Fear Not the Fundamentals

– By Marni Edelhart on Medium

One of my favorite mindless TV programs is Love It or List It. It features a designer and a realtor who compete to convince homeowners either to love and remain in their own (newly remodeled) home or to list it and move to a new place. At some point in each episode, as contractors tear drywall from studs the owners, “must-haves” are replaced with “must dos” needed to keep the house safely standing. Invariably, the homeowners express irritation at being forced to pass up dreams of a new game room for the tedium of repairing a cracked foundation.

Now imagine if instead of replacing rotten pipes or removing asbestos insulation the contractors focused only on the flashy cosmetics, or even a step down from that just threw some twinkly lights on the front of the house and called it “updated.” Even if the homeowners initially feel dazzled by the sparkle, the scales would fall from their eyes when rain poured through their damaged roof onto new quartz counter-tops.

Similarly, businesses that approach digital transformation via slap dash adoption of bright shiny object technologies will achieve only superficial results. Organizations must carefully examine their structure from cellar to roof and wall-to-wall to discover the fundamental changes needed for lasting transformation.

For instance, on a recent call with a Pivot Advisor I got completely caught up discussing speed in Mobile. He raised the design challenge of ensuring that apps/sites load without delay on mobile devices. Sexy or not, this single factor can have a very material impact on your customer retention. Imagine your own frustration when any website, whether it be on your laptop or your smartphone, spins with the effort to open or when a site includes so many bells and whistles that accessing it absorbs all of your device’s processing power; nothing gets you to close a tab or browser page faster (except perhaps clicking on that seemingly innocent link that turns out to be x-rated).

Fundamental changes often require the courage to tear down your drywall and get a good look at the studs underneath. Only once you have rebuilt outdated processes and organizational structures can you begin to decorate. You may have the most exciting content around, but if your website is not mobile-ready it essentially does not exist. Your dressing rooms may be interactive, but if your supply chain is out of order your customers still leave empty-handed.

Brands don’t have the option to “list it” in exchange for a ready made modular digitally transformed version of themselves. Instead they must go through the process of fine-tuning fundamentals. This work may not make headlines but will ensure that your customers choose to “love it” for years to come.

What’s the New “Target Pregnancy Story”?

– By Marni Edelhart on Medium

Five years ago, Charles Duhigg published an article in the NY Times Magazine about How Companies Learn Your Secrets which featured Target’s success analyzing shopping behavior in order to learn things such as whether or not a particular “guest” is pregnant. Duhigg shared a now-famous anecdote about an irate father who complained that his local Target had been marketing items such as cribs and diapers to his teenage daughter, who to his eventual apologetic chagrin was, as it turns out, pregnant.

Recently, on a program development call for the upcoming Marketing Analytics Conference the “Target Pregnancy Story” came up as it has in so many conversations I’ve had about this topic. This story is often held up as an example of both the power of and risk posed by data-driven marketing practices. Target however, began developing the process that led to this anecdote in 2002, we have had fifteen years to refine both the analytics behind our marketing campaigns and the campaigns themselves.

So, where is the new Target pregnancy story? Why are senior marketers still referencing this dated example? It is time to find some new touchstones and to that end, here are a few suggestions:

1. UBER sued for revealing a customer’s affair. Man signs into UBER on his wife’s phone, logs out, but she continues to receive notifications of his trips thus revealing his extra-marital activities. He is now suing UBER for $48 Million.

2. Amazon Go Store. Amazon has launched a convenience store right here in Seattle where today’s smart phone carting consumer can have the in-store experience without all that pesky human interaction. Yes, this model promises less friction, but does a smart shelf that tracks when you pick up that cupcake, put it back, walk away and then pick it up again really sound less intrusive?

3. Dove’s #SpeakBeautiful Campaign. Some days you eat too much ice cream, or you find yourself tagged in an unflattering photo, or your hair has its own ideas about style and you may want to vent about these moments over social media. Twitter and Dove partnered to ensure that anyone sharing negative feelings about their looks received an auto-slap of positivity whether they wanted it or not.

With the proliferation of location-based marketing, customer service chat-bots and resident interactive interfaces we can look forward to ever-increasing instances of all too knowing brand engagement. Target may have started this conversation by being the EPT of circulars, but data driven marketing will only improve as we continue to call out potential oversteps in this art.

The Stores Not Closing

– By Marni Edelhart on Medium

The headlines have become repetitive: stores closing across the country as retailers go bankrupt, or struggle to avoid it, shuttering physical outlets in favor of pursuing our dollars on digital channels.

Retailers have long accepted that not all stores make money. Most rely on their most profitable stores to fill in the gaps by those that only break-even. And those that break-even usually lose money if you look at the corporate as opposed to the local P&L. In years past, the goal of brand penetration justified maintaining stores in lower-performing markets, but this model becomes less feasible as changing customer behavior causes sales, even at the busiest stores, to decline.

Other journalists have documented this trend more effectively than I could hope to, including most recently Michael Corkery in the NY Times. What gets missed however, in the coverage of retail employees out of work and plummeting stock prices, are the communities who rely on physical, local stores.

Statistics show that about 70–80% of Americans shop on the internet. That’s a majority, but still leaves at least 20% unaccounted for including the 13% of Americans who still have no internet access and those who do not have the credit needed for online shopping. Additionally, if you have no address or no permanent residence, you can’t very well rely on delivery.

Emerging payment models that allow the simple tap of a phone or swipe of a watch assume that the user not only has credit, but has secure enough credit to make purchases almost thoughtlessly. As the producer of a retail summit series I have learned the expensive way how easy it is to go from browsing to buying once your browser has your credit card information stored at the ready. Although these payment methods increase convenience, for those who do not have access to credit or only to very limited credit limits they are often unavailable or high-risk.

Under-served communities might not mark the bankruptcy of BCBG Max Azaria, but, when Walmart starts closing stores, some towns simultaneously lose their grocer, pharmacy, primary employer and community gathering space. Once upon a time the arrival of a Walmart decimated downtowns with deep discounts, but now in their absence remote areas look to a different, and much needed, brand of retailer. Two retailers — 99 Cents Only Stores and Family Dollar — have both developed a robust online presence (check out the 99 Cents Only Stores’ Instagram) without investing in E-Commerce. All sales happen in store and these stores often exist in under-served areas that would otherwise be food deserts. These less flashy brands driven not by trends in tech, but by selection, savings and accessibility are actually opening new stores to meet the demand of cash in hand, price-conscious customers.

Retail’s digital transformation has in many ways empowered consumers by increasing competition and allowing for increasingly seamless transactions. As with any economic or cultural shift however, the impact radius leaves some on the outside looking not to their screens, but to local stores to meet their basic needs.