trial + error

Marketing as Service Design: The Supermarket of the Future

Sat, 02 Feb 2013 12:36:00 +1100

Thinking about the future of marketing, I’ve been struck over the past few years by the idea of marketing as service design. Specifically, how might agencies partner with clients to produce, as Mel Exon says, advertising good enough to pay for? Digital strategists – having one eye on the consumer and another on the future – are in a unique position to deliver ideas that create real value by baking innovative technology directly into clients’ service offerings – generating effective engines for business growth in doing so.

Unfortunately, the promise of these kinds of ideas has outpaced action, and we only have a handful of case studies that exemplify what this type of marketing might look like. So, I got to thinking… how might we apply current technology to improve the grocery buying process?

Where are we now?

Supermarkets operate in a highly fragmented, mature market landscape where individual players ruthlessly seek competitive advantage and depend on constantly improving operational efficiency in order to survive. Despite this, the consumer-facing shopping experience hasn’t changed fundamentally in decades.

During the recession, supermarkets fared exceptionally well, as Americans cut back on expenses and cultivated cooking hobbies. Today however, the workforce is closer to full employment, meaning that people have less time to spend on cooking and shopping and more disposable income to spend at restaurants and on higher-quality foods.

More broadly, people are more comfortable with online shopping than they have been at any point in the past (according to a recent Accenture study, 3 out of 4 shoppers prefer retailers that use personal information to improve shopping experiences, and 61% would trade privacy for personalization). But online shopping has not disrupted the grocery industry as dramatically as other brick-and-mortar retailers.

At this point in time there is an opportunity to apply many benefits unique to online shopping (comparison research, personalized recommendations, wish-listing, etc.) to the grocery-buying process.

What might the future look like?

Modern technology – especially the rise of big data and “connected everything” – presents an opportunity for supermarkets to re-assess their role in customers’ lives. They should start thinking of themselves as platforms to help customers achieve personal consumption goals, and they should seek to eliminate as much friction as possible in the purchase process. Importantly, the relationship between grocery provider and grocery consumer should not begin and end in-store, but extend through other aspects of a customer’s life.

Specifically, platform-agnostic proprietary utilities could create significant competitive advantage for supermarket chains by…

Nudging customers toward making healthier purchase decisions over time
Rewarding customers for making healthy purchase decisions (Doing well this week? Treat yourself with some ice cream!)
Suggesting recipes, with settings for minimal-effort bachelors and foodies alike (which might also capture an audience that would otherwise dine out)
Allowing people to bookmark ingredients they’ve tried in other settings to investigate later
Learning what people like over time and recommending items based on purchase histories
Alerting users when they are running low on frequently purchased items, and automatically updating shopping carts to compensate
Telling people if they’ve selected too much or too little food for the week
Allowing customers to set new consumption goals after comparing their buying patterns against the average and against their budget

… and capturing users in their ecosystems with a seamless click-to-purchase experiences that deliver all items as needed, once a week, or (since customers like to pick out their own produce, and items like meat and dairy don’t lend themselves well to home delivery) pre-bagged at the store for customers to pick up on their way home from work.

Innovations such as these would create a more personalized shopping experience and allow the grocery store to act as more of a partner to its customers.

Someone should do this because…

1 – In such a competitive market, building trust and brand loyalty should be a primary strategic objective of supermarket chains.

Ideas that leverage technology to create real value for consumers endear brands to their customers and make them more meaningful over time (I, for one, would love a super market that helps me achieve my goal of eating healthier over time - and telling people they’ve selected too much food for the week, for example, pays dividends over time if it helps customers waste less and save money overall). And brands that are considered more meaningful to consumers systematically enjoy greater consumer preference, advocacy and loyalty.

2 – Engaging customers in programs built around personal data allows supermarkets to collect more and more accurate data on its customers. This will help them better-anticipate consumer behaviors and preferences, manage labor costs more efficiently, make more-intelligent wholesale purchase decisions, and negotiate more-favorable contracts with suppliers. More and better data will also allow supermarkets to personalize their service offerings to individual customers, thereby generating loyalty and allowing them to serve deals to customers (in real time) when it is tactically-necessary.

3 – Building a seamless and comprehensive product ecosystem around customer service dis-incentivizes people from purchasing groceries anyplace else.

Integrating with the Fridge of Tomorrow (image below), for example, would benefit the supermarket chain by extending its brand experience from the store to the home – in fact, grocery stores should be the main drivers of smart refrigerators, as they have more to gain by cutting exclusive deals (think, Google paying Firefox to be its default search provider) than manufacturers have by out-competing each other on features that may not be significant purchase-drivers in their industry.

In sum…

In the highly competitive supermarket industry, brands must pursue competitive advantage relentlessly. Using digital technology to bring the grocery shopping experience from a time-sucking errand to a value-added convenience might just be “marketing good enough to pay for” – though, clearly, the ideas offered here only scratch the surface.

*Note that I did not choose a specific brand for this exercise, and I used the terms “supermarket” and “grocery store” interchangeably. Though I wrote it with a chain like Whole Foods in mind (one that caters to more-urban, less-price-elastic customers), these ideas would work for most retailers of perishable foodstuffs – and perhaps even better for a chain that is having trouble differentiating itself in the highly fragmented grocery market.

Throwback. ANIMAL BEATBOX - Tropfest 2011 Winner (TSI:...

Thu, 31 Jan 2013 14:41:24 +1100

Throwback. ANIMAL BEATBOX - Tropfest 2011 Winner (TSI: “Key”) (by TROPFEST)

Love. Love. Love. On so many levels. Child of the 90s | Internet...

Fri, 25 Jan 2013 11:43:20 +1100

Love. Love. Love. On so many levels. Child of the 90s | Internet Explorer (by internetexplorer)

Shugo Tokumaru - “Katachi” (Official Music Video)...

Thu, 24 Jan 2013 06:50:04 +1100

Shugo Tokumaru - “Katachi” (Official Music Video) (by pitchforktv)

4A's Strategy Festival Talk

Fri, 16 Nov 2012 04:11:00 +1100

Last month, I was honored to be asked to speak at the 4A’s Strategy Festival, which is run in conjunction with the Jay Chiat Awards, now (I believe) in their second year. My brief was to answer the question:

What inspires you to be more agile? Who does things faster, better, smarter … and what can they teach us?

…so I spoke for 5 minutes on teenagers. Obviously.

Let me just say that this project was immensely rewarding. Not only did I learn a whole lot more about agile in the process of writing the deck, but presenting my thoughts was a very agile learning experience in itself. I’m definitely going to try to do this again sometime soon - perhaps at SXSW or a TEDx - to apply my learnings from this experience. I might even take an acting or public speaking class in the meantime!

Here’s my deck:

Hi, I’m Alex.

I’m here to tell you that everything you need to know about agile, I knew in high school – but then forgot.

Let me explain.

We can all agree that teenaged boys are complete and utter morons, right?

They think they know everything, but actually know nothing
They’re obnoxious and think they’re so much cooler than they really are
They procrastinate all day only to stay up until 4am finishing an essay
They think they can do absolutely anything

Well, that’s pretty much how I was….

Anyway, I think that teenaged boys are consummate agile strategists.

Adolescence is a time when just about every assumption you have made about the world comes into question. The world is shifting around you, and everything you do is new, unsettling, and exciting.

If you think about it, this is kind of like how advertising is today – with new forms of interactive media throwing many of the assumptions we used to make out the window. Similar to teenagers, we planners are realizing that we operate within increasingly complex systems – where the rules of the game are constantly shifting.

Like advertisers, teenagers have no idea what they’re really doing, but unlike advertisers, teenagers learn more in a shorter period of time than at any other time in life (excepting their first 2000 days). They come out on the other side of high school much more mature, intelligent, and better off than they were to begin with.

So how do high-schoolers do so well for themselves?

Failure.

Adolescents fail at an absolutely phenomenal rate.

Let’s use, as an example, my teenaged quest to get girls to like me romantically.

These are pictures of me in high school.

Let me assure you, I wanted to get laid. I was just horribly mistaken in thinking that these haircuts would help me achieve that goal.

That’s okay, though. As a teenager, I was such a moron – bullheaded, not quite self-conscious yet, and so used to failure that this kind of thing didn’t really phase me.

So I tried again, failed again, learned from experience, and tried again, failed again, learned from experience and tried again…

See a pattern here?

The way I learned as a teenager was inherently agile.

Just as agile developers learn about their customers through build-measure-learn loops, I learned about girls through a similar validated learning process:

plan of attack – massive failure – re-adjustment = build – measure – learn

Just like agile practitioners, I too realized that not everything my target audience said they did actually conformed to their behavior.

Sure, I devised elaborate, long-term strategies to woo the object of my affection, but I didn’t improve until I actually got out there and tested my theories in the real world.

An important point here is that the faster adolescents go through build-measure-learn loops – the faster they are able to iterate – the better they get over time. Which is why the kids going on dates freshman year were the ones with girlfriends senior year, and why the kids reading “The Game” probably still haven’t had sex.

This lean-like loop is not where the similarities end between high schoolers and agilists – and the parallels are not only confined to the realm of dating….

Agile stresses the importance of feeding these iterative loops with intuition – intuition fed by outside knowledge of how things work in other spheres.

High-schoolers are constantly learning from and sharing with their peer groups – friend groups work like “self-organizing teams” where new ideas “flow” from person to person, are discussed, scrutinized, and put into the queue of what to test next in the real world.

In the case of dating, friends might tell each other what has and hasn’t worked for them in the past
In class, friends tell each other what kinds of books are worth skimming and what articles are must reads
The same goes for techniques on the playing field…

I remember procrastinating for hours in my dorm room talking about philosophy with friends of mine. I was fortunate enough to go to a school where everyone I lived with came from a vastly different background than myself. We all had different interests and different experiences, and it was in those late-night dorm room discussions that my theories and ideas about the world were scrutinized, challenged, built upon, combined with others, and generally made more robust overall.

Mixing knowledge late at night with friends who had different perspectives and experiences definitely caused me to hand in a paper or two late, but it was immeasurably more valuable than anything I ever learned in class.

Another point I want to make is about the importance of dreaming big.

Kids are the ultimate dreamers – they don’t know the limits of their abilities, so they think they can do anything, and they are great at imagining best-case scenarios.

Somehow, by dreaming big, the same kid who thought it was a great idea to dye his hair black (me) was also a top-class rower.

I would never have been able to do this had I not (a) been stupidly overconfident, (b) failed at just about every other sport I had tried, and (c) been governed by a goal that was big enough to matter – qualities more common in kids than in adults.

Interestingly – though maybe not surprisingly – the very success of our agile development during adolescence makes us worse agile strategists in the long run.

Repeating these agile learning cycles actually shapes us into a different “product” over time.

So once I found something that worked well for me, I stopped adapting and started falling behind. It’s pretty clear that what worked for all of us 5 years ago doesn’t work anymore, so I’m going to have to re-adopt some of the agile methodologies I used naturally in high school is I want to succeed in 2013.

So, what are the TAKEAWAYS? What can we learn from teenaged boys that will make us better agile strategists?

1 – Be comfortable with failure (and learn how to use it). This is probably a tired point by now, but I’ll say it anyway. Kids are naturally better at failing than adults because they’re not as good as we are and they haven’t fully developed a self-conscious, but we need to model these behaviors in our workplaces and remember that testing hypotheses is often preferable to long-winded research and deduction — especially today when everyone is still trying to figure everything out.

2 – Talk more. Procrastinate more. Remember the value of bringing ideas from the outside into your work groups. Read the internet, take classes, and encourage everyone you work with to do the same. For fertilizing your brain with outside stimulation and sharing it with your teammates makes everyone’s time at work more productive overall.

3 – Dream big. Start with a goal that is clearly articulated and big enough to matter. Value simplicity of purpose over sacred consumer insights. But then go for it with everything you’ve got.

Really, agile is about learning – as fast as possible, with as little waste as possible.

As defined in software, agile is an approach that aligns the development process not only with the objectives of the organization but with the needs of the customer, in order to rapidly deliver high-quality outcomes.

Looking to teenagers for inspiration might seem odd at face-value, but I think it’s only natural.

Thank you!

Photo

Thu, 08 Nov 2012 15:12:49 +1100

E. B. White on the three New Yorks

Fri, 17 Aug 2012 02:34:00 +1000

There are roughly three New Yorks. There is, first, the New York of the man or woman who was born there, who takes the city for granted and accepts its size, its turbulence as natural and inevitable. Second, there is the New York of the commuter—the city that is devoured by locusts each day and spat out each night. Third, there is New York of the person who was born somewhere else and came to New York in quest of something. Of these trembling cities the greatest is the last—the city of final destination, the city that is a goal. It is this third city that accounts for New York’s high strung disposition, its poetical deportment, its dedication to the arts, and its incomparable achievements. Commuters give the city its tidal restlessness, natives give it solidity and continuity, but the settlers give it passion. And whether it is a farmer arriving from a small town in Mississippi to escape the indignity of being observed by her neighbors, or a boy arriving from the Corn Belt with a manuscript in his suitcase and a pain in his heart, it makes no difference: each embraces New York with the intense excitement of first love, each absorbs New York with the fresh yes of an adventurer, each generates heat and light to dwarf the Consolidated Edison Company… .

- E. B. White

Prophetic 1995 Student Internet PSA (by RackFocusFilms)

Thu, 16 Aug 2012 05:12:34 +1000

Prophetic 1995 Student Internet PSA (by RackFocusFilms)

oldie but goodie (via Image: Girls = Evil)

Mon, 30 Jul 2012 23:47:03 +1000

oldie but goodie (via Image: Girls = Evil)

jtotheizzoe: The (Secret) City of London Part 1: History C.G.P....

Mon, 30 Jul 2012 02:03:12 +1000

jtotheizzoe:

The (Secret) City of London Part 1: History

C.G.P. Grey takes a fascinating look at the mostly-unknown city within a city within a country within a country.

Photo

Fri, 08 Jun 2012 06:22:15 +1000

this is my favoritest animated gif. ever.

Fri, 11 May 2012 00:50:00 +1000

"the atoms that make up your body were once forged inside stars."

Thu, 10 May 2012 01:51:57 +1000

“the atoms that make up your body were once forged inside stars.”

- i like that thought. a lot. (via wellhellouberblond)

Nice design aesthetic (via Instagram)

Fri, 04 May 2012 01:37:16 +1000

Nice design aesthetic (via Instagram)

If you cut this poster, you’ll get 100 business cards. If...

Tue, 10 Apr 2012 13:15:03 +1000

If you cut this poster, you’ll get 100 business cards. If you place them in order, you will get a flip book.

(via 100 IDS (A Business Card Poster that Turns into a Flip Book) | Show Us Your Clips)

The City of Samba (by Jarbas Agnelli) Tilt shift of the Carnaval...

Mon, 26 Mar 2012 11:21:03 +1100

The City of Samba (by Jarbas Agnelli)

Tilt shift of the Carnaval party in Rio de Janeiro.

Art direction, FTW. Hooray For Earth - True Loves Music Video...

Tue, 20 Mar 2012 00:28:25 +1100

Art direction, FTW.

Hooray For Earth - True Loves Music Video (by DovecoteRecords)

curiositycounts: An enjoyable homage to famous frames of the...

Mon, 05 Mar 2012 10:43:12 +1100

curiositycounts:

An enjoyable homage to famous frames of the past and present.

(via)

"We are taking technology embedded with our values and our culture and embedding it in the developing..."

Thu, 01 Mar 2012 07:24:34 +1100

““We are taking technology embedded with our values and our culture and embedding it in the developing world, which has very different values and cultures,” Soren Gigler, the World Bank specialist, told those at the FailFaire event here in July.”

- In Twist, Nonprofits Honor Technology’s Failures - NYTimes.com

"I think this dynamic will force more brands to stop making exaggerated claims and do simpler,..."

Sat, 25 Feb 2012 04:22:42 +1100

“I think this dynamic will force more brands to stop making exaggerated claims and do simpler, authentic demonstrations. And as a result, it will force brands to spend more time making sure they have something relevant and important to demonstrate. In other words, this may force brands to improve. It will become less and less possible for inferior brands to outspend and outshine better products, and more possible for the best product to win.”

- Amazon Kindle: The Idea Writers: Copywriting in a New Media and Marketing Era (Advertising Age)