Category Archives: Business strategy

Online retailing doesn’t always deliver

Hey, Gerry Harvey and the crew of the whingeing Australian retail coalition – online retailing doesn’t always deliver!

If you’ve been following the brouhaha here in Australia over online retail then you would know that some of Australia’s biggest retail behemoths have been whingeing boldly and loudly about the non-application of GST (10%) to overseas online retail below $1000 in value.

If you believed these retail dinosaurs, you’d think that online retail was a great evil attacking the very fabric of fair-faced capitalism! Nothing could be further from the truth.

As this latest article identifies, online retail has some problems that should be familiar to anyone who has spent a little bit of time understanding the phenomenon. Problems facing consumers shopping online include:

  • non-delivery
  • item was not what was claimed online
  • privacy and security issues with internet transactions
  • confusion over application of domestic consumer law to overseas purchases

One of the reasons consumers shop online is because “bricks-and-mortar” retail has let them down.  Big retail in Australia generally has poor customer service and the range of products on sale is far fewer than what is available online over the internet. The first problem is something big retail could fix but it would cost them extra money in recruitment and training, something they all want to avoid. The second problem is unavoidable due to globalisation and communications – something that has been obvious over the past 20+ years.

Rather than spend the millions of dollars on a public relations campaign whingeing about a paltry tax payment, big Australian retail could actually improve performance through good ol’ fashioned competition. They could provide better service. They could offer a wider array of products. They could lower some of their prices to be more competitive with online (still higher, but not the umpteen hundreds of per cent differences we often see now). This comes at a cost to the retail monoliths and this is the real reason why they fly the online tax propaganda.

Retail stores in Australia have a huge advantage over online:

  • products are visible and tangible
  • products can be bought on the spot
  • there is no postage charges and overseas currency banking fees to pay
  • good customer service builds consumer trust and improves word-of-mouth marketing
  • Australian retail can use their own online stores to supplement their retail stores, thereby being both supportive of the business and enhancing the brand (but only if the online store actually meets consumer needs)

The trouble is, big Australian retail needs to put in some effort to compete. That’s why the CEO and Board of Directors get paid the big bucks – to work hard on strategy and operational performance. Quite frankly, I don’t see much evidence that they are willing to work hard beyond the easy fix of spending their company’s money on simplistic advertising drivel.

Reflections on Web 3.0 social media conference

I have had a few days now to reflect upon what was presented and discussed at the Web 3.0 social media conference that was held in Sydney last Thursday and Friday.

The key point is that social media cannot be ignored by companies and nor can it be ignored by “marketeers”. “Marketeers” is obviously some cutesy professional term used these days to describe marketing executives or marketing departments; a noun that I find strangely childish and stupid.  But I digress.

For the organisation, social media offers scope, range, and reach to potential customers and clients. Using social media tools such as blogs, Facebook, Twitter and LinkedIn allows organisations to communicate using channels that are becoming increasingly popular. 

Mark Higginson from Nielsens reported that growth in the online sector in Australia was strong, even showing a growth in online media use from the 55-plus demographic. Moreover, in the words of Alex Crompton from Aussie (Home Loans), “It’s (social media) where the people are.” In other words, look at where your audience is and work out the best (if not all) the media channels necessary to connect with them. The online space will continue to eat into traditional advertising channel revenue as people spend more time online.

Not surprisingly, the case for social media use was strong. Not only did presenters emphasise the communication and marketing aspects, but many also told us of the importance of “community”, “engagement” and “the social” aspects of the online universe. Online brand reputation and “tribal support” are significant, as both Alex Crompton (Aussie) and Karen Ganschow (Telstra) indicated in their presentations. Products and services can be improved by using social media as a way of listening to customers, and then using the feedback to enhance the customer (and brand) experience – all good commercial sense. Generating online champions who advocate (and even solve problems) on your behalf, is even better!

Nick Love from Fox Interactive Media was confident that the internet in the near future would be totally about “the social”. Nick was so confident , that he forecast that “social” media would become redundant since the social aspects of online use and interaction would become embedded into everything that happens online. Nick referred to the “social web” as a way of explaining how pervasive the shift to social networks was becoming. Mark Higginson from Nielsen wasn’t convinced (and nor was I) that the internet in the future would be totally social, but I think Mark and I would agree that the social aspects of online communication and engagement will continue to grow and become very important.

The three of us would agree, however, that social media has an important “reputation currency” associated with it, something at the heart of authenticity and engagement. It remains to be seen how marketeers will leverage “authenticity” and “engagement” to sell their wares and promote their brands.  Actually, it is already beginning to happen on social media sites such as Youtube where content is becoming monetised (product placement is a classic example).

Karen Stocks from Youtube keenly promoted (financial) success from Youtube celebrity spinoffs and content creators such as Australian Natalie Tran. Youtube offered global reach, attention, and eyeballs for product placement and brand awareness. At the heart of Youtube success was “viral marketing” – some authentic and often accidentally successful Youtube clip that captured “people’s imagination” and took off. One quoted example was the Mentos mints in the bottles of diet coke that literally took off, and with it sales of diet coke to boot! Of course, it’s not all beer and skittles (or mints and coke) for Youtube content creators. Naomi Klein warned us in No Logo that companies prowl for ideas from a range of sources (and these days social media is one of them) for emerging trends and then commercialise without any profit going to the edgy content creators who displayed their ideas first.

Michael Kordehi proved that Microsoft has informed and entertaining speakers with a great presentation on enhancing a richer and deeper personal experience with the web. Michael showed off some of the IT whizz-bangery that he and his team had done for NineMSN’s Grazia magazine. The image quality of the digital fashion shoot photos were enhanced for much finer image detail (something clients wanted from fashion photos online) AND also to enhance the way readers could share these images with their friends. Using your own navigation around the images, you could then save and send it to friends so that they saw the same sequence of images as you did. I think he referred to it as an “e-journey” but I think he’ll need to do more work on that term to make it part of the popular lexicon.

Other professionally presented talks were from Paul Borrod of Facebook and Cliff Rosenberg from LinkedIn, both of whom promoted the social media benefits of their respective services. I already use LinkedIn but I must say that I am a little more inclined to take Facebook  more seriously than I have in the past, based on some improvements to the interface and an assurance to improve privacy.

Marc Lehmann (Saasu.com) talked about the naturally selected web which pretty much was about getting the web to cut through the mess and give you exactly what you want without relying on search. Because we are all still time-poor, we need a more life-like web that relates to our own needs and our own digital identity. Marc thought that today it is not about the web, it’s all about the data. How can we get the data we need and personalise the information to meet our individual demands and save us time?  And Nicholas Gruen, in his presentation on Government 2.0 and web 3.0, also advocated how the provision of (government) data could be used by people in many different ways – the classic example was the Gov 2.0 mashup late last year at which an inventive bunch of people reframed and rearticulated government data into informative and interesting ways. In other words, put the data out there and let the people work out for themselves how they will use it and what meaning they will derive from it.

One of the best presentations from the conference was from Sandy Carter of IBM. Sandy gave some excellent real-life examples of companies using social media for a variety of strategic purposes. The message was clear: before using social media, an organisation must articulate and understand the problem it is trying to solve and then work out how (or if) social media can make a positive difference. In fact, 80% of your time should be about planning and setting out the objectives and the strategy, while the remaining 20% is about the technology and the tools. Much of what Sandy had to say, and in far greater detail, is in her book The new language of marketing 2.0. The book outlines a set of six steps (ANGELS) that provide a useful guide to utilising traditional marketing techniques with what web 2.0 has to offer. And thanks Sandy for the free copy!

There  were other interesting papers that I summarised in my notes but I need not go into detail here. Suffice to say, the conference encouraged thought and good discussion about how social media can be leveraged to improve communication, enhance marketing and customer engagement, and promote new forms of interaction and community among online participants. The conference was very impressive indeed.

The web 3.0 conference 3-4 June 2010

I will be attending the conference in Sydney, Web 3.0 & the future of social media, being held at the Sheraton-on-the-Park Hotel in Elizabeth Street.

I will be interested in hearing a realistic assessment of the future of social media. I will be especially interested in the social media crusaders and what they have to say about business embracing web 2.0 tools and thinking.

It will be interesting to hear how far business has come in accepting social media as a legitimate form of communication and business sttrategy because I am not sure how much the government sector really wants to engage in this space. Naturally, I understand the reluctance for government to fully implement web 2.0 (not sure we’re ready for anything further than that!), but I am still watching to see how Gov 2.0 really translates into practice.

My fear is that Gov 2.0 is more about dumping content onto websites than really engaging in the conversation with the citizenry. I hear Senator Kate Lundy is a real advocate for Gov 2.0 but with such an adversarial political system, I can’t see too much leeway being given for governments to really become transparent and open to detailed scrutiny.

We already have seen the media dump on the government over the funding of a home insulation scheme – a scheme let down by the insulation industry and greedy quick-make-me-rich merchants exploiting a good idea. It must be difficult for even the Gov 2.0 advocates to encourage more openness in government, especially when other members of the government want to censor the internet and treat the technology with such suspicion.

So, I will see what I can discover about the  leading edge private businesses who see the benefits of web 2.0.  I’ll report back after the conference with my notes and responses.

On media needing multiple platforms

Hot on the heels of my blog post yesterday, an AFP syndicated article on the Sydney Morning Herald (SMH) website today says that media companies must look at multiple publishing platforms to enhance revenue streams. 

The article, Media need multiple platforms: execs, says that “with advertising revenue eroding and free content abundant, media companies are going to need to adapt their strategies to the new environment ushered in by the internet, they said at the Bloomberg BusinessWeek 2010 Media Summit.   Hard to believe it has taken the media companies this long to work out this very fundamental change to publishing and content creation!

And why is it that media companies have been so slow?  Perhaps it comes down to sticking one’s head in the sand and pretending change isn’t happening. Or perhaps a media company might like to think it can bully alternative publishing and content creation providers out of the media business.  But perhaps it all comes down to the fact that changing traditional media publishing means doing new things.  And doing new things means thinking very hard about a changed publishing environment where control is no longer the sanctity of media company monoliths.  We already see how traditional and control-centred companies like to work in the music industry; desperate to hold onto oligopolistic control of music content and distribution despite a rapidly networked digital world.

However, change is inevitable and some media companies are actively looking at all the opportunities.  Julie Michalowski, vice-president for business development at Conde Nast, was quoted in the SMH article as saying:  “What we want to continue to do is to build digital relationships so that we can have a multi-channel relationship with our consumers that includes print and includes other ways that they want to access us”.  Hooray for that!

On the media tsunami

Readers may recall a blog post I wrote last December called On sailing ships and dodos.  The post was about traditional media moguls trying to keep control of media publishing and content.  In the new distributed world of publishing and content generation, this traditional strategy of publisher control is breaking down.

Indeed, traditional media will face even greater competition as the media tsunami hits in 2010, according to media commentator Tom Foremski in this recent online article.  Foremski is a former Financial Times journalist who started a news blogging service in 2004, called Silicon Valley Watcher.

Foremski writes that “the many different forms of media will continue to flourish and splinter and to compete with each other in 2010, only at a far greater scale.  This is all made possible because of the availability of very powerful and inexpensive self-publishing tools and services”.  These new self-publishing tools includes blogs, Twitter, podcasting, Facebook, etc.  Whilst many of these tools for self-publishing have been around for a few years now, they are becoming easier to use, with improved functionality and integration.

Not only will all this self-publishing have an impact on tradtional media empires, but it will also impact on advertising and public relations.  Dilution of advertising and public relations messages within the media space will become a real problem as more self-publishing and user-generated content competes for eyeballs.

In my opinion, media and PR will need to be far more focused and targeted, using the right communication tool and content, to reach the right audience.  A one-size fits all publishing model won’t work.   Moreover, companies will need to better understand all the different types of media, communication tools and channels, to work out how best to integrate their media campaigns, and support (rather than compete) the different types of media channels.

In other words, a more networked publishing model needs to develop to take advantage of different forms of media publishing and content generation.  And more attention needs to be given to the re-creation of content in different forms in order to tailor information and content in ways more useful and specific to individual consumers.  The web 2.0 “mashup” approach is something to consider by making a range of information available to be reconfigured in different ways.

The times are a changing. Organisations, especially media companies, better get used to the idea.

On network culture

One of the interesting things about humans is their interrelationships with other people.  There are historical reasons for this based on family, tribe, and community.  Such groupings were necessary to survive.  In most human societies today, the family unit is still the foundation of people’s relationships.  Friends and the people we socialise and work are also part of the human interrelationship matrix.  And interestingly, people have relationships with characters in books and on television, they have online relationships, and they have virtual relationships in digital spaces such as Second Life.

It should therefore be self-evident that people relationships are significant in nearly all that we do.  In fact, modern humans are truly part of the networked society as a consequence of the internet and World Wide Web.  We have in fact extended the possible reach of our relationships, widened the scale of intensity of relationships (between very weak to very strong); and increased the scalability of our relationships.  So shouldn’t we now recognise the importance and value of the network culture?

In many organisations, relationships are grounded in an “old style” corporate mentality dealing primarily with direct work-based relationships, often hierarchical in form.  In most cases, the network is based on physical proximity.  However, relying only on work-based physical contacts to get one’s work done is not enough these days.  In order to get the right person with the right information at the right time, we need more than just physical proximity.  We need access and immediacy.  We get access and immediacy through our networks, often facilitated through information technology channels.

In a recent blog post by Stefan Lindegaard, called How to create a networking culture, Stefan outlines some ideas for establishing and recognising a network culture within an organisation.  Not surprisingly, this recognition starts at the top. Stefan says: “Leaders [need to] show a genuine and highly visible commitment to networking. Leaders must walk the walk, not just talk the talk. … Leaders should also share examples of their networking experiences whenever possible”.

At the practical working level, Stefan has identified the following: “People [need to be] given time and means to network. Frequent opportunities are provided to help individuals polish their personal networking skills. Not everyone is a natural networker. But almost everyone can become good at it with proper training and encouragement.   Both virtual and face-to-face networking are encouraged and supported. Web 2.0 tools and facilitated networking events maximize the opportunities people have to initiative and build strong relationships”.

Now this all makes very good sense.  Why wouldn’t organisations want to leverage individual and groups’ people networks to get things done more quickly, more efficiently, and more effectively?  Such networks are at the heart of collective intelligence and knowledge management.

Why not use all the network facilitation services available in our modern world, from coffee shops to internet and Web 2.0?  And why should there be any doubt about the value of people networks when we can see how fundamental interrelationships between people have been over time?  Network culture should no longer be revolutionary – it should be accepted organisational practice.

On experiencing context

I want to talk about experiencing context.  I want to investigate what it means to experience something that is really going on rather than what is supposed to be going on.  I want to see what happens in practice as distinct to what the theory might suppose.

I am reading the classic book on urban planning by Jane Jacobs, called The death and life of great American cities.  As a lapsed economic geographer, I am always drawn to the intersection between economics and space and how in practice these two dimensions work.   The first observation, certainly if you are from Sydney as I am originally, is that there is a dark nexus between property developers and urban development.  Much has been made about the power of developer influence on government planning, for instance.

In fact, I recall one big developer wanting to concrete over the beautiful Kuring-gai Chase National Park in the north of Sydney to build more multi-dwelling housing!  The worst part, of course, is that besides giving the developer more profit and more power, the architecture of said multidwelling housing leaves a lot to be desired with their prefab look and feel.

In the introduction to Jane Jacob’s book, she cites an example of a so-called slum in Boston (in the 1950s) called the North End.  To much of Boston, and certainly the city planners, North End was a major slum.  Yet when Jane Jacobs visited the place before a future-planned “redevelopment”, she was amazed by the life and vitality of the place.  She rang a planning friend who confirmed he thought it was a slum, albeit a slum with pretty good health and socioeconomic statistics behind it.  Moreover, her planner friend actually visited North End and found it to have a “wonderful, cheerful street life”, even better in summer.

Jacobs says: “Here  was a curious thing. My friend’s instincts told him North End was a good place, and his social statistics confirmed it. But everything he had learned as a physical planner about what is good for people and good for the city neighbourhoods, everything that made him an expert, told him that the North End had to be a bad place” (page 15).

The story certainly tells me how important it is to experience the context.  I doubt whether it will always be good enough to just look at the theory, or the statistics, or the expert opinion, without experiencing the context for oneself.  More importantly, however, is the finding out about the experience from the people active within it.

It therefore comes as no surprise that in many areas of our professional lives where we have to make decisions, we often rely solely on past experience, our previous training, and the thinking that pervades ourselves and like-minded colleagues.  This is quite insufficient.  We need to explore other ideas and other people’s views, especially the views of the people involved – the real stakeholders.  And if we can break these patterns, either through our own determination or allowing some disruptive thinking to break through from elsewhere, then we can at least look at the world in a different way.

If we can experience context, and include the contextual experiences of those involved, we can make more informed choices and decisions that reflect the real context as distinct from our personal-world-view context.