Influencer Marketing

As those who know me realize, I have my opinion about “paid influencers.” I found a great article that describes it as akin to clickbait. I commend it to you.

Mitch

Is Brick & Mortar Really Dying, or Just the Current Merchants?

I have posted many time about the self-inflicted “death” of brick and mortar stores. A quick review of the Retail category will show you many.

Others have written that the demise is inevitable. I have disagreed and further stated that the primary problems are self-inflicted.

If the other writers are correct and I am wrong, what caused Amazon.com to spend $13B to buy a brick and mortar retailer, Whole Foods?

Mitch

Do They Work Hard To Be This Stupid, Or Does It Come Naturally?

Ok, that might be a little harsh, but JC Penny deserves it. After they tossed Ron Johnson who was repositioning the stores really and brought back the guy they fired for unacceptable performance; they then hired a home improvement CEO to fix their situation. He has now hired a home improvement CMO to help him. Her job is apparently to use digital wizardry (social media etc) to drive more sales, which will either be online or in-store.

How is that going to work out well? Are they trying to attract Millennials to a store those kids think their grandmother’s shopped in? (Who else is social media focused on? Gen-X, ok they think Penny’s is their boring parent’s store), and if they get into the store is it not going to confirm their every expectation that it is their grandmother’s retailer? And if they instead get them to shop online, why will they like the merchandise selection? Ron Johnson’s plan, which really did change the store, might have benefited from a stronger social media push to get new customers faster as their old ones fled the new store. But how on earth is the root cause of JC Penny’s continuing decline a social media failure?

How stupid is this? Pretty stupid in my opinion. But let’s look at who they hired, as the Board continues to amaze me at how many mistakes they can make. Though this set may finally do them in.

The hired a guy that supposedly turned around Home Depot by focusing on supply chain. Indeed Home Depot has managed to bully their vendors into many concessions for the privilege of continuing to sell through Home Depot. But Home Depot has a dominant position in the category. Exactly what leverage is Penny’s going to use to abuse their suppliers?

They hired a CMO who lasted less than a year and a half at Lowes (another home improvement retailer) whose expertise is digital marketing. How does that really help an also-ran retailer like JC Penny break out. Oh wait they fired the guy that tried to do that. So what do they want? More sales. When do they want it? Now. Will this work. Not in my opinion.

The JC Penny Board of Directors is clearly approaching legendary incompetency status as did the GM and HP boards before them.

And we shall see. As I said in my post two weeks ago, these bigger retailers can last a long time on their glide path to extinction.

Mitch

In ‘N Out vs McDonald’s

I have posted before about the differences between In ‘N Out and McDonald’s. Just last week one of the Principals in our company, Neil Reckon, noted a process example difference between the two companies I have seen but never thought about before he pointed it out.

When things get jammed up at McDonald’s, and most other fast food drive thru restaurants, they take your money and then have you pull ahead into a waiting area so they can bring your food out to you. The root cause of the problem is that the time it takes to cook the food is longer than the time it takes to get from the order entry point (the microphone and speaker you order from) to the cashier. If there are people in line behind you they don’t want them to wait, so they move you off to a waiting area. As all lean thinkers would recognize, this waiting area is “waste.”

What does In ‘N Out do when they are jammed up? They move the order entry point back further so they have more time to prepare your order. Then when you get to the front of the line, your order is right there for you and you can be in and out.

How do they move the order entry point further back in the process? Simple, the same employee that McDonald’s and others are using to run food out to waiting cars, In ‘N Out positions several cars back of the usual order entry point in the line and they take your order and “radio” it in. Thus the order is sent earlier and you don’t have to wait.

Lean thinking applied. Look upstream for the root cause not down stream for a fix/rework.

Mitch

Some Major Retailers Really Don’t Get It

The difficulties major brick and mortar retailers are experiencing is not news. The stocks are being hammered, stores are closing, and I suspect it is crunch time in the C-Suites. Yet they still don’t get it. And the “it” is not about e-commerce. It’s about retail.

In a recent Advertising Age article on the topic, a major retail analyst is quoted as follows:

“”The problem with some of these stores is too much sameness — the brands aren’t special enough,” said Oliver Chen, retail analyst at Cowen & Co. “These stores need to reinvent themselves.” He noted more personalized marketing, better products and radical changes to the store experience could help the situation.”

The article focuses on three retailers, Macy’s, Kohl’s, and JC Penny. One of the ironies in the story concerns JC Penny. This retailer realized several years ago that they needed to reinvent themselves. They hired Ron Johnson, former CEO of Apple retail, and then fired him when sales dropped. I wrote about this back then. They rehired a former CEO, went back to their old format and have been sliding even faster.

The second irony in this situation is that each of these retailers excitedly proclaimed what they are going to do to “fix” the situation.

Macy’s is going to stop screaming at their customers about their promotions. (They really don’t get it, as I posted about their root cause problem a while back.)

Kohl’s is going to focus on “personalization, simplification and clarity in our marketing strategy.” They really mean their marketing communications strategy.

Meanwhile JC Penny “is also leveraging the much improved mobile app as a way to drive awareness and retention.”

Putting lipstick on a pig. Their root cause problems are not communications problems, they are customer experience problems. Trying to fix this with a better marketing communications strategy (even if you call the person doing it your CMO, it doesn’t make them a CMO, when in fact they are your CMCO, Chief Marketing Communications Officer), will not work.

These are big retailers, so predicting their demise is probably premature. After all it took GM 60 years of stupid to finally go bankrupt. When you have a lot of glide path, it can take longer to hit the ground.

These retailers, and they are not alone, need to realize that physical locations can be a competitive advantage and a value add. Right now they are just a cost add.

Mitch

And Again with a Title Change for the CMO

Almost 3 years ago I wrote about the Chief Revenue Officer phenomenon. Well seems it is still in style. Coca Cola just “retired” their CMO and will be replacing him with a “Chief Revenue Officer.” Is that a euphemism for head of Marketing and Sales? Or maybe it’s the organizational equivalent of the COO. So does the CEO then have a CRO, COO, CFO and CPO (Chief People Officer) reporting to him/her and maybe a CIO.

If so, I can see that. But that’s not the plan at Coke. In their case the CRO is going to report to the COO and is not responsible for sales anyway. So just like the CMO was not really responsible for Marketing, just the back-end of Marketing, not the more highly leveraged front-end of Marketing. This new CRO is not really responsible for revenue anyway.

Is the goal to fool the Board? Create another expendable position should things go bad or…?

Hard to know for sure since they are shaking up other reports; creating a Chief Innovation Officer and elevating the CIO to report to the CEO. Pretty sure this seems like rearranging the deck chairs on the Titanic, though I doubt Coke is in danger of sinking. Just slowing.

Mitch

Proving My Point About Airlines

The other day I posted about the root cause of the United Airlines disaster. In that post I wrote, “United is, unfortunately, not unique in the airline world with this culture.”

And to prove my point, quickly, Delta (the most admired airline I think they claim), showed why I said it by their action kicking a family off their plane.

Mitch