Make Your E&SR Product Strategy More Transparent To Consumers

 [posted by Sally M. Cohen]

The recent Gadgetology Green Study conducted by Retrevo – a site that bills itself as “the first matchmaking service for people and electronics” – found that consumers are confused about companies’ green claims and about what actually constitutes a “green” product. That’s really not all that surprising considering the amount of information – messaging claims, labels, various terms related to environmental and social responsibility (E&SR) – flooding the market today. Even more standardized labeling schemes like the EPA’s EnergyStar and WaterSense, FairTrade certification from Fairtrade Labelling Organizations International, or even the USDA’s Certified Organic symbol may be recognizable to consumers, but many still don’t know how products achieve these labels. (See Mark Bittman’s recent New York Times article for more about confusion around organic food and food production.)

 

But is exposing the details about your E&SR products (and corporate sustainability and social responsibility policies) really that important? I would argue yes, for two major reasons: 1) We know that consumers take E&SR into account when making purchase decisions, and, providing important information can help sway consumers’ purchases. And, while some consumers may simply look for a known label or a broad messaging claim, 2) you want to avoid seeming insincere about E&SR (the dreaded “Greenwashing”); details can give weight to your E&SR story. Ultimately, if you don’t put the information out there in front of the consumers who want it, they will be able to find it elsewhere, thanks to Web sites like GoodGuide.com and Sierra Club Green Home which arm consumers with detailed information about the products they buy and the companies that make them.

 

There are a number of ways to be make your E&SR product strategy (and corporate strategy) more transparent to your customers. One way is to publish an annual corporate sustainability or responsibility reports (as Nokia, Lenovo, and many other E&SR-focused companies do), but this information is often much more accessible to shareholders and industry analysts than it is to mainstream consumers. Another way to increase transparency with customers – as well as capitalize on consumers’ current interest in E&SR – is to surface your E&SR product strategy much closer to the product itself. One such example is Apple:

 

 

Environment pages for Apple’s MacBooks, Mac mini, and Mac Pro link to Environment Status Reports which allow consumers to explore product-specific including greenhouse gas emissions, materials composition, and packaging information for each individual product.

 

Another great example comes from Timberland:

 

 

For more than 2 years, their “nutritional label” summarizes the climate impact, resource consumption, and chemical components for each pair of shoes – directly on the shoebox.

 

Other companies are following suit: HP’s Eco Highlights labels, and Continental Clothing’s carbon footprint information on their garments’ care labels … How are you increasing transparency to customers about your E&SR product strategy?

Mobile 2.0

[Posted by Thomas Husson]

I recently had the opportunity to speak at the mobile 2.0 conference in Paris. There are lots of events of that kind but this one was all the more interesting as there was a European start-up contest, showcasing how innovative mobile is.

What stroke me is that all the themes and roundtables were focusing on online trends expanding in the mobile space. From social networking to widgets via m-commerce, this is all about web ideas being reinvented in the mobile space.

Definitions of web 2.0 vary quite a lot. For mobile 2.0, this is all the more difficult as I think it is the result of a constantly evolving process: the convergence between web and mobile.

The result is yet unknown as mobile is a new and complementary channel / media with its own specific rules.

There are no doubts though that this market is evolving quickly despite the economic crisis.

Forrester recently fielded a Technographics survey in Europe: Mobile Internet penetration now stands at 24% among Europe online users on a monthly basis. Forrester will soon publish a report with detailed analysis on how the European mobile Internet space is evolving. 

You can continue to ignore mobile 2.0 but at your own risks. Not having a mobile presence nowadays is a bit like not having a web presence circa 1999 / 2000.

Will Consumers Buy Green & Socially Responsible Products...In A Recession?

[Posted by Sally Cohen]

Last week I published a report -- Making The Case For Environmentally And Socially Responsible Consumer Products -- which brought to light some interesting data on how consumers feel about purchasing "green" and responsibly made (E&SR) products. Here is a highlight:

The good news for product strategists: A small, committed group of consumers are willing to pay a premium for E&SR products; for the rest, E&SR features or considerations help to differentiate your product during the purchase decision-making process.

Since this report went up on the Forrester site, I've had a number of discussions about what these data might look like if we collected them today, in the midst of an ugly recession. And no wonder, since many of us perceive "environmentally-friendly" or "fair trade" products to be more expensive than their conventional counterparts. And in many cases this, of course, is true: CFLs often cost a bit more than conventional bulbs, and a 2009 Ford Escape Hybrid's MSRP is more than $9k above the conventional model's asking price.

We must face the facts of this economic downturn: As my colleague Paul Jackson has shown, consumers' cut-backs in the downturn will effect their spending on technology -- this includes E&SR devices, appliances, and household goods. Consumers will defer replacement of installed devices, and if they are planning to buy new technology, many will forgo any premium associated with "green" or "social responsibility." 

But the reality is that -- even in the recession -- consumers' reactions to the premiums they might pay for E&SR products differ. Just yesterday HP officially started selling its Enviro batteries, made by Boston-Power. These Li-Ion batteries have a three-year life and can charge to 80% in only 30 minutes (40% in 10). They've been awarded the Chinese CEC Ecolabel and the Nordic Ecolabel. They also cost $149.99. While this price tag has raised a few eyebrows in the blogosphere, others think the $20-30 premium is less-than-expected for a battery with all of these features.

So will mainstream consumers buy your E&SR products in the downturn? At price parity, yes. At a premium, I think it depends on two main factors:

1) Does your product's E&SR features provide benefits in line with consumers' current desire to save, save, save (e.g., energy-efficient technology, automatic shut-off, or longer time to replacement)?

2) More importantly, are you effectively messaging your product's E&SR features that are helping consumers save?

Stay tuned over the next couple of months for research answering these questions. In the meanwhile, I'd love to hear what you're doing to sell E&SR products in the recession.

Why is ABC Dominating Internet TV?

[Posted by Bobby Tulsiani]

Interesting findings from Nielsen that ABC has 9 of the top 10 shows watched online.  It is interesting that ABC has carved out a dominant position with out being on everybody's favorite TV portal, Hulu, or setting up a vast distribution network (similar to what CBS has put in place).

We have discussed online TV distribution strategies in our report, The Internet Television Value Chain, and would love to hear your feedback on what you think ABC is doing right?  Or what its competitors are doing wrong?

Universal Shows Media Companies How to Navigate Through a Recession

[Posted by Mark Mulligan]

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YouTube are reportedly close to signing a deal with Universal Music Group (UMG). The reports are still unconfirmed and details are thin on the ground, though a standalone microsite called Vevo is rumoured. I’ll hold off from further speculation until details are confirmed, but what is worth looking at now, is why these sorts of deals are happening at this point in time.

 

UMG is pursuing a number of direct-to-consumer strategies (e.g. Lost Sounds) and lots of first mover deals with new distribution partners (e.g. Nokia’s Comes With Music, BSkyB). This is all part of a strategy of expanding its role in the value chain (a topic I recently addressed more broadly in this post). UMG is navigating a path through the recession, understanding that discretionary consumer spending on media such as CDs is much more vulnerable than utilities and subscriptions. So they are focused on increasing margins and exploiting new revenue streams to offset the decline in core revenues. 

 

But UMG’s recession didn’t start in colder months of 2008.  UMG and all other record labels have been in recession since near the start of the century.  They may have been a little slow to react initially, but they are now keenly aware of the scale of the problem and are responding vigorously with innovation, none more so than UMG.

 

During the music industry’s recession, media consumption has changed beyond recognition. Consumers spend more time with more media than ever before.  They spend more time online, on mobile, on TV, on console etc.  They spend more money on media than ever before but less on music.  Households have more monthly outgoings than at the start of the period: pay TV, multiple mobile phones, broadband etc.  These items are much more difficult for consumers to cut back on than the occasional CD or DVD purchase, even though they are a much bigger financial drain on the consumer.

 

It’s no coincidence that UMG is actively licensing to subscription based services (e.g. Sky) and ad supported offerings (e.g. imeem, YouTube). Those are the two key ways of developing new revenue in this new recession impacted media world.  And by entering into partnerships rather than just licensing, UMG are doubling their odds of a profitable return on their investments. 

 

Being a media company in the 21^st century was already becoming an increasingly complex affair.  The recession is compounding that, and staying still will ultimately equate to failure.  Media companies across all genres would do well to take a few lessons out of UMG’s book.

 

Does ITV understand what its audiences want?

UK commercial broadcaster ITV’s announcement this morning that it would be cutting 600 jobs, slashing programming budgets and selling off a number of its assets, was hardly a surprise. Broadcasters internationally will recognise the picture: the downturn in advertising revenues, to which ITV is exposed more than any other UK broadcaster, has been accelerated by the economic downturn. Current models are not sustainable and hard decisions have to be made.

ITV is also struggling to adjust to fundamental shifts in the way we consume media content. As viewers spend more time online, TV’s dominance is under threat. Moreover, while viewers have hundreds of channels to choose from, mainstream broadcasters like ITV are struggling to deliver to advertisers the mass audiences their business was built on. Long gone are the days in the UK when a top-rated TV show would attract 15 or even 20 million viewers – now even when ITV has a smash hit – a Dancing On Ice or an X-Factor, 10 million is rarely achieved. The future may be in niches but ITV’s strength has always been in delivering those big audiences.

Faced with such a market, ITV’s attempts to manage its decline have been patchy. It has understood the value of delivering strong niche audiences via digital channels such as younger-skewing ITV2 and has seen audiences growing for its online catch up service at itv.com. But the news today that it is to sell off Friends Reunited highlights an area where the broadcaster has consistently failed to understand what its audiences are doing. By acquiring one of the UK's early breakout web successes, ITV made a nod to the future. But it bought too late, for too much money, without a strong sense of how it could leverage Friends Reunited’s appeal to the benefit of the ITV brand. Recent attempts to revive the site, though noble, were doomed. We’re all on Facebook now.

There are smart people in ITV, though whether they are the ones who will still have jobs remains to be seen. It has some fantastic content brands: The X-Factor delivers 10m viewers and is a great driver of traffic to itv.com, but those shows are very expensive and too rare. Elsewhere, even the virtual ‘bankers’ of the schedule have gone the way of real-life bankers, with shows such as Heartbeat and The Bill having been cancelled or cut back, without yet a new generation of shows to take their place.

 

While he was Chairman of the BBC, the current ITV Chairman Michael Grade once argued that success was all about good programmes, to the horror of those at the BBC who were busy creating world-class online content. Has Grade understood that the future is about content brands, not programmes, and that ITV’s online offerings represent a bridge to the future, complementing those strong content brands from its core TV business? Has that bridge been destroyed in an attempt to recreate a leaner version of a business model that worked in the past? Time will tell.

 

Is Netflix the Biggest Threat to the Cable Industry?

[Posted by Bobby Tulsiani]

Ad Age has a great article about Time Warner’s “TV Everywhere” program, which follows the recent news by Comcast’s for its “On Demand Online” service. Both moves are clearly an attempt to get ahead of cord cutting and cannibalization that could happen with the spread of online video.

The cable companies have closely been monitoring YouTube and Hulu to get a sense of the appetite for online video. But for all the attention they are focusing on those Internet giants, they might want to start paying more attention to their flank where NetFlix is making some aggressive moves (wait isn’t NetFlix a movie company!?).

NetFlix has been getting a lot of praise for its streaming platform that is being distributed across a wide range of devices. What is going less noticed is the range of content available on that service is much more than movies. NetFlix has a deal with ABC & CBCS (Hulu has neither) and just signed a deal with SouthPark (Hulu & Joost weren’t willing to provide cash payment):

With a real business that generates profits even in the downturn, NetFlix can continue to build its library while still compensating  creators:

“There was no talk of ad splits or guarantees or advances, just a payment for a show Netflix seemed really happy to have,” Mr. Stone said. “We’ve never given the show to anybody else to stream, but we like Netflix as a service. We use it.”

My colleague James McQuivey often talks about consumers flocking to convenient products. With drop dead easy connections to the TV, plans to launch an affordable streaming only service, and a loyal base of consumer - NetFlix may not only be the most convenient solution for movies, but also for TV.