Is Brick & Mortar Really Dying?

Is it brick and mortar that is dying or brain-dead, non-merchants who are finally being pushed out of business? Many of my clients are forced to deal with big box retail buyers who are so focused on rebates, shipping allowances, distribution center contributions, advertising allowances and lower prices that their companies no longer focus on being retail merchants.

I have written before how Lowes (one of those big box retailers I am talking about above), lost out on at least $10,000 in business from me because they couldn’t be bothered to sell it. That story link is about a dishwasher. On another trip they lost out on carpeting and flooring for an entire house as well as some other items for a similar reason.

I am reminded again about the dichotomy. Last week Amazon opened a brick and mortar book store in a shopping center/area in San Jose called Santana Row. They have opened about nine stores so far around the country. What is most funny to me about this one is that it is across the street in the center from where a Borders used to be located. Maybe Borders was just on the wrong side of the street … yeah right.

BTW, Amazon took over a vacated Brooks Brother’s location. Now there is a retailer that seems to have failed to keep up with the times. As Jeff Bezos said recently, “if your customers aren’t getting younger, you’re going out of business.” Something Cadillac almost didn’t learn in time.


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No Action Talk Only

I have accused the airlines, who spend countless dollars claiming to be customer-focused, of operating on the premise that passengers are an inconvenience to the efficient movement of airplanes.

I recently discovered an amazon vendor that may have the airlines beat. Here is the statement and review at the top of their seller page:

0% positive in the last 12 months (54 ratings)
sdg265 is committed to providing each customer with the highest standard of customer service.

They may be committed but based on 0% positive ratings in 12 months, perhaps they need to be ‘committed’ as delusional. Why they are still a seller on amazon, is my real question.

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Too Much Choice

Bud Light, like many mainstream beers, has suffered a downturn in sales as craft beers have continued to make inroads. The number of craft beers is growing rapidly and while most hold minimal market share, each takes some sales from the so-called mainstream beers.

The big brewers have been struggling to find effective strategies against the craft brewers and some have launched their own craft brands. The craft brews are using classic guerilla marketing tactics and filling a clear need that the big brewers have ignored. So what else can the big brewers do?

Bud Light is recognizing and trying to leverage two ideas to stem their share loss. The ideas are:
1. If you can’t fix it feature it
2. Too many choices causes consumers confusion and causes them to buy less

In a press release last week, Bud Light announced their approach and showcased two ads. They are focused on the simplicity of their beer: Four ingredients, that’s it. Beer is beer, and they do it right. Secondly, it is easier to know your beer than to have to look it up on the internet to decide if you want to buy it.

Will this strategy work? Clearly, I don’t know, and I like it. I am unclear if the slide in Bud Light sales is driven by less demand for light beer or the inroads of craft beers … or both. This campaign should help them either way.


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Ingredient Branding

I am a fan of ingredient brands and ingredient branding done well. Dolby is my favorite example of a great ingredient brand. Intel Inside being my best example of expensive ingredient branding without an effective ingredient brand.

I recently ate at The Burger Place in Minneapolis and they prominently featured their use of Certified Angus Beef. The hamburger even came with the plastic logo in the picture sticking into the bun. This retail location clearly feels the Certified Angus designation is of value to them.

A visit to the Certified Angus Beef website tells a great story about the certification and gives you information you can use to understand what it is. It also provides you locations where you can buy it at retail or in a restaurant.

According to data from Kansas State University, demand for the brand increased about 79% over the 5 years from 2009-2014. In 2014 the brand represented about 12% of the total beef market.

The product sells at premium prices over other beef and continues to gain market share. Congrats to the folks at CAB for the excellent job they have done in growing the value of their ingredient brand.

BTW, if you’d like to learn a bit more about ingredient branding, I wrote a paper on the topic. It’s free to download.


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Dealing with a Bad Online Review of Your Business

Online review sites are the rage. Unfortunately they often are given more credibility than they deserve. I wrote a piece back in 2016 about some disturbing things I have heard more than once about Yelp.

Experts agree that negative reviews to which you respond appropriately can actually do you more good than positive reviews, which are often looked at as biased or from your friends.

Responding appropriately is the issue. What does the fuzzy word, “appropriate” actually mean? Good question, glad I asked it. Sometimes the best appropriate answer is no response at all. Often an apology and clarification is the appropriate approach. However, there can be many “sticky” situations including snarky people and people who are just “over the top.” Responding appropriately to them is a talent and may require some thinking.

We suggest you consider there are two audiences for your response: the original poster and others who may read the thread. You don’t really want to get into a lengthy back and forth with the original person as that is likely to make things worse. What you really want from them is a thank you after your post. While that may not be possible, look at your response from the point of view of making it a happy ending for you and the poster.

The other audience is the larger community of people who will read the review and make decisions about your business based on that review. How do you respond for that audience, which may be different from how you might respond if you were only considering the original writer. This is a talent. I recently found a great example (in my opinion) of how to respond where the greater audience was the primary audience but the response was also likely to shut down the original complainer.

Dealing with online reviews is a real issue in the modern world. Gaining the skills required to appropriately respond is critical.


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You Didn’t Need to do a Study to Project This

An article in Automotive News Europe citing a “study” by AlixPartners, LLC states that billions will be spent on developing autonomous cars with over 50 major players involved. They then confidently predict that most of these efforts will fail, and only a few will survive. Well duh, that’s how it always works when a disruptive technology comes along.

What would be really nice to know is who the few survivors will be. They aren’t able to predict that. No surprise and no slam on them for not being able to do so.

This was a serious piece written by a Bloomberg reporter for a recognized publication. And I am unsure if anyone funded the “study” or if AlixPartners released it for publicity purposes, which they succeeded in getting. I guess I wonder how this is newsworthy as it’s clearly obvious to the most casual observer in the field.

Anyway, maybe I am just a cynic. (well no maybe there)


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How Far Behind Is Marketing … Still

I recently found this article in Ad Age about the “new” idea that Marketing should integrate with product development to create better products since promoting (marketing in their language) better products is easier. The author cites the CMO of Rambus, (a company with no products incidentally) as a leading proponent of this idea. We commend him on this thinking.

Too bad the author didn’t read Ralph’s article in Industrial Marketing Management 20 years ago where he not only showed why such integration was necessary but how to do it. Or the first part of our book Value Acceleration which also so states.

But then most of the Marketing profession is still focused on the back-end of Marketing … unfortunately.


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