3 foundations that will enable Amazon to disrupt supermarkets.

3 foundations that will enable Amazon to disrupt supermarkets.

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.

 

 

How to ensure your copy does not get read.

How to ensure your copy does not get read.

Copywriting is easy.

That is what you tell yourself, after all, you can write, you are a professional, very used to communicating, and doing it successfully.

My sister is a writer, and every now and again she grabs one of my posts over which I have slaved (yes, it is OK to have family subscribed) and goes into what I call her ‘Teacher mode’

Out comes the red pen and professional editor and she rewrites my posts.

They are subtly altered, so the intent of the post is clearer, makes a greater impact on the reader, and ends up being way, way better.

It galls me a bit that it is a skill beyond mine,  but on the other hand, she makes me feel better by telling me she could never dream up the topics and angles that I do, all she does is polish it a bit.

We are inundated with copy, it comes at us at all times, through all our devices,  and now is increasingly visual  as a means to fight the war for your attention. However, like most things the volume going up does not have any real impact on the quality, if anything the average has dropped as we become ‘do-it-yourselfers’ in order to keep the volume up.

The headline is the most important element of copy in any piece. If you fail to cut through, catch attention, and create an urge to read on, it does not matter how good the rest is, it will not be seen.

There is piles of advice around on how to write a great headline, most of it pretty good, but also so much that we tend to get tunnel vision, and forget most of it, so following are 4 basic things I see continuously that ensures I do not open a piece.

Talking about yourself.

Nobody cares about you, except perhaps your mother, or in my case, my sister. They care about themselves, their lives, and their problems. A good headline reflects those needs, pain points, and offers help to a specific group that you wish to communicate with, and at  the very least, creates interest.

If you are a dentist, do not talk about how modern your equipment is, or how many degrees you may have, address the reason someone  may be looking for a dentist. They have broken a tooth, their child has a crooked bite, or they have a toothache that needs attention.

Using jargon.

Every industry has jargon, it acts as shorthand for insiders, so if you want to grab the attention of your competitors, use the jargon they understand, but if you would rather catch the attention of those who might want to act on what you say, avoid it like the plague.

Last week I saw a headline that promised: ‘to deliver a sophisticated customer centric e-commerce solution to SME’s’ . How much better would it have been if the headline simply promised to make it easy from small businesses to get paid.

Showing how clever you are.

For your potential customer, clear beats clever every single time. It may not get a chuckle from your mates in the pub after work, but so what, they are already your mates, and not required to pay your bills. The most common offender is the use of a pun, never as funny in a headline as in the pub, followed closely by the use of ‘digital shorthand’ such as ‘gr8’.

Allowing grammatical and spelling errors.

Perhaps it is just my age, but a spelling or grammatical error in a headline or sub head ensures I do not open it. Not only does it offend my sense of what is right, it demonstrates that the writer is either too stupid to understand the basic rules of written communication, or that they have so little concern for my time that they did not make the effort to get it right. Why would I read it in either case?

The difference between ordinary copy, and great copy is a big bagful of money, and a lot of effort, experience and specialist skill.

 

The value of an engaged employee.

The value of an engaged employee.

We all talk about the necessity of ‘engaging employees,’ but rarely truly achieve it, or see it in others. However, when  we do see it, we just know in our guts that we are looking at the way we would always like it to be.

Yesterday I spent 90 minutes in a suburban McDonalds store killing time between appointments, reading the daily rag, drinking an excruciating coffee, and fiddling with the language in a client report. All this time I watched a young bloke in the store make everyone he came into contact with feel special, even great.

He was just a casual employee, whose job it is to clean the tables and mop the floor. He did this, but he also did much, much, more. He opened the door as people were coming towards it, he high-fived the little kids, he helped a lady fold a stroller after extracting her baby, he joked and pranced, and he did all this with a huge smile on his face.

Every single person he interacted with smiled back, and had a word, he threw some light on everyone’s day.

As the store manager delivered a meal to the person at the table next door, I observed to him that this young bloke was worth much more than they were paying him, to which the manager responded, ‘We give him as many shifts as he wants, and we love having him here’

Despite the excruciating coffee, and other sometimes annoying human traits on display from time to time at Maccas, I know I will be back at this one, and hoping to see this young bloke loving his work, and making the day of others again.

 

 

 

How big is the Strategic deficit of Australian FMCG retailers?

How big is the Strategic deficit of Australian FMCG retailers?

Strategic deficit is the amount of time, capability, commitment, and energy necessary to bridge the gap from where you may be right now, compared to the most advanced of your current and potential competitors.

A few weeks ago, if asked the question of Australian retailers, particularly the FMCG retail gorillas,  Woolworths and Coles, I would have said several years and more resources than they seem to be prepared to allocate, but more importantly, there is a complete shift in mindset that is required.

Now, if asked the same question, with the news last week of the $US13.8 billion purchase of Whole foods by Amazon, I would suggest the strategic deficit has just doubled, perhaps tripled overnight. Not only has the deficit blown out, but  the rate at which it is accumulating is accelerating given the huge $16 billion investment Amazon made in ‘Technology and Content’ in 2016, the horse has not just bolted, it is over the hill. Not all of that $16 billion will be directly impacting their ability to deliver groceries, but a fair chunk of it will be applicable, and the rest will be learning in other areas that they will be able to leverage over time.

Back in August 2013 when Jeff Bezos bought the Washington Post for $250 million cash, many were asking “What does he know about the newspaper business’?

The Post had been one of the icons of journalistic excellence, one of the true ‘newspapers’, but had crashed into successive losses in the face of digital disruption.

Bezos bought the Post, not for Amazon, but from his own funds, it is a personal investment, and therefore perhaps better even that Amazon itself as a signpost of his commitment and what may come elsewhere.

In this National Public Radio report on progress at the Post, there are some useful signposts that may be applicable to Amazons recent purchase of Whole Foods. However, it can be summarised into a few words:

Technology that makes the customer the absolute focus of every single decision and action is the essential foundation for success.

Now, many of the same people are asking ‘What does Amazon know about the fresh produce retail business?  My response is ‘Wait for the implementation of  Amazons brand of technology directed at the produce consumer, and we will find out”.  I would be pretty sure that Amazon has a range of pretty good ideas to be tested at Whole Foods, that will see the hurdles of home delivery of fresh and frozen food overcome.

I am sure Coles and Woollies will be watching, but so was the newspaper business watching technology eat its lunch for a decade before they had any idea of how to address the challenge, and even now, seem incapable of doing anything about it.

 

The marketing flip, with pike & twist.

The marketing flip, with pike & twist.

The marketing degree of difficulty has exploded, making getting a good score  exponentially more difficult.

There used to be a few TV and radio stations, newspapers and magazines by which to reach potential customers, and supply them with the information you thought they needed to buy your stuff.  It was mass marketing, with little to no ability to customise, personalise, or engage.

The name of the game was scale.

Scale of capital to control the means of communication and mass produce products for sale

Scale of financial resources  to afford the advertising costs demanded by the communication owners

Scale of markets, mass consumers

Scale of intermediaries like supermarket chains, and suppliers of capital and equipment.

Scale had all the power.

In 15 years, less than half my working life, marketing has flipped.

Individuals now have all the power

Marketing has to be personalised, one on one, or it will be ignored

Media channels are now virtually infinite, and the cost can be modest to free

Brands are only as good as the last delivery of value to the individual

However, the objective remains the same, just as with the fancy dive. It is to go through the surface with as little splash and disturbance as possible, a good old fashioned, well executed and relatively simple swan dive can achieve that objective as well as the fancy risky, and hugely complicated combinations of tricks.

Next time you are contemplating a complicated marketing dive with a pike and twist, consider the benefits of simplicity.