The mirage of Direct to Consumer sales..or licks to bricks to clicks

Recent press releases and articles continue to stress the Utopian future vision for brand owners of direct to consumer relationships and sales. The reality is as always is more nuanced, and that there is no single solution , because current consumer behaviour demonstrates how much they have already embraced multiple shopping channels.

Nestle for instance recently announced they now have 5% of their sales direct, with faster growth rates than offline channels...to me that means in food at least they are just about keeping pace with on line food sales....

If you step back from the hype and consider the evolutionary curve of selling to consumers you might plot the journey thus: "From licks to bricks to clicks" Starting with mail order (licking stamps)-》 to retail outlets both fixed and mobile -》to online ,the odd one out is actually the retail store as it is the only one the consumer has traditionally had to leave home for,even if that is not the case today of course.

Those either side of retail stores in this evolution have therefore often in fact had direct sales..

The difference in today's debate is that is the manufacturer/ brand owners are trying harder to go direct and cut out the traditional middleman,in order to trouser the extra margin... I mean to have relationships with each and every one of their consumers.

Now in the age of supposed consumer indifference it is worth asking to what extent consumers actually want to have direct relationships with brands.... Secondly brand owners will surely need to develop additional new /non core competencies in consumer contact on a massive scale..?

Finally is it not the case that future has already arrived , and that multi channel shopping is simply a must have to meet consumer need states and existing behaviours.... Believe the hype?

Another day ,another food scare story.....

You may well have become aware in a seemingly never ending series of food scare stories that food is dangerous , not just unhealthy... most food apparently... and especially the foods you love... It has also become apparent that most food companies are actually trying to kill us all, by stealth, and that marketers are evil incarnate. In addition to the run of the mill stories about "Processed food" last night I watched a pretty balanced ,evidence based expose about the dangers of a pretty much basic and unprocessed food, which also scared me .......the culprit this time is ... rice, and I share this with you in a sense of public service announcement. Apparently arsenic occurs naturally in rice , and can cause Arsenic poisoning if eaten in sufficient quantities daily over time ,and if not cooked in a particular way which reduces the Arsenic level....but which is probably not much known or used by rice eaters, certainly none I know. Now I don't know about you , but I wonder if all the rice eating cultures of the world knew they should give up eating rice, immediately, or change the way they cook it? More worrying how did previous generations survive.? Are today's rice eating peoples all really Zombies? Unfortunately the programme last night didn't deal with these rather more exciting and important questions....

Bravery or stupidity at Work?

When does Bravery in one's work life become stupidity ? It seems to me that there is a world of difference between how Bravery is viewed in the corporate as opposed to the entrepreneurial world. I have worked with people who had to show physical as well as psychological bravery simply to take paid work in cultures where eg traditionally women are not expected to ... one woman telling me she was regularly verbally abused in the street for working , wearing trousers,driving a car, you name it . I have often in my own cozy yet cutthroat corporate career got myself into hot water by acts of intellectual independence, telling it like I saw it , as opposed to simply going with the party political line..no doubt harming my development prospects.Brave or stupid , bad team Player? I always felt I was being paid to think, to lead, and as such it was my duty to express my opinion,back it up with data and experience, and then execute to the best of my ability ,whichever way the decision went. Bravery at work can sometimes bring a lot of problems....take whistle blowers, those who shine a light on illegal ,dangerous or unethical behaviours ;one rarely reads about them being rewarded, generally it seems they actually seem to get punished somehow.... Conversely was I brave or stupid to take the chance of my first international posting , without any guaranteed parachute or way back ?A lot of good people are too cautious to risk this step , which for me was in many ways the most rewarding period of my career. I'd be equally amazed if I was the only person to have wrestled with staying or quitting a company without having the next move lined up..is it brave to go or Stupid? Similarly I have carried on pushing unpopular innovation projects in the face of apathy or negativity from higher up the decison making chain ; in a corporate context this is a short cut to failure ,irrespective of whether the idea itself was a potential winner.Bravery or stupidity? In a classic,corporate career context then maybe I have been naive or stupid,certainly not brave. Conversely if you are an entrepreneur or visionary then one of the overarching qualities you need to display is a willingness to be brave, to challenge conventional thinking head on, and keep on whatever the challenges that prevent you realising your vision. So, as we approach that time of year where some people will be hanging on,in jobs they don'the really love ,just for the year end bonus or the uncertainty of change in a difficult job market what advice can I Offer? Would I do different if I was starting out again? Your life , your career, your decision...

Brand Innovation in packaged goods

The 9 out of 10 rule as applied to humans and not cats. Although a certain well know brand of cat food claims to enjoy a staggeringly high preference ratio amongst its particular target audience ie cats ,the same rule of thumb applies somewhat differently in fmcg branded innovation targetting humans, where the failure rate amongst new product launches is held to be 9 out of 10 . Clearly we are getting our new product strategies, planning and launches staggeringly wrong overall, putting a lot of time , effort and credibility with both customers and consumers at risk. No one would hopefully question the imperative for continuous , accelerated and much more successful new products.By definition launching genuinely new products is risky and costly , as well as having typically a medium term payback. In return successful genuinely new products should enhance average margins . Here are some personal observations from someone who has spent a lot of time developing and launching new products both in the UK and internationally... The first requirement is to have a clear joined up business vision, with brand , portfolio and overall business strategy including priorities acknowledged up front, and the role of new products understood and shared...alongside that of say acquisition ,lower risk brand extension or increasing distribution by investing in the sales team., or as is often the case sweating the assets .or a big favourite in multinational head office teams...rolling out a success from another country ( usually the planet Klingon*). The second key requirement oddly enough is not so much about having ‘that great idea’ , but all about nurture and protection as you incubate and develop it to deliver it, intact ,to market. To succeed the idea must please many gatekeepers with different needs along the way, and maybe the most dangerous are the internal ones.. the voice of the consumer or the carefully chosen customer are often easier to ignore. The journey of a new product from the first appearance on an innovation funnel chart to a successful launch is a fraught one ...but each idea needs a true believer on the main board, otherwise it is doomed. A new idea is by definition out of the ordinary and somehow challenging to the current business, and may require a leap of faith or real empowerment by The local Board ....or head office.