News emerged this week that Amazon will buy LOVEFiLM in response to the aggressive expansion plans of Netflix, the American video streaming service. The brainchild of a DVD enthusiast, LOVEFILM developed from humble origins (the founder’s mother’s kitchen, to be precise) in 2004, and soon became one of the great post-dot com success stories, exceeding 1 million members in 2009.
What makes this such an impressive achievement and so distinct from most rapid growth businesses of the last 10 years, is their use of very traditional marketing techniques. It is one thing to pioneer new markets through harnessing new, bleeding-edge technology, but quite another to create one using nothing but existing technology. That really requires imagination, and no small amount of bottle. Well LOVEFiLM had both in abundance. They took a thirty year old movie rental model, combined it with a 350 year old postal service, and walked away with a £200 million deal courtesy of Amazon.
So how did they achieve this quite ridiculous feat? Well great things come in small packages as they say, or in this instance the great thing WAS the small package. Spacious enough to contain up to four DVDs but compact enough to fit through even the least accommodating of letter boxes. But the really ingenious part is what happened after you’d watched it. The design was engineered so that you could simply insert the DVD back in the packaging, throw that in the nearest post box and it would magically find its way back to LOVEFiLM without costing you a penny.
This simple yet brilliant strategy immediately set LOVEFiLM apart from the less dynamic high street rental giants, and helped the company to win the British Video Association’s Rental Success of the Year Home Delivery award in 2005, 2006, 2007 and 2008!
You may be asking yourself how anyone can get so excited about a piece of cardboard and some pretty archaic marketing and delivery methods. But that’s the point. I admire LOVEFiLM’s achievement precisely because of its simplicity. They took a long established marketing technique, direct mail, and applied great attention to detail both in terms of branding and usability. After years in the industry I know only too well what enormous implications these seemingly trivial details can lead to.
No doubt Amazon will now have a very different approach in mind for the future of LOVEFiLM. Their goliath presence on the web will surely see the model move rapidly towards an exclusively virtual experience. And rightly so. In a world characterised by constant and unrelenting change, it is often a company’s willingness to embrace and manage such change that will determine its ability to survive. But for me, regardless of any future success they achieve through the use of new, ground-breaking technology, their distinguishing characteristic and most enduring achievement will always be their early ability to distinguish themselves through nothing more than a user-centric mentality and fantastic attention to detail.
There is a more valuable and practical lesson for young marketers in this story than in any number of technology-fuelled Facebooks, Googles or Twitters – you don’t necessarily need better things to do things better!
Craig.
