What Are You Doing About It?
I recently met with the head of marketing for a major UK broadcaster whose career had previously included senior roles in shopper marketing and innovation with P&G and PepsiCo. His path had taken him from working with major grocery retail groups on improving visibility and driving product sales for his brands, to finding ways to create distance between his side and the retailer’s own private label. With a move into broadcast I asked whether he felt he’d leapt from the frying pan of a hyper-competitive consumer product world into the fire of the media industry where advertising is increasingly seen as a secondary investment for brands.
His response was that their challenges were essentially the same: both have diminished roles due to changes in consumer preference and new competition; and neither yet had a clear roadmap for changing the models the industries have been built on.
The More Things Change, The More They Stay the Same
What led us here can be found in a simple review of history: in the 1950s brands were king. Consumers had newfound wealth, a desire to fill their homes with goods, and they weren’t yet jaded. In 80s-America, a TV spot that ran on three networks would reach 80% of consumers, stimulate interest, and drive sales. Retail was simply the only fulfillment channel. In the book, Absolute Value, authors Itamar Simonson and Emanuel Rosen argue that the rise of brands was in response to an information-poor environment; brands served as a proxy for quality. But in the 90s this all changed when Tim Berners-Lee created the early version of the Internet and suddenly the consumer could look under the hood, hear from others, get the straight story – this was the beginning of retail’s great tectonic shift. And today, according to Nielsen, almost 90% of consumers with smartphones use them to price check after making in-store product comparisons. [Read more...]