May 6, 2014 | Change, Management, Marketing, retail, Small business
Courtesy High McLeod @ Gaping Void
Retail has changed, very quickly and in a fundamental way, but not for everyone.
Retailers, the blokes with the bricks and mortar still hold sway in most markets, but to varying degrees, and can continue to do so if they are as smart as they have been in the past.
Consumers no longer have to go down to the store to buy much of their stuff, their store increasingly is in the palm of their hand. That is fine for cameras, refrigerators, and perhaps baked beans in a can, but not so good for fresh produce, meat, fruit & veg, and dairy, categories that are driving the profitability of supermarket retailers.
If we know anything, we know new models will come to light.
In the past, producers needed retailers to break down their bulk product, whether it be jeans, baked beans or refrigerators, and sell to consumers, but now consumers can go direct. So, it is not just the retailers who face change, it is the producers.
Held to ransom for years by retail that in effect sold them retail real estate while selling to the consumers, suppliers have some leverage back, and a few of them are game enough to love it.
The question both needs to answer is how they can best meet the needs of the newly empowered by information, consumer, who does not really care who supplies them the product, it is just about the convenience, choice, delivery and price of a transaction.
Looked at from this perspective, the retailer has a role to play in the relationships consumers have with brands, and suppliers, but they must make their money from a different model, one that relies on the manner in which they “touch” the sales process, rather than being the one solely in charge.
Sales leads that come from social media and the web are still just as likely to generate a sale in a physical retailer as they are on the web, and given that web sales are still a small proportion of total sales, using the web should be a seen as an opportunity, a bonus, not a threat, as Tesco in Korea has demonstrated.
It is perhaps telling of the times that the ACCC is mounting a case against Coles for beating up on its suppliers to improve its earnings. Nothing new there, but Coles management has an obligation to maximise earnings for shareholders.
The horse has bolted.
SME’s in the Australian food supply chain are now a rare breed, killed off my the high $A, retailer housebrand strategies, the scale of multinational competition, and poor management. The two retailers seem to have realised that without local supply, their long term options are limited, and so seem to be softening their short term demands in recognition that the sustainability of the food production value chain is in their interests.
PS Earlier today, after the initial publication of this post, I became aware that Big Sister Foods had been put in the hands of the administrators. While Big Sister is an Aussie company, part of that small club of natives, it spent 20 years as a part of Reckitt & Coleman in the 70’s and 80’s. Sadly I am not surprised, as their current website is about the worst I have ever seen, perhaps indicative of the declining state of the business.
May 5, 2014 | Change, Communication, Social Media
The Atlantic has made the call, at least asked the question.
Is Twitter dying?
I have no idea, as I am not a real twitter fan, never have been, simply because I do not see the sustainable business model yet, although there is no doubt of the disruptive impact of twitter on traditional media.
The thought of spending more of my most valuable and finite resource, time, on a platform that can deliver numbers, and can deliver with work some semblance of a community has never grabbed me, as the opportunity cost just seemed too high.
Surviving on advertising in a world where advertising space is now close to infinite, and thus almost worthless unless you can employ a degree of targeting that requires a degree of engagement that usually only comes from an existing relationships seems fraught with the sorts of hooks snake-oil salesmen use to catch the unwary.
Perhaps I am just getting old.
What twitter has done, which has benefited all of us is to highlight the value of condensing a message into its core, distilling out all the verbal trappings we often add in that really add no value. In addition, there is no doubt that the immediacy of twitter has played a vital role in getting information out about nasty, momentous, and often funny things that happen. The first time this was evident to me was the London bombings, when news came out via twitter way before any formal network could work out what had happened, and since then, Twitter has been the newsbreaker on almost every occasion.
So, I do not think twitter is dying, just trying to grow up.
Apr 29, 2014 | Communication, Customers, Sales, Small business
Successful selling
Regularly I find myself on the receiving end of a pitch of some sort, as do all in business. We all buy and sell on a daily basis, and whilst there are easily recognisable and specialised functions that buy and sell on behalf of our organisations, we nevertheless are “pitchers”, and “pitchees” every day.
It seems that one of the impacts of digital communication has been to help us forget, or perhaps brush over some of the foundation sales skills honed over the millennia of human activity, so here they are again:
- Listen rather than speak. Asking questions, listening to the responses, and then asking the follow up questions has always been, and will always be the best sales strategy.
- Benefits not features. When you are speaking, talk about the benefits of your offering to the “pitchee” rather than reciting the features. Customers are really only interested in what value a product is to them, not what the range of features may be, so focus on value to them by demonstrating how your product makes their life easier, more efficient, and more productive.
- Deliver useful insights, knowledge, and intelligence. Being of value to a customer is more than just flogging product, it is also about articulating the context in which the product will be used to add value. Clearly however, there is a line here with confidentiality, any potential customer who hears what their competitors may be doing from you will never trust you again to keep their confidence, but the best sales people are always able to deliver solutions to problems they have collaborated to articulate.
Easy to say, often hard to do.
Apr 24, 2014 | Branding, Category, Customers, Marketing, retail
Businesses spend many millions trying to understand the way consumers consider the choices confronting them in a supermarket. With up to 30,000 items on shelf, and some categories having hundreds of choices, it is a key consideration.
A mix of psychology, data science, habitual behaviour, discretionary spending dollars available, and individual preferences all play a role.
A complicated mix.
However, there is a way to at least clarify part of the mix.
Consumers use decision trees, usually without thinking about them when they are in a supermarket making their purchases.
Some purchases are automatic, a habitual choice, others are made after a considered set of choices on a range of factors important to the individual are made, and there are, obviously, many shades of this continuum that apply to a highly personal process.
Imagine a consumer approaching the dairy case looking for fruited yoghurt. Some may just buy their usual brand, flavour and size irrespective of everything else. Others will make a series of choices that will vary for every person, and may look something like the decision tree below.
It will differ for each individual, some will choose the brand first, others the flavour, or the size and price, and a whole range of variations on these factors, but based on the total sales, supermarkets will range products, and give them shelf positions and space based on sales, gross margins, delivered margins, and various promotional strategies. They also use a decision tree.
Retailers and suppliers spend huge amounts of effort, and resources. on this category management exercise, trying to read the consumers mind, and anticipate their reactions to various combinations that are available to them.
It is a data intensive exercise, well suited to the “big data” techniques that are evolving around us. Combining checkout data with store loyalty cards is now becoming commonplace, what is emerging currently is the integration of mobile and social media data into the mix.
As you walk into the store to buy something, there has already been lots of effort gone into reading your mind, and there will be lots of effort and money expended in store in an effort to manage your purchase decisions.
Apr 23, 2014 | Branding, Marketing, Strategy
My early days of marketing were as a minor part of the team that created Meadow Lea, the brand that completely changed then dominated the margarine markets for the following 25 years. I was really just a young gopher, but the lessons that came with those successes, and the trials in between, were scorched onto my brain.
10 years later I joined a major dairy company as marketing manager, and the first thing on my list was to do to ourselves in the milk business what Meadow Lea had done to the butter market.
Shock, horror, Sacrilege!!.
It was even illegal.
Pulling the dairy fat out of milk and replacing it with vegetable fat had been enshrined as illegal in legislation, which was not about to change because some marketing bloke thought it was stupid, and could see a commercial opportunity.
Even the technical staff of the business thought I had gone stark mad, or at least drunk too much at lunch with the agency (it was the eighties after all) and refused point blank to do any development.
It took eight years, but eventually Farmers Best was launched, and whilst not becoming anything like the Meadow Lea blockbuster I had envisaged, certainly prevented anyone else having a go.
My point, not all the good ideas come from the domain you inhabit, from your people, or even your branch of technology.
Looking outside for ideas, technology, and innovation in all its forms, is not just sensible, but in these days of homogeneity and rapid dispersion of ideas and techniques, it is essential.
And the law? well, it was quietly changed as it had became obvious that consumers did not give a fig what sort of fat it was, they wanted the benefit of lower cholesterol and resulting longer life.
Apr 22, 2014 | Communication, Customers, Marketing, Sales, Small business, Social Media
These days with the ubiquity of mobile and social, almost everyone is a media channel.
Recognising this simple fact changes the formula for media success. In the old days, the formula used so successfully by mass marketers was:
Money X mass media = Sales.
This used to work, no longer, now that media has fragmented into thousands of pieces, and individuals have a personal menu of media consumption based on their interests, time, and competing priorities in their lives. The formula marketers now have to use is something like:
Time X tailored and personalised media = a chance for a sale.
Much more uncertain.
In this context, spending some time considering the productivity of the investment being made in social media, and you are making them, even if it is just the employee who spends some of your time checking their facebook timeline, would be useful.
Following is a framework you might like to think about. The reality is that it is little different from a normal Marketing Audit, is it just that we are focussing on social and the content that fuels engagement.
Social media competitive analysis.
- What are we doing?
- What are direct competitors doing?
- What are the successful Social media attention grabbers doing?
- What kind of content are our competitors producing and distributing?
- How, where and when are they distributing?
- How are competitive strategies performing? A. In keeping their customers engaged, and, B. In attracting other customers, including ours
- Where do we have opportunities?
- Where are we under-performing?
- What can we do to restructure our activities within existing capabilities?
- What capabilities do we need/should be developed?
Content plan
- Determine the behavioural and “tone” of the intended audience
- Indentify what type of content should be developed
- Source and develop the content
- Create a content calendar
- Develop a set of performance metrics
- Build in the expectation of continuous A/B testing, tweaking testing, tweaking….
- Build a list of users, and track their use of and engagement with your content, being prepared to personalise
- Leverage the list, but ensure that the communication is always personal, and appropriate to the current situation of the prospect.
Repeat all above, again.
Content marketing has become all the rage, there are so called gurus out there selling new brands of snake-oil, and many are extraordinarily good at parting you with your money. However, the simple and fundamental truth of marketing remains: you must add value to your customers lives. Failure to do that results in just having a big bag of fancy hot air, not much use to anyone, no matter how fancy the plan.
Oh, and one last thing about plans that I bang on relentlessly to my clients: You get only 1 point out of 10 for the plan, the other 9 are reserved for implementation.
For a “How to” of an audit of the technical detail on your site, this post of Neil Patels is a terrific start.
I would value your feedback on how you undertake a content audit, so let me know.
