If you are going to take a break from digital “bliss” by putting your phone down, take the time to read this Harvard Business Review primer on augmented reality. “Augmented” is not the same as the “virtual” reality which your children love and of which you make fun. Augmented reality bridges physical reality with the data that all of the machines around us are generating utilizing a screen attached to our face (aka glasses). Think of a heads up display on a fighter jet.
So you can be on a plant floor, retail store, trading floor, or hospital and see the reality in front of you merged with the data that can assist you in making better and faster decisions. It’s well worth the read and sitting with your team to think through the implications for your business. One way we hope to use this technology is with our mechanical team so they can access repair manuals in front of the machine instead of going back to a terminal. Download the app before reading the article and it will literally jump out at you from your phone. This reality does not bite!
America has the highest per-capita amount of retail real estate of anywhere in the world. And with the digital world crashing the world of brick and mortar, a lot of “b” and “c” malls need major changes in their customer bases.
According to some analysts, over 400 of the country’s 1100 malls may close in the next few years. Fortunately, Adam Smith (with some help from Henry Ford), is quietly riding to the rescue. The WSJ had a story titled “The Mall of the Future Will Have No Stores” about the re-purposing of a Michigan mall into a combo traditional mall by re-configuring one of the major retail anchor spaces into significant engineering design center for Ford Motor Co. for almost 2,000 of employees. The key to all of the re-purposing around the country has been to add either office space or residential into the retail mix.
Nothing like a market evaporation to bring out the creativity. My bet is we are entering a new golden age of Malls and far from the headline of the “Mall of the Future Will Have No Stores”. Or as Henry Ford said, “Failure is simply the opportunity to begin again, this time more intelligently”.
While Wal-Mart was busy getting hip buying Jet.com, Amazon was getting serious and just announced that it is offering air freight services to its sellers based in China. Think of this as the penultimate direct to consumer structure ever. Wal-Mart is still the king but this does not bode well.
The new battlefield is digital and like all battles it’s not the glorious stories on page one that mean victory. Similar to real wars, it’s superior logistics that win but to find this you have to dig into the WSJ story on page B4 with no photo announcing the new service.
This is a game changer for all who sell wholesale products. Imagine that today your factory in China now has a direct link to your customer’s home or business WITH EFFICIENT Amazon built end to end logistics. That’s a real “Jet”.
How much of our time is spent thinking how to improve our company’s offerings? We update labels, fragrances, and even names of items on a regular basis. Are we wrong to obsess?
According to one of my heroes, the former P&G CEO A.G. Lafley, we are on dangerous ground. In an intriguing Harvard Business Review article, he discusses why consumer innovations often “flame out”. His answer, based on recent advances in brain science, is that “…the mind loves automaticity more than just about anything else-certainly more than engaging in conscious consideration.” Or in English, “Customers don’t want to spend the mental energy needed to choose between products.”
When innovating a product and brand, a progression from the past is always better than a break from the past. Poster child of how not to make this change is Instagram’s changed icon and how Facebook destroyed MySpace. The article also has a very interesting sub section on small brands (could be us except we dominate our retail channels with two channel focused mega-brands). It’s titled, The Perverse Upside of Customer Disloyalty. Basically, it says that the market for most product categories is large enough to support a small brand that consumers occasionally purchase when confused or not loyal to the leading brands. They try the fringe brands to which keeps them in the market, but not enough return to help them break through.
So don’t engage in automaticity and read the article!
I love to look at other peoples shopping carts and baskets when I’m in any retailer. It’s a sneak peak into the holy grail of consumer insight. The NYT had a fascinating article about food stamp users basket analysis published by the Department of Agriculture. SNAP, run by the Department of Agriculture, is a 74 BILLION dollar program with 43 million users. That’s more than 13% of the American population and even more of the households. Digest those numbers in the context of 320 million Americans and 120 million households.
The main point of the story is that 9% of the spending in these households is on soda. Or as they put it… it’s a 7 billion dollar subsidy of the soda industry combined with the after effects of the effect of obesity on our nation’s healthcare costs. The article then barely notes that non-snap households essentially buy the same basket.
But I’m not in the soda industry and the real interesting read is the report itself with lots of “nuggets” around American eating habits: https://www.fns.usda.gov/snap/foods-typically-purchased-supplemental-nutrition-assistance-program-snap-households
Millennials are viewed as the golden unicorn of the consumer market. Mass Media, in love with outlier stories that sell air time and “page views”, miss the most important takeaway of any serious data based analysis around millennial consumer behavior. Therefore most Millennial oriented stories (see my post last year about Millennial fragrance preferences) are with a lens focused on differentiation. But a closer look shows Millennials are acting age appropriately and many of their “unique” behaviors are really behaviors that have become the societal norm.
This video is of fantastic speech by Simon Sinek about millennials with great consumer insight. The reality is, it’s not about Millennials as much as it’s the story each of us lives as we transit this world attached to a mobile “device”. Watch, learn and laugh as you look in the mirror. And by the way a great one to watch with your children.
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