Why Media, Technology And Retail Are Now One Market (Where Apple Is King)

We can tell the difference between a phone, a newspaper and a shop. Yet increasingly their individual success is becoming interdependent as major players attempt to dominate the market by forming partnerships with (or acquiring) prominent providers of complementing services.

Apple set the rules of the game. By providing a complete ecosystem of hardware (Macs and iPods,) software (iOS and OS X) and innovative services that people ‘[did] not even know they want[ed]’* (iTunes) Apple ‘trapped’ consumers in its comfy web where everything works great together. But the appeal extends far beyond functionality – Apple has created a desirable end-to-end customer experience that is aspired to in its own right.

Contenders for its throne include Google and Amazon, both of whom are busy filling in ‘gaps’ in their portfolio through launching hardware ranges (Nexus and Kindle) as well as offering additional services aimed to lock consumers in (e.g. Google+). Amazon’s announcement that Microsoft’s Bing will be the default search engine on the Kindle Fire HD (http://mashable.com/2012/09/07/bing-kindle-fire-hd/) is a clear strategic attempt to keep Kindle users away from Google.

But they are still missing the crucial ingredient – the gravitational pull of the Apple experience. Consumers crave to be trapped in their ecosystem because it makes them feel like a certain kind of person. But what kind of person would I feel like if I were trapped with Amazon/Bing?

As I write this in a trendy Brick Lane café, there are 4 other customers tapping away on their Macs. I doubt there’s a café anywhere that’s only full of HP or Sony users.  Until another brand – or a partnership – creates a cultural aura and a branded end-to-end user experience around their technology/media/search engine/retail offer, Apple will remain uncontested.

Fighting for leadership are brands originally known for hardware (Apple,) online retail (Amazon) and a search engine (Google). But what would you call that market..?

*Steve Jobs’ quote and innovation cliché. Aka Henry Ford (who invented the car): ‘If I had asked my customers what they want, they would have said a faster horse’

Luxury Brands in the Digital Space: from Laggards to Leaders

On the whole luxury brands have been slow at adopting digital media. It was felt that the exclusive in-store experience which goes a long way to justify the price tag just wasn't a match for the online world in which these exclusive brands would have less control over their brand and overall customer experience.

Yet today's announcement of Burberry's social media chief Musa Tariq's move to Nike is yet another piece of evidence pointing to the emerging leadership of luxury brands in experiential digital marketing. 

Louis Vuitton's current interactive 'Beyond the Limits' campaign invites you to explore the hidden underwater worlds lead by Michael Phelps (http://www.louisvuitton.com/front/#/eng_US/Journeys-section/Encounters/Beyond-the-limits). This immersive, emotional experience has no direct link with clothing, instead reinforcing the position of Louis Vuitton brand as an aspirational, other-worldly dream.

Burberry too has pushed its customer experience to a new level with multimedia platforms such as Tweetwalk (where Twitter followers could see backstage snaps of outfits before the models hit the catwalk) as well as 3D live streaming of its fashion shows in Autunm/Winter 2010 shows.

These luxury brands are using digital media to create evocative, memorable experiences which are in line with their core brand offer and other categories have much to learn from this. 'Digital' is the current buzz-word in marketing, but is mainly used to refer to functional features such as media reach, click-throughs and growing your number of subscribers and followers. Luxury brands remind us of the vast potential of digital for building an emotional connection with the customer through providing meaningful, unique experiences.

Yet as multi-media becomes widely accepted in luxury sphere, it will be interesting to see which brands shall hold back. I suspect that in not-too-distant future it will be differentiating not to have a digital presence.  

Sony’s Music Unlimited vs Spotify: the Battle for Streaming takes off

Sony’s release of its Apple (iOS) compatible Music Unlimited streaming service, intended to challenge Spotify’s iPhone app, is a natural and welcome step in line with changing customer music needs and behaviours. Streaming is the future for all forms of digital entertainment, and music is leading the charge.

But I think Sony is missing a trick here. They offer two subscription packages: $3.99/month for listening to pre-determined channels (radio-style?) and $9.99 for access to Sony’s music library consisting of 15 million songs. Spotify’s catalogue has long surpassed 15 million, but more importantly, there is no clear incentive for any one customer group to switch to Music Unlimited.

As I have argued before, Spotify’s finest trick was to get people hooked in the first place by offering free music access. Consumers do not appreciate the value of technological innovation until they’ve tried it themselves. There are high barriers to adoption in place, and only a truly motivating and appealing incentive will push people to give new technology a go – and therefore fully experience the benefits that innovation offers.

Sony is not offering any such incentive. There is no free service to get customers to buy in, so Music Unlimited will struggle to convert iTunes/CD people to streaming. And for those of us who are with Spotify – well, there are no clear benefits to switching. And switching is a pain in itself.

One thing’s for sure: the Battle of Streaming has only just begun.

Sony's Music Unlimited

Gaymers’ New Look: of Cider, Festivals and Branding Different

I love Gaymers. It transcends my two great passions in life – cider and festivals. It's synonymous with brilliant music, muddy wellies and frolicking in the sunshine. In the competitive cider market where virtually identical brands vie for the attention of young urban professionals their strategy of branding around music and bringing it to life through festivals is a stroke of genius.

Their packaging re-launch is yet one more step in that direction. It's a clear move away from the visual cues associated with ‘standard’ ciders such as Magners and Bulmers (see below) such as the bottle shape, gold label, focus on provenance and ‘originality.’ (N.B. Can anyone actually tell them apart?) 

Gaymers’ new look is clearly influenced by visual styles and emerging cultural codes associated with festivals. The bright block colours and playful retro typography come up time and again in the likes of Bestival and Lovebox and thus help position Gaymers as an affiliate of the liberal outdoor music culture. By comparison, the ‘standard’ cider look begins to feel formal and stuffy with their carefully crafted ‘signed’ labels.

When everyone talks about originality, it stops being original. The introduction of Stella’s Cidre brought a welcome shake-up to the category and drove many estbalished cider brands (including Magners) towards premiumisation. Gaymers have recently been hit by this trend as they were stuck in the middle, but the current move is a clever competitive response which should hopefully grow not just their sales but the cider category in general. I, for one, am really excited.

Nintendo: Catching up with the Digital Revolution in Gaming

Nintendo blaming price promotions (http://www.marketingweek.co.uk/news/nintendo-blames-price-promotions-for-profit-slump/4001363.article) for a profit slump is nonsensical; discounting is only ever a symptom of an underlying business problem rather than a cause. Strong brands and product manufacturers do not need to reduce their prices to shift volumes. Judging by Thursday’s announcement Nintendo’s recent focus has been to desperately cling onto market share, even at the cost of profitability.

The underlying reason for such ailing fortunes is the expansion of their competitive set. The digital revolution that is underway in gaming (as well as most other industries) is fundamentally altering consumer behaviour in a way that is squeezing Nintendo’s devices out of the market – who wants to buy a hand-held console if they can download the games onto their iPhone for a lower price? Portability and convenience used to be Nintendo DS’ great selling point, but carrying one device is infinitely more convenient than carrying two.

This is part of a wider trend in technology that is leading the consolidation of devices into a fewer number of formats, each of which acts as a multi-purpose platform. The result is that Nintendo’s strategic focus going forward should be on software rather than hardware, both from the point of view of the market trends and the core strengths of their brand in the eyes of the consumer.

Boutique Budget Hotel: Redefining Luxury Customer Experience

Once upon a time, luxury brands were premium and budget brands were mass-market. Yet as consumers become more demanding, brands are becoming ever more creative in meeting multiple, seemingly irreconcilable customer needs.

The launch of Bloc Hotels is in Birmingham is the latest in a series of such feats. A ‘Boutique Budget’ hotel brand, Bloc has developed a new model based on an in-depth understanding of customers’ behaviour and needs when travelling on a budget (rooms start at £30).

As most short-stay travellers do not unpack and prefer not to eat in their hotels, Bloc has chosen not to offer storage or dining facilities. The resulting savings mean that its hotels can focus on those elements that cue a premium accommodation experience for guests: for example luxury linen, powerful drench showers, state-of-the-art WiFi and HD TVs, and a superb location.

By focusing on the brand touch points that make a real difference to its customers, Bloc is able to provide a luxurious experience in spite of its failure to tick all of the customary ‘luxury hotel’ boxes (with associated price tags). This innovative challenger model has potential to shake up not only the travel industry, but also potentially any luxury product category.

Even if you can’t build your customer experience from the ground up, do you have a full understanding of what’s important to your customers and what isn’t? Focus on the elements that have a real impact on consumers’ perceptions, rather than wasting resources on those that don’t, and you can create a superior experience without an associated increase in cost.

Spotify: Redefining Music Monetization

I’m a Spotify Premium customer, meaning I pay £9.99/month for unlimited access to virtually all music that is out there – including streaming onto my iPhone. I do not own any music, don’t use the iPod function or even have iTunes. Spotify meets my music needs better than any other provider.

In the pre-Spotify era I would not have dreamed of spending £120/year on CDs or downloads, but now feel it’s providing me with such good value I don’t think twice about it. It is their ability to innovatively monetize the market that seemed like it was fast heading into the abyss of promotions (HMV) and giveaways (YouTube) that I admire most.

It’s true that Spotify’s profitability and financial future is a very controversial issue. Yet no matter how healthy their finances are, it is critical to appreciate the revolutionary nature of their new revenue model. At a time when piracy threatens the music industry an approach that gets customers to pay more for accessing music whilst feeling they are getting better value is not to be sniffed at. The consumer interface of this model is a brilliant innovation, and even if Spotify are unsuccessful at making its financial ends meet other music providers should take note.

Spotify have not yet got it right. But they’re onto something, and the music industry better take notice of this completely new way of engaging with their audiences. After all – iTunes caught the big players unaware, and many (HMV included) have still not developed a strong enough platform to compete with Apple. History might be about to repeat itself.