Meet the Chinese Consumer of 2020

April 21, 2013

 

Most large consumer-facing companies realize that they will need China to power their growth in the next decade. But to keep pace, these companies will also need to understand the economic, societal, and demographic changes shaping the profiles of consumers and the way they spend. This is no easy task not only because of the fast pace of growth and subsequent changes in the Chinese way of life but also because of the vast economic and demographic differences across the country.

The preceding quote is from the latest “DFS Learning e-Blast” article, Meet the Chinese Consumer of 2020, by Yuval Atsmon and Max Magni.

In this March 2012 McKinsey Quarterly article, the authors discuss changing demographics, new spending patterns, and the implications on companies.  This is one of a series of articles we’re sharing on our growing PRC consumer.  It is important for us to understand the context of this critical consumer’s evolving needs, desires, and behaviors as we seek to effectively meet their shopping needs in the markets where we serve them.

More from the article:

Many of the changes taking place in China are common features of rapid industrialization:  rising incomes, urban living, better education, postponed life stages, and greater mobility.  Japan saw similar changes in the 1950s and 1960s, as did South Korea and Taiwan in the 1980s. 

But some unique factors are also at work, such as the government’s one-child policy and the marked economic imbalances among regions. Our analysis reveals important insights into the likely demographic and socio-demographic profiles of Chinese consumers at the end of this decade.

Read the short article to learn more!

Mike Osorio, your Dare to be Contagious™ strategist

www.OsorioGroup.com

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8 Qualities of Remarkable Employees

April 14, 2013

Great employees are reliable, dependable, proactive, diligent, great leaders and great followers… they possess a wide range of easily-defined—but hard to find—qualities.  A few hit the next level. Some employees are remarkable, possessing qualities that may not appear on performance appraisals but nonetheless make a major impact on performance.

The preceding quote is from the latest “DFS Learning e-Blast” article, 8 Qualities of Remarkable Employees, by Jeff Haden.

In this February 21, 2012 post on Inc. Magazine’s online edition, the author provides a straightforward list of qualities which separate ‘remarkable’ employees from ‘great’ ones.

At DFS we strive to select, develop, and retain the very best talent in luxury retail.  Learn how the author defines remarkable and then reflect on how or if you are developing the remarkable among your team and decide whether ‘remarkable’ is for you!

Read the short article to learn more!

Mike Osorio, your Dare to be Contagious™ strategist

www.OsorioGroup.com

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Improving the customer experience through the ‘peak-end’ rule

March 29, 2013

 

If you take a moment to understand the idea, you have an opportunity to reevaluate and transform your retail customer experience in ways that could go a long way toward creating an ideal customer perception, and profitable customer behavior.

The preceding quote is from the latest “DFS Global L&D e-Blast” article, “The ‘peak-end’ rule: Can it transform your customer experience?”, by William Cusick, President of Vox Inc. and the author of “All Customers Are Irrational:  Understanding What They Think, What They Feel, and What Keeps Them Coming Back.”.

In this October 23, 2009 article, the author describes a simple technique that makes use of human psychology to maximize customer experiences.

At DFS we are keenly interested in understanding how we can create emotionally engaged customers.  The ‘peak-end rule’ can help us along that path.

More from the article:

It’s about having the right perspective, and taking advantage of a chance to create memorable experiences for your customers. The reward is higher retention and higher profits.

Read the short article to learn more!

 

Mike Osorio, your Dare to be Contagious™ strategist

www.OsorioGroup.com

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Unleash the Power of Customer Relationships

March 24, 2013

 

Building a sustainable Customer Culture takes courage, commitment and hard work. It is solely through Customer Culture that we establish and sustain the inspirational humanistic environment that builds mutually beneficial customer relationships. The unfortunate alternative to building a rich Customer Culture is the current luxury and retail business model where nameless sales people sell luxury products and services to anonymous customers, all in the course of a one-time soulless transaction.”

The preceding quote is from the latest “DFS Learning e-Blast” article, Unleash the Power of Customer Relationships, a white paper created by The Luxury Institute.

In this January 2012 white paper by The Luxury Institute, you will read about the seven critical steps the Luxury Institute espouses for luxury brands to build Customer Cultures that will dramatically increase customer and associate acquisition, retention and referral rates.

As all of us at DFS continue to evolve our approach to developing, delivering and measuring a true luxury customer-centric culture, this article serves as a wonderful reminder of the reason for our quest and challenges us to critically assess our strategies.

More from the article:

Do it for your brand, do it for your associates, do it for your customers, do it for society, but most of all, do it for yourself. Building a true Customer Culture in your organization will dramatically enhance your own life experience. It will transform you from being just another business executive into a happy and thriving human being who enjoys a meaningful life with a far greater purpose than the pursuit of money. Ironically, the sales and profits will follow.

 

Read the short article to learn more!

 

Mike Osorio, your Dare to be Contagious™ strategist

www.OsorioGroup.com

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The New Japanese Consumer

January 1, 2013

DISCUSSION TOPIC

 

The New Japanese Consumer

November 18, 2011

 

All:

 

After decades of behaving differently, Japanese consumers suddenly look a lot like their counterparts in Europe and the United States. Celebrated for their willingness to pay for quality and convenience and usually uninterested in cheaper products, Japanese consumers are now flocking to discount and online retailers. Sales of relatively affordable private-label foods have increased dramatically, and many consumers, despite small living spaces, are buying in bulk. Instead of eating out, people are entertaining at home. Workers are even packing their own lunches, sparking the nickname bento-danshi, or “boxlunch man.”

 

The preceding quote is from the latest “DFS Learning e-Blast” article, The New Japanese Consumer, by Brian Salsberg.

 

In this 2nd quarter 2010 article from the McKinsey Quarterly, the author provides an interesting overview of the Japanese consumer’s changing domestic purchasing behaviors.

 

In previous e-Blast articles we’ve explored the changing dynamics of consumers in Korea and China.  Today, learn what factors are changing the way the Japanese consumer thinks about shopping and brands, and how this impacts their shopping behaviors.  By better understanding what drives today’s Japanese shopper, we can better serve our #2 customer nationality as they visit our locations throughout the world.

 

More from the article:

 

This fundamental shift in the attitudes and behavior of Japanese consumers seems likely to persist, irrespective of any economic recovery.  That’s because the change stems not just from the recent downturn but also from deep-seated factors ranging from the digital revolution to the emergence of a less materialistic younger generation.

 

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 to join the discussion!

 

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Insights on Korea’s Luxury Market

October 8, 2011

DISCUSSION TOPIC

Korea’s Luxury Market – 10-04-2011

“…the performances of famous brands in Korea have been mixed. For example, LVMH and Ferragamo continued to do well, but others, like Gucci Group and Dior, saw sales drop in real terms in 2010.”

The preceding quote is from the latest “DFS Learning e-Blast” article, Korea’s luxury market: Demanding consumers, but room to grow, by Aimee Kim and Martine Shin.

Read about the changing Korean shopping landscape in this write-up of the results from McKinsey’s 2011 Korea luxury consumer survey, available on the McKinsey & Company Web site. The authors note that McKinsey research shows that South Koreans spend a higher percentage of their household incomes on luxury goods than the Japanese do, and the South Korean market looks to sustain strong growth for several years to come. But the country’s thing for bling is evolving: buyers are beginning to think more about brand differentiation than about ostentatiously displaying famous logos.

While DFS does not currently do business directly in Korea, the insights from the McKinsey story highlight the purchasing behaviors of Koreans who continue to travel in significant numbers to many of our destinations.

More from the article:

Thus, while the headline news is that the luxury market is still growing strongly, uncertainty is also mounting. In this year’s report, McKinsey addresses these concerns, which come in the form of three key questions: Can South Korea keep it up? What’s changing? And what do these trends mean for the players in the luxury industry?”

Read the short article to learn more!

Mike Osorio, your Dare to be Contagious! ™ strategist

www.OsorioGroup.com

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Recess comes to the workplace

October 8, 2011

DISCUSSION TOPIC

Take a Break to Increase Productivity – 09-19-2011

September 19, 2011

A survey from Harris Interactive found that recess was key to improving workplace health and productivity, and re-energizing employees.

The survey was sponsored by Keen, the footwear brand which earlier this year launched Keen’s Recess Revolution tour, a series of events designed to inspire adults to “reclaim playtime and take much-needed 10-minute breaks from the daily office grind by escaping to the outdoors.” With a pop-up playground featuring tetherball courts, Frisbee, hula hoops and more, the tour has made stops in Denver, Minneapolis, Portland and San Francisco. The survey was released on September 14 on World Recess Day, a day-long outdoor event held by Keen in Washington D.C.

The Survey on Workplace Recess, conducted during August 2011 and involving 1,099 adults employed full-time, revealed:

  • More than half (53 percent) agreed that a 10-minute “recess” outdoor break initiated at their workplace every day would make them a healthier, happier or more productive employee;
  • Forty-one percent felt outdoor breaks would help them deal with stress at work;
  • Forty-four percent indicated that they would participate in recess if it were offered at their workplace, with the greatest interest among women (53 percent) and Millennials (51 percent).

At the same time, more than 70 percent said they’ve never participated in a paid recess-type break outside of lunchtime. Seventy-eight percent (78 percent) felt that certain factors would need to be in place for recess to be a part of the workday, including encouragement from top management (39 percent), participation from their boss and/or colleagues (25 percent), a designated time of day for recess to avoid scheduling conflicts (35 percent), and recess becoming part of the company culture (33 percent).

Dr. Toni Yancey, author of Instant Recess: Building a Fit Nation 10 Minutes at a Time and co-director of the Center for Health Equity and professor of health services at UCLA, said in a statement that short activity breaks would aid in reducing obesity rates and sick days while lifting employees’ mood and subsequently improving productivity

“If employers offered and encouraged a paid activity break during the day, it would offer a real return on investment for them — delivering $1.50 – $2.00 for every dollar spent implementing the program, according to our estimates,” said Dr. Yancey.

Added James Curleigh, Keen’s CEO, “I hope that the idea of workplace recess will catch on with companies that aspire to be great places to work, ultimately making recess as common as casual Friday.”

Discussion questions:  What do you think of the proposed benefits and feasibility of scheduled short activity breaks for retail store and headquarters employees?

My post:

There are physical and psychological benefits to a well designed “recess” strategy. The key is infusing a bit of fun into the sameness of most retail workdays, whether in the office or on the sales floor. The Pike’s Place Fish guys are a well-used example of this done right, but there are many others out there. It is difficult to schedule in today’s lean staffing store environment, but worth the effort. Especially when the boss plays too. It can be as simple as a 15 minute fast-paced walk outside to a green area to enjoy a coffee and a chat, or a little more planned, such as a once or twice monthly walk to an ice cream place as a reward. Don’t make it too structured, or you’ll lose the ‘fun’ element. This can be a big part of an ongoing and authentic engagement strategy.

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:  Take a Break to Increase Productivity

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Service Lessons for Retailers from the Airlines

October 2, 2011

DISCUSSION TOPIC

Three Lessons Retailers Can Learn About Service From the Airlines – 09-16-2011

September 16, 2011

As a frequent flier with over 1.5 million Aadvantage miles (how about that!), it struck me on the way home from Shop.org that the retailing industry should use the airline industry as a cautionary tale. It’s a business that could do SO much better, but doesn’t, and has devolved into a commodity industry whereby the definition of success is safely transporting passengers from one place to another. And, God bless them for that! U.S. airlines, at least, have a stellar track record on safety.

But airlines have optimized the logistics end of the business to the point where it’s all about cramming as many passengers as possible onto as many flights as possible, moving them from point to point efficiently, and calling it a day.

Three Retail Lessons

1. Don’t promise what you can’t deliver. Simple enough, right? The old adage of under-promise and over-deliver applies, and yet the airlines do it in reverse 99 percent of the time. Returning from Shop.org, I traveled on a jetBlue flight that was delayed 90 minutes due to weather plus a slight (if there is such a thing) mechanical problem. Here’s the rub: jetBlue announced a 40-minute delay and delivered a 90-minute delay. Traveling for 30 years, as I have, this is almost always the case. Any ultimate delay will actually be worse than originally announced. Retail Lesson: When there is a problem, give your customers a realistic assessment of the issue right away, and then try to do better than that.

2. Don’t try to go from full-serve to self-serve. Since I hadn’t flown on jetBlue in 5+ years, I noticed the difference, so I’ll pick on them. When jetBlue first started flying, they had free snacks and free TV. While they still offer those two things (sort of), they have downgraded to an a la carte menu where you have to pay for movie channels on the “free” TV, pay for a headset, pay for “premium” snacks, pay for a pillow/blanket “kit,” pay for a few extra inches of leg room, etc. In short, they are now a regular airline and the TVs are in need of updating, too. Retail Lesson: When your business is founded on offering “free” extras, don’t start nickel and diming customers. If you are a full service retailer, be careful when you start trying to get your customers to check themselves out, use kiosks to find merchandise, help themselves at the meat case, etc.

3. You didn’t have me at hello! Does anybody but me remember the “good old days” of flying when flight attendants and gate and reservations counter attendants actually greeted you and maybe even spoke a complete sentence or asked how your day was going? It’s been well over a decade since I got more than a “good morning” from an airline employee. (Side note: I have had better luck on the phone and almost all airline employees have been civil if not friendly when asked a question). Retail lesson: Just think of the extra business you could garner if your associates were actually friendly and engaged each potential customer.

For retailers, commoditization could mean the industry degrades to the point where a handful of retailers successfully delivers products to consumers more or less on time, with an optimized supply chain, but with minimal to no service and differentiation. And, we don’t want retail to be like the airline industry, do we?

Discussion questions:  What’s the best way for chain retailers to motivate their employees to offer superior service? What’s your air travel tale of woe, and what can retailers learn from it?

My post:

The number of posts clearly indicates that the airline situation strikes a nerve with almost everyone.  For most routes, the choices are few and the airlines know it.  So in a financial model driven by high fuel and labor costs and meager profits dependent on pure price and supply chain efficiencies, it is no wonder that expecting anything other than arriving safely in your destination is futile.

On the retail side, the sobering reality is that a model built purely on supply chain and pricing efficiencies will deliver an awful experience over time.  And unlike the airlines, there are usually other options and the customer will go elsewhere.

It has always been this simple:  Retail interesting and innovative products in a compelling environment (virtual or physical), staffed by caring, knowledgeable people who love what they do.  Hire for these talents (merchants, store leaders and staff alike), pay well, invest in development, and authentically engage them in the business.  Unfortunately too many retailers over-complicate the formula and chase each other down the uninspiring product and price-driven path to boredom and irrelevance.

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:  Three Lessons

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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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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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