Apple is now the 3rd largest music retailer in the country behind Wal-Mart and Best Buy. "With a 10% market share, Apple sits close behind #1 retailer Wal-mart (15.8%) and #2 Best Buy (13.8%). All findings were recently reported by NPD Group and are based upon their survey of 400,000 people age 13 and older." And thats a pretty sizable chunk I have to say considering around age 13 kids start flexing that consumer muscle.
Significant for several reasons-
1) RIP CD: Both of the top retailers mostly sell music in the CD format. Online store bestbuy.com has a 1.1 percent market share with sales of both CDs and digital music. iTunes is strictly digital. This signals a fairly significant shift in consumer behavior to the digital medium, but its one we have seen coming for quite some time. Will movies and videogames be headed this way? You betcha. Check out Xbox Live and you can already see it happening.
2) Death of Retail: consumers still aren't emtionally tied into online offerings. Very few online sites can really get people excited the way a sale, promotion, or retail experience can. Face it people like real-world connections. People visit BestBuy just to check out the products, not even buy anything and the brand has been smart to encourage it. Typically consumers prefer making purchases in person, and will always place a higher value on products they can see in person, but digital commodities such as movies, music, and games are changing that. Companies like Freshdirect have made it acceptable to use digital for everyday things outside of media. Look for this to expand in the future.
3) Product Power: Apple is a rare brand indeed that has been uniform in its messaging online and off. The iPod has become ubiquitous with many things beyond music, and purchasing one has extended iTunes to greater depth. Nothing like having the number 1 product in your category and getting consumers to switch to your service. Cingular is banking on this with the Jesus iPhone. Don't bet on it.
4) Uniform branding: Apple has a sizeable advantage on BestBuy and Walmart in its branding. Those two brands are retailers with many products, while Apple creates simple propositions for all of its own products. It has become synonymous with cool, music, and even more up the ladder, digital lifestyle. Apple has been working hard to bridge the gap between offline and on. Events in its stores which feature up-and-coming bands, are the smartest thing I have seen from them in awhile. As Apple grows, and digital music, consumers habits are clearing shift but their emotions will always lie within the physical space. Figuring out how to turn digital behavior into physical results could enhance itunes as well as Apple. Look for integration of iTunes in physical space to be the next powerplay for Apple. All made that much easier with a clear branding proposition.
Unless an iPod killer comes out of left-field look for Apple to take the top spot eventually, may take 5 years or so, but who even thought they would be here as of 2000? How did owning a mac become hip? Is this killing shopping, all this online purchasing? Not so much, if anything it is fragmenting how consumers actually make their purchases. One could argue though that is has hurt music in creating generations of folks who only purchase singles, forgoing b-sides after they hear a 30 clip they dont fancy. It will be interesting to see how consumer's emotional connection to digital shopping changes in this new era, and how brands will be forced to adopt retail to digital as well as vice-versa.
Big Bite Apple
Sunday, June 24, 2007
Friday, June 22, 2007
Been busy as heck traveling and whatnot. Worn out, but took some interesting shots on the adventures. Thinking about turning this into a nice little book. What do ya think?
Tuesday, June 12, 2007
Redscout initiated the second in a series of innovation roundtables last week. The featured speaker was Rob Walker, contributing writer to the NYTimes, author, and idea provocateur for Murketing. He also has one of the best Flickr groups on the net with his street savvy eyes. Rob is often at the forefront of consumer theses and the subsequent branding implications, and each week seemingly stumbles upon another rich area for fodder. Rob was kind enough to share his opinion as a journalist, on consumers, marketing, and brands. The night was also an excellent networking opportunity for individuals from various backgrounds. Rob had quite a few interesting points such as:
-Red Bull starting as the epitome of anti-mass only to become a mass brand
-Apple's lack of transparency and openness, which can actually boiled down to "Cool Stuff for Sale"
-The power of youth today to have adopted marketing on granular levels to the extent they not only create brands for themselves, but communicate through brands
-The similarity between the ambiguity of Livestrong and the iPod. Both brands mean so many things to multiple crowds
-Reminded me that the true phenomena of Obey is that it was pre-internet, not just its expanse
-The power of brands ultimately lie in the value consumers place, not necessarily what the brand brings or percieves
-Real gurus invent their own words
-Mass culture might be gone with the invention of the net and democratized information
Rob gave a very thought-provoking style and let us know he has a new book dropping soon. Much of this will be explored in a further deep dive here on the Lifefilter. Stay tuned! Redscout will presenting another salon later on in the summer at a "secret location"
Friday, June 08, 2007
A discussion came up the other night about brands taking on a meaning of their own. Companies can push positioning on us about product attributes, or benefits, but ultimately the connection is made by consumers. Hence crappy products can survive and thrive and good ones often die. What really caught my ear though was a comparison of the Livstrong bracelet and the ipod. Ok plastic and plastic? No the fact that both products have infinite emotional connections heaped upon them by consumers. The iPod isn't necessarily the best music player, but consumers continue to buy it and make it the market leader. The design crowd loves the lack of lines, technologists love the simplicity of the UI, others just want the damn headphones to look cool. The livestrong bracelet is more than a cancer supporter, its a lifestyle, its a social movement and its fashion statement. Both brands would be lying if this was their original intent.
I think that great products will always encompass multiple emotions because no two people are alike. Really true meaning comes down to the consumer who engages the product. Advertising will never be able to create that type of connection, as much as it might push it upon us. It can highlight it and push awareness, as well as sell it to us, but we dont connect to products through advertising. Looking back at the products that have defined generations, things such as the VW beetle encompass branded ambiguity so well, but none of these products were created on the belief of appealing for so many reasons. Disagree? Maybe you should ask the consumer..
This is a bit old, but alogorithms seem to be the rage at the moment. We Feel Fine, is "An exploration of human emotion, in six movements", that scours the Internet every ten minutes, harvesting human feelings from a large number of blogs. Blog data comes from a variety of online sources, including LiveJournal, MSN Spaces, MySpace, Blogger, Flickr, Technorati, Feedster, Ice Rocket, and Google. We Feel Fine scans blog posts for occurrences of the phrases "I feel" and "I am feeling". The data is then illustrated in colorful dots, in a universe-like manner. The equation allows you to break down:
-Feeling (happy, sad, depressed, etc.)
-Age (in ten year increments - 20s, 30s, etc.)
-Gender (male or female)
-Weather (sunny, cloudy, rainy, or snowy)
-Location (country, state, and/or city)
-Date (year, month, and/or day)
Over 8 million feelings have been recorded along with the likes of sexiest cities, saddest cities, most loved cities and happiest states. This methodology is a fantastic read of emotions on a global level, something that omnibus's or surveys probably couldnt get it, with the recording of people's candid blogging nature. Its potentially an incredible tool to read large-scale populations in relation to major events. I feel like im window watching when i read this.
Tuesday, June 05, 2007
Crazy is as crazy does. Sometimes its life only to be balanced by work. I love this blog, but its curiosity is inately fueled by my passion at work. And work comes first. Crazy is work currently and hence nothing in this space. Probably won't change soon, and i certainly can't talk about it, but its opportunities of a lifetime. Someday it will all make sense.
In the meantime pictures of crazy new york will have to suffice.
Sunday, June 03, 2007
Always good to go home, especially for close friend's weddings. 3 weddings + 1 family graduation in 6 weeks, leaves one happily tired. Nothing is better for the head and the heart than family and friends.