Even Big Digital Companies Need Little Humans . . . Lots Of Them
Amazon offered $10,000 of startup capital and up to three months of pay to qualifying employees who quit . . . and go start a local last-mile delivery business. The eCommerce giant had previously invested in local delivery companies, seeding the creation of 200 such enterprises. But in a tight job market where most logistics firms can hardly hire drivers, Amazon had to pull out the stops in hopes of creating two or three times as many delivery partner businesses. It’s also a sign that Walmart’s recent announcement that it would offer one-day delivery to 75% of the US by year’s end (on orders over $35) is creating exactly the pressure on Amazon that Walmart intended. This is precisely the fruit that a market economy is supposed to produce: benefits for consumers, as well as the more than 3 million employees that work for the dueling giants. And it’s an important reminder that, no matter how digital we get, humans are at the heart of the future of work.
WW — A Great Digital Transformation And Innovation Story, But Branding Needs Work
Michael Lysaght is the CTO and VP of digital products at WW, the company formerly known as Weight Watchers. He joined us at the Digital Transformation & Innovation 2019 Forum in Chicago this week to share the WW story (Forrester podcast). WW’s community-based, in-person support model and membership and food product business model started to hit a wall as newly empowered consumers counted their steps, tracked their calories, and joined online support groups. Under new CEO Mindy Grossman, the company started to reinvent itself. Enter Michael. Michael was a successful Weight Watchers customer from years ago. When hired, he inherited old core systems, an absent software culture, and top-down support for change. Over his tenure, he has hired hundreds of developers and breathed life into a software culture that embraced engineering discipline, Agile development, and testing and deployment automation. The result is an app that went from one-star ratings to 4.8 stars, a new set of lifestyle and life-stage affinity groups, and a revitalized company. Now if we could only be reminded of what WW stands for . . .
Global Leaders Are Extending New Zealand’s “Christchurch Call” For Social Media Restrictions
Last week, French President Emmanuel Macron hosted a meeting with global government and corporate leaders to discuss and extend stronger measures against social media hate speech, prompted by a gunman who, in March, in Christchurch, New Zealand, killed 51 people and streamed the attack live on his Facebook page. Countries including Australia, Germany, Japan, the Netherlands, Spain, India, and Sweden said they backed it, as did US tech giants Microsoft, Google (and its video platform YouTube), and Amazon. Microsoft president Brad Smith said, “The Christchurch Call will be assessed ultimately by the impact it has. [And the impact it has will be] leading to real action, even if it’s not binding.” To this point, all companies investing in and providing social media client and employee empowerment should learn from these actions to seek to end use of social media for acts of terrorism.
As Transparency And Privacy Measures Take Hold, Advertising Must Become More Creative
Facebook announced this week in a blog post to advertisers plans to implement its long-awaited tool for users to manage their “off-Facebook” activity, which essentially negates Facebook’s most powerful advertising tracking capabilities. While users will be delighted to be rid of ads that follow them around the web, advertisers will lose the capacity to track users and create custom trackable audiences using Facebook’s advertising tools. CMOs will need to rethink their strategies for how to develop and deploy digital advertising. The model of cheap content that barrages consumers at every digital touchpoint will become invalid. You will need advertising that consumers want to engage with, content that consumers find enticing, and experiences that are interesting and unique. Creative differentiation, and the tech- and data-savvy agencies that apply it to all touchpoints, will be critical for CMOs to navigate the new advertising ecosystem that awaits.
Edgewell Buys Harry’s For $1.3 Billion But Not For The Same Reasons Unilever Bought Dollar Shave Club
Edgewell plans to acquire direct-to-consumer (DTC) brand Harry’s for $1.37 billion, seemingly mimicking Unilever’s 2016 acquisition of Dollar Shave Club (DSC). C-suites considering similar acquisitions will find comparing the two buyers’ strategies instructive. Most DTC acquisitions aim for access to rare first-party customer data. But that’s just one component of a complex acquisition that will need to fit your brand portfolio, channel strategy, and culture. Edgewell’s buy differs from Unilever’s across a number of dimensions:
• Survival vs. growth. Edgewell is under threat: Harry’s directly competes with its Schick, Edge, and Skintimate lines. Unilever had no razors. The buy opened Unilever to the men’s grooming market for growth.
• Retail vs. direct. For a DTC, Harry’s has a sizable retail distribution. This asset gives Edgewell greater clout with retailers like Target — something the $2-billion-revenue Edgewell needs more than the $60-billion-revenue Unilever. DSC was Unilever’s first fully-, vertically integrated buy.
• Product vs. tech. Most notable is Edgewell’s positioning of the deal to “create a next-generation consumer products platform.” Many DTC brands such as Rent the Runway and Sweetgreen angle themselves as technology companies to win VC dollars. For Edgewell, Harry’s is the future of their consumer packaged goods (CPG) business. Still a CPG business, Unilever will likely use DSC as a lean-data-machine instructor.
Before laying down a billion or two, review our take on making sure your DTC strategy really drives the right value.