Over the past couple weeks, I’ve had several conversations and phone calls about Wal-Mart’s holiday advertising which broke prior to Thanksgiving. Committed to not making the same mistake as in 2004, Wal-Mart aggressively launched a media blitz to insure that they would get out the blocks selling at 5 a.m. on Black Friday. They launched the holiday with a series of spots featuring celebrities like Garth Brooks, Martina McBride, and Destiny’s Child. Then, they essentially bought out the day before Thanksgiving television networks with spots touting their Friday morning blockbusters with as strong a price/item blitz as I have ever seen from any retailer.

While they claim that 2 million+ shoppers broke down their doors in the first two hours on Black Friday to get their $398 laptops and $179 flat screen televisions, I’m afraid that the world’s #1 retailer forgot that this is the season to remember what got you to the top spot in the first place.

It certainly isn’t running a feel-good campaign with big names singing nice songs, which looked a lot like Target campaigns of old. Actually, these reminded me of campaigns that used to make Dayton’s and Marshall Field’s the place for holiday shopping when department stores were just that. I don’t think running department store type of spots is what has made Wal-Mart the shoppers destination store all year long as well as the holidays. Then to come back with a price-item campaign for Friday morning specials when you have been touting “Always low prices. Always” for years just to make traffic goals for 7 hours on Friday seems really contradictory. Granted having an exclusive boxed CD set from Garth Brooks (even though he’s been retired for 4 years) is a real merchandising coup. But to go and break prices on laptops that cause people to trample each other just getting into the store and then have fist fights over one of only six that were in stock that morning does nothing but put you in the same boat that nearly sunk Kmart years ago. The news is filled with reports trying to discredit the company now that it’s so big. Why do they have to resort to old time tactics that not only disappoint customers who are used to being able to get what they see advertised at Wal-Mart but also to undermine the trust that they have so effectively built on their march to the top?

It seems they forgot what got them there. Real people talking about real savings on real items they want that are in stock. No doubt Wal-Mart’s campaign needed a fresh look and inspired outlook, but simply running a campaign that looks and feels like those done by the very retailers they took market share from every year is really a step backwards.

The New York Times reported that Black Friday sales were down .9% from last year and that it was a “lukewarm” sales day. I actually went to Wal-Mart on Black Friday at about 4:30pm (you think I’m crazy enough to be there at 4:30 AM?) to see what was happening and pick up some outdoor lights as well. There were no lines at the registers, there were no traces of the blockbuster items, and it was as exciting (from a customer standpoint)as a Friday in mid-August. It sure isn’t the way I remember holiday sales from years ago. ‘Tis the season!

Here’s to you and your–hope your holiday is more exciting!

Happy Holidays!

Ken

Today, November 3rd, is World Usability Day. Have you planned all of your celebrations for this memorable event? If you haven’t, you might want to celebrate something significant—like the fact that you figured out how to hot sync your Treo or that you finally were able to set the right ringtone on your cell phone or Blackberry. In short, it’s the day founded by the Usability Professionals Association (product designers, testers, etc.) to signal the need for improvements in making things we use every day more easy to function in our life (according to USA Today).

Having spent a lot of time in the consumer electronics industry, I am well aware that one of the biggest consumer needs from the retailer is HELP in not only picking out the right model and brand but also assistance on how to get that gizmo to work right from the start. A big part of the burden certainly has to go back to the manufacturers who want mass market appeal but who in fact make their products extremely difficult to figure out and even harder to operate the stuff that they make.

Several years ago while at Eckerd, we worked with Ken Dychtwald and the Age Wave organization in an effort to make our stores more “friendly” to the growing mature market as we looked realized that the baby boom generation was moving quickly past 50 and looking at their sixties in the next 10 years. Besides looking at merchandising that met this customer’s needs (from reading glasses to Metamucil), we also looked at ways to make our stores easier to shop for an aging customer. Better signing, automatic doors, eye-level shelf positioning, and blood pressure machines were just a few of the things we addressed to make it easier for the 76 million baby boomers to shop our stores. Unfortunately, we didn’t do much with our people in the stores to make the experience more relevant and more usable. We still had 16 year-old high school juniors working in the pharmacy counter talking to 67 year old customers who needed help with hemorrhoid medications, vitamins, diabetic needs, etc.—all things that the clerks neither knew anything about nor did they often know what they were used for.

Inspired by what we learned from Age Wave, I asked a lot of questions later when I joined Circuit City and I pushed for us to challenge the Sony’s and Panasonics of the world to make a VCR or television with dials and labels that a person with bi-focals could read and understand. That still hasn’t happened, obviously, according to the Usability Professionals Association, and it will only happen if retailers demand it. They probably won’t because their sales associates don’t get it either. Not only do the store associates need to know the features of the products, but they also need to be able to relate to the growing mass market of people (like me) who have the cash but maybe not all the savvy (or eyesight) to understand the latest technology and how to use it. This is a big opportunity for companies that are “customer centric” or who claim to have “just what I needed” to keep me up to the state of the art in electronics. The Wal-Mart’s and Costco’s are going to continue to grow their market share in these categories, but they are not likely to provide any more help than to assist in loading the items in the customer’s car. It ‘s the specialty stores who have a big opportunity (and their best defense) to provide people who can help explain how to use the products and determine the right item for each customer. That’s where the Geek Squads can help, but they are basically an after-the-sale swat team. What about before the customer buys?? The marketing opportunity is to have the right people (maybe they should be 47 instead of 17 years old) who can relate to the customers and at the same time provide feedback to the manufacturers on how to make their products more usable. Maybe then, we could have a “World Helpful Associates Day”.
Have a great day.
Ken

There isn’t a presentation that I do or a discussion that I am involved with in this retail marketing and branding world which doesn’t come down to a discussion about low prices being the key to getting today’s consumer. No doubt about it. Every consumer market research study that I have ever seen ranks price as number one in importance in selecting a place to shop. I always point out that this is no surprise and that price just gets you on the playing field and it’s all the other branding and marketing activities that a store does which make up the customer’s mind as to where he or she is going to spend their dollars. It inevitably comes down to a discussion about value. After all, if it really was all about price, we’d all be driving Dodge Neon’s and doing all our shopping at Wal-mart.

That’s why it was interesting to see the news reports last week about Neiman Marcus’ 4th Quarter performance, which showed record-breaking results:

“Apparel and accessories retailer The Neiman Marcus Group Inc has enjoyed fourth-quarter and full-year profit increases, encouraged by full-price sales and expense control.

Fourth-quarter net earnings leapt 67 per cent to $34 million compared to $21m in the same period last year. Net sales totaled $851m compared to $784m the year before, while same-store sales grew 9.6 per cent.” Just-Style.com, 9/7/05

Wait a minute. Did that say “full-price sales” helped earnings increase 67%? Now, granted N-M has never been known as a place for great discounts. But if the consumer is so conservative and looking only for a good price at all levels of income, this just doesn’t seem to make sense. (Especially, when you read that Saks sales were down 0.3% for the month)

I didn’t have to wait long for an explanation. The day after reading this report, I was talking with a colleague of mine from the National Speakers Association and we were discussing my presentation focus and the importance of people in the branding strategy and execution. She indicated that she was a regular shopper at Nieman’s—not a really big spender, but a loyal customer. She said it was all about the way she was treated and that even though she didn’t consider herself a major customer, the store treated her as if she was one of the late Stanley Marcus’ dear friends. She said she regularly received mailings and personal phone calls advising her of new merchandise that matched her past purchases and tastes. More importantly, she said, “was the way she was treated when she walked into the store. “People actually called to me by name and welcomed me back. They made me feel like I was the most important customer in the department. And my friends, who sometimes accompanied me, were really impressed.”

Well, if it works at Nieman’s, it certainly works at the local grocer, the corner drugstore and the big box at the local Town Center. Give the customer personalized and interested service and they will come back and drive up your profitability. A few years ago, Yankelovich and Partners, did research which showed that over half (53%) of customers will pay as much as 10% more to get good service. So why don’t stores make sure that the people in the store understand this and perform to customers’ expectations. Unfortunately, it’s because management is too obsessed with the next great sale circular or full-page ad or major promotion. Loyalty is the key—both from customers and from employees—to driving up record sales and profitability. Stanley Marcus understood this a long time ago. It’s time for today’s merchants and marketers to get with it too. It’s a people business after all.

Let us know what you think.

Ken