Several years ago, we mentioned how the Internet and mobile technology offered the promise of changing how coupons will be delivered. The idea was that electronic coupons will be highly attractive to consumers due to the ease by which they can be obtained and redeemed. Yet, in late 2014 the delivery of coupons via methods other than free standing inserts (FSI), such as coupon included in newspapers or in the mail, remains relatively low. In fact, couponing company Inmar reports that 91% of coupons are still distributed using a print version, with much of this still coming from coupons cut from newspapers. (The Inmar site also has useful statistics on various methods consumers use to locate coupons.)
The fact electronic coupons are taking time to be widely accepted should not be viewed as a rejection of this delivery method by consumers. More likely, it is about habit and the routine people follow when retrieving coupons. Strong coupon users tend to have a high affinity for gathering these in a physical way and actually enjoy the activities involving in leafing through printed material and then tearing out the coupons they want.
However, according to this Advertising Age story, the tide may finally be turning in favor of electronic coupons. The story notes how consumers are beginning to accept the electronic coupon in greater numbers, especially load-to-card coupons, which are added directly to a loyalty card a consumer has for specific retailers. The story also offers several interesting statistics on coupons including showing how coupon redemption rates are considerably higher for electronic coupons compared to FSI coupons.
When a company makes a decision to pull a product from the market, in most cases the decision is a final one. The product has reached the stage of its product lifecycle where it just does not make sense to continue selling the product nor are there other companies interested buying the product so it can continue to be sold.
However, it is not always the case that a dead product remains dead. For instance, a classic example is the revival of Classic Coke, which in the 1980s reentered the market after being displaced by New Coke. More recently television shows, such as Arrested Development and 24, have been brought back to life following requests from thousands of fans. And on a smaller scale, a regional candy product name Astro Pop, which had a strong following in the early days of the space race only to see interest in the product fizzle, was brought back to life by a fan that just happened to own a candy company.
The key reason products seem to be returning from the dead is almost certainly due to the power of the Internet and social media. Both make it extremely easy for likeminded consumers to voice their opinion on products for which they have a strong allegiance. Of course, from the marketers' side reviving an old brand sends a message that they care what their customers want and, if lucky, remarketing the product could turn out to be a profitable decision.
Another example of customers reviving an old product can be found in this NBC News story (via Today Show website). It talks about a Coca-Cola product called Surge, which is similar to Mountain Dew, that was pulled from the market in 2002. The soda giant is returning this product following high customer demand. What is interesting about the reinstatement of this brand is that it will only be sold online through Amazon at what appears to be a pretty stiff price.
The fact Coke is resurrecting Surge in this manner is something that raises several marketing questions. For instance, is Coke primarily testing distribution through Amazon rather than in retail stores as an experiment that may lead Coke to distribute other specialized products? For example, using Amazon to distribute Coke in special limited-edition bottles? Alternatively, does Coke just see Surge for its PR value rather than as a money-making product that will occasionally be available in the same way McDonalds treats the McRib sandwich?
Also, the relationship between Coke and Amazon is another interesting part of this story. If the sale of Surge is wildly successful, will Amazon share buyers' information with Coke so they can target these customers with other Surge products, such as tee shirts? Moreover, if they do, will future sales of Surge have Coke selling directly to the customer?
By all accounts, the writing on the wall at RadioShack reads "We May Soon Be Out of Business." Many news sources, including this one from the Los Angeles Times, are reporting RadioShack will likely declare bankruptcy fairly soon. The reports that RadioShack may fold should not be a surprise and only adds to a long list of retailers that have called it quits in the last ten years. As we noted back in 2011, undoubtedly the Internet is to blame for many of these closings. Online retailers have dramatically altered the retail landscape, and the store-based retailers that did not see this coming early on have found themselves in deep trouble.
Yet in the case of RadioShack, there are many more issues that have led them to this point, with much of it centering on not fully understanding how their customers had changed. When RadioShack was in its glory years, circa 1970s, their product line was heavily skewed to do-it-yourself electronic products that appealed not only to hobbyist and tech-nerds but also to the average consumer who needed an electronics part, such as a TV antenna. Back in the day, RadioShack was about the only retailer offering electronic products within a retail setting, though there were also many mail order firms doing the same. In fact, RadioShack was so well-known for specializing in electronics that it was quite common for customers of all types to think of RadioShack first when in need of electronic products and parts. Even more, back in the late 1970s and early 1980s, they were also were likely on most personal computer buyers' short list of sellers.
However, by the 1990s things changed. Namely, a company perceived as selling what were viewed as technological and somewhat innovative products failed to keep pace with evolving trends. As one example, for many years RadioShack continued to write receipts on paper rather than utilizing computer-entered transactions. For a company selling computers, this seemed very strange. This along with product offerings and staff that did not keep up with innovation in computer and cellphone technology led many customers to lose the mental connection RadioShack once had with technology. Of course, it also did not help that category killers, such as Best Buy and more recently online sellers, such as Amazon, entered and rapidly became the go-to retailers for tech products.
While declaring bankruptcy is no guarantee RadioShack will be out of business for good, all signals suggest this may be the case.
Research studies conducted and written by marketing academics, such a marketing professors, can often be a challenge for the general marketer to follow. Much of this has to do with the way studies are written which is often in a style that is not easy to read as it is presented within complex sentence structure, mentions research-specific terms and issues, and may contain advanced statistical analysis. Additionally, some research papers are discussed at such an advanced theoretical levels that the untrained has difficulty grasping. Because of these and several other issues, few marketing practitioners bother to read current research published in academic journal.
However, marketing professionals should not be so easy to dismiss such research. There are many outstanding papers written each year that produce compelling results and may even prove quite useful in practice. For example, this story from Forbes presents results of a research study conducted by three business professors (the author of the story is one of the researchers).
The study focuses on the impact product placement within a television program has on advertisements appearing after the placement. Specifically, the researchers investigated how the placement of ads during different parts of a program affected three types of ads: 1) ads for the same product that was also in the product placement; 2) ads for the same brand though different product than what appears in the product placement; and 3) ads for competitors to the product placement. Data was then gathered by analyzing the set-top box viewing habits of nearly 500,000 households. The measurement behavior in this study was to see what percent of the audience tuned away when ads started showing.
There are several results presented with the most interesting being that for ad group #3, product placement was shown to increase viewers' desire to tune away. The implications of this and the other results are certainly something that even the non-trained research can understand, though these too are discussed in the story.
Back in 2013 we discussed how retailers were having trouble with the evolving shopper activity called showrooming. Showrooming is where customers visit stores to examine and even sample products only to leave the store without buying anything. Instead, they access the Internet to purchase the product they experienced in the store with the purchase often being through a different retailer than the one they visited.
Even back in 2010 we noted how retailers were concerned with how shopping practices were evolving thanks to new technologies. In particular, retailers sensed they were losing sales as they observed consumers pulling out cellphones while still in the store only to see them head for the exit. The assumption then was that the cellphone served as a price comparison tool and, despite any assistant provided by the retailer, the cellphone wielding customer was only concerned about price.
Well, it now appears retailers' fear of significant lost sales due to showrooming may not be as bad as previously thought. As discussed in this Washington Post story, the results of a large-scale study conducted by Nielsen supports retailers' contention that many customers do follow the showrooming practice. However, the research also indicates that a large number of customers do the opposite as they first search for products on Internet retail sites only to make the purchase at a physical store. This practice, which some are calling "Web-rooming," has led retailers to respond with several services including the order-online-but-pickup-at-store option. The Web-rooming practice was also supported by research undertaken by Accenture.
The message from these reports is that retailers must accept that the world is changing and so too are consumers' shopping methods. The message to retailers is that in order to maintain a handle on how shoppers' practices are changing, retailers must frequently talk with their customers and find out what they want. They also must throw out old retail habits and adapt to what consumers really seek in their retail experience.