28 April 2008

Apple's iPhone goes 3G and downunder.

Apple's new 3G iPhone looks set for a June global launch in Australia.

According to a New York Times article on Sunday, Apple is likely to launch it's 3G iPhone in June. The new phone has been designed to to further increase its appeal to both consumers and carriers in Australia, Asia and Europe.

A number of Australian carriers, including Vodafone, are known to have been internally trialling the phone on their networks for months now. The trials and the arrival of the 3G version confirm that the new iPhones will now be able to run on Australian 3G networks.

The launch of the new phone seems designed to coincide with the opening of Apple's Australian flagship store in Sydney. Part of Apple's global rollout, the flagship stores are designed to not only enhance the brand but underpin Apple's direct sales strategy.

The NYT reported that analysts and the industry were expecting Apple to introduce the 3G phone to ensure Apple's Steve Jobs meets his 10 million iPhone sales forecast by the end of 2008.

More than 1.7 million iPhones were sold by Apple last quarter with Apple struggling to meet demand in particularly in the US and Europe. However, this contrasts with reports of lagging European sales being blamed on Apple's network exclusivity, pricing and lack of 3G capability. Complicating demand issues is the widespread belief that more than 1 million unlocked phones have found homes outside the US and are not in official carrier forecasts.

Meanwhile, competition is expected from Samsung's Instinct and LG's Vu, both very similar to the iPhone. Both were premiered at the Las Vegas CTIA Wireless 2008 earlier this month and are expected to launch on US networks soon. They will also pose a significant threat to Job's ability to meet analysts' expectations and will add urgency to the 3G launch.

13 April 2008

Prada and Starbucks: the non-place of retail.

In his eponymous essay and book Non-Places: Introduction to an Anthropology of Supermodernity (1995) French anthropologist Marc Auge coined the phrase "non-place" to refer to places of transience that do not hold enough significance to be regarded as "places."

In Auge's original concept non-places were those spaces you typically encounter when travelling such as airports, bus terminals, hotels, shopping centres and supermarkets and which you often only remember in very generic terms.

But the concept of non-place is now increasingly engulfing many more places as brand owners and their brands struggle with brand differentiation and experience.

I was recently struck by the comment in a recent review of Taylor Clark's Starbucked: a Double Tall Tale of Caffeine, Commerce and Culture, where the enclaves of Starbucks were described as "non-place" and could just as easily be in "Manchester, Mumbai or Montreal" given the scale of its globalisation.

The two key issues non-place raises is: does globalisation make it possible for ANY brands to create real and unique spaces? do the elements of branding actually work against the development of these kinds of spaces and experiences?

In the first instance, globalisation is designed to bring about both ubiquity and consistency in the performance of the brand and in the consistency of experience. For retail brands there should be little difference between your experience of your brand in one country versus another. This is best demonstrated by luxury brand, Prada.

Given the brand strength of their various marks and portfolios, luxury retailers rely particularly on the elements of place to support their brand positioning. Location, store fit out, visual merchandising, service and stock are all shared elements. In Los Angeles, the Rem Koolhaus Prada designed store might look like a garage - it has no fascia and unlike most stores on Rodeo Drive, is open to all. Despite Koolhaus' experiments with reversing a traditional store layout (the stairs face backwards and are used as more of a display area, the overall design, layout and availability and display of product still remain essentially consistent with the Prada brand identity and system.

While Koolhaus tries to subvert our notions of a retail space, I felt it was as much a a non-place as a Gap or a Starbucks, because my experience was essentially the same as any other Prada store I had been in from Rome to Sydney. As Auge puts it Prada presents "the clean, cold lines of non-place" and in what he describes as the "supermodern".

Auge describes a place "as relational, historical and concerned with identity, then a space which cannot be defined as relational, or historical, or concerned with identity will be a non-place". In simple terms, Prada's place branding is so concerned with the assertion of its own identity everything else seems opaque.

This failure supports the second issue, if branding is designed to contribute to the creation of meaning, why in the same instant does it also create non-identity and non-space and perhaps the answer lies in the non-critical application of branding.

Branding works best if it can create, manifest and control the experience of identity. However, the application of logos, design systems, visual positioning, tone of voice which all in their own way produce brand and product expression and convey core messages and meaning, also work best in an environment that can be ordered. This is the purpose of branding, to create that order through a shared and understood experience.

If we take Starbucks as an example, it is fairly easy to see how Auge's non-place can be applied and how branding works against the brand. Firstly, the stores have been designed against a specific set of criteria with user experience mapped through identified touch points. These touch points, whether they are transactional (lining up at the counter order and pickup the coffee) or visual (the logo) are part of a series of cues for messaging the brand, and provide an incentive to buy and consume product.

Secondly, because customer experience is so managed within the store to maximise sales, the brand is only ever going can only deliver a ubiquitous experience. It is as
Starbucks chairman Howard Schultz said, the brand has last lost its soul (see DIFFUSIONblog 3/5/07) If as Auge claims place is "relational, historical and concerned with identity" then Starbucks branding is never going to deliver anything but a partial sense of this.

In an internal memo published last year Shultz describes "the commoditization of the Starbucks experience", he laments the the loss of "the romance and theatre" of the traditional Italian espresso machines, which have been replaced by "cooking cutter" formats and automatic machines. And it is is this sense of place created by the "romance and theatre of the machines", which is what I think is part of this non-replicable brand experience. They are intrinsically linked to the European cafe experience, which tends to be seen as non-commodified, unique and very very much about Auge's idea of "place", the Italian lifestyle.

So what can retail brands do? Auge describes the place and non-place as "polarities" and with the latter never fully resolved and this is where I think retailers need to address. If we are all supermoderns, wondering from place to non-place as we traverse the globe and even our own countries in the search for authentic experience, we need to start to encounter retail experiences which relate to a sense of place, are embedded in historical context and contribute to the creation of personal identity. The desire for a Prada suit might deliver some aspects of this but the store as the mechanism of experience is flawed. Branding needs to be far more self critical and ready to fall outside systems and formats. Its why love boutiques and flea markets. They are unordered, lack any brand homology and are always different.

12 April 2008

Colour wars 2: Darrell Lea defeats Cadbury

In the latest round in the international colour wars, pint sized chocolatier Darrell Lea has defeated international retailer and bully boy Cadbury Schweppes for control of the colour purple in Australia.

In DIFFUSIONblog 25/5/07 we reported that Cadbury had won an appeal in which it claimed that since 1995 it had achieved a substantial, exclusive and valuable reputation and goodwill throughout Australia through the Pantone 2685C colour purple.

It alleged that since 2001, Darrell Lea had consistently used a colour bearing a "striking and obvious" likeness to Cadbury's purple in its signage, badging, wrapping, store fit-out and point of sale facilities.

The Australian Federal Court has now dismissed the latest application by Cadbury Schweppes that the use of purple by Darrell Lea amounted to misleading and deceptive conduct.

Justice Peter Heerey said he was not persuaded that Darrell Lea in using purple had passed off its business or products as those of Cadbury or had contravened Australia's Trade Practices Act.

"I am not satisfied that such usage has resulted, or would result, in . . . purchasers of chocolate being misled or deceived," Justice Heerey said.

Cadbury had claimed customers the use of the colour purple affected customers ability to discern the difference between the two company's products.

But Darrell Lea counterclaimed Cadbury's knowledge was limited to inspection of goods on display and physical surroundings. The claim was correct as the original evidence presented in an audit of colour use made no attempt to actually observe brand experience.

"Cadbury Schweppes has deliberately established a connection between our shade of purple and Cadbury chocolate, and many consumers associate Cadbury purple with Cadbury chocolate,'' Cadbury managing director of Mark Callaghan said in a statement.

"We remain totally committed to protecting our brand identity and Cadbury will appeal this decision.''

As we noted this the second appeal Cadbury has lost. In the original April 2006 hearing, a Federal Court judge dismissed Cadbury's claim. In the disputed hearing the court ruled Cadbury did not “own” the colour purple and that Darrell Lea's use was not likely to convey to a” reasonable consumer” that it was associated with its rival.

The field of brand identity can be somewhat murky and "locking up" what are essentially public colours without a similar attention to the impact of the rest of the identity system can be fraught with danger, as Cadbury continues to find.

11 April 2008

Yahoo, slow death of a portal?

Microsoft's increasingly aggressive stance on its Yahoo bid looks certain to be bolstered by recent figures on Yahoo’s overall performance as a search vehicle.

According to SearchEnginewatch nearly 10 billion "core" searches were conducted in the US in February, accounting for a 6 percent decline from January search activity.

Altogether search queries were down at all the major search engines. Google serving 5.9 billion search queries, down 5 percent from January. In February, Google's share of searches was 59.2 percent, up from 58.5 percent.

Yahoo's search share slipped from 22.2 percent in January to 21.6 percent in February. Overall, it served 2.1 billion searches, down 8 percent from the previous month.

In March, much the same scenario has also been played out over at Hitwise, whose measures have Google owning around 67.25 percent of all US searches for March. Yahoo! Search, MSN Search and Ask.com each receiving 20.29, 5.25 and 4.09 percent respectively.

In 2007 Hitwise had Yahoo with 21.26% of all searches and the year before that 22.30%. It represents not only a continuing rout by Google but also plays into suggestions that Yahoo’s market position is being eroded.

In Australia, the Yahoo7 alliance has been criticised for its inability to find focus with advertisers increasingly shunning the joint venture (See DIFFUSIONblog 23/10/07) and relegating it to a second tier advertising status.

In February Nielsen//NetRatings Yahoo!7 in third place in the market with 5 million unique users, though this figure is an aggregate and does not represent search only. It cites its recent content deals with Bebo and Disney as proof that its a real challenger to Google.

The Australian operations focus seems to be on stretching the width of advertising, rather than increase the range of opportunities for users and increasingly gain traction from engagement with the brand. In a mature market such as Australia, where Neilsen claims internet usage has peaked at 80%, the effort may go unrewarded and probably unrecognised.

This scenario is mirrored in almost all aspects of Yahoo’s attempts to rescuscitate its ailing brand.

The simple fact, as the statistics show, its market relevance with users and with advertisers is declining. From a content, usability and experience side, Yahoo now does little to differentiate itself from its competitors. Its competitors, particularly MSN, do nothing more than mimic the same.

Portals, like Yahoo, and before that Excite, Lycos and AltaVista (remember these!) all experienced year-on-year declining relevance and consequently market share as their brands no longer provided users with differentiating content and experience. It wasn’t about building advertising platforms, it was as Google worked out, about building a brand that delivered differentiating and innovative content and usability for users.

I'll let the statistics speak for themselves. According to SearchEngineWatch in 2001 Yahoo was the top search engine, referred the most traffic to web sites in the US, accounting for more than 38% percent of search referrals with MSN 15.9 percent, the nascent Google 11.3 percent and AOL 7.8 percent. Internationally, Yahoo referred 41.5 percent of all traffic, followed by Google at 13.9 percent, MSN 12.9 percent and AOL 5.4 percent.

As everyone knows, its a numbers game. And the numbers are real.