Enterprise Marketing & Promotions Management

The Lion Sleeps Tonight… But When the Sun Comes Up

By / July 2016

Guest Contributor, Insights

In an era of global competition and technological change – survival begins with each and every sunrise.

 

The Folk Tale of Lions & Gazelles
Folk tales are the ‘simple truths’ of, the reality of, human history. Folk tales are… simple, universal, memorable stories. They are the generational wisdom that from our past, help us to understand our present and guide us toward a future.

Note: In 1961, 55 years ago, I was graduating from high school and the Tokens, a doo‐wop group, had the most popular song in America — The Lion Sleeps Tonight. You might want to click here. The Tokens set the mood for the rest of the story… as there is relevance. Trust me!

Sam Walton… Defined the Relevance of the Folk Tale of Lions & Gazelles
In late 1991, 25 years ago, I had the privilege of walking a store with the late Sam Walton. During our walk through, I asked him what kept him up at night. He said the continuing challenge of change brought about by competition and technology. He thought the old folk tale of Lions and Gazelles best described the challenge—the threats of change. Sam told me that every senior officer at Walmart had a reminder plaque in their office that read:

“Every day in Africa a gazelle wakes up. It knows it must run faster than the fastest lion or it will be killed. Every morning a lion wakes up. It knows that it must outrun the slowest gazelle or it will starve to death. It doesn’t matter whether you are a lion or a gazelle. When the sun comes up, you better be running.” – Anonymous

It no longer makes any difference whether your company is over 100 years old, or 50 or a startup. The future of everything is essentially defined by the next ‘sunrise’. Whether your company is a lion or a gazelle… you better be running!

Marcom… Disruption Defined by the Relevance of the Folk Tale of Lions & Gazelles
In 1995, 21 years ago, Rick Fizdale, then Chairman of Leo Burnett, wrote a Preface to the Schultz, Tannenbaum, Lauterborn classic book, Integrated Marketing Communications Putting It Together & Making It Work. “The database will prove to be a more powerful marketing tool than television ever was.” He further noted that the… “United States, with its remarkably diverse population and clearly defined regions, aggregating consumers by gross demographics (as well as the very idea of “mass”) was always an illusion.” “The old assumptions, strategies, and tactics for reaching a broad base of people with a single selling message delivered by mass media are no longer valid.”

In a forward to the same book, James C. Reilly of IBM, wrote, “… so, too, will a company’s marketing be defined by
the customers’ agenda. In such an environment, the premium will be placed more on the relationship and less on the transaction.”

So here we are… 21 years later, IMC, today, defines the conceptual framework for marketing as the premise morphs to promise and soon everyday reality as database and Internet message distribution technology, and the resulting demise of legacy mass media from newspapers to broadcast TV, makes it possible to segment a formerly faceless mass audience into a number of clearly defined, different and highly relevant pods or even individual target markets of one… with both metrics and ROI to validate effectiveness.

The book, IMC, and the insights of Fizdale and Reilly, as the video below points out are revolutionary, undeniable, and now on the precipice of being practical. Watch the video if you want to see how all of this change might work…

 

Retailing… Disruption Defined by the Folk Tale of Lions & Gazelles
Sears Roebuck was founded in 1893. The Kroger Company was founded in 1883. Both are around the same age, over 120 years old. Both were the innovators and disruptors of their era and subsequent eras. One company has adapted to present day and future realities. The other—has not. And… today, even Amazon management has to remember that it is not the only river in the retail jungle.

How profound is the change in retailing that kept Sam Walton up at night? The Cleveland Research Company in their May 19, 2016 report notes that:

  • US eCommerce sales grew 15.2% vs. the rest of retail at 1.2% during 1Q16.
  • eCommerce now accounts for 7.8% of total retail sales, up from 7.5% in 4Q15 and 7.0% in 1Q15.
  • eCommerce contributed 54% of total retail sales growth during 1Q16.
  • $10.5B shifted online during 1Q16 compared to prior years – consistent rate a prior quarters with approximately $40B shifting online each year.
  • Companies like UPS, Walmart and Amazon are increasingly focused on developing and expanding same-day and next day delivery capabilities as consumers have highlighted shipping speed/cost to be a key factor in their purchasing decisions. “To succeed in this world, you have to change all the time.”

Walmart was founded on July 2nd, 1962, a year after the year The Lion Sleeps Tonight was at the top of the charts. Amazon was founded on July 5th, 1994, 32 years later. But it only took 22 years for Amazon to surpass Walmart’s market capitalization which today stands at $231 billion vs. Amazon’s $341 billion. Change happens fast!

Brands… Disruption Defined by the Folk Tale of Lions & Gazelles
According to AC Nielsen,

“…there will be more change in CPG in the next 5 years than there was in the last 50.”

To validate the above statement, Nielsen reports, “…in 2015 the top 25 food and beverage companies generated 45% of category sales in the US but drove just 3% of total category growth from 2011 to 2015 with a compound annual growth rate [CAGR] of just 0.1%.” Private label drove 23% and mid-tier companies drove 25% of the growth. However, it was the 20,000 companies below the top 100 who drove 49% of all category growth, with a CAGR of 6.3%.

[Footnote: The World Wide Web was invented in 1990 by Tim Berners-Lee. Newspaper advertising revenue has gone from more than $46 billion in 2004 to less than $20 billion in 2014. The Cell phone was 1st introduced in 1973 — the iPhone in 2007. Today there are over 6.8 billion cellphone and smartphone subscribers in the world… almost as many subscriptions as there are people. In less than 1/2 a century, business models that previously existed for centuries have been disrupted or destroyed. Technology is the herald of change The Lion Sleeps Tonight, but when the sun comes up…]

“TO SUCCEED IN THIS WORLD, YOU HAVE TO CHANGE ALL THE TIME.” – Sam Walton


Contributed by Ron Lunde, Senior Marketing, Advertising Executive & Market Strategy Consultant
Ron held senior management positions in grocery retailing including Supervalu, Grand Union and Price Chopper. He was also a Sr. VP. at the Leo Burnett Advertising agency. Ron is credited with introducing Space and Category Management systems to the industry as well as working with the Price Chopper team to introduce and deploy the first data driven frequent shopper program in the US. He was also a consultant to the Financial Accounting Standards Board in developing the Issues that govern the accounting requirements for all trade promotion and marketing expenditures. Lunde currently serves as a Market Strategy consultant to retailers and CPG brands.

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