“Reverse Retailing”: how some shops get the Internet spectacularly wrong

There was a time when customers rightly expected shop assistants to provide superior services, that is to help them with the selection of the right good.

With the advent of search engines, some shopkeepers seem nowadays to expect their clients to do their online homework before they enter their premises. In other words, shops see themselves solely as mere distributors of goods, providing no expertise with regards to selection or comparison.

This is what I call reverse retailing: when customers have to rely solely on the Net to gather information, they simply end up doing the shop assistant’s job.

Am I exaggerating? Read the following real-life experiences:

First story: in a mobile phone store

A couple years ago, a few days after I bought an expensive smart phone, I came back to the shop to ask how I could transfer my address book onto the phone’s built-in memory. The very guy who had sold me the phone started to patronise me. And upon my insistence for clear explanations, he then lost his temper.

It is unbelievably unpleasant to be shouted at by a shop assistant, especially when he happens to be a spotty teenager. To his credit, maybe the use of anti-acne cream made his testosterone shoot up? Or perhaps he had lost his virginity the night before, and suddenly felt invincible. All in all, I was inches away from smashing his face – don’t worry about me, this thought was certainly triggered by the fact that he was short and skinny. In the end, I left the premises, confused and fuming, and looking at a retail brand I had respected for many years… with anger.

Pathetic.

Second story: in a photo & video outlet

In this shop located in central London, I had the temerity to ask for the price of the latest Olympus’ shock/waterproof camera. The salesperson replied:

- I need to have the name of the product; otherwise I cannot look in our computer system.

Of course, I did not have the damn name in mind.

I asked him: “surely, there are not so many waterproof Olympus digital cameras on the market. You sure you cannot easily find it in your ’system’?”.

While I was doing my best not to loose my temper, he suggested with certain aplomb:

- I tell you what: why don’t you go on Google to find the camera’s name?

What exactly was expected from me when I entered the shop? Showing up with printed pages of my research on Google Shopping pages? Or with a photocopy of the magazine advertisement where I first spotted the product in question?

Mesmerising…

 

Third story: in another mobile phone retailer

Once I had paid for an iPhone, the salesman, who had been thrilled by my propensity to buy such an expensive good without asking too many questions, suddenly refused to insert the SIM card in the handset. I naively thought that, like in the good old 20th century, part of the service included the opening of the carton box, the insertion of the SIM card, and the usual blabla on battery charging and initial experience with the handset. Well no, in a digital world, self-service prevails.

I ended up presuming that the shop assistant had studied artificial intelligence at the MIT, and that he was therefore far too intelligent to open a carton box.

Back at home, I almost broke the iPhone in anger since it took me ages to find out how to insert the SIM card. It was entirely my fault though – I should have been on the Net to look for explanations… and I would have discovered that, silly me, all I needed was a paperclip. As the cultured readers of this blog post know, there is a tiny hole on the side of the iPhone. Put a paperclip into it, and sesame opens. That simple!

Again, in all fairness to the MIT-graduated shop assistant, the basic task of inserting a SIM card was way below his intellectual capacities. It was therefore my duty, as a customer who, let us remind this, had signed up for a 18-month long contract, worth more than £900, to service myself.

Unbelievable…

 

Fourth story: in a car reseller

This time, before entering the store, I did do my homework and spent time researching finance options to buy a car. It looked like leasing was a valuable route… except that there were 7 options on the site. Unwilling to explore in details the minutia of leasing finance on my own, in front of a PC screen, I naturally decided to pay a visit to the local franchise… What a mistake.

The salesman bluntly refused to explain how the leasing options worked. And guess what he told me:

- You need to go on our website. There is a dedicated section on leasing – you will see, it is very well explained.

With uncharacteristic magnanimity and patience, I smiled and told him: “Great. Will do. Thanks”.

In the end, I bought a car from a competing brand, and got a loan from my banker, a reassuringly physical person.

Incroyable.

Last example: in an entertainment goods chain retailer

I had heard on the radio a new version of Miles Davis’ famous “So What” tune. While browsing at the Jazz section of this huge store in London, I asked the person behind the counter situated within, let me repeat again, the Jazz section: “I heard this new version of So What a few times on the radio recently. Do you know which artist covered it?”.

- What’s the name of the artist?

- Erm… I don’t know, that’s my question.

- How do you want me to find the track if you don’t know the name of the artist?

- Because you are paid to be knowledgeable about jazz music, otherwise you would be selling, say… paperclips.

Incredible!

Morality:

As in many industry sectors, the digital revolution happens not only because of its intrinsic benefits, such as always-on, international, instant, practical, cheap, comparable, etc, but also because of the sheer frustrations we experience in the quotidian of our physical world.

What is the point to go ”physical shopping” when the service can be in some instances so rubbish?

You would be better served by robots… Guess what, this is exactly what e-commerce is all about!

eCommerce is highly successful, gaining share of market… but surprisingly, some besieged shops now use the Internet as an excuse to provide less value, and lose even more market share!

If we extrapolate this reverse-retailing trend, we may end up having our high streets cleared of low-value retail chains. Then, what would remain is self-service businesses, such as supermarkets, and niche boutiques that provide genuine added-value experiences.

eCommerce could therefore trigger another retail revolution by helping with the revival of independent shops. What a twist this would be!

We used to be happy to rely on the advices of those experts working in record, fashion or electronic consumer goods stores. Bring them back, or you may perish!

Pendant la crise, n’oublions pas l’économie numérique

L’innovation est un incroyable moteur de croissance.  Pourtant, par ces temps de crise, un pan entier de « l‘économie de l’innovation » en France semble avoir été oublié : les services numériques, un secteur qui englobe une grande variété d’activités, allant des réseaux sociaux en ligne et du marketing sur les téléphones portables, jusqu’aux technologies d’affichage électroniques, de la télévision sur Internet ou des jeux vidéos.

 

Or, la révolution digitale est d’une importance primordiale pour trois raisons.

 

Pour commencer, elle participe à la transformation rapide du monde des affaires : par exemple, les secteurs de la musique, du cinéma, de l’assurance, ou du tourisme ont du totalement repenser leurs stratégies et leurs organisations. Nous nous devons donc, en tant que nation, de maîtriser la problématique générée par la révolution digitale si nous voulons maintenir une économie en bonne santé.

 

Ensuite, la révolution numérique affecte aussi en profondeur la société en redéfinissant la vie quotidienne. La consommation des médias, l’amitié, l’éducation, la politique, l’expérience de la démocratie etc… Les mutations sont nombreuses et rapides, et ici aussi nous nous devons de comprendre et d’anticiper les conséquences sociologiques de ce nouveau paradigme, et donc de maîtriser les innovations en amont.

 

Enfin, sur le plan stratégique, dans le monde numérique, le champ de bataille n’est pas national, mais global, et il tend vers la prédominance quasi monopolistique de quelques entrreprises: Google dans les moteurs de recherche, Amazon dans le commerce en ligne, YouTube dans la vidéo sur internet,  Facebook dans les réseaux sociaux, ou Twitter dans le micro-blogging.

 

Or, le centre névralgique de cette révolution se trouve, comme pour celle de l’informatique dans les années soixante-dix, sur la côte ouest des Etats-Unis, et en particulier dans la Silicon Valley.

 

Nous avons certes de belles réussîtes françaises, comme Dailymotion, qui concurrence l’ubiquité de YouTube,  ou des jeunes et prometteuses entreprises comme Total Immersion (logociel de réalité augmentée), Linkfluence (analyse des medias sociaux) ou Pearltrees (systeme de classification des pages Internet).

 

Cependant, la France est à la traîne, comme beaucoup de pays européens.

 

Devrions nous en être préoccupés ? Certainement, non pas par chauvinisme déplacé, mais surtout à cause d’un véritable gâchis intellectuel. En effet, avec l’excellent niveau de nos écoles d’ingénieurs, des prépas spécialisées dans les sciences physiques et les mathématiques, des centres de recherches et des universités dans le secteur des technologies de l’information, nous avons, en tant que nation, un avantage compétitif patent qui est malheureusement sous utilisé.

 

Le problème en France, c’est l’innovation, et son financement.

 

Au delà des explications classiques, qui vont du manque d’avantages fiscaux pour le métier de capital risque à la préférence des étudiants pour des carrières prometteuses dans de grandes entreprises (qui peut leur en être grés lorsque le « système » n’est pas là pour supporter l’entreprenariat), que pouvons-nous faire pour changer la donne ?

 

Paradoxalement, la crise est peut être, dans ce cas, une source d’espérance. Explication : puisqu’elle est caractérisée pas une pénurie de liquidité, tant pour accorder des prêts que pour investir monnaie trébuchante dans des entreprises innovantes, le réflexe bien français de faire appel à l’état serait, dans ce cas précis, non pas une solution de facilité, mais créatrice de valeur. Rappelons à l’état son devoir de régulation, de « compensateur » de l’inefficacité des marchés, pour soutenir un secteur d’activité stratégique.

 

Concrètement, pourquoi ne pas créer un fond de capital risque qui serait financé par l’état, et qui n’investirait que dans des entreprises du secteur numérique qui ont leur siège social, ou d’important sites opérationnels, en France. Ce fond devrait aussi attirer des chercheurs et entrepreneurs étrangers, qui pourraient alors créer et développer leurs activités sur notre territoire. De plus, si une invention ou un brevet n’arrivait pas à attirer l’attention d’investisseurs privés, plus pour des raisons conjoncturelles qu’objectives, ce fond représenterait une deuxième chance.

 

Il apporterait une bouffée d’oxygène et une certaine pérennité alors que nous traversons une période instable et destructrice.

 

Le but du jeu ne serait surtout pas de créer une usine a gaz pour les planqués de la république ! La structure du fond devrait être légère ; sa réactivité rapide, son organisation professionnelle, dénuée de toute contrainte technocratique. La sélection des dossiers se devrait d’être transparente (pas de favoritisme, merci bien) et apolitique. Ses employés viendraient du secteur privé, et ses objectifs seraient mercantile : investir pour créer de la valeur pour l’investisseur de référence, c’est a dire l’état… c’est a dire tous les français.

 

C’est en investissant en temps de crise que l’on prend de l’avance sur la compétition. Cet adage est plus facile à dire qu’à faire, surtout en cette période d’endettement, lorsque l’investissement dans le long terme peut paraître superflu. Or, au milieu de cette crise créée par des dysfonctionnements purement financiers, c’est à l’état d’intervenir de manière ouverte et intelligente. Un fond d’investissement pour le secteur numérique serait une réponse éclatante et un pari pas si risqué qu’il n’y paraît sur l’avenir de la France.

Art as a source of inspiration for ad agencies (part two)

After the hotel Everland, here is another unique and unbelievable experience some of you could enjoy soon.

Once again, this project is located on the roof of Le Palais de Tokyo museum in Paris. But instead of a hotel room, it is an exclusive restaurant.

Nomiya is an art installation conceived by Laurent Grasso with the collaboration of architect Pascal Grasso.

(photo: Kleinefenn)

This is a temporary, transportable dining room with a unique panoramic view over Paris and the Eiffel tower.

(photo: Kleinefenn)

Importantly, unlike the hotel Everland, this project is sponsored by a brand, Electrolux, and is currently “alive”: to book a lunch, a dinner or a cooking training session, visit the Art Home web site.

This is another example of lateral thinking – how brands can, besides the products and services they usually offer, provide a genuinely amazing and unique experience…

Art as a source of inspiration for ad agencies (part one)

Clients often ask agencies to come up with distinctive ideas for exclusive brand experiences, original engagement solutions with consumers.

Take a look at what two artists did last year in Paris. Out of the blue, Sabina Lang and Daniel Baumann (better known by their abbreviation L/B) have managed to create an amazing artistic project with their Hotel Everland.

It consisted in a hotel room that used to be located on the roof of the Palais de Tokyo, a contemporary art museum on the right bank.

On the way up

On the roof

As you can see on the photos, the design was striking and the location pertinent.

There was a digital trick though, which made the whole story even more enticing and intelligent: people were unable to book through their usual travel agents. The only option was to log on the hotel’s website  approximatively two months before the d date. At one stage during the day, an icon would appear… and the first person who would click on it would win the right to spend 444 Euros for a one-night stay.

This is what I call “meta exclusivity”. Even Warren Buffett or Bill Gates, with their deep pockets, would have been unable to book a night, unless they were willing to spend hours refreshing the webpage in question in order to win the virtual lottery.

The digital aspect of this project certainly added a universal dimension. People from the four corners of the world were suddenly able to participate in this original experience. A physical experience, indeed, but triggered by a digital platform.

This is Art.

But if it had been conceived for a brand, what a communication excercise it would have been! And what a smart way to blend digital with physical.

This is surely a source of inspiration for ad agencies and brands.

Again, look at the view.

Facing the Eiffel tower

Will digital agencies collapse?

Suffice to say that, with the advent of digital, “traditional” agencies have had to re-invent themselves, to change, to innovate.

The real difficulty has not been to develop digital capabilities, but to integrate them in the overall offering. On the one hand, there is the fast-moving, project-based, technology-led, disruptive and full of surprise digital activity. On the other hand, there is the well-known, slow growth, retainer-based, old reflexes-driven and rather predictable traditional marcom business.

The key was, and still is, to foster innovation and change, without destroying the mainstream business.

Well, one can argue that many agencies did successfully integrate digital.

In short, today, a genuine – and somewhat ideal – multidisciplinary approach to client service could equal to: (ATL + BTL + PR + media + design + content) * (digital + non-digital).

Now, let us talk about pure player digital agencies. In the last three years I met a few of them, whether independent or part of a ad network. Interestingly, some of them seem to be totally un-interested in integrating tradional advertising. Digital is all they breathe.

In other words, traditional agencies got our of their comfort zone to understand and internalise digital… while some digital hotshops now refuse to venture into the jungle of traditional advertising.

Does it make sense? Will they loose business if they don’t adapt soon to the current paradigm, where clients want agencies to be not only media neutral, but also “idea neutral”, both in the physical and digital worlds?

This is what John Gapper, associate editor at the Financial Times, recently wrote: “The proliferation of agencies not only feels to many advertisers like a luxury in straitened times, but is also ill-fitted to the new digital world.”. He added “It did not matter while clients had plenty of money to throw at the problem, but they are no longer willing to pay lots of agencies for overlapping roles, and are squeezing fees”.

In a world where integration and multidisciplinary skills are important to clients, what will happen to digital agencies who remain allergic to the non-digital stuff?

TV versus Internet

I am going to participate to a debate on the Internet and the future of television broadcasting at the University of Oxford Internet Institute on Friday 16th October.

All participants were asked to provide initial comments that would be discussed during the debate. Here is my opinion piece:

The television broadcasting industry is in danger.

And once again, this is all the fault of the digital revolution.

On the one hand, it is evident that the advent of broadband access for the general public is disrupting, if not destroying some sectors such as the music industry.

However, one could argue that broadcasted television’s lack of appeal is not just due to the superiority of digital platforms, but also to its intrinsic limits: in an age where computer and mobile screen interfaces can do wonder, watching programmes on a TV set is indeed a frustrating experience.

Take for example the problem of screen sizing. How many times have we ended up watching people on the screen who look wide… simply because the TV set is enlarging the image to the panoramic view? Apparently, there is a “smart” option on TV sets, which automatically re-sizes images. So if TVs have a brain, it is smaller than that of my other media players.

Just like a landline telephone handset compares poorly to a mobile phone, television interfaces and remote controls are inferior to PC and Internet interactivity. As the Duke of Edinburgh elegantly put it this week: “to work out how to operate a TV set, you practically have to make love to the thing. Why can’t you have a handset that people who are not 10 years old can actually read”. No further comments needed!

I concede these considerations may be trivial… So, amongst a long list of more serious issues, I am highlighting two critical topics for our forthcoming debate at the University of Oxford’ Internet Institute on the future of broadcasting:

First, let us talk about QUALITY OF CONTENT.

From chess to foreign affairs through to football, military history, economics or ballroom dancing, our post-modern society provides such a variety of hobbies and passions that television programmers are confronted with the impossible task of addressing the wide interests of the audience.  This Sisyphean mission must have frustrated countless TV executives, hence their propensity to aim for a common denominator.

How many evenings per week do we think: “there is nothing interesting tonight on TV… once again”?

Take architecture: I am a fan. Why can’t there be a decent programme on the latest news about buildings and urbanism? We all know that cost is king, especially when the target audience is not massive. But a one-hour programme dedicated to architecture could be in the form of a debate between academics, practicians and amateurs, nothing more. A monthly discussion would be sufficient to satisfy my curiosity and passion. More would be perfect, but I cannot be too demanding.

The same could be said about jazz music, diplomacy, roman noir, philosophy, archaeology, etc.

By catering for the masses, TV cannot compete with platforms such as social media, blogs or video aggregators, where niche topics strive.

If TV channels want to retain their freshness, “live” effect, utility and relevance, they must diversify their offerings. With TV channels such as SciFi, Film 4 or Cartoon Network, they have started to do so years ago. However, rather than solely betting on specialist channels, they should also think about mainstream TV channels that would offer different programmes, that are not just cop dramas, soaps, news and reality shows. There is room for mainstream channels… with a lateral twist.

Second, there is a problem with regards to GEOGRAPHICAL AVAILABILITY.

Evidently, for media broadcasting industries, legal frameworks are of national nature. This is a critical issue in Europe, where a significant proportion of EU citizens do not live in their country of origin. For those “expats”, watching a TV show from their native country is difficult. There are ersatz of TV channels, such as French-speaking state-funded network TV5, which are supposed to select the best of French, Swiss and Canadian programmes. In fact, it is an illogical and confusing amalgamation of disparate programmes. And in addition, you often need to pay for these kinds of un-attractive TV channels!

Because radio needs less bandwidth, or thanks to a more relaxed legal framework (?), it is far easier to listen to foreign radios channels. Coming back to my experience as a French expat, there is a wonderful iPhone application called France Radio, which allows me to listen, live, to all French state-owned radio stations. Believe it or not, this service is provided for free by two Spanish software programmers…  Either they are in love with French culture, or they have something against state radios!

With the arrival of Hulu and Boxee in Europe next year, what happened with radio will be repeated with television.

There will still be an issue with advertising and legal restrictions.

For the former, addressable advertising may be the panacea. Germans living in Italy will have their TV show interrupted by an ad for a local Italian retail chain, thus allowing advertising revenue to be maintained (the multiple problems generated by addressable advertising will be discussed in a separate blogpost).

For the latter, the EU must simply come up with a pan-European set of rules that will allow the emergence of a “broadcasting Shengen” agreement. Let TV programmes freely cross our frontiers! Knowing the efficiency of European lawmakers, I presume this undertaking should take a couple of months.

With all these issues around traditional TV broadcasting, the future success of Internet television as a flexible and value-added service will not come as a surprise.

Still, “classical” television broadcasting is not dead… at least for now.

TV is also about feeling a sense of community: we all love to watch, at the same time, something unique, enticing, extra-ordinary. We just enjoy so much the sense of sharing an amazing experience, live, with a few friends, but also with millions of people.

In a world where multi-tasking and “always-on” seem to prevail, and where interacting with friends, strangers and even brands is commonplace, traditional television’s main weakness, that is the passiveness it implies, may be its ultimate strength: What a delight, after a day spent struggling with a continuous flow of emails, SMS, instant messages, tweets and blogposts, to peacefully watch a great TV programme. With no red button to click on… Am I that old school?

Google: mighty giant or ephemeral phenomenon?

Google could be seen as the modern equivalent of Rockefeller’s Standard Oil – a sort of quasi-monopoly with a take-no-prisoners mentality.

In “classical” industry sectors – by classical I mean pre-digital – like automotive, mining, telecoms or oil extraction, economies of scale and entry barriers provide corporations with a crucial layer of protection.

Is it the same on the Internet?

And if not, is Google a giant with feet of clay?

Let us take a look at the directory-publishing sector as a benchmark – a relevant choice, since Google is nothing less than a universal version of a yellow pages operator.

These companies used to run large and expensive sales forces. The sheer amount of money needed to set up a competing business was usually too great to be worth the effort. With the advent of digital technology, however, automated space booking replaced sales forces, lowering barriers to entry.

Combined with superior algorithms and a first-mover advantage, this favoured the emergence of Google.

But the digital nature of Google’s activities is in fact both its weakness and its strength. Even with disproportionate scale and substantial competitive advantage, a digital business is not as well-protected as Standard Oil or yellow pages firms used to be. As seen with Netscape a few years ago, companies can be wiped out in a matter of months.

And the Internet is intrinsically open to any kind of attack, and not just that of known competitors. Tomorrow, an 18-year-old Swedish genius could come up with a better search engine or a better monetisation model.

It is difficult to raise funds for and perilous to launch a new TV channel, a new car manufacturer or a new mobile operator; it is feasible to launch a search engine, a social network or an online video site with a worldwide audience.

That is the very nature of the digital economy: it can rapidly transform or even destroy whole industry sectors. It did this to music, insurance and travel, and it could do it again to the online search business.

Another reason to doubt Google’s longevity is that the value of sponsored links on search results pages – the bulk of Google’s revenue and profits – could decline.

In 10 years, will we continue to click on sponsored links when we search for information? Will we be interested in opening a link that was paid for by a company that simply wants you to visit its webpage? Or, will there be a Tivo-isation of search, with a growing number of users systematically skipping advertised links?

I would also argue that the big battle in search is around the qualification of results, a giant leap from the neutrality – read lack of added value – of the yellow pages. If you want to spend a nice evening in Barcelona, combining theatre, restaurant and bar, online search services of Lonely Planet, Michelin, Time Out or Wallpaper may be more helpful than Google, which in this case looks like an uninspiring amalgamator of basic information. Even better, you could use social searches by asking your Bebo, MySpace or LinkedIn acquaintances.

Finally, with regards to privacy, there is also the possibility of a backlash against intrusive information-gathering – see the recent Phorm debacle in the UK. In this “1984 scenario”, web users could decide, in order to protect their privacy, to spread their searches across various and unconnected services, so that no one search engine could capture their whole behavioural profile. For example, you could use Bing at work, Google at home, Wolfram at university, Twitter while commuting, and Facebook while travelling.

All these concerns may undermine Google’s supremacy.

I bet, though, that its management have already anticipated all these issues, and have stockpiled weapons of mass retaliation…

Still, in the end, what really strikes me about Google is the amazing energy it deploys in innovating in myriad areas, and not always inter-connected ones. Isn’t this a sign that Google is consciously enlarging its portfolio of activities – just in case search, the cash cow, does not perform as expected in the future?

Or, conversely, is it just a candid and optimistic expression of Google’s self-confidence, where even not-for-profit activities are commonly included in its corporate strategy? As if it knew it can magnanimously afford to mix mercantilism with charitable actions – see Eric Schmidt’s surprisingly open comments about Google’s plans during a video interview by Ken Auletta of The New Yorker.

Digital media is such a volatile and open-ended industry that it makes cinema tycoon Sam Goldwyn’s famous saying “Never predict anything – especially the future” even more pertinent.

Let us see where Google is in a few years – I shall stop drinking Pinot Noir for an entire month if Google is as prevalent as it is today…

McKinsey is looking for creative people!

Just joking… It is very unlikely to happen.

Really? Read this:

Imagine you are the top guy at McKinsey: what would be your next move?

McKinsey is rich and famous, and excel at providing recommendations. They are often criticized for not being interested in following up their power point presentations with implementation solutions… But to their defense, one could argue that this activity is not part of their core competence. Fine.

However, should McKinsey seriously think about diversifying?

They cannot continue to advise their clients to re-engineer their business, reshape their organization, and revamp, transform their corporate strategy, without at one stage applying these very prescriptions to themselves!

Actually, McKinsey has already been reinvented.

From corporate strategy in the early days, the consultancy developed a marketing strategy practice in the 1970s, and then moved to brand strategy at the end of the 1980s by buying a small brand consultancy called Envision and then by simply spreading its knowledge to all partners around the world in view of becoming a leading expert in brand portfolio management… which indeed happened!

So, again, what’s next for them?

Logically, after marketing and branding, communication should be the next move, no?

In this case, they would have to hire creatives…

This strategic move could relegate advertising agencies to mere production/adaptation outlets.

Or, it could have counter-productive consequences for McKinsey: full of anger, agencies would retaliate by becoming less addicted to the communication matter and more of a marketing-at-large consulting partner (a phenomenon that has in fact already started).

I still cannot imagine jeans and trainers running down the corridors of McKinsey with drawings in their hands and big ideas in their heads!

But since the 21^st Century is full of surprise, who knows what will happen… Watch this space.