Target “Misses” It’s Online Projections. And We Care…why?

Saw this story on RetailWire titled “Does Target have a problem online?” (click here).

The gist is that analysts are worried about Target because they exceeded the national average of 15% online growth. But their online growth at 20% was less than the 30% that had been projected. (Same thing happened at WalMart.)

And we care…exactly why?

The theory of “omnichannel” is that the consumer doesn’t care about our silos. So why should we be reporting and analyzing numbers based on those same silos?

Kickstarter Mythology Needs Some Retail Reality

Kickstarter mythology has outgrown reality.

(But let me be very clear. I’m NOT talking about Kickstarter art, music, and movie projects. It was designed for these and they seem to be running pretty well overall.)

I’m talking about Kickstarter campaigns that raise money by Directly Selling new Products that have never been built – and taking orders for lots of them. In the computer business we used to call this selling vaporware and investing in businesses dedicated to vaporware led to the dotcom crash. Segway and Google Glass were both massive vaporware disasters.

Now, by selling vaporware with Kickstarter, we’re seeing amazing train wrecks among the most highly successful money raising campaigns. These train wrecks are all made possible by the mythologies that drive Kickstarter and other crowd funding sites. (Incidentally, a comment below points out this is a far more dramatic version of the direct mail practice of “dry testing”. There is already FTC guidance on dry testing.)

The Mythology of Kickstarter for Inventors. Inventor mythology starts with a belief that it’s enough to come up with a good idea and some money to build it. And Kickstarter appears to “unshackle” inventors so this can happen.

Big Data Caution…from GK Chesterton

“The real trouble with this world of ours is not that it is an unreasonable world, nor even that it is a reasonable one. The commonest kind of trouble is that it is nearly reasonable, but not quite. Life is not an illogicality; yet it is a trap for logicians. It looks just a little more mathematical and regular than it is; its exactitude is obvious, but its inexactitude is hidden; its wildness lies in wait.”
…GK Chesterton, “Orthodoxy”

It was with great interest I ran across this comment the other day. And it got me thinking about the world of big data today.

The red flag for data abuse comes when people cede their human initiative and let data take over. Listen to how people discuss “big data” and you’ll start getting a sense their vision is to have data run the world. I suppose in a corporate bureaucracy this provides perfect cover for a mistake. (“The data said to do it” or perhaps “The Data Scientists said it would work!”).

Consumers Buy Products, Not Brands: How This Should Change Your Advertising

“Whenever you can, make the product itself the hero of your advertising.”
– David Ogilvy, Ogilvy on Advertising

We live in a grand age of “brand advertising” – where most ad agencies believe that their role is to directly build brand with advertising. Except they’re wrong.

There are far more advertising options for building a brand than so-called “brand advertising”. Quite often, these options end up building stronger brand, faster and at less cost. Sadly, most agencies never tell their clients about these other options – perhaps because they’ve never thought that deeply about them. (It’s a bit ironic, since one fundamental of creative is that a linear approach to subtle things is often the least effective. So creative teams shouldn’t be surprised that the fastest way to build brand isn’t to directly try to build that brand.)

Is Disruption the Most Important Model for Innovation?

The theory of “Disruptive Innovation” is an idea that has come to dominate business. Why? Business pundits and consultants would tell us it points the way to the strongest business success.

Except I think there’s a different truth. The thing the disruption theory does most reliably is give you a great way to sell your business to funding sources, to the press (who LOVE a great disruption story), or to that narrow niche of customers who passionately hate the “old ways” and don’t care if the new way is really any better. The theory of disruption is even being used to sell changes designed for wholesale destruction of our public school system in the US (with an odd leap of faith hoping that whatever replaces it will be better). (More on schools here.)

Using theory to promote an idea isn’t necessarily a bad thing. But truth is important for businesses to succeed. Is there really a strong connection between disruption and long term success? That’s far more tenuous. At least that had been my growing sense of the theory.

And now I see that battle has been joined on exactly this issue. Writer and Harvard American History professor Jill Lepore fired the first shot with an excellent article in The New Yorker (“What the Theory of ‘Distruptive Innovation’ Gets Wrong”).

Big Data. Big Promise. Big Caution.

Big data claims to be the new salvation for all businesses. Because, we’re told, big data will discover amazing new truths. Time will tell.

But in the meantime, most big promises should also be accompanied by big cautions. Which one’s are most important as we approach big data? Recently, on the Financial Times website, Tim Harford wrote a blog post on the topic: Big Data: are we making a big mistake. It is one of the few really thoughtful big data discussions we’ve come across in a while.

Research Shows that Smart Phones HELP Retail

The tech theorizers have suckered us into a mythology – the one where the Four Virtual Horsemen of the Tech Apocalypse destroy whatever they touch.

So, as soon as someone saw the first retail store shopper pull their smart phone out, tech titans started taking credit for the destruction of retail. But, new Deloitte research (link here) suggests we might want to keep our retail outlets open after all.

Want Consumers To Pay Attention To Your Ads? Make Them Meaningful.

A few weeks ago I ran across this article titled “Four Reasons Why We Choose to Watch Ads”. Seemed like a smart read because I always love to see simple lists about advertising.

Smart Choices Make Online Videos that Drive Web (and Retail) Sales

What video content does a shopping consumer need and want?

Marketers are encouraged to fill websites with exotic videos made with the most expensive production value. But too often those videos aren’t useful to consumers. And most manufacturers can’t afford them if they have extensive lines of products.

So how can you create online videos for your product line with today’s tight margins? Let’s focus on one critical situation: when online retail or online catalog sites display video to someone looking at your product. (This video is often perfect for in-store use as well.)

Learn What a Consumer Needs by Considering How They Find Your Video.

In the vast majority of cases consumers follow the same path. First, they browse the site to find your product or arrive at your product on the website with search (local or global). In other words, they’re focused on finding a product much like yours.

On that catalog page for your product they find a small list of important things about the product, photo’s, a range of specifications, and the price. Somewhere on the page they finally see your video after clicking an embedded link.

So think about it. Before the consumer gets to your video they already know a lot about your product and have made quite a few shopping choices. That means they need a very specific type of video. But fortunately, one that can be made on a smaller production budget.

How Do You Make Effective Online Catalog Videos?

A few simple rules should guide the content you create. But most importantly, choose what you show and say to respect the things your consumer already knows about your product. Other thoughts:

Focus on the things that need moving picture – not the things that are better said on the printed page. For example, specifications are better on your web page – not in the video. Instead, deliver visual demonstration that shows consumers what they’d never understand any other way. With tools and hardware, for example, the simple act of a hand picking up a product answers important questions for consumers because it puts key features in context.

Don’t ignore the simple demonstrations. Consumers often need to confirm what’s written with simple visual demonstrations. And don’t let your product teams cut them short just because the producers (who aren’t your customer) think they might be dull.

Use animated graphics to show how your product works and reveal what’s hidden. These animations are much more important than animated logo’s. (Yawn!) And don’t cut the animations short. Nothing bugs me more than an animation that only runs for 1 or 2 seconds.

Your online shoppers may be shopping for their business or for personal use. Don’t narrow your options unwisely.

How Do You Make Online Catalog Videos That are High Quality AND Cost Effective?

This is your the more difficult challenge. Trying to do too much on a budget that’s too small wastes your money. At the same time, many production options will break your budget on just one video. Here are some thoughts.

Avoid the “default” choices of production companies. Most video producers approach every project seeking to create the same thing: an expensive stand-alone video with lots of bells and whistles your consumer doesn’t need.

Hire professionals who understand how to create this specific type of video. The web is filled with video footage where we can’t see what’s going on or where the video doesn’t enlighten us. YouTube seems to have engendered a wealth of bad angles and bad lighting shot from too far away (or too close) with too much clutter in the frame. Remember, just because someone CAN shoot video doesn’t mean they should.

Focused on the visual demonstrations that drive sales. And make sure you know what sales points you need to make and what objections you need to overcome in the video. Then work with your agency or production team to find the best ways make that happen.

Make a baker’s dozen. One web video usually can’t cover the product lines offered by most manufacturers or retailers. So shoot many at the same time. With related products, my team has become quite skilled at combining shoot days, props for demonstrations and edit resources to create these retail videos at high quality but for much lower prices per video.

Having said all this, effective video isn’t cheap. If anyone claims they can shoot a group of effective, high quality sales video’s for much less than $4,000 per video, you’re not likely to be pleased with the result.

The Online Video Age Offers Tremendous Opportunity

With wise choices, manufacturers can get the effective and high quality video they need for very reasonable prices. Even better, these videos can make the different between failure and success. But you must stay focused on knowing the mind of your consumer and making the smart choices that delivers the video that leads them to buy your product.

Copyright 2010 – Doug Garnett

Impact Driver or Impact Wrench? Once More Hardware Marketers Hurt Themselves with Names

End-user confusion about drills and drivers is rampant – although the model in this stock photo looks more bored than confused.

Tool makers have created a wilderness of product, category and project names that stand in the way of revenue and market share growth. And no category is more confused than drills and drivers.

At the Oregon State Fair recently I ran into some impact drivers from a major brand. You know impact drivers – those great compact tools that use small bursts of torque to deliver turning power around the screw, bolt or nut.

“Impact driver” is a strong label for the category of tools because they are used by pro and DIY alike primarily to drive screws and self-tapping hex headed screws (e.g. those used for steel studs). Impact drivers are also used, but less often, to drive lag bolts, remove small stuck bolts, and in a few other driving situations. In other words, from both the pro and DIY end user point of view, they are an evolution of the drill/driver.

But at the fair, the boxes were labeled “impact wrench”. Huh? An impact wrench?

An impact wrench is a big tool used on cars, trucks, and in factories that delivers 2500 to 7000 in-lbs of torque and is used for the heaviest duty work on cars and trucks. It also exclusively drives sockets and is used on heavy bolts.

But the tool in that package was an impact driver – a tool that delivers small bursts of usually 500 to 1300 in-lbs of torque – torque that is light enough to drive screws or hex head screws without breaking them.

How can we expect consumers to buy products without consistent categories and names? This challenge is particularly miserable in the drill and driver category.

These impact tools are a recent innovation (last decade). But even before they were put out to consumers, purchasers at all levels were already confused by the chaotic range of language used to describe the features and benefits of drills, drivers, and hammer drills. And they were even more confused by battery sizes and types.

Why all this confusion? In part, companies have grasped for short-term profits in ways that fragment the categories. But also, there has been very little effective mass communication for these tools.

The confusion is quite serious. To see it, just walk the aisle at any retailer and try to envision what a consumer faces.

As just one example, many contractors think the hammer function and the impact function are the same. Except, they’re entirely different. The hammer drill adds impact along the axis of the drill to help masonry bits break out more material. The impact driver is entirely different – generating small impacts in the plane at a 90 degree angle to the axis to tighten or loosen screws, bolts, and nuts.

Two recommendations:

My agency’s research finds that nearly every area of the hardware business is losing money because of problems with language. It’s particularly problematic for products like saws and drills. It’s even worse when it comes to talking about projects and the best practices for those projects.

1. If the tool & hardware business is to make its next step in growth, we’ve all got to become better at controlling these names. Because clear naming drives product sales. In fact, good, clear end-user driven names can drive sales as much as 3 or 4 times higher.

2. The tool and hardware business must start communicating about it’s products. Lack of communication created the confusion amongst impact drivers, impact wrenches, and hammer drills. But it goes much deeper. Engineering teams throughout the business are inventing amazing new products faster than potential buyers are told about them. But without communication it’s as if the product advances don’t exist. (If a product’s invented and no one knows about it, was it really invented?)

These product advances are exciting. So it’s sad that our business too often lacks the communication savvy to cash in on the value of those advances.

This situation won’t last. The companies who figure out how to communicate best with their consumers will own their markets and make much higher profits.

Copyright 2010 – Doug Garnett