Who could blame you? I mean, I think I actually met with the guys in this VIDEO just last week:



There isn’t room to list all the new words, terms and acronyms we’ve learned in the last few years:  moblog, m-commerce, phishing, NFC, PPC, CPA, CPO, CPS, DSP, skyscraper, pure play, Splinternet, semantic Web, SMS, TCP/IP, VOIP, XML, RSS, API, CSS, SMM, SMO, black hat (and white hat – I mean, duh) SEO, cybersquatting, adware, P2P, spider, favicon, mousetrapping, greenwashing, augmented reality, branded entertainment, geotargeting, behavioral targeting, network effect, SERP, cloud, triple play, (Web) abandonment, (Web) arbitrage, bot, deep linking, delist, linkbait, spyware, widget, maybe a million others… and certainly dinner isn’t dinner without a good forking.   Or something like that.

But there’s a new new term whose fear factor I want to eliminate right away: agile commerce. As defined by Forrester in its March 2011 paper, Welcome to the Era of Agile Commerce, agile commerce is “an approach to commerce that enables businesses to optimize their people, processes and technology to serve customers across all touchpoints.”

There are 15 pages of text and charts delineating the difference between multichannel and agile commerce, and the analyst also penned a Forbes article titled “Why Multichannel Retail is Obsolete.” “Agile commerce is a metamorphosis,” he says. “It is time for organizations to leave their channel-oriented ways behind.”

The problem is that all this relies on what I consider to be a seriously antiquated view of multi-channel operations.

The definition of multichannel commerce upon which the new agile commerce movement depends is a way of doing business that leaves customer touchpoints and transactions in silos: potentially envisioned, designed, managed and measured independently from one another.  It assumes that prospects/customers probably use one channel but not another (e.g. Jack’s a “store person,” Jill’s a “Web person,”), that user expectations in each of these channels do not overlap, that content, design, functionality, payment options, etc. etc. all differ from one channel to another and that it doesn’t matter because consumers don’t really see all the channels anyway.

What contemporary marketer believes this anymore?

Is there a digital-savvy executive alive who doesn’t know all the stats about connectivity exploding, and audience fragmentation, and the accelerating evolution of technologies, and the emergence of smartphones and tablets and ebooks (oh my)?  Is it news that TV watchers also like being online, or that newspaper readership is sliding around? And yet these are the metrics and conversation points that the paper uses to announce that it’s a new world and that ecommerce players better get with it.

For any marketer trained to start with the customer, the revelation that we must strive to deliver a 100% (a girl can dream) seamless experience from one channel to the next and that our business eco-system must be woven together and able to learn so that a user’s behavior is reflected and rewarded as she wanders from one touchpoint to another… well that’s no revelation at all.

Good marketers recognized and began turning their organizations toward this vision many moons ago.  The consumer is where everything begins and ends.  In the future, channels will be like lights in a galaxy that deliver a seamless, 24 hour brand experience.  Rather than you having to travel to the brand (e.g., you drive to the store), all the access points will do the virtual traveling instead.  With you in the center, the brand will constantly update its customized knowledge of and relationship with you, in all directions and in nearly all applications.  A little like ”Minority Report” but in a good way – and without having to remove your eyeballs.  [And yes, I wrote this paragraph while entirely sober.]

Now don’t get me wrong here; I doubt there is an organization on the planet that feels fantastic about where it is on this trip we’re all taking together.  Forget even the fantasy of walking into a physical location and having a person (or digital display) interact with you in a way that reflects a 360° level of knowledge of my relationship: I’d be excited just to talk to a call center rep who can see me transacting on his company’s own website in real time and help me out in a normal, knowledgeable manner.

We have a long long (long) way to go.  But this post is my way of saying that no one should be discouraged, or privately assume that keeping up is impossible.  The  next time you see or hear a new Internet/marketing/digital business buzzword, it may be just that: a new arrangement of letters describing a principle you already understand (perhaps better than those making up some of these new terms in the first place) and live by.

Either way – as long as we keep our heads – it makes for a good game.  And, hey! I’ve got Bingo!!!
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A version of this post was originally published on the Marketing Executive Network Group‘s blog, MENGBlend.

The author’s well-researched hypothesis is that we are either ignorant of or – in many cases – simply choose to ignore the profoundly negative, corrosive effects of needing to have everything cheap, cheap, cheap.  The article’s primary example from the book is shrimp, which went from an expensive treat to something you can get at any cheesy seafood chain restaurant nearly any night of the week on the “all you can eat” menu: a phenom fueled by so much greed and artificial chemicals that what they should serve at our tables is the resulting ”pollution and toxic waste,” with a side of the “ruinous debt, environmental degradation, horrifying human rights abuses and violence that left millions destitute” in Thailand and other countries.

Yummm.  Pass the garlic bread.

But do Americans care?  Lower food prices at Wal-Mart are impressive because, even if you never set foot in one of its stores, its mere presence drives down food prices in the surrounding area.  Hurray!  Forget about the fact Wal-Mart’s brand-name food items aren’t all that much cheaper, in fact, and how do you know that that chicken isn’t cheaper because it’s of lower quality?  What we do know is, well, all the things we know about how Wal-Mart has historically kept its prices down. 

These practices are why I do not shop at Wal-Mart.  But I’m in the minority.

And has this obsession American’s have with inexpensive goods damaged us in macro ways that are now coming home to roost?  When prices are too low, innovation is nearly impossible, reports a Harvard economist. 

Paging General Motors. Oh, and this moribund company is already “out of bankruptcy?!” Paging the U.S. government…

The only true major American innovation outside of Apple that’s gotten any real attention… has occurred on Wall Street.  And we all know how well that’s going for millions of people.

So I’m worried.  There are a lot of executives who have generated a lot of shareholder value by sticking the low-price needle into our arms… and consumers like it.  Now we’re in a recession, which is likely to compound the effect: many now have no alternative but to shop for the least expensive goods – and others use it as a sadly understandable reason to reverse course and cut back.  People are worried, and conserving:  I’ve seen several studies where people say they’re cutting back on “values” purchases, such as “green” and organic goods for example.

Where does it end?  What do we care about the most?  The U.S. is consistently on the wrong side of global lists of developed countries ranked for homelessness, obesity, high school graduation, health care quality… and we’re the biggest polluter in the world.   

There’s a lot of chest-beating on television about the national debt.  “We’re saddling our grandchildren with crippling debt! Gahhh!”  What about what we’re doing right now - what we care about today? 

Then at some point, finally, you had to accept that whatever was to be, would be. As with the 7 stages of mourning, you had no choice but to find acceptance?

Well that it what I am trying to do, as a coffee-drinker and long-time sales and marketing executive, with respect to:

STARBUCKS.

Yes, Starbucks. I give up. I do. Seriously. I started writing about Starbuck’s travails on a whole other blog, for cryin’ out loud, and things have only deteriorated.

Yes yes, I can hear you counter with a reminder that I like the Pike Place and the oatmeal, or that maybe the $4 breakfast combo isn’t too bad. Neither could balance a series of seemingly endless missteps that I did not think could get any worse. Then Howard Schultz rode back into town on his “You ‘executives’ need help; I’m back to bring this place back to its roots” horse and the place went entirely over the edge.

Seriously – I am like this because I love Starbucks coffee.

The problem with Schultz’s naked arrogance is that the world around this company has changed forever. The “roots” from which this company originally drew sustenance are long gone. We can all see that the company over-extended itself with respect to both its geographic footprint and prices… but where is the leadership?? Schultz has been back in that seat for nearly 2 years.

Just as I can’t blame Obama for AIG’s 2008 bonuses, I’m not going to pin firings and store closings on Schultz. He had to clean up a mess that he found upon his return. But beyond that… he spent part of his comeback interview in last July’s Portfolio magazine lavishing praise on a “magical” blended drink from Italy that was “going to be the next Frappuccino.”

Meanwhile, I can’t get a cup of coffee in under 15 minutes in the morning and have to wait for the milk to be refilled.

Since the Portfolio interview last summer, the company’s made a number of “puzzling” moves, including:
- launching the new Vivanno (starting at $2.79)
- reversing its decision to kill the breakfast sandwiches that were difficult for staff and smelly for customers
- maintaining prices despite the worst recession in living memory
- laying off staff with no accompanying attempts to address the stores’ painfully long lines
- creating a new rewards program that was minimally rewarding (Costco had a better deal)
- promising to eliminate the music program that remains in full swing in New York (where the music rack is often neater and more stocked than the condiments counter)
- announcing a new instant coffee

Earlier this week, I cut to the middle of a WSJ article about Starbucks in which I spotted a quote from Schultz: “The issue at hand… is the cost of losing your core customer. It’s very hard to get them back.” I saw a spark of hope – at last, maybe the chain was going back the basics. Was it possible??

Nope.  Instead, the article says that Frappuccinos will come off the menu boards altogether, only to be hand-sold by a salesperson in what will undoubtedly be a lengthier, more harried transaction.  And in a world headed toward greater transparency, where restaurants are being forced to post calorie counts on their menu boards, Starbucks is headed in the other direction with a plan to remove prices (prices!) from their menu boards.  If you want to know what your order actually costs, a staff member will have to stock and point you to a new paper menu somewhere on the jammed counter next to the CDs. 

Ironically, Schultz’s response to all this is to start running a new ad campaign that counters the “myth” (his word) that Starbucks coffee is too expensive.  Unfortunately, nothing reinforces an existing impression that your products are probably too expensive than you deciding to hide your prices from me.

But, hey: new, “more sophisticated” test stores will have wood decor and a big wood table.

Saving core customers, making a store feel “more like a coffeehouse” – these are worthy ideas rooted in the company’s past that should remain. The thing is, a brand must sometimes re-envision its execution of such fundamental values based on the contemporary circumstances surrounding it.  Let’s say Ford had “Get a customer safely from here to there” as one of its original tenets.  Back then, that might have involved horses and buggy whips.  Today? Same concept, updated execution.

Starbucks is unquestionably struggling to see its external circumstances in a clear and honest light.  If it did, it would understand that it has so weakened its own brand that it must re-earn its customers’ trust by truly going back to square one: a good cup of coffee, at a decent price, delivered in a timely fashion. Hold the wood table. Period. The company must remind us that it is first capable of delivering on this primal promise before it can have our psychic ”permission” to explore any of these pet projects (e.g. fruit drinks made from powder).

Until then, all these Vivanno-like moves will not only deepen the company’s failure, they’ll also remind us every day that the company cares more about itself than it does about its customers.

As for the 7 stages of mourning, I am trying to get my head around the possibility of reaching the final stage – Acceptance – while standing in a Dunkin Donuts, holding a latte.

For all intents and purposes, this is my first post on the general state of marketing since the US economy imploded. I haven’t said a whole lot because I’m still forming my own opinion on what brands need to do to survive and maintain consumer loyalty. What I am ready to say is that the key is value.

I believe the key distinction now, however, is between real and perceived value. Perceived value is what I talked about when I happily acknowledge(d) buying $250 Gucci sunglasses. I am fully aware that I could derive the same amount of real value from $10 shades bought on Canal Street.  Shield eyes from sun? Check.  but I saw a level of psychic value in the brand for which I was willing to pay an enormous premium. I measured that psychic value by how the world around me recognized that value. Looking at myself in the mirror wearing Gucci sunglasses gets old quickly. But having people reinforce my purchase – every day – as I walk around the city? Priceless. Value has two ingredients: (1) the real value that delivers functionality, and (2) the “psychic premium” I’m willing to pile on top so that the world sees me (and I see myself) in a certain way.

It turns out that it is not just beauty – but also value – that is in the eye of the beholder.

This is why even people “with money” have slowed their spending… why even luxury goods are seeing a decline in sales. It’s no longer fashionable to display the same brand names that only months ago were a mark of prosperity. Those marks are now seen as an indication of greed, of phony superiority, of foolishness. It’s not cool to show you have lots of discretionary income when everyone else is suffering. That’s why Mrs. Dick Fuld is still shopping at Hermes but now demands the store place her purchases in a plain white bag. It’s why Danny Meyer says his restaurants are actually selling the same amount of wine (as before the crash) but fewer bottles, his supposition being that people have decided that a bottle sitting on the table is an unwanted signal of wealth. It’s why DeBeers’ new ad campaign attempts to position diamonds as something to be kept forever in a world filled with “disposable distractions.”

Don’t get me wrong: there will always be rich people who wear big big diamonds in environments where everyone else is doing the same. That’s not going to change, but that’s also not what fueled the success of Coach and Vuitton and even Starbucks in the US: what did was millions more not-so-rich people over-extending themselves to buy that Vuitton bag (or Gucci sunglasses) because they liked the world’s reaction. These behaviors are at the heart of the “trading up” phenomenon in America. Take away both (a) the people who couldn’t afford their purchases in the first place, and (b) those who can afford expensive things but who will no longer get the thrill of everyone else’s desire, and you’ve got major, major problems. Products and services that run on perceived value need to make a new plan, Stan, and fast.

This will not happen overnight. As I said, some people who can still afford to buy status-driven things will continue to do so. Others will wean themselves off instead of going cold turkey. Read the Wall Street Journal editorial, “I Once was Chic, But Now I’m Cheap,” written by an Apple buyer who vows that his family’s next computer purchases will be PCs. The piece reads like a therapy session. The writer’s preparing for the DT’s.

I’m also not particularly convinced that this is some sort of seismic global shift in values; the current economic situation may simply repress luxury consumption for awhile. But until that happens, consumers will either live without or discover products and services that deliver more real value: and once a shopper discovers that a store brand whitens his teeth as well as your brand, he may never come back.

Draw your loyal customers closer, now.  Add value, if you can.  Remind your customers why they buy from you.  Get them to tell others, and you may just be able to stay flat (which is, after all, the new up).  The water level is going down, gentle readers, and all that’s underneath are the brands that deliver enough usefulness to hang tough until the next tide comes in. And that could take quite some time.

recession Danny_Meyer shopping Neil_Fiske Bobos_in_Paradise overspending

NOTE:  And while you’re at home, you’ll have time to check out my second blog at http://www.stephaniefiermanmarketingdaily.com.

    

Many retailers and other merchants still use the old “Green Stamps” method to deliver their loyalty programs: they give you a card and punch it (only 8 more slushies to go ’til you get one free!). You are then supposed to keep track of it, and put it somewhere so it’s handy the next time you show up. All of this assumes you remember you have it in the first place.

As with gift card breakage, this is why these programs have such low redemptions rates and – for most consumers – become so unsatisfying: they’re just too hard to use. And if you’ve ever handed an over-worked counter clerk a paper card and asked for a stamp or a punch during the lunch rush, you know that that’s not a happy face he’s giving you. I’m not missing the fact that having a program that no one uses creates a certain amount of practically-free good will for the issuing company, but that’s a tremendous amount of work for an effort that does not ultimately generate the loyalty these merchants desire.

Now comes a loyalty technology company called Chockstone, which is introducing the newest generation of “single swipe,” a functionality that allows POS-based retail loyalty programs (QSR, department stores, gas stations, etc.) to be administered on the same major credit cards we all use today. For a single issuer, such as Subway, this makes the program easier to use and more likely to bring the customer back. It seems to me, though, that the overall potential of this technology could far more significant.

The average U.S. household is signed up for 12 loyalty programs. If multiple programs are administered on a single credit card, then “presence of” (information) and my usage of all of those programs will reside at a single source. Imagine the benefit to the credit card issuer, the administering retailers and other non-participating retailers and merchants:

* Mastercard, Visa and the issuing banks could all tinker with their loyalty efforts based on an assessment of the programs you have loaded on the program and your usage patterns. The issuers could also create an incremental revenue stream by selling various levels of data to participating and non-participating retailers via the creation of a loyalty database co-op.

The early movers could also create their own added loyalty by providing information and custom incentives delivered as a message printed on your monthly card statement.

* The owner of each loyalty program could adjust the levels, incentives and form of its program based not only on their own results, but potentially, your use of competitors’ (or complementary retailers’) programs as well. And customized reward programs could be administered at a cost close to zero. Subway, for example, may want to increase your rewards if it knows that you also have Quiznos’ loyalty program loaded on your credit card.

* Paneros (which, let’s say, may not have a program or might want to be smarter about the one it has) could purchase blind transaction data from the co-op showing your activity with Subway and Quiznos. It could then be quite surgical about testing and defining the value it would take to get you to shift to their program – not too much, not too little. It could creat one mass program, a “best customer” initiative or both.

Most functionality that would be required for all of the above to happen does not yet exist, but the potential for everyone involved is huge. At a macro level, every party in the value chain could achieve higher loyalty, with the right customers, at a reduced cost.  And I could throw away that paper Burritoville punch card I never have with me, anyway.

And, friends: I’ve started a new daily blog at www.stephaniefiermanmarketingdaily.com, offering shorter takes on news and trends of the day. I’d be delighted if you’d take a look.

loyalty marketingmarketingcredit cardsubway restaurantchockstonemarketingloyalty marketingloyalty program

1. I went to high school in Texas.
2. I am still in the same apartment I moved into after business school (two words:  rent control).
3. I am addicted to Japanese vinyl toys, a la KidRobot in Soho.
4. I was once ordered to make a halloween costume for someone at work – and I did.
5. I’m a little embarrassed that I’ve never been to Governors Island (it’s been open to the public since, uh, 2004… hey, I’ve been busy!).
6. I am a huge fan of subway art.
7. The only other language I know so far is… Latin.  So if I ever have to take the SATs again, I’m ready.

I have tagged 7 other people to participate:

Mark Potts:  Recovering Journalist

Sam Taylor;  Reputation-Dynamics

Paul Dunay:  Buzz Marketing for Technology

Saul Colt:  Smartest Man in the World!

Jarvis Cromwell:  Reputation Garage

Steve Sieck:  SKS Advisors

Joe Jaffe:  Crayon + other endeavors

According to The New York Times, a meme “is an infectious idea or any other thing that spreads by imitation from person to person… the World Wide Web is the perfect Petri dish for memes.”  It seems like a 21st century chain letter to me but (a) neither I nor any of my family was threatened with death if I didn’t ‘pass it on,’ so that’s an improvement, and (b) it seems a harmless way to connect with people and to promote websites and blogs not only inside your existing network but to a broader audience, as well. 

Perhaps memes could be worked into fresh “Refer A Friend” online customer acquisition campaigns.