Tag Archives: marketing

Rewriting retail rules

Apple Computer
Temptation greater than Adam & Eve's fruit

Lately, we’ve been focusing on some of the new things that are making us look at marketing in a different way.  We’ve discussed social media, shopping apps, on-line gaming and auctions, plus the myriad ways marketers make money by using badly-disguised “tricks”.

Yet one thing missing here lately has been report of innovative bricks-and-mortar retailing.  Not surprising, as we read about the consistent quarterly downturn of majors such as Walmart, The Gap and so many others.

While savvy chains like Target, Tiffany, Costco, Publix — plus our frivolous favorite, Gumps — are doing well or just holding their own,  let’s admit it, many chains haven’t added any real “Oomph!” to their operations in a while.

But there is one company you really never thought of as a retailer which  is now making the corporate suits at the chains tremble, and that’s Apple.  From all trade reports, not since Adam and Eve has there been such excitement over an opening.

Ten years after its first Apple Store opened its door, the company has grown “faster than any retailer in history”, fawns a recent feature on USA Today, heralding the opening of their latest New York emporium.  With sales last quarter topping $ 3.2B — an increase of over 90% YTD — Apple is said to be rewriting the rules of retail. (Darn, and we were just learning them!)

What’s amazing is that this growth comes when the entire category (computer retailing) appears to be dying.  Witness the list of chains that have already shuttered all or some stores, or plan to:  Gateway, Circuit City, CompUSA, and Best Buy.  In contrast, Apple plans to add 40 new stores to their current total of 330, all expected to create the camp-outside-night-before-opening fervor they inspire in their fans.

To us, the Apple Store mystique is not entirely new.  We were already onto them way back on 8/24 when we posted about how fun they were.  After parting with beaucoup bucks for an iPad at one last year, well, we simply became groupies like the others…  

Not that we actually hang for hours at these stores, sitting at different terminals, writing a book (as apparently one customer did) or flirting with the quirky Genius Baristas (their “geek” sales team).  After all, we do have a business to run!

But we sure like to visit them.  The stores exude excitement and coolness, like a hot, stylin’ nightclub where you’re a VIP and from where you’ll never be bounced, and finally emerge, hours later, drunk on new tech.

Then, one day, not long ago, the iPad developed a serious problem:  the on/off switch stuck.  So we bundled the baby up and rushed it to the nearest Apple Store.  Like an efficient paramedic, a Genius Barista immediately came by, looked at it grimly and rushed it back-stage.  We feared the worst…

But it was just minutes later that the young Genius emerged with a brand, new iPad.  No muss, no fuss, no questions, and certainly no request for more money.  Could retail be any sweeter?!  

(Did we even bother to ask why the thing stuck in the first place?  The answer is an equivocal “No”.  We simply took the new unit and ran…)

The person responsible for this retailing nirvana is none other than former Target merchandiser-in-chief,  Ron Johnson.  Focusing on the the customer experience and sound assortment strategies that made Target a great place to shop, Johnson did what many said was impossible:  he turned a great computer-maker into a great retailer.

Marketers like to say:  “Well, we focus on our core competency, nothing else. ”  Heck, we’re guilty of that same sentiment.   But we admit we may be wrong here, as many apparently were about Apple. 

It’s not that they even had to go into retail.  Or, as though they weren’t already on top of their game with their numerous “iProducts” and now, the brand new, barrier-breaking iCloud.   And it’s not like Steve Jobs isn’t already a guru, if not a god, becoming more so with each re-appearance of his ravaged body at new product launches.  

It’s just that this is a company that decided to take total control of their brand.

That’s why Advertising Age just named Apple “Marketer of the Year”.   If they’re also named “Retailer of the Year”, well, then the rules really have to be rewritten.

SPECIAL SERIES-Post #2: Aceing ACV

This is the second of a “back to basics” review series  of the marketing process.  For series introduction, see 4/5 post

Now that your multi-element marketing plan is in place, you need to take it on the road.  The question is: where to?  

Allocating marketing dollars is one equation everyone struggles with at some point.  As one famous ad man quipped:  “Half of all advertising spending is wasted.  The key is knowing which half.”

We were gratified for the recent opinion of a blogmaster (those who write these for a living:  the easy life!) that echoed what we wrote about on 11/11 and then again on 3/10 about…fishing.  Daniel Scocco (daniel@dailyblogtips.com) guest-posted on Copyblogger, and we paraphrase that here because it is worth repeating…ad nauseum:

Go where the fish are!

What is the most important factor you need to have if you want to go fishing?
Most people will say the fishing rod. Others will say the bait, or a boat. Interestingly enough, they are all wrong.  The most important element of the equation is the presence of lots of fish.  If you have a lake full of fish but don’t have a fishing rod or bait, you can probably still improvise something that would let you enjoy a fish dinner tonight.  But no matter how great your bait or how cutting-edge your equipment, if there aren’t any fish, there’s no fish dinner…That means…[you need to] target known customers willing to spend money.

 

Remember that we wrote about on 3/10 how ACV — all-commodity volume — is the retail segment keystone because it measures actual sales activity, not just population.  When you target a market with high ACV, you simply have a larger number to bite your bait.  After all, 1% of  millions is something.
 
 Yet there are times when marketers want to go to smaller ponds.  Fact is, high-ACV (“A” markets) such as Los Angeles, Chicago etc, are expensive.  Media costs and, in fact, costs to implement promotional programs there are typically much higher than in B or C markets.
If your budget does not allow this, or if you have a very specific product niche, then focusing on a smaller market makes sense.  But here the key is to know the specific demographic of your target to ensure no wasted dollars.
We urge you to invest in market research (primary and secondary), scanner data and psychographic studies that tell you all about your target.
Segmenting the market is the key to success today, and one that giants like Unilever have down pat with their excellent studies on ethnic and generational groups.  Then, you can tailor your message accordingly.
In short,  if you want to be a successful fisherman today, you’ve got to ace ACV.
NEXT WEEK:   The retailer’s angle…

SEVEN STEPS TO SUCCESS

Last month we listed the top ten MISTAKES MARKETERS MAKE, and we promised this month we would tackle the more uplifting topic of SUCCESS.  (Thankfully, only SEVEN of them…) Technically, doing the opposite of  “Mistakes” should yield success,  but here we address these more specifically:

1.  WALK THE TALK.  This may seem like a “Duh…” but it’s surprising how many companies say they practice marketing but have no actual marketing department, manager or function.  The successful marketer knows the difference  between sales and marketing, and builds the latter in his/her organization to support the sales efforts.

2. PRACTICE WHAT YOU PREACH.  Malcolm Gladwell’s fascinating book Outliers describes a study which proves that to achieve genius level in any profession — be it doctor, lawyer, and yes, even a Rock band — you need to put in a minimum of 10,000 hours of practice.  Successful marketers don’t sit on their laurels and are always honing their craft.

3.  LEARN TO LOVE METRICS.   Most marketers love the power of  words but many hate the push of numbers.  Successful marketers know that only by setting and measuring specific goals can they be assured their marketing plan works…or if they should start looking for another job.

4.  SEEK SOLUTIONS.   Top marketers know they’re not in the business of  manufacturing or distributing widgets.  They’re in the business of providing solutions, either for actual or merely perceived problems.   They live by the famous cement company tag line:  find a need and fill it.

5.  EMBRACE THE NEW.  Smart marketers realize that while they may not personally appreciate FaceBook,  Twitter, Del.ici.ous, or any other of the myriad social and viral networking tools out there today, they know  what they can or cannot do to market a specific product or service.  Then, they make a dispassionate decision whether or not to employ them. 

6.  HARNESS  THE POWER OF PR.  The new social networking tools are popular and powerful because they’re not like advertising, but simply a general concensus on the merits of something.   Advertising may be effective at creating awareness, but there is nothing quite as convincing as a non-paid endorsement from a third party (PR).  Savvy marketers  try to get the “buzz” out about themselves and their products as often as possible.

7.  CRAFT A CRISIS PLAN.  No matter how brilliant a marketing plan or its execution is, it can all come tumbling down during a crisis.  We have seen this numerous times when a product contamination or foodborne illness can bring an entire industry to its knees.   Successful marketers rely on two complete plans:  their marketing AND their crisis one.

NEXT MONTH:  FIVE FOLLIES vs. FACTS!