Same Silo, Different Day

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Same Silo, Different Day

By Peter Breen - 05/26/2017

There’s a moment in “Duck Soup” when Groucho Marx says, “Why, a 4-year-old child could understand this. … Run out and find me a 4-year-old child. I can’t make head or tail out of it.”

I know I’m severely dating myself by referencing a movie from 1933. (I’m not that old, actually, but my father controlled our lone family TV set – for which I’m now grateful, by the way.) One of the less troubling, yet still bothersome, aspects of getting old is that you have to sit by and watch classic cultural moments fade into obscurity. Few remember Groucho anymore, but we all know Grumpy Cat.

One aspect of the marketing industry I’d be more than happy to watch become obscure is the apparently indomitable budget silos separating various pieces of the business. I’ve been writing about them for almost 20 years now. Brand management vs. consumer promotion, consumer vs. trade promotion, digital vs. traditional media, shopper marketing vs. everything else. In my new role at Consumer Goods Technology, breaking down the walls between IT and marketing – and sales, and most other functions – is a similarly ongoing issue. 

But despite near-universal agreement that silo busting should happen, it just never does. Established, institutionalized habits are incredibly hard to break.

If you think about it, Groucho’s fading punch line is echoed regularly these days whenever parents happily acknowledge that they often must consult with their children to figure out how to better use laptops, tablets and smartphones. These kids grew up with that technology, parents marvel. It’s second nature to them.

I was thinking about this fact in March while attending ShopTalk, a second-year conference in Las Vegas that showcased an array of new product manufacturers and retailers on its numerous stages. These companies don’t talk about silos or internal alignment. And they might look at you in wonderment if you mention the need for consumer product manufacturers to embrace e-commerce and direct-to-consumer sales, to improve digital marketing capabilities, or to use consumer data to drive future growth. These “kids” grew up with that technology, you see. It’s second nature to them. In most cases, in fact, they wouldn’t exist without it.

Take Stitch Fix, a 6-year-old apparel “retailer.” Consumers provide their size, style and price preferences and pay a simple $20 styling fee (that’s credited toward a purchase). The company then employs a mix of proprietary algorithms (devised by 75 on-staff data scientists) and “expert human stylists” (mostly part-timers) to create unique apparel items that are shipped free to customers, who buy what they want and send back the rest (also free of charge). The curated inventory includes national brands and directly sourced items.

I’m guessing Stitch Fix, whose recent marketing plan includes a fairly heavy TV schedule and a very aggressive retargeting program, doesn’t have distinct marketing budgets. Neither does Tiesta Tea, a 7-year-old manufacturer of loose-leaf blends with 14 employees and a chief executive officer (Dan Klein) who only recently relinquished social media duties to a new marketing staffer. Tiesta is currently available in 6,000 stores, including Costco and Albertsons locations, by the way.

Or Hickies Inc., a 6-year-old company that makes a non-tie, adaptive-fit “lacing system” for athletes that flexes with a foot’s motion. Hickies has 22 employees, most of whom work in its Brooklyn, New York, headquarters. But it already has retail distribution in 43 countries and will launch website operations in Europe and Australia this year. 

These companies aren’t encumbered with the entrenched strategies or the legacy systems and processes that are hindering the modern business transformation necessary for consumer product manufacturers to succeed in a changing marketplace. In some ways, they’re the business equivalent of a 4-year-old child. (In this context, is it a stretch to view Dollar Shave Club as the kid and Unilever as Groucho?)

As Path to Purchase Leadership University covers in its “Shopper Marketing for E-Commerce” course, the industry is at a turning point. The sales and marketing activities that for decades have been treated as two separate functions must align. 

Why? Because e-commerce eliminates any gap that ever existed between consumer and shopper, the gap between the onset of a consumer need and the completion of a purchase designed to fill that need. While the traditional purchase funnel is still there in theory, a consumer can now get from start to finish in a few seconds and a couple of clicks. 

In that environment, keeping up walls between brand marketing, shopper marketing, trade promotion and everything else isn’t just counter-productive, it’s potentially lethal. Keeping IT at a distance seems a little crazy, too, since technology is now the key to both internal alignment and consumer engagement.

It might be time to run out and find a 4-year-old child.

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