Amazon Go accelerates in size and confidence

 

Amazon Go Grocery, an expanded version of the walk in, select and walk out Amazon Go format, has been open since end February and it is different from the much smaller stores that preceded it and which have been making inroads in cities across the US.

Rather than being sub 2,000 sq ft, this is a 10,400 sq ft concern, putting it firmly in the small neighbourhood supermarket or super-sized convenience store category.

As such, the offer is substantially different from the Amazon Go norm where the focus has been on snacks, prepared and packaged foods and perhaps a cup of coffee from a machine while the shopper is at it. In Amazon Go Grocery there is a much greater fresh offer and it now becomes possible to shop for the evening meal or even to stock the larder. Yet the look and feel of the store is nearly identical to an Amazon Go with the difference being the mechanics of allowing customers to have a ‘bigger’ shop with trolleys, reusable bright green bags and suchlike.


There are also elements of the Amazon-owned Whole Foods Market about what has been done with products from suppliers to that chain being used to boost the Go Grocery offer, although prices are generally lower than in the sister enterprise.
this still doesn’t break even with the economics but they look more and more likely to be able to develop that in the future . There will be a limit to how many they will launch but when they do sort out economics beware 7-11 in USA and TESCO Sainsbury’s in UK.

This may all still represent small change for Amazon, but increasingly the app-based walk in walk out food shop at scale looks a realistic possibility. UK retailers need to take note.

check out other Blogs on Amazon and on creating fast check-outs

1. Bezos masterclass in management through shareholder letters #1 /22

2. Zig while amazon zags

3. Amazon-Go leading the way

4. Robots make stores Better Simpler Cheaper

5. Frictionless C-Stores

 

 

bring on shareholders who align with your values

Jeff Bezos letter to shareholders 1997: 

Key message 1/22 :

Jeff Bezos has been writing a letter to shareholders since 1997 and looking at all if them gives an insight to the organisation and a masterclass in leadership. This is a series of short blogs  that gives you a snap shot / key takes outs of each letter, along with links to them all.

“We first measure ourselves in terms of the metrics most indicative of our market leadership: customer and revenue growth, the degree to which our customers continue to purchase from us on a repeat basis, and the strength of our brand. We have invested and will continue to invest aggressively to expand and leverage our customer base, brand, and infrastructure as we move to establish an enduring franchise. Because of our emphasis on the long term, we may make decisions and weigh tradeoffs differently than some companies.”

Takeaway

  • Don’t let short-term success, including going public, distract from the long-term focus. Amazon’s focus is market leadership, customer growth, retention, and brand — even if these come at the expense of near-term profits or the risk of negative “Wall Street reactions.”
  • Key to this growth has been Bezos’ clear, consistent message. Each year, it helps attract investors who share the company’s vision and maintains their financial support even when Amazon is at odds with the norm.

Challenge

  • Building an e-commerce company in the early days of the internet meant building on the precipice of huge growth, in terms of infrastructure and huge changes in consumer behavior. Taking advantage of these opportunities meant investing all available cash into growing and delivering value to customers.
  • Bezos explained Amazon would never focus on profits or shareholder returns directly, but would focus 100% of its energy on building value for its customers.
  • When his first letter to shareholders was composed in 1997, Amazon was already a successful company by some metrics — 838% year-over-year growth had recently brought the online bookstore’s revenues to $148M. But much of Wall Street was skeptical of the still-unprofitable company that had just gone public, didn’t pay dividends, and didn’t seem to care about becoming profitable.
  • In that first letter, Bezos didn’t try to convince investors that Amazon was profitable — instead, he explained why profitability was the wrong metric by which to judge a company like Amazon.

Solution

  • Amazon’s real strength is scale. As a company grows, if it’s smart about its costs, these can be minimized while sales increase. Margin expansion follows, and a team suddenly has a chance to grow at a faster and faster rate. More customers also mean more data, which leads to even greater decision-making power.
  • Shareholders who understand this can reap exponential gains.

 

  • Bezos ended his 1997 letter by reminding Amazon’s shareholders that it was their responsibility to decide whether this was a thesis worth investing in. In the opinions of many analysts of the time, it was not. Many were proved wrong. He still talks about every day being Day 1 and those who invested with a similar goal of inventing each and every day have been rewarded.

Jeff Bezos Letter to Shareholders 1997

links to all letters

  • 1997: Bring on shareholders who align with your values

Jeff Bezos Letter to Shareholders 1997

  • 1998: Stay terrified of your customers

Jeff Bezos Letter to Shareholders 1998

  • 1999: Build on top of infrastructure that’s improving on its own

Jeff Bezos Letter to Shareholders 1999

  • 2000: In lean times, build a cash moat

Jeff Bezos Letter to Shareholders 2000

  • 2001: Measure your company by your free cash flow

Jeff Bezos Letter to Shareholders 2001

  • 2002: Build your business on your fixed costs

Jeff Bezos Letter to Shareholders 2002

  • 2003: Long-term thinking is rooted in ownership

Jeff Bezos Letter to Shareholders 2003

  • 2004: Free cash flow enables more innovation

Jeff Bezos Letter to Shareholders 2004

  • 2005: Don’t get fixated on short-term numbers

Jeff Bezos Letter to Shareholders 2005

  • 2006: Nurture your seedlings to build big lines of business

Jeff Bezos Letter to Shareholders 2006

  • 2007: Missionaries build better products

Jeff Bezos Letter to Shareholders 2007

  • 2008: Work backwards from customer needs to know what to build next

Jeff Bezos Letter to Shareholders 2008

  • 2009: Focus on inputs — the outputs will take care of themselves

Jeff Bezos Letter to Shareholders 2009

  • 2010: R&D should pervade every department

Jeff Bezos Letter to Shareholders 2010

  • 2011: Self-service platforms unlock innovation

Jeff Bezos Letter to Shareholders 2011

  • 2012: Surprise and delight your customers to build long-term trust

Jeff Bezos Letter to Shareholders 2012

  • 2013: Decentralize decision-making to generate innovation

Jeff Bezos Letter to Shareholders 2013

  • 2014: Bet on ideas that have unlimited upside

Jeff Bezos Letter to Shareholders 2014

  • 2015: Don’t deliberate over easily reversible decisions

Jeff Bezos Letter to Shareholders 2015

  • 2016: Move fast and focus on outcomes

Jeff Bezos Letter to Shareholders 2016

  • 2017: Build high standards into company culture

Jeff Bezos Letter to Shareholders 2017

  • 2018: Wandering is an essential counterbalance to efficiency

Jeff Bezos Letter to Shareholders 2018

Zig while amazon zags

or 5  ways to compete with Amazon

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One of the biggest challenges that face retailers at the moment is how to compete with the jugganaut that is amazon. Powered by the profit driver in AWS:amazon web services and more recently AAS: amazon advertising services the retail industry fears their arrival.

First understand them . the best way to get into amazon’s DNA is to read the letters to shareholders that Jeff Bezos has written every year since he started in 1997. Look out for a seperate blog on that subject coming soon .

The second defence is attack 

Strategy #1: Own the pre- and post-transaction experience
Amazon are very focused on making the transaction as easy as possible at low cost, but we still have to assemble solutions on our own. If an organisation offers a ready-made solution that saves us time and effort (at a price we can live with), we’re grateful.

  1. Meal delivery companies, for example, have leveraged this basic insight to create a new category. Cooking a meal is time consuming: go to the supermarket, fight through the crowds order to find a few ingredients, wait in a long line, lug your bags home, put everything away, measure and chop the ingredients, and assemble the meal.Meal delivery companies like Gousto, HelloFresh, and simply cook eliminate all of these chores but the last one by shipping pre-made meals that require very little prep. (Amazon launched their own meal kit delivery service in July in order to catch up after falling behind for five years.)
  2. Furniture  or Clothing : Virtual Reality is allowing you to select and choose furniture or clothing that fits your room or you.Once you’ve selected what you want to buy, sometimes extra effort is needed to actually assemble, install, learn how to use it, customize it, and then repair it once it breaks.
  3. Electrical retailers: DixonsCarphone Warehouse are competing vs amazon in electrical by offered get technical support pre and post purchase. Installing Fridge freezers, Kitchen ranges / recycling fridges.
  4. Garden Retailers offering Garden Services
  5. Mothercare offering to come and assemble the cot or bed for you rather than you have to put things all together.
  6. Laura Ashley assembling beds.

Strategy #2: Turn your services into a platform
The fastest-growing companies in history, such as Google, Facebook, Uber, Airbnb, Amazon, and Netflix, are all platforms. The platform business model captures the most profit, builds a moat that is hard for competitors to cross, and scales quickly once it reaches critical mass. While building up a global workforce of employees to offer support services may take massive amounts of time and capital, a platform can get there in a fraction of the time. And, if you don’t do it in your niche, it’s likely that Amazon will — if it hasn’t already.
Amazon Services uses a platform model to deliver hundreds of services at scale including services with and for the home, automotive, electronics, yard and outdoor, assembly, health and wellness, lessons and classes, and pet services. It even has an Uber-like service, Amazon Flex, which has drivers in 30 cities who deliver Amazon products.

You can build a platform by focusing on your niche , playing to your strengths, particularly your unique understanding of your customer, in order to more effectively recruit, vet, train, and manage a network of service professionals and help them solve the specific problems that customers in your niche face. The most successful platforms in the world aren’t ones that offer every service under the sun. They are ones that are the most focused.

  • Uber is a platform that has focused on logistics and transport
  • Netflix is not trying to meet all entertainment needs, but focused on emotional connection

Netflix founder Reed Hastings: “We’re not trying to meet all needs. So, Amazon’s business strategy is super broad. Meet all needs. I mean, the stuff that will be in Prime in five or ten years will be amazing, right? And so we can’t try to be that — we’ll never be as good as them at what they’re trying to be. What we can be is the emotional connection brand, like HBO. So, think of it as they’re trying to be Walmart, we’re trying to be Starbucks. So, super focused on one thing that people are very passionate about.”

Strategy #3: Reduce every point of friction in your customer’s journey until you hit a ‘wow tipping point’
To reduce the friction at every step of your customer’s user journey, leverage your own customer data to uncover friction points and relentlessly remove them. Start by removing glaring problems. Then keep going until you reach the ‘Wow!’ tipping point
A hallmark of many of today’s most successful companies, is that they don’t stop improving their product once it’s good enough. They identify every interaction their brand has with a customer and aim to make it a ‘Wow!’ experience. It’s not just tech firms; retailers are taking note as well.

Strategy #4: Create a must-have brand and then use it as leverage
One of the biggest threats to Amazon is the power of brand. A truly powerful, must-have brand like Apple or Disney doesn’t need Amazon to succeed. They have built a direct relationship with the consumer. As a result, Amazon has lost tens of billions of dollars in potential revenue because people buy Apple products on Apple.com or in the Apple STore. Furthermore, Amazon’s whole business model is antithetical to people’s innate desire to display their personality and status through what they purchase. There is always going to be a segment of people who value self expression over low prices and convenience. The luxury category is one of Amazon’s Achilles’ heels.
Amazon is confronting the ‘brand’ threat in two ways.

  1.  First, amazon has shown that it’s not afraid to build or acquire its own brands (19 in total). Amazon also leverages its data on which products sell best in each category to launch its own generic brand, Amazon Basics, which now has over 3,000 products. In each category these products appear in, they are featured.
  2. commodifying brands by forced discounting, using its direct relationship with customers and audio purchasing to push competing commodity brands. With Amazon Alexa, customers can say, “Buy toothpaste,” and Amazon will send its recommended toothpaste rather than the toothpaste with the best brand, for example.

Make no mistake, Amazon is trying to destroy the value of branding overall and learn from your customers in order to compete with your most profitable products. Bezos’ famous saying, “your margin is my opportunity,” is particularly relevant here. Branding creates a perception that facilitates charging a higher price. Bezos is attacking that pillar of higher prices.
By having a must-have or a luxury product, you give yourself choices on how to leverage your brand:

  1. using an embargo period Netflix keeps its original content exclusive to Netflix for a certain number of days and then sells it on iTunes and other platforms. The other platforms are not only sources of cash, they are also marketing.
  2. allowing just some products to be sold on Amazon (sell some brands on Amazon and others only on your own site),
  3. not selling on Amazon at all (Birkenstock, for example, prohibits its sellers from selling on Amazon. Sales tripled to $800 million last year),
  4. partnering exclusively with one brand. (Martha Stewart has a multi-year exclusive agreement with Macy’s).

Strategy #5: Defining the problem & Extreme Experimentation

Amazon really understands the problem that they are trying to solve. and works hard to clarity the brief for any new innovation, making it crystal clear what the customer problem is they are trying to solve and then how they will develop a proposition to solve that problem .

This, more than any other strategy, is why Amazon is so successful: Amazon is not a traditional business. If you think it is you have already lost. You are competing against an economy.

Part of what makes the Economy Pyramid Model so successful is the sheer quantity of experimentation. Amazon’s culture of listening to customers , defining the problem & experimentation is so deeply ingrained that Bezos has repeatedly gone on record saying that Amazon’s success is directly correlated with the number of experiments it performs.

Amazon isn’t just experimenting internally with new platforms like Alexa, Kindle, Flex, Marketplaces, and dozens of others. Each of those platforms then empowers an economy of producers to create millions of experiments. In so doing, Amazon passes the cost of experimentation on to producers, receives income for each experiment, and then doubles down on the blockbusters by creating their own competing brand. It’s a brutally effective strategy. Amazon aggregates producer experiment data to launch its own competing products.
In a world that is rapidly changing, the companies that succeed will be those who increase their rate of experimentation faster than the environment changes. And Amazon is a core part of that environment.

If you need help in defining the problem and creating experiments contact me.

Mary Meeker Internet Trends Highlights

11 Highlights from Mary Meeker’s “Internet trends report”

revisited for 2020 New Year

mary meeker 2019

Mary Meeker released her 2019 Internet Trends report in June but I thought it would be useful in the new year to have another look at it to see what it brings for 2020 .

This year’s total slide count came in at 333, up from 280 when compared to the previous year. And while some of Meeker’s insights may be obvious (subscriptions services are luring new customers through free trials) other observations are more insightful  (Fortnite is more akin to a social media platform than video games.

1. For the first time, Americans spent more time on their mobile devices than they did watching TV. A 2019 estimate suggests that adults spent an average of 226 minutes (more than 3.5 hours) on their phones compared to 216 minutes on TV. For comparison, 10 years ago, TV reigned with 266 minutes-per-day while mobile use clocked in at just 20 minutes.

2. Multiplayer video games such as Fortnite which command some 250 million active users, most of whom are under age 17, are becoming increasingly similar to social media networks, thanks in large part to events such as DJ Marshmello’s concert, which attracted nearly 11 million people in game. Also fueling its rise are platforms such as Twitch and Discord, which act as a sort of new town hall for Gen Z.

 

3. An increasing number of people are using images to communicate: More than 50 percent of all tweets, for example, now include images. People are also taking more pictures than ever before and platforms such as Instagram are amplifying this relatively new style of digital communication. Text really is a less-than-ideal mode of communication, We’re translating ideas and emotions into symbols and hope they’re decoded properly. The more visual our communication platforms become, the better storytelling we as advertisers can do.

4. For the first time, more than half of the global population were identified as internet users. In 2018, the report found approximately 3.8 billion people—51 percent of everyone on Earth—were connected to the internet, up from 3.6 billion (49 percent) in 2017.

5. New platforms are emerging as hubs for internet ad spend   Amazon, Twitter and Pinterest collectively saw 6-times year-over-year growth since 2017. Still, Google and Facebook reign supreme and continue to see steady growth, but watch out!

6. In 2018, American adults spent an unprecedented average of 6.3 hours per day interacting with digital media—time which was largely split between mobile devices at 3.6 hours and desktop or laptop computers at two hours. The amount of time U.S. adults spend per day online jumped 7 percent year-over-year from 2017, and was more than double the amount of hours they spent online in 2010.

Insight: “The lines between search, social and e-commerce continue to blur and Facebook and Google should check their rearview mirror for Amazon—it’s a lot closer than they think, Meeker reports that Amazon’s ad business is up 2.6-times in revenue but what she doesn’t note is that others are jumping on the bandwagon—Instagram, Google and even Walmart have all made competitive moves in the space.

“As customers spend more time than ever on digital media—6.3 hrs per day—and e-commerce contributing to 15 percent of all retail sales (slide 20), advertisers have a captive audience ready to click ‘buy.’”

7. Free trials were the most effective marketing tool for online streaming services to attract new users, with 42 percent of consumers listing “free trial tier” as the most compelling reason for trying a new service.

8. A growing number of adults report being online “almost constantly.” Twenty-six percent of American adults rarely disconnected from the internet in 2018; among the 18-to-29 demographic, that number jumps to 39 percent, according to Pew Research cited in Meeker’s report.

 

9. Most television viewers are multi-platform multi-taskers, with 88 percent of viewers saying they use a second digital device while watching TV and 71 percent saying they look up content related to what they’re watching mid-show.

10. Messaging platforms offering automatic or optional end-to-end encryption are rapidly rising in popularity with secured services like Telegram and WhatsApp outpacing the growth of non-encrypted messaging services like Twitter and China’s WeChat. At the start of this year, 87 percent of web traffic was encrypted, compared to just 53 percent in 2016.

 

11. Despite people spending more time online, digital ad revenue slowing down : The report says digital ad revenue grew 20 percent, down from 29 percent year-over-year.

Insight: “Since there is more spend on the platform and more businesses leveraging these paid media platforms, that means there is now more competition,” “In order to reach your target market, it will come at a higher price because there is the same [amount] of supply but more demand.”

Security and regulation such as GDPR are also playing a role in the slow down. “Privacy consciousness is rising and the tech industry is making changes on that front, but privacy by default is increasingly required by lead users,” “As users become more aware of surveillance capitalism, solutions that put the user first will reshape the landscape.”

Hope you found this overview useful but…. if you want to see the whole presentation you can find it at Bond Capital on the link here:

Zippin through the store

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A Bay Area startup has launched a small public demo in San Francisco that will grow into a full-sized AI-driven convenience store in the coming months.

A Cooler with soft drinks and sandwiches and a shelf full of crisps is just the beginning for this start-up Cashierless C-store concept by Zippin that launched recently. But the Beta concept will scale rapidly Into a fully fledged C-Store as learnings are applied.

The concept uses relatively inexpensive cameras and weight sensors on shelves. The camera feeds are analyzed by algorithms trained through machine learning to recognize the appearance of each product the store carries.to accurately understand when a customer picks up items and puts them in a bag or pocket.

An app is used to sign in and complete the checkout. This also improves the customer experience as customers get used to the technology, and learn how to use it by signing in ( we found that helps customers know that we know they aren’t stealing things ) as well as quick payment.

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Amazon-Go is rolling out in further stores in San Francisco and New York as well as rumoured to be looking in London. Walmart has just announced a larger less tech but still cashierless store in Dallas.

Zippin will provide another technology that will allow retailers to compete with Amazon-Go in the Better, Simpler, Cheaper stake.

5 tips for driving (digital) success

5 fingersHere are 5 simple tips will help drive success in your organization and make you a (digital) hero:

1. Identify and understand the problems
This is so trivial but yet incredible important and frequently ignored. Companies, governments and other organizations try to solve problems without understanding them. The first step of solving any challenge, with our without technology, is to identify and understand the problem(s). I use plural because we often jump on the first problem when there are several. There’s a myriad of great tools to identify problems including the 5 Whys, Customer Journey mapping, Customer Research, and more.

2. Be inspired and challenged by great people
The honest truth is that most people are comfortable with what they have and know. The unknown and change is frightening. But to survive in the current competitive, fast-moving world we need to challenge ourselves to consider other points of view, think differently, and to change fundamentals.

These are a few ways you can challenge yourself:

  • Follow people on Twitter and LinkedIn such as Tom Goodwin, Martin Lindstrom and Benedict Evans
  • Meet and hire partners that will challenge you (and don’t always agree)
  • Talk to the competition’s customers

3. Always involve unbiased customers
Another basic mistake too many organizations make is solving problems without involving the people that are intended to use it. For example launching a website without testing the concept, content and final design on the intended target audience or deploying an expense management tool without including employees in the evaluation and implementation process.

Lack of time or cost are common excuses, but how much time and money do you lose when a website or software doesn’t achieve its goals?

Always involve end users at every step of the way. Remember that colleagues or the boss are usually not representative of the end users.

4. Define clear success factors, measure and follow-up
How do we know if we’ve achieved success if we didn’t define it in the first place? Many organizations have too generic or end-goal-centric metrics. The most common measures of success are revenue growth and cost savings. The challenge with these is that it’s usually not possible to measure success until e.g. 3-6 months after the project has been completed.

A better alternative is to include success factors that can be measured throughout the project. For example user task completion rate, satisfaction and sticking to the MVP timeline.

5. Understand why Culture eats Strategy for breakfast
Want to change the business or organization? Think that a new app, knowledge sharing system or HR website will achieve radical change? It won’t unless people want change. Ensure that every initiative to change has a plan to get buy-in from the organization including the grass roots. No. 3 above will help, but is not enough.

Use these 5 tips in whatever you do and I can promise you a greater chance of success. Furthermore there’s a pretty good chance that the organization will consider YOU a digital hero.

Amazon-Go leading the way

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Amazon opened a fourth Amazon-Go cashier less convenience store in Chicago, the first location outside Seattle. The new store is at 113S Franklin St in Chicago’s Loop, one block from one of the City’s elevated train routes and within a few blocks of Union Station. Good C-Store location dense with Office workers and on a commenter path.

Amazon-Go using camera technology, scanners and Machine learning algorithms to improve the customer journey.  They may be ahead in technology but they still have a long way to go understanding Food Retailing.

Read here about the first store AMAZON GO-GO

Amazon isn’t the only one chasing a cashier less vision, Frictionless shopping is the goal of many retailers and start-ups.  Companies like Standard Cognition and Zippin have opened their own pilot stores so other retailers can use the technology.

Standard Market based in SanFrancisco is a concept store that users overhead cameras but no sensors to correctly matches items to the right shopper, detects when a shopper returns an item to the shelf or puts it in a bag or a pocket. (View a video HERE) Customers download the STandard Checkout App to shop and checkout. No scanning required for a frictionless experience.  View more detailed story HERE,

Zippin are a startup based in BAy Area of SanFrancisco and have a Beta-Concept store where they are learning fast  READ more HERE

MobyMart in Shanghai is learning fast  ( read story HERE)

and in UK Tesco and Sainsbury’s are trialing stores where customers scan the products themselves and then have a simpler checkout on a phone.

Making it as easy and frictionless as possible is the battleground of retail in the next few years and using data and digital to deliver a Better, Simpler, Cheaper Shopping Experience is the ExamQuestion for many retailers at the moment .

 

 

 

 

Standard Market – Frictionless Store

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Standard Market based in SanFrancisco is a concept store that opened on 7th September located at 1071 Market Street, that allows customers to shop & pay without scanning or stopping to checkout. The Proof-of-concept store uses overhead cameras but no sensors to correctly matches items to the right shopper, detects when a shopper returns an item to the shelf or puts it in a bag or a pocket.

Customers download the Standard Checkout App to shop and checkout. No scanning required for a frictionless experience.

CHECKOUT A VIDEO DEMO BY CLICKING

This concept is potentially more scalable in Europe as it has higher levels of privacy with no Biometric information collected from customers including facial recognition, with lightweight installation process with overhead cameras and no sensors.

This is a great example of making the customer experience Better, Simple, Cheaper, with a frictionless experience for customers, simpler stores to run, and lower running costs ongoing. The opportunities around Anonomised shopper analytics in the store are also enormous, allowing continuous improvements.

7 steps Data-Driven Customer Growth.

seven steps

Accelerating customer growth to drive commercial success through data is challenging and requires commitment and alignment from around all the organisation to be successful, but there are 7 steps that make the journey more successful

  1. Identify the commercial & customer Goals in next 18m-36m
  2. Build a clear vision of a radically different data-driven customer experience, working across digital & bricks & mortar and align across the organisation.
  3. Remove Silos of data use creating a single version of the truth, with a data strategy linked to business goals e.g. Unified View of customer data, GDPR ready and tools developed to meet commercial goals.
  4. Breakdown the institutional fear of data & digital at all levels through training & doing: it’s a tool that anyone can use to do what you have been doing better
  5. Use Data Analytics to Map & Prioritise customer journeys & personalised experiences across human & digital touchpoints and align organisation capability to deliver for customer.
  6. Identify & Build the capabilities (Process, Tools People) that will be required to transform process design from efficiency focused (cheaper) to customer focused (better simpler cheaper) , specifically putting in place an analytics capability to enable data-driven, personalised journeys
  7. Foster stronger bonds between technical and different business people. This is a two-way process to ensure the technical teams understand the commercial imperatives, and customer solutions you would like to build, and the business teams learn to trust the expertise of technical IT teams. It will also allow you to improve data quality through showing the business impact.

Using Data & Advanced Customer Analytics  to put the customer at the heart of an organisation is a transformation that future looking organisations need to start implementing now.

Transformation to ensure data is part of the DNA of an organisation takes time and a holistic approach.

5 ways hard-headed leaders promote innovation

retail leaders

I have known many CEOs and CMOs over my career. The best ones created innovative transformational cultures. Many tried. Some failed to comprehend the definition of the word itself; others lacked the vital leadership traits to inspire creativity and implement great ideas. Those who were adept at driving innovation and sustaining it over the long haul had one thing in common: they were hard-headed.

Their tough-mindedness came from an unshakable belief that innovation is critical to corporate survival, and that without powerful and constant change, innovation would be elusive. These trailblazers were innovative leaders, but surprisingly some of them weren’t creative, themselves. That didn’t matter because they were good a recognizing great ideas and welcoming change. No change, no innovation.

So, how do unshakable leaders create change and how to they sustain the innovation outcome?

  1. They unsettle the organization. There’s a host of companies that get things done, control performance, spot problems and deliver their budgets. But the structures, the processes and the people that keep things ticking along can snuff good ideas and block movement through the system. Innovative leaders appreciate that there is a difference between what’s needed to run a business and what’s needed to foster creativity. This ethic prevents excessive layering from killing ideas before they reach the top.
  2. They’re hardheaded about strategy.  Leaders who embrace innovation have a pretty clear idea of the kind of competitive edge they’re seeking. They’ve thought hard about what’s practical and what’s not. So the approach is not wishy-washy, but focused and driven. When this methodology brings results, employees become disciples of the strategy and the culture that facilitates execution.
  3. They make innovation a priority in the “walk” as well as the “talk.” When executive teams demonstrate innovative thinking and practices, the rest of the organization is clear on direction. This facilitates coherent cross-functional teamwork and an innovative modus operandi that encourages diverse viewpoints.
  4. They take note of what’s already going on with a view to balancing creative thinking with the discipline of assessing solutions and their implementation. The best backdrop for spurring innovation is knowledge – knowing the business cold. Good ideas often flow from the process of looking at customers, competitors, and the business as a whole.
  5. They appreciate that not many ideas work the first time, so they’re prepared to praise failure, move on, or try again until the company gets it right. From there, innovative leaders marshal resources behind a few winners and then execute like the SKY Cycle team

Innovative leaders are a special breed. They aren’t as interested in “minding the store” as they are about “opening new stores.” Nor are they shy to admit to controlling strategic direction, influencing the culture, and monitoring the process and practice that unleashes business’s most elusive success factor.

retail leaders 2

5 ways to compete with Amazon

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 5  ways to compete with Amazon

One of the biggest challenges that face retailers at the moment is how to compete with the jugganaut that is amazon. Powered by the profit driver in Amazon Web Services and more recently Amazon Advertising Services the retail industry fears the arrival. But there are ways of defending by attacking

Strategy #1: Own the pre- and post-transaction experience
Amazon are very focused on making the transaction as easy as possible at low cost, but we still have to assemble solutions on our own. If an organisation offers a ready-made solution that saves us time and effort (at a price we can live with), we’re grateful.

  1. Meal delivery companies, for example, have leveraged this basic insight to create a new category. Cooking a meal is time consuming: go to the supermarket, fight through the crowds order to find a few ingredients, wait in a long line, lug your bags home, put everything away, measure and chop the ingredients, and assemble the meal.Meal delivery companies like Gousto, HelloFresh, and simply cook eliminate all of these chores but the last one by shipping pre-made meals that require very little prep. (Amazon launched their own meal kit delivery service in July in order to catch up after falling behind for five years.)
  2. Furniture  or Clothing : Virtual Reality is allowing you to select and choose furniture or clothing that fits your room or you.Once you’ve selected what you want to buy, sometimes extra effort is needed to actually assemble, install, learn how to use it, customize it, and then repair it once it breaks.
  3. Electrical retailers: DixonsCarphone Warehouse are competing vs amazon in electrical by offered get technical support pre and post purchase. Installing Fridge freezers, Kitchen ranges / recycling fridges.
  4. Garden Retailers offering Garden Services
  5. Mothercare offering to come and assemble the cot or bed for you rather than you have to put things all together.
  6. Laura Ashley assembling beds.

Strategy #2: Turn your services into a platform
The fastest-growing companies in history, such as Google, Facebook, Uber, Airbnb, Amazon, and Netflix, are all platforms. The platform business model captures the most profit, builds a moat that is hard for competitors to cross, and scales quickly once it reaches critical mass. While building up a global workforce of employees to offer support services may take massive amounts of time and capital, a platform can get there in a fraction of the time. And, if you don’t do it in your niche, it’s likely that Amazon will — if it hasn’t already.
Amazon Services uses a platform model to deliver hundreds of services at scale including services with and for the home, automotive, electronics, yard and outdoor, assembly, health and wellness, lessons and classes, and pet services. It even has an Uber-like service, Amazon Flex, which has drivers in 30 cities who deliver Amazon products.

You can build a platform by focusing on your niche , playing to your strengths, particularly your unique understanding of your customer, in order to more effectively recruit, vet, train, and manage a network of service professionals and help them solve the specific problems that customers in your niche face. The most successful platforms in the world aren’t ones that offer every service under the sun. They are ones that are the most focused.

  • Uber is a platform that has focused on logistics and transport
  • Netflix is not trying to meet all entertainment needs, but focused on emotional connection

Netflix founder Reed Hastings: “We’re not trying to meet all needs. So, Amazon’s business strategy is super broad. Meet all needs. I mean, the stuff that will be in Prime in five or ten years will be amazing, right? And so we can’t try to be that — we’ll never be as good as them at what they’re trying to be. What we can be is the emotional connection brand, like HBO. So, think of it as they’re trying to be Walmart, we’re trying to be Starbucks. So, super focused on one thing that people are very passionate about.”

Strategy #3: Reduce every point of friction in your customer’s journey until you hit a ‘wow tipping point’
To reduce the friction at every step of your customer’s user journey, leverage your own customer data to uncover friction points and relentlessly remove them. Start by removing glaring problems. Then keep going until you reach the ‘Wow!’ tipping point
A hallmark of many of today’s most successful companies, is that they don’t stop improving their product once it’s good enough. They identify every interaction their brand has with a customer and aim to make it a ‘Wow!’ experience. It’s not just tech firms; retailers are taking note as well.

Strategy #4: Create a must-have brand and then use it as leverage
One of the biggest threats to Amazon is the power of brand. A truly powerful, must-have brand like Apple or Disney doesn’t need Amazon to succeed. They have built a direct relationship with the consumer. As a result, Amazon has lost tens of billions of dollars in potential revenue because people buy Apple products on Apple.com or in the Apple STore. Furthermore, Amazon’s whole business model is antithetical to people’s innate desire to display their personality and status through what they purchase. There is always going to be a segment of people who value self expression over low prices and convenience. The luxury category is one of Amazon’s Achilles’ heels.
Amazon is confronting the ‘brand’ threat in two ways.

  1.  First, amazon has shown that it’s not afraid to build or acquire its own brands (19 in total). Amazon also leverages its data on which products sell best in each category to launch its own generic brand, Amazon Basics, which now has over 3,000 products. In each category these products appear in, they are featured.
  2. commodifying brands by forced discounting, using its direct relationship with customers and audio purchasing to push competing commodity brands. With Amazon Alexa, customers can say, “Buy toothpaste,” and Amazon will send its recommended toothpaste rather than the toothpaste with the best brand, for example.

Make no mistake, Amazon is trying to destroy the value of branding overall and learn from your customers in order to compete with your most profitable products. Bezos’ famous saying, “your margin is my opportunity,” is particularly relevant here. Branding creates a perception that facilitates charging a higher price. Bezos is attacking that pillar of higher prices.
By having a must-have or a luxury product, you give yourself choices on how to leverage your brand:

  1. using an embargo period Netflix keeps its original content exclusive to Netflix for a certain number of days and then sells it on iTunes and other platforms. The other platforms are not only sources of cash, they are also marketing.
  2. allowing just some products to be sold on Amazon (sell some brands on Amazon and others only on your own site),
  3. not selling on Amazon at all (Birkenstock, for example, prohibits its sellers from selling on Amazon. Sales tripled to $800 million last year),
  4. partnering exclusively with one brand. (Martha Stewart has a multi-year exclusive agreement with Macy’s).

Strategy #5: Defining the problem & Extreme Experimentation

Amazon really understands the problem that they are trying to solve. and works hard to clarity the brief for any new innovation, making it crystal clear what the customer problem is they are trying to solve and then how they will develop a proposition to solve that problem .

This, more than any other strategy, is why Amazon is so successful: Amazon is not a traditional business. If you think it is you have already lost. You are competing against an economy.

Part of what makes the Economy Pyramid Model so successful is the sheer quantity of experimentation. Amazon’s culture of listening to customers , defining the problem & experimentation is so deeply ingrained that Bezos has repeatedly gone on record saying that Amazon’s success is directly correlated with the number of experiments it performs.

Amazon isn’t just experimenting internally with new platforms like Alexa, Kindle, Flex, Marketplaces, and dozens of others. Each of those platforms then empowers an economy of producers to create millions of experiments. In so doing, Amazon passes the cost of experimentation on to producers, receives income for each experiment, and then doubles down on the blockbusters by creating their own competing brand. It’s a brutally effective strategy. Amazon aggregates producer experiment data to launch its own competing products.
In a world that is rapidly changing, the companies that succeed will be those who increase their rate of experimentation faster than the environment changes. And Amazon is a core part of that environment.

If you need help in defining the problem and creating experiments contact me.

 

Zara’s Click & Collect Robots

zara C&C

As much as a third of Zara’s online sales are picked up in one of their stores. This in turn has led to a problem for the retailer, with long queues of disgruntled customers at the Click & Collect desk.

In an attempt to make the customer experience better-simpler-cheaper, Zara has developed a robotic service that involves fetching ordered items from the back of the store and bringing them to a drop box where the customer can collect them. Customers now only need to enter a collection code when they arrive in a store which activates this process.

Better-Simple-cheaper example of using Customer Data & Robotics to improve the Customer Experience

Alexa I’ll have a skinny decaf latte

starbucks-korea (1)

Starbucks have always been leaders in mobile technology to improve the customer experience, with leadership in mobile order & pay technology.

In an initiative designed to simplify ordering even more consumers in Korea can now remotely voice activate a Starbucks order using Samsung’s digital assistant Bixby. They can also pay for it at the same time in advance of picking it up . Starbucks led in South Korea ( a digitally leading culture) to be the first to leverage the technology to improve the customer experience

Never Stop Listening

produce shotNever stop Listening

As she’s scanning organic bananas or buckwheat kernels at the checkout the assistant at local health food store strikes up a conversation. She’s curious to know if the bananas are just for making smoothies and what the customer uses the buckwheat for. These seemingly insignificant interactions are hardly worth remembering and yet over time they spark ideas for new menu items to be introduced at the in-store cafe and give rise to opportunities to better serve her community of customers.

Good marketing starts with the customer’s needs and wants, not with the company’s emergency.

A great marketing strategy is geared towards creating lasting connections instead of simply being focused on reaching short term targets.

The gifted marketer doesn’t simply try to sell what’s in stock today. She strives to understand what her customer will want tomorrow and then creates the culture and momentum to deliver that.

If your success and profits are by-product of satisfied customers, it stands to reason that your priority is to matter, not simply to make and sell.

The challenge that many organisations have is understanding what matters to customers, and rapidly transferring that understanding into developing products and services that matter to customers.  Don’t get me wrong, being on the shop floor and interacting with customers is a critical part of marketers and leaders’ role. Good retailers still spend a day or two a week out in shops, and Terry Leahey in Tesco formalized this with every leader spending a week in store: TWIST, Tesco Week In Store Together, starting with himself.

Using Data-driven technology can harness the power of your colleagues and customers to listen intensively to customers and anticipate their needs at even more scale.

At Coop we starting a Listen Act and Fix programme where we gathered ideas from colleagues and used these to understand and prioritise problems to fix.

At Sainsbury’s “Tell Justin” was a colleague crowdsourced ideas generation programme where 150,000 colleagues could write to Justin King the CEO with ideas. He saw every idea and they were passed to senior managers to review. Every Idea earned a certificate for the colleagues and a simple thank you from Justin. The best ideas when they were implemented were celebrated through the company.

At Starbucks in USA they have taken this idea further to crowdsource ideas from customers. My Starbucks Idea created a digital portal and crowdsources suggestions to improve service/experience and lets users vote for their favourite ideas. Every idea is responded to by management and customers are kept involved in development, through digital media or you-tube style updates.  Ideas such as writing name on the cup, or even suggesting baristas taught the basics in sign language are being seriously reviewed.

Aligning Organisations around Transformation

data worldDigital mastery in an ever increasingly digital world is one of the key priorities of an organisation. The road to travel on the journey to making your organisation more customer focused in a digital world is challenging and one that requires alignment and commitment from the CEO, the Board and Shareholders down.

There are 5 priorities for a chief customer officer  / chief digital officer

1) Build a clear vision of a radically different future state and align it with Shareholders Board, CEO and Exec.  ensure that they are involved in co-creating the vision and understand the elements of how it works. If you need to train them on Twitter, facebook, what’s app or programming, do it so they understand a digital world.

2) Engage Colleagues in a 18m-36m Goal and develop a clear action plan. Ensure that you have a detailed and well managed transformation programme with agreed outcomes. Engaging colleagues in building this will be critical. It’s amazing how digitally literate teens and twenty somethings in a retail organisation are!

3) Breakdown fear of data and digital across the organisation. Board-> Senior managers-> middle managers -> Colleagues. Communicate widely and use storytelling to engage at all levels. Be very pragmatic and engage people in learning by doing rather than telling ( run Twittter workshops, small projects designed to deliver quick wins, training by doing.) Focus on small wins early and let people tell these stories across the organisation themselves as their wins. Align objectives and remuneration to deliver the goal from Exec down to all colleagues.

4) Foster stronger bonds between technical and business people. This is a two way process to ensure the technical teams understand the commercial imperatives, and customer solutions you would like to build, and the business teams learn to trust the expertise of technical IT teams. It will also allow you to improve data quality through showing the business impact.develop a data strategy aligned to business goals , build tools as required to deliver commercial goals.

5) Steer the course through strong Governance. Digital Transformation should be governed through the EXEC as well as relevant touchpoints to ensure continual alignment.

These 5 priorities along won’t drive the transformation but applying them is a start that many organisations who are now Digital Masters followed.

Clever Cars

clever cars 2

What can your driving habits tell us? A lot is the answer. In fact, where people drive can reveal a lot more than Google searches and this is what advertisers, startups, and car-makers are quickly realising.

For years car companies have been installing software and sensors that collect driving behaviour and location data from our cars. This is invaluable to advertisers & car companies alike.

 

Car companies argue this data will enhance the driving experience CX.  It could help to predict flat tires, find parking spaces or charging spots, alert authorities to dangerous crossings & even track criminals fleeing from crime-scenes.

Advertisers are even more excited. Israeli startup, Otonomo, cleans up and organises data for carmakers. They let drivers select the information they’re willing to share with companies in exchange for rewards & discounts – imagine leaving work late and a £5 Dominos discount coming up on your display 🍕

This is only the start. Ford estimates that by 2020 their vehicles will have 100m lines of code and Gartner estimates 98% of new cars in the US & Europe will have an embedded cyber connection.

clever cars

What about BIG data?

The real interesting part is when all this data is aggregated. With all this data, companies can see trends that are linked to other events. For instance:

  1. Hedge funds could use boot sensor data to see how much people bought when they went shopping which would show consumer spending
  2. Banks could see how many people had stopped driving to work, thus suggesting they’ve lost their jobs, and if this number began to rise they could anticipate an economic downturn
  3. 3rd parties could track trips to the police station, domestic violence shelters, STI/HIV testing centres and infer sensitive information about drivers’ health and relationships.

Autonomous cars won’t stop us… 

One of the most important big-picture outcomes here is that car manufacturers are not only hardware companies now, they’re also software companies. It’s often been suggested that traditional companies will die off with the coming of autonomous cars, but this shows they’re using tech themselves to find new sources of revenue.

People need to be aware of the level of privacy they’ll be giving away. Soon your car could know more about you than your family…

Starbucks data driven coffee

starbucks cup

Starbucks have adopted a data driven mobile first approach to making the customer journey simpler and easier in its coffee shops world-wide.

Innovating and transforming the Customer experience by leveraging data-driven analytics and technology is critical for success in a 21st Century convenient foodservice retailer. 21% of Starbucks transactions are now completed via mobile … in store at the till using Apple Pay via app or using Starbucks Mobile Order and Pay . What’s more is Starbucks processes more than 6million Mobile Order and Pay transactions a month globally.

Mobile Order & Pay is available on iOS and Android . It’s an established of the popular Starbucks mobile app that allows customers to place and pay for an order in advance of their visits and pick it up at a participating Starbucks location. Mobile ordering is emerging as the fastest and easiest way for Starbucks customers to order ahead , then pay and pick up their purchases, providing on-the-go customers a simple and quick alternative to get their favourite coffee.

The Mobile Order and Pay feature allows customers to choose a store from a (Google) map view , browse , select and customise drinks, view the estimated time the order will be ready and pre-pay the order. All within the Starbucks app, and integrated into the existing Starbucks app, and my-Starbucks Rewards loyalty programme. A simple easy way to sign up and earn Stars

PROBLEM: It’s Too popular….

The Mobile Order & pay is creating some problems, that Starbucks are working hard to fix. Customers expect not to wait at all, but at busy times the queue is building up and customers are waiting and creating a headache. Starbucks being Starbucks though is working it through operationally and using data driven technology ahead of its rivals to improve the customer experience

They have launched an AI driven Starbucks Barista where customers can text through their orders: Check out below

 

 

Starbucks are leading the way as Tech leaders in convenience foodservice, using data and technology in a way that McDonald’s , are starting to respond but need to respond rapidly if they want to meet customer needs.

 

Data driven Easyjet flys easy

easyjet4Data Pulse # 434

Removing Friction in the customer journey to make it easier is critical for future success, and is important as a way of telling your Brand story , particularly if you are called EasyJet. Digital transformation can accelerate this change if applied with a clear focus on the commercial goals combined with deep understanding of the customer journey .

Carolyn McColl at Easyjet made great strides at using digital technology to transform the organisation making it easier for their customers to travel, simpler for their colleagues and cheaper for the organisation. They started with a clear understanding of the commercial goal: More customers flying more often on Easyjet, and developed a series of customer propositions that made it easier to fly driven around the key hardware that most travellers provide themselves: The Smartphone.

Easyjet app developed with key functionality

easyjet2 (2)

 

1) Book Flight

2) My Flights Booked

3) My Flights Tracked

4) Mobile Check-in and Mobile Boarding Passes.

5) Option to book HireCare & Hotel.

All personalised through MyEasyjet traveller registration , that uses customer data held, (including passport, address credit card details ) geolocation of all data, previous flights searched and taken to make it easier for booking.

I have just headed off skiing flying Easyjet:

  1. The email alerts prior to travelled felt timely & relevant: adding personal information, and checking.
  2. The mobile boarding pass removes friction in finding a printer to print a boarding pass and then not losing the boarding pass as you travel through the airport .
  3. The Flight Status monitor is an easy way of seeing ahead of leaving for the airport if flights are delayed or reassurance.

Easier Self Serve Baggage Drop.

Easyjet now have self serve baggage drop in Manchester as well as Gatwick , which makes it easier and quicker to drop off baggage rather than queuing

What Friction Points Next?

TO AND FROM THE AIRPORT

I would appreciate Easyjet helping me get to the airport and then to my onwards destination. It would be easy to partner / connect with Google or Citymapper to provide live travel options on drive times, Trains/ buses to catch, or even a link to Uber to get a ride to and from the airport.

WALK THROUGH AIRPORT STRESS FREE.

I would really appreciate being walked through the airport with digital alerts that help me understand which gate to go to , the time to gate, and alerts on how busy it is at anyone time.  This technology is available and has been piloted in London City Airport by Dan Byles and the team at PlanetIT. So watch out for a digital concierge helping you through the airport and ensuring you have enough time and and not be rushed.

Eat, Drink and Shop at your pace.

I’ll even be able to order ahead and have my Starbucks coffee and porridge waiting for me as I arrive through security !

I am a demanding customer but I am really just like everyone else just more vocal.

Good Luck to Johan Lundgren , new CEO easyjet in accelerating the use of data even further to make easyjet even easier.

H2 Accelerate growth using data

data-driven-marketing-4

Accelerating growth through data is challenging and requires commitment and alignment from around all the organisation to be successful, but there are 7 steps that make the journey more successful

  1. Identify the commercial & customer Goals in next 18m-36m
  2. Build a clear vision of a radically different data-driven customer experience, working across digital & bricks & mortar and align across the organisation.
  3. Remove Silos of data use creating a single version of the truth, with a data strategy linked to business goals e.g. Unified View of customer data, GDPR ready and tools developed to meet commercial goals.
  4. Breakdown the institutional fear of data & digital at all levels through training & doing: it’s a tool that anyone can use to do what you have been doing better
  5. Use Data Analytics to Map & Prioritise customer journeys & personalised experiences across human & digital touchpoints and align organisation capability to deliver for customer.
  6. Identify & Build the capabilities (Process, Tools People) that will be required to transform process design from efficiency focused (cheaper) to customer focused (better simpler cheaper) , specifically putting in place an analytics capability to enable data-driven, personalised journeys
  7. Foster stronger bonds between technical and different business people. This is a two-way process to ensure the technical teams understand the commercial imperatives, and customer solutions you would like to build, and the business teams learn to trust the expertise of technical IT teams. It will also allow you to improve data quality through showing the business impact.

Using Data & Advanced Customer Analytics  to put the customer at the heart of an organisation is a transformation that future looking organisations need to start implementing now.

Transformation to ensure data is part of the DNA of an organisation takes time and a holistic approach.

7 steps to data-driven customer obsession

seven steps

As we break for Christmas I have just had a great morning with DataIQ Leaders discussing how data can transform CX.

I led a discussion with a group of Analytical leaders with seven simple steps on the road to build advanced Customer Analytics. It’s challenging and requires commitment and alignment from around all the organisation to be successful

  1. Identify the commercial & customer Goals in next 18m-36m
  2. Build a clear vision of a radically different data-driven customer experience, working across digital & bricks & mortar and align across the organisation.
  3. Remove Silos of data use creating a single version of the truth, with a data strategy linked to business goals e.g. Unified View of customer data, GDPR ready and tools developed to meet commercial goals.
  4. Breakdown the institutional fear of data & digital at all levels through training & doing: it’s a tool that anyone can use to do what you have been doing better
  5. Use Data Analytics to Map & Prioritise customer journeys & personalised experiences across human & digital touchpoints and align organisation capability to deliver for customer.
  6. Identify & Build the capabilities (Process, Tools People) that will be required to transform process design from efficiency focused (cheaper) to customer focused (better simpler cheaper) , specifically putting in place an analytics capability to enable data-driven, personalised journeys
  7. Foster stronger bonds between technical and different business people. This is a two-way process to ensure the technical teams understand the commercial imperatives, and customer solutions you would like to build, and the business teams learn to trust the expertise of technical IT teams. It will also allow you to improve data quality through showing the business impact.

Using Data & Advanced Customer Analytics  to put the customer at the heart of an organisation is a transformation that future looking organisations need to start implementing now.

Segmentation is a tool to grow customer numbers

netfix house of cardsdata pulse #37

Delivering the most relevant, inspirational messaging and experiences through advanced segmentation and targeting is a key advanced use of data. Segmentation itself is relatively straight forward, we all do it all the time. The skill for CMO lies in bridging the technical teams and the business imperatives to develop segmentation that delivers on commercial objectives

Netflix is an organisation that uses data in three of the advanced states. Netflix micro-tagging of vast content archives allowed creation of nearly 77,000 film segments, rich data, views, searches , times, pauses and more is used to build behavioural profiles and predictive algorithms give uniquely targeted recommendations.

The segmentation techniques are not dissimilar to the segmentations that Tesco, Sainsbury’s , Coop  and Asda built for segmenting customers. Both cluster users based on attributing product features to films / products and then clustering film watched/ products bought using analytics.

The difference is the Volume, Velocity and Veracity of data used.

Coop Food apply 7 segments to members annually,

Netflix create 77,000 segments on daily basis, continually refining which segment members are in so better able to predict your best next film.

More complex isn’t always better, as organisations need to WALK before they can RUN, and align people and processes before they build more complexity. Asda is now using customer segmentations and tools and processes for building ranges and promotional plans, and continually building and refining, as well as segmenting customer communication to improve the Customer Experience

Customer focus, data-driven to deliver commercial imperatives.

Building more sophisticated segmentations will develop but add value if they are aligned to deliver commercial objectives, so creating strategic and operational capabilities

 

 

Agile Marketing Explained

scrum vs sprint

WHAT AGILE MARKETING IS AND WHAT IT ISN’T

If you’ve been halfway tapped into the marketing zeitgeist lately, you’ve seen this phrase: Agile marketing.

Everybody’s talking about it as the “next thing in marketing.” It even has its own manifesto. Despite all this hooplah, however, you shouldn’t feel too bad if you can’t quite put your finger on what Agile marketing is.

Take a look at the Agile marketing groups on sites like LinkedIn, and it becomes clear that more than a few people are a tad confused about it. Is it simply restructuring your marketing and in-house creative teams and their processes to be more nimble? Sort of. Does it just mean streamlining your process and jettisoning any baggage that slows your team down? Kind of.

To give you a nice, clean 20,000-foot explanation of it, Agile is a work management methodology that has been dominating IT work management for the last several years. It has been known to increase teams’ flexibility and ability to react to demand while improving productivity. Now that it’s proven itself effective, the marketing folks have taken notice.

Agile-driven creative teams have reported that their creativity has experienced a major boost once freed from the endless development cycles that can happen in traditional marketing work management. Creative teams have seen their productivity explode by 400 percent and with less fuss. Marketing teams can test and iterate on campaigns faster.

If you’re like most marketers looking for ways to get creative and campaigns on time and with less fuss, here is a quick crash course on Agile and how you can use it to make your marketing and creative teams as creative and effective as they deserve to be…

 

What Agile Marketing is not

Some less-informed marketers will talk about agile marketing (with a lower-case ‘a’) as simply a mindset or philosophy. Their comments focus on streamlining processes or looking for ways to make your team more nimble and faster to react to opportunities. And it’s easy to see where these ideas come from, since they are basically just going off the adjective ‘agile.’ Not coincidentally, these things are some of the biggest benefits of using Agile (with a capital ‘A’) in marketing.

Unfortunately, this confusion can lead to lots of talk on the subject without the power to actually make those benefits a reality. It’s only when you understand what Agile marketing really is that you start to make progress.

 

What Agile Marketing is

Simply put, Agile marketing is the application of a specific work methodology (Agile) to the way marketing projects and non-project work is executed.

Where most creative teams produce projects sequentially from step A to step Z, also known as a waterfall methodology, Agile marketing seeks to put your team’s resources into creating a minimum viable product as quickly as possible. It’s also built not to plod along on a single project for weeks, but to accommodate all of your most important tasks—from multiple projects and even ad hoc requests that can be completed in a short timeline.

To accomplish this, Agile requires that all work be broken down into “stories,” which can be chunks of larger projects or small ad hoc requests. Each story tells your team, in a nutshell, what needs to be created. With that information, your team assigns to the story the number of hours they think it will take them to complete the story. Your team divides their time up into periods of time called sprints, which are a week or two weeks. Naturally, every sprint has a set number of hours which will be filled by stories and is intended to be a period of focused creativity that allows ample time for creative team members to explore a number of approaches to a story before moving forward. Again, the stories are chosen for a sprint based on their priority, and the creative team goes to work. Stories are placed on a public burndown chart, where team members and stakeholders alike can see them move from ‘incomplete’ to ‘approval’ to ‘complete’.

As you can see, Agile is quite different from the traditional workflow most creative teams are used to, but the benefits are undeniable. Agile eliminates the bottlenecks and wasted time in found in conventional methodologies and empowers creative teams to collaborate more, and make on-the-fly decisions about a project’s direction, task order, or priority. Hence the name Agile.

This increased productivity and quality, of course, have a direct impact on the companies that use Agile. In fact, studies show that Agile firms grow revenues up to 37% faster and increase profits as much as 30% more than their non-Agile counterparts.

Data-driven Pop

Sprite Cherry LeBron

The Coca Cola Company is the world’s largest beverage company selling more than 500 brands of soft drink to customers in over 200 countries. It generates mountains of data – from production and distribution to sales and customer feedback, and the company relies of a solid data-driven strategy to inform business decisions at a strategic level.

In fact, Coca Cola was one of the first globally-recognized brands outside of the IT market to speak about Big Data, when in 2012 their chief big data officer, Esat Sezer, said “Social media, mobile applications, cloud computing and e-commerce are combining to give companies like Coca-Cola an unprecedented tool-set to change the way they approach IT. Behind all this, big data gives you the intelligence to cap it all off.”

Product development

Coca Cola is known to have ploughed extensive research and development resources into artificial intelligence (AI) to ensure it is squeezing every drop of insight it can from the data it collects.

 Fruits of this research were unveiled earlier this year when it was announced that the decision to launch Cherry Sprite as a new flavor was based on monitoring data collected from the latest generation of self-service soft drinks fountains, which allow customers to mix their own drinks. As the machines allow customers to add their own choice from a range of flavor “shots” to their drinks while they are mixed, this meant they were able to pick the most popular combinations and launch it as a ready-made, canned drink.

Healthy options

As sales of sugary, fizzy drink products have declined in recent years Coca Cola has also hooked into data to help produce and market some of its healthier options, such as orange juice, which the company sells under a number of brands around the world (including Minute Maid and Simply Orange).

The company combines weather data, satellite images, information on crop yields, pricing factors and acidity and sweetness ratings, to ensure that orange crops are grown in an optimum way, and maintain a consistent taste.

The algorithm then finds the best combination of variables in order to match products to local consumer tastes in the 200-plus countries around the world where its products are sold.

Social data mining

With 105 million Facebook fans and 35 million Twitter followers, social media is another hugely important source of data for the company.

Coca Cola closely tracks how its products are represented across social media, mining this gives insight into who is consuming their drinks, where their customers are, and what situations prompt them to talk about their brand. The company has used AI-driven image recognition technology to spot when photographs of its products, or those of competitors, are uploaded to the internet, and uses algorithms to determine the best way to serve them advertisements. Ads targeted in this way have a four times greater chance of being clicked on than other methods of targeted advertising, the company has said.

Everyone Everywhere True North

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I learnt early in my career that Service organisations have millions of brand touch points delivered everyday by colleagues who interact with customers. Once you have defined the Customer Offer and Brand Story, aligning all the Brand touch points to give a consistent Brand Story is critical for success. This is the  essence of the “True North” turn around plan at Co-op Food. There are lots of ways to do this:

Tesco has implemented Yammer – an ‘enterprise social network’, allowing them to realise a vision of having ‘over half a million valued colleagues effortlessly connected and aligned:  Everyone, Everywhere’. To make this work, Tesco had to also change policies and processes: Tesco added in-store wifi and changed their policies to allow store staff to take their personal mobiles onto the shop floor.

Coop has changed the policy that allows colleagues to use their own mobile phones in the convenience shops , and they have uses several different tools ( WhatsApp, Slack ) to enable colleagues to communicate more clearly with each other. Posting pictures, chating and solving their own problems.

This has helped to create a sense of community between colleagues that extends across stores. Colleagues use the network to celebrate success, share learnings, ask questions and find answers. For example, bakers might share images of their morning display – and the service has even been used to share excess stock with nearby stores that are running low

Yammer has encouraged greater cooperation and a healthy sense of competition. Directors are also able to monitor conversations and can react quickly if required.

Grab a Breakfast at Greggs

greggs

It’s not something that you would usually associate with Greggs The Pasty Champion but they have now entered the Digital world and starting to create an omni-channel customer journey that has the potential to change the high street and take on Starbucks at their own game.

This week Greggs updated it’s new ‘Greggs Rewards’ mobile payment app designed to reward its customers for their loyalty whilst making shopping across its 1,700 shops more convenient, quicker and easier.

The rewards app is the first entirely digital loyalty scheme launched by a UK food-on-the go retailer that eliminates the need for customers to carry a separate loyalty card or their wallet when they shop.

By registering for a Greggs Rewards account via the app or online at http://www.greggs.co.uk, customers can top up their accounts with any amount from £5-£50 using their debit/credit card or with the added safety and simplicity of PayPal, allowing them to pay securely in-store with their smartphone.

Greggs Rewards will not only allow customers to pay swiftly for their purchases, but also reward them with exclusive treats and rewards built in to the app.

These offers include a free Greggs’ breakfast when opening an account with at least £20, hot drink incentives (e.g. buy 7 coffees get your next free), a birthday treat and a monthly prize draw for the chance to win an i-Pad when shopping using Greggs Rewards. Furthermore, PayPal is also giving the first 10,000 Greggs’ customers a free £5 bonus credit to spend when they sign up and register for auto-top up with PayPal.

Greggs Rewards has been developed using the Eagle Eye digital transaction network which enables retailers, in real time to connect with potential and existing customers, to deliver relevant offers, rewards and services that can be redeemed securely through any point of sale. The digital solution removes the need for paper vouchers or plastics cards, making for a seamless shopping experience that eliminates fraud.

Greggs have built a great machine with IT and payment partners the challenge exists whether they have also built the internal capability to learn how to follow the customer and add value in a segmented and targeted way.