As we have noted many times in this blog, the Internet and mobile technologies are dramatically altering how nearly all business is done. While it is certainly debatable as to which industries have been affected the most, certainly retailing is at the top of the list. Whether this is because technology allows customers to choose from a virtually unlimited number of items or offers the convenience of rapid delivery or makes it easy for customers to gain information and compare products, online shopping is transforming retailing.

Yet, the benefits customers obtain by shopping online is just one of many changes retailers must face. For example, changes include such things has millennials moving from suburban to urban areas which impacts the location of physical stores. Also, there is greater emphasis on health and fitness, which is changing the types of products customers seek. And, of course, the increased sharing of information among fellow shoppers, such as through social media and rating sites, is making it necessary for retailers to communicate in more detail and with a greater sense of urgency.

A good example of how retailing is changing can be seen in this state of the grocery industry story from Fortune. It looks at key issues affecting a retail model that has been in existence for nearly 100 years. The story suggests remaining competitive requires grocery stores to innovate or face a very uncertain future. For instance, grocery stores need to not only address issues of location, food choice and customer communication, but they also will need to become more tech-savvy, such as offering automated ordering options, and create a more comfortable and attractive shopping environment, such as offering in-store bars and restaurants.

And in the future even more innovation will be needed, such as home delivery using driverless vehicles, real-time information on the origin products and even robot-assisted stocking of shelves (see included YouTube video).

Last week we talked about how creativity is often an invaluable trait for those wanting to be successful in marketing. This quality is a requirement due to intense competition, changing customer needs and other factors, which force marketers to be continually on the lookout for new opportunities. How much time and effort a marketer should invest in finding new opportunities will certainly depend on the business. For well-funded companies, with large marketing budgets and employees whose main job is to research potential new markets, looking for new ideas is a full-time effort. Smaller marketers, who may not have the luxury of a staff dedicated to research, may not be able to afford to spend time each week looking for something new. However, they still need to be watchful of new developments by keeping in close contact with their current customers to see what seems to be capturing their interest, or use other methods, such as watching news sites and social media, to see what they can learn.

The true test of being innovative is to have a product that is at the forefront of an emerging market or at least not too far behind. Unfortunately, this is very easy to say, but often difficult to do. As we noted in a previous post, it is often tricky to determine whether a developing market holds viable long-term potential or is just a fad. Jumping in too late may mean a marketer has missed the market while jumping in too early for a market that never takes off can prove to be an expensive mistake. So making the decision to enter or hold off is one of the more difficult marketing decisions organizations face.

Another example of a market that may or may not have long-term potential is discussed in this story from Advertising Age. It reports on the growing market for cooking products targeted to children. Sensing that a new market is evolving, marketers are addressing this with a number of new products including kid-size stainless steel cookware, television programs, magazines, as well as pretend kitchens. The story suggests demand in this market can, in some ways, be attributed to the efforts of the Food Network cable channel. Their shows, featuring children in cooking situations, may be helping to frame cooking as an activity for girls and boys of any age.

If it turns out kids are accepting cooking as a fun activity, then marketers should expect this market to be much more than a fad and getting in too late may be costly.

Choosing the right price to charge is among the most complex of all marketing decisions. As we note in our Pricing Decisions tutorial, setting price is complicated because marketers must take into consideration both internal factors, which are those largely controlled by the marketer, and external factors, which are outside their control. For external factors, what their competitors charge is the most obvious one marketers will consider. This is especially crucial if the target market does not see much difference between competing products. In this type of market, constant monitoring of competitors’ marketing activity is needed, including watching what happens with their price.

One industry in which response to competitors’ pricing seems to be increasing can be found in higher education. For instance, many may be under the perception the price of tuition at colleges and universities seems to be always increasing. However, competition to attract students is forcing most institutions to become more aggressive in their marketing efforts, including becoming more competitive on price. While the published tuition on a university’s website is essentially the list price a college is charging, increasing competition is forcing schools to offer price adjustment that reduce the actual price. These adjustments usually appear in the form of scholarships, grants, and other incentives that can substantially lower what a student will pay.

Another example of how the higher education market is changing in response to price can be seen with college textbooks. Historically, what has been somewhat unique about the textbook market is the lack of competition for textbooks. At most institutions, professors choose the book they want to use, and students pay whatever price the school’s bookstore charges for the book. In this situation, there is no competition for the book (i.e., professors generally do not give a choice of different books that students can select), consequently students must pay whatever the price may be, which can be steep.

However, as discussed, in this Bloomberg story, businesses have responded to the high cost of textbooks by offering other options, such as short-term rental and digital versions. The result is that students' spending on course materials has been dropping for several years, even though the price of textbooks has risen.

From a marketing perspective, this is probably not a good sign for textbook publishers unless they fight back by offering less expensive options or providing more value for the prices they do charge.

In our What is Marketing? tutorial, we summarize what marketing is about with a single sentence consisting of just 28 words. However, a clearer picture of marketing can be found in our dissection of the key terms found in our definition. In particular, for this post we want to focus on just one word found in the definition - “create.” An essential characteristic of nearly all marketers is that they must be creative in all aspects of marketing. This is especially the case for product decisions. Marketers need to be constantly on the lookout for new ideas that can lead to goods and services that will be of interest to current customers or, better yet, to customers they do not currently serve.

Considering the importance placed on launching new products, some may wonder why companies are ever late to a market when there are potentially great rewards for those who are early. Of course, there are many reasons including lack of research to identify new trends, lack of money to invest in new ideas and, possibly the most common reason, executives are happy with how things are going and do not see a need to explore new ideas.

Of course, the last reason is probably the thing that will eventually lead to problems. Being content with where a company stands in terms of marketing decisions is almost always a bad idea. Creating products is one of the most important aspects of what marketers do while not changing or innovating is almost always going to lead an organization to troubled times.

An example of the importance of innovation can be seen in this story from Fortune. It discusses how fast food chain Chick-fil-A, a company that is not necessarily known for innovative ideas, caught its competitors off guard last year when it added iced coffee to its menu. Chick-fil-A has found being early, to what is now a rapidly growing market for iced coffee, has been met enthusiastically by customers and is a key reason coffee sales have doubled. Naturally, Chick-fil-A’s success has brought competition from other major fast food outlets, which means company executives can’t afford to sit back and gloat about their success. Instead, with the speed at which competitors are introducing their own iced coffee products, Chick-fil-A will need to come up with another innovative idea in the very near future.