War without winners

War without winners

Those bleak Sundays burn us out of bed

with its dreary march of doings like the Russian army platoon.

Peace at war with ambition,

until the shrill of Monday sounds it call back to the trenches.

Then I wish it was Sunday, to play with my boy once more:

Too late.

Necessity calls us to attention

And greed fuels our fierceness

A war without maps

A war without winners

A war that never ends

Even after you retire to your tent at the end of the battle,

you live with the shame that you once left a mate dying,

or more than once heard someone crying

but never stopped to lend a hand, and instead mopped your brow

and walked bravely on.

(I wrote this poem in 2000 - after a year or so in Australia - and discovered it recently in a old document on a rainy Sunday afternoon. I think the topic is obvious, and it just seems an apt message during these tough times as we alll struggle to make sense of the constant demands of work on our lives; be it entrepreneur employee.)

The only advice you will ever need

Why do you read blogs like these?

In last week’s article a few readers disagreed with central ideas of the post. (When they sign off ‘annoyed’ or ‘rubbish’ is the first word in the comment, presumably they disagree a lot.)

The argument I put forward was essentially this:

Most of us agree that a great retail experience is the key to future growth and success. If that is the case and this happens:

• Option A: Pair of Shoes + In-store experience = $100.
• Option B: Pair of Shoes + Online experience = $70.

If customers opt for Option B, they may SAY that it is because it is cheaper, but logically and reasonably people are choosing Option B because they DO NOT value the In-store Experience at $30 more. 

Another commentator accused me of continually attacking retailers. I was hoping that it was a helpful debate to have, and to focus the attention on how much customers really value the in-store experience. (The service of providing a communications platform like this by the team at Inside Retailing is, in my humble opinion, invaluable,)

My advice was essentially this:

• Create a smart strategy.
• Re-design your customer experience.
• Re-train yourself and your staff.
• Take a few risks. 

Another commentator took umbrage at this advice with a good dose of sarcasm. His point of view is that advice like the above is worthless.

This brings me to these important questions:

• Is it really worthwhile to read up on your industry, gather different opinions and attempt to stay informed?
• What is the nature of the advice that you get in general business books or blogs?
• How much is the advice that you get worth and importantly, how much do you value that advice?

I looked at two opinion leaders for some guidance:

The 12 most important lessons learned at the recent (2012) NRF conference in the US can be found here. In the meantime here are just two of lessons extracted from that summary:

• “Websites are consumers of software applications. There are not manuals. They’re tools.”
• “Stop being in arms race for likes and followers – start liking your customers.”

Then I turn to Seth Godin again. He provides some advice on pricing. His formula for pricing is that you have to consider the two S’s.

• Substitutes (alternatives)
• Story (of your product)

Even though I wrote an eBook on pricing – with 8 steps and plenty of formulae, I consider the value and relevance and importance of Seth’s FREE advice more than the $12.87 of the eBook, because it focuses your thinking on the two critical aspects of pricing – which is more important than understanding the difference between a mark-up and a margin.

As you can see the nature of these insights (Seth, NRF as well as my earlier advice) is quite generic.

That is for good reason.

I could give you the recipe for a world-class meringue and the three pastry-chefs reading this blog will be ecstatic. The other readers not so much.

If you were given advice like this, you would have to apply inductive reasoning. By looking at the fact, you have to draw a general conclusion.

Alternatively, I could suggest that to make a good dessert, you must use fresh ingredients and consider the local tastes.

If you were given advice like this, you must apply deductive reasoning. (Deductive arguments are attempts to show that a conclusion necessarily follows from a set of premises or hypotheses.)

Most advice that will get on blogs and mass media will be of the latter type. Whether you are pastry chef or a backyard barbecue boffin, you could make something of the latter advice.

Which brings me to the main point I would like to offer for your consideration.

When you receive ‘advice’ – whether it is from Seth Godin or Dennis Price or your next door neighbour; it is ALWAYS worth nothing unless you add the missing ingredients.

So, the commentator was right; my advice was worthless. It always is. So is everyone else’s; including the best paid consultant or your local GP.

The ‘advice’ can only become something of value for you, the reader, if:

You THINK about the advice in context of your own business/ issues.

You DO something about it

No writer/ consultant/ trainer will ever be able to do those two things for you.

Even if you receive poor advice and you decide to do the opposite; it paradoxically turns out for the better, right? The difference being that you have taken the time and effort to realise (as in make real) the value of the advice.

If you reconsider the premise of last week’s post – we have to focus on fixing the in-store experience - and my ‘advice’ was:

• Create a smart strategy.
• Re-design your customer experience.
• Re-train yourself and your staff.
• Take a few risks.

In order to realise the value of the advice, you have either pay someone to do it for you or you have to do it yourself; but without doing anything, it really isn’t worth much.

This is why I closed my post with this statement: Will you just click to the next blog, or will you explore the alternatives? And that is true today again, as it always is.

The risk of having plenty of free, unsolicited advice on tap (thanks to the internet) is that we skim over everything and take ownership of nothing. (By the way, I am as guilty as everyone else.)

My golden rules for the information age:

1. Ignore all unsolicited advice. (If you are reading someone’s blog that is presumably solicitation?)
2. All advice is worthless unless you act on it – or against it.
3. Seek advice from people who you disagree with.
4. If the only tool you have is a hammer – every problem looks like a nail. (What is your adviser’s trade?)
5. If you never disagree, don’t bother. (Because you are not thinking about it.)

Dennis

PS: I am a big boy and I am happy to cop criticism; if you write opinion pieces and you don’t get criticised you are not doing your job well enough. (It is perfectly on-brand, for me…) So, please don’t read this as a defensive exercise.

Dr Dennis Price consultants to and trains the retail supply chain to (re-)capture their entrepreneurial mojo with the right skills, strategies and systems to grow a sustainable business.

12 Truths for Retail in 2012 - from NRF Conference

DLYohn 12 Truths to Guide Retailing in 2012

View more presentations from Denise Lee Yohn, Inc.

HT: Futurelab

A more appropriate strategy

The growth in online is a direct correlation with the degree of dissatisfaction consumers experience with traditional retail.

Initially there may have been an element of experimentation, but slowly new habits are being formed – and traditional retailers are being put out of business. By the same token, there are likely to be many eCommerce start-ups that come and go without ever registering their presence in the market place, so it is not all one-sided.

What is happening?

Most pundits (me included) and most practitioners intuitively feel there will be a continued future for brick-and-mortar retail based on our understanding of consumer psychology.

Most of us understand that the difference is the quality of the experience. Most of us think there are certain categories where the web will play a limited role in facilitating the transaction and enriching the experience – without supplanting it. (E.g. fine dining.)

In the next year or two the retail landscape will continue to be remodelled – and a concomitant amount of pain.

How are retailers responding?

In this state of flux, retailers are responding in a variety of ways, but I will consider three only:

1. CHARGE: Some retailers think that it is a viable strategy to charge consumers for the ‘experience’ (and the value-add) of being able to try on in-store, get product advice – before heading of to buy online
2. REPLICATE: Retailers attempt to replicate their physical stores in an online environment; or by trying to bolt on a functional eCommerce site to their existing operations.
3. SWITCH: Others give up or think about switching to online only, being seduced by the low capital investment and lower overheads. 

How should retailers be responding?

A more appropriate response to the three approaches listed above would be:

ONE: CHARGE

The difference in prices between only and offline does not seem to be more than about 10%-20% in most cases – after accounting for delivery costs.

In any event, price comparisons are really hard to make.

For instance, Harvey Norman charges the same price online/offline ($600) for the one product I tested. The Kogan private label brand is 30% cheaper at $400. On the manufacturer’s website the RRP is $800.)

Retailers should ask themselves if the experience/value the store-visiting consumer gets is worth 10-20% more. I don’t think charging $10 to try on a pair of shoes is going to be hugely successful.

But, in principle, if you are charging $10 more then the consumer must value the benefit they get from the in-store experience at $10 or more.

This is a brutal test – and if consumers are walking out the store after ‘using’ you to go and buy online, then they have just valued your service at less than you thought it was worth.

TWO: REPLICATE

I wrote about it last week in the post titled the big squeeze. In the current climate there is only room for the very big/very cheap or the very specialised – as I termed it an ‘extreme niche’.

It obviously depends on the category somewhat but generally speaking you would be better off securing a hero product and going after the global market in an extreme niche than trying to be all things to all people. (I am still waiting for Harvey Norman to call ;-))

THREE: SWITCH

Don’t get your hopes up. It is actually not that easy to find a supplier who will provide a pure-play online retailer with a product. They can (and increasingly) do that themselves, so why would they need you?

You may not have rent to pay, but believe me, if you start running the numbers on distribution costs you will be unpleasantly surprised.

And there are many other costs that are ongoing which are often forgotten in the set-up phase. It is hard work to constantly tweak the site and practice SEO. Pretty soon you will be employing someone to simply answer emails. There is a good reason why the margin between online and offline is (in most cases) only 10%-20%.

IN SUMMARY

We can bemoan the fact that our world is changing, we can slate the consumers for being disloyal or stupid or we can lobby the government to punish the etailers with some extra charges and levies.

Or we can do something constructive about it.

Like creating a smart strategy. Like re-designing your customer experience. Like re-training yourself and your staff. Like taking a few risks.

One of my favourite marketing philosophers wrote this not so long ago:

Interest rates are super low, violence is close to an all time low, industries are being remade and there's more leverage for the insurgent outsider than ever before in history.

The status quo is taking a beating, there's no question about it. That's what makes it a revolution.

And then again…

So stop thinking about how crazy the times are, and start thinking about what the crazy times demand. There has never been a worse time for business as usual. Business as usual is sure to fail, sure to disappoint, sure to numb our dreams. That's why there has never been a better time for the new. Your competitors are too afraid to spend money on new productivity tools. Your bankers have no idea where they can safely invest. Your potential employees are desperately looking for something exciting, something they feel passionate about, something they can genuinely engage in and engage with.

The sad thing is, most people will just click to the next blog. What will you do?

Have fun (anyway)…

Dennis

Dr Dennis Price consultants to the retail supply chain to perform better and grow their presence in retail with the right skills, strategies and systems.

The art of e-mail

 Verbs HAS to agree with their subjects. 

 Prepositions are not words to end sentences with. 

 And don't start a sentence with a conjunction. 

 It is wrong to ever split an infinitive. 

 Avoid cliches like the plague. (They're old hats) 

 Also always avoid annoying alliteration. 

 Be more or less specific. 

 Parenthetical remarks (however relevant) are (usually) unnecessary. 

 Also too, never, ever use repetitive redundancies. 

 Contractions aren't necessary and shouldn't be used. 

 Foreign words and phrases are not apropos. 

 Do not be redundant; do not use more words than necessary; it's highly superfluous. 

 One should NEVER generalise. 

 Comparisons are as bad as cliches. 

 Don't use no double negatives. 

 Eschew ampersands & abbreviations, etc. 

 One-word sentences? Eliminate. 

 Analogies in writing are like feathers on a snake. 

 The passive voice is to be ignored. 

 Eliminate commas, that are, not necessary. 

 Never use a big word when a diminutive one would suffice. 

 Kill all exclamation points!!! 

 Use words correctly, irregardless of how others use them. 

 Understatement is always the absolute best way to put forth earth-shaking ideas. 

 Eliminate quotations. As Ralph Waldo Emerson said, "I hate quotations. Tell me what you know." 

 Resist hyperbole; not one writer in a million can use it correctly. 

 Puns are for children, not groan readers. 

 Go around the barn at high noon to avoid colloquialisms. 

 Even IF a mixed metaphor sings, it should be derailed. 

 Who needs rhetorical questions? 

 Exaggeration is a billion times worse than understatement. 

 Proofread carefully to see if you any words out.

(anon)

Most people

Success is a numbers game. Society generally expresses a belief in the scientific method and professes to rely on ‘evidence’; except when it comes to success apparently.

Most people set the alarm to wake them up in time to get where they need to be.

Most people eat more than they need because they feel hungry

Most people worry about what other people think about them

Most people do the things at work that will not get them trouble

Most people do things that are expected of them

Most people work at jobs they thought they could do

Most people work for a living because they have to

Most people are afraid of looking stupid

Most people are afraid of being fired

Most people don’t think about the alternative

Most people are not successful – by any measure you choose, including in their own estimation of their own lives.

If you want to be successful and happy, then you must not be like most people.

You should set the alarm to awake in time to get where you want to be.

You should eat enough to feed your body

You should not worry about what other people think of you

You should do the things at work that may get you trouble

You should do the unexpected

You should go for jobs that you may be able to do

You should live to work because you want to

You should be afraid of looking just like ‘most people’

You should not be afraid of being fired

You should think about the alternative

Then, maybe you will be successful. Or not. But at least you have given yourself a shot.

And so it goes in business too.

Have a vision. Write a strategy. Manage your risk. Do research, find out what the customer wants. Analyse the competition. Match the competitor’s price. Smile for the customer.

Except that statistically that does not work. How many businesses fail following that approach? How many businesses survive, but fail to grow still following those principles?

You should think about the alternative. At least think about before you do what you have always done. If nothing else, you will be more convinced and more committed to your course of action and that alone would be an improvement.

The big squeeze is on. Where will you pop out?

This time of the year there is much navel-gazing resulting in posts containing predictions. This is NOT one of those.

Recently I had reason to look for something in an old presentation I remembered giving at a Sensis Marketing Conference.  In that presentation I made a

I have saved one slide as an image HERE – and you can read all 19 predictions I made in March 2008. (You will see how many prediction I got right/wrong when you scan the image.)

But one ‘trend’ in particular is transforming retail at this very moment – and it does not get much air time. I variously refer to it as the ‘dumbbell’ effect or the ‘big squeeze.’ More technically would be the term ‘channel compression’.

In effect what it means is that the middle-ground (of anything) being squeezed out of existence.

In retail it means the small, authentic and unique will survive along with the mega big, mega-cheap – and very little else.

In shopping centres it means convenience centres and regional/super-regionals will survive (albeit after some transformation) – and very little else.

In movies it is Multiplex or Art House – and little else.

In e-commerce it is the long tail.

I would go so far as to say that anybody wanting to make a fist of anything would have to apply ‘extreme niche-ing.’

The existence of the ‘long tail’ was first conceived by Chris Anderson of Wired magazine – and this phenomenon has shape e-commerce and (possibly because of the influence of multi-channel retailing) the effects are now being felt in traditional retail as well.

What does this mean in practice? If I am right, it means that:

It is highly unlikely that Harvey Norman (for instance) will succeed with the current iteration of www.harveynorman.com.au. They would be much better off creating a site for (e.g.) TVs –and sell TVS and nothing else. Let’s face it, when was the last time you went online to buy a TV and bought a sofa on the spur of the moment. The site selling sofas is one click away anyway.

It is highly unlikely that the www.westfield.com.au shopping portal will ever reach the heights envisaged. If it does, it will be despite a powerful trend that only seems to getting stronger and stronger.

If you are a retail entrepreneur wanting to start or grow a business right now, your best option is to find a point-of-difference that will be attractive to a niche market – and attack that market with all your resources.

If nothing else, the dire economic forecasts will enable the brave and reward the strong – which is not such a bad thing after all.

And speaking about the brave; I would like to extend an offer to readers of this blog. To stimulate my grey matter I teach occasionally at University of Wollongong; and starting early February 2012 I am running a Retail Management subject for the MBAs and post grads.

As part of the program, I am opening up all the tutorials to readers of Inside Retailing – FOR FREE. If you are interested, email me (contact details on my website) and I will send you more info.

But note in advance that you will not be formally registered and you will receive no accreditation and it does not include invitation to the actual lecture days. It is done completely via e-Learning (online). I am doing this because I think the students will benefit from having practitioners in the online forum – and you may benefit from getting to test the waters to see if this is something you may actually enjoy.

Dennis

Dr Dennis Price consultants to the retail supply chain to effectively acquire and grow their presence in retail with the right skills, strategies and systems.

Future of Shopping according to Paypal

What do you think?

(PS: If you are reading this in a Reader, swing by the site and let me know what you think of the 'refresh' we implemented.)

HT: unclutteredwhitespaces

Top 10 Customer Service Awards (US) = Fail

If there is anything lamer than this, let me know. 

If THIS is what makes you win a CS award, then it is obvious why retail is struggling...

This is not a test. I'ts about being tested.

I love the game of cricket.

Like most things, I have grown to love it more as I have watched and learned and thought about it more. In particular I love test cricket.

It is called a test for a simple reason: it is a test. Unlike many other sporting events which are simply a contest of skill and strategy, test cricket is true test of all those things – but with your body and mind numbed by day after day in the blazing sun.

Some may argue the Tour de France or even a simple golf tournament offers the same test – but, unlike those sports, test cricket requires relentless concentration, split-second decision making and lightning reflexes; even on day four or five. And the consequences of being just momentarily distracted or going to sleep is instant dismissal, a ball hit for a six or cropped catch; all of which can change the course of the game.

It’s as brutal as a boxing match, and I think Michael Clarke would have possibly settled for a knock-out punch to the head instead of another hour of batting at some point of his marathon innings.

I sometimes fear that a game that is so ‘slow’ – it could go for 5 days and still result in a draw - which means it may not retain its appeal to future sport-loving generations.

I am hoping that it does because it will be the antithesis of modern day living; which seems to all out about speed, action and instant gratification – and an almost pathological aversion to bearing the consequences of your decisions. (Life is all about playing the blame game and finding someone to sue at the drop of the proverbial hat when the slightest injustice is perceived.) And paradoxically, this stark contrast with everyday life may become its most attractive feature.

On the cricket pitch there is no place to hide. No one to blame for a nicked ball or a dropped catch.

But the best of all is that, more than any other sport, cricketers accept that they will get their fair share of ducks – even Don Bradman did – and they usually accept those and move graciously on for another innings.

And that is what I love about the game.

And yes, there is a lesson for business in all this. But you will have to take the time to distil it yourself. Maybe there is greater value in discovering it for your self than me providing an executive summary in a closing paragraph.

My son, aged about 7 or 8  (about 7 years ago)waiting to have his turn...