Category Archives: Marketing

You had us at “Subscribe”!

A lot has been said and researched about millennials. We millennials (yes, I guess I’m voluntarily disclosing my age bracket here), have been called a number of things, mostly not very flattering. Time Magazine has called us “lazy, narcissistic, and entitled”, but in the same article, also calls us “Saviors”. Such constant contradictions are also what make us unique. Our phones are an extension of us, and yet – we’d rather keep a phone conversation one-dimensional, and would much rather just text someone than call them. We love to buy online, but do not want to be “sold” to. We don’t want to commit to a product in an as-is condition, we’d much rather pick and choose what we want.

Image result for millennials

 

(Image Source: https://www.theodysseyonline.com/time-stop-hating-millennials)

 

As a millennial and a marketer myself, I too, am self-contradictory in many ways. I would love to try out new brands and products, but I hate the act of actually setting foot into a store and shopping. So, the idea of having an option to just subscribe to a smorgasbord of products that I would like to try, and have them sent to my doorstep, is very appealing. And I know that I am not an exception – there are many other millennials who are just as mall-averse as I am. And then, there are also many of us that are tempted by the idea of having access to a variety of options to choose from, because what if, heavens forbid, we end up missing out on something?!

There is more to this phenomenon than the emergence of the ‘subscription economy‘, and this is more than an evolution of a business model. This is about the shift in purchasing power to millennials, and a fundamental cultural shift in consumption, driven by the way that this generation buys. Now remember, we are the generation that not only legitimized and achronymized the fear of missing out, but we are also the same generation that is admittedly so narcissistic and often self-serving that we genuinely believe that we deserve the best, and more of the best, and as often as we like. 

Which is why, the landscape for brands is now completely altered. While customer loyalty was never a given, it is more of an earned privilege now than it ever was. That said, brand loyalty is not quite dead yet. The real development here, is the emergence of the Curation’ economy – when your shopping basket and your wishlist are essentially like a Pinterest board. We’ve all witnessed the end of the ‘one size fits all’ approach, and watched it evolve into the era of customization. But we have now even moved beyond just plain customization, to the era of handing over the control to consumers, knowing fully well that they may not necessarily want to “commit” exclusively to your brand.

Yes – this commitment-aversion too, is yet another millennial-ism. Unlike our parents, the baby boomers, many of us think that “marriage” in the social context as well as the business context is a nice-to-have, at best. Which is why, we don’t see the need to be “married” to a brand, even if we’re really happy with it. We’re fondly nostalgic about the brands that we grew up with (case in point: AOL Instant Messenger), but the nostalgia has not necessarily translated to active usage/consumption in our adulthood – except, of course, in the case of cult brands like Google, Apple that have maintained their relevance over the years. We want to test everything that’s out there, in the quest of figuring out what works best for us. We want variety, but on our own terms.

Such millennial-isms of ours are being enabled by the ever-increasing plethora of subscription services that provide an assortment of products across categories like beauty, home cooking, personal grooming, fashion, d-i-y crafts, healthy meals, fitness, etc. to name a few. Luxury concept subscription boxes are in a league of their own – with services like ‘Quarterly‘, you can even get assorted subscription boxes curated by your favorite celebrities – so not only are you signing up for the variety, but you are sign up for the unique, curated experience. ‘Try the World‘ lets you try gourmet food from across different countries, every month. All you have to do is choose your assortment, sign up for a delivery frequency of your choice (usually monthly), set up a recurring payment, and then wait for your subscription box to get to your doorstep. And before you start to think that this is getting predictable – there is even a ‘care package’ subscription for women to help with premenstrual blues “to fulfill your cravings, feminine care, and pampering needs that will help you feel better and lift your spirits.” In conclusion, whichever product category you want to try out, chances are – there’s a monthly subscription box for that, just a click away.

We may have already reached the peak of the subscription economy boom. Unsurprisingly enough, a pure curated subscription-driven model alone is not a sustainable model that can be expected to bring profits in the long run. The numbers simply don’t add up in the long run, and economies of scale (especially on eclectic, niche assorted boxes) are an elusive target. So the question that remains is – is the subscription economy a bubble that is about to burst?

The subscription economy does not necessarily have to be a bubble. There is a way for it to achieve its true purpose – which is, to provide millennials the variety that they are seeking and the control that they desire, and still manage to make money from the endeavor – this really is an opportunity for every brand to leverage. In fact, the subscription economy enjoys a very unique advantage in this context – it is only in this unique ecosystem that variety-seeking behavior and brand loyalty can peacefully co-exist (potentially).

Imagine the possibilities if other brands too found a way to engage us attention-deficit-struck millennials via monthly sample-sized subscription boxes that we don’t mind paying a little premium for. Subscription-driven businesses like Birchbox, have found an additional way to keep its audience engaged via brick-and-mortar stores where members can “BYOB” (build your own box). And non-subscription driven business have also begun to catch on. For instance, in a genius move that both squashed competition and added a steady stream of additional revenue, Unilever bought over the blue-eyed baby of the subscription economy – Dollar Shave Club in 2016. Allure magazine offers a monthly “beauty box” containing beauty and makeup items. Starbucks offers two subscription options: One, a subscription service where you can BYOB (as referred above), and pick the coffee, tea & syrup products that you’d like to subscribe to, and the second, to the “Starbucks Reserve Roastery Subscriptions” which are exclusive “micro-roasted” blends that coffee connoisseurs can access. Free-of-cost, self-reported intelligence on customer preferences, and opportunities to cross-sell are among the many other reasons why this is a brilliant move. Amazon has a “Subscribe and Save” option for products that they know are likely not one-time purchases , as well as a “Prime wardrobe” clothing rental/subscription service – which are win-wins for both Amazon and its customers. Customers end up saving money on products if they subscribe, and Amazon gets a steady stream of revenue from these subscribers.

Image result for rent dresses
(Image Source: http://nypost.com/2013/10/17/rent-the-runway-opens-first-showroom-in-nyc-2/)

My favorite subscription economy success story though – is Rent the Runway (RTR). The fashion startup, often touted as the “Netflix for designer dresses” eventually realized that as fun as subscription boxes are, the steady revenue needs to come from a steady premium source. In May 2016, they launched an ‘unlimited package’ for a $139 a month, letting customers rent three items at a time with unlimited exchanges. The intended audience for this program, was obviously the ‘power users’ of the RTR website – the frequent renters. While this higher price point took a little longer for customers to swallow – it is also now the reason that RTR was able to enjoy profitability (and a $60 million investment from Fidelity) for the first time since its inception in 2009. This program that was originally the ‘bitter pill’, went on to account for more than 20% of RTR’s revenues, a proportion that we can expect to only increase. (Update: Beginning October 16, 2017, RTR has launched a new clothing rental subscription service for everyday clothing items, at a flat rate of $89. Translation: The fashion subscription space just got even more interesting. Let’s wait and watch!)

This is not very different from the good old 80-20 principle logic. This is what keeps airlines afloat – most of their revenues on a full flight come from the first class passengers, not the economy class. Is this not the reason that customer loyalty programs exist – to engage, nurture, and reward your best customers?

These possibilities in no way signal the death of brand loyalty – but rather, they are a sign of the changed times, of how ‘loyalty’ has radically evolved – and how it can in fact, be more profitable and sustainable. Millennials often get a bad rap for being fickle, but the truth is that we are in fact, the most brand loyal generation. In fact, despite the millions of options that we have around us to choose from, we are actually becoming increasingly more loyal (yet another millennial contradiction!) – if the price is right, and if we get to exercise control, and if we actually want to ‘subscribe’ to what your brand offers, and what it stands for.

The jury is still out on whether subscription box services are here to stay as a trend, or they are merely a passing fad. But if these companies think outside the box (pun intended), they may just be able to firmly clinch that much-coveted spot in millennials’ wallets and minds. After all, if a curated, customized and unique experience can be nicely boxed up and sent to a customer’s doorstep at the right price point – now that is an offer a millennial worth his/her salt may not be able to refuse.

Messengers of Confusion

We all get why marketers choose ambassadors and evangelists for their brands. They help put a face and name to the brand, and add a human element to the perceived experience of using the product that the brand advocates. They also personify the sky-high stack of values that marketers  hope their audiences associate with their brands, and strike that elusive chord of emotional connect with those audiences. Long story short, ambassadors and evangelists are intended to be catalysts in the Attention-Interest-Desire-Action-Recommendation cycle. And the choice of brand ambassador is supposed to make their audiences go: “Of course, that makes sense.” and NOT “Err.. What were they thinking?!

Lately, though, there is an increasing number of brands whose choice of ambassadors seems to be more a cry of desperation, than a positive reinforcement. Don’t get me wrong, the chosen ones in question are super successful and admired people in their field. By themselves, their own personal brands are associated with all things positive. But it’s their association with certain brands that comes across as completely random, and honestly, just plain sad.

(Image credits: jessicaalbalove.tumblr.com)

(Image credits: jessicaalbalove.tumblr.com)

Take the Windows Phone, for instance. Jessica Alba is the face of the phone, and in all their commercials, press conferences, and other public interactions – the key reason that is claimed as the basis of this mutual association (Alba’s home & baby products venture ‘The Honest Company’ shares space in Windows phone promotional material), is that the Windows Phone works for people like Ms. Alba who have to multitask and juggle between diverse parts of their lives efficiently. Frankly, the whole premise of this association is weak-sauce, and it’s presented in a way that’s not really helping Microsoft’s case. Sure, the phone has clever features like the ‘Kids’ Zone’ that makes sure your kids don’t get access to any of your stuff on your phone (and thereby, don’t get to delete / tinker Apps around on your phone!). I also quite like the ‘Live tiles’ interface – interesting stuff, very Flipboard-esque. But I still don’t see any clear proposition and distinct advantage that makes me want to switch over to that phone. Also, no offence to Jessica Alba, but they may as well have used anyy other seemingly multi-tasking, well-liked celebrity as their endorser and I bet nobody would’ve wondered: “Hey, I wonder why they didn’t choose Jessica Alba as a brand ambassador!” It’s not a no-brainer association. Or even something that instantly clicks.

(Image source: www.engadget.com)

(Image source: http://www.engadget.com)

Another such “association” that is hard to comprehend, is the Alicia Keys – Blackberry 10 alliance. As if featuring her as a brand ambassador wasn’t confusing enough, Keys was appointed as ‘Global Creative Director’ for Blackberry (I’d love to see the job description for this one!). I know the Querty ‘Keys’ have always been one of BB’s trump cards, but isn’t this taking it a little too far?! Also, it’s not like Blackberry wants to leave their established positioning as a business phone behind: With the BB 10, they basically want to be a business phone & more for “people who want to get things done”. Apart from the obvious vagueness of that statement, it implies that BB now wants to be everything for everyone: a classic recipe for marketing disaster. And as much as I love Alicia Keys, it’s hard to digest her pantsuit-clad, Blackberry-brandishing Avatar: It’s just doesn’t make for a convincing story; and incidents like her continuing to use her iPhone to tweet (and later attributing it to hacking) are not helping the case either. Let’s just say this girl isn’t exactly on fire here.

(Image credits: http://en.inmoreau.com)

(Image credits: http://en.inmoreau.com)

The Justin Timberlake – MySpace alliance is one more such confusing story. But it may be worth watching this one closely, as there are two different factors in the mix: 1. Timberlake himself is the unlikely entrepreneur here and has invested $35 million in MySpace and released a new single exclusively via the platform, and 2. MySpace seems to be poised for a huge overhaul in terms of its design (getting rid of the clutter), quality of content, and focus: Timberlake plans to leverage the “social component to entertainment” by bringing fans and artists together in a more organized community on MySpace. So, the jury may still be out on this one.

To me, an example of a ‘no-brainer’ choice for brand ambassadorship would be Tiger Woods for Nike. Yes – despite all the scandals of the past couple of years, I think Tiger Woods still is a good choice for Nike – as opposed to Lance Armstrong, who has obviously earned his dismemberment. Reason being, while the personal character of Tiger Woods may be questionable, his professional capabilities and achievements cannot be doubted. On the other hand, with Lance Armstrong – the very reason for his glory: his performance on the cycling track – can no longer be held as the golden standard. And Nike is, after all, about performance. Nike never said it represents good husbands, or good family men – it only said it represented go-getting, performance-oriented stellar athletes and sportspersons. And his personal life notwithstanding, Tiger Woods still personifies this performance-driven perfection that Nike is all about.

There are plenty such great brand ambassadorships around. Take the case of Jennifer Hudson‘s much publicized, winning battle against the bulge courtesy Weightwatchers, for instance. Or the long standing James Bond – Omega association. Or heck, even John Stamos and Oikos – what better way to underscore the Greek-ness (and ahem, appeal) of their brand?! These ambassadorships make sense, not just because they make people sit up and notice the brand, but more so because they echo the exact qualities that the brand clearly wants to highlight, and they speak directly to the purchase decision maker. While it is true that the right ambassador could work wonders for a brand, it’s not an imperative to success. And whether or not marketers choose to enlist celebrity ambassadors – it’s high time they reminded themselves that their brand is supposed to be the hero of the story, and the ambassadors merely the narrators and messengers of it. Not the other way around.

The Secret Caveat of Brand Karma

What goes around…
(Image source: rotflpictures.com)

We’ve all heard those quotes reminding us how the true test of one’s character is during hard times. Last week reminded me of how true this holds even in the case of inanimate Brands. Up until now, I genuinely believed this is common knowledge, and something every brand, every marketing team, and every social media community manager is aware of.

American Apparel’s ‘Hurricane Sandy Sale’ Email

Turns out, it isn’t. On October 29, while Hurricane Sandy was in devastating full swing and in the middle of its terrible rampage across nine states along the east coast, American Apparel sent out an email (included on the right) specifically targeted to consumers belonging to these nine states, inviting them to shop online in case they were ‘bored’ during the storm. No concerns about the well-being of their consumers mentioned, no help offered. Needless to say, Twittersphere exploded with criticism for AA, and this insensitive faux pas has brought some seriously bad PR to AA shores.

But does AA care? Nah. Their CEO Dov Charney said on record that this wasn’t really a big deal, and he doesn’t think his marketing team made a blooper. His exact words were: “Part of what you want to do in these events is keep the wheels of commerce going.” 

While I do appreciate Mr. Charney’s commitment to constantly keeping an eye on the ball, he unfortunately doesn’t seem to acknowledge the fact that the “wheels of commerce” are the last thing on people’s minds when they’re going through a life-threatening natural calamity. And a result, a brand which blatantly admits it’s only thinking about keeping the cash registers ringing through rain, storm and disaster will obviously ruffle many feathers.

Gap checks-in to “Frankenstorm Apocalypse – Hurricane Sandy”

Another kindred brand that attempted to make light of the situation is Gap. They decided to ‘check-in’ via Foursquare on a “Great Outdoors” category spot they’d specially created: “Frankenstorm Apocalypse – Hurricane Sandy” (See image alongside)

Incidents like the above make American Apparel and Gap look like “bad person” brands who don’t really respect the feelings of their audience. And that may not bode very well for them, especially given how powerful negative word of mouth can be. In fact, according to a recent Retail industry roundup by About.com, a whopping 140 million people on Twitter found American Apparel’s Sandy Sale offensive and inappropriate. While we don’t have a way yet to directly translate this number into impact on sales, we can take it as a good indicator of purchase intent at the very least – which of course is by no means a number American Apparel could afford to risk. And Gap faced the music as well – featured below is just one among the several irate responses they received.

Reactions to Gap on Twitter

In contrast, Starbucks has been surprisingly humane and empathetic pre and post Sandy. Yes, I say ‘surprisingly’ because of the reputation Starbucks earned for themselves following their indifferent treatment of the 9/11 rescue workers in NYC back in 2001. But that was then, this is now. Not only did Starbucks announce they were shutting their stores early for the safety of their employees, but they also made sure their consumers knew they were being thought of, and their well-being was being hoped for, via their various social media channels. They also made sure consumers were kept posted on what Starbucks’ response was to the hurricane. In addition, post the storm, they also urged their audiences to make a contribution to Red Cross to help rebuild the areas affected by Sandy. How much of a tangible difference does all this really make to the lives of people actually affected by the storm? Maybe none. But it sure has made people think of Starbucks as every bit of the warm, community brand they claim to be, in stark contrast to the unapologetic indifference of brands like American Apparel.

What’s even more impressive is brands like Verizon that are choosing to actually put their money where their mouth is. Verizon just announced that they’re going to waive domestic voice and text charges for customers in the areas affected by Sandy. That’s an even bigger step than AT&T and Sprint who announced they would waive off late charges for hurricane victims who were not able to pay off their phone bills on time because of the storm. (Sure, if Verizon had waived off even Data charges – they would be considered the Angels of Telecom-land, but waiving the voice-text charges too is a pretty substantial step in itself!)

Be it Verizon or American Apparel, there are several such instances of brands showing their compassionate side or self-serving side in the face of hurricane Sandy. By choosing to reach out to consumers during the storm, these brands could only meet one of two consequences: 1. Be lauded for their sense of customer service and gain more emotional capital; or 2. Earn people’s wrath by attempting to capitalize on a tragic situation or being unabashedly indifferent to it. In either case, thanks to social media, the side-effect is always amplification. Good deeds and bad deeds alike are amplified, shared virally and by the time a brand can react to it – acquire the status of a socio-urban legend. For instance, Radian 6 recently reported that Hurricane Sandy triggered 11.5 Million social media conversations. Imagine the kind of wanted / unwanted amplification a brand would stand to gain against this backdrop.

It’s not just the sheer money-mindedness behind the sentiment displayed by American Apparel and Gap that is so controversial. What these brands seem to have completely missed is the fact that in the age of social media, for all practical purposes; they are viewed as a real person with a voice and personality by their audiences. The KIND of person they come across as, however, is their choice. And this is exactly why brands need to have good karma. Because at the end of the day, whether it’s Starbucks checking in on their customers’ well-being or P&G dispatching Duracell charging stations and Tide laundry trucks for free assistance to hurricane victims, or Verizon waiving off charges for hurricane-hit customers, it does boil down to Karma: What goes around will come around (with amplified effect), especially in today’s socially charged digital times. And by default, it might just be time to institute and operate by a new motto of commerce – Caveat Marketer (Marketer, beware!).

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