Archive for February, 2012

F-Commerce Didn’t Fail. Advertising Did.

Thursday, February 23rd, 2012

By Doug Stephens

Bloomberg recently suggested that F-Commerce (as it’s come to be known) has been failure.   They pointed to retailers like GAP and JCPenney beating a path out of Facebook, citing their disappointing results.One Forrester researcher was quoted as saying that selling on Facebook is “like trying to sell stuff to people while they’re hanging out with friends at a bar.” , implying that Facebook was simply too social to be worth a retailer’s time.

So, while only a year ago most were hailing Facebook as the new frontier of retail, it seems to quickly be becoming a ghost town, as brands and retailers shutter their f-stores.

Advertising Still Sucks

But consider this; how many commercials on TV last night were memorable?  How many ads in the magazine you read last week stood out?  How many retail experiences in the last month left you delighted and rushing to tell friends about it?  Can you remember any? My bet would be not many and perhaps none.

So should we really be surprised then that consumers have been largely unimpressed with the efforts of retailers on Facebook?  After all, most have done little more than transplant versions of their online advertising collateral to Facebook. Why should we as consumers be excited?  If the truth be known, neither GAP nor JC Penney has done much to excite customers for at least decade or two, so can we really blame Facebook for the failure of their F-Stores?

Beyond the Like Button

If we’re honest about it, most retailers simply are not being creative enough.  Almost none have woven their products skillfully into the social mechanics of Facebook.  And I can’t think of one that makes it fun or cool to shop with friends in their Facebook stores.

The vast majority of brands haven’t figured Facebook out yet.  And who can really blame them.  Most are coming off a hundred years or so of what author Seth Godin refers to as The TV Industrial Complex – the marketing construct in which the goal was to advertise on TV so you could sell enough product to buy more TV advertising and all in an effort to interrupt consumers as many times as possible. There was no need for brands to be interesting or creative.   As long as they could keep buying lots of advertising, they succeeded.

Facebook doesn’t work that way.  It isn’t TV and in many ways it isn’t even the web.  It’s different, it’s organic and living.  And perhaps what’s got marketers most freaked out is that Facebook tells you when you’re boring, when you need to work harder.  It’s almost immediate in passing its judgement on your creativity or lack thereof.  Scary stuff for an industry accustomed to monologuing with consumers.

Shopping IS Social

I still maintain that one day, Facebook (or its successor) will be recognized as one of history’s great shopping venues but marketers are going to have to be far more ingenious, inclusive and socially sensitive in their approach.  That doesn’t mean putting like buttons on ads and calling it a day. It’s means creating amazing digital architecture that lets people go shopping with their friends.  It’s about staging exciting Facebook events people can share with their friends and family.  It’s about crafting unique, memorable and socially sticky content that people can’t get anywhere else.  It means NOT advertising.

As for the belief that social hangouts can’t be places of commerce, it’s simply unfounded.  In fact, we have only to look as far as the local market, mall or Main Street to understand just how social shopping really is.   Shopping is and always has been as much a product of sociology as it has been a driver of commerce. The two are joined at the hip.

All of this is more than just a mere tweak for marketers.  It’s a massive and historic shift.  In essence it’s a transition out of the industrial advertising era into a new and enlightened age of marketing.   And it may be a transition that not all brands are capable of making and frankly, perhaps that’s a good thing.

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Posted in Advertising, Behavioral Marketing, Branding, social media, Strategy, Technology, Trends

The Future is Temporary: Retailing in A Pop-Up World

Tuesday, February 21st, 2012

By Doug Stephens

Reebok pop-up store New York City

The concept of pop-up retail has been around for more than a decade.  Vacant, a company out of Los Angeles, California is credited with pioneering the concept of pop-up shops in North America, after seeing similar concepts in Tokyo.  They observed that Japanese consumers would sometimes line up for hours to buy limited edition goods.  Once stock was sold out, the store would simply close until new stock arrived.  This led Vacant to innovate the current model for pop-up, whereby stores would open for a defined period and then simply close, only to pop up later in a different location.

Until 2007 however, pop-up shops, while intriguing, were regarded largely as a novelty.  The retail industry remained dominated by the foundational precept that stores were more permanent things.   The goal of most retailers remained long-term, favorable leases in locations with trusted consumer traffic levels. This was how retail was done and how it was won.

Popping Up Out of the Ashes

The economic collapse of 2008 brought new opportunities for pop-up retail.  Landlords who were reeling from fallout in the commercial real estate market entertained previously unthinkable, short-term agreements for their space, paving the way for a host of temporary retail installations.  From Los Angeles to the mean streets of New York, the economic meltdown spurred a brilliant series of unique and daring pop-up concepts.

Above all else, these concepts seemed to breathe new life into a retail industry that had become fat and lazy, in the days leading up to the financial crisis.  Retail had too long depended on excess consumer spending to buoy demand. Only when the bottom fell out of the market was it apparent just how unremarkable most retail had become.

In a sea of sameness, these unique and fleeting pop-ups caught the attention of consumers and made retail interesting again.

From Novelty to Strategy

Today, pop-up has become a legitimate channel strategy.  Everyone from Walmart to Hermes has turned to these temporary formats to reach consumers where their full-line stores couldn’t.

Entire cities have embraced the concept of pop-up retail as a means of revitalizing urban neighborhoods.  One example, Oakland California’s Pop Up Hood concept, offered 6 months of rent-free space to independent merchants to test out their retail concepts in designated parts of Oakland.

Even entertainment moguls Jay-Z and Kanye West opened a pop-up shop last year in New York City to commemorate the release of Watch the Throne.  The store was open for one weekend only.

Technology is also fueling more creative approaches to pop up.  Augmented reality applications are transforming inanimate spaces into engaging consumer buying portals – trips through the looking glass.  Net-A-Porter’s recent launch of its Karl Lagerfeld line, whereby the outside of the store became a living interaction point for mobile device wielding consumers, is one such recent example.

Net-A-Porter uses augmented reality to wow crowds at their Karl pop-up stores

Commercial Real Estate Redefined

What these and other concepts point to is an historic move away from retail being solely about established patterns of consumer traffic and purchase intent based on familiarity.  The new consumer is seeking surprise and excitement from retail and is in many ways returning to its pre-industrial revolution roots and the concept of the travelling market.

For the commercial real estate industry, the writing may be on the temporary wall.  The success of pop-up retail signifies the need for less permanent real estate overall.  It’s logical to expect more retail chains to move to a mix of flagship (got to be there) locations and opportunistic, temporary installations to create excitement and capture sales. The commercial real estate professional of the future may be relied upon as much for their keen sense of guerilla marketing instinct as they are for their knowledge of the market overall.

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Posted in Store Experience, Strategy, Technology, The Future, Trends

Let’s Get Visual: Marketing in a post-text world

Sunday, February 12th, 2012

By Doug Stephens

As you read this post, you are digesting a form of content that represents a quickly diminishing proportion of the total web content you consume each day.  The written web is steadily becoming a thing of the past.

By 2013 Cisco estimates that 90% of all consumer IP traffic will be video.  If you think this sounds implausible, consider that even today video represents well over 50% of all consumer traffic.  Social bookmarking site Pinterest recently hit 10 million unique monthly users faster than any other site in history.  Infographics, a marriage of visual design and data, have become a common means of helping us digest and contextualize complex data sets.  Even traditional newspapers are increasingly turning to the infographic as a means of getting the story across to readers, giving welcomed relief from the graphs, charts and tables traditionally used by media to convey data.  Even resumes are moving from text to graphics, with sites like visualizeme.com and others turning the traditional, dull resume into a thing of the past.

This move to a visual web makes sense when you consider the avalanche of information that the typical consumer is coping with today.  A 2009 University of California San Diego study estimated that the average consumer was already being exposed to about 34 gigabytes of information or 100,000 words per day.  With dramatic increases to both processing power and the ubiquity of mobile technology in the 3 years since the study, one can only assume these figures would be even more mind-boggling now.  Thus, it follows that our minds are seeking visual breaks – a respite from the enormous glut of data coming at us.  Images and video give us that.

What it means for brands, manufacturers and retailers who haven’t already realized it, is that the days of telling customers about your product with words are coming to an end.  Traditional catalogs, brochures and selling aids won’t cut it in a world where consumers are seeking visual and audible alternatives.   Your word-based pitches will be shunned.

The fundamental reality is that as our capacity to process information steadily increases, our predilection for words will steadily diminish. Our brains are subconsciously seeking messages that provide our eyes these visual resting points.  In other words, the brand with the best pictures, graphics or video will likely win – regardless of what they sell.

This means reimagining your business, your brand and your product through all visual tools at your disposal. It means exploring your brand through the lenses of Youtube, Flickr, Pinterest, Tumblr and other visually based social tools.  It means revisiting websites with an eye to crystalizing thoughts and ideas into images and sounds, instead of words.  It means showing consumers instead of telling them.

Welcome to the visual web.

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Posted in Advertising, Branding, social media, Strategy, The Future

Why Amazon Needs Stores

Tuesday, February 7th, 2012

By Doug Stephens

It was reported this week that behemoth online retailer Amazon is planning to open a brick and mortar store location in its home market of Seattle.  The intent, it’s speculated, is to create a destination for the Kindle Fire and a selection of exclusive Amazon content.

Given Amazon’s size and dominance in digital channels, one has to wonder why it would bother with brick and mortar stores at all.  Surely it’s not an effort to make Amazon a household name – that’s been accomplished.  And would the unit Kindle sales of a few stores really make a strategic difference for the company?  Probably not.  In fact, one could argue that the magic of Amazon’s business model is that it moves enormous amounts of product without the burden of operating physical locations. So why stores?  Why now and to what point?

The answer may lie in one very simple truth.  When I try to picture the Kindle Fire experience, nothing comes to mind.  There is no tangible, sensory or emotional connection to the product at all. Whereas with Apple, I can clearly conjure images of crowded stores with people aged 6-60 lining up to try the new iPhone or iPad, my Kindle Fire recall is a vacuum.  And I doubt that I’m alone.

In truth, what Amazon needs to sell over and above the Kindle Fire, is the “Kindle Fire Experience” –and that’s where stores play a strategic role.  It used to be that if you wanted to demonstrate the experience of your product, whether it was snow tires or breakfast cereal, you just bought lots of television advertising.  In fact, in 1965, a mere 3 television ads in primetime bought you 80% of the viewing public!  Today, that number is closer to 117 and that only guarantees you the potential to reach your audience – there’s no guarantee your ads will actually be consumed.  I can’t think of many brands that can afford 117 primetime television ads.

The Store is the Ad

This all signals a much deeper and more historic shift in the strategic purpose of physical stores, which I’ve alluded to before; that being that physical stores will increasingly serve as a distribution channel for brand experiences as opposed to simply products.  On an escalating scale, stores, not televisions, are where people will have their first encounter with new brands and products. The store will serve as the front end of the experience, the buzz agent and the catalyst for consumer evangelism and purchases across multiple online and offline touch points.  So, the store is no longer the end of the marketing cycle but rather the beginning – the living, breathing advertisement for the brand and product.

I believe that Amazon has recognized this fundamental shift.  The question becomes whether the company that did so much to disrupt our concept of the e-commerce experience, can apply the same craft and cunning to the in-store experience.

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Posted in Branding, Store Experience, Trends