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Shelf potato alert – Microsoft Kin mobile phone

This article appears courtesy of The Shelf Potato Blog, by Doug Garnett. The article was originally published on July 1, 2010, by Ben Smith.

“From half baked spud to dud in 2 months is no way to go through a life-cycle son.”

Article: “Death of the Microsoft Kin: A Look at the Evidence”

Article: “Microsoft’s Kin smartphone: No, it kin’t”

If you saw the commercials or talked to a rep in store, you probably couldn’t figure out what problems Kin solved or unmet needs it satisfied. The fact that it was pulled from the market so soon by a company with so deep of pockets leaves only a few conclusions and bigger questions.

How bad were sales – did anybody buy it?

Did Microsoft launch something it knew was bad but needed the flop to validate something? Was it a really expensive live focus group?

Article: “Microsoft Kin Gets a Price Cut…Already”

I always have a problem with companies willingness to make price moves once it is too late. Just 2 days ago the phones prices were effectively cut in half. Why not launch at those price points or heck it’s a mobile phone – why not free. At least they might have gained momentum out of the gate and gotten enough in peoples hands to see if it has legs.

What can we learn from Kin?

Don’t launch it if it is flawed.

Know your level of commitment going in. What are you willing to do if your product doesn’t get off to a good start. A powerhouse like MSFT can pull a stunt like this and still get the buyers to return their call. The rest of us don’t have that luxury.

Communicate what you do that is unique or you do better than anybody else – understand and share whatever your value is. I still have no idea what Kin does that you can’t do with an iPhone, droid, or whatever that motoblur feature is. They had an 8 figure budget to tell their story with and still failed.

Fight where you can win. They weren’t going to out apple apple on tv ads – and other players such as htc are running ads that are pretty clear with their value prop. How did anybody at msft or their agency convince themselves that their story would work. Beyond iPhone I am willing to bet the majority of phone choices occur in-aisle. If MSFT truly believed in the product they should have paid to staff demos 40 hours / week in the verizon stores / best buy.

Above all – be realistic.

If you liked this article be sure to check out Doug Garnett’s Shelf Potato Blog.  You can follow Doug on twitter @drtvguru, and of course at www.theshelfpotato.com

What Is A Shelf Potato?

By Ben Smith

The term “Couch Potato” has made it into pop culture, with its own wikipedia listing.  So when my friend Doug Garnett mentioned a concept he kept coming back to when describing dud products at retail, “Shelf Potatos”, I knew exactly what he was talking about, and I figure that anybody who is reading this retail oriented blog can start to get the picture.  Here is the concept, in Doug’s own words:

For years I’ve written about a type of retail product that my agency calls a “shelf potato“. It’s a well loved product — loved by the manufacturer, loved by the retail buyer who brought it in, and loved by the consumers who buy it. Except, the product mostly lounges on the shelf instead of rushing out the door.

It doesn’t need to be this way. Communication can bring shelf potatoes alive – especially communication with direct response television. (That’s DRTV – short-form and long form.)

There are many important examples of shelf potato success. Grills identical to the Foreman grill sat on shelves for nearly 20 years before that infomercial brought them to life. The Drill Doctor drill bit sharpener was languishing on retail shelves until our half hour made them into a superstar and a brand. The Kreg Jig sold well to cabinet shops, but came alive at retail once a half hour infomercial showed homeowners what they could do with it.

For more, read my article with tips for finding those shelf potatoes that communication can bring alive. The article was published by Home Channel News on May 5, 2010 as part of their Hardware Show Daily at the National Hardware Show.

Maybe your shelf potatoes can come to life if you put them on the right program for retail fitness.

What do Shelf Potatos have to do with Retail Leverage?  Well if you’ve had experience with Shelf Potatos, you know that they are enemies of gaining leverage at Retail.  They can stop you in your tracks, or set you back to square one, all the while sucking time and resources away from your primary mission, which is to drive growth for retailers and improve your standing at retail.

From time to time, I will syndicate content from The Shelf Potato Blog.  I think you will find it to be retail infotainment!  Let’s be realistic – if you are reading a retail blog, you think about what makes some products fail and some products succeed.  If we can save one spud from being a dud, then it was all worth it.

Martha Stewart Called To Carpet For Benefiting From A Legal Trade

By Ben Smith

I wanted to provide an update to Vince Young’s prior coverage of Stainmaster carpet’s move to Lowe’s and share an article by Chris Burritt that just appeared in Business Week detailing how the dust has settled.

“Martha Stewart can thank a move by Invista’s Stainmaster unit for her good fortune. Stainmaster had been a major Home Depot carpet brand since 1996. Invista recently dumped the leading home improvement retailer to boost its sales through No. 2-ranked Lowe’s and a string of smaller distributors. Home Depot managers figure Stainmaster was under pressure by its independent carpet dealers, who had trouble competing with the big box retailer’s low prices. “We were selling a lot of carpet at very good prices,” says Gordon Erickson, Home Depot’s senior vice-president for decor. “We were a bit surprised.”

The net is that Martha Stewart now has the featured brand of carpet at the #1 carpet retailer in the US, Home Depot.

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Forget Perfection – Just Worry About Good Enough

By Ben Smith

So I thought I had  come up with this revelation, but apparently I’m not the only one.  The good news is that as you read this you’ll likely realize you’ve had the same thoughts too.  Type A personalities might want to stop reading now.

We are in the age of “Good Enough”.

Wired magazine called it “The Good Enough Revolution - When Cheap and Simple Is Just Fine”.

They lead with the example of how in camcorders, the fancy expensive football size gave way to Flip’s pocket sized basic video camera with built-in USB.  The ability to easily upload & share short video clips proved “good enough”.  Of course Flip can’t be feeling too cocky.  One day they’ll be the victim of “Good Enough”.  See the next few examples I’ve supplied and you can probably imagine why …

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Sharp Quattron TV’s Add Yellow But Their Marketing Makes Me Blue

By Ben Smith

We’re not fans of 360 marketing plans here at Retail Leverage – partly because the term is overused, and partly because the terminology leads you to believe that your plan is incomplete if you don’t cover all your bases, spreading your dollars around. For most of us, you have to choose – have a crappy 360 plan, or focus your dollars to own something.

You might think that the big players have seemingly unlimited funds that allow them to execute plans that cover the marketing spectrum, but that doesn’t mean their spend makes sense.

SHARP QUATTRON TV’S

Today we’re focusing on Sharp and the launch of their new line of TV’s branded as “Quattron”. Sharp likely had a big budget to launch – table stakes to market products in the television category are likely in the hundreds of millions. Still though – they aren’t going to out advertise Sony & Peyton Manning, or Samsung & the NFL sponsorship, and their budgets will never come close over multiple quarters.
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Product Specification: A Shield in the Battle Against Private Label at Retail

By Vincent Young

As long as I can remember, only two brands of toothpaste have mattered – Crest and Colgate. I use Crest. Why do I use Crest, you ask? Because, as a very young child, our family dentist used Crest during my annual check-up and he then gave it a tacit recommendation that we should be using it too when he gave me a sample tube of Crest (along with floss and a new toothbrush). From that moment on, my Mother would look for the Crest brand of toothpaste for our family to use.

When a brand is either directly or indirectly specified as “appropriate for optimal effectiveness” by an expert or by a complimentary good, then your brand’s ability to wield assortment, pricing, and promotional power at retail increase significantly.  Sounds like a recipe for Retail Leverage (or inoculation against private label).

So how do you protect yourself and build Retail Leverage?

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The Concept Of Retail Momentum: Feed The Beast Or Lose It

By Ben Smith

In physics, momentum defined as the product of the mass and velocity of an object (pmv).  In life, momentum is when things are going good and keep on getting better.  In sports, when teams go on a winning streak, it is often referred to as “The Big Mo”.  However you define it – once you’ve got it, you want to keep it.  And when you lose it, you may have to work twice as hard to regain it – if you are ever lucky enough to get momentum again.

WHAT IS RETAIL MOMENTUM?

Now look at momentum from a retail perspective.  Here at Retail Leverage, we’re defining Retail Momentum as when your sales velocity reaches critical mass. The definition works at all levels – it can occur in a single store, category, retailer, channel, or the entire market.  Of course getting your sales to a high level and sustaining them is easier said than done.

This is probably a good time to tell you this article isn’t about how to achieve a high level of sales and gain momentum.  It’s about understanding Retail Momentum and ideas to keep from losing momentum.

Note – this article is written through the lens of a consumer electronics marketer, and it proudly reflects the scars of insanely short lifecycles, ridiculous promotions, merciless partners, and painful paths to profit.  I think the concepts shared and ideas we are trying to generate will apply across multiple consumer segments, but I wanted you to know where they came from.

RETAIL MOMENTUM – USE IT OR LOSE IT:

Frankly at some point everybody and every brand has their moment in the sun.  There are enough levers you can pull that it is possible to get virtually any product to a high level of sales for a period of time.  That’s not the problem.  It’s not about being #1, it’s about sustaining it.  Well – that doesn’t tell the whole story.  So far everything I’ve said is from the brand perspective.  Me Me Me.  Us Us Us.  Here at Retail Leverage we continually argue that selling at retail is not about your own product or brand – it’s ultimately all about the retailer.  Them Them Them.

So what is the key thing you need to understand?

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Want To Gain Big Dollar and Lots of Leverage In General At Retail? Look Closely To Find The Answer.

By Ben Smith

Retail leverage comes in many forms.  In its purest form, it may be attainable only by those brands in a position to dictate terms to their customers.  For many brands it can be as simple as decreasing their reliance on existing customers.  I demonstrated this concept of decreasing reliance on existing customers in an article I recently wrote about “Blue Ocean” retail strategies, which highlighted the pursuit of alternative channels as a way to gain Retail Leverage.

I offered my own definition for “Alternative Channels,” which is means of distribution outside of those you’d traditionally expect for a given product / service to reach customers.  I provided examples of Alternative Channel successes such as Nintendo Wii Fit in Sports Authority, or OfficeMax branded office supplies in Safeway grocery stores. Pursuing alternative channel opportunities might be difficult and cause extra work, but I doubt they cause any brand marketers move out of their comfort zone, or to lose sleep at night over risking the perception of their brands by the company they keep.

This article explores pushing the boundaries of your own retail comfort level and looking at channels that aren’t necessary alternative, because they are already selling products from your category.  I’ve got 2 great examples of retailers in this story – and as the title suggests – they might hold the key to big dollar and lots of leverage in general!

HOW FAR ARE YOU WILLING TO GO TO FIND THE ANSWER?

Signing up for extra work and the challenge of going where others haven’t gone before is one thing.  Good for you if you take the challenge on.  Can I suggest another strategy that involves going somewhere that is in plain sight but that you’ve probably avoided going before?  The answer is right in front of you.
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Understand Retailer Private Brand Strategy By Watching Football

By Ben Smith

I never pass up a good analogy to help myself understand a complicated story, and spice up a boring one. The growing use of private brands (or private label) by retailers has become the key story of this new era in retail marketing. There are so many different stories and perspectives floating around, I think what gets lost in the buzz is the underlying reason of why retailers have turned to private brands. So what does retailer’s private brand strategy have to do with the NFL?  On the eve of the NFL draft, I will help you look at retailer’s private brand strategy from a new & more fun perspective.

LOOK AT AMERICA’S GAME:

In hindsight, the NFL probably truly became America’s game somewhere between the baseball strike (‘94) and the rise of online fantasy football leagues (‘99-01). Now of course the Superbowl has long been the dominant tv event, but as we all know, a large number of people tune in just for the commercials and the experience. Regardless of how it got there, the NFL rose to the top of american sports (and culture), and eventually found itself in a position that anybody who gets to the top of their field struggles with – staying #1, and continuing to grow.

WHAT FUELED THE NFL’S GROWTH?  TV!

In the spirit of Michael Scott of “The Office”, I’ll quote Wikipedia – because if it is on Wikipedia it has to be true (and in this case it is): “The television rights to broadcast National Football League (NFL) games are the most lucrative and expensive rights of any American sport. It was television that brought Professional Football into prominence in the modern era of technology. Since then, NFL broadcasts have become among the most-watched programs on American television, and the fortunes of entire networks have rested on owning NFL broadcasting rights.”

WARNING – RETAIL PARALLEL COMING:  Think about how the NFL’s relationship with its TV networks has similarities to Retailers relationships with the branded manufacturers whose goods they sell in their stores. Don’t get hung up on who makes & who sells – just stay with me here. Without the TV networks, or without the branded goods, neither the NFL or retailers would be in their positions of power – each needs the other. Would the NFL be where it is today without the TV networks? Would Walmart have gotten where they are today without finally breaking through the public’s perception that Walmart carried the same quality branded goods as other retailers?

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The Retail Leverage Principle of Physics – When Two Opposing Brands Are Better Than One

By Vincent Young

Most categories at retail have room for a “good-better-best” stratification of category players. In today’s culture at retail, the retailer is predisposed to seek ownership of the “good” position by introducing an opening price-point category alternative under a private label or house brand. As a result, branded suppliers typically feel compelled to justify a position in either the “better” or “best” lanes within a category in order to survive on shelf long-term.

Herein lies the opportunity for a paradigm shift for branded suppliers at retail – why not offer both? In order for branded suppliers to have greater control over the rules of category engagement, many branded suppliers at retail have realized that the key to success is to offer branded solutions for both “Better and Best” simultaneously to the retail marketplace. How do some do it – by expanding their own brand portfolio and purposely introducing and managing a new category competitor through licensing agreements?

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