Enterprise Marketing & Promotions Management
Omni-channel marketing

The Other Side of Whoa…

By / July 2017

Insights, News

We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run. Roy Amara PhD

The other side of Whoa is Go!

There are three factors to consider when developing a market strategy product suite/platform/stack proposal:

  1. Growth: Online shopping is increasingly happening via Amazon, Alibaba and other top online marketplaces. Consumers purchased $1.09 trillion worth of goods last year—or approximately 44% of all e-commerce sales transacted around the world. Digital Commerce 360   Both Brick and Mortar as well as large online merchants need to understand the key marketplace factors in each market so they can keep up. Niche brands and startups need to know the most effective markets/strategies for selling their products on these fast-growing channels.
  2. Regulation: On June 27, 2017, The European Commission fined Google $2.7 billion. The Commission handed down a three-part analysis that found, 1. Market dominance, 2. Abuse of dominance, and 3. The effect of illegal practices. The Commission concluded that Google therefore illegally stifled competition. This Commission’s approach for evaluating antitrust violations could have far-reaching consequences on accepted business practices in Europe and in the near future, the U.S. and may well not be limited to Google.
  3. Collapsing the Funnel: Retailing is moving from evolution to revolution. Online is disruptive and ischanging the rules of consumer expectations, demand and satisfaction. Marketing strategies and tactics must adapt. New rules require new tools.

The current 50-year-old process is known as the ‘customer acquisition funnel’. The ‘funnel’ defines and directs virtually all marketing and sales activities. Historically, to sell a product, a customer had to be made aware it existed; taught what it did and how it differed; inspired to feel the need to buy it, and actually enabled customers to make the purchase.

Since the dot com boom, the promise of the internet in fundamentally changing distribution, marketing, advertising and consumption has never fully lived up to the hype. Yes, although major web services sucked the ink out of classifieds and newspaper advertising, digital seemed unable to truly slay the beast that is TV advertising. And although consumer choice became more plentiful, the process of shopping for, purchasing and receiving products did not change as much as many had thought. We still lived in an age determined and defined by the limitations and inefficiencies of the traditional marketing funnel. Many retailers and brands have not been ‘alert’ to the implications of the transformation assuming that they had plenty of time to adjust to something that perhaps would never happen on ‘their watch’. The rise of new distribution, marketing technology and purchasing channels— from on-demand infrastructure and consumer tracking to 1 hour delivery stands to dramatically reshape the historic funnel—collapsing it in on itself, opening up new battlegrounds for retailer and brand competition while delivering significantly more consumer choice and satisfaction.

One of the primary beneficiaries of the funnel transformation stack will be in big data/digital/ecommerce platforms There now exists the ability to provide not just a bi-directional advertising platform, but a broad stack of funnel capabilities including audience data, targeting potential customers, customer relationship development, frictionless customer engagement, payment processing, and even fulfillment. This stack produces tremendous (and hard to duplicate) advantages and value for both retailers and brands. Metrics will clearly define the platform value to the purchaser and justify costs.

Today, Amazon and Alibaba are in the market. Tomorrow, left unchallenged by comparable technology, they will—be the market.

Contributed by Ron Lunde, Senior Marketing and 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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