Archive
Bricks & Clicks: Why Store Presence Increases Online Sales in a Market Area
My brother (a partner in a law firm with some shopping center landlord clients) and I were discussing retail and the challenges retail landlords face today. Press coverage suggesting a retail apocalypse is concerning when income from property depends on retail stores.
There are important changes happening in retail – but there’s also a lot of error out there. So we discussed why I think the “retail apocalypse” storyline is a myth. We discussed Amazon’s opening of over 300 brick locations. We discussed that the top shopping centers are doing well – the middle ground and low ground are where the suffering is highest.
I also observed that while retail is here for the long term and should remain stronger than online stores for the long term, there are short term trends that might be very serious problems for retailers – like they probably still have too many stores left from their expansions in the 2000s.
Then Stan asked me why I think on-line sales are higher when there is a brick and mortar store in the vicinity.
Consumer Solar Needs a Steve Jobs to Make it Fly Off the Shelf.
I love solar energy. And it’s encouraging that tremendous advances in technology have driven panel costs down while delivering more energy from smaller packages.
Yet, despite major investement in solar, the past 4 years have been more difficult for the solar energy industry than I’d expect – high profile bankruptcies, accusation of product dumping by Chinese manufacturers, and a Republican lust to create a scandal from these failures. And, from what I can see, the consumer solar applications just aren’t moving like they should.
There is a tendency with emerging markets to suggest the problems are technological. But I disagree – at least in the standard way we think about technology. Right now, it looks like core technology advancement has outpaced solar demand – driven by innovations in savvy & low cost manufacture as well as increasing energy output. That suggests the problems are more subtle. Read more…
Latest TiVO Results Illustrate the Impact of Communication Failure
TiVO never told potential consumers their value so far too many boxes sat on retail shelves.
TiVO finances offer a superb example of how early communication failure dooms a new product. Remember, you rarely get a decent second chance. And even if you do, your stumble at the beginning may open the door for rivals to muddy the waters.
And that’s where their failure started. TiVO’s first communication was based around the concept of “pause and rewind live TV” and similar VCR related ideas. As a proud TiVO owner, those ideas are miles away from the real reasons we love our TiVO’s – it reflects a minuscule part of why TiVO matters. Even worse, in advertising it sounds, frankly, quite silly and unimportant. It created a strong fear of meaningless gadgetry rather than a useful perception about the value the TiVO delivers. Read more…
The Politics of Potatoes
How much unrealized profit do you have sitting on the shelf? If only you could get past the politics...
One general theme affects politics of potatoes: perspectives about money. On the one hand, companies easily minimize development costs when they are excited about a new product. Meanwhile, the marketing costs required to redeem a shelf potato flash onto everyone’s radar screen. So overall, your biggest challenge is shifting the corporate eye from the fresh, new thing to the reality of finding the highest returns for the lowest investment. Read more…
Avoid Shelf Potatoes: Do It Right the First Time
Avoid Shelf Potatoes by succeeding the first time. This is critical both with retailers and inside your company. Consumers are more forgiving.
So, the most important Shelf Potato lesson is that AVOIDING them in the first place is your best way to success.
How can products avoid becoming potatoes? Learn from the lessons here. Know when you need communication to drive a product and either supply that communication or don’t proceed with introduction. Use research (and honest introspection) to detect problems ahead of time. Negotiate carefully with retailers to ensure the right placement. And, avoid putting a product at mass retail before you’re ready. Quite often, retail merchandisers will love a product but not be the best judges of the challenges it will face on the shelf. Read more…
Even Cars Can Be Shelf Potatoes. Consider Volkswagon’s Eurovan
Eurovan vacation in Eastern Washington
The Eurovan excites passion among those who own them or would like to own them. We Eurovan owners wave to each other on the road and stop to talk in the parking lot. I’ve even had an owner leave me a note asking me to help him find a roof rack setup like the one on ours. BUT, in 2003 VW cancelled the product in the US.
And that leads us to today’s installment of ShelfPotato Diaries. Why did a car that excites this passion eventually fail? It seems their rationale for cancellation included two primary reasons: Read more…
Eight (8) Reasons Products Sit on the Retail Shelf
Grills like this were on the shelf for nearly 20 years before communication made a breakthrough
Grills nearly identical to George Foreman’s lingered on store shelves for nearly 20 years. Then, the Foreman infomercial blew the doors off driving over $100M in sales in two years. And we learned that while the Grill delivered tremendous value to consumers, no one had known of those benefits or believed it would deliver them.
Not all Shelf Potatoes have potential like the Foreman Grill. Some sit on the shelf because they should. Contributor Ben Smith has noted that the Microsoft Kin was released with massive communication, failed to show unique value, then lingered on the shelf only to be cancelled leaving a black spot on Microsoft’s reputation. Read more…
Snuggie was A Shelf Potato
Why would a shelf potato this cozy want to race out the door?
But they never sold in the volume that the Snuggie has. So what turned Snuggie into a super-hit? Communication.
Yup, those cheesy ads. Love them, hate them, or merely put up with them (because what choice is there?), Snuggie’s advertising drives sales. I guess we needed to see the entire family cheering on their team while dressed in Snuggies (and with their backs uncovered). And without their ads we’d still look at a Slanket on the shelves (if they ever got there) and decide they looked just like … well … a blanket. If you’d run into the Slanket at retail, would you have known why you might want one? (And did they have them in leopard print? Oops. That came later.) Read more…
Failure to “Cross the Chasm” Leads To Shelf Potatoes
Literature about crossing the chasm in technology is filled with reasons products should have been re-engineered, re-thought, or simply never attempted.
But this literature rarely mentions communication. Too bad. Because in my experience, communication may be the single biggest reason for failing to make the jump.
Take DirecTV. I had the good fortune to do some strategic work early in DirecTV’s lifecycle. Their initial marketing was all about technology. Digital picture quality and 250 channels dominated the discussion.
Our work focused on later consumers – not the earliest adopters. And what we found surprised DirecTV. Because we found that these later adopters didn’t care in the least about the values DirecTV was using to sell their product. Read more…
Welcome Ben Smith
Ben Smith, co-author of the RetailLeverage.com blog, is going to be commenting on the topic of Shelf Potatoes. Ben has a superb background dealing with the retail channel from the manufacturer side. He has also been deeply involved with creating advertising to solve retail problems.
His twitter feed can be found at @RetailLeverage and there’s great related content at RetailLeverage.com
The Shelf Potato 