Monthly Archive
for: ‘June, 2017’

Amazon’s $13.7B Endorsement of Brick and Mortar

For years Amazon’s guerrilla forces have been leading a small cadre of pureplay electronic retailers in a battle to overthrow (or steal profit from) the Commerce Establishment. They’ve been motivated by battle cries like “Give me electronic liberty or give me death”. Or “in your margin is my opportunity!” This scrappy group has, in the true form of guerrilla fighters, used high profile actions to dominate the attention of their well established brick and mortar opponents. As a result, the establishment has wasted time, energy, and opportunity being “anti-Amazon” rather than being “pro consumer” or “pro growth”. Press coverage has made it clear the field of battle is littered with casualties. And, in true war correspondent style, the number and type of casualties are often overstated for the sake of a good story. There is real damage on both sides. There are many very large casualties on the e-commerce side (a fact often ignored). And this year we’ve seen very serious casualties among traditional retailers – but not all from this fight.  A lot of brick and mortar damage is self-inflicted or the result of warehouse and discount stores. Then, we reach June 16, 2017 – a day that will go down in the annals of, well, something. That’s the day that…Amazon strode across the field of battle to join the other side. Wait… What? Yup. Amazon just joined the establishment…well, sort of. With all the retail casualties strewn across the field of battle, the establishment isn’t what it used to be. And with the […]

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Reading the Fossil Record: Why Data and Machine Learning Tell Us Less Than We Think

A few years back I read a post on Retail Wire that pondered whether retailers will need traditional research once mobile tracking is “in place”. The question reveals a very common flaw in how people think about research. And That flaw continues today amid all the AI and machine learning hype. Developing conclusions from mobile data is the equivalent of scientists reading the fossil record. When I was a kid, scientists had been observing the fossil record for hundreds of years. So, they really thought they knew what the truth was. Dinosaurs were reptiles, they had reptilian skin, they were cold blooded, lived isolated lives, and modern day lizards are their direct descendants. Fast forward to 2017. My kids learned that some (many) dinosaurs had feathers, that some (many) were herd animals, they were pretty fast moving, that some lived in family based units, some hunted together, and that birds essentially evolved from dinosaurs. The original scientists weren’t bad at their jobs. In fact, they were brilliant. The problem was all they had was observed data. They created solid, grand theories from the observed facts they knew. With Observed Data You Never Know What You Don’t Know. Paleontologists erred in their theories because there were thousands and millions of fossil truths they couldn’t see – they hadn’t yet been discovered or analyzed. Mobile data puts us in a similar spot. So does purchase history, shopper behavior, browsing behavior online, phone call data, and almost every other type of data the modern AI theories are based […]

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Competing with Amazon: Innovative Products are Key to Brick & Mortar Future

Lately I’ve seen writing that suggests retailers can’t win long term competitive advantage with products. To be fair, retail IS incredibly complicated and success depends on smart strategies throughout the eco-system. Steve Dennis, for example, recently discussed the importance of “the story” that leads consumers to your store. And although I believe Steve is too dismissive of products in this instance, I agree with the importance of story. But… Wait…What? No competitive advantage in products? Retail ONLY exists to sell product! It’s true that retailers gain no strategic advantage when buyers merely load up stores with products (any products) or search for “best products” without a plan for how they contribute to strategic success.  The buyer’s job must be more than filling in a spreadsheet of products. Still, since selling product is the only reason stores exist, a product based strategy must be a key focus in order to survive and thrive. But how? One Strategic Option:  Leveraging Innovative Products One way to build strategic power with products is with a program around innovation. In this strategy, retailers seek out innovative products, put them prominently on the shelves…and advertise them at significant levels of spending – usually with TV. In 25 years of working with programs like this, a reliable and consistent innovation program will: Bring very large numbers of new shoppers into stores. Bring very large numbers of existing shoppers back more often. Make shopping more interesting and entertaining. All that adds up to higher foot traffic, more spending per visit, higher product margins, improved brand preference, and better shopper retention. In fact, using Steve Dennis’ term, done right these products become a core part of your story. […]

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