Archive for August, 2006
Reinventing Wal-mart
Posted by: | Comments
The last time I looked Wal-Mart was responsible for 8% of all the retail in the US. It has captured this position by dominating the low end of the market.
Now Wal-Mart plans to pursue upscale markets. There is a Wal-Mart test store in Plano that features "expensive jewelry, $500 bottles of wine, plasma TV sets and other expensive items along with organic foods."
Being the master of the low end is not easy. Many are called, few will flourish. The secret is to squeeze costs and margins till they cry for help. It may not easy, but it is simple. The model is unmistakable: pile em high, sell em cheap.
So when Wal-Mart decides to go after the upscale market, it is suddenly obliged to learn an almost entirely new marketing game. Now the trick is to follow consumer taste and preference has it plays whack-a-mole niche to niche, leaping daringly trend to trend.
The good news, I think it’s good news, is that Target has demonstrated that this is possible. To its credit, Target didn’t just master some of the secrets of the high end, it actually rewrote the rule book. It came precious close to capturing design as it was moving from a small community of professionals with a characteristic weakness for interesting glasses to a much larger American mainstream. Target very nearly branded design as its own. It was a brilliant, audacious piece of marketing. (Thanks to Vincent LaConte, as below, I know that the hero of this piece is Ron Johnson, now VP of retail at Apple. Johnson was Vice President of Merchandising for Target Stores until 2000, presiding over what the Apple corporate website calls "new initiatives for branding, marketing and merchandising.")
But now that is gone. Or better, Wal-Mart will now have to be design-sensitive but it will get no special credit for being so. Is there a compelling play out there that it can claim for itself? It might go looking for a celebrity hookup of the kind that Kmart had with Martha Stewart. In this case, a taste arbiter lends her mastery of consumer taste to the retailer. It’s a kind of one stop shopping for the retailer. The perilous business of consumer sensitivity is farmed out to someone with their own suburb instincts and established track record.
Or, and as the author of Flock and Flow this would be my preference: that Wal-Mart invest in a big board with which all the trends and drivers of consumer taste and preference are tagged and tracked. This would be useful for the low end work. There will come a time in our culture where low prices and fast response times are not enough to satisfy the dynamism of the marketplace. But it will be especially at the useful at the top end where already we are seeing trends change so fast, we are sometimes tempted to wonder if they weren’t merely a figment of someone’s imagination, no sooner thought than gone.
Yes, on careful and dispassionate reflection, that would be my recommendation: build a big board using Flock and Flow as the template. You know where to find me.
References
McCracken, Grant. 2006. Flock and Flow: predicting and managing change in a dynamic marketplace. Bloomington: Indiana University Press. on Amazon here.
Van Riper, Tom. 2006. Wal-Mart Goes Upscale. Forbes. August 30, 2006. here.
OK GO AGAIN
Posted by: | Comments
The Ok Go video I noted last week continues to tug at me. It is an arresting piece of work, but I can’t say why, exactly, it should exercise fascination. On its face, it’s dorky guys engaged in a dorky project. (Perhaps 90s in this way but still, surely, too dorky actually to fascinate.)
At first, I thought that the power of the video come from the juxtaposition of synchronized dance and a rock band. Rock bands are obliged never to exhibit anything so ordinary as coordination. Cool in our time has been consistently defined by a refusal of anything so individuality-killing as this. For instance, the Beatles were the last band to wear a uniform, and no band in recent times has worn anything coordinated except as a rather good joke.
But no. I think there is something else going, and if you will indulge me I am going to see if I can figure it out. (I am in the LA airport as I write this, and I think God I remember to bring my earphones which now just barely protect from the roar given off by TV sets and travellers.)
There are two kinds of synchronization going on in the video: one is between the band members, the other between the band members and the treadmills they use to such good effect.
I didn’t see it at first but these treadmills are arranged so that they run in opposite directions. There are 4 or 5 of them, and each reverses the direction of the last. This means that the walk ways have been side by side to make a walk way that runs back to front. Clever! The band member uses each walk way for a brief moment of transport and then steps off to avoid being carried away. The video is among other things a study in person and machine interaction which consists of careful, fleeting and exquisitely organized articulation.
I had the feeling I had seen this somewhere before, and then it occured to me that this looks a little like the relationship between person to person conversation and email communication. In the first, I am obliged to take your call when you place it, and you are obliged to take mine when I place it. (I will ignore for the moment the function of answering machines, and much telephonic conversation is, really, machine to machine, not person to person.) The power of email is that it allows me to lodge my communication when it is most convenient to me and you to deal with it when it is most convenient to you. This is a kind of synchronization that fragents the conversation into shards and sees to their insertion as and when it is most opportune. Or, in the language of the video, I get your video as and when I step into a time frame I can best content with it. This is not only a matter of ease of access, but frame of mind. I can entertain emails in the intellectual, conceptual, identity view corridor best suited to the demands they make of me. (I’m thinking about this last issue thanks to Brad Berens [iMedia Communications] and a conversation we had yesterday.)
I think this is what contemporary culture must look like, ever more efficient synchronization that allows us to dispatch the various and pressing demands made of us (and rise to the demands of multiprocessing of multiple projects), even as we are free to engage in our own more or less lunatic enterprises (as these expand in kind and number as well). (This is another way of saying that the new technologies and "lifestyles" will be designed to accommodate both of the individualisms identified by Daniel Bell: the instrumental and the expressive.)
This might be why the OK GO video is so fascinating. It captures both these things. So there are two things to observe about the video for anthropological purposes. The first is that it plays out an emergent issue of the contemporary world, and this is I guess one of the things we hope art will do. But, second, and more endearingly, OK GO get to make this contribution to contemporary culture only because they were prepared to break one of the principal rules of contemporary music, what we might call the anti-uniformity rule.
Tip to travellers
I just spent a week doing research in LA. I stayed at the Los Angeles Athletic Club downtown. If you have a taste for faded grandeur, this is the place for you. The neighborhood is unsavory. The club is stuffed with great rugs, pretty good art, and a certain wainscotted comfort that is somehow ennobled by the fact that the club is no longer the beating heart of elite commerce and LA fatcat chumminess. There have been several spectacularly unsuccessful attempt to renovate and redecorate and these too have the effect of making the grand dame more noble and more interesting. The staff are charming and courtesy. The rooms are simple but plenty good enough. And the prices are not to be believed. You will have to belong to a university club somewhere that has reciprocal privileges, but I think the LA Athletic Club would be a good reason to sign up.
The problem of smugness
Posted by: | Comments
The world of branding moves fast. No sooner have we made one mistake, we rush off to make another. That’s the nature of the beast. We don’t ever go back to wonder how things might have been done differently. There is always a new mistake to make and we want to be the ones to make it.
Take the Apple campaign, the one that features two men, one Apple, one PC. This is a very odd piece of marketing. It warms the heart of every Apple owner. But, really, did they need encouragement? If ever there were a group of people who qualified as consumer devotees, Apple buyers are it.
So, if the ads are not directed at Apple owners, then who? Surely not non-Apple owners. The ad makes fun of non-Apple owners. It declares them clueless morons, incapable of creativity, obsessed with work, men in grey flannel suits. What are chances that making fun of this group is going to recruit them? Surely, Apple has done the opposite of what they intend.
Apple has a problem. They live in a dichotomous universe. There is a small group of loyalists. And a much larger group of those who don’t really care. But they weren’t content with that. Thanks to the advice of TBWA\Chiat\Day, I guess, they found a way to turn their non loyalists into anti-loyalists.
Um, good work, fellas. Self congratulation is a dangerous thing…and really bad marketing.
References
For an example of the Apple vs. PC ad campaign, go here.
Anthropology: now, cash prizes!
Posted by: | Comments
Those of us who loiter at the intersection of economics and anthropology have many good qualities…except for the loitering part.
One of these is that we understand some of the dynamics that drive culture and commerce. This gives us a leg up when it comes to investing, and THIS gives us an opportunity to turn our active curiosity into cash, cash, cash! (As long as the academy continues to do a dreadful job understanding contemporary culture, we must find our own funding.)
Of course, we have to get better at reading and understanding the dynamics of culture and commerce, but as we do, we pull away from our chief competitor, the Wall Street analyst.
Pip Coburn offered a thought in this direction yesterday in his weekend newsletter:
We look to invest in situations involving monumental change. We look for situations where the pace of money coming into "the machine" to out of "the machine" will be materially altered. The underlying premise is that monumental change may lead to an immediate alterations of inherent value. If we are able to have clarity and conviction regarding the monumental change, we will be able to make money since Wall Street is poor at assessing monumental change but rather lives in a space of considering that change happens only incrementally. (reproduced by kind permission of Pip Coburn)
Pip’s newsletter is on restricted circulation, but see his recent book for a general statement of his view.
References
Coburn, Pip. 2006. The Change Function. New York: Portfolio. at Amazon here.
Conflict of investment declaration
I am a "change fellow" at Coburn Ventures.
Yahoo and the economists
Posted by: | CommentsYahoo is hiring academic economists and other reseachers, we learned today.
This development is driven by a couple of things. As a newcomer, Google stole a march on incumbent Yahoo and Yahoo would like it back. Google has data miners, but it appears often to act as if it can win and sustain advantage with great technology alone. If Yahoo could add new user sensitivity, this might help close the gap.
Second, Yahoo has staggering amounts of data that can be used in house and sold to others. In July, there were 482 million unique visitors, each of whom, over the course of the month, spent around 4 hours viewing around 240 pages. This generates data like crazy: over 12 terabytes a day.
It’s a little like the old story from the Dole pineapple plantations of in 20th century Hawaii. Dole would can the pineapples and pour the juice into the ocean. Finally, someone said, "You know, I think you could sell that stuff." In this case, of course, the "juice" doesn’t just make the corporation richer, it makes it smarter.
In fact, this should work like a virtuous circle. Orphan data get a home. Academics get grist for the mill. Yahoo gets more consumer centric. More consumers join Yahoo and spend more time there. More data is generated. The cycle begins again.
But why these academics? Economists have formidable powers of pattern recognition to be sure. And they are good at working with just this kind of data. By why proceed is if the numeric measures were the only ones available to us? Economists too often act as if they have taken a vow of noncontact, that they cannot engage people unless their existence has been registered at a distance, and they cannot know about these people unless data have been metriculated out of the real world into the realm of the number.
Well, if we are dealing with the census data for a couple of years ago, these are all practices well advised. But that 12 terabytes that Yahoo will collect today is from people who are not only alive, and in fact probably still on line. If we think we see a pattern, there is no reason why, with the appropriate permissions, Yahoo could not poll players and convene focus groups on line. Indeed, there is no reason why the economist could not make contact with a living, breathing, blogging individual and determine the "whys" that make the "whats" make sense.
The trouble of course is that economists don’t ask because they have the suspicion they already know. The actor is self-interested, rational, and advantage seeking. But come on. Reason not the need, as Lear is made to say, or our lives are "cheap as beasts." If this were the only motive at work in the human communities, markets and cultures would be simpler, flatter, more predictable and less "exuberant" than they prove so persistently to be.
We can discover these other motives, extracting them from those terabytes of data, but not if the Yahoo economists think them away.
My conclusion (and I think you saw it coming; it is, after all, self interested) is that all that the mountain of Yahoo data is a task, a trek for economists and anthropologists working together. Take us along as sherpa if you have to. But take us along.
References
Delaney, Kevin J. 2006. Hoping to overtake its rivals, Yahoo stocks up on academics. Wall Street Journal. August 25, 2006.
Ok Go: you have to see this video
Posted by: | CommentsI am going to be on the plane most of the day, but before I board, may I suggest this video from the Swedish Chicago band Ok Go?
It’s not like anything I have ever seen before. It is astonishing, in a very low key, very low tech, utterly wacky, entirely brilliant way.
So the Letterman-Schaeffer question: "is this something or is it nothing?" What new developments in contemporary culture does this portent? It’s kind of like syncronized swimming without the swimming? Rock and roll has always made a near fetish of being more rough than ready, more chaotic than formed. And this most be one of the reasons this video is such arresting (and arrested), so genre busting, so sincere on the one hand, so ridiculous on the other.
Here is YouTube acting as our periscope on a world that might otherwise passed right over head.
See the video here.
Acknowledgments
Thanks to Leora Kornfeld for this extraordinary find.
Firing the most bankable celebrity
Posted by: | Comments
Yesterday, Sumner Redstone fired the most bankable star in popular culture. Now we have dust up on our hands.
Cruise’s lawyer, Bert Fields, called Redstone’s decision "petulant and puerile" and suggests that Redstone may have "lost it completely." Redstone noted, well, yes, petulantly, that Viacom shares were up yesterday and that proved "the street approves of what I did."
The relationship between Hollywood and Wall Street has always been an uneasy one. The latter is drawn to the Hollywood for the glamor, the celebrity, and of course the parties. Hollywood is grateful for the money, but it is loathe to surrender creative control or suffer any sort of interference.
This is the way Cameron Crowe put it several years ago.
You have more and more people coming into the tent with the creative guys. You have marketing and concept testers, advertising people. What you find gets the high numbers is easily appealing subjects: a baby, a big, broad joke, a high concept. Everything is tested. The effect is to lessen the gamble, but in fact you destroy a writer’s confidence and creativity once so many people are invited into the tent.
Let’s face, it with the intervention of business, the world of movie making might be a lot more like film making in Paris, and for that matter, American culture a lot more like French culture. (And one shutters, absolutely shudders, to imagine this. We would all eat, dress, and vacation much better than we do…and American culture would be a pale shadow of its present self.)
The "tension" between Hollywood and Wall Street, between culture and commerce, usually plays in the former’s favor. Hollywood must occasionally defer to the money men, but in the process it secretly converts them. Put it this way: how is Redstone acting? Quite a lot like a an old time studio boss, no? In this contest, the capitalists act like the Hollywood people, thinking from the gut, going with their instincts. This is not a partnership. Hollywood always wins.
When will Capital begin to act with the same discipline and due diligence and fudiciary responsibility it exercises elsewhere. Yes, there’s a problem. When it comes to culture, commerce often draws a blank. There are no good models of what a star like Tom Cruise is worth, no clear way of estimating what his public declarations cost Mission Impossible III.
Wall Street has got better at every sort of calculation. Observations are gathered. Numbers stream. The world is better monitored and newly intelligible. So, when do we start to think about culture with new acuity?
References
Edelstein, David. 2006. M. Narcissus Shyamalan. New York Magazine. here.
Marr, Merissa and Kate Kelly. 2006. For Hedge Funds, Backing Cruise Could Prove to Be a Risky Business. Wall Street Journal. August 24, 2006
McCracken, Grant. 2006. Mr. Redstone, get off the couch. This Blog Sits at the Intersection of Economics and Anthropology. August 23, 2006
Weinraub, Bernard. 1997.
Sumner Redstone, get off the couch
Posted by: | CommentsSumner Redstone recently fired Tom Cruise, complaining of what the WSJ calls "public antics and incessant stumping for personal causes."
We don’t think that someone who effectuates creative suicide and costs the company revenue should be on the lot.
Mr. Redstone, what in God’s name would you know about "effectuating creative suicide?" There is a presumption here, that Mr. Redstone is capable of making this determination and that he is correct in making it here.
A great many movie goers might be inclined to say that they don’t much care how Mr. Cruise conducts himself off the screen just so long as he entertains and engages on the screen. The private and the public Cruise may have been delinked. It’s almost certainly true that Mr. Redstone has never tested the proposition or even considered it in any systematic way. I would be very surprised if he even had a model of contemporary culture that helped decide the matter one way or another. No, he’s just winging it…and risking some part of the future of Paramount in the process. Very odd, really, when you stop to think about it.
This raises an interesting possibility: that when Chairman Redstone publicly fires a big star and does so with grand declaration to which he is not entitled, he is engaging in behavior that is not very different from jumping on the couch in the middle of an Oprah interview.
References
Marr, Merissa. 2006. Sumner Redstone Gives Tom Cruise His Walking Papers. Wall Street Journal. August 23, 2006.
Up Periscope: YouTube as the raw feed of contemporary culture
Posted by: | Comments
What is YouTube, exactly? We know the particulars: it was founded a February 2005 by a couple of guys, Chad Hurley and Steven Chen. It serves up user-created or user stolen videos to anyone who comes to the YouTube website. The numbers are sensational: 100 million views a day.
But that doesn’t really answer the question. I mean, what is YouTube? (These speculations are always tricky, a little shapeless and difficult to do. It used to be that thinking about the future was hard. Now it’s thinking about the present that’s the challenge.)
Let me offer a "starter thought" and see where it takes us. I think YouTube is not about entertainment, it’s about information. Or it’s not about information, it’s about intelligence. To put this another way, YouTube is not the future of Hollywood, it’s the future of the magazine. Actually, it’s the world post-magazine.
All of us are now trying to stay within shouting distance of a contemporary culture busting out in all directions. The cost of falling out of touch is substantial. Not knowing about YouTube in, say, August of 05 was perfectly okay. No harm, no foul. Not knowing about YouTube in August of 06 is really a good way of destroying your credibility…as an anthropologist, an analyst, a marketer, an educator, a librarian, a parent, a teen. Well, there is almost no one in our culture who can now afford to say, "YouTube? No, I’m sorry I haven’t heard of that."
This is a special problem for an anthropologist like me. I invested heavily in the 1990s to get in touch with contemporary and popular culture. Pursuing an education at the University of Chicago and then tenure in Canada meant that I missed most of the 70s and the much of the 80s. Off planet, out of touch, inclined to say things like "John Travolta? No, I’m sorry, I don’t recognize that name."
Once I had a hard time of it even after "graduation." The problem was always staying in touch. Movies and music. What was the best plan here? Go to lots of movies? Buy lots of CDs? Spend a fortune in time and money keeping up? Not really. Better to stay in touch with people like Leora Kornfeld and Dave Dyment who could be relied upon to give gentle, whispered council, like listening to a trusted financial advisor who puts things right with a few, carefully chosen words.
What I needed was 1) the wash on the internet, a tide that could be depended upon to deliver new key words and early(ish) notice (i.e., "Panic! at the disco"), and 2) YouTube, a place that can give me a more, mostly visual, information. Ok, now I have it. My self training gave me that foundation, and YouTube provided most of what I need (i.e., the video "I write sins not tragedies") to place this in a larger context. It didn’t matter that the quality of the video is sometimes abominable. I just needed a general idea. Most of all, I need costless access. I don’t have to buy the CD. I don’t need to hunt down information. A couple of clicks and I know.
This is what magazines used to do: keep me in touch the things I needed to know. But what has brought the once mighty Time to its knees is precisely that there is no way that a single paper based publication working even on a weekly interval to give me the notice I need. There are too many things out there, moving too quickly, and too many things in here, colliding too often, for a single editorial perspective to serve. As usual, the middle falls out. What I want is key word notice plus raw feed follow up.
And this is what is wrong with the notion of the "branded channel" recently announced by YouTube. The idea, if I understand it, is that YouTube will invite brands to pay for the privilege of creating customized channels. The business model, never easy to spot in these matters, is, I think, this: I will watch ads (i.e., endure branding) if you, the brand, serve an editing, winnowing, filtering function for me.
But isn’t this what just died? If we know anything about millennials it is that they know how to work information sources extremely well, and that they have formidable editorial powers of choosing and combining what it is they want to know. Ironically, YouTube is recreating the magazine it just killed. Branded channels, that’s what magazines used to do. YouTube works best as the raw feed of contemporary culture. Brand channels, this is what just got disintermediated.
References
Anonymous. 2006. Advertising in search of revenues look to web’s latest heroes. Financial Times. August 23, 2006.
Anonymous. 2006. Paris Hilton to promote YouTube website. Financial Times. August 23, 2006.
Panic! at the Disco. 2006. I writes sins not tragedies. On YouTube here.
Acknowledgments
I had an illuminating dinner with Debbie Millman a couple of days ago and, the "periscope" comes, indirectly, from her.
What I did on my summer vacation (or, “may I have your passport, please?”)
Posted by: | Comments
On my summer vacation, I went looking for Erna Schonwald.
I’ve wanted to collect for some time now. My father collected Inuit carvings. Will Straw, a friend in Montreal, turned eBay into a collecting machine, making one brilliant acquistion after another. The two of them made it look like fun.
I especially liked the idea of collecting, the solitary pleasure, the little universe you build purchase by purchase, the way things you never knew or cared about suddenly assume "must have" status. But what to collect? Rugs, watches, wine, movie posters, motel coasters, first edition noir? Nothing appealed to me.
Then I came across Erna’s passport on eBay. This, I thought, this I would like to have. It came in the mail, paper in paper. The passports of 1920s Austria were delicate things, green ink on beige paper, filled now with forms, stamps, signatures, and of course Erna’s photograph, from which she looks out at us steadily, apparently thinking something funny and kind.
My German isn’t very good. So the passport didn’t give away very much. Erna was born in late October in 1894. The passport was issued in 1922. In between, what? It looks as if Erna gives her profession as a private beautician, but I could be wrong.
Lots of questions. Why did she leave? Where did she go? How did she fund her trip? What happened next?
My sister said, "look at the Ellis Island website," and this says Erna arrived in the US in 1923. She was sponsored by her brother Philippe who arrived the year before. Philippe is described as "Dr." Schonwald and he had been sponsored by his cousin, A.F. Low in Seattle. Ah, so that’s where the money came from.
But more questions. Why was a doctor leaving his homeland in 1922…at 47 no less? The early twenties seems a little early to be escaping anti-semitism, but then my German history isn’t much better than my German.
Then my sister discovered a reference to a Dr. Schonwald, President of the East Point Oysters Company of Stanwood Washington. What are the chances, she asked me, that there were two Dr. Schonwald’s in the area in the period? So, what, Dr. Schonwald was a biologist?
And then I discovered that someone has digitized the Seattle phone book for 1923. (I mean, is the Internet not the greatest thing in the history of the universe?) This calls "Philipp" a physician. And it says that his office was at 227 Cobb building. Using these key words in Google, we learn that the Cobb was built in 1910 with the purpose of offering "200 of Seattle’s best doctors and finest dentists the choicest office possible." Ok, so he’s a not just a doctor but a man of substance. (So what about the oyster thing again?)
If we consult the 1930 census, we discover that Philippe has a wife, Peggie, and two daughters, Lurlie, 15, and Rose, 12 and a Norwegian servant called Matilda. These means, among other things, that when Philippe came to America, he was travelling with two children under the age of 10.
The census also gives us a glimpse of Erna (mistransliterated as "Ema") as a boarder. Oh, my heart sank a little. Erna would now have been 35. The census says that she was a bookkeeper. Finally, it gives her birthplace as "Vatican City State." My heart rose. There is no way that this is a misprint. There’s no way the census taker misunderstood. This is either an extravagant act of the imagination or the truth.
The 1930 census says that Erna was boarding with Ariston Wchwertner, but it is clear that this too is a misprint. Erna was boarding with a "Schwertner," with whom she shared German as a first language. Also, it turns out that Schwertner was working as a nurse in a doctor’s office, and now of course we wonder whether Erna’s might have been a bookkeeper in same.
While I was searching for Schwerter, a familiar name popped up: Philipp Schonwald. This is the man who sponsored her journey from Guafenstein, Tchecho Slowakei, via Surabaya, Indonesia to San Francisco and then Seattle.
This means that Erna is merely listed as a boarder. She is in fact living with a woman who is almost certainly a relative. And chances are now good that she works with this woman as well, which suggests that she is working for her brother. Ah, Erna safe in the bossom of her family.
After that, the trail goes cold. I can’t find any more about her. Thoughts, speculations, more information, any of this would be most appreciated. Does anyone have an idea why Dr. Schonwald left in 1922 or Erna left in 1923? What little I know tells me that the Jewish community had been leaving since the 1860s. But what would have persuaded a physican to move his family and two small children across first an ocean and then a continent? But most of all, was Erna born in the Vatican City? Or was this a brilliant lie?
I ran out of vacation. It’s up to you.
Buy this book II!
Posted by: | Comments
Forgive me turning this blog into a book store window, but here’s another book I recommend to your attention.
Conflict of interest declaration: I wrote it.
Flock and Flow has just appeared. It applies complexity theory to the turbulence of contemporary cultures and markets. It builds "early warning systems" for marketer.
Amazon has it here.
I am still on vacation!
Buy this book!
Posted by: | Comments
Henry Jenkins has just published Convergence Culture.
This book will create a seismic event in the social sciences, where Jenkins’ name is widely known and much admired.
We must hope the book will be read and embraced in marketing and branding circles where it has the potential to change the way we think and what we do.
I cannot recommend this book too highly.
Jenkins’s book is published by New York University Press. You may order it from Amazon.com here.
Conflict of interest declaration: Henry Jenkins is the head of the Department with which I am associated at MIT. I don’t believe this influences my recommendation, but full disclosure is called for.
Post script:
I am still on vacation!
