I Chair the Advisory Board for the new Canadian shopping platform SHOP.ca. I became involved because although Canadians love both the Internet and shopping, e-commerce in Canada has lagged. Canadians have not had good product choice. Goods cost way more than in the US. Online shopping is fragmented and don’t even think about trying to return something to an American supplier. We’re at a turning point in ecommerce in Canada where a consolidated platform can transform the shopping experience.
For sure, shopping is being transformed as “social” changes many things. A recent IBM survey of more than 2,000 Canadians showed that friends and family are by far the most trusted influencers of purchasing decisions, but retailers are also gaining trust among shoppers. The same research identified a growing movement among consumers to use social media to build communities with others who share their interests and tastes. These strangers help other consumers make more satisfying purchases.
At the same time, these audiences are progressing on their own linear time lines that see tweens researching everything from politics to marine biology; young adults communicating seamlessly around the globe; seniors attaining barrier-free aid and services that suit their maturing lifestyles and needs. Younger generations have greater faith in the information they receive through various social channels than they do with the familiar family circles on which we once depended for our sense of moral and social foundation.
As shopping becomes social, companies need to adopt the principles of collaboration, sharing, openness and inter-dependency to build strong relationships with their consumers and other stakeholders. We’re trying to do that at Shop.ca and others are taking note. “In the era of mobile and social networks, consumers are becoming more connected and more demanding in their expectations of how they interact with retailers,” says Jamie Spiller, IBM’s smarter commerce lead. “By applying the principles of smarter commerce, companies like SHOP.CA are creating a rich online experience that is personalized, timely, and relevant, and spans the entire commerce lifecycle of buying, marketing, selling and service.”
All of this is leading to a rethinking of marketing perse. With the Internet becoming ubiquitous, the Four P’s – product, price, place and promotion no longer work. The paradigm was one of control, simple and unidirectional: firms market to customers. We create products and define their features and benefits, set prices; select places to sell products and services, and promote aggressively through advertising, public relations, direct mail and other in-your-face programs. We control the message.
The Internet transforms all these activities. Welcome to Marketing 2.0.
From Products to Experiences
Products are now mass customized, service intensive and infused with the knowledge and the individual tastes of customers. Companies must constantly innovate, and product life cycles collapse. Customers now participate in creating products. Through online communities, customers co-create products and services. Products are becoming experiences. The old industrial approaches to product definition and product marketing die.
From Price to Discovery of Price
Enabled by online marketplaces, dynamic markets and dynamic pricing increasingly challenge vendor fixed pricing.
In these early days of new price discovery mechanisms we question even the concept of a “price” as customers gain access to mechanisms that allow them to state what they’re willing to pay and for what. Customers will offer various prices for products depending on conditions specified. If you deliver this afternoon I’ll pay A. If I can buy this quantity I’ll pay B. I’ll accept certain defects and pay C. If someone else will pay D, then I’ll pay E. Buyers and sellers exchange more information and pricing becomes fluid. Markets, not firms will “price” products and services.
From Place to Anyplace
Every modern company competes in two worlds: a physical world (marketplace) and a digital world of information (marketspace.) Companies shouldn’t worry about creating an eye-catching web site but a great online community and relationship capital. Hearts, not eyeballs, count. Within a decade, the majority of products and services in many developed countries will be sold in the marketspace.
A new frontier of commerce is the marketface – the interface between the marketplace and marketspace. For example, some companies have both physical stores and online presence (clicks and bricks). Customers of Costco.com can buy products online, and if they don’t like what they’ve bought they can return items to the store.
From Promotion to Communication
Advertising, promotion, publicity, public relations and most other aspects of corporate communications are archaic concepts. They exploited unidirectional, one-to-many and one-size-fits-all media to communicate “messages” to faceless, powerless customers.
Online communities upend control. Friction dissolves among customers and between you and your customers. Customers often have access to near perfect information about products and the power shifts towards them. They are no longer external entities, and they control the marketing mix, not you. They choose the medium and the message. Rather than receiving broadcast images, they do the casting. Rather than getting messages from earnest PR professionals, they create “public opinion” online with one another.
The New Brand
The Brand is also changing. Rather than an image, promise or badge the brand is becoming more complex construct – owned by the customer. In many cases the brand is a relationship.
Marketers are losing control, and that’s a good thing.
So rather than the Four P’s think of the ABCDE’s of marketing: Anyplace, Brand, Communication, Discovery and Experiences.
Don Tapscott has written 14 books, most recently (with Anthony D. Williams) Macrowikinomics: New Solutions for a Connected Planet.