WWTT? La-Z-Boy Campaign Offers Comfort and Thanks to Healthcare Workers

If you’re a bit of a YouTube watcher, or a fan of The Office, you may have heard about “Some Good News,” hosted by John Krasinski. So in that vein, here is some more excellent news, along the lines of a new La-Z-Boy campaign that combines a considerate donation with some heartfelt user-generated content.

If you’re a bit of a YouTube watcher like me, or a fan of The Office, you may have heard about “Some Good News,” hosted by John Krasinski. If not, watch through some episodes, and take joy that there is still plenty of good in the world. So, in a similar vein to SGN, here is some more excellent marketing news, along the lines of a new La-Z-Boy campaign that combines a considerate donation with some heartfelt user-generated content.

To offer some physical comfort to healthcare workers, La-Z-Boy is donating $1 million worth of furniture to frontline nurses. According to the furniture retailer’s CMO, Eli Winkler, the company is working directly with the American Nurses Association to select nurses in areas of the country most heavily impacted by COVID-19, and those individuals will be able to receive their choice of a chair, recliner, or sofa.

But the La-Z-Boy campaign doesn’t just end there. Dubbed “#OneMillionThanks,” the furniture retailer has created a microsite that encourages the public to find creative ways to thank healthcare workers — and to share those thanks on social.

#OneMillionThanks La-Z-Boy CampaignI had the opportunity to ask Winkler some questions about the La-Z-Boy campaign earlier this week, and of course my first question was about the campaign’s inspiration, and why the retailer wanted to get the public involved. Winkler responded:

“La-Z-Boy has always provided comfort to those who need it most. Frontline medical professionals have had to live without the normal comforts of home for the last while. In many cases they have had to distance themselves from their families, while also enduring an incredible amount of stress. We saw an opportunity to say ‘thanks’ in the way that we know best — by providing furniture to nurses who deserve both physical and emotional comfort.

“This is our way of showing thanks. But we wanted to create a million more ways to say ‘thank you.’ People have shown an incredible amount of creativity while at home. We wanted to harness all that creativity and generate one big “thank you” for medical professionals. A simple show of thanks goes a long way.”

Participants are encouraged to get creative with their thank yous and post to social, tagging with the hashtag #OneMillionThanks. The campaign is supported by 15 and 30 second video clips, created by creative agency RPA and supported by a digital buy.

La-Z-Boy campaign, featuring Kristen BellIt’s great that La-Z-Boy has its brand ambassador Kristen Bell participating in the project, but I feel like there’s more to this than having a Hollywood sweetheart encourage UGC.

When I look at the microsite, the impression I get (whether intentional or not) is that this campaign does more than just help healthcare workers feel good. #OneMillionThanks is also a creative exercise to help the people doing the thanking feel good, too.

Scrolling through the site, you come across myriad activity ideas to help create your thank yous, from origami heart-folding to DIY sidewalk chalk paint.

La-Z-Boy campaign ideas for showing thanksDespite the fact that these activities are geared toward creating thank yous for healthcare workers, at the end of the day they’re also great activities for individuals, couples, and families to work on while under quarantine — whether they’re creating a thank you or something else. I’m certain the DIY sidewalk chalk paint instructions will be put to use for many more projects down the road, and perhaps the origami heart folding will inspire people to look deeper into the Japanese art form as way to de-stress and be creative in general.

Practicing the act of gratitude is a great way to improve your mental health and well-being … something I’m sure we could all use a bit more of nowadays. And while the #OneMillionThanks La-Z-Boy campaign probably wasn’t aiming for this, I’m glad that by asking people to create thankful content, La-Z-Boy is helping us all be a little more creative and gracious.

Speaking of practicing the art of gratitude, one of my and favorite authors and YouTube personalities, John Green created a wonderful Vlogbrothers video about it, as well as gratitude journaling. I highly recommend giving it a watch — once you’ve finished making your own #OneMillionThanks post.

Marketers, tell me what you think about this campaign, how you’re practicing creativity and gratitude, or anything else on your mind in the comments below!

Why Pulling Out of Amazon Is the Smartest Decision for Your Brand

Nike announced that as part of the company’s focus on elevating consumer experiences through more direct, personal relationships, it will stop selling its merchandise directly to Amazon.com. Here’s why Nike made the right decision.

Nike announced that as part of the company’s focus on elevating consumer experiences through more direct, personal relationships, it will stop selling its merchandise directly to Amazon.com. Here’s why Nike made the right decision.

Partnering with Amazon undoubtedly has benefits — namely, a built-in audience and speedy delivery options. However, it’s crucial to consider what you’re jeopardizing in exchange. You’re losing control of how your brand is presented. Even if you’re lucky enough to benefit from Amazon’s search algorithm — another thing brands have no control over — you essentially have no say in how your brand experience is delivered.

Last year, Nike partnered with Jet.com, and given what Jet’s chief customer officer said, I’m not surprised. David Echegoyen told Footwear News, “the way in which people find, discover and use your product is as much part of the experience as the fact that you buy them and use them.” Echegoyen explained that Jet’s focus would be on delivering an experience that would allow both brands to utilize customer insights to enhance their experience. And because Nike products would only be sold direct from the brand on the Jet site, the confusion and brand dilution that shoppers often experience on marketplace platforms would effectively be eliminated.

What every brand should seek in its retail partners — and, really, all partners, to the extent that it’s possible — is recognition of the importance of delivering a cohesive brand experience at every touchpoint, and the desire and capabilities to do so. The advantages of owning your brand experience are abundant.

Control Your Customer Journey

By limiting the channels where your products are available, you’re better able to deliver the best experience to your customers. This includes everything from product recommendations to delivery preferences, the physical unboxing experience, and more. This controlled approach also serves as a preventive measure against counterfeiting issues that could otherwise tarnish your brand’s reputation.

Own Your Data

Amazon traces every shopper’s step, utilizing that data to make product suggestions based upon its own algorithm. These are insights that would be incredibly valuable to brands, arming them with information that can help to deliver a better experience across all platforms, ultimately earning loyal customers. The problem is Amazon owns that data and doesn’t share it with brands. Now, selling direct to consumer on your own channels provides you with 100 percent of your data, the benefits of which warrant its own article. With a compatible, focused retail partner, there may be more room for a discussion about data sharing.

Secure Better Profit Margins

It’s difficult to predict revenues when the sales process is out of your hands. Going direct to consumer gives brands the most control over profit margins. However, as a new or emerging brand, third-party channels are commonly part of the mix. Profit margins are dependent upon the type of partner and the value they bring to the table — or in this case, the cart. Amazon controls the market, so the terms of merchant agreements are almost certainly dictated. However, when you have a like-minded partner dedicated to delivering an experience, the terms may be subject to negotiation.

Shatter the Delivery Myth

Thanks to the “Amazon Effect,” brands and retailers have had to figure out how to meet delivery expectations. My company conducted a 2019 study that revealed online shoppers weigh shipping costs and delivery speed more heavily in their purchasing decisions than ever. Consider that 58 percent of respondents said shipping costs greatly impact their decision to make an online purchase, and 62 percent said free shipping was the most influential factor in their decision to make future purchases. By utilizing sales and transportation data from your fulfillment team, you can map your customers’ journeys and customize shipping pricing and delivery speed to meet their unique expectations.

Selling through partners can be a huge asset, but it means there will always be an intermediary between you and your customer. If your sales channels include third-party retailers, make sure you’re all on the same page. Amazon can bolster brands in the short term, but to build a sustainable business, you must control how customers experience your brand, wherever they are.

Maria Haggerty is CEO and one of the original founders of Dotcom Distribution, a premier provider of B2C and B2B fulfillment and distribution services. 

When Brands Apologize, Customers Often Listen and Forgive

Happy customers are loyal customers. But what happens when “surprise and delight” is actually “surprise and incite”? Social media has raised the stakes for brands. Customers, most often angry ones, have a forum to air their grievances.

Happy customers are loyal customers. But what happens when “surprise and delight” is actually “surprise and incite”?

Social media has raised the stakes for brands. Customers, most often angry ones, have a forum to air their grievances. I see it constantly on Twitter, and have admittedly participated myself, when air travel goes terribly wrong or quality falls short of expectations.

The good news is that it’s recoverable.

Brands that react swiftly, thoughtfully, and transparently are the ones who win. And by win, I mean they don’t necessarily lose customers as a result of their actions, inaction or missteps.

This week alone, two retailers were seemingly insensitive to their female customers and perceived as body-shaming the very people they want to empower.

Macy’s

Macy’s was called out in one tweet that received 48,000 likes and 6,000 comments for plates by a company called Pourtions that were highly controversial for their message. Intended to bring humor to the concept of portion control, the dinner plates feature a large ring that read “Mom Jeans,” a smaller ring that read “Favorite Jeans,” and an even smaller ring that read “Skinny Jeans.”

Macy’s responded by apologizing and vowing to remove the plates from their stores. Of course, not everyone in the Twittersphere agreed with this decision. But it does show a sense of responsibility for its products and consideration for its customers.

Forever 21

Forever 21 also came under fire this week for sending Atkins bars in online orders with plus size merchandise. They’re not just good at fast fashion, but they also showed they can deliver a fast reaction.

In response to press coverage of the “snafu,” Forever 21 said:

“From time to time, Forever 21 surprises our customers with free test products from third parties in their e-commerce orders. The freebie items in question were included in all online orders, across all sizes and categories, for a limited time, and have since been removed. This was an oversight on our part and we sincerely apologize for any offense this may have caused to our customers, as this was not our intention in any way.”

In this case, I think the word “test” is a critical one. If Forever 21 had done some market research and testing, perhaps it would have learned that a partnership with a brand like Atkins, that is depicted as a diet company, could be detrimental to its brand perception.

Conclusion

The merchandise you sell, the partners you align with, the sites where your ads run, the people you hire, the way you respond to criticism — all of these decisions impact your customers and shape your brand identity.

To err is human; to forgive, divine.

How Marketers Can Throw Away Data, Without Regrets

Yes, data is an asset. But not if the data doesn’t generate any value. (There is no sentimental value to data, unless we are talking about building a museum of old data.) So here’s how to throw away data.

Last month, I talked about data hoarders (refer to “Don’t Be a Data Hoarder”). This time, let me share some ideas about how to throw away data.

I heard about people who specialize in cleaning other people’s closets and storage spaces. Looking at the result — turning a hoarder’s house into a presentable living quarters — I am certain that they have their own set of rules and methodologies in deciding what to throw out, what goes together, and how to organize items that are to be kept.

I recently had a relatable experience, as I sold a house and moved to a smaller place, all in the name of age-appropriate downsizing. We lived in the old home for 22 years, raising two children. We thought that our kids took much of their stuff when they moved out, but as you may have guessed already, no, we still had so much to sort through. After all, we are talking about accumulation of possessions by four individuals for 22 long years. Enough to invoke a philosophical question “Why do humans gather so much stuff during their short lifespans?” Maybe we all carry a bit of hoarder genes after all. Or we’re just too lazy to sort things through on a regular basis.

My rule was rather simple: If I haven’t touched an item for more than three years (two years for apparel), give it away or throw it out. One exception was for the things with high sentimental value; which, unfortunately, could lead into hoarding behavior all over again (as in “Oh, I can’t possibly throw out this ‘Best Daddy in the World’ mug, though it looks totally hideous.”). So, when I was in doubt, I chucked it.

But after all of this, I may have to move to an even smaller place to be able to claim a minimalist lifestyle. Or should I just hire a cleanup specialist? One thing is for sure though; the cleanup job should be done in phases.

Useless junk — i.e., things that generate no monetary or sentimental value — is a liability. Yes, data is an asset. But not if the data doesn’t generate any value. (There is no sentimental value to data, unless we are talking about building a museum of old data.)

So, how do we really clean the house? I’ve seen some harsh methods like “If the data is more than three years old, just dump it.” Unless the business model has gone through some drastic changes rendering the past data completely useless, I strongly recommend against such a crude tactic. If trend analysis or a churn prediction model is in the plan, you will definitely regret throwing away data just because they are old. Then again, as I wrote last month, no one should keep every piece of data since the beginning of time, either.

Like any other data-related activities, the cleanup job starts with goal-setting, too. How will you know what to keep, if you don’t even know what you are about to do? If you “do” know what is on the horizon, then follow your own plan. If you don’t, the No. 1 step would be a companywide Need-Analysis, as different types of data are required for different tasks.

The Process of Ridding Yourself of Data

First, ask the users and analysts:

  • What is in the marketing plan?
  • What type of predictions would be required for such marketing goals? Be as specific as possible:
    • Forecasting and Time-Series Analysis — You will need to keep some “old” data for sure for these.
    • Product Affinity Models for Cross-sell/Upsell — You must keep who bought what for how much, when, through what channel type of data.
    • Attribution Analysis and Response Models — This type of analytics requires past promotion and response history data for at least a few calendar years.
    • Product Development and Planning — You would need SKU-level transaction data, but not from the beginning of time.
    • Etc.
  • What do you have? Do the full inventory and categorize them by data types, as you may have much more than you thought. Some examples are:
    • PII (Personally Identifiable Data): Name, Address, Email, Phone Number, Various ID’s, etc. These are valuable connectors to other data sources such as Geo/Demographic Data.
    • Order/Transaction Data: Transaction Date, Amount, Payment Methods
    • Item/SKU-Level Data: Products, Price, Units
    • Promotion/Response History: Source, Channel, Offer, Creative, Drop/Wave, etc.
    • Life-to-Date/Past ‘X’ Months Summary Data: Not as good as detailed, event-level data, but summary data may be enough for trend analysis or forecasting.
    • Customer Status Flags: Active, Dormant, Delinquent, Canceled
    • Surveys/Product Registration: Attitudinal and Lifestyle Data
    • Customer Communication History Data: Call-center and web interaction data
    • Online Behavior: Open, Click-through, Page views, etc.
    • Social Media: Sentiment/Intentions
    • Etc.
  • What kind of data did you buy? Surprisingly large amounts of data are acquired from third-party data sources, and kept around indefinitely.
  • Where are they? On what platform, and how are they stored?
  • Who is assessing them? Through what channels and platform? Via what methods or software? Search for them, as you may uncover data users in unexpected places. You do not want to throw things out without asking them.
  • Who is updating them? Data that are not regularly updated are most likely to be junk.

Taking Stock

Now, I’m not suggesting actually “deleting” data on a source level in the age of cheap storage. All I am saying is that not all data points are equally important, and some data can be easily tucked away. In short, if data don’t fit your goals, don’t bring them out to the front.

Essentially, this is the first step of the data refinement process. The emergence of the Data Lake concept is rooted here. Big Data was too big, so users wanted to put more useful data in more easily accessible places. Now, the trouble with the Data Lake is that the lake water is still not drinkable, requiring further refinement. However, like I admitted that I may have to move again to clean my stuff out further, the cleaning process should be done in phases, and the Data Lake may as well be the first station.

In contrast, the Analytics Sandbox that I often discussed in this series would be more of a data haven for analysts, where every variable is cleaned, standardized, categorized, consolidated, and summarized for advanced analytics and targeting (refer to “Chicken or the Egg? Data or Analytics?” and “It’s All about Ranking”). Basically, it’s data on silver platters for professional analysts— humans or machines.

At the end of such data refinement processes, the end-users will see data in the form of “answers to questions.” As in, scores that describe targets in a concise manner, like “Likelihood of being an early adopter,” or “Likelihood of being a bargain-seeker.” To get to that stage, useful data must flow through the pipeline constantly and smoothly. But not all data are required to do that (refer to “Data Must Flow, But Not All of Them”).

For the folks who just want to cut to the chase, allow me to share a cheat sheet.

Disclaimer: You should really plan to do some serious need analysis to select and purge data from your value chain. Nonetheless, you may be able to kick-start a majority of customer-related analytics, if you start with this basic list.

Because different business models call for a different data menu, I divided the list by major industry types. If your industry is not listed here, use your imagination along with a need-analysis.

Cheat Sheet

Merchandizing: Most retailers would fall into this category. Basically, you would provide products and services upon payment.

  • Who: Customer ID / PII
  • What: Product SKU / Category
  • When: Purchase Date
  • How Much: Total Paid, Net Price, Discount/Coupon, Tax, Shipping, Return
  • Channel/Device: Store, Web, App, etc.
  • Payment Method

Subscription: This business model is coming back with full force, as a new generation of shoppers prefer subscription over ownership. It gets a little more complicated, as shipment/delivery and payment may follow different cycles.

  • Who: Subscriber ID/PII
  • Brand/Title/Property
  • Dates: First Subscription, Renewal, Payment, Delinquent, Cancelation, Reactivation, etc.
  • Paid Amounts by Pay Period
  • Number of Payments/Turns
  • Payment Method
  • Auto Payment Status
  • Subscription Status
  • Number of Renewals
  • Subscription Terms
  • Acquisition Channel/Device
  • Acquisition Source

Hospitality: Most hotels and travel services fall under this category. This is even more complicated than the subscription model, as booking and travel date, and gaps between them, all play important parts in the prediction and personalization.

  • Who: Guest ID / PII
  • Brand/Property
  • Region
  • Booking Site/Source
  • Transaction Channel/Device
  • Booking Date/Time/Day of Week
  • Travel(Arrival) Date/Time
  • Travel Duration
  • Transaction Amount: Total Paid, Net Price, Discount, Coupon, Fees, Taxes
  • Number of Rooms/Parties
  • Room Class/Price Band
  • Payment Method
  • Corporate Discount Code
  • Special Requests

Promotion Data: On top of these basic lists of behavioral data, you would need promotion history to get into the “what worked” part of analytics, leading to real response models.

  • Promotion Channel
  • Source of Data/List
  • Offer Type
  • Creative Details
  • Segment/Model (for selection/targeting)
  • Drop/Contact Date

Summing It All Up

I am certain that you have much more data, and would need more data categories than ones on this list. For one, promotion data would be much more complicated if you gathered all types of touch data from Google tags and your own mail and email promotion history from multiple vendors. Like I said, this is a cheat sheet, and at some point, you’d have to get deeper.

Plus, you will still have to agonize over how far back in time you would have to go back for a proper data inventory. That really depends on your business, as the data cycle for big ticket items like home furniture or automobiles is far longer than consumables and budget-price items.

When in doubt, start asking your analysts. If they are not sure — i.e., insisting that they must have “everything, all the time”— then call for outside help. Knowing what to keep, based on business objectives, is the first step of building an analytics roadmap, anyway.

No matter how overwhelming this cleanup job may seem, it is something that most organizations must go through — at some point. Otherwise, your own IT department may decide to throw away “old” data, unilaterally. That is more like a foreclosure situation, and you won’t even be able to finish necessary data summary work before some critical data are gone. So, plan for streamlining the data flow like you just sold a house and must move out by a certain date. Happy cleaning, and don’t forget to whistle while you work.

Returns Are the Final Frontier for E-Commerce Dominance

E-commerce has had to overcome several barriers in its relatively short lifespan. (Well, relatively short for a Baby Boomer. But not so much for Millennials and Gen-Zers, who don’t remember a time when milk was delivered to your doorstep daily.)

E-commerce has had to overcome several barriers in its relatively short lifespan. (Well, relatively short for a Baby Boomer. But not so much for Millennials and Gen-Zers, who don’t remember a time when milk was delivered to your doorstep daily — but you couldn’t get almost everything else delivered for free in two days.)

First, there was online penetration. In 1999, only 44% of Americans had Internet access, either at home or at work.

Next, there was the fear of using your credit card online (65% in 1999). Most people got over that as they began to trust traditional retailers’ online sites and Amazon became a household word.

Shipping costs are too high. Enter Amazon Prime and FREE SHIPPING on orders over $30 from other retailers.

“I want to see it and feel it” and “I need it today” resulted in shopping online and buying offline, a common practice for several product categories even today, including high-end electronics and clothing.

Returns are a hassle and/or expensive. Yep! About 33% of global shoppers cited online return policies and processes as deterrents. (Chain Store Age, October 2015)

If there’s one thing consumers hate more than paying for shipping, it’s paying for return shipping. As counterproductive as it seems, I go out of my way to take Amazon returns to a return center to avoid paying $7 for return shipping. Returning an online purchase to a retail location is another option that consumers will choose — one that is probably more time-intensive, with a higher negative ROI. I don’t have firsthand knowledge, but I’m sure most online retailers have tested a higher price point with free shipping vs. lower price point plus shipping. Chances are, free shipping wins.

Zappos offers free returns so you can try different sizes and colors of shoes on in the comfort of your own home. However, free returns are met with the same skepticism regarding price as free shipping.

E-commerce continues to grow at a decent pace.

“Early analysis from Internet Retailer shows online retail sales in the U.S. crossed $517 billion in 2018, a 15% jump, compared with 2017. The growth in retail sales in physical stores reached 3.7% last year. This means that e-commerce now accounts for 14.3% of total retail sales, when factoring out the sale of items not normally purchased online, such as fuel, automobiles, and sales in restaurants. And it also means that in only a decade, the web has more than doubled its share of retail sales. Ten short years ago, e-commerce was at 5.1% of total retail purchases.”

While an almost threefold growth in 10 years is impressive, I think that making the return process more satisfying for consumers can accelerate the growth of e-commerce. Changing the consumer mindset about return costs may be the answer.  In his book, “Misbehaving: The Making of Behavioral Economics,” Richard Thaler notes that members view their Costco and Amazon Prime annual fees as investments and make no attempt to allocate those costs over the various purchases they make during the year.

Is there an opportunity for an unlimited free returns membership add-on from Amazon or another retailer? I know people who are chronic returners at brick-and-mortar stores who would welcome it. Pricing it certainly would be tricky. What do you think?

UPS Begins Preparations for a Freight Strike

UPS has now begun discussions with UPS Freight customers to inform them of the potential for service disruption and the need to arrange alternative carriers. Because it cannot guarantee against a work stoppage, UPS can’t afford to put its customers’ volume at risk of being stranded in the UPS system.

I had the following email forwarded to me yesterday from a UPS Freight customer. And I have to say, I can’t believe UPS is doing this! The news starts at paragraph three … UPS Freight will not be picking up freight as the freight contract with the Teamsters gets close to the vote. Essentially, UPS will not be picking up freight starting before the voting period (based on the below schedule) and will not resume operations until the vote has been completed.

This will have the same effect of going on strike. Luckily, it’s only UPS Freight this time. Here’s the email:

Dear (Customer Name):

UPS and the Teamsters Freight National Bargaining Committee concluded the current round of discussions on October 25, 2018. UPS’s offer, which we believe should be ratified, is an offer that rewards our employees with wages and benefits at the top of the industry and compensates them for their contributions to the success of the company. 

A union-hall vote, in which Teamster employees will go to their local union hall to cast ballots, is expected to take place November 7-11. At this point, UPS does not have an extension in place to the current UPS Freight contract.

To ensure transparency and not put your volume at risk, starting Thursday, November 1 UPS will not pick up any UPS Freight volume with a delivery date after November 8. The last day UPS will pick up UPS Freight will be Thursday, November 1 for five-day shipping commitments; Friday, November 2 for four-day shipping commitments; Monday, November 5 for three-day shipping commitments; Tuesday, November 6 for two-day shipping commitments; and Wednesday, November 7 for one-day shipping commitments.

If you have a bundled contract, or incentives dependent upon UPS Freight volume, we will ensure you experience no negative financial impact.

The UPS Small Package National Master Agreement (NMA) has been ratified. Customers can remain confident UPS is ready to continue to serve its small package customers throughout the holiday season and beyond.

We appreciate your patience as we work through this negotiation.

What This Means for Retailers

A strike could have a major disruption to retail and e-commerce businesses that rely on UPS Freight. Apart from DC-to-store shipments and some store-to-store loads, the less-than-load (and truckload) carriers transport inbound freight to DCs and warehouses once they clear ports, not to mention larger (non-parcel) deliveries directly to customers.

UPS has now begun discussions with UPS Freight customers to inform them of the potential for service disruption and the need to arrange alternative carriers. Because it cannot guarantee against a work stoppage, UPS can’t afford to put its customers’ volume at risk of being stranded in the UPS system. UPS is actively working to empty its network of freight by Fri., Nov. 9. UPS doesn’t want customer inventory custody issues as loads are abandoned throughout the network.

UPS Freight is the fifth-largest provider of LTL services, with $2.6 billion revenue in 2017. Keep in mind that even with UPS Freight in service, there was already a capacity crunch in the LTL market. Today’s announcement will leave many retailers scrambling to find alternative carriers.

I guess if there’s any good news, it’s that — unlike small parcel, which is dominated by the FedEx and UPS duopoly — there are many LTL alternatives in every region. Shippers that need help transitioning freight away from UPS have several options. They can directly contact other LTL providers or work with 3PLs and freight brokers. If they need referrals, Shipware is happy to help. Email rob@shipware.com.

Sears Had Everything: How Retail Success Became Failure

From 1969 to 1972, the retail success story Sears used the catchy jingle, “Sears Has Everything!” Not anymore. It’s ironic that Sears, the mail order giant of the 19th century that dominated retailing throughout the 20th century could not survive the e-commerce age of the 21st century. After all, Sears created mail order marketing — which evolved into direct response marketing, right?

From 1969 to 1972, the retail success story Sears used the catchy jingle, “Sears Has Everything!” Not anymore.

It’s ironic that Sears, the mail order giant of the 19th century that dominated retailing throughout the 20th century could not survive the e-commerce age of the 21st century. After all, Sears created mail order marketing — which evolved into direct response marketing, right?

Trout and Ries had a term for this phenomenon in their landmark book, Positioning: The Battle for your Mind: “F.W.M.T.S.” — Forgot What Made Them Successful. In fact, Sears abandoned its catalog business in 1993.

As Shiv Gupta noted in his Target Marketing blog post on Tuesday:

“Sears was so busy picking up loose change off the floor, it forgot to look up at the bus barreling toward it.”

Sears really did have everything. At one point, you could buy a Sears house. “Sears Catalog Homes were catalog and kit houses sold primarily through mail order by Sears, Roebuck and Company, an American retailer. Sears reported that more than 70,000 of these homes were sold in North America between 1908 and 1940.” Wikipedia

But they also had the ability to capture the imagination of the American consumer. I have fond memories of going to the Sears store with my father and marveling at the range of merchandise: every tool imaginable, appliances, sporting goods, toys, clothing, jewelry — you name it; Sears had it.

Then there was the magical day that the Christmas Wish Book arrived in the mail and my siblings and I would spend hours with it, fine-tuning our wish list for Santa. Iconic Sears brands jumped off the pages of the catalog and into my imagination to become aspirational purchases: a Ted Williams baseball glove, a Silvertone guitar amp …

What happened?

Sears simply stopped innovating somewhere along the way. Here are some milestones:

  • “Founded shortly after the Civil War, the original Sears, Roebuck & Company built a catalog business that sold Americans the latest dresses, toys, build-it-yourself houses and even tombstones. The company was, in many ways, an early version of Amazon.” (NYTimes, 10/16/18)
  • In 1896, Sears benefited from a United States Postal Service program called Rural Free Delivery, which extended mail routes into rural areas. (NYTimes 10/15/18)
  • As more Americans began living in cities, Sears opened retail stores, the first in 1925 in Chicago.
  • “Later, its vast spread of brick-and-mortar stores positioned it in prime retail locations across the country. For years, it was the largest retailer in the United States, operating out of the tallest building in the world. At various points, it sold products like fishing tackle, tombstones, barber chairs, wigs and even a ‘Stradivarius model violin’ for $6.10.” (NYT 10/15/18)
  • Sears benefited from being a pioneer chain in a landscape of largely independent department stores. Along with JCPenney, it became a standard shopping mall anchor. Together, the two chains, along with Montgomery Ward, captured 43 percent of all department store sales by 1975 … (Then) Skyrocketing inflation meant low-price retailers, such as Target, Kmart and Walmart … lured new customers. The market became bifurcated, as prosperous upper-middle class shoppers turned to more luxurious traditional department stores, while bargain-seekers found lower prices at the discounters than at Sears. (Smithsonian 7/25/17)
  • Sears was major player in financial services in the 1980s, with Allstate Insurance and Dean Witter in the brand portfolio that included Kenmore and Craftsman. But by 1989, Sears was a shade of its former self. “It slashed prices on most of its inventory and in time shut its catalog operation, closed hundreds of stores and laid off tens of thousands of employees. Stores began carrying more outside brands and accepting nonstore credit cards to entice customers.” NYTimes 10/15/18

After abandoning the catalog business in 1993, Sears made a brief return to its roots by buying successful cataloger Lands’ End in 2002, only to spin it off in 2013.

In the end, Sears forgot what made it successful. It had everything. But Sears blew it.

The Decline of Sears Is a Story About Narrow-Minded Analytics

I am a data-driven marketer, but I also talk about the dangers of using analytics for narrow-minded goals at the expense of long-term advantages. The story of Sears and its eventual bankruptcy is very illustrative of what I mean about narrow-minded analytics — used for short-term gains at the expense of longer-term goals.

I am a data-driven marketer, but I also talk about the dangers of using analytics for narrow-minded goals at the expense of long-term advantages. The story of Sears and its eventual bankruptcy is very illustrative what I mean about narrow-minded analytics — used for short-term gains at the expense of longer-term goals.

I know, because early in my career, I had spent several years at Sears. More importantly, I was there when Sears was bought out by Kmart holdings.

In 2004, Sears was already in decline. But it was still a force to be reckoned with. Despite the fact it had struggled to improve its soft lines (apparel, textiles, etc.) performance, it was still the go-to retailer for hard-line goods, such as appliances and tools. Management was also trying new formats and new product lines to rejuvenate the Sears brand.

Then the announcement came. Sears will be bought out by Kmart Holdings and ESL investments, run under the leadership of Eddie Lampert. The feeling among Sears employees was immediate demoralization. It was as if an old but proud ship was under attack by a ghost pirate ship under the flag of a cursed and dead brand.

Sensing the fear, senior management began preaching the benefits of a more efficient, data-driven management mindset that ESL investments would bring. Along with more resources, the data-driven culture would reward “smart risk-taking.” By better leveraging data, Sears would climb out of its slow descent to once again become a dominant leader in retail.

In this spirit, I became involved in an aftermarket pricing project, where we leveraged pricing and sales data to determine the optimal price of thousands of parts used in the repair and maintenance of hard-line goods. The project netted over $10 million in the first year alone, and the team was recognized with the “making money” award (Yes, that was the name of the award). As more price optimization projects came online, tens of millions of dollars in bottom-line revenue were being realized quarterly.

While the pricing initiatives were a brilliant use of analytics, senior leadership didn’t take advantage of the analytical talent to address the issue of the declining top line. Where was the data-driven strategy for top-line growth? Were we simply collecting cash for the big transformation? Was something already in the works? As we tweaked and re-tweaked algorithms to squeeze more profits, the brand atrophied. Long story short, you have what Sears is today.

However, this story is not an indictment of the transformational powers of data-driven thinking. Rather, as I have written in previous articles, such as here and here, this is an indictment of management’s ability to exercise visionary, data-driven thinking. Analytics is a powerful tool, but it doesn’t replace courage and visionary thinking.

Sears was so busy picking up loose change off the floor, it forgot to look up at the bus barreling toward it.

With analytics, this is easy to do, because it is exceptionally good at optimizing for your current environment. Changing the rules, however, requires the blend of analytics and courage.

Some argue that Eddie Lampert and ESL investments always planned to juice and kill the Sears brand. Eddie Lampert has denied this from the beginning. I believe him, because there was a time when Sears’ coterie of store brands (such as Kenmore and Craftsman) still carried immense market value. That was the time to begin stripping Sears.

This is simply a story where the potential and power of data-driven thinking was advertised as an opportunity for transformational change, but was frittered away picking up loose change.

Swimming in Amazon Shopping — for the Exotic and Different

Amazon shopping is its own beast. When I moved to Brazil, any mention of “Amazon” immediately conjured up visions of this great river teeming with hungry piranhas, surrounded by nearly impenetrable jungle; one of the last truly wild places on Earth, a great place to visit. But, as the expression goes, you wouldn’t want to live there. That was 19 years ago.

Walking in the Amazon
Credit: Peter J. Rosenwald

Amazon shopping is its own beast. When I moved to Brazil, any mention of “Amazon” immediately conjured up visions of this great river teeming with hungry piranhas, surrounded by nearly impenetrable jungle; one of the last truly wild places on Earth, a great place to visit. But, as the expression goes, you wouldn’t want to live there. That was 19 years ago.

Say “Amazon” today and the 24-year-old behemoth that comes to mind is the largest online retailer in the world, a direct seller and digital marketplace with a piranha’s aggressive appetite. It is said to have chosen its name because the Amazon was “exotic” and “different.” It is both. This year, Jeff Bezos, Amazon’s founder and boss, reported that the company had achieved 100 million Amazon Prime subscribers, or 64% of households in the U.S. If any company can be said to have disrupted the retail landscape, Amazon is the one.

Swimming in Amazon
Credit: Peter J. Rosenwald

The unbroken growth of Amazon shopping worldwide demands the answer to the difficult question: which came first, a consumer desire to be able to conveniently purchase a wide range of goods with the convenience, price and choice offered online by Amazon and its principal competitors? Or Amazon’s brilliant marketing, which seduced the consumer away from brick-and-mortar retailers — even shopping malls — to the computer screen and convenient home delivery?

Amazon River
Credit: Peter J. Rosenwald

There is no doubt that sophisticated online shopping appeared at just the right moment in the digital revolution. Whether it will doom retail shopping is an open question.

A recent article in eMarketer Retail provides some clues to the direction where consumers are driving the online business model.

“According to ‘eMarketer’ forecasts, the gap between U.S. first-party sales on Amazon and third-party sales is widening. In 2017, direct sales grew 20.9% to reach $70.40 billion. By 2019, that total will climb to $95.08 billion. By comparison, marketplace sales jumped 41.4% to $129.45 billion last year. And marketplace sales are expected to log growth topping 30% this year and next. “

What is the “marketplace,” other than a digital shopping mall in your home or in your pocket? Why endure the traffic, parking problems, store clerks who frequently know less about the merchandise than you do and all of the bother that comes with it?

The answer would seem to be that consumers still find “shopping” fun, and welcome the live interaction with like humanoids. (What was that great one-liner? Christmas is the time people stop shopping and start buying things.) Last weekend, a visit to a nearby shopping mall found it teeming with happy families, kids and canines in tow, enjoying the experience.

But shouldn’t the generous loyalty programs offered by some online marketers overcome the temptation to go out and shop? It appears not always. Another recent article, also from eMarketer, said:

“Loyalty programs have a serious retention problem. Consumers are quick to sign up, but quick to forget about a loyalty program once they get their initial discount. Members, overloaded with points, miles and free shipping offers, are not necessarily consolidating purchases with one brand in order to accrue rewards.”

There is no simple answer, which is good news for resilient retailers. The many benefits of the Amazon marketplace model appear not to always outweigh the entertainment value of physical retail shopping. Social media is not really very social and you can’t buy the kids ice cream cones on your iPhone.

The piranhas may have to go hungry for a while longer.

humanoids on the Amazon
Credit: Peter J. Rosenwald

The Cost of Marketing to the Wrong Consumer, and How to Get It Right

We all know that Internet marketing is easy and cheap. But regardless, marketing to the wrong retail customer can come at a high price. Here are some suggestions for how to keep your marketing judicious and well-targeted, so you’re reaching the right audience.

Internet marketing is easy and cheap. That’s all the more reason to use it judiciously, because the cost of marketing to the wrong retail customer can cost big. Here are some suggestions to make sure you’re targeting the right audiences.

Effectively used, marketing has the power to connect the right consumers with brands and turn them into loyal, repeat customers. But what happens when it’s not, and what’s the cost incurred? Bigger than you think — bad campaigns are deadly on a number of fronts. It’s not just lost sales. They result in lost loyalty and a confused target market. They can quickly alienate some of a retailer’s most valuable potential and current customers. That leads to further difficulty attracting and maintaining relationships with the very people who could have been your best customers, brand ambassadors or social media amplifiers.

Because it’s easier to reach out in today’s digital environment, retailers can more easily connect with their client base now than ever before, for better or worse. Just because they can, doesn’t mean they should. It’s very easy to try a new type of campaign or use digital tools like social media, but it’s just as simple for poor planning and execution to lead to a negative result.

With the rise of digital marketplaces and the vast increase in shopper options, the way shoppers buy products has drastically changed. This means that retailers must regularly adjust, refine and improve their approaches to marketing. It’s critical to understand that just using the internet as a marketing tool isn’t enough —it’s easy to market in a tone-deaf manner. As with any other campaign, success depends on careful planning during every stage of development and the judicious use of accurate, current data and relevant analytics tools. When marketers don’t do this, they risk the consequences of directing their marketing initiatives at the wrong consumer. And there are far too many marketing strategies that don’t lead to the generation of value or a customer transaction.

What Sets Great Modern Marketing Campaigns Apart?

It starts with careful and thoughtful direction of resources involves gathering data, collecting and securely storing it, and effectively using analytics tools to derive useful, actionable insights that form and bolster relationships. Drilling down, certain qualities of effective marketing campaigns set them apart from other, less-successful efforts. Here are a few of the most important concepts for reliable, powerful and positive results:

  • Focus on a well-defined customer type: Great campaigns don’t cast too wide a net. Instead, they have a clear idea of whom they’re targeting.
  • Don’t worry about long-tail keywords: Unless your company can compete with the giants of your market segment — and giants of every segment, like Amazon — it’s best not to put too much stock in these keywords.
  • Emphasize qualified leads: A qualified, well-understood customer persona is much more than an email address. With a thoroughly developed customer profile, including data about budgeting and identity, companies have better results. This is one of many areas where powerful, effective analytics comes into play.
  • Align large and small details to the defined personas: A strong campaign should feel relevant, attractive, focused and engaging to its recipients.
  • Segment your database, continually: Building the difference between prospective and existing customers into targeted variations of the same campaign, for example, helps retailers realize the best results. Continually segmenting databases through the use of effective big data and analytics tools is one difference that sets retail leaders apart from the rest of the pack.
  • Properly value existing customers: You already have a stronger relationship with existing and past customers than with potential ones. An incentive like a coupon or discount — with the exact terms defined in part through analytics and big data — is often enough to secure a new purchase.
  • Gather feedback: Valuable intelligence about your products, customer service and brand experience comes from social media and many other online communities. Retailers need to be where their customers congregate online, then gather feedback for review by staff and use in automated analysis.
  • Build emotional connections: Lasting, meaningful connections with core customers are more important than customer service in many instances. Building these relationships means encouraging purchasing over the long term. Consider these examples:
    • Target determined it was too narrowly labeling bedding and toys for children based on gender. Taking changing attitudes about gender fluidity into account, the retailer stopped marketing based on gender. It now markets bedding and toys with a more inclusive strategy.
    • Dick’s Sporting Goods announced it would stop selling assault rifles and raise its minimum age for purchasing firearms to 21. CEO Edward Stack decided this would provide an overall benefit and strengthen bonds with customers throughout all of its product lines.

A large part of the fine-tuning involves drawing on the power of data and analytics to ensure they can move at the speed of the modern consumer and connect to them effectively. Many aggressive, short-term campaigns use crowdsourcing, social media and apps to build strong, short-term connections. Carried out properly, these efforts increase positive sentiment among the customers you know are interested in shopping with your company. This turns the digital world into an invaluable public space in which businesses can interact with customers, using existing and custom-built tools to quickly and efficiently reach them. The costs of marketing to the wrong consumer are both clear and substantial. So focus on your current and prospective customers and leverage big data and analytics tools to market to the right ones.