On point! "Efficiency while ignoring effectiveness" agreed, it is not productive and often does not affect the bottom line in a meaningful way. Lack of effectiveness stacks up until there is a new efficiency mess to throw money at.
The Costco family is incredible! I have no doubt that continuing to focus on employee satisfaction will maintain SG&A gains, reduce turn-over and drive long-term sustainability with consistent quality standards. When you make $15.00/hr stability is key for associates.
At the end of the day, companies with the best people and most efficient administrative processes will win. Seamless will be the essential requirement for this sector, but special service will set them apart from Amazon, Walmart, Target, Jet, and so on.
When we pay for a "membership," consumer expectations change. When your employees can't afford to split a one bedroom apartment within an hour commute from work, you're not running a strong enough business. Every company should be improving their supply chain to ensure they can pay their employees a living wage. Standards of excellence cost less in the long-run.
Well they do not deliver in Brooklyn. I think it is more important for lifestyle grocers to deliver to places where shoppers will not carry groceries back home vs. having delivery from three blocks from your home. I can handle three blocks, not three train transfers.
Naadam did a beautiful job taking the shopper on the journey and making them feel like they were experiencing it first hand. They turned owning a piece into a souvenir and treated customers as part of the brand. Very well executed launch and growth stages.
When you are in a store consumers engage in the activity of "shopping," online the engage in search and find AKA "scrolling"; these are very different fundamental activities and the experience is not comparable; therefore they do not convert at the same rate. When ecommerce begins to fill the void of retail therapy, I believe we will see triple digit increases.
Hot topic for me and great quote! "Social channels are for being social, not for selling." Social was the first channel that opened communication between corporate and consumers; a golden opportunity quickly tarnished by bad manners and marketers. Short-term goals and lack of importance put social channels at the bottom of the funnel from day 1. When they grew and could no longer be ignored, retailers were late to the party. Everyone scrambled to pick-up the slack and it turned into marketing departments instead of Customer Success channels. It fueled a loss of authenticity as we are bombarded by images and conversations that are purely well crafted advertisements. What used to be IRL raw, is now assumed fake.
There was a time that a brand inherently evoked immediate trust from a consumer. You have it, until you lose it. Today, consumers have been burned with privacy abuse, degrading service and an innate sense of mistrust to the point where every brand is starting at -1; leaving the entire industry at a disadvantage. I think we can all agree that no one wants a shopper to hit the "delete me forever" button. However, where is the value?
If I share my data with Uber, I get a car in 3 minutes to take me anywhere I want to go. If I share my data with a retailer, I get an email marketing message asking me to buy something. I have not seen any consumer value by sharing my data with a retailer. Please correct me if I am wrong. The last birthday card I received from a brand I frequent was Equinox, not Alo or Carbon 38. My gift was a 25% off coupon for a massage. They have my data and know how much I spent in the PRO shop, just give me the same value in a gift certificate; better yet based on my data wrap up a size Medium Alo sports bra that is on sale and mail it to my to arrive on my birthday. A coupon is not a gift.
I firmly believe that consumers own their data, and it is a privilege for them to be sharing it with anyone. Sharing insights should be a conscious effort and validation of brand trust by way of benefiting from value. I predict by 2020, consumers will get control of their data and it will shake the industry in ways you've never imagined. 2019 is 100% about building genuine trust and value with shoppers across physical and digital engagement points.
Digital first brands are connecting with their core consumers and building brand value by inserting themselves in their audiences lifestyle and value structure. Traditional retailers have low hanging fruit by focusing on micro-messaging to their core top 20% of shoppers and starting from scratch in a meaningful way with first-time buyers. Fast forward 5 years, the trust we build in 2019 will directly reflect our businesses in 2023 when digital will reflect 58% of sales.
Retailers need to start treating their customers as if their life depends on it, because it does. Earn pocket share, not market share. In any relationship, we like to know where we stand, feel connected, and valued; it is a 2-way street. I'd rather build a company that is everything to someone, than something to everyone.
The irrational connection between a brand and consumers is every luxury brand's goal. The industry works by creating desire for the brand affiliation as much as the product. Allowing an aspirational and loyal consumer the opportunity to feel the brand is always worth the investment, so long as the objective is achieved. Gary Friedman is on the right track, however he is not the first and with any hope he will not be the last. RH is making these social locations to engage with the brand a permanent lifestyle destination vs. a pop-up shop and it resonates well with today's "accessible luxury" initiatives. Armani has hotels, Ralph Lauren has restaurants, Gucci opened a cafe, and Roberto Cavalli owns several. RH is creating a brand culture that is more than a physical product and should perform better than a Facebook ad or Google Adwords because people want someplace to go other than a traditional department store or Starbucks.
It's a long play strategy that is more expensive but it has the chance to reap unprecedented returns for the brand as a whole. The disconnect is how brands opening consumer touch points across the industry will embrace new technology to manage such an opportunity. Few solutions are on the market and even fewer brands are leveraging a CXM (Customer Experience Management Platform) to ensure every visitor is getting personalized, meaningful service and experiences are converting engagement into sales. I have a sneaking suspicion this will be a space evolving in retail tech over the next two to five years. The ROI make sense but it's nearly impossible to measure.
Beyond the compound and the new RH chill space in the Meatpacking District, I believe this is phase 1 of a larger initiative like opening a hotel chain. I can't think of a better brand experience for a home goods company than a chain of hotels furnished with entire collections of products that can be purchased. What would it really be like to have "this" design in your own bedroom, a living room? Experience a feeling in a space you might want to take home.
The first step, is to eliminate "branded" shipping boxes, no more FARFETCH, Carbon38, and Amazon slathered across the box sitting on my porch in Brooklyn would be helpful. Also, if we could track our packages with any amount of accuracy, we could make sure we were home or if it wandered away from our porch there would be something meaningful to report to the authorities like the "find my phone" app.
The logistics of USPS is ancient and leaving merchandise sitting on a porch is not a secure way for a federal organization to leave delivered mail. Perhaps every home should have larger "package" boxes that match the key to the mailboxes? I would be curious to know what the post-ship, pre-receive shrink rate is for companies to validate an investment for this timeframe. It's an interesting quandary; just last week, a neighbor was sitting on the porch with an umbrella in the rain waiting for a package that was being delivered after it was stolen three times. Not very convenient.
I find it interesting how tech is transforming the "work" to the consumer. Deleting customer service and forcing the shopper to take on the responsibility of "doing business" is not a convenience. Living in New York City, I advocate for a "locals" line or VIP pass like you suggest Ken. Having to change my brain from shopping which should be creative into a functional process dilutes the experience and actually takes away from the shoppers relationship with the brand. Downloading apps and doing all the work yourself does not feel like innovation but a sexy way for retailers to optimize their costs by passing it to the consumer. Universal preference guidance, live recipe builders based on cart add would be more welcomed in my world. Personally, I have no interest in bagging my own groceries and scanning items while I am coordinating ingredients for a weeks worth of meals.
Agreed Ricardo, I relish leaving the office for a coffee and enjoy the European cafe culture. I believe Starbucks has a greater success focusing on in-store experience and talking a page out of the RH playbook. Starbucks used to be the place, dare I say that is was a luxury experience in 2007? Now it feels more like an assembly line where no one knows your name. Do you remember when the Barista knew knew you and put a smile on your face first thing in the morning.
Personally, I have moved all "coffee" meetings and in-between times to the NY Meatpacking RH to the coffee bar on the 3rd floor because it is inviting, sophisticated, comfortable, and quiet. I can enjoy a moment with my coffee, a colleague, and my laptop.
There are some Starbucks stores that still have beautiful seating areas, local artists hanging on the wall, and music low enough to have a conversation but they are rare and typically found in Europe. Starbucks is one of the few players that can scale a social space. The demand for "a place worth going" is just as desired as "magically appearing."
In today's retailing environment you have to go high or low; there is no room for mediocre.