Ged Carroll

Blog

  • Stone Island morphing print + more

    Stone Island morphing, evolving print for its new collection | Dazed – why Stone Island isn’t cited more often as innovators is beyond me. It’s more than a football casual brand. Stone Island morphing print is an extension of the approach that the brand has taken in materials development. It changes technical and aesthetic properties, with one eye on tactical garment detailing.

    Elizabeth Warren plan to break up Amazon, Facebook, Google, big tech – Business Insider – this could get interesting. While Elizabeth Warren won’t be president, her views will help shape Democratic party policy. Big tech’s historically cozy relationship with the Democrats will come under pressure.

    How Makimoto’s Wave Explains the Tsunami of Specialized AI Processors Headed for Market – ExtremeTech – great read and analysis on the current trend of specialised processors for machine learning and crypto currency applications. More on Makimoto’s wave here.

    WHY COMPETITION IN THE POLITICS INDUSTRY IS FAILING AMERICA A strategy for reinvigorating our democracy Katherine M. Gehl and Michael E. Porter | Harvard Business Review – it seemed pertinent to read just as the UK spins out of control on Brexit. I can’t work out if it is consumer behaviour or related to the electoral system. In both the UK and US; they have first past the post systems rather than proportional representation. Proportional representation is more popular in many European countries including Ireland and Germany.

    Huawei seen as better value for money than Apple and Samsung by Brits | YouGov – interesting trade off between low trust but good value

    Eight in 10 Britons rely on cash for everyday payments, report finds | Money | The Guardian – there seems to be a discrepancy between cash infrastructure usage and apparent cash usage? I suspect that card usage must be focused in the large cities and cash usage more popular in smaller towns.

  • Geothermal energy + more things

    Swedish technology could make geothermal energy as mainstream as wind and solar | Quartz – interesting because it deals with the lumpy supply issue of wind and solar in the energy mix. Geothermal energy is closer to the steady production of nuclear or coal fired power stations operated in an optimal manner. Although geothermal energy has been well understood for decades, a key problem has been keeping the fissures open that geothermal energy relies on to create steam.

    UK cash system ‘on the verge of collapse’, report finds | Money | The Guardian – putting the Queen on debit cards anyone?

    Rone artist takeover of hotel site | ABC – right strategic approach to build buzz but wrong vision

    Audi hasn’t forgotten about fuel cells – Roadshow – which makes a lot more infrastructure sense than electric charging due to energy density benefits

    Jibo Is Probably Totally Dead Now – IEEE Spectrum – The servers for Jibo the social robot are apparently shutting down. Multiple owners report that Jibo himself has been delivering the news: “Maybe someday when robots are way more advanced than today, and everyone has them in their homes, you can tell yours that I said hello.” – that’s probably the saddest thing I’ve heard in robotics since I learned about Sony Aibo Mk ! device owners having Shinto funerals for them when they gave up the ghost. It also shows the flaw in cloud connected consumer products

    Europe’s AI start-ups often do not use AI, study finds | Financial Times – Two-fifths of Europe’s artificial intelligence start-ups do not use any AI programs in their products, according to a report that highlights the hype around the technology. The research by London-based investment firm MMC Ventures could not find any evidence, based on public information and interviews with executives, of artificial intelligence applications at 40 per cent of 2,830 AI start-ups in Europe (paywall)

    The Aldi effect: how one discount supermarket transformed the way Britain shops | Business | The Guardian – The checkout assistants, who had been trained to memorise the price of every item in the store, were so fast that shoppers experienced what some would come to call “Aldi panic” – the fear that you cannot pack your goods quickly enough.

    Flickr dumps despised Yahoo login system – CNET – gosh when I remember how controversial the move to Yahoo! ID was for flickr users back in March 2007. It was a defining moment in the community and its obvious that grudge has continued to be held by old skool users

    Huawei Said to Be Preparing to Sue the U.S. Government – The New York Times – interesting move to try and get the US government to show its hand, on the other hand the US government can just go over case studies like T-Mobile and the African Union hacking as evidence

    Revealed: Facebook’s global lobbying against data privacy laws | Technology | The Guardian – Shock horror Facebook lobbyists aren’t just bag carriers but actually do their job

    Bollinger Motors: a Refreshingly Traditional 4×4 Company • Gear Patrol – While other manufacturers fetishize connectivity, Bollinger Motors plans to sever the digital connection. The B1 and B2 won’t offer autonomous capability. There are no current plans for a digital cloud infrastructure. The trucks will have manual windows and door locks. Driving a B1 or B2 won’t be a pure ascetic throwback. You’ll be able to connect your phone to the stereo. But, the goal is to offer an escape. That reads to me like a new definition of automotive luxury.

    UK unicorn Revolut is fighting back after its week from hell | Business Insider – I expect to see many more exposes like this

    Read Pornhub Launches Safe for Work Category that Features Videos without Nudity | Pornhub – interesting that PornHub is branching into SFW (suitable for work) content and that this move seems to be inspired by Starbucks putting a porn filter on its free wifi. Unfortunately Pornhub’s ad vendor Traffic Junky keeps showing NSFW material on the page and you have to wonder about brand safety with Pornhub relying on a creator submitted SFW tag which doesn’t police NSFW content within it. More media related content here.

  • The post about Weight Watchers & Kraft Heinz

    Two big consumer orientated companies: Weight Watchers and Kraft Heinz announced financial losses.

    1966 Food Ad, Kraft Foods, "Weatherproof Cookout" (2-page advert)

    Why is this significant?

    Consumer good marketing is in more turmoil than it has been for a long time. Millennial-led memes are changing the environment for consumer goods brands:

    • Authenticity
    • Natural trumps anything else for health
    • Body positivism

    There are also some structural and competitive issues:

    • Private label brand expansion; in particular Amazon
    • Online retailing disrupting traditional shopper marketing
    • Amazon’s advertising offering
    • Horizontalism
    • Subscription and delivery services
    • New product models

    Authenticity

    Authenticity is something that has become at the centre of culture. In a time when social channels and media have painted an artificial life and traditional marks of success are hard to attain ( like home ownership) experiences became important. It wasn’t enough for products to fill a need; they also need to have a story with heritage behind them. Brands have become started by ‘real people’ who’ve become influencers in areas such as make-up.

    The good news is that authenticity isn’t anti-brand, in fact the notion of credibility that you would have heard 20 years ago no longer has resonance. Naomi Klein’s No Logo or becoming a ‘sell out’ celebrity no longer resonate.

    The challenge of authenticity changes by category:

    • Processed food: considered not authentic by their synthetic nature, food delivery services and DIY meal packs act as alternatives
    • The move to beards has adversely affected shaving products, hence the Gillette pivot to women and Unilever’s bizarre adverts to encourage male body hair shaving
    • Beauty products: Authenticity has supported the launch of niche brands by influencers. This is rather different to the likes of previous brands like Gloria Vanderbilt | Murjani Corporation tie up to launch the first designer jean brand in the late 1970s

    Natural trumps anything else

    In the 1980s and 1990s we saw a take off in healthier foods from artificial sweeteners to margarines that have more beneficial properties in preventing heart disease. Butter and cheese were seen as unhealthy products. Jump forward to today. Sugar whilst not considered good, is considered a better product than artificial sweeteners. High fructose corn syrup is considered to be the great satan of sweetness.

    Now butter is back in. Margarine is losing market share year-on-year, which is the reason why Unilever divested its margarine business. Consumers looking for vegan options look towards nut butters and coconut oil. Polyunsaturate fats just don’t matter that much any more.

    TV dinners are losing out to recipe packs; where a set of fresh ingredients and a recipe are supplied to consumers instead of microwave heated processed meals. From Kraft Mac and Cheese to Uber Eats delivered macaroni and cheese.

    All of the brands, manufacturing process and supply chain prowess are problematic for consumer goods giants.

    Body positivism

    Consumers continue to flock to a fitness movement, that would be familiar to consumers in the 1980s. Health and fitness has become ever more professional with a fetishisation of high protein diets.

    In parallel to this has come along a move towards being more accepting of people regardless of their shape. This body positivism moves the dialogue away from weight loss and fitness as a health requirement to a broader lifestyle and mental wellness positioning.

    More realistic body shape models is reducing the social pressure on weight control and dieting. Working out is more about performance and strength in terms of emphasis. Again all of this impacts food formulations further.

    Body positivism means that a proportion of the population have ‘permission’ to indulge: which probably explains the popularity of comfort food like American diner fare and dessert restaurants.

    Private label expansion

    Discount stores like Aldi have gone from 2% of UK retail sales to over 7.5% last year. They focus on private label brands and only a third of the SKUs presents challenge to traditional grocery retailing. And brands already have had an uneasy relationship with mainstream supermarket private label brands that culminated in legal action like the Penguin | Puffin legal case back in 1997.

    One of the most amazing things about Amazon is how it has utilised its retailing data to target and launch a plethora of private label brands across sectors at a phenomenal pace.

    Horizontalism

    Over a decade ago now, I worked at a creative agency and we were asked to pitch by a new premium crisp (American English: potato chip) brand. They were similar to the Kettle Chip brand. The key difference was that they didn’t own the production facility. Their manufacturing partner was a private label manufacturer for supermarkets, but didn’t compete in the branded product space.

    The brand had worked with their manufacturing partner on new product development and were bringing their own marketing and branding expertise. All the big consumer companies have seen marketers get their knowledge and knowhow with them before moving off and forming these upstart brands. The brand managed to piggy back on someone else’s logistics channels.

    By comparison the likes of Mondelez have their own factories and logistics to reach their retail partners. Infrastructure provides quality and cost controls at scale but put restrictions on new category entry and new product development.

    That means that putting a product into the market takes time and costs more money to happen. Move forward ten years with Amazon and direct online sales becoming easier, you are seeing upstart brands taking advantage of horizontal services.

    It is similar to the business model that Nike rolled out in sportswear during the 1970s and how the computer industry changed as it moved into the PC age.

    Online retail disruption

    Originally it was only retailers that have had to deal with the move of consumer shopping online. Supermarkets have managed to turn their retail and warehousing presence into effective e-commerce delivery with varying degrees of success. Those that didn’t do well at it like M&S and Kroger have partnered with the likes of Ocado for the technological knowhow.

    Amazon has posed a threat to these retailers as the company has moved from not only being a rival retailer but a product search engine. Even stealing search volume from Google. Amazon has also rolled out private label products and proved itself to be a capable platform for new brands looking to launch consumer goods competing with the big brands.

    Add into this Amazon’s advertising business and the company seems to have greater king making marketing power than the traditional large supermarket chains.

    Uberisation of services has seen food delivery become a substitute product for home cooking changing consumer behaviour in a way that doesn’t favour consumer brands.

    Subscription and delivery services

    The speculation around the Amazon Dash launch hinted at the potential impact that subscription services could present to consumer companies. The classic model of Dollar Shave Club or Birchbox took the Book Club or Columbia House record subscription model. They moved it from direct mail campaigns and newspaper magazine direct response ads, to online and applied it to two very different consumer use cases:

    • Experimentation for highly engaged consumers in areas like beauty
    • Convenience for low passion products like razors

    These businesses have scared the pants off consumer businesses. Gillette has experimented with its own brand subscription service for razors. Unilever went out and bought Dollar Shave Club for a $ 1 billion valuation. They also failed to buy the Honest Company which sells baby products and household goods.

    The fear and sense of being displaced and disrupted by these new services is greater than their financial impact. It likely fulfils the nightmares that McKinsey and Deloitte presentations to the C-suite about digitalisation of business and disruption create.

    Weight Watchers & Kraft Heinz: making their tasks more difficult

    Kraft Heinz’ CMO had to deny that the company had under-invested in its brands. That statement felt eerily like the cliched moment when a football club chairman says on the record that the manager has their full support. Eduardo Luz has a tricky problem on his hands:

    • He admits that what the analysts have said is true and Kraft Heinz has underinvested in brands. That’s a CMO death sentence right there, spectacular fuck-up and unlikely to get work at another significant consumer goods company
    • Says that its a misconception that cost-cutting adversely affected brand investment. He is then relying on owner 3G Capital’s cuts to resurrect the business in the future. A 27% drop in market value is a big hole to fill for shareholders. Their approach is considered to have worked at Anheuser-Busch InBev and Burger King in terms of raising profits. 3G Capital are quite open about the fact that they use zero-based budgeting (ZBB)

    IF they are doing ZBB properly, this is what the annual plan process should look like:

    • Last year’s spend isn’t rolled over from a planning perspective – that’s the zero, essentially a blank sheet of paper. The idea is that there are no sacred cows
    • There is a research aspect to the planning
    • The plan is crafted promising a specific ROI and asking for a certain amount of investment
    • Senior management vet the plan and come back with two possible outcomes: plan approved, or pushback and ask for changes

    The benefits of ZBB

    • Efficient resource allocation by focusing on needs, requirements and benefits
    • Focus on operational efficiency
    • Can increase collaboration and co-ordination within the firm

    ZBB has its challenges

    • The benefits of brand advertising deliver ROI far longer than a year, so it doesn’t measure their full impact and isn’t optimised for brand building
    • Justifying every line item can be problematic for functions with intangible outputs like brand rather than direct response marketing
    • In a large company, there is likely to be an overwhelming volume of information to support the budgeting process
    • Time consuming

    That hasn’t stopped the likes of Unilever and Proctor & Gamble adopting it.

    If Luz thinks that ‘under investment’ in brands is a misconception. It seems reasonable to assume at least some of the following happened:

    • The research process didn’t take account of market changes and was probably focused at a brand level on operational efficiency rather than horizon scanning
    • The specific ROI promised was a misconception
    • There was inadequate training put in place to effectively plan and assess with ZBB
    • 3G Capital’s wrong-headed implementation of ZBB caused Kraft Heinz to focus on maximising the profitability of low growth areas through cuts and not focusing on investing sufficiently in (newer) high growth areas. These high growth areas are likely to be due to the kind of changing market dynamics outlined earlier in this post

    Kraft has struggled with low growth for over a decade which was the primary business reason for buying Cadbury – a higher growth business at the time that could also be used to take Kraft into new geographic markets. 3G Capital took on a serious challenge when they merged Kraft and Heinz.

    By comparison Weight Watchers seems to have had their eye on the horizon; they realised that body positivism had moved the goal posts on size and decided to refocus on health. But they thought that a rebrand rather than innovation was the way forwards. Weight Watchers weren’t fooling anyone except themselves with the move to WW and ended up with a declining subscriber base.

    But there are opportunities out there for them. Imagine if there was a Weight Watchers restaurant on Deliveroo providing healthy meals cooked just for you – as an extension of their supermarket product range? Or dietary advice and for those that want to bulk up and be everything that they can be that’s more cost effective than a dietician and more trustworthy than surfing cross fit forums?

    Instead they went from a brand that stood for something in the eyes of consumers, to something that was literally meaningless.

  • Puma + more news

    Puma Poaches Manchester City Kit Deal From Nike | Business of Fashion – big move by Puma in football, especially considering that all the money is boot sales and Puma is currently a distant number four behind Nike and adidas. New Balance is considerably closer for Puma to reach than the top two. Kit sponsorship deals are self liquidating brand marketing.

    A Perfectly Cromulent Cultural Moment – memes as societal discourse

    A Brief History of Computer Vision (and Convolutional Neural Networks) | Hacker Noon – a great read, it reminded me about the work that search engines like Yahoo! and Google were doing around image recognition back in the day and Virage et al did in the mid-1990s onwards

    Know-It-All Robot Shuts Down Dubious Family Texts – WSJ – which begs the question why Facebook wasn’t here, providing a similar kind of service on its platforms? (Paywall)

    Subaru Recalls Cars to Fix Glitch Possibly Caused by Fabric Softener – WSJ – no you haven’t read the headline wrong, it apparently affects a sensor. The investigative process must have driven the engineers crazy

    Musical.ly, now TikTok, to pay fine to settle FTC allegations | Digital – Ad Age – Social video app Musical.ly, now known as TikTok, agreed to pay $5.7 million to settle Federal Trade Commission allegations that it illegally stored data from underage children and refused parents’ requests to delete it.Data collected from children under the age of 13 included names, email addresses and, for a period, user locations, the FTC said. The settlement represents a record penalty under the Children’s Online Privacy Protection Act, a 1998 law designed to put parents in charge of what information is collected about their children on the internet.

    Creepy AI Tech From China Can Identify You 50 Meters Away With Your Back Turned, Face Covered – interesting how they are using gait analysis for identification. Of course the way around it is to put something in your shoe. More related posts here

    Prada tries to put luxury’s derailing train back on course | Trendwatching – It’s not hard to see the link between this innovation and recent events in the luxury fashion industry. When it comes to diversity and inclusion, iconic fashion brands have lurched from one epic fail to another recently. Gucci perpetuated blackface via a sweater. Prada itself perpetuated blackface via its window displays. Burberry sent a noose down the runway. Philipp Plein fat-shamed a journalist. D&G offended many in one of its key markets when its ad showed Chinese models struggling to eat spaghetti with chopsticks – Prada is also listed in the Hong Kong Stock Exchange so this makes sense from a shareholder perspective as well

    Who needs malware? IBM says most hackers just PowerShell through boxes now, leaving little in the way of footprints • The Register – running in RAM rather than memory

  • Hasan Minhaj and other things that caught my attention this week

    Supreme by Hasan Minhaj. I hadn’t watched much of Patriot Act mainly because there is more content that grabs my attention on Netflix. This clip is a great dive into hype culture by Hasan Minhaj – often the best humour is that with uncomfortable truths in it.

    Amazon playbook on Amazon Vine. Gartner L2 made this useful clip on the effective use of Amazon’s Vine programme.

    Key take-outs (my observations in italics):

    • Amazon don’t allow vendors any editorial controls over reviews and look to keep them honest and authentic
    • Vine seems to be really good in the process of accelerating product launches for vendors
    • Use Vine BEFORE Amazon’s sponsored products and sponsored brands advertising function; by the sounds of it pretty similar to the way you’d have previously used PR in a product launch marketing campaign
    • L2 recommends ensuring the efficacy of the product; but Vine COULD be used as the last gate in the innovation process before you go gangbusters. Lots of negative reviews could still save you on a massive production run and huge advertising spend

    Sophie Cope (Electronic Frontier Foundation) on digital privacy and the surveillance state. Great video on the World Affairs channel – interesting how this has become such a big issue amongst ‘wonkish’ audiences. More privacy related content here.

    Lynx (Axe for non UK audiences) have latched on to the ASMR meme that has been popular for a couple of years. It feels weird to watch, I am not sure what the strategic insight(s) were for this work beyond the fact that beards are sticking around for a good while yet.

    https://youtu.be/x9T7BJ-jf6o

    The last thing is the positive experience I had with American Express this week when I lost my card. I spoke to a real person on a decent phone line who quickly canceled my old card sent me out a new one that arrived in 48 hours.