When we think about retail formats, likely the most under-appreciated is the vending machine. While online retail sites, such as Amazon, and big-box retailers, such as Wal-Mart, receive a heavy dose of press coverage, vending seems to always be looked at as an also-ran – something that is there but not all that interesting compared to more publicized retail options.
If you view vending machines as just a piece of machinery that you need to smack to get your packaged snack to fall, then take a look at this story from SelfServiceWorld. It reports on innovative forms of vending that sell products not previously offered through that outlet. For example, the story discusses the selling of cupcakes that are freshly baked each day. There is also a vending machine stocked with fresh salads and a vending machine in Australia selling bananas.
Obviously because these products have a short expiration dates, the key to these vending machines is the need to supply inventory on a regular basis. That requirement alone is likely to prevent fresh vending options from appearing in most corporate cafeterias. Despite this limitation, fresh vending is one area of retailing that is poised for growth, so expect to see more products distributed this way.
Maybe it is pure coincidence that we posted two stories today related to the evolving concept of the Internet of Things (IoT). The concept itself is simple to understand – marketers can learn more about customer behavior if customers' activity is tied to methods of data collection. Probably the easiest example of this is for a retail store to identify a customer when they enter a store, such as via a smartphone app, and then send a signal to the store's computer tracking system telling it to monitor the customer's activity. This could also extend to newer mobile communication devices, including glasses (e.g., Google Glass) and connected wrist watches.
But as pointed out in both the story from Stores and the one from Knowledge@Wharton, the implications of IoT are not only about customer tracking. The Internet of Things may present a paradigm shift in how retail activity is managed. For instance, IoT may permit customers to walk into a store and walk out with products without stopping at a checkout line. Retailers may also be able to send specific promotions and other value-added services (e.g., recipes, design ideas, clothing suggestions) based on products customers have purchased.
The Internet of Things is not limited to monitoring product purchases, it also includes the use of sensor technology to assess store inventory (e.g., sends a message when stock is running low), change promotional displays (e.g., senses certain customers and delivers targeted messages), and tracking store traffic patterns (e.g., watches how customers move around the store).
Additionally, at a more advanced level, IoT includes products where sensors are embedded. For example, a bottle of wine may contain a sensor that could send a message back to a retailer indicating when the bottle has been emptied. The retailer can then text or email suggestions or promotional information for the customers' next purchase.
Of course, privacy issues are the hot topic with the Internet of Things. The presumption on the part of marketers and technology folks, who are at the forefront of IoT, is that customers will want to give up some degree of privacy in order to obtain the benefits provided, such as individualized promotions and other loyalty programs. That, of course, will be something to watch.
A good percentage of space appearing on packaged food products sold in retail stores is there due to government regulation. The most obvious are the lists of ingredients and other nutrition information. Recently, the Affordable Care Act extended the food labeling requirement beyond food packaging and will now apply to food service, specifically food sold in restaurants. While technically restaurants are legally required to include nutrition information for the food they sell, the federal government has yet to enforce the law and, as expect, few restaurants are actually offering the information.
Some states, though, have their own requirements. For instance, as discussed in this Los Angeles Times story, California has a law requiring restaurants place nutritional information on their menus. That law has been in effect for five years. But most restaurants are also ignoring this as they wait to see what happens with the federal law. The state of California is also not taking it very serious as there appears to be some question as to whether the law is still even on the books.
No matter what happens, if labeling laws are ultimately enforced, restaurants may experience a sizable expense for redesigning menus to include the information. And, for some chains with very large menus, the additional requirements could lead to higher printing costs as the information could result in menus having more pages.
While marketers do face increased cost, they may also see opportunity in redesigning menus to more effectively communicate their offerings to customer. The cost of designing and producing new print menus also may be enough to push some restaurants to abandon print and instead introduce digital menus that are presented within a tablet computer.
Savvy marketers are always on the lookout for trends that impact customers' daily lives. For instance, they look for emerging needs that previously customers did not know they wanted satisfied. Or they find customers have developed their own crude techniques for solving a problem. Marketers who are lucky enough to be early at spotting a trend that is ultimately widely adopted, can reap enormous benefits (e.g., Apple with iPod).
Yet, not all trends materialize in a way that only a few companies are able to spot. For example, consider mobile payment systems, where customers can make purchases by simply using their smartphone. Way back in June 2010 we wondered just how long it would take for the mobile purchase ability of cellphones to replace credit cards and cash carried in a wallet. As it turned out, it took some time. Only now, four years later, does it appear mobile purchasing has risen to being a legitimate threat to the wallet. This is especially the case in countries outside of North America and Europe, where making payment using mobile devices is burgeoning.
As discussed in this Trendwatching story, mobile payments are particularly well accepted by Asian Pacific consumers. For example, one statistic from the story reports that 46% of Asian Pacific consumers make mobile purchased compared to only 17% in North America. The story also offers examples of how companies in China, India, Thailand and other countries are attracting customers with mobile apps and other services designed to address consumers' desire to make mobile payments.
For marketers in Europe and North America, the message from this story is one that must be watched closely. While there is an expense in the infrastructure needed to accept mobile payments, the tide is moving in this direction, and marketers should be ready.
When marketers sit around dreaming up new products, they often find the quickest and least problematic path to getting something new on the market is simply to make small changes to existing products and call it new. For instance, a common technique is to extend a current product line by either adding a feature (e.g., new flavoring) or taking something away (e.g., remove ingredient that reduces calories). Marketers following this strategy may even retain the brand name that is associated with the product line so that the new product will be called Brand X's New ABC product. In these cases, the name chosen and displayed on the packaging is usually descriptive of what is now contained or removed in this new product, such as Brand X's New Chocolate-Flavored ABC product.
But, what if the change is relatively minimal? For instance, what if a marketer adds a very, very small amount of a new ingredient to a product, can they now promote the product with this as the new product name or is it misleading to do so?
Well, the U.S. Supreme Court is now hearing a case covering this issues, and their decision has the potential to change how marketers label products. As discussed in this Los Angeles Times story, the issue comes from a lawsuit filed by a relatively small juice-products manufacturer, POM Wonderful, against one of the world's largest consumer-products companies, Coca-Cola. POM is claiming the labeling of one of Coke's Minute Maid brand products is misleading because the product name is Pomegranate Blueberry Juice. However, the product's ingredients clearly show that pomegranates and blueberries make up less than 1 percent of the juice, while apple or grape make up 99.4 percent.
POM claims that labeling the product with the name of ingredients that make up such a small part of the product is confusing and misleading to customers. As one might expect, the reason POM brought the lawsuit is because they have a competitive product with 100% pomegranate and blueberry juice. Of course, Coke takes a different stance saying, essentially, customers are smart enough to know what is contained in the products they buy.
While this may seem to be a straightforward case of one company suing another, the stakes are much higher than just these two companies. Thus, the reason why the Supreme Court has taken on this issue.