Posts in e-commerce

Digital commerce redirects the future of retail

June 27th, 2019 Posted by CMO, consumer behavior, Consumer insight, Digital marketing, e-commerce, food retail strategy, Retail brand building, retail brand relevance 0 comments on “Digital commerce redirects the future of retail”

Profile of refined strategy for brick and mortar

In today’s consumer-driven marketplace, staying ahead of food and lifestyle cultural swings, shopping behaviors and the significant sea changes they create, are the most important considerations to marketing strategy effectiveness. Failure to recognize and address these ongoing shifts can negatively impact brand relevance with core consumers.

Case in point:  increased traction of e-commerce occurring in most product categories consumers’ value is causing a domino effect that will drive the future of successful retail strategy. Consumers are pushing harder on their preference for retail uniqueness, differentiation and memorable experiences. In the first of our two-part series we will look at implications of digital commerce to retail, and in part 2 we’ll peel the onion on what’s coming for CPG brands.

Home is where the heart, wallet and shopping reside

As consumer friction declines in e-commerce purchases and fulfillment, the inevitable move to online-ordering convenience will continue to grab share momentum. This trend is starting to amass a variety of ancillary impacts, such as consumer preference for the exceptional retail experience over the mundane. When the very definition of convenience to satiate needs transfersfromregional zones toarmchairs and screens in the family room, retail businesses are now being challenged  to adjust their optics and embrace new cultural (read consumer) priorities sooner rather than later.

  • This is an inevitable transition. In a recent report from Federal Express, the granddaddy of quick delivery is projecting e-commerce growth will double the number of packages shipped to 100 million per dayby 2026.

The point-and-click ease of fulfilling product ‘wants’ creates a companion outcome: less and less venturing out from the four walls of the residence. More in-home purchase and consumption of everything. More online comparison shopping. More emphasis on consulting consumer reviews. Along with this at-home shopping revolution is a declining tolerance for the routine hassles of destination shopping and the time requirements to drive, park and walk. How far will people be willing to go for a shopping experience that has nothing special to offer — what’s really going to pull them from that point-and-click simplicity?

Experience with the endless shelf of digital commerce will adjust expectations of ‘want it now’ and cause people to be less forgiving of retail out-of-stocks and more limited assortments. With it, the added value premium on exceptional in-store experiences goes up as anything that feels commodity-like will yield to the ease of electronic ordering.

Trends ahead and the emergence of micro-trading areas –

Consider the long-term impacts of the decline in car ownership (once a defining metaphor for personal financial success and independence), alongside the emergence of driverless delivery vehicles and drones. Distance-confining legs, scooters and bikes are increasingly common modes of urban transportation. Witness the explosion of online restaurant and ghost- kitchen prepared food delivery that jumps squarely on the never-have-to-leave-home bandwagon.

As retail shopping becomes increasingly commoditized, there is a growing consumer thirst for scarce and transcendent experiences, more personalization and meaningful relationships with retail banners that matter. This may play against the vanilla, conventional character of some chain store concepts that can feel derivative, common and maybe even a bit boring.

By definition, the chain model depends on consistency and mechanization to achieve operating efficiencies and the ability to replicate at scale. Is it possible to rethink the business paradigm to allow for different designs, footprints and merchandise collections more attuned to the community they serve?

As convenience gets a makeover, with it comes a premium on re-casting what a trading area looks like to smaller circles of proximity. Alongside this condition we observe the continued idealization of the “small town” as a colloquial, romantic reference point for aspirational lifestyles. In urban areas this puts an increasing premium on reflecting neighborhood character and shopping within walking distance.

In Chicago, a fair example of this is Andersonville, a northside city neighborhood known for its Clark Street shopping district packed with unique collectible stores, fashion boutiques, local restaurants – all walk-able within a three-block core. Stands to reason this ‘go smaller’ development favors shopping experiences that mirror the lifestyle characteristics and populace of the neighborhood.

For retail we see five implications for planning strategy:

  1. Increased pressure on the viability of destination shopping centers, as convenience is recast within shorter distances from home.
  2. The rise of smaller footprint store designs that align with neighborhood shopping areas.
  3. Emergence of retail concepts based on lifestyle experience more so than the traditional array of shelves and merchandise. Instead the attractions are ideas, emotion and guidance rather than pushing merch off fixtures (a twist on omni-channel commerce strategies).
  4. Recognition that the future is with those who work to build bonds and relationships beyond just stocking inventory at a price.
  • Expect to see a host of novel ideas develop in service of more relevant lifestyle associations such as on-line dating brand Bumble and their wine bar café concept and Taco Bell’s new hotel.
  1. The bifurcation of omni-channel strategies to embrace exceptional experience that reside inside the retail store front while volume objectives are delivered online. How will this symbiotic hand-off work between high touch retail and digital convenience? Only the seamless survive.

Speaking of smaller footprint concepts, if people are increasingly food shopping for meals and menus more so than stock-ups, does it make sense to force them to search for 7 to 12 items in an 80,000 square foot maze? Can food shopping be made more fun and less of a navigational chore by specializing in what’s for dinner?

ALDI, a darling of grocery hard discount, recently announced an expanded test of their new “Local” store concept in the United Kingdom. The 6,000 square foot stores operate with 300 fewer SKUs than the normal ALDI. Proof that hard discount does not mean absence of insight, relevance and creativity.

Larger trend: ‘Extremeification’ of retail in America

Robinhood, the investment platform for non-one-percenters, recently reported examples of the growing bookends of success between the higher and lower ends of the retail spectrum — while the middle falls away. Restoration Hardware (RH) continues its relentless march towards further upscaling its retail roots. After recently posting a 7% gain in sales, RH stock shot up 25% on the related news of its new chic catalog concepts RH Beach House and RH Ski House. As well LVMH (Louis Vuitton Moet Hennessy) and Dollar General are celebrating record highs at the same time in their share prices.

Yoga pant purveyor Lululemon reports Spring quarter revenue of $782 million vs. its period forecast of $755 million, despite increased competition in its category. Last quarter profits hit a record $97 million. Hard discount and heavenly experience collectively show how disparate propositions that lean in heavily on their mission and ethos are advancing.

You have to stand for something — and go all in (go low or go high). In fact that’s really the message here. The future of retail belongs to the innovators who go deep on uniqueness and memorable experiences — which by definition requires focusing the concept and target audience appeal to a specific need and cohort. All things to all people is often a recipe for ambivalence.

Find your core, narrow your appeal, optimize your mission and go for it.

Looking for more food for thought? Subscribe to our blog.

Bob Wheatley is the CEO of Chicago-based Emergent, the healthy living agency. Emergent provides integrated brand strategy, communications and insight solutions to national food, beverage, home and lifestyle companies. Emergent’s unique and proprietary transformation and growth focus helps organizations navigate, engage and leverage consumers’ desire for higher quality, healthier product or service experiences that mirror their desire for higher quality lifestyles. For more information, contact Bob@Emergent-Comm.com and follow on Twitter @BobWheatley.

 

 

 

 

 

 

 

You are now selling sand in the desert…

February 22nd, 2019 Posted by brand marketing, Brand preference, brand strategy, consumer behavior, Consumer insight, e-commerce, Healthy lifestyle, Higher Purpose, shopper behavior, storytelling 0 comments on “You are now selling sand in the desert…”

Navigating the Impact of Infinite Choice

If ever there were a time when sound, informed strategy mattered to the success and outcomes of food, beverage and lifestyle marketing this would be it. Like it or not we’ve entered the era of nearly infinite consumer choices in a media environment of almost countless channels. This requires a new marketing formula.

Thinking at scale today takes on a completely different meaning when consumers are presented with so many options within a click to buy environment. Thus, how should you design for success when you’re ultimately selling sand in the desert? We will answer that question here.

Left to its natural course, food marketing tends to gravitate towards the vanilla middle – an effort to appeal to the broadest possible audience – and in working to address everyone, you end up mattering to no one. When the options are legion this can quickly turn marketing and communication investments into a moonshot without navigation – the hit (or more often miss) driven by luck more than intention.

At various times we’ve written about the importance of putting consumers at the center of strategic planning. Now, we further qualify that statement by saying – in order for a strategic marketing plan to be measurably effective, putting consumers at the center of planning is table stakes. And determining who that consumer is will require even tougher decisions to prune and refocus the definition of the cohort you wish to serve. Why? Because the 80/20 rule is in full force as the vast majority of volume and profit will come from a smaller segment of committed advocates – assuming you’ve planned for relevance to a community of potential believers.

This is the most compelling argument ever for – different

Let’s start with a foundational understanding that the brand must be perceived as special, unique, useful and valuable before there’s any shot at being memorable. No one has the time or mental bandwidth any longer to assess the vast array of options in any given product category. So how do you resolve the reality of inexhaustible choice?

You must start with the intended core user and work backwards. Seth Godin made a cogent observation in his recent book “This is Marketing” when he described the effort behind what may be the most powerful TV commercial ever made – Apple’s “1984” spot for the launch of the Macintosh. The spot aired during the most watched American sports program on earth, the Super Bowl. The majority of viewers would not have understood or probably cared about what Apple was trying to convey in its dark Orwellian mini-movie.

The lesson: it didn’t have to register with everyone to be successful. Godin observed the spot only needed to touch a million savvy creators and early adopters who picked up that Apple was up to something revolutionary. The rest of the viewers didn’t matter, and indeed the rest is history given Apple’s ascent to brand superstardom. Whatever the brand, the audience of committed advocates will always remain relatively small.

It is with the small and devoted cohort where effort and outreach needs to be directed. And those investments should come from a concerted endeavor to push hard at the edges of what’s unique and different in your brand proposition. Here’s the question we often evaluate with clients: how can positioning, audience, product formulation, and the character of the brand, be dialed sufficiently to the right or left so that we’re able to create a new category – one that our client can own?

Who is it for and why?

To dial in your position successfully you then have to know who it’s for and why. It follows if you want to have meaningful relationships with consumers, then imbue your brand with greater meaning. But for whom?

That’s a big question that requires some rigor to answer correctly. Who is going to quickly respond and be drawn like a magnet to your product proposition? Once defined, all eyes and energy must be directed to fully understanding their hopes, dreams, needs and aspirations. Your marketing strategy is then fine-tuned to align with that insight, opening the door for the brand to become an enabler of their wants and needs – in a voice that’s relevant to them – becoming a reflection of their wants and how they’d like the world to perceive their beliefs and priorities.

This is important because purchases now are largely symbolic representations of what people want others to know about what they believe in and think.

The hard truth about marketing

Of note, we’re doing business in an environment overflowing with self-assured claims, assertions and hype. Here’s the difficult pill to swallow: people don’t believe any of it. The counterintuitive basis of effective marketing today is to not look, talk and walk like marketing.

That said, there is a reflexive habit in strategic planning to navel gaze. To focus on the craft of what’s been created, formulated or built. Here at Emergent we totally understand that spirit and where it comes from, after all most brands are justifiably proud of the considerable effort they invest in technology, quality and improvement. But this also sets the table for potential marketing disconnect.

You are not selling a food or beverage

In the same vein as pet food is sold to humans and not to dogs or cats, it isn’t the product that people are buying. What you are actually marketing are feelings, connection, desire, happiness and status. Not stuff, not items, not things in boxes or bags. Not chips or salsa or soup. People are buying a feeling and expression of their status and belief system.

So then, what’s the path to creating a marketing plan with this insight embedded all the way through? It will require all of the hands on the marketing tiller to be empathetic anthropologists of what the biggest brand fans are about.

Here are some areas to focus on strategically:

  • What your audience wants, not what you want to tell them
  • What they believe
  • What they need
  • What they aspire to
  • What story would emotionally resonate with them

The more you invest in seeking to understand, the more likely you are to land on the big idea (one that immediately influences the behavior of the business) and create a voice for the brand that is engaging and is shared. When you seek to improve the lives of your best customers, you earn permission for a relationship with them and the marketing you create comes across less like a transactional maneuver.

If you think this way, it will flow downstream to impact how the business operates. We already know that what the brand does is more powerful than what it says, so there’s an opportunity built into the recipe for authenticity.

Brand trust continues to decline, so the game plan must be to build it, earn it, cultivate it. The reason transparency has ascended to ever higher importance is precisely because people don’t accept anything on face value. Claims and assertions are exactly that. When you verify, validate and reveal the product creation story by letting consumers all the way in, it fosters belief and trust.

10 components of successful marketing  –

  1. You must push for positioning that’s truly unique, different and helps create a new category
  2. Refocus and narrow your audience definition to the smaller community of ardent fans
  3. Devote your insight research to this audience and discover how the brand sits in service of their lifestyle needs
  4. Become an enabler of their wants and desires
  5. Recognize you’re not selling a product but an emotional connection
  6. Activate brand experiences because behaviors speak louder than words
  7. Know that being relevant is more important than being superior
  8. Authentic storytelling to this audience is the path to engagement
  9. Trust is everything…you must earn it
  10. Transparency is the precursor to creating trust

Looking for more food for thought? Subscribe to our blog.

Bob Wheatley is the CEO of Chicago-based Emergent, the healthy living agency. Emergent provides integrated brand strategy, communications and insight solutions to national food, beverage, home and lifestyle companies. Emergent’s unique and proprietary transformation and growth focus helps organizations navigate, engage and leverage consumers’ desire for higher quality, healthier product or service experiences that mirror their desire for higher quality lifestyles. For more information, contact Bob@Emergent-Comm.com and follow on Twitter @BobWheatley.

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