buying

The Hour of the Underdog

Robert Borneff Marketing , , , 0 Comment
The Hour of the Underdog

Successful, well-managed companies are excellent at developing and improving their products and services, so that they perform  exactly according to the customers’ needs. These companies listen carefully to their customers and everything that may not please the customer is rejected.

Professional market research, good business planning and proper execution of the plan are cornerstones of good management.

Successful companies grow continually to maintain their share prices and to create new opportunities for their employees. To maintain that growth the focus is on large markets that promise a maximum of revenue.

Sounds good! Doesn’t it? There is only one problem. Large and well-managed companies are often good in developing and improving products that already exist. This can be for example a recliner with even more motion functionality or a softer rug or faster closing window shades.

But what about products that are new on the market or not even invented yet. What about products that are currently only sold in niche markets? What about products that provide a lower margin than the mainstream products? For example a recliner with integrated butler to operate the TV remote and provide drinks; a self-cleaning carpet or grocery bags that dissolve into air after 48 hours of use.

It turns out that big companies are often only good with sustaining technologies, meaning already existing products. Regarding new or different products these companies often fail. The reason for that is, that the same management practices that made these companies to industry leaders also make it extremely difficult for them to work with disruptive technologies. This is the conclusion of Professor Clayton Christensen in his book The Innovator’s Dilemma.

So, What’s the Big Deal?

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Reinventing Retail and Design

Robert Borneff Marketing , , , 0 Comment
Reinventing Retail and Design

Retail is changing! In her blog post on June 6, 2016 Jennifer Marks with Home &Textiles Today quotes the last WSL Strategic Retail Survey (”How America Shops Mega Trends”), that 55% of women said their top spending priority is paying off dept, followed by saving (48%) and vacations (35%). Jennifer Marks concludes consumers are losing their interest in accumulating “stuff”.

On the bright side Deloitte found out (Retail Volatility Index 2016), that small and mid-sized retailers are taking market share away from traditional retailers (also see Disruption in Retail). That’s mainly because small retailers can offer niche products and experiences that big retailers can’t offer. These small companies are well informed, prepared and adaptable, so they stick out from the competition.

I was blessed to be able to attend the opening session of the High Point Market in spring 2016 with Polly LaBarre (The Mavericks at Work) discussing “Reinventing Retail and Design”. Polly described in her sweeping half hour talk what it takes to make a difference. The following are her key points of her presentation:

  1. Stand for something

Successful companies differ from the competition in their core values. Some may be specialized on a certain product group others may serve a certain customer group but every company has a mission and values which it stands for.

  1. Do they work of art

Successful companies develop their strategies together in a bottom-up atmosphere. It is an open and honest discussion where all team members participate equal.

  1. Open Up

Successful companies not only have an open working atmosphere (internal),  they are also opening up to the world outside. They are very interested in the opinion of their customers and also take criticism serious.

  1. Lead without authority

Because of the open internal and external atmosphere, hierarchic structures or military style management forms are missing. Everything is in a steady flow. The loss of control is accepted.

  1. Learn as fast as the world is changing

Successful companies know that the world today is changing faster than ever before. Being on top of the development is crucial to maintain the lead long-term.

Certainly this sounds easier than done. But young organisations like Jazzy Jobber don’t have a past to which they are connected too. They are also not connected to expensive inventory or other assets like buildings and machinery. There are also no management structures that could block future development. These are only a few advantages that give organizations like mine a little head-start. Time and effort will show how to benefit from it.

Source:

The next big idea; Jennifer Marks; Home&Textiles Today; 2016

 

 

7 Types of Multi-Channel Customers

Robert Borneff Marketing , , , 0 Comment
7 Types of Multi-Channel Customers

Customers are enthusiastic about shopping, independent of where they go to. It can be the Internet shop, the social networks or in the brick and mortar store.  With consumers increasingly becoming more experienced with the internet, retailers need a solid “cross-channel” strategy. The search for product information, the sales initiation and the sales incentive often take place in other channels than the actual purchase.

Retail of tomorrow means that one thing cannot be done without the other. While some of the customers are happy to receive in-house advice and then shop online, other customers inform themselves online and then buy in the brick and mortar shop. In addition, very often the Internet helps to find the best offer.

This development offers many opportunities for retailers. Companies should find out how to reach their target customer with different sales channels to gain new customers and keep them loyal  in the future. An important part here is the emotional connection of online customers with their favorite online shop.

But who exactly is the customer who buys through these different channels? Roland Berger Strategy Consultants , has specified the following purchase types:

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Disruption in Retail

Robert Borneff Retail , , , 0 Comment
Disruption in Retail

For a long time the advantage of leading retailers was their size. They were able to buy goods cheaper, because they bought large volumes. They had lower overhead costs because they operated many stores with centralized structures. They had large marketing budgets to run expensive advertisement with a lot of it on TV. Their sales were continually rising.

But suddenly the party was over. Much smaller retailers are snatching away market share from the big guys. According to an article in the Economist, large consumer packed companies (CPG) lost 3% market share between 2011 and 2015. What happened?

Why small retailers gain market share

  1. Online marketing is much cheaper and reaches more and more people. At the same time people are watching less TV. The advantage of big marketing budgets is declining.
  2. Through outsourcing of the production and online distribution, it’s easier for small companies to enter the market.
  3.  Small companies are often more flexible and understand better to keep up with the pace of their fast changing customer preferences.
  4. Consumers willing to spend more for a certain product tend to prefer smaller brands. Traditional big brands are the shops for basic, cheap products. According to Deloitte one-third of American consumers, would pay at least 10% more for the “craft” version of a product.

The Need to Change

All this has provided a big opening for smaller firms. The retail industry seems to enter a new world. Now there are multiple opportunities to navigate around the competition for brick and mortar stores as well as online shops.

The key for retailers to take advantage of these opportunities is to be brave enough to put everything aside that was once important and rethink and redefine the business completely. Last month Target announced that it will commit more than $7 billion to adapt to the rapidly evolving customer preferences. Everything from pricing models and store design to the retail experience and customer relation needs to be questioned. Standing still is not an option and boldness in this marketplace will be rewarded. Jazzyjobber will be part of this journey and welcomes everyone to join in.

Source:

  1. Invasion of the bottle snatchers; Economist 2016: http://www.economist.com/news/business/21701798-smaller-rivals-are-assaulting-worlds-biggest-brands-invasion-bottle-snatchers
  2. TargetCorporate,  February 2017: https://corporate.target.com/article/2017/02/financial-community-meeting

The 2 Main Things in Retail Today

Robert Borneff Retail , , , 0 Comment
The 2 Main Things in Retail Today

The possibilities to sell goods to customers have never been easier and numerous than today. eBay, Etsy, Amazon, Craigslist, online stores, mail-to-order, garage sales, flea markets, auctions, product parties  and pop-up stores are just a few alternatives to the classic physical store. This huge selection enables customers to shop according to their preferences.

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Sailing Blue Oceans

Robert Borneff Marketing , , , 0 Comment
Sailing Blue Oceans

Business is tough! When you start a business, you should find out what the competition is doing! To gain market-share you have to beat the competition! To be successful you have to offer a better product at a lower price offering better service! – Sounds familiar? We all know this. Business books are full of it. But is this really the way for a company to be successful, in a time when everything seems to be upside down? Can it not even be dangerous to do what competitors are doing, just trying to do it better?

Markets, products and customers are changing today faster than ever before. Who still thinks that phone calls overseas have to be expensive? How much do we have to pay for social media? Can you publish a book yourself today? Hasn’t Amazon opened a store where you can leave with the product without payment?

One way to be successful in today’s marketplace is to not to fit in or stick out of the competition, but to be different. Instead of butting heads with other companies, eliminate the competition by doing what nobody else does. Create new demand for products and services that only you offer. Sounds difficult? It is, but wait, there is help.

W. Chan Kim and Renée Mauborgne developed a strategy to maneuver around the competition and sail in untapped ocean of new markets. Whereas other companies fight in cutthroat competition that turns the ocean bloody red, companies following this strategy may find calm blue oceans to sail in. That’s why it’s called Blue Ocean strategy

How does this work?

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Change in Retail – The Customer in the Center

Robert Borneff Retail , , , 0 Comment
Change in Retail – The Customer in the Center

Online shopping is booming. Big traditional retailers like Sears and Macy’s have eliminated stores and cut jobs. Amazon seems to continually grow and expand. Online shops take market share away from brick and mortar stores.  Thanks to the development of mobile devices such as all inclusive cameras, alarm clocks and communication tools with social media that we carry with us 24/7, online shopping is a no-brainer. Mobile devices become the most important shopping partner for price comparisons, product reviews and recommendations. Does that mean there will be no physical stores in the future?

Regarding indifferent commodity products like toilet paper or cleaners it is likely that these products will be bought increasingly online in the future. But what about products that need to be selected more carefully like fresh produce, fashion or higher class furniture? These products still need to be seen, smelled, or tried out by the customer. The purchase of these products itself provides an essential experience that can’t be replaced with virtual or augmented realities.

Classic go-to stores will always be there in the future. But they will probably look not like the ones we used to know. Here are some major trends for the next years:

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Transparent Marketing

Robert Borneff Marketing , , , 0 Comment
Transparent Marketing

In their book “Don’t Think Pink” the authors Lisa Johnson and Andrea Learned call for the need of Transparent Marketing to attract female customers. Over the last years women became the key- customer especially in the home furnishing business.

Transparent Marketing supports credibility. Credibility translates into trust; trust translates into relationship, and relationship can translate into sustained sales. The trick about this approach is to focus on the need of women without directly pointing to it. Here are some areas to emphasize on:

 

1. Focus on key customers

Instead of trying to be there for everybody, the focus should be on a specific customer group. This small group of customers will later on attract a larger audience. Choose niche marketing over mass marketing.

2. Know your customer

Find out as much as possible about your customer. Find out how they act and react. Communicate online and offline as much as you can and listen carefully. Make sure that the message you are sending online through your website and social media is consistent with your real life activities. What are the challenges of your customer? What is their motivation? What are they afraid of? What are their dreams?

3. Be present

Women are always thinking about their family, friends and neighbors. Make sure your customers can use the relationship with you to improve their social connections. Take advantage of the power of word-of-mouth-networks. Be at the right places at the right time, so that your customers always keep you in mind. Work together with other brands for common goals to reach out and explore new markets.

4. Open up

Keep improving the way you make the life of your customers better. Inform your customers about all aspects of your business. Include your customers in your decision process. Always ask for feedback. Use your testimonials to reach out to other customers. Work with referrals as much as possible.

5. Be emotional

Women like to be taken away by stories about how your product will improve the quality of life. Capture her imagination to help her understand how your product or service will fit into her life. Select images, messages and stories that will authentically reflect the values of your customers. A good story will give them the tools they need to visualize what it will be like to interact with your brand.

Apply your marketing to all senses of the customer. The customer will recognize the small things, the background music and the color of your displays and will pay more attention to the message of your store. Offer some little extras that the customer will discover herself.

Never push anyone into buying something. Be sure all questions are answered before the sale will be closed. It’s the experience with your brand that builds the bond with your customer.

6. Be Bona Fide

Your brand should be different from others and stick out of the crowd. Don’t follow your competition!

Show personality and be authentic. Be honest with the strengths and weaknesses of your brand. Work with real life situations to promote your product instead of idealized scenarios. For example showrooms must not be perfectly cleaned up as a display.

Be consistent in what you say and what you do. Two-faced messages disturb your credibility. Encourage questions and provide as much information as possible. Make sure this information can be shared publicly.

Source:  Don’t think Pink by Lisa Johnson and Andrea Learned, 2004

 

 

Simple Living

Robert Borneff Lifestyle , , , 0 Comment

You may think “Why is there a post about Simple Living on a Blog about Furniture and Interior Design?

The reason is that a growing number of people realize that chasing the Golden Egg does not make you happy. Long working hours, stressful jobs, exhausting commutes are just not worth it anymore. People prefer spending time with their family, being together with friends and neighbors or working out in Mother Nature. They like to spend time preparing for a good meal and be part of what their kids are doing.

I am not talking here about hippie communes or lonesome hermits in the middle of nowhere. More and more people rethink their life and choose different priorities than before. The idea of simple living is almost 3000 years old and can be found in every civilization. The famous Bohemians in Paris in the 19th Century were part of this movement.

Simple living does not mean you have to refrain from luxury but enjoy it. Luxury is great as long as money plays a minor role. Being happy and grateful – That’s what’s important.

Simple living is also about the little things in life. Things you would not even recognize doing like enjoying the foliage of the forest in the fall on a hike.

This way of life creates different expectations from retail stores. These people don’t storm in the store every time the sales sign goes up.

In my opinion these customers value their time and want something different out of their visit.

Some of them may come, because food is offered (think of Ikea). Others may be attracted by events for the kids, like a puppet theater, a magician or a crafting table.

These customers prefer to enjoy the merchandise, not necessarily with a buying intention in mind. Some may be inspired by the store layout and develop design ideas for their home.

Some Boutique Stores also mix up their merchandise with art, jewelry, shoes, food, cosmetics and table ware. The stores have a special type of customer in mind and cater exactly to his taste.

There are many ways to increase traffic in a store, but to find out what fits best, you have ask the customer. People like it, when their opinion is valued. The customer feels taken care of. The customer feels in control and that creates trust.

The good news about trusting customers: They may become loyal to your store and you see them again and again.

8 Ways Spending Money Makes You Happy

Robert Borneff Lifestyle , , , 0 Comment
8 Ways Spending Money Makes You Happy

As the saying goes, Money alone cannot buy happiness. But money can buy, what makes people happy. This was shown by numerous studies to this subject by Elizabeth W. Dunn of the University of British Columbia, Daniel Gilbert of Harvard and Timothy D. Wilson of the University of Virginia. Here are eight ways how spending money really makes you happy.

            1. Prefer memories over products

While material things are quickly perceived as boring, the memory or traveling or attending concerts last longer.

 

 

            2. Spend money for others

There is no indication that people are happier when they simply spend more money for themselves. But anyone who donates parts of his income or purchases gifts for others, is happier on average.  There is neuroscientist evidence that people who are asked to donate to a local charity, have brain activity in regions of their head that are also active when people are rewarded.

           3. Buy less insurance

The research of Mr. Gilbert shows that people deal much better with disasters than they would believe. He speaks of the psychological immune system. In contrast, buying extended insurance warranties that extend the guarantee of a product is not always useful.

           4. Pay now, consume later

Anticipation is the greatest joy! The great thing about anticipation:  It often makes you even happier than the actual event itself.

But many people pay for their purchases with credit cards. That means: Consume now, pay later.  The nuisance of having to pay is pushed into the future, which is supposedly not as bad. Experiments show that this is not the case.

            5. Pay attention to the “unimportant” things

People make poor judgments regarding their future happiness feelings of purchases and tend to overestimate some of them. In other words they think buying a product makes them happier, than it actually does. That’s why you should think about in detail how you would actually use the product in everyday life. You may be surprised!

            6. Buy many small amenities, instead of a few large luxury items

Little pleasures, great happiness:  Treating yourself to something frequently is more important than quantity, number or scope of the item. An experiment showed that people prefer short frequent massages over a few long ones.

            7. Do not compare too much

Research shows that people comparing different offers prior to a purchase mainly focus on the price. It would make them much happier to spend a little a more and get better quality. The quality difference of product is often not obvious at the moment of purchase but comes out later through the use of product. In Germany there is a saying: “ Who buys cheap, buys twice!”

           8. Follow the crowd

 Experiments show: Those who rely on the experience of others have a better chance to invest their money properly – and to be happy with a purchasing decision. The abundance of consumer reviews for all kind of products and services on the web is therefore very helpful.

Source: Sueddeutsche Zeitung; November 20, 2012: So macht Konsum gluecklich