This Fix is coming from Cornwall where none of the shops sell anything you need and Amazon can still make their next day delivery work. The few shops that are prospering are ones where that run an online store as well as the physical one. Fix friend Tom Goodwin points out that now shopping needs to either be practical or be an experience and most of the high street falls into the gap
This week Warren Buffet sold all his Walmart shares. And Amazon continue to experiment with physical stores – this is a good look at what they are doing in Seattle with their bookstore – and it also suggests one motivation behind the stores is recruiting more Prime members. This NYTimes piece looks at Seattle as a lab for Amazon to test their theories on stores – with a number of grocery outlets under development. And other retailers also use the area.to test out new concepts.
A Fix friend has stopped developing ecommerce sites as the major platforms like Shopify make it incredibly straightforward for just about anyone to start and run their own web store. But it’s hard to beat Amazon in any category online; although there are some interesting business doing well in Fashion such as the UKs Lyst and Cabi in the US has a novel model where local salespeople drive the brand.
It’s highly likely that the best model is a blend of physical and online – stores drive discovery in a way the web still struggles with. As London business rates rise this year we’ll see many old stores washed out by the hit to their bottom line. What takes their place? People like AppearHere encourage trial and our friends at Form and Thread found a pop up gave their online sales a boost as did these guys. So expect your favourite online store to pop up somewhere.
Talking of Prime, a new report from Accenture gets into Loyalty and sees it as an Illusion – which we would tend to agree with. As this summary from Warc argues companies are wasting huge amounts of money on schemes that consumers tend not to value. In our experience too many companies see loyalty as Inertia rather than recognizing the value is in the Insights that can be derived. Money Saving Expert reckon that the vast majority of people who haggle with Sky, BT etc get big discounts so these companies do rely on inertia. But given the Missing Metric doesn’t let them see how many people they are pissing off, they carry on regardless.
What if instead they used their relationship to get real insight and find new products and services that would delight their customers? Like Seth says, this is a much better way to approach marketing. We are starting to work with a fascinating start up that uses Machine Learning to quickly get insights from customer data we can use in various ways – if that sounds of interest get in touch.
One company has profited from loyalty more than any other; Apple. They have kept hundreds of millions of people within their franchise for a decade. Their share price is now at an all time high as people start to contemplate the next iPhone
Lots of rumours – including a theory the pricing will push up to $999. I still believe that AR will be a big factor in the next iPhone. There is still a lot of hype and little hard facts around AR and VR and Magic Leap have suffered recently – from the hype backlash. Apple are the prime candidate to cut though the hype and produce some compelling tech that excites the mass market.
This chart shared by a FT writer on Twitter shows the challenge facing the publishing industry. As print display evaporates - tracking the audience decline – the digital display revenue stalls. And chasing the audience across GAFA doesn’t help – C4 accuses Facebook of paying them a minuscule amount.
A promising sign is that digital subscriptions are growing – the New York Times put on over a quart of a million in the last quarter of 2016. With all the noise about Fake News and with so much happening the value of News Brands has never been higher. And subs translate into more eyeballs, so that has to be positive for ads in the longer term– if we can focus on formats that don’t detract from the experience.
GAFA & Content
It looks like Snap will seek a $20bn valuation when they IPO – maybe stretching to $22bn. Whilst many see the question as being whether Snap turns into Facebook or Twitter, Stratchery makes the case their model is closer to Apple.
By trying to outrun the competition with better products, that capture more revenue, they set themselves a tough course – but what else can they do? One obvious function of this is that exclusive content will become vital to them. Given their different demographic we can see they will be an attractive partner to content providers and having a Hollywood mindset will be more useful than a Silicon Valley one.
We focus a lot on Agencies in our consulting work and the divide between media and creative agencies keeps surfacing as a major issue. Lots of people trying to solve this and Fix friends in Sydney have bought a smart media agency to blend with their team.
And payments in China is going mobile much faster than in the west. The way the QR code was dismissed over here has slowed things right down. We predict QR codes are going to have a come back soon. Snap is making them cool again.
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