Brick & Mortar Suicide Continues…despite Covid -19

I have written on several occasions over the last few years about how brick and mortar retailers are doing more to destroy themselves than the e-tailers they blame. (Do a search on suicide and you will find them.) I haven’t provided a story recently, but then today happened.

One of the key reasons for using brick and mortar is to get the item right now. Such was the case today. We were in need of a new, entry level, Windows laptop. The obvious brick and mortar place here in Reno would be Best Buy, so off we went.

They had two excellent choices. We asked the sales person if he could get either of them for us. He scanned the items and said no to both. He was not even able to order them to be delivered to the store. They were not available. (Well I saw one of each available, but did not bother to ask if he could sell the “floor sample.”) We just left.

Next stop Wal-Mart. Nice computer department, just nobody staffing it. We found a clerk who paged the “technology specialist” who finally arrived. We showed her the item we wanted and she gave us the same answer as we got at Best Buy: not available.

Last stop was RC Willey a furniture store that also sells appliances and electronics. Found two computers there and the sales person was all over it for us. He went and got it and in the mean time 3 other sales people asked if we were being helped. Wow, not committing suicide here.

Adapting to Change

For the last year+ companies have had to deal with the changes brought on by the pandemic. Much has been written about being adaptive, agile, flexible, customer-focused, etc. While some businesses have had no ability to adapt because governments effectively shut them down, others have found interesting ways to adapt including focusing on take out food rather than inside service; find ways to allow outdoor dining even in cold weather; remote learning including remote exercise; remote medical visits and more.

I recently saw and experienced a truly unique adaption that combines many attributes to solve multiple problems. The Cinemark Theaters here in Reno, (and likely other places) are allowing you to create a Watch Party for you and about 20 of your closest friends.

For a fixed price you rent the entire theater. You can bring about 20 people with you. The price of renting the theater is $150 if you see a new movie and $100 if you see a classic movie. They give you choices of times and movies throughout the day. Concessions are extra of course, but discounted as well.

How does this solve multiple problems? Movie theaters in the modern era have multiple theaters together to reduce overhead. In “normal” times there are lots of movies to show and the theaters are kept busy. In today’s world we see several problems: Only a few movies are being released so there aren’t enough to fill the available screens; the number of people allowed in a theater is limited due to social distancing; and many people are reluctant to go out.

A private watch party solves all of these problems. People pick the movie they want to see when they want to see it. And the theater is not restricted to just “first run” movies. Thus more theaters are in use.

The number of people is limited by the rules and can be further limited by the person arranging the watch party. If you allow the maximum number of people the cost per ticket is about 1/2 the going rate. You can then reduce it further if you like and still pay about the going rate. The theater sells concessions and they have their own “salesperson” selling out the theaters for them. Win Win Win.

And it is great fun and my neighbors love it.

Mitch

Super Bowl 2021: The Ads

As has been my tradition for most of the time this blog has been around, I will comment on this year’s Super Bowl ads. As a reminder, my perspective is that these ads should be a “big deal.” At $5M for 30 seconds, the production value needs to be “super.” I also believe the ad needs to have a message that resonates with the target customers. It can be to affirm loyalty with current customers, to attract new customers, or both. And, of course, we have no idea whether the ad was actually effective because we don’t have the metrics that matter. Our question is often: Does the advertiser?

This year’s Super Bowl, like the year it represents, was unusual in terms of the # of fans allowed to watch in person, as well as the stated intentions of some major brands to “sit out” the game in lieu of donating the money to a “cause.” My question is why are those two activities mutually exclusive? Certainly, these huge companies can do both and many donate to worthy causes all the time, and advertise in the Super Bowl. Was the point to denounce the Super Bowl as a capricious event in this time? If so, why? And I then have to ask when a parent company like Anheuser Busch advertises but Bud does not, why? Again, I am not privy to their inner decision-making process, so I don’t know, but it seems illogical.

Now to the ads themselves. As I have noted many years now, these ads are just not “super.” I had people speculate that the current crop of creative managers just aren’t that creative. Maybe, but I don’t think so. Maybe we have reached a point where fear of offending anyone makes edgy communication worrisome. Regardless, again, this year, the ads were mostly mediocre.

The top ads as rated by the audience were the two Rocket Mortgage, “Certain is Better” ads. I agree they are on point and clever. And Rocket can easily determine if it made their “phones ring.” My other two ads that I felt were on message were the GM ad for electric cars challenging Norway, and the Huggies ad. The ad I felt had the best “non-product” message was the “meet in the middle” ad sponsored by Jeep. Unfortunately, the ad was pulled from You Tube because Bruce Springsteen, who was featured in the ad, was arrested for a DUI. So maybe offending someone is a bigger deal than lack of creativity.

Mitch

The Secret to Selling More

The secret to selling more isn’t where you’ve been looking—if it was, you’ve have found it already!

            But where is it?  To answer that question, let’s go back in time.  Long, long ago…in the 50s…when manufacturing was King, management was concerned with making  “good” stuff.  When the stuff coming off the manufacturing line was “bad”, top management went to the person running manufacturing and beat them up.  “Make better stuff!”, they screamed at the hapless manufacturing manager.  But lo, often the stuff never improved. 

            It never occurred to top management then that the reason that their stuff was coming off the manufacturing line “bad” didn’t lie in the manufacturing function at all!  It never occurred to them that maybe the problem was in design.  Maybe the stuff was never designed in a manufacturable way!

            Fast forward to…now.  Now your sales are down, and most managements are beating up their sales managers over it.  “Sell more stuff!”, they’re screaming!  Well, maybe the reason for insufficient sales isn’t in the sales area at all.  Maybe it’s in the marketing area.  Maybe Marketing has done a poor job of “designing” your stuff to be sold.  Maybe they’ve specified the wrong features, or targeted the wrong audience, or come up with the wrong positioning, or are using the wrong channel, or have “mis-specified” any number of other attributes of your stuff. 

            As design is to manufacturing, marketing is to sales. 

            Now’s the time to take a hard look whether your stuff is matched with the needs of the customers that you are uniquely qualified.  That is, whether your “what” (the stuff you make) is aligned with your “who” (the customers you are in a position to serve.)  A mis-alignment there is not something that can be solved by selling harder—you must address the root cause.  Yet the leverage of a proper alignment between you “who” and your “what” is enormous.  Then selling is easy! 

Ralph

More Confirmation That Innovation is a Team Sport

A recent study by the Wharton School confirms that innovation is a team sport. The study was prompted by the apparent reduction in innovation during the Covid-19 pandemic, and the work from home regime.

Productivity overall has not really suffered as a result of working from home, but innovation has. We are not surprised as we have noted for years that innovation is a team event and working in isolation, even with Zoom and other conferencing tools, causes innovation to suffer when people are not together.

Many have the impression that innovation comes from “innovative people.” All people are innovative, it is just where in the innovation process they are best able to provide value. Too many people confuse ideas/creativity with innovation. Creativity is but one part of the innovation process and without the others, innovation fails.

For more input on this subject feel free to download our free white paper: Managing for Innovation.

Mitch

What’s The Purpose Anymore?

I was recently driving thru Oregon and stopped for gas. Before I could get the pump started an attendant came up to me and offered his assistance. I then remembered that it is against the law to pump your own gas in Oregon. (Same is true in New Jersey I believe.)

Obviously I allowed him to proceed, whereupon he asked me if I was paying at the pump or inside. At the pump I said. He helped me navigate the somewhat different screens involved in so doing and then he was at it. I went inside to get some snacks and when I came back the car was full, the hose was back on the pump and fuel door was closed. The attendant was not there and neither was my receipt, so I left.

As I entered the roadway I noticed that my windshield was still dirty, which I had intended to clean while the I was fueling the car, but that process was changed for me. Apparently, at least at this station, they do pump your gas but don’t clean your windshield.

My question is what value does the attendant add? Answer, at least for me, nothing. However he does add to the cost of the fuel I paid for and he does have a non-value-added job.

In my opinion, non-value-added jobs are bad for the economy if they are required and bad for a company if they don’t recognize it. How could this become a value-added job? Pretty simple: look back at what those attendants did when they were the norm and people didn’t pump their own gas and do the things they did: clean the windshield, check tire pressure, ask if the oil level needs to be checked. And like my local 7-11 pump screen does, up-sell me for snacks, drinks, etc.

If the only purpose of the job is because the government mandates it, how can you turn it into an advantage for your company?

Mitch

Customer Experience

As I have noted in prior posts, customer experience is the competitive weapon of the future. Clearly, if you can’t get your marketing right, which is aligning your company with the current and future needs of your customers, all bets are off. But assuming you get that right, then customer experience is how you differentiate.

It’s amazing to me how many companies just don’t get that. My current example is Toll Brothers, the home builder. Well to be precise, per their tag line, America’s Luxury Home Builder. They are a highly rated company that builds a better than average house. They appear to compete on that value proposition. The problem is their customer experience does not align with their value proposition.

My current example is personal, though I have heard from many Toll homeowners that I am not remotely unique. We currently own a home built by Toll. They did a good job with the home and while the experience was not perfect, they made good on their promises and warranties. As with most new homes, they offer a one-year warranty on virtually all items/workmanship.

We recently discovered, after having lived there for 18 months that we did not have a screen for one of our windows. It had never been installed. We have never opened the window, so we never knew, and the home warranty inspector apparently missed it also. Upon finding that the screen was missing, I asked the local office if they would replace it. Their swift answer was no. I pretty much expected that as our community was sold out and they don’t apparently need to care about us anymore.

Not to be deterred, I simply went to their corporate website and logged a complaint with their customer service team. I got an automated email telling me that my issue was important to them and they would respond shortly. After a week of no contact, I tried again. It has now been two weeks since the second contact which was also acknowledged as being important, but still no response.

Clearly, their customer experience lasts only as long as construction and the warranty period. Given how many homes Toll is building just in my town, you would think they would want happy customers and referrals. Not getting one here, and frankly don’t know anyone who would say anything other than their product is better than average.

In a world where customer experience is the competitive advantage, they may be finding difficult times ahead, especially if other builders decide to compete with their product.

Mitch

 

Destroying Brand Integrity and With it … Brand Value

Many people have been skeptical for decades or longer as to the real difference between one brand of gasoline and another. Many suggest that one of the reasons no brand can charge much more than a private brand, much less more than each, other is because there is no real difference.

Others will suggest that it is in the additives, which are mixed in at the station in the underground tanks. Seems suspicious and dubious to me.

And then to make it even easier to doubt a brand’s credibility you have this situation pictured below. A private brand tanker, labeled as such, delivering gasoline to a “high value” branded gas station. But it is full of Chevron with Techron … of course it is, they were just too cheap to brand the delivery truck. Right!

 

 

 

 

 

Mitch

 

 

 

Location, Location, Location

Those three words are often advice given to people looking to gain a competitive advantage. We hear the term in real estate a lot. It is also used for “small real estate” as well; namely location within a retail store. Many large retailers will charge a fee for a premium location like an end-cap or a side stack. These locations are known to help companies sell more of their goods, and the retailer makes more money from increased sales as well as the fee.

Well that’s how it usually works. Not necessarily though.

I recently saw/experienced an example of this while shopping in a grocery store during the CCP virus crisis. Many things are sold out for unknowable reasons such as toilet paper, canned goods, pasta and pasta sauce, to name a few. I was looking for pasta sauce and found almost none in the aisle. As the picture below shows.

 

 

 

 

 

 

However, one aisle over, on a side-stack at the end of the aisle, what do I find? A full display of pasta sauce from a “local” supplier. They had obviously paid for this “premium” location, which back-fired during the stressed-out times shoppers find themselves in today. People look for items “where they belong” and this was not where it belonged so nobody saw it; as evidenced by a nearly full display. (See the picture below)

 

 

 

 

 

 

 

Exceptions to every rule.

Mitch

The roll-up or roll-over of mid-sized companies

Our team member, Rick Hubbard, found this clever video recently. (Click on the link and scroll down in the article to find the video). It was produced to spotlight the conglomeration of smaller ad agencies and what can happen to them. We liked it because it is not just ad agencies that get acquired and “changed.”

In the November 30, 2019 issue of Forbes, they had an article featuring Bigelow Tea. The article, “High Tea“, talks about this family owned business, which is actually run as a B Corporation, a For Benefit enterprise. It’s socially conscious focus is an integral part of its ‘being,’ and allowed it to become a B Corporation.

Cindi Bigelow is the second generation family member, who is grooming a third generation. Their fame is originally from the Constant Comment tea, which was developed by her grandmother, and is a secret recipe. (Kinda like Coca Cola).

They are constantly “hit on” to be bought out, which is not happening because, like this video, (click on the link and scroll down in the article to find the video) they know what would happen.

Mitch