The New Target.com….oops?

September 20, 2011

DISCUSSION TOPIC

New Target.com – 09-13-2011

September 13, 2011

Through a special arrangement, presented here for discussion is a summary of a current article from StorefrontBacktalk, a site tracking retail technology, e-commerce and mobile commerce.

When Target’s development team launched the new Target.com on August 23 after two years of development, it must have felt like a dream come true. But it wasn’t — at least not for customers who discovered that big chunks of the new site didn’t work at all, and almost nothing worked as well as the site they’d seen a day or two before.

Why? What went wrong? Actually, not much, from the point of view of experienced developers. Naturally the site had glitches — that’s to be expected.

Target decided to end its arrangement with Amazon two years ago — and that meant it had a completely blank slate to start from in creating a new site. Most e-commerce execs would love that opportunity to shed all the legacy code, the decade or so of kludges, workarounds and hacks that make it so difficult to do anything really innovative. All that old junk makes new approaches next to impossible.

But the downside is that there was also no legacy code that worked. If a new feature was too buggy, there was no old version to fall back on.

Target’s developers figured that was OK. The site would go live, they’d work the kinks out as quickly as possible, soon there would be all sorts of great new stuff built on the wonderful infrastructure that was still invisible on opening day, and everyone would understand — right?

No. Customers neither knew nor cared that the new website was the product of two years of loving development and was bound to have a few hiccups at first. It didn’t matter to them that Target had to build from scratch or that all sorts of wonderful new features would be coming once the site was stable.

All that customers saw was that their passwords, which worked fine on Monday, didn’t work on Tuesday. They couldn’t edit their wedding registry lists. They could no longer track orders they had paid for a day or two before. The weekly newspaper ad wasn’t showing up; neither were coupons. A large digital countdown clock on the homepage (an extremely long homepage) warned that today’s Daily Deals would end in so many hours, minutes and seconds — but the link went nowhere.

In fact, lots of the links were dead ends, delivering customers to very pretty error pages featuring Target’s mascot dog. (There’s a downside to using pictures of a dog mascot all over your site, including error pages: at a certain point, customers are likely to start really hating the sight of that little dog.)

No doubt all of that will soon be fixed. Much of the site was working far better the following day. But it will take a lot longer before customers feel like the new site is as good as the old one — which, of course, means better than the old one.

Discussion questions:  Do you think Target bungled its new website launch? What’s the best way to prepare and reassure customers for likely problems encountered as part of such overhauls?

My post:

Well it is now 11:30pm East Coast time and the site appears to be mostly working.  It was down when I first tried and then came up 10 minutes later with everything functioning except the “daily ad” link.

The comments above are accurate:

1.  “Glitches” are certainly failures, and

2.  The customer will not hold this against Target.

It is, however, a significant embarrassment to the IT team and should be a cause for concern for senior leadership.

Overall I like the design of the new site and think the situation will be forgotten by tomorrow – as long as it continues to function!

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:  New Target.Com

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The Art of Asking Questions

September 20, 2011

DISCUSSION TOPIC

The Art of Asking Questions – 09-12-2011

“..asking questions effectively is a major underlying part of a manager’s job — which suggests that it might be worth giving this skill a little more focus.”

The preceding quote is from the latest “DFS Learning e-Blast” article, “The Art of Asking Questions”, by Ron Ashkenas.

In this August 30, 2011 blog post on the HBR Blog Network, the author provides clear guidance on the power of using the right questions to help an individual, a group, or even an organization succeed.

As you read this article, think about your ability to ask appropriate questions to guide progress, remove obstacles, and lead effectively.

More from the article:

Most of us never think about how to frame our questions. Giving this process some explicit thought however might not only make you a better manager; it might also help others improve their inquiry skills as well.”

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!

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


Fashion’s Night Out

September 14, 2011

DISCUSSION TOPIC

Fashion’s Night Out Draws Critics 09-12-2011

Marking its third year in the U.S. last Thursday, Fashion’s Night Out drew a horde of people, lots of media attention and not many shoppers. But was the spectacle enough?

Some think so.

“What I love is to see youngsters,” Dior CEO Sidney Toledano told Reuters in Paris. “All (these young people) will not become clients, but we need to seduce them today to have them tomorrow.”

Indeed, most stores reportedly broke even at best or more likely lost money for the night, paying for the booze, hors d’oeuvres, giveaways, DJ’s, models, musicians, celebrities and other entertainment. Some on the record said they believe that was enough if the one-night event celebrated fashion for existing customers and reached some old or potential new ones.

Australia Vogue’s editor-in-chief Kirstie Clements told The Australian that with the rise of online shopping, stores have to be more experiential. She said, “It’s really about sales, not celebrity.”

The fashion fiesta, spearheaded by Anna Wintour, Vogue’s worldwide editor-in-chief, has spread to 250 cities in the U.S., and 17 countries around the globe.

But Bud Konheim, CEO of Nicole Miller, lamented that no purchases were being made.

“FNO is a hype where anybody can go and get a free drink in any store in New York,” he told Women’s Wear Daily. “What does it do for business? Nothing. FNO doesn’t move the needle, but it adds to the perception that fashion is fun. We have to make people feel good or else we’re out of business. In terms of the money we spent on FNO, we didn’t get it back.”

A particularly vocal critic has been New York Times fashion critic Cathy Horyn, who in 2010 called for an end to the event. She wrote at the time, “What are you really celebrating? Not art or great books. You’re celebrating shopping.”

This year, she wrote that the event made sense in 2009 when traffic was sparse and small stores were closing, but “now it’s become a party, an institutionalized kickoff to Fashion Week, and though it apparently raises money for some causes, I have to believe that the costs of security, crowd control and entertainment, not to mention the traffic headaches, outweigh the actual benefits.”

She further noted that major stores are now thriving and “smart and fashionable, not safe” merchandise is drawing traffic to stores across the city. Concluded Ms. Horyn, “You really don’t need outside influences to shop these days.”

Discussion questions:  What is your assessment of Fashion’s Night Out? Would you advise retailers to participate? What would you do to improve it?

My post:

The critics need to chill.  This is like a Saturday downtown art walk or music festival.  Not meant for immediate sales, but rather to increase awareness and passion.  Fashion, my friends, is art.  The Vogue Fashion Night Out allows the industry to celebrate the art and fun that is fashion, as well as raise money and awareness for various supported causes.  The long-term viability of the fashion industry is helped by bringing in more aficionados and aspirational fashionistas.  Yes, many will just enjoy the giveaways but as Dior’s Toledano astutely declares, “All (these young people) will not become clients, but we need to seduce them today to have them tomorrow.”

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:  Fashion’s Night Out Draws Critics

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Planet of the Apps

September 14, 2011

DISCUSSION TOPIC

The Rise of the Planet of the Apps 09-06-2011

Through a special arrangement, presented here for discussion is an excerpt from a current article from the Joel Rubinson on Marketing Research blog.

Four years from now, it is likely that globally there will be close to two billion (yes, billion) smart mobile devices, outselling computers, according to Yankee Group estimates.

Nielsen reports that over half of mobile phones being activated now in the U.S. are smartphones. IDC estimates 182 billion (yes, billion) annual app downloads by 2015.

Flurry estimates that smartphone owners spend more time on apps than PC owners spend on the internet from their computers.

Smartphones, tablets and the iPod Touch will create the mobile, app-enabled lifestyle. Why? Because mobile is not like a computer with a small screen; it is transformational. Apps provide needed simplicity for mobile web access by extracting the essence of a service and putting it right in front of the user in a way that fits perfectly within the screen limitations while adding a localized dimension.

If there is any life activity that is crying out to become appified, simplified, localized and mobilized on your smartphone, it is shopping. Furthermore, marketers want it too. Imagine you will be able to deliver messages and offers to a shopper as they stand right in front of your brand and its competitors that are customized from prior purchase activity. This is behavioral targeting and “recency,” two principles of media placement on steroids.

Look at this distribution of time spent on apps by category from Flurry; it appears that shopping aids have not yet taken off.

  • Games: 47 percent
  • Social: 32 percent
  • News: Nine percent
  • Entertainment: Seven percent
  • Other: Five percent

However, app developers are starting to work on this:

  • Modiv has been testing a mobile shopping solution called Scan It with Stop & Shop that is now about to be tested on iPhones. It links offers to your frequent shopper history and knows where you are in the store.
  • Ad Age reports Finish Line unveiled a new app that gives shoppers access to real-time inventory at the store nearest them. Users can check to see if an item is available in the style, size and color they’re looking for before coming to the store.
  • Amazon offers a price checking app so you can be in a Best Buy or Walmart, check the price of the same item at Amazon and decide if you want to order it from within the app.

Truly it is the “Rise of the Planet of the Apps.” As an increasing majority obtains smart mobility, as smartphones replace PCs as the number one way of accessing the internet, as life becomes app-enabled, people will insist, “Yeah, we want an app for that” — and they’ll get it.

Discussion questions:  How will the growing appeal of apps change the way brands and retailers connect with consumers? How will it change the way consumers interact with brands and retailers?

My post:

The biggest concern I have with app-driven shopping is the reliance on price to drive consumer behavior.  It is as though no one can learn the obvious:  using price as the single differentiator allows only one or two low-cost providers to survive the ensuing carnage.  In this model, Amazon and Wal-Mart will clearly prevail.  Anyone else?  Doubtful.  My hope is for the brands to drive unique app offerings that focus on experience over price.  However, except in the rarified world of luxury products and consumers, it is increasingly difficult to capture the consumer’s attention with anything other than price, and perhaps celebrity.

A reason for hope?  With the increase in influential bloggers, I can foresee a success formula that utilizes targeted ‘endorsements’ to drive consumers to shop at regular price for their favorite influencer’s recommendations.  This works particularly well in the beauty industry.  Let’s see who makes this move vs. the damaging price-only model.

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:  The Rise of the Planet of the Apps

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The State of Labor in Retailing

September 14, 2011

DISCUSSION TOPIC

The State of Labor in Retailing 09-02-2011

Labor Day is almost here and the retail industry’s focus is on sales this weekend and not the original intention of the holiday — to celebrate American labor and its historic role in making the nation great.

So what is the state of labor in the retailing business?

The industry, like others, has its problems, with a workforce largely made up of part-timers who work terrible hours for low wages and few benefits. The combination of unmotivated and sometimes poorly-trained workers and managers under extreme pressure to succeed has created issues in some stores.

Retailing also suffers from an upper management disconnect. As covered many times on RetailWire, top executives often do not have a true understanding of what workers deal with in stores. Unlike in the past, many top execs are more likely to come from MBA programs than up from the ranks.

Like other industries, compensation of upper tier executives has grown at an exponentially faster rate than front line workers. A few businesses — Whole Foods comes to mind — have taken steps to tie executive compensation to what workers within the chain make, although even here the c-suite is growing at a faster rate than store employees.

In 2006, Whole Foods increased its the salary cap from 14 times the average pay of all full-time employees to 19. That number was nearly twice the cap (10x) Whole Foods had in place in 1999. The average hourly wage for full-timers at the chain between 1999 and 2006 grew from $12.36 to $15.38.

The debate over benefits and how to control health care costs remains contentious within the industry. Major grocery chains in Southern California and the United Food and Commercial Workers seem, almost unbelievably to outsiders, on the brink of another work stoppage. An employer lockout followed by a strike in 2003/2004 was extremely damaging to Albertsons, Kroger and Safeway with the chains estimated to have lost $2 billion, not to mention the hardship faced by workers not pulling in their regular paychecks.

Not all labor relationships within retailing suffer from animosity or, perhaps worse, apathy. There are many broad exceptions: Costco, Container Store, Trader Joe’s, Wegmans, Zappos and others are often given high marks for employer/employee relationships.

Ultimately, however, many retail businesses see and treat workers as expenses to be contained and not assets to be exploited. They do this even as they proclaim, almost in unison, that their front-line workers are most important to performance.

Discussion questions:  What do you think is the state of labor in the retailing industry today? How would you fix it, assuming you believe there is something that needs to be fixed?

My post:

As a career-long retail leader, this subject never fails to frustrate me.  The easy excuse of the poor state of labor in retailing is the dominance of short term financial metrics driving bad leadership at the shop floor level.  The constant demand of immediate results that beat market expectations forces leaders to cut investment in long-term success strategies:  training and development, benefits that drive employee loyalty and performance, and time spent in efforts to intentionally engage line workers.

However, any leader in any retail organization can decide today to focus on loving their teams and provide simple development opportunities and engagement activities.  I’ve seen it personally over and over again.  Having said this, those retailers who continue to push their leaders to not focus on positive efforts to engage their staff will continue to decline into irrelevance.  Why?  Most operational leaders do not have the character strength to counter poor senior leadership.

How to fix this?  Support those retailers who get it – Container Store, Zappos, Costco and others.  Their financial results will continue to strengthen their market share and eventually kill off lesser contenders.  The evolution of retail, happening in front of us.

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:  The State of Labor in Retailing

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JC Penney leaves the Outlets

September 14, 2011

DISCUSSION TOPIC

A Contrarian Penney to Sell Outlet Stores 09-02-2011

While many other retailers are increasing the number of outlet stores they operate, J.C. Penney is getting out of the business altogether.

According to a Bloomberg News report, Penney has reached a deal to sell its outlet stores to SB Capital. The department store chain made the decision to get out of operating the 19 stores at the same time it is closing its print catalog business.

SB Capital will continue to operate the outlet stores under the J.C. Penney banner for 21 months before a name change is made. The company is also bringing on Penney’s outlet store management team to run the business.

Penney’s decision to close its outlet stores runs contrary to the current trend in retailing that sees many chains and designers expanding. Sales in outlet stores are capturing a greater percentage of overall sales, particularly in select categories such as apparel. According to The NPD Group, total year-over-year apparel sales increased 1.4 percent for the 52-weeks ending April 2011. By comparison, apparel sales in outlet stores grew 17.9 percent during the same period.

Marshall Cohen, chief industry analyst at NPD, said the success of outlet stores is due to value conscious consumers “looking for brands they either already have, or that they trust. They want products that are tried and trusted and they don’t mind spending money on them.”

Discussion questions:  What do you make of J.C. Penney’s reported decision to sell its outlet store business? Do you expect other retailers to follow Penney’s lead?

My post:

This is a very interesting move on the part of J.C. Penney’s leadership.  It may seem counterintuitive to move away from a currently trending business model.  However, I applaud any business that chooses to focus on its core business vs. dabbling in other areas.  Despite the continuing challenges, Penney has made several good moves to strengthen its core:  closing unprofitable stores and formats, adding key customer-desired elements such as Sephora cosmetics, and strengthening its web offering.  A focused mid-tier department store world dominated by Kohl’s and Penney at the bottom/middle and Macy’s at the top sounds about right.

What I find really interesting is the decision of SB Capital to choose to make this purchase without the ability to keep the name.  In so doing, I assume this a pure real estate play and I doubt a new name for an outlet center anchor will emerge but rather Saks Off Fifth or similar will eventually occupy the sites.

The evolution of American retail continues…

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:  A Contrarian Penney to Sell Outlet Stores

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Culture before Strategy

September 6, 2011

DISCUSSION TOPIC

Culture Trumps Strategy Every Time – 09-06-2011

Culture is the set of habits that allows a group of people to cooperate by assumption rather than by negotiation. Based on that definition, culture is not what we say, but what we do without asking.”

The preceding quote is from the latest “DFS Learning e-Blast” article, “Culture Trumps Strategy Every Time”, by Nilofer Merchant.

In this March 22, 2011 blog post on the HBR Blog Network, the author clearly articulates an argument for fostering an effective culture to drive sustainable business results over the short and long haul.

As you read this article, think about the overall culture at your company and the culture in your work area and determine how well you are contributing to a culture of trust, conflict resolution and co-ownership.

More from the article:

After working on strategy for 20 years, I can say this: culture will trump strategy, every time. The best strategic idea means nothing in isolation. If the strategy conflicts with how a group of people already believe, behave or make decisions it will fail. Conversely, a culturally robust team can turn a so-so strategy into a winner. The “how” matters in how we get performance. Yes, it does.”

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!

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