Are retailers caught in a content trap?

Discussion
Nov 09, 2017

Adam Blair

Through a special arrangement, presented here for discussion is a summary of a current article from the Retail TouchPoints website.

Harvard Business School professor Bharat Anand has pinpointed some of the key reasons why traditional businesses, including retail, have found it so difficult to find their footing in a digital-first world. Too many companies fall into what he calls the “content trap.”

In his book of the same name, Prof. Anand writes that, rather than focusing on the new world of connections that digital enables, companies remain fixated on the content they produce: a news story, a song, a taxi ride — and, in the case of retail, the products they sell.

“When digital came along, its power seemed to be about creating reach,” Prof. Anand said in an interview with Retail TouchPoints. The ability to reach consumers “multiplied” significantly versus the analog world.

But what was different about digital technology versus, for example, television and radio, was its impact on user connections.

“It changed the hub-to-spoke model,” said Prof. Anand. “Traditionally a company was the hub, producing content (or a product) and distributing it to the spokes — viewers or customers. Digital increased the number of spokes, but now a spoke could interact back with the hub. They could be part of creating content or a product.”

Moreover, “The spokes could now talk to each other. That’s what many organizations still miss: the user connections — user-to-company or user-to-user.”

Some retailers are in a “better position” to adjust to the content trap. For instance, Home Depot emphasizes curation, advice and inspiration in its stores and Best Buy has added strong service components to its product offerings with its Geek Squad.

Part of the challenge is that many businesses view the new technologies as “substitutive” to the original analog or physical product rather than “complementary” with an ability to enhance it. Retailers are also “still so product-focused versus customer-focused,” and adapting involves a shift in mindset toward creating connections.

Prof. Anand said, “The real role is curating, or serving as a platform, and recognizing that other people are creating as well.”

DISCUSSION QUESTIONS: Why do you think retailers have been challenged adapting to co-creation — two-way dialogue that defines the digital-first world? Do you see something particular to retail that is inhibiting change?

Braintrust
"Retailers will increasingly take an 'if you want something done right ... ' stance which will call for dedicated effort."
"This mediascape is mostly outside the retailer’s control, and its costs may or may not result in profitable sales."
"Perhaps where retail is still struggling is the idea of conversation between “spokes” — the customer-to-customer aspect could be really valuable."

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20 Comments on "Are retailers caught in a content trap?"


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Anne Howe
BrainTrust

I feel that most retailers could (and should) get on board with the “complementary” view of content. It is as simple as being willing to be all-in on the conversations/relationships, regardless of where they happen in the hub-and-spoke model. Retailers today just keep resisting adding humans into the mix to converse and be helpful to both prospects and customers. It’s a fatal error.

Carol Spieckerman
BrainTrust
Some of the points seem a bit out of alignment with the premise of “content” but I’ll go with the main idea. Thanks to the ever-proliferating number of “spokes” mentioned in the article, retailers now have an insatiable appetite for content. The challenge, and opportunity, is that they can’t (and actually don’t want to) create it all themselves. Hence the requests-evolving-into-demands to obtain more of it from their brand marketing partners. The idea of “curating” content is fast becoming past-tense as simply managing it, ensuring accuracy and defining accountabilities become front and center. I call this the “content conundrum” and the world of content is only going to become more unwieldy and blurry as digital marketplaces proliferate, as mobile marches on, and as the digital rethinking of physical retail and interplay between digital and physical intensifies. Content is at the center of the action yet retailers tell me that even the big CPGs aren’t developing comprehensive and relevant content plans. Retailers will increasingly take an “if you want something done right … ” stance which… Read more »
Adrian Weidmann
BrainTrust

Absolutely spot on! We’ve been spending too much time, energy and resources to simply digitize the analog status quo. In his 1995 book, “Being Digital”, Nicholas Negroponte envisioned the seismic change in the status quo of what our understanding of normal was, and what it would take to “be digital.” Taking full advantage of the potential of being digital means to completely bust the analog paradigm. It’s been another 10 years since 2007 — the year of the Internet supernova — and many brands and retailers are constrained by analog thinking. Brands and retailers alike need to become a “digital” platform that proactively ingests, curates, publishes and shares relevant and valued content across all customer touchpoints.

Bob Amster
BrainTrust

The digital communication environment has been changing too fast for many entities and individuals to absorb all of what is out there. Some react faster than others and not everything that is new is good or worth embracing, especially if one has limited resources. Others will experiment with multiple new tools and see which have the right stickiness.

Frank Riso
BrainTrust

The old adage that if you build it (a store) they will come is pretty much the way of retail or the way it has always been in the industry. We are a very conservative industry and, especially when you operate 500, 1,000 or 5,000 stores, it is very difficult to manage the two-way dialogue with millions of customers. Some of the initiatives mentioned in the item regarding Home Depot and Best Buy existed before the digital age but improving these services has increased with digital and we can expect to see more and more as old world technologies are upgraded with more new school technologies.

Chris Petersen, PhD.
BrainTrust

There are four Cs not being addressed effectively by today’s retail:

  • Content: Especially rich content that engages;
  • Curation: Selection of product assortment and content to support;
  • Consistency: Across products and all media;
  • Connectedness: Across all touch points, especially mobile.

For decades retailers have been publishing content from brands. As stretched as retailers are to implement all aspects of omnichannel, few have the resources to address content co-creation, curation and engagement.

Pilots with AR and digital media interaction would suggest that there are significant opportunities for brands to strategically collaborate with retailers to transform content and engagement across the customer journey.

Ron Margulis
BrainTrust

The thing inhibiting change in the relationship between retailers and customers, particularly in the grocery channel, is the continued existence of trade promotion dollars. As long as retailers are getting funds to support products the consumer may or may not want, the two-way dialogue will be stifled. There is a great blog on this here.

Nikki Baird
BrainTrust

Easy answer to these questions: it’s hard to justify investing in something that doesn’t have an immediate payoff. A promotion leads to sales. A conversation may lead to a more loyal customer … eventually. And if that more loyal customer spreads the word to other customers, that’s very hard to track or measure. So they fall back on what’s tried and true.

To get out of this, either someone needs to prove that engaging in conversation pays more long-term than engaging in promotions, or someone needs to take a header and just give it a try to see what it really gets them. But most retailers don’t have the confidence — or the runway — to cut short-term benefits for nebulous long-term gains.

Todd Trombley
Guest

Many retailers have been greatly challenged by the notion of co-creation. This is surprising given that most retailers readily recognize the truth that most of their best customers have a bonded relationship with their “go-to” advisor or a particular store. So one would think that retailers would naturally seek to use digital tools to move these connected relationships beyond the four walls of a store.

I guess we might chalk this up to marketing’s historic propensity to view marketing as a “mass” function. Digital allows for these relationships to be expanded into many electronic formats: personalized emails and text-based apps connecting seller and customer are a couple of examples. One-to-one or one-to-few marketing seemed rather daunting, from a scalability perspective, when it first emerged. The new tools and apps allow this scalability challenge to be addressed.
Retail simply has more customers than B2B. The new technologies and enhanced knowledge about deployment are causing an appreciation of how to do co-creation.

Kate Munro
Guest
Many of today’s brands and retailers are engaging in a race to the bottom, sacrificing quality and innovation for speed. When you are so focused on stripping out all costs to improve margin, there is no leeway for innovation. And many of these retailers and brands are mired in old ways of thinking and doing things — relying solely on Excel spreadsheets, emails and flights abroad for buying trips instead of first shopping the supplier’s showrooms online. There are so many examples of things like this that it would fill a page. Last year, I heard a very seasoned retail executive bemoan the fact that a department at his company spent multiple meetings and many months debating a color change for one of their tools. Of course, this is not across the board, but speed bumps like this are getting in the way of retailers’ digital transformations. And they are getting in the way of their ability to compete. Retail is an industry built on communities and collaboration — a key point for brands to… Read more »
Camille P. Schuster, PhD.
BrainTrust

The idea that you no longer control the conversation is very difficult for many retailers to accept. The norm had always been one-way communication — retailers and brands created messages to send to consumers. The only time there were messages from consumers was when there was a complaint and that was a separate department. Many retailers still operate from this model and are losing. Today’s model reorganizes the company because consumer complaints, digital listening for messages sent to the company and monitoring what consumers say to their friends must all be part of the message creation group. In addition, keeping track of which consumers respond to which messages creates a challenge for companies. It’s a new world and all the assumptions about one-way communication have to be replaced.

Mark Nicholson
Guest
Many believe user generated content (UGC) is the path to more. While it’s true in some ways, such as the ability to scale, it’s not without risks. To use it means relinquishing control. Leaving content production to the masses as UGC does can often result in derailing content strategy. The only UGC that would be recommended is reviews, in many cases. The most common recurring issues with content strategy are often focus, as in to stay on topic and maintain relevance, and having that focus validated through keyword research to identify where to put resources. In the case of the latter, it happens all too often. Both really. As a result, you have lots of content, but less than 5 percent producing results. Having seen this many times, especially with retailers, it’s time they start to understand how content marketing can and needs to work with SEO in order to be effective at generating results. They are in fact two separate areas, but provide significantly more ROI when they come together. The author mentions that… Read more »
Ed Rosenbaum
BrainTrust

Could it have been that retailers believed technology was not going to have an effect on them? Why would it in their minds? After all, customers were used to and enjoyed coming to their stores and that would never change. Surprise, surprise! Guess what. It changed and retailers were left wondering what happened. Now that we are ankle deep (at least) in the technological world; retailers have to find a way and commit the human element to communicating through social media. They are trying. It just has not taken hold and become part of what they consider their daily business.

Ralph Jacobson
BrainTrust

As usual, Carol Spieckerman has added comments that cover virtually everything I had in mind, and more. Great points, Carol! One more issue is that we often talk about issues like content management as if the whole retail industry is at the forefront of evolution. Those innovators that we can all name are only a few retailers in number. The vast majority of retailers are still managing content, or NOT managing content as they did at least a decade ago. And, I’m not just talking about the mom & pop stores. Also, there are plenty of CPGs that have no content strategy defined. Other than an overall slow-to-adopt best practices culture, I see no real reasons for retail to be lagging behind in this area.

James Tenser
BrainTrust
Modern retail remains anchored in its superior ability to move and distribute goods. Digital tech has shifted focus toward information about goods and shoppers. It may seem puzzling that retailers are still struggling to cope with this content imperative after two decades of virtual retailing, but let’s not underestimate how massive the challenge was to present product information in the first place. Creating and curating product images alone presented a giant learning curve. Suddenly, it seemed, retailers were thrust into the unfamiliar role of media producers. The interactive nature of newer digital media changed the channel and added a multiplier effect. Instead of originating the storylines, products, brands and merchants are now the subjects of stories created by others. Social media act as amplifiers. This mediascape is mostly outside the retailer’s control, and its costs may or may not result in profitable sales. Unlike Prof. Anand, I would not equate “content” with “product.” There are very important distinctions between “stuff” and “bytes about stuff.” But his observations about the innumerable “spokes-people” who now shape the… Read more »
Cate Trotter
BrainTrust

I actually see a lot of retailers embracing co-creation — Lego’s Ideas platform, for example, is a well-known, but great example of having this two-way dialogue with customers. Plenty of companies use customer input as part of a marketing campaigns and contests such as vote for your favourite flavour, test these exclusive limited-edition versions, send in your ideas and we’ll make the best one etc. So I think the idea of having dialogue with customers is well recognised. Perhaps where retail is still struggling is the idea of conversation between “spokes” — the customer-to-customer aspect could be really valuable. Yet, you have retailers who still don’t like the idea of someone taking a photo in their store, even though they may use that to have a conversation with friends, followers etc about the space.

Cynthia Holcomb
BrainTrust

Easy. Brand control. Control over their brand[s]. The fundamental life blood, revenue generating, core of any retail business, its brand. Brand control, a difficult mindset to cross. Just look how well “omnichannel” and other digital mantras have worked out for most retailers.

Jacqueline Gallardo
Guest
2 months 11 days ago

Of late, what we see is a struggle among traditional retailers like Kohl’s and Walmart to keep pace with the likes of Amazon and gain a foothold in the online marketplace — something that demands enormous investment and effort. It’s going to be tough for the brick and mortar players until they manage a transition to the omnichannel mode. A look at the latest earnings numbers of Macy’s — especially in the run up to the holiday season — will reveal what is in store for the sector.

Ricardo Belmar
BrainTrust

Most retailers are used to a very direct cause and effect relationship. The digital world has introduced more indirect cause and effect relationships around influence (social media), product discovery, and a multi-way interaction between consumers, brands, and retailers. The direct promo to sales relationship retailers are so used to, has many more variables to it once we integrate digital into the equation. Content development has an important role to play in digital, once that used to be provided by store associates primarily, and now rely on a combination of in-house generated content and content from brands. In the future, retailers will augment this with AR and VR technologies which should give them a renewed ability to integrate the digital and physical worlds in a more natural way for consumers.

One area retailers need to focus more on as they work to build stronger loyalty and build lifetime customer value is to enhance the 2-way dialogue via social and other channels. I expect chatbot technology and other AI tools to help retailers here in the future.

Alex Levashov
Guest

I think that the many if not most brands have a bigger problems with co-creation: the consumers just don’t care about their products and their content, so the spokes do not talk to the hub or to each other.

wpDiscuz
Braintrust
"Retailers will increasingly take an 'if you want something done right ... ' stance which will call for dedicated effort."
"This mediascape is mostly outside the retailer’s control, and its costs may or may not result in profitable sales."
"Perhaps where retail is still struggling is the idea of conversation between “spokes” — the customer-to-customer aspect could be really valuable."

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