A recent report from Commonwealth Bank states that the online retail trade reached $9.5b in 2010; 56% of which went to overseas sites. Their estimates tell a story of a rapidly increasing trend: the growth in the year to May 2011 was 126% in volume and 90% in value.

What rarely gets a mention when discussing the implications of this for Australian retailers is that the challenge they face consists of two separate issues – online versus offline and onshore versus offshore – and that in Australia, the focus has been on the former, and least important, of these.  

The decade up to 2005 was kind to Australian retailers, and this may go to explain why online retail in itself has been seen as a threat to their existing businesses rather than an opportunity to expand it. In the early days, while overseas retailers - perhaps as a result of operating in markets where innovation is a prerequisite for survival - got busy evolving their businesses, optimising them for a new retail reality, satisfied Australian retailers were in denial and fought against online retail in general.

We found ourselves competing in a global market at the same time as the rest of the world, but where other retailers saw Australian customers, we only saw American competitors. They were proactive, we became reactive.

And we still are.

There is a lack of confidence among Australian retailers, and nowhere is this more evident than in their eagerness to engage in discounting and price-wars like there is no tomorrow. Lowering prices has become the default solution to every problem, and brands are severely damaged in the process. We will never be as cheap as our overseas competitors, but efforts so far have been based on the assumption that if we cannot compete on price, we cannot compete at all; one disastrous consequence of which was the campaign against GST exemption on imported goods.

To succeed online we must aim to increase the perceived value of our products. By leveraging the opportunities offered by technology, we must proactively address other aspects of retail, such as service, quality and shopping experience. The belief that price is the sole driver of online retail has kept us from addressing the most obvious shortcoming of Australian retailers, which is innovation.

As Australian retailers discuss GST and the strong dollar, overseas retailers are introducing innovative solutions to problems:

·         To improve online service, Best Buy (US) developed Twelpforce. Via Twitter, customers can ask a large network of voluntary staff members – most of which are off-duty – about anything tech-related, and get instant replies.

·         Online UK clothing retailer Banana Flame launched an augmented reality feature which lets customers try on clothes using their web camera, before asking the opinion of friends via social media.

·         Peer reviews and ratings allow people to trust products and retailers. The latest and bravest company to leverage the power of word-of-mouth is Dominos Pizza (yes, the US version). After first responding to negative feedback by making better pizzas, they now encourage customer feedback on Twitter, before broadcasting it live on billboards in Times Square!

These are just a few recent examples of how the online shopping experience has been enhanced. Internet has created an ever expanding pie, and if Australian retailers want a piece of it, they must evolve past merely offering some products up for sale on an internet site from the mid-nineties. Internet must start being viewed as complementing, rather than competing with, bricks-and-mortar stores, and value must be increased through innovation, not decreased by cutting prices.

Unlike retail stores, offices aren’t open houses; an office is the “behind-the-scenes” of an organisation for which you need a backstage pass to enter. Companies in the service industries don’t have the luxury of a site from which to offer quality meet-and-greet time to the customers.

Internet is thus the equivalent of a storefront for most service-based enterprises, and I will use the example of an advertising agency to discuss the importance of online presence and brand building.

I have previously mentioned the importance of practicing what you preach; indeed it is the very raison d’être for this blog. The principles I use to market myself are the same as I intend to apply to my employer’s clients; keywords being authenticity, openness and walking the walk, as opposed to merely talking the talk.

For an advertising agency this principle would manifest itself along similar lines as it does for me. They provide marketing services to clients, and the least one should expect from a marketing expert is for them to excel in creating and maintaining their own brand.

It is safe to assume that prospective clients will conduct a little desktop research before inviting agencies to pitch for their business. Leaving them with only an outdated website is risky business and I find it surprising that many agencies keep showing the world the rundown front of a shop which looks like it's been uninhabited since last May. They claim to be the experts on brands don't car eenough about their own to keep their website even remotely up to date.

Social media shouldn’t be employed just for the sake of it; however in a dynamic and creative industry like advertising, it makes sense to be involved in the online social sphere. An actively managed agency-brand has the potential to attract and retain both clients and employees.

Here’s how I see a potential division of roles for online tactics for an agency’s self-promotion:

Website: An agency’s website is the foundation of the brand; a carefully managed image and a demonstration of the best that the agency has to offer. You won’t really get to know an agency through their above-the-line façade, so you're looking to be guided towards slightly more impulsive communication channels.

The website provides the agency with a platform from which to present its people and philosophy. It's great for showcasing show reels, case studies and their proudest moments of the past. The website is the packaging of the product, so design and functionality becomes important. Ideally there is a creative concept and overall structure. Mother and Naked are great examples; Mother also having gone through a full renovation of the concept several times. For years their website featured nothing but contact info - a bit like Publicis Mojo - to me, this made the brand even more mythical and fascinating. It's not many agencies that are in a position to pull this off though.

Regardless of which media platforms were used; Mother created a great brand, and in the process demonstrated their skills instead of talking about them.

I don't know too much about Mitchell, but by the look of their website, they're better accountants than marketers.

While the website is the retouched outcome of a professional photo shoot, the blog is where the model must engage in conversation and prove she is more than a great exterior.

Blog: This is where the agency shows off its personality and has the chance to shine. However; if they fail to provide their readers with substance, good intentions may backfire on them. Here, content is king and design is nothing. As all marketing in the New Brand Democracy, blogging is risky business; inviting criticism and putting oneself under pressure to constantly perform. From the perspective of a new reader, the agency is only as good as it latest post.

A blog should inspire and educate clients and employees - potential and existing. Regular updates will potentially ensure a perception of the agency as being progressive and ambitious; made up by people who are passionate about their industry and their clients.

Through commenting on current (relevant) events, new research, their work and best-practice around the world, the agency can convey its strengths as a knowledge-based enterprise.

Being the personality of the agency is actually a truth with modifications; the blog presents the professional side of the agency; the formal one which thinks before it talks. Twitter, however, is the darker half:

Twitter: Twitter is the agency in real-time; its live-to-the-world broadcasted Oscar speech - pre Michael Moore and seven-second delays. This is the after-hours version of the brand; it is informal, funny, social, less serious and more human. And probably a good reflection of what the culture is like at the agency; what they're like to work with and for.

It all comes down to presenting an authentic and holistic view of the brand. If it can make a good impression while 'uncensored'; the brand becomes more credible and people will have fewer inhibitions against interacting with it.

The combination of skills and human resources is what online media should aim to communicate, and the impression with which the reader should be left is: They have created a great brand for themselves so they can probably create a great brand for my company too.

An agency which is a great brand makes their employees proud to be working for the agency; it attracts the best in the industry; the agency produces better work; leading to an even stronger brand. And so it goes...

Having recently been enlightened about the important role retail store plays in the communication-mix, I was inspired to have a look at the store that delivers what is arguably one of the best holistic brand experiences in Sydney: the Apple store in George Street.

First some digressions...

When you visit a store - particularly a flagship store - you are visiting the brand at home and you get to know it in its natural habitat. The brand at home is as good as it gets. If it fails to impress here it probably never will.

Each visit goes to prove the effectiveness of previous marketing efforts, but each visitor is inevitably also under the influence of certain expectations made by these efforts. Promises have been made and the capability of the brand to deliver on these is about to be put to the test.

Being the first meeting between brand and customer, the retail store is an arena for forming of first impressions. However, the power-balance dictates that this process is a one-way street; the customer not having to do any hard work to impress the brand. The marketplace is a battle of the brands, where survival is granted by the consumers in exchange for respect and credibility.

Brands with flagship stores have an advantage in that there is no disruptive noise from competing brands, including the retailer’s. In traditional retail stores, less opportunities to deliver a brand experience means the actual products will be in focus; making the retail environment less effective as a communication channel. Over the last years retailers have also increased their leverage significantly compared to the products they sell, further complicating the individual brands' ability to deliver a physical in-store experience.

In retail stores with a larger number of less dominating brands, such as supermarkets and bookstores, the retailer’s own brand will be more prominent. Interestingly, it is largely defined by the combination of the brands on offer.

The retailer-brand also influences the product-brands and their distribution strategies make for a powerful message to the market. Which is why it was surprising to discover that the Norwegian luxury-brand of water (it's silly, I know), Voss, formerly barely available to Madonna, is now being sold in a chain of supermarkets. For only $6 for 0.35l (This brand is a testament to the power of branding and people's insistence to use brands as our primary medium for self promotion)! By distributing its ‘premium’ water through one of the five warlords of the national supermarket price-war, Voss couldn’t do more to devaluate its brand if they tried.

I would like to know how much the individual brands have over the lay-out and design of the store; the placement of their products and the presentation. I guess it comes down to one’s place in the food-chain and that retail stores are forced to reflect the hierarchy of market shares. The bigger you are: the better you get treated: the more you sell and so it goes...

In Norway Coke denied the supermarkets to sell its biggest local competitor, Solo. Although the move was deemed illegal and Coke was forced to retreat, there are several slightly more subtle tactics left for the powerful to unleash on their inferiors.

And now, back to Apple...

First thing you do is walking through a glass-door and for a moment you exist in a space that is neither street nor store. A glass front creates a smooth transition between the Apple world and the slightly less stylish outside world, here represented by George Street.

Super stylish silver/blue glass stairways transport you between the spheres of Apple heaven: three levels of computers, phones and Ipods. In other words, lots of buttons to play with.

I was allowed to take pictures inside the store, which was a pleasant surprise. Only rule was no staff could appear in the photos. That’s fair enough, or it would have been if it wasn’t for the fact that the staff nearly outnumbered the customers. On a Saturday!

There is of course an upside to this overwhelming number on staff, as they provide you with a level of attention which, apparel aside, is quite unique in retail (this is of course easier when you have three stores rather than hundreds). What separates Apple from apparel is that the staff leave you to play around with the products without making you feel bad about not buying anything.

If a store is the home of a brand, the employees are the hosts and effectively the personification of the brand. A great brand has the ability to make the staff proud to work for it and the subsequent friendliness and enthusiasm will reinforce the brand image(in the case of Apple: young, fun, modern, cool etc). The opposite scenario means a downwards spiral and a lousy experience for the customer.

My humble prediction for 2010 is that the employees of Voss will go from being too cool for school to about as cool as Adam Sandler in The Waterboy.

(download)

Click here to download:

FW.zip (593 KB)

Ps. I contacted the person responsible for the Apple store project, Phil Schoutrop of Buchan Architectures, with some questions, but he was unfortunately bound by confidentiality agreements.

We are not just about to enter a new year; we’re at the doorstep of a brand new decade. It’s the end of another ten-year period soon to be defined by the pop-culture which dominated it; January 1 becoming the date by which we separate two eras. Rather than a sliding scale of 20 different and unique years, the collective mind will refer to two distinct decades; as if everything from fashion and music trends to the economy and sociopolitical situations magically change overnight and 1999 and 2000 have as much or as little in common as do 1990 and 2009.

We’ll have to wait for the bright lights of belated wisdom to find out how history will define 2000-2010; at the dawn of what is yet to come we are left with summaries of what has just been. A tabloid society gets what it deserves and it is thus top-ten list galore in media; this blog being no honorable exception.

I wanted to kick off a new year of searching for a job (if it sounds like I'm in it for the long run, it is completely unintentional) with a post that is on brief; without too many digressions. As a result my top-ten list is both progressive and self-indulgent; it has got nothing to do with the decade that was and everything to do with me and the year to come. Considering that my competitors’ lists are all on the same topics (movies, records, people who shaped the history etc. etc.), I am proud to present a list not even Google will find anywhere else:

The top-ten reasons for why you should hire me as your new planner in 2010

1.    I’m a curious person. I read books on politics, sociology, advertising, current affairs, psychology, marketing and philosophy. It may sound like I must be very smart or very pretentious, but I’m neither; I just like to learn new stuff.

2.    I’m interested in people; what motivates our actions and how we influence each other, how culture is formed and how individuals contribute to shape culture. And what role brands can play in all this.

3.    I’m creative. At least fairly. It’s a bit like saying I’m intelligent; it’s something you need to show rather than tell. A bit like being a credible brand. Nevertheless.

4.    I’m intelligent too. Ok, everything’s relative, but the point I’m trying to make is that the prospect of using both the right and left half of the brain is what I find attractive about strategic planning, and that I believe my skills include representatives from both halves.

5.    I’m a consumer; I want brands to treat me with respect; I believe in treating others the way one wants others to treat oneself.

6.    I believe in big ideas; I want to come up with and develop, original and credible, holistic concepts.

7.    I’m critical and honest; I question everything and tell you my honest opinion. Not everyone likes that

8.    I’m motivated. I left a well-paid job in Norway to start a new career in planning in Sydney. All I want is a chance to make myself indispensable.

9.    An effective strategy must consider all tactics. I have experience from agencies specializing in advertising, public relations, media planning and below-the-line. Not years and years of experience, but still….

10. Once I start working on something, my brain never rests. Pay for 8 hours, get 12 hour for free!

Happy New Year! 

The newly released TVC for Gut Foundation aims to create awareness of bowl cancer. The ad compares the media attention received by bowel cancer victims to that of victims of terrorism and breast cancer. This is not a discussion of whether or not the message is important or the intentions justifes the use of disturbing images; the question is whether it is the best strategy.

Every organisation faces competition and The Gut Foundation is no exception; the fight against bowel cancer is also a fight for attention, most notably against breast-, skin- and prostate cancer. While we happily side with Nike against Puma and Pepsi against Coke, we don’t want to choose between terminal diseases; yet, this is exactly what this advertisement suggests we do.

The ad emphasizes that bowel cancer kills more people than breast cancer, implying that the latter receives a disproportionate amount of attention and reveals bitterness about being the less glamorous sister. This is no doubt frustrating and unfair, but one doesn't win many supporters by making the viewers feel responsible for the situation.

It’s not a competition. And even if it is, it shouldn’t be made explicit for the target audience.

The film is intended to provoke controversy, and while the TVC itself will receive much attention, the hype is destined to be short lived; any immediate positive effect will be eliminated when considered in a long-term perspective.

John Singleton is the initiator of The Gut Foundation and the campaign, and with a slightly longer and more prosperous career than me to look back on, he may know a thing or two that I don’t. I do, however, still question his goal to simply attract as much attention as possible by screaming the loudest. How do they intend to sustain the attention? The Gut Foundation is up against some brilliant concepts (Pink Ribbon and Movember) and perhaps they should stop fighting them and join them instead. These are long-term strategies that have achieved a great level of involvement without resorting to shock tactics.

People today don’t get involved with an ad saying “Don’t die from bowel cancer”. It reveals a way of thinking prevalent in the 1960’s which today underestimate and consequently offends its audience.

12 people die every day from bowel cancer. Terror is no daily event, and if it happens on the scale dramatised in the film – 9/11 proportions – considerably more than 12 people will die. The comparison becomes contrived and it is obvious that they aim for some free airing on the 6 o’clock news to justify the production costs and congratulate each other for a successful campaign. The value of the free publicity will be calculated and constitute a fallacious proof for the success of the campaign.

Statistics isn’t an insight. Who has a concept of ‘12 people die every day’? How many children die of hunger every day, tens of thousands? Should media rather write about bowel cancer? Why exactly?

Not making the headlines every day is a destiny bowel cancer shares with hundreds of other phenomena; diseases; wars; famines and natural disaster, many of which are responsible for more lives. The strategy is thus neither unique, credible nor particularly relevant to bowel cancer.

A murder of one child receives a lot of attention; as does Australia versus England in cricket and Amy Winehouse’s rehabs. Media coverage is about news worthiness; it doesn’t correlate with peoples’ real sympathies, and is thus not the criteria by which we should judge the perceived importance of a cause.

Without trivializing people dying of cancer, it is safe to assume that few are interested in reading about it every day. Would you rather open the newspapers on any given day to read about yesterday’s cancer victims than the morning of September 12^th 2001? A terrorist attack is sudden; violent; random; it is an attack on our society by fellow human beings; the complex causes and future consequences is cause for speculation and discussion; being enlightened on a range of social issues helps inform our personal opinions about religion and politics.

You can’t really have an opinion about cancer ("Everyone for, raise their hand").

The target audience for this ad is the very audience who reads about terror and sports. While we may appreciate the paradox of our own media habits, I think they’re unlikely to change as a result of this advertisement. It is not fair, but it is the reality with which the organisation is faced and has to admit before developing the strategy.

The rationalization for using terrorism imagery is that the cause is too important to be “soft-cocked about” (Mr. Singleton's words), but this seems to be an excuse not to conduct more research and find some slightly moreactionable insights.

Good intentions can also be difficult to argue against. The agency probably didn't charge full price so who are we greedy people to criticize them?

For people to visit the doctor, we must understand why they don’t. People know smoking kills, but they still smoke. Humans aren’t always beings rational beings and Mr. Singleton should know this better than most. 

When I was in New York many years ago, I was hustled by a street artist who drew a really bad portrait of me while we were chatting, and talked me into paying USD 10 for it. I felt stupid, but tried to convince my friend - and myself - that it was a pretty cool drawing, and encouraged him to get one too (I know, pretty pathetic).

This is a classic case of post-purchase dissonance. When one's purchase doesn't match one's values and attitudes, one must adjust them to justify it, usually through creative rationalisation. It mostly occurs after expensive purchases, but also when your pride has taken a hit. He who regrets a purchase will become a brand advocate. However, being a result of selfish face-saving motives, this form of advocacy is of little value to the brand.

Genuine advocacy appears when the initial investment is in social or cultural capital rather than financial. I will argue that while brands should encourrage these investments, it also comes with a responsibility to provide return on investments and to fulfill their part of the contract they thus sign. Only through reciprocity and authenticity will a sustainable and mutually beneficial relationship between the brand and its investor-consumers be maintained.

We invest resources hoping to make a future profit. The concept of perceived cultural and social value is complicated and difficult to measure rationally; it may be status or respect; for having good ideas, or for being an early adopter. Popularity can be the collective term.

If you can do anything to increase the value of your object of investment, you will. Our intellectual investment activities reveal our values and pretentions, and few of us are above protecting our self- and public image. An awareness and understanding of individual protectionist strategies are therefore of value for brands when developing their own communication strategies.

To induce intellectual investments, brands must provide potential investors with incentives to spend time and energy interacting with the brand (some times incentives are offered directly to the most attractive investors; a cultural emission). Starbucks is an example; the brand receive ideas and insights; the investors receive exposure for their creativity and feedback from their peers.

A brand must respect their investors and their contributions. The consumer is an intellectual stockholder, and there exists a contract between them and the brand. If the brand stays true to their marketing communication and respects and utilize the recources with which they have been entrusted, the investors will become brand advocates and a positive brand-image will be reinforced.

If the brand can't keep their implied promises; if they can't live up to the image they create through the communication which triggered the initial investment, the investors will escape the sinking ship with whatever integrity they have left. They will feel allienated by a brand who changes character and the platform from which they agreed to practice their individual image-building and myth-making.

Word-of-mouth will still be a factor, only with a negative prefix. The downward spiral has begun.

Every relationship relies on reciprocity; the input must equal the output. One-way communication is asking the consumer to trust, like and purchase the brand, without giving anything back. This is not sustainable. Without the support of ethos-fueled advocacy initiated by their consumers, a brand will find it difficult to maintain a positive image; ultimately embarking on their descent down the ladder of the brand hierarchy. Only the basement is the limit; a dark and crowded "buy now, pay later" purgatory.

A brand is a product plus added value. Added value has evolved from being rhetorical to becoming tangible, and the consumers play an important role in defining and creating this value. The value which the brand creates for its customers will ultimately increase the value of the brand itself.

If the investor feels like a valued team-player, her communication too will be authentic; and the approaching wave of word-of-mouth will gain credibility and power as it flushes over our rational minds and independent thoughts like a tsunami. The early adopters will be acknowledged and receive social rewards; in short they will become popular. People who are popular will stay loyal to the brands without whom they would not have been where they are today  - "I would like to thank God, my mym and my dad; Playstation; Google, and a vast number of soft-drinks; you know who you are".

I’m a bit ambivalent with regards to the use of slogans. Some are great; they sound cool and capture the essence of the brand.

When being somewhat consistent, however, and continue advocating that brands behave and think like a character, I think a slogan suddenly appears rather ill-placed. People don’t have slogans. They do, however, have a set of beliefs, values and traits which together inform their actions.

This is what I think brands need to focus on too.

Whether you call it a single minded proposition, business values or a strap line, their role should be to constitute the foundation upon which all communication is based, and serve as a guideline for what to say and how to say it.

Slogans limits the potential to create an interesting character of the brand. It appears as less complex than it in fact is. It is like an annoying catch-phrase that a sit-com character insists on finishing every sentence with. It becomes a habit and they feel obliged to continue doing it.

Slogans get in the way of interaction with consumers. People associate slogans with corporations, and dropping them in conversation will only serve to reinforce, and remind us of, the vast difference between the personal and corporate spheres. The level playing field suddenly becomes slightly steeper. Slogans are for insecure companies with a need to assert themselves in the marketplace. Yet, many great companies use them.

Here are two examples of ads with great slogans, both of which happen to be by Mother, London 

Ps. Some people actually do have slogans. They assume the form of euphemisms such as 'life-motto', and will be something like “Seize the day”; often tattooed on an arm, prefereably in sign-language. Companies shouldn’t use this as an excuse to use a slogan; it merely goes to suggest how superficial and clichéd slogans can be

PPS. Here are some of the slogans I came up with when I tried my luck as a creative in London.

Specsavers – You’re not as smart as you look

New Scientist – What you don’t know could hurt you

Norwegian Airlines - There's a whole world out there

Who Magazine - What planet are you from?

Budweiser - Who's your beerbuddy

Vitel Water - The day after the night before 

Datsun - Feel like one in a million

In a future post I will try to categorize insights. In the meantime, here are some random thoughts:

·         An ideal insight will provide the link between the business problem, the customer and the product. 

·         Research leads to observations. Observations enable us to ask the right questions to which the subsequent answers are insights. They explain why people do what they do, and provide the link between research and tactics.

·         Insights are mostly irrational and intuitive. People typically can’t articulate their real motivations, and the challenge therefore becomes to find out something about people that they don’t know about themselves. I find that being brutally honest to myself help identifying insights which are true of others as well. Well, at least I assume so.

·         How effective is it to tell people what they essentially already know about themselves? A brand should solve a problem, not telling people what their problems are.  

·         The more specific the insight, the more valuable it becomes. An insight that relates directly, and preferably exclusively,  to your brand or your target audience is more actionable. However, in terms of creating big, long-term ideas, it is an advantage if the insight also relates to a wider cultural phenomenon. The two don’t have to be mutually exclusive.  

·         In an increasingly democratic marketing environment, the consumer get to do more talking, and the brand more listening, than used to be the case; the consequences of which are the increased importance of creativity during the strategic stage.  

·         The creativity in strategic planning lies in defining new problems, looking at these from fresh perspectives and coming up with surprising, yet relevant, approaches to solve them.  

·         Previously, advertising was theoretical; rhetoric appearing in a virtual and impersonal media space. Today, communication is practice; interaction takes place in a real and physical world inhabited by people (yes, even in cyberspace). Attitudes and behaviour must be changed in practice, not just in an ideal abstract world. This has increased the importance of insights.

·         The role of communication has changed. Rather than coming up with clever ways of telling people how they should feel, we must find ways of engaging people and incentivize them to interact with and invest in the brand. This requires insights on several levels.  

·         There are many kinds of insights and they go to inform different aspects of a strategy; the value of which will often be influenced by the nature of the problem they are intended to solve. Some are rational; others emotional; some derived from observation; others from perception and even assumption. 

·         Many ads are based on ideas rather than insight. The ideas may be great, but must have a foundation of insights. When these still are successful, I believe it is because people have taken ownership of the brand and taken over the control of its connotations. Without insights a brand is an abstract entity that belongs to no one and everyone. It’s up for grabs and, depending on the product, may be held hostage by a segment of the market. It can turn out to be positive, but is ultimately a risky business.  

·         Many insights are generic, and the final ads often end up being generic too; they end up promoting a product category rather than a brand. 

·         "Our consumers love cricket/rugby/music (so lets tap into this love)" is thus not an insight. The answer to why they love music or cricket, on the other hand, is.

·         Some brands seem to have an idea of what type of attitudes and rhetoric appeal to their audience, but without a link to the business problem and the product, communication is next to superfluous. The key to effectiveness becomes the missing link. 

Have you heard of a Maslowian insight? Probably not cause I just made it up. Please keep on checking my blog for updates and you will soon learn what it is and why it can make a huge difference