Chinese New Year : Celebrating the Traditional & the Modern in the Year of the Dog

Chinese New Year Instore theater

Greetings from Shanghai where the pace of life is slowly returning to normal after the Chinese New Year festivities, which kicked off on February 16th.

I’ve long enjoyed CNY celebrations in cities around the world. However, the experience of my first Spring Festival in Shanghai is one I will not soon forget.

The 15-day festival is the most important holiday on China’s cultural and retail calendars. For reference, it's interesting to know that Chinese families spent close to $100B on CNY shopping and dining in 2014– almost double what was spent during American Thanksgiving.

A CULTURAL TENSION

Among other things, I observed the festival to be a study in contrasts. On the one hand, there is a strong cultural imperative to return home for a traditional celebration with family members. I still have a hard time wrapping my head around the fact that homeward-bound Chinese travelers make almost 3 billion trips annually during the New Year celebration, creating the world’s largest human migration.

However, the idea of duonian, or “escaping” from the Spring Festival is also gaining popularity throughout China. Growing numbers of urban professionals enjoy escaping the mainland for international vacations, while migrant workers are increasingly forgoing trips home to skip the financial burden of the gifts expected to accompany their arrival.

PepsiCo's Quaker Chinese New Year displays

Travel home or escape? Cook a traditional meal or dine out? Shop at customary markets or online?       Give time-honored gifts or foreign goods? Or even an English couplet?

The interplay between 4,000 years of tradition and a decidedly modern lifestyle was at play throughout CNY preparations and celebrations this year.

At many points during the festival, I encountered people expressing aspects of this duality – a deep yearning to honor tradition mixed with a desire to infuse their holiday celebrations with contemporary goods and experiences.

AN OPPORTUNITY FOR BRANDS

I also observed several companies actively helping Chinese consumers reconcile this cultural tension. They represent great examples of how a brand can deepen their relationship with consumers during moments that matter, by answering unmet needs and desires with delightful solutions.

WeChat:

Image: Caixin Global

I’d be remiss not to start with WeChat’s reinvention of the hongbao, or cash-filled red envelope customarily exchanged during CNY celebrations. In 2014, the company launched a Red Envelope App, which allowed users to digitally participate in the customary gifting. 

WeChat drew on the traditional iconography of the red packet, so the app felt familiar and rooted in tradition. However, a novel innovation allowed gifters to send a lump sum to a group to be dispersed in random amounts, adding a new element of surprise and luck.

By all accounts the idea was a cultural hit, and exchanging money via the Red Envelope app has become a modern tradition (and a clever way to drive WeChat trial and use). In 2017, approximately 46.6 billion red envelopes were exchanged – an incredible 33 envelopes for every person in China. Aptly, The China Post declared that, “even grandma is ditching hongbao for WeChat’s digital red envelopes.” 

TABAO:
Chinese New Year preparations customarily include family shopping trips to local markets to buy fabric for new clothing, décor items, gifts, candies, and the ingredients for holiday meals.

Today, consumer goods are abundant throughout the year, families live further apart, and shopping trips are rapidly shifting to hypermarkets and online. Yet, many still yearn for the time-honored market experience.

Last year, the eCommerce website Taobao acknowledged this tension with a beautiful redesign of their user interface for the CNY holiday. The seasonal overlay drew inspiration from a famous, Song-dynasty era painting of a traditional Chinese market, Along the River During the Qingming Festival. 

Image: Dragon Social 

Taobao created an animated, interactive interpretation of the art that became their homepage during the festival. Users could shop the animation, either by clicking parts of the picture corresponding to what they wanted to purchase or by using a search feature. 

This creative website redesign was an insightful solution to help shoppers reconcile a longing for the traditional market trip with the ease and convenience of accomplishing their holiday shopping online. 

NOKIA:
During the festival, there is no shortage of nostalgic advertising that explores the increasing difficulty of pausing one’s busy life to return home. 
(See here, here, and here, but have your tissues ready). 

Image: Nokia China

This year, Nokia did something less expected with their holiday advertising, which launched the Nokia 6 just ahead of the CNY. The campaign features a dutiful son who is a busy actor, unable to return home for the New Year. 

His mother, unsatisfied with a video call, surprises him on the set of his film with a home-cooked meal, and the pair enjoy a warm dinner together.

I love the way that Nokia suggests an unexpected solution to a common consumer dilemma, by reimagining the idea of the “return home” and opening up new paths to family togetherness.

PEPSI:

Pepsi’s “Bring Happiness Home” campaign is a fourth and final example of the insightful updating of CNY tradition. Each year, the brand partners with award-winning talent to produce a short film that celebrates CNY and explores the idea of a “happy family.” 

This year’s production, Thunderbolt Parents, is a musical comedy that tells the story of two generations of love and dreams. It sagely reminds “young people” across generations that we will find our parents much cooler (and more complicated) than we imagine if we only make an effort to understand them.

Image: Pepsi, 2018

Over the past 7 years, Pepsi’s launch of a short film has become a CNY tradition in its own right, signaling to consumers that the Spring Festival is near. 

This year’s project has already garnered over 600 million views, along with a noteworthy amount of social media buzz.

I appreciate the way that Pepsi, true to its fun-loving spirit, uses a star-studded cast and karaoke-worthy tunes to refresh the idea of the traditional reunion dinner. Pepsi joyfully reminds consumers that, with a little heart, celebrating the New Year with family can be a lively, modern affair. 

THE YIN & YANG OF MODERNITY AND TRADITION

These examples are four sparks that illuminate how an insightful blend of the customary and the contemporary can result in a delightful updating of tradition. 

Rapid technological innovation and increasing prosperity are contributing to moments of cultural change in cities around the globe. This is certainly true in China during the Spring Festival and at other times throughout the year as well. 

I believe brands, especially multinationals, are at their best when they can help consumers forge new ways forward while also helping them retain what is important from the past. 

The most successful will approach this opportunity with the perfect blend of fresh thinking and humility – a mandate that will be at the core of my work in the year ahead.

Happy Year of the Dog to all. Xin nian da ji! (Have a prosperous New Year.)

2018, A YEAR IN QUESTIONS

Have you ever heard of a “questionologist?” I had not, until I came across the word in a book by self-proclaimed question advocate Warren Berger. He posits that asking better questions can be a game-changer—sparking innovation and propelling us forward in our personal and professional lives.

This idea inspired me to frame up some thought-provoking questions for the year ahead of me. I’ve jotted down three queries, shaped by my observations about the significant cultural themes of 2017. I hope they will be thought-starters I can come back to throughout what promises to be an exhilarating year ahead.

 #1: CAN WE BE SMARTER ABOUT OUR SMART PHONES?
(Alt: Are Smart Phones Ruining Our Lives?)

 In 2017, a growing body of research illuminated the negative effects of our digital culture. We learned that we touch our phones a shocking 2,617 times per day, that the majority of Americans feel near-constant anxiety about how their social life stacks up (#FOMO), and that “phubbing” is weakening our relationships.

A steady stream of cultural influencers voiced concerns about the all-consuming powers of social media, with Deloitte dubbing mobile addiction a “real phenomenon,” and more than one of Facebook’s founders are publicly criticizing the platform for exploiting human psychology while weakening social bonds. This movement is perhaps best summarized by Justin Rosenstein‘s provocative statement that “all of our minds can be hijacked.”

People didn’t sit idly by as the realization set in that our screens make us less happy and reduce our brainpower. Rather, a growing awareness of the toll of near-constant scrolling, liking and swiping prompted cultural responses like the 72-hour tech cleanse, DIY hacks to help you use your phone less, and even the idea that you can become a “conscientious objector” to social media.

In the year ahead, I foresee the dialog about the potentially detrimental results of the “attention economy” continuing and reaching a broader audience. Even Facebook engaged this month, with the company’s first acknowledgment of the ways the platform can harm mental health.

In particular, I think we will see a growing number of people looking to companies and brands to help them re-evaluate the role of digital and social technology in their everyday lives. Undoubtedly, business leaders will continue to offer tech tools to connect with their customers. However, these efforts will be influenced by a cultural desire for more tech-free spaces – physical and mental.

This will include growing interest in tech tools that can help limit or modify existing habits and behaviors.

And, increased value placed on solutions that help bring some focus back to tangible experiences and relationships.  For example, travel providers predict the digital detox vacation will be a 2018 trend. And, Nokia punctuated this year’s holiday marketing campaign with the call to “Switch Off” for Christmas.

This tees up the first question to ponder in the year ahead:

How is my company suited to participate in the reappraisal of our smartphone-centric culture? How can we help people maintain the upper hand in their relationship with smartphones and create spaces for analog thoughts?

 WHAT LIES OUTSIDE MY FILTER BUBBLE?

 The events of 2017 also underscored the incredible power of technology (social media in particular) to divide versus unite.

Eli Paiser coined the term “filter bubble” in 2011 to describe the intellectual isolation that occurs when algorithms selectively tailor everything we see to align with what we already believe.

However, the concept experienced a true cultural inflection point this year, when it became clear that heavy filtered (and fraudulent) online content likely played a significant role in surprising election outcomes in both the U.S. and the U.K.

These revelations led to a productive cultural conversation about the ways that self-selecting algorithms have the potential to filter diverse viewpoints out of a growing number of aspects of our lives (what we watch, where we go, what we buy, who we meet, even how we get to work).

In the year ahead, I look for the movement to “break out” of filter bubbles to gain steam, with people actively seeking perspectives that challenge or at the very least broaden, what they already believe.

We are already seeing cultural signs of this including: public calls for more understanding (see article: “The Other Side is Not Dumb”), tech applications like Escape Your Bubble, and marketing calls for greater cultural acceptance á la this beautiful ad from HP.

From this space of recognizing and challenging bubble boundaries, comes a second question:

How can we help people better understand their own biases and cultivate a broad range of perspectives in their everyday lives?

 WHAT MAKES US HUMAN IN 2018?

 Before you write this last one off as coming out of some sort of phenomenological left-field, hear me out.

It is a safe bet that the word “robot” appeared in mainstream media content more in 2017 than in any prior year. In fact, Wired calls this the year robotsu really, truly arrived. We know that in the not-so-distant future machines will cook our meals, teach our kids, care for our aging loved ones and maybe even steal our jobs.

We also know that machine learning is quickly blurring the lines between what it even means to be a human or a robot. Over the past year, technologists have created algorithms that can design symphony halls, indiscernibly mimic human voices, and even pass college courses.

Futurist Kevin Kelly goes so far as to say that by 2025, technological advances will bring a convergence of humans and machines that will rework the planet’s sphere of consciousness.

In the year ahead, I would not be surprised to see a cultural identity crisis of sorts, as more of us stop to consider exactly what it is that separates humans from machines.

Thus far, I have seen this inquiry result in more interest in traits like creativity, imagination, and the capacity to empathize – all areas where humans still have (and are likely to maintain) the upper hand.

Additionally, I expect to see more cultural exploration—and possibly also governmental action— around the ethical implications of human/robot interactions.

I’ve also been pleased to see companies take a more active role in considering and investing in new educational formats that will help ensure that future generations will be able to stay one step ahead of our technological counterparts.

And so, a final question for leaders:

What am I doing to ensure that my company creates an environment where current and future generations can survive—and thrive—in a machine-powered world?

WISHING YOU AN INSPIRED YEAR AHEAD

There we have it. Three seemingly simple questions; very few concrete answers. I hope they will inspire unconventional ideas in my own work, and that they might spark new thoughts for you as well.

In the meantime, happy New Year, and best wishes for a fulfilling and productive season ahead.

There are fairly big changes on my horizon, as I prepare to move my family (dog included!) to Shanghai and assume a new leadership role. Please drop me a line if you find yourself in my new home city, where you’ll find me setting aside my mobile more often and looking to burst my filter bubble, while remaining ultimately thankful for the capacity of technology to help us build a better world.

Holiday Cheers for Inclusive Advertising

‘Tis the season for holiday ads. I always look forward to the parade of new efforts that dot the marketing landscape this time of year.

I love that the annual holiday “adstravaganza” has been elevated to a cultural event in the UK. (And, I am intrigued by the fact that some British marketers now monetize their holiday ads through the sale of related merchandise!)

These holiday messages surely exist to build brand equity and make the register ring. But taken together, I think they can also serve as a nice mirror that reflects back important themes on our current cultural landscape.

This year, I am heartened to see several ads (and their omnichannel extensions of course) veer beyond the more expected holiday motifs to celebrate moments of connection and inclusivity across differences.

From British grocery retailer Tesco, we see a celebration of the ways families from different walks of life and religious traditions participate in the shared ritual of the turkey roast. The spot, titled “Turkey every which way,” closes with the affirmation “Everyone is Welcome” at Tesco.

From Lego Australia comes a story of what can happen when Santa and the Asian martial arts archetype Sensei Wu team up to save Christmas. In addition to reflecting the spirit of imagination foundational to the brand, the whimsical tale delivers the charming sentiment that we are better when we work across cultural perspectives to “build together.”

From Sonos, the lively message that a shared musical celebration is just what is needed to transform a dull holiday gathering into an epic, multicultural and multigenerational holiday dance party.

And, from Samsung a poignant statement about the universal power of gratitude compliments a diverse group of building tenants who come together to thank the doorman who has gone the extra mile to make each of their holiday celebrations– from Diwali, to Christmas, to Chinese New Year –extra special.

In a year when the news headlines have been dominated by the many issues that divide us, it is refreshing to see marketers choose to hold up a cultural mirror that celebrates the potential for connection across boundaries, be they ethnic, religious, generational or otherwise.

Around the globe, our cities are diverse and becoming more so every day. Millennial consumers are particularly comfortable in this heterogeneous world and deserve credit for encouraging companies to stand up for inclusivity. Cheers to these advertisers who have taken note of this cultural shift and chosen to emphasize what unites rather than what divides this holiday season.

Happy holidays, and may each of you enjoy your own simple moments of simple connection amidst the year-end bustle.

Beyond Cryptocurrency: What’s the promise of blockchain for marketers & their consumers?

BLOCKCHAIN & BITCOIN: WHY ALL THE HYPE?

If your news feed is anything like mine, you’ve seen a lot of buzz about blockchain and the cryptocurrencies it supports over the last few months.

I am fascinated by this technology, and the predictions that it could transform life, as we know it. For a provocative glimpse of the blockchain-supported future, I recommend Taylor Pearson’s Ribbonfarm piece. In it, Pearson explores how blockchain technology could disrupt not only the internet, but just about every facet of life as we know it, changing: the capacity of nation-states to govern, how and why we choose to pay attention to things, the concept of a career, how we are compensated, and even how we get where we need to go.

Taking a more practical view, it is interesting to think about how blockchain is poised to revolutionize the nature of transactions in industries like finance, healthcare, and shipping – making them faster, cheaper, and more secure.

And of course, I am following the currently exploding investor interest in cryptocurrency. Revolutionary idea or bubble bound to burst? Financial leaders around the world say it’s too early to tell.

Yet, all the emphasis on these faceless transactions has me wondering – what about the people? What will the rapid expansion of blockchain technology mean in the life of the average consumer over the next few years?

THE TRUTH ABOUT BLOCKCHAIN: POWER TO THE PEOPLE

At it’s heart, blockchain technology has the power to transfer information from the hands of large organizations back to average people, and that is what I find most interesting about it.

For purposes of tracking with my thinking, it is helpful to conceptualize blockchain in its simplest terms, as a decentralized database that keeps a ledger of digital exchanges. Transactions are lumped into time-stamped “blocks,” locked into a chain of complex algorithms and then verified by a global network of independent ‘miners’ (working for digital payments, of course).

Once a block is added to the chain, it is almost impossible to change. As one expert describes, “meddling with a blockchain would be like trying to tamper with a fraction of a tapestry – “for the full picture to remain plausible you’d have to rewrite the whole thing.”

Thus, what “happens on the blockchain stays on the blockchain,” prompting The Economist to deem it a “trust machine.”

It’s not a stretch to see why someone in an industry like finance might wax poetic about this tech-enabled transparency. It has the potential to revolutionize currently time- and cost-consuming transactions like buying a home, notarizing a document, crowd-funding a company, or maintaining medical records. Banks, for example, could save $20B a year by 2022, simply by using blockchain technology to reduce the need for expensive and time-consuming audits and record-keeping processes.

Further afield, the blockchain will bring transaction costs down an “order of magnitude” to enable business models (particularly outside of large corporations) that haven’t even been imagined yet.

But, there are non-financial applications too, and this is where the technologist and marketer in me get most excited.

Consider the fact that the internet, despite all its democratic promise, has actually become a tool to consolidate control. As Pearson notes, “instead of a decentralized, open network, the Internet today is made up of a handful of applications that have leveraged their network effects to re-centralize information through the creation of walled gardens. Facebook, Google, and Amazon lead the pack.” Power, in the form of “data” and “information” is increasingly consolidated in the hands of a few, which become more omnipotent everyday. This is not lost on everyday people, who have growing concerns about protection of their personal information as well as the transparency of the tech giants, but few avenues for recourse.

The simple human truth about blockchain is that it could rebalance the scales, by transferring the control of information from companies back to consumers.

(An interesting side note here: Bitcoin’s anonymous creator, Satoshi Nakamoto, was purportedly inspired by a 1997 book called The Sovereign Individual, which forecast that a new technology of money would decentralize and dis-intermediate society in the way many originally hoped the internet would.)

SOUNDS GOOD, BUT HOW WOULD THAT WORK?

Because blockchain enables the rapid transfer of verifiable, incorruptible information, it has the potential to give everyday people greater control over information – their own data as well as what they receive from the companies with which they do business.

In the future, blockchain could be a valuable “trust machine” – or way for companies to deliver the accountability and responsibility that consumers increasingly demand.

To illustrate, here are three examples of companies experimenting with the transparency-enabling power of blockchain.

#1: London-based startup Provenance designed a tool to track a product through every part of its journey, including where it starts, where it goes, who has it, and for how long. Their current applications focus on food and clothing. For example, tracking tuna fish from hook to grocery store shelf. Ultimately, the company offers a “mind-boggling” amount of provenance information all tied together in one package that can be universally accessed via smart phone. It differs from the dozens of existing applications because the information is transparently recorded in the immutable blockchain. Founder and CEO Jessi Baker told Wired it is a “much-needed mechanism to broker brand trust,” and I have to agree.

#2: Everledger offers a product similar to that of Provenance, but one that creates a global ledger for diamonds and other high-value assets. The application tracks diamonds to confirm their authenticity and also ensure they are not conflict diamonds. It is unique because origins and shipping information belongs not to a certification house that consumers need to “trust” but is encrypted onto the immutable blockchain.

#3: Entrepreneur Mark Cuban recently unveiled a new project called Mercury Protocol, which seeks to create a next-generation social networking site, built atop the Ethereum blockchain. The team hopes that messaging apps like Facebook and WhatsApp will adopt the software, which showcases two innovations: 1) users can sign in without turning over any of their personal information, and 2) the platform generates tokens for constructive behavior, hopefully deterring the behavior of fake-news creators and trolls.

#4: Furthest afield but perhaps most interesting is Lotus, a global Buddhist community employing blockchain technology to ensure temples around the world use funds transparently. A ledger, visible to a global community of members, records and displays how funds are allocated and then spent. It is not hard to imagine how a for-profit company could apply this same technology to add a similar layer of transparency to their philanthropic giving or sustainability efforts.

Each of these ventures is leaning into the budding promise of blockchain technology to be a tool with which to offer transparent information. I can imagine a future where marketers of all shapes and sizes employ blockchain to help their customers know more about the things they buy.

Want to claim your product is handcrafted? From a unique or single source? Made of only sustainable or recycled materials? In the blockchain future, marketers will not just claim these attributes but be able to offer buyers verifiable proof.

Consumers are hungry for transparency, and the blockchain will help companies provide information it in its most unadulterated form. This makes it an incredibly powerful tool for brokering brand trust. That – cryptocurrency trading boom aside – will be blockchain’s true promise for marketers in the years ahead.

WILL PREDICTIVE MARKETING MAKE RETAIL LESS FUN?

Every retail leader has “build a better predictive marketing program” on their to-do list this fall. Savvy marketers are using their growing troves of shopper data to predict what customers might want to buy next,  and then merchandising these items at every touchpoint.

In many categories, it is beginning to feel like shoppers no longer need to stop and consider what they actually might want to buy; they just refresh their social media feeds and let retargeted ads remind them what is on their list. Author Kevin Kelly calls this the “filtering effect,” and he identifies it as one of a dozen technocultural trends that will reshape society by 2050. He predicts that in the coming years the retail landscape will shift from “mass personalization” to “mass customization.”

 In this not-so-distant future, shoppers will look to filters (brands, curators, friends) and algorithm-powered recommendation engines to deliver customized clothing, food, transportation, and more–on demand. In retail, this could mean that most if not all experiences will involve browsing and selecting from a highly customized set of options that past selections suggest a shopper will like. As Kelly notes, “the filters have been watching us for years; they anticipate what we will ask. They can almost autocomplete it right now...To some degree we will rely on the filters to tell us what we want.”

WILL DATA CREATE A RETAIL FILTER BUBBLE?

 This incredible ability to individualize the retail offer sounds great at first blush. Shoppers have too little time to wade through too many choices, and data-driven marketing is a powerful solution. But the promise of such a hyper-curated universe also begs the question: if the filters narrow everything, what is being left out?

As retailers get better and better at offering customers only things they are highly likely to want – are we building a retail filter bubble? One that may eventually diminish the retail experience?

 The concept of the “filter bubble” describes the result when a constant personalization of (mostly online) content isolates people from news and information that does not align with their existing beliefs and search habits. Many argue that putting on such blinders – knowingly or unwittingly – can create tunnel vision, narrow one’s worldview and foster a negative “groupthink.” This has led to a movement to encourage individuals to “pop” the news filter bubble and preserve the diversity of online news and content, and even tech players like Google have joined the effort.

While the consequences for retail may not be quite so dire, it is troubling to imagine a retail world where shoppers mostly browse and purchase items that an algorithm has determined they will probably like.

At best, that sounds boring and staid in a category and culture that values the novel and unique. At worst, it could leave shoppers feeling dispassionate and uninspired. In a heavily filtered retail world, it is not a stretch to imagine retailers will see less brand and product diversity in shopper baskets, lower trial of new brands, and have fewer opportunities to surprise customers with an unexpectedly satisfying product.

That last point is the stickiest for me. Research supports the idea that unexpected discoveries are a critical element of the retail experience. In a large global study conducted by McCann Truth Central a few years, two-thirds (66%) of respondents said that they are looking to be inspired while shopping and over half (57%) worried that they will discover fewer new things if companies always show them exactly what they are looking for.

Culturally speaking, we know that deciding to buy something (or not) is a way for shoppers to define themselves and express their values. Do we really think customers will be happy to cede the bulk of their purchase decisions to a faceless algorithm, no matter how sophisticated or precise?

CAN SERENDIPITY SAVE THE RETAIL EXPERIENCE?

 So if we worry that too much data will make the retail offering predictable and uninspired, what’s the solution? Serendipity.

Serendipity is the unexpected discovery of something you had no idea you’d want, in a time or place when you were actively looking for it. Like my new Blackwing pencil collection – the perfect gift for an upcoming wedding anniversary, discovered cleverly merchandised at the checkout counter of my neighborhood bookstore. Or the Mr. Davis undershirt brand I bumped into while browsing a high-end watch site. (Editorial note to my wife: Just looking, I promise.)

The thrill of the find has historically been a key part of the brick and mortar retail experience. It’s the invitation to browse the storefront window, the thrill of the hunt during a flash sale, or the unexpected find in the holiday catalog. However, the move to data-driven transactions is crowding it out.

I recently heard the President of Chronicle Books describe an emphasis on serendipity as a key part of the retail strategy that has helped the company thrive where competitors struggle. “Our books have to be discovered,” she noted, underscoring the fact that simply battling it out on the shelves of Barnes and Noble or building a better recommendation algorithm would not cut it for the brand.

There is a kernel of wisdom in this strategy for all retailers. Besides pushing for more sophisticated big data competencies (which we surely should continue), it’s time to consider how to design a little bit of serendipity into the retail experience. It will keep shoppers out of a retail filter bubble and ensure that we continue to find ways to surprise and delight them.

A few real-world examples hint at attempts to design an element of discovery into a brand experience. Square recently opened curated showrooms. Havianas launched a series of summer pop-up shops in unexpected locations like a New York Ferry. And, Nordstrom launched Olivia Kim pop-up shops that introduced shoppers to a novel Korean eyewear brand.

These all facilitated finds in the physical world, but there is an opportunity to bring an element of surprise discovery into the online shopping experience too. I’ve challenged myself to think about how to weave online serendipity into my strategic thinking for 2018 and beyond.  Could a retailer or brand:

1.       Allow customers who are increasingly mindful of the filter bubble effect to opt-in to random email recommendations?
Real World Inspiration: New York Times writer Steph Yin subscribes to a handful of science-themed Twitter bots to provide “serendipitous notes that take me out of my day, if only fleetingly.”

2.      Build a bot that facilitates serendipitous discoveries on an eCommerce website?
Real World Inspiration: The SF MOMA developed an app that makes contextual recommendations, guiding visitors to unexpected works of art based on their physical location within the museum.

3.       Create their own monthly subscription service, offering an assortment of unexpected products that surprise & delight?
Real World Inspiration: Bespoke Post provides men a themed box of novel products, true to the brand personality but not curated to an individual’s taste and purchase history

At the end of the day, the march to a data-driven retail landscape is inevitable, and more personalized retail offers provide benefits for retailers and their customers.

However, in a world where shopper data work against the joy of discovery, there will also be value in preserving the power of the unexpected find. In the months and years ahead, let’s plan to deliver more serendipity, shall we?

Reflections From Berlin: The 4th Generation of Retail is Coming – Are You Ready?

“The future of retail will be led by sophisticated technology companies who happen to have a retail business.”

This quote lit a fire in me at a recent Consumer Goods Forum Summit presentation in Berlin, where pervasive topic of conversation was the fast-approaching 4th generation of retail (“4G Retail”).

Dan O’Connor, a fellow at Harvard’s Advanced Leadership Institute, spoke about the impending shift. In his conceptualization, the past 100 years saw three iterations of the retail model and the landscape today is being disrupted by a fourth new model.

O’Connor preaches that companies which function between innovation curves are best positioned for success. He cites Netflix as a great example, noting their ability to leverage one declining business model (the DVD) while anticipating and preparing for the next (digital content).

My key takeaway from his impassioned overview: in today’s retail environment, visionary leadership means optimizing for the world we know while preparing for the 4G Retail future.

Thinking about where retail has been helps us see more clearly where we are headed, so let’s dive in at the beginning!

The first wave, 1G Retail, was mediated through small, community-driven trade networks. In 1G Retail – which still accounts for 50% of the global retail pie – proximity, localization, and relationships are everything. This is the domain of the small family-owned shop where everyone knows your name and your buying habits.

Retail consolidation marked the beginning of the 2G Retail era. Starting in the 1960s and 1970s, large retailers (think: Wal-Mart) created new economies of scale by merging fragmented supply chains. These pioneers offered both convenience and cost savings, creating a juggernaut model that comprises 30% of the global retail pie today.

The rise of the online marketplace ushered in the third generation– 3G Retail. In this model, transactions take place on “platforms,” like Amazon or Alibaba’s Taobao. And, through what O’Connor calls “intermediaries” like Facebook, Google, or WeChat. Amazon’s IPO took place less than two decades ago. Yet, 3G Retail already accounts for at least 20% of global retail dollars.

Driven by real-time data analytics and rapid innovation (e.g., subscription pricing, mobile ordering, same-day delivery), the digital store model disrupted almost every aspect of the retail landscape. 3G Retail also prompted a shift in the very pace of the business, from a 52-week planning cycle to an environment that requires near-constant response to real-time developments.

 O’Connor dubs the next era 4G Retail or the age of “Real Time Retail.” In this 4G landscape, he predicts that a significant part of commerce will take place on a small handful of large digital value networks,” or digital platforms that serve a widening variety of functions including commerce, search, and social. Notably, technology companies and not traditional retailers will own these networks. In the U.S., we immediately think of Amazon, but around the globe, other platforms like Alibaba, Flipkart, and JD come to mind.

Tech innovation notoriously empowers consumers, and the Age of “Real Time” Retail will be no different. Imagine the 4G landscape like today’s retail on steroids – with interactions increasingly fast and frictionless. Transactions will take place on a few digital platforms, seamlessly along the spectrum between online and offline.

Same-hour delivery via driverless truck. Check. Personalized offers based on yesterday’s purchase behavior. Yep. A content-rich environment where everything you see is for sale? You got it. The 4G world will push the era of consumer control to its infinite boundaries, fueled by innovations around things like robotics, AI, driverless delivery, and 3D printing.

So now that we know that a 4G world is coming, what should we do about it?

 Here are three implications. In a 4G Retail World: 1. Data is table stakes 2. Retail platforms > media platforms 3. Success requires inventing new moments of consumer discovery.

#1: Data Is Table Stakes

In the 4G Retail future, the companies who control the data will rule the world. Success in the 4G retail world will require “big data collaboration” – both within organizations and across new (unconventional) manufacturer + retailer alliances.

This was illustrated in a recent Financial Times piece about Alibaba, which noted the company’s transformation into a growing “big data conglomerate.” Their massive data stream informs everything they do including merchant strategy, marketing, inventory management and even the layout of physical stores.

Despite the importance of data-driven insights, most traditional retail companies still face significant organizational and technical challenges to integrating and analyzing their own data. These issues compound when companies try to look further afield to think about how to work together with digital platform partners (e.g., Amazon) to optimize.

Getting their data house in order is an urgent matter for current retailers, since even simple data transformation efforts can take many years to launch.

#2: Retail Platforms > Media Platforms

My hypothesis is that in the 4G Retail landscape, the importance of large retail platforms will ultimately dwarf that of traditional media publishers. In fact, I am not sure the traditional standalone media content players survive in this future.

Think this sounds radical? Consider the similar tale of digital consolidation playing out in two very different retail markets, the U.S. and China.

In the U.S., Amazon is steadily reducing the need for online consumers to venture far from their site. They dominate commerce, with over half of shoppers starting every online shopping trip on the site and a full 90% cross-shopping Amazon even if they find what they are looking for on a retailer site. Amazon Prime Video is tripling their production of original content series over the next few years. Amazon Spark – curated retail in a social media format – looks poised to change the way we shop. In a retail future where consumers can shop, view content and socialize all within the Amazon platform, traditional publishers start to look much less relevant. 

That “single platform” future is even one step closer to reality in China. Alibaba-owned Tmall already controls more than 60% of the Chinese eCommerce market. Their multi-faceted Alipay is a true “killer app” that lets users complete a wide variety of tasks (from bill pay, to calling a cab, to getting a loan) right within the app. Like Amazon, Alibaba is aggressively expanding into digital media and entertainment with ventures including Alibaba Music, Alibaba Pictures and video-streaming site Youku. With aspirations far beyond simple retail transactions, Alibaba is building a vast “social commerce” ecosystem that supports almost everything someone needs or wants to do online.

This shift to a world where commerce, content and social life seamlessly merge on a single platform will require marketers to rethink the 4P’s through the lens of ecommerce retail platforms. (These are the future “Digital Value Networks” in O’Connor’s G4 framework).

New alliances between retailers, manufacturers and social platform companies will be critically important. Retailers and manufacturers will succeed by viewing shoppers as more than “trips and baskets” and by understanding their increasingly wide array of behaviors on digital retail platforms. In a G4 world, an Amazon shopper could be binge watching her favorite show via Prime Video, purchasing the outfit the main character is wearing, while conversing with her friends about the plot twist that just happened. How will your product or service get in on the action?

Savvy industry leaders will benefit from thinking now about which partnerships matter and how to develop these.

#3: Success = Imagining New Moments Of Discovery

In a 4G world, the retail storefront will be “everywhere,” and it will be up to brands and retailers to create new times and places to engage shoppers.

Critical questions for retailers and manufacturers will include: Where and when are my consumers that my product could be? How can we bring our product or service experience TO them, as they come to us less frequently? How do we offer a personalized experience to every shopper?

A number of retailers and manufacturers have begun seamlessly integrating the retail and hospitality consumer categories by rolling out “buy what you see” lines available for purchase at boutique hotels. This seamless, arresting experience is a picture-perfect example of the thinking needed to succeed in the G4 Retail world.

The spoils will go to the companies with the vision to imagine and create the retail landscape of the future – where every space and moment of technological interaction with a consumer is a potential storefront. What can you do to create a more seamless, simple connection to your customers today?

At The End Of The Day, So What?

We’re at the early, nascent stage of the 4G Retail Age. Today, promise yourself that you will be one of the leaders with the vision to co-create the new, exciting, ready-to-be-built world of 4G retail that’s coming, whether we like it or not.

IN AN ERA OF NATIONALISM, WHAT’S A GLOBAL BRAND TO DO?

THE ERA OF THE LOCAL BRAND

One of my favorite things about my current job role is seeing firsthand the unique ways that global brands come to life around the world.

Take Quaker Oats, for example. The brand emanates from a universal product core but is expressed very differently in Dallas versus Shenzhen.

In my recent travels, I have seen thriving national and regional brands everywhere. There is Paper Boat Beverages in India, Oppo in China, and Casas Bahia in Brazil. The list could go on.

These aren’t just one-hit-wonders but part of a well-documented trend. Across countries and categories, global brands face increased pressure as domestic options give them a run for their money.

In China, foreign FMCG brands lost share in 16 out of 23 measured categories last year, facing pressure from nimble domestic companies. In India, domestic brands grew by 32%, while brands with global presence grew by only half that amount. A similar dynamic played out in Indonesia.

This trend is marked in growth economies but it affects mature consumer markets like the U.S. and U.K. too. In these locales, consumers increasingly trust smaller ‘craft’ brands, which command a price premium and garner intense loyalty based on the perception that they are more authentic or unique.

I can’t help but think that this growing ‘buy local’ sentiment is fueled – or at the very least enhanced – by the rise and growth of nationalist political movements around the globe.

In the United States, American Apparel will soon offer shoppers the option to pick a U.S.-produced version of their iconic t-shirts – a move the company says will cater to the segments of shoppers for which ‘buy American’ is critically important. China recently declared May 10 “Chinese Brand Day,” in an effort to help companies build strong domestic brands that will reinforce China’s status on the global stage.

The implications are clear for stewards of these regional and national challengers. The cultural wind is behind your sails and there is undoubtedly an opportunity to flourish and grow.

WHAT’S A GLOBAL BRAND TO DO?

The path is less clear for the larger global players. In an age of nationalism – what is a multinational brand to do?

I am intrigued by the idea that, in a world that feels increasingly divided, global brands are singularly positioned to connect.

The McCann Worldgroup conducted a global brand study that revealed two fascinating data points. First, 85% of respondents said they believe global brands have a role to play in making the world a better place. And, a full 81% said they believe global brands have more power to make change than governments. Wow.

I believe this view of global brand as positive change maker points to an opportunity for brand leaders to dig deep to consider what unique value they bring to the table.

As the mere value of being ‘international’ means less and less, what specific values can you bring to consumers’ lives? This is a two way street and companies have an opportunity to think both from the top down and bottom up. The most important thing for Global brands is not to blindly hinge their brands around western values. The value system might not cross boundaries in the turbulent geo-political world we live in.  

 ADDITIVE VALUE

Taking it from the top – what can you add to a local or national culture? Can you bring an idea, an offering, or an innovation that wasn’t there before?

Around the globe, retailer Ikea does an excellent job of communicating their unique Swedishness across consumer touchpoints. The brand’s value-add particularly shines through in the food space, where they offer authentic Scandinavian fare as a destination within retail stores and a category incremental to their core homegoods competency. An “astounding” 30% of Ikea shoppers head to the stores just for food and the company is considering expanding into standalone restaurants.

In a similar vein, consider retailer Muji’s offering of smartly and simply designed home and office goods. Their vast assortment of products shares a unique, Japanese design aesthetic that has created cult followings in cities around the world.

TRANSFORMATIVE VALUE

Working from the bottom, global brands and retailers need also to think about how the local context can enrich and transform their offerings.

For example, the Lay’s brand has done a great job adapting to local taste palates, introducing successful flavors like Magic Masala in India, Hot & Sour Fish Soup in China, Thai Sambal in Thailand, and Fish & Chips in the U.K.

Canadian athletic retailer Lululemon also understands that global success means thinking locally. The company chooses to sponsor not famous athletes but local community influencers through their local ambassadors program. The ambassadors receive skills training and business promotion (not to mention hefty merchandise discounts) in exchange for teaching classes in Lululemon retail locations and generally evangelizing the brand.

Fast-fashion retailer Uniqlo has also focused recently on making sure flagship stores express global ideas in local ways. This is achieved through the WearHouse program, which reserves significant floorspace in otherwise globally homogenous stores for local products and cultural events. Company leaders note that this is an important way to stay relevant while also delivering on the mandate to bring something back to local communities.

BRAND VALUE FOR GOOD

Finally, at the macro level, global brands should consider how they can leverage their scale for good. In this age of transparency, there is no hiding from one’s size or sweeping it under the rug. So, why not transform the elephant in the room to your largest asset?

Two great examples come to mind here:

First, PepsiCo’s Performance with Purpose Initiative, which aims to affect positive change on three fronts: product, planet, and people. The global organization has ambitious goals to re-engineer products to reduce less healthy ingredients, reduce their environmental impact and advance an agenda about respect for human rights and diversity. All of these efforts are driven by PepsiCo CEO’s belief that, in the 21st century, a good company must also be a good citizen.

Second is Dove’s Global Self Esteem Project. This initiative, activated in 100+ countries around the world, develops educational tools and programs to help young people build confidence and a healthy body image. Recently, the company has begun localizing content to understand and react to how body-image issues are different across countries.

THE BOTTOM LINE

In the retail category, there is much talk about today’s omni-channel consumer. As shoppers move seamlessly between retail environments, they expect brands to keep up by delivering a frictionless shopping experience.

Omni-channel consumers don’t distinguish between a brand’s website, storefront or mobile app. Technology has trained them to simply want it all. In consumer speak, ‘I want to purchase exactly what I want, when and where I want it.”

The reality is that today’s consumers are omni-cultural as well. They don’t see the retail world in the discrete categories of local vs. national vs. global brands. Rather, they are accustomed to a diverse range of options, and they move seamlessly between them choosing different brands to fill different needs.

At a Walmart in China, a shopper might choose several multinational food brands for their provenance, then add a national cosmetic brand appreciated for its use of traditional ingredients, then stop by their neighborhood wet market to pick up turtle meat for dinner. In India, shoppers have no problem ordering Paper Boat juice via Amazon and might throw in a pair of Nike’s while they are at it.

While large, international brands retain a role in this omni-cultural world, the new nationalism challenges the orthodoxy that global brands are always best. In increasingly competitive markets, global players are under new pressure to articulate and differentiate their offerings. Easily said but, how to do it?

At the end of the day, global brands have an opportunity – possibly even a mandate – to build bridges in an era of divisiveness. As a steward of a proudly international portfolio, I look forward to forging new paths in the name of omni-cultural consumption.

MARY MEEKER MUSINGS – 2017

I enjoy Mary Meeker’s internet trends report every June, and the 2017 version presented at last week’s Code conference did not disappoint. 

Meeker, a partner at VC firm Kleiner Perkins Caufield & Byers, touched on a wide array of topics via 355 slides delivered in under 35 minutes. Noteworthy themes included: the explosion of mobile, continued media disruption, the mainstreaming of gaming, China’s “golden age” of entertainment and transportation, and opportunities for disruption in healthcare.

This content sparked several ideas for me. I’ll share a few here and would love to know via comments what resonated with others. 
 

Spark 1: Who is a “technologist”? – Everyone

A key theme across the report was the pervasive role of tech in today’s culture. Sure, we intuitively know that tech makes the world go round. But the numbers Meeker presented are striking: 40 percent of the 20 largest companies – in terms of 2017 market capitalization – are tech companies, and 100 percent of the top five carry the same label. Further, Meeker highlighted dozens of noteworthy companies throughout her presentation, and all are thriving due to tech-driven innovations.

For me, this prompted a reappraisal of the word “technologist.” This is often a standalone job title within an organization or department, or a descriptor that people use to augment their “real” job title. Meeker’s numbers underscore the fact that this concept must evolve. 

Increasingly, all business leaders are technologists, or should be. The complete fusion of tech and business culture requires us to put tech thinking at the core of everything we do. Across industries, companies and job titles, all business leaders of the future will be "technologists."                                                                        

Spark 2: Two Corners for Marketers – Visual and Voice

Meeker also said that companies who thrive in this tech-driven era are able to “see around corners” to envision a future that others may not see coming. 

If I put on my marketing cap, I can identify two sharp corners around which marketing and retail leaders are beginning to peer. They can be summarized as the “Two Vs,”: voice and visual.

Corner 1 - VISUAL marketing:

Meeker noted that online ads (and all kinds of online content) are becoming digital storefronts. This simple statement is quite extraordinary if we stop to think about it. 

Tools like Pinterest’s “Shop the Look,” the shoppable Facebook feed, Snap’s “Swipe up to Buy,” and the curated email newsletter are fundamentally changing the way consumers shop and purchase. The newly launched Google Lens takes this to next level, and it will train people to expect to be able to take a picture of literally anything and buy it immediately.

As ads become transactional vehicles for click and purchase, marketers will need to find other ways to build brand relationships. To that end, they will need to re-imagine the role of retail stores. We know, and Meeker emphasized, that retail stores as a genre aren’t dying, but stores that don’t engage and enrich consumers are. 

It’s conceivable that the role of ads and stores may “flip” in the next decade, with ads becoming transactional storefronts and storefronts becoming spaces for building brand relationships.

Ironically, marketing teams who have spent the better part of the past decade refining their Search Engine Marketing strategies now need to contemplate a not-so-distant future where pictures matter much more than words.

Corner 2 - VOICE marketing:

Much as Visuals are replacing words, Meeker also pointed out that Voice is replacing typing. 

Already, 20% of mobile queries are made via voice, and this represents incredible growth for a genre that didn’t exist even five years ago. Further, she noted that the number of installed voice assistants and their use cases are increasing and that voice recognition accuracy continues to improve.

Why does this matter for brands? Consider the growing number of transactions in which consumers never see a package, a product design, a logo, or even a brand name. Marketing guru Scott Galloway recently called voice the “killer app” for brands, noting that a shopper can prompt a voice assistant to “buy batteries,” have Alexa return a result, buy something, and get a product delivered to their door – all without ever encountering a brand name.

Again, this calls for marketers to stop and re-think. In a world where brands become invisible at the point of purchase, brand stewards must reimagine new ways to maintain share of mind, drive brand preference and express brand identity. 

This movement to Visual and Voice is a major “corner” for business leaders to see around in the next few years. Are you ready?
 

Spark 3: Humans (not robots) will chart the course of our future

Meeker closed the report with a slide suggesting that the key drivers of growth in the 21st century will be “computing power and human potential”. 

This was a heartening idea. After all, it can be a stressful time to read the news. Meeker’s report nods to complex political environments, rising national debt and entitlement obligations, and the very real workforce disruption the next decade will bring. 

Meeker provided an important reminder that it is our humanity that will see us through the future. Even as we bring tech to the core of all we do, things like reading widely, traveling, pursuing broad education, feeding our curiosity, and honing the ability to connect the dots in news ways will continue to differentiate human intelligence. These are the skills that will usher us into the new tech-driven decades ahead.

I'm striving to be ready – are you?

Can Amazon be Beaten: How UK Grocery Retailer Ocado Is Holding Its Own

Imagine a retail grocery business run by a deep technology estate. No stores, only online deliveries from automated warehouses. Robots in those warehouses pick most items and send them via high-speed conveyor belt to human attendants for packing.

A human-like robotic hand is capable of handling over 50,000 products of all shapes, including delicate items like produce. This process is all monitored by technology that can alert the human attendants to packing errors. Other “collaborative robots” learn from and assist the human warehouse manager. An artificially intelligent warehouse system collects data and optimizes operations. A computer program even maps the best delivery routes for drivers.

This isn’t the grocery store of the future but a description of the present-day operations at Ocado. Ok, the robotic hand is still in development, but the rest is 100% operational.

I’ve recently returned from a UK market tour where colleagues were buzzing about this unique, online-only grocery retailer. They are the world’s largest and their team of technologists and techies has been working to change the way we shop for groceries for the past 16 years.

Amazon Fresh entered the UK market last summer, and many predicted Ocado’s demise. Yet, the retailer has survived, some might even say thrived. Their 2016 sales beat forecasts, rising 14.8% to £1.3B. This momentum has continued in 2017 with both sales and weekly orders increasing despite a sluggish British retail environment.

I have heard of other similar David vs. Goliath success stories. Earlier this year, I wrote about the fact that Amazon is surviving but not thriving in several other markets including China, India, and Mexico.

This most recent example got me thinking again about how and why homegrown retailers are able to give Amazon a run for their money.

In India, Amazon has struggled to win trial and loyalty in face of rival Flipkart’s entrenched awareness and strong seller relationships.

In Mexico, Amazon has fought to build trust in a market where the cultural defaults are cash payments and brick and mortar shopping. Meanwhile, local competitor Mercado Libre has leveraged a nuanced understanding of local culture to hold their own.

In the UK, Ocado’s impressive tech infrastructure is helping them keep Amazon at bay. The Independent calls the company “superlatively innovative” and they likely embody what the grocery category will look like in the age of the 4th Industrial Revolution.

Yet, Ocado has retained a strong compass for human values too. The company is testing delivery via more sustainable electric vehicles. They are partnering with underground urban farms with lower carbon footprints vs. traditional farming. And, they run a ‘Code for Life’ initiative designed to prepare the next generation of workers for the automated workplace.

I don’t want to overstate Ocado’s success. They still have a long road ahead; one that requires them to sustain their growth and license their tech infrastructure to an international grocery partner soon.

Nevertheless, I am heartened to see an innovative player succeed in the face of a powerful incumbent competitor.

Photo Credits: Business Insider, http://read.bi/2qJuvwE

The Rebirth of Consumer Curation

Well over a decade ago, savvy retailers started to offer edited assortments to shoppers dealing with a growing number of options. Remember Target’s collaboration with Issac Mizrahi or the growth of retail chain Anthropologie? Analysts dubbed this phenomenon ‘curated consumption,’ and it became a standard retail offering.

To “curate” means to "pull together, sift through, and select for presentation." There is a functional aspect to curation, as it requires the working through a volume of choices. It also requires the creative act of making selections that others see as unique or inspired.

In today's tech-enabled culture, I’ve noticed this editing process happening with a new scope and speed. A growing variety of things are being curated with increasingly sophisticated tools  – a dynamic I’ll call Curation 2.0.

The Dawn of Curation 2.0

Whether we are considering where to work, live, or vacation; how to eat, dress, or style a home; or what to listen to, watch, or read – the options available at our fingertips continue to grow. In this cultural landscape, the more technology offers us, the more we need new tools to curate the vast landscape of what is available.

This struck me while perusing a group of the most upvoted product ideas on the Product Hunt Website. (The site itself being, ironically, a curated selection of startup ideas.)

Entrepreneurs clearly recognize a cultural need for help dealing with option overload. Across the new product ideas, the offer of an edited selection of options was a recurrent theme.

I found products to curate everything under the sun: job postings from around the world, minimalist design objects, local spots for travelers, coffee shops for working, art, or weekend plans.

Many of these start-ups are business models yet to be proven, but they complement a litany of more established applications with curation elements like Netflix, Flipboard, and Apple Music. (And of course Pinterest, perhaps the grandfather of curation apps.)

Curation on the Retail Landscape

Curation 2.0 means you can find a great local dive or unique objet d’art, but it is also playing out on larger scale. Where there are masses of consumers, there are companies to help them navigate through a dizzying number of retail categories by choosing only from an edited assortment.

One only need begin with StitchFix for clothes, then move on to BlueApron for groceries, 99 chairs for furnishings, and Canopy for most everything else.

The fashion category is one particularly interesting example of how an industry can be revolutionized by Curation 2.0.

As the pace and scope of fashion has eclipsed the abilities of the average shopper, many have turned to editors for help.

Subscription services like Trunk Club (and the already-mentioned Stitch Fix) and curation websites like AHA and LiketoKnow.it have become an integral part of the way many consumers shop for and buy clothing.

Some of these applications use tech-powered curation. For example, Stitch Fix employs over 50 data scientists to create selections tailored to individual customer tastes. Others, like AHA, rely on human tastemakers to identify inspired options.

Whether guided by an algorithm or a living, breathing person, curated fashion doesn't seem to be a passing fad. One industry expert predicts that subscription services will become a full-fledged fashion retail channel in the coming years.

What’s Next?

As shoppers enjoy curated shopping experiences in a few pioneering categories, their decision-making muscles will atrophy. It is not a stretch to imagine they will desire – even expect – curated help across all their shopping experiences.

Retailers and brands sold at retail should ask themselves how they can leverage technology to become trusted editors. To start, consider a quick-fire brainstorm:

Q1: What do we sell that my consumers would like to consume in an edited assortment?

Q2: What type of curation do my consumers want? (Consider: Customized Combinations? Inspired suggestions from a tastemaker? Community-generated recommendations?)

Q3: Should my curated selections be generated by an algorithm? A human? Both?

What’s Even Further Afield?

Looking down the road, I predict a need for ‘meta-curators.’

As consumers come to rely on curated collections across many categories, the number of requisite websites and apps will once again explode. As a consumer, I would love to use many of the tools I’ve called out above – but who has the time?

The inevitable next step will be to pare down to a smaller number of broad curation tools that work across traditional categories.

Will the next wave of Silicon Valley darlings be applications that crack the meta-curation code?

Until then, good luck and happy editing!

Tax-Paying Robots May Be the Future of Work: Why Should We Care?

It’s not news that robots will replace large numbers of human workers over the next few years. For context, a 2016 WEF study found that 5 million jobs in 15 countries could go by 2020.

But, Bill Gates recently made headlines by calling for a tax on companies’ use of these new automated workers. His thought-provoking argument:

The shift to automation will leave many out of work and without meaningful re-employment prospects. For example, U.S. retail jobs are identified as one of the most at-risk for robot replacement. This pending disruption is evident in the customer-service robots popping up around the country. For example, Lowe’s LoweBot, Macy’s On-Call assistant, Pepper’s debut in California malls, and of course Amazon's cashier-free grocery store.

The reduction of paid labor will shrink the income and social security tax bases and limit governments' abilities to help those affected – at a time when they need a social safety net the most.

Gates maintains that we should take steps to plan for this automated future by instituting a tax on robot workers. Companies could fund the tax with some of the windfall from their labor reduction. Governments could use the proceeds to support displaced workers and retrain them for positions where human skills are still needed. Gates' examples include healthcare and education, but I also see opportunities for retailers to launch retraining efforts.

The robot tax is not a completely novel suggestion. Last month, European parliament considered and rejected a similar proposal, a decision hailed by the robotics industry.

It's no surprise that some economists and policy makers opposed the idea. The challenges are complex, but the main points are these: 1) slowing tech growth to keep humans in jobs delays the inevitable and will have unintended consequences, 2) automation created jobs throughout history and may do so again, and 3) automation is not happening fast enough, limited by an abundance of cheap human labor.

Net/net, critics argue that while the effect of widespread automation will be negative for some people, the economy will be better off as a result.

With compelling arguments on both sides, how to make sense of this issue?

In my view, Gates’ position is about highlighting the vast inequality created by tech innovation.

Today, the gap between rich and poor is at record levels in most of the developed world, and the U.S. leads the pack. In this country, the richest 10% of workers earn 16.5 times that of the poorest 10%. This ratio has more than doubled (up from 7 times) since 1980.

The impending automation revolution will further deepen the divide between rich and poor. Fortune magazine stated this well:

"Some people will see their jobs become obsolete and will need to acquire new skills in order to obtain well-paying work. Robots and artificial intelligence will exacerbate economic inequality and place a burden on many workers to learn new skills."

It is on behalf of the "some people" that Bill Gates speaks. He argues, I believe correctly, that it is the duty of business and government to plan for the displacement of millions of American workers – even if the net economic effect will be positive.

By extension, I believe it is the duty of business leaders to understand and improve the wide economic inequalities that exist today and will deepen in the years ahead.

Retail leaders, in particular, can be a part of the solution by imagining the future of the automated workforce.

We should explore how human workers might work alongside robot “colleagues” to deliver enhanced customer experiences.

We can identify opportunities to retrain displaced workers for these new roles, perhaps building on programs like Amazon's Career Choice.

And, before we get completely wrapped up in automation, we should identify points of human interaction worth preserving and consider how these might create new opportunities for differentiation or revenue. This might be akin to the way some consumers pay a premium today for artisanal food. (One scholar intriguingly posits that someday the act of getting a manicure from a human might be a service for only the very rich!)

The arrival of the automated workforce is a business issue, since inequality creates social, economic and political tension that does not foster a healthy environment for commerce.

But it is a human issue as well. As tech concentrates wealth, knowledge and power in the hands of a few, it is critical to think about broadening it's positive impact in the lives of the many.

Taking Stock Of Amazon Abroad

E-commerce giant Amazon has experienced soaring profits at home in recent years while consistently losing money internationally. This is counterintuitive, since the smaller business in expansion markets should have more room for growth.

I’ve recently spent time in Mexico and India – two countries where Amazon is surviving but not thriving.

Amazon’s journey in both is a good reminder that while the U.S. sets the pace for retail around much of the globe, companies also have to evolve (sometimes dramatically) to succeed in diverse markets.

Amazon learned this the hard way in China, where efforts to establish American practices did not end successfully. This makes strong performance in growth markets like India and Mexico even more important. India is the largest underdeveloped ecommerce market in the world, and Mexico is not far behind. With mushrooming middle classes and rapidly expanding access to broadband, both countries represent huge potential. However, there are also unique challenges since both are predominantly cash societies, where online commerce is not yet the cultural norm.

Amazon has had to actively customize their business model to survive in both, while contending with the fact that local players sometimes set the agenda.

In India, Amazon’s performance is still second to local player Flipkart (which owns 43% of the market). The Seattle-based giant is still investing heavily, to the tune of $1B per year, to build infrastructure and win trial and loyalty. A big part of their strategy has been finding ways to “localize” by adding cash-on-delivery payment options similar to those of competitors, a “Chai Cart” program to connect with small vendors over cups of tea, and a “seller university” to help small traders learn how to get online and growth their business.

In Mexico, Amazon has grown modestly since their 2015 launch, paralleling slow growth in online retail overall in the country. Here too, they have had to adapt to fit the local market.

Like in India, this has included following the lead of regional players like MercadoLibre and accepting cash-on-delivery payments. And, in a uniquely Mexican modification, Amazon accepting gift cards purchased from Mexico’s network of Oxxo c-stores. No doubt, Amazon would prefer their own offering but shoppers in Mexico’s largely cash economy have thus far preferred the already-trusted Oxxo name.

In both India and Mexico, Amazon has had to invest heavily in infrastructure to support fulfillment. Notably, this has included building warehouse locations to support Prime and same-day delivery. Despite their differences, international consumers across markets share a high level of expectations. All expect the same fast and free delivery now globally ubiquitous with the Amazon brand name.

Amazon has also had to contend in both markets with the fact that the cultural default is still brick-and-mortar shopping. (In Mexico, for example, 98% of retail sales still happen in physical stores).

The Amazon response has been two-pronged. First, the retailer has invested heavily in advertising to assuage concerns about the authenticity and quality of products ordered online. They have also created options that allow shoppers to pick up merchandise at the location of trusted brick and mortar retailers. This has created an interesting hybrid type of commerce, and it will be interesting to see how this might develop.

These modifications, and in fact Amazon’s very assertion that it is going to win new markets through “a lot more local market customization” underscore the magnitude to which cultural nuances still matter.

While it is very possible for global players like Amazon to succeed in international growth markets, they will need to find ways to stay carefully attuned to thinking global while acting local. 

International Discount Days: A View From Mexico City

I recently traveled to Mexico City, where the retail scene was just slowing down after a busy El Buen Fin.

The 3-day shopping holiday–loosely translating to ‘the good weekend’–was launched in 2011 by the Mexican government and the Council of Business Coordination in an effort to stimulate the national economy. Retailers throughout Mexico are encouraged to offer discounts and special payment plans during this late-November retail push.

By all accounts El Buen Fin has been a success. It has become the world’s third-largest shopping event (after American Black Friday and Chinese Single’s Day). In 2015 El Buen Fin sales grew more than 10% over the previous year, to over $10B USD. This year 11 retail centers and more than 6,000 businesses, double the number from last year, participated. These included not just retailers, but also service providers like restaurants, spas, travel agents, and pet hospitals.

While El Buen Fin is inspired by Black Friday, several characteristics make the Mexican holiday unique.

 It takes place over a long weekend vs. a single day like Black Friday. Typically falling just before U.S. Thanksgiving, it is pegged to Mexico’s Revolution Day.

This Mexican shopping holiday receives ongoing government backing. El Buen Fin is promoted as the “cheapest weekend of the year,” and it is supported by a dedicated website, Twitter account (#ElBuenFin2016) and Facebook page. During 2016, SHCP (Mexico’s tax collection agency) offered $27 million in cash prizes to shoppers who made purchases with a Mexican-issued credit or debit card.

While the number of participants continues to grow annually, the discounts tend to be smaller than those in the U.S. And, retailers often discount items that are not moving vs. the U.S. custom of offering hot, new merchandise.

Some Mexican retailers use El Buen Fin to preemptively capture sales from Mexican shoppers that might otherwise shop stateside during Black Friday or Cyber Monday. However, traffic flows the other way as well. Some businesses, especially those in border towns, seek to attract U.S. shoppers during the weekend–a feat made easier this year by the strong value of the dollar against the peso.

From a global perspective, El Buen Fin is one of many “discount days” now crowding the retail calendar. It joins Single’s Day, the Dubai Shopping Festival, Australia’s Boxing Day, and India’s Diwali Shopping Festival. Not to mention a litany of new contenders like Amazon Prime Day, Small Business Saturday, Green Monday, and Free Shipping Day, all driven largely by e-commerce.

These manufactured shopping days clearly play into shopper Psychology 101, combining the power of a deal with time scarcity to spur purchasing.

The rise of the “Discount Day” also provides an interesting view into the inherently social nature of the retail endeavor.

The proliferation of national shopping days comes at a time when myriad factors such as media fragmentation, waning civic engagement, and a growing economic divide–to name a few–have decreased the occurrence of truly ‘shared’ events in countries around the globe.

The strong collective interest in Discount Days reminds us that shopping remains a shared cultural event. Whether people come together around traditional shopping days or newly invented ones, in a physical or online environment, shoppers are ultimately social creatures that thrive on the ability to browse, select, and decide in the company of others. Retailers could gain insight from recognizing and furthering this dynamic when developing Discount Day programs and offerings.

The Discount Day dynamic also has implications for the future of global retail. Will these shopping days remain largely concentrated within their countries of origin? Or will they leap across political borders, as social phenomena are wont to do?

In recent years, we’ve seen the Black Friday tradition cross the Atlantic, prompted largely by Amazon’s introduction of online deals in the UK. For their part, British shoppers and brands are increasingly cashing in on Single’s Day deals. As shoppers become more aware of and open to shopping other country’s deal days, could this dynamic feed borderless trade and perhaps drive increased price transparency on a global scale?

These consequences would require retailers to do some focused analysis and soul-searching. Are discount days a profitable and sustainable long-term strategy? Or, do they merely compress demand, cannibalizing from other time periods and training consumers to buy only on deal?

The one certainty is that Discount Days continue to proliferate and thrive, making strategic calendar planning a must-have for manufacturers and retailers and lending additional dynamism to the complex global retailscape.

China: Grocery Markets Are Thriving Online and In Real Life

The Chinese grocery retail market is one of contrasts.

Shoppers have flocked online in the past several years, and the $41B Chinese e-grocery market is the world’s largest by a wide margin. Retailers of all sizes have taken note and are making big bets in this arena.

Despite the explosive growth of e-commerce, brick & mortar grocery stores still play an integral role. While over half of Chinese households do buy groceries online, a full two-thirds still say that going to the grocery store is a fun, engaging experience.

I experienced this thriving retail culture during my recent visit to Shenzhen & Hong Kong, and have four insights to share about the dynamic Chinese market.

#1:  Traditional outlets dominate, but global retailers are making strides.

The Chinese grocery market is highly fragmented, with the top ten retailers accounting for less than 7% of the volume. Domestic players have leveraged their nuanced understanding of local consumers to outperform global competitors in recent years, but the multinationals are making strides to catch up.

Larger retailers are succeeding by finding ways to make the western supermarket format uniquely Chinese. They are introducing live food offerings similar to those available in traditional Chinese wet markets.

Store: RT Mart

Store: RT Mart

Many are developing new food and beverage innovations tailored to local palates and events, such as Chinese New Year.

Others are even re-thinking their footprints and building flagship stores in large shopping districts so they can be integrated into the daily retail experience. 

Store: Vanguard
Photo Credit: IGD Retail

#2:  Hypermarkets are struggling while small formats are flourishing.

Convenience formats are booming in large part due to their ability attract young, middle-class shoppers who are increasingly affluent and time-pressed. Big box retailers who have experienced slow growth in larger formats are testing smaller ones, like Easy Carrefour and Tesco Express.

Store: Tesco Express
Photo Credit: IGD Retail

 Global and regional players alike are succeeding by adding western concepts like ready-to-eat and carryout options to these smaller formats.

Store: Metro My Mart
Photo Credit: IGD Retail

And, in a nod to the multi-channel landscape, some small format stores like Metro’s My Mart are attracting shoppers by serving as collection points for online orders.

Store: Metro My Mart
Photo Credit: IGD Retail

#3:  Retailers are using “store within a store” concepts to expand offerings.

Categories like wine, cheese, bakeries and coffee are relatively new in China. Savvy retailers are building these out as destination areas within larger stores, in the process attracting a growing segment of middle-class shoppers.

Others, like CRV’s Ole, are creating specialized sections of imported products – another relative newcomer on the Chinese grocery landscape – often grouped by country or cuisine type.

#4:  A focus on food safety creates loyal shoppers.

China has been hit by a wave of safety scandals in recent years, and grocery retailers are finding success by reassuring customers about the provenance of their products.

Large players like Carrefour are leveraging their sourcing capabilities to expand private label offerings that carry a safe halo and are marketing that to their advantage.

Startups like Farm Direct are finding success via vertical ownership of farms and retail outlets, which allows confidence in the safety of their products through control of the entire growth/distribution/retail process. 

Store: Farm Direct

Tech-savvy competitors like previously mentioned MyMarket offer systems like Star Farm, a food traceability system featuring QR codes that allow consumers to track a product’s journey from source to shelf.

Store: Metro My Mart
Photo Credit: IGD Retail

The Takeaway

In my travels, a recurring theme is that a deep understanding of local consumers and their tastes engenders success.

As I’ve written before, brands can be global in their values but need to localize quickly to maintain relevance in a global world.

Michigan: Detroit and Ann Arbor Emerging as Tech Towns

I spent most of my last week in the Midwest taking a market tour of Detroit and speaking at my alma mater, The University of Michigan. I was completely energized by my trip to Michigan after 10 years.  It is one thing to read about the economic resurgence happening in the area but it was another to experience it firsthand.

The Cube at University of Michigan

In their book, “The Smartest Places on Earth,” co-authors Agtmael and Bakker assert that a handful of global cities like Detroit are transitioning from “rustbelts” to “brainbelts.” These locales, most of which are anchored by world-class universities, boast a cohort of innovative, young entrepreneurs who are attracted by affordable living, a burgeoning cultural scene, and the opportunity to collaboratively solve 21st-century problems. I definitely found this to be the environment in greater Detroit – one aptly expressed by a local clothier’s slogan, “Detroit Hustles Harder.”

I was especially intrigued to learn more about how Ann Arbor (Detroit suburb and UM’s hometown) has grown into a formidable tech hub. This makes intuitive sense. Michigan and nearby universities mint thousands of eager young graduates every year and the city has recently taken steps to retain them and support their endeavors. This includes efforts by organizations like Ann Arbor New Tech Meetup, Tech Brewery, Ignite Ann Arbor and A2Geeks. These investments have paid off yielding companies like Mobiata (now an Expedia company), the more fledgling Clinc and even new publications dedicated to reporting on the region’s start-up culture. And of course, where there is tech-generated income, new retail businesses emerge. I was delighted to encounter a mix of classics, like Zingerman’s Deli, and thriving new businesses, like Today and The Session Room, in Ann Arbor’s tree-lined downtown district.

I return to Texas invigorated and eagerly anticipating the next innovations to come out of this bustling Midwestern brainbelt. And I am hoping this serves as a road map to revitalizing towns that had suffered the loss of manufacturing jobs over the last decade. 

Brazil: Deals & Splurges Driving Growth in Retail

I recently had the pleasure of visiting São Paulo, Brazil, for a market tour, customer immersion, and team meetings. I returned with fresh insights about the consumer & retail landscape in this vibrant country – the world’s 8th largest consumer market.

The Context:

Between 2009 and 2013, Brazil was a hot growth market with a booming economy. The retail real estate environment was almost speculative and grocery retailers raced to expand their presence. Growth has been more modest in recent years as the country faces a deepening recession marked by high inflation, rising unemployment, and falling wages. However, Brazil is still a market with a lot of potential. It is a populous nation of 203 million, where young people under age 34 account for over half of the population. It is the third largest grocery retail market in the world, with spending of close to $70 billion USD in 2014.

The Insight: Growth at the Low & High End

Brazil has a high level of income bifurcation and this was apparent when traveling through São Paulo. I learned that the country has the #1 Ferrari dealership in the world. And, it is #1 in private helicopter ownership – a necessity for those with the means to avoid the challenging traffic. Conversely, Brazil is a very poor nation, where the average GDP per capita is $12,100 (vs. $51,000 in the U.S.) and 21% of the population lives below the Brazilian poverty line.

Not surprisingly, I learned that the retail grocery landscape mirrors this split. Discounters and luxury grocery retailers have been rare growth spots in recent years, while formats in the ‘middle’ have languished.

“The Discounters”

Brazil is home to a unique format called the atacarejo, and it has been the country’s fastest-growing grocery segment over the past 3 years. The word itself is a neologism, a mix of atacado (wholesale) and varejo (retail). Atacarejos offer bulk sales of food and other items that can be paid for in cash. They are no-frills outlets that keep prices low in large part through low operating costs. Most employ a tiered pricing strategy, offering the best deals for those who want to buy volume. Traditionally this model attracted wholesale customers but in recent years it has appealed to everyday Brazilians with shrinking disposable incomes.

According to Supermercado Moderno magazine, the number of atacarejos grew from 299 in 2013 to 436 stores in 2014. In March, Nielsen reported that sales in atacarejos grew 12.1% in 2015 over the previous year – more than double sales in the industry as a whole. These outlets have been a boon for large retailers, who are investing heavily in the format. For example, Carrefour bucked the trend of sluggish grocery sales in 2015 posting 8.5% growth in sales at existing stores driven largely by growth at Atacadão, the country’s biggest cash-and-carry chain. More recently, Grupo Pão de Açúcar’s atacarejo format – Assaí –reported 37.6% sales growth year-on-year for Q2 2016. Based on the success of the atacarejo in Brazil, retailers are opening similar formats in other countries throughout Latin America including, for example, Columbia.

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The atacarejo model undoubtedly appeals to price sensitive consumers dealing with the implications of recession. However, it also resonates culturally because consumers enjoy the shopping style. Credit-shy shoppers feel comfortable dealing in cash. Brazilian families, which tend to be larger, are able to pool together to buy in bulk and share the cost savings. The largest shopping day is Sunday and shoppers appreciate the bazaar-like atmosphere, where there is space and variety for the whole family to explore.

This format seems poised to retain a presence and relevance even after the country begins to recover from the recession.

The Luxury Purveyors

A second arena of growth has been at the high end. The Italian retailer Eataly opened its first Brazilian (and also first South American) location in 2015 amidst the deepening recession. Fast Company aptly described Eataly as an “Italian grocery market-cum-restaurant emporium-cum-enoteca slash bakery slash cheese shop.” Eataly’s New York outpost opened in 2010 to the delight of consumers and food journalists alike and there are locations in Italy, Tokyo and Munich.

The São Paulo store is located in the Itaim neighborhood, an upscale area near several business districts. It is a two-story luxury emporium that offers fresh and local fare not to mention a Nutella bar, a roast meat counter, and a place to purchase handmade pasta.

Upscale offerings in Brazil are not limited to large multinational retailers. Brazilian retailer Super Muffato opened its first gourmet store in Londrina, Paraná earlier this year. Industry group ABRAS describes the outlet as a “gastronomic paradise” complete with a 700 bottle wine cellar and sommelier, sushi bar, imported cheese shop, and a global cuisine section. This is the third opening under this concept, highlighting the room in the market to provide a more premium retail offering in Brazil, despite its continuing economic challenges.

These outlets capitalize on the “food as hobby” and “food as entertainment” trends. For affluent consumers looking to economize, Brazil’s growing gourmet options offer the ability to procure ingredients for cooking at home rather than spending the money to dine out. Further, they show that Brazilian consumers are willing to spend on categories that engage them even during tough economic times.

My Takeaway:

The Brazilian grocery landscape is one of juxtapositions, like city of São Paulo itself. Growth at the bargain and luxury ends of the spectrum shows no signs of slowing anytime soon.

For retailers, particularly those without plans to grow through these formats, it will be important to find ways to infuse elements of both the atacarejo and the gourmet grocery into everyday shopping experience across formats.

Further, retailers who continue to struggle in the middle will need to find new ways to create value for customers. This is not unlike the situation of U.S. fashion retailers who are looking to loyalty programs, unique shopping experiences, technology and even product scarcity to lure buyers back to the middle. 

Brazil: Exploring Favela Culture

I’m in São Paulo this week, where more than 2 million people, about 11% of the population, live in working-class settlements called favelas. Global media coverage of the estimated 1,643 favela neighborhoods usually focuses on the negatives: gang violence, drug culture, and lack of infrastructure. These are real and pressing issues that residents and community organizers work daily to address.

There is another narrative that needs to be written about the favelas. They are Brazil’s cultural incubators – vibrant spaces that influence the larger city and with growing influence in their own rights.

The favelas are “alive with sound and movement.” They are unique, walkable spaces with a blend of retail and residential property use; something urban planners strive to create in other cities. Gatherings tend to happen outdoors and create a lively street culture. Living in close proximity to neighbors encourages the exchange of ideas, and “incubates” novel blends of culture and commerce. For example, I saw in my visit many an ad hoc musical performance outside a grocery store, where an enterprising entrepreneur was leveraging that to sell drinks and snacks to curious on-lookers.

Not unlike the far-reaching influence of U.S. hip-hop culture, the expressions and ideas that develop in the favelas trickle out to influence tastes in the broader Brazilian culture. They shape music, fashion, food, and language. Samba, Carnival, and more recently funk carioca all emerged from these spaces.

Brands and Retailers looking to connect with the country’s large, relatively young population would do well to take notice. This is especially true for foreign companies that seek to expand into the Brazilian market and need to tailor their offerings to local tastes.

In addition to sending cultural influences out, recent years have seen new occupants flowing in. Students, artists, expatriates, and middle-class Brazilians are taking up residence in favela neighborhoods – seeking affordable housing and cultural diversity. They bring higher expectations about the rights and services they deserve, and favela dwellers are increasingly finding ways to make their voices heard. In the last few years, they have been empowered by the ability to use social media for connecting, organizing, and problem-solving. Taking notice, Google recently launched a mapping project with the goal of giving Rio’s favela communities visibility and, therefore, louder voices in the complicated politics of the country. By the way, one interesting observation on my trip was the very high frequency of use of waze app by Brazilians to navigate their challenging traffic situation.

Amidst this change and growth, new business models are developing in many favela communities, including tour operators, hostels for young foreigners, and community art projects.

One start-up, Friendly Mailman, is taking on the problem of unreliable mail delivery. Because residences and businesses lack street names, much less physical addresses, it is almost impossible for government carriers to reliably deliver mail within the favelas. The company’s founders used algorithms to create a proprietary digital “map,” which their private carriers use to deliver parcels to customers who pay a modest monthly fee. This is surely the tip of the iceberg when it comes to innovative tech platforms that could serve favela residents in meaningful ways.

I do not wish to detract from the complex history that created Brazil’s favela neighborhoods or the often-difficult conditions of daily life within them.

However, I am enthused to think about how they also embody the power of human creativity and ingenuity. Forward-thinking companies have an unprecedented opportunity to consider new ways to meet the needs of Brazil’s growing working- and middle-classes. I’m particularly fascinated about the potential to use technology platforms to cater to emerging consumer needs and aspirations. For example, could a retailer use a click-and-collect model to improve food access within a larger favela neighborhood?

True, there may be missteps and there is no one-size-fits-all model. However, success in this arena represents the dual opportunity to simultaneously create company value while also bringing value to a currently underserved market.

In a Global World, Think Local

Consumers in the global economy have access to a dizzying array of products from around the world. Shoppers find Mexican spring water in Canadian supermarkets and U.S. fashion labels in Kenyan shopping malls. Goods unavailable at brick-and-mortar stores can be ordered online or even virtually via retail ‘teleportation.’

Paradoxically, in this context of unprecedented availability of global brands, many indicators suggest that shoppers increasingly prefer local offerings.

A simple statistic got me thinking about the trending interest in all that is local. According to data from MasterCard Advisors, U.S. small-business retail sales have risen 5.4% this year, outpacing growth in total retail. The trend is more marked in categories like apparel, where small businesses enjoyed significant growth against a declining category.

CNBC reports that property management companies are following the money by actively pursuing locally-owned concepts – reversing a three-decade trend of favoring national tenants. This shift is a win-win for them and their tenants. Shoppers are drawn to the unique merchandise and dining experiences, the easy shopping formats, and more personal service. Local businesses help landlords differentiate their shopping centers from more homogenous big-box-anchored centers and increase foot traffic.

National companies have started to recognize the trend, too. Retailer West Elm now features a curated selection of locally designed merchandise and supports the makers through community events organized by local store managers.

The increased interest in ‘local’ isn’t limited to retailers. In hospitality, Airbnb offers access to quaint, local residences in lieu of the homogeneity of larger chain hotels. And of course, grocery shoppers continue to express strong interest in local food, which is perceived as better quality, better tasting, more sustainable, and commands a price premium. 

The desire to buy local is not limited to the U.S. Here are a few interesting examples from around the globe:

In Asia, Trendwatching.com observes that “from Asia, by Asia, for Asia” is the region’s hottest consumption story. Regional tech brand Xiami is consistently outperforming global rivals. In China, luxury shoppers are opting for local fashion brands over the
ubiquitous international labels that have dominated the fashion scene for the last decade.

Entrepreneurs throughout Africa are finding ways to use their understanding of local needs and contexts to outperform global competitors in their market sectors. The Ugandan-based service app Yoza connects customers with entrepreneurs who offer laundry and dry cleaning service in their local neighborhood. Kenyan consumers have flocked to the M-Pesa mobile payment system, which has made the Western models of retail banks and credit cards all but irrelevant.

I tweeted several weeks ago about India’s Dabbawalas, a centuries-old food delivery service that has survived – and thrived – in the face of competition from global tech startups.

And, in New Zealand, half of Kiwi consumers recently said they try to buy local brands, both to support the local economy and because these companies better understand their needs and tastes.

These local-focused entrepreneur stories might be interesting, but why do they matter?

The “buy local” movement is driven by consumers’ relentless search for authentic goods and services. In a world where a consumer can have any good, at any time, purchasing a less-available, local item – be that a shirt, a piece of home decor, or street fare from a food truck vendor – becomes a source of pride and distinction. This tendency toward the local is facilitated by technology, which allows small, entrepreneurial players to launch, market, and scale their businesses with speed and success.

In reflecting on all of this, I can’t help but think that the old adage, “think globally, act locally” is as true as ever. Global brands will do well to think hyper-locally in order to maintain relevance with consumers in a glocal world.

UK: New application fills consumers’ baskets while they work, sleep, play…

Couple of weeks ago travels take me across the pond to the UK. While I’ll steer clear of adding my analysis of the Brexit vote, I am felt compelled to reflect on changing retail landscape in the U.K & implications here in the U.S. Specifically what was intriguing was the launch of an innovation aimed at making grocery shoppers’ lives a little easier.

Tesco recently leveraged the power of IFTTT (If This Then That) to create an automated shopping application. While it is powered by sophisticated backend technology, the proposition is simple: shoppers can join Tesco’s IFTTT channel to create “recipes,” or triggers that will automatically add items to their shopping basket at Tesco.com.  Yes, bots will do your shopping & take out the mundane tasks.

IFTT, eloquently described by Tesco Labs, is a “platform for joining together all your different online accounts to enable you to do clever things.”

Consumers sign up for a free IFTTT account and connect it to other applications (think: Facebook, Twitter, email, etc.). Registered users can then create “If, Then” recipes that proactively help accomplish a variety of tasks including controlling home appliances, staying healthy, connecting to loved ones, shopping smarter, or staying current. A tech maven can get an email whenever there is breaking news from their favorite publication. A health nut can receive a text anytime they fall short of their Fitbit goal. (Finger-wagging tone free of charge.)

Tesco’s channel offers a few recipes to get shoppers started. You can add milk on a certain day of the week, get an email if a product drops below a certain price, or even add burgers to your basket if it’s unexpectedly sunny.

Further, users are encouraged to create their own unique recipes. I can only imagine that these user-generated recipes will provide Tesco rich new territory for mining consumer insights and identifying unmet needs. 

This proactive technology is an example of the many “butler/bot” applications that are stepping up to manage the mundane and time-consuming aspects of people’s lives even when they are not actively thinking about them. (See: Google Alerts, Amazon Dash, and Brita’s wifi pitcher). Clearly, it has the potential to help consumers save time and money, and even make more satisfying purchases.

In addition to these consumer wins, I can’t help but think about what this application might mean for grocery retailers and their partners.

One innovation expert suggests that automation disrupts the typical shopping process (make a list, go to store, seek and select products) in a powerful way. It creates new imperatives to get a product into a shopper’s consideration set and basket long before they enter the doors of a store – if they ever do.

Conversely, as shoppers offload the job of shopping for weekly staples, they may enter retail grocery environments with more time and mind space to seek and sample novel products, creating new opportunities for brands and retailers to engage them.

Eventually, cart automation could pave the way for a “predictive grocery basket,” wherein algorithms would allow retailers to understand a shopper’s patterns and populate their basket with the items they want. While this may be a few years away, what a game-changer it will be if consumers can accomplish most of their grocery shopping without a single step, swipe or click.

For more on how Tesco is piloting technology to innovate the retail grocery space, read here.

Image Source: The Memo, 2016

Ireland: Living Experiential at the Guinness Storehouse

I know I’ve talked in the past about Experiential Marketing and how it works hand in hand with Behavioral Economics theories, but now I can say I’ve had the opportunity to put ‘theory’ to a real-world test.

 I visited Ireland recently, and while there, was not about to miss a tour of the world famous Guinness Storehouse. And, while I have never considered myself much of a connoisseur of dark beers, let’s just say I think I may have come out on the dark side.

 From the very start, the whole experience is designed as a journey. You walk into a converted Guinness factory, built in 1902, to a modern, glass and steel atrium in the shape of a pint of Guinness, and at your feet is a copy of the lease for the original brewery site granted to Arthur Guinness. 

 The first floor is really devoted to telling the story of the company and it’s ingredients, and it does so in extremely compelling ways. The Storehouse uses interactive, dynamic displays that let you follow both the history of the brewery, but also the processes that go into things like the roasting of the barley or the boiling of the hops.

 Ultimately, it’s great to learn about the company, but I was here for the beer! So after my history lesson, I went up to the tasting room.

The first thing about the tasting room, is that it’s not a room. It’s a sensory experience over 3 floors. You’re first walked into a dark corridor, dimly lit with a golden glow that lets your eyes adjust before you enter the next phase, a large, all-white room with ‘vapor pods’ that allow you to experience the aromas of the four ingredients that give Guinness it’s distinct flavor.

 An attendant is there to give you more details, both on the components and the actual tour experience. I found this welcome, as it was valuable insight on what is a great example of a marketing DO!

 After you’ve been served your complimentary glass, you’re moved to a beautiful tasting room. Coolly lit, with dark wood floors and walls, it’s meant to evoke the look of the beer in the traditional glass. Not only that, but it’s also a replica of Arthur Guinness’ home. A helpful guide was there to explain the proper way to sip Guinness, so if you have any questions, consider me an expert.

 I likened the whole experience at the storehouse to being metaphorically poured into a pint. You start at the bottom of the glass, learn the history and the ingredients in every pour as you climb, and you end at the top, sipping Guinness on the 7th floor, where the Gravity Bar gives you a commanding 360 degree panorama over Dublin.

 It was an experience to say the least, and, having been given a master class in both the craft and consumption of Guinness, I have to say…I have a new found appreciation for it. To be honest, I’m not really much of a beer drinker to begin with, but as I was saying, having the ability to truly experience the process and care that goes into it has made me a bit of a believer. I also never thought I’d appreciate a dark beer especially, but by this point in the tour I’d already learned how to appreciate the individual ingredients, so of course I’d enjoy the sum of the parts.

 If you ever find yourself in Dublin, I recommend taking the trip to the Storehouse. Especially from a marketing perspective, it’s exceptional; an inspiring bit of work that turned me into a believer. I may have joined the dark side of beer, but I was still illuminated by the experience.