The End of Mass Marketing: Go Small or Go Home
For over one thousand years success in business relied on providing a narrow segment of consumers with a narrow segment of products, distinctly suited to their needs and sold nearby.
More recently, the proliferation of mass media — TV, national newspapers and magazines — combined with the expansion of national retail chains, along with the growth of a global and efficient supply chain, led to a world of mass marketing, mass production, and massive retailers.
The retail world moved from personalized products for local markets to mass-produced products for mass markets.
Mass marketers thrive on “must-have” items — huge volumes of single styles, sold across many market segments to an audience of consumers eager to have the item they saw advertised in mass media, and which, in turn are produced in great scale and efficiency.
This strategy worked. Until it didn’t.
Mass brands, mass production, mass retailers and mass advertising serve mass markets. These industries of advertising, retail and supply are highly inter-dependent, and therefor they face today’s disruptive market together; and, together they struggle to find new models and new relevance.
Because, the world changed… today we have too many stores, too much media, and too much product pumping through a highly-efficient global supply chain. This has resulted in an over-supply of mass market goods, which in turn (per macro-economic supply-and-demand forces) drives down prices and favors off-price stores, branded outlets, and web sites competing for who can sell this over-supply for the lowest price.
At the same time the Internet changed the world. Google, Facebook and other information sharing networks allow for the acquisition and application of personalized marketing on an unprecedented scale.
When billions of people search via Google and billions of people share their likes on Facebook they create large numbers of unique communities. These virtual communities become accessible niche markets with unique attributes, attitudes and expectations.
Today, people demand, and receive, niche brands and products that are intensely relevant to their distinct personal, cultural and situational requirements, products that stimulate a clear emotional response or solve a personal need. By definition, these niches are unique, authentic and passionate, and consumers will pay a higher price for products created for specifically for them.
Further, the Internet and the applied use of consumer data, allow companies, large and small, to effectively identify these niches of consumers, and launch new brands and products with precision-targeting, now readily and cost-effectively accessible through YouTube, Google, Facebook, and online marketplaces including Amazon, eBay, Etsy and Jet.com.
Years ago, there were famous, or infamous, national “must-have” products: Cabbage Patch Dolls, Beanie Babies, the latest Harry Potter book. Yet, the market hasn’t seen a true mass market “must-have” consumer product in over 5 years.
“Must-have” products still exist in the new landscape. However, these are must-haves for niche markets — serving specialized regional, ethnic, and interest segments. Today’s “must-haves” are laser-focused on Latino working mothers in Southern California, readers of “Fifty Shades of Grey” who also purchased North Face outerwear and live in Illinois, or HO-gauge model-train collectors across America.
Robin Lewis, in his book, “Retail’s Seismic Shift,” describes this phenomena as pivoting from KRAFT FOODS to CRAFT BEERS.
Success has moved from Mass Markets to Niche Markets.
I am going to share a radical concept with you — We must return to providing a narrow range of products and services to a narrow segment of customers. Only this time, we will leverage emerging technology, powerful consumer data, and a localized, fast, short-run, supply-chain, to pursue many niches at once.
We need… “The Itch for Niche.”
We must move from huge single-style production runs to a large number of smaller, quicker, segmented runs.
From 1 million units of one style to 100,000 units of 20 styles, and 10,000 units of 500 styles — a far larger number of units, satisfying a far larger number of customers. And, by delivering products that will be uniquely relevant to consumer’s distinct desires, interests and needs, we will provide greater value, deliver greater satisfaction, earn consumer loyalty, and recognize a greater profit.
To win, we should borrow a page from Amazon CEO Jeff Bezos’ playbook: obsess over providing customer satisfaction, quickly embrace emerging trends, challenge our legacy processes and make faster decisions.
We must return to our roots, a thousand years ago, when brands and merchants met their customer’s needs on an intimate, and high-value, level. Only now, with emerging technology and big data, we can do so at enormous scale, across many niches and classifications, simultaneously.
Scratch here, “The Itch for Niche.”
© 2018, David J. Katz — New York City
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