Seven Billion And Counting

31 10 2011

Today is a special day. According to Time Magazine, somewhere today the seven billionth living person will be born. Somebody get a cake and some forks. No candles, because the 0th birthday is the null set.

Your guess is as good as mine where this baby will be born. The odds are good, though, that it will be in either China or India. Those two nations account for 2.5 billion of total world population.

Time says that 108 billion people have lived since 50,000 B.C. (that’s when homo sapiens arrived on the scene). Say goodbye to the Neanderthals and their sloping foreheads. They probably never would have been good customers anyway.

The sad reality is that much of the world’s population and newborns are in regions least capable of supporting them. Many African nations have female fertility rates of 5 or greater, while developed western nations struggle to even statistically replace themselves (in the US, the rate is 2.01 children per woman). Were it not for immigration and increased lifespans, we would not be growing at all…and perhaps even declining, once you factor in infant mortality and other juvenile deaths.

Interestingly, Time says that we are quite capable of supporting these 7 billion (and even the 8 billion that we will have in a very short 14 years, reflecting the 70+ million we are adding each and every year). The problem is more at the local level rather than global. Access to birth control and abortions (right or wrong) in the western world have no doubt helped push our fertility rates downward. But if it’s a local problem, eventually it becomes a global problem. These mouths need to be fed.

What is perhaps the most compelling thing for us to ponder is how we as Americans can so easily lose our place in all of this. With 312 million citizens, we are still the third-largest country on the planet (albeit a very distant third). We comprise 4.4% of global population, but also account for about one-third of total global consumption. Of course, we can counter that we also represent a little over one-fourth of global GDP.

Big producer. Big consumer. Small player. While my intent is not to create a guilt trip, it is worth pondering. We are a very fortunate people. We take so many things for granted. For example, the internet to us is like the air we breathe. Without either, we would die. But according to Time, only 27% of the world has access to the internet. This means that 1.89 billion people can surf the web, check email, and update the status.

To put that in more easily digested form, it means that Facebook’s 800 million users actually says the social media giant has reached nearly 50% realizable market penetration.

Mark Zuckerberg must be getting nervous. FB’s growth curve is going to flatten out real soon, unless we can get the other 5.11 billion online. Something to think about with that IPO looming.

What I find most interesting of all the global data is that the typical person lives in China, is Christian, is more likely to be male, more likely to live in a city, is 29, and makes a paltry $10,000 a year. Oh yeah…and does not use the internet.

A few of those factoids sound like us, but many do not. This Global Citizen is an amalgam of juxtaposed traits, but aside from religious preference, does not sound at all like Joe or Jane American. We are older. Make more money. Much more likely to live in a city. Make a lot more money. And slightly more likely to be female.

Which reiterates my earlier point. We are a hamlet in the global community, in spite of merrily producing and consuming at levels far greater than our size might normally predict. And our hamlet is a demographic anomaly. Academics can argue until the next billionth person is born as to why westerners came to so powerfully dominate virtually every aspect of the planet (was it ingenuity? luck? cultural and economic imperialism?). But one thing is for sure: While it may be good to be in this particular place and time on the planet, everything we do impacts the rest of it, both today and tomorrow. As a marketer and a consumer, I need to be cognizant of this fact in all that I do.

And it probably wouldn’t hurt if we all did a little introspection on the subject. Because 7 billion is a lot of people. And in 13 years and 3 months, #8 billion will be conceived.

Dr “Baby, Baby” Gerlich

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Raising Cain

31 10 2011

It is still a year and one week until the next presidential election occurs in the US, but already the campaigns are heating up. And marketers are bouncing around like kids on caffeine.

Take, for example, the latest web ad from GOP candidate Herman Cain. It’s smokin’. Literally.

 

Talk about controversy. Who features smoking in ads anyway? What the hell was Cain thinking? “If I am elected, I promise a pack of smokes in every pocket and purse.”

Sure. Excuse me while I exhale a liter of sarcasm.

Cain’s ad has drawn more attention than just about anything the rest of the GOP wannabes can serve up right now, and has been parodied all over late night television. Which can mean only one thing:

Herman Cain has some darn savvy people working for him.

While I am disgusted with even the notion of smoking, I acknowledge that Cain has managed to break through the clutter to get our attention. If his 9-9-9 plan isn’t getting through (and it apparently isn’t, since it has so many detractors), an attention-getting ad can work wonders.

Furthermore, while social media play a role in his campaign (he uses video clips widely on his site, features a Twitter feed, and has no problem with the video spreading virally), we must also recognize that he is also using somewhat old school media here. Whereas President Obama relied almost exclusively on tweets in 2008, Cain is taking a very different tack. In the process, he has gained an incredible amount of traction among the other 6 contenders with whom he sparred in Las Vegas recently. You know, he might just make it. He might just be the GOP nominee.

And if you think this nation had a holy crap moment in 2008 with the first African-American candidate, and then President, just consider the implications of a duel between two African-Americans. Martin Luther King, Jr., must be smiling down from heaven.

We have come a long way. And we have also come a long way from the day in which 1 in 3 Americans smoked (it’s now more like 1 in 5). Would the ad have been any less believable if it didn’t have the one last drag on the cigarette? And for that matter, what about that creepy smile Cain cracks at the very end. Yikes. I doubt the ad would have been less effective, but it may have been more believable had Cain not gone goofy.

While I hope that Cain’s ad doesn’t glamorize smoking, I have to salute a person who can so decisively find his way to the top of the discussion heap. He left the door wide open for parody, but sometimes even parody can yield positive results.

In the mean time, I just need to figure out if this 9-9-9 business is worth inhaling more than a cigarette.

Dr “The Heat Is On” Gerlich





How To Stop A Marketer Dead In His Tracks

31 10 2011

Last night my oldest daughter, Becca, and I stopped in Amarillo the view the balloon “glow” being held in conjunction with the Pirates of the Canyon event. We enjoyed seeing the operators fire up the jets, making their balloons glow in the dark chill. And I, of course, was in heaven trying to capture it all on my Canon.

But as we headed back to the van, I noticed that one of the corporate balloon sponsors had an impressive RV on the lot, awning out and LCD TV showing the World Series via one of the underbelly bays. I love RVs and camping, and was drawn to the majesty of this rig. It was at least a 40-footer. Fully-on body wrap touting the sponsor’s logo. All the bells and whistles.

I told Becca how these Prevost buses start at $1 million and go up. Way up. I joked, “So do you think we should we should get one of these?”

She wasted no time in reply. “No. We already have one.”

I was stunned. Here’s a kid whose middle name is Gimme. My close friends know that her angst-filled life has become mine as well (such is the lot of being 14…and a parent of one). But there she was, completely out of the blow sounding like she had all the wisdom of Solomon in her still-forming cerebral cortex. Holy crap. Four words that could send any marketer to his instant demise. Words that basically tell any marketer where to go, and oh, by the way, here’s a road map.

To be honest, we don’t own a Prevost. While part of me still fantasizes of being a rock star (and all the trappings thereof Nickelback so eloquently crooned), my life for now is much simpler. Yes, we have an RV, but it is a very modest one. A paltry 31-feet. No marble floors. No TVs in the underbelly bays. A manual awning. Paid-for and actually cost less than a shiny new Ford F-350.

Maybe, just maybe, Becca is absorbing some of the lessons her marketer father has been preaching. That in spite of the fact that I teach people how to take other people’s money, we really do not necessarily need everything that marketers dangle before our eyes. Even if that million dollar ride might be nice.

We’re pretty dang cheap when it comes to vehicles (we always buy used, and keep them maintained until they fall apart on the driveway). We value our experiences more than we value our possessions.

Marketers tease us with bling and glamor, hope and fear. They try to convince us that we are unhappy (or should be) with our current product, and that a shiny new replacement will make us feel much better. That we really do need six when 1 or 2 will do. It’s an idiocracy, but we buy into the idea anyway.

But out of the mouths of babes oft come gems. Becca uttered the four most powerful words any consumer can say to a marketer. We. Already. Have. One.

And even if you don’t, they’re good words to keep at the ready, for they are the ultimate buzz kill for any marketer intent on spinning his web of persuasive speech.

Yes, that was a Proud Papa moment last night. I just hope I can remember to use it the next time Becca asks me to buy something for her. And I hope I can remember to use it the next time a marketer ask me to buy something for my sake…and for his.

Dr “No Sale” Gerlich





Size Matters

31 10 2011

American retail is a strange scene. For decades business has been fixated on the idea of bigger-is-better. Almost as if they were all from Texas and had adopted our apparent motto. Supermarkets slowly got bigger and bigger…growing from 15,000 items 40 years ago, to 30,000 20 years ago, and now 45,000 individual items.

As if you have tried even 1/100th of them. At least we have enough yogurt choices to keep us in variety for a few months at a time. What in the world would we do without it?

Back in the early-1990s, Walmart launched its supercenters, with stores ranging from 190,000 to 220,000 square feet. Actually, these were a slightly pared down version of Walmwart Hypermart concept stores (2 in the Dallas area, and 2 in Kansas City), each over 220,000 square feet). Those test stores did not fare well, so Walmart spared us all by trimming a little fat.

Lucky us.

About the same time, the Tandy Corporation (ever heard of Radio Shack?) launched Incredible Universe. I actually bought a stereo system at the Arlington store. It was a sight to behold. In fact, it was a universe…the universe of every known electronic product at the time. The store sank from the weight of its inventory, and disappeared within a matter of a few years. Thankfully.

But all of a sudden, a perfect storm of bad economies, in-migration to city centers, over-storing and e-commerce have collided to force many chains to reconsider size. Small is the new black, as long as it includes food. Walmart and Target are leading the charge of the “lighter” brigade, with Best Buy also shedding a few square feet at many stores.

Which is another way of saying that change is inevitable. Even in the opposite direction.

Walmart is forging ahead with its Neighborhood Market stores (often 25,000-30,000 square feet), as well as downsized urban stores shoe-horned into major metros like Chicago and New York. Target is doing likewise. Walmart is even trying its hand at convenience stores.

And you know what? I say it’s about time!

I am completely head over heels in love with the idea of less-is-more. I am tired of walking miles in sprawling supercenters. I would rather buy more and more of my stuff online. And I would rather my time be spent on me…not mundane repeat purchases.

Even when the stores are still large, it is possible to use space wisely. A new two-story Walmart/Sam’s Club in the Dallas area reduces the footprint by 50%. The multistory Target in downtown Minneapolis is an urban shopper’s dream. And being able to simply find what you really need without spending an hour wandering aimlessly under the mesmerizing bright lights is worth its weight in lumens.

I’m just glad the big chains agree, albeit for different reasons. Walmart and Target must figure out how to squeeze into crowded urban spaces. Furthermore, land is expensive everywhere, so building smaller is more efficient.

Martin Lindstrom, in Brandwashed, repeats an oft-cited fact: shoppers often become paralyzed when confronted with too much choice. How in the world Big Retail ever thought that more choice would be better for us (and them) is beyond comprehension. The fact of the matter is, most of us just get confused when we have 90 yogurt options from which to choose. But when we have 10, we actually become much more decisive.

Wow. The implications are huge. Carried forth to our closets, it means we really don’t need that many shirts. Pants. Shoes. (Ladies?)

OK, I better duck right about now. And I will confess, as a man-card carrying kind of guy, to every once in a while reaching a fashion paralysis while perusing a few dozen clean and ironed dress shirts. “Where the heck is that black shirt with the button-down collar? The rest of these just won’t do.”

Sure, taken to its extreme, this trend could spell real estate trouble in the years ahead if we all decide we want to shop at smaller stores. Just as we are still trying to absorb all those midsize Walmart building abandoned after the move to supercenters, we could find ourselves living amid a slew of empty retail behemoths.

That’s a problem for another blog to solve. But for now, it wouldn’t bother me a bit if I never walked another mile inside a Walmart. Literally.

Dr “Retail Diet” Gerlich





Puff The Magic Dragon

31 10 2011

One of the biggest urban legends of the 1960s was that the Peter, Paul & Mary song, “Puff The Magic Dragon,” was actually about smoking weed. Tokin’. Mary Jane. Tune in, turn on, drop out. Heck, the legend was even revived in Meet The Parents, lest another generation not be able to inhale the story.

Crazily, this same iconic phrase may very well be used again early in 2012 with the release of Aeroshot, the latest invention of Harvard Professor David Edwards.

No kidding. Take 6-8 puffs from this magical little cylinder, and you’ll be bouncing down the sidewalk.

With an MSRP of $3 apiece, or 3 for $8, each tube is a one-use-only application, and is roughly equivalent to the caffeine content of one large cup of coffee. But why waste time and calories chugging java when you can just cut to the chase? Isn’t the real reason we drink coffee for the caffeine?

Guilty as charged. Which reminds me. My cup runneth empty.

But while caffeine delivery systems have been tried apparently for the last 5 years, this one seems like it has the best shot of making it. And it has me a little worried. Sure, caffeine is a very legal stimulant. Research reports are mixed about its alleged harmful effects. We can get our caffeine in a variety of beverages, as well as in pill form (I remember those little yellow NoDoz back in college!). But think about how easy it will be for people to abuse this handy little friend.

It was earlier this year that drink makers of products like 4 Loco had to drop the caffeine from their high-octane (12% alcohol) drinks. Think about it. Caffeine. Alcohol. It was the yin, the yang and the bang bang. Talk about being pulled from opposite directions.

But now Aeroshot makes inhaling our favorite legal drug way too easy. We don’t have to drop nasty pills that tear up our stomach. We don’t have to find pre-mixed drinks, or mix our own. We won’t even have to find a Starbucks. No, we can just take a puff. Not much different from other popular drug delivery systems.

At $3 a pop (literally), it is more expensive than the cup of coffee it replaces. But maybe that’s the convenience charge. I really do not want to see caffeine be over regulated. Still, I can see the FDA getting a little nervous (sorry) about these product. And I sure as heck hope that stores keep these out of my kids’ reach. The last thing I need is a couple of girls dropping in, turning on and tuning right out of the building at light speed.

Dr “Take A Deep Breath” Gerlich





It’s All About Klout

26 10 2011

We live and die by numbers. Batting averages. Points For. Points Against. Earned Run Average. RBIs. Number of Facebook friends and Twitter followers.

“Wait, how did those get in there? I thought you were using a sports metaphor again.”

No, but it drew you in, right?

I know people who collect friends and followers as if they were baseball cards (there’s your sports reference). They obsess over how many they have. They lose sleep whenever someone unfriends or unfollows them. They wear their number as if it were a talisman, an indicator of their footprint on the social graph.

Turns out, though, that merely having a lot of friends is only a small part of the equation. What’s really important is our Klout. A Klout score ranges from zero to 100, with higher scores reflecting one’s overall influence online.

I can see it now. Future resumes will have a line for your Klout score, which may or may not be a good thing. I guess it kind of depends on the job. If you’re applying to be the social media manager for Pepsi, you better have a darn high one. If you’re an aspiring accountant, not so much.

Klout, which has calculated over 100 million scores, is based on our presence in many places, including Facebook, Twitter, LinkedIn, Instagram, WordPress, Google+, FourSquare and others. It measures not just how many friends or followers we have, but how many times we post, how many times our content has been shared or retweeted, and how many comments it has generated.

In other words, it is a measure of our all-round performance in the social arena.

And you thought you were Lord and Mayor of Red Robin. Silly you. That would be me. I’ll call your Klout score and raise you 5.

I calculated my score again today and came in at 57. To be honest, I have no idea how that compares to any of my students or other readers (but if you comment on my FB status update or WordPress post on this, it might go up a tick or two). I am most active on FB, Instagram and WordPress, so my score is a reflection of all my pithy comments and breathtaking pictures. Maybe if I resumed tweeting like I once did (my 4000+ tweets are preserved for cyber posterity), I could rise a few more notches.

Perhaps some enterprising aftermarket inventor will develop a little LED sign for our cars so we can broadcast our Klout score as we zoom down the freeway. “Ooh, honey. There goes someone with a high Klout score. Maybe he’ll accept my friend request, and my score will go up. Hold my beer and watch this.”

Which means that Klout Envy will soon be the newest malady to afflict society, leaving the door open for other enterprising people to produce a Viagra-like cure for flaccidly low scores. It will be like SEO (Search Engine Optimization), but at the individual level. Singles bars and Match.com will soon have ways for people to announce their Klout score as they seek out significant others.

When I jumped online way back in the 80s (with BBSs) and 90s (with ListServs), I had no idea that one day I would (or should) be as concerned about my online social “clout” as I am being told I must do today. It’s almost like having to hit .300 every year with 40 home runs and 120 RBIs. With numbers like that I could probably get a job playing ball with the Rangers.

Or maybe as a sports metaphor writer. Now be sure to pass this along. My Klout score is counting on you.

Dr “Out Of The Park” Gerlich





Prime Time

25 10 2011

Sam Walton may take the lion’s share of the credit for revolutionizing retail, but I think that Amazon’s Jeff Bezos may very well be the most understated pioneer in business history. In 16 short years he has built from scratch a company that is quietly rewriting the playbook.

And while its 3Q sales for 2011 (between $10 and 11 billion) is a mere drop in the retail bucket compared to Walmart’s greater than $400 billion annually, it always has the attention of the folks in Bentonville. If anything, Amazon’s e-commerce machine is the envy of every WM executive who would love to figure out how to replicate it.

While Amazon is often recognized for capturing the book market and then systematically adding product categories, as well as gobbling up competitors like Diapers.com and Zappos.com, perhaps the biggest feather in its cap is its success with Amazon Prime.

According to industry estimates, about 5 millions out of 121 million Amazon customers have ponied up $79 for an annual subscription, which at face value provides unlimited “free” two-day delivery of each and every purchase. No minimums. Nearly every product category included. Ship to anywhere.

Sounds good in principle. Toss in the free streaming movies that Amazon now gives to all Prime customers, and you start to suspect this is a major profit center in its own right. Why else would Amazon give away something for which Netflix suddenly realized it had to charge 60% more?

Oh yeah…and let’s not forget the trial periods Amazon gives to Moms-to-be and students. It’s all intended to suck people in to the river.

Of course, one could argue that Amazon Prime helps lock customers in to one source for their merchandise, and this alone is a solid retort. But I think this river runs much deeper. Unless you are a very frequent customer (say, ten times per year or more), most people are not getting their money’s worth on the subscription.

And let’s not forget that Amazon has brokered enormous shipping discounts with its couriers. That box of books that might cost you $8 to send may only cost Amazon a fraction of that. The price of shipping goes down significantly when UPS can fill truckloads at a time.

So this sword is indeed double-edged, but in a good way. Amazon uses Prime to maintain loyalty, and then hopes you forget to use it very often. Why, it’s almost like selling a piece of merchandise for $79, but not having to deliver $79 worth of goods.

Now you know why Amazon can afford to give away the streaming movies. And why Netflix is wondering how to recoup the 800,000 customers it has lost since July.

That Amazon gives away Prime to Moms-to-be and students is yet more evidence of Jeff Bezos’ genius. Amazon may only be 1/10th the size of Walmart in sales, but it is a much leaner, meaner fighting machine. With an unblemished track record of store closings (it’s still batting zero for zero, thank you very much), there’s just not a lot of overhead to worry about.

Which is every reason why Walmart should be.

Dr “Click Here” Gerlich