Love in the time of downloads: dating Netflix, Blockbuster or Red Box

I’m a big film fan, but I don’t go out to the movies much except during the summer, when I live in a little town with a refurbished classic theater. It’s the kind of place where they show offbeat first run and art house films in air conditioning. There’s a swanky coffee shop on one side, a grungier one down the street, and plenty of sushi bars, so it makes for a great night out. But the rest of the year, I do all my viewing through DVDs and downloads.

When we first got to Pittsburgh, the city offered Mega DVD stores inside the local supermarket chain, Blockbusters all around, and, in case you were sick of the top five releases, one good local alternative store. In Massachusetts, I’m loyal to a friend who owns a small local store and special orders Japanese anime for my kids and foreign films for me. When we left, I made a promise to avoid Blockbuster, as a token of appreciation for my friend and his amazing collection of old, foreign, and odd movies.

With the move to Pennsylvania, we signed up for Netflix and spent the winter in a new town catching up on past seasons of Deadwood and the Sopranos. I probably should have gone for something with a bit less death, but hindsight is, well, you know. Even so, the little red envelopes that appeared in my mailbox every few days made me happy.

Two years in, I’m less in love with Netflix. It’s definitely better as a monogamous relationship, where I’m not negotiating the top of the list with kids, weekend guests, and spouse. There’s also that whole category of times where, no matter how fast they are and how many processing centers they have, you can’t really wait a day or two for a movie you need. The teenage girl sleepover, the “hey, we’re stuck home with nothing to do” Sunday evening, and the “I have the flu and need something to watch” scenarios all require movies immediately. So, sometimes we peruse the "on demand" selections offered by our cable company. Not a bad solution, although it’s often the same limited selection as the big stores.

Being tech-savvy folks who like to travel, we got into the habit of downloading movies onto our computers for the kids while they’re in the airport or car. At home, the rest of my family is now addicted to a series called Chuck, which they watch in bed, squashed around the laptop. At some point we even figured out how to connect the computer to the television so we could watch it on a slightly bigger screen. Not bad at all, although the laptop-tv configuration is a bit cumbersome and requires the sacrifice of a computer when someone requests a movie. I still find myself running into a chain rental store every once in a while on a whim or a need (hoping my friend in the local DVD store in Massachusetts can’t sense my treachery from hundreds of miles away). Recently I noticed that the supermarket had replaced its Mega DVD Store with Red Box, but I am not tempted to try it. It's too much like the vending machines in highway rest areas – something you might turn to out of dire necessity rather than falling asleep at the wheel, fully aware that there wasn’t a Starbucks or diner for the next 60 miles. Apparently I'm not the only one who views my movie source as a kind of relationship: On TechCrunch, Michael Arrington claimed he was "breaking up" with Netflix for Blockbuster back in 2006! It's clear that some of these preferences are driven by convenience as much as romance.

But maybe my love affair with Netflix isn’t over. Although it’s already sold out of its first shipment, Netflix has teamed up with Roku to offer a $100 streaming video setup – a small box attached to your tv that allows you to download and order movies on line using WiFi technology. Early analysts were complaining that the back orders would take six to eight weeks, although now Netflix claims two weeks tops.

Well, for true love, I can wait a bit longer. Even with season three of Deadwood on the top of my list, it’s almost summer. After all, my friends in Massachusetts think there might be a gelato place opening up next to the local cinema.

Heinz: when marketing in red is good

I would be remiss if I didn’t comment on some good retail news related to my new home town. Although there are no longer ketchup processing plants in the city, the association between Heinz and Pittsburgh is strong, with the food giant lending its name to everything from the football stadium to a large philanthropic organization to a set of luxury loft apartments. Heinz is among the lucky companies reporting a steady increase in profits in the last eight months. According to comments made by Chief Executive William Johnson,

The company's top 15 brands, which include ketchup, sauces and processed foods, generate 70% of its revenue. It currently has 13 brands that bring in $100 million a year, and by 2009, Johnson said Heinz expects to have four more hit that mark. "We now expect to increase consumer marketing by almost $60 million this year," Johnson said. "This represents a more than 20% increase from last year and is well above our original commitment. We also expect to maintain our recent trend of double-digit increases in research and development spending."

While having basic products in economic belt-tightening helps keep them steady, it’s worth noting that Heinz’s marketing strategies are also critical. Their emphasis on core products in the US and Europe, especially at a time when food prices are steadily climbing and companies are competing even more fiercely for a wealthier consumer base awash in excess food.
For marketing purposes, it helps that Heinz has some tried-and-true packaging.

My vintage food t-shirt collection includes some bright red ones with the ketchup logo on the front. Everyone recognizes it. But on a more upscale note, Heinz is marketing their brand on clothing, cooking aprons, and European football shirts (that’s soccer to you Americans – and the jerseys are a hot item on both sides of the Atlantic). The ketchup bottle logo may be ubiquitous to folks in the US, but according to food and marketing experts, it’s well known and liked even in France!

Henry Miller once said “Americans can eat garbage, provided you sprinkle it liberally with ketchup, mustard, chili sauce, tabasco sauce, or any other condiment that destroys the flavor.” Despite the fact that Europeans have historically belittled our palates, and gladly bequeathed us the McDonald’s version of pomme frites (remember Freedom Fries?), the global taste for ketchup is not limited to fast food. Having originated as a spicy fish sauce in Southeast Asia, it’s no accident to see ketchup in Thai and Indonesian dishes. In Korea, Heinz has added a chili pepper to the ubiquitous ketchup logo and nonsensical English phrases: both the shirt and the product are selling like crazy. Indeed, some of Heinz’s growth markets are in China and India, where they are developing, producing, and marketing products designed to match regional tastes.

But Heinz is more than ketchup. Executives at the company also pointed to its European operations, which are being led by "encouraging results" in U.K. groceries, Weight Watchers, Heinz healthy meals and desserts, and strong volume growth in Italian infant feeding.

One other reason to like Heinz is that they do work on keeping food processing plants in areas that need the work. Despite closing some plants (including Pittsburgh not too long ago), Heinz has plants in Ohio and just announced it will be opening a frozen food facility in South Carolina. There’s still the issue of contracted tomato growers. This week’s outbreak of salmonella linked to tomatoes in Florida will certainly take its toll, despite the fact that most of Heinz's tomatoes come from California.    Luckily, Heinz claims that part of its mission is transparency in the food system. Working with the University of California at Davis and the Business Coalition of the Sustainable Food Lab, trying to develop farming and planting methods that are less environmentally draining and more consistently profitable for workers and producers.  In the future,  there's hope that they can mesh good labor, sustainable and/or organic production, and profitability.

So, while I’m going to stick to my favorite New Orleans hot sauces for most things, I think we may refill the freezer with Weight Watchers cookie covered ice cream bars and add some ketchup-red soccer jerseys to the family wardrobe.

3G IPhone: Place-based advertising, whrrling through New Orleans and Atlanta

My daughters and I are just back from a trip that involved a lovely five and a half hour layover in the Atlanta airport. We had a lot of great things to eat that we’d bought in New Orleans, so the only food review I have is from the C Concourse is of the Ben and Jerry’s stand (milkshakes: B+ for thickness, A- for taste).

Swallowing my annoyance at having to pay for internet access in an airport (bad form and lousy public relations for arguably the busiest airport in the world), my daughters and I sat and watched streaming videos on my laptop until we were unceremoniously booted off for “excessive traffic.” As I told the tech support person on the phone, isn’t excess traffic what everyone wants from the internet? After a few irate phone calls and some more muffuletta, I calmed down and walked around the concourse. My mood improved considerably when my daughter found a kiosk where we could rent a dvd and return it by mail the next day. While we were hanging around, she kept pointing out all the folks around us with iPhones. I grimaced jealously and went back to “Be Kind, ReWind,” a celebration of older techniques and technologies in its own modern package.

Judging from this week's highly anticipatedWorldwide Developers Conference, our envy is only about to go up. The 3G iPhone is cheaper than the original version, but in opening the door to more carriers, service costs will likely be higher. With increased speed of data transmission and the launch of the App Store pending, many companies are busy developing downloadable applications for the iPhone. It’s a win-win situation because Apple plans on taking a smaller cut of the profits than other cell phone companies. Here's another interesting tidbit:

Goldman Sachs analyst David Bailey expects iPhone and iPod users to download 20 million applications from the App Store by the end of this year, about 110 million more in 2009, and 210 million in 2010. Broken down, that means the average iPhone user will download five applications in 2009.

The store itself has another neat feature: many of the applications available will be free, since it’s a source of great advertising. And for the pay-for-use applications, it’s the easiest form of selling in the world: credit card information is already stored on most people’s iTunes accounts, so iPhone users can shop quickly. With free stuff and easy access, I'm sure it wouldn't take me very long to hit my five-a-year average. That all depends on the applications, which, even at this early point, pique my interest. For example, according to Business Week,

One free, ad-supported application for Tribune that's expected to be available when the App Store launches keeps track of an iPhone owner's commute, estimates the travel time, and suggests alternative routes.

Other applications include: video games with motion-sensing technology, interactive study guides for medical students, and, of course, many GPS-based programs. Apple also announced "MobileMe," which creates a link between the iPhones and your computers, allowing you to standardize calendars and receive updates on both devices.

Pelago’s iPhone-only application, named Whrrl, has a GPS-like capacity to help you find bookstores and restaurants, but with a twist: the recommendations are based on what the people in your social media networks used and liked. Granted, the public availability of this information will generate some of the same consumer backlash being waged against other applications that gather roaming data on people’s habits. It’d behoove Apple and its partners to develop privacy-protection practices before we find out the drawbacks of treating the phone like an elk migration tracking device.

Even so, I hope the next time I’m stuck in the airport, I can avoid the pay-as-you-play, not-so-customer-friendly wireless network and do everything we need to keep entertained through my brand new iPhone. By then, you can give me a Whrrl and check out my favorite New Orleans restaurants. In the meantime, I think I'll keep them secret.

Tags: iphone, place-based advertising, ooh

Introduction to digital signage webinar coming up on June 12th

There's been a lot of talk lately about digital signage, and specifically, treating the store as a new medium for communicating everything from product advertisements to late-breaking news and important information. Regardless of where you stand on the issue, there's no doubt that the industry is growing at a fast clip, and a lot of retailers, brands and marketing agencies are clamoring to learn more about its efficacy as a marketing medium.

While there are a lot of proclaimed "experts" in the field, POPAI, the global organization for Marketing at Retail, has decided to start holding bi-monthly "Introduction to Digital Signage" webinars to get more of their members -- as well as interested non-members -- properly oriented in this complex and evolving field. The first of these webinars is coming up this week - Thursday, June 12, at 1PM EDT.

If you're already an expert in the field of digital signage, this webinar isn't for you. But if you're just starting out in the industry, or if you have a client or partner that is, it will give you an excellent introduction to the exciting world of digital out-of-home media.

Specifically designed to help newcomers see past the industry hype and focus on the projects, business cases and best practices that have been successful in the real world, POPAI's Introduction to Digital Signage webinar is a great way to spend an hour of your time -- and only $50 -- to jump-start your understanding of what works and what doesn't in the digital signage world.

The topics we'll cover include:

• An introduction to the digital signage market with some basic market history and analysis,
• A look at some of the most common usage scenarios,
• An explanation of the components used in typical digital signage networks,
• A discussion of the benefits and drawbacks of using digital signage, and
• An examination of some of the most common pitfalls and problems that occur, and ways to avoid them in the first place.

So please join us on Thursday, June 12, 2008 at 1:00pm EDT


If you're interested, you can click here to sign up now! You have to sign up by the end of the day on Wednesday the 11th in order to participate, so don't wait too long if you want to check it out.

Tags: digital signage

Corporate social responsibility - what's it worth to you?

Whenever I teach at the college level about corporations and theories of social organization, there are always a handful of students who will claim that even egregious misconduct by big companies is offset by their philanthropic acts -- I've come to call it “the Ronald McDonald House Effect.” The question is this: Does it matter how much a company’s practices damage the environment if they pour some of their profits into good works? And does it matter if corporate social responsibility is done for selfish (image polishing) as well as altruistic reasons (if there even is such a thing as altruism)? Judging from recent media output on social responsibility, it matters, but we’re not sure how, or for how much.

As I’d tell my students, when it comes to ethics, there’s no simple equation to evaluate the actions of institutions. These are big questions that have to be answered in context.

Two big economic and social trends have pushed the complex issue to the forefront of today’s business news. The first trend goes under the sustainability/fair trade and labor banner, which, as polls show, matters more and more to consumers of all types. As environmentalism goes global, socially responsible business practices become mainstream concerns.

The second trend is the economic downturn. Although people are making greater use of discount stores, an equally common consumer trend during tight times is sticking to the tried and true, the trusted and well regarded. Here’s an example: studies show that mothers on a restricted budget will buy more expensive brand name items because there are greater risks associated with spending the last few dollars on a generic macaroni and cheese that won’t be up to standards, a laundry detergent that leaves your clothes grey, or shirts that come loose at the seams after a single wear. This is particularly true with food, where convenience stores full of more expensive brands have greater neighborhood prevalence than supermarkets or wholesale clubs, which often require residents to travel a distance, usually outside of public transportation routes. Sometimes that brand loyalty is tied to ethics: not only is the product good, but also it’s produced with overt concern for the health and wellbeing of the environment, workers, and consumers.

A study done at the University of Ontario asked, "Does Being Ethical Pay?" and showed that consumers were willing to pay more for goods they believed were ethically produced than unethical ones or ones lacking information. People who claim to have high standards about fair trade and other social responsibility issues were the most willing to shell out, especially if the item was highly rated as ethical. Folks who had no predisposition were willing to pay a bit more, but didn’t care after a certain level the degree of ethical imprimatur. But we're still left wondering what counts as ethical or responsible in any given setting. A company like Seventh Generation is going to have a completely different profile and attitude than Proctor and Gamble but that doesn't mean the overtly environmental one wins the ethical game hands down. P&G has both overt and quiet versions of social responsibility going on.

To be meaningful, social responsibility has to mesh with either the corporate founder’s interests or the company’s overall culture. I’ve heard the term “greenwashing” bandied about more frequently in the last two weeks than I’d ever heard it before – one website allows consumers to post and rank commercials according to the degree of greenwashing. Greenwashing is almost as ubiquitous as, well, green. Maybe it's because Oprah used the word, or it’s on a “What’s hot/ What’s not” list in some grocery checkout magazine.

The point is: consumers know when a company’s faking it. It’s hard not to get a little cynical when the industry hands out awards (called the Halo, even) for philanthropic work annually by The Cause Marketing Forum, honoring the best communications programs between companies and their favorite nonprofit causes. Indeed, corporate dollars are spent on research on “how to achieve the maximum benefit” from social projects “while still increasing shareholder value.” Although Marketing with Meaning has its sights on the right ideas (building long term relationships with customer base), the University of Ontario studies pinpoint a key issue: social responsibility becomes less meaningful if we dilute ethics to a broader, more general idea like “meaning.” I doubt “meaning-washing” will catch on the way “greenwashing” has, but you get the idea…

Still, some of today’s better versions of corporate philanthropy do often have an interesting and generative cast to their activities. The best are educational and, while somewhat connected to the product line of the company, not so tightly connected as to appear self-serving. A combination of online and direct promotions strikes the best balance. One place where companies are finding success are websites that allow consumers to research information on related topics, make contributions of their own, or participate in outreach and fundraising events. I'm always happy to note that some of my favorite food companies, like Ben and Jerry’s, Stonyfield Farms, and Annie’s Homegrown, set the standards for this.

Ultimately, consumers will vote with their wallets on the degree to which causes -- green or otherwise -- matter to them and their purchase decisions. I expect that many will start small... now I think I’ll postpone my search for meaning, and go get some ethical ice cream.

Honing the pitch: niche markets during a downward trend

There was a cautionary article in last week’s New York Times Magazine about bloggers whose personal lives become too transparent in this public forum. That isn’t about to happen here, but anyone reading these posts will be hard pressed not to notice my penchant for chocolate and iPhones– and perhaps some of my biases about market research and advertising. One message I can't avoid is the delicate dance between mass and niche markets. There will always be magic products that sell across demographic lines, but in the current economic climate, most companies need to know who their real customer base will be for the long haul.

Of course, some big groups -- older people and teens -- will simply remain important because of their sheer size. It’s smart to target ads to baby boomers as they age and to teenagers, who set and build trends even when they aren’t spending at the same amazing rates. Just recently, three interesting stories pinpointed why niche markets need specific products and marketing campaigns:

First, Marketing Daily notes that while sales of home repair and yard maintenance goods are on the downward trend, sales of certain luxury goods remain high – and the buyers are men with money. It doesn’t mean it’s an easy sell. According to Mires+ Ball, these men require a particular sales pitch:

For higher-end clients, that means "you have to tell a pretty smart story, but then back it up with something tangible, and performance driven. Anything that looks like frivolous excess - visuals that show a house with eight cars in the driveway, for instance-just doesn't play." While affluent men are still spending, he says, all the dour economic headlines have also meant that they're likely to be far pickier, using higher standards to justify splurges. "Men will scrimp and save on everyday things, so that they can make that one big purchase that's really meaningful -whether it's a surfboard, a guitar, a wristwatch or a car."

Second, a new study confirms that gay brands are good business. Some companies, like Subaru, Absolut, and Levi’s have already recognized the power of brand marketing to gays and lesbians. While market research tends to overestimate the wealth and disposable income of gay households, it is true that gay and lesbian consumers are a loyal and vociferous group. A study for the ad agency Prime Access and media group PlanetOut found that advertising makes a huge difference in perception and purchasing decisions by gays and lesbians, who preferred gay-friendly companies. LGBT folks were also much more likely than their straight counterparts to boycott or reject products from companies with anti-gay agendas.

Add in two more facts: first, a large percentage of gay and lesbian consumers are perceived by their peers as influential because of their “ahead of the curve” knowledge about cultural trends and new products. And second, brands with gay-coded appeal are also almost always perfectly okay to straight markets. That is, gay consumers “read” products as gay-friendly while straight consumers are often oblivious to all but the most obvious gay tags. Even when the message is overt, straight consumers are generally neutral about companies that market to gays. In fact, sometimes LGBT branding adds cache to an otherwise ordinary item.

The third is the most misunderstood niche targeted by advertising: racial and ethnic groups. According to BIGresearch, African-Americans and Latinos use more new media and are often quicker to adopt new technologies (especially video games, text messaging, video on phones, and iPods) than Whites and Asians. But even this data makes the mistake of using homogeneous racial categories, which hide differences and nuances within groups. For African-Americans, age, social class, and geography create cultural differences that are glossed over even in traditionally black media outlets. Latinos are also a wildly diverse group, especially when linked back to particular national or regional cultures. Would it be too revealing to point out that almost none of my friends (even those of different races and ages) can relate to the stereotyped subcultures that are portrayed in popular media?

Video games are a great example of the inability of the companies to get African American interests and needs right. African Americans are heavy users of video games but very few games have black men who are not villains or criminals or black women who are not victims.

On potential reason for that is that almost no game developers are black. One of the few African American women professionals in the gaming industry, Shana Bryant said:

There are a number of games in which inclusive design — of both women and minorities — would constitute a significant improvement. It’s something as simple as including ethnic characteristics in a character creation engine instead of just offering a palette swap or allowing someone to create a female player in a sports title. In a lot of cases, there’s very little overhead, and the payoff is noticeable.

It’s also important to consider that African Americans and Latinos represent only a fraction of the academic fields of engineering, technology development, research, and marketing. In a recent MTV blog series, all the black professionals in the gaming industry who were interviewed mentioned that engineering, game development, and marketing were not thought of as career paths among young African Americans.

As the dollar gets tighter, these niche markets will matter more, as people will tailor their spending in directions that are less risky and less questionable in terms of defining themselves according to a mass market. And, remember, the great thing about niche markets is the boundaries are fluid: Even though lately I’m anything but trendy, there’s a Subaru in my driveway, some Levi’s in my closet, and an iPhone on my wish list. But for now I think I’ll hold off on the men’s luxury clothes and Grand Theft Auto III, and just make sure there’s enough chocolate in the pantry.

Tags: demographic marketing, niche marketing, advertising

The Gap is good TV-free, but Old Navy needs a rescue-at-sea

I'll tell you the moral of this story up front: sometimes not advertising is a great way to advertise.

Advertising Age recently noted that the GAP continues to eschew television advertising as part of its overall marketing plan. While this allows the company an 18% savings in advertising expenditures, it coincides nicely with GAP’s recent profitability (up 40% according to some sources). A quick look at the numbers shows that the original GAP brand and Banana Republic are moving out of a sales decline, while the lower-priced line Old Navy struggles along. Given the fact that the GAP line is mostly promoted in print magazines and billboards, much of their overall corporate TV ad budget goes towards Old Navy. You might think there’s a direct correlation here (Less TV = Better Sales) and while there’s certainly some relationship, it’s worth examining some of the other branding variables for both lines before we pinpoint the exact cause of death on a still-breathing corpse.

First, Old Navy has been struggling with its product line for some time now. According to the NY Times:

Last month, the company said its lower-cost Old Navy chain had become too fashion-oriented, with an emphasis on youthful women’s clothing that put off customers shopping for basics. Weakness at the chain prompted the departure of its president, Dawn Robertson, in February.

President for less than two years, Robertson’s strategy of aiming for a younger market and hiring designer Todd Oldham to create new products never really stood a chance. Oldham’s safari-themed prints are still bulging out of the half price rack and it’s the end of May -- an eternity in Old Navy turnaround.

Down the street at its sister store GAP, though, a considerable amount of energy and money has been spent on re-shaping the brand with social consciousness recognition. The (PRODUCT)Red campaign was mainly done through print ads, with famous do-gooders wearing the Red line, to raise awareness and money for HIV/AIDs research and health care in Africa. Despite criticisms about how many of these funds actually make it to direct aid and sluggish sales early on in the campaign, the imprint of celebrity charity literally adhered to the Red line at GAP. More recently, the company is going to sponsor a conference on international child labor campaigns, as much to raise awareness as to save face after watchdog groups targeted child labor in Gap-contracted factories in Dehli.

Finally, in a slightly safer vein, GAP’s latest venture is a line of art t-shirts designed by an array of artists connected with the Whitney Biennial. Most are well known and already well compensated (Chuck Close and Kiki Smith), so it’s not clear what “support for the arts” means in this case (“allowing more people access to fine art,” was one suggestion, although $38 a t shirt is still out of the ordinary joe’s price range).

The strategy is still a hit, though, since it hints at the charitable and social consciousness vibe and certainly stays in line with the tastes of GAP’s main customer base in the educated upper middle class. While these folks are also pulling back spending, a combination of selling the basics and selling a message may keep GAP itself afloat.

So why is Old Navy sinking? You’d think the lower cost line would be thriving in recession times, especially when merchandise gets moved through the store and discounted at such a fast pace. Summer clothes are already in the half off racks, but I see fewer people in the store every time I walk by. Yes, the teen market is definitely sluggish right now, but an even bigger problem is that Old Navy has no identifiable style, since it shifts and re-shifts its product line so quickly. There’s too much variety with no coherence. More importantly, no single product remains to be the “signature” piece drawing shoppers back inside. Variety is not always the spice of life.

The real genius who’ll throw Old Navy a life line needs to come up with a single print or television campaign that will not sell merchandise, but link the brand to something beyond its retail doors. (Currently, the closest they get is a charitable donation incentive if you fill out their online survey after shopping there. As one financially savvy teen commented as he went through the checkout, “yeah, sure, so YOU can get the tax break.”)

Until then, GAP’s management is right to save money, avoiding celebrity commercials or campy ads with kitschy references and focus on getting the merchandise connected to a loyal consumer base. Their bet on out-of-home media also seems apt, as more retailers pump ad dollars into posters, billboards and other below-the-line media every day.

But even great cause marketing and the right choice of media won't be enough to save everyone... Right now, shoppers need a pretty solid reason not to limit themselves to department stores, where they can save time and gasoline and the clothes actually last more than a single season. So until Old Navy finds their special purpose, it might be best for them to keep those advertising dollars in hand.

Tags: advertising, retail, out-of-home

POPAI's introduction to digital signage webinar coming up on June 12th

If you, your clients, your partners or any other interested parties are starting to explore the strange and exciting world of digital out-of-home media, POPAI's holding the first of what will be many "Digital Signage 101" or "Intro to Digital Signage" webinars on June 12th.

Specifically designed to help newcomers see past the industry hype and focus on the projects, business cases and best practices that have been successful in the real world, POPAI's Introduction to Digital Signage webinar is a great way to spend an hour of your time -- and only $50 -- to jump-start your understanding of what works and what doesn't in the digital signage world.


The topics we'll cover include:

• An introduction to the digital signage market with some basic market history and analysis,
• A look at some of the most common usage scenarios,
• An explanation of the components used in typical digital signage networks,
• A discussion of the benefits and drawbacks of using digital signage, and
• An examination of some of the most common pitfalls and problems that occur, and ways to avoid them in the first place.

So please join us on Thursday, June 12, 2008 at 1:00pm EDT

If you're interested, you can click here to sign up now!



Tags: digital signage, in-store TV, electronic billboards

P-O-P Every Bit As Important As Brand Building

Those were the words out of Kellogg's Frances Booth, Category Management & Customer Marketing Controller, when she spoke at this year's spring POPAI meeting this past April. Here's the blurb from the POPAI UK site:

[For] Kellogg, P-O-P is every bit as important as traditional brand building especially when it comes to new categories, Frances explored the role P-O-P plays versus other forms of support including above the line. She also explained what Kellogg are learning about the do’s and don’ts of P-O-P.

The presentation concluded with a summary as to how the Company are changing the way in which they work with suppliers and how they are continuing to seek an open dialogue with them in order to generate new ideas and a reciprocal understanding of the Kellogg business.

The meeting also featured a presentation by shopper research agency, Shoppercentric, who unveiled their latest findings on impulse shopping.

Danielle Pinnington, Managing Director of the Company, looked at the factors driving the growth in impulse purchasing and provided an illustration of the way in which it reaches beyond Fast Moving Consumer Goods (FMCG). The presentation demonstrated a clear understanding of the role of impulse among shoppers, the channels that make it happen and the triggers which, in 2007, led to 31% of shoppers claiming 70% of items purchased were selected on impulse.

There's been a lot of discussion lately over the relative merits of different advertising media, since TV viewership is on the decline, and other sectors -- notably, out-of-home, Internet and even mobile -- are growing at substantially faster rates. We've also heard folks like P&G, Unilever and Wal-Mart talk about how important all forms of POP and shopper marketing is to their success. Thus, hearing it from Kellogg isn't too surprising (though it is certainly reassuring).

Tags: advertising, shopping, POP

Another thing that keeps me up at night...

So I've been a little remiss on posting lately, but I promise I have a really good reason. I'm not normally inclined to post personal stuff on these blogs, but a lot of you folks already knew that my wife and I were expecting our first baby sometime around now. Last week, he decided to show himself to the world. Say hello to baby Liam:

The surprised look on his face is because I was telling him about the digital signage industry at the time -- the number of overlapping vendors, the lack of standards or formal metrics, the continual volume of hype fed into the channel. But fear not, a solution is at hand: he promises to start working on the problem as soon as he learns what his fingers are for.

Thanks for your patience, folks. Things on the blogs should get back to normal in a few weeks :)

- Bill

Mythical authenticity: retromarketing anew

When my kids were younger, we used to get tons of toy catalogs in the mail. One was called “Back to Basics,” and it was obviously aimed at Baby Boomer parents, with re-issued toys from the 50s and 60s, like Flexible Flyer wagons, wooden blocks and Tinker Toys. The slogan, “they do make them like they used to!” appealed to that generation of parents, who may or may not have actually hauled a red wagon around their yard, but yearned to make that kind of idealized childhood possible for their own kids.

When done successfully, especially with an already sentimental demographic, nostalgia sells. Retrobranding is not new – notice all those VW Beetles on the road? – but some companies are counting on a deeper affinity for brands from a not-too-distant past. Nostalgia is too simple a term to describe what’s going on here.

According to last week’s New York Times, one company, River West Brands is entirely devoted to acquiring and re-establishing certain brands, packaged in a reinvention of their original design. Some of the products -- notably Brim coffee, Underalls, and Salon Selective Shampoo – are not necessarily things that people still want or need (Brim is an instant decaf, for example, in an age where real coffee has morphed into a whole host of status symbols) Rather, Paul Earle, company founder, claims that the past experience invoked by these brands can be put to use generating interest and loyalty to newer incarnations of similar products.

Think of “brand memory,” as something more than firsthand knowledge: the taste, the appearance, or even just the advertising slogans are familiar even to people who may not have ever used the product on a regular basis. Anthropologist Arjun Appadurai famously reminds us that things (as well as people) have a history and a biography. Interestingly, this memory doesn’t have to be 100% accurate, it just has to tap into something that seems collective -- something lots of people can easily relate to. My daughters love the Tootsie Pop commercial with Mr Owl who counts to three before he can’t stand it and bites to the tootsie roll center. Is the commercial from the 1970s that good? Or timeless? Or is it the grainy edge to the animation? Or the fact that their parents stop dead in their tracks and say out loud, “One, Ta-whoo, Threee,” along with the owl? Embarassingly, it’s probably a bit of each.

Advertising campaigns have certainly played on nostalgic content before, but an existing narrative storyline of a product is a rich vein to tap. It’s the same reason why fairy tales, myths, and legends engage people who never lived in Bavaria or ancient Greece. They create a sense of belonging, of being part of a larger story beyond our individual lives. Marketers work hard at creating “backstories” for products – the revival of a retro-brand, carrying history in its DNA saves the marketer a whole host of time and energy. The Times cites recent research in The Journal of Customer Behavior:

Retromarketing is not merely a matter of reviving dormant brands and foisting them on softhearted, dewy-eyed, nostalgia-stricken consumers,” they asserted. “It involves working with consumers to co-create an oasis of authenticity for tired and thirsty travelers through the desert of mass-produced marketing dreck.

Now, I’m cynical enough to know when we’re being sold a tall tale, especially one rooted in the 1950s. But I’m also aware that authenticity is as much an invention as is nostalgia. Creating authenticity is what culture’s all about – and in consumer culture, companies invent rich worlds for their products. If they do it well, the story becomes real (it's almost like the marketing version of The Velveteen Rabbit).

Here’s my big question, though: how do we know which brands are worth reviving? Take Postum, which, despite being loved by my 80-year-old mother and a whole lot of Mormons, is an acquired taste at best, and is easily replaced by a good brewed decaf latte or even chai-in-a-box!

Is Postum interesting or cool enough to be Americana? My vintage Mr. Bubble and Spam t-shirts evoke a whole world of comments. There’s even a new line of Oscar Mayer wear for teens. The difference is that these brands are not yet defunct – and everybody’s got a story to go with these products (remember, when it comes to brand memory, it doesn’t matter if it’s real, overheard, or even made up, as long as everyone agrees on the "memory").

It’s the ability to invent or tap into a story behind the brand that makes the brand valuable even long after the products have been removed from the shelves. I for one believe foods are the best bet because they resonate in collective memory both visually and physically. Taste and memory defy science and yet we are learning more and more about the way they’re tied.

We may have to wait a few years to see if Underalls and Eagle snacks return as part of the consumer vernacular. Until then, I’ll be on eBay, looking for a Tootsie pop t-shirt for my daughter and Postum for my mom.

Tags: branding, marketing

Just a date or serial monogamy?: Loyalty programs in an economic downturn

Here's a follow-up to ongoing stories about consumer behavior during economic slowdowns (as a stress-reducer, I’ll still avoid using the R-word): The key question for retail sales right now is, of course, how to keep spending steady? Or, in other words, how do we know you love us if you don’t come back for more? Right now spending is unquestionably heading down and as those tax rebate checks begin rolling out, the necessities (food, gas, and love?) will come first. Surveys say we should expect to see people using that small boost to fulfill daily needs and bring down personal debt.

Some reports suggest that technology sales are still good: people continue to see televisions and cell phones in the category of "needs" rather than "luxuries" (and in a perfect world, my economic stimulus package would prove my love for Apple in the form of an iPhone). But aside from that, most analysts suggest that even adjusting for housing and car sales, personal consumption is shaky. As Mike Mandel of Business Week points out, it's also a bit hard to define:

What the government calls "personal consumption" is actually a grab bag of items, some of which don't really fit the usual notion of consumer spending. For example, the nation's current annual personal consumption of $10 trillion includes about $1.8 trillion in outlays by Medicare, Medicaid, and private health insurance providers... In fact, once medical outlays... are set aside, it turns out that the rest of personal spending has actually fallen since November, adjusted for inflation. The decline is pretty much across the board: inflation-adjusted purchases of food, clothing, furniture, and motor vehicles are all down. The part of health-care spending that individuals control most directly—prescription drugs—is down as well.

Although spending on clothing and household goods looks tight, Kohl's and Aeropostale posted some gains. But what are they doing that might make a difference? Kohl’s has a two-way romance going: one is a longstanding relationship with its credit card and frequent customers. The second is a flirtation with the regular crowd. The retail giant counts on a strong loyalty marketing program, with a pre-existing direct mail coupon and deeper discounts for credit card holders. At the same time, fliers offer regular deals for "walk-ins." Even teens are spending less, and their loyalty is like a high school crush: the retail love story with Aeropostale will probably be short lived. The clothing company didn't rate a mention in a recent list of "Top 15 Brands for Gen Y Trendsetters."

Where does that leave everyone else in the retail dating game? There’s no question that tempting consumers to spend will depend on incentives such as in-store deals, bargains, and coupons. It also doesn’t hurt if it’s a relationship with perks. Consider the success of grocery store loyalty programs that give regular customers money off at the gas pump for every dollar spent.

In general, loyalty programs might want to increase their flexibility at a time when customer relations are no longer like serial monogamy. Programs where consumers stop getting coupons if they don’t purchase on a regular basis will quickly lose viability. The concept of "unprofitable loyalty" may be worth revisiting so that regulars get more incentives but infrequent customers still feel as though there might be a better bargain in returning rather than seeking out a competitor.


Tags: shopping, loyalty, retail marketing

The refrigerator can read your mind

...Or at least your barcodes, which more marketing experts are hoping will be an extension of your thoughts and needs. In this case, the point-of-sale moves even further into your home and automatically into your pantry.

Warren Belasco’s new book, Meals to Come looks at the future of food and cooking, noting how scholars have consider the meal-in-a pill, the thinking kitchen, and automated grocery shopping since before the 1939 World’s Fair. My favorite image is from around the 1950s, showing a gleaming metal and plastic kitchen with no actual food, mess, or cooking smells, but a space age mom pulling fully prepared trays from the automatic fridge-oven combo.

In some ways, we’re certainly closer to that image today than ever before. Prepared foods for both in-store and take out consumption have become a growth industry for supermarkets. Delivery grocery services like PeaPod and NetGrocer will even bring your fresh and prepared foods right to your door. And now, appliance manufacturers are edging up to the futurama kitchen with a refrigerator that allows you to swipe a product’s barcode directly into the appliance, creating a grocery list that can be transmitted to the store immediately. Incorporating microprocessors, touch screens, and internet communications into your kitchen means no more running out for milk at 10 pm. Imagine downloading a recipe, comparing the ingredient list against what’s in your refrigerator, and sending out a shopping order for what’s not. It is the DreamWorld of the 50s come to fruition.

Wait, wait, wait. I hate to be the Luddite in the Temple of Future Goodness, but is this really necessary? Or better? (I’m not even going to mention the international food crisis as one reason why this technology might appear a bit excessive. Okay, well, I am. But Belasco ties these things together, too: if we want the kitchen of the future, we have to create a future where access to good food remains constant for the global population and doesn’t deplete resources unevenly).

Even if we don’t end global hunger today, how far we can go with smart appliances and customized, immediate food sales? At least let’s consider whether it’s worth the effort:

1. Are new techno-smart kitchen appliances a growth market? GE, one of the oldest and the second largest appliance manufacturers in the US, just announced that it likely going to sell off its century-old but slow growth appliance line. This doesn’t mean people won’t buy stoves, refrigerators, and washing machines in the near future – but creating a whole new product line means you’d better be sure there’s enough income and desire out there for such big purchases. Right now replacing old televisions and laptops seem to be a more pressing consumer concern. Consider also that the market for new appliances is going to be energy-efficient, green and with greater recycle-ability. When manufacturers add in new circuitry, screens, and other technology, they might want to make sure they’re LEED compliant first.

2. Isn’t this a bit redundant? The goal is to move people away from doing online shopping on their computers and having it dispersed throughout the household. But what if my cell phone can do all that work for me? It’s small, I can take it everywhere I want in the house (scan the barcode on my laundry detergent, my shampoo, and my milk, all in one handy device!) Why incorporate it into a refrigerator? As one shopper told me, “the more gadgetry they stick on the microwave, the more expensive it is when it breaks. You’re usually stuck just going out and getting a new one.”

3. Fast, free delivery is often neither. Aside from the fun technology, one factor hidden in these point-of-sale-to-your-doorstep services is the difficulties and costs of delivering that milk. First, there’s the cost of gasoline. Just ask my local milkman, whose prices just went up (and yes, speaking of the 1950s, when we're in Massachusetts, we have a milk delivery service complete with the cute insulated milk box on the doorstep -- and if you want it, glass milk bottles. It’s local, organic, and we never run out). Whole Foods, which has just started its own home-delivery option, is only selling dried and canned goods at this point. While Amazon has proven the cost saving measures of virtual stores, it’s much more difficult to get people to standardize their weekly grocery purchases than their occasional book buying (think about how much you believe in the accuracy of Amazon’s “personal” recommendations based on your past purchases.)

4. Who needs this the most? Consider the people who would most likely benefit from this technology: people who are less mobile, like senior citizens and new parents, people in urban food deserts, where there are no nearby grocery stores, and others in rural or geographically less accessible sites. But these are not the consumer groups most likely to pay the premium price for these techno-savvy appliances.

So, until they get all the kinks worked out, I think we’ll put off that kitchen remodeling job a bit longer.

Tags: shopping, self-service

Wii Fit for charity in New York City today!!

If you missed your last local Wiimbleton contest, this might be a chance to redeem yourself -- at least if you live in NYC, as Marketing Daily notes:

Nintendo, whose U.S. headquarters is based in Redmond, Wash., will host an all-day event at the park's Merchant's Gate near Fifth Avenue intended to coincide with National Fitness and Sports Month. The event to promote the home video game system will center on live demos of the Wii Fit and Wii Balance Board.

The game maker will offer up some 40 different Wii Fit activities for consumers to try out; for every demo, the company will donate $5 up to $25,000 to the American Heart Association. On hand will be company brass and various luminaries from the American Heart Association.

The piece also reports that Nintendo is working out a deal with Westin Hotels to offer the balance board as an exercise option for its customers. Although I got my yoga mat for Mother's Day, given the new luggage restrictions on airlines, I think I'll leave it home next trip and give the Wii Fit a try instead of waiting on line for the treadmill in the fitness center!

Tags: wii, retail

Visual vignettes and virtual shopping

When I began teaching about food, I pointed out to my students that market researchers had much better information than social scientists, including studies that looked at how people moved through a store, what eye level was the most compelling for purchases, and whether it mattered if items were up front or back on the shelves. But the virtual shopping experience described by Valla Roth and Matt Draper of MarketTools reminds me that old fashioned social science research techniques can often provide better data than in-store surveys and tests. The system allows potential customers to walk through a supermarket on their home computers. The pictures of the aisles and the movement through the store are facilitated by 3D graphics, allowing the researcher to assess how and when a shopper might pick up a 3 for 1 deal or ignore the end-of-aisle displays.

Long before we had the computer graphics to make it virtual or sexy, I learned a similar technique demonstrated by the late Dr. Peter S. Rossi, head of the Social and Demographic Research Institute at the University of Massachusetts Amherst. Rossi pioneered a new method of research called the vignette technique (or in its less glamorous name, factorial survey), in which different descriptions of a situation are given to respondents, who are then asked a series of questions to elicit individual responses to each description. The vignette technique is great because it allows the researcher to measure and analyze fairly complex scenarios in a way that surveys and linear question-and-answer formats do not. Rossi and his wife Alice (an equally famous sociologist) used it to measure how people perceived their relationships and obligations to family, but vignettes have also been used in studies of AIDs/HIV, religious beliefs, and the delivery of social services to different populations. For all this, consumer market research has shown surprisingly little use of the technique, opting more for focus groups, surveys, and in-store tests.

In a way, MarketTools’ new approach is an “upgraded” vignette method. Giving the vignettes a 3D interface and having the consumer act out inside of a virtual environment combines the vignettes with a much-needed visual element. Since people are better at relating and responding to stories with a images,  we hope the collected responses will be better too. And imagine the next step: perhaps a Wii-like interface where you actually “walk” through the store and interact with objects.  It would be like The Sims for market research (but of course, in The Sims pizza never goes bad and groceries can be delivered at any hour of the day...)

Here are some limits and suggestions, though: No matter how sophisticated our graphics get, they are still a mere representation of reality. People’s main complaint about shopping on line is that the product image on the website does not match up to what arrives in their home. And while the grocery store layout is ubiquitous to most people, there is a certain fudge factor to getting it as realistic as possible, and comparable to what people are used to in the real world. In the end, real interactive video might prove more useful than graphic representations. Also, t one thing this method alone won't mimic the different types of shopping trip that people take -- the data won’t tell you if people on a milk run or a weekly shopping trip are most likely to make point-of-sale purchases. Tying the tech back to storylines and vignettes would help: give people a scenario before setting them lose in the virtual shopping world (“It’s Wednesday, only your teenage daughter will be home for dinner, and you have to be home in half an hour.”).

It’s almost impossible to follow customers around and see how they react to deals without being invasive. As much as I like talking to my informal research group in the supermarket, I don’t learn much about their point-of-sale behavior. But I am much more attuned to their overall patterns and cycles, their brand preferences, and the frequencies at which they buy certain products. I'd love to see how they make decisions in real time, even in an imperfect imaginary realm, so if that's the current state-of-the-art, I'll still take it.

Tags: shopper marketing, market research, shopping