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Newspapers Too Smart for Themselves?

2009-06-08T21:06:00Z

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?

Scratch and Sniff

2009-04-22T19:31:00Z

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?

Facebook All Atwitter?

2009-03-19T18:23:00Z

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.

Take A Picture to Save Money?

2009-03-16T15:36:00Z

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?

Time to Turn the Page on Printed Newspaper s and Books?

2009-03-13T17:44:00Z

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.

Chamber and RMA together?

2009-03-11T17:41:00Z

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.....

Time for the Chamber and Partnership to Reunite?

2009-03-10T14:47:00Z

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.

How a Newspaper Reinvents Itself

2009-02-26T19:23:00Z

The old joke goes "What is Black and White and Red all over?" A newspaper. While this held true for the past few centuries the newspaper industry today is dying at the hands of the almighty Internet. While the Black and White are still there, the Red now only shows up on the balance sheet. Newspapers, like magazines, are able to exist because of advertising and to a lesser extent, paid circulation. Numerous articles and blogs have been written on the state of the industry and what it should do to survive. Part of the problem is the consumers expectation for free content which forces newspapers into a corner. Do they try and charge readers for the content or do they offer it for free on their website? Charging for it generates a revenue stream much like charging for the print edition. Giving it away for free draws a bigger audience which translates into higher rates for online advertising, but effectively eliminates the business case for the printed version. So how do printed newspapers survive?

Almost all markets have at least one newspaper, usually the amalgamation of the what used to be two or three papers. They have a Front section, a Local section, a Sports Section, maybe a Business Section and Classified ads. A vast majority of the front section is usually AP wire stories that you could read in 1,000 other papers across the country. More importantly, you could find the same stories, but in REAL TIME, on thousands of websites. The Local section has stories about local schools, nonprofits, crime, etc and that are usually only available in that particular metro area. The sports section is a few stories about local high school and collegiate teams along with a lot of AP stories, once again, that could be found on thousands of websites in REAL TIME. The Business section highlights a few local businesses, local publicly traded companies and pages and pages of stock market results that, once again, can be found on thousands of websites in REAL TIME.

So, out of all the content listed above, the Local section is the only part that is unique to a particular paper. Why not make the entire paper local? Don't have enough reporters? Publish the numerous local blogs that exist in every community. Newsweek magazine is changing from a reporting-the-news reactive format to a opinion based analysis of the news stories. Or in simpler terms, they are in effect using personal opinion, called blogs on the Internet, as the main part of their content. I am sure every local paper received ten times more oped pieces and letters to the editor than they publish. Why not include more of these?

The basic business idea of product differentiation seems to be non-existent at newspapers. What is the other thing that makes the newspaper different from other forms of media? They have people that come to your door on a daily basis to deliver something. Who says they have to be delivering a newspaper? Team up with local florists and direct mail houses to add a new line of business with very little additional overhead. Do something, anything other than serving simply as the local AP print house.

A New Brand for Generics?

2009-02-23T15:39:00Z

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.

Grocery Shopping 2.0?

2009-02-03T15:13:00Z

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?

Gray Matter- The Total Package?

2009-01-28T14:27:00Z

I am working with a client on a new product to be rolled out to several grocery store chains. She is a typical entrepreneur that observed a need in the market and is now on the way to filling that need. Being a one person operation, she has done all branding and design herself. We met a few days ago and she brought samples of the packaging she is going to use. While very descriptive of all the scientific attributes of the product, the labels do nothing to catch the consumers eye. It is the equivalent of putting the ingredients on the front of the package...lots of blah that no one would stop and read. In a grocery store you have only a few seconds to catch the eye of the harried consumer, particularly for a new product that the consumer is not looking for. I suggested she get rid of all the text and replace it with simple logo, picture, etc. A concise attention-grabbing image had much better odds of getting me to pick it up, flip it over and then read about the details. No one cares about the chemical makeup of a product; they want to know how their life will be made incrementally better by using it. I know my life is much better when I grasp my square Fuji water bottle. The shape of the bottle MUST somehow make the water taste better, right? Nope, but the unique shape made me buy it, and pay a little more for it.

What the client needs to realize is people buy on emotion, not logic. A recent book , buy-ology

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. Coming to a mall near you, the Pepsi Challenge, part II, complete with MRI machines and neurologist.

Century 21 to Century 2.0?

2009-01-15T19:09:00Z

Century 21 recently announced they were moving all their TV advertising dollars online. Last year they spent a little over $26 million of which only $2.3 million, less than 10%, was online. On some level, this should come as no surprise. The proliferation of real-estate related sites like Trulia, Zillow and others have taken all the secrecy out of buying a house. Buyers can now access comp sales, pictures, days on the market and other info that used to be only available to real estate agents. Couple this access with the maturing of location software, like Google Maps, and you have an entire industry that has been radically changed by the web.

While all this makes the move of the advertising spend to online seem like a no-brainer, it is often very hard for large, established companies to change their ways. I applaud Century 21 for moving with the market and way from a traditional medium, TV, that has been clearly replaced by a superior mousetrap. Not only is this mousetrap, the internet, available in a more and more homes, the recent release of mobile devices, like the iPhone, Storm, etc that allow internet access anytime, will allow the web to become even more pervasive. I know my eyes spend far more time looking at my laptop or iPhone than looking at my TV.

From Ala Cart to Ooh-La-La Cart

2009-01-15T00:40:00Z

I was doing a little grocery shopping today and was trying to remember my mental list. Inevitably I will forget something or remember it when I am on the other side of the store. I started wondering why someone hasn't invented, or at least marketed, the RFID-enabled shopping cart. I know there are RFID devices that know where a cart is in the store so it can play related ads on a little screen. What I am talking about is a cart that uses my shopping history to help guide and remind me. Basically this:

Scan your Preferred Customer Card thingie on the cart-this will allow the cart to know your shopping history since every time you use the card to save $2 it tracks your preferences.

Several things could happen next. The cart could beep every time you pass an item that you purchase frequently. The cart could alert you to similar items that are on sale. Or even better yet, it could use a Amazon/Pandora like algorithm to suggest items you may like based on other shoppers that bought similar things. One step further would be to create an app that would register everything that goes into your cart and then store the nutritional value in a database that you can access from your PC or iPhone. You could also store a grocery list and then access it from your PDA while in the store.

I could go on and on about the seemingly lack of use of RFID on the consumer side. I know slotting fees and the like drive the grocery business and the milk is always in the back of the store, but someone, I am talking to you small regional grocery store, should step up and create a truly unique reason to come into one of their stores.

Your thoughts?

Facebook'em Danno!

2009-01-14T16:25:00Z

So today we have evidence of the increasing pervasiveness of social networking tools like Facebook. According to CNN, a police department in New Zealand has their very own Facebook page and posted a surveillance video of a robbery. Within a few days a visitor to the site recognized the perp and turned him in to authorities.

This is a great illustration of the effects social networking sites can have on the real world. The virtual communities that live within Facebook and other sites allow for an unprecedented reach into a particular community. Until the web, marketers and advertisers segmented populations using zip codes, block groups, etc. Consumer segmentation was not the reason the government invented zip codes. Where in the past the police may have sent the video to local TV stations and hoped someone was watching, they can now directly reach local citizens that want to be involved.

I can envision a local retailer in a town going onto Facebook, creating a group and using it to ask for feedback on a new menu. A local grocer could announce a new sale or promotion. A local grocer here in Richmond has at least five dedicated groups on Facebook, none if which were created by the company. Too bad since the simple creation of a thing like a Facebook group could lead to their best ever focus group. .