Sunday, June 4, 2017

Pressure Cooker

Retailers, Grocers Prepare to Get Roasted as New Competitors Bring the Heat

In the few short months since I wrote the Unclumsy article on the sad demise of Radio Shack, the wave of retail closures has continued, now plainly visible above even our loud national politics as the business press covers every terrible detail of what, actually, seemed like a pretty obvious and inevitable arc.

One after another and across all industries, the casualties keep arriving:

Gander Mountain Closing all Locations, Going Out of Business [Read More]
HHGregg to Shut Down all 88 Locations Nationwide [Read More]
Bebe Is Closing All 175 of Its Stores [Read More]
JC Penney to Close up to 140 stores, Offer Buyouts [Read More]
Central Grocers Will Close 9 Ultra Foods Stores, Sell 22 Strack & Van Til Sites [Read More]
Sears and Kmart Might Not Have Enough Money to Stock Their Shelves [Read More]

In particular, having been plainly outplayed at their own game by online retailers, the news on Sears is harsh:
"Our historical operating results indicate substantial doubt exists related to the company's ability to continue as a going concern," Sears Holdings said in a filing with the Securities and Exchange Commission.
...and the smart money says it's not slowing down anytime soon.

The New York Times, indeed, asks: Is American Retail at a Historic Tipping Point?

And, Bloomberg reports, simply: America’s Retailers Are Closing Stores Faster Than Ever

It's a fact, of course, that brick and mortar stores are stymied by (a) the challenge to draw foot traffic from consumers who already prefer online shopping, (b) the overhead of real estate, (c) the burden of local sales tax, and (d) finding quality staff, but it's also true — and a much simpler explanation for their woes — that they've simply not prepared a way to follow their consumers out the door. Like Radio Shack, many retailers just have NO PLAN to extend the relationship with a loyal customer into their day-to-day mobile world. They had loyal customers and they let them walk away to Amazon.

The retailers that are succeeding in this new environment, like Walmart — note recent acquisition of Jet — and Target, are investing widely in technology. They're active — in investments, at the very least — and engaged — just check out Walmart Labs — and, like Amazon, unafraid of the change and advantages that smart technology investments will bring. They are working to develop the services that will integrate their brands and sales channels seamlessly into the daily and busy lives of their loyal customers. Take Amazon, for example. In the past few years they've rolled out:

1. Subscribe and Save: A simple mechanism to keep consumer dollars out of the hands of Walgreens and local grocery chains by auto-delivering items on a weekly or monthly basis. If you get the timing right — that's always the trick — this is the perfect reliable revenue stream for Amazon and a real convenience to the consumer.

2. Dash Buttons: A pack-of-gum-sized device to re-add detergent, your favorite brand-name snacks, and the rest of your recurrable items directly to your Amazon cart. I'm not sure the practicality of these buttons, but they make a heck of marketing statement and, without a doubt, have been a combined effort of brands to run an end game around retailers' premium shelf space and endcaps. In effect, Amazon will now own the real premium shelf space: at the consumer's fingertips, right in place of the item they need to re-order.

3. Amazon Echo: The latest in the Amazon assault on local merchants, it's a lot like Google's Home Assistant and it can, with the sound of your voice, re-order items, adding 'em directly to your Amazon cart. A virtual butler of sorts, it provides every reason in the world to forget about driving to your corner store or local grocer.

Aside from Radio Shack and the stores noted above, the pressure will continue on local merchants and, sadly, so will the march of poor earnings reports and coverage of store closings. Who will bear the burden of the next brunt? If you're in the grocery business, the answer is... probably YOU! Between the convenience of Peapod and Blue Apron and Instacart, the perfect shopping experience provided by specialty stores and boutique markets, and and strong initiative of Target into the grocery business — not to mention their dedication to finding keen technology solutions — the old-line merchants, it seems, will continue to feel the heat until they find the right mix of technology to co-exist alongside their current channel. That's what consumers expect, anyhow.

There's time for all this to change, of course, with executive leadership that recognizes that the upside to the challenge of change is really greater long-term stability for a business model that no longer relies on physical presence as much as it relies on a responsiveness to its consumers.

– Jon Roketenetz

Jon is the CEO of online re-order facilitator GimmeAnother and founder of 3VERB.

Sunday, January 8, 2017

One Good Punch

Be on the Lookout; The Next Great Sentence is Just Around the Corner

I read somewhere* that this – by the sportswriter John Lardner – is the “the greatest novel ever written in one sentence,” about the professional boxer and Middleweight World Champion, Stanley Ketchel, aka “The Michigan Assassin:”

“Stanley Ketchel was twenty-four years old when he was fatally shot in the back by the common-law husband of the lady who was cooking his breakfast.”

...and it’s probably true. Or, at least, I’ve not yet encountered a single sentence that beats it for pure intrigue, balance, and depth. Can you fit the entire plot, character development, and scenery of any novel into a single sentence? Probably not, but I'm reminded often that you can find – and should look for! – a single sentence or sentiment tucked away in every book that truly resonates at some cosmic level, a sentence that wraps the entire idea of the book into its own ideal, the one corner of a photograph that tells the whole story. Back when I only read books made of paper I would dog-ear the bottom of the page (we nicknamed this “the bottom dog”) to make for easy reference later. I miss this about paper and it’s a lost opportunity with e-books, the ability to pass along the book itself and have that modest hallmark persist.

A few years ago, I wound my way through Bob Dylan’s Chronicles – who knew then that its author would go on to win the Nobel? – and stumbled upon the great scene wherein Dylan and Dave Van Ronk’s wife, Terri, wander through the Village in NYC, past the plate glass window of a hardware store. She notes of an electric can opener displayed in the window:

“What a ridiculous thing, an electric can opener,” Terri once said as we walked past the shop window of a hardware store on 8th Street. “Who’d be stupid enough to buy that?”

I burned through the rest of book – the lengthy sections about his time New Orleans still my favorite part – but I kept returning to those few sentences about the can opener which I now keep in a text file on my computer desktop to this day. Why? They’re the perfect reminder, to me, of the complexities of perception of consumer products AND a warning about obsolescence alongside the importance of utility in product design. Who would be stupid enough? The 1970s and 80s, I guess, when electric can openers were the thing to have in your kitchen. Useful and uselessness, all wrapped up with a bow and sold straight through to the consumer.

More recently, I worked on typesetting a book for a friend that was filled with a good amount of life lessons, sorrow, and hope. I read it in detail – proofread, in fact – and am certain to walk away with more knowledge than I had before starting it. And, along the way the author had inserted this line, a quote by Thoreau:

“The bluebird carries the sky on his back.”

I felt like I read the whole book just to encounter that one line, so perfect and meaningful. And so true of the mighty well-placed sentence, a small bird upholding the atmosphere for the clouds.

– Jon Roketenetz

Jon is the CEO of GimmeAnother and founder of 3VERB.

Citation: The John Lardner Reader (The University of Nebraska Press) attributes this quote to the sportswriter Red Smith in True.

Monday, December 12, 2016

Watching Your Dolllars (Walk Out the Door)

Specialty Retailers Shrug and Wait to See What Goes Down

Brick and mortar retailers remain under pressure from online retailers, of course, especially as Amazon continues to hone their game: products offered at little or no margin and an almost perfect delivery channel, your gift of instant gratification arriving the day after you hit the order button. Indeed, recent reporting on their Prime service also indicates that Amazon is willing to lose revenue on this service in order to establish that recurring and impulse related relationship with the customers. What amazes me most, though, is that so many brick and mortar stores – many that consumers still like and trust – let these dollars walk out their door in light of this challenge from Amazon, conceding the opportunity for a repeat order or the chance to establish a longer-term relationship that might yield additional revenue.

In 2015 Radio Shack closed almost 1800 stores. Think about that for a second. A store and brand and signage that had economically and visually anchored strip malls in communities across the country, sunk. The demise of these stores, no doubt, was a confluence of events – they certainly weren’t helped by the recession, for example – but also an opportunity for other brick and mortar stores to do an honest assessment of their own customer relationships in a retail landscape being rapidly redefined by perfect experience after perfect experience at Amazon. Why bother to stop by a Radio Shack? They couldn’t answer that simple question. More pointedly, why hadn't management called for the obvious: a simple, dedicated initiative to bring consumers across to I’ve bought a thing or two at RadioShack in the past but, like you, can’t say I ever received a single email communication from them asking or incentivizing another order. What planet where these guys livin’ on? This was 2015, not 2005.

Over the next few years, Amazon's investment in an array of distribution centers dotted across the country – just check the local news or ask your favorite commercial real estate agent – are sure to make brick and mortar a terrible challenge for those retailers who just shrug and wait to see what happens rather than making simple technology enhancements to engage the omni-channel expectations of consumers. They’ll shoulder the burden of rent, real estate, taxes, and staffing headaches while trying to entice modest foot traffic that may never arrive. They'll learn the lessons of Radio Shack as consumers walk away, just like Amazon was hoping.

– Jon Roketenetz

Jon is the CEO of GimmeAnother and founder of 3VERB.