Jun 13, 2012 | Change, Customers, Management, Marketing, retail
Data mining as it is evolving in retail is a fascinating exercise in identifying behavior characteristics that apply to very small percentages of the shopper population, and doing something with them. Progressively retailers are getting better at leveraging the data, and as the penetration of cards increases past a critical mass, so will the effectiveness of the marketing and promotional programs. Of course, consumers are well aware of this, and have well developed “relevance meters” built in.
Consider the category management of potatoes. Pretty dull stuff? no, fascinating stuff. I am making these numbers up to illustrate the point, but consider, of 100 customers using their cards at the checkout, perhaps 10% have potatoes in their trolleys, and 10% of that 10% have a particular variety, and of that 10% (now down to 0.1%), they also have sour cream and chives in their trolley. Pretty reasonable guess that the potatoes will be cooked in their jackets, with sour cream and chives garnish, particularly if the shopper is single, no kids, and also buys steak. An opportunity to offer the consumer a deal on a bottle of red wine on her way out of the shop, or in the associated retailer across the way? Multiply that by 5 or 6 million cards, and you have a pile of data to mine.
The gold standard of retailer card data mining is Dunhumby, now owned by UK retailer Tesco. They did such a great job in the development stages of the Tesco loyalty card, that the retailer bought them to keep their competitors away from them. In a move that recognises the future, Dunhumby is now crowdsourcing ideas via Kaggle, a fascinating startup that turns data mining into a competition for data nerds.
This is Category Management on steroids, and represents a monumental change in the skills needed by FMCG suppliers deal with dominant retailers. In the Australian context, very few FMCG suppliers have any idea of the power of the data tsunami coming at them, and how this will impact on their brand marketing strategies. It is also the realisation of the vision of category management the few of us who were playing with this stuff 30 years ago had when the data was warehouse withdrawals, we had a bit of U&A consumer research, and managed it all with calculators.
Jun 11, 2012 | Branding, Change, Communication, Management, Marketing
Today in Sydney has been about as miserable as it gets. Rainy, cold, grey, just plain shitty, and not fair for a public holiday.
What a relief it was to find a distracting way to spend the afternoon.
After watching the replay of the unfinished French Open final, assiduously avoiding any media when I “rose” so I did not know the score, I started to clean up the hard drive of my laptop, removing some of the stuff that had accumulated to clog it up.
Amongst the “random savings”, were quite a number of advertisements I had accumulated from various sites, all of which had the common element of having struck me at some time as being enormously creative, funny, engaging, delivering a serious message, or just sufficiently different to really cut through, when flogging stuff from cars and fashion to condoms and computers. They all, in one way or another, rang my creative bell.
It also struck me that we are in the middle of a huge confluence of two enormously powerful forces, technical development, and creativity, that is changing everything. Hardly an original insight.
The technical advances of the last 15 years have reduced the costs of technology, and the distribution of content to relatively miniscule proportions, which has opened up huge new opportunities for creativity to be seen. However, the digital media has become so clogged with content, from the great to the absolutely inane, that being seen is still the greatest challenge, so creativity remains an essential element of all successful communication. It has also offered up the opportunity to focus laser-like on a very small group of individuals, delivering a compelling message that they would have been unlikely to get in the old mass communication days.
I cannot finish without offering my pick as the best ad of all time, at least the best I have seen. Perhaps surprisingly, it comes from my childhood, so is a very old ad, but is a very simple execution delivering a powerful message in unequivocal terms. Pity the companies management was not up to same standard as their communications people.
May 30, 2012 | Branding, Innovation, Marketing, Social Media
This new avenue to live broadcast, as distinct from posting a video on Youtube, seems to me to be a game-changer.
Social media lives by interaction, engagement, that is what gives it its power, and to be able to go live to an audience, even if it is just your own family at first, offers the opportunity for the networking capacity of social media to accelerate at a logarithmic rate.
For a while I have wondered at the task facing Google competing against Facebook, which has an established base now of a billion, they have built formidable barriers to exit and entry, but “on air” could just change the equation.
The momentum seemed to be moving slowly towards Google, but this innovation will give it a great big shove, particularly in the light of the facebook IPO, with the shares currently being traded at 10% less than the issue price, and 25% below the peaks reached on the big day. There appears to be a healthy dose of cynicism that has suddenly emerged as a result of the obscene amount of wealth facebook insiders have skimmed, whilst the gullible have done their dough, and this cynicism can only assist Google+ build some much needed competitive momentum.
May 23, 2012 | Branding, Communication, Customers, Marketing
The holy grail, the prime objective of billions of dollars of advertising, the wall behind which many campaigns that have failed to generate incremental sales have hidden, Brand Loyalty.
I cannot help but wonder if the label “Brand Loyalty” is sometimes just a metaphor for making the purchase choice easier. The environment we inhabit is now so absolutely over-run with messages information, and tactics to build “customer engagement”, that we all must have a serious case of cogitative overload, weather we know it or not, so we need a mechanism to sort the options.
In this context I am reminded of the old “KISS” principal, Keep It Simple Stupid.
Apple is often cited as the greatest marketing machine we have ever seen, an accolade I am comfortable with, but perhaps there is another dimension. Rather than building brand loyalty, perhaps they have just so simplified the purchase decision in an environment that is psychologically threatening by the number of alternatives, and the techno-speak that most use as communication , that they grab the sales almost by default.
Apple has successfully made buying a piece of tech few buyers understand simple, and attached a cache to that simplicity. This spoof makes the point, but mind the language.
May 18, 2012 | Customers, Marketing, Strategy
Marketing groups usually set about segmenting markets by one of two basic ways:
- By demographics, age, sex, education, income, with/without children, and so on, or,
- By product category, for example meat is usually segmented by breed, cut, pack size, price.
However, there is a third way, one that disregards the traditional segmentations, one that recognises the difference between cause and effect.
You do not buy fillet steak because you are a 35 year old graduate earning 150k +, with no children, you buy filet steak because you like it, or your partners school friend is coming around for a BBQ, you buy it because it is the right product for the job to be done. Nobody buys a Ferrari to get from point A to point B, they buy a Ferrari to make a statement, as a car costing 10% of the Ferrari will offer reliable, relatively comfortable transport.
The marketing of every product can benefit from these simple questions, asked from the point of view of the prospective customer:
- What job do I want done?
- How will this product deliver on the job to be done?
- Which of the acceptable product options offers the best value, however the I define value in the circumstances?
