Reducing Assortment

In the past year or so you may have read about retailers “reducing assortment”, which in English means taking some brands and products off their shelves. You may also have heard about Walmart’s Project Impact, which sought to de-clutter their stores of signage as well as low-velocity SKUs. All retailers are doing this to some extent, so watch out, because if you really like Brand X, it might be gone when the store you shop reduces their assortment.

Why reduce assortment?

Why do this? Retailers say it makes shopping easier for their customers. In an interview with MediaPost this week, Stuart Taylor, VP/Customer Analytics for Nielsen, highlighted the ease-of-shopping rationale, saying 60% of the retail chains they surveyed “are doing it to reduce shopper confusion.” Research would seem to back him up. In comments to analysts last year, P&G’s then-CEO, A.G. Lafley, cited store tests where reduced assortment had no negative impact on sales or consumers’ sense of variety. In fact, he said, consumers believed they had more choices. I don’t doubt his research.

Real-world experience, however, hasn’t been so rosy. The most recent press about reducing assortment has focused on the consumer backlash. What? You mean I can’t buy Ben & Jerry’s here anymore? Walmart shoppers loyal to a delisted brand would have to complete their shopping trip at Target.

Reduce this!

Taylor admits in the interview that “as variety goes down, sales go down, too.” He’s not the only one to have noticed this correlation, which is why you’re hearing about retailers reconsidering reducing assortment.

It’s important, though, not to overlook Taylor’s bit of analysis on why sales went down. “Instead of thinking of this just as a cost puzzle,” he advises, “we need to bring the consumer into the picture.” (Maybe he's read this, this and this.)

Don't kill the golden goose

My observation is that retailers focused less on consumer choices and more on which manufacturers would give them the best deals. Buyers know that if you tell four brands you are only going to accept two of them, you'll start a negotiation where at least one of the winners reduces price.

The case for reducing confusion and streamlining store operations is a good one. If it’s strictly financially-driven, however, it won’t benefit anyone.

Listen to your audience, not your gut

One of the oldest criticisms of the advertising business is that its people are out of touch with its audiences. We hear this a lot because it's true.

Nature vs. Nurture

You may have read (here or here) about a recent Xyte Inc. study finding that most ad people are of a particular personality type that shapes the messages we produce.

Unfortunately, those messages don't connect as well with the other personality types that represent most consumers.

Blind Spots

The diagram above came from a colleague's presentation about social media. He was pointing out how most marketing people think iPhones are ubiquitous, while in reality they're not (yet).

iPhone penetration is such an easy thing to ascertain, so why would it be such a blind spot? Because we don't stop and look beyond our own experience.

Start with the basics

The implication is that we have to work extra hard to understand our consumers. Recently we've posted about empathy toward consumers (here and here), which takes sustained effort.

Start by using your iPhone to your advantage. Look up some basic data, such as the average weekly grocery budget in a typical household. (Some people say it can be $20.)

Make it a habit

Don't stop with one statistic, though. Work hard to get a feel for what your audience is really like. Listen to them every opportunity you get.

Regardless of your personality type, building a relationship with someone takes time and effort. If we treat our audiences this way, our messages will be relevant and our work better.

Democracy on Foursquare

Recently on Foursquare, I was ousted as Mayor of my client's headquarters....by my client.

For the past few months I was unchallenged. No one at the client was checking in. This didn't seem right, even if you don't count my insistence on being addressed as "Your Honor".

Several of my clients now vie for the title, and I doubt I'll take it back anytime soon.

I wouldn't have it any other way. This is progress.

Is "Consumer" a bad word?

EDINBURGH – Yesterday in our meeting with European colleagues we returned to the subject of empathy and Dev Patnaik’s book, Wired to Care. (We posted about this in January.)

Discussions with people from around the world always force us to clarify the meaning of our words. Dropping our idioms and figures of speech make us communicate clearly in international audiences.

In yesterday’s discussion we agreed that the word “consumer” describes what someone does, not who they are. Empathy is not about getting people to consume, but understanding who they are as people so we can get them to consume.

So, to drop the jargon and speak plainly: Shouldn’t we just call them “people”?

Transcend, Transcreate, Translate

EDINBURGH – Meeting with colleagues from around Europe underlines the challenges of advertising the same message in many languages.

Increasingly, clients must market the same brands and products in different countries around the world. This isn’t a matter of simply translating messages into various languages. It’s having an idea that works across borders. I’ve posted about this before (here, here and here). It’s challenging.

My previous post about Story, Creative and Content made me think a little differently about this challenge. The point of that post was that marketing today requires us to distinguish among those three concepts. Story is strategy, Creative is an idea, and Content is what we produce to put in all the appropriate media or channels.

Here’s how that works internationally.

Stories must Transcend

Stories are strategies, and internationally they must transcend market situations and cultural differences. This often means we must look at similarities across borders, not searching for the lowest common denominator but the simplest, most powerful story. A timely example is Nike’s World Cup theme, “Write the future”. It’s a good story.

Create and Transcreate

Creative is an idea, and internationally one can transcreate these ideas – not translate, but transcreate. That means we think about how our story can or must be told in different market situations. Perhaps the creative varies because of differences in the frame of reference, source of volume or competitive set. The best case is to advertise a brand message, as in the Nike World Cup example, while specific product ads usually require more adaptation.

Content is what we Translate

Content is what we produce to put in the appropriate channels, and internationally this is what we translate into German, Dutch, Arabic, French, Mandarin Chinese, et cetera. Raid Kills Bugs Dead. Raid los mata bién muertos.

Transcend, Transcreate, Translate

Marketing today requires us to distinguish among Story, Creative and Content. Internationally this requires us to Transcend, Transcreate and Translate.

Story, Content or Creative?

The other day the word "story" kept coming up.

The first mention of "story" came when a former colleague described his new startup, which writes content for brands that publish editorial related to what they sell, perhaps in a lifestyle magazine, social media app, or even simply a website. An agency that does this is actually called Story. It's fascinating when you think of all the content these initiatives require. Similar to what I posted about online media, content requires constant care and feeding.

Later the same day I interviewed a strategic planner candidate who, coincidentally, brought up "story" as the basis of all marketing communications. You hear this in advertising agencies. A great copy test researcher once told us his definition of great advertising: "A good story well told."

Lastly, someone tweeted about a book offering a "storytelling manifesto for change-makers and innovators".

This made me think about three overlapping words: story, content and creative. Are they the same thing?

Try this: story is strategy, creative is an idea, content is what we produce to put in all the appropriate media or channels.

How would you distinguish among these? Let me have your POV below.

The Race to the Middle

Today we had ample opportunity to think about the Race to the Middle, which is Forrester Research's description of how traditional ad agencies are building digital/data capabilities, while digital agencies are building brand/strategic capabilities. Both parties seek the territory and clients of the other.

Winning the Race to the Middle

There will be many winners of the Race to the Middle, from both sides. They all will share some common characteristics, chief among them a willingness to break out of their comfort zones.

One giant leap

A large group of my colleagues got out of their comfort zones today simply by attending an agency-sponsored, daylong digital immersion, including a presentation by a Forrester executive. Although Forrester has cited our agency for its digital prowess, not everyone has the same level of learning, experience and capability. Most of the audience got out of their comfort zones simply by their willingness to learn.

There's no need to wait for someone to train you, however. We all must take a DIY approach.

One small step

For example: This morning there was an article on AdAge.com by an anonymous creative director at a big ad agency who went to his first digital creative awards show. It was a sincere reflection on what was obviously a new frontier for him. Still, you could be forgiven for thinking: Did this guy just wake up after 20 years?

Indeed, this sentiment showed up in the article's comments section. It seemed tragic that a creative director could be turning his attention to digital for the first time.

The bigger tragedy, however, would be if he stopped after one awards show. I wanted to track him down and exhort him, in Churchill's words, to "keep buggering on".

Keep buggering on

Our business isn't made of bricks or clicks, but of people. Agencies who win the Race to the Middle will owe their victories to individual employees who get out of their comfort zones and add to their personal skill sets. Find your own ways to participate and learn by doing. If you have any suggestions, please add them in the comments section below.