Published on: June 24, 2010...sponsored by TCC, “changing shopper behavior”
Notes & comment...
If “sustainability” was the keyword yesterday, “connectivity” was front and center this morning, with a focus on how technology has created a new marketing environment that needs to be embraced by both retailers and manufacturers. Some highlights:
Andy Bond, the chairman of Walmart-owned Asda Stores, said that he is passionate about the notion that consumers need to be participants in the businesses that they patronize, that we are entering an era in which “our businesses are run by the consumer for the consumer.” Consumers, he said, are exercising a kind of “collective power” via the internet that might also be called “democratic consumerism,” on a scale never before seen.
Asda, he said, has accepted this reality - in part because it has no choice. After all, he said, there are 200 Asda-related Facebook pages, but only one of them controlled by the company. And so the company has created an online infrastructure that allows shoppers to review products, and the result has been 90,000 product reviews in the past year, read by 25 percent of Asda’s customers. It also has meant creating webcams that allow visitors to Asda’s site - YourAsda - to actually watch goings on at headquarters, in stores, even at suppliers’ factories.
“This is not about losing control of your business,” Bond said. “It is about understanding that you will run a better business if you let your customers in.”
One of Asda’s more provocative ideas - a contest that will reward customers who come up with good ideas with real money. That means, he said, offering five percent of annual savings to whoever comes up with a money-saving idea. Save the company two million pounds, he said, and you can get a check for five percent of those savings.
Zein Abdalla, CEO of PepsiCo Europe, made the same point about welcoming consumers in, pointing out that an internet-based campaign to get shoppers to come up with a new flavor for its Walker’s chips line in the UK led to more than one million entries and four million site visitors.
“Digital is a solution,” he said, a kind of “connecting glue” that is “a way to enter into dialogue with target consumers.” Of course, this also creates business process challenges, he said - because once you’ve invited consumers in, you have to respond quickly. In the case of the new chip flavor, that meant bringing the winner to market in four weeks, rather than the 26 weeks that ordinarily would have been needed.”
Along these same lines, Mike Bosman, CEO of One Digital Media in South Africa, said that consumers “don’t see things the way they are. They see things the way they are,” meaning that they filter all their experiences through they own filter of technology and experience, and then share their opinions with others who do the same thing, creating a kind of “super consumer” of enormous power. “Imagine if they like your product and brand,” he said. “And then imagine if they don’t like your product and brand.”
Of course...sometimes things are not what they seem. The morning led off with students from the City of London Freeman School performing a scripted revue about the impact of technology on their habits and desires - though it seemed more like some adult’s perspective on what he or she thought that teenaged passions and priorities must be. (Sure, there were Lady Gaga referencers...but there also was music from Close Encounters of the Third Kind and Beverly Hills Cop which sort of threw the whole exercise into question.)
But then, at the end of the morning, when three of the performers were brought up on stage to talk about their own buying habits, it turned out that they are mostly concerned about peer pressure and price, and that in addition to Facebook and YouTube, television and magazines play an important role in shaping their buying decisions. Score one for traditional media! (Memo to moderator: always pre-interview your panelists...)
There is, I think, lessons here that we all need to keep in mind.
First of all, we need to remember that teenagers are not a homogeneous group. They have as many differences as similarities, and certainly are shaped by the specifics of their upbringings, surroundings, education, etc... Treat them as a blob, and the quality of your marketing efforts will be equally blob-like.
Second, one of the reasons that internet marketing has taken off to the degree that it has is that adults - you know, the people with the actual money - have adopted it. Kids often don;t buy on the internet because they don’t have credit cards...but they show no compunction about asking their parents to make purchases for them. (This has the added advantage of making it more likely that the parent will pay for the actual acquisition.)
Finally, to quote the writer William Goldman, “Nobody knows anything.” (He was talking about Hollywood, but the same could be said about all of us who talk and write about this stuff.)
Figuring out where technology is going to take us is a highly predictive, subjective and even instinctive business. We know how Facebook and YouTube have grown, but where will they be in five years? What will be their next iterations? And how will these young people respond to all these various influences when they start making their own purchase decisions?
The key, as Bond said, is a level of transparency that embraces the options, listens to the participants, and engages with users in a way that invites them into the retailing and marketing process. The winners, in the end, will be the companies that are facile and nimble enough to know that there are no concrete answers, that there is no finish line.
Here’s the question I would like to have had asked of the hundreds of mostly middle aged white men who made up the CGF Summit audience. At one point, during a Q&A session, referring to the importance of engagement, Andy Bond said that he had Googled his name and found a high level of reaction to something he’d said in an article.
So here’s the question I wish the moderator had asked. He should have turned to the audience and asked, “How many people here have Googled their own name? How many have Googled the name of your company?”
I have no idea how many hands would have been thrust into the air. But the answer, either way, would have been instructive.
I’ll be filing an update from the CGF Summit here in London later this afternoon. Look for an email informing you that it has been posted.
BTW...I’ve finally posted some retail pictures from the Australian leg of my trip on our MNB Facebook page.
Thanks, as always, to TCC ... which is sponsoring “The Content Guy On The Road.”
TCC offers customized retail marketing programs that change shopper behavior - attracting new customers and building customer loyalty...generating 4-5 percent sales increases and expanding basket sizes...generating in-store excitement and creating real and tangible differential advantages for your stores.
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- KC's View:
- Quickly...I got an email this morning from MNB user Chris Anstey in which he responded to a point I made yesterday afternoon...and which I think deserves elaboration here.
I wrote (and you can see the whole piece in the reposting of yesterday’s update at the bottom of the home page):
There are only four US retailers here, and three of them - Walmart, A&P, and IGA - have international connections that explain their presence. Only one US retailer - Price Chopper, of upstate NY - has seen fit to send a delegate here (though there are other Americans from various manufacturers, trade associations colleges, etc... and then there’s me).
It seems to me that for CGF to be a truly global organization, they’re going to have to do a better job of speaking to and attracting US retailers to conferences like this one. There’s nothing wrong with being a Europe-centric organization, or being both Europe-centric and Asia-centric. But you can’t be really global without the US at the table.
To which Chris Anstey responded:
Who needs who most? Does CGF have to woo the US retailer? Or should the US retailers be recognising that their responsibilities for collaboration stretch beyond the oceans? I’ll answer my own question for you! These companies should engage willingly.
The CEO’s hold the keys to the solutions for food industry sustainability and it’s good to see the CGF leaders doing something about it. The followers and laggards, not only in the USA, may get the benefits anyway but need to consider whether they are delivering their own values for their staff and their consumers. They sit on their own operational efficiency drives without working on the sustainability of their raw materials or the consumption of their consumers.
An excellent point. I accept the premise that too many American food retailers are provincial and don’t always see the value of traveling over the Atlantic and Pacific Oceans. No argument here, and I should have included that in my criticism.
That said...it must be noted that a lack of attendance at the CGF Summit is not necessarily exactly the same thing as being unwilling to travel around the world to see new things. One can do the latter with doing the former.
But I’ll stick with my original statement, that if CGF wants to be truly global, it has to figure out a way to get them to “stretch beyond the oceans.”