Is this the future of retail?

In the run up to Christmas, and the mad post-Christmas sales dash that followed, it seemed that the only thing anybody in Cambridge did was shop.

There are two malls in Cambridge, the Grand Arcade and the Grafton, and I live almost precisely between these two shopping meccas. In the days before and after Christmas, there must have been a few hundred thousand people coming in and out of Cambridge.

I realise that the Cambridge economy is fairly booming. According to official reports,  Cambridge retail pulls in just over a £1 billion each year. In the run up to Christmas, the average retail footfall increases by 30% with people spending on average between 2-4 hours of their time shopping (according to a 2008 city government customer survey).

One billion is a hefty amount of money, and more importantly, it’s a hefty amount of man hours going into shopping as an activity as opposed to doing something more philanthropic, such as working up solutions to world hunger, or even using the time to improve ourselves and our lives.

Which brings me to the interesting observation three Cambridge stores; the Apple Store, Build-A-Bear Workshop and Levi’s.  When you watch people in these three different retail environments, you see completely different behaviors.

When you wander into any Apple owned retail store, you immediately notice that people are not just looking at products, they are actively using them! Apple stores are now famous for perfecting Experience Shopping. The notion is that when you have a high-involved product like computers, the best way to sell them is simply to let people experience them in real life conditions. So Apple retail has counters loaded with Macs connected to an in-store wi-fi service that anybody can wander in and start to use.

You therefore see a lot customers dropping in just to check their email, twitter and Facebook accounts, or to surf the web and chat with friends over IM.

An Apple store patron surfing the web

Towards the middle of the store, you have a series of gaming computers loaded with some of the latest Mac-friendly games. Here teens and kids as young as 5 are parked on cushions, playing games for up to an hour at times.

Gaming corner in the Apple Store

Apple is also famous for turning their retail into learning centres. Apple staff regularly hold training sessions throughout the day. At one, I witnessed two pensions learning how to create home movies on i-Movie. At another, I witnessed budding musicians learning how to use GarageBand and USB keyboards to create their tracks.

Wait a minute! These people aren’t really shopping! They are learning, communicating, researching and enriching their lives, all the while, realising that this is what the Apple brand enables. In essence, Apple uses its retail to demonstrate its brand promise every single day. Sure you can still buy at the Apple retail stores. But shopping itself has been made more subtle and de-prioritised to focus on brand experience. The end result is that people feel like they drive the interaction rather than the other way around.

How the approach is working for Apple? In the US, Apple tops the charts in retail sales. Whereas brands like Saks Fifth Avenue are earning $362 per square foot a year, Apple rakes in a chartbusting $4032! They are almost twice as profitable as Tiffany’s & Co famous store in NYC. (source: CNN Money 2007)

Still, some have argued that the Apple approach towards experience centres isn’t for everyone. And so it seems. Nokia has tried for years to emulate Apple’s retail format with their flagship stores and has failed. In part, Nokia really didn’t understand what Apple did. They never successfully made their retail about brand experiences. Their stores were often poorly staffed. Or had too little space in some cases. In the end, Nokia has recently decided to close its flagship stores. So if Experience Retail isn’t the answer to all brands, what are the other choices?

Let’s move across the hall from the Apple Store in Cambridge to the Build-A-Bear Workshop. Whereas Apple is all about experience with the brand, Build-A-Bear is all about brand participation.

Build-A-Bear using kids in store to help them decide on future products.

In fact, their central products, the bears and stuffed animals, are purposely left as unfinished products. Instead, kids are involved in “creating” their own custom product, from choosing the animal casing, which can be anything from the classic teddy bear to lions, leopards, dogs, bunnies and unicorns, to stuffing, fluffing and sewing it. They are even asked to groom and dress their toy in any number of available outfits, all of which cost extra of course.  The kids are then given official adoption certificates and are asked to name their toy. My daughter chose the Jack Russell Terrier toy and named him affectionately, Mac, after a neighbour’s golden Labrador and now treats her toy as her real pet dog.

What Build-A-Bear hit upon was the realisation that kids like to create. No, they love to create! By offering an interactive, family oriented experience in store built around participation, Build-A-Bear doesn’t become just another shop selling you more stuff, they become a treasured childhood experience.

Today, Build-A-Bear now even lends out its Workshop for Built-A-Bear birthday parties where creation becomes the focus of a birthday experience. Personally, this is going a bit too far for my tastes, but I can imagine a lot kids wanting a birthday party there, especially if that becomes their first Build-A-Bear experience.

A Build A Bear birthday party

I would love to say that all of the retail stores in Cambridge are as interesting and involving as Apple and Build-A-Bear, but sadly they are islands in oceans of dreadful shopping. The remaining stores are still living in the retail stone age, focused solely on using sales to drive footfall, offering crazy discounts to get people to buy. While neighbouring stores plastered 70% off signs on their windows, the Apple Store and Build-A-Bear Workshop didn’t have any, and yet, their stores had as visitors as ever.

Is it simply because of their unique formats and products that Apple and Build-A-Bear could make experience and participation retail work, or could it work for other brands as well. To answer this question, let’s look at the Levi’s store, which sits just a few doors down from Build-A-Bear.

Historically, Levi’s can be said to have led the industry with creating in-store experiences. Their famous $20 million flagship store in San Francisco, which opened in 1999, had cutting-edge technology, interactive attractions, and high-quality music and video. It was described as being “part theatre, part art gallery, part museum, part cinema and part rave.”

Greg Ercolino, president of Ercolino Productions, a New York-based technical consultant and systems integrator who designed the store described it as being  “…like a film festival. People want to be entertained, they want to learn something new, they want to experience something.  To do that, you have to be interactive and show them things they haven’t seen before.”

The store features a live DJ/VJ booth for audio and video artists to perform. Activities and attractions at every corner of the new store, such as the four video periscope stations near the main entrance which allow customers a virtual — if not voyeuristic — tour of each floor. Then there’s the 3D body scanner that lets customers get a custom-fitted pair of Levi’s and the “shrink-to-fit” attraction — one of the store’s odder features — that dips you and your new Levi’s jeans into a special bath, then blow dries you and your pants in a human dryer until they hug every curve just right.

Taking custom-fitting even further, the Levi’s Original Spin Program allows customers to choose from a range of cuts and styles and have a pair of jeans custom tailored based on their exact measurements and preferences.  There is also a “Factory Area” where they can watch Levi’s staffers embroider a custom design on a pair of jeans with a 15-color thread embroidery machine, or burn a photograph into them with a special laser-etching machine.

In addition, the store features a range of other multimedia and interactive attractions including CD listening stations, Internet stations, and “Attitude Pods” — specially designed audio/video entertainment chairs

Was any of this impressive, ground-breaking, hi-tech, personalised and entertaining retail experiences in my local Cambridge Levi’s store? No. Not a single one. In fact, the Levi’s Cambridge store looked pretty much like every other fashion store in Cambridge: a small retail space with a bunch of clothes and a few changing rooms.

The more important question is did all of this impressive retail kit improve Levi’s fortunes? Again…no. Sales and profits at Levi’s have been plummeting for years.

In 2008, they saw profits plummet by 98% in the second quarter, which they blamed on weak consumer spending. In the first quarter of 2009, they saw a 50.5% profit drop, which they again blamed on consumer spending. Though they did finally see a sales peak of 5.5% by the end of the third quarter, they were still struggling in the so-called “tough economy.” Meanwhile, sales in Apple stores soared, as did those of Build-A-Bear. Weak consumer spending? Or maybe consumers were just being more selective about where they spend their money.

So, while Build-A-Bear and Apple have made experience and participation based retail models work, why didn’t it improve Levi’s fortunes?

One reason is that their flagship model was impossible to roll-out to all of its hundreds of global retail stores, mainly because, as in Cambridge, most Levi’s retail stores are small. The other problem is that Levi’s still doesn’t own most of their retail outlets, a situation they have been trying to improve since 2005. The main problem in my mind however, is that none of the 3D scanners, video periscopes and other whizzbang store gimmicks were core to bringing the brand to life. Sure you could get your jeans blow-dried to your skin. Or your favourite design laser etched onto your jeans. But is this why you buy Levi’s? Is this what the brand is about, customisation?

Back in 2007, when I was planning for a new campaign launch, I hit about a golden truth about Levi’s. Levi’s is probably the ONLY brand in the world that one could with confidence say was present in every major revolution, youth movement and key historical event that has happened in the last 60 years. Such is their absolute ubiquity that you can be almost certain that somebody participating in or witnessing a historical event or mass movement, was wearing a pair of Levi’s jeans. This impressive heritage with historical moments and youth movements is what the brand is about. It’s history as witnessed by people wearing Levi’s.

What Levi’s and other retailers should be looking for, are ways to bring their brands to life and involve people at retail with their brand experiences, not just product ownership experiences.

With Levi’s this would translate into to creating centres of “history through my eyes” and customised every shop in the world with witnessed history as it happens, providing innovative ways for people to share, talk about and even create memorable historical moments.

With other brands, it’s high time they start to rethink and reinvent. Shopping as it stands cannot be maintained indefinitely. And replacing it with more experience-driven shopping that aids in self-actualisation and real personal or community growth is the key to maintaining strong performance in the challenging years to come.

Sources:
Consumer expenditure in Cambridge

Cambridge consumer shopping survey

Levi’s sales performance

Levi’s San Fransisco Flagship store

Problems with the Levi’s Flagship store

Like the latest fad in fashion, Conversational and Community Marketing is all the rage in marketing today. So what’s so special about it? Do you really need to be bothered, or can you happily go about your business and ignore it?

None of us can escape the fact that the Internet has changed many things for businesses. In my earlier post, I talked about the growing importance for total transparency in everything from a company’s behavior to their pricing and profit margins. Guiding this need is the every growing Internet population of ‘Prosumers’, or rather ‘empowered shoppers.’ Although the size of the prosumer population has never been officially measured, we can figure it out by looking at people’s online behaviors.

For instance, if you look at the last years results from Forrester’s Technographics surveys, you see that:
•    10% of the UK online population read blogs
•    17% watch user generated videos
•    12% participate in discussion forums
•    and 20% read online reviews.
These are all behaviors of empowered shoppers. Let’s focus on the last point, the 20% who read reviews, which is the most common indicator of an empowered consumer.

Related US study by Forrester shows a similar breakdown of behaviors.

Nielson Netview estimates that there are 34,151,628 online Brits. So 20% of that figure is roughly 6.83 million Brits who we can classify as acting like prosumers. Granted, that still means there are still a good 27.3 million other online shoppers you could target. But consider this. If every one of the 6.83 million empowered shoppers talks to just 3 other people, your ‘informed shopper-base’ suddenly grows to 20.49 million shoppers! Suddenly, that 27.3 million has shrunk significantly. So it’s probably safest to treat everybody like a prosumer and get on with business.

Let’s look at it from another angle. What if 80% of your prosumer base doesn’t like your brand and trashes your products online? You have a serious problem on your hands, even if that 80% represents just 1% of your customer base. Because that 80% will promote their negative opinions to the rest of your customer base, encouraging them to flee in droves. On top of that, the percentage of the prosumer population is actually growing. So by next year, that 1% will increase to 2% and so on.

So what can you do about it? Well, first you can start by listening to your customers and take their pulse of how they feel about your brand. There are a number of buzz trackers and listening platforms out there, but the one I prefer, both for cost efficiency and for their ability to scan in multiple languages is that offered by Attentio. To get a quick idea of what the Attentio Brand Dashboard can do, check out their website at Attentio.com or give it a go at their public buzz monitoring site, Trendpedia.com. For some sample results, check out this review I made for Lexus a few years back while I was working at Lateral.

Excerpt from the Lexus Hybrid Debate

The Brand Dashboard continuously trawls a wide range of online sources, from blogs to forums, newsgroups and social networks, looking for certain keywords that you define, which act as flags of potentially relevant conversations. As there are literally millions of sources to scan, most listening tools work as a “present to forward” looking information source. In other words, to get the most accurate results, you need to set it up in advance and let it run for several months. Backward looking scans with Attentio are possible but are typically limited by the length of time articles and comments remain online, currently between 3-6 months on average. With Lexus, I scanned a number of keywords related to the brand, but also the names of competitor’s brands and common words used around hybrid technology. This allowed us to get a good feel for what people really thought of Lexus’ Hybrid cars.

Some companies I know, now utilize this type of data to complement their ongoing qualitative and quantitative research as it provides a higher level of reliability than what they get through focus groups and panels. After all, people are far more likely to tell what they really think in sites like TripAdvisor than in any focus group you run.

Listening however, is only the first step. You also need to be able to respond to opinions online. The most effective way of doing this is to empower and encourage every employee in your company to participate in social networks, forums and blogs where the conversations are happening (which you can also identify using your Brand Dashboard). The advantage here is that your employees are typically your best advocates. So let them talk and share their opinions and knowledge. There are examples of companies who have done this to remarkable advantage.

The first is Microsoft, where practically every employee blogs about something, most related to their specific profession. There are currently 262 officially tracked blogs in their directory across a mind-boggling array of subjects. These blogs are effectively are helping Microsoft to redefine their approach to be more “customer focus” through one on one interaction with customers. In many cases, this ability to have real conversations with customers is helping Microsoft to fix errors and improve products at a faster pace than ever before.

Another great example is Redfin, a US based estate agency. Redfin’s CEO, Glenn Kelman took the US real-estate market by storm last November when he decided to be completely transparent about the US real-estate industry. As such, he publicly exposed every dirty trick estate agencies use to sell you a property. His blog was almost a “how-to” in avoiding the cons that most British still face when trying to purchase property. With 300+% year-over-year growth in unique visitors, Redfin has been the fastest-growing major real estate website in the U.S Redfin has also increased its market-share significantly as a result of its game-changing approach.

Redfin and Microsoft are both examples of companies who have mastered Conversational Marketing.

Another surprising example was McDonald’s in New Zealand. Selling burgers is easy. Selling McDonald’s to a group of cynics and non-believers is a different proposition altogether. In 2006 this was the situation McDonald’s found itself in. No matter what it had been doing and saying over the previous years around its health, quality and nutrition initiatives, people were still viewing McDonald’s food with wariness and mistrust. Nothing seemed to stick, sink in or sway public opinion in favor of a company that was trying to break free of its past. This was hurting the organization, not only from an image standpoint, but also with regards to the bottom line. McDonald’s decided it was time to get on the front foot and set the record straight about its food and they way it behaves once and for all.

Peter Bush, the CEO of McDonald’s Australasia had the right idea. ‘If we could sit down for just five minutes and tell our story one to one with the consumer, McDonald’s wouldn’t have the brand issues we have today.’ His conversational approach become the seed to their Take a Closer Look campaign, in which people’s conversations and concerns were displayed in the ads against McDonald’s irrefutable facts. Essentially, McDonald’s leveraged conversations around its own myths as the basis to start conversations with its customers.  The result was that 70% of people who had seen the campaign believed what McDonald’s was saying. Ultimately, people reported that the ads made them feel better about eating at McDonald’s.

The New Zealand campaign was eventually followed by a larger, online initiative called Make Up Your Own Mind, in which consumers could literally ask any question to McDonald’s and they would answer it with facts. Unfortunately, when I challenged them on their continued decline of their food quality in many restaurants I visited, their answers were cut and pasted from other questions people asked, word for word, making it sound like the work of PR people. When further questioned about their support of aspartame in their Cola’s, their answer was literally right from the official apartame website: hardly a non-biased, credible source of information. The lesson here, always assume that your consumers already have done their online research. Brand sites like these are typically the last resort, not the first port of call.

Community and Conversation are often mixed in today’s marketing lingo, however they shouldn’t be. Although they are linked, they aren’t exactly the same. The McDonald’s campaign used Conversational Marketing, but it didn’t create a community. In contrast, Bugaboo strollers clearly has created a community of involved like-minded parents on its site, effectively leveraging people’s real conversations and stories within its communications to foster a sense of participation and brand ownership. When you link Conversation and Community to brand strategy, you get a robust brand platform from which you can engage today’s growing base of consumers who want to be involved in the shaping of the brand.

The resulting benefits of participation and ownership can add significant value to the brand, seeding it with real human experiences and emotion that reaches the long tail of your consumer base. Considering that 49 % of people made a purchase based on friends recommendations on social media property (Razorfish, 2008), social media can be viewed as an important channel and tool to interact, manage and enable these brand communities.

If this strategy appeals, does this mean you should run out and create a community? Not at all. What most digital agencies won’t tell you is that you actually don’t need to build your own community. In fact, unless there is a clearly unmet nascent consumer need for your community, you are much better off partnering with an existing community than building your own. Start by looking to see which fan created communities already exists around your brand. You may be surprised to find a few. Brands such as Apple, Nokia, Saab, Ford, Harley Davidson, Suzuki, Asus and many more all have dozens of fan created brand communities that you can interact and partner with. On top of this, there are thousands of niche, vertical communities around every passion you can imagine. Many of which could very well serve your existing customer’s interest and needs. And most of these verticals are heavily under-funded and some corporate partners could be very welcomed.

There are a number of different ways brands can establish leadership online, from providing a groundbreaking service like Amazon.com, to creating a strong brand position that completely resonates with a core customer base, which is what RedBull has done. To identify potential leadership strategies that a brand can adopt in any given category, I have created a 7 stage positioning chart.

Brand strategies for traditional and empowered consumers

Now the first 4 stages are the brand positions that have defined traditional marketing since the 1980’s. These are Stage 1: Generic or unbranded, Stage 2: Brand as reference, Stage 3: Brand as personality and Stage 4: Brand as icon.

Stage 1, or Generic Brands are often commodity products, such as oil or aspirin – products which, for the most part, are all pretty much the same. In generic brands, volume, price and accessibility determine sales. As you see in the chart, it occupies the bottom corner of our “differentiation versus consumer” matrix. Which basically mean’s that it’s a brand positioning that appeals mainly to value-oriented consumers. As such, loyalty is practically non-existent. The cheapest item typically rules. Marks & Spencer has used this positioning recently when it created its new low priced, value line of “Basics” as a way to keep their recession concerned shoppers from defecting to Tesco.

In Stage 2 we move to the Brand as Reference stage. This is when a brand becomes the category. Think Xerox or Gatorade, where your product name becomes synonymous with it’s benefit. Gatorade = sports drinks and Xerox = photocopying. Interestingly, Google has been trying hard to ensure that “googling” something, to mean they are searching the web, doesn’t appear in any dictionaries as a way to keep their brand out of this troublesome space – a strategy that has so far proven effective.

Stage 2 brands often live in areas of intense competition. Take Colgate for instance. It’s a toothpaste competing with Aquafresh and a number of other brands, which all, to varying degrees of success, do exactly the same thing – clean your teeth. So marketers of reference brands tend to focus on traditional value-based segmentation models to understand needs, “I need/want to look good,” so “white teeth is important”. Advertising then looks for hooks to find good ways of matching rational product benefits with these needs.

Because Stage 2 brands are often low involvement brands, loyalty is often based on “points and rewards” schemes, essentially turning loyalty into a commodity business that you can buy and sell. Naturally this is problematic because a challenger brand can always offer to “buy” up loyalty by purchasing points from customers who defect. Frequent flyer miles are a good example, where airlines have been known to purchase each other’s customer’s frequent flyer miles.

Stage 3 brands work hard to differentiate themselves by using personality as a point of difference. The UK softdrink Tango used this to brilliant effect in its advertising in the early 1990’s. Historically, the strategy was effective because it made brands more humanistic and appealing. It also created emotional reasons to purchase rather than rational ones. In markets where TV still dominates, personality can still work as a brand strategy. However, in the online world, its impact tends to be more limited. Once you start, you have to constantly reinvent the creative to keep it fresh, alive and interesting. And even then, consumers eventually grow bored or tired with the effects. Just track the rise and fall of Diesel Jeans. What was the last ad from them that you can remember? When was the last time you visited their website? And why would you anyway?

Much of the value-based segmentation that exist today came from the drive to give brands a personality that resonates with consumers. Loyalty for Personality Brands tends to be driven around brand experiences. This is why you have a lot of product trialling in supermarkets for instance. Or why brands like Kraft spend millions on creating recipes around its products to get you to try them in new dishes.

Most of today’s top global brands, from Nike to Nokia, are at Stage 4, the Brand as Icon stage. In this stage, the brand is part of the psychological make-up of the consumer. It becomes a way for people to identify themselves. So the 18 year-old football fanatic wears Nike and Quicksilver and drinks Red Bull because those brands help him define who he is. Loyalty among icon brands tends to be fairly strong, as it’s built on an emotional basis that is linked to the way the customer wants to be perceived.

As much of this brand ID creation is influenced by the brand behaviours of peers and tribes, the community, both online and off, plays a growing part in our brand preference list. If we extend this thinking further, we see an evolution where the brand itself becomes a type of community, one defined by common interest and preferences. This is why owners of Harley Davidson motorcycles often feel a bond or affinity with other owners. Or why drinking a can of RedBull is like being part of a club of hi-energy fanatics.

There is an interesting variant on this brand space which is quite strong among today’s prosumers, and that’s called the Brand as Activist/Philanthropist. Currently this is a highly attractive and powerful niche positioning that appeals heavily to prosumers. The more empowered a consumer is, the more cynical they become about corporate behaviour and blatant profiteering. By linking the brand to its social/CSR behaviour, the brand gains real meaning and impact online. The opportunity for customer involvement is also very high as you can make the customer part of your “giving back to society” activity.

With the exception of a few key brands such as Newman’s Own in the US, which is founded as a social enterprise, most brands utilise this not as a brand positioning, but rather as a tactical strategy. Which is a shame really, because as global problems increase, the opportunity for brands to stand out with this strategy are significant.

One could argue that the Brand as Activist/Philanthropist is not really an evolutionary step up from Brand as Icon stage, but rather a comparable strategy in itself. However, I have put it here simply because I believe that Iconic brands will have to align their brand values with their behaviours to survive. Prosumers are looking for brands with real meaning. Not just marketing fiction. And how the corporations and the people behind the brands behave determine that meaning. We have seen enough evidence of this in the last decade, between Shell, Nike and now Texaco, to know that a business and brand has to be more than its products and marketing. It has to be also its mission, beliefs, values and most importantly, its behaviours against the first three.

An equally powerful brand position to adopt online is Brand/Customer Partnership, our Stage 6. I see a lot of Iconic brands trying to move into this coveted online brand space with mixed results. The idea is that the brand becomes defined with the participation of it customers interacting within a community or conversational framework.

The power of this position is that it leverage’s the needs of prosumers to create deeper reasons to engage with brands beyond marketing fluff. Remember, most of society lives in a world beyond their control. Corporations and government seem to have all the power and generally are seen to exploit people. The Brand/Customer partnership strategy recognises this and helps empower customers more directly by allowing then a greater degree of control over key aspects of the business, from product creation using Customer Made strategies, to distribution and sales using social affiliate marketing. The customer becomes a virtual member of your business and hence is rewarded for contributing to the business. In a sense, the customer becomes a “brand owner” via their active involvement and participation. This sense of ownership offers them the psychological rewards of being more in “control over their lives” while also being able to contribute to something larger than themselves that they can believe it.

The last point it critical and is why many iconic brands continue to fail in this strategy. Most iconic brands were built up off the back of stellar marketing budgets over decades. If you have spent a billion dollars or more on building your brand, it can be very hard to suddenly start surrendering its development over the masses. The other problem is that Iconic brands typically see their CSR initiatives and marketing as completely separate entities. In fact, some see Brand and Corporation as separate entities as well. And this is where the positioning becomes hard to implement.

To work in true partnership with consumers, you not only have to be willing to surrender a degree of control over your brand development, you also have to give them a reason, that is larger than themselves, to want to become involved. So just letting customers create commercials for you or asking them to give ideas for new products simply isn’t enough. You have to have a goal, a mission that they can believe in and want to be part of. Think of Dove’s Campaign for Real Beauty. The effectiveness of the campaign was that it not only gave people a reason to believe, but it also empowered them to contribute to the debate and be part of a mass movement.

Which is why the Brand as Activist/Philanthropist sits before Brand/Customer Partnership. If you adopt the first strategy, you will have powerful motivators for customers to work in partnership with you to make it happen.

In this space, the community of like-minded buyers are key to thriving in this space. Suddenly the brand is no longer a brand of me, but a brand of we. As marketers, we need to look beyond the individual to also look at their networks.

The final positioning is Stage 7, Brand as Democracy, in which you literally use your brand as a platform for tackling global problems working in tandem with your customers. Brand as democracy enables the community to turn the power of the brand into direct social action in an effort to affect global change. Whether it is to use the brand as a media or to use the brand as a platform for doing good.

In essence, you allow them to decide what problems you should be addressing to solve. For instance, if you are Coca-Cola, your customers may dictate that you should be addressing the problems of global obesity and water shortage. Using democratic principles and digital platforms, you can empower your customers to vote, debate, propose and participate in finding solutions to these problems together with you. To make this work, you would need to align your agenda with that of the community and create a triple win alliance between you, the customer and NGOs. Here, the customer and society win through the community action; the NGO wins through greater reach, participation and finance; and you win through a level of loyalty that cannot be beat by any other brand or strategy.

The key to making this positioning model work is to know how to apply positioning strategies of this nature is to have a detailed understanding of your market, competitors, business trends and consumer behaviours. This is why I typically recommend starting with a quick internal and external audit that involves your marketing and sales staff, as well as anybody else with who may have a unique insight. I then work with you to define a number of likely brand positioning scenerios to find the one or ones that best fits the business needs and objectives. As it’s possible to be at different stages at the same time in different markets or for different consumer groups, it helps to look at your business holistically and understand which positions are the best for which markets.

Many of the more competitive brand strategies rely on new forms of online marketing, or even require the creation of new online services and products. In the later articles, I will explore some of the more popular methods being used today.

Whenever I read an article on privacy, I realise that the vast majority of writers are always in the first two camps, with even the modern pragmatist leaning further and further into the fundamentalist camp. So I wonder. Are the conspiracy theorist correct and we are living in Arthur C. Clarke and Stephen Baxter’s future where privacy will cease to exist all together? Or perhaps there is a more obvious explanation. Perhaps the pace of change is so fast that even hardcore pragmatist have difficulty keeping up with them. 

The data collecting capability of business is expanding at a phenomenal rate. In a year, business’s will have collected 40 exobytes (4.0 x 10 to the 19th power) of data on us. How much of that data people have agreed to give up is completely unknown. 

And that number will only go up as Google, the mobile operators O2 and 3 Mobile, and handset manufacturers all continue to leverage people’s willingness to surrender data in exchange for better personal service. Google for instance, has now made its social network, Orkut accessible from mobile phones, but added a location service that allows friends to know where each other are, as long as all of one’s friends are on Google and signed up to the service. Likewise, Nokia has countered with a similar service called Friends that links its Maps 3 software with Ovi accounts and your phone book. Then there is Google’s controversial introduction of its Street View service in Google Maps, which caused so many complaints from even the normally “unconcerned” that Google had eliminate the service in some regions.  

The telecoms industry have even more aggressive plans. We have all seen the movies where national security agencies use  wireless triangulation to pinpoint the location of runaway agents. And yes, that’s based on fact as all mobile phones ping the closest wireless access node or receiving station. So by triangulating between three nodes, they can pinpoint you to an area of roughly 10 meters of so (though don’t quote me on that number as it’s probably a lot less). 
 
Now, according to The Guardian, two telecom leaders have increased their data ambitions. Both O2 Media and 3 Mobile want to match location data with customer’s age, gender, web browsing habits, home addresses and buying habits to order to predict your future behaviour, essentially the holy grail of mobile data.  With operators forecasting greater declines in revenue from voice (in part due to the growing use of Skype on mobiles) they are urgently looking for ways to monetize data and to promote different location and time related services. An example of this is a service I mapped out  good decade before all of this existed called location-aware entertainment (or LAES for short). Basically, LAES is a kind of concierge service that literally personalises the entertainment selection you receive depending on where you are, and what you are likely doing at a given time of day. So in your morning commute, the service would send your favourite newspaper. During lunch, maybe the next chapter of a book you are reading. On the commute home, the next episode of a TV program you’ve been following. All without you ever having to enter your preferences, as the service simply learns them as you go along. 

Cloud Computing raises data privacy concerns to a whole new level. The idea behind Cloud Computing is that instead of having applications stored on your own computer, they would reside on the Internet, in much the same was that many blog word processors do today. The goal being that every file you create, you also store on the Internet, just as people currently store huge personal libraries of photos on Flickr. Privacy activist fear that companies will start tracking every keystroke as we work and write; a notion that will convert many of the pragmatist to the fundamentalist camp. In truth, Cloud Computing could be the end of privacy as we know it, as well as a major security risk for users. Imagine what information a hacker could steal by gaining access to every keystroke not only you make, but everybody who uses a popular service such as a Cloud version of Microsoft Office. And let’s face it, they’re server software is known to sometimes look a bit like Swiss Cheese.  

So is this really the end of privacy then? Or will corporations get better at managing and securing data? The answer is, business’ won’t have a choice. Companies are increasingly facing a growing guadmire of legislative, security and reporting requirements that will inflate their cost almost as quickly as they inflate their ability to leverage all that data. Which makes senses given that politicians have the most to lose if corporations leak or misuse data. Because ultimately, politicians are the ones people blame when corporations behave badly. 

Still there are grey areas. Although current EU legislation on data privacy dictate that customer’s have to opt-in for specific uses of data, companies can simply package this opt-in requirement around a “cool new service” that is so generic that it allows them to do whatever they want with the data and even in some cases, share that data with “selected partners” that are made available over the service for your benefit. So customer’s still need to choose carefully before signing up to new services until these loopholes are closed.  

Already now, marketers are constantly debating what can and cannot be done with customer data. And yet, never have I met a marketing manager willing to live in the dodgy grey areas of the law to marginally increase sales. They all fear their legal departments far too much for that. Besides, why bother? Is it really worth the potential political and PR fall-out?  So can company’s be trusted with your personal data? In most cases, yes. But proceed with caution and read the fine print, carefully.

Now if we only had a regulation that controls what the government collects on us.

INQ Hong Kong Launch event

So it seems that social media has gone mobile in a big way. Yes, we all heard of those great Facebook and Twitter apps for the iPhone that just work brilliantly. And yes, you can get Facebook on other handsets as well. However, the mobile upstart, Team INQ has put together a nice piece of kit for the ever struggling mobile operator 3 that does social networking one better. It’s called the INQ¹.

The Gadget Inspectors have appropriately fallen in love with this device, as seen in their video.  And there are some pretty good reasons for it as well. Anyone who has worked in the device side of the industry will tell you that mobile phones are all about design, design and design. Not just the outside, but the software as well. 

Given that the handset itself doesn’t look that much different than let’s say, the Nokia E66, just what is it that makes this interesting? I can already hear the echoes across the blogosphere. “Ah, it’s just a gimmick!” In part, it is just a gimmick, albeit a well done one. The gimmick is that unlike Nokia, INQ has taken it’s UI to task. The icons for all of the embedded social applications are in the main screen menu, making it a quick flip to get what you want. While Nokia’s applications are well and truly hidden in submenu’s and folders. 

On top of that, there is excellent integration with its applications. Java has long been a drawback of mobile phones in that it’s a ringfenced application with limited integration. Here however, the integration is smartly done. I especially like being able to utilise Facebook as my addressbook and the automatic push of Twitter posts. It would be interesting to see just how difficult it is to set up all of one’s social accounts on the phone; an area where the iPhone excels, and the others struggle.

Packaging is another area that INQ has gotten right. While Nokia, Samsung and Sony’s packaging is sometimes stylistic and fashionable, they can also be downright corporate looking. 

With the INQ¹, they sought to “create an object of beauty – something to cherish, not chuck. All too often, packaging needs up in landfills, or recycling bins at best. While we’d like people to keep it, use it and treasure it. When we design our handsets we remix and edit internet services so that the play best on a mobile. Similarly, we remixed the idea of a box and made it into a place to display artwork.  The box art, and the illustrations on the help cards, come from people whose work we really like,” states INQ’s blog. 

The artist for this box is Yuko Shimizu who is also credited on the box itself. Other artists whose work will soon adorn future INQ handsets can be found here.

It’s all very reminiscent of the early part of the century when Nokia partnered with famous designers to create their phones. These so called Limited Editions always sold out even before hitting the stores. It does make one wonder why Nokia didn’t spin off a business producing just limited edition handsets for the design conscious, like they did with the Vertu for the ultra-rich. Instead, new upstarts are taking the thunder away from the market leaders. 

For INQ’s part however, despite a fair start, they have a long road ahead. First off, they are already a generation behind the others, who are already moving towards touch-screen phones. Secondly, their distribution is far too limited, being solely available through the mobile operator 3. Thirdly, putting one’s eggs in the social networking basket may sound like smart business today, but who can say which platforms will dominate in the next two years. And eventually, the majors will learn from these upstarts, take their own UI’s to task and reinvent them from the ground up. Or just buy out INQ. Anybody want to vote for a Sony INQ3?