Category Archives: Long Tail

Voice recognition arrives one solution at a time

The Smart ShopperVoice recognition seems to be a theme in my life lately. I just finished setting up Naturally Speaking on my wife’s computer, so she can save wear-and-tear on her joints by dictating instead of typing. Then I read a piece by David Pogue of the NY Times, about another terrific productivity tool: Voice mail services that take your calls and convert them into email text, for you to review, sort and save. Finally, I read about the device pictured here, which allows you to rattle off the groceries you need and have it assemble your marching orders as a finished list.

Someone has already commented on the engadget blog entry where I learned about this device that it will fail. The reason: You can buy a lot of groceries for its purchase price.

As a marketer, I would disagree for two reasons:

  1. The long tail — We’ve observed that nearly everyone listens to music, yet relatively few listen to any particular artist. Some really obscure artists have made successful careers for themselves, thanks to lowered distribution costs.* Because of this same long tail phenomenon, a $150 device will be bought by enough people to be a success, especially because the concept behind it is sticky.**
  2. It helps ease a reviled chore — In my entire life I’ve only known one person who actually enjoys buying groceries. Just one. Everyone else just wants the stuff to magically arrive in their kitchen. Although it doesn’t go that far, this Top 10 New Product winner (at the recent Consumer Electronics Show in Las Vegas) does help family members collaborate on a job almost nobody enjoys.

I predict it will do quite well. I’m also confident that this is the beginning of a trend in technology. There will be more voice recognition tools, helping us get more work done. And more often than you might imagine, they will be combined with the cell phone. Sooner rather than later.

In November I was speculating that some day in the distant future, mobile voice recognition would help automate the construction trade. This past week has made me think this future is closer than anyone might imagine.

*Watch for a post from me later this week on the future of the music industry, as music labels become nothing more than the distribution arm that a recording artist needs to survive.

**Watch for another post this week on the art of making a product or concept sticky. It’s a review of a great book that expounds on the last third of Malcolm Gladwell’s The Tipping Point.

Bram Stoker: The original blogger

Tonight’s PBS retelling of Bram Stoker’s Dracula reminds me of a post I’ve been composing in my head for months but haven’t permitted myself to submit. I wanted to write about the storytelling (and marketing!) power of blogs. Thus my hesitation. I refuse to be a party to navel-gazing.

In the ten months I’ve been writing Digital Solid, I’ve encountered so many bloggers talking about blogging on their blogs. And who cares? Other bloggers, that’s who. Give me a break!

In this space I have talked about using technology to tell stories — and how storytelling is key to marketing. But there’s another fact you need to know: The blog is a unique medium for storytelling — one that is growing in relevance to marketers.

One friend recounted his Great Lakes sailing adventure in real time via his blog. Others have reported on their struggles to launch a product or a software upgrade. Their adventures have unfolded, one post at a time. And I’ve followed, loyal reader that I am.

Just as I followed exciting stories as a preteen, when I first read the groundbreaking novel of a humble Irish civil servant, Bram Stoker. His chilling book, Dracula, along with Edgar Allen Poe’s writings, ignited in me an enduring love of scary stories. But even then I realized that Stoker’s style was unusual. Most of Dracula was told as diary entries.

This evening I saw a (not very good) retelling of his story on television. What I am truly anticipating is the day when this story is presented as a faux-blog.

It would start with the postings of Jonathan Harker, the young clerk who shows the poor judgement of advancing his career in the mountains of Transylvania. Other characters would follow suit, just as they do in the pages of the novel.

A fiction blog (do you have a better name for it?) would have special demands. The novel takes place over the course of several weeks. I expect that the blog would compress the action considerably. Perhaps several action-packed entries would even be posted in quick succession on the same day.

But the point is, the Dracula blog would be wholly entertaining. And yes, it could be sponsored.

Now think of a more contemporary serial, presented by a brand wishing to show itself in the context of the story being told. And imagine devoted readers, who look forward to receiving the next installments via RSS. That day is not too remote, and in the words of one of Stoker’s characters, it will be cracking good fun.

It is happening today, by the way, on a cell phone near you. The Last Messages is a novel told exclusively through cell phone text messages. Finnish subscribers followed the story through over 1,000 messages sent to their phones.

iPhone changes several games at once

iPhone and Steve JobsYesterday Steve Jobs showed off Apple’s long-rumored mobile phone. The iPhone combines cell calling with a widescreen video iPod and WiFi-driven Internet communicator. It will change many games.

It will certainly improve the growth of mobile marketing. Apple truly understands how to provide pleasing user experiences, so I suspect that the iPhone’s broad, 3.5 inch color screen will make viewing video and web-based email not only easier, but fun. And the ability to browse your voice mails the same way you do emails will certainly add to the calling experience. Other cell phones would have to struggle to catch up if this interface resonates with users.

But another game-changer will be in movies on demand. David Denby wrote in this week’s New Yorker about how the tiny screen is changing the big screen. Hollywood is scrambling to adjust to a new type of movie viewer, one who is “platform agnostic,” and really doesn’t care if a film is projected in a theater, played from a DVD or downloaded in some form. This person is still in the minority, however. Denby explained that the tiny hand-held video players are fine for movies about talking heads, but the blockbuster, action/adventure films look sad and flimsy. They also strain the arm of the user, as you work to support a tiny player in your hand. Or you have to loom close to it as it rests on something, placing your body into some rather uncomfortable contortions.

The iPhone won’t change this film-viewing limitation, or reduce the crick in your neck. But it will add a new reward to the early adopter — a cool, hand-held analogy to the ever-growing home theater flat screen TVs. It will be perceived as the biggest little screen in town, and will make hand-held screen size an important bragging point.

Denby ends his analysis by speculating that dreary, uncomfortable multi-plexes will have to respond to this tiny threat in a way that can benefit every type of movie-goer. They may have to reinvent themselves, offering amenities and settings that once again make watching a movie in a theater a pleasure . If this comes to pass, no small part of the reason for these innovations will be from the iPhone and its nascent imitators. Many theaters, according to Denby, will even have ushers, to personally remind audiences to turn off their game-changers before the lights dim and the feature begins.

Can negative reviews of your product actually help you?

Earlier I had talked about Hosted Conversations, a hybrid online ad and portal to content. All content is about your product … generated by (gasp!) the unwashed masses. Okay, that’s harsh, but sometimes clients look at user generated content that way.

Fellow blogger Chris Brown, and others, were sceptical that the ad unit would represent good cross-sections of opinion. In other words, criticisms would be mild and rare, thus destroying any credibility.

So here are three questions:

  1. If you truly opened conversations up, would you get seriously flamed, and have way more negative than positive opinions voiced?
  2. If the answer to the above is no, would the relatively rare damning reviews hurt your brand and a decision to purchase from you?
  3. Is the risk worth it? In other words, do people trust online reviews in the first place?

I found one person’s opinion on all three. That person is Sam Decker, VP of Marketing and Products at Bazaar Voice. In a report he presented back in September, he provided some clarity to Question #3, when he showed how there is a strong correlation between online and offline reviews. In other words, experience should demonstrate to most consumers that there is reliability in online reviews.

I can also speak for myself and say that my online research has been at least as helpful in purchase behavior and satisfaction than have the opinions of friends and associates. He also quotes a familiar source for a theory on how and why trust can be developed online:

The Edelman group found that ‘trust in someone like me’ has tripled over the last two years. The key phrase here is ‘someone like me.’ Shoppers identify with the reviewer based on the content of the review, user attributes, and product attribute ratings.

For answers to Questions #1 and 2, I refer you to Sam’s contribution to a recent Forrester Research podcast, called Word-of-Mouth (third one down in this list):

We’re finding across our clients that with online reviews, [they] are 8-to-1 positive to negative.

Products with mixed reviews actually drive conversion, because that’s what we as consumers are looking for. We’re looking for that negative review that can give us the right information we need in order to get out of decision paralysis and make a decision. It also drives authenticity, which is what this is about in the first place.

The Take-aways:

If you have a good product, it will get mostly good reviews. And even the bad ones may cause people to buy your product if (a) They don’t relate to the reviewer, or (b) They don’t look at the complaint as a big negative.

As you can tell, I feel that with proper precautions, the risk is ultimately worth it. Be honest, be open, and — oh, yes — be prepared to step into the conversation to add your brand’s perspective to the negative comments.

In a product review I talked about in my previous post, the first (and as of this writing, the only) person responding to a slam on the Hosted Conversations concept was none other than Rick Murray, of … Edelman!

The Metaphysics of Netflix

Ever since Netflix announced that they would pay a million dollars to anyone who could significantly improve their recommendation engine, I’ve wondered what it would take. Now I think I know: a philosopher.

For those of you who have been wondering, dozens of individuals and teams have taken the challenge. They’ve downloaded the 10 million-record preference dataset from Netflix and crunched the numbers earnestly, with varying results. As of this writing, NIPS Reject is in the lead, with a lift over the Netflix algorithm of 6.13 percent. (Tough luck, WXYZ Consulting – you’ve been in the lead for nearly a month, but your 6.11 percent just got topped.)

With an additional 3.87 percentage points yet to be racked up, the road to victory is long — possibly impassable. If I understand my statistical modeling correctly, every unit of progress to that 10 percent goal will be a far tougher slog than the one before it. There clearly needs to be a breakthrough in how the problem is approached if anyone has a chance of winning. A couple of days ago, it occurred to me that the source of this breakthrough might be a better ontology.

Ontology is the study of logically structured categorical models. It helps us understand a particular domain of reality by looking at its essential elements, and especially, how they are interconnected. Because ontology proposes to explain big complicated things, this discipline was honed first by philosophers. More conventional scientists took a little longer to catch up. And as I learned earlier this week, philosophers seem to still have the upper hand. At least, that’s the case with my friend.

A university professor and doctor of philosophy, my friend was filling me in on his latest, fascinating endeavors, as we chatted over Christmas cookies and good Scotch.

When he isn’t teaching at an East Coast university, my friend is doing lucrative consulting work. The computer science company we works with is tapping into a huge demand among Fortune 100 companies for his brand of categorization. They combine this new way of seeing the data with the datamining muscle of leading-edge computer modeling.

He explained that these clients are drowning in data, but these data are in silos that imprison them. It’s hard to tease out the stories they have to tell, and impossible to combine them to make a more complete model of that industry’s “reality.”

My friend has an apparent talent for getting to the essential reality of his clients’ domains. And yes, as you can imagine, he’s doing very well for himself.

I won’t disclose the latest industry with whom he’s involved, but let’s say it’s water desalination. He described how engineers have fed their databases with terabytes of facts, but given little thought, beyond their initial purpose, to the structure of their databases. He helps remedy that with his brand of philosophy.

In a proof of concept meeting with the company, my friend announced to them what he proposed. Ever the showman, he said, “Gentlemen, what we’ll deliver to you is the Metaphysics of Desalination!”

They signed the next day.

Now I wonder if his skills couldn’t be put to this Netflix challenge. I suspect the first question he’d ask is, Why is it so tough? After all, prediction engines for other products, such as books and music, are fairly reliable.

The answer, I suspect, is that films appeal to us on so many more dimensions than songs or written stories. In a cinematic experience, there is just so much information to take in. What’s more, the alchemy of that information — those flickering images projected to give the illusion of movement — seems to take place uniquely in each of our heads.

In order to parse out movies into logical categories, I suspect that the first thing my friend would do is call of more input — perhaps appending data from a rich, relatively impartial source such as the Internet Movie Database. In other words, he’d ask for a second silo to “fuse” with the first.

He would then look at the elements and properties of the films without regard to the reviews of viewers. He would sort out those things that are merely a part of the film, without influence on the viewer, while taking special notice of the items that would likely cause a change in how the other elements are perceived.

It wouldn’t be easy, and it may not be possible. But the reward would be significant. It would also result in a new movie ontology, which is something I and other movie buffs would find endlessly fascinating, the way baseball fans pore over box scores.

As soon as my friend returns with his family to their New England home, I’m going to send this to him, as my own million dollar challenge. Although I’m going to have to scale it back a bit. Maybe another bottle of Scotch.

A content explosion is helping to drive mobile media adoption

Which came first: The mass production of the first home radios or the programming broadcasted to them? The answer is both. Radios spread like a contagion as consumers heard a distant studio’s music, news and laughter coming from their neighbors’ open windows. It seemed to promise something for everyone.

We’re seeing the same push-pull with mobile media. Take podcasts.

According to a survey of nearly 3,000 adults, conducted by the Pew Internet & American Life Project, the number of Internet users who are listening to podcasts has nearly doubled in six months. Since the spring of this year, podcast listeners have grown from 7% to 12% (of all adults who use the web).

To understand this surge in popularity you need to look at two trends. First, the prevelance of portable music players. By some estimates, one out of every four Internet users now owns an iPod or other music player. True, you can own one and never listen to a podcast, just as car ownership in the middle of the last century didn’t mean you automatically went to drive-in movies. But the growth of one fueled growth of the other.

Then there is the vast depth and breadth of content. The report cites as an example Podcast Alley, a podcast directory. In two years its listings shot up from 1,000 to over 26,000. This content is also easier to access. It also doesn’t hurt that the popular iTunes system has provided even more content on its iPod-friendly download service.

Are pocket videos the next podcasts?

It appears that podcasts have hit a critical mass, and are well on their way to becoming mainstream. Will the same two trends — hardware and content — fuel a cell phone video explosion? This week I may have experienced a taste of things to come. First, I was genuinely surprised at what a hit my video-recording cell phone was.

My mobile device, The V from LG, was small enough to unobtrusively record the fun around the Thanksgiving dinner table (with my family’s consent, of course). Well after dessert was served, we were playing a guessing game called Taboo. The next morning I could show the 15-second segments on my notebook computer. Here’s an example. It was a surprisingly fun way to use this gizmo, and one that enhanced the get-together.

Not that it’s always Amateur Hour on my phone. There is also a modest selection of professionally-produced streaming video available on it. But the ability to make homegrown videos that can be played and shared with friends will only accelerate adoption of the mobile medium as a whole — especially with today’s news.

Very soon, V CAST-equipped mobile phones will become a two-way conduit to amateur videos on a massive scale. YouTube made it official today that they will be providing content to Verizon phones. In addition to user-generated content, YouTube offers brief videos that are professionally produced and categorized for easy search and retrieval. These myriad videos, appealing to nearly any taste, are likely to further fan the flames of demand for entertainment that follows you wherever you have a cell phone signal.

Hey, come here. Take a look at this miraculous, pocket-sized video screen. Let’s watch what happens next.

In online video as well, Mom and Dad hog the remote

Forbes reports that, contrary to popular opinion, online video is being viewed by someone who is typically older. Online video for the post-pubescent set even has its own nearly octogenarian poster child: geriatric1927. This chap has been posting video blogs for three months and has over 30,000 subscribers to his ongoing narratives (as well as hundreds of thousands of occasional viewers).

The marketing implications of this trend are considerable, because consumers well out of college have more disposable income. They also have many more consumer needs. Insurance. Healthcare. Luxury items. All of these and many more are the domain of grown-ups.

As marketers follow these consumers online, streaming video content will continue to expand and fragment. Soon there may not be a single consumer category that cannot be supported with simple and often inexpensive narrow-cast video messages. These messages may not — and some would say should not — be commercials as we know them. Instead, think sponsorships, product placements and even interactive demos that take full advantage of the burgeoning online medium.

The often low cost of this content, and the ability to find and cater to thinly sliced niches, is particularly exciting. Once again marketers will be given the opportunity and the challenge of mastering a long tail strategy for attracting and wooing narrow segments. 

Move over, Son.

I was vegging in front of a glowing screen long before you were even born.

Postscript: Here’s a study that speculates on online video advertising growth over the next several years.

Burger King masks and eBay are big this Halloween

Before the internet there was little chance for enterprising types to profit from holiday-generated scarcity. I’m thinking of the Cabbage Patch Kids dolls, which were the must-have collectibles for much of the 1980s, and caused frenzied pre-Christmas rushes at bricks-and-mortar stores. Now there are online markets to help resolve supply / demand imbalances. I was reminded of this as I talked to my friend at BuyCostumes, the world’s largest e-commerce costume site.

Earlier this month I wrote that if you remove the constraints of shelf space dictated by a physical costume store, you see the same Long Tail sales trends that other categories experience (at BuyCostomes, at least). When variety of product is virtually unlimited (pun intended), niche sales can be very profitable.

Conversely, when there is a lot of demand for something in limited supply, not only will you sell out quickly, but you’ll see that product continue through the food chain until it finds its ideal price. Certainly for Christmas items, but also for Halloween, which is now the second largest American holiday in terms of spending.

A fact I was reminded of when I learned that Burger King costumes are big this year.

BuyCostumes has an exclusive deal to sell these masks this year, and sold nearly 2,000 of them over the course of about 6 hours (cumulatively, because they sold them in batches over several days).

The retail price was $39.99. Many who scooped them up immediately put them back on the market. My contact at BuyCostumes guessed they were going for as much as $80 each on eBay and finally settled down to $65, including shipping and handling. Unfortunately, the speculators, plus eBay and perhaps pay-per-click ad sites (see the ads on the Google search I did this weekend) were the only parties to profit from this demand spike.

For several years I’ve been reading that movie theaters are talking about putting their tickets for extremely busy nights up for a higher price than normal, and conversely, marketing their slow nights at lower ticket costs. That day is still a long way off, for social reasons and not technical ones.

Similarly, I wonder if holiday-related e-commerce sites should consider having their own markets for their hottest products, so they can benefit from these demand spikes. After all, oil companies do it. And isn’t a Burger King mask that can be re-sold many times on eBay and Craigslist just as fungible as a gallon of sweet crude?

The only constraint I can think of: Society may not be prepared to have a merchant with exclusive rights to a product take every action to benefit from its popularity. The negative PR implications of an online auction by the seller may be too great, leaving the opportunity in the hands of the speculators and eBay.

You’ve got to wonder. If the frantic parents outside the toy stores of the 1980’s were told there would be an auction for the last 10 Cabbage Patch Kids, and “Who will start the bidding at $100?” … would there be a riot? And would there be a flame-fest from consumers if modern-day eTailers did the same?

Scrutinizing the long tail of Halloween

Jon Krouse is in a perfect position to help me test a hypothesis about long tail behavior. A co-founder of OnMilwaukee.com (a rare success story among regional online communities), Jon recently joined BuyCostumes.com. This is the world’s largest online retailer of costumes. As you can imagine, the month of October is major crunch-time for him.

Nonetheless, when I instant messaged him the other day to see if I could test an assertion from Chris Anderson, Jon was willing to help. Anderson is a Wired editor and most notably the author of The Long Tail. He contends that for companies with virtual inventories, just about any item they post for sale — no matter how obscure — will sell (i.e., be downloaded for a price) at least once every three months or so. Using sales statistics from Rhapsody.com, he made it sound like this was nothing short of an immutable law.

That’s for virtual inventories. Anderson admits it’s a little trickier for companies with real ones. That’s the case with BuyCostumes. I’ve visited their warehouse, which stores over 13,000 very real SKUs. Yow!.

Companies like this must mark down some items teetering at the tip of the tail before they finally sell. Carrying costs are a constraint that virtual inventory merchants simply don’t have. But the fact is, even real inventory items sell with some price manipulation. Or so Chris Anderson contends. I wanted to know for sure, and asked Jon.

He reported that minor adjustments to price do indeed make the most obscure costumes and accessories sell. Sure, there are the rare dogs, but priced properly, nearly all SKUs generate profits. This is huge, because the number of items offered is a precedent for the industry.

Imagine how many items a bricks-and-mortar costume shop can physically stock. Now consider that at one time quite recently, conventional wisdom was that no one wanted more selection than could be held on a really well-stocked costume shop’s shelves. Or, for that matter, in music store’s bins, or along a bookstore’s stacks.

The web, with its power to categorize, search and suggest, has exploded that myth. Which would mean little to a company like Jon’s if the demand for these products wasn’t so large.

How many sales are anticipated in the next couple of weeks for this humble little online costume shop?

“At our busiest, we’ll be doing 20,000 orders a day*,” Jon reports. Tune in November 1 to see a photo featuring the costumes that my wife and I chose and wore at Jon’s Halloween party, the first in his and Peggy’s new home. 

*It never hurts to advertise. BuyCostumes has major private label deals with major retailers, plus an effective search engine optimization and pay-per-click advertising strategy in place.

The odds are stacked against this podcast advertising pioneer

I admire what Podbridge is attempting to do. They seem to have taken the lead in monetizing podcasts. I doubt they will succeed, though, unless other conditions change and change fast. Podbridge has created a podcasting advertising network, one that promises to match audio ads to podcasts that you download via iTunes (and, eventually, elsewhere).

Ads would be fed to you randomly along with podcast content. The ads, which would be dynamically stitched onto the podcasts, are served up based on your age, gender and location (such as ZIP code). Nice idea, but …

My skepticism has to do with whether people will volunteer this information (age, gender, location) to receive something that they are currently accustomed to receiving for free, and mostly free of ads.

Much more logical (but logistically challenging) is to follow the ad model that Podbridge claims to be mimicking — that of magazine advertising.

In this alternative, each major podcast producer would receive ad insertions and interweave those ads with their content. This wouldn’t provide the flexibility and customization of regional-, age- and gender-based targeting, but it would talk to people based on their enthusiasms. For instance, DVD rental ads would be placed on podcasts such as Filmspotting (as they are now, for PeerFlix).

These ads could still include Pay-Per-Call ads supported by Ingenio, as Podbridge is currently planning. It’s a brilliant use of this phone-based ad concept, which was first introduced and tested in limited Yahoo sponsored listings.

This alternate business model also allows for the strength of product placement, something that started with the early days of radio and television, and has found a new life as a way for advertisers to get their products in front of viewers who use DVRs to blaze past television progamming’s commercials.

True, this lack of scalability makes it a less-profitable business model, since podcasts are typically today such a Long Tail phenomenon.

But the dearth of consumers willing to opt-in to receive ads makes the Podbridge concept fatally flawed in my opinion. At least until there is a critical mass of premium content podcasters who will only distribute their product with Podbridge-provided advertising. That day is a long way off.

Mobile marketing of tomorrow is beyond anything you can imagine

Here’s another long post, but I suspect you’ll find it worth the ride. It will paint a picture of what mobile marketing will be like, much sooner than you may think. Actually, it will paint a picture of what person-to-person retail (as opposed to digital retail) will be like, because mobile devices will merely be the means that will take us to this fascinating future.

If you’re a new reader, I need to explain why I write this thing. I strive not to be part of the echo chamber that is current public discourse. By echo chamber, I mean the repetition of the same hot concept or idea until it starts to sound credible. Many occupational blogs (as opposed to recreational blogs), merely convey the industry “news” of the day. Sometimes that’s worthwhile. But other times, the repetition contributes to a pattern of half-baked ideas taking on more significance than they deserve.

My hope is to make sense of what’s happening or about to happen in marketing technology — and occasionally to pass along a juicy tip or two that you can use right now. Rishad Tobaccowala, chief innovation officer of Publicis, put it well. He’s with one of the world’s biggest advertising groups. Tobaccowala was quoted in The Economist as saying, “All of us have been classically trained, and now we’re in a jazz age.”

We’re all riffing, my friend, and I’m hoping this blog will help keep the improvisation going.

Let me steer us back from that digression. I mentioned The Economist, which you must understand is not just a magazine about economics. Although, to use a famous Seinfeld quote, “Not that there’s anything wrong with that.” On the contrary. Living, breathing economics is much like living, breathing history. By that I mean the following:

  • Economics bears no resemblance to what most of us were exposed to in school
  • Economics is extremely helpful in making sense of this furiously changing world

A case in point is the mundane and exciting observations of economist Tim Harford. In his recent book, The Undercover Economist, he sets us straight about Starbucks. We think they are larger and more powerful than they are because they have a location on every corner of major cities — or so it seems. He uses the example of how you cannot pass into or out of Washington D.C.’s Metro Station without encountering at least one Starbucks.

Yet that is proof not of the seductive draw of their products, but of the weak gravitational pull that they exert. By contrast, Mr. Harford points out that there is only one Washington D.C. Department of Motor Vehicles. If you have a problem with your driver’s license, you must go there and suffer. And people do. They must.

That’s power. That’s scarcity! Conversely, Starbucks knows that the majority of coffee drinkers are quite fickle about where they buy their coffee. It just so happens that Starbucks is big enough to buy up those scarce good locations so that they consistently arrive in our faces when we round the next corner.

The scarcity is not in the lattes and cappuccinos, but in the prime locations from which they are proffered. This is why, he asserts, Starbucks is not nearly as wealthy, in relative terms, as the merchants of those selling opportunities — namely, the landlords who rent to Starbucks and the property owners and brokers who sell to Starbucks. A validation of this theory can be found in a recent New York Times article about the proliferation of bank branches and the property boomlet that this industry expansion has ignited.

Banks, too, know that they are selling a near-commodity. And so it goes: the tyranny of location, location, location.

Imagine if these industry leaders could say, “To hell with these physical locations. We’re stuck in place while our customers travel around the city. That’s just dumb!” Or more likely, what if this declaration was from non-leaders in their industries? After all, the leaders in gourmet coffees and financial services have much invested in their physical brand. It stands to reason that it is the upstart competitors who will stage the more nimble attacks, just as small bands of guerrilla-fighting American Revolution soldiers sprung out of the bushes to fight and ultimately defeat the legions of lockstep Redcoats.

But how will this assault be staged? I’m suggesting that there will someday be a mobile army of coffee merchants and bank branches. These establishments on wheels will find their customers around the next corner because they will see them coming from ever-changing maps of movements and probabilities.

Why maintain a brand address, after all, when you’ve trained your customers to expect you to show up exactly where and when they need you? Of course, this data will come from the only possession other than our wallets that we dare not leave home without (and soon enough those two will merge into one!). I’m speaking of course of the cell phone.

Already, privacy-protected surveillance is being done on a city-wide scale. You can read of several such studies on the following MIT web site, but I’m going to quote from one such study, about a “realtime” Rome, Italy:

In the visualizations of Real Time Rome we synthesize data from various real-time networks to understand patterns of daily life in Rome. We interpolate the aggregate mobility of people according to their mobile phone usage and visualize it synchronously with the flux of public transit, pedestrians, and vehicular traffic.

By overlaying mobility information on geographic and socio-economic references of Rome we unveil the relationships between fixed and fluid urban elements. These real-time maps help us understand how neighborhoods are used in the course of a day, how the distribution of buses and taxis correlates with densities of people, how goods and services are distributed in the city, or how different social groups, such as tourists and residents, inhabit the city. With the resulting visualizations users can interpret and react to the shifting urban environment.

How cool is that?

When I first saw these maps, which surge and pulse with life, I thought they were interesting but were like many technologies — a solution in search of a problem. Now I think I’ve found the problem: Taking power from the owners and renters of real estate and putting them in the hands of retailers. And in doing so, making life for their customers easier and more pleasant.

I’d love to go on and address the objections that I’m sure you have about privacy, and the ability to move branch locations through congested urban streets. Those answers will have to wait (unless you’d care to ask me in the Comments area — in which case I’ll be much obliged). But for now, I’ll leave you with this thought:

If a retailer …

  • Analyzed aggregate cell phone data about your movements as well as everyone else’s who want the same services as you, and …
  • Anticipated through statistical means where to locate itself to fulfill those needs, and …
  • Alerted you through that same cell phone where they are in real time (e.g., “We’re two blocks away — care for your favorite beverage?”) …

Would you choose instead to go out of your way, back to those place-bound merchants you visit now?

I suspect that this consumer choice is quickly on its way.