New Product Introductions, Marketing Campaigns Call for Understanding Online and Physical Retail Realities
BROOKLYN, NY; March 3, 2020—Created for Karen Raugust and my “10 Keys To Success in A Changing Retail Landscape” session at NYTF, these slides can serve as an outline for just about any product introduction or marketing campaign, toy or otherwise. Let us know if we can help you ask the right questions and flesh out the outline when working on your next project.
Confronting the Apparel Industry’s ‘Going Out of Business Model’
“What made us successful yesterday may be the reason for our failure tomorrow,” said Edwin Keh of the Hong Kong Research Institute of Textiles and Apparel at the Sourcing Journal Summit: The New Fundamentals. Indeed, the rate of change in the apparel and footwear industries over the past decade will be mightily outpaced by the changes over the next decade.
Other speakers at the Summit offered variants of that theme. “If you started your company tomorrow would it look like it does today?” Jesus Vega asked. An “entrepreneurial agitator” who had been with Inditex’s Zara unit, he posed the question relative to the “Freddy Mercury-ization of retail: ‘I want it all and I want it now.’”
Outstanding in both content and execution, the mid-October Sourcing Journal Summit gave voice to six specific areas of concern:
- Sustainability — and the lack of clarity in what the term means.
- The need to align direct-to-consumer brands’ data-driven business model with the product orientation of traditional retailers.
- Uncertainty re tariffs, borders, and the regulatory climate.
- The prospects for moving production to less heavily tariffed territories.
- Inventory backups.
Edward Hertzman, founder and president of Sourcing Journal Media, and host of the Summit: “There is twice as much organic cotton [labeled on] t-shirts as there is organic cotton. . . .If we asked everyone in this room [about 400 people] to write down what sustainability is, would any two have the same answer?” It was a rhetorical question, but McKinsey & Company’s Karl-Hendrik Magnus answered for all: “No.”
The need for “common language” regarding sustainability came up repeatedly, as did the need to differentiate between environmental and social responsibility. Cyrus Wadia, a former Nike executive now also with McKinsey: “Sustainability has to be on the same plane as other business factors — not an add-on. . . .Sustainability is moving from nice to have to must have — but mostly for 2025” and beyond. And Hertzman again: When a manufacturer promises you organic cotton, how do you know it is? “You don’t.”
“So much capital is locked up in inventory that you have to solve the inventory problem before you can embrace sustainability,” said Chainge Capital’s John Thorbeck. “We need a sustainable business model. This is a going-out-of-business model.”
Aligning Business Models
“Direct-to-consumer brands [DTCs] have tech strength but they’re not product people. Wholesalers’ and retailers’ strength is product but they don’t have data or don’t know what to do with the data they have, and they don’t have the ability to reach that digital consumer,” said Andrew Postal, Managing Partner at MMG Advisors, an investment banking firm. “Most traditional wholesalers and retailers stink at it,” he added.
That said, D2 Brands/Delta Galil’s Victoria Vandagriff, whose company does not have DTC brands, interestingly pointed out that direct is “how customers want to shop.”
DTC brands can manufacture 200 of each of 10 designs and know within days, at most, what sells, said Lever Style’s Stanley Szeto; Lever is a contract manufacturer for Theory, Hugo Boss, Stitch Fix, Bonobos, and others. That, he added, is very different than the two million pieces a Uniqlo will have to order without knowing how it will be received.
The small orders for DTC brands require “flexibility — you need a supplier that can deal with on-demand” production and delivery, said Taylor Shupe, of Future Stitch, a knit apparel manufacturer.
DTC brands’ digital expertise “allows you to acquire data about the final customer,” said Anthony Choe, founder of Provenance, a private equity firm. “Most DTCs don’t take advantage of that. But the right brand needs to be in multiple channels,” including both traditional retail and digital platforms. “Digital is under-distributed in the real world [meaning traditional retail],” Choe continued. “But the retail economics are starting to work for digital-native brands” to make the transition.
Uncertainty: Tariffs and More
The prevailing sentiment came down to:
- Get used to tariffs. “There may be some respites, but it’s not going back to what it was,” said Michael Zakkour, a retail and digital commerce consultant.
- Expect corresponding price increases. “Tariffs are real. It’s going to come from somewhere,” said Stephen Lamar of the American Apparel & Footwear Association (AAFA). “When you move to new contracts you’ll see those costs passed along the supply chain to retailers and consumers.” Similarly, while Postal of MMG noted that efforts to raise prices to date haven’t worked, part of the current difficulty is that “tariffs just happened. We didn’t have a chance to adjust the supply chain.”
- Pressure to renegotiate licensing agreements is growing. Postal said that tariffs are accelerating demand by licensees to lower royalties. “Those manufacturers [large public companies] that have clout can to go to licensors and say, ‘Renegotiate or I’ll give you the brand back.’ Others can’t.” Still, with royalty rates of 7%-9% for brands and 13%-16% for entertainment properties, “the margins are not sustainable. They’ll have to either restructure minimum guarantees and royalties or go out of business,” Postal said of licensees.
With 69% of footwear, 41% of apparel, and 84% of accessories manufactured in China, moving production in response to sudden tariffs is impossible. For footwear, in particular, where the technology and piece work are both intensive, it’s not going to happen, all agreed.
“If Vietnam gets big enough and this guy stays in office you’ll see tariffs there too,” said MMG’s Postal. And, noted Nathan Serphos of Michael Kors, “Vietnam is not going to double its population over the next two years.”
As for Ethiopia, the Dominican Republic and other locales, “It’s been done before,” said Harold Grunfeld, a customs and international trade law specialist at Grunfeld, Desiderio, Lebowitz, Silverman & Kledstadt. “But who wants to kill themselves trying to get goods into this country? It’s not a short-term solution” to the new tariffs.
Grunfeld also alluded to classification and accounting practices that can sometimes be used to offset at least some of the tariffs.
“Excess inventory is a problem for 2020,” said Chainge Capital’s Thorbeck. “Too often people think it’s a seasonal issue, but this has been a problem for a long time. It’s not just a matter of selling through the existing inventory” and then re-ordering.
“As a wholesaler you produce what’s ordered; when you’re sitting on inventory, 90% of the time we don’t make that back,” said D2/Delta Galil’s Vandagriff. Added Teva/Deckers Brands’ Anders Bergstrom, “We don’t have short-term inventory. It’s 18 months to produce; my job is to keep Ross Stores from getting a great deal.” And: “Inventory = risk, and risk management is about managing data and having vertical synergy in the supply chain,” MMG’s Postal, noting that DSW had bought the Camuto Group [with Authentic Brands Group].
“Some [stores] are buying flat to down,” said Janine Stichter, a retail analyst at Jefferies, “but structural headwinds, e-commerce, and tariffs going forward” mean inventory problems are not going to diminish anytime soon.
“We need more emphasis on process innovation,” Thorbeck urged the audience. “Tariffs complicate the situation, and technology” isn’t the only solution. “Inditex changing delivery from the standard 6-9 months to 1-3 months — that’s a process enabled by technology but it’s an innovation in process.”
The difficulty of working on Amazon’s terms — and the lack of an alternative to working on Amazon’s terms — was a universal given. But the bottom line, also a universal given, is that “everyone will have to learn to deal with them,” said MMG’s Postal. “Amazon is today’s Sears catalog.”
Retail Radicals: Prescriptions from the Trenches for Revitalizing Physical and Online Selling (and Renting!)
NEW YORK, NY; August 8, 2019—The themes articulated through nine very different presentations at The Robin [Lewis] Report’s 10th annual Retail Radicals forum at Columbia University were consistent to a fault, with overlapping examples (often humorously so), and a common outlook despite the presenters coming from divergent sectors of the retail industry.
- Detrimental impact of reporting comp sales figures;
- Pressure for unrealistic quarterly growth to satisfy The Street;
- Reliance on spreadsheets rather than shopper realities;
- Delivering “local wonder;”
- Growing value of peronalization/customization;
- Decline of the most basic customer service;
- Integration of online-offline shopping;
- “Experiential” shopping.
None of these are new, but in an environment (which no one needed to emphasize to this audience, and no one did!) where store closings compound hourly, the need for more-than-cosmetic change is accelerated, and the perspectives of the speakers, and how they supported their points of view, provided multiple lenses through which to build toward the future. And while The Robin Report, and this event, are focused primarily on apparel and accessories retailing, the insights of the day apply across all sectors.
A Dose of Desperation
Witness the success of online apparel rental companies, represented at the conference, in separate presentations, by CaaStle’s Christine Hunsicker and Rent the Runway’s Gabby Cohen. CaaStle provides subscription model apparel rental infrastructure for retailers including Ann Taylor, NY&Co, Vince, and others. Rent the Runway aggregates apparel and accessories through purchase or consignment from multiple sources and rents items on an occasion or subscription basis.
“With new business models you need a little desperation,” says CaaStle’s Hunsicker, in order to prod senior management at traditional retailers (or anywhere else) to take chances. Similarly, Paul Charron, former CEO of Liz Claiborne, speaks of the “challenge of disrupting without usurping the prerogative of the CEO.”
On the difference between bricks and mortar selling and online rental: “Everything rents; 6%-7% of your [rental] customer base will have your worst-selling garments in their closet,” says Hunsicker. “The most important consideration for the renter: ‘Do I like the photo enough to have it?’”
By Hunsicker’s count, CaaStle’s retailers will sell 2.4 items to the average customer a month — but the rental customer will go through 108 garments over 12 months.
“Customers are our mini-warehouses,” she adds. “If we’re doing our job right, only about 15% of our inventory is in our warehouse at any one time.”
To retain customers, a retailer’s online rental operation needs to add “at least 50 new SKUs a month.” Ann Taylor, she says, introduces 150 new SKUs to its stores and rental system a month. But she also distinguishes between an Ann Taylor, which uses rental to add new, younger customers to its client base, while a retailer such as NY&Co, at least initially, sought only to monetize existing inventory that hadn’t sold through in its physical stores.
The ultimate business question: How long it takes to earn back the cost of acquiring customers. The goal, for Hunsicker, was 12 months. Netflix, she says, takes 20 months. “For traditional transaction brands [going to rental] it’s been two months” for CaaStle clients (CaaStle is only about a year old).
What of rent-to-buy? “It’s price dependent; 25%-30% of revenue from consumers is buy. At Ann Taylor, where the base monthly rental fee is $95, buy is a 30% kicker.”
With CaaStle, the retailer retains ownership of the inventory while CaaStle warehouses and services (processes orders, dry cleans, etc.). This differs from Rent the Runway, which usually owns its inventory, but, as mentioned, sometimes works on a consignment basis.
CaaStle is adding its first men’s brand this month with Scotch & Soda. “Men are more open to new business models,” Hunsicker says, “but it’s one chance [the clothes need to fit/look good] or they’re out.” Two more men’s brands are in the offing.
At Rent the Runway, Cohen says the company is building a drop box network for returning items, which would speed turns. So far Rent has installed about 25 at WeWork locations and at seven Nordstrom stores. Earlier in the afternoon, Columbia University professor and past C-level retailing executive (Sears, Lord & Taylor, Gap, others) Mark Cohen derided the announcement that Kohl’s is installing Amazon returns centers in hopes of building foot traffic.
Rent is also adding offerings that people “don’t need to keep or store,” such as kids’ apparel (they outgrow quickly) and skis.
Integrating Retail Into Lifestyle
Successful physical fashion retailing is “not about racks and racks and racks of apparel,” says Kevin Roche, of retail design firm Woods Bagot and a nine-year veteran of design for LVMH.
Roche sees continued “integration of office, living, retail, entertainment, sports” in uniquely designed spaces, and a need to incorporate “tons of technology and touch screens” in bricks and mortar stores.
Luxury retailers, in particular, he says, should trim the number of their physical outlets. “There should be 5-8 Nieman-Marcuses,” he says, while large-scale redesigns should be more judicious. “You can spend $300 million to redesign a flagship like Macy’s, but that won’t impact your other 584 stores.” It’s different, he notes, if you’re Harrod’s and you have only one store.
Is Smaller Better?
What of smaller-footprint outlets ala Target and Nordstrom’s efforts? “Walmart closed 114 Express stores in 2018,” notes Columbia’s Cohen. “The customer may live in the neighborhood [and see it as a neighborhood store] but they still expect 200,000 square feet of merchandise,” says Columbia’s Cohen. Also from Cohen:
- “The off-price growth streak is over.”
- “Walmart has foolishly entered a race [with Amazon] that it cannot win. Amazon is a market place, not a store. Like it or not, Walmart is a store.”
- “Acquisitions add to a company’s efforts [to grow] as ceramic tiles do to a mosaic.”
If you have the opportunity to hear Mark Cohen in person, do so. While he is very entertaining, his store-by-store critiques are uncompromising, and I can barely touch on his prepared remarks let alone the adlibbed asides. Ultimately asked by an audience member who does retail well, he didn’t miss a beat responding “Costco,” then adding, as he thought, Amazon, Zara, and “Feldman Housewares on the Upper East Side, near where I live. You go in and ask for what you need and the woman at the register tells you what aisle it’s in or that they don’t have it and you’re better off ordering online. Mom and pop hardware stores have an incredible array of merchandise and offer the best customer service anywhere.” To which everyone nodded in agreement.
Slides below are courtesy of Mark Cohen:
The eye-opener for many, judging by the gasps as her slides went up, was Alibaba’s Candice Huang. Consider:
- Alibaba’s Singles Day sales event on 11-11 (all “1’s” for a shopping day designed for singles) generated $30.8 billion in sales in one day compared to total U.S. online sales of $24.2 billion over the five-day Thanksgiving holiday (Thursday through Monday).
- The platform boasts 700 million active monthly users who, if they stay with Alibaba for five years, place an average 23 orders across 132 categories and spend $1800 annually through the platform.
- With all the focus on China’s growing middle class, Huang says Alibaba has 100,000 users spending $159,000 each annually, though no one asked if that includes small businesses that might be making bulk purchases (think of the dollies of food items purchased at Costco by small restaurants and food carts and trucks).
- 59% of users are under 29. (Rent the Runway’s Cohen says median age for its customers is also 29.CaaStle’s Hunsicker says its sites’ core customers are 28-45.)
- Among Alibaba’s sites, Huang describes Taobao as a “superapp” from which customers can do general retail shopping as well as book travel, live entertainment, and other services — analogous to the shift at malls to offering more entertainment options in addition to traditional shopping.
Quote of the day:
- “’Focus group’ is a dirty word.” — Alexander Genov, head of consumer research for Zappos.
Note: Slide up top courtesy Christopher Timmins, Intel, which presented the The Robin Report conference along with sponsor SAP.
Applying Psychographics to Jeep Owners and Aspirers
NEW YORK, NY; SEPT 18, 2018—“Thinkers” value quality, reliability and longevity over lifestyle. “Achievers have a ‘me first, my family-first attitude’” and see money as defining success. “Innovators” are skeptical of advertising and are “number one into authenticity.”
What’s it all mean in marketing terms? Luxury market analyst Pam Danziger takes a deep dive analyzing the psychological makeup of Jeep brands with Strategic Business Insights’ (SBI) Patricia Breman. Using SBI’s eight-prong VALS Types (psychographic characteristics) Danziger and Breman examine ownership vs. aspiration to buy, but the analytic style would be well applied to just about any brand.
Walking Surtex, Stationery, and Home Shows 2016: Design, Product & Packaging Trends
NEW YORK, NY; May 16, 2016—The joy of Surtex, which focuses on art, about half of which is available for licensing, the other half for sale, is its co-location with ICFF, a show for contemporary and avant garde furniture and design, and the National Stationery Show. The three shows crossover with the licensing world on both the design and manufacturing levels, and feature interesting packaging ideas as well. It takes a great deal of walking, but there is a wealth of creativity to be seen and inspiration to be had.
There is also fluidity across the shows in that some exhibitors would be wholly comfortable in different areas — particularly some of the artists found in ICFF and the Stationery Show who might be best served by the Surtex audience of manufacturers and retailers. That’s what makes a 5+ hour walk here fascinating (and I didn’t make it to the downstairs furniture show which in the past has been heavy on upscale living and bedroom offerings, lighting, and the like).
Most interesting finds this year were the first two exhibitors at the far end of the hall on the third level in an area dedicated to emerging designers.
Mike Joyce is an established graphic designer whose Stereotype graphic design agency features a portfolio strong on album art (Katy Perry, Iggy Pop, others) and advertising (Volvo, Visa, etc.).
His “personal project,” Swissted, started in 2012, combines his “love of Swiss graphic design and punk rock by redesigning old” concert posters into International Typographic Style posters. He takes information such as the band lineup, date, venue, and ticket prices from the originals (which he collects) and creates entirely new designs. He sells museum quality prints on 140 lb. cover stock in multiple sizes from $50 (17”x23.75”) to $150 (36”x50.5”) but is looking to “carry it to the next level” and is open to licensing the work.
Next to Joyce is Airplantman Josh Rosen, who creates vertical garden frames and tabletop “vases” — I hesitate to use the word (he calls them vessels) to house airplants.
The plants are dipped in water for a few hours about once a week. Easy to see the frames or vessels licensed by botanical gardens or other nature-oriented or environmental properties, and certainly sold in those venues. The frames, available 11”x11”, 11”x18”, and 24”x18”, are powder coated aluminum with nylon coated stainless steel cable that holds the plants in place. They retail for up to $135.
Other creative executions:
- Cardboard six-pack beer carrier with attached greeting card from Beer Greetings. It’s the beer equivalent of the ever-popular wine bag with card on the carrying handle. In this case the card is the side of the package. Retails for $4.95, which is the same as a mid-range greeting card these days. The company has been selling the item direct for about a year and a half and started wholesaling the line about six months ago.
- Monster Factory has been making licensed Volkswagen children’s play tents for some years (I remember seeing them at Bed Bath & Beyond); now they’ve added a VW van pet carrier, a cooler, picnic blankets, and a pet bowl.
- New coloring books are still pouring forth, despite the fact that the market is reportedly cooling.
Galison, exhibiting in the Chronicle Books booth, has a recently-released Andy Warhol coloring book with the Warhol Velvet Underground album cover banana on the cover (Galison has a range of Warhol items, including soup cans and a coming Time Capsule kit). Paris-based Omy, distributed in the U.S. by Ameico, has pocket maps, postcard books, fanny packs, pencil cases and other items. Hester & Cook has placemats and placecards. Sourcebooks offers calendars, dream books, and such. The list goes on.
- Flash drive manufacturer Mimoco, which specializes in licensed drives, says sales of classic Star Wars models have cooled off, though younger fans are still interested in the newer characters.
If Star Wars, its best seller, indexes at 100, the second best-selling line, Marvel, would index at about 75, a sales rep says. The company has confidence that Star Wars has longevity while it expects the Marvel line to drop off over a five to six year period.
About three and a half hours into walking these shows, I was starting to think there were substantially fewer letterpress companies exhibiting than the last few years, and that Brooklyn had lost its cache. Not at all. Minutes later I made it to a dedicated letterpress area in the stationery show—and within about 10 minutes and two or three aisles had come across I Am Here Brooklyn (jewelry), Boundless Brooklyn (DIY paper sculpture kits of water towers, bridges, etc.), Gold Teeth Brooklyn (greeting cards), Umlaut Brooklyn (cards and wine bags), and the representative from French chocolatier Marie Belle, which has a New York store in Soho, immediately informed me (with no prompting) that they now have a store in Brooklyn, too. Not to mention that many of those letterpress firms are located in Brooklyn even if the company names doesn’t shout it out.
On the packaging front, two exhibitors made great use of cork-stoppered glass vials: Japan’s YHM Jewelry, which also has a Brooklyn store but which mostly sells online, uses glass vials about 6” high that have a little greenery at the bottom and eyehooks in the cork from which are suspended necklaces or earrings. It’s a beautiful presentation (and the much of the jewelry is quite nice and very original). Similarly, the aforementioned I Am Here Brooklyn uses much smaller vials for its hammered metal pendants with an initial on them. Again, makes for a nice display concept.
Unto itself Surtex, which is relatively small, isn’t formally a curated show, but it’s always seemed to attract a high quality of exhibitors. Plenty of seasonal art, children’s, florals; many agents, some of which have a certain consistency of taste across the artists they represent, some of which are totally varied in an effort to have something for every retail need; many new artists each year looking to test the waters. Surtex is as good a barometer of what’s available for licensing for textiles and other goods as you’re going to find. The bonus is that the co-located shows might not be as focused on textile-oriented designs, but are full of licensable ideas — from designs to products to packaging.
The shows opened at the Javits Center here yesterday, and run until 6 p.m. today and until 4 p.m. Tuesday.
Next up: I’ll be at Licensing Expo in Las Vegas June 20 (day before the show opens), 21 and 22. I am available to conduct personal tours of the show based on your needs. Two slots remain. For information about the personal tour, please contact me at email@example.com. I’m also leading a workshop, How to Work With Licensing Agents and Consultants, as part of LIMA’s Licensing University on the 21st. My panelists are an all-star team of Gary Caplan, Gary Caplan Inc.; Carole Postal, CopCorp; and Ilana Wilensky, Jewel Branding. To register for Licensing University, click here.
Coke Tastes The Licensing Feeling
NEW YORK; JANUARY 27, 2016 — Coca-Cola’s new “Taste the Feeling” ad campaign “will be focused more on the functional and emotional benefits of Coke the product” rather than the loftier brand equity-rooted celebration of the brand’s “role as a social facilitator and symbol of peace, love, friendship and brotherhood” of the prior “Open Happiness” campaign.
That’s Stuart Elliott’s take in his MediaVillage column this morning. Elliott wrote The New York Times advertising column for 23 years, and has been contributing to Jack Myers’ MediaVillage for just under a year (and it’s great to have his voice back!).
From a licensing perspective, the question is how that new theme will manifest itself in merchandise, and while not mentioning licensing per se, Elliott indirectly addresses the key to a sound licensing program as well as a good ad campaign: emotional resonance.
Elliott wonders “if ads that play up what’s inside the bottle will overlook the specialness of the bottle and the other unique qualities and attributes of Coca-Cola that have contributed to its status as perhaps the world’s best-known (and most-liked) brand. . . . A thirst quencher, yes, but also an intrinsic element of American popular culture and a symbol of American life.”
Licensed Coke products reflect that, and Elliott couldn’t do better than singling out, as he does, the shape of the bottle, vintage ads, the Coca-Cola Santa, and other advertising slogans, as well as songs and movies where Coke has played a starring role. Not to mention the polar bears.
As I told the students in my Branding & Licensing class at LIU Post this week (part of a Branding & Licensing minor inaugurated by the university with LIMA and Beanstalk’s Michael Stone last semester), Coke’s is a classic case study in how licensing can support a core brand. Relative to revenue, licensing is a rounding error at Coke, albeit a highly profitable one. With licensing under the guidance of Kate Dwyer in Atlanta for almost seven years now, Coke tastes that feeling just fine.
Ira Mayer, former publisher and executive editor of The Licensing Letter, conducts competitive research and consults for companies in the licensing business; you can contact him by clicking on the “Contact” button above left.
The Myth of One-to-One Marketing
“One-to-one marketing” is a great catchphrase, but in practice it has always been a myth unless you’re talking about a salesperson working directly with a customer.
When the concept was first popularized in 1993 by Don Peppers and Martha Rogers in their book, “The One to One Future,” the phrase was a marketing rallying cry: Traditional mass marketing was losing its impact; it was time to narrowcast, to speak to consumers one-to-one. Peppers and Rogers have built their company, 1to1 Media, on that foundation.
That was early Internet times. The technology wasn’t there, but the wake-up call was prescient: address your customers in a way that makes them feel as though they are being personally catered to.
I argued then (mostly in speeches) and still maintain that it is an illusory tactic. Making people feel as though your message was crafted just for them is a bit of legerdemain. Useful, but not really one-to-one.
Why not one-to-one? It isn’t cost effective. Despite the tools at our disposal now, one-to-one can rarely be implemented other than literally person to person. It’s too expensive to set up systems to truly be one-to-one responsive. Even when it seems obviously do-able.
- I hadn’t been on Spotify since the first few weeks it was introduced. So I created a new account at the free level — knowing I’d be getting ads — and started listening to classical music. Mostly opera. The ads I got: Madonna. You would think that with all Spotify knows about my listening habits, they’d be the logical ones to craft one-to-one messages. Given the frequency of those Madonna ads, they clearly didn’t have many advertisers to choose from. You’d think they’d create house ads…but how many would they need?
- Our children are 26 and 29 years old. I haven’t bought children’s clothes at Lands’ End (or much of anyplace else) in many years. So why is Lands’ End — a company I shop regularly — sending me promos for school uniforms? And while we’re on the subject, why didn’t my customer history follow me when I changed my preferred email address? Now the better discounts go to an old mailbox, while the new address gets less favorable offers. (Which raises the further question of what better rates lurk that I don’t know about.)
Apart from the fact that it just doesn’t make economic sense to have every sales effort tailored to every individual based on their activity on a site or in-store purchase history, many of us have multiple family members logging in and browsing/purchasing, which understandably confuses the vendor’s system.
Netflix has sought to solve that problem by establishing separate accounts family members can use. While Netflix’s recommendations for my wife and me still often reflect other family members’ viewing preferences, it’s a start. Maybe Netflix is still drawing on older selections prior to setting up the separate accounts. Meanwhile, Amazon used to be dead-on with books recommended for me (especially in more arcane subject matter), but not so much anymore.
I’m hardly the only one mystified by the lack of coordination between viewing/purchase history and the recommendations I get. Joe Queenan wrote a piece in The Wall Street Journal recently, “Those Recommendations Don’t Compute.” I don’t expect one-to-one, but we should all at least receive loosely relevant when it’s online. The expectation online is different than, say, with a newspaper — a medium I still enjoy browsing precisely because I get to see things I wouldn’t search for or otherwise see — or even TV, where the expectation is still mass-targeted ads (destined to change eventually as well for all but the biggest event-viewing experiences such as the Super Bowl, where the ads are content in and of themselves).
On the plus side, my friend Andy tells me he got a promotion from Pandora pointing out that he’d listened to 800+ selections in a particular genre. The music network then suggested Pandora lists he should check out, and they were indeed relevant. That said, he summed up the concern many of us have about moving our listening from physical to online media: “maintaining the continuity of ownership.” That, however, is subject for another day.
Awesomeness Seeks to Bridge ‘Connectivity and Commerce’ For YouTube Stars
“They call themselves ‘creators,’ we call them ‘influencers,’” says Dreamworks/AwesomenessTV’s Jim Fielding. Dreamworks owns Awesomeness, which is a marketing engine for young (often very young) makers of YouTube videos. There is also an Awesomeness social media community for the tweens and teens that marketing engine targets.
Fielding, who spent more than a decade with Disney Stores, including four years as President, and then served as CEO of Claire’s, knows his audience — and old media types like me are decidedly not in his sights. Fielding’s mission: “Connectivity and commerce,” he says — to help those “creators” establish strong direct relationships with consumers as well as a strong retail presence.
From a viewer perspective, Awesomeness is an umbrella for YouTube channels that cater to these demographic groups. The nomenclature is awkward, though: Awesomeness refers to its social media offering as a network while it prompts those coming to its website to “Watch our channel.” But the “channel” is an aggregation of 91,000+ existing YouTube channels as well as those generated specifically by Awesomeness. And again, admittedly, I’m not the target, but I find the AwesomenessTV interface confusing for trying to find a specific creator’s work unless they happen to be featured. (Much easier to get there directly through YouTube.)
Semantics and my own navigation challenges aside, the channel signs creators with existing YouTube followings and uses its marketing expertise to propel them to higher levels of viewership. Licensing can become part of the package — that’s part of where Fielding figures in — though as in other entertainment realms, the creators often retain those rights for themselves, or their managers/agents/parents/lawyers or other handlers.
Still, the power of that umbrella is considerable. “Discovery might have 300,000 viewers for a very successful video,” Fielding told me at Licensing Expo in Las Vegas last month. “We put a video up yesterday that had 1.5 million views in three hours.” Awesomeness adds 24-32 “pieces of content per week, plus longform” videos. Awesomeness also creates videos for brands looking to engage its audience of tweens and teens.
While many see the shelf-life of these videos as extremely limited, Fielding points out that search can bring viewers back to old episodes. He cites as an example “Life So Rad,” a series created for retailer Kohl’s. When the third season went up, viewers sought out the first two seasons, which they found even though those older shows were no longer highlighted on the site.
That can be a blessing and a curse, since the fashions a Kohl’s might be featuring in a season one episode probably don’t exist by season two, let alone season three. Still, it signals that much sought after level of engagement.
Among the more successful of Awesomeness’s stars are:
- Amanda Steele, who started posting YouTube videos when she was 10 and is now 16. Her subjects: beauty and fashion.
- Ingrid Nilson, who has been making videos for seven years, was a judge on Project Runway, and has three million YouTube subscribers and at 26 is earning 6-7-figure endorsement and other marketing fees.
- Tyler Oakley, a humorist, author, and gay rights advocate who used his social media celebrity to raise $1 million on his birthday for The Trevor Project, an L.A. non-profit that provides a safe haven for LGBT and questioning youth in times of crisis. On the more “commercial” side, he stages pajama parties on college campuses, where $250 VIP tickets include meet ups.
The company will support a new “creator” by backing production of 6-12 episodes. “If there’s the right engagement we’ll do more,” Fielding said.
Fielding sees the biggest threat to these celebrities’ longevity in how long they will be willing to produce two to three videos a week. “Most of them started by making selfies,” he notes. The more visibility they get, he adds, the more sophisticated the production values get and the more time it takes to produce even 2-3 minute clips.
The bottom line, says Fielding: “The fans will tell us when [the Awesomeness creators/influencers] aren’t relevant.”
Contact: Jim Fielding, firstname.lastname@example.org.