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December 22, 2013
Two ‘presents’ for the digital holidays
By: Mark McDonald

Happy holidays. Digital gets special attention this time of year. While the mass media will concentrate on the growth of ‘online’ sales, Cyber Monday and digital products as gifts, I wanted to go deep on two examples that illustrate how digital novelty is becoming deeper best practice.

Digital Printers on 5th Avenue

This week I was in New York for the weekend and went shopping at a number of department stores. Riding up the escalator at Saks Fifth Avenue where I was a retail tourist more than a customer, I was greeted with a display that looked a lot like a store credit card promotion booth.

Rather than a table filled with applications and a cute promotion, the table contained a MakerBot 3 D printer! The idea was that if you spent $150 or more at the store, they would custom print a Christmas tree ornament. Browsing the merchandise, I can see that it would be pretty easy to spend $150 at that store, so this is more of a technology give away than a real demand promoter. Remember I was a retail tourist, as were many others in the store.

It was a good example of the accelerating introduction of advanced technology into the mainstream. For Makerbot, the promotion got their product into the market. The flat snowflake style ornaments they printed showed a limited set of capabilities, but they did take 3D printing from a concept to demonstrated capability. For Saks it was a novelty and conversation starter, something that was a little slice of an expanded experience delivered via digital technology.

Everything old is new and digital again

Amazon provides the other example. It is not surprising, given Amazon’s track record of growth and innovation, but their example shows the extent to which digital drives a deeper retail experience. In this case it came in the form of a targeted email offer to purchase their new Kindle DX. Here is the ‘exclusive’ offer that I am sure thousands of others received.

“As a valued customer who has been with Amazon for over two years, we'd like to give you an exclusive offer on Kindle. Enjoy a new Kindle Fire HDX after making just one payment of 25% of the device price, plus tax and shipping. We'll bill the remainder in three equal installments every 90 days. No interest, no finance charges, no hidden fees, and no credit check. Act quickly—this is a limited-time offer.”

Targeted messaging and financing offers have been around since the advent of marketing. The combination is used to sell everything from jewelry on shop at home channels to Sham Wow’s on late night TV. Amazon’s offer is the latest generation of this approach. Using analytics and the ability to know the customer, Amazon added a relationship dimension to the offer, one that recognizes the relationship, probably past order history and previous product views. Providing financing reduces the cost of the Kindles to less than $30 a month or a dollar a day. Amazon’s knowledge of the customer is deeper than other ‘easy pay’ offers, as the company knows more than your credit card number. This reduces financial and operational risk for the offer.

These ‘presents’ present examples of future consumerism

These two ‘presents’ represent the continued evolution of digital technology in the marketplace. Makerbot’s presence in the store shows people the technology first hand, moving from hype to its here. At the same time Amazon is evolving traditional sales and marketing offers in ways that improve targeting while reducing operational risk. We will see more of both in the future as technology continues to change the front office and present new opportunities for growth.

The holiday season concentrates media and popular culture on retail and consumer innovation, raising the visibility of innovation and the future of consumerism. These two examples reflect the increasing use of technology in customizing the consumer experience and refining the way experience is incorporated into long-term relationships.

Expect to see further applications of 3D printing to drive customization beyond the gimmick discussed above. Think about the ability to postpone tailoring to specific needs until the point, place and time of service. Likewise, think of the ability of analytics to reward customer relationships in ways that reduce their cost of acquisition without compromising operations and margins.

Those are items for future consideration. For now, please accept my best wishes for the holidays and the New Year. 2013 has been a year when organizations moved from digital consideration to digital action. 2014 will only build on that momentum as digital moves broader and deeper across our personal and professional lives.

All the best for now and the New Year!

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