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“… I wonder if Starbucks has a much bigger problem: its most important brand attribute was a flush economy. Maybe the strength it most relied upon might have been actualized within the four walls of its stores, but it drew on a quality that was outside the stores, and beyond every definition of its brand.”
These are the words of Jonathan Salem Baskin as he commented on the slowing state of retail.
What’s the coffee Goliath’s problem?
Says Baskin, an AdAge columnist and author of Branding Only Works on Cattle, “disposable income.” Lack of it is what may be killing this experiential marketing powerhouse. Americans just don’t have much to spend anymore.
So what can retailers do in an environment where experience comes at a cost that consumers are less-and-less willing and ABLE to bear? It’s a complex problem that requires creativity, risk-taking and divorcing ourselves of some bad habits supported by some of our trusted resources.
The situation is being driven by forces beyond weak consumer spending. Namely, the hyper-connected, always-on interactive ecosystem we all swim in is a force that has customers feeling both empowered and distracted. They’re immersed in everything other than your marketing messages.
Success in this brave new world is about recognizing and ACTING on these shifts.
Let’s Get Radical
Could something radical be in your future? Quite possibly, if you’re up to the task or in a tight enough pinch… or if you’re just lucky enough to accidentally stumble upon the power of digital communities. In particular, those built specifically with action-oriented inputs and outputs.
Although one Chicago-based company called Threadless did it’s not likely YOU will casually stumble upon such a business. Successful, e-commerce “social media” communities are not built for “conversation” so much as they’re built to move product! But how?
The key to success is adopting the mindset that Threadless has embraced and run like blazes with. The essence of this mindset is rooted in concepts that span multiple corporate elements — not just marketing alone. No it’s not some kind of slick voodoo from a social marketing “expert” but it IS radical. It IS, many say, not marketing at all.
The Secret Sauce: Empowering Experiences
What’s the secret sauce of Threadless.com — one of the country’s most innovative small companies? Inc. Magazine says it best: The Customer Is the Company. Now I know that sounds bizarre but here me out.
What is it that Jake and Jeffrey are doing “so right?” They’re providing an experience… one that’s been ergonomically designed (remember Jeffrey Rayport’s tips?). Think “form factors of media consumption.” What do people want to do and how do people want to act — naturally? How can you design around your customers intentions?
As an example, Progressive Auto Insurance knows its customers will seek quotes rather than just blindly sign up for a policy — so why not allow them to do so RIGHT ON THEIR WEB SITE’S FRONT PAGE? It’s an action that Progressive would rather not have customers doing but one they cannot control. Yet they CAN control the environment that it happens in — their own!
Progressive understands the buying process of their customers and is boldly injecting themselves in to the mix. In doing so they’re offering authentic value to customers. They’re giving them what they want.
Similarly, multi-channel retailers need to engage in more experiential-based tactics to woo new customers and increase sales (or leads). But what does that mean?
It could mean what I just described — understanding how customers decide on buying then allowing them to do what they’re naturally inclined to do (on your turf). Simple. Yet it could also mean a complete re-thinking of the term “marketing.” It could mean being willing to embrace a fairly radical, new mindset.
The Doctor is In
Marketing decision-makers and creative strategy developers at the highest level are coming under pressure to address new market dynamics that hyper-connectivity, and a lousy economy, are creating. Consumers don’t care anymore PLUS they’re pinching pennies.
“Advertising is about supply finding and ‘creating’ demand,” notes Doc Searles, co-author of The Cluetrain Manifesto, and a Fellow at Harvard’s Berkman Center for Internet and Society. “[There is] nothing wrong with that. At its best, it’s good and necessary stuff. But think about what will happen when demand can find and create supply.”
Searles wrote about this concept years ago (that makes him rather smart and perhaps a “futurist”). Today, the vision is becoming reality. Search engines, described as “databases of human intentions,” quickly birthed search engine marketing (SEM) to capitalize on human gestures communicating commercial intentions. Masses of customers created and articulated their demand in the form of search queries.
What did Web affiliates do? They monetized the livin’ daylights out of the situation by getting in between customers (demand) and marketers (supply)… to the extent it makes retailers uneasy today but that’s another column!
SEM was quickly followed by “reverse auction” Web sites such as Hotwire, Priceline and LendingTree. Here, customers create demand and go further. They actively negotiate pricing. Marketers compete for their business.
When taken to an extreme the idea of allowing customers to create demand and bring it toward supply can be rather scary. It’s called “crowdsourcing“, and it’s not for the faint-hearted.
Art Project Gone Wild: Community Style
Similarly, Threadless customers are communicating their demand… yet the company is going even further. Jake and Jeffrey are allowing the community at large to create supply (highly artistic tee shirts) and then “voting up” that supply (creating true demand) based on the uniqueness of the product. It’s totally market driven.
“Threadless was built as an art project,” says founder Jake Nickell. “It was really just a hobby for us. We were just two members in the community trying to help people find a way to express themselves and get their work shown to a large audience.”
Supply creation — namely, product design and production — is driven entirely by customer/artists. For example, customers of Threadless.com band together (create demand) and design their own clothing (supply/inventory). Product is then sold to the group of buyers.
Most marketers, for now, aren’t quite as experimental. Yet elements of crowdsourcing’s power are catching on and should be kept in mind by marketers. Why? How? More on that soon but what about YOUR thoughts, fair readers?
Is crowdsourcing just too much for most marketers to contemplate? It IS more of a business model, after all. Yet I believe the elements within crowdsourcing are EXTREMELY valuable to “traditional marketers” running traditional businesses. They may never use a crowdsourcing biz model but the “secret sauce” that makes crowdsourcing work is applicable to traditional retail models.
