Counterfeit irony: Four credits for deception in social networking

It used to be that colleges were a feared breeding ground for anti-corporate militants. Now, it seems, college students are turning activism into a form of socially-networked brand protection. This week there’s a case where a sponsoring corporation wanted to advocate socially responsible behavior among consumers – and, in a great twist of irony, ended up using ethically questionable tactics including guerilla marketing and college credit for a sponsored course mostly created by a corporate trade organization to do so.

The story emerged at Hunter College in NYC, where last week the Faculty Senate recently met to Monday to denounce a course taught last spring. The course was funded by a $10,000 grant from Coach (whose CEO Lew Frankfort is a Hunter alum, who claims his concurrent 1 million dollar donation was completely unrelated). But suspicious course content and a well-timed donation are not enough to warrant faculty censure, of course. What brought charges of violation of academic freedom was the course content, its purpose, and the methods students were asked to use – not to mention that the professor claimed to have been coerced and was unqualified. Add in the fact that the Hunter College faculty includes well-known critic Stuart Ewen, whose most recent book is titled PR! A Social History of Spin, and you've got a full-blown recipe for disaster.

What exactly happened to be of interest beyond the ivory walls?

It starts with Coach and other companies, who are always worried about counterfeit products, even having gone so far as to develop their own nonprofit trade group, the International Anti-Counterfeiting Coalition (IACC). They decided that rather than do all of the legwork themselves, it would be much better to compel student (who make up a fair number of those inclined to purchase counterfeit items) do it form them via social network sites. Using Facebook and MySpace, the Hunter class invented a blogging student named Heidi Cee, who posted an ongoing story about the loss of her Coach bag, a gift from a boyfriend, her subsequent search for it through posting a reward (more than the bag’s original worth!!!), its return, and her discovery that the returned bag was not her original but a counterfeit. Her personal lesson, which she shares with her network friends, is to check out the IACC’s website and start a campus activist organization to end counterfeiting. Only after an on-campus event pitching the IACC message did the class revealed that Heidi was fake.

I’ve spent about twenty years teaching 18-24 year olds, and my limited wisdom tells me the students couldn’t have “known better” without some adult guidance. After all, isn’t it the college’s job to teach and model ethical behavior to the future generation of business and political leaders? Of course the students behind the charade thought it was great fun: they were handed power tools without the instruction manual. The professor in charge claimed that with a pre-set curriculum and hand-holding by the IACC, he could not present the counter arguments, the limits, or even the ethical dilemmas raised by the class project (the IACC has supposedly adjusted its curriculum packet and puts the blame back on Hunter for assigning an inexperienced professor to the course). The Faculty Senate Report points to the fact that the IACC approved the students’ plan to create Heidi Cee and use a deceptive Facebook account. One student’s justification – “People do crazy shit on Facebook every day” – highlights the fact that the ethics of corporate-sponsored “crazy shit” were not something they were taught. The real question is: would I write a recommendation for (and would you hire) someone with no ethics training on their resume?

Of course, even if the students and faculty are found to be at fault, it's clear that the IACC must have had at least some involvement with these highly questionable tactics. Marketers walk a self-imposed line every day, trying to sing the praises of their products without lying outright to potential customers. Sometimes they go over the line, and when that happens, it's the job of consumer advocacy groups and perhaps even a few key government bodies to step in and get them to stop (though the latter group is pretty inept, so I'd count on the former). But questionable marketing practices will continue, and they may even get more outlandish as brands struggle to find new ways to connect with consumers.

Still, maybe it would have been better for the IACC to wait until the students graduated and just start using that MRI on their brains…

Tags: marketing, ethics, advertising

Safeway takes its private label public

Private label brands have become a staple at grocery stores, big-box retailers, discount warehouse clubs, office supply stores and pretty much everywhere else you can think. While private label items were once sold as the low-cost alternative to higher price, higher-quality items, today the items typically carry a small but still appreciable discount over their name-brand cousins, but at a price that is similar to and sometimes even exceeds that of the higher-priced goods.

Grocers in particular have jumped on the private label bandwagon, as goods stamped with their own name can often bring in 200-300% more gross margin than similar name-brand products which can be pretty significant when margins hover in the low- to mid-single digits.

Interestingly, some private label goods are doing so well, and have such a positive reputation in the marketplace, that they're starting to become full-fledged brands of themselves. That's precisely what has happened to Safeway's O Organic and Eating Right brands, as Supermarket News notes. Both brands have seen sales surges recently thanks to renewed interest in healthy eating and of course the gigantic sales monster that is organic. Just last week Safeway's CEO noted that O Organics recorded 2007 sales of $310M, and is expected to do $400 million "with ease" this year, with sales in the first quarter alone up 50%.

Wanting to capitalize on that trend, the company is going to be selling some of the products in this line to other grocers and retailers, who will basically treat it like any other name brand. To do this they're forming the Better Living Brands Alliance, which includes, "manufacturing, marketing and distribution companies as brand licensees; co-pack and distribution partners to provide a supply chain network; and support from EMAK Worldwide, a group of marketing agencies based in Los Angeles, for communications with consumers, and Crossmark, a professional services company for consumer goods based in Plano, Texas, for communications with retailers."

Safeway is taking a bit of a risk here by stepping outside of its typical role as a retailer and entering the murky world of product distribution and sales, however given the margins they're probably making on the O Organics and Eating Right goods, it may be a great hedge against store traffic slowdown or average ticket size decrease due to economic uncertainty and slowdown. If nothing else, it's a savvy play to try and take advantage of our current craze over organic and (perceived) higher-end foods.

Tags: private label, shopping, retail

Wii Fit: Better than chocolate for Mother's Day?

I’m a cynic: there’s no question about it, so it’s no surprise that I tend to think of Mother’s Day as greeting card and florist marketing gimmick. The original Mother’s Day was more to my liking: It was initiated after the American Civil War , as a day where women stood up for peace and justice world wide.

Cynicism aside, I’m still sending my mom a card and I sure hope there’s chocolate and breakfast in bed for me on Sunday. And in case anyone I know is reading this, I could really use a new yoga mat…

But wait! Maybe my family should get me the new Wii Fit attachment (which won’t really be available until May 19th, but when pre-ordered from Wal-Mart, comes with a $10 gift card). That way I can do yoga and exercises from the privacy of my own living room, using the patented Balance Board to check my stance and chart my progress in weight and body mass index over time.

Wii Fit is Nintendo’s latest expansion of its product line. The wildly successful Wii has appealed mainly to a certain demographic (you know who they are and they’re probably not reading this blog). Targeting mothers is an interesting strategy and a smart one, since women are major consumers, especially for fitness products. The Wal-Mart promo is designed to tap into the shrinking pool of spending money, literally banking on the fact that people might be more willing to make discretionary purchases on technology for special occasions and gifts. The Wii Fit seems like a bargain coming in at $89.00 (with that $10 gift card) at Wal-Mart, which is less than the average $138.00 people spend on their moms, wives, and grandmothers. Consequently, the retail giant has set up an entire Mother's Day strategy behind the new device, hoping that customers in the store for a Fit might pick up a few other items while they're there.

Compare that to my Mother’s Day list: a new yoga mat runs about $20, plus maybe a new membership card ($55), and a fancy new metal water bottle ($20) and you’ve spent about the same amount. The WiiFit should last a bit longer than my ten punch yoga class card, so it’s probably better in that regard. But let’s remember something: it’s an attachment. You’ve already got to have a Wii: that’s an additional $200 if you forgot to buy one for your kids over the winter holidays.

On the other hand, if you really wanted to get me some useful technology, I’m still pining for an iPhone…

Here’s the big question, though: will the Wii Fit be worth the price and get used? Nintendo is banking on the footprint to be a big seller based on the fact that it’s fun. They are careful not to claim that it’s a weight loss device or that it should in any way replace going outside for a bike ride or walk. Claiming it "helps you get to know your body better," they’re smart enough not to tie it in too closely to fears about the "obesity epidemic." That’s good because there are countless similar gadgets that end up in garage sales across the US. In 2005, Jackie Chan had a similar product called the J-Mat Fitness that allowed users to work out with the movie star and martial arts master and track their progress. Of course, the Wii itself is what makes the Wii Fit so appealing, piggybacking off an already successful and well-designed product.

Interestingly, the Wii Fit has already been for sale in Japan for a while. The creator, Shigeru Miyamoto, in pitching the Wii Fit in Japan, talked about his vision for its use – for family fun! This is interesting, because those sorts of activities are more in line with Japanese cultural values regarding family time. Americans may think they’re all about family values, but culturally, we are the people known for bowling alone. I do yoga with my kids and more often with my friends at the yoga studio, but keeping track of my exercise patterns and weight loss are solitary pursuits. At the same time, both men and women say they exercise more consistently when it’s a social activity – hence the worldwide success of low impact chains like Curves (also not exactly designed to make you into Lance Armstrong).

Here’s where the Wii Fit differs from DDR (Dance, Dance Revolution) the phenomenal dance game that has become an exercise tool for countless after school programs, phys ed classes, malls, and recreation centers. DDR is inherently social – most of the time, you do it with someone. Indeed, it’s a competition. I have the unfortunate feeling that for many moms who are the recipients of Wal-Mart’s special offer, the Wii rrFit is destined for that drawer in the entertainment center that’s a repository for extra remotes, old aerobics tapes, and broken joysticks. At least until they release a new snowboarding interface and the kids pull it back out.

And since I know the iPhone is a bit too pricey, I’m hoping that when I get home from the Mother’s Day Peace Vigil, there will be a new yoga mat and some chocolate waiting for me.

Tags: Wii Fit, Wal-Mart, shopping

I feel it in my gut, but you're zapping it in my brain

The Lovesong of Neuroscience and Marketing

Imagine being able to measure the brain’s response to a cereal commercial, a vacation ad, or an in-your-face sports drink promotion. Neuroscientific research claims to have a handle on not only what people’s brains are doing during these ads, but what each little twitch of the face and tingle of the brain tells us about whether we prefer Coke or Pepsi or whether we’re just drinking that Sprite because the ad made our frontal cortex happy. There's even been some recent election year controversy over neuroscientific analysis of political preferences.

Market research companies like NeuroFocus, Neurosense, and SalesBrain purport to be able to map the human mind, its reactions, and fine tune ad campaigns to deep reactions. Mind Hack author and blogger Tom Stafford quotes Jonathan Harries, the creative director at advertising agency FCB:

It is very hard for our clients to buy gut feel because every time they approach [a campaign], their jobs are on the line. Neuroscience promises to measure the gut feel, and that is exciting for us. It makes it easier for us to sell what we believe is right.

Some of the techniques include brain imaging, eye tracking, and electrograms to test reactions to different versions of the same product, and have been used by shopper marketing programs for years now. Eye tracking allows researchers to note the particular features that capture attention. Functional magnetic resonance imaging (FMRI) maps changes in the blood flow to the brain, pinpointing the areas that are activated. Quantified electroencephalography (QEEG) measures tiny electrical impulses in the brain via sensors set placed directly on the scalp. Other techniques quantify facial expressions and aural responses.

Neurofocus, a research company overpopulated with PhDs and MDs that claims to be the next wave in neuromarketing, sums it up well:

The findings are clear and indisputable, because they are based upon measuring consumers' actual brainwave responses and eye motion during testing."The human brain is the most amazing processor of information that exists, and the most challenging to understand in terms of how it treats information streaming into the visual cortex," said Dr. A. K. Pradeep, NeuroFocus's founder and chief executive officer. "But now, thanks to the advances that have been made in neuroscience, we have gained new insights into how people perceive and process images. That new knowledge enables us to spell out, in detail, exactly what are the most efficient and effective ways to communicate on a screen. Conversely, now we also know specifically what doesn't work well, or is even counterproductive.

Now, I’m no neuroscientist, but any scientific method that claims to have indisputable findings should probably be submitting for the Nobel Prize. Even physics and genetics require some interpretation of results. Consider what Jonah Lehrer, author of Proust was a Neuroscientist, says about fMRIs:

I'm always struck by how even neuroscientists who work with fMRI everyday, and are acutely aware of the limitations of the technology (the 3-5 second time lag, the messy data, the difficulty of imaging certain areas, the fidgety subjects, etc.) still use the same metaphor of transparency. They talk about "looking at the inside of the brain," or how the brain scanner is like a "window," or how they can "see what's happening in real time". Of course, fMRI is an incredibly powerful and potent tool which allows us an unprecedented understanding of the mind at work, but I get a little tired of all these visual analogies. Before we can "see" anything with fMRI, someone has to perform a tremendous amount of statistical analysis.

Now, statistical analysis is something I actually understand – or at least, it can be transparent. But statistics require interpretation, which means they're not necessarily irrefutable or clear. One of the first things you learn about research when you’re a social scientist is that everything depends upon interpretation. And if everything depends upon interpretation, then the scientific part of what we do is only in the application of a method. Once you’ve got your data, what you do with it is as much art as science. Still, market research has always had a love affair with “real” science – mostly in the form of psychology, so they tend to play up that angle.

When we look more closely at what neuroscientific market research is doing, there’s a bit of the good, the bad, and the ugly at play. Let’s start with the ugly, which I’ve already laid out for you – it’s not pretty when people must use research science as means of justifying what they do.

The bad is (potentially) how the ethical implications of advanced neuromarketing will be handled. What if, for example, a marketer finds signs of mental or physical illness, indications of criminal intent (shades of Minority Report), or downright maliciousness? What are their responsibilities for reporting it to the research subject? To legal authorities? And is giving a marketer access to your deep-seated emotions tantamount to giving them permission to market to you subconsciously?

The good is that these methods, each in an interesting way, can tell us things about human reactions. Put together, studies of brains and bodily reactions are useful. The most interesting work coming out of neuroscience today is related to repairing memory loss, fixing degeneration from age and correcting genetic abnormalities. Used carefully, neuroscientific research might also tell us what kinds of environments and products are best for people with cognitive disorders, chronic illnesses, or other impairments that make everyday life difficult.

But there's still a wide gap between neuroscience for science's sake and neuroscience for marketing's, and when it comes to the latter there are serious issues that will have to be addressed if it's ever to take off on a very large scale.

So far, I think I’d rather not share that feeling in my gut.

Tags: neuromarketing, advertising, minority report

Report says digitized retailing is becoming more prevalent

According to The Centre for Retail Research's latest offering entitled 'The Store of the Future 2012-2015', over a quarter of high street retailers (to use the British turn of phrase) expect they'll need to close down some of their bricks-and-mortar locations within the next five years in order to cope with changing demand and increased use of the Internet by customers. Further highlighting that trend is that 70% of retailers plan to introduce new formats and more information services in the same period, for the same reason, as noted in this article from Retail Bulletin:

According to Dr. Steve Perry, Executive Vice president, Visa Europe: "The critical role that converging technologies are going to play in shaping the retail space of the future is clear for all to see. The study shows that while changes may occur over a relatively short time period, the Store of the Future is likely to be shaped by a range of technologies in the digital era, but all will have a common goal - to create greater convenience for the customer and in turn achieve stronger differentiation and business success for the retailer."

Clearly mobile marketing is becoming the bridge between traditional online and offline assets, and it may be the catalyst that finally drives more retailers to implement fully-integrated inventories, service offerings and corporate policies that would allow the consumer to, for example, universally do their shopping online and pick up their orders in-store. Far too many retailers continue to have problems implementing even the most basic cross-channel marketing programs and policies. For the longest time you couldn't shop on barnesandnoble.com pick up at Barnes and Noble, or even get store personnel to order you an out-of-stock item via their own website. Many of today's retailers continue to have problems integrating loyalty programs and gift cards into their e-commerce platforms, despite the fact that all of these things have existed for well more than a decade.

The in-store experience is still important to a lot of shoppers. Product interaction, in-person customer service and social interaction are still powerful forces that drive people to bricks-and-mortar stores. But the convenience of online shopping is hard to beat, and many retailers aren't doing themselves any favors by continuing to treat online shoppers and real-world shoppers differently.

Tags: shopping, multichannel marketing

What's in a shopping cart? Only a slice of the pie

Thursday I made a stop at the supermarket during the middle of the day, middle of the week – no market research on senior citizens this time, just a quick trip for things we needed to make it until Saturday. At the checkout I ended up with: navel oranges, apples, cilantro, lettuce, cukes, tofu, eggs, cheese, two kinds of bread, organic peanut butter, specialty crackers, macaroni and cheese, yogurt, and six different kinds of chocolate bars. Only about four things were on my grocery list. Some were impulse buys – but not perhaps what you'd think. All that chocolate was on the list. Some of the produce was not.

But what can you tell about my consuming and shopping future from just this one cart? (Here’s one hint: almost everything, including the crackers, are brands I buy all the time. The only variation was the chocolate – I buy it every week, but always try new kinds . Today they actually had new varieties on sale!). How would you characterize my purchases? What can they tell you about brand loyalty (some), consistency (a lot), and general purchasing trends (produce as impulse buy!!) ? Looking at shopping carts is a tried and true research method, and is always a staple of larger shopper marketing programs. It’s certainly better than consumer surveys. CPG News recently reported (as noted in this RetailWire BrainTrust post) that:

Catalina Marketing has spent two years examining 250 million shopping baskets weekly from 130 million separate shopper identifications. The goal is to probe the gap between what shoppers say they buy in surveys and what they actually purchase.

I probably wouldn’t mention those chocolate bars in a survey. But the shopping cart in isolation – one day, one cart – is as problematic as the shopping survey. One of the things I’ve been studying for years is everyday meals – how frequently people eat at home, what they cook, what they get as take out or prepared meals, who they eat with. The most important thing I’ve learned is that people live their lives according to patterns, but one slice won’t give you even the slightest idea what any given day might look like. For example, the Sunday dinner is different from but dependent on its contrast with the weekday supper, the holiday meal captures the extremes, and there are other punctuation marks all along the way.

Shopping carts are going to reflect patterning, too. Mine was a Wednesday cart on a week when someone had done the week’s shopping on the previous weekend. But we eat a lot of produce and always run out midweek. I’d also exhausted my chocolate supply, which sometimes (but not always) happens too. But if you looked at our cart over a month, you would get a very different picture – where do we run to for a loaf of bread or eggs? How much do we shop at little local markets or at big supersavers like Costco? What happens on a week when we do get down to the Saturday morning farm and specialty markets (the Strip District, for those who know Pittsburgh). How much did we eat out this week? Who is doing the cooking and who is being fed (the mac and cheese was for my daughter’s friend, who never eats anything else I make)?

Certainly many market researchers worry about whether people will tell “truth,” but truth is not in a snapshot. Rather it's in multiple images, over time and place (the whole pie!). More importantly, shopping carts are the repositories for later use. If we don’t find out how people are making use of the products, we don’t understand their purchases. Shopping cart data may be rich, but it's ultimately less useful if we don't map patterns of food use along with food purchases.

Still, watching shopping carts is particularly important right now as two consumer trends are butting up right against each other: one, the growing concern with organic, natural, and “green” products (which still tend to be a bit more expensive in most markets) and two, the rising cost of food in general, which tends to push people more towards bargains, coupons, and other sale items.

Mapping patterns seems like a lot of work, but without it, you’ve got tons of data and no anchoring scheme. The distinction between shopper and consumer is too simplistic to capture what’s going on (on Wed I was both and neither!!!). It also needs to be matched against what’s on sale, what’s out of stock, and what’s new in the store (seasonally, for example).

Shopping cart data needs to be put into a meaningful framework in order to make sense. If the data comes without questions and information about how the products are about to be used, all we know is what people have bought. There’s no insight into why.

But they've probably figured out that I buy a lot of chocolate...

Tags: shopping, shopper marketing, market research

Use your tax rebate to fund cheap Chinese?

Here are two pieces of news from this week: One, the federal government has started sending out those tax rebate checks, designed to ease anxieties and checkbooks and spur the economy. Two, the mainstream media has suddenly noticed that with the dollar heading downward, the days of cheap Chinese imports may be heading to a close.

About your tax rebate: TNS Retail Forward did a quick survey to see how people were planning on using that refund. Although most people said they’d be putting it into savings, not surprisingly, the wealthier consumers were much more likely to say they’d be making a high end purchase (jewelry, computer, HDTV). Those already feeling the sting in their pocketbooks said they’d be most likely to pay a credit card bill, or buy groceries and gasoline. Some hopeful stock analysts are prognosticating that the timing of the rebates in early summer may translate into increased vacation spending (keep those Disney stocks up!), though more realistically, Kathleen Pender of the San Francisco Chronicle looked at all of the recent surveys, (scientific and not) and found that, overwhelmingly, people say they’re going to try and pay off their debts.

But dancing to the second story: the news about global labor suggests it might be a better value not to be spending your rebate on what is commonly known as “cheap Chinese” – and I don’t mean pork dumplings and chow fun noodles (Mmmmm)...

Apparently the media has suddenly noticed that the days of inexpensive manufacturing and exporting from China are coming to an end. While some bemoan this as a great loss, cutting short what felt like an endless supply of cheap workers and goods, perhaps it might make more sense to recognize that historically, economically those conditions were short lived and illusory anyway. Morally, in the long run, it's not such a bad thing. And for all the die-hard capitalists out there: wouldn’t it make more sense if all global workers all made enough to spend their surplus on a few luxury items? Sure it might mean having to wait a while for the audience to develop, and there are bound to be some rough patches along the way, but the payoff comes in the form of billions of people with spending money in their pockets.

Alexandra Harney’s new book The China Price does a great job laying out the relationships that make such a situation inevitable. First, the supply of "surplus" labor (rural Chinese who move to urban areas and work in factories) is less than predicted. In fact, the government has been making a stab at bolstering rural economies and farmers in order to limit unrestricted urban growth and reduce the impact on their domestic food supply chain. Second, campaigns to expose the sweatshop conditions in many Chinese factories have been more successful of late – Apple, Nike, and even Wal-Mart have been shamed into promising better oversight and more social responsibility.

But here’s how they come together: In an era where people on both ends of the globe are feeling their earnings dribble out and barely cover their basic expenses, Wal-Mart and other retail manufacturers might want to distance themselves from the relationship between low cost and low wage. Better to blame the high cost of oil now rather than wait a few years and try and explain how they ran out of cheap labor to exploit.

So what's supposed to happen when a country with lots of cheap labor gets less attractive, whether due to government intervention, a rise in wages, or simply less workers? Up until now, multinational companies with a taste for cheap labor have been content to simply find a new country. As GM CEO Jack Walsh once famously said, "Ideally you'd have every plant you own on a barge,” ready to move if any national government tried to impose restraints on the factories' operations, or if workers demanded better wages and working conditions.

Thus it’s no surprise that corporations are already looking elsewhere, prepping a new country to be the barge . Indeed, even Chinese manufacturers are trying to head it off by investing in low cost labor in nearby Vietnam, where wages are as much as 30% cheaper than China and the countries have similar communist policymaking. In 2006, Chinese investment in Vietnam totaled $312 million. You can see the future in the present, with the changing composition of Vietnam’s exports – no longer rice and coffee, but furniture for Pottery Barn, textiles for Wal-Mart, and footwear for Nike.

Unfortunately, we're at a point in time where simply shifting labor resources can have a potentially disastrous effect on seemingly unrelated things. For example, have you heard about Wal-Mart, Costco and others having to limit purchases of rice these past few weeks? Rice is one of those commodities that many countries were resistant to import, especially in Asia, where particular breeds are more heavily prized than others, and the crop is central to national identity. If Vietnam -- traditionally a rice exporter -- switches over to sneakers and t shirts now, imagine how the food crisis could look in a few years.

But no country is a barge and no population is free of history, needs, and desires. Vietnam may have a large “supply” of young workers in the 20 – 30 age range, but they are also generally literate and healthy, having the benefit of more standardized education and steady food supplies, but it's still only a fraction of the size of China's population. And despite hardline governments in both places, the Vietnamese have a recent history of successful labor protests, which suggests that it will be much harder to keep wages down on this particular floating barge.

My probably not-very-popular advice about your tax rebate? Save some, spend what you must, and donate a little to those who don't benefit from the current situation.

Tags: shopping, consumerism, money

Eating Chinese, Shopping Italian, Paying Global

Whole Foods "Groceraunt" Pushes Variety to the Limit

Many people (myself included) have a love-hate relationship with Whole Foods. The premier natural foods supermarket does what it does all too well: from the minute you walk into any of the stores to the time you go through the checkout line, you are surrounded by beautiful food in an environment that doesn’t beat you over the head with the fact that it’s a mega-market. But there’s a bit of self-righteous overzealousness in the air, especially as they vacillate between promoting big scale global organics alongside a newly popular "eat local" dictum. It's hard to stay morally pristine when food prices – especially for organics – are rising.

Back in the 1990s, when my local Whole Foods was still a small chain called Bread and Circus, we would often go there for special cheese sampling events, a smoothie from the juice bar, or sushi-to-go. Once we even took friends and had a rather tipsy pre-Thanksgiving all-day tasting of organic turkey, wine, appetizers, desserts, and condiments. When WF took over, they did away with the juice bar and expanded the hot foods section. We got in the habit of stopping before long driving trips, stocking up the cooler with specialty sandwiches, hummus, fresh fruit, cookies, and drinks. Our current Whole Foods competes mightily with a local supermarket, Giant Eagle's Market District, each offering weekly dinners you can take right out the door and serve to your family or guests.

The newest Whole Foods in Scottsdale Arizona takes the ready-to-eat offerings up two or three notches, and comes up with a new word for the approach: "groceraunt." Some folks think this will be a great new term, though for me it brings to mind my grey haired Aunt Iris wearing a grocer’s apron. But even Aunt Iris -- a great cook, mind you -- could never offer so many options, including huge, wide-screen LCD TVs, televising cooking lessons and a station where staff will grill or smoke your fresh meats and vegetables for you. Dinner at my aunt’s house also did not include a Tapas bars, wine and cheese tasting, or seasonal draft beers, all of which the new store offers. Capping things off, The Scottsdale concept store has a pizza making spot, Latin and Asian hot foods bars, and a café with baked goods and coffee.

Given what they’re putting together, I can’t help thinking we’ve already got a name for this: food court. Oh, you say, it’s in a grocery store so it’s different. But people have been shopping and eating in supermarkets like this for at least two decades (and before that, especially if you live in a city and shop in local, neighborhood stores rather than malls!). For people who don’t like fast food, the ability to grab a container of berries from the produce section, bread from the bakery, and then prepared foods is a way of life, not a big surprise.

I’m just amazed that so few of these places have added wireless -- Wegman’s is one of the few that does. Here in Pittsburgh, Giant Eagle has increased its organic and prepared foods, but also gone in the other direction: GE Express are smaller, well placed grocery stores with a reduced set of supermarket offerings, lots of meals-to-go, and a small wireless café, all connected to a discount gas station.

Indeed, the new concept WF will probably do very well in upscale locations like Scottsdale -- areas with many professionals who work 24/7 and have lots of disposable income. But I hope it’s not a general strategy, tipping the balance towards “bigger and more” rather than “specialized and better.” With transportation costs soaring and world-wide concern over key food crops (rice shortages, stalk rust on wheat, subsidized corn production for biofuel, and high priced dairy), all grocers are going to have to reign in some of their expansion.

In one way, WF’s gamble may pay off big, since their clientele have always been willing to pay more for perceived health and prestige benefits. But getting bigger won’t do much for their "Whole Paycheck" nickname, which will only be amplified as prices for organic and conventional foods go up with energy costs.

What’s great about this concept is what’s great about Whole Foods in the first place: good food, good quality and lots of choices. But there must be some limit to the variety that such chains can offer (or that consumers demand). Perhaps I am rejecting both my American consumer and market researcher hats when I say too much variety is simply too much. It all sounds good – but does it really benefit anybody? And will it remain a necessity when producers and consumers are going to have to begin balancing the costs with the growing demand for organic and natural foods? Whole Foods already has the structure and philosophy in place to sell in line with a more local and seasonal approach. The Groceraunt, in its first incarnation, seems to be going in the wrong direction. Still. I’d rather see more of these than fast food restaurants popping up at department stores, malls, and rest stops, but I expect that even a significant growth for the former isn't going to have much of an impact on growth of the latter.

Tags: groceraunt, retail, shopping

What's in Santa's Sleigh?: Mobile Search Advertising and Color Barcodes

Ever seen the original version of Miracle on 34th Street? One of the best scenes is when Kris Kringle, taking a toy request from a child in Macy's, tells a distraught mother that she can get the toy at Gimbels, Macy's big competitor. The marketing executives take it three steps further, compiling a local merchandise directory so that sales associates can send customers to the right store if Macy's doesn't have what they're looking for. The hope, in this case, is that customers will be so impressed by the good will and helpful information at Macy’s that they will come back more frequently and spend more money there (as one happy mother exclaims).

I don't know if Macy's ever did try in the real world the strategy that worked so well for them in the movies, but I've yet to come across something similar today. In my mind the closest thing we have in the digital era is Priceline, but even with William Shatner batting for consumers, it's still missing a hefty dose of benevolence.

But perhaps a new contender is coming up on the horizon. In particular, Amazon recently announced a modern version of this Miracle approach called TextIt, a new service where customers browsing in a real retail bookstore can use their cellphones to scan the barcode on a book or other item, get its information and price, and order it directly through Amazon (if available). Not exactly the kind of goodwill gesture that Santa Claus might endorse, but one that many digital merchandisers are counting on as a competitive edge. Adweek highlights recent research predictions that mobile search advertising will have phenomenal growth in the next five years. The foundation for these prognostications is the speed at which companies are trying to develop their software for mobile phones. Better photo quality on cell phones and more standardized barcodes are the key concerns, and both are actively being addressed by multiple vendors. As if to seal the future deal with a kiss, Microsoft announced today that it had patented a color barcode licensed by the International Standard Audiovisual Number International Agency.

The beauty of the color barcode, aside from its visual design appeal, is adaptability. According to Microsoft's press release , though they can be physically smaller these multi-colored codes can be read from more places, like televisions, posters, advertisements, CDs, and computers. As a simple example, imagine seeing a print ad for a movie posted at the train station. While you’re waiting to commute in to work, you can use your phone to scan the barcode on the poster, watch a trailer for the movie and find nearby theaters and playing times without having to type in phone numbers or a ton of additional information.

As I mentioned in a prior post, some analysts have even predicted that the cell phone will be the death of modern advertising, which will have to morph into something else. Consumers are more involved in tracking and debating the value and significance of various products than ever before. Indeed, perfume blogs have garnered such consumer power that they have upended a lucrative and previously unfettered industry, leaving marketers and manufacturers with great distaste for the intrusion. Even so, the balance of digital power tends to remain with manufacturers.

While the new tracking media has great potential, it still has a number of problems. Barcodes and cell phone technology have made more inroads in Southeast Asia, but critics cite multiple standards and lack of consumer awareness and education. Microsoft hopes to use its gigantic reach to address the first problem. As for the second, consumer use is not as advanced as technological desire partly because people are unaware of the capabilities. Let’s face it: so much technology, especially the mobile digital kind, spreads when it’s picked up by the magic demographic – young users with some disposable income and a desire to be on the cultural cutting edge. But these users also move on quickly if the application doesn’t have an interesting or innovative purpose (see this great chart on the quick boredom with Twitter). Even with a recent trend towards thrift in the younger demographics, comparison shopping and bargain hunting are still more in the worldview of an older demographic.

Developers might need to think more broadly right away, rather than waiting for people to figure out new uses on their own. It's not like companies are going to hold our hands and point in the direction of their competitors until everyone gets up to speed. I have a feeling it’s going to be a while before Microsoft hands consumers a color barcoded guidebook to getting what they want. Perhaps we're better off believing in Santa.

Tags: shopping, mobile advertising, retail media

Teens turn to thrift as jobs vanish and prices rise

I tried to think of a better headline, but the one from USA Today is pretty complete. Quite simply, fewer teens have the high-paying jobs and access to cheap transportation in order to still be able to afford that $150 Coach wristlet handbag or $100 designer jeans anymore, and that spells big trouble for retailers who count on a steady stream of free-spending minors in order to turn a profit. Instead of bemoaning the end of an era (and let's face it, most of 'em probably didn't even realize that such easy access to cash isn't actually normal), some brands and media are instead trying to capitalize on being frugal.

That's right, my friends. Thrift is in.

For example:

Last week, Ellegirl.com, the teen offshoot of Elle magazine, launched a new video fixture called Self-Made Girl, which shows teens how to make clothes and accessories. The first video offers tips on how to create a prom clutch.

"It's a little tacky in the economic unrest to tote a big logo bag," said Holly Siegel, the site's senior editor. She said it's no longer about teens "one-upping each other," but rather where they can get it cheap.

Victoria Bradley, a 16-year-old from Springfield, Mo., says the $80 she earns each month from baby-sitting is being eaten up by more expensive school lunches, late-night snacks with friends and stylish clothes.

Now, she says, she and her friends head for the thrift store or just browse at the mall.

"I used to be able to buy a T-shirt and jeans every couple of months," Victoria said, adding some of her friends are even "making their own clothes or altering their old ones to fit or look better."

Victoria's mother, Michelle Bradley, said she and her husband cut back spending on themselves last year, and early this year also started paring back "frivolous" buying for their three girls.

Now, I'm a consumer, and while I do tend to live pretty simply I admittedly enjoy some creature comforts. So I'm certainly not going to get on a pedestal and talk about the timely demise of conspicuous consumption or anything like that. The fact is, economic slowdown isn't usually good for anyone, even if it does knock some of the wind out of annoying nouveau riche and get people to pile a bit less debt onto their already overburdened credit cards.

As expected, some of the big brands are already starting to feel the effects of the belt tightening, with American Eagle and Tween Brands Inc. (who operate Limited Too) already posting lower profits and revising their forecasts downward. The good news is that those who can provide more affordable luxuries stand to win a bigger slice of the remaining money out there, and perhaps a new crop of customers that they might not have otherwise had access to. Aeropostale and H&M are typically put into this category, but thrift stores and second-hand clothing stores are feeling significant growth, and that's only going to continue if the glow surrounding thrift continues to wear down the stigma of shopping for used clothes.

Tags: retail, shopping, finance

Don't start the creativity revolution, I mean recession, without me

In their continuing coverage of the “R” word the New York Times recently ran a story about how marketing campaigns are responding to economic fears. What does selling look like during a recession? New advertisements focus on value for the dollar, saving money, and living cheaply while still living well. Surprising stuff, given the ad industry’s historical love of excess. Despite growing economic divides since the 1980s, the push for new goods and newly defined luxuries-as-necessities, it’s interesting to see marketing that’s, well, trying to be honest.

At the same time, there’s something quite depressing about the thought that advertisers are only creative when there’s nothing to be sold. Perhaps. Or perhaps, like any profession in the 24/7 economy, the daily pressure to produce at such a pace sucks all the fun out of advertising. It’s no surprise that some of the most innovative and interesting ads come from companies or groups who are not trying to secure a seat on the stock market. Look to socially responsible and green-focused campaigns for more innovating approaches to advertising. Companies that create socially conscious short films and movies circulated via YouTube and email are able to bridge the gap between selling something and recognizing that for some consumers in a tight economy, less is more. The best messages combine self-interest and altruism. People generally choose organic foods first for their own health benefits, but are then grateful to think they are contributing to the health of the planet. They also care more about the larger society in times of hardship and crisis. Selling value in a tight economy could also be about selling social good.

When consumer purchasing is corralled by tight budgets, advertisers need to re-think their purpose. Some argue that because of all the new digital media (especially cell phones), advertising as we know it is on its way out. Another argument might be that today’s conditions require new approaches, such as a better focus on information and communication rather than imprinting brands and their implied identity boosts.

Honesty, after all, is actually a great design feature.

Tags: advertising, marketing

Tommy experiments with a new kind of retail TV

While much has been made of major brands launching (or at least testing) in-store TV networks, Tommy Hilfiger has decided to take a different direction and launch their own branded content channel -- on the Internet. Now obviously Internet video channels are nothing new, and in fact some consumer products companies have been trying their hand at branded video channels for a while (does Bud.tv ring a bell? No? Yeah, that's been the big problem). But according to this little blurb at PROMO Magazine, "Tommy Hilfiger has launched TommyTV in collaboration with Sony BMG to present live concert performances online from the ongoing Hilfiger Sessions series along with archived footage of past performances."

Of course, a bunch of live performances isn't going to gather a huge and loyal audience. No, for that the company has decided to turn up the mix, with, "exclusive artist interviews and backstage footage from intimate concert settings around the world." Additionally, "Hilfiger Auditions section will let aspiring musical artists upload videos of themselves and compete for a shot at stardom on a platform intended to draw music industry executives and casual Web surfers." While user-generated content isn't a 100% sure-fire way to grab and hold an audience or build a fanbase, you can't deny that it worked for YouTube, and gained a huge following when user-generated commercials were run during the 2007 Superbowl. And in fact, the company has been savvy enough to partner with the big user-generated video sites, noting that, "TommyTV branded channels on YouTube and Joost will feature concert clips to draw surfers to the Web site. Clips will also be accessible on MySpace and Facebook. Sony BMG’s myplay music network will feature pre-roll videos and banner ads intended to push traffic to TommyTV.com."

On the one hand, it shouldn't be rocket science to create a modestly successful video website. Populate it with enough A-grade content that can't be found elsewhere, foster growth via user submissions and the usual bevy of social media technologies, and all the while promote the brand on other channels and in other media. But I don't quite understand what the company hopes to gain for their effort. Tommy's image has changed significantly in the few decades that it has existed, as has its target audience. That having been said, it doesn't strike me that having a video channel - even a reasonably successful one (and let's face it, that's the best they can possibly hope for) will do much to spread their message, build their brand image, or attract new potential customers.

Tags: retail TV, branding

It's just not as funny in email...

A recent study by researchers at NYU and the University of Chicago found that people routinely overestimate the success of their ability to communicate over email. In particular, sarcasm was a big miss. Overconfidence and egocentrism are the main culprits.

Well, gee, I’m not surprised (and yes, that IS a hint of sarcasm you read in my words). Once again, it’s really great when business school research confirms what people already know. After all, given their conclusions, it sounds like people in business, marketing, even education might need a reminder. But right now, as you read this, there are probably fifty newly minted education doctoral students whose dissertations focused on the difficulties that eighth graders encounter when trying to decipher textbooks, classic novels, or their history homework. Despite their love of the image, sometimes the world of business and advertising forgets that reading and communicating are skills.

If you take a look at what the advertising industry says are some of the top advertising slogans of the past ten years, you’d be surprised at what you find. Interestingly, many of them also have rather memorable icons to go with them (the Geico lizard, for example). What the study does point out is that we communicate better when we have images, nonverbal cues, gestures, and intonation helping us out. Or, better yet, a recognizable universe of cultural ideas that we share. Communication is always imperfect, but it works better if we have some clues in common.

It’s the same in the world of food. For researchers, despite advances in chemistry and molecular science, taste is incredibly difficult to pin down. And while I may wax on and on about the most amazing chocolate I had in Montreal last week and even bring you a piece to try, what you taste and what I taste is only imperfectly shared. It works better if we both have lots of shared images (chocolate bars! bonbons! truffles!), experiences (remember eating that molten chocolate cake in Boston!), and cultural stories (Mr Hershey, I presume?) about chocolate (it’s supposed to be sweet, dessert, indulgent, not laced with hot pepper, and definitely not as a sauce over the fish. Okay, well, maybe. You try it first.). And some chocolate creations (poop shaped, perhaps? ) are never ever funny. Knowing about taste in food is actually something we develop - based on the people we meet and the places we go -- as much as we think we’re born with it.

What’s important about this for the new forms of media is that communication isn’t as straightforward as you think it might be. No matter what kind of technology you have, words are important. The most important finding in this study has to do with the presumed state of mind of the communicator. Egocentrism is widely available in our culture, especially among those who think it’s their job, their mandate, and their calling to create the commercial messages that shape our landscape.

What the email research tells us is that marketing folks need to make a much greater effort – develop some skills, shall we say -- understanding the visual worlds of people who don’t look, think, eat, or email like them. Digital and new media have a world of tools way beyond emoticons at their disposal. The trick is using them for something everyone might understand.

Tags: marketing, advertising

Brave New World revisited: Blissful ignorance, like Soma for consumer regrets

“The warm, the richly colored, the infinitely friendly world of soma-holiday. How kind, how good-looking, how delightfully amusing every one was! "
- Aldoux Huxley

We all know someone like this, be it a friend, a co-worker, a sister, in-law, or favorite cousin: At a restaurant with this person, whatever they order, it’s going to get sent back to the kitchen.

My special someone like this – let’s call her Heidi – always, always, always wants her steak done differently, her fish without sauce, and her sandwich without mayonnaise, even if she ordered it that way in the first place. She could find a dirty spot on lettuce that has been put through an industrial dishwasher. And then there’s Heidi’s partner, Stan, who likes to buy things at Costco, bring them home, and then take a few weeks to decide if he really likes them. He put a flat screen television on his American Express card a few months ago, watched the Super Bowl, decided it was too small, and back it went. Picky eaters, buyer’s remorse, indecisiveness, rejection, and regret are anathema to manufacturers and marketers alike. Wouldn’t it be great if you pre-empt or eliminate this, without perhaps, lacing the water supply with mood-enhancing drugs?

It might not be necessary, according to a study done by professor of marketing Dhananjay Nayakankuppam at IU, which found that people don’t want to know too much negative information about their purchases. The study used three fairly typical experiments on consumer choice: two consumer tests on chocolate and hand lotion, and then a video rating experiment.

Researchers dubbed their finding the “Blissful Ignorance Effect,” but they might as well have called it, “the Marketer’s Dream Study” because it’s so keyed in to what the marketing world wants to hear about its clients – less is more and the image is all.

But if you look closely, the key point is this: “once people commit to buying or consuming something, there is a kind of wishful thinking that happens and they want to like what they’ve bought.” I wonder: is that such a complex insight that needed a funded study? Give me some chocolate and unless it tastes like cardboard (or is shaped like something hideous), it’d take a cataclysmic event to get me to regret eating it. I mean really, chocolate?!!! What is there to regret? Nayakankuppam says, “We want to be happy with our decisions.,” and points to people’s emotional attachment to their purchases. But it’s false reasoning (or wishful thinking!) to apply those insights backwards to the original decision-making process and suggest people don’t need the information in the first place.

What marketers often fail to consider is that all material things – especially consumable goods – have a biography and history. Marketers focus on brand loyalty a lot, but the truth is, it’s much more complex, especially when products are relentlessly and continually altered and labeled “new.” The unending quest for newness has to be countered by something, perhaps either regret or blinders, just so people have a chance to move on! Case in point: I’ve just barely begun to enjoy my latest cell phone or my laptop and there’s a better version of it out there. Yes, technology changes fast. But does that mean I don’t want information about it? Certainly not AFTER I bought it.

What is lacking in this study is context. After all, if people professed to be unhappy with their purchases, would that be better? Are consumer experiences really divided only into angry regret and blissful ignorance? One key question the UI researchers neglected was whether they’d go back and buy the same product again.

Consumers have the unenviable conundrum of having both too much and too little information. From chocolate to hand lotion to DVD players, how much does any of us really know about the exact process by which they are made (ask and I’ll be happy to tell you all about chocolate)? The only time it’s transparent is when there’s a problem (lead paint) or the production process is part of what’s being sold (the market for green or sustainably-produced goods, for example). So much information that comes with advertising is not useful or not clearly authoritative. Ignoring bad feelings or second thoughts after a purchase is probably a great safety mechanism for our overloaded brains. Simplicity is good, but not because consumers are whacked out on soma, but because they’re bored with too much useless info and a lot of pressure to move on to another purchase before they’ve had much time to enjoy the one they’ve got!

Now eat your soma, I mean chocolate, and be happy.

Tags: retail, marketing, advertising

Wal-Mart learning from P&G in India

Back in August of last year the Wall Street Journal had an interesting and insightful article about the predominant shopping styles in India, and in particular how many preferred the "controlled chaos" of traditional markets and stalls to the sometimes antiseptic Western approach to the task.

While it's still a bit too early to point out lots of success stories from big Western chains finding their way in the subcontinent, the biggest of them all -- Wal-Mart -- has already decided that they're going to have to enlist some pretty serious help if they want to stand a chance in the fiercely-competitive retail landscape. That's why, according to this article from The Economic Times, they're studying longtime-partner P&G's data on the Indian market while revising their own strategy:

Globally, the relationship between [Wal-Mart and P&G] goes well beyond a vendor-retailer relationship and P&G has offered to share its understanding of the Indian market to help Wal-Mart in building efficiencies in supply chain and merchandising for its cash-and-carry business.

Senior officials at P&G told ET that its India unit has shipped its first consignment of personal-care products to Bharti-Wal Mart, a joint venture for the cash-and-carry and logistics initiatives.

While the joint venture will focus on B2B business, the Bharti group plans to launch small-format retail stores shortly. The officials said P&G India is helping Wal-Mart understand the nuances of doing business in India. Wal-Mart’s India exposure has been so far restricted to sourcing from the country for its global operations.

Considering that something like 95% of all trade falls outside of what's considered "organized retail" in India, it's clear that even Wal-Mart would have a pretty hard time trying to move into the market with their large- or super-sized stores. Taking a page from Indian retail entrepreneur Kishore Biyani's playbook, a focus on hyperlocal markets might be the best way for the retailer to establish a foothold with the core population in that country.

Tags: india, retail