The LongTail of Retail, and 2008 the Year of Mobile Marketing?
Posted on | December 9, 2007 | No Comments
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In The LongTail v. the Re-tail, – written for AdvertisingAge (reg required), Al Reis tells of a recent shopping expedition where he drove to three separate retailers looking for 3 separate items (one per retailer) and came home empty handed. In all three cases the items were out of stock. Al, this has happened to me more than I care to think about which for me the consumer is very aggravating but also represents for the retailer a lost sale.The problem it seems is rooted in the consumer packaged goods industry’s love affair with the Long-Tail – i.e. exponential brand proliferation leading to more SKU’s than even the largest retailers can handle in inventory. Examples include; 14 varieties of Coke, 46 variations of Crest toothpaste, 20 flavors of Jello.
At the retail level, brands consider multiple SKU’s to be good strategy in the game of “shelf warfare†as each additional SKU has the potential to run a competitor off the shelf. But what happens at the consumer level when we cannot get the products we want? Al and I both left empty handed, and Al and I (not together of course) each went home to ultimately order the missing product online – which may just be the better way to shop for brands with wide varieties of product variations and where stock-keeping is far less of an issue (think Amazon). This easily becomes the permanent shopping habit in many categories.
Al’s advice to marketers, “Use the right tactics for the right venues”.
Despite supply driven SKU proliferation, the Pareto principle is alive and kicking with in-store purchases, but far less so online. How to win the shelf war – well that is another question – personally, I vote for smaller shelves.
Bryon Morrison predicts that As Eyeballs, Dollars Converge, Mobile Marketing Will Explode. As President of Ipsh a mobile marketing practice within The Omnicom Group, he has cause to be optimistic. Bryon cites 5 trends (the article speaks of 6 but I could not find #6) that will shape and build the momentum in advertising on the “third-screen” in 2008. I will summarize – and expand a bit – on them here (for those of you who don’t subscribe to AdAge).
- THE CELLPHONE WILL BECOME EVEN MORE PERSONAL
- Barbarians at the Gate: Yahoo, Google, MobiTV, Warner Bros., Apple and TeleNav are making major investments in applications and producing pretty exceptional tools for people.
- Phones are highly personal (and customizeable) communications channels. Brands are figuring out how to inject themselves into these channels and customization.
- Applications provide a much more rewarding user experience, which will propagate the development of even more applications and these applications will serve as a platform for customizing how a consumer interacts with brands.
- A final reason you’ll see more applications downloaded to phones is because the phones are improving and can run the applications. More evidence of this: In recent campaign tests for both Land Rover and 20th Century Fox, the iPhone pulled higher click rates than both the Treo and the Blackberry – the researchers attribute this to the iPhone’s larger screen, range of applications and rich graphics.
- THE CELLPHONE WILL BECOME A REMOTE CONTROL FOR REALITY
- Consumers will use their phones to enhance and manage events, concerts, vacations and trips, and brands are creating wireless environments that provide value to attendees from the time they purchase tickets to the day after the event.
- Smart marketers are utilizing mobile opt-in databases, giving us knowledge of the capabilities of subscribers’ phones as well as demographics and user behavior.
- MOBILE BRAND LEADERS WILL APPEAR IN 2008.
- A land-grab mentality will take place in the coming year as brands realize the mobile channel is uncluttered and comparatively inexpensive.
- NEXT YEAR, THE CONSUMER IS IN CHARGE
- With the advent of the internet, a shift in control began to take place, going from the brand to the consumers. With this delicate medium of mobile, the pendulum swings even farther toward them giving consumers a choice of how they best want to communicate with brands.
- I would also add that for brands reaching out to younger demographics, the “third-screen” is increasingly becoming the medium of choice. These younger generations also have an extreme 24/7 mentality when it comes to relationships, and this means the relationships to brands as well.
- I also anticipate a proliferation of “mobile-social-networks” which will allow for more brand advocacy and experiences within communities and groups.
- BRANDS ARE “IN THE KNOW”
- Mobile is no longer just an “American Idol” voting tool. Smart marketers know it. Their questions have gone from “What’s mobile marketing?” to “We have a little extra budget; can we do it so we can say we did?” to “How do we do this right?”
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