Friday, July 13, 2018

Payment Trend: Cashless Restaurants

A small but growing number of U.S. restaurants are going cashless--meaning they accept only credit/debit cards or electronic payments such as Apple Pay.

Why? According to restaurant owners interviewed by Visa, the benefits are:

  • Many Millennials prefer cashless transactions
  • Handling cash takes time and costs the restaurant money
  • Transactions are faster, reducing wait times
  • No cash means higher security and lower risk 
Not so very long ago (at least in marketing eras), some restaurants were cash-only, not wanting to pay merchant fees to accept Visa, MasterCard, American Express, and other plastic. Now Visa has actually offered restaurants a cash bonus to go cashless.

One disadvantage to consider is whether cashless restaurants will be unable to serve the market of people who, by choice or by economic situation, are cardless.

On the other hand, the increased popularity of Starbucks Mobile Pay, Apple Pay, Samsung Pay, and other payment apps indicates that there is a definite market of people who prefer mobile transactions.

Monday, July 9, 2018

Delta Involves Customers with Social Media

Delta Airlines is using the visual power of social media to involve customers in its brand and to communicate the extent of its services.

Above, Delta's official Instagram account, which invites customers to "share your travel pics" along with the hashtag #Delta. With 716k followers, and lots of stunning travel images to enthrall and inspire, the airline is encouraging two-way communication via Instagram. Note the brand logo in the header, a good way to reinforce and support other marketing efforts for synergy.

The airline's official Twitter account has nearly 1.5 million followers and 750k tweets in 11 years of participation. It announces travel alerts, promos, community activities, and more via Twitter.

Delta's official Facebook page has more than 3mm likes and lots of visually-interesting informational and promotional content, such as new designer uniform photos and new destination photos.

Delta also uses hashtags for promotional purposes. One recent promo, "Pilot Talk Sweepstakes," invites the public to enter and win a free trip to the Delta destination of their choice by spelling out the city or country using "pilot talk" alphabet ("A" is "Alpha," "B" is "Bravo," etc.). Of course #pilottalksweepstakes is the hashtag.

Monday, July 2, 2018

Creative Advertising with Benefits

Last month, Procter & Gamble's SuperBowl campaign "It's a Tide Ad" won big at the Cannes Ad Festival. "Tide Ad is very hard-working, classic marketing but refreshed as if we were inventing that today," said one of the jurors.

If you didn't see the ad pictured above, you can see it here. Join the more than 5 million YouTube viewers who've clicked to see it.

The complete campaign is both classic and newly creative (explaining the big win at Cannes). One of the twists is that the ads appeared to be hijacking other ads during the SuperBowl until...well, the reveal is: "It's a Tide Ad." By design, the point was to have football fans and casual viewers alike look at all the commercials and wonder whether each was from Tide or a different brand.

The 2018 Tide ad spoofs P&G itself, because of the 2010 Old Spice campaign in which Isaiah Mustafa talks with the audience about "the man your man could smell like," ending the ad perched on a white horse on the beach. Now Mustafa is back, on that white horse, helping to reveal that the new ad is for Tide.

Along the way, the Tide ad shows benefits like clean clothes. Too often, today's commercials are so cleverly creative that actual benefits are missing. Not at P&G. The benefits are definitely part of the creative message.

Tuesday, June 19, 2018

Ocado Technology Crosses the Pond

Image from Ocado Group's website
Ocado is well-known in the UK for its efficient web -based grocery retailing business. Today, more than half a million consumers shop online at Ocado's e-commerce site and have their groceries delivered.

The company has developed a highly efficient warehouse system that uses robots to pick and pack. See it in operation here.

Now the US supermarket chain Kroger has an exclusive deal with Ocado to build a series of robotic grocery warehouses across America. Ocado's technology will also help Kroger with delivery logistics, a key element.

Currently, Walmart dominates the US grocery business . . . and Amazon's acquisition of Whole Foods Markets turned up the competitive heat last year.

In the long run, Kroger wants to drive down costs and increase efficiency and customer service by transitioning to Ocado's system. Ocado's CEO says the deal with Kroger will "reshape the food retailing industry in the U.S. in the years to come." Meanwhile, how will consumer behavior shape the industry and competition among grocery retailers, online and in stores?

Monday, June 11, 2018

Hummus Market Is Humming

Hummus is having its turn in the marketing spotlight. Above, only part of the hummus display at a Wegmans supermarket in Virginia. In addition to the store's private-label hummus (at top right), other national and regional brands are featured.

One of the featured brands is Ithaca, named for a city in upstate New York, where Wegmans got its start. Smart marketing move to give Ithaca chainwide distribution on the East Coast rather than confining it to New York. Variety-seeking consumers and dedicated hummus-lovers outside of NY will see this unfamiliar brand, check out its unique attributes, and give it a try.

In the overall U.S. market, Sabra is the dominant brand, a market-leading position it's held for years. It's growing rapidly and expanding its R&D and manufacturing to keep up with high demand.

Wegmans carries Sabra, of course. But the diverse brands in each of its stores help to differentiate Wegmans from national supermarket chains, encouraging shoppers to return for unique and interesting choices. For the hummus brands, the marketing objective in this competitive marketplace is to secure distribution, raise brand awareness, and reinforce brand loyalty.

Note: This is post #1200 for my Marketing Handbook Blog.

Monday, June 4, 2018

Macy's Fine-Tunes Store Retailing

Macy's is still attracting in-person shoppers, despite the incredible growth of online and mobile shopping, all competing for the attention of customers. Among the innovations it's using to draw shoppers into stores is its outlet-style retail section, known as Backstage.

In my local Macy's, Backstage occupies an area on the lower level, with its own cashiers and decor. Customers can register for text messages about new products, in-store events, and other Backstage specials. This retail brand has its own Instagram account, Facebook page, and Twitter account.

Backstage is largely stocked with "off-price" merchandise, often new products purchased out of season or as excess inventory. Mostly apparel, but also home goods, brand-name cosmetics, and lots of shoes.

What caught my eye was the above sign in the handbag department, sitting on top of a showcase featuring "previously loved" merchandise. Turns out these are high-end purses that have been repaired and are now marketed at discounted prices compared with the original new-product price.

One strategy Macy's is using to fine-tune its store retailing is "Growth 50." This involves testing a concept in 50 stores, assessing the lessons learned, and applying the most effective ideas to hundreds of other stores. Watch for more innovations and lessons learned as Macy's reinforces customer loyalty in this age of omnichannel retailing.

Friday, June 1, 2018

Pepsi and "Performance with Purpose"

As part of its "Performance with Purpose" strategy, PepsiCo has three types of product portfolios. One is "fun for you" foods and beverages like Mountain Dew. The second is "better for you" products like Baked Doritos. And the third is "good for you" products like Naked Juice.

 Just a few days ago, it acquired Bare Snacks Inc., which markets Carrot Chips, Apple Chips, and other crunchy snacks made from fruits and veggies. This acquisition expands the pantry of "good for you" products.
In the beginning, Bare Snacks produced apple chips and other products from its own organic apples. The company recently said that no matter who acquired it, Bare Snacks would stay true to its strategy of producing fruit and veggie snacks that taste good, as well as being healthy.

PepsiCo is also using a "brand incubator" to encourage small businesses to pursue "good for you" food and beverage innovation. In addition to money, the entrepreneurial brands enrolled in the Nutrition Greenhouse incubator receive mentoring to grow their businesses.

Wednesday, May 23, 2018

Yogurt, yogurt everywhere

Walk into any supermarket or health-foods store today, and you'll see a vast array of yogurts in the dairy case. Flash back just 11 years, and the yogurt offerings were meager, to say the least. Dannon was marketing yogurt in US stores, but the food category was miniscule and anything but mainstream.

The incredible growth of yogurt during the 21st century is due, in large part, to the entrance of one brand--Chobani, which launched its Greek yogurt in 2007.

Today, Chobani is competing with brands that didn't exist in 2007, as well as brand and product extensions of companies that were part of the yogurt market in the 20th century. Consumers have responded to the new wave of yogurts by trying new products and, in some cases, becoming loyal yogurt lovers.

No wonder Chobani has been redesigning its products and packaging to stand out in this increasingly crowded environment. The company is also reformulating yogurts with lower sugar and more flavor pop. And it's "stretching" the branded yogurt concept into drinkable products, among other innovations.

Yogurt is everywhere. How will Chobani, Dannon, and other brands maintain the interest and loyalty of consumers in such a competitive marketplace?

Sunday, May 20, 2018

The Sneakerization of the Non-Dairy Milk Market

Does the "dairy case" in your local supermarket include rows of shelves with alternatives like soy milk and almond milk?

The increase in number and variety of non-dairy milk products illustrates the "sneakerization" of this market--meaning the proliferation of multiple products for microtargeting niche or microniche consumer segments. Ever-finer market segmentation for targeting small niches interested in specific types of products/benefits, in other words.

Even calling these products "___milk" can be controversial. But despite industry efforts like the long-running "Got Milk?" campaign (which morphed into "Milk Life"), consumption of traditional dairy milk is not going up.

In fact, many consumers are seeking out milk alternatives for health, nutrition, and lifestyle reasons.

Consumers are paying attention to these non-dairy milks and seeking out new choices, boosting demand for what was once a tiny niche. This is changing the makeup of the industry. For instance, adapting to this trend toward proliferation of non-milk products, one former dairy producer now makes peanut milk.

Sneakerization of this market means more competition among non-dairy milk products AND milk products, all seeking to improve market share, sales, and profitability.

Thursday, May 17, 2018

Upcoming 12th Blogiversary


June will mark the 12th anniversary of this blog! My very first post was about the way Boeing views the future (for strategy reasons) vs. the way competitor Airbus views the future.

At the time, I indicated a preference for Boeing's view, because it envisioned a point-to-point future for passenger flights, whereas Airbus's vision was for giant jets flying passengers from one airport hub to another.

The difference matters, because these visions of the future guide companies in planning for new products and supply-chain priorities. In turn, suppliers and buyers both consider what Boeing and Airbus think about the future of air travel and the airline industry. They factor these and other projections into their planning for marketing strategy.

In general, what Boeing envisioned in 2006 has come to pass now. As a result, there is higher demand for lighter, fuel-efficient jets than for heavy, gigantic jets like the Airbus 380.

Boeing at this moment sees air travel demand increasing from 2017-2036, according to its Current Market Outlook. In fact, it believes this will mean airlines will need to have twice as many passenger jets in service by 2036, compared with fleet sizes today.

Today, Airbus also believes that demand for air travel and air cargo will increase year after year after year, and by 2036, the company projects a need for 35,000 additional aircraft.

The competition between these rivals continues as the market expands and airlines line up new aircraft. In 2017, Airbus sold more aircraft than Boeing. However, Boeing was the leader in aircraft delivered.

Notice that the focus is on Airbus AND Boeing, because these two manufacturers are the two largest in the world.

How will their competition affect the overall market, including smaller manufacturers?