10 Reasons Why Consumer Marketing Will Never Be The Same
William Shatner, aka Captain James T. Kirk, the small and big screen galactic superstar, led us through imaginary and powerful vistas of very cool technologies yet to come. After meeting Mr. Shatner I discovered he truly is a Tech Head (or perhaps a Trek Head) seeking and enjoying the hyper-speed of technology in the age of instant communications, content, social feedback, and “beam me up Scotty” dreams of instant transport.
Shattner also enjoys buying the latest Star Trek products in retail stores as well as online. We were always right about our refulgent Captain Kirk. He really does keep up with hyper-changing new products, seeking to deliver new frontiers.
Since the imaginative days of Star Trek a multitude of software and hardware technologies have changed the landscape of brand and product opportunities within the consumer electronics product category. Our own Star Trek tech frontier is causing polarized market disruption, accelerated market opportunity; causing P&L tensions of strategic risk throughout traditional retail environments. In fact, these “Star Trek products” are serious catalysts to fiduciary and SG&A disruptions for retailers and manufacturers, on a global scale.
Disruptive as well as opportunistic hardware products include smartphones, tablets, slates and netbooks along with newly connected Internet televisions streaming to and from mammoth back end serving and storage farms. Opportunistic software products include instant access content; applets, widgets, games, movies, music and a vast array of cloud computing applications — Hmm, we never thought about business risk and opportunity while sleeping and dreaming about the voyages of the Enterprise. We never imagined that risk in our business, never sleeps, never tires.
“So Mr. Spock, how have “Star Trek” devices changed consumer marketing forever?”
- We have entered a new consumer-centric world of price transparency which benefits consumers, however, causes grave disruption for any retailers still relying on old consumer traffic, purchasing behaviors & consumption models.
- Past necessities are becoming obsolete. Old consumer products such as camera film, paper, stamps, envelopes, magazines, newspapers, CDs and DVDs have rapidly been replaced or augmented by smartphones, smart slates, tablets and smart TVs allowing consumers to instantly enjoy a multitude of home, mobile and business activities through varying pieces of glowing glass.
- Smartphones cause disruption: The four walls of the retail store have become porous. Last year consumers would drop into their retail cart a $184.85 Garmin global positioning system. Today, consumers take out their smartphone, point their camera at the product UPC code with an onboard app like Red Laser which records it, then tells you both details and reviews about the product, the prices at websites, and the prices at physical stores near you. Talk about disruptive! ‘Amazing, the exact item on www.XXX.com’s website is only $106.75, with no shipping, no tax.’ Smartphone reckoning represents a revolution in retailing. In essence, retailers’ advantages are eroding because of “Star Trek” technologies.
- Traditionally valued consumer brands are consolidating and in some cases collapsing, disappearing and declining across retail shelves. Part of the reason is that consumers are now the publishers, cloud friends, prosecutors and jury of your brand, products and pricing. Consumers whisper and yell faster and more effectively than marketers. And unlike 80% of advertisers, they do not correspond and share in metaphors, they speak direct, they speak effect, they speak reality, not ad agency metaphor speak!
- A multitude of retailers are embracing private label product agreements and strategies, allowing for complete control of costs, pricing, line logic assortment, advertising, communications and brand positioning. Competing with manufacturers on the same shelf is a vendor partner or competitor: yes, both!
- The strongest retail gain last year on a percentage basis occurred in electronic shopping which grew at a rate of 16.4%. The ongoing shift from brick and mortar stores to electronic shopping is supporting the longer-term growth strategy of more profitable non-store retail models.
- The TV business in particular is rapidly aggregating new profit pools through a variety of internet content downloads. There is a certain, dedicated turf war between content providers, TV manufacturers and retailers for the profitable delivery of content to consumers through connected TVs.
- Traditional retailers with hefty SG&A costs are P&L challenged. Retail disruption is caused by: lower priced, lower margined products breaking into the market; greater online price and service competition; once hearty and essential retail store traffic transcending to online endless aisle shopping venues; and smart phones allowing instant price comparisons at the last three feet of retail.
- Single product category retail business models (just consumer electronics, just food, just clothing, just tires, etc.) are traffic challenged. Consumer traffic is the heartbeat, the bloodline for any retailer. This spells flinty competitive opportunity for multi-category retailers both in physical stores and online.
- The connected TV mirrors the razor blade business. The next battleground for the hearts and minds and wallets of consumers will be through connected Internet TVs, as making a profit on TVs is now juiced by making a profit on downloading content through TV screens. In essence, the TV business is becoming the razor blade business, where you promote your razors to sell and profit from your blades. In this case, Internet content purchased represents the profitable “blade” business when downloaded onto TV screens. This is just one example of where the new frontier of profit lives and thrives. Viewing screen pricing will continue to decline to feed the opportunity for more razor blades, more profitable content through our mobile, business and home lives.
So, let us go where no man or woman has gone before. Our new 24-hour-a-day world of instant information, entertainment, product pricing, product reviews and personal connectivity is disruptively morphing the consumer electronics business as well as the overall retail business across the globe. Smart brands will seek and find deeper more meaningful consumer relationships in congress with smart devices, and channel buying preference. Profitable brands will capitalize through increases in productivity, delivering increases in profitability best realized through the instant push and pull thrusters of the internet.
Peter Weedfald is the Senior Vice President of Sales for Sharp Electronics Marketing Company of America. He has also served as President of Gen One Ventures, SVP, Chief Marketing Officer of Circuit City, SVP of Sales and Marketing in North America for Samsung, and SVP of global marketing and EEVP, GM & Chief Marketing Officer for ViewSonic.