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June 10, 2019

Welcome back to your weekly update on the changes, trends, and movers-and-shakers making headlines across marketing, brand, consumers and more!

From Deepak’s neuroscience desk, a look at why our brains love good storytelling, and the role neuroscience is playing in informing a new metric that will measure digital OOH advertising performance.

And for your commute, a TED talk from BCG on needing to identify what you’re willing to give up before you can even dream of building the fast, flexible, creative teams that will challenge entrenched work culture and drive business growth.

Below are a few thought-provoking articles to kick-start your week. Thanks as always for reading, sharing and sending your contributions.

BRAND & MARKETING

RETAIL, SALES & SHOPPER

  • Walmart just announced InHome Delivery, a new, in-home grocery delivery service where the retailer would deliver items directly to a customer’s fridge or freezer.
    • Consulting POV – Sometimes Walmart does stuff to keep up with the “narrative” in eCommerce; this seems like a remarkably difficult strategy to scale. An interesting experiment but a very costly solution to last mile logistics.
  • To reduce its reliance on traditional retail as digital competition undermines sales of everyday items, CVS is testing a new HealthHub concept store with more space devoted to health care services.
  • Ikea is doubling down on capturing the digital consumer with a new shopping app and a Pinterest-embedded catalog. Place, the app, will suggest products based on users’ room dimensions and personal style preferences, features AR to help shoppers envision products in their homes, and combines in-store and online experiences.
    • Consulting POV – Ikea continues its fine tradition of WPP partnership here (after the Cannes award-winning work app they did with Kantar’s Consulting team last year!). Pinterest remains the most underleveraged asset in retail digital media, and Ikea is smart enough to realize that in the mobile world you have to be where shoppers are, not where you want them to be.  Mobile media is a lot like pre-cable TV: the major apps are like the VHF channels you always watch, and minor apps are like UHF channels you needed to tie tinfoil to an antenna to watch (anyone under 35, find an elder to translate this for you!).
  • Sam’s Club has quietly been doing really innovative work and reimagining the way consumers shop, leading Forbes to label it the most innovative American retailer not named Amazon.
    • Consulting POV – Sam’s Club is doing some interesting stuff as they seek to create a very different economic footprint in their buildings. Tim Campbell’s review of their prototype format is a helpful guide to many of these initiatives.
  • Meanwhile, competitor Costco is just now starting to recognize the opportunity in and consequentially prioritize eCommerce. It’s a big pivot, considering the company’s recent preference was for customers to come in-store, believing that in-store customers would purchase more than those who shopped online…!
    • Consulting POV – Costco expands slowly in .com for 2 reasons: their core model is still growing, and their core model relies on building managers who aren’t distracted. Costco for years has wanted to minimize the disruption to club business management and club results…a Costco building only makes about 3-5% operating profit and losing volume to eCommerce for a club manager could be the difference between success and failure for the building manager, who is the most important person in Costco’s ecosystem. Finding ways to sell items that don’t make sense for their in-building model is a very logical extension of Costco’s proposition – for those that want more Costco info, Tim Campbell’s overview deck is a fantastic resource.
  • Amazon is piloting a pop-up program in the UK that will place 100+ small online businesses into ten pop-up shops on the high street for 6-8 week stints. Square is also a partner of the effort, which gives up-and-coming brands with successful online businesses a chance to explore physical retail for the first time.
    • Consulting POV – The UK is an interesting market for Amazon, where they balance the scale of a significant business and the imagination of a startup. They’ve done other popups in the UK: Anusha Couttigane profiled a fashion one from them last year. This Amazon Advanced deck from Kantar’s Consulting team is a more detailed overview of their strategies.
  • In addition to accelerating its e-commerce and omnichannel efforts, Versace is leaning into increasing its brick-and-mortar presence by 50% in an effort to double the brand’s annual sales.
    • Consulting POV – Post-merger with Michael Kors to form Capri last year (analyzed here by Anusha Couttigane and Tiffany Hogan), it’s not surprising to see Versace try and both broaden and democratize its brand proposition through a stronger retail footprint.
  • As digital experiences completely transform the nature of convenience for consumers, 7-Eleven is investing heavily in new technology, customer connectivity, and “phygital.”
    • Consulting POV – 7-11 Australia is an unusual manifestation of 7-11’s global format: like most Australian convenience retail, it’s very gas/drive-up driven. We’re not sure why they’d tour the US to understand the future of convenience retail…the US is probably 10-15 years behind most of the world in this format!

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