Published on: March 28, 2017by Michael Sansolo
Understandably there are MNB readers who believe we write a little too much about the competitive threat posed by Amazon. No doubt they won’t be thrilled to hear this, but that’s not the only dark cloud on the horizon.
So brace yourself.
There were two incredible examples of potential storm clouds this offered up last week at the annual food marketing conference run by Western Michigan University and both should have you reaching for your umbrella.
Start with the twin German hard discounters Aldi and Lidl, both of whom are revving their engines for an attack on the US market. The session, led by industry veterans Bill Bishop and Bill Bolton, detailed the impact both of the companies have had in markets around the world, biting off market share and hammering profit margins.
What made the session especially eye opening were two key points. First, the new and stunningly more attractive stores being opened by both companies, giving them a greater presence in fresh products and making them an even more significant competitor. In other words, what you’ve seen from both these companies in the past is not what you will see in the very near future. Aldi and Lidl are becoming much more than price merchants.
Powered by those new stores, Bishop and Bolton made the second significant point; they project that the two companies combined are aiming for about $50 billion in annual US sales in just a few years.
In other words, the German retailers are hoping to bite off an enormous chunk of sales in a slow-growth market. That’s going to mean a lot of pain if they succeed because those sales have to come from somewhere.
That alone would be eye opening, but another speech at the conference raised a completely different specter. Kevin Hartman, head of analytics for Google, offered a startling glimpse into the world of the search engine giant and what the future of computing may entail.
Consider that Google says today we’re only using about 1 percent of the computing power possible, which means that big data, the internet of things and topics I cannot even imagine still have vast possibilities of future growth. Hartman also explained that the cost of computing power today is a fraction of what it was five or 10 years ago, which makes so many of these new things possible.
Google’s goal, he says, is something marketers have long wanted to achieve: knowing what customers (or users) wants before they even ask. So that freaky ability of Google to fill out a search for you after you’ve typed just a few letters is going to get even freakier and faster.
Hartman sounded a caution that’s worth considering: patience is no long a virtue. As he put it, “companies that follow trends may never catch up.” Fortune and the future, it seems, will favor the bold.
That list of the bold apparently includes names like Amazon, Aldi, Lidl and Google. Where’s your name?
Michael Sansolo can be reached via email at firstname.lastname@example.org . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available on Amazon by clicking here. And, his book "Business Rules!" is available from Amazon by clicking here.
- KC's View: