Today more than any other day, having started my career in a GE company (the erstwhile GE Capital International Services), I have this involuntary urge to pay my tribute to “Neutron Jack” in my small and perhaps largely insignificant way. But yet, I must, as the words come out, “Straight from the Gut” for the big man, who has left an indelible mark on every individual that he has remotely touched through his rich legacy, leadership, and philosophy.
From the poster boy of the internet to just another internet entrepreneur, this image doesn’t seem appropriate for Mark Zuckerberg to have in the history books of the future. It is this profound thought which led me to embark on a journey to conjure up visions of a grand Facebook comeback and suddenly the future of Facebook looked bright and shiny, all at once. And mark my words, Zuckerberg will save face and this is how.
There are two kinds of competitors in Retail at present- brick and mortar retailers and Amazon. There are two ways to stay ahead of the competition. And here I take the tiger, chasing the two men in a forest, analogy. While the two men are running away to save themselves from the tiger, one of them suddenly stops and takes out running shoes from his bag, to which his friend asks-“You think you can outrun the tiger?”. To this the other man responds- “No, I just need to outrun you. So, instead of taking on Amazon, retailers need to focus on beating their brick and mortar competitors.
I wrote this sometime back for a friend of mine, who took the plunge and started an e-commerce business, after leaving his cushy job at a Global Technology giant. Though the background of the article, mirrors the Indian Retail/ E-tail ecosystem, that is yet to come up to world standards in terms of customer centricity, the fundamentals are the same anywhere in the world.
The world of advertising will have to undergo a serious change if it has to survive. Though Facebook’s ascent as a viable alternative to the traditional media has been temporarily quelled, it is only a matter of time before they are back to challenge the domination of television as the primary medium of reaching out to the masses. To ensure that television ads are less of a drain on the advertiser’s pockets and also to ensure that there is less customer fatigue, there needs to be a number of changes made to the conventions of advertising, and ensure that advertising creates a pull rather that the push it receives now. But beyond these problems, which can be discussed separately, is the big challenge that brand managers continue to face on a daily basis, which is of shrinking budgets for advertising expenditures. If the last problem is solved creatively, it could address parts of the other problems that were mentioned earlier.
Recently, purists were pained to see the exit of Ron Johnson from J.C. Penney. Johnson tried to carry out an experiment of fixing J.C. Penney’s pricing, which had been using too many discounts. Johnson perhaps believed that offering discounts on artificially inflated prices was simply not ethical and diluted the brand of J.C. Penney. But alas! The brand Penney had already been diluted and customers came to Penney precisely because of the large discounts on offer. So, when Johnson came up with a clean and clear cut pricing, sales dropped. Many people believe that Johnson did not listen to the customer, which is why his new pricing strategy failed. Customers are mostly lured by discounts, which leads to a very interesting conclusion (amongst many others) - is price always about perception?
The flavour of the season, nay the flavour of the year in India is heavy discounting. If you look at online retail, there are deep discounts being offered on goods and services. The discounts are no longer restricted to FMCG (fast moving consumer goods) ones alone, but span across healthcare products, consumer durables, consumer electronics and even fashion accessories. If you look at modern retail stores – they indulge in full page advertising in newspapers with details of item-wise discounts to entice consumers to descend in hordes, often stretching their fragile systems and processes to points of near breakdown. There is a mob mentality, which has clouded the thinking of even the most rational and astute of retail strategists in the country: If there is no sale, there is no sell – that seems to be the morale of the story.