The business world is being disrupted by the combined effects of growing emerging economies, shifts in global demographics, ubiquity of technology and accountability regulation. Infosys believes that to compete in the flat world, businesses must shift their operational priorities.

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June 17, 2010

Two questions for evaluating a product launch strategy

How to hit the target with a product launch

What makes a good product launch? As I've written in the Harvard Business Review (in the June 2010 print edition, Interaction section, p.20):

"A company that is planning a product launch should ask not only,

How can we capture customers' attention and whet their appetite so as to maximize product sales?

but also,

How can we genuinely improve things for the customer thru a better-planned launch?.

The answer to the former question is to generate mystique and so on, while the answer to the latter is to cover as much of the customer base as possible at launch, ensure sufficient supply so that there are no stockouts, that customers can get their product without hardship, etc.

A company that focuses exclusively on the former question is likely to devise a launch that is manipulative, rather than one that genuinely meets customer needs. Apple's magic perhaps lies in it's impeccable focus on both."

 

This was originally written on April 6th, as a comment on HBR Editor-at-Large Julia Kirby's post on the HBR blog, entitled Where Most New Product Launches (But Not Apple's) Go Wrong, which praised Apple's iPad launch. (HBR later decided to publish this comment in the June print edition).

Then on April 12th, Apple announced a delay in the international (i.e., outside the US) launch of it's iPad by a month.

I further wrote on April 15th,

"On April 12th, Apple announced that it is delaying the international launch of it's iPad by a month. The reason is that the iPad has been so successful in the US that it wants to delay launching the product in other countries until it's sure it can meet the demand there. In delaying the international launch, Apple risks looking a bit sloppier to some international customers, and perhaps disappointing some who had hoped to have the product in their hands sooner.

But at a second look, this decision shows extraordinary sensitivity on the part of Apple towards it's customers. The company is admitting, "Hey, we didn't know the demand would be so high in the US, which means it's likely to be high abroad as well". And by delaying the launch, the company is signaling it's keenness to ensure that it can meet that higher demand, whether at home or internationally.

Even international customers will appreciate that Apple wants to make the launch smooth for them, rather than pushing ahead and risking overburdening it's supply chain. That would likely result in stockouts forcing customers in many countries to scramble for the product and suffer the heartburn of losing out in the "race" (people are usually ok with being disappointed as long as most people around them are too, rather than feeling that they alone have got the short end of the stick - a phenomenon known as the Contrast Effect ! ).

At worst, the company can be faulted for underestimating the strong demand for the product in the US (and few customers would hold that against them !).

Importantly, the decision shows that this company asks the second question above, that a company must ask whilst planning a product launch. As I've written above this question, "how can we genuinely improve things for the customer thru a better planned launch?" ensures, among other things, sufficient supply so that there are no stockouts and that customers can get their product without hardship. And it reaffirms that Apple is indeed impeccably focused on customer need. I used to be surprised at the iconic status that this company has attained - I no longer am. "

 

But not so fast. A couple of days ago, the first day of the iPhone 4G's sales were marred by problems. The company did apologize to customers, explaining that the hiccups were primarily due to higher-than-anticipated demand. Perhaps the iPhone launch team (as opposed to the iPad launch team) did not quite ask the second question above. However this can hardly be held against them, given that most companies fail to ask that crucial second question. So it appears that while that company is largely impeccable, it's not entirely infallible.

These two questions are one of the findings that arise from my research over the past five years into innovation - successful or unsuccessful - in business. Interestingly, independent research from Prof. Uzma Khan and colleagues from Stanford University's School of Business appears to corroborate  the validity of these two questions.

In any case a company that genuinely asks - and honestly answers - the two questions above can hardly go wrong in it's product launches.

August 8, 2008

Why ShoppingTrip 360 ?

Did you know that nearly 30 percent of shoppers around the world wait until they're in the store to decide which brand they will buy ?

Did you know that one in ten shoppers simply change their minds in store and buy a different brand than what they had planned ?

Did you know that almost 20 percent of shoppers will buy from categories they had no intention of buying from before entering the store ?

Did you know that in the United States, almost one in five shoppers leave a product they planned to buy on the shelf and walk away empty-handed ?

Continue reading "Why ShoppingTrip 360 ?" »

July 27, 2008

Me, Myself and My Shopping

The grocery industry didn’t convince the American consumer that maximum return on stimulus checks could be achieved right in the supermarket aisles," says Precima General Manager Brian Ross

He should know for his firm just published a survey of 1,948 consumers to find that while 89% shoppers continue to remain loyal to their neighborhood grocery store of choice, as many as 72 percent said they’ve made fewer trips to buy groceries in the past six months.

The problems for Grocery Retailers however may just be getting worse with what the Minneapolis Star Tribune calls "trading down" by the value conscious shopper who is

Continue reading "Me, Myself and My Shopping" »

July 17, 2008

If you stock they will come

New York City, 5th Ave: 4 to 5 hours
New York City, Soho: 4 hours
New York City, 14th St.: 3.5 hours
Beverly Hills, CA: 30 minutes to 1 hour
Seattle, WA: 3 hours (out of stock)
Knoxville, TN: no line (out of stock)
Honolulu, HI: 20 minutes (out of stock)
Minnetonka, MN: 1 hour (out of stock)
Glendale, WI: 10 to 15 minutes (very little stock)
West Des Moines, IA: no line (very little stock)

If you are wondering what that was all about, the DVICE had this wonderful piece on the lineups for the 3G iPhone from Apple which now, we are reliably told, is out of stock with atleast a 12 day lead time for delivery.

 

Continue reading "If you stock they will come" »

July 10, 2008

Curious George walks the aisle

The City of Orlando it is reported is considering a new Shopping Cart Ordinance.

The city might consider requiring new stores with more than 20 carts to have a cart retention system. Customers of Big Lots, for example, must pay a quarter for a cart. At Wal-Mart, a digitally encoded locking signal prevents shoppers from leaving the parking lot with the cart

Orlando is not the only city complaining about Shopping Carts that show up at the most unlikely places. From Oceanside CA to Victoria Canada Shopping Cart Containment measures seem to be the flavor of the season.

With all this focus on stolen and abandoned Shopping Carts, Retailers maybe thinking containment and perimeter security, but what about the Shopping Cart inside the store.

In last week's blog it was clear that Retailers have very little knowledge of what happens in-store with Shopping Carts as the value conscious shopper walks the aisles.  But change is on the horizon with a few leading edge initiatives like Neilsen's PRISM, BestBuy's tests with Brickstream, Tesco's one-in-front initiative that uses thermal imaging.

But here is the challenge for solutions focused on monitoring in-store shopper traffic.

A survey on Australian shopping habits revealed that shoppers were not only venturing to their local more frequently, but were spending more time browsing in-store.

the average female spends 12 months of her time on Earth in shopping centres hunting bargains and buying everything from potato chips to the latest must-have patent heels. It found that for men shopping was generally a chore. For women, it was a pleasure

So its no longer about driving traffic in to the store and measuring traffic it is about making the browsing a pleasure or less of a chore depending on the shopprer profile.

This is where current technology solutions from cameras to infrared imaging to thermal sensing fall woefully short for they may provide a measure of traffic concentration in a section of a store or the total footfalls through an aisle, but they do not provide any insight into the browsing experience of the Shopping Trip from start to finish.

Without this corral to check out view of a Shopping Trip, any data of in-store traffic is about as insightful in understanding how the female shopaholic browses the store as studying an in-store random walk by a Monkey with a homing device on its collar.

So how can Retailers and Consumer Product Manufacturers gear up to understand the female shopaholic better to make those 12 months of a lifetime of browsing a pleasure ?

What disruptive innovations are out there which can give a corral to check-out, 360 degree view of the Shopping Trip ?

Also see

If you stock they will come ?

July 2, 2008

Are you being served ?

My neighborhood Wal-Mart Store is undergoing a major revamp. Aisles have shifted, products are being re-stocked, planograms are hanging off the shelves. Into this "work in progress" I waded the other evening with my 3 year old. The "work in progress" didnt quite matter to my shopping experience but all the workmen in their gear got my 3 year old terribly excited enough to lose the keys to the mini-van. The "work-in-progress" notwithstanding the Store Manager and his associates spent 45 minutes with us retracing our steps to finally help find the keys.

On my way out of the store I couldnt help wonder on the irony. Here I was a regular shopper to the Store, spending close to an hour in the store running up a basket total of about $125 and there was no trace of my presence in the store but for my transaction at the checkout register. Till I walked up to the Store Manager seeking help he had no knowledge of who I was, where I had been in the store and what I was trying to buy. The retracing was useful in more than one way to both of us. I got to pick a couple of alternatives for products that were out of stock while the Store Manager got to know that I usually avoid walking past the pallets with promotional products to avoid running into other shopping carts who have no view of incoming traffic.

This incident reminiscent of the British Comedy "Are you being Served" was another reminder on the scant visibility to what happens in-store with a shopper once he or she walks-in.

Shopping in-store continues to be holy grail of Retailing. Rowan Pelling writing in The Telegraph UK notes that a real shopping experience beats E-Bay anyday with his preference to

prod and squeeze a product like a French peasant sizing up plums.

Prodding and squeezing may not be the only things shoppers are looking to do these days. The Belfast Telegraph notes that Irish shoppers are looking for ways to reduce grocery bills.

In a report out today, it says almost one-third of shoppers spread their spending across a number of supermarkets.

Retailers are being setup against each other for a greater share of that monthly grocery basket by that value conscious shopper.

A recent report by Unilever titled "Winning Shoppers in Turbulent Times" throws further insight on how the value conscious shopper is changing habits.

The number and types of shopping trips are changing. People are combining errands to make fewer trips and they are buying more on each trip.

People are already employing savings strategies, such as clipping coupons, as they seek both quality and value

But what can the Retailers do about this value conscious shopper ?

They have no idea who she is most of the time, atleast not until checkout. They very rarely know what the shopper has on her shopping list while she walks the aisles. What is worse as she wanders around the aisles in search of value, they have no way of getting in front of her with the right messages.

What if one were to conjure up an innovation with the intelligence to not just divine what shoppers are interested in but also the ability to influence what they actually buy - will the industry embrace such an innovation ?

Conversations with Executives in the Retail and Consumr Packaged Goods on this question have revealed some predictable and some intriguing reactions.

This looks like an interesting idea but I don’t know if I am the right person to champion this within my organization ?

You have a cool technology but I need to understand what it will cost for me to deploy this across my business even before I decide if it is worth my time to experiment ?

But here is the challenge with Innovation that disrupts. It has a 360 degree impact on my organization. I don’t know how many different business cases need to be looked at to make a decision on adopting this Innovation ?

I don’t know how many different constituents or stakeholders I need to herd into a single room to make that leap of faith ?

Are traditional organization structures limiting Retailers and CP Manufacturers from taking the leap of faith to embrace disruptive innovations ?

What will it take to get Retailers and CP Manufacturers to think 360 to embrace such innovations, especially those that can help unravel the mind of today's value conscious shopper ?

Also visit

Curious George Walks the Aisle