I spent just a bit of time in the last month listening and looking over the shoulders of some folks who were in a variety of fields that have been around for a while including retail, manufacturing, merchandising, trade associations, private equity guys and others in the mainstream or in the periphery of the industry.
Busy, earnest people who have a view of what they are doing and how they are going to accomplish…”the next thing.”
True innovators, those that think they are innovators and those who cannot stop the wheel long enough to think about what they would change if they could.
Many of them running hard but just on the edge of the shadow of the technology, idea or process that fundamentally changes the ground-rules and economics of the business they are in.
It’s going to be a heck of a 24 month period!
Despite distractions from would be acquirers, shareholders and competitors Yahoo is beginning to focus some attention on CPG and CPG/retail.
In the last few weeks they have:
- Done a deal with Wal*Mart.com to target interested consumers with WM.com products on sale.
- Started to work with some Retail Circular suppliers across the retail spectrum, to peel off circular promoted items and feed them to interested consumers.
- Added 94 newspapers to their consortium of 779 newspapers for content to feed to local consumers. (in competition with Quadrant One.)
This growing awareness of the importance of CPG and CPG retail is probably just a dollars based understanding. It is true that CPG and retail spend significantly on creating brand awareness with consumers. More importantly to ad vehicles such as Yahoo and Google is that FMCG (the fast moving grocery and GM products rather than electronics, music, apparel, etc.) are products that need to be repurchased, decided on, changed out at least once per week and in general more often. When it comes to frequency of purchase, number of products purchase on a single occasion and total spent over a year’s time the FMCG industry rocks! You Mrs. advertising executive want to grab attention, traffic and loyalty??…grab FMCG.
But! Tain’t easy. Not online. Consumers can turn off online commercials and sites, just like they do with TV and newspapers at home. Build your message into a convenient, contextual application designed for the way folks shop for groceries and you will be amazed at basket size, repeat purchase and WOM-buzz. Build it the wrong way and you are toast….but toast won’t buy your solution….at least not twice. (more…)
In an early June rant, I gave my impressions of the recent FMI show. I thought the show represented the changes in collaborative leadership that are beginning to emerge in the CPG and Retail Industries. Clearly both FMI and GMA are in a state of flux about their direction and about the issues in which they wish to be involved.
There seem to be 6 big movements inviting, tugging at the fabric of the industry. Within that 8-10 organizations or consortium are trying to lead the industry or at least parts of it, in those 6 directions. All of the movements address important issues. Clearly no one change will “win”. Some combination of these will, after vying for senior management support (read budget), take hold while others may fall by the wayside.
The 6 big movements as I see them:
1. P.R.I.S.M. This recognizes the power of the store as a brand-building advertising vehicle. This has some very powerful support by manufacturers and retailers alike. There is also enthusiastic encouragement by industries who would install and service the advertising components. The movement has clear appeal….after all where better to try to influence consumer purchase than while they are in “buy mode” at the place of purchase. The movement also has some infrastructural support as Nielsen has agreed to measure traffic and “convert” it to metrics common to alternative mass media. The movement is fraught with both potential and possible hurdles….. which include fundamentally opposing views of consumer reaction. Manufacturers and retailers hope the consumer is “captive” and will therefore see the new vehicles. The consumer seems most interested in getting through the store quickly, and may have other ideas. If the industry is correct billions of advertising dollars could easily flow out of traditional media and into the stores. Some of those dollars might well come from the retailer’s promotion vehicles such as their circular. Also the increased visibility into the store might well bring into view promotion non performance which could cause as many dollars to leave the retail network as come in on the advertising front.
2. Health and Wellness. Perhaps the most pervasive potential change that the industry could exploit. It is an opportunity to both tie consumers closer in loyalty to a particular banner and offer successful retailers and their supporting manufacturers the ability to “play” in a second enormous market…health/wellness - care. The consumers are very enthusiastic about this leadership role for their grocer. Combinations of organizations such as Harvard and Topco offer the ONQI service, the Delhaize Group is offering their version, Guiding Stars,and there are dozens of other efforts, most not quite as sophisticated. From my perspective the most well thought out approach (although perhaps the approach most difficult to understand) is provided by Bill Bishop and the Institute of the Future. This movement also offers challenges in that the quality of the basic product data required to offer consumers clear guidance is out of date and inaccurate (as is all product data in this industry). The inability of industry players to deal with this issue broadly will cause this movement and grocers great harm. (more…)
Wow! At the May 28th Chicago, DisplaySearch conference, DIGITAL SIGNAGE, THE FUTURE IS OUT-OF-HOME, the buzz was on just how big this vehicle would become and how soon.
“The Fourth Screen” is the use of video displays for Out-Of-Home advertising (with the first three being; TV, your PC and your mobile device). It was clearly viewed as an opportunity worthy of huge investments. Speakers from Panasonic, LGE, NEC, Sharp, Samsung and others debated size of screen (big is good), technologies, distribution channels, connection streams and content complexity, but they were in absolute lock-step about the billions of dollars they were each spending on new expanding plants and R&D.
Stats were fast and furious but if I got it right the domestic screen count across the 8 markets targeted total 2.5 million today. ONE vendor talked about a new plant which would be producing 7 million per YEAR when in comes on stream in a year or two. AND the units this plant provides are bigger than ANYTHING available today! Bigger is certainly viewed as better, and after doing serious research in Wrigley Field last Friday I have to admit those little TV’s with the United Airlines sponsorship look pretty unimpressive by modern standards. New plants cost $5 billion each and there are $50 billion committed, over the next four years.
Now Out-of-Home advertising is neither new nor restricted to Digital Signage. Paper signage, lite-box diarama’s and other media have been around for years. 2/3rds of the efforts today are NOT in retail, but in office buildings, airports, elevators, schools and lots of other places where people are captive. That is what we USED to be at home. We HAD to watch the commercial between innings! Now we do not have to watch any advertising (other than in-show product placements) on our home screens so……naturally advertisers are going to watch for opportunities to either force feed ads to captive audiences OR put the ad in a contextual environment (ie: in a store,….where you can DO something about it!) So, again the appeal to Out-of-Home advertising is the audience cannot TIVO you and they might see you on a screen not too far from a shelf and a check out. (more…)
I visited the FMI show in Las Vegas in early May. I decided to wait and gauge the industry reaction to the show before expressing my own.
I appear to be in the minority in my view of the success of the show. Traffic on both sides of the aisle was clearly up from the anemic levels we saw in Chicago last year. Whether resurgence or last gasp (it WAS a trip to Vegas after all) is yet to be determined.
My observations:
1. The crowds of folks were legitimate buyers and seemed eager to find new news and services/products of value.
2. Traffic was good in certain areas. It seemed like the more popular booths were Online Grocery Marketing (note I did not limit to e-commerce), MyWebGrocer in particular, Forecasting and Pricing with Demandtec, KSSR and SAF having pretty decent audiences, the W5Networks guys with a new ESL technology, the systems guys (usual suspects like IBM and Agilysis) and a pretty good play for some surprises like the GS1 booth where some interest was focused on the recently announced product recall system.
3. The educational sessions were mixed. I went to a dozen. Some were pretty straight-forward “how to” type presentations. Others (Bishop on the CCRC Health and Wellness Map, a fellow on the importance of branding using all resources) may have been hard to get our heads around but held immense strategic value if studied. And a few that held promise (New Category Management, Jumping the Technology Curve, CAO, New Technologies (2) and New Ways of Working Together) but either teased for future releases or might have been a bit polite about the hurdles that stand in the way of widespread adoption.
Many of the most interesting discussions/services/products were held at Starbucks, in hallways and in more adult beverage locals with subjects around new RFID technologies, new RFID alternatives, P.R.I.S.M., Master Data, ISI and a number of other movements or companies that offered the next generation of solutions. These truly new and innovative ideas seemed to have a number of characteristics most of which demonstrated learning’s from the prior generations of products which were exhibited in the booths including: (more…)
