British supermarket chain tests iPad-ready shopping carts.

Want a side of Apple with your supermarket runs?

Shopping Cart with iPAD interface

Shopping Cart with iPAD interface

British grocery store chain Sainsbury’s is testing out new shopping carts with solar-powered iPad docks and speakers (iPads not included).

The trial, first rolled out at a Sainsbury’s location in Kensington, West London, will allow customers to watch live sports and sports-related news after docking their tablets to holders affixed to their shopping trolleys, the Telegraph reports. A built-in battery with a self-charging solar panel keeps the tablets from running out of power, and a sensor on the front bumper will beep if an engrossed shopper gets close to crashing into another cart.

The carts have been developed by broadcaster Sky TV to shine a light on its Sky Go service, which serves up television on the go on Apple devices (an Android app is reportedly coming soon).

Sainsbury’s said in a statement that the shopping carts, which may be rolled out to other stores in Britain if successful, could convince more shoppers to patronize a store.

“We strive to make our customers’ lives simpler, which is why we’re looking at these new trolleys,” said Brett Hart, the supermarket chain’s shopping cart buyer.

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Successful Brand Marketing

With an increase in trust deficit world over, here is what brand managers need to weed out of their environments to retain their brands’ trust

MARKETING’s greatest invention is the brand. In effect unheard of 100 years ago, brands and branding now march triumphant. Everything and everybody — places and destinations, political parties and social movements, people (first celebrities and politicians, now, it appears, all of us) — are brands.

Yet, aside from a few usual suspects such as Apple, in the branding heartlands, all is not well. Y&R executives John Gerzema and Ed Lebar highlighted the problem in 2008, when they reviewed longitudinal evidence from Y&R’s Brand Asset Valuator research programme. In their book The Brand Bubble, they charted a ‘precipitous’ decline in brand trust since 1993, along with sharp falls in consumer perceptions of quality, brand awareness and ‘brand esteem’.

In 1993, for example, consumers trusted 52% of the brands researchers asked them about. Fifteen years later, the figure had fallen to 25%. Gerzema and Lebar pointed out that stock markets may have been pushing up the value of brand-owning companies, but brands themselves were being ‘hollowed out’.
Then came recession. Halfway through, Promise chief executive Charles Trevail observed that “according to every survey and index on trust in institutions and organisations from around the world, trust is in terminal decline”. Even when the recession was supposed to be lifting, Alterian chief executive David Eldridge commented on his company’s latest research: “Consumer trust is at an all-time low.”

So what’s the problem? How can brands and branding be so successful, yet so sickly at the same time? The answer may lie with the occupational diseases of brand management — diseases that are generated by the daily working lives of brand managers.

MASKING THE PROBLEM
Brand management as ‘mask management’ is the most common of such diseases. Because brands are all about external communication, many brand managers find it hard to resist the temptation to paint ‘lipstick on the gorilla’ — telling customers what the brand manager knows they would like to hear, rather than keeping to the truth of what the organisation can, or actually intends to, deliver.

In reality, the most important part of the brand manager’s job is one of internalisation: bringing customer views and perceptions from outside the organisation inside, so that the organisation understands, responds and resonates to customers’ changing demands. Yet, activity-wise, the minute-by-minute focus of the day job is external communication. When changing the external message is easy (and fun) and changing the organisation inside is hard (and painful), the lures of lipstick-on-the-gorilla mask management can become irresistible. In fact, they can even be dressed up as a new theory. Remember when we were told that punters didn’t buy the beer, but its advertising? Remember George, the Hofmeister bear?

Next on the list is brand hubris. Not long ago, it was fashionable among brand consultants to show their clients a chart depicting the relative prices of different T-shirts. Some sold for a fiver or less, while branded ones were at least £50. “Which T-shirt do you want to be?” the consultants would ask. The difference between being able to charge £5 and £50 lies in “branding”, they would say. “We can help you become experts at ‘branding’.”

Well, they may have been experts at branding, but they were dunces at economics. If you sell 1000 T-shirts for £5 with a £1 margin, you make £1000 profit. If you sell 10 for £50 with a £48 margin, you make £480 profit. By implying that the supply/demand curve could be ‘branded’ away, these consultants were usually doing their clients a real disservice. While they were doing the rounds with their presentations on ‘branding’, full of impressive words such as ‘intangibles’, the brand that romped it on the high street was Primark.

That is not to say that discounting is always the best strategy. Rather, it is to challenge the widespread belief that it’s the ‘extra stuff on top’ — the stuff added by ‘branding’ — that is the source of brands’ margins and profits. The fact is that, apart from some special cases such as luxury goods, if you look at most successful brands — such as Amazon, Apple, Dell, easyJet, Facebook, Google, IKEA, Nike, Starbucks, Tesco, Toyota, Virgin and Wal-Mart — what marks them out is not superb ‘branding’ (sometimes it’s superb, but very often it’s not) but that they deliver outstanding customer value, often via breakthrough innovations, technology and/or underlying business models.
‘Branding’ alone hardly ever makes a business successful. It is businesses, including their culture and ethos, that make brands successful. And as soon as the business drops the ball on innovation, service, quality or price, or forgets its cultural roots, the brand quickly loses its lustre.

CLARITY OF PURPOSE
Brand narcissism is our third, closely related, occupational disease. Brand narcissism works on two levels. At the first, every brand manager desperately wants their target audience to recognise their brand, love it and be loyal to it by, for example, acting as an unpaid yet enthusiastic brand advocate.
There is nothing wrong with these dreams per se. They are natural. What is wrong is when we morph the wish into a ‘strategy’ of ‘success by being popular’ — where getting people to talk about and ‘love’ the brand becomes an end in itself, pretty much divorced from the value it’s supposed to be delivering.

The second level of this brand narcissism, which is even more dangerous, is where the brand manager forgets the underlying purpose of the brand and starts acting as if it’s the job of the customer to add value to the brand (by paying a price premium or being its advocate, for example), rather than the job of the brand to add value to the customer.

An obvious point, perhaps, but it can be difficult to remember in a world where your every passing thought, and key performance indicator, is about how well-remembered you are, how preferred you are, or how many people are talking about you.

Our final occupational disease is toolkit myopia. Brand managers are surrounded by a dizzying array of sophisticated tools and techniques for research, testing, data-gathering and evaluation. They are on an endless quest for the breakthrough insight and the sparkling creativity. It’s difficult to master all these things and the quest easily becomes obsessive. So much so, that it soon seems as if excellence at these diverse technicalities lies at the heart of successful branding — when it is not.

You can, for example, use exactly the same technical toolkit, excellence, to build a brand that perfectly communicates a brand’s unique value.
And to hide the fact that the brand is nothing more than a me-too mediocrity. You can use technical excellence to articulate specialness and hide sameness, but content-wise, they are opposites, having an opposite meaning to the customer.

The one thing that branding as mask management, brand hubris, brand narcissism and toolkit myopia have in common is that they destroy trust. They are potentially catastrophic mistakes, yet they are in the air brand managers breathe, growing naturally in their working environment. So they have to be combated on a daily basis.

How? What’s the antidote? To remember that a brand’s real job is to build trust, and that everything the brand does must be tested against this yardstick. It’s this simple human understanding that successful brand managers never let anyone forget.

Five Star Appliance Becomes Apple First-tier Distributor In China

According to the information from the headquarters of the Jiangsu-based Five Star Appliance, which was acquired by the American electronics giant Best Buy, the company has signed an agreement with Apple to become its first-tier distributor.

Under this agreement, Apple’s store-in-store will enter 40 quality retail stores of Five Star Appliance in 2009. The first batch of five Apple store-in-store areas will reportedly be opened during the upcoming Labor Day holiday on May 1, 2009, and these stores will be located in Five Star’s Nanjing Xinjiekou store, Wuxi Shenglimen store, Suzhou Shilu store, Hangzhou Wensanlu store, and Changzhou Guanhelu store, respectively. Before the end of September 2009, the 40 Apple stores-in-store will all open for business and some of these stores will introduce Internet access to provide customers with convenient experiences.

Apple’s worldwide distribution are divided into four specifications, which are Apple store, Apple store-in-store, Apple quality distributor, and Apple distributor. Apple store is directly opened by the company itself and there is only one such store in China that is located in Sanlitun, Beijing.

Jing Xing, Five Star’s director for brand and market promotion, said that Best Buy’s international department has signed a worldwide strategic cooperative agreement with Apple. As a wholly-owned subsidiary of Best Buy, Five Star Appliance will be the core sector for this cooperation in China. Five Star Appliance will select 40 quality stores to implement the cooperation in four phases. Meanwhile, Apple’s plants will adopt the one-stop supply model to supply products to Five Star Appliance’s retail stores.

Jing said Apple store-in-store is one of the most important projects for Five Star Appliance in 2009. This project has a significant meaning for improving Five Star Appliance’s image, further attracting young customers, and providing a new business model to the company.

Formalized Services in Retail Stores

Retail stores have always given away advice along with selling products. Now some stores are turning helpful services into a profit center. Medical services are leading this move into retail stores. Medical clinics are popping up in pharmacies across the nation, and thousands of new clinics are planned to open in stores over the next couple years. No appointment is necessary to get quick, cheap fixed-price treatment for minor illnesses. This is a wonderful development in a nation with runaway health care costs and where fewer and fewer people even have a family doctor. The convenience will obviously draw lots of customers into the stores. Wal-Mart is even testing clinics in some stores.

Are there other services that might be popular in a fixed-price convenient retail setting?

How about “instant handy-man” services at the hardware store? The handy-man could have a small workshop for repairing or assembling stuff that people bring in. Or the handy-man could follow you home to install a ceiling fan or wire a new outlet “while you wait”. Garden centers could offer the same for tree-planting. Computer repair clinics would be great too, but computers are designed to be disposable these days and a small part is often too expensive to justify repair. Apple could set itself apart by designing its computers for ease of repair and then offer the services while-you-wait in the Apple brand stores.

Similar services have always been a part of other businesses. Jewelry stores offer repairs and ear-piercing. Photo development kiosks were a big deal before the coming of digital cameras (it’s interesting that they were located in drug stores and discount retailers, just like the new clinics). Home centers offer kitchen planning and installation services.

Repair and design services could be added to many retail businesses. You might offer the services already — to make it a bigger part of your business you’ll have to increase awareness. Set aside an area of your store for the service and give it prominent signage. Then include it in your advertising and watch your traffic grow.

The iPhone’s new business model

iPhone“Twice as fast. Half the price.”

That’s the story about the new iPhone 3G that Apple is selling, and it’s a line that was echoed by Apple VPs and industry analysts in the Moscone West spin room after Steve Jobs’ keynote Monday.

“The new price point is a very big deal,” said Tim Bajarin of Creative Strategies. “With that, and the 70 countries, Apple is now a world player on the mobile smartphone stage.”

But it’s not that simple. There were a lot of financial details Jobs left out of his keynote that only emerged later in the day, in a 8-K form Apple (AAPL) filed with the SEC and a long press release issued by AT&T (T).

Apple alerted the SEC that although it had signed deals with 70 countries…

“…Under the vast majority of these agreements, Apple will not receive follow-on revenue generating payments from carriers”

AT&T, for its part, warned investors of…

“…potential dilution to earnings per share (EPS) from this initiative in the $0.10 to $0.12 range this year and next.”

What does it mean?

It means the iPhone has a new business model.

When the device was first introduced, Jobs was able to dictate some rather unusual terms. Customers had to pay full retail price for it (a practice almost unheard of in the mobile phone industry) and carriers had to share a sizable cut of their monthly revenue with the manufacturer (also virtually unprecedented).

Now, the carriers are subsidizing the cost of the phone, making up for it in monthly charges, and they are no longer funneling a share of that monthly revenue to Apple. As Piper Jaffray’s Gene Munster puts it: “Apple is basically playing by the rules that all other cell phone hardware manufacturers play by.”

Pressed for specifics, Munster speculates that AT&T is paying Apple about $400 for the 8GB iPhone and keeping $199 of that. It probably pays Apple about $450 for the 16GB model, he says, and keeps $299. [Update: in a note to clients Tuesday Munster came up with a slightly higher number. He now estimates that Apple is charging carriers, on average, $466 per iPhone. Toni Sacconaghi at Bernstein Research comes in with a range that goes even higher; he believes Apple will sell the new iPhones to carriers for anywhere from $350 to $700 each.]

This is a big change. Gone is that nice revenue sharing deal where Apple socked it away as deferred income over the life of a 24-month contract — a comfortable cushion against lean quarters in the company’s future, should they ever arise.

Gone too is the nice iPhone bonanza AT&T got upfront last summer by selling all those 8GB iPhones for $599 each (minus a small commission, perhaps $80, to Apple).

But don’t cry for AT&T. As its press release made clear, it’s going to make up for that by raising the $20 monthly fee customers pay for unlimited data services to $30. That works out to $240 extra over the life of a two-year contract.

“Half the price,” it turns out, actually costs customers $40 more.

But most people look only at the purchase price when they buy cell phones, and at $199 for the 8GB model, the iPhone is going look a whole lot more affordable to a lot more people. Munster, for one, believes that Apple will more than make up in volume what it’s losing in revenue sharing.

Munster had predicted that Apple would sell 12 million iPhones in 2008, beating its own 10 million target by 20%. With the new price point, he says, 12 million “should be a lay-up.” And what about his famous prediction that Apple will sell 45 million iPhones in 2009 — a number that he acknowledges is “way ahead of the Street”? Munster is not raising that target, but admits he’s “increasingly comfortable” with it.

Vodafone and Airtel to Bring iPhone to India.

No sooner has Steve Jobs unleashed the new 3G iPhone at the Worldwide Developer Conference (WWDC) in San Francisco than back home, not one but two carriers — Bharti Airtel and Vodafone — have announced, in conjunction with Apple, that they will be bringing the iconic device to India later this year. However, neither has specified the launch date or pricing of the 3G iPhone in India.

And now that the wraps are finally off of the much-hyped 3G iPhone, a quick recap of the stuff it’s made of. iPhone II marries all of the features of iPhone with 3G networking to make the device “twice as fast” as the first-generation iPhone. iPhone II features built-in GPS for expanded location-based mobile services and iPhone 2.0 software with support for Microsoft Exchange ActiveSync, and is capable of running hundreds of third-party applications already built with the recently-released iPhone SDK.

Vodafone and Apple will bring iPhone 3G first to Australia, Italy, New Zealand, and Portugal on July 11. In these markets, Vodafone will make available iPhone 3G on both prepaid and contract price plans that will include value data bundles. Vodafone will then, later this year, make iPhone 3G available in other markets including the Czech Republic, Egypt, Greece, South Africa, Turkey, and most importantly — India. Details of specific launch dates and price plans will be made available in the respective countries by individual Vodafone operating companies. Vodafone customers in all of these markets including India can pre-register online and in retail stores in the next few days.

Meanwhile, Airtel customers who wish to receive more information on the Apple iPhone can send an SMS with keyword “iPhone” to 54321 (toll-free number). Airtel will announce details regarding pricing and availability at a later date, the company said.

Announcing the Apple-Vodafone partnership, Frank H R Vekamp, global CMO of Vodafone Group, said, “We are very excited to bring iPhone 3G to many of our customers across Europe and emerging markets this summer. Vodafone’s extensive, high-speed, and reliable networks mean customers can enjoy a great Internet and communications experience on their iPhone 3G.”

On a similar note, Manoj Kohli, president and chief executive officer of Bharti Airtel, said, “We are delighted with the opportunity to bring the innovative iPhone 3G to India. As India’s leading telecom operator, Bharti Airtel has always stood for innovation and customer delight. With our reach across the country and iPhone’s revolutionary features, we have a valuable proposition for our customers in India.”

Meanwhile, Tim Cook, chief operating officer of Apple said in separate announcements that they are thrilled to work with both Vodafone and Bharti Airtel and can’t wait to get this revolutionary product in the hands of even more people around the world.

Techtree had previously reported about the possibility of Apple going multi-carrier in India. Now that it’s indeed official, we asked some people for their views on the same. “Vodaphone has an international tie-up with Apple for the iPhone in a lot of countries, so it is little wonder that they got roped in for India as well. This seems to be purely from a goodwill point of view. Bharti Airtel on the other hand has a huge reach in India, and they’ve been roped in as well by Apple. This is purely from the business point of view,” said a hard-core techie we know. A Vodafone customer said, “I’m rather more interested in knowing when they are launching the iPhone in India and what will it cost”. Meanwhile, an Airtel subscriber had this to say, “I’d like to see attractive schemes like special tariffs on voice-GPRS services along with better network services and support.”

All said, both Bharti Airtel and Vodafone are established names in telecom; Bharti Airtel is known as India’s leading integrated telecom services provider while Vodafone is known as the world’s leading international mobile communications group. It will be interesting to see how the carriers’ respective associations with Apple play out, to say the least.

RRL launches iStore

Reliance Digital, the consumer durable and information technology arm of Reliance Retail, today, has launched iStore at Ashoka Metropolitan Mall, Hyderabad.

Covering an area of over 2,875 square feet, iStore will house the entire range of Apple products for professional and consumer segments including iMac consumer desktop computers, MacBook consumer notebooks, Mac Pro and MacBook Pro, iPods and the entire suite of Mac software along with over 500 accessories and peripherals complementing Apple products.

Commenting at the launch, Ajay Baijal, chief executive officer, Reliance Digital, said, “We at Reliance Digital are delighted to bring Apple products to Hyderabad through iStore. Customers in Hyderabad shall now have access to the latest, iconic products from Apple in a world-class ambience with end-to-end customer support.”

The company plans to expand the retail presence of iStore across all major cities of India.

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