By Chris Shimojima
The Pocket Chief Growth Officer
What a year 2016 has been. From Brexit to Trump, from the Cavs to the Cubs, the Olympics, exploding smartphones, Theranos debacle, Dow 20K (?)….whew.
In addition to these happenings, I thought there were many other developments in 2016 that served up themes that are relevant to us, business professionals.
The Brexit win and Trump election, both signify the utter failure by the losing parties of truly understanding whom their important constituents are and what they desire. This should be a reminder to companies of all sizes and life stages, from start up to large fortune ranked enterprises, not to forget the most important tenant of brand management – listen to the voice of consumer.
The other important observation from the Trump election is how powerful and effective ‘earned’ and social media can become when complemented with a clear, simple message delivered with consistency and amplified by passionate advocates. This is another reminder for brands, especially ones that have to compete with bigger better financed competitors…..make sure your brand has a clear, powerful value proposition that differentiates you from the pack that is delivered consistently….and you are nurturing and rewarding your most passionate brand advocates. As simple as this is, how many brands out there truly practice this?
In my opinion, 2016 marked, when e-commerce shifted into fourth gear. Amazon is no longer an e-commerce operator, but has become a formidable consumer platform. Nothing else comes close to a business that has added some 10 million new Prime members just over this past year (that’s the size of Greece). Just looking at my own shopping behavior, because of Prime, Amazon’s share of my wallet continue to increase; but, this year, it has taken a significant leap because I have started to buy more consumer staples from Amazon, like vitamins and supplements, protein bars, soaps and lotions.
When I began in e-commerce many moons ago, the conventional wisdom was that you couldn’t sell goods online priced under $15 and make a profit because of high fixed and operating costs. Today, with the advent of increased automation, better logistics management, and pure scale, e-commerce enabling sub-$15, even sub-$10 items is now more feasible. Combine this with a loyalty platform like Prime, and new innovative operator like Jet.com whose business model is tailor made for consumer staples CPG’s are poised to drive e-commerce further in 2017….into fourth gear.
Another e-commerce theme that I noticed more in 2016 is ‘personalization’. On NikeiD, most of Nike’s best shoe models can now be custom designed. Personalization is such an important part of William Sonoma’s business, it launched a business solely focused on personalized products. Bed, Bath & Beyond just announced the acquisition of Personalization Mall, a company that offers personalization on everything from towels to Christmas ornaments. At last count, there are more than a dozen businesses that offer ‘custom’ suits and shirts for men. You can’t ignore M&M’s custom messaging on their confections. Under the radar, personalized products are becoming an important e-commerce growth driver. The advantage of personalization is obvious as it is a way to offer unique experiences that can differentiate your brand from the pack. 2017 will be an interesting year to track how prominent personalized offering becomes and how it can be applied to more businesses.
An interesting development that is taking shape for e-commerce is the strong dollar. With the dollar forecasted to reach parity against the euro (and possibly the yen) in 2017, and with more foreign brands investing in global e-commerce capability, I wonder if US shoppers will discover the merits of going direct to the source. The beneficiary will be interesting ‘cultish’ fashion brands who have limited distribution here in the U.S. fashion influencers, bloggers and social media all can play a significant role in giving these brands an e-commerce entry point. The shipping fees to the U.S. are not outrageously high. The ones I visited ranged from $10 to $25, and most of them were offering a Free Shipping event for the holidays. International e-commerce will be an interesting space to watch next year.
Finally, I am now convinced more than ever that brand power matters. With the retailing space continuing to winnow it’s weakest, and with Amazon continuing its dominance, brands will have to rely on their own wits to succeed. Brands that do not have a strongly unique proposition for its target will not survive. Does your brand have a compelling story?