Spring '12 Agency

May 20-23, 2012 | Colorado Springs, Colorado

How to keep up with hyper-connected consumers

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The convergence of social, local, and mobile has radically changed consumer needs and expectations. Here's how smart brands are turning this mass disrupter into success.

Change can be both bad and good. On one hand, change marks the death of old ideas -- it renders what was once the pinnacle of innovation obsolete. On the other hand, change allows for the birth of new concepts and technologies, thereby opening up new avenues.

Kenny Tomlin, founder and CEO of Rockfish, tackled this topic during his keynote address at the iMedia Agency Summit in Colorado Springs, Colo.

Tomlin opened with a real-life allegory -- the creation of the Sears and Roebuck Company. Richard Sears started out as the proprietor of a train station in the late 19th century. During that time, the pacific railroad was celebrated as one of America's biggest technological innovations.

One day, Sears accepted a shipment of watches that had been rejected by a local jeweler. Capitalizing on the fact that the U.S. had just inaugurated national time zones, Sears decided to sell the watches, which became wildly popular with consumers who now viewed keeping time as a sign of social sophistication.

Sears eventually moved to Chicago where he developed his catalogue and took advantage of the new rail technology by shipping his items. That, coupled with transparent pricing (a first for Americans who primarily negotiated the prices of items) and direct language, allowed the Sears to become one of America's great entrepreneurial success stories.

Drawing parallels between past and present super-companies, Tomlin likened Richard Sears' success story to that of Amazon's Jeff Bezos.

"Both launched their companies based on innovations that happened at the infrastructure level, both launched a single product that was in high demand, both used transparent pricing, both used personalization in marketing, and both brands grew rapidly through word of mouth." Tomlin said.

So, what can we learn from this?

"Anytime there is significant innovation occurring in infrastructure that transforms how people are connected, it ultimately becomes disruptive to commerce," Tomlin said.

In other words, companies like Amazon forever change the way we do business. In order to develop new innovative applications, we must first adjust to changes that occur within the infrastructure as well as the platform.

Think of it this way: The infrastructure (railroad) and the platform (trains) allowed Sears to sell his inventory in a whole new way (application). The same can be said for Amazon -- the infrastructure (internet) and platform (browsers) allowed Bezos to sell books online (application).

"Innovation at the infrastructure level creates new channels for connecting with consumers," Tomlin said. "Innovation at the platform level creates highly valuable companies that produce an entirely new ecosystem around them, and innovation at the application level shifts consumer demands as social networks and their access to knowledge and info expands."

When speaking of SoLoMo, smartphones are the infrastructure, Facebook and Twitter are social platforms, and companies like Yelp and Foursquare are the leading local applications.

What does this mean for agency and brands? First, it means that companies can be easily displaced. According to Tomlin, there is no such thing as brand loyalty, especially when talking about innovation and technology. New businesses are constantly born, and consumers are more than happy to switch brands in the pursuit of less expensive, higher quality products. Therefore, infrastructure innovation is viewed by companies as disruptive -- brands are constantly changing their business models in the effort to stay relevant.

Most brands work at the application level. However, to stay truly relevant, brands need to innovate on the platform. For example, Wal-Mart has endeavored to buy agencies and technology companies to create a startup culture within the framework of the super-company. Wal-Mart did this because there was just too much bureaucracy at the corporate level.

Forward-thinking brands must continually innovate to remain fresh and relevant to clients. Brands must think of themselves as technology companies because, really, it's all about product, data, and technology. Would you define Amazon as just a retail company, or as a retail and technology company? Would you define Netflix as just an entertainment company or an entertainment and technology company?

Lastly, if you are a brand, it's time to start fostering relationships with agencies and startups. Brands that keep things purely in-house bottleneck ideas and stifle the flow of innovation.

Jennifer Marlo is associate editor at iMedia Connection.

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