Creating an environment of trust

August 30, 2011

DISCUSSION TOPIC

12 Things We’d Tell Our Boss if We Could 08-30-2011

“I truly need frequent feedback.” Please don’t wait till the year-end performance review. I can do a better job for you if you let me know what I’m doing wrong, and what I’m doing right, on a regular basis.”

The preceding quote is from the latest “DFS Learning e-Blast” article, “12 Things We’d Tell Our Boss if We Could”, by Karen Burns.

In this June 16, 2010 article on Yahoo Finance, the author provides a series of points your subordinates might make with you if they could, and of course what you might want to say to your boss.

If you are a leader, think about whether you are leveling with your boss as well as providing an environment of trust and open dialogue for your subordinates.   As leaders we’re all bosses, and we’re all subordinates.  Read from both perspectives to get the most out of this article.

More from the article:

Of course, not all employees feel free to say what they’re actually thinking. You know who you are! That’s why in today’s column, the employees of the world get to speak up. What would you say to your boss if you could say absolutely anything at all? This is your chance, people.”

Read the short article to learn more!

Mike Osorio, your Dare to be Contagious! ™ strategist

www.OsorioGroup.com

What do you think?  Please add your comments and add to the discussion!

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Local vs National fast food options

August 27, 2011

DISCUSSION TOPIC

Walmart Brings Local Curry Flavor to UK Stores 08-23-2011

It’s a common to walk into a big box store and find a McDonald’s, Starbucks or some other large foodservice banner with space inside. What’s not common is to find local restaurants cooking up dishes inside a national or regional chain store. That’s what makes the news that Walmart’s Asda business is setting up “curry counters” run by local Indian restaurants across England interesting.

The first counter, which opened at an Asda store in Birmingham in April, has seen sales triple in that time, according to reports by The Sunday Mirror and Just-Food.com. The counter is operated by Zouk, a restaurant based in Bradford.

“Our customers love the authenticity and quality of the range at Zouk, and with more and more families on a budget, but not wanting to sacrifice eating out, launching this new concept is a winner,” Noor Ali, ethnic buyer, frozen, non food & concessions at Asda, told The Sunday Mirror.

Ms. Ali said the growing popularity of Indian dishes makes this move a no-brainer for the chain.

“We sell more than 3,000 ethnic products and Asian is by far the largest and most popular. Launching restaurant -­ managed curry counters in our stores and giving local businesses the opportunity to expand is a natural step for us,” she said.

Asda has opened three other curry counters in stores since the April launch and plans dozens more across England, including locations in London. The counters planned for London will be operated by Chak89, which runs an award-winning curry house in Mitcham, Surrey, according to Just-Food.com.

Discussion questions:  On balance, do you think local restaurants would perform better or worse than national chains in leased space within big box stores? Are there any stores you’re familiar with in the U.S. that are already doing this successfully?

My post:

The idea of using high-quality, well known local eateries rather than national chains in retail environments is not new.  But WalMart (Asda) is to be applauded for offering this choice.  The US consumer is certainly infatuated with the national fast food banners, but that does not mean a well known regional player would not be a fantastic addition to the mix.  The key is to offer choice.  It also is a good P.R. move for a big box retailer to curry favor (excuse the pun) with the local shopping public.  In the end, the idea only works if the consumer responds. In this case, they certainly did.  Always something to learn…

Mike Osorio, your Dare to be Contagious! ™ strategist

www.OsorioGroup.com

What do you think?  Please add your comments and add to the discussion!

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Go to the full discussion at Retailwire.com:  Walmart Brings Local Curry Flavor to UK

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The Lure and Growth of Outlet Malls

August 27, 2011

DISCUSSION TOPIC

Outlet Malls Adding Square Footage 08-26-2011

At least in terms of real estate, outlet malls are the stars of retail. The channel appears to be the only one witnessing noticeable square footage growth.

A series of articles recently detailed the appeal of factory outlet malls while pointing to expansion efforts in markets around the country. The first ever outlet opened in Oklahoma City in August. A new outlet shopping center is being built in San Clemente, CA.

The expansion comes as apparel sales at factory outlets rose 17.8 percent for the 12 months that ended in April, NPD Group told The Weekly Herald in Washington.

“Americans are so focused on price,” Lee Peterson, executive vice president of creative services at WD Partners, told the Chicago Tribune.

But a number of factors besides budget-shopping are driving outlet center’s growth:

  • Overcoming stigma: Outlet centers over the years have lessened the perception of a bargain-bin atmosphere. Steve Craig, chief executive of Craig Realty Group, which owns Citadel Outlets in Los Angeles, told the Los Angeles Times, “Ten years ago, if I said, ‘Come shop at an outlet,’ they’d say, ‘Oh, no, I shop at Neiman Marcus.’ I don’t get any nose cringes anymore.”
  • Luxury appeal: Nordstrom, Neiman Marcus, Barneys and Saks are also all opening up more outlet locations. Bloomingdale’s and Lord & Taylor are opening outlets for the first time.
  • Vendor expansion: Newer vendor brands such as Not Your Daughter’s Jeans, Vince Camuto shoes and Under Armour are aggressively expanding outlet locations.
  • Marketing ramps up: Bus tours and hotel shuttle packages are often now offered to attract tourists to the mall. Coupons and radio ads are being used to drive nearby traffic.
  • Hybrids: Hybrid malls combining full-price and outlet stores are opening. Macy’s recently announced plans to open its first traditional department store in an outlet center.
  • Location! Location!: With limits, many outlet centers appear to be opening closer and closer to towns and cities.
  • Economics: It’s not only lower rents, but common area assessments (no elevators/escalators, no collective heat/air conditioning) and staffing costs are lower than traditional malls. At the same time, Chicago Premium Outlets in Aurora generates $700 a square foot while Simon Property’s top-performing outlet mall, Orlando Premium Outlets in Florida, generates $1,300 a square foot, according to the Chicago Tribune.

While the heap of recent articles exploring outlet centers growth were overwhelmingly positive on the channel’s prospects, it was stated that location remains a drawback for consumers not fond of driving far distances. Although many appear to be opening closer to traditional mall towns and cities, brands are still said to worry about opening outlets too close to their full-price department store or mall customers.

Another issue is merchandise quality, although it appears to be a minor complaint. While outlets in the early days did sell a large quantity of the prior-season liquidation goods formerly found at full-price locations, an estimated 85 percent of apparel — even at luxury stores — is made specifically for outlets at inferior quality to offer the needed lower prices. Outlet shoppers either don’t know or don’t care. But Boston University professor Ellen Ruppel Shell, author of Cheap: The High Cost of Discount Culture, warned in The Oklahoman, “It’s really a case of buyer beware to know what you are getting. And the sales clerks don’t always know.”

Discussion questions:  What’s your assessment on how the factory outlet channel has evolved and its future prospects? What limits do you see for factory outlet center growth? What warnings, if any, would you offer brands?

My post:

Retailers must tread carefully here.  On the one hand, centers in places like Oklahoma City are a phenomenal way for retailers such as Polo Ralph Lauren, Saks Off 5th, and others to penetrate a fast growing and underserved demographic at a relatively low cost of capital and ongoing labor/overhead.  In addition, given that the current economic malaise is likely to continue in much of the US for the next several years, Outlet locations allow a retailer a much needed growth opportunity particularly for publicly traded companies whose stock price is largely driven by growth (or lack thereof).

On the other hand, luxury and upmarket brands must carefully consider the risks to brand equity.  The more this channel grows, particularly in close proximity to urban centers, the higher the chance of degradation of brand perception.  Long term, this could hurt brand equity and growth.  However, as most upmarket brands operate on a global platform, there can be two strategies:  One which capitalizes on what appears to be a long term trend toward price driven retail in the US and potentially some markets in Europe, and another which focuses on the high growth Asian and emerging market economies which allow for high margin, regular price selling.

A great example of this is the Timberland brand.  In the US, I can buy a Timberland knit polo shirt for $60, ~$48 on sale at Macy’s.  Pricier than similar product from moderate brands, but I’m willing to pay the price for the quality, fit and the prestige of the brand.  Recently in Singapore, I needed a casual shirt quickly while attending a conference.  With only 15 minutes to shop, I went into the Timberland store in the Shops at Marina Bay Sands and spent the equivalent of $104 for a similar knit polo shirt.  Clearly this brand is taking advantage of this two-pronged strategy as are many others.  Currently the only “outlet product” they sell is online and only footwear, but you see my point.  Sad to be a brand only operating in the US these days…

Mike Osorio, your Dare to be Contagious! ™ strategist

www.OsorioGroup.com

What do you think?  Please add your comments and add to the discussion!

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Go to the full discussion at Retailwire.com:  Outlet Malls Adding Square Footage

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The Courage to be Bold

August 10, 2011

DISCUSSION TOPIC

Have the Courage to be Bold 08-09-2011

August 9, 2011

Through a special arrangement, presented here for discussion is a summary of a current article from the Hanifin Loyalty blog.

Is your company bold? Does your company have the courage to be bold? At the recent Customer Relationship Management Conference, Shaun Smith, author and partner, Smith & Co., spent an energizing morning talking to attendees about what defines a bold organization and how its boldness manifests itself in how it relates to customers, prospects and employees alike.

Bold firms share the following characteristics. They…

  • Stand Up – They know what it is they believe in;
  • Stand Out – They are remarkable and different;
  • Stand Firm – They build communities for employees and customers to create sustainability around their brand.

Why is it so important to be bold in any one of these three ways? It’s because “Purpose” is to be considered the fifth ‘P’ of marketing. Now more than ever, companies need a raison d’etre to stand out and be compelling for their customers and prospects.

Mr. Smith shared an example to illustrate each point:

Stand Up:
The main value of the Six Senses resort in Maldives is concern for the environment and for an exquisite customer experience. When guests arrive by seaplane, they are given a bag for their shoes in keeping with the “no news and no shoes” policy. There is no television or any sort of outside access because the purpose of this resort is luxurious relaxation. In respecting the environment, they are vigorously devoted to a recycling and reuse program. Fifty percent of profits they’ve made from their own purified water go directly to parts of the world where there is no access to fresh water. All this reinforces the brand message of “intelligent luxury.”

Stand Out:
Burberry stands out because it engages in infectious communication. They create “wow” in as many ways as possible in their customer experience. Their artofthetrench.com has 400,000 loyal customers who uploaded pictures of themselves onto the site. Also, they brought the masses to the runway by having 3D fashion show screening events, showing these same fashion shows real time on the internet and added the ability to order Burberry product from an iPad app.

Stand Firm:
Zappos “stands firm” in that they walk their talk. They are committed to their culture, not only with how they interact with their customers, but also how they engage with each other inside the company. Culture is so important to Zappos that if it appears during training that a new hire will not be a good cultural fit, they will give that person $2,000 and terminate the relationship. From real time engagement with customers on social platforms to quirky office meetings and recognition activities within headquarters, Zappos is able to continually reaffirm its corporate identity and stand firm as it recommits to its values.

Discussion questions:  What defines a ‘bold’ organization? Is the treatment of existing customers, prospective customers or employees most critical in building a ‘bold’ enterprise?

My post:

The reason this subject keeps repeating itself is due to the fact that most retail leaders continue to ignore the painfully obvious:  Bold approaches to service start with leaders with a bold commitment to exceptional employees.  Paraphrasing the brilliant approach at a bold (though non-retail) purveyor of extraordinary service, Ritz-Carlton:

  1. Have leaders who believe the vision in their hearts and model that belief with everything they say and do.
  2. Select the best employees and support them in every way
  3. Consistency and repetition of the core beliefs and values

You could also call this courageous leadership.  Courage to have, know and continuously strengthen your organization’s values and reason for being.  Courage to understand what it takes to be exceptional in your business – leaders and staff alike – and consistently hire and train for this.  Courage to never waver from either, despite any and all obstacles.  Stand up, stand out, and stand firm indeed!  So simple and yet so elusive.

Mike Osorio, your Dare to be Contagious! ™ strategist

www.OsorioGroup.com

What do you think?  Please add your comments and add to the discussion!

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Go to the full discussion at Retailwire.com:  Have the Courage to be Bold

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The rise of “virtual mirrors” creates a new way for brands and retailers to engage with consumers

August 9, 2011

DISCUSSION TOPIC

Looking and Buying Without Touching 08-08-2011

By Bernice Hurst, Contributing Editor, RetailWire

August 8, 2011

At first glance, a story about John Lewis introducing virtual mirrors devised by Cisco so customers don’t have to strip off to see how a new outfit looks seemed like new news. But a quick Google search revealed others have been following a similar path since 2007.

John Lewis believes customers trying multiple fashion lines along with accessories will facilitate cross-selling and mutual retailer and customer satisfaction.

When Adidas introduced similar technology to their Paris store in 2007, Louis Ramirez pointed out a fallacy on gizmodo.com. “I think the concept is cool,” he wrote, “but I’d be more concerned over the fit than how they look.”

Cisco’s mirror uses sensors to measure customers and then find suitable outfits. Their spokesman told Retail Gazette, “The technology takes the drudgery out of searching for items and exposes people to a wider range of clothing. It will be more efficient and provide the retailer with the chance to cross-sell brands and accessories, while at the same time improving levels of service.”

Ways to incorporate social media are also being studied so customers can share their images with friends once privacy issues are resolved.

Meanwhile, webcams are the mirror of choice for glasses. La Boutique Peugeot uses customers’ webcams like a mirror before purchasing in-store. Ray-Ban boasts its virtual mirror is “the definitive augmented reality experience, which permits you to virtually try-on the latest Ray-Ban styles.” Sunglass Hut uses digital photo booths in some stores so customers can immediately send pictures to friends or social networking sites for other opinions on their choice. UK-based glasses2you, promises a wider range of glasses at a lower price than specialist opticians.

Various approaches to virtually applying cosmetics have also been tested by the likes of Walmart, Carrefour and Superdrug amongst others. IBM and Israel’s Ezface use an “augmented reality system” to combine video images with virtual/digital elements on the same screen, according to singularityhub.com, but the complexities of accommodating individual skin tones, lighting, hair color, etc. may explain why neither kiosks or sales have yet made headlines.

Discussion questions:  How appealing will virtual mirrors be for customers trying on clothes? Are virtual mirrors rendered impractical by the inability to test the way products fit and feel?

My post:

The point here is not about efficiency, it is about fun.  Retailers and brands who choose to use the technology should do so as a carefully considered addition to their consumer touchpoints.  If done well, the technology allows the consumer to play with the product, share their experience with friends and ultimately engage them with the product in a (hopefully) positive way.

The technology does not replace the physical shopping experience.  Rather, it provides a further pull for the customer who wants to play with the product in real terms to come into the store.  For those who are shopping online with no intent to go into the store, it can make that experience more engaging as well and produce higher conversion and spending rates.

  1. Do your research with your targeted consumer groups to ensure playful engagement is a desired experience.
  2. Test the technology and roll out if the desired metrics are achieved:  conversion, spend, or simply higher client engagement.

Mike Osorio, your Dare to be Contagious! ™ strategist

www.OsorioGroup.com

What do you think?  Please add your comments and add to the discussion!

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Go to the full discussion at Retailwire.com:  Looking and Buying Without Touching

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Thank you for visiting my blog!  Please subscribe using the RSS button and comment on my postings.


Cracking the code on India

August 6, 2011

DISCUSSION TOPIC

Succeeding in the Indian Market 08-05-2011

Through a special arrangement, presented here for discussion is a summary of a current article from the Third Eyesight blog.

In most conversations we have had with international brands in the last two to three years, India consistently appears on the list of the top-five markets in which to expand. Over the last two decades, some European and North American brands have seen profits while others are wondering what fit of madness brought them to tackle this market.

Typically, when looking at a new market, the very first question anyone would ask is: What is the market potential for the brand? However, you should also be prepared to ask yourself: What need is the brand addressing and what is the value being offered by the brand? Just because a brand is huge somewhere else in the world does not automatically make it desirable to the Indian consumer.

While most brands want to target the Indian middle-class millions, their sourcing structure and strategy places them out of the reach of most of the population. Brands that have succeeded in creating a significant presence, maintaining their brand image and having a sustainable operating model, have almost uniformly had a significant amount of local manufacturing. Notable examples from fashion include Bata, Benetton, Levi Strauss, Reebok, among others. Domino’s and McDonald’s have also collaborated with and developed their vendors locally to bring down costs and improve serviceability.

Apart from the costs and margins, another important issue is that of the adaptability of the product mix. Brands that are sourcing locally and have a significant product development capability in India are also able to respond to specific needs of the Indian market better, rather than being driven by what is appropriate for European or North American markets. The famous “Aloo-tikki” burger by McDonald’s is a great example of a product specifically developed for the Indian consumers. Not just that, India is probably McDonald’s only market in which its signature dish, the Big Mac, is not sold.

Of course, flexibility in tweaking the product to suit Indian market can become a concern when it amounts to losing control over the brand direction and mutating away from the core proposition that defines the parent in the international market.

Another key question is: What is the degree of control that a company wants to exercise on the brand, the product, the supply chain and the retail experience of the consumer? The corporate structure itself may be determined by the internal capabilities and strategies of the international brand in their home market or other overseas markets. A brand that has presence through a wholesale business in the home market may not have internal capability or experience in retail and would look for an Indian partner who can fill in the gap.

During our work, we have come across both extremes — companies that want to manage the minute details of the India business out of their own head offices, as well as companies that are so hands-off that they only want to hear from their franchisee or licensee when things are especially good or particularly bad. While a balanced, middle-of-the-road approach would be the logical one in each case, in reality individual styles of the top management have a huge influence on the approach actually taken.

Discussion questions:  Do you agree with the author’s list of key questions brands should ask themselves when entering a foreign market such as India? Which aspects mentioned in the article — sourcing structure, product adaptability, control issues, etc. — tend to be most overlooked?

My post:

After many years of watching the experience of retailers and brands who have attempted to crack the Indian market, it is amazing to see new entrants repeat the same mistakes:  American (and other western countries) arrogance, assumptions around the vast quantities of ‘ready consumers’, and lack of partnering with local expertise.

Like most emerging markets, India is a country of vast potential but one which requires humility, patience and flexibility.  India is also a huge country with many distinct cultural and economic zones each of which require careful study.

My advice for low and mid-market products and services:  get in soon.  The Indians themselves are more than capable of developing and delivering what the Indian mass consumer desires.  Long term, and probably sooner than we imagine, only luxury brands and other difficult to acquire or duplicate products and services will need to be sourced internationally.  Next on the horizon will be the rise of the Indian international brand.  It is time for western and especially American companies to learn humility and understand the need for partners if they wish to have a long term global presence.

Mike Osorio, your Dare to be Contagious! ™ strategist

www.OsorioGroup.com

What do you think?  Please add your comments and add to the discussion!

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Go to the full discussion at Retailwire.com:  Succeeding in the Indian Market

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