A New Retail Dynamic

Whenever we go on the internet to check out how much something costs, we expect that it could change by the day, the hour or even the minute. Heck, it feels like they put the price up if we dare to look at something twice – especially that flight for a weekend getaway.

We’ve been trained in digital forums to know that prices are in a constant state of flux – dynamic. They vary based on demand (which is now trackable) to maximise the sellers’ profitability. Everything on the internet just moves that bit faster – the programmable nature of the forum creates a naturally turbulent environment we have to navigate, especially when it comes to commerce. While it can be frustrating and annoying, it also creates a sense of anticipation. It makes us act quickly, and come back frequently to see what else might seduce us. We have to make sure we’re not missing out, or that we paid too much.

While prices in the physical world do change, they’ve never been as malleable as they are on the web. Sure, grocery prices to change every week, car yards to have offers every month, and most retailers have sales. But no traditional retailer changes price by the minute, or even by the hour. Maybe it’s time they started.

It’s worth remembering the constraints retail had in a pre-internet world. Changing the prices in a grocery store required weeks of planning, long paper trails, the changing of pricing tickets on shelves, and the printing of physical retail catalogues. Most retailers had similar constraints when it comes to changing prices in stores. It turns out the low frequency of price changes in stores was in reality, a technology limitation. While local retailers could slash the price on a slow selling item with a sharpie, or a fresh fruit retailer could discount a pineapple before it rotted, larger retailers with many stores had a much tougher time changing prices.

But now that many stores have digital pricing displays on shelves, why haven’t they leveraged the possibility for totally dynamic pricing on the shelf? Answer: Legacy Thinking.

The only constraint that now exists is in their minds.

Crazy idea for free

Imagine if retail stores had prices that changed constantly, maybe even by the second. The moment I mention it to people, they think I’m crazy and that this would be ‘unfair’ to consumers. They says it’s something a store just couldn’t do. How could a store just change its prices every other moment? Answer: The exact same way the internet does. How cool would it be to reduce a price dynamically in front of a consumer to entice a purchase as they walk past an item they picked up and put down again – to send out a post on social media on a quiet day and announce a half price sale for just the next 30 mins? Or to announce at a random time on a Saturday the store will have a radical price reduction. Maybe an unexpectedly busy time would require the prices to go up to thin out the crowd in a too busy fast food restaurant?

Sure, there’s massive flaws in this idea, there’d be winners and losers, people complaining and people gaming it to their advantage. But surely it would generate traffic, attention and conversation that harkens a market bazaar of yesteryear where literally anything could happen.

Maybe it’s this kind of crazy that retail needs.

This year the internet arrives in Australia

We don’t really have the internet in Australia. I mean, sure we are connected to it, but we aren’t even in the top 50 countries for internet speeds. That’s a total travesty for our economic future. Some of the countries with faster internet include Kenya, Lithuania, Slovenia, Moldova and many developing economies. This is the modern day equivalent of having unpaved roads, no electricity or running water. Outside of the three S’s – Search, Social & Streaming, we barely have web services which can turn industries upside down. But some of that is about to change.

Later this year Amazon arrive in Australia and with their cheap capital (free shareholder money they don’t pay dividends on) and serious intent to dominate this new market. We will finally get, at least one part of the internet, other markets have had for years. If you think you’ve seen disruption to industry in Australia, buckle your seat belt, because we are about to see what they other half of the world already have.  We’ll get to know not only what same day delivery feels like, but 2 hour delivery. We’ll get to know how great it feels for that delivery to be free and we’ll get to pay prices which will make our local retailers seem like robber barrens. It will change our consumer and business landscape because it will be an example of possibility.

I was a guest of the award winning podcast Future Sandwich episode aptly titled, Surviving Amazon. Have a listen here, or wherever you get your podcasts.

Also be sure to check my media page for weekly interviews I’m doing on Tv & radio on all things future.

Don’t forget to join me for to celebrate my new book launch The Lessons School Forgot, on June 20th. Free tickets here, see you there! Steve.

What we can learn from street hawkers

I was in Shanghai China last week and had another experience with street vendors or ‘Hawkers’. The hot item that week seemed to be light flashing rolling heels for kids shoes. I lost count how many times I was approached to buy some. It got me thinking about what we can learn from their hustle.

Hawker China

Lessons for Startups from Street Hawkers:

It’s a numbers game. They approach every single tourist. (I stand out in China). Even though we may or may not want the toy they are selling, they don’t let their perception ruin the chance for a sale. They’d rather get a ‘No’, than miss a potential yes.

They take rejection with a smile. They don’t get upset when you say no thank you. Especially if you say it nicely. They understand that you are not rejecting them, but the offer. It’s not personal and they know it.

They go through the range. If one product isn’t right, they pivot and offer another from their range. They give every prospect a few options and work out what they might need. They try and solve your ‘gift or memento’ problem.

They are proactive in retail. If you’re looking, they ask questions and interact with you. They don’t wait at the counter for you to bring an item up to buy. They don’t sit and ignore you looking at their smart phone – like some retail workers do in western markets. They know how to sell in retail. And here’s why, they live on commission, not hourly rates – no sale, no money. What a difference that makes for sales people.

Make an offer: They often let you make an offer. Your price is probably higher than the minimum they’d accept. (Something we could do more often in B2B selling).

They Negotiate: They have flex in their pricing, let the customer have a perceived win through negotiating on price. A large part of what we buy is how we feel when we buy it. They know this and make it fun.

They know the rates: They’re great international marketers, they know the exchange rates of every country and give you the numbers immediately. They live in the customers world.

They are thankful: When you buy, they thank you for your custom. Appreciate your support and do business with a smile.

If we ever want to learn how to sell, then we should pay attention to people whose livelihood depends on it, not those who get a wage for doing it.

Follow me on SnapChat – search ‘Sammartron’ for more business insight.

The one thing you can do better than Apple

Apple store genius bar

You’ve probably been to an Apple store. They’re a very different proposition to what computer retail stores looked like in the first 30 years of the PC revolution. They are super busy, it’s no surprise it’s the most profitable retail outlet in the world per square meter. But the thing that impressed me the most isn’t the slick architectural design and visual brilliance, it wasn’t even the knowledge of the genius, it was this one thing:

I went in to get my macbook fixed after I made an appointment on line. When I arrived a staff member checked me in for my appointment, and then I stood in a line with other people waiting for help. I didn’t have to wait long. But when it was my turn a different guy turned up and said, “Hey Steve, come take a seat and lets get your sorted out.” The thing that threw me was that I was in a bunch of 10 people, I’d never seen this guy before, and yet he knew my name, and come right up to me. He didn’t yell “Steve?, is Steve here? you’re next..”

So I asked him how he knew who I was among all the other random people. And he told me what they do. When you check in on the iPad they write a description of what you look like. Clothes, colour hair, tall, short, red back pack and so on. So there can be no mistaking who is who. There could always be more than one Steve…. there could be two people wearing black t-shirts. This detail ensures they always get it right. He told me that they are told to come up to the customer and great them personally and intimately. And it really works, I felt good.

Now, I know you think that this is not so innovative. It’s hardly a new idea, and anyone could do it. And that is exactly the point. Anyone company could, but not many do. If the worlds biggest company can make a single customer feel like they are getting personal service, what could your startup or small business do?

You should totally read my book – The Great Fragmentation.

 

Why Beacons will become the Pocket Spam of the web of things era

There’s a lot of talk about the amazing things beacons will be able to do at retail level. And all of it is true – at least from a functional perspective. For the first time products will be able to directly interact with potential customers at store level. Physical spaces people spend time in will be able to interact with the people inside those spaces. Department stores, farmers markets, concert halls and  football stadiums are all being filled with beacon technology. And it will give birth to a new era of pocket spam. I wonder if what we really need right now is more vendors shouting at us with offers we didn’t know we wanted? I doubt it.

So, here’s the startup opportunity for Beacons which few are focusing on just now.

How to stop them.

Yes, the spam filter equivalent for the intrusive beacon. And I know you’re thinking that this time it’s different, because it wont happen unless we allow push messages. But when was the last time you read all those terms and conditions for a web based service? Often we say yes to something before all the details emerge and when the world was slightly different. It’s our legacy decisions which get taken advantage of.

Often the market for the hotdogs around the stadium is bigger than what is on the main playing field. And there’s always less people watching that game while you set up shop on the sidelines.

Random Soundbites

In the past few weeks I’ve been in the audience a few times when some smart people have taken to the stage. The presentations were largely retail focused. As usual I took notes and thought I’d share some random soundbites from what they had to share. I haven’t got the sources for each quote, because I couldn’t write those down quick enough without losing the information. But the thing that really matters isn’t the exact figures, but the patterns they are part of:

  • 10 years ago car buyers used to visit the dealership an average of 6 times before buying a new car. Now the average 1.5 times. When surveyed about the cars they bought more than 90% of buyers knew the specs in more detail than the car salesman.
  • Retail Delivery Gap: Australian retailers believe their customer shopping satisfaction rates are 80%. When surveyed the actual satisfaction rates from shopper was 8%.
  • There are a significant amount of retailers who are now treating the customers as employees: Airline check in – Supermarket check out. This is all fine so long as it reduces friction and increases joy. It shouldn’t be the default approach, but a considered one.
  • Retailer measurement used to be all about foot traffic and transactions, now they can measure everything in between, before and after. But smart retailers will need to ensure they have permission and share the prize with those providing the data.
  • Big data is a bit like teenage sex: “Everyone talks about it. No one knows how to do it, and everyone thinks everyone else is doing it, but not many actually are.”  Not my quote – but made me laugh.
  • Advertisers need to get ready for revised TV. A television that knows who is watching it, what they’ve bought, where they’ve been and what they car about.  One that can serve up specific, permission based  and relevant content for a single person. 1 to 1 television creative executions – the TV’s can already do it – but it seems no marketers can?
  • The delineation between physical and digital is over – pointless and and us versus them zero sum game. The intersection is now mandatory, or even tables stages – it’s now phygital.
  • People like buying stuff, but not so much paying – but the money isn’t the pain point, it is the process and the friction they hate. Sellers need to get out of the way.
  • Network Survival: A network stays alive so long as it provides trust and reduces friction. What’s interesting is that friction is often reduced by routing the long way round.
  • The top 12 Australian retailers have $700 billion worth of currency convertible loyalty points on hand – a giant liability, or is it an asset?
  • The phone is now becoming the personal life controller. It is the new location for commerce – literally where the phone is: simple example is Uber.
  • We are entering the wallet wars era. The digital wallet as spruced about by Bill Gates way back in 1995 – every tech player, bank, payment system and hardware developer is in the battle.
  • Mobile payments growing at an astounding rate in e-commerce. In the past 2 years payments via mobile phone grew 57 fold in Australia alone.
  • Mobile provides a leap frog opportunity. Many players who missed the first web iteration, can now disrupt the disrupters by doing an amazing job on mobile – this game is still open.

What does this tell us. Just that there is so much happening, and no matter what business we think we are in, we are all in the startup business now.

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A mist of innovation

Today is a hot day in Melbourne 34 degrees celsius or 93.2 degrees fahrenheit. It seems though it is never too hot to retail coffee in our fair city of Melbourne. Looking for a java fix I quickstepped down to the nearest caffeine haunt in docklands. I happened upon a new outfit called Cafenatics. Their coffee and food were both good. Their outdoor air conditioning was the total bomb. I freaking loved it.

They had set up a nice water misting system in both their outdoor dining area and even inside. It was just perfectly soft so that you didn’t feel wet, just cooled down. So amazing, I tweeted about it, posted in on Foursquare and even made the effort to write this and share some pictures of it (below). A simple idea I’ve never seen before.

The thing I like just as much is that this is clearly not a new technology…. the Romans probably invented it. Proving again that innovation is an attitude and there are probably a thousand low cost ways any of us could employ tomorrow to wow people. This certainly got me talking.

cafenatics1

cafenatics 2

cafenatics 3– – –

The curious thing is that, their coffee is what I came for, and their mist cooling system is the story I left with.

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