Alex Leece

The Continuous Channel – The New Retail Frontier?

I recently watched a presentation by Steve Nave, former SVP & General Manager of Walmart.com and in it he raised the concept of the continuous channel as a new frontier for retailers. He talked about rather than seeing retail as a multi channel process, we should be taking a step back to look at the entire brand, letting customers shop the way they want to shop and bringing it all together into one continuous channel. Essentially instead of serving customers through individual channels, we serve them at touch points across channels by optimising the organisations processes and technologies. The picture on the left is a trial advertising program by Tesco in South Korea. In a “virtual store” concept, people could shop with their mobile phones whilst waiting for a train directly from an ambient installation set up to look like a store and have their groceries delivered to their home hours later. This is a great example of allowing shoppers to purchase in new ways, on their terms and across channels.

Traditionally there were only three channels which organisations could utilise to actively generate sales, the stores themselves, direct sales (phone/direct marketing) and printed catalogues. These channels essentially each only had a single touch point within them. This has now all changed with the advent of the internet and the establishment of ecommerce as a legitimate channel. The internet differs from the three traditional channels in that it doesn’t simply create one touch point but a vast array of new ones. It feeds emerging technologies as it expands into mobile, tablet, TVs, instore, cars and not to mention social media. The key thing to note here is that when you think about it, none of these new touch points are actually a new channel in themselves, they are all being fed by the existing internet channel. The opportunity here for retailers is that increasingly everything is becoming a touchpoint with which consumers can transact with your organisation. Whilst this may sound similar to the concept of multi-channel retailing, the difference is in the thinking of how the channels and touch points intersect together and how the organization responds to the customer across them to drive sales.

For this to work, information, and data must flow freely between channels on the customer end and within the business units of the organisation, no silos. Customers more and more expect to be able to shop across channels, for example purchasing an item via mobile and collecting it instore. They need to be able to shop when and how they want to, customers shop with your company as a whole, not with an individual channel. With this in mind we can look at new ways to intersect them. I think whilst it may be very hard to truly get to a point where this is fully achieved but it is a good journey to be on and will help drive retailing into the future.

The Walmart example that Steve discussed is a good one to look at in terms of a big retailer testing out initiatives which cross the channel boundaries. Walmart has implemented the below strategies with their ecommerce platform that go some way to letting the customer shop their way and intersects both instore and internet enabled channels:

Site to Store – customers could purchase products online and have them sent to their local store for collection.

Pick Up Today – customers can view a stores stock online, purchase and put it on hold knowing it’s ready for them when they arrive in store to collect it.

Scheduled Delivery From Store – customers can order something online from a store and schedule the delivery for when they want it to arrive at their home.

These strategies are interesting in not only do they cross the typical “channel” boundaries, but really add utility for the customer.

Looking forward, Steve identified the below future milestones he thought to be criticial to driving the continuous channel strategy going for Walmart:

–Social – not just in a setting up a Facebook page way but really looking at what the intersection is between business and social. They started an initiative called “Walmart Labs” to explore new technology around understanding what people are talking about in social media. With that insight, then as brands we can come to people and be relevant to them and the local community TODAY in new ways. For example we could use the information to influence what store staff talk to customers about when they enter the store, the POS instore, or what new initiatives stores can do for people. It’s about more then just sending emails of a relevant sale to people who have indicated they like blenders on Facebook.

-Mobile – This will help drive the continuous channel as a future for ecommerce. Customers are turning to mobile devices more and more for information when they want it quickly. To help keep pace in this area, Walmart are going so far as acquiring tech company start ups to remain agile and take advantage of the latest advances in technology.

-New Store Models – Can ecommerce begin to help influence store layout? Walmart are now siting the online division at the table when discussing how stores are designed to help bring online into the bricks and mortar channel. For example we don’t necessarily need the store floor space to show all products if we can back it up with online channels. For example you could show just 3 digital cameras in each price point, knowing 300 more are online which we can get to store for someone today, or to their home.

Whilst we won’t see the end of bricks and mortar stores, customers will always have something to do instore, (a point I touched on in my post Why Bricks and Mortar Stores Will Always Have a Role to Play) retailers will need to rethink their operational strategy to keep up with how consumers expect to be able to shop, on their terms, across channels.

Alex

How To Make Stuff

Partially to share my thoughts and partially to force myself to organise them, I thought I’d share my take on how to make stuff based on the experiences I’ve had so far in driving digital work.

Now this is not a new concept, but I find the 4 D’s of web design are a great basis for looking at the process involved in any digital based project and can be applied to anything from a website to a mobile app.

Discovery: Requirements & Flat Plan

Collaboration. I find the best first step is to get everyone involved in the project in some way, shape or form into a room with a whiteboard and a marker. Begin by ensuring everyone is on the same page around the core of the idea then start discussing and drawing. Start by wireframing out the core components of the idea with boxes and arrows linking them all together to show the process flow. From my experience just going through the process of doing this will help the idea to become clearer as to how it all fits together. As a thought process, consider, what directs peoples awareness towards the idea, how do they experience it, what do they do to engage with it, how do they share it and what closes the loop and keeps them coming back either to stores or the experience itself.

Design: Wireframes & Design

After the general concept has been discussed and the requirements of the project has been agreed upon, the next step is to work on wireframes and design concepts. Wireframes have evolved over time and are becoming more and more visual, even interactive. There are a number of different pieces of software out there now which help to create and visualize wireframes, making them far quicker and easier to put together. Not only that but they can be done in a number of different ways from prototypes in keynote to grey box layouts. There is a fine line between visual and functional and how functional you need to make them.

Once the wireframes are put together, it’s time to look at the design. I find it best to visually design just the key elements with a few concept options at first to get the direction approved. Once this step is complete, it is then quick to go through and design each element of the approved wireframe with the approved design.

Development: Content, Front & Back End

The first step here is asset collection, it’s crucial for the team developing the product to have all the assets they require as soon as possible to keep the process going. In terms of back end, look to leverage previous projects for functionality to speed up development time and reduce costs.

Coming back to the concept of collaboration again, digital projects really require cross disciplinary teams. I’ve found this to be a real team process and not only just in terms of the digital team with front and back end development. You’ll often need creative direction and content input from across the agency also from, TVP, Photo Studio and Mac Ops. It’s all about finding the most efficient place to put the specific task.

In terms of signing off the development, look towards an iteratitve process. It’s simply not possible to present a first development stage that is perfect, so present a first build, second build, taking feedback and improving as you move towards the deadline.

Delivery: Testing, Launch & Post Launch

Before the project goes live, if the time allows, I definitely recommend user testing. It’s always surprising to see what the users will comment on and how they experience the journey. It can often be vastly different to what you imagine and some of the functionality that may seem logical through development may be shown to not be quite so.

Unlike traditional channels, once a digital project is live, it isn’ t the last you’ll see of it. Often there will be teething issues to resolve and you’ll need to keep an eye on tracking & feedback against KPIs. As a side note, look to bake in tracking and analysis features and consider hosting environment and how best to keep it running fast.

As a thought point to end on, perhaps good enough is actually good enough in the digital world. This process is not an exact science and it takes trial and error to really learn and push the boundaries. Being fast and agile like a tech start up really helps to drive this sort of work and unlike other mediums it really lends itself to being iterative.

Alex

The Value Of Proximity

Technology is allowing people to become more and more connected via social and mobile networks. These connections span from people in their locality right through to people on the other side of the world. This growing number of connections can create alot of noise and we do start to see marginal disutility within the social network as the connections become less valuable to the person. Traditionally, we were only able to foster connections with those in close physical proximity but what role does proximity now play as the world becomes increasingly open.

As a lens of looking at this issue, I came across the principles of Gestalt psychology. This theory is based around the concept that the brain is holistic, parallel, and analogue, with self-organizing tendencies which affect how we perceive things around us. Proximity is one of the grouping principles that this theory is based on and it occurred to me that it may relate to how we subconsciously self-organise our networks. The principle states that, all other things being equal, we perceive stimuli that are close together as part of the same object, and stimuli that are far apart as two separate objects. This simplifies things in our mind and reduces the number of small stimuli we need to process. Whilst this theory does most typcially apply to visual perception, focusing on the idea of our brain having a tendency towards self-organizing, it may not be too much of a stretch to consider physical proximity to be a grouping factor we use in organising networks to reduce noise.

Therefore as a way of coping with the growing amount of connection noise we experience, we may start to see people subconsiously group those people that are in close physical proximity together. They then may devote more attention to this group, allowing them to cope with the excess of less valuable connections within the network. We would of course be more likely to interact with these people on a regular basis and the effect may be exacerbated by the fact that content is becoming more and more tailored to what we are more likely to engage with (take Facebooks top stories timeline for instance). This would mean that proximity plays a role in the value of a connection as the closer you are to the other person, the more likely this connection will be on your radar. I know I spend alot more time interacting with my friends that I see on a regular basis than any others. So what does this mean for the reality of how much more utility we gain as the world becomes more connected, do we get as much value from the long distance connections as we do the local ones?

It’s not a new concept that proximity fosters valuable relationships among people, especially when considered in the work environment. A recent research paper gave some credence to just how much of an impact it can actually have (see reference link below). An analysis of a decade of Harvard biomedical research collaborations, found that the closer the proximity of the offices of key research partners, the more influential their joint papers were likely to be. It mattered whether collaborators were walking down the same corridors through the office, or eating at the same cafes. It seemed to be that the presence of physical collaboration through closer proximity produced better work from the team, despite on the surface being able to communicate just as efficiently over long distance via technology. The continued importance of location may seem unnecessary with the advent of Skype, smart phones, and other technologies that make it effortless and inexpensive to collaborate with people around the world, but location still seems to matter. Being able to communicate across distances means we can do alot of different things more efficiently but face to face contact and proximity is still important as the noise from our connections increase and it simply can’t replace personal interaction.

Whilst technology is allowing us to become more connected and break down geographic barriers, I believe that proximity may still play a role in how we organise our networks (even if only subconsciously) and can be an indicator of the value that a connection provides.

Alex

Reference

Lee K, Brownstein JS, Mills RG, Kohane IS (2010) Does Collocation Inform the Impact of Collaboration? PLoS ONE 5(12): e14279. doi:10.1371/journal.pone.0014279

http://www.plosone.org/article/info:doi/10.1371/journal.pone.0014279

Technologies Impact on Creativity

New York by Frank Gehry

The building pictured to the left is a recently opened skyscraper called New York by Frank Gehry. I think it is the perfect real world example of technology meeting creativity, plus I just think it’s beautiful.

I think the definition of what we consider creativity is changing, morphing to include functional aspects. In terms of advertising, how users will interact with a campaign, on which devices, at what time are all just as valid creative aspects as what colour the typeface will be. Many people may see technology as negatively impacting creativity in advertising as the proliferation of people becoming “connected” through PCs, tablets, mobile and social networks drive campaigns that have just as much to do with functionality as they do the big beautiful idea. However, I think it’s actually creating an environment that not only encourages creativity but actually means that it’s more effective.

I believe creative work now more than ever equals effective work. Previously a creative campaign would run it’s course through the paid broadcast media channels and fade away, only leaving word of mouth behind. Now, if people watch something they enjoy on one of their connected devices or with one present, they can then share the experience with their friend network and create discussions around it. Not only that but it lives on as a permanently available record on the internet.

Technology (being connected) & social networks amplify the message of creative campaigns, if people are interested in the content enough to spread it throughout their networks.

Moreover, technology has created an environment which empowers people as content seekers, distributors and creators. We’ll search out and only engage with what we wan’t to, whereas previously we obediantly consumed content that was broadcast to us (because we didn’t have a choice). In this new environment if what we create as advertisors isn’t creative and engaging, more and more we will just get ignored and passed by as people get used to accessing only the content they are after. Television broadcasters are dealing with this issue currently with time shifted viewing, newspapers are being replaced by daily updates on news websites and people are using iPods in the car to listen to music rather than radio. So what do we need to do as advertisors to continue to be relevant to people:

Be Interesting: Lets deliver information and content that is revelant to the person who is experiencing it at the time, whether it’s a price on a product they are seeking out or an amusing video to kill a couple of minutes at the office. Let’s deliver content that is easy and enjoyable to experience for everyone no matter where they want to access it, whether it’s from their mobile, tablet, PC or letterbox.

Do Stuff Rather Than Say Stuff: Look to create things as well as ads. Create utility. Allow people to access the interesting content on their terms.

Experiment: Maybe good enough is good enough. Lets be agile and iterate, operating more like a tech start up than a typical agency. Work together in cross disciplinary teams. Gareth Kay also made the suggestion of putting a percentage of the marketing budget directly towards R&D.

Why can’t the next Facebook/Twitter/Instagram be started within an agency?

Alex

Why Bricks and Mortar Stores Will Always Have a Role to Play

Tom Ford Store

I have recently been reading the excellent book, Why We Buy – The Science of Shopping by Paco Underhill. In it, he raised some points which really highlight to me the fact that bricks and mortar stores will always have a role to play in the retail environment. In my opinion it is unlikely that retail locations will be completely replaced by E-commerce, M-Commerce or F-Commerce, ever. To begin the discussion, lets look at defining shopping in a way that frames it as more than the simple acquisition of goods to fulfil a need.

Shopping: experiencing that portion of the world which is deemed for sale, using our senses of sight, touch, smell, taste or hearing as basis of the decision making process. (Ref. Paco Underhill)

The key message for me here is the neccessary sensory aspect is lacking in online retailing. Clearly you aren’t able to touch, smell or taste products without physically being instore. It is alot harder to truly understand the selling points of a product without being able to experience it fully. Take a look at shoppers as they wander round a store, picking things up, looking them over, taking them out of the pack, exploring and discovering. Further to this point, impulse purchases are often a result of touching and experiencing the product and indentifying the benefits it holds on the spot.

Merchandising can be just as powerful as advertising. For the most part we like to purchase based on trial and touch.

Why do we want to touch and experience things before we buy them? Firstly, for many products the tactile qualities of the product are a key selling point, such as luxury clothing from Tom Ford or manchester and linen. Even if the tactile qualities of the product don’t neccesarily require it be touched, they often still need to be experienced to get a feel for their benefits. Take technology products such as tablets, until you’ve had a go on one, flicking through some photos and articles, you really can’t tell how useful they really are.

So what else do stores offer that online retailing struggles to replicate?

Brand Experience: The instore environment can be tailored to deliver an incredibly strong brand experience, stronger then any press ad, TVC or web page. The store design and fit out, music, staff, location and surrounding stores all add up to deliver a message to people about your company and its values. Are you a high end store with exclusive location, plush interior and knowledgable staff or a discount retailer with a large store, bulk merchandising and convenient car parking? These choices alter how people perceive your company in a big way. Music also sets the tone of the environment, no self respecting teenager would shop in a store playing classical violin concertos.

Discovery: Instore you can create an environment which encourages discovery, exploring the store and experiencing the product. Sure this occurs on the internet naturally but instore it’s a much more experiential journey. Point of Sale which creates clarity of where you are in the store without oversaturating the information helps add to this. It sets the tone of the products around it but leaves the opportunity to explore the actual products in detail. For example using fashion imagery rather than text description of exact products. Sounds and smells can also be controlled, which can lead people through the store. Bakerys in supermarkets fill the store with the aroma of fresh bread, alluring you to discover and purchase the freshly baked bread.

Talking: Stores attract groups of people, if discussion can be fostered, the products begin to start selling themselves. If for example a group of girls are out looking for jeans, they will chat about the products and which looks best on each other, then perhaps running into friends and start getting their opinions also. This conversation my spread to the shoppers around them, bringing them in to the discussion. Sure it may be argued that this can be replicated to an extent online with F-Commerce (social shopping), but I don’t think it’s quite the same as the organic face to face conversation that can occur in a store environment.

Where does this leave online retailing to fit into the picture?

Obviously it will be a requirement for all businesses to offer their products online in some capacity in future if they wish to make the most of their revenue opportunities. I see it working in tandem with their retail locations. Bricks and mortar stores will be about delivering a strong brand experience for those who visit, allowing people to touch and experience the products in a controlled environment. Online retailing will then open a new avenue of sales rather than canabalising stores. Those that aren’t able to reach your physical stores perhaps due to location or lack of time, are able to purchase. It’s also great for making convenient repeat purchases on products you are already familiar with or low involvement purchases such as groceries. The convenience of being able to shop from a laptop, mobile or tablet, 24/7, 7 days a week is something people will come to expect and is an opportunty for retailers especially considering online stores don’t require staffing to be open and don’t have the same cost overheads.

Online retailing also allows retailers to take advantage of The Long Tail, a theory by Chris Anderson that there is actually more money in the “non-hits” rather than the “hits” as there is a substantially larger amount of them. It is too expensive for a bookstore for example to stock on a shelf a 15 year old book on the history of extinct moth species, filling them instead with the latest Harry Potter. However since online it costs nothing to have it available and you may actually sell one or two a year, add all these “non-hit” purchases up and you have a large revenue stream.

Technology is affecting the way retailers are doing business just as it is effecting the way we advertise to people but I don’t think there will ever be a substitute for the good old fashioned retail outlet.

If you’re interested in reading Why We Buy, you can purchase the book here: http://www.amazon.com/Why-We-Buy-Science-Shopping/dp/0684849143

Alex

Gareth Kay on How To Make Strategy More Useful

I last night attended a talk by Gareth Kay (@garethk) from Goodby, Silverstein & Partners on how to make strategy more useful. Thought I’d post up my rough notes of key points he talked to.

I think the key take aways for me were that creative work is becoming more effective work over time as technology and social networks create an environment where the message of creative campaigns gets amplified. Secondly, in order for us to make strategy to drive this creativity more useful, we need to create better problems. It’s definitely a case of more creative work in is conducive to more creative work out.

Notes below:

Creative work more than ever equals effective work. Technology (being connected) & social networks amplify the message of creative campaigns. It drives business and fame plus is more efficient over time.

 How to make strategy more useful:

 1 Define better problems – not just “sell more” or “raise awareness”. Interesting problem provides the foundation for interesting creative. “make 999/1000 people not want to be a police officer” (a problem for creative regarding recruiting police officers).

 2 Be in the service of people

 3 Be a bit less visible – less interruption , visibility through invisibility, don’t necessarily expect people to come to you – be part of their day.

 4 Break the tyranny of messaging – “what should we say”, consider doing things rather than saying things.

 5 Look at the way we work – big ideas aren’t necessarily so big anymore, more small bets can create momentum. Consider an “R&D budget”, iteration, experimentation vs planning, cost of failure is less, agile cross discipline teams, can’t be perfect, improvising towards a simple goal. Embrace change.

Alex

Musings On The Future Of Radio

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We all know about the impact of smart phones,  but what about smart cars. As cars become more and more digitally enabled, what does this mean for the future of how we advertise to people in this context and thereby radio?

Take the images in the slideshow above of the new 5 series BMW for example. Here we have a passenger who is able to browse the internet from the comfort of their vehicle. Perhaps catching up with their social networks via the likes of Facebook or Twitter or checking the latest news via their favourite website. Radio could potenitally be being streamed into an environment where people are not only a captive audience, but connected to the web just as they would be in the living room (or on the street with their smart phone for that matter). Moreover, if radio is being streamed digitally, does this open up the possibility of being able to interact with the live stream much like digital TV?

Computer technology is finding its way into all aspects of our physcial lives, creating new meaning and utility. I’d like to consider two key aspects of utility that could potentially be built upon by utilising technology in this space.

Convenience – delivering relevant information when & where you need it. It’s all about making it as easy as possible for people to get the product information they require in order to purchase. Whats for sale, where, and for how much. If for example you heard an ad for groceries which you were then able to interact with via voice or a computer screen, you could potentially seek out more details about the products and where your nearest store is to purchase them. Being able to do this instantly from the convenience of your vehicle may become natural as people get used to being “always on” and connected. Perhaps in future you’ll be able to purchase groceries whilst on the way home, during a radio ad and have them delivered to your door. Convenient.

Context – relevant information delivered in the correct context for the environment. Simon Bond (BBDO) made the argument earlier this year at Cannes that no screen is equal, we must tailor our messages to the individual platform. He also discussed how we view each platform differently, relating each to Jungs personality Archetypes (PCs for example as a Sage). With this in mind, I’d see radio as somewhat of an Explorer/Sage, assisting you make sense of your environment and imparting information that is relevant to you. To this end, digitally enhanced radio could become more hyper-local, transmitting content related to stores that you are driving past, alerting you to deals that are close by. Perhaps radio could be streamed to different target audiences by selecting the types of vehicles you wish to reach. This could be quite effective as the type of car people choose to purchase is often quite reflective of their personality also. Those who drive new Audis would most likely be interested in high end products for example.

Time to order my new car.

Alex

Technology vs Advertising

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Technology

Through creation and innovation technology provides people with new material objects, networks and services. I’d like to note also that I think it is predicated by age, in that what is considered technology by us now, will just be stuff to children who grow up exposed to it.

Of interest to me, is how technology, more specifically technology involving or related to the use of computers, impacts upon  how we reach and engage with people as advertisers.

Computer technology changes our media consumption habits, from how we gain information, how we interact socially and even how we shop. As media consumption patterns change, so to must the way we deliver advertising messages to people. Needless to say the advertising and media industry has always had to adjust to changing media habits, from radio to television, how people consume media has continued to change, and will always do so. What doesn’t change though is the basic principal of what we do, to create great work which inspires the desired behaviour change.

To help us understand what is driving the rapid progress of the computer technology causing these changes, we can consider three laws which I heard Faris Yakob put forward a while back, his blog is at http://farisyakob.typepad.com

The first, is Moores Law – The number of transistors that can be placed inexpensively on an integrated circuit doubles approximately every two years. (Computers get faster for less money.)

The second is Kryders Law – Computer storage space doubles annually while the cost roughly halves. (Computers store more for less money, trending towards marginal freeness.)

As a side note, Kryders Law is one of the key reasons that Youtube and  Facebook are able to be viable businesses as storage space will continue down towards marginal freeness which essentially means they can store huge quantities of user content without charging anything. We now see the likes of Dropbox and Cloud systems which take advantage of this also.

Finally, we have Gilders Law – The total bandwidth of a communication system roughly triples every 12 months. (Faster internet for less money.)

Take these three laws together as a whole and you get faster more compact computers and devices, virtually unlimited storage capacity and high speed internet allowing greater amounts of data to be transferred, all at a falling price. This drives the creation and widespread adoption of new computer devices which impact our media consumption.

So what does this mean for advertising?

As people become more “connected” through computer technology, they expect media content tailored to them when and where they want it across multiple devices. These devices have enabled a new form of connected social networking to thrive, people now want to engage with their favourite brands and share these associations with their peer groups online as a form of establishing themselves within the social landscape.  There are now new opportunities for selling that aren’t confined to a bricks and mortar stores and huge volumes of data with ways to listen to customers which would never have been possible before.

All this change is forcing us to adapt in how content is delivered through each medium and changing advertising from a one way message to “consumers” into a combination of messages and conversations with people. A scary thing for brands as they loose direct control.

To survive in this environment, agencies may need to start acting more like start ups and software companies, building and prototyping agile solutions for engaging consumers across platforms.

On that note, lets get innovating.

Alex