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.

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.

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.

Image courtesy of ViralBlog

There was also significant debate about whether these deal sites were salvation or suicide for small business, who for years had battled large retailers with deeper pockets.  Many felt daily deals could be the playing field leveller, that allowed the little guy to achieve marketing reach on a budget.

However, while consumers appeared to be prepared to jump on deals, many wondered what the actual redemption rates on deals were at retail.  More importantly, statistics began to show that deals as a long-term customer acquisition tool were weak, with many consumers admitting to cherry picking deals and never returning to the store again.  There were even a few horror stories of merchants being driven out of business by deals that went viral and exceeded all capacity to fulfill demand.

My take at the time was regarded as somewhat contrarian.   I felt that “deals” were not and never would become, a self-sustaining business but rather that, deals, discounts and promotions were and always had been mere marketing tactics. I felt that players like Groupon and Living Social, to name just a couple, had not invented a new business model but simply digitized an old tactic – the price cut –  that had existed since the beginning of time.

If there was anything impressive about deal sites, it was perhaps the massive uptake they could achieve with their offers.  When Gap ran a $50.00 gift card offer for $25.00,  they sold half a million of them.   It was like the difference between putting coupons on car windshield and dropping them from an airplane.  But the degree to which an offer like this actually paid off for the GAP is still unknown.  Groupons were notoriously difficult to measure at point of sale.   Some argue that the offer did further damage to the already waning GAP brand.

As consumers, we tend to be wowed by digitization.  Digitizing things tends to make old things look new and cool again but the shine wears off fast.  If there’s nothing fundamentally new or game-changing about the concept, we lose interest quickly and move on. And it would appear that many of us have gotten over daily deals.  Because underneath the shiny exterior, these were just coupons and does the world really need another coupon?

Last week Techcrunch reported that in the last half of 2011 alone, an unbelievable 798 daily deal sites folded.  By the end of 2011, Groupon’s share price had slipped below its IPO level, as the company was plagued with accounting scandals and reported retailer acquisition troubles. Some even began referring to Groupon as nothing more than a thinly veiled “ponzi scheme.”

What lies ahead for daily deal sites is unknown.  More may be born and almost certainly, more will die.  A few might innovate and create real value propositions.  My guess however is that eventually the surviving deal sites will simply be swallowed up into larger online entities.  Every major player including Amazon, Google and Facebook will have a daily deal arrow in its quiver but they will be reduced to being nothing more than one of many marketing tactics available – not businesses unto themselves.

UPDATE:  Following the posting of this article, I participated in a discussion with Natasha Mitchell, Host of the Australian Broadcasting Corporation’s Life Matters, on the future of daily deal sites.

Here’s the audio of that program.

Amid the sounds of tearing gift wrap and popping champagne corks, ailing giant Sears Holdings Corp. announced over the holidays its intent to close as many as 120 stores.  This of course, came as little surprise to the industry that has witnessed the slow motion train wreck that Sears has become over the last several years.  The company has desperately been throwing a variety of ideas against the wall in the hope that something sticks.  So, far nothing has.

Yesterday Bloomberg news quoted Sears Chief Executive Officer Lou D’Ambrosio as saying that a combination of more technology and physical store improvements would help to put the retailer back on track and that Sears has to get better at delivering what its customers want across multiple platforms.  Mr. D’Ambrosio by the way, came to Sear’s by way of companies like Avaya and IBM, so he’s clearly no lightweight in discussions around technology.

Few would argue with the idea that Sears lags technologically or that its stores are dingy and dilapidated.   Even fewer would dispute the truth that Sears has to execute across multiple channels to be successful – that’s just table-stakes in today’s industry.

When tactics are mistaken for strategy

The problem I have with Lou D’Ambrosio’s thinking is that I believe Sears real problems are far more fundamental and critical.  In fact, I would argue that both the lagging technology and shoddy store conditions at Sears stores are symptoms of a far more deadly syndrome and one that goes to the very root of the company.  In my opinion what’s killing Sears is a complete and utter lack of clear and forward-looking vision.  No one has created a cogently articulated picture of what the Sears of the future looks like.  No one has made a promise to consumers about delivering something remarkable or uniquely valuable.

It’s a classic example of a business mistaking tactics for strategy.  Last year the “strategy” was licensing store space to Sear’s vendors.  This year it’s renovations and technology.  Who knows what will it be next week, month or year.   Certainly not the store staffer responsible for representing the brand to the consumer.  And therein lies the problem.  Sears has lost all sense of brand essence and purpose.

The one and only question

Frankly, there’s  only one question that the leadership at Sears needs to answer.  “What can Sears offer the world that the world can’t get somewhere else?”  The answer to that one question becomes the cornerstone for the entire strategy going forward. It becomes the prime occupation of every Sears employee – from Mr. D’Ambrosio down.  The answer to that question is all that matters.

If the answer is “nothing”, then there’s no technology or store renovation plan on earth that will save Sears.

The recent launch of Amazon’s price check app was greeted with everything from retailer outrage to government sabre rattling!  Some even called it evil!  Really? An app…evil?

In case you missed it, to commemorate the launch of the app, Amazon offered consumers up to $15.00 off their purchases if they used the app to price check items in local stores, before ultimately buying the same items on Amazon.  So, Amazon gets the pricing data and the sale, the consumer gets the discounts and the goods and the local retailers gets the pleasure of being the not-for-profit showroom. 

As you can imagine, this caused an uproar.  Retailers, industry associations and even a U.S. Senator joined the appeal for Amazon to halt the promotion.  Some felt Amazon was preying unnecessarily on brick and mortar retailers when they could least afford it – during the holiday sales run up.

Many cited Amazon’s “unfair advantage” on pricing.  I’ll grant you, the playing field isn’t perfectly level.  Amazon’s exclusion from having to charge sales tax makes it tough on their brick and mortar rivals but that isn’t exactly a new situation.  Online retailers have never been required to charge sales tax in states where they have no substantial physical presence.

If the only discernable difference between you and Amazon is the sales tax, you never had a chance in the first place.

Among the new rules of retail, there’s one that’s ironclad.  If your products, services and/or overall customer experience are not so substantially different from Amazon’s that you defy direct comparison, your life expectancy is limited.  And there’s no level of outrage,  complaining or Senatorial intervention that will change that.  In fact, Amazon won’t be your only worry – every competitor is potentially lethal when you lack any notable competitive differentiation.

And if you really don’t like Amazon’s price check app, brace yourself.  As smart phone sales continue to grow exponentially, more and more consumers are going to be wielding the likes of Google Shopper, Red Laser and a host of other apps aimed at directing consumers to the best possible price – and all other things being equal, they’ll take it.  The best retailers will focus relentlessly on ensuring that that all other things are in fact, NOT equal.

It’s just this simple:  Differentiate or die.

One thing I hear very often from C-level leaders of companies when I’m presenting on the topic of social business is “I don’t use it, but I totally get it”.   They claim to understand the relevance of social networks and social media but simply choose not to use them.   They frequently cite a lack of time as their reason for not taking part personally, yet also claim to have a clear sense of how social media can be usefully deployed by their companies to engage consumers.  They don’t use it but they totally get it!

Of course only half of the statement is true.

Look at it this way; would your company hire a CMO who had never watched a television program? If your CFO had never constructed a budget, reviewed a P&L or read a balance sheet, would you have faith in them to manage the company’s finances?  Chances are we’d find this lack of core understanding simply unacceptable. Yet we somehow accept corporate leaders taking a pass on social business.  Why is that?

And what precisely is it that is diverting C-level attention away from what is arguably the most significant communication revolution since the printing press?  What level of email or voicemail proliferation is depriving them of the 5 minutes it takes to set up a Twitter profile, just to see what all the fuss is about?  Aren’t they even a little interested to see what their customers have to say about them on Facebook?  Shouldn’t they be?

The truth is the choice to opt out of social is just that — a choice.  And moreover, if it were any other aspect of the business that was being so openly ignored, we’d consider it negligent but because we call this “social” it’s somehow considered extra-curricular and optional.  It’s not considered an essential tool like finance, operations or human resources are.

Social business is not something that you read a book on and understand.  You have to make it a discipline.  You have to witness for yourself how connections are made, relationships are built and value is exchanged.  In order to get it, you have to do it.

The C-level leader of the future won’t be excused from social business.  At very least, a solid functional capability and understanding of social networks will be expected – no different than acumen in finance, marketing and supply chain management.  The use of social and professional networks both internally and externally will be as common as email is today.

The bottom line is that any corporate leader who claims that social business, media and networking “isn’t for them” is either coasting to retirement or running from their responsibilities.

If you own a credit card, it’s entirely possible that you’ve run into situations where your card won’t work.  Maybe your credit limit was exceeded, your mag stripe lost its mojo or maybe the entire payment network was just temporarily down.  Whatever the case, they’re not pleasant situations but can usually be overcome with some other method of payment –  cash, debit, or another credit card perhaps.

What you’ve never had to worry about is dealing with a credit card with a dead battery.   But that’s precisely what could happen in a world where all payment methods are contained on your mobile devices.  When you need it most, you may simply not have power.   Imagine travelling and running out of juice, just as you need to buy a ticket for a departing train.  Or having your phone die just as your bill is presented to you in the restaurant.

The recent introduction of the iPhone 4S brings this potential problem to the foreground, with users complaining of as little as 5 hours of battery life.   And plugging in isn’t always possible when you’re on the go.

It’s a problem that will need to be solved and there are several possible ways.  Either device manufacturers will need to extend battery lives considerably or users will have to carry backup power supplies.

There is also a potential third solution in the form of inductive charging zones, which would enable wireless re-charging of mobile devices either on or in the proximity of a charging station built into various surfaces.  In other words, surfaces in restaurants, on trains, airplanes and anywhere that people are on the go, will be equipped with inductive charging technology, keeping devices charging while idle.

As we struggle to get our heads around the significant issues of privacy, security and banking infrastructure that mobile wallet presents, what could ultimately undermine its speed of adoption may come down to simple battery life.

Technology has given rise to a steady evolution whereby consumers are increasingly becoming producers. Music, publishing, printing, design, software development, and video are only a few of the areas that have been touched by this rapid transformation.   With it has come massive economic disruption as entire industries, like the printing industry for example, have felt the effects of the “pro-sumer” movement. But what if we could take it a step further and move from being mere producers of data, media and content to becoming manufacturers of actual physical products?

Imagine a world where we can quite effortlessly produce many of the household items we need on a daily basis, such as tools, household accessories, toys etc., What if many of these things could be manufactured in the comfort of our own home.  Imagine having the ability to create the things we need, as we need them, one at a time in any design we prefer.

Items created using 3D printing technology

Now, what if I told you that what I just described is not only possible, but that by 2020 it could be commonplace?

Welcome to the world of 3-D printing.

3D printers create objects by stacking layers of material – often metal or plastics – onto one another in the form of the desired object.  Designs are based on three dimensional digital models that can be created using simple and accessible software.

Originally used by manufacturers to build expensive prototypes, the technology is quickly scaling down in affordability with commercial grade 3D printers available on the market for as little as $15,000.00 and a low-end desktop unit for as little as $1,200.00.  And while that might still sound like a pretty steep price tag, consider that the first Sony Betamax retailed for well over $1,000.00 in 1975 dollars, a price seen as prohibitive by many consumers at the time.

While the widespread household use of 3D printing could take a while to catch on, it’s fascinating to consider the radical impact such a change could have on our economy and the manufacturing in general.  How many items that we rely on a supply chain of businesses to produce, could simply be made as needed by consumers themselves?

It’s also fascinating to think about how this technology could be used by children for play and education.  Could 3D printing be the 21^st century version of the chemistry set or Lego kit?

Here’s a video with more on 3D printing technology and it’s potential to change our lives.

[youtube]http://www.youtube.com/watch?v=Q-uhoww_W_I[/youtube]

If you use Google maps, then you’re probably familiar with Street View.  As the name suggests, Street View allows users to literally fly down to street level and have a 360-degree look around.

In April of this year Google began expanding the concept to include 360-degree photography of interior business spaces within Street View functionality.  Now the program is officially rolling out in Australia, Japan, the U.S., and New Zealand and is focusing exclusively on small businesses including restaurants, bars and retail stores. Businesses who want to have their location photographed by a “Google-trusted” photographer have to apply.

This is about more than pretty pictures

According to Google, the idea behind shooting interiors is to provide potential customers with immersive imagery that would simply make them more comfortable with deciding to visit businesses.  While that is undoubtedly one outcome, I think there’s either more to this than Google is admitting to at the moment.  Or it could be that they are missing out on a much larger opportunity.  Given Google’s savvy, I tend to think it’s the former.

The opportunity lies in the astounding fact that almost half of all small retailers in North America do not have a website of any kind.  Those that do often have something that looks like a glorified yellow pages ad –static and outdated.  It’s a segment of the market that is woefully lacking in offering consumers any degree of web-based experience.

What Street View Interiors offers is the core of web experience that begins to make a business’ Google Place page feel a lot more like a decent website.  My bet would be that that’s exactly what Google wants business owners to begin to regard their Places page as – their website.  A fully baked Places page now can contain reviews, maps, directions and telephone numbers, offers and an immersive 360-degree tour of the location and surrounding area.  Add in applications like Google Checkout, and you have a fully functioning website with e-commerce capability – a quantum leap for the average small retailer.

I’m Seen Therefore I am

Small retailers have never really excelled at e-commerce.  The reason in most cases is quite simple. Many buyers feel that there’s a risk in ordering something from some hole in the wall store they’ve never heard of. Without a well-known store brand name to rely on, most consumers aren’t willing to chance it.  It’s been a perennial problem for small retailers.

Through Street View’s interior shots, would-be consumers can at least confirm that the store in fact exists, lending a significant sense of pre-buy confidence.  If the store also happens to be well kept, stocked and merchandised (at least at the time it was photographed), it might just seal the deal.

In what has become the ultimate game of online chess, my guess is that Google is thinking at least a few moves ahead.  In this case, the strategy as I see it is for Google Places to become the de facto home page and ecommerce portal for millions of small businesses worldwide – a massive opportunity, if they can tap it.