"The social landscape has changed. We are operating in a different market. How do we overcome these challenges and understand how people consume entertainment? We must have the ability to look ahead and create the future, even though the immediate benefit might not be there."
So said Charles Goldstuck, chief executive of TouchTunes (New York City), during the company's Partners Meeting in Phoenix last month.
While Goldstuck was speaking specifically about TouchTunes' new digital broadband product offerings, his emphasis on understanding today's consumers, connecting with them and making them part of the process -- the central theme of his message -- really resonated with me. I think it's applicable far beyond music operations.
Consumers' expectations are changing at lightning speed, and the trend is irreversible. If we as an industry can synchronize with consumers' behavior, we can create a bigger footprint and become more relevant in their minds, thus ultimately building sales and increasing growth. But we must first accept that consumers are now the creators, not us.
It can be difficult for traditional retailers to recognize that the real change is what the modern consumer expects. Delivering a quality product is still important, but differentiating a purveyor from the competition calls for a new dimension.
Goldstuck explained we can no longer "feed" our customers by sitting back and waiting for someone to come along and buy something. "This is the start of a new era," he warned. "We must connect the consumer at home to the consumer on the go to the consumer in the venue -- and integrate the world at large." He envisions the TouchTunes network becoming a social medium, bringing together like-minded music lovers and giving operators and locations tools for offering them incentives tailored to their tastes and preferences.
The vending industry needs to adopt this mindset. The key is asking the right questions: how do we form links between our businesses and the end-user? How do we connect our patrons to the products and services we offer? To modify consumers' behavior, we must comprehend their desire for affiliation and responsiveness, and that requires giving them access at home and on the go as well as in the location.
An approach that has worked for TouchTunes is conceiving and producing integrated products, not isolated ones. The company has harnessed the power of social networking through its website, mytouchtunes.com. According to Goldstuck, to win the battle and remain relevant, we must add social networking to our arsenal.
The goal is to use the Web as a frontline asset to engage end-users online, attract people and get them to join the user network. Then you add value with incentives that keep them coming back.
Members interact with each other at home (on the website) and on the go, using their mobile phones (TouchTunes just launched a MyTouchTunes application for the iPhone). This consumer buzz promotes the venues where the jukeboxes are deployed. The reward program builds loyalty to the location, drives play and ultimately increases revenue for operators. The location also becomes part of the networked community, and gives its members a reason to participate.
This synergy is essential because people don't behave the way they did 10 years ago. They consume such services as recorded music and electronic games online and on their mobile phones, not just in recreational locations. By using social networking, TouchTunes is reaching out to customers when they're on the go, building brand affinity and attracting them to the point of purchase.
Vending faces a different situation. The majority of patrons use machines where they work or study, and those machines are not readily accessible to outsiders. I think vendors must concentrate on the people in their locations who are not using the machines. The operator can find ways to encourage patrons to interest nonusers, and product suppliers can play a crucial role.
I know that there is no easy, prepackaged solution for doing this, and I know that imaginative people are working on it right now. To speculate, though, it is possible to imagine the operator setting up users' groups or forums on the company website and installing wirelessly programmable signs on vending machines. The website would provide a medium for communicating specials, menu changes and new products -- and there would be a major role for suppliers in designing these. It should be feasible to design loyalty programs. Alert operators always have conducted patron surveys; this kind of website would make that much easier and more useful.
The technology is there; what's needed is creative thinking and -- what is not new -- a sympathetic understanding of our consumers and their desires.