Digital’s introduction to retail, be it a slow one, will accelerate as the understanding of the width of web and mobile broadens from being all about destinations, to integration into every aspect of business:

Find the presentation below or at slideshare.net/helgetenno.

As always find the individual slides under CC-license here: flickr.com/everythingnewisdangerous

I’ve included the part of the script describing the three areas of retail I’ve concentrated on; product, in-store and business opportunities:

Product opportunities
The product is not just a “brand” living on a shelf or being consumed by a member of the public. It is a character, which within the framework of a strong identity changes its characteristics to fit different roles through the stages of its own lifecycle; from the initial idea, the spark, to its realization (design), its distribution, shelf life, shared product experience and recycling (sustainability). Digital amplifies the characteristics, and helps the identity adapt at each stage.

In-store opportunities
The retail outlet is the most important arena for public choice. It is intense in its range of decisions, and numbing in its range of (similar) products. Inside this arena there are limited opportunities within frameworks. Frameworks put in place by the non-digital, non-organic world of cardboard and floor space. Digital transcends the limitations of the shop infrastructure, serving communication through personal devices controlled by a digital brain in “the cloud”.

In the advertising mindset the retail communication belongs to the “call-to-action” category. But this limits itself both in its expense on resources (financial and labor), scarcity of real estate and limited time span. In the design mindset the goal is rather strength through identity, creating a long lasting top-of-mind preference through establishing an interesting story, sharing values, creating memberships and avoiding the retail rock concerts of advertising.

Business opportunities
There are new business opportunities to be explored and discovered through the extension of digital and organic platforms. From engaging the crowds to taking the store to the world – not limiting access to it by physical destination. In categories where products follow patterns and become remarkably similar, it is digital and organic platforms that not only invite customers to explore and discover new, unique experiences. But also develop more layered identities, establishing thicker product relationships, and unwrap new business opportunities.

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A special thanks to PSFK which as with a stroke of coincidence launched their brilliant PSFK Future of Retail Report just last week, adding a whole section to my presentation – I’ve been extensively referencing the source.

PSFK Future of Retail Report

I would also ad these brilliant people and publications as they all helped in filtering the cases and surfacing the best ones:

springwise.com
popsop.com
mashable.com
rubbishcorp.com
adverblog.com
Ingmar de Lange
mobilemarketer.com
digitalbuzzblog.com
Zeus Jones
storefrontbacktalk.com
cpbgroup.com
techcrunch.com
Seth Godin
Richard Murray (for giving us the best insight on retail)
and for his brilliant and extensive posts, *Supercollider at geoffnorthcott.com.

In the communications hierarchy, there are four main field’s positioned in relation to each other. Could visualization introduce a way of understanding their role and ability in relation to each other?

During a short talk with Ji Lee at Gulltaggen 2010, he presented a hierarchy where advertising is at the top, then marketing, brand and at the bottom design. I’d never thought of placing these four fields into such a structure, but loved the concept, and it made sense to position them in relation to each other in this way.

Trying to design this idea, I ended up drawing a pyramid and started adding context to each stage…

Advertising
At the top of the pyramid, advertising can be at least three things:

1. Positioning (Al Ries, Jack Trout),
2. Creating an anticipation of the experience outside the experience itself.
3. Direct sales

Advertising is a great tool for selling anything from low interest products to aiding in creating or changing the perception of a brand. Advertising is tangible, but swift and constantly changing. Its stories and messages are focused on getting people to perform an action. Advertising is designed from briefs defined by guidelines, strategies and goals further down the pyramid; it’s top level communication.

Marketing
Marketing is the process of promoting and selling goods and services. It’s executed through individual actions, but fundamentally it’s the overall strategic program, defining, coordinating and executing on all levels of the organization. Marketing is the sum of day to day activities putting products to market and activating people through promotion and sales. Marketing is designed to achieve company goals and is constrained/directed by brand and design.

Brand
There are as many definitions of what a brand is as there are brand experts, from Neumeier’s “gut feeling”, to Yakob’s “The collective perception”. One thing is for certain; brand value exists in the mind of people engaging with it – not the company itself. But still, there needs to be guidance and direction to this value. The brand strategy defines how the company should achieve the right set of values. Branding aims at creating an advantage in a market place filled with identical products, as Helen Fischer quotes George Bernard Shaw: “Love is overestimating the difference between one woman and another”. The brand direction defines a framework and guides the rest of the company’s promotional and sales activities, but it is not fundamental, it is not the core company idea.

Design
The fundamental idea behind the company comes from its design. From identifying how to offer value in a specific situation, to designing the product (or service), how it creates value, its unique, identifiable identity, its story, form, interaction etc. From the initial value proposition to its tangible product the design defines how it creates value, how it performs, and how it remarks itself in the marketplace.

Design in this context is not just the visualization of an engineered product; it’s the comprehensive identity of the company or product – from the ground up.

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By looking at the pyramid we can identify the role of each field of communication and how it relates to the other fields. (Advertising is created on the basis of the marketing strategy, which is the consequence of the brand and design platform. The brand is an enforcer of, or supplement to, the design – or lack of design).

It’s also important to note that job title does not define which part of the pyramid you are working on. Great ideas come from great groups of people, not labels. The point is: Understanding the role of the job at hand, and how this job is positioned in the greater complexity of the communications strategy.

If an identity is to create value through identifiable and differentiating qualities, it can’t be designed through employment in the latter stages of a standardized process. It needs to lead the entire creative and strategic process from its initial spark to its finale.

In his talk on FMCG, brands and product design, Richard Murray suggests that we are better at creating categories than individual brands.

Is the sameness of unoriginal ideas to be blamed on our processes being too similar? If the analysis to the insight, to the design and form follows the same pattern across consultancies, agencies and brands, then everybody follows a similar pattern in order to discover the great insight that leads to the unique idea. The problem is, there is a lack of unique ideas. We are in a hammer and nail situation: “If we think our only tool is a hammer then every problem looks like a nail”.

Organic platforms isn’t only evidence of this, it might as well be the biggest category driven collection of surfaces we have.

A great deal of organic productions are built on an offspring of a model created back in 2000. A brilliant tool with an unfortunate side effect: everybody follows an identical pattern for development, one that engineers the structure in a one-dimensional approach, before adding identity at the end; as some kind of tag.

There are originally two legs to identity: The first one is the understanding that the visual identity and story of the product helps it differentiate itself in the market and create a place in peoples harts. The second one is the experience created around the product which helps the product become unique, by enhancing its identity through experience.

On organic platforms there is a third leg as well: Identity design is not only used to design experiences, it also identifies existing experiences.

What does this mean: Designing identities, on organic platforms, has expanded it’s traditional form, which to a large extent has been focused on visual identities and story. Designing identities now also demands that we identifying existing experiences and redesign / augment / ad value to them.

The result of the existing generic standardization, is that it has created an overwhelming range of sameness. Different brands offering the same services, content and applications online – following a pattern that not only creates a surge to make sure we are offering whatever everybody else is offering (the artificial standard / benchmark), but worse – having everything created, copyable by the competition.

Adding a different color scheme or logic at the end of a process does not create a unique experience, it merely ads a label to a generic offering. This is the result of a mindset where identity takes a back seat and is added at the end.

A generic brand identity is not an identity, its a category.

Unique and identifiable brands on organic platforms comes from doing the opposite to the standard process: It starts with the identity, and employs it to every strategic and creative decision from the first spark to the finale. Resulting in a unique and identifiable experience, which the competition is unable to copy and standardize in the marketplace.

In a new video from WIRED, presenting their new magazine/tablet concept, they suggest some solutions to a series of opportunities in digital publishing.

Design
First one is the fact that they’ve used print designers, a good idea obviously as having skilled experience and storytelling designers challenge and play with the interactive medium (and not the other way around – a UX guru who is asked to design some storytelling) provides some stunning results. The magazine layout and experience speaks for itself..

”This is an opportunity we have been waiting for, for fifteen years. We have all these visual tools at our disposal, to tell all these stories, in a way that is efficient, that is multi-dimensional.”
- Chris Anderson, Editor and Chief, WIRED

Advertising
Then it’s their focus on advertising as still being sponsorship placement, and not purchased editorial. But seeing that advertising is such an important part of the audience / participant experience it needs the same thinking as any of the editorial content.

”The advertising is as important as the editorial, especially in Wired Magazine, and people come to Wired for the authority of the edit and the richness of the experience to learn about new products and services that our advertisers provide.”
- Scott Dadich, Creative Director, WIRED

From the video (below) this looks to create some great experiences. And integrates the advertising further into the total value of the publication.

According to Tom Himpe, in his book Advertising Next, the lack of space and time available to brands to tell their story and engage people in the richness of their marketing value proposition is one of the shortcomings of traditional media. And even though the potential for the interactive storytelling stuff hasn’t been explored all that much in this concept, inviting brands in to create these kinds of experiences gives them a lot more room and opportunity to create a valuable, memorable and remarkable experience.

The WIRED brand and the business model
Also, as pointed out by Chris Anderson; WIRED understands that the only way to earn money in publishing is by having a strong and identifiable brand with a unique offering. It is crucial for WIRED to extend the existing brand identity and experience, in order to continue building the same audience/participant relationships as existing publications are.

”Our readers have relationships with brands, we have a great website, we have a great print magazine, and this is just adding one more avenue of communicating and connecting with the brand of WIRED”
- Scott Dadich, Creative Director, WIRED

This is applied all the way down to the content, where it is hoped that such a great and unique editorial experience will be something not found for free somewhere else and there will be a willingness to pay for it.

”But we also think its time to reset the economics. For the first time people might value this experience so much that they’ll pay for it”.
- Chris Anderson, Editor and Chief, WIRED

Find the article here and the video below or here.

Without dialogue and participation companies get stuck.

The traditional media model is a triple negative:

- No direct relation between companies and people.

- Focus on unique narratives as band aid for lack of unique and differentiating products.

- Having to force complex company/product value propositions into short, simple, media format narratives. (Advertising Next, Tom Himpe)

In this world companies stopped being companies and became brands. People became consumers and customers.

Again… a double negative:

- The tangible value provided by the product is replaced by an artificial generic marketing narrative.

- “Consumers and customers” as terms replace complex human beings with labels. C&C have no motivation or aspiration, just two goals: Getting hold of something, and then making it disappear.

The problem with the traditional media mindset is:

- It forces brands into impossible “time slots”, where the communication has to attract attention (which takes most of our resources) and present a unique and identifiable value.

- There is no response…

And this (“no response”) is the real challenge… because without response companies get stuck.

Brands tell brilliant stories, which in the end are the only stories they listen to, or probably more correct: the only ones they listen FOR. Brands start believing their own generic narrative and listen for it when talking to customers and consumers, while the reality is that there are thousands of narratives, or millions, out there: (brandtags.net)

And with no healthy response cycle, there is no product/tangible value response, just brand/narrative adaption. So, companies get stuck.

That is the beauty of the opportunities rising from dialogue and participation (mistakenly labeled “social media” as if it is a destination…), its an opportunity to break with this and start learning about the product and the real tangible value it is creating in peoples lives.

Products have always been important in peoples lives. Most of the stuff we own and talk about is stuff we have purchased. There is a deep and profound relationship between people and a lot of their stuff.

Unfortunately it’s easy to get the impression that this relationship hasn’t been the focus of marketing, which has spent most of its energy on positioning, availability and sales promotion. To some extent one can suggest that marketing has ignored the existing relationship between people and their products, and instead built it’s own marketing relationship, different from the product’s and built on a different set of values.

This has led marketing and products apart, and often created a cleft between them. This cleft has been further forced by the traditional media mindset where it has been impossible for companies to connect with their audience and participants, where media has become an obstacle, a superfluous middle man, where the marketing and the advertising has become messages – not exchanges.

(And one might also suggest that where the product relationship is based on personal and individual narratives, the marketing relationship is based on a generic and artificial narrative)

There are two negatives here, the first one is that marketing is set on creating its own relationship – ignoring the really valuable one already in place between people and products. The other is the traditional communications landscape, which is increasing this distance between the marketing relationship and the product relationship.

Luckily the shift that has been going on for the last four years aims at correcting this. Where marketing changes from focusing on its own agenda to enforcing the values set by the product. Where we are seeing focus moving away from messages and to exchanges and relationships. Which brings marketing and products back together again. Creating a better environment for products, people, companies and the relationship between them.

Is media in the wrong business? Looking at business model imperatives it seems that it is…

In the excellent book Business Model Generation, by Alexander Osterwalder & Yves Pigneur, there is a chapter on “unbundling”. Where the concept is that there exist three fundamentally different business types, and that a company should separate these types from each other to avoid conflicts and undesirable trade-offs.

From the book:

“The concept of the “unbundled” corporations holds that there are three fundamentally different types of businesses: Customer relationship businesses, product innovation businesses, infrastructure businesses.”

And then continues:

“Each has different economic, competitive, and cultural imperatives. The tree types may co-exist within a single corporation, but ideally they are “unbundled” into separate entities in order to avoid conflicts or undesirable trade-offs.”

Under the imperative “competition” there is an interesting revelation: Where product innovation focuses on being employee centered, and customer relationship management on being highly service oriented. Infrastructure management has its competitive imperative set to “Cost focused; stresses standardization, predictability and efficiency”.

Now looking at these three models I would say media definitely puts itself in the infrastructure category – which also might be its biggest mistake.

Media used to be in the infrastructure business, providing mere opportunities to traffic messages from the brand to the consumer. But today this is costing media dearly. Having little or no unique content, having standardized every piece of real estate available for the brands to purchase, and thus removing any advantage in the bidding war. Thus resulting in trying to sell its identical product by having the cheapest product (or the biggest discount) and flooding its editorial content with advertising in order to compensate for the low price per. unit sold.

Its sometimes seems like media doesn’t see that basic marketing economics (scarcity and demand equals higher price) also applies to their business.

If media is in the infrastructure business, it is in the wrong business.

I would suggest media position itself to the relationship business, and be selling completely different, more scarce and more valuable products to brands.

What I would like to see is a change of business model focus. From infrastructure destruction, to creating valuable relationships – providing new and interesting products for brands to sponsor in order to increase the value being created between media and the participant – as opposed to flooding the available real estate with messaging as uninteresting and generic as the format it has chosen to be presented in.