when i was studying one of the holy tenets was the four p’s of marketing, and i know that the web has put a spanner in the works of those now, and made them less equal in terms of their how relevant they are. distribution doesn’t need to be some large store that you pay millions to get your products into, you can simply set up your store online and service it from yopur garage. which makes it significantly more democratic. look at the success of radiohead distributing “in rainbows” online with the pay as you go pricing model, which is supposed to have thrown the entire music industry in disarray. they didn’t need to use the whole music industry system and so received a significantly higher proportion of revenues than they would ordinarily (there is an interesting interview in the new wired about this). unfortunately they haven’t carried this through completely, and you can’t still download it from the site.
as a corollary to this i read that emi spends 25 millions pounds a year scrapping unsold CD’s! that is atrocious when you think of the costs of production on top of that. if it was purely online the costs are for transaction costs on the sale and licensing of the IP.(however i still buy vinyl which has got to be the most unwieldly format there is, so i’m fairly hypocritical in this case)
when in australia i noticed an interesting retail phenomena, the large surf brands (billabong, quicksilver etc) have now created their own retail outlets. when i was growing up the surfshops used to aggregate all the brands, and then sell them indiscriminately- but it seems that the surfshops are going the way of the major sportswear companies; the adidas, puma and nikes. the benefits of this are obvious, you have your own channel with which to showcase your products in your way, you can market them as you like, you can quickly change stock and you can have a personal relationship with your customers. kind of like a website.
i wonder if this is a chicken and egg discussion; the web opens up the ability to control many more aspects than retail, but then it opens up the question of how much further can they take it? 2.0 has allowed for democratisation of your brand and giving it over to your consumer to play with it, it’ll be interesting to see how this is interpreted in the bricks and mortar world.
Brendan McNulty 