Could Moneyball be the Ultimate Metaphor for Retail?

Last night I was working on a client's website, and had the film 'Money Ball' on in the background. I've seen this movie several times already, but this viewing, framed perhaps by the work I was doing, made me think about all the ways in which Money Ball perfectly describes the world of today's retail. In an era of technology-leading discount giants (who also happen to dominate retail), it makes staying relevant, even if you are a house-hold brand-name company, difficult. So why is retail so hard? My fear is that although we have mountains of data, we aren't leveraging it correctly. Nor are we telling bold enough stories in our marketing and communications. With all this focus on data, have we lost focus on what matters most?

As we’ve observed from the announcements this year alone, Macy’s, J.C. Penney, Sears and Kmart are just a few of the major chains that have announced sweeping store closures. And unfortunately for them, and many others, this trend of closing brick-and-mortar locations isn’t likely to slow anytime soon, as retailers have been forced to reexamine their overhead, competitive advantage and vulnerabilities. Much like in this movie, the different franchises, strained by owner and fan pressures, player budgets, injuries, and the available talent pool force the A’s to reinvent themselves.  

Retail business leaders everywhere are leaning more on their internal teams, and agency partners, challenging them to define a strategy for how to diversify and reach larger audiences (that, or how to get more revenue from existing customers). Some brands have determined that the millennial demographic (for instance) is their key to sustainable and healthy continued growth, and so they are pivoting from affiliate or email marketing, and launching more social-first initiatives to meet millennials organically, in places millennials spend their time.

Some brands aren’t departing from their traditional marketing strategies, but have been forced to merchandise differently, (essentially) becoming flash-sale sites, blasting out deep discounts accompanied by free shipping minimums, hoping these offers and promotions will keep their fulfillment teams busy. The problem with this strategy (of course), is that it trains the customer to only purchase when the discount is deep enough, and holding onto margins (for you) will be nearly impossible.

The equalizer here, is that everyone in retail is under the same pressures. Both the biggest behemoths with an army of strategically placed warehouses all over the country - to the leanest startups driving innovation with nothing to lose. I’m jumping ahead here, but first Moneyball quote: “There is an epidemic failure within the game to understand what is really happening. And this leads people who run Major League Baseball teams (insert retail company name) to misjudge their players (customers) and mismanage their teams.” The pressure is constant. And despite the sensational headlines from (what I call) “fluff publications” (and no, I won’t name names), this “retail problem” is NOT new. Retailers have always been in a tight spot. It’s been a slug-fest since the birth of the department store. Retailers are like terriers who get themselves into tight spots, and must create opportunity to live another day. Furthermore, brands have always been competing with a lot of noise in the marketplace, especially within their given category, for both general consumer awareness and sales. And with the proliferation of technology, specifically mobile adoption, retailers are competing in many new places – in many new ways – on platforms that they (often) don’t fully understand before they do so.

Think of the brand scrambling that occurred when Snapchat first rolled-out and everyone realized there was probably an opportunity here to increase their awareness and sales. You can imagine marketing leaders asking their teams, “Do we have a Snapchat strategy yet? Is anyone on our social team able to ‘snap’ for us? Can we afford not to be there? Can we afford to be there? What is our brand story, and is it right for snapchat? How can we track the results from Snap?”

Now before I continue, I realize there is probably a savvy CMO reading this post and saying “Brett, Brett, Brett (shaking their head). Don’t you realize the answer to retails’ problems rest in the DATA! The data is our bible. Our go-to resource which tells us everything we (marketers) need to know and it’s our roadmap for everything we do, and explains why we do it. You poor thing.” And my response would be, yes, you are correct. Data is king. Data tells us a lot about how users are interacting with our brands, using our sites and applications, but even the data has limits (GASP!). Suppose for a moment that we take that previous example of a brand that simply starts to discount, to achieve the required sales. Let’s say that 65% of the eCommerce site traffic in Q1 is coming from these deep-discount promotional activities. What happens to the data? The majority of that data will only reflect the story of users who reacted to this type of opportunity, and not your brand. These may be bargain hunters, but not brand loyalists. So does that mean you should take all that data, and make all your marketing plans based on what that data tells you? Probably not, unless you are able to keep discounting at that level, but this is just one example. Think of all the money you must spend on marketing, to get volumes of traffic to your site, for only a fraction to convert into sales. That sort of sounds a lot like what baseball franchises do.

As someone that lives in the world of analytics, and uses data every day, I don’t want to give the wrong impression. My intention is NOT to dismiss data (on the contrary), but merely to point out that data alone will not necessarily solve the pains that come along with retail. Retail requires diversification in many directions, and this is where the Money Ball metaphor gets called into play. To me, the similarities to retail are uncanny. You can't just do any one thing. There is no silver bullet. Just because you have the best leadership team, doesn’t mean you will succeed. Just because you have the best ESP, doesn’t mean you will dominate. Retail requires some risk, some unknowns, constant tinkering, and that is part of why retail has a powerful pull (despite the grumblings). It’s a category that is alive, breathing, and can’t be nailed-down. There is joy in the game of retail, but it's all about balance and diversification. Data can only get you so far. Vendors can only get you so far. Technology can only get you so far. Products can only get you so far. Sometimes what you need is not a huge budget, but a great story, that is authentic and resonates. As American author William Bruce Cameron said, “Not everything that counts can be counted, and not everything that can be counted, counts.” Which brings me to the quote that inspired this bluster:

Situation: During the 2002 MLB season the Oakland A’s leveraged a new system for recruiting players (sabermetrics), and this technique worked. At this point in the film, the A’s have won 20 consecutive games, and seem unstoppable. Finally, they lost 6-0 to the Minnesota Twins on September 5th, the game is now over, and the Twins are celebrating on the field. Voice-over from faux Joe Morgan:

"What the Minnesota Twins exposed is that the Oakland A's were fundamentally not a sound baseball team. I mean, they had a flawed concept that started with the general manager and the brain trust over there thinking that they could reinvent baseball. You can't approach baseball from a statistical bean-counting point of view. It's won on the field with fundamental play. You have to steal, you have to bunt, you have to sacrifice, you have to get men in scoring position, and then you gotta bring 'em in. And you don't do that with a bunch of statistical gimmicks. Nobody reinvents this game."  

Perhaps my biggest takeaway from this film is that we, as marketers, should be inspired to stop asking all the wrong questions, and start asking the right ones. Be bold. Take chances. Think laterally and engage with authentic audiences. Diversify. Don't be scared. Speak up and share ideas, and the best leaders will embrace those ideas, and leverage them to continue moving retail ahead in new and interesting ways. 

Respond Less. Lead More. A Challenge to Marketers

I’m disappointed to say that I have already received several emails this morning, from leading retailers, in response to Amazon’s #PrimeDay. The copy states some version of "no membership required” and offers a forgettable promotion of some sort. When I clicked-thru to view the offer (because hey, everyone wants a deal), I find a single SKU, discounted by an unimpressive amount, that would only appeal to a narrow set of customers – even their most brand-loyal.

I’m not sure that kind of approach is going to keep brands afloat in this hyper-competitive retail environment. This is why Amazon is the leader. And good or bad, it’s the same reason Trump is president. We spend too much time responding to what is loudest, instead of trumpeting our own authentic voices and stories - no matter how small or seemingly unimportant. They are important! This tactic of piggybacking off of someone else's offer might have worked ten years ago, even five years ago, but not today. It's as played-out as the "snowed in?" emails you expect during winter storms. Especially within an industry that now requires disruption and original creative thinking to effectively stand-out and resonate with younger generations.

Do brands really believe that millennials are going to stop their day, and convert against a SKU which you had excess inventory of, just because it was framed between some “clever” messaging (not clever at all) and visuals? I’d like to challenge retailers everywhere (and their agency partners) to not play the RESPOND game anymore, but to think laterally and originally, and LEAD the conversations. Many are already doing this, and those are the marketing campaigns that I personally enjoy. But going after Amazon on PrimeDay (of all days), with a sleepy response-offer, is like shooting a small hole in the boat you are crossing the ocean in.

Think different. Receive attention (and sales) for something authentic - because that is what works these days. And when you get that message all primed-up (bad pun I know) in your ESP, go ahead and send me that email. We'll appreciate it. Promise.

+ NOTE: I orginally published this on LinkedIn, you can view that published post here. 

Amazon Loses Their 1-Click Patent This Year. So What?

It is finally happening. Amazon is going to lose their 1-click patent this year, after enjoying a twenty-year epic run of providing customers with unrivaled online shopping checkout convenience. But now that Amazon will lose their protection over this technology – what does this mean for all other online retailers, who are constantly seeking new ways to increase sales, in a highly competitive landscape?

Before we dive into how the online market will react to this, let’s identify which retailers would most benefit from this eCommerce strategy. To begin with, Amazon added one-click checkout, mainly as a way of making it easier for repeat customers to finish their online transactions, without the hassle of re-entering their ship-to address and payment details. After all, its these final steps in the online shopping process, which represent the portions of the eCommerce conversion funnel, where most retailers lose the largest percentage of customers to checkout abandonment. So by simplifying this process, reducing the required customer actions down to a single click, you can imagine that the majority of retailers who are now able to implement this strategy, would almost immediately gain new benefits. These would be: increased time on site, lower bounce rates, lower abandonment rates, higher conversion rates, increased sales, more repeat purchases, greater customer loyalty, the list goes on.

As mentioned above, websites with strong repeat customers probably stand to gain the most benefit from adding this tactic into their websites, because it makes it simple for customers to complete the transaction, without thinking too much about it. Which brings me to perhaps one-click’s most powerful benefit. Does it simplify the process and please the customer? Of course it does. But what it also does, that is a little subtler, is that it psychologically circumvents (for the customer) the traditional consideration phase, which are the moments just before you click “buy” – where you might think about whether you need more detergent, dog treats, crayons, tooth paste etc.

Typically, when customers reach the payment page of the checkout process, the reality of financial spending gets very real. Psychologically it’s at this point, customers consider the amount of money leaving their wallets/accounts. How much money do I even have in that account? Can I afford this? Do I really need another pair of shoes? This payment phase in eCommerce, is the point where most of the abandonments take place, and this is a moment that impacts brick-and-mortar customers in much the same way, and its why merchants everywhere can’t wait for epayments to be universally adopted. Technological sophistication has enabled customers to entirely skip the “consideration” phase altogether in certain circumstances, and so we see more and more retailers adopting those processes wherever possible.

Going one-step further, citing another progressive Amazon strategy, in the news this year we have heard all about Amazon’s checkout-free grocery store concept – which if you haven’t heard about it – allows customers to find what they need from their store aisles (bread, milk, kale), and then exit the store by passing through terminals, which automatically charge your epayment source whether that is on your smartphone, smartwatch etc. This new speed-pass version of retail, while positioned to customers as we are pleased that we can save you time, isn’t as humanitarian-centric as it appears. Like their one-click checkout process, the sub-text is we’ve made the traditional “checkout process” disappear, so customers won’t think too much about what they are purchasing, and will likely spend more than they intended, more frequently. But I digress.

So what are we likely to see happen in the eCommerce space? My bet would be that many brands will start to add in the one-click checkout process, because its common sense. Over the years, we’ve already seen other big companies, such as Apple, start to license the technology from Amazon because they understood the value in making the purchase process as easy as possible, and couldn’t wait until now, when it would be available for free. Apple liked this technology so much in fact, that they’ve been paying Amazon licensing fees (in an undisclosed amounts) since around 2000, which is only a year or so after the patent had been awarded. So now that this will be available to anyone who can implement it, I think we will see different phrasing on these CTA (call-to-action) buttons, created around this idea of one-click checkout.

My hunch is that while brands will most likely have someone on their marketing or eCommerce teams, who is aware of this patent expiration, and championing this idea for how to improve user experience, there will likely be a BIG push from eCommerce platform providers (such as Salesforce, WebSphere, etc) to their clients - encouraging them to use their version of this new one-click buttons so that all their metrics will increase positively. This would represent a win for the vendor (who can now boast they aided their clients to higher KPIs), and a win for the client (who can make more money and please more customers).

As mentioned at the start, the customers that will use this technology the most, the ones that are likely to benefit from this most of all, are returning customers. That is, brand loyal customers who have been to your site before, perhaps completed a profile, but certainly saved their payment details for future use. In the industry, the ability to facilitate this for your customers, is sometimes referred to   ecommerce-site registration – but this is essentially where customers can be offered a login, so that they can store information, such as payment details. Once these details have been stored, then upon future site-visits (sessions) – assuming they are logged in already – they can easily make use of the one-click technology. I just mention this part, because clearly there is more to consider than just adding a CTA button that reads “one-click checkout”, as you need to make sure that your website provider can accommodate this.

Lastly, the implications for desktop shopping are huge, because again, you are saving the customer time – which they appreciate. But when you think about the mobile implications this will have, well those may even be bigger. Recently, in an article on the MultiChannel Merchant blog, this is discussed at length and would make for an interesting separate post. For now, if you find any articles on “on click” being discussed, I’d invite you to share them here as comments.