Facebook dies on its initial public offering and the Royal Mail in the UK jumps 38%….
Is it like the Hare and the Tortoise?
The old-fashioned dinosaur, the last-century, so-over-it snail mail…beat out the latest and greatest?
Sounds almost like one of those unfounded Internet myths that get passed around and around and around until they are debunked…and then still get passed around and around and around….
But it’s true.
Investors rushed to buy Royal Mail shares, the stock price jumped 38% on day one and the complaint was that it was priced too low – vs. Facebook too high.
Read the story – interesting and lots to learn about privatization.
But here is the thing – one of the key factors in the huge interest shown in the Royal Mail was the growth of its parcel service business – in other words, the delivery of the stuff you buy online.
And there you have it – a business that began with Henry VIII has future value. At least until we can do the Star Trek beam me the package Scotty on a scalable, commercial basis – bet on Royal Mail in your lifetime….
Frankly, I find this story and the offering to be a critical lesson and a wake-up call for all the digibabble analysts and promoters and more…for the blinder-wearing evangelists who believe life started with the Internet.
Remote retail – as I call it – has long been a growing business. What began as select customers calling trusted sales associates then led to ads with phone numbers and printed catalogues, and now digital channels are a continuing evolution of the shopping experience (that by the way, still includes walk-in).
The digibabble buzz is that mobile is the new be-all and end-all in retail, but I can tell you that old-fashioned mobile phones were already making an impact on printed catalogue sales in the 1990s – get it?
Bottom line: follow the content – in this case, the merchandise. Understand that in remote retail the moment of truth is the opening of the package – if you get what you expected…or more, if it’s packaged and shipped in an interesting and elegant way, you win – if not….
And by the way – anyone with experience in the business knows that by including “bounce backs” in the package – that is, offers that make sense based on what you know about the buyer (and we have better data today…no?) and assuming they are happy with their order (see above) – you increase your chance of repurchase exponentially – and I have to tell you, I rarely find them in my purchases from newly minted digital-only retailers…take note.
So as digital sales increase, as social drives more digital sales, as mobile revolutionizes retail (and whatever digibabble you can possibly conceive around digital, do not lose sight of the post – as in the Royal Mail, the United States Post Office, FedEx or others) – the more successful we are in really understanding retail, the more we will need them to be really successful…in fact, the more we will need them to still be really successful….
At the end of the day digital, big data, social, mobile – all depend upon delivery of a package when they are applied to remote retail – a lesson that is clearly understood by some….
“To ‘choose’ dogma and faith over doubt and experience is to throw out the ripening vintage and to reach greedily for the Kool-Aid.” Christopher Hitchens
So don’t drink the Kool-Aid and don’t join the crusade. Buy a few stamps…they still have value….
What do you think?