How imaginary crocodiles could have saved Nokia

Why dominance means nothing if you stop delivering.

Zeitgeist reported recently on the number of high street names issuing profits warnings after an icy December kept shoppers away from their tills.

While these companies hang on hoping that things will improve (they won’t have liked the news this morning), other retailers have already bitten the dust.

The encroachment from online retailers onto traditional bricks and mortar stores is only going to increase as once dominant names slowly diminish into also rans, punished by their failure to adapt to progress.

While such a destiny is unfortunate for a lumbering organisation with a physical and costly infrastructure to maintain, for what should be a cutting edge technology company it is unforgivable.

A mere ten years ago, Finnish communications company Nokia dominated the mobile phone market. This rather quaint BBC story from from a decade ago reports that ‘Nokia has strengthened its grip on the world’s mobile phone handset market’ and that ‘for the first time, Nokia has a market share more than double that of its nearest competitor’.

Back when Nokia dominated everyone

The major competitors back then were Motorola, Ericsson and Siemens and mobile phones were for calling, texting and maybe even playing Snake.

The report concludes with a prediction from Forrester who anticipated that ‘five dominant players would control Europe’s networks by 2015’.

While that prediction may come true, it is questionable whether any of the dominant manufacturers from yesteryear will be among them.

This week’s  ‘leaked’ memo from Nokia’s CEO Stephen Elop claimed that the company was ‘standing on a burning platform’ and surrounded by a ‘blazing fire’.

This is not a pleasant place to be. As mobile phones became smartphones an ever increasing importance was placed upon a phones operating system, both in terms of functionality and usability.

Just as the old high street stores threw up websites that weren’t quite as good as the dedicated online retailers Nokia produced Symbian, an operating system that failed to impress anywhere near as much as the ones you’d find on an Apple, Blackberry or Android phone.

The smartphones of today

Elop’s acknowledgement of the problem has opened the door for a radical change in strategy to try and rescue the problem.

Rumours abound of a partnership with an existing platform.

“It could either be a very bad marriage or a marriage of two players that have not been very effective alone.” commented Magnus Rehle of Greenwich Consulting.

The two likely candidates are Android, which would essentially relegate Nokia to a manufacturer in competition with other Android handset makers, or Microsoft who have also struggled to ship as many copies of their Window Phone 7 operating system as had been hoped.

The former would be a rather bitter pill for a once dominant giant.

The latter, and arguably preferable option, would bring together two massive organisations who have struggled to assert their dominance in the category.

Neither party would comment though it has been reported that Elop had been in discussions with both Microsoft CEO Steve Ballmer and Google CEO Eric Schmidt.

An announcement is imminent, though as Hakim Kriout of Grigsby & Associates points out ‘Very few companies regain their leadership once they’ve lost it.’

Whichever route Nokia go down the lesson is there for brands in every category.

It is infinitely preferable to stay top of the pile than to have to climb back up after a fall.

Regardless of your current dominance, if you fail to keep up with what people want and expect from you, someone else will deliver it and take your crown before you’ve admitted there is a problem. Brands must avoid the complacency that dominance can bring.

Despite their size, Avis demonstrate the challenger attitude with their ‘We try harder’ ethos while Google are ‘always in beta’ .

If brands assumed that they were surrounded by crocodiles and stayed alert to change and ready to react, they’d be much more likely to avoid getting trapped by ‘blazing fires’.

Here Come The Boys!

Retailers and brands in dire need of some Sexual Equality

Thanks to an increasing number of ill-advised comments by Andy Gray and Richard Keys and declarations by MP Dominic Raab that men get a raw deal from ‘obnoxious feminist bigots’, sexual equality has suddenly become such a hot topic across the UK that the economy-ruining snow has melted away.

However, before we start preaching about how middle-aged sports presenters need to brush up with what is and isn’t an acceptable way to behave in 2011, we may want to look closely at our own industry and address the outdated way many brands and retailers still deal with the reality of the modern male shopper.

The conclusions of a recent study by Saatchi & Saatchi X suggest that just as women are fully entitled to get offside decisions as wrong as their male colleagues regularly do, so men are encroaching onto the traditionally female territory of ‘shopping’.

The study further implies that the failure to create retail experiences that appeal to men’s needs limits their engagement and that we need a much better understanding of the whole male purchase journey. Their Director of Strategy Simon Goodall notes,

“Men love doing things they can do well. They like opportunities to demonstrate mastery, which means they like to go into a shopping environment knowing the answers to questions they might want to ask.”

Goodall also believes that retailers ought to do more to help men find the information that they need to make decisions before they reach the check out.

This view supports the findings of OgilvyAction’s 2008 global study examining the decisions that shoppers made in store. Managed and analysed across EMEA by yours truly, this research suggested that across a range of categories, UK males were generally less likely than females to know which brand they are going to buy before entering the store.

Anything that helps with that decision making process should be considered.

Craig Inglis, Marketing Director at John Lewis states that men dwell less than women when shopping and are more rational and pragmatic in their shopping habits. Thus, male-oriented areas of the store should be clean and modernist with obvious signposting to help men navigate their way around the store.

However, brands and retailers can begin to engage men long before they reach the store. Goodall cites Best Buy’s ‘Twelpforce’,  which offers advice on Twitter as an effective example of a retailer engaging with men and empowering them with the information they crave.

Twelpforce: A good example of engaging men

What’s more, cracking the male shopper is something that will only grow in importance.

A recent study of 2,400 men in the US by online giant Yahoo! revealed that 51% of respondents believed that they took a primary role in buying groceries.

Yahoo’s Director of Research and Insights, Lauren Weinberg, commented that while panellists may have inflated their involvement in purchase decisions, male customers’ perceptions of, and interest in, shopping are changing fast.

Regardless of whether some respondents exaggerated their role or not, the results indicate that gender boundaries are disappearing and modern households no longer see grocery shopping as a ‘womans job’.

Within the set that is ‘Male Shoppers’, we also need to understand the different mindsets men have across different categories, retail environments and lifestages. For example,  the Yahoo! study found that fatherhood was influential with 60% of dads claiming to be the decision maker across a range of categories including pet care, clothing and packaged goods.

All of this means that brands need to think not only about who they target, but also how they represent men in their adverts.

John Badalament, a writer and founder of website ModernDads.net believes that “Men need to be something other than invisible or buffoons in advertising”.

Domino’s Pizza: Not such a good way to get men onside

Not only do such depictions alienate men, but a 2010 multinational study by EuroRSCG found that there was a “pining for chivalry” from women in the developed world and that “young people want to see demonstrations of male strength and responsibility.”

Chivas attempt to celebrate chivalry

Dove celebrate ‘being a man’

Even a seemingly harmless campaign like P&G’s “Behind Every Olympic Athlete is an Olympic Mom“ Winter Olympics ads resulted in grumbling from underappreciated dads, who still make up the vast majority of volunteer coaches for youth sports.

There is clearly still plenty to learn about engaging male shoppers effectively, though with the Yahoo! research finding that men are more brand-loyal and less focused on promotions than female shoppers the rewards for those who are successful are huge.

Either way, just as it has become clear that old dressing room banter is no longer appropriate in a TV studio, so it is equally apparent that failing to engage such an influential and  lucrative proportion of shoppers is just as unacceptable.

White sky in the morning, profits warning!

How will the snow affect the UK retail landscape?

While the news at the time focused on stranded air passengers, a crippled transport network and the need for some inventive parenting to explain why Father Christmas was unable to deliver presents on time, the after-effects of December’s heavy snowfall are now being felt strongly on the UK high streets and shopping centres.

With the tinsel and fairy lights still in full view, it has been a far from Happy New Year for the number of retailers forced to announce that their sales were lower than expected with the consquences ranging from store closures and job losses to profits warnings. Many cited the unwelcome cold snap as compounding difficulties brought about by the economic crisis, changing consumer habits and threats appearing from non-traditional competitors.

First to register concern were HMV, who admitted in an unscheduled trading statement, that like-for-like sales across its UK and Ireland outlets had plunged by 13.6% in December. Having seen other music and entertainment retailers, including Zavvi, Our Price, Tower Records and even Woolworths bite the dust in recent years it isn’t surprising that the entertainment specialist is feeling the heat while the rest of us freeze.

Zeitgeist has already touched on how ‘In some industries, the concept of owning something tangibly has become redundant;‘, with music and film sitting high on that list. More worryingly for HMV as the owner of Waterstones bookshops is Amazon‘s online dominance of the category and the rise of devices like the Kindle and regular smartphones that are likely to eat into book sales in the coming years.

Deeper Problems

While the sub-zero temperatures may have kept shoppers out of their stores the weather can’t take all of the blame. This weekend, this half of Zeitgeist bought a CD as a friends birthday present. A quick look online showed the item retailing on HMV.com at £8.99, however in-store I was obliged to pay £17.99. The Sales Assistant helpfully told me that the difference was because online sales are shipped from Guernsey. I rather suspect that the lower price has more to do with the fact that other online stores such as Amazon.co.uk and Play.com are also selling the item for £8.99 than where the item is shipped from.

It’s not hard to see why the bricks-and-mortar stores are in so much trouble when they have to sell items for nearly double the online price to cover their overheads. In this instance the extra cost doubles as a ‘Failure to Plan‘ tax for me, but increasingly shoppers will go online for their entertainment needs rather than paying a premium for the convenience of getting it immediately on the high street. Alternatively they’ll simply download or stream it and do away with the need for any physical material purchase.

This final option shows how behaviour change can be brought about with the right motivations. For years now, we have been encouraged to reduce unnecessary waste and raw materials to help the environment. However, it is the convenience of having music, film, games and books stored digitally, rather on discs in plastic boxes or paper, that has proved more of a driver than any desire to save the planet.

Others Affected

Another retailer to be affected by how we now spend our leisure time is Games Workshop who issued a profits warning of their own soon after.

Two other retailers who also issued a now on-trend profits warning are greeting cards merchants Clinton Cards and maternity and babyware retailer Mothercare.

For Clintons this is the second such warning in six months and time will tell whether ‘strategic intiatives‘ taken by the board will have the desired effect or whether as a nation, a new generation is growing up to wish ‘Happy Birthdays’ and ‘Merry Chistmases’ via text message or social media sites.

Encroachment on their traditional market by the major multiples hasn’t helped Mothercare and brokers Seymour Pierce have questioned quite how much of their problems are down to the snow.

With the Christmas period so crucial for many retailers there may be more similar statements being prepared in boardrooms up and down the land. The slightly milder weather in early January may help ‘The Sales’ boost some bottom lines, but with a number of retailers choosing to delay exposing shoppers to the increase in VAT the bargain hunters may not spend enough to make up the shortfall, particularly if they are saving for a more expensive 2011. If a handful of retailers do go under it begs the question, ‘Who will take over their retail space and what will the retail landscape look like in a couple of years from now?’.

Such gloomy announcements from household names will do little to help the economy and improve consumer confidence, particularly once the seemingly permanent VAT rise comes into effect everywhere.

In the meantime we’ll have to wait and see what legacy the snow is going to leave in other sectors such as insurance, utilities and travel. Either way, it might be an idea to start saving now for those premiums and gas bills.

Right place, right time delivers Fedex viral gold

How great timing can accidently help you become part of a mini viral sensation.

With the news in the UK pretty much exclusively focussing on how the cold weather has brought most of northern Europe brought to a standstill, Zeitgeist was reassured to see that the snow and ice are playing havoc in the US too.

This CNN clip of cars balletically skidding down a hill in Spokane, Washington and into each other has found its way onto a number of popular websites.

As the out of control cars smash into each other a FedEx van appears and chooses a route that doesn’t involve climbing a hill of ice and manages to continue its journey onwards to deliver Christmas presents.

The truck is only visible for around ten seconds of the two minute clip but subtly shows that while others struggle, Fedex delivers.

This particular clip has already been viewed by over half a million people and other instances and TV broadcasts will boost that number considerably.

And all through the good luck of having a competent driver in the right place at the right time. If the Fedex marketing team haven’t already broken up for the holidays they might even think about buying the rights to the first 30 seconds of the clip and running it as an advert while the weather remains so severe.

Whatever they do, Zeitgeist hopes Fedex identify the driver and give him (or her) a nice Christmas bonus. They might also want to offer jobs to the drivers of the red and black cars who managed to keep calm and deliver a driving masterclass.

Timing it would seem, really is everything!

Letters make sweet music together

Sex sells. This much is accepted, but as stated by Jef I. Richards, ‘only if you are selling sex’.

With the weather reminding us that Christmas is coming up, brands are fighting to be considered as great presents. For some, this means appealing not to the consumer but to the shopper.

One brand that has identified the link between musical notes and bra sizes is lingerie emporium La Senza who have launched a Cup Size Choir. The premise is quite simple. Each model represents a note relating to her cup size.

To start with, the girls sing a Christmas carol. After that the visitor can play them and make their own tunes. Users can record their compositions and share them with friends as well as endorse the site via Facebook and  Twitter. You can even win a years worth of lingerie!

With men in the market for gifts for their partners the site should help La Senza reach an audience that maybe wouldn’t be regular shoppers.

The ingredients of interactivity and women in skimpy outfits won’t do any harm to the sites attempts to go viral. The idea is simple, relevant to the brand and not crucially not gratuitous or overly demeaning to women.

That might be enough to breakthrough the noise of all the other brands attempting to get your Christmas coins.

Let us know if you manage to make any cool tunes.