January 16, 2013
BrainTrust Query: Marketing Simplification
Through a special arrangement, presented here for discussion is an excerpt of an article from the Joel Rubinson on Marketing Research blog.
Marketing organizations should embrace simplification as a pervasive strategy for competitive advantage. Life has become too complex with overwhelming numbers of choices at every turn. Complexity leads to frustration, anger, and people making bad choices that make them feel stupid.
Consider the success of three firms that are in the simplification business, pure and simple.
- Google. No company has simplified life more than Google, making search the way we find information, navigate to websites without having to remember the URL, and marking the beginning of how we shop. Yes, Google has simplified the shopping process among an overwhelming array of offerings.
- Amazon. Amazon remembers us, our preferences, and our wishes. It shows us what others think of the products we are considering. It is open 365/24/7, so we choose the store hours. It even gives us apps so we can buy the product we see in a store at a lower price online.
- Apple. Apple has led the movement of reinventing how something works to make it simpler with the emergence of touch interface apps on smartphones and tablets.
NBC made their Olympics programming accessible however and wherever someone wants, and guess what? TV viewing went up. Simple! Staples advertising is based on "simple" (using the word "easy") but then runs deals that can only be redeemed online vs. in their stores Not simple … it’s one brand, guys!
There are 45,000 products in a supermarket but the average shopper only buys 400. In a Home Depot or Lowe’s, chances are what you are seeking is located somewhere distant in their massive store.
Can we reinvent marketing approaches to simplify shopping? Absolutely! Tesco turned Korean subway stations into grocery stores where you order using your smartphone from virtual products displayed on the back wall. You can imagine less futuristic approaches that would also be demonstrable improvements. Some examples:
- A brand and retailer might use signage and mobile apps to let shoppers know what the best sellers are in a category (a brilliantly simple idea I first heard from Herb Sorensen).
- A cross-functional team of shopper marketing and social media personnel might drive visual integration by reinforcing package graphics with photos on Facebook to make it easier for shoppers to find the product that matches their needs on a given day.
- Retailers could seamlessly link online, mobile, and offline shopping with the use of unifying profiles, to create digital shopping lists that are brought into the store. Such a system could push reminders to shoppers based on likely purchase cycles. This is only a step or two beyond what you already see with SCAN IT! in Stop & Shop.
Insights teams need to learn how to bring these insights to marketers, developing a model of what "simple" looks like and what the impact will be on customer action.
BrainTrust
Recent Discussions
Discussion Questions
How can marketing approaches simplify shopping? Which of the three — Apple, Amazon, Google — offers the best lesson for others around marketing simplification?
Poll
The key is to realize that the goal is not to simplify shopping—the goal is to simplify shopping for a particular shopper. The mistake we may make is assuming simplification at the shelf is simplification for the shopper, and that’s not the case. In that sense, Amazon has the best model because it is simplifying (or trying to simplify) my experience, which will be different from Joel’s experience.
“Keep it simple” is usually (but not always) a good philosophy, whether it applies to assortment planning, branding and sales promotion, or other elements of the retail mix. One exception to the rule: JCPenney, where the effort to simplify the pricing message was communicated and executed poorly with well-known results.
It’s no accident that some of the best-performing retailers (from Aldi to Costco) are working on a much narrower SKU base than many of their competitors, making the store experience and supply chain process both more efficient. And it’s also no accident that many of the retailers with the best results in 2012 preached “simplicity” in their pricing message, from high-end retailers like Nordstrom to the off-pricers continuing to gain market share from promotional department stores.
I think this simplification of touch points for shoppers is actually a natural evolution. It is happening due to consumer demand and competition. All of the examples in the article are great ways that shoppers are capitalizing on the ease of access to goods and services.
As time goes on, we will see a steady migration toward the most effective programs and followers will solidify the winning “formats.”
Marketing approaches that make navigating stores easier and save time for harried consumers will be winners. Retailers want consumers to spend more time navigating stores so they will make impromptu purchases, but this is antithetical to consumer desires.
Brand marketers strive to capture self space and share of mind through limitless line extensions. Consumers crave simplicity (remember when there was only one type of Crest toothpaste), but are faced with seemingly endless choices, all requiring time and research to decipher.
The solution for retailers is not simple, but by putting consumer needs and desires first, a pathway towards the solution will become clearer.
We had an interesting lesson that builds on Dick’s comment about SKU rationalization/simplification. I worked for a company that was considered buying a number of stores from a competitor in a market where our newest concept stores were being built. We knew that we had about 15% of the SKUs that they carried and wondered our offer appeal to their shoppers.
As part of the purchase process we did some consumer research to determine how the consumer perceived our stores and theirs. There were several notable differences, one of which was the ease of shopping. While we carried fewer SKUs, we were perceived as having far more than we did. By drilling down into the research, we learned that we carried the items they wanted purchase, enabling a grouped purchase occasion resulting in an easier shopping experience.
Simplification should be THE mantra for retailers now, but it’s certainly much easier said than done. SKU rationalization is a key factor that helps marketers across the board, but not necessarily within their realm of control (unfortunately), thus making their jobs more difficult.
Some basics to think about:
- simpler graphics: less said, more understood
- better sales staff: let staff explain more vs clutter the store
- clarity of color: what is the single, most powerful brand color
- SKU rat, more / better spacing on the sales floor (do you need 100 pair of the same jeans out?)
- digital enhancements: how can new tech work at retail
Overall, simplification is very hard to do. It takes a lot of discipline and in my mind, a genuine “overlord” of the brand who has the power to make the calls necessary. If you think about the companies that do simple well, that is always the case: one-eyed vision.
When we are in a store and throw up our hands thinking “there has to be a better way,” by “better” we often mean “simpler” so marketers and product manager should always be looking for opportunities to keep it simple.
One undercurrent in Joel’s article that’s important to note is that in an omnichannel shopping environment, simple is highly correlated with consistent. Merchants that allow you to buy anywhere and return anywhere and that align their pricing, promotions, and assortment across channels are making shopping simpler for their consumers.
For how many years have we heard that consumers have too much choice? Decades, certainly. And the response has always been to add more choices. Consumers don’t seem to be too concerned about that. The idea that choice leads to “Complexity [and] frustration, anger, and people making bad choices that make them feel stupid” is bogus. Certainly researchers can get consumers to complain—which is their nature—but actual purchase behavior and the voracious use of new shopping technology belie the complaints.
Amazon is changing the retail model. They started from a different point and continue to disrupt with a consistent focus on the individual customer.
In today’s world “simple” is very personal.
Established retailers have legacy approaches and structures (silos) that make it very hard for them to execute consistently and simply for individual customers.
There are still too few retailers who know and treat their customers as individuals; most still operate at the “average customer” level or at best for broad proxy segment levels.
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The key is to realize that the goal is not to simplify shopping—the goal is to simplify shopping for a particular shopper. The mistake we may make is assuming simplification at the shelf is simplification for the shopper, and that’s not the case. In that sense, Amazon has the best model because it is simplifying (or trying to simplify) my experience, which will be different from Joel’s experience.
“Keep it simple” is usually (but not always) a good philosophy, whether it applies to assortment planning, branding and sales promotion, or other elements of the retail mix. One exception to the rule: JCPenney, where the effort to simplify the pricing message was communicated and executed poorly with well-known results.
It’s no accident that some of the best-performing retailers (from Aldi to Costco) are working on a much narrower SKU base than many of their competitors, making the store experience and supply chain process both more efficient. And it’s also no accident that many of the retailers with the best results in 2012 preached “simplicity” in their pricing message, from high-end retailers like Nordstrom to the off-pricers continuing to gain market share from promotional department stores.
I think this simplification of touch points for shoppers is actually a natural evolution. It is happening due to consumer demand and competition. All of the examples in the article are great ways that shoppers are capitalizing on the ease of access to goods and services.
As time goes on, we will see a steady migration toward the most effective programs and followers will solidify the winning “formats.”
Marketing approaches that make navigating stores easier and save time for harried consumers will be winners. Retailers want consumers to spend more time navigating stores so they will make impromptu purchases, but this is antithetical to consumer desires.
Brand marketers strive to capture self space and share of mind through limitless line extensions. Consumers crave simplicity (remember when there was only one type of Crest toothpaste), but are faced with seemingly endless choices, all requiring time and research to decipher.
The solution for retailers is not simple, but by putting consumer needs and desires first, a pathway towards the solution will become clearer.
We had an interesting lesson that builds on Dick’s comment about SKU rationalization/simplification. I worked for a company that was considered buying a number of stores from a competitor in a market where our newest concept stores were being built. We knew that we had about 15% of the SKUs that they carried and wondered our offer appeal to their shoppers.
As part of the purchase process we did some consumer research to determine how the consumer perceived our stores and theirs. There were several notable differences, one of which was the ease of shopping. While we carried fewer SKUs, we were perceived as having far more than we did. By drilling down into the research, we learned that we carried the items they wanted purchase, enabling a grouped purchase occasion resulting in an easier shopping experience.
Simplification should be THE mantra for retailers now, but it’s certainly much easier said than done. SKU rationalization is a key factor that helps marketers across the board, but not necessarily within their realm of control (unfortunately), thus making their jobs more difficult.
Some basics to think about:
Overall, simplification is very hard to do. It takes a lot of discipline and in my mind, a genuine “overlord” of the brand who has the power to make the calls necessary. If you think about the companies that do simple well, that is always the case: one-eyed vision.
When we are in a store and throw up our hands thinking “there has to be a better way,” by “better” we often mean “simpler” so marketers and product manager should always be looking for opportunities to keep it simple.
One undercurrent in Joel’s article that’s important to note is that in an omnichannel shopping environment, simple is highly correlated with consistent. Merchants that allow you to buy anywhere and return anywhere and that align their pricing, promotions, and assortment across channels are making shopping simpler for their consumers.
For how many years have we heard that consumers have too much choice? Decades, certainly. And the response has always been to add more choices. Consumers don’t seem to be too concerned about that. The idea that choice leads to “Complexity [and] frustration, anger, and people making bad choices that make them feel stupid” is bogus. Certainly researchers can get consumers to complain—which is their nature—but actual purchase behavior and the voracious use of new shopping technology belie the complaints.
Amazon is changing the retail model. They started from a different point and continue to disrupt with a consistent focus on the individual customer.
In today’s world “simple” is very personal.
Established retailers have legacy approaches and structures (silos) that make it very hard for them to execute consistently and simply for individual customers.
There are still too few retailers who know and treat their customers as individuals; most still operate at the “average customer” level or at best for broad proxy segment levels.