The marketing agenda in internet times. Part 3: The market has little time and does not wait.

 

The marketing agenda in internet times. Part 3: The market has little time and does not wait.

 

Introduction

This is my third blog for Marketer’s Digest. Following a general introduction, I commented mostly on the importance of branding for my contribution in December. In the contribution that is now in front of you, I will elaborate on speed as a carrier of business value. I mentioned before that the trend of ‘winner takes all’ exists in the digital age. This means that there is a large premium on ‘being the first’. Being too late can be fatal. Next to that: the client does not wait. The client has a choice. If the B2B or C2B client comes, you have to be ready for him.

Internet has sped up the world and made it more dynamic, it delivers more information to us in less time and therefore also forces quicker decision making. Where we had years or maybe months to consider something 10 years ago, in current business we have to consider it in weeks, days and in some markets even seconds. Speed is everything in, for example, the current financial business where minimal price changes disappear by arbitration away in the blink of an eye.

A nice practical example of what speed does, is the physical distance between the data centres of the New York stock exchange, Wall Street. Data centres 300 meters away are just a fraction faster than data centres 2 kilometres away. This fractional time difference can make a difference of billions of dollars for the investor on the stock market. The local price of land shows this.

Basildon is, for example, the home of the data centre of NYSE Euronext. 70 trading companies rent capacity located a few meters from the data centre of NYSE Euronext in Basildon. It costs them 2000 pounds per year (per square meter) to connect the server to the data centre there. The time savings of 36 microseconds are essential in the algorithms for high frequency trading and can therefore yield billions of dollars.

 

The bigger picture

Businesses can only survive in a dynamic market with, among others, more speed, reactive power and an acceptable cost level. The ability of businesses and consumers to deal with this moment, now, is key: any place, any time. Plans are nice. However, the money has to be made now and the client is here now. The client surely is not going to wait until you have approved your marketing strategy.

This means, in practice, that marketing disappears in favour of sales. On the one hand the branding element of marketing is becoming more important, namely the constant creation of a purposeful perspective for the enterprise to the market. The rest of it is sales. Hereafter, I will give you examples of how every sales moment is used more to benefit marketing.

 

topdown plaatje

supply driven                                                                     demand driven                                       

 The accompanying diagram  illustrates the movement. Upper left is traditional marketing and branding. Lower right is sales. The large movement is from schedule push marketing to reality pull sales. The demand for speed means that companies have to orient themselves towards the sales channels that allow information to be adapted quickly, without high costs. This generates a shift to digital sales channels.  

At the same time, all kinds of flexible physical sales channels are starting to arise, a phenomenon that is really new in the Western World. It is important, however, to communicate the same brand  on all channels. This is sometimes forgotten.

Also, the adaptive speed of the assortment has become increasingly important. The product has to be there when the customer asks for it. More and more, we see that the customer decides the assortment himself via smart logistic feedback of what the client buys of what is in store. ZARA got big with this concept. ZARA updates the assortment every three weeks based on what has been sold. This can differ per ZARA shop. This way ZARA can continue to serve the volatile customer demand. They have a good business with this.

 

Speed increasingly seems to almost be more important than cost level. We see this in the insourcing trend, the reverse of outsourcing. Many companies moved production to Asia, especially China, in the past decades. Outsourcing. However, outsourcing mainly works for stable volume processes. Where customer demand changes rapidly, we see the reverse happening. Large businesses, Philips, for example, are more often bringing production back to Europe. The reason? Rising labour costs in Asia and sometimes unbridgeable culture differences play an important role. However, what is often forgotten: China is not around the corner and to be able (and allowed) to implement certain decisions and innovations, time is needed and time has become very scarce. Production in the neighbourhood brings more control on the factor time and creates speed. Insourcing as a consequence of the business necessity for  quick adaptation happens more often and not just in large players: Mexx clothing today is, for example, produced also in Ukraine and Romania and not in the far East.

 

Successful examples of speed in marketing.

Omoda

Shoes and clothing are not bought exclusively in shops anymore. The consumers, – owning tablets and smart phones at a large scale, – want to be able to choose and order 27/7. The portion of shoes, for example, that is sold via the internet in the Netherlands is 7-8% (data from the branch organisation, November 2012) and the trend is that the percentage rises.  

Omoda is a Dutch shoe company from Zierikzee. Next to the web shop, Omoda has 13 shoe shops in the Netherlands. Since a few years, Omoda is also active in Belgium and Germany. Omoda can, due to different assortments, compete against foreign dominating web shops like Zalando or Spartoo. It can, within a few weeks (every second counts!), have fashionable wedge sneakers produced within the Omoda brand and offer them at half price. Moreover, they learn from their own shops how they can treat customer as king and apply this quickly in their web shop. 

Pop-up shops 

Pop-up shops are temporary shops in empty spaces or empty shops. British store Debenhams opened a pop-up shop in Moscow  in August 2012 as a teaser for their first physical shop in Russia. Or quickly starting a shop, for example for temporary or seasonal assortments like Christmas items. Empty shop windows can also be used as sales channels by filling them with advertising posters in combination with, for example, the use of QR codes. Of course linked with social media. That is much faster  than via the physical newspapers and brochures.

Integration of brand experience and sales creates speed

A final marketing trend in association with speed that I name is to strengthen the customer experience with direct additional sales events. Here, you directly see the integration of marketing and sales. By orienting more towards events instead of continual sales cycles, the company maintains speed. You can change or introduce events quicker and cheaper than a new assortment. Using twitter and facebook as channels for communication is usually effective.

 

In all these initiatives you see that the client is taken up in the big picture of the company and that the client is made into a brand ambassador. Word of mouth remains very powerful! Give customers an experience that they will later talk about. What do you think of the Porsche initiative to display your picture on a Porsche, because you have ‘liked’ Porsche on facebook and became a friend.

Making the sales moment an event itself is the most direct for the customer. ABERCROMBIE & Fitch has developed its shops accordingly. Clothing brand and shop experience, for special people and pretty people are fully integrated and people are queuing in front of the shop to go in. The recent opening of the first Abercrombie store in Amsterdam in December 2012 was really a party that actually started weeks before the opening itself. 

 

The APPLESTORE on Fifth Avenue New York and the SONY shop are examples of the integration of sales and brand experience. They are expensive and expensively equipped shops but still quickly adaptable to the changing wishes of the customer.

Guerrilla marketing and ambush marketing are often applied additional sales tactics and can be employed quickly, focused, direct and cheap. The example of ambush marketing by Abercrombie during the election campaign of Barack Obama in 2008 is a good example of this.

 Servicing &Apps 

In servicing too speed is increasingly becoming the deciding factor for the customer. The customer has a question now and wants answers now. Web care and servicing via twitter is therefore arising more and more. Via, for example, @KLM, the Dutch airline company, you get a fast reply to all travel questions. It works quickly, well and inexpensively. It is of course very helpful for this, that many have a smart phone. Twitter brings the real time internet much closer this way, they have even surpassed Google in terms of speed.

Many apps are essentially solutions for speed. Many apps have essentially selected and readied necessary information for you so you do not have to find it yourself. Therefore, many apps will probably be added in the coming years, and of course apps to find the right apps.

 

Decision

 

We live in interesting times because of all these changes and all these new opportunities in business. I hope that the examples mentioned inspire you to apply your business even better with speed as business carrier! And do not wait too long with this since you now know that speed is the key to success. The market has little time and does not wait.

 

———————————————————

The series:

The marketing agenda in the Internet Age. part 1: ‘Why’ your Company?

The marketing agenda in the Intenet age. part 2. Dancing with the stars

The marketing agenda in internet times. Part 3: The market has little time and does not wait.

The marketing agenda in internet times. Part 4: welcome in the risk society

The marketing agenda in internet times. Part 5: marketing organization. Who’s at the wheel in your organization?

The marketing agenda in internet times. Part 6: the strainer

The marketing agenda in internet times. Part 7: The company reference gird: you never walk alone

The marketing agenda in internet times. Part 8: Innovation in the digital era

 

 

Dutch:

Marketing in de internettijd. Deel 1. Why your company

Marketing in de internettijd. Deel 2. Dancing with the Stars

De marketing agenda in de internet tijd. Deel 3: De markt heeft weinig tijd en wacht niet.

De marketing agenda in de internet tijd.Deel 4: Welkom to the risk society. Nieuwe digitale realiteit, nieuwe risico’s

De marketing in de internet tijd. deel 5. Marketing organisatie. Wie zit bij u aan het stuur?

De marketing in de internettijd. Deel 6. De strainer

De marketing in de internettijd. Deel 7. De company reference grid: you never walk alone

De Marketing in de internettijd deel 8. Innovatie in het digitale tijdperk

———————-

 

 Alernative text:

The Marketing Agenda in the Internet Age

Part 3: Time and Trade (Wait for No Man)

Introduction

This is my third blog for Marketer’s Digest. Following a general introduction, in this post for December I explore the importance of speed as a driver of business efficiency. I mentioned in an earlier post the trend of ‘winner takes all’ that exists in the digital age. There is an increasingly large premium on being the first: being too late can all too often be fatal. Next to this, but equally important, is the fact that the client does not wait. He has a choice. If the B2B or C2B client comes knocking at your (digital) door, you must be ready for him.

The Internet has increased the speed of the commercial world and made it much more dynamic: it delivers more information to us in less time and in the process forces quicker decision making. Where we had years or maybe months to consider something 10 years ago, in the current business world we must make decisions in weeks, days and in some markets even seconds. Speed is everything in, for example, finance where minimal price changes can appear and disappear in the blink of an eye.

A practical example of what speed does can be seen in the importance of physical distance among the data centres of the New York Stock Exchange. Data centres 300 meters away are able to process data a fraction of an instant faster than data centres 2 kilometres away. This tiny time difference can mean billions of dollars in profits for the investor on the stock market. The local price of land shows this.

Basildon, for example, is the home of the data centre of the NYSE Euronext. 70 different trading companies rent capacity located a few meters from this data centre, and it costs them 2000 pounds per square meter per year to connect their servers. Time savings of 36 microseconds are essential for high frequency trading algorithms however and can yield billions of dollars in return for this investment.

 

The bigger picture

Businesses can only survive in a dynamic market with, among other things, more speed, quicker reactions and lower costs. The ability of businesses and consumers to deal with the present moment is key: any place, any time. Plans are nice, but money must be made now and the client is here now. He will not wait around for you to sign off and approve your marketing strategy!

This means, in practice, that marketing evaporates in favour of the pressure of the point of sale. On the one hand the branding element of marketing is becoming more important, namely the constant creation and reestablishment of a purposeful perspective in the market. The rest is sales. I will now go into a little detail about how the point of sale can be used to benefit marketing.

supply driven                                                                                                                demand driven

The accompanying diagram illustrates the current trend. The upper left represents traditional marketing and branding. The lower right is for sales. The large movement is from schedule push marketing to reality pull sales. The demand for speed means that companies have to orient themselves towards the sales channels that allow information to be adapted quickly and without high costs. This generates a shift to digital sales channels.

At the same time, all new kinds of flexible physical sales channels are starting to arise, a phenomenon that is very new to the Western World. It is critical, however, to communicate the same brand on all channels. This is often forgotten.

Also, the adaptive speed of the assortment has become increasingly important. The product has to be there when the customer asks for it. More and more, we see that the customer decides the assortment himself via smart logistic feedback of what the client buys of what is in store. ZARA got big with this concept. ZARA updates its stock every three weeks based on what has been sold. This can differ for each and every ZARA shop, allowing the company to constantly cater for volatile customer demand. This has been the root of their success so far.

Speed is increasingly almost more important than even cost levels and margins. We see this in the insourcing trend (the reverse of outsourcing). In past decades, many companies moved production to Asia, especially China, to cut costs. Outsourcing. Outsourcing however works best for stable volume processes. Where customer demand changes rapidly, we see the reverse happening. Large businesses – Philips, for example – are regularly bringing more of their production back to Europe. The reason for this? While rising labour costs in Asia and the sometimes unbridgeable culture gap play an important role, one vital reason is often forgotten: China is not just around the corner and its workers not able (or allowed) to implement certain decisions and innovations. Time is a valuable resource and it has become very scarce. Production in the local neighbourhood permits more control and increases speed. Insourcing, as a consequence of the business necessity for rapid adaptation, happens more often and not just among large players: For example, Mexx clothing is today produced in Ukraine and Romania, not in the far East.

 

Successful examples of speed marketing

Omoda

Shoes and clothing are not bought exclusively in physical shops anymore. Customers – more often than not owning tablets and smartphones – want to be able to choose and order 24/7. The proportion of shoes, for example, sold via the internet in the Netherlands is 7-8% (data from the branch organisation, November 2012) and the trend is that this percentage is on the rise.  

Omoda is a Dutch shoe company from Zierikzee. Next to the web shop, Omoda has 13 shoe shops in the Netherlands. Since a few years, Omoda is also active in Belgium and Germany. Omoda can, due to its variable stock selections, compete against the dominant foreign web shops like Zalando or Spartoo. It can, within a few weeks (every second counts!), have fashionable wedge sneakers produced within the Omoda brand and offer them at half price. Moreover, they learn from their own physical shops how to treat the customer as king and apply this doctrine equally to their web shop.

 

Pop-up shops

Pop-up shops are temporary shops in empty spaces or empty shops. For example, the British store Debenhams opened a pop-up shop in Moscow in August 2012 as a teaser for their first physical shop in Russia. Pop-up shops are also regularly seen all over the world as a means of rapidly addressing temporary needs, often stocking seasonal assortments such as Christmas items. Empty shop windows can also be used as sales channels by filling them with advertising posters in combination with, for example, the use of QR codes (invariably linked with social media). That is a much faster and more flexible means of advertising than possible via physical newspapers and brochures.

 

Integration of brand experience and sales creates speed

A further marketing trend associated with speed is direct additional sales events. Here, you can easily see the direct integration of marketing and sales. By orienting itself towards specific events in place of ongoing sales cycles, a company maintains its speed. You can change or introduce new events more quickly and cheaply than is possible with ranges of stock. Using twitter and facebook as channels for communication is usually effective.

In all these initiatives you see that the client is always included within the outward narrative or image of the company and becomes an ambassador for the brand. Word of mouth remains, as always, all powerful: give your customers an experience they will talk about! Take, for instance, the fantastic initiative by Porsche to display your picture on a sports car as a result of ‘liking’ Porsche on Facebook.

Enterprises should focus on making the point of sale itself a memorable event for the customer. Abercrombie & Fitch is an example of a company which does this very well, and has developed its shops accordingly. With ample ceremony and atmosphere, the brand and the shopping experience are fully integrated, giving the desired sensation that this is a product for special and beautiful people. As a result, they have people queuing outside their shops to go in. The recent opening of the first Abercrombie store in Amsterdam in December 2012 was designed to have the feel of a party that started weeks before the actual opening.

The Apple Store on Fifth Avenue New York and the SONY shop are further examples of the integration of sales and brand experience. They are pricey and expensively equipped shops but still crucially able to adapt quickly to the changing wishes of the customer.

Guerrilla marketing and ambush marketing are often applied additional sales tactics and can be employed quickly, cheaply and with focus. The ambush by Abercrombie during the election campaign of Barack Obama in 2008 is a good example of this.

 

Customer Service & Apps

With customer service too, speed is increasingly becoming the deciding factor. The customer has a question now and wants her answers now. Web care and servicing via twitter is becoming more and more the norm. Via, for example, @KLM (the Dutch airline company) you can get a fast reply to any and all travel questions. It works quickly, well and inexpensively. It is of course very helpful for such strategies that most customers today have smartphones. Twitter brings the real-time internet much closer, surpassing even Google in terms of speed.

Many apps are essentially solutions for speed, having already selected and readied the necessary information for you so you do not have to find it yourself. To this end it is likely that many more apps will continue to be added to the various stores in coming years, in addition, of course, to more apps to find the right apps.

 

Decision

We live in interesting times with all these changes and new opportunities for business. I hope that these examples mentioned inspire you to carry out your business even more effectively with the tool of speed at your fingertips! Do not wait too long, of course, as you should now know that speed is all too often the key to success. Time and Trade wait for no man.

 

———————–

The series

 

The marketing agenda in the Internet Age. part 1: ‘Why’ your Company?

The marketing agenda in the Intenet age. part 2. Dancing with the stars

The marketing agenda in internet times. Part 3: The market has little time and does not wait.

The marketing agenda in internet times. Part 4: welcome in the risk society

The marketing agenda in internet times. Part 5: marketing organization. Who’s at the wheel in your organization?

The marketing agenda in internet times. Part 6: the strainer

The marketing agenda in internet times. Part 7: The company reference gird: you never walk alone

The marketing agenda in internet times. Part 8: Innovation in the digital era

 

 

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