Chasing the Customer … When There’s Writing On The Wall

 

 

Adjusted … Adjusting … Clueless

 

UPS ♦ Apple ♦ New York Times

 

When There's Writing on the wall                    Above slide from the recent Consumer Goods Technology Conference presentation by P. Berry Phd.

There is no question that ecommerce is both a disruptive technology and ‘shapeshifter’.

There are those that have adjusted — those that are adjusting — and those that still appear … clueless!

Examples:

Adjusted – UPS: E-commerce customer deliveries now account for 45% of United Parcel Services U.S. package volume. UPS UPS Truckhas created an innovate logistics support system for clients to earn their business. UPS just reported strong 3rd quarter growth due in large part to its innovative new business model. UPS has adjusted by working with brick and mortar retailers to deliver ‘brick and pick’ orders to their consumers. UPS ships from the retailer warehouse to individual stores. Customers are then notified that their order is available at their local retailer for pick up.  UPS has also created an alliance with the U.S. Postal service where UPS delivers packages to the branch post office , Surepost, who then delivers to the customer on regular mail routes. This service save the shipper approximate 1/2 of regular ground delivery charges.

Adjusting – Apple’s iTunes: The Wall Street Journal  ran a feature story on October 25th which underscores itunesthe disruptive nature enabled by today’s ever changing technology and shifting consumer demands. The article headline reads, “A Sad song for iTunes” Cassettes disrupted the record market. Then CD’s disrupted the cassette business model.  iTunes crushed both the music industry’s CD and album strategy. Now streaming technology is enabling subscription plans that are sapping downloads at the world’s biggest seller of music, Apple Inc. Music sales at Apple’s iTune Store have fallen 13% to 14% world-wide since the start of the year. However, global music industry sales have remained relatively steady helped in large part by a 28% jump in revenue from streaming services. Apple’s ‘adjusting’ strategy is the $e billion acquisition of Beats which included the headphone and streaming music subscription business. Apple plans to relaunch Beats next year as part of iTunes.

Clueless – New York Times: The ‘Gray Lady’ continues to show the age of leadership thinking. A recent post on Talking New Media relates to the New York Times efforts to adjust to a new media form factor or find relevant content. The article headline reads: Wall Street applauds NYTimes buildinglayoff announcement, but the company is spinning its wheels on mobile and tablet platforms, while failing to develop new media brands.”

According to the Talking New Media article:

“Despite the enormous brand equity the Times enjoys, and its deep reservoir of publishing talent, the paper has actually been the best example of the cliché that newspaper publishers just don’t get digital. It is not true, it is just that for the Times, digital means the web, and any new digital platform that has emerged just another way to get their print and web content distributed. It isn’t working – neither driving enough new subscription revenue, nor advertising revenue, to avoid the need to make cost cuts – cost cuts that are necessary because the paper continues to lose print ad revenue.

The cure of what ails the Times is the same as other legacy brands: stop being one brand, one product, chopped into many different bits, and instead become publishers, the creators of many brands, many products. The mobile and tablet platforms, like the web itself, opens up endless possibilities for creating new, separate brands, brands that might one day feedback content to the main news product, but are not developed for that purpose at creation.”

In an effort to cut costs, The New York Times recently announced the early buyout of 100 staffers. Industry observer  D.B. Hebbard wrote:

“But these things happen at media companies that are not moving in the right direction, and where the future looks far less bright than the past.

The problem is that eliminating 100 positions won’t have a major impact on costs at The Gray Lady and so future layoffs are not out of the question. This drip drip drip of layoffs has an effect inside the building.”

The New York Times is not, however, alone in its struggles. McClatchy just reported a slide into the red as ad revenue fell 8.6%. Canadian Publisher Post Media Corp. Canada recently reported that revenue fell 13.3 percent to $146.8 million compared to $169.3 million in the prior year, with print advertising revenue down 21 percent. Both of the papers in Chicago, Chicago Sun Times and Chicago Tribune, are having an extraordinary time retaining print readership. In a metro area of ten million residents, the two metro papers struggle to reach any level of readership worthy of a national advertising buy,  according to Talking New Media. Reports are circulating that the Sun Times owner may sell off its suburban newspapers to the rival Tribune to try and stay afloat.

As you can see from the chart below, managing the ‘shapeshifting’ change in form factor from physical to digital is undoubtedly the only path to survival. Mastering the transition from print to digital appears to be a skill set that few in legacy media management have been able to accomplish as of yet.

The ‘writing on the wall’

 

 



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