The changing face of malls, and retail success

IndochinoI don’t go to malls very often. But I went yesterday with my wife and son to get some back-to-school gear for my son. I was struck by two things. First, there were very few empty spaces. I keep reading about how Amazon will lead to the death of retail and how malls are suffering. And, maybe they are. But, I expected a far more depressing experience than the one we had. And, yes, some of that might be related to my low expectations.

The bigger surprise for me though was the number of brands that I think of as online brands that had their own storefront – I noticed Casper, Untuckit, Peloton, and INDOCHINO. Maybe, I shouldn’t have been surprised. After all, we interviewed INDOCHINO CEO, Drew Green and featured the company’s success in Marketing to the Entitled Consumer. According to Drew, brands like INDOCHINO are opening physical stores because:

  • The aforementioned retail apocolypse makes real estate more affordable;
  • Employees, known as Style Guides at INDOCHINO, focus on helping the consumer get what they want – and not just selling whatever inventory is in stock at the time;
  • Style Guides also provide expert measurements to ensure customer’s clothes fit perfectly;
  • Retail is a marketing channel – it provides brand exposure, an opportunity to boost customer experience, and customers that start their relationship in a store go on to order more confidently online.

I don’t know if all of these reasons apply to the other brands that I saw – INDOCHINO is a great example of a Consumer-First business. But, there’s no doubt that these businesses are changing the face of malls. Who knows what they’ll look like the next time I visit if my record of once-every-few-years holds up!

Best Buy thrives by delivering value to customers

Best Buy should be dead

Bloomberg Businessweek; July 19, 2018

In Marketing to the Entitled Consumer, we demonstrate how a focus on reciprocal value forges strong customer relationships. We show how companies can gain a sustainable edge by finding new ways to deliver value to consumers. And, we argue that once you have created value for customers, you must build on that value, creating a consistent reputation for giving customers what they feel entitled to—or what they will feel entitled to once they get used to it.

During my Forrester Research days, I always enjoyed speaking to the CRM team at Best Buy and often quoted one of their communications mantras: “give, don’t take.” What they meant was that they tried to find ways to provide value to customers in their communications, and not to focus on extracting value from them. In the years since, like many other retailers, Best Buy struggled. In fact, it almost collapsed during the great recession, losing $1.7 billion in one quarter in early 2012.

Yet, with a new CEO and a significant focus on delivering reciprocal value, Bloomburg Businessweek recently published a feature emphasizing that Best Buy is not only still alive, but thriving. I saw a few of the examples that we recommend companies follow to build reciprocal value:

  • Enhance your product or service. Best Buy introduced the role of “in-home advisors” which it describes as personal chief technology officers. Hubert Joly, Best Buy’s CEO who has led the change at the company, describes how advisors “…can talk about what’s possible, be human, make it real.” And, he adds that it can be “a great way to make a sale, but it’s also the beginning of a beautiful friendship.” We love this way of thinking, In Marketing to the Entitled Consumer, we point out that “a marketer who treats you like a friend is always to going to be looking for opportunities to give you a little bit more of the things you like best.”
  • Reduce consumer effort. One of the things that’s really cool about the advisor role is how they seemlessly coordinate with Best Buy’s Geek Squad team which helps with repairs and installations. In the Bloomberg Businessweek story, an advisor identifies a customer need to connect their electronics and she is able to arrange for a Geek Squad member to show up within the hour. No hassle. No battery of phone calls. No effort on the customer’s behalf.
  • Solve the consumer’s broader problem. The in-home advisory program grew out of Best Buy’s strategic growth office, which the article refers to as “a safe space for ideas.” The program has three rules: no job is too small; we will come to your home for free; and we will be comfortable not closing a deal. Advisors are tasked with, and trained to, identify a customers need and to speak with the customer in terms of value. They set out to help customers achieve a broad objective, such as making their home “smart” or connecting all of their disparate technologies.

If this all feels too daunting or too far above your pay grade. Don’t despair. Pick ideas that you can implement and start small. One of my favorite aspects of the article is a theory that Joly refers to as the bicycle theory. He points out that “If you try to direct a bicycle at standstill, you fall. The key is to get moving,”

 

Why do brands so offend to make offense a skill?

689px-King_Henry_IV_from_NPG_(2)

16th-century imaginary painting of Henry IV, National Portrait Gallery, London

In Ireland, secondary school students take two national exams when we are about 15 and 18 years old. The Junior Certificate helps determine where students will track for their Leaving Certificate, which then determines entry for college programs. They both take place during a three-ish week period in early June, and I don’t think I’ve ever studied more intensely than preparing for those exams.

Maybe that’s why I remember random German phrases, obscure mountain ranges in Eastern Europe, and snippets of poetry as Gaeilge.

This weekend, a famous speech from Henry IV, Part I (which I studied for my Intermediate Certificate, as the Junior Cert used to be known) came to mind in relation to a phenomena Nick and I call the “transference of entitlement.” We use this phrase to describe the effect of experiences we have with one company that set expectations for other companies. We usually think of it as a steady build-up of expectation rather than something triggered by a specific event. The reason Prince Henry’s soliloquy came to mind though was the result of back-to-back experiences that I had with car rental companies that couldn’t have been more different, and “like bright metal on a sullen ground” one of the experiences glittered, while the other offended.

Budget/Avis – the company that used to ‘try harder’ – offended. When picking up a car last Thursday in Boston to go visit our daughter, we stood in line for an hour and a half to get to the counter to pick up the car we had ordered (I know, I could have skipped the line if I joined the loyalty program). When we got to the counter, the agent didn’t apologize, or even reference the time we had spent in line. He was surly and just acted like he didn’t want to be there. Then, when we dropped the car off on Sunday we were about an hour later than we had scheduled. By the time they checked us in, they registered us as an hour and a quarter late (yes, there was a long line again). And, as a result, they charged us an extra $95. I was so incensed, but had the good sense to let my wife discuss it with them. I don’t think I would have been particularly diplomatic. My wife handled it very well, and ultimately they removed the charge. But, we were left with a bitter feeling towards the brand.

We went from the Avis return counter to the Alamo counter to get a new car to drive to New York to visit my wife’s family. The lady checking us in couldn’t have been more pleasant. When I questioned the price she quoted versus what we had been quoted online, she seemed genuinely concerned, and when it turned out she had been right and I was wrong, she remained pleasant and gracious. Returning the car in Manhattan was a smooth process where all of the employees were friendly and responsive. I left with a significantly enhanced impression of the Alamo brand, and it even restored a bit of my faith rental car companies.

Maybe if I hadn’t had the Budget/Avis experience, the Alamo experience would have been unremarkable. But, coming so quickly in succession, the positive Alamo experience seemed to “show more goodly and attract more eyes; Than that which hath no foil to set it off.”

I’ll stop torturing the analogy, but suffice to say that your customers’ perceptions of your brand experience is influenced not only by what you do, and not only what your competitors do, but by what every company does. The transference of entitlement is driven by our experiences with every brand – good and bad. When those experiences come in close proximity, the benefit or harm is only accentuated.

 

Nobody’s perfect (even Amazon)!

What do Zyrtec allergy medication, Hunts tomato sauce, and Barilla pasta have in common?

The answer? Search for one (Zyrtec) on Amazon, and you’ll get recommendations for the other two. Or, at least, I did. Website recommendations really stand out when they miss the mark. Of course, relevance is relative, but as one of the companies that brought recommendations to the mainstream, we expect Amazon to be better.

In our research, we have asked scores of marketers, experts, and consumers which companies they think are most consumer-first, and almost everyone we’ve ever asked mentions Amazon — often as their immediate and only response. It’s remarkable, therefore, when Amazon is only average.

Amazon returns

And, while it’s possible that its because we live and breath consumer-first marketing that we notice an ineffective product recommendation, but I was really taken aback recently when returning a product to Amazon.

Some quick background: My son is in 7th grade, and beginning to slowly think about the high school applications he’ll need for next year. We bought a few different test prep books from Amazon, and when we realized that two were almost identical, we decided to send one back.

The returns process online was nice and easy, and then I got surprised – and not in a good way. Amazon often offers free return shipping for Prime members (and subsidiary Zappos pretty much pioneered the idea of ‘buy, try, and return’). I think of free returns as a ‘nice-to-have’ not a ‘need-to-have.’ After all, why should the retailer pick up the cost of my decision not to keep a product. I appreciate when a company provide free returns, but I don’t expect it. What shocked me was that it cost the same to return the product via UPS as returning it to an Amazon Locker. Of course, an item still has to be picked up from the locker, but doesn’t Amazon want customers to use the Lockers – to get used to visiting places that have them (such as Whole Foods), and to get used to using them so that outbound shipping costs would be lowered – by delivering in bulk to one location?

Maybe if this was another company I wouldn’t have reacted so negatively. Nick and I often talk about the “transference of entitlement” in which experiences we have with one company set expectations for other companies. In this case though, Amazon helped to set the level of entitlement, and then needlessly failed to live up to it.

Getting it wrong might be worse than not trying!

Sheraton Amsterdam EmailWe’re never going to claim that personalization is easy. But, we do think that there are simple solutions that can have a big impact. And, then there are ideas that might be good ideas but the execution makes it all moot. I genuinely hope that we share much more positive experiences than negative on this blog, but sometimes there’s at least as much to learn from one company’s mistakes as there is from another’s success.*

Last week I was in Brussels for internal meetings and we stayed at a nice hotel downtown for most of the trip. My last night was planned for the slightly-less luxurious Brussels Sheraton – somewhere I stay fairly often as it’s so handy before an early flight.

I have platinum status with Starwood which means I get upgraded to their best available room. So, when I received an email during my trip inviting me to “bid” to potentially get upgraded, it struck me as a wasted “touch”.

But, what struck fear into me was when I read the copy inviting me to bid to upgrade my room at the Amsterdam airport Sheraton. I had one of those mild panics while I flipped over to the SPG app to discover, thankfully, that I was indeed booked at the Brussels airport. So, not only a wasted touch, but one that left a customer in mild sweats and palpitations – thanks for the personalization, guys!

*I also hope I don’t become a brand assassin for the brands that I use most often – just because they’re the brands I hear from most often.

Show me that you know me!

We started this blog two days ago. In that time, I’ve probably spent the most amount of blog-related time trying to get WordPress’s Twitter widget to work. Sure, I can add two separate streams of my and Nick’s tweets. But, what I can’t do is set up one stream of #EntitledConsumer tweets. Why? I still have no idea. It is an offered feature, I just can’t get it to work. So, imagine my delight when WordPress emailed me today to tell me about the most underrated feature for new websites. Yep, you guessed it: widgets.

Wordpress email re Widgets

How much better would my experience have been if that email had actually been tailored to me. Imagine if it was, “Hey Dave, we see that you’ve installed and uninstalled the twitter feed widget about 68 times, is everything ok now? Here’s some knowledge base articles that we don’t think you checked out that might resolve any remaining issues.” Instead, I got a generic, “lifecycle” email (two days after someone signs up, send them this) which not only added no value, but showed me that WordPress doesn’t know me, is unlikely to get to know me, and doesn’t seem to care. I’m an Entitled Consumer; and that’s not good enough!