July 13, 2014

Creating vs. Capturing Demand

I wanted a healthy portion of breaded lake perch, something you're not going to find in the Pacific Northwest.

One simple search "breaded lake perch" took me to Walleye Direct (who knew), where, you can get all the breaded lake perch you could ever want.

This is called "capturing demand". Walleye Direct did not create this order. Rather, they used marketing smarts to steer me to them, once I decided I wanted to buy lake perch.

An entire generation of marketers have been trained to capture demand. E-commerce continues to grow because the first generation of online marketers have more than a decade of experience capturing demand. 

Think about it. Gap runs a commercial last year (click here) ... that commercial doesn't capture demand, rather, it creates demand (creating demand requires a whole different set of skills, by the way). 

Gap spent the money to create demand. Hundreds of companies compete to capture the demand created by Gap. Some companies are far better at capturing demand than others, leaving Gap at risk.

We can all attest that retail (in-store purchases) is stuck in the mud. This is the logical outcome of the creating/capturing demand issue. Retail is unable to capture demand effectively - why drive 20 miles to Macy's when you can sit at home and buy from Macy's ... or why drive to a Gap store when you can buy from Macy's online (or Gap online)?

Retail has to change. Retail is terrible at capturing demand - meanwhile, retail "brands" are great at creating demand. And yes, I get it, retail still comprises more than 85% of purchases ... but we're not complaining about retail comprising the majority of purchases, we're complaining about the fact that retail (in-store purchases) is not growing.

I think retail will become more entertainment-centric, it will have to, in order to better capture demand. This, not omnichannel, is the focus of the next half-decade.