The eminent demise of the printed version of newspaper has been predicted for quite a while.  The assumption is that consumers desire for free online news is such that those not offering it at no cost will lose readers.  The main issue with offering it free online is people will slowly stop buying and subscribing to the printed version.  As this occurs, newspapers will struggle with ways to maintain circulation and the almighty ad dollars. 

A newspaper in Rhode Island is actually charging more, much more, for the online version.  Wait, I thought the online version was far cheaper to produce and publish than the printed version so why should it cost MORE?  Apparently those in charge a the Newport Daily News think that by pricing the online version at 137% more than the printed version will price people out of the online version and steer them to the printed version.  I think this will only lead to fewer readers of both the printed and online editions.  A little like cutting your nose off to spite your face. 

Your thoughts?

A few months back I blogged about how the science of the brain is being used more and more by marketers.  I wrote:

"...analyzes why we buy what we buy by using medical MRI machines to monitor consumers brains to measure their subconscious reactions to brands and products.  Time after time, the subconscious thoughts deep within the gray matter overruled the more logic-driven conscious.  Decades of traditional marketing research, including focus groups, have been predicated on the conscious being the "right" answer.   Group think, and other issues,  influence answers in so many ways that traditional research methods may no longer be the best tools to gain true insight."
                   
As we move toward using science to help us sell stuff to the masses, it occurs to me that basic sensory targeting seems to be missing.  It is widely known that targeting our five senses is the most effective way to convey emotion, feeling, thoughts, etc.  It is why certain music takes us back to specific places and times and why the smell of cut grass takes us back to our childhood.  The way a product feels in our hands can be just as important as how it looks; heavier objects often convey better quality.  Yet most retail packaging is designed almost entirely around just one sense, our ability to see. 

Go to the local grocery store and check out the cereal isle.  There are rows and rows of colorful boxes stacked in neat rows all vying for our visual attention.  Some may use text more while others prefer pictures, but they all are focused on what we the consumer are seeing.  The same can be said for chips, soft drinks, coffee, you name it.  From a touch perspective they are all mostly slick cardboard which convey nothing other cheap packaging.  The best tasting cereal is in the same box as the worst tasting cereal.  Our sense of smell is exposed to only the faint aroma of the ink that used to print the box.  Our sense of hearing is completely left out unless you shake the item and then they all sound alike anyway.

The only items that do engage the senses are those that aren't packaged.  How many of us will squeeze and smell fresh produce before we buy it?  I would say most all of us.  We do this because we have ready access to the actual product and more importantly, our eyes don't have the pretty packaging to rely on.  We intuitively trust our other senses to allow us to pick the best banana, cantaloupe, etc.  We can do this with our eyes shut.  Ever tried to but cereal or brownie mix with your eyes closed?  You can't do it, at least not based on what the item would taste like.  Why not make the box of brownies actually smell like fresh baked brownies?

There has been a lot of web chatter recently about Facebook.  First they altered their privacy statement, got slammed in the media, and then changed it back.  Now a few weeks later they have changed the layout of the site.  Many have commented on how the new look is very similar to that of Twitter.  Implications are that Facebook saw Twitter as a threat so rather than wait, they proactively made the change.

This change has generated it's own Facebook page where users can express their feelings about the changes by voting yes or no.  As of this morning, there were over 380,000 votes and comments on this change.  From what I can see, a vast majority are "no" votes. 

This brings up a couple of interesting questions.  The first being did Facebook know that this would cause a stink among users and there fore generate more PR?  After the recent bad PR from the privacy change, I would say bad PR is the last thing they would want or need.  The second question is why do it?  Facebook has over 175 million active users.  Presumable a vast majority of users signed up because they at least somewhat approved of the layout.  So why make the change?  Or better yet, why completely change the way a user interacts with your product without at least doing a little research about likes and dislikes?  I know the final decision lies with Facebook, but once you have 175 MILLION users, your product is no longer really yours.  It's now belongs to the general public.   Too many people are emotionally invested in Facebook, and the related connections with friends, loved ones, etc to go changing it without asking.  Why not keep both the old and new version and let users choose?

If Coke and more recently Tropicana can alienate customers by making product and packaging changes, what did Facebook expect?  Always stay true to what it is that made you successful.  Just ask Starbucks.

The current shift by consumers to increased coupon clippings and emerging technology may be coming together.  A recent post on Ad Age delves into the developing technology of 2-D, or QR, bar codes.  Used in Japan and other markets for several years now, the idea is for users to snap a photo of the bar code with their mobile phone.  The phone , assuming it has the appropriate software installed, will the translate the image and send the user to the URL, email, etc that is linked to the code.  In Japan, large billboards feature the codes allowing users to snap a photo of them with their phones and receive coupons, web links and more.

The current obstacle in the US is the lack of code-reading software on phones.  Once phone, the Iphone by Apple, already has the ability due to free software that can be downloaded via the App Store.  I recently downloaded this type of software on my Iphone from 2D Sense.  Once installed, I went to www.2dsense.com and created my own 2-D code that you can see below:



If you have the software on your phone, you can take a picture of this code and it will take you to my website.  It works better if you print the code and snap a picture if the printout, but I was able to make it work by taking a picture of my laptop screen.

With several companies working on this technology, I would say we will be all be seeing a lot more of these in the near future.  The applications from a marketing perspective are quite endless.  Print this on the side of a box of cereal and when the customer "scans" it with their phone they get a coupon on the spot.  Put the image on a Facebook page and take the user to a website.  The already use tiny bar codes to track bees, why not track all of us ants?

Amazon recently introduced the second version of their popular electronic reader, Kindle.  It is basically a digital screen with WiFi built in that allows users to purchase complete digital books for around $10.  The idea is that digital books are cheaper since their is no printing costs involved.  The first generation Kindle sold out during the Holiday season despite costing several hundred dollars.  The device claims to give the reader the same experience as reading a real live book due to special ink that mimics ink on a printed page.  While it may be easy on the eyes when compared to others electronic screens it will never be a real page turner due to, well, the lack of pages to turn. 

This may all change in the near future.  According to a recent article on economist.com, HP labs has a new product known as electrophoretic screens that are flexible electronic screens.  They can be bent, folded and rolled up, much like a traditional newspaper or magazine.  Imagine the possibilities if you could take a few of these screens, bind them together like pages of a book, and turn them as you read.  This would allow the traditional user experience to blend with new digital purchase functionality to all for an infinite number of titles to be viewed on a device that simulated the turning of real pages.  Every time the screen, or page, is turned, the device would know that the next "page: would pick up where the previous "page" ended.

If I am a newspaper or media company, I would invest heavily in this emerging technology because if it works, the last good reason to purchase printed newspaper, magazine and books "people like to feel something in their hand and turn the pages" will be gone.

In my most recent post I gave a few reason as to why the Greater Richmond Chamber and the Greater Richmond Partnership should combine forces.  There is a third Richmond-region organization that would also be a good candidate to join with the Chamber, the Retail Merchants Association. 

Much like the Chamber, the RMA is a membership organization that charges member companies, retailers in this case, annual dues.  In return, members receive RMA-related communications, discounts from other members and invites to RMA events.  Pretty much the identical to what the Chamber offers its members.  Think of the RMA as a Chamber for retailers.  While the RMA has around 960 members and the Chamber around 1,800 members, there are several hundred companies that are members of both associations.  While the RMA has in recent years expanded its reach to cover most of the northern part of Virginia, most of its members are located in the Greater Richmond region.  A glance at the Board of Directors will find many of the same people and companies involved with each organization. 

Staff wise the RMA has around ten full-time staff compared to the Chamber's staff of 30.  However, the titles appear to be very similar within each organization.  They each have an events person, a government affairs person, a membership person and a finance person.  So the organizational structure of both the RMA and the Chamber are pretty much identical.  The services they offer are pretty much identical.  Quite a few of their members are identical.  I can understand why Richmond region companies, retailers in particular, are having a hard time deciding where the dwindling dollars should be spent. 

Will any of this consolidation of organizations actually occur? In a word, no way.  The Chamber and the RMA both lost long-time leaders to retirement within the past year.  The Chamber's president stepped down after 18 years with the Chamber while the RMA president retired after being at the helm for the past 15 years.  While I would argue this transition is the perfect time to reorganize and strategically re-evaluate the future of the organizations, my guess is the newly appointed CEO's of each organization will want no part of it.  It is the non-profit equivalent of asking the City of Richmond and the Counties to come together as one.  Oh wait.....

The current economic crisis and associated rise in unemployment is impacting the Greater Richmond Region much like the rest of the country.  Local elected economic development professionals around the nation are scrambling to find new ways to attract new businesses while also retaining current businesses within their regions.  The Greater Richmond region actually has two organizations, the Greater Richmond Chamber and the Greater Richmond Partnership, that seem to doing this in parallel. 

The Chamber is a member-based organization with a mission "To serve our members and enhance our community by building a pro-business environment and outstanding quality of life".  The Partnership mission is "To help grow the Greater Richmond economy through the attraction of high quality jobs and new capital investment, the retention of existing businesses, and the continued improvement of the region's business climate."  Both of these missions seem to be very similar.  The only real difference is the Chamber has a membership base of 1,800 local companies while the Partnership actively recruits new businesses, both domestically and internationally. 

From a funding perspective, the Chamber generates a substantial portion of its revenue from membership dues while the Partnership received funds from local jurisdictions and companies.  Both organizations rely on fund raising drives every few years to bring in additional revenue from regional businesses.  Both organizations occupy prime office space in downtown high-rise buildings. The Chamber has almost the entire seventh floor of the 600 East Main Street building while the Partnership occupies a portion of the eighth floor of Riverfront Plaza.  The Chamber employs a staff of 30 professionals while the Partnership employs a staff of 13 of which three are based internationally.  The current staff of the Partnership could easily fit in the current Chamber space thus eliminating the overhead of the Partnership office.  The Board of Directors for the Chamber is composed of business officials from local companies, while the Partnership board includes a few local business executives along with elected officials from the local jurisdiction of Chesterfield, Hanover, Henrico and the City of Richmond.  These localities happen to the be same areas currently served by the Chamber.  They are also the same localities that contribute financially to the Partnership.  On the private side, all of the investors that have contributed to the Partnership's 2009-2014 funding cycle are members of the Chamber.

Isn't it time to reevaluate combing the Partnership and the Chamber in an effort to cut costs while at the same time eliminating the competition between two local organizations?  Both organizations share common goals and have common stakeholders. Other regions that Richmond is frequently compared with,including, Charlotte, NC; and Nashville, TN; have their respective organizations operating as one organization while another, Birmingham, AL; is currently seriously considering such as merger of their Chamber and Economic Development organization.  According to the Birmingham committee chair, Mr. Dudley Reynolds, the move is being done because "it is time for the business community and the political community of the region to speak with one voice".  The Chamber and the Partnership both consistently stress regional cooperation so that the Richmond region can have one voice....isn't it time to do as they say?  The time is now for the Greater Richmond Partnership and the Greater Richmond Chamber to be an example to local businesses on how to adjust to the the current economic climate by making cost-saving changes and elimination of duplicate services while serving the Richmond region with a common voice.

The economy is in the tank.  Consumer spending and confidence are both at miserable lows.  Retail sales are not any better.  The current economic situation isn't very positive for a majority of brands and categories.  One bright spot is the private label business.  You know, the generic, or store brand, line of products.  Sometimes they are as generic as Target-brand dish washing powder.  Other times they are "branded" like the Equate line of products at Wal-Mart.  Regardless of the branding, they are the lowest priced items in any given category.  They can be 30-40% cheaper than their national brand counterparts.  Given this cost savings, it is easy to see why private label brands are gaining market share as consumers look to pinch pennies everywhere they can.

This new-found thriftiness brings up the question of how much does the brand mean to items that are essentially commodities?  Shampoo, soap, toilet paper, band-aids, cereal.  All things that we all use but also all things that are used in the privacy of our homes.  No one sees or knows which brands of these things we use so the emotional purchasing of a brand or label to impress others is not present.  Sure, a lot of us want to drive a nice car or wear an alligator on our shirt and ladies want to carry the trendiest handbag.  These needs are driven to impress others or give us a feeling of fitting in with some segment of the population.  So at some level I understand the branding, particularly premium branding, associated with these items.  But frosted flakes and toilet paper?  I would guess that the store brands of each of these would work just fine for us while saving us money.  I would even bet that if you took these items out the national branded packaging most consumers would not notice the difference.  Are Tony the Tiger or Don't Squeeze the Charmain really what makes us pay more for these commodities?

Wal-Mart has grown into the  world's largest retailer over the past few decades by being proud of the being the least expensive place in town for household goods.  Over the past year they have further embraced this position with the Save Money. Live Better tag line.  While this should help to get consumers back in to the stores, the question remains if they will go the generic, private-label route once in the store.  The 1,000 store chain Aldi is a no-frills all private label and generic store.  With a little more of a marketing push, viral in particular, Aldi could become the brand and store de rigour over the first few years of the Obama administration.

I predict over the next few years that the new cool and popular thing to do will be to buy the cheapest items within these categories.  Brown lunch sacks, recyclable of course, will become the new designer bag and people will be proud to show it off in public.  We will go so far from conspicuous consumption that a whole new subculture of completely inconspicuous consumption will emerge.  Cheap, I mean less expensive,  will be cool and generic will be popular.....from Going Green to Saving Green.

Some recent work has me thinking more about planograms and their effectiveness, particularly in grocery stores.  The pretty much universal grocery store setup has the outside walls ringed with refrigeration units and stocked with all the refrigerated and frozen foods.  The milk and eggs are in the back, the fresh produce on one side, the frozen foods on the other side with bread somewhere in the middle, towards the back.  This layout works for a couple of reasons. It allows the electrical requirements for the refrigerated units to all be on the outer ring of the store.  More importantly, it forces you and I to walk all over the store to buy staple items.  The thought is along the way we will see enough other stuff that the number of items in our basket will increase beyond what we originally came into purchase.  All of these reasons are beneficial to the retailer, not the consumer. 

With grocery margins being razor thin and competition fierce, there is an opportunity for a grocer to try something radical in an effort to obtain market share.  Make it about the consumer!  Make it easier to get in and get out with the things we need.  Rearrange your shelves based on how our brains work; do it based on the meals of the day.  For example, take breakfast.  There are core items that everyone eats for breakfast.  Milk, cereal, orange juice, oatmeal, yogurt, coffee, waffles, pancakes, syrup, sausage and bacon.  Why not group all of these items together in the store?  I know my brain easily groups foods by the meals I eat, not by what is on aisle 12 in the store.  I know this could create issues with how to place the refrigeration units, but it isn't rocket science.  With all of the market basket data available today, the above list of items could easily grow ten-fold and could also be tailored to include what shoppers at particular stores purchase together.  Some will say this will eliminate the chance to pick up the unintended purchases that the current Tour De Store setup creates.  I disagree and think the number of items purchased may actually increase since the likelihood of forgetting an item will be decreased.  How many of us have returned home missing the key part of a cookout menu because the mustard, ground beef, buns, chips and pickles are all on different aisles?

The best websites are successful because things are easy to find and then easy to purchase in a short amount of time.  Isn't it time these best practices are applied to the brick and mortar locations?