Content Matters

Sales Tax Will Have Little Impact on eCommerce

The web is all a-flutter about the likelihood that Congress will start requiring ecommerce sites (and catalog retailers) to begin to collect sales tax in all states. The bill has passed the Senate and now moves to the House, where its passage is less certain.

If it passes, it will clearly be a boon for the states, who now miss out on an estimated $20 billion per year in sales taxes. But it's unlikely to do much for brick & mortar retailers, in their efforts to curb showrooming.

In the early days of online commerce, the avoidance of sales tax was definitely a key factor in helping ecommerce sites generate revenues. In those days, most sites charged for shipping, so avoiding sales tax was a way to offset shipping costs. And, of course, on large purchases, saving 7-8% could be significant.

But today, saving sales tax is one of the smallest value propositions that the good ecommerce sites offer. I'm an active Amazon shopper. My first Amazon purchase was in 1996 - it was for the book Creating Killer Websites and two others. In the years that followed, I rarely went a week without an Amazon box being delivered to my house. I was among the first group of users of Amazon Prime, and remain a member today. 

While the shift of books and CDs to digital form has reduced the number of packages shipped, it hasn't reduced my purchases. We stream Amazon movies via a Roku box, buy our MP3 music from Amazon, use the Kindle app on the iPad for reading and more. And for all but the very largest purchases, I don't bother price-checking. Amazon provides a great user experience, fantastic customer service (on the few times I've needed it) and delivers exactly what I need. So,for me, it's not worth looking around in order to save a few dollars on a typical purchase. I'd rather buy from Amazon.

I've never been a "mall person" and prefer to shop on my own time, typically around midnight when I've finished everything else I need to do for the day. Amazon customer reviews are typically much more informative than the sales reps at a brick and mortar store, while their product selection and inventory are much more complete.

Living in New York, I've been paying sales tax on my Amazon purchases for the past four years. It's had zero impact on my purchase behavior.

While Best Buy is now price-matching ecommerce sites in an effort to stop showrooming, the user experience on Amazon is typically superior. And for those users who don't ask for the price match, Best Buy prices are still 25-40% higher than Amazon on most items.

At the margins, requiring online retailers to charge sales tax may give a slight boost to brick and mortar stores. But for most of us, the benefits of online shopping far outweigh the experience that brick-and-mortar stores provide. 

Why Daily Deals Are So Damn Hard (and what can be done about it)

The Daily Deal market has taken some big blows in the past week.

Last week, PrivCo's scathing report on LivingSocial claimed their financing round was at a $330 million valuation, down nearly 95%.

This week, of course, saw Groupon stock down more than 25% on disappointing earnings and a horrendous Q1 outlook. A day later, Groupon (GRPN) CEO Andrew Mason was forced to resign, or, as he jokingly put it:

“I’ve decided that I’d like to spend more time with my family. Just kidding – I was fired today. If you’re wondering why…you haven’t been paying attention.”

So, is that the end of the Daily Deals market? Not really.

The Daily Deals market is really, really hard for several reasons:

• There's no barrier to entry
• There are few, if any, economic benefits to scale 
• Merchants have had, at best, mixed results
• Consumers are trained to ignore emails, particularly if the initial deals are not compelling

So, why is there a future for Daily Deals?

There's still a huge opportunity in the hyperlocal market. Local merchants need ways to drive foot traffic to their restaurants and shops. The old models of yellow pages, newspaper ads and classifieds don't work any more (and in many cases never did). A regular web presence is important when consumers search for you by name, but doesn't help you get their attention with special offers. 

At the same time, consumers want deals. They've been trained to look for discounts, ecoupons and other deals. 

So, what might a successful Daily Deal product look like?

It's probably small (or small-ish). One of Groupon's failings is that it tried to scale quickly to dominate the space. In doing so, it put too many sales rep feet on the street and put too much pressure on merchants to do deals that really didn't make sense. If you had fewer reps focusing on higher quality businesses and trying to understand how to make those deals work for both merchant and customer, you'd have a better product. That product might have lower margins and smaller revenues, but it might be sustainable.

It's probably not just an email blast. I never see Daily Deal messages as Gmail is good at sorting them into my \Promotions folder, which I rarely view. A Daily Deal offer might work better if it were worked into my workflow. For example, when I use Yelp, it might let me know that a restaurant in a cuisine I've looked up previously is now offering a deal.

It's more personalized. Yelp knows a bit about me, as do Foursquare, Netflix, Seamless and Gmail. If you know the sports that I follow, the cuisines I eat, the areas I visit (work and leisure), the music I listen to and more, you can create much more compelling deals for me.

The winner in the Daily Deals game will be the company who can leverage analytics and personalization in the ways that Amazon has done for ecommerce. Understand what I want and you can solve my needs and those of the merchants. And there's still a pretty big pot at the end of the hyperlocal rainbow.

 

Related articles

Groupon Fires Its CEO, Andrew Mason

Breaking: Andrew Mason is out as Groupon's CEO

PrivCo may be wrong, but LivingSocial's CEO is still sugarcoating this round

LivingSocial CEO Fires Back And Calls Damning Report 'Fiction'

Social Media Strategies for Black Friday

As we move into Thanksgiving week, brands, retailers and ecommerce sites are focused on Black Friday, Cyber Monday and the 32 shopping days leading up to Christmas. All, of course, have active social media components to their marketing efforts. And some will do it well, while many others will not. Let’s take a look at what makes for an effective social media Black Friday strategy.

Multi-platform

The first thing, of course, is to not focus your efforts on a single platform. Customers use various tools, so don’t fall in love with your favorite platform, while neglecting others. Facebook, Twitter, Instagram and Pinterest should all be part of your Black Friday Social Strategy. For those with brick-and-mortar stores, Foursquare is important. Why not offer special discounts for check-ins? And as mobile takes hold, the web is becoming more and more visual. Retailers should take advantage of visual platforms like Pinterest and Instagram.

Existing or Specialty Accounts?

One key decision is whether to use your existing brand accounts to communicate Black Friday deals or to create new ones. In other words, should you push deal offers through your existing social media accounts or create custom Black Friday accounts? I recommend the latter. If I’ve been following a brand and am accustomed to seeing 3-5 messages per day from them, I don’t want to see that change to 40 deal offers per day for the holidays. Use your existing accounts to promote awareness of these Black Friday deal accounts, but don’t suddenly change how your existing brand accounts function. Your customers chose to follow you for a reason; don’t alienate them by changing behavior for five weeks.

Personalize

Should your social media streams be “one size fits all” or should you have multiple streams for different buyers? That depends a lot on the size and diversity of your offerings. For some brands, that’s easy. For a retailer like dELiA’s, catering to a single demographic, one stream will suffice. Amazon uses a single Twitter address, @amazondeals, for all its Gold Box deals, though I think they would benefit by adding category-specific deal streams as well for electronics, media, home and other key categories. A good rule of thumb might be if at least 25-30% of your deals could be relevant to a given customer, keep it as one stream. If less than that, you should consider splitting it into multiple streams.

Rewards

There must be a benefit to your customers for following you. Benefits might include early access to a deal, notification of what deals are coming up, or special discounts available only to social media followers. And keep timing and inventory in mind. Just as physical stores alienate customers by not having enough inventory on doorbuster items, etailers can lose customers by promoting items that are sold out by the time you click.

Awareness

So, you’ve created one or more Black Friday streams – how do you promote them? First, use your existing social media accounts. Sprinkle messages into existing streams with messages like “for early updates on Black Friday deals, follow us at …”.

Make sure that the social media buttons appear prominently on your BF Deals page. Amazon (AMZN) uses a text link “Stay connected via e-mail, Facebook and more” with a pulldown menu on its Gold Box page, but it took me a minute or two to find it. They’d be better served by adding the graphical buttons there.

Amazon’s links may not be prominent, but at least they have them. Walmart (WMT), which uses its standard Twitter and Facebook accounts to promote its deals, does not have any link to those accounts on its Pre-Black Friday page. Best Buy (BBY) and Target (TGT) offer the ability to sign up for Black Friday deal email alerts, but no links to their social media accounts.

Retailers have been talking about integrated, multichannel marketing efforts for several years. Yet, few of them seem to be taking even the simplest steps to make that happen. Your social media marketing should not be isolated; it must be integrated with your other online and offline marketing efforts.

Engage and Monitor

Most retailers still treat social media as a broadcast medium, but the real value comes from engagement and monitoring.

There are many ways to engage with your customers on social media platforms. Why not allow them to vote on which item will be the next deal? Or use Instagram to post pics of the hot deals they land? And, of couse, you should listen for frustrated customers. Your messages will be shared in positive and negative ways. Watch for criticisms of items that are sold out by the time customers click or other negative comments. Work to make those customers happy if you can.

Track hashtags like #blackfriday to see where your content is being shared – as well as that of your brands and competitors.

Mobile

Mobile commerce is growing rapidly. Your customers will be researching Black Friday deals on their tablets and phones. And they will price-check their purchases in the stores. Many will complete purchases on their mobile devices. Yet the user experience on most ecommerce sites is less than ideal on mobile.  While you can’t solve that overnight, there are steps retailers can put into place today to improve the customer experience. Make sure that all your social media links go to mobile friendly pages. Don’t overload your deal pages with unnecessary fluff. Amazon does this better than almost anyone. While their website landing pages are a crowded mess, their Lightning Deal pages are clean and simple.

 

Some retailers choose to create or modify their apps for their Black Friday sales. Macy’s, Walmart and others have launched apps. Apps are great for those customers who will be shopping at your brick & mortar store, but I’m not as bullish on Black Friday apps as some.  I think shoppers will only use apps from the one or two places they plan to do most of their shopping. For me, that’s Amazon, and that’s the only BF app I use. I believe it’s more important to get your content into the streams that customers will be using – and those are Twitter, Facebook, Pinterest, and of course, email.

The 32 days starting this Friday are the make-or-break period for most retailers. Social media is a key part of an integrated marketing program, yet most retailers still struggle with the "integration" aspect. The rewards are great for those who can truly do so.

Boycott Retailers Donating Percentage of Proceeds to Sandy Relief

As I write this dozens (perhaps hundreds) of marketers are kicking around thoughts of new marketing campaigns in which they donate a percentage of their proceeds to relief efforts for those hit hardest by Hurricane Sandy. I have one word for them:

STOP!

I'm sure they are doing this with the best of intentions. And I bet most of them are good people. But this practice, which seems selfless is anything but. In reality, what these companies are doing is saying "Hurricane Sandy - what a horrible event; how can we benefit from it?"  While some are obvious - like American Apparel's (APP) blatant Hurricane Sandy Sale email, others may seem to be doing good on the surface.

Here's Ferragamo's pitch:

In aid to those affected by Hurricane Sandy, a percentage of proceeds will be donated to the American Red Cross Hurricane Relief Efforts, Friday, November 2 - Sun, November 4.

In this instance, they don't even state what percentage they're giving. Is it 10%, 1% or .0001%? No way to tell. 

But even if they were giving an explicit percentage - as companies like Courtshop, Barney's New York, Gilt City and Natori are doing, it's still horribly offensive in my opinion. They are out there using the victims of Hurricane Sandy as props in an effort to market their products. And that's simply craven and wrong.

Look - if you're a retailer or other brand and you wish to make a donation to help the victims of Sandy, there's a really easy way to do it. Write a damn check. And if you truly want to tie that to revenue, feel free. You can project what your revenues will be this week or this month - so write a check for some percentage of that. But don't wrap your marketing efforts in Hurricane Sandy. 

And this goes beyond just Hurricane Sandy. As we approach the holidays, Toys R Us and other retailers love to put up boxes to collect Toys for Tots gifts. But what they're really doing is inflating their own sales, by convincing their customers to buy additional gifts at full price. Before their well-deserved bankruptcy, Borders was the master of this, aggressively asking every customer at checkout "do you want to buy a book for a needy child?". "Oh, no" I was tempted to respond; "I like the needy to remain ignorant". Instead I, like many others, was guilted into buying additional books at full price (Borders never chose books off the sale rack for these offers), propping up their weak revenues.

If retailers want to support organizations like Toys for Tots, it's really easy to do. Let your customers buy those gifts at cost, rather than at retail price. That way, we know you're doing this because you mean it, not to inflate your own revenues.

So, join me in commending those companies which are out there writing checks - like Disney (DIS), News Corp (NWS), Target (TGT), Kohls (KSS), Hanes (HBI), Home Depot (HD), Wal-Mart (WMT), Viacom (VIAB), Ross Stores, Wells Fargo (WFC), BofA (BAC), Lowe's (LOW), Chrysler, Ford (F) and others. These companies have given without asking anything in return - and we should support them.

And please also join me in boycotting those companies who are trying to boost their top line by wrapping themselves in the cloth of the victims of Hurricane Sandy. They are shameless and do not deserve our patronage.

Do you know other companies who are generously supporting those impacted by Sandy? Or companies looking to use Sandy as a marketing ploy? Please note them in the comments below. 

Nook HD Aside, Two Key Questions Will Determine Barnes & Noble’s Future

In an anticipated response to Amazon’s latest Kindle Fire releases, Barnes & Noble (BKS) announced two new models in their Nook line – the 7” Nook HD and the 9” Nook HD+.

The new devices, which will be available in October, are built on top of the Android Ice Cream Sandwich operating system, but with a B&N wrapper. Price-wise, the new Nooks are competitive with their Kindle Fire peers, as well as the Google Nexus. The 8 GB Nook HD costs $199; the 16 GB model $229. The HD+ starts at $269 for a 16 GB model with a 32 GB model available for $299.

Initial product reviews from Engadget, CNET, The Verge and others all point to a product with strong technical specs and great design aesthetics. The 7” HD is clearly aimed at readers, while the larger HD+ with its 1920x1200 screen resolution aims to match the Kindle Fire HD as an entertainment device.

Yet product specs are largely irrelevant to whether Barnes & Noble may have a successful future. The long-term viability of Barnes & Noble will not be determined by product features, but really by addressing two key questions:

1. How, if at all, can the brick & mortar stores be an asset, rather than a financial drain?
2. What markets can B&N own?

The first generation Kindle was first released in late 2007 at a price of $399. While sales exceeded initial expectations, the first generation Kindle remained a niche product. Amazon released the 2^nd generation Kindle in 2009 at a $299 price.

In October, 2009, Barnes & Noble responded with the Nook at $269; Amazon responded by immediately cutting the price of the Kindle 2 to $259.

When the Nook was first released, Barnes & Noble’s brick-and-mortar stores were an asset. Kindles were still somewhat of a curiosity and the typical consumer had probably never held one in their hand. Meanwhile, the iPad had yet to come to market, and these early tablets were simply viewed as e-Readers.

Having a 1,000 square foot display at the front of each B&N store was a key way of getting consumers to see and touch these devices for the first time. At a price point above $200, these devices were not yet impulse buys, so giving a buyer the ability to try it out in a store gave Barnes & Noble an initial edge.

Since that time, tablets have emerged and readers have become ubiquitous. Almost every student in my daughter’s 8^th grade class has at least one of the iPad, Kindle or Nook. According to PwC, by Q1 of 2012, 30% of adults in the US had at least one portable reading device. Price points have dropped below $100, making it an impulse purchase. It’s so easy and inexpensive to buy a Kindle from Amazon that you don’t need to touch it first. Today, roughly 6 in 10 eBooks are sold through Amazon, with Barnes & Noble accounting for 25% and Apple 10%. The new Google Nexus and rumored 7” iPad Mini will create further disruption in the market. And those products will be available at Wal-Mart, Target and Best Buy, where Nooks will not.

Fast-forward five years and any benefits of big box brick-and-mortar stores will vanish. eBooks already have double-digit market share in the US, with PwC forecasting that to reach 50% by 2016. The average Barnes & Noble store is 26,000 square feet. As more and more content is consumed via devices, the revenue per square foot of these stores will continue to slide and Barnes & Noble will be forced to shutter many more stores. 

What were once an asset will simply become an anchor on the company’s bottom line.

Which leads me to the second question: Which, if any, markets could Barnes & Noble own?

Under the above scenario, Barnes & Noble can expect to see their e-reader market share drop from the current 25%. At the same time, in-store sales, which currently account for 60% of the company’s revenue, will, no doubt, shrink to a fraction of that as more content is purchased in digital form.  The reduced foot traffic to stores will have an even bigger impact on profit margin, driven in part by the sale of cards, trinkets and other impulse buys near checkout.

So, the outlook for Barnes & Noble successfully competing with Amazon, Apple and Google as a general purpose e-bookseller seems pretty dim.

Yet I do see an opportunity for Barnes & Noble to succeed, by focusing on select niche markets where it can dominate.

The two most obvious markets in my opinion are children’s books and the education market.

Children’s books remain one of the more profitable segments in the book industry. According to the Association of American Publishers (AAP), children & young adult book sale growth exceeded 61% last year. Barnes & Noble has long been a leader in the sale of picture books and early reader titles. And while e-readers have transformed the overall book market, I believe there is a lot more that could be done to bring the children’s book market to digital. The solution there is more than just a cool device, but rather a close partnership with publishers to develop multimedia content optimized for the digital platform. Neither Amazon nor Google have shown the ability to work well with niche markets. For them, it’s all about scale. Yet Barnes & Noble has longstanding relationships with publishers whom it could partner with to transform the digital reader market for children.

The education market is also ripe for transformation and few companies are as well-positioned as Barnes & Noble to do so. This past spring, B&N partnered with Microsoft to create a jointly-owned Nook subsidiary aimed largely at the education market via the Nook Study etextbook platform. I think Barnes & Noble should double-down on the education space. When B&N put itself up for sale, I suggested Blackboard, Inc. as a potential suitor. I still think that deal would make a lot of sense, but even if that never comes to fruition, Barnes & Noble needs to root itself deeply into the textbook market. That market is up for grabs and it seems that Apple or Barnes & Noble will become the likely winner. Barnes & Noble should move quickly to secure the needed partnerships and focus its efforts on winning there.

There’s no clear path to profitability for Barnes & Noble through brick-and-mortar stores or as a general bookseller. it simply does not have the size, scale or online traffic to compete with Amazon in the long run. The quicker it focuses on the niche markets it could win and jettisons costly businesses where it cannot, the more likely they can write a successful next chapter in their history.

Why Amazon Must Embrace Columbia House Record Club Model Now

If you came of age in the 70s, chances are pretty good that at some point  you were a member of the Columbia House Record Club. You know the one. Get 10 records for a penny if you agree to buy six more over the course of the next three years.

And if you're like me, you loved the part about getting ten records for a penny, but hated the fact that if you forgot to send back that month's card, they would automatically send you the record of the month, which inevitably was something like Olivia Newton John or REO Speedwagon. And it was too difficult to send back, so you'd begrudgingly pay for it.

The annoyance aside, the basic model worked. You could buy records anywhere, but you bought them from Columbia House to fulfill your obligations.

It wasn't just Columbia House, of course. Continuity programs were successful for Book of the Month Club, Time Life Books, Newhouse, Rodale and numerous other publishers. But they've largely died out, with ecommerce and digital media have taken hold.

Yet I think that now is the time for Amazon ($AMZN) to take a close look at continuity programs.

Why now?

Piper Jaffray's Gene Munster today projected that the Kindle Fire tablet is going to be "destroyed" by Apple this holiday season.

"The only reason people really buy the Kindle Fire is because it's cheaper," he said. "There's a high probability that Apple comes out with that 7-inch tablet that's going to compete against the Kindle Fire this holiday, and I think it's just going to get really difficult for really all the players."

If that truly is the case, what should Amazon do?

In my view, they should immediately move more aggressively to get Kindles and Kindle Fires into the hands of readers. And the best way to do that is to bundle the hardware and the books into a super attractive package. There are two obvious (and related) ways to do that:

1. Get a Kindle for $1 with the agreement to buy 12 books in the next 12 months; or
2. Buy a Kindle and we'll give you a coupon good for 6 free eBooks

Of the two, I prefer the former. It's the razor and razor blade model and Amazon has to make sure that readers are using its format of razor (the Kindle), not iBooks.

Beyond that, I think that Amazon should simply send free Kindles (or a coupon for a free Kindle) to Amazon customers who buy a significant number of hardcover books. If you're buying 10 or 12 hardcover books each year from Amazon and aren't buying any in eBook form, you're an active reader who is likely to buy an ereader in the next 12-36 months. Why not lock that user in right now?

Amazon's customer files are the one huge advantage it has over Apple right now. No one knows more about reading habits than Amazon. And no one has stronger commerce analytics. So Amazon should put those analytics to use locking readers into the Kindle format. Because once you choose a format and channel, you're unlikely to change that. I buy all my books in Kindle format, even though I have an iPad, because I started with a Kindle. And because Amazon's model is built upon selling books, not selling hardware, they can afford to use the device as a loss leader. The Apple model is reversed and I don't see them shedding margins on the device to improve media sales.

It's time for Amazon to embrace the Columbia House model to lock readers into the Kindle format.

Are Showrooms the Future of Brick & Mortar Retail?

Barry Ritholtz had an interesting post this morning, posing the question of whether Best Buy had simply become Amazon's showroom. This is a topic I've discussed with a number of people in the past 6-12 months - what is the future of brick and mortar retailers in a world driven by ecommerce?

Already today there are a number of product segments where physical stores are irrelevant. Music is the obvious one. It's much easier to discover, explore and purchase music online than offline. And since the primary use of CDs now is to burn them to get music onto your iPhone or iPod, the physical media just becomes an unecessary step.

The same applies to books. A few years ago, I'd wander into a Borders (BORD) or Barnes & Noble (BKS) to flip through books, then once I'd decided which to buy, I'd typically order it from Amazon (AMZN), as the cost savings was typically 20-40%. Today, that browsing step is largely unneeded. The other day I wanted to pick up an introductory book on Python programming. After reading Amazon reviews, I narrowed it to three potential choices, downloaded the free first chapter of each onto my iPad, then bought the one I liked best.

As the Ritholtz post points out, the most effective and economical way to purchase electronics is to look at or listen to them at a Best Buy, then order them from Amazon. With free shipping (especially for Amazon Prime customers), aggressive prices and favorable return policies, there's little benefit to buying them at a physical store. The one possible exception today is big screen TVs where Best Buy (BBY) can provide value add through installation and setup.

The only barriers to this model that stores have today are either impulse purchases (you'll see the typical item on the checkout line has a huge markup - a USB hub that sells for $18 at Amazon was priced at $30 at Best Buy) or price ignorance. That $30 USB hub might have seemed attractive had I not been able to find the Amazon price using my iPhone. As more users have smartphones, it will be harder for retailers to count on ignorant consumers.

So, what will happen to the brick and mortar stores going forward? Some, of course, will simply vanish, following in the footsteps of Tower Records, Blockbuster and Borders. Others may develop more value-add services that help drive sales (tailoring for clothes, etc), while I think we may see a new "showroom" category emerge.

There are definitely products that you need to physically see before purchasing. Luggage is a good example. You can take three different 21" upright wheeled bags with the same approximate capacity and they will be arranged very differently. Ebags and its peers do a good job, but I think most people will want to see how their stuff will fit. The same applies to a lot of clothing. My wife walks through women's clothing stores touching all the materials before picking something out. I can order shirts or slacks online at Brooks Brothers but for many items, especially women's fashion, there is a need to touch the item first.

But you don't need to stock a complete inventory of every size for this. A showroom, where users could see and feel the items, could drive a lot of sales.  I wonder if the economics could work to enable mall showrooms which are really just "super affiliates" for Amazon. I don't think the standard Amazon affiliate commission would cover all the costs of an offline presence, but if there were a higher affiliate rate I don't see why it couldn't work for select items.

Another area where this could work would be eyeglasses. I find it obscene the markup that LensCrafters and other vision stores charge on a pair of glasses. More outrageous is the "with and without" insurance rates - where they offer special pricing but not with your insurance coverage. So, while my daughter's primary glasses come from Lens Crafters, she buys her spare pairs (camp, prescription sunglasses, etc) from Zenni Optical. Optically, the Zenni glasses are the equal of the mall store versions, but they're priced at $20-40 rather than $300-400. The frames vary in quality but are solid overall. But the problem is that it's really hard to choose a pair of eyeglasses without trying them on first. My daughter will try on 12-15 pair before selecting the ones she likes. So, it would make sense to open mall kiosks that act as Zenni affiliates. Try on all the frames, pick the pair you like, provide your prescription and have your glasses shipped to you in a week for about 10% of the cost you would have otherwise paid.

To be economically feasible, showrooms may have to be funded in part by manufacturers (as they are in the automotive industry). But, between manufacturer incentives and affiliate programs, there's certainly room for this new model.

What do you think?

 

 

What a Long, Strange Marketing Trip It’s Been

It’s no surprise that a key to innovation is rejecting conventional wisdom. And innovation thrives in many businesses, particularly those in the technology space. But whether in silicon valley or silicon alley, marketing is still largely done in the same way it has for decades. Companies hire PR firms who push out press releases, while marketers post product info to web sites and create factsheets for their sales staff.

Marketers may dabble with new approaches, sticking a toe into the social media space by creating a Facebook fan page or setting up an official Twitter account, but even then most apply old approaches to new platforms. Knowledge is shared through boring white papers which sit behind a registration wall while Twitter accounts push out links to bland press releases or staid marketing messages.

 When it comes to breaking the rules of marketing and rejecting conventional wisdom, David Meerman Scott (literally) has written the book. And now, he’s joined together with HubSpot CEO Brian Halligan to author a new book, Marketing Lessons from the Grateful Dead.

It’s not the first time that David has written about the Grateful Dead. Readers of his book World Wide Rave may recall a discussion framed by asking whether you wanted to be like Led Zeppelin, whose historic reunion show at the O2 arena was not made available in video format (and where YouTube was forced to remove clips posted by fans), or like the Grateful Dead who, long before the days of Facebook and social media, encouraged concert attendees to record their shows, even setting up special sections where they could plug in to the soundboard to get better quality recordings.

As the book pointed out:

If you want to remain relevant in an always-on, fan-centric, YouTube world, you need to embrace—not restrict—your most important supporters. You need to believe in the power of a World Wide Rave to sell your products and services.

In this new book, David and Brian take a look back at how the Dead worked to develop and nurture an active community of fans, then show how to apply many of those same techniques to today’s marketing platforms. For example:

Rethink traditional industry assumptions – Rather than focus on record albums as a primary revenue source (with touring to support album sales), the Dead created a business model focused on touring.

 (blogger note: if you’ve read what Fred Wilson and others have written suggesting media companies look to monetize the audience, not the content, this is a great example)

Bypass accepted channels and go direct – The Grateful Dead created a mailing list in the early 1970s where they announced tours to fans first. Later,they established their own ticketing office, providing the most loyal fans with the best seats in the house.

The foreword to the book is written by one of the biggest (literally and figuratively) Deadheads, former UCLA and NBA great Bill Walton. As he so eloquently describes it:

Their passion, creative spirit, imaginative soul, and industrious commitment to promote truth, fairness, justice, and the Grateful Dead way led them through the evolutionary transition where they went from playing for silver to playing for life. This book tells you how to make that transition for your own career.

David Scott’s books are always practical, insightful and a fun read. Fans of his prior books won’t be disappointed here. Marketing Lessons from the Grateful Dead may be his finest book to-date.

 

Well Wishes raises $25k for Charity:Water via social media

Last December, I posted about microdonations and the project that Laura Fitton (@pistachio) had kicked off with a goal of raising $25k for Charity:Water by her birthday.
Well, her birthday was yesterday, and while it took a few minutes past midnight, Laura's extended social network helped her achieve the goal.

The bulk of the funds (more than $15k) were raised and contributed on Twitter via Tipjoy. Tipjoy and its founders contributed a matching $5k, while another $5k or so was raised directly on the Charity:Water site. That will be enough to provide fresh water to five villages, saving countless lives.

Laura did an amazing job, tapping into her network and the extended network of retweeters to get the needed contributions. While some contributions were as little as $0.25, others were much more substantial. I have to recognize @linlee888 who pledged $1 per follower, then blew that away with a $1,300 donation.

Laura put an amazing effort into this, topping it off with a one-hour live broadcast via UStream TV last night starting at 11pm. Putting yourself on a webcast with accompanying live chat is a pretty brave thing to do (and believe me, there are some weirdos chatting out there) but it all helped her achieve her Christmas wish.

The full details will be posted shortly to the Pistachio site. In the meantime, please join me in congratulating Laura and her network.

Interpreting the Black Friday Results

Barry Ritholtz points out the hype and spin in the media coverage of Black Friday. Journalism 101 instructs writers to understand your sources and what their motivation may be. But the media often don't seem to let that get in the way of a good story.

Much of the reporting of Black Friday focused on the data provided by the NRF - the National Retail Federation. Yes, the trade association representing retailers. As Ritholtz points out, the New York Times article suggests that NRF data tallied up sales from Thursday, Friday and Saturday and found shoppers spending, on average, 7% more than last year. But, the data were not from sales results.  The NRF data were based upon self-reported spending results from a survey of 3,370 shoppers. Hardly scientific.

As Barry suggests, and as I referenced in my earlier Cyber Monday blog post, a better source to monitor might be ComScore. The ComScore numbers are based on actual eCommerce sales; on Friday, they tallied up $534 million in online non-travel sales, up 1% from the same day last year. The results for the first 28 days of November remained 4% down from a year ago. Those numbers seem a bit more realistic to me, based upon anecdotal discussions I've had with friends, colleagues and a retail analyst I know.

It will be interesting to see where the Cyber Monday numbers come in. I'd guess they will be down a bit from last year. My guess is that as more and more consumers get broadband access in their home, the need to wait until "Cyber Monday" to access fast Internet from work is diminishing.