Chinese New Year : Celebrating the Traditional & the Modern in the Year of the Dog

Chinese New Year Instore theater

Chinese New Year Instore theater

Greetings from Shanghai where the pace of life is slowly returning to normal after the Chinese New Year festivities, which kicked off on February 16th.

I’ve long enjoyed CNY celebrations in cities around the world. However, the experience of my first Spring Festival in Shanghai is one I will not soon forget.

The 15-day festival is the most important holiday on China’s cultural and retail calendars. For reference, it's interesting to know that Chinese families spent close to $100B on CNY shopping and dining in 2014– almost double what was spent during American Thanksgiving.

A CULTURAL TENSION

Among other things, I observed the festival to be a study in contrasts. On the one hand, there is a strong cultural imperative to return home for a traditional celebration with family members. I still have a hard time wrapping my head around the fact that homeward-bound Chinese travelers make almost 3 billion trips annually during the New Year celebration, creating the world’s largest human migration.

However, the idea of duonian, or “escaping” from the Spring Festival is also gaining popularity throughout China. Growing numbers of urban professionals enjoy escaping the mainland for international vacations, while migrant workers are increasingly forgoing trips home to skip the financial burden of the gifts expected to accompany their arrival.

PepsiCo's Quaker Chinese New Year displays

PepsiCo's Quaker Chinese New Year displays

Travel home or escape? Cook a traditional meal or dine out? Shop at customary markets or online?       Give time-honored gifts or foreign goods? Or even an English couplet?

The interplay between 4,000 years of tradition and a decidedly modern lifestyle was at play throughout CNY preparations and celebrations this year.

At many points during the festival, I encountered people expressing aspects of this duality – a deep yearning to honor tradition mixed with a desire to infuse their holiday celebrations with contemporary goods and experiences.

AN OPPORTUNITY FOR BRANDS

I also observed several companies actively helping Chinese consumers reconcile this cultural tension. They represent great examples of how a brand can deepen their relationship with consumers during moments that matter, by answering unmet needs and desires with delightful solutions.

WeChat:

Image :  Caixin Global

I’d be remiss not to start with WeChat’s reinvention of the hongbao, or cash-filled red envelope customarily exchanged during CNY celebrations. In 2014, the company launched a Red Envelope App, which allowed users to digitally participate in the customary gifting. 

WeChat drew on the traditional iconography of the red packet, so the app felt familiar and rooted in tradition. However, a novel innovation allowed gifters to send a lump sum to a group to be dispersed in random amounts, adding a new element of surprise and luck.

By all accounts the idea was a cultural hit, and exchanging money via the Red Envelope app has become a modern tradition (and a clever way to drive WeChat trial and use). In 2017, approximately 46.6 billion red envelopes were exchanged – an incredible 33 envelopes for every person in China. Aptly, The China Post declared that, “even grandma is ditching hongbao for WeChat’s digital red envelopes.” 

TABAO:
Chinese New Year preparations customarily include family shopping trips to local markets to buy fabric for new clothing, décor items, gifts, candies, and the ingredients for holiday meals.

Today, consumer goods are abundant throughout the year, families live further apart, and shopping trips are rapidly shifting to hypermarkets and online. Yet, many still yearn for the time-honored market experience.

Last year, the eCommerce website Taobao acknowledged this tension with a beautiful redesign of their user interface for the CNY holiday. The seasonal overlay drew inspiration from a famous, Song-dynasty era painting of a traditional Chinese market, Along the River During the Qingming Festival

Image :  Dragon Social  

Image: Dragon Social 

Taobao created an animated, interactive interpretation of the art that became their homepage during the festival. Users could shop the animation, either by clicking parts of the picture corresponding to what they wanted to purchase or by using a search feature. 

This creative website redesign was an insightful solution to help shoppers reconcile a longing for the traditional market trip with the ease and convenience of accomplishing their holiday shopping online. 

NOKIA:
During the festival, there is no shortage of nostalgic advertising that explores the increasing difficulty of pausing one’s busy life to return home. 
(See here, here, and here, but have your tissues ready). 

Image:   Nokia China

This year, Nokia did something less expected with their holiday advertising, which launched the Nokia 6 just ahead of the CNY. The campaign features a dutiful son who is a busy actor, unable to return home for the New Year. 

His mother, unsatisfied with a video call, surprises him on the set of his film with a home-cooked meal, and the pair enjoy a warm dinner together.

I love the way that Nokia suggests an unexpected solution to a common consumer dilemma, by reimagining the idea of the “return home” and opening up new paths to family togetherness.

PEPSI:

Pepsi’s “Bring Happiness Home” campaign is a fourth and final example of the insightful updating of CNY tradition. Each year, the brand partners with award-winning talent to produce a short film that celebrates CNY and explores the idea of a “happy family.” 

This year’s production, Thunderbolt Parents, is a musical comedy that tells the story of two generations of love and dreams. It sagely reminds “young people” across generations that we will find our parents much cooler (and more complicated) than we imagine if we only make an effort to understand them.

Image : Pepsi, 2018

Image: Pepsi, 2018

Over the past 7 years, Pepsi’s launch of a short film has become a CNY tradition in its own right, signaling to consumers that the Spring Festival is near. 

This year’s project has already garnered over 600 million views, along with a noteworthy amount of social media buzz.

I appreciate the way that Pepsi, true to its fun-loving spirit, uses a star-studded cast and karaoke-worthy tunes to refresh the idea of the traditional reunion dinner. Pepsi joyfully reminds consumers that, with a little heart, celebrating the New Year with family can be a lively, modern affair. 

THE YIN & YANG OF MODERNITY AND TRADITION

These examples are four sparks that illuminate how an insightful blend of the customary and the contemporary can result in a delightful updating of tradition. 

Rapid technological innovation and increasing prosperity are contributing to moments of cultural change in cities around the globe. This is certainly true in China during the Spring Festival and at other times throughout the year as well. 

I believe brands, especially multinationals, are at their best when they can help consumers forge new ways forward while also helping them retain what is important from the past. 

The most successful will approach this opportunity with the perfect blend of fresh thinking and humility – a mandate that will be at the core of my work in the year ahead.

Happy Year of the Dog to all. Xin nian da ji! (Have a prosperous New Year.)

Holiday Cheers for Inclusive Advertising

‘Tis the season for holiday ads. I always look forward to the parade of new efforts that dot the marketing landscape this time of year.

I love that the annual holiday “adstravaganza” has been elevated to a cultural event in the UK. (And, I am intrigued by the fact that some British marketers now monetize their holiday ads through the sale of related merchandise!)

These holiday messages surely exist to build brand equity and make the register ring. But taken together, I think they can also serve as a nice mirror that reflects back important themes on our current cultural landscape.

This year, I am heartened to see several ads (and their omnichannel extensions of course) veer beyond the more expected holiday motifs to celebrate moments of connection and inclusivity across differences.

From British grocery retailer Tesco, we see a celebration of the ways families from different walks of life and religious traditions participate in the shared ritual of the turkey roast. The spot, titled “Turkey every which way,” closes with the affirmation “Everyone is Welcome” at Tesco.

From Lego Australia comes a story of what can happen when Santa and the Asian martial arts archetype Sensei Wu team up to save Christmas. In addition to reflecting the spirit of imagination foundational to the brand, the whimsical tale delivers the charming sentiment that we are better when we work across cultural perspectives to “build together.”

Pic group.jpg

From Sonos, the lively message that a shared musical celebration is just what is needed to transform a dull holiday gathering into an epic, multicultural and multigenerational holiday dance party.

And, from Samsung a poignant statement about the universal power of gratitude compliments a diverse group of building tenants who come together to thank the doorman who has gone the extra mile to make each of their holiday celebrations– from Diwali, to Christmas, to Chinese New Year –extra special.

In a year when the news headlines have been dominated by the many issues that divide us, it is refreshing to see marketers choose to hold up a cultural mirror that celebrates the potential for connection across boundaries, be they ethnic, religious, generational or otherwise.

Around the globe, our cities are diverse and becoming more so every day. Millennial consumers are particularly comfortable in this heterogeneous world and deserve credit for encouraging companies to stand up for inclusivity. Cheers to these advertisers who have taken note of this cultural shift and chosen to emphasize what unites rather than what divides this holiday season.

Happy holidays, and may each of you enjoy your own simple moments of simple connection amidst the year-end bustle.

Reflections From Berlin: The 4th Generation of Retail is Coming – Are You Ready?

“The future of retail will be led by sophisticated technology companies who happen to have a retail business.”

This quote lit a fire in me at a recent Consumer Goods Forum Summit presentation in Berlin, where pervasive topic of conversation was the fast-approaching 4th generation of retail (“4G Retail”).

Dan O’Connor, a fellow at Harvard’s Advanced Leadership Institute, spoke about the impending shift. In his conceptualization, the past 100 years saw three iterations of the retail model and the landscape today is being disrupted by a fourth new model.

O’Connor preaches that companies which function between innovation curves are best positioned for success. He cites Netflix as a great example, noting their ability to leverage one declining business model (the DVD) while anticipating and preparing for the next (digital content).

My key takeaway from his impassioned overview: in today’s retail environment, visionary leadership means optimizing for the world we know while preparing for the 4G Retail future.

Thinking about where retail has been helps us see more clearly where we are headed, so let’s dive in at the beginning!

The first wave, 1G Retail, was mediated through small, community-driven trade networks. In 1G Retail – which still accounts for 50% of the global retail pie – proximity, localization, and relationships are everything. This is the domain of the small family-owned shop where everyone knows your name and your buying habits.

Retail consolidation marked the beginning of the 2G Retail era. Starting in the 1960s and 1970s, large retailers (think: Wal-Mart) created new economies of scale by merging fragmented supply chains. These pioneers offered both convenience and cost savings, creating a juggernaut model that comprises 30% of the global retail pie today.

The rise of the online marketplace ushered in the third generation– 3G Retail. In this model, transactions take place on “platforms,” like Amazon or Alibaba’s Taobao. And, through what O’Connor calls “intermediaries” like Facebook, Google, or WeChat. Amazon’s IPO took place less than two decades ago. Yet, 3G Retail already accounts for at least 20% of global retail dollars.

Driven by real-time data analytics and rapid innovation (e.g., subscription pricing, mobile ordering, same-day delivery), the digital store model disrupted almost every aspect of the retail landscape. 3G Retail also prompted a shift in the very pace of the business, from a 52-week planning cycle to an environment that requires near-constant response to real-time developments.

 O’Connor dubs the next era 4G Retail or the age of “Real Time Retail.” In this 4G landscape, he predicts that a significant part of commerce will take place on a small handful of large digital value networks,” or digital platforms that serve a widening variety of functions including commerce, search, and social. Notably, technology companies and not traditional retailers will own these networks. In the U.S., we immediately think of Amazon, but around the globe, other platforms like Alibaba, Flipkart, and JD come to mind.

Tech innovation notoriously empowers consumers, and the Age of “Real Time” Retail will be no different. Imagine the 4G landscape like today’s retail on steroids – with interactions increasingly fast and frictionless. Transactions will take place on a few digital platforms, seamlessly along the spectrum between online and offline.

Same-hour delivery via driverless truck. Check. Personalized offers based on yesterday’s purchase behavior. Yep. A content-rich environment where everything you see is for sale? You got it. The 4G world will push the era of consumer control to its infinite boundaries, fueled by innovations around things like robotics, AI, driverless delivery, and 3D printing.

So now that we know that a 4G world is coming, what should we do about it?

 Here are three implications. In a 4G Retail World: 1. Data is table stakes 2. Retail platforms > media platforms 3. Success requires inventing new moments of consumer discovery.

#1: Data Is Table Stakes

In the 4G Retail future, the companies who control the data will rule the world. Success in the 4G retail world will require “big data collaboration” – both within organizations and across new (unconventional) manufacturer + retailer alliances.

This was illustrated in a recent Financial Times piece about Alibaba, which noted the company’s transformation into a growing “big data conglomerate.” Their massive data stream informs everything they do including merchant strategy, marketing, inventory management and even the layout of physical stores.

Despite the importance of data-driven insights, most traditional retail companies still face significant organizational and technical challenges to integrating and analyzing their own data. These issues compound when companies try to look further afield to think about how to work together with digital platform partners (e.g., Amazon) to optimize.

Getting their data house in order is an urgent matter for current retailers, since even simple data transformation efforts can take many years to launch.

#2: Retail Platforms > Media Platforms

My hypothesis is that in the 4G Retail landscape, the importance of large retail platforms will ultimately dwarf that of traditional media publishers. In fact, I am not sure the traditional standalone media content players survive in this future.

Think this sounds radical? Consider the similar tale of digital consolidation playing out in two very different retail markets, the U.S. and China.

In the U.S., Amazon is steadily reducing the need for online consumers to venture far from their site. They dominate commerce, with over half of shoppers starting every online shopping trip on the site and a full 90% cross-shopping Amazon even if they find what they are looking for on a retailer site. Amazon Prime Video is tripling their production of original content series over the next few years. Amazon Spark – curated retail in a social media format – looks poised to change the way we shop. In a retail future where consumers can shop, view content and socialize all within the Amazon platform, traditional publishers start to look much less relevant. 

That “single platform” future is even one step closer to reality in China. Alibaba-owned Tmall already controls more than 60% of the Chinese eCommerce market. Their multi-faceted Alipay is a true “killer app” that lets users complete a wide variety of tasks (from bill pay, to calling a cab, to getting a loan) right within the app. Like Amazon, Alibaba is aggressively expanding into digital media and entertainment with ventures including Alibaba Music, Alibaba Pictures and video-streaming site Youku. With aspirations far beyond simple retail transactions, Alibaba is building a vast “social commerce” ecosystem that supports almost everything someone needs or wants to do online.

This shift to a world where commerce, content and social life seamlessly merge on a single platform will require marketers to rethink the 4P’s through the lens of ecommerce retail platforms. (These are the future “Digital Value Networks” in O’Connor’s G4 framework).

New alliances between retailers, manufacturers and social platform companies will be critically important. Retailers and manufacturers will succeed by viewing shoppers as more than “trips and baskets” and by understanding their increasingly wide array of behaviors on digital retail platforms. In a G4 world, an Amazon shopper could be binge watching her favorite show via Prime Video, purchasing the outfit the main character is wearing, while conversing with her friends about the plot twist that just happened. How will your product or service get in on the action?

Savvy industry leaders will benefit from thinking now about which partnerships matter and how to develop these.

#3: Success = Imagining New Moments Of Discovery

In a 4G world, the retail storefront will be “everywhere,” and it will be up to brands and retailers to create new times and places to engage shoppers.

Critical questions for retailers and manufacturers will include: Where and when are my consumers that my product could be? How can we bring our product or service experience TO them, as they come to us less frequently? How do we offer a personalized experience to every shopper?

A number of retailers and manufacturers have begun seamlessly integrating the retail and hospitality consumer categories by rolling out “buy what you see” lines available for purchase at boutique hotels. This seamless, arresting experience is a picture-perfect example of the thinking needed to succeed in the G4 Retail world.

The spoils will go to the companies with the vision to imagine and create the retail landscape of the future – where every space and moment of technological interaction with a consumer is a potential storefront. What can you do to create a more seamless, simple connection to your customers today?

At The End Of The Day, So What?

We’re at the early, nascent stage of the 4G Retail Age. Today, promise yourself that you will be one of the leaders with the vision to co-create the new, exciting, ready-to-be-built world of 4G retail that’s coming, whether we like it or not.

Can Amazon be Beaten: How UK Grocery Retailer Ocado Is Holding Its Own

Imagine a retail grocery business run by a deep technology estate. No stores, only online deliveries from automated warehouses. Robots in those warehouses pick most items and send them via high-speed conveyor belt to human attendants for packing.

A human-like robotic hand is capable of handling over 50,000 products of all shapes, including delicate items like produce. This process is all monitored by technology that can alert the human attendants to packing errors. Other “collaborative robots” learn from and assist the human warehouse manager. An artificially intelligent warehouse system collects data and optimizes operations. A computer program even maps the best delivery routes for drivers.

This isn’t the grocery store of the future but a description of the present-day operations at Ocado. Ok, the robotic hand is still in development, but the rest is 100% operational.

I’ve recently returned from a UK market tour where colleagues were buzzing about this unique, online-only grocery retailer. They are the world’s largest and their team of technologists and techies has been working to change the way we shop for groceries for the past 16 years.

Amazon Fresh entered the UK market last summer, and many predicted Ocado’s demise. Yet, the retailer has survived, some might even say thrived. Their 2016 sales beat forecasts, rising 14.8% to £1.3B. This momentum has continued in 2017 with both sales and weekly orders increasing despite a sluggish British retail environment.

I have heard of other similar David vs. Goliath success stories. Earlier this year, I wrote about the fact that Amazon is surviving but not thriving in several other markets including China, India, and Mexico.

This most recent example got me thinking again about how and why homegrown retailers are able to give Amazon a run for their money.

In India, Amazon has struggled to win trial and loyalty in face of rival Flipkart’s entrenched awareness and strong seller relationships.

In Mexico, Amazon has fought to build trust in a market where the cultural defaults are cash payments and brick and mortar shopping. Meanwhile, local competitor Mercado Libre has leveraged a nuanced understanding of local culture to hold their own.

In the UK, Ocado’s impressive tech infrastructure is helping them keep Amazon at bay. The Independent calls the company “superlatively innovative” and they likely embody what the grocery category will look like in the age of the 4th Industrial Revolution.

Yet, Ocado has retained a strong compass for human values too. The company is testing delivery via more sustainable electric vehicles. They are partnering with underground urban farms with lower carbon footprints vs. traditional farming. And, they run a ‘Code for Life’ initiative designed to prepare the next generation of workers for the automated workplace.

I don’t want to overstate Ocado’s success. They still have a long road ahead; one that requires them to sustain their growth and license their tech infrastructure to an international grocery partner soon.

Nevertheless, I am heartened to see an innovative player succeed in the face of a powerful incumbent competitor.

Photo Credits: Business Insider, http://read.bi/2qJuvwE

UK: New application fills consumers’ baskets while they work, sleep, play…

Couple of weeks ago travels take me across the pond to the UK. While I’ll steer clear of adding my analysis of the Brexit vote, I am felt compelled to reflect on changing retail landscape in the U.K & implications here in the U.S. Specifically what was intriguing was the launch of an innovation aimed at making grocery shoppers’ lives a little easier.

Tesco recently leveraged the power of IFTTT (If This Then That) to create an automated shopping application. While it is powered by sophisticated backend technology, the proposition is simple: shoppers can join Tesco’s IFTTT channel to create “recipes,” or triggers that will automatically add items to their shopping basket at Tesco.com.  Yes, bots will do your shopping & take out the mundane tasks.

IFTT, eloquently described by Tesco Labs, is a “platform for joining together all your different online accounts to enable you to do clever things.”

Consumers sign up for a free IFTTT account and connect it to other applications (think: Facebook, Twitter, email, etc.). Registered users can then create “If, Then” recipes that proactively help accomplish a variety of tasks including controlling home appliances, staying healthy, connecting to loved ones, shopping smarter, or staying current. A tech maven can get an email whenever there is breaking news from their favorite publication. A health nut can receive a text anytime they fall short of their Fitbit goal. (Finger-wagging tone free of charge.)

Tesco’s channel offers a few recipes to get shoppers started. You can add milk on a certain day of the week, get an email if a product drops below a certain price, or even add burgers to your basket if it’s unexpectedly sunny.

Further, users are encouraged to create their own unique recipes. I can only imagine that these user-generated recipes will provide Tesco rich new territory for mining consumer insights and identifying unmet needs. 

This proactive technology is an example of the many “butler/bot” applications that are stepping up to manage the mundane and time-consuming aspects of people’s lives even when they are not actively thinking about them. (See: Google Alerts, Amazon Dash, and Brita’s wifi pitcher). Clearly, it has the potential to help consumers save time and money, and even make more satisfying purchases.

In addition to these consumer wins, I can’t help but think about what this application might mean for grocery retailers and their partners.

One innovation expert suggests that automation disrupts the typical shopping process (make a list, go to store, seek and select products) in a powerful way. It creates new imperatives to get a product into a shopper’s consideration set and basket long before they enter the doors of a store – if they ever do.

Conversely, as shoppers offload the job of shopping for weekly staples, they may enter retail grocery environments with more time and mind space to seek and sample novel products, creating new opportunities for brands and retailers to engage them.

Eventually, cart automation could pave the way for a “predictive grocery basket,” wherein algorithms would allow retailers to understand a shopper’s patterns and populate their basket with the items they want. While this may be a few years away, what a game-changer it will be if consumers can accomplish most of their grocery shopping without a single step, swipe or click.

For more on how Tesco is piloting technology to innovate the retail grocery space, read here.

Image Source: The Memo, 2016