7 min read

Losing Control, Gaining Commerce

The blurring lines between marketing, media, and sales

This piece was authored by Molly Schonthal who is both an Underscore Core Member and a digital pioneer, focused on the future of commerce. Molly is the Vice President of Strategy and Innovation at Salsify an Underscore portfolio company.


The lines between marketing, media, and sales are blurring.

Walmart just announced that they are bringing website ad sales in house, Kroger and Walgreens announced that they will combine forces, Kohls announced a partnership with planet fitness, and hybrid retail/coworking concepts like WeMarket are popping up with greater frequency. So, now you can be at work while in a store or shop sale priced food on your fridge, or be in a pharmacy and pick up groceries. In short: There’s a distinct merging of retail spaces and contexts.

   

We are experiencing a shift: Mass Markets → Masses of Markets

Product experience, the way we come into contact with it, understand it, interact with it, happens in bits and pieces, through media, browsing a store aisle, scrolling through a newsfeed on Facebook, browsing a retail store, through a marketplace at work, interacting with a digital ad at a gas pump, or searching on Amazon. As a result, the extent to which manufacturers control their brand experience has dramatically changed.

This new reality brings new challenges.

There are, however, a few simple principles that brands can keep in mind to make the challenge of adjusting to a masses of markets environment easier to comprehend and more actionable.

When brands have to show up in a variety of places that are simultaneously marketing and commerce-driven touchpoints, operating models are challenged. This means that even though there are more opportunities to show up, it will become harder for brands to continue to be found.

Masses of markets mean that brands must invest in understanding several different playbooks. Each new point of sale comes with new “rules of the game”. If mastering Amazon sales is one playbook, then mastering Walmart or a direct to consumer sales channel is another. Feeding an algorithm is much different than feeding a pipeline. For instance, the rules required to show up on an Amazon digital shelf have more in common with the world of media, driven by formulas and algorithms, than they do with traditional merchandising practices.

Many brands have attempted to sell directly in order to regain proximity with consumers, however selling directly involves being able to understand context and consumer well enough to compete with digitally native brands. Check out any product that has shown up recently on your Facebook newsfeed (Thirdlove, Allbirds, Away luggage) for proof that the bar for direct-to-consumer experience has been raised.

           
Quip has done a terrific job of taking advantage of multiple routes to market. This once internet-only brand now has volume driving partnerships in Target, artistic displays in pop-up stores, and a terrific D2C experience. Their ability to use what they know about consumers to create a loveable, functional, design-oriented product that was initially shared through social networks allowed them to build out terrific product content, great consumer insights, a community of enthusiasts, partnerships with other channels and continue to innovate their core offering. It becomes a virtuous cycle.
   
Another key point of differentiation in the masses of market environment is the way in which the whole enterprise must mobilize around an opportunity. Traditional routes to market flow back office to front office e.g. make stuff, merchandise it, distribute it, market it, sell it, rinse, repeat. However, for Amazon, when you’re out of stock (a typically back-office problem) it translates into serious damage for search ranking, which is a distinctly front office or marketing and media problem. Unlike a traditional merchandising problem that can be solved quickly with re-stocking, damage to an algorithm can take months to recover from.

The perfect digital shelf and the perfect product experience is a moving target. Amazon changes its A9 algorithm multiple times a year. In such an environment, product experience is a moving target. To be competitive, your product and branded content have to be easily stored, enriched, enhanced, optimized, changed, re-formatted, updated, re-created multiple times per month vs a couple of times per year. This requires transitioning your focus from perfect product data to flexible product data. The way in which your product shows up on Walmart, will be different from how it shows up in a D2C environment, or a shoppable Instagram ad, or on a shelf.

Brands must transition their focus from perfecting internal systems to perfecting the points of consumer interaction. Whenever, wherever the consumer finds and interacts with your products are the real “moments of truth” not the data in source systems- which often lags behind in recency and accuracy. For the purposes of commerce growth, brands must work from the consumer backward, not internal systems forwards. The key to success becomes, not focusing on one “golden record” but the ability to create several variants.

Modern brands recognize that they are no longer controlling their ideal brand experience, their consumers are. Because digital experiences allow us to understand consumers in more detail, there’s no excuse for ignoring their context. Since the advent of do-it-yourself slime recipes became a trend for kids, Elmers has adjusted their content to this specific context.

   
Another terrific example of understanding the role consumer plays in relation to brand is the Nike Melrose Flagship store. Nike told Forbes that the store was essentially designed “by the people of Melrose.” The store’s look, feel and merchandising is built on data, driven by digital interactions.
    

The Amazon Four Star store in NYC is merchandised based on what Amazon knows about what consumers are buying (sales data) and what they love (ratings and reviews). Target is now experimenting with smaller format stores that uses their knowledge of consumers and context to cater to local needs.

Showfields in NYC is a “pop up” department store designed to expose consumers to a physical, almost artistic experience with digital-only brands. It’s also merchandized by theme e.g. wellness, design etc. Shopping Showfields feels more like a gallery walk/exploration rather than a search and retrieval mission.

    

In Summary, Masses of markets invite and require a new approach to brand growth: Occasion based, contextual, in flexible, human terms.Brands need to question their mission to stay in control and work in a linear fashion and adopt a more dynamic way of working that allows them to adapt to new opportunities and contexts as they arise, taking multiple bets at the same time.

If the old rules of commerce were consistency and ubiquity, the new rules are speed and agility. The goal becomes less about control, and more about fluidity. Those who fail to address this new environment face a challenging future.


Learn more from Molly via her Core Summit 2018 lightning talk on winning the customer experience:

A big thanks to Molly for sharing her insights on the future of commerce! To stay in touch, and learn more from other Underscore Core members subscribe to the monthly Core Community newsletter and join us on social media.