Peer pressure destroys the power of Advertising

Peer pressure destroys the power of Advertising

Oct 11, 2017 | Change, Marketing, Operations, retail

The major consequence to marketers of the transfer of power from themselves to their customers is that the effectiveness of their marketing efforts has been deflated, irrespective of their mix of legacy and digital channels, by the power of peer pressure.

As a kid, yo-yos came and went several times, usually with the backing of Coke, as did hula hoops and several others, but the story of fidget spinners appears different.

They came from nowhere, a craze amongst teenagers fuelled by YouTube, that left behind all the usual corporate toymakers who have had to scramble to get their hands on stock, probably arriving about the time the craze will end, leaving them on the beach with warehouses of product the kids see as yesterday’s news.

The toy business, like many, has a rhythm that has evolved over many years. There are a couple of peak sales periods, and the promotion of new toys is aimed at these periods, with lead times of 12-18  months or more. These hierarchical toy marketers NPD cycle times bear no resemblance to the cycle times of the newest crazy thing that catches on.

Finger spinners appeared in the US in early 2017, and sales appeared to have peaked in May or June, and are now in decline, a decline as rapid as the rise. How do businesses geared around an 18 month product development and promotion cycle time compete in this new marketplace  powered by their consumers, not even their customers, who are often the kids parents. Kids went on line to buy these thing before the bricks and mortar retailers had heard of them. Perhaps this is the virus at the core of the recent move to Chapter 11 of Toys R Us, weighed down by a mountain of debt, just before the peak selling period.

This severely condensed cycle time is the new reality of consumer markets, and our legacy  hierarchical organisation structures are unable to accommodate the change. Instead, organisations need to find more ‘organic’ ways of responding to the stuff that goes on in their markets, to see the odd things at the fringe that might become the next big thing, and respond to them with an appropriately condensed supply chain cycle time.

It is not very often organisations will be faced with something as radically short term as fidget spinners, but the lesson is appropriate in all markets, as the disruption to one extent or another, is everywhere.  This condensation of the demand cycle, way out of the control of marketers, is a tectonic shift on the nature of markets and marketing in the 21st century to which adaptation is the key success metric.

 

 

 

Don’t believe everything you think

Don’t believe everything you think

Sep 22, 2017 | Change, Leadership

 

Leaders who are unable to see another point of view, listen to others, and absorb and engage with diversity are destined to make mistakes.

Good leaders have a point of view, but they allow others to put theirs, see when their ideas can be improved, and sometimes utter those amazingly strong leadership  words ‘I did not know that’

Your beliefs, powered by experiences are powerful barriers and filters to the way you see the world, they reinforce the status quo for you.

Have you ever made a mistake, seen a better way with the benefit of hindsight that should have been obvious with a little more information, thought, time and effort?

Yes, most of us have.

If you answered no, seek counselling, quickly, before you do  any more damage.

Cartoon Credit: Hugh McLeod at gapingvoid.com

 

The single most common question I ask myself

The single most common question I ask myself

Sep 20, 2017 | Change, Governance, Marketing

How do I demonstrate value?

As a senior marketing bloke in a large business, being heard around the board table was always a problem, as it is hard to quantify the impact of what you do. Try as hard as possible, there are still holes in the case, as the reality is that you are setting out to tell the future.

‘Do this, and that will happen’

While marketers are no longer seen as the corporate equivalent of ‘Zelda the fortune teller’ it remains hard to compete for scarce resources with those who are able to table hard data, and are able to quantify the holes in your logic, should they choose to do so.

While pointing out that one is in the past and cannot be changed, while the other is in the future, and therefore is able to be shaped by sensible and informed investment, there remains the uncertainty of the future. Success depends on the confidence that a management has in the ability of the marketer to assemble facts and suppositions into a credible projection of outcomes, in line with the risk profile of the corporation

It is even harder in consulting to small businesses. Every dollar spent on marketing with the promise of better outcomes in the future is a dollar out of the owners pocket. They have all been stung by the purveyors of various forms of marketing snake oil before, so are a wary and appropriately cynical lot.

I have concluded that the answer is a bit like motherhood, the value off which is only visible over a long period, but is then indisputable.

Photo credit Ali Alhosen via Flikr

Every change has unwelcome side-affects

Every change has unwelcome side-affects

Sep 11, 2017 | Change

Change has side-affects, like any medicine. Usually those side-affects are not palatable, and sometimes the medicine does not work.

However, not taking the medicine never works as a cure.

I am 65, so have had a few friends ‘pop off’ from various ailments over the years.  In particular I remember two because of their amazingly different responses to the very similar conditions that eventually beat them.

Colin was diagnosed with a virulent form of cancer, and did undergo some pretty mild palliative treatment, but essentially accepted his fate with grace, and went quietly.

Kevin did not go quietly. He fought the disease with everything he had, going from a big, robust, outgoing, exuberant character, to a tiny defiant shell with a huge smile on his face. He accommodated the numerous and challenging side effects of the aggressive treatments he was receiving as a human guinea pig in several clinical trials with a brand of black humour that made visiting him a joy. I saw him a few days before the end, which I think we both knew was close.  He was consoling me over his coming demise, (unbelievable) reflecting  on his gratitude for the life he had been given, and hoping that his role in the trials would help others.

Much of what I do involves commercial medicine that is not always easy to take, there are side-affects, which are often very unwelcome to some, but there is little about the medicine that is experimental.  Taken in the right doses at the right time, and most often the patient will survive and thrive. However, it usually gets worse before it gets better in the early stages of treatment, which is where many give up and go quietly.

No silver bullets, no gain without pain, and several other such cliches all apply, but the real trick is not to give in too early, and not to accept the seemingly obvious as the inevitable.

 

3 foundations that will enable Amazon to disrupt supermarkets.

3 foundations that will enable Amazon to disrupt supermarkets.

Aug 4, 2017 | Change, Marketing, retail

Shopping is a physical and sensory experience, humans evolved doing some sort of physical ‘shopping’ even if for most of our history, the similarity of that activity to a trip to the supermarket has been fleeting. Much as we might hate the queues at the checkout, difficult parking, reducing range as the retail gorillas replace our habitual brands with their own house-branded, and increasingly ‘Bandit branded’  (retailer owned ‘brands’ masquerading as proprietary) Sku’s, there is still an emotional and social element to the experience.

It applies even more in more specialist retailers, the more specialist, the greater the degree of sensory engagement necessary.

This is all breaking down, and quickly, as even high fashion, and highly personalised fashion like Shoes Of Prey, which can designed and bought on line.

So what can we expect from Amazon that would justify $US13.6 billion for Whole Foods?

 Virtual supermarket.

Virtual and Augmented Reality is coming at us like a train. Just as shoes of Prey allows you to design your own shoes, Warby Parker  has become a billion dollar company in 6 years by helping you to choose your glasses on line,   Amazon (surprise surprise) is playing with Prime Wardrobe , and Ikea is experimenting with a virtual furniture app.  it seems a short step to using Virtual reality from your couch to ‘walk’ through, select, place and order and schedule delivery from a grocery ‘store’.

Almost a year ago my second son bought a VR set for a few hundred dollars, and when I fiddled with it, thought I had seen the future of market research. Even so recently my imagination did not take me that next small step to an actual ordering and delivery management system, but why not?

Crowd sourced logistics.

The biggest stumbling block to digital grocery growth has been the logistics, both timing and cost. Fresh and frozen produce where timing and cold chain integrity is paramount, requires a different set of logistic standards to shelf stable commodity categories. Shoppers are very price sensitive across homogenised commodity categories of temperature agnostic products, and it does not matter much if they remain on the front step for a while, diametrically opposed on both counts to produce.

Timing of delivery has been particularly problematic in multiple income homes, and building delivery certainty creates considerable cost.

Both have been solved by the sort of technology Uber uses. Pretty simple to have a crowd sourced delivery service where the vehicles just have a refrigerated unit in the boot hooked into a power source in the car, combined with the delivery scheduling Uber has amply demonstrated works.

 Payment security.

Payment security while it should be a problem, as the level of fraud increases rapidly in Australia, from 16.2cents/$1,000 in 2013 to 24.5 cents/$1,000 in 2015, (according to the Australian Payments Clearing association), it seems not to be for most of us. However, It will be very soon. Blockchain technology will remove much of the risk, and in the early stages of development, seems to be ‘fraud-proof’. Amazon has been experimenting extensively with Blockchain , collaborating with many large financial and digital innovators to better facilitate and secure web based financial transactions.

It seems to me that these are the three building blocks Amazon needs to make a huge dent in the traditional supermarket business, struggling to identify the sustainable sources of growth and profitability. Whole Foods is only the stalking horse, as there is a lot of expertise in procuring quality fresh produce in predictable volumes, and Whole Foods is already an expert in this. Amazon will add the Whole Foods expertise onto what they are doing already, and bingo, another disruption coming your way.

 

 

Why Operational improvement and change initiatives usually fail.

Why Operational improvement and change initiatives usually fail.

Aug 2, 2017 | Change, Leadership, Lean, Operations

How do you make short term operational and process improvements ‘stick’ for the long term?

Most change initiatives fail to deliver on their early promise. You get some short term improvement, some changes made, but the effectiveness of the process dwindles with time.

I often see failed improvement initiatives, usually labelled ‘Lean” or ‘6 Sigma’ by those involved, that leave a pile of paper, some awareness and knowledge, and from time to time some useful results, but nothing like the promises of the expensive consultants as they signed you up.

Why is that?

Nobody goes into a change process expecting it to fail

In my observation, the single most common reason these initiatives fail is because they ignore one of the basic tenets of Lean: respect for people.

Lean gets a start because management sees problems they have failed to solve, or do not know how to solve. So they bring in some Lean consultants who reach into the tool box and come out with some of the common tools, go through an education process, implement, and get some quick and sometimes impressive wins, and victory is declared. After that declaration, the focus moves elsewhere,  and the process slowly deteriorates.

Why is that?

Everyone was so committed, excited at the early results, the consultants were paid a shedload, so it should have worked.

In 30 years of doing this stuff, there is always one dominant reason they fail.

The initiative is top down, not bottom up.

Those at the top see problems manifest in the P&L. Their motivations are financial, operational and strategic. They talk about alignment, and people being the most valuable asset, then ignore them.

By contrast, building initiative from the bottom, asking those doing the work how to improve it, then giving them the tools to improve, and rewarding them with acknowledgement as well as a more secure job and maybe a pay rise, is where the action is.

However, for managers, they are trained to see their job as managing. Having some stuff bubbling up from the factory that has not gone through the formal approval processes and subjected to the discipline of  the accountants mandatory NPV  and ROI analysis is uncomfortable and challenging to their authority as managers.

This is where the distinction between managers and leaders comes in.

Managers, usually unwittingly, kill off the grass roots enthusiasm to make their workplace safer, more interesting, and more productive because it makes them uncomfortable, less in control.  By imposing rules, they interrupt the productive flow evident in successful initiatives. By contrast,  leaders encourage and promote the ambiguity that sometimes results, and works with it.

Which are you, Manager or Leader?