Friday, July 25, 2008

Shopping by TV - TiVo and Amazon Team Up

The New York Times reported that TiVo and Amazon are teaming up to enable consumers to shop from their TV's. Some of the first shows to try it out will be The Oprah Winfrey Show, and The Late Show with David Letterman. They'll offer the books, CD's, and DVD's that guests will be promoting when on the shows.

On the one hand, this is producer nirvana. I've spoken with a couple of producers for cable channels, and they consider this the holy grail - to be able to quantify their audiences not in terms of reach, but in terms of immediate market potential. In terms of sales.

Books, movies, and music are an easy way to go. I'm curious how this might ever possibly work for fashion or home decor, because it seems like the potential will only ever apply to first-run shows. But maybe that's how to make them TiVo-proof, with a certain degree of irony there - imagine, "Tonight's episode of Gossip Girls will feature limited availability of Serena's and Nate's outfits, provided by [insert brand name here]. Don't miss your chance at getting the look!"

There's one other implication to consider about this kind of matchup. Our whole world of advertising and retail is built on the assumption that there is a gap between when a consumer may decide they want a product, and when they actually purchase it. In the case of something seen on TV, once you decided you wanted, say, Serena's shoes from Gossip Girl, you had to figure out who made them, find out who sells them, make sure they fit at some point (though this could be after you've purchased them), and then actually buy them. This link between a set-top box that enables interactive and internet access, and a retail store that enables commerce short-circuits that whole process. And it's not the only technology doing that: mobile phones, even consumers with wireless laptops sitting in front of the TV change this dynamic.

Do retailers need to become producers? Some CPG brands have already gotten into the mix. But it's a lot harder to enable the commerce than it is to feature the product.

Tuesday, July 22, 2008

The Dangers of User-Generated Content for Retail

So McDonald's has been holding a contest to update the iconic Big Mac jingle, and they announced the finalists - including one guy who was previously arrested for holding up a McDonald's at gunpoint - and served 12 years for it. While content aggregators like YouTube have been fairly vigilant (some would say overly so) about making sure that the content users post is legal to use, there is also the question about whether the user themselves could be damaging to a brand. Something to think about before you highlight a user product review...

Thursday, July 17, 2008

How Much Info is Too Much at the Shelf?

I've posted plenty of times on RetailWire as a supporter of NYC's initiative to get calorie counts on the menus at chain restaurants. I think it's very misleading to consumers to use terms like "low fat" when hidden behind that sign is something that slugs 1,000 calories or more. So, sure, some restaurants post calorie counts online or in little brochures that sometimes are easy to find or available in the store (and sometimes not), and their argument has been that because they do make the information available, they should not have to put it on menu boards.

The problem with online information is that it's not accessible for when you're making a product selection decision. A lot of online calorie calculators that I've seen restaurant chains put out are not mobile phone friendly at all - they require you to "build a meal" and then tell you, once you've configured multiple options through multiple screens - you get a result. Taco Bell's is a good example.

Here's where it gets interesting. Contrast that with efforts by companies like Staples, who has debated publishing consumer-generated product reviews at the shelf - and the huge number of questions doing something like that generates. Which review do you pick? Is it misleading if you publish a highly favorable review when overall the reviews tended toward the negative? What do you do with a product that received mostly negative reviews? And on and on.

Mobile phones do change the game a bit - providing price and sometimes availability through a mobile phone search is rapidly becoming ante. Reviews (or at least summarizations of reviews) will likely be next, if not additional spec or detailed information - like nutrition info, in the case of restaurants. There are calorie-counting sites out there that will help - like My Calorie Counter - but it's still interface-intensive to compare multiple products against one another.

The ultimate challenge is balancing what you can provide to consumers against what different customers want as part of the experience. MSNBC calls reaction to the calorie information "sticker shock" of a sort, and quotes a NYC health official who is perfectly happy with that result, while meanwhile a restaurant patron wants to switch menus with her friend who received an old one that doesn't have the calorie counts - because she wants to be kept in the dark. It all just makes me think that dynamic displays are an inevitability (granted, once the cost to implement reaches something that retailers can afford to invest in) - so that consumers can taylor what they see, not just online, but even when they're looking at the shelf.

And, for the record, given that California is looking into even stricter standards, and that retailers already have to accomodate New York's specific rules, I believe it will be a short amount of time before we see calorie labeling spread nationwide.

Tuesday, July 15, 2008

The Re-convergence of Media Brands and Retail

In May, Disney quietly reacquired the Disney stores from Children's Place - the company it had sold them to in the first place. This was after a wild ride in the '90's for media brands - who rushed into the world of retail amidst the emergence of trends like "retailtainment" and "experiential retailing". You couldn't go to a mall without hitting a Warner Brothers store or a Disney Store, and there were several other media companies that tried - Paramount and Nickelodeon come to mind.

The idea was to build a local place where consumers could experience some of their favorite characters, build a closer affinity to the media properties, and in turn spend a lot of money on merchandise. I happened to see this evolution first-hand while I was a consultant at PwC - I was working on an IT Strategy for the Nickelodeon stores when they made their attempt at retailing in the late 1990's. The sad truth, at the time, was that the 20-30% in licensing fees that the studio could get were a heck of a lot more - and with a heck of a lot less capital invested - than the 3-6% the retail stores would return. The stores team argued in vain that there was a lot more at stake than just the return - there was an untold return when you looked at it from a marketing and brand engagement perspective. The problem was that at the time they weren't sophisticated enough to get a lot of customer data or market basket analysis out of their customer purchase history - so they couldn't prove it.

Times have changed, and I think Disney's reacquisition of the retail arm of the brand demonstrates that. With the combination of online and in-store, you can get an enormous wealth of customer information, and the analytics tools are strong enough (they almost always have been, actually) and user-friendly enough (something they haven't always been) that you can get a lot of insights about your customers these days. Disney has shown signs of understanding that it's about more than just sales - I read somewhere about their strategy in the UK, and how they are much more willing to deal on content distribution because they know it helps drive the merchandise, and all the derivative forms of content that go with it - like live shows and special events.

However, I will say that I think the stint that the Disney Stores did with Children's Place was good for the stores. Children's Place ran those stores not as a brand extension of a media property, but as a place to get great clothes and fun toys, which all happen to be coated with the characters that your kids love. And that's the challenge for all of these media companies as they rethink their retail strategies - how to balance the function with the brand, while ensuring that they are measuring the primary strategy behind stores: increase brand engagement.

As a famous media property once said, "We have the technology." The time is ripe for these stores and this strategy to pay off.

Monday, July 14, 2008

Weird results from a study on consumer tech adoption

Last month, TNS Global put out the results of a consumer study on 12 retail "innovations" to gauge consumers' receptivity to them. The study surveyed about 4,600 consumers across 8 countries: US, Canada, UK, France, Germany, Spain, China, and Japan. You can download the report here, and I first learned about it from this article.

The results are kind of weird. The article says research's authors found that Japanese consumers were among the least likely to be excited about new technologies as part of the shopping experience - which, if you've ever been to Japan, just doesn't make sense. The survey asks about mobile phone shopping, interactive dressing rooms, and virtual assistants (in the survey, they specify holographic for some reason), among others - all "innovations" that are actually more than just a dream in the Japanese market. They're not well-established, sure, but they are there. When you look at Japanese respondents' ratings of the "newness" of these technologies, they do give these innovations some of the lowest ratings for newness, which may have impacted how they responded to the appeal of each. I just feel, in looking at those results, that a "why" behind the answers is missing, somehow.

Just in general I would be interested in seeing the results against specific internal-to-a-country geographies where some of these innovations are already established. For example, with the work that Stop & Shop has been doing around "smart carts", one of the innovations covered among the 12, it would be interesting to see how survey respondents in the Northeastern part of the US feel about the technology - since they have had a better shot at actually seeing it and/or using it - than their US counterparts elsewhere.

Another weird result: biometric payments topped the list as the most interesting technology for consumers overall. I contrast that with my experience in Nisswa, Minnesota over the 4th of July weekend - where the Cub Food store, once a Pay By Touch customer, still had the signature capture devices bearing the Pay By Touch logo, but with the biometric scanners all yanked out, since the company is now defunct. Was Pay By Touch before its time? Very probably. But is its time due in 2015? Hmmm. I'm thinking no.

And one more that twigged my interest: the resurrection of the "smart appliance" concept in this survey. I just don't see, as apparently consumers do, the arrival of a self-replenishing refrigerator by 2015. More likely, to me, is the integration of a barcode scanner into mobile phones' cameras, so that you can scan a barcode and add it to your shopping list, rather than a refrigerator that is somehow going to be able to tell me how much milk is left in the carton.

It's a very interesting topic, and I'm glad they did a broader market survey, but I thought the selection of technologies to include was kind of strange - smart refrigerators and holographic sales assistants representing one extreme, vs. social shopping networks (which even survey respondents didn't find so innovative) on the other end of the spectrum.

I think the only thing that can be firmly concluded from this survey is that the Sony Walkman Axiom is true: you can't get consumers to tell you much that is useful about things they haven't imagined yet. That is the biggest challenge about being customer centric - you have to take leaps of faith-type risks and see how consumers respond, rather than following a well-analyzed shopping innovation idea. That kind of faith is not often found in retail, but if you wait for consumers to tell you what they want from the shopping experience, you'll never invent the Sony Walkman of Retail.

Friday, July 11, 2008

Retail's Killer App is Now Free For the iPhone

When I say "killer", I mean in the sense that this is the application that retailers have been worried about (or at least should be) making it onto consumers' phones. What is it? A free, innocuous little app called "Save Benjis", available for download to the iPhone via Apple's new app store. According to the company that developed it, Sol Robots, you can even use the iPhone's camera to snap a picture of the barcode in order to look up prices. It also provides access to product information and reviews, and enables consumers to buy it if they find it cheaper online.

The app is based off of the FindersCheapers website, which also does product search and price comparison. It is functionality similar to Google's product search, or MySimon, though for my part I had not heard of it before today. What makes Save Benjis different - besides being built specifically for the iPhone - is that it is designed for mobile use, for example with preferences to let users specify default settings for data entry fields (in order to minimize typing on the iPhone's touch screen, probably the most awkward part of the iPhone user experience).

I've said it before, but I mean it this time: if retailers have not figured out how they are going to deal with consumers who have access to online pricing - and product reviews - while standing in the store, they better figure something out quick - real quick.

Alas, I am not iPhone-enabled - having just finally gotten my Blackberry to sync with Entourage, I am hesistant to disrupt what works - but my husband is. We'll check it out this weekend.

TechCrunch's coverage of Save Benjis (among other iPhone apps)
LifeHacker's coverage of Save Benjis

Thursday, July 10, 2008

The Retail Customer-Centric Dilemma: Local vs. Unique

I love this post on PSFK, crying foul somewhat over a Trader Joe's sign promoting how they search the world for exciting and unique things for their customers. The post calls out that this sign kind of flies in the face of Trader Joe's efforts to be "local". Which raises an interesting question: how do retailers balance the drive to present their customers with "new and unique", while respecting the more "green" drive to be local?

Don't confuse this with localized assortments - this isn't about how you customize assortments by store based on the customers who shop there. This is more about how you reconcile to big consumer trends - green/local/sustainable vs. unique/experiential/adventurous. I don't think they're unreconcilable, but it goes back to my post from yesterday - if you're going to put your brand out there as tapping into anything green or sustainable, you better be totally transparent about it. So if you do source from, say, Malaysia for that unique root you can't get anywhere else, you better be willing to explain to your consumers how you're not a. exploiting poor Malaysian farmers to get that root, and b. creating a huge carbon footprint to get that poor little root onto your shelves.

Wednesday, July 9, 2008

Why you need to be GENUINELY green

There has been a lot of discussion lately about retailers being more "green". RSR's Paula Rosenblum and Steve Rowen did some research on the topic and found that a lot of retailers are pretty enthusiastic about the idea, and not just because they want to save some bucks. Retailers are up on green initiatives because they see the consumer trend towards valuing more responsible corporate citizens, and they want to position themselves to be seen as such "corporate citizens" when the trend hits its tipping point (are we there already? I don't know...).

The challenge is, when you decide to go green, you better go all the way. Especially in today's world of consumer access to information - and to soapboxes. Witness "This Store Blows", a blog set up specifically for consumers to report retailers that have their front doors open while running their air conditioning in the summer. The blog is NYC-oriented, but as the idea gets picked up, I'll bet you that it won't stay that local.

I don't remember where I read it, but if I find it, I'll update this to reflect it, but I read somewhere that the best green strategy is total transparency. If you decide to go green, chances are you aren't going to be 100% perfect right out of the gate - and that's OK, as long as you disclose where the skeletons are and what you plan to do about it. For example, Marks & Spencer has made a big deal about its green initiatives, but they had to take a step back on some of their plans to reduce the carbon emissions of their delivery fleet - they had planned to switch over to biofuels, but given the debate about the true net impact of ethanol, particularly corn-based ethanol, they decided to wait on that front, but were moving ahead with plans to redesign the trucks to lower the wind profile.

If you're not up-front and transparent about your green progress, you'll become an easy target for quite possibly millions of citizen green-watchers (and more aggressive organizations), who are just itching for a chance to call you on your green hypocrisy.

You know, given all of the raging discussion over on the marketing front about "giving up control of the brand" and letting consumers have more influence and say, it seems like green initiatives would be a great place to practice "letting go" - you're not going to have much choice in the matter anyway.