Net-a-Porter turns 13 in 2013

Net-a-Porter, the popular online luxury fashion retailer now owned by Richemont, becomes a teenaged business in 2013, a year of new initiatives.

• Becoming a print publisher: 'It isn't a secret that Net-a-Porter will be publishing a major fashion magazine within the next 12 months or so', says CEO Mark Sebba.
• Expanding to Hong Kong and Asia, with a few adjustments: 'There are nuances in terms of body sizes in different markets. But beyond that we believe there's a certain segment of clients who are global', says Net-a-Porter's Holli Rogers. 
• Featuring exclusive collections by brands such as Lover (which is based in Australia).
• Doing even more to reward each EIP (extremely important person), loyal and high-spending customers who enjoy special privileges such as personal shoppers, priority ordering and more.
• Apps, microsites and other tech-driven tactics to help its customers find and buy the fashion they want, when they want it.

Net-a-Porter is an e-commerce expert and a power in fashion retailing. Print publishing is an entirely different business, however, presenting different marketing challenges. It will be an interesting year ahead for Net-a-Porter!

Big stores, big data, bigger profits and better shopping experience

This shopping season, every retailer of any size will be capturing as much data as possible about transactions, including which products are purchased (and in what combination), how often each customer buys and through which channel (in the store? via app? online? catalog?).

By analysing such big data, retailers can gain insights into customer behavior and prepare marketing programmes to strengthen relationships with loyal customers (and turn occasional shoppers into loyal buyers).

A McKinsey study from 2011 suggests the enormous potential of mining big data: 'We estimate that a retailer using big data to the full has the potential to increase its operating margin by more than 60 percent'.

Amazon, in fact, has boosted sales by analysing big data to present customers with product recommendations based on previous purchases and browsing history. Customers benefit because the shopping experience is tailored to their needs and preferences.

Waitrose and John Lewis, part of the same corporate entity, now have a joint customer insight director to help mine big data for actionable information. 'Customer insight is an increasingly sophisticated area and a central part of modern retailing', explains the group chairman. (At left, the first cobranded ads from these two stores.) 

A Harvard Business Review blog post observes that smaller retailers may be unable to afford data collection and analysis on this level, possibly putting them at a competitive disadvantage. On the other hand, there's an app for that--big data analysis, I mean. Of course, this is oversimplification of a complex situation, but the point is that customers have more power than at any time in the past, so retailers of all sizes must be ready to satisfy shoppers' needs or risk losing relevance and market share. Big data is only part of the solution, but it's a big part.

Fortnum and Mason, 2012

Fortnum and Mason's traditional holiday hampers are back, and this year, the company is ready for high demand. In 2011, technical glitches prevented Fortnum from filling a lot of orders--a costly problem for the firm, not to mention the problem of negative customer reaction.

For 2012, Fortnum revamped its supply chain and its info tech back-office support. Now its orders are well ahead of hamper sales two years ago.

And yes, Fortnum may be more than 300 years old, but it uses 21st century communications like online videos and Facebook to promote its hampers. It also maintains a Twitter account. Oddly, neither the FB nor the Twitter accounts are featured on the retailer's home page, although a Google search located them right away.

Fortnum also presents an online 'magazine' (not a blog) with articles about new products, background about where some foods come from and more info.

What about traditional holiday windows? Look for displays that tell the story of Dick Whittington, famous as Lord Mayor, if you visit Fortnum before the end of 2012.

Reckitt Benckiser adds to its health and hygiene brands

Reckitt Benckiser (RB) is the company behind such best-selling brands as Clearasil spot cream, Air Wick air fragrances, Strepsils throat lozenges and Cillit Bang cleaner.

The company's vision 'is a world where people are healthier and live better'. Its purpose 'is to make a difference by giving people innovative solutions for healthier lives and happier homes'.

 With the acquisition of Schiff Nutrition International, RB has now expanded its health and hygiene portfolio of products. Before the acquisition, health-related products accounted for 21% of RB's revenue, hygiene products accounted for 38%, home products accounted for 21% and the remaining 20% of revenue was provided by pharmaceuticals, foods and portfolio brands.

Looking at digital communications, RB recently concluded a deal with WebMD, a health information website, that will reportedly allow RB to more precisely time and target ads for Mucinex and other products to consumers. The idea is that as consumers use WebMD to search for symptoms of flu, colds and similar ailments, RB will be able to understand when and where flu outbreaks occur and immediate implement online ads highlighting appropriate products. WebMD says no personal data or identification will be involved in this arrangement.

What's next for RB as the company seeks to help consumers live healthier and happier lives?

Singles Day boosts online shopping in China

More than a decade ago, college students in China decided to start a new tradition of celebrating Singles Day on 11 November (you know, 1111--four singles). The idea was to give gifts to good friends in the hopes of helping romance blossom.

Now Singles Day has become perhaps the busiest cyber-shopping day in China. Alibaba (one of the country's most popular e-commerce sites) received orders for more than £ 1 billion worth of goods in just the first 13 hours of this year's Singles Day. By the end of the day, total purchasing was reportedly even higher than on Cyber Monday in the US.

Smaller online merchants such as Seventh Princess (photo above) saw significant sales increases, as well. Online travel companies promoted special savings, and retailers with store locations also offered special deals to attract buyers. And of course, delivery services had to be ready to put all those packages into the hands of recipients, another major plus for the day's economic activity.

Social games go mobile

What game is this? And who markets it?

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It's Candy Crush Saga, but you knew that. And if you look carefully at the upper left corner, you can see that King.com is the marketer.

In a very short time, Candy Crush Saga will be available to play on mobile devices. Bubble Witch Saga is already available for iPhones and iPads. Bubble Witch Saga is also available for Kindle Fire and King.com is thinking about broader use on Android platforms.

Mobile could make all the difference in King.com's future. Why? Because King.com is looking to challenge market leader Zynga, the company behind FarmVille, Words with Friends and other Facebook-based games.

Players have been spending less within Zynga's Facebook games in recent months, while King.com's revenues have been increasing. Zynga has experienced changes in top management and reduced its workforce as it works on a new strategy to restore rapid growth.

Meanwhile, Facebook indicates that more than half of its users log on from mobile devices. As a result, if a Facebook-based game isn't available for mobile use, users can't play as often (and that affects revenues for game developers as well as Facebook).

King.com's CEO is moving more toward mobile, saying: 'I believe that in a year from now, this is going to be a standard'. In fact, King.com's revenues from mobile games are already exceeding its expectations. Will King.com be able to overtake Zynga, boost revenues and become the number one social game company through its focus on mobile?

Tis the season for pop-up stores

Just in time for the holidays, Walmart and Mattel have partnered on a new virtual pop-up toy store in Toronto's subway system. Want to buy? Scan the code, and the purchase will be completed and sent to your home (no extra charge for shipping).

Microsoft opened pop-up stores around North America for holiday shopping and to coincide with the launch of its Windows 8 op system.

The Beatles pop-up store is driving around New York and Los Angeles, promoting the recent release of Beatles' music on vinyl (everything old is new again!).

Chanel's London pop-up store has perfumes and fragrances ready for holiday gifting, complete with special gift wrap.

Paperchase opened a holiday pop-up inside Selfridge's Oxford store, with gift wrap and other seasonal items.

Where will the next pop-up appear?

Buy it now or never: Zara's fast fashion cycle

Constant sales have conditioned consumers to the idea that they can wait for the best price, wait until the last minute to buy. That approach won't work with Zara, the fast-fashion affordable clothing chain owned by Inditex.

Founded in 1975, Zara rings up nearly €14 billion in annual sales worldwide. Gone are the traditional spring and fall fashion collections, priced at full retail when released and later marked down to sell at a discount before the new collection debuts. Gone are the weekly or monthly sale promotions. The focus is on up-to-the-minute styles, priced to sell today (without markdowns tomorrow).

Inditex maintains its own manufacturing facilities and partners with small shops for finishing details close to its headquarters in Spain. It has great flexibility to make more of a very popular item or switch to something else as customer tastes change. Store managers report daily on customer requests, what's hot and what's not, so the experts at Zara's main office can design, produce and ship updated apparel in about two weeks.

This fast fashion cycle means that consumers must have a different attitude when they shop at Zara. 'With Zara, you know that if you don't buy it, right then and there, within 11 days the entire stock will change,' the editor of Tank tells the New York Times.

Coca-Cola's 70-20-10 marketing

In March, Coca-Cola's marketing chief explained Coca-Cola's marketing investments this way:

"We invest 70% of our resources in existing products, 20% in innovations related to existing products, and 10% in pure innovations."

As an example of the 70% investment, Coca-Cola introduced the new 375-ml "pocket size" bottle earlier in the year. Minute Maid Pulpy, created for China, is a pure innovation that has become a best-seller throughout Asia.

Coca-Cola retains the #1 position in InterBrand's ranking of 100 best brands. It's launched a number of sustainability initiatives in recent years, including the PlantBottle (recyclable, biobased packaging).

Most important, Coca-Cola is embracing social media to engage its brand advocates. The CMO says his thinking has changed over the years: "I used to think that loyalty was at the top of the pyramid of classic marketing awareness model, but now it’s advocates."

Coca-Cola is reaching out through Facebook and other social media to stimulate dialogue with brand fans and remain relevant to its target market. The company has more than 54 million Facebook likes, by the way, and 630,000 Twitter followers. It's on YouTube, Pinterest and Flickr as well.

Christmas windows 2012

Harrods, Selfridges, Fenwick and other high street stores are already displaying holiday windows in all their finery. Here's an early look at a few of this year's themes.

Harrods 2012

Fenwick 2012

Selfridges 2012

• Harrods' windows feature Disney princesses and fairy-tale characters wearing elegant gowns designed by Oscar de la Renta (Snow White, above), Missoni and other famous designers. 
• Selfridges' "not your usual Christmas windows" at the Oxford Street flagship store showcase a giant gingerbread building, mini-ponies and other eye-catching features to call attention to seasonal and gift merchandise.
• Fenwick, in Newcastle, unveiled its holiday windows with Santa, elves, reindeer and other traditional lovable mechanical figures--including an iPad-like list of elf and safety tips.

Yes, competitors are stakeholders

Stakeholders (also known as publics) are groups such as community residents, media representatives, stockholders, financial analysts and others who have an interest in or some influence on marketing performance. Obviously, customers, employees, managers, suppliers, government regulators and others can directly influence a business and its performance, meaning they're particularly important stakeholders.

So why consider competitors as stakeholders? Because every company can, directly or indirectly, affect the performance of its competitors. Often a marketing plan is designed to capture market share from a particular rival or reinforce customer loyalty in the face of competition from a new up-and-comer. Doesn't that make you a stakeholder in your competitors' performance (and your competitors stakeholders in your performance)?

Consider:

• Comet's recent descent into administration is largely due to intense competition from online electronics retailers. If those online competitors didn't exist, Comet would likely still be in business. The competitors intended to increase market share and turnover, and the unintended consequence was that Comet couldn't survive.
• Amazon's Kindle Fire directly competes with Apple's iPad. Amazon actually offers a head-to-head comparison to show how its product beats the iPad. Clearly, both Amazon and Apple are competing for the same customers, with implications for market share and for ongoing revenues from downloaded content.
• BSkyB has seen customer enrollments slow due to more competition from Virgin, BT, and others that are offering good deals to attract customers. Subscribers aren't one-time buyers; losing a customer means losing future revenue, just as gaining a customer means gaining future revenue. The stakes are high.

Show respect for your competitors and take their actions seriously, because what they do may very well change the course of your marketing. I'm not suggesting that competitors consult with each other or collude, because antitrust rules make certain kinds of competitive agreements and coordinated actions like price-fixing illegal.

I am saying that a healthy, competitive industry is in the interests of all participants, including customers. New choices emerge when many companies compete, whereas customers face fewer choices when firms like Comet go into administration. In fact, competition can spark real creativity and innovation when companies are motivated to overtake rivals or recapture market share from rivals.

UPDATES: (1) Natalie Massenet, founder of Net-A-Porter, believes competitors can and should be collaborators. Read more in my 2016 post here.

(2) For quotes from four companies that consider competitors to be stakeholders, look at this 2014 post from my US marketing blog.

Tesco delists New Covent Garden soups

Supermarket giant Tesco recently announced that it is delisting New Covent Garden (NCG)'s range of fresh chilled soups. A Tesco official explained: “We regularly review our range to reflect changes in the products customers buy.”

Why is this marketing news? Here's the background:

• Tesco introduced its own label "New York Soup Company" fresh soups range last year, part of the grocery giant's strategy to increase sales of its own products. It also stocks its Tesco Finest soups. (How many chilled soups can or should one supermarket stock?

• Before launching New York Soup, Tesco had delisted NCG in 2011 but reinstated it after resolving "pricing issues." In fact, NCG's shelf slots were expanded once the brand returned to Tesco's distribution. Reportedly, Tesco has sold 20,000 units of NCG soup every day for the past decade.

• NCG has had four owners in 25 years. Currently, it's owned by Hain Celestial, a US-based food company that also owns Linda McCartney's food brand, and is headed for expansion into European markets. Will this take some of the sting out of being delisted by Tesco?

• Note that Tesco's New York Soup uses tub packaging, whereas NCG does not. With some buying trends suggesting consumer preferences for tub packaging, this may be a factor in NCG's future sales until the company plans a redesign.

• UK purchasing of private-label foods is on the rise. Tesco's own labels are doing well (and may well be more profitable than selling someone else's food brands). Still, will consumers be unhappy that NCG is no longer available through Tesco?

• Before the delisting, nearly 20% of NCG's sales were through Tesco stores. NCG clearly faces a major challenge in making up those sales through other retailers.