How Businesses Thrive during Dangerous Times

The Covid-19 pandemic unleashed suffering on a global scale not seen in our lifetimes. As if waves of sicknesses and death were not bad enough, businesses everywhere were rocked to the core, resulting in job loss and economic hardship. And it’s not over. But amid the turmoil, some businesses are as strong or even stronger than they were before the pandemic changed everything. Here are their stories, and the lessons we may learn from them.

1 Take Care of Your People: Raising Cane’s Chicken Fingers Rallies through a Hard Times

Todd Graves saw the storm coming. Graves, the co-founder and CEO of fast-food chain Raising Caine’s Chicken Fingers, followed the spread of Covid-19 in China before the virus was news in the United States. He read about lockdowns happening to contain the virus. He quickly grasped the potential impact of Covid-19 on his business. So he and his management team went into crisis mode even though there was no crisis to react to yet.

The executive team canceled a scheduled management retreat to celebrate its five-year plan and started to change how the chain operated. Raising Caine’s quickly implemented CDC guidelines for social distancing and placed an “uber-intense focus” on sanitizing every location, as discussed in QSR magazine. Managers were trained on how to conduct team meetings in socially distanced fashioned so that operations would not be disrupted. Fortunately, most Raising Caine’s locations have drive-through service. So the company changed the focus of its marketing to put a full-court press on its enhanced safety measures and its drive-through service.

Almost all Raising Cane’s 500 locations stayed open and did a thriving business. Thirty-three non-drive-thru locations temporarily closed, but Graves kept employees in closed locations busy sewing masks and supplying local hospitals amid a mask shortage.

Raising Cane’s purchased sewing machines and supplies for the group. Two teams worked in shifts to comply with the company’s social distancing procedures. They created more than 600 masks in their first week and upped production to 100 a day. The mask sewing initiative gave employees in closed restaurants a sense of purpose as they gave back to the community. And beyond those efforts, Raising Cane’s launched fund raisers to help frontline workers in hospitals putting their lives on the line to fight the pandemic.

All the while, Graves refused to furlough or lay off any of the 23,000 workers.

“Our mantra then was no crew member left behind,” Graves told QSR. “I wanted the team that went into this pandemic to be the team we come out with. And so we’re going to work like heck to get through it.”

Initially, the chain suffered a hit as the pandemic upended our lives. Sales were down as much as 30 percent. But by late April, they had returned to pre-pandemic levels even as other restaurants struggled — a stunning turnaround.

This was a story we all needed to hear in the early days. Raising Cane’s gave us hope and put its people first.

2. Sense and Respond: Amazon, Target, and Walmart Ascend to Greater Heights

Some businesses prospered during the pandemic. You know three of their names: Amazon, Target, Walmart. All of them crushed their quarterly earnings announcements throughout 2020 and enjoyed all-time valuations on the stock market.

Why?

All three of them benefitted from the rise of the stay-at-home economy, in which people increasingly bought what they wanted from their sofas. Amazon already had a lock on ecommerce, and both Target and Walmart wielded an advantage with their curbside pick-up capabilities. People who preferred to order groceries, clothing, and housewares from their homes, then pick them up without leaving their cars, chose Target and Walmart. As a result:

  • Target’s curbside pickup service sales jumped by more than 700% during its fiscal second quarter.
  • Walmart’s eCommerce business jumped 97 percent year over year, partly because the popularity of curbside pick-up services.
  • Amazon just kept powering through, showing 37% year-over-year growth for the third quarter ended September 30, 2020.

Were they in the right place at the right time? No. They prospered because they know how to sense and respond.

Target and Walmart had been steadily building ecommerce services and curbside pickup over the past few years. They both saw the rise of a mobile consumer who preferred the immediacy of driving to the store but didn’t have time to go inside to make their purchase. When the pandemic made many people frightened to shop inside stores, curbside pickup served Target and Walmart well.

Amazon, building off its already strong ecommerce operation, had made a major investment in its own delivery capability, including its own air cargo fleet. The move triggered a war with FedEx and raised questions about whether Amazon had overreached. But as retailers struggle with maxed out supply chains in the 2020, Amazon seizing control of its own destiny now looks smart and forward-thinking.

In addition, by building out its cloud computing service, Amazon Web Services, Amazon positioned itself well when stay-at-home living in 2020 caused a surged in online usage. Amazon Web Services is the backbone for digital platforms ranging from Facebook to Netflix — a $10 billion business.

Amazon, Target, and Walmart aren’t standing still. Amazon continues to expand in to industries as diverse as advertising and healthcare — both leveraging Amazon’s ability to mine its own customer data to deliver personalized services and products. Target is doubling down on its in-store experience by opening Ulta beauty stores within a number of Target locations, anticipating a return to more in-store shopping in 2021. Walmart is also stepping up its own healthcare services and recently announced the launch of a fintech startup.

Leaders always think ahead — during good times and hard times.

3 Act with Purpose: Netflix Invests in Racial Justice

Netflix put its money where its mouth is.

As the world erupted with protest over racial inequality in 2020, businesses sought to have a voice. Many responded with gestures of support on social media. Others took action, and Netflix was one of them. In early June, Netflix CEO Reed Hastings announced that he was donating $120 million to support scholarships at Black colleges and universities. On June 30, Netflix announced it was allocating up to $100 million of its cash holdings into financial institutions and organizations that directly support Black communities in the United States. As reported in The New York Times, the action would help Black-owned lenders inject more capital into Black-owned businesses.

It turns out Netflix had been planning the capital reallocation since April. The New York Times reports that the company’s decision makers were influenced by book “The Color of Money: Black Banks and the Racial Wealth Gap,” by Mehrsa Baradaran, a law professor at the University of California, Irvine.

Netflix’s financial commitment reflects the company’s culture in other ways. For example, Netflix’s marketing arm Strong Black Lead, is committed to hiring people of color and supporting their voices. (Read more about Strong Black Lead here.)

Netflix’s actions point to a bigger role that businesses have to be purposeful, a major news theme of 2020. Corporate accountability to society really took hold as the Covid-19 pandemic spread. In March, According to a recent Kantar study of the public’s attitudes about COVID-19, more than three-quarters (77 percent) of people surveyed said they wanted to see brands talk about how they’re helpful in the new everyday life. And 77 percent wanted to see brands to inform consumers about their efforts to face the situation. Meanwhile 62 percent of people around the world surveyed by Edelman said that their country would not make it through this crisis without brands playing a critical role in addressing the challenges. Then, in June, the conversation turned toward race. An Edelman survey revealed a widespread public outcry for businesses to take a lead tackling racial inequality. Sixty percent of Americans surveyed by Edelman said that businesses must speak out publicly against racial injustice. Sixty percent said that brands need to use their marketing dollars to advocate for racial equality and to educate the public on the issue.

But businesses were not always sure how to take a stand. After Nike published an ad condemning racism, economist Scott Galloway took the company to task for over-emphasizing a message over taking action. He called on more businesses to focus on deeds, not words. Netflix was all about both words and actions.

4 Be Nimble: Airbnb Rebounds

Airbnb was on the brink of collapse. Under CEO Brian Chesky, the company had built one of the most storied brands in the digital age by creating a network of property owners willing to rent homes to travelers. Airbnb had become so successful that it was threatening the established lodging industry without owning a single hotel. It’s no exaggeration to say that Airbnb helped invent the modern-day sharing economy, in which people profit by sharing their assets for a fee. But Airbnb was like traditional lodging industry in one important aspect: Airbnb and its network of entrepreneurs needed people to travel and book lodging. And as the pandemic took hold, travel had practically ground to a halt. Overnight, bookings plunged. By mid-March, Airbnb saw $1.5 billion in bookings vanish.

Airbnb’s stellar trajectory was halted. A planned initial public offering was out of the question. Chesky laid off a quarter of his staff, slashed expenses, and sought capital to keep the business afloat. Things did not look good as the weeks went by. Even as people emerged from lockdowns, traveling was not popular.

Or was it?

In fact, Airbnb’s data scientists noticed something happening: people emerging from lockdowns were traveling. But their preferences had changed. Instead of looking to fly to cities and stay in tony urban locations — a mainstay of Airbnb’s revenue — travelers were looking to rent homes in smaller locations within 200 miles of their homes. People were ready to get out of their homes and travel. But they wanted to rent entire homes instead of sharing them with other people (and risk contracting the Covid-19 virus), and they wanted to drive, not fly. So as reported in The Wall Street Journal, the company quickly changed. Airbnb redesigned its website and app so that its algorithm would showcase travelers interesting locations such as cabins.

Incredibly enough, by July guests were booked stays at the rate they were just before the pandemic crushed the travel industry. By December, Airbnb had recovered so fully that it launched a successful IPO after all.

“People are now discovering small towns, small communities,” Chesky said. “They’re discovering national parks, falling in love with the outdoors, and realizing they can go to all sorts of other places. This is an irreversible trend.”

And Airbnb was ready to capitalize on that trend.

Airbnb needed to do a lot more than reposition itself to short term travelers in order to survive the tumult of 2020, but listening to its customer data and adapting were essential. In 2021, Airbnb says it appeals to a new type of traveler — people redefining their staycations, traveling in small pods of families and friends, or visiting different towns with an intent to relocate permanently. You can be sure Airbnb is adapting to them, too.

5 Be Bold: Disney Saves Its Future

It’s quite possible that “pivot” is the most overused word in 2020, used to any business that adapted during the pandemic. But Disney really did pivot its business, and may well have saved it.

It has been painful to watch the COVID-19 pandemic crush Disney’s fabled parks and resorts. In September, Disney announced it would lay off 28,000 employees across its parks, experiences and consumer products segments. Disney blamed prolonged closures and capacity limits at open parks for the layoffs.

On November 12, Disney reported its first annual loss in 40 years, and declining attendance at its parks had a lot to do with that decline. Disney said that the pandemic cost it $7.4 billion in operating income in the fiscal year, and $6.9 billion of that loss came from theme parks and experiences division.

But by November, Disney had already made a very important move to change course. On October 12, Disney reorganized its media and entertainment divisions in order to focus on streaming content, namely its wildly successful Disney+ platform. Kareem Daniel, the former president of consumer products, games and publishing, would now oversee the new media and entertainment distribution group, responsible for content distribution, ad sales, and Disney+.

In an announcement, Disney said that its “creative engines will focus on developing and producing original content for the Company’s streaming services” — meaning that Disney’s creative teams, ranging from Pixar to Lucasfilm, will be all-in to support streaming, focusing on Disney+, Hulu, and ESPN+, all streaming brands owned by Disney. Meanwhile, a newly created Media and Entertainment Distribution group under Daniel would be responsible for monetizing and distributing that content.

Disney didn’t wait for its restructuring to change the way it operates, either. In September, Disney bypassed movie theaters in the United States and released its feature film Mulan on Disney+ (while distributing the movie in theaters internationally). Mulan received mixed reviews and lackluster box office receipts globally. But as Kay McGuire of Screen Rant discussed in an analysis of Mulan’s financial results, Disney+ was a lifeline for Mulan.

And on December 25, Disney skipped theaters and released Pixar’s animated movie Soul on Disney+.

These were big-time moves, but they did not emerge from left field. In 2019, Disney had already laid the groundwork for its newfound focus on digital content — first, by taking ownership of the popular Hulu streaming service, and then by launching Disney+. Hulu gave Disney an instant streaming audience of 28 million (at the time) and a prestigious content library with popular titles including The Handmaid’s Tale. Disney+ gave Disney an arm to unleash its powerful library of content, including the coveted Marvel franchise, as well as new titles such as the wildly popular The Mandalorian, which tapped into the eternal appeal of Star Wars.

Little did Disney know that a global pandemic would trigger a massive shift in people’s entertainment options, from going to the movies to streaming them. By the end of the 2020, Disney+ subscribers had grown to 86.8 million, and Hulu paid subscribers had grown to 36.6 million.

And the financial results reflect the increase in subscribers. In its earnings announcement, Disney said that its Direct-to-Consumer and International division, which includes streaming, had generated $4.85 billion in revenue, up 41 percent year over year.

Disney knows where its near-term future is: streaming. And so it doubled down. And its stock value, incredibly enough, increased even as its theme parks continued to struggle.

Disney demonstrated an eternal truth about industry leaders: when times are tough, the make bold moves. Disney’s digital-content first approach was reflected elsewhere in the entertainment world, too, most notably when Warner Brothers said it would release its entire slate of movies on the HBO Max streaming platform as well as in movie theaters.

These are hard times. Businesses that want to survive them can learn from Disney.

Hope in 2021

Weeks into 2021, we see glimmers of hope for a sustained rebound from the ravages of the pandemic. The travel industry as a whole is showing some signs of life. The live events business, crushed by the pandemic, could return as early as the fall of 2021. Initial public offerings area actually booming. Much uncertainty and hardship remains. But new stories will be told and lessons learned. Stay tuned.

Photo by Jake Ingle on Unsplash

Target and Walmart Succeed by Delivering on Retail’s New Brand Promise of Health and Safety

Target and Walmart are selling safety. And they’re succeeding.

Both retailers surprised analysts by reporting strong quarterly earnings in August, sending their stock prices to all-time highs. It turns out that as the COVID-19 pandemic rages on, people are choosing to visit Target and Walmart even at a time when going to the store means putting our lives on the line.

Why?

Because the brand promise of retailers has changed from “Save money and enjoy our store” to “Shop with us, and we’ll protect you from yourselves.” And both Target and Walmart have delivered on this promise big time.

Target and Walmart Make It Easy to Shop without Stepping into the Store

They offer services such as curbside pickup that limit a shopper’s exposure to the risks of being inside a store. Walmart began rolling out curbside in 2016 (the service was called Pickup and Fuel then). Target responded a few years later. Both companies are benefitting from the surging interest in curbside. Target said that sales through Target’s curbside pickup service grew by more than 700% in the second quarter from a year earlier. Walmart said U.S. eCommerce sales grew 97 percent, as more customers shipped packages to their homes and used same-day delivery and curbside pickup.

Target and Walmart Have Changed the Rules of Shopping

Early on, both Target and Walmart aggressively enacted health and safety protocols such as using floor stickers to help shoppers keep their social distance, installing plastic guards to protect employees and shoppers from each other in the check-out lane, and mandating that shoppers wear masks to enter their stores. These protocols have not worked perfectly.

Unfortunately, some selfish shoppers have chosen to recklessly endanger everyone else by not wearing a mask. And yet, Target and Walmart are convincing people to visit their stores. Target reported that in-store comparable sales climbed by 10.9 percent during its second quarter. Walmart’s U.S. same-store sales were up 9.3 percent.

The Golden Arches of Retail

Retailers such as Target Walmart have, in effect, become the new Golden Arches. Decades ago, McDonald’s famously made the Golden Arches a symbol of consistency and predictability for restaurants. Especially as Americans began to travel more in their cars in the 20th Century, seeing those Golden Arches by roads provided some measure of assurance that you knew exactly what you were getting when you stopped for a meal. Today seeing that Target logo by a highway provides some degree of predictability and comfort in the hostile land of the maskless.

This truth resonates as shaken families across the United States have tried to reclaim some semblance of normalcy by embracing the time-honored tradition of the American road trip. According to Airbnb co-founder and CEO Brian Chesky, Americans are getting in their cars again and taking 200-mile road trips to smaller communities and outdoor parks. That’s because congested cities are more dangerous than state parks and hotels in the country. Air travel is more dangerous than a leisurely drive in your car. But even so, when you hop in your car and hit the road, you take on new risks, and if you travel with a family, you put them at risk, too. Depending on your destination and where you live, your drive may take you through multiple cities and states, each with their own customs for managing coronavirus health and safety. You’re literally leaving your comfort zone when you go on a road trip. Even familiar places now seem like unexplored territory.

Short road trips will continue to define the American vacation experience especially with national holidays that make it possible for people to travel for long weekends all year-round. If you took a road trip this summer, you know the drill by now: you probably planned for your trip carefully in ways you did not need to only months ago. Perhaps you investigated a motel or an Airbnb’s COVID-19 hygiene practices and protocols ahead of time. You might have packed a cleaning kit to wipe down your room when you arrived. Maybe you packed snacks to minimize having to stop at restaurants, especially if your drive took you to places where you were not sure how well people followed mask-wearing or social distancing protocols. But at some point you, needed to stop somewhere. You were low on gasoline. Your kids needed to go to the bathroom. You forgot to pack enough socks and need to buy an extra pair.

But as we know by now, a routine stop elevates your stress level. You stop at a gas station or a store by a highway exit, and you go into self-preservation mode, assessing the danger levels by using your own internal survival rules, just like Jesse Eisenberg did when he was trying to avoid encounters with zombies in Zombieland. How small or big does the location look? (Tiny aisles in roadside gas station convenient marts seem deadly.) How crowded is the place? Do they post a sign with ground rules for maintaining social distance? And are customers wearing masks?

Fortunately, at gas stations, you refill the tank outside and can manage your social distancing. But when it comes to getting a cup of Starbucks, a bottle of water, or those extra socks, it’s time to pull out your mobile phone and search for the nearest Target or Walmart. That’s because you know they have a national policy of requiring people to wear masks when they enter the store, and they offer services such as curbside. You’ve probably been to a Target or Walmart near your home and seen firsthand the policy in place. You’ve noticed the employees wearing masks and red shirts wiping down the self-checkout lanes at Target or processing your purchase from behind the relative safety of a plastic shield. Those details mean everything.

Maybe you’d like to support local businesses, and the closest big-box retailer is a bit farther than you’d like to drive. But people are getting sick and dying, and idiots who refuse to wear masks are making things worse. At least Target and Walmart, no matter where you go, require masks. It’s not a fool-proof approach — belligerent people who refuse to wear masks still slip through. But it’s something. And those wide aisles sure make it easier to avoid getting too close to some careless shopper who isn’t paying attention to where they are pushing their shopping cart. That predictability of service and safety could save your life.

My Own Road Trip Experience with Retail

I have learned these new rules of the road firsthand. My wife Jan and I have taken three road trips since the pandemic hit, two out of necessity and one for leisure. The first road trip, several hundred miles to Massachusetts in early June to see my seriously ill father, was stressful at first. When we stopped at a rest area for a bathroom break, I was anxious. But seeing chairs in public spaces put away and signs announcing social distancing procedures made me feel just a bit more comfortable. At least someone in the rest stop was taking some measures. Just about everyone wore masks, too, but not all travelers did. So we kept our stops to a minimum. As we drove east and entered New York state, the drive became more relaxing. That’s because New York state residents were uniformly compliant with their mask wearing and social distancing, whether we were visiting a rest stop or staying in a motel. The entire state felt like an advertisement for how to respect each other during the pandemic.

The drive to Massachusetts was important. Not only did we see my dad, under hospice care at home, but we also overcame our fear of traveling during the pandemic. We eventually worked up the courage to take a 280-mile drive to La Crosse, Wisconsin, for a long weekend of hiking and biking. Like everyone I know, we had hit a point where we just needed to get away — to drive somewhere and escape. We knew this trip might be like visiting the wild west. The state of Wisconsin has been more aggressive than many other states about opening its economy, and we’d heard of local Wisconsin businesses being lenient with their protocols. Halfway into our drive, we stopped to rest in Madison, Wisconsin. It was an uneventful stop. We found a shopping mall we knew about. Masks were mandatory to enter, and compliance was nearly uniform. Like the survivors in The Walking Dead, we kept our eyes peeled for mask-less mall wanderers and easily avoided being near them. When we arrived at La Crosse, we immediately visited a somewhat remote trail for a glorious late afternoon hike up a steep trail with challenging switchbacks — just the kind of experience we’d been hoping for and, frankly, one I needed to work off my COVID-19 flab. Fortunately we encountered few people on the trail, and when we did, we held our breath and kept our masks on.

After the hike, we both wanted cold water and Gatorade. So we stopped at a local gas station with a shopping mart inside. Right away, we went into self-preservation mode. And the place failed, miserably. Lots of people without masks came and went through the narrow doorway. And apparently no attempt was made to monitor the number of people in the cramped store. After sizing up the place, we aborted the mission. Unfortunately, the gas station was not the only place in La Crosse where apparently no one cared about masks. But, undeterred, we decided it was time to adopt the Target Strategy. We found a large, welcoming Target nearby, which looked like a beacon of safety in the distance. Sure enough, just like the Target near our house, the one in La Crosse mandated that all customers wear masks — which they did. And just as we’d experienced at our own Target near our home, the mask-wearing employees had the spray bottles out to keep the place clean. At the check-out lane, a good-natured employee asked us how our day was going as she wiped down the counter and rang up our purchases. We mentioned how much we appreciated the visible safety protocols. Seeing employees so diligent about keeping the place clean was comforting. She admitted that other employees sometimes grumbled about how tiresome the constant cleaning was, but she was a new employee and therefore did not have any other frame of reference. Always wearing a mask and keeping a spray bottle and paper towel at her side seemed a natural part of the experience.

The New Retail Customer Experience

A great customer experience now comes down to how quickly and safely you can get out of the store, and how well a store can assure you with visual cues that they really do take your personal health and safety as seriously as they say on their website and in their official emails. During the pandemic, Target and Walmart have sensed and responded, and there’s no turning back. 

Walmart Promotes a Kinder Black Friday – and a Possible Future for Retail

After treating Black Friday like a cattle round-up for years, Walmart is finally injecting a little humanity into the year’s worst shopping tradition. On November 8, the retailer announced measures intended to make Black Friday shopping just a bit more pleasant:

  • Walmart is serving four million cups of complimentary coffee (courtesy of Keurig) and a few million free Christmas cookies from the Walmart Bakery.
  • Walmart will make it easier for shoppers to find top deals in-store via the Walmart app.
  • Check Out with Me store associates stationed throughout the stores and equipped with mobile check-out devices will make it possible for shoppers to purchase items on the spot, thus avoiding long lines.

These changes are long overdue. But why aren’t more retailers improving the Black Friday experience? For years, as part of my first-hand research into Black Friday, I’ve stood in long lines with shoppers in the cold pre-dawn of this massive shopping day. I have waited Continue reading

Apple Watch: Hot or Not?

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Adweek‘s hottest digital gadget of 2015 is also one of the most controversial. The Apple Watch has been called both a flop and a behavior-changing device. I believe that the Apple Watch is a flawed first-generation product that will ultimately take hold for these reasons:

  • The Apple Watch makes use of a natural gesture, the swiping of the wrist, to accomplish everyday tasks.
  • Businesses ranging from Target to Starwood have built a large Apple Watch ecosystem via the development of apps that support tasks ranging from shopping to checking into hotel rooms.

My new CMO.com byline discusses why any business that depends on mobile consumers needs to find a place for the Apple Watch in its customer acquisition and retention strategy. Waiting around for the Apple Watch to become mainstream will cause you to lose ground to the businesses that are already getting exploring the branding potential of the Apple Watch. Check out my new column and let me know your opinion of the future of the Apple Watch.

Will Beacons Help Target Improve the Shopping Experience?

Beacon

Target recently announced the rollout of beacons at 50 stores in Chicago, Denver, Minneapolis, New York City, Pittsburgh, Portland, San Francisco, and Seattle. Beacons are devices placed in locations that make it possible to share content (such as offers) with a person’s mobile device. Through beacons, Target will offer deals and product recommendations as customers shop at their local Targets. With nearly 1,800 stores in the United States and a strong brand, Target joins a growing list of major retailers putting a greater emphasis on location marketing via beacons. The news is significant because it demonstrates how technology and data together can create more relevant and useful customer experiences at scale.

In its announcement, Target emphasized how beacons can deliver content such as deals on products that might interest shoppers while they are in a store. People who opt in via a Target app will receive offers for products on a “Target Run” app home page as they navigate their local Target stores. As Target explained on its website:

Let’s say you’re browsing women’s apparel. You might get an alert about nearby items that are trending on Pinterest. As you move over to get your groceries, and you may see the “Target Run” page updated with a department-wide offer or a Cartwheel deal for items like Archer Farms Organic milk or Market Pantry cheese.

I believe the success of the rollout depends on how well Target enhances the in-store shopping experience. Cross-selling products can help or hurt the experience depending on how well Target tracks customer activity and pinpoints offers at the right time and place.  What really catches my attention is the potential for Target to make shopping easier without selling anything. For instance, customers will be able to dynamically re-sort their shopping lists as they move through a Target. (Target compares the experience to smartphone apps rerouting drivers depending on their routes.) Target also plans it possible for shoppers to use the Target app to ask for customer assistance — which could be a boon especially during the holiday shopping season, if Target staffs its stores adequately.

On the SIM Partners blog, I discuss more fully the implications of Target’s launch of beacons. I invite you to read my post and let me know your reaction.

Walmart: reform Black Friday now

The reports about out-of-control Black Friday shoppers is appalling to read about and watch on YouTube. At a Mesquite, Texas, Walmart, a surging mob nearly crushes a woman to death and destroys a retail display, which evokes the 2008 incident when a Walmart employee was crushed to death by a mob of bargain-hungry Black Friday shoppers in New York. At another Walmart, shoppers tussle over $2 waffle makers, and at a Walmart near Los Angeles, a woman injures 20 people with pepper spray in a violent bid to secure a coveted discounted Xbox game player. It’s only a matter of time before we experience a tragedy akin to the notorious trampling deaths of 11 people at a Who concert in Cincinnati in 1979. And only Walmart can make things right.

As I wrote on my blog yesterday (and back in 2008), Walmart needs to take accountability for the in-store violence. A major first step is respecting the power of the crowd. There’s a reason why crowd psychology is a formal branch of study in the field of social psychology. Crowds create a dynamic – sometimes positive, sometimes negative – that can be as powerful as a surging river rapids. When your local Walmart dangles the promise of 99-cent DVD door busters in front of a surging crowd gathered outside its store, we should not be surprised that a stampede mentality takes hold. And if you’ve been to as many Walmarts as I have on Black Friday, you know how notoriously understaffed its stores are (in an obvious bid to squeeze as much profit out of the day as possible). The formula for disaster is simple: create the conditions for a stampede in an enclosed space and then fail to monitor what happens next. Should we be surprised that these violent outbursts occur?

Jeremiah Owyang shared my post on his Google Plus page and asked, Should companies be liable that potentially chum consumer frenzy? Or should consumers self regulate safety?

Respondents ranged from Eddie Presley, who wrote, “wal-mart may not be super liable, but they are super sue-able. They need to rethink their sale across the board – even to the point of Continue reading

Black Friday breaks loose

Black Friday has turned a corner. The traditional start of the holiday shopping season has become a cultural phenomenon that spans days, and even weeks. While Black Friday naysayers criticize stores for pushing the opening of the day into Thanksgiving evening, American consumers simply shrug their shoulders, shop, and engage in a ritual that seems to transcend any economic condition. And I don’t see any signs of the Black Friday momentum slowing down.

In past years, I have waken up in the middle of the night, stood in frigid lines with Black Friday shoppers, and studied the shopping phenomenon in places ranging from the Chicago suburbs to a small town in the Wisconsin northwoods. This year, I was already suffering from a serious case of Black Friday fatigue by the time the most famous shopping day of the season arrived on November 25. By then, I had already been inundated with Black Friday promotions from retailers such as Amazon, whose “countdown to Black Friday” sale hit my email in-box on November 13. And you couldn’t do any last-minute Thanksgiving errands at Target without encountering a Black Friday war zone, as Target’s pre-Thanksgiving 4-day sale resulted in aisles saturated with merchandise at door-buster prices. USA Today reported that retailers ranging from Sears to RadioShack were using social media to promote Black Friday deals in a run-up to the day.

For Black Friday 2011, I didn’t even need to wake up in the wee hours to visit Kohl’s and Target for 5:00 a.m. openings. So many stores were open at midnight that I simply hopped in my car and continued my Thanksgiving evening once the dinner and movie-watching festivities at my house had subsided.

Continue reading

Cirque du Soleil: too much LOVE

While I was shopping for blue jeans at Target this weekend, I came across a surprising find: official T shirts from the Beatles Cirque du Soleil LOVE show on sale for $12.99, and wedged like excess stock on a rack of music merchandise.

Although making official LOVE merchandise available at Target might provide a short-term dividend for Cirque du Soleil, I believe the approach is a long-term mistake. Cirque du Soleil packages LOVE as a high-end experience. Part of the appeal of seeing the show — and a big reason why people are willing to pay $70-to-$150 for a ticket — is the chance to enjoy the legacy of the Beatles in a way you cannot elsewhere.

The show occurs in a theater-in-the-round custom-made for the act in the Las Vegas Mirage. Just outside the theater, you can find exclusive (and expensive) merchandise at the LOVE boutique (an irresistible destination) and grab a drink at the Revolution lounge.

There is no other way you an experience LOVE unless you are in Las Vegas. And LOVE is an experience well rendered.

Selling LOVE T shirts at Target cheapens the Cirque du Soleil LOVE brand. You don’t think “upscale” when you find LOVE merchandise carelessly tossed on a rack as you stroll the aisles of Target looking for mayonnaise, shampoo, and $20 blue jeans. And the Cirque du Soleil LOVE brand loses its aura of exclusivity, too.

I am reminded of what happened to Krispy Kreme. Once upon a time, going to a Krispy Kreme store was really cool. The only outlet in the western suburbs of Chicago was located miles from our home, and we went out of our way to go there. The service was great. Watching the donuts made was a hoot. And the donuts themselves were delicious. But seemingly overnight, Krispy Kreme saturated the market. A store opened closer to our home. You could find Krispy Kremes stocked in grocery stores. The brand was no longer special. And the brand failed.

Krispy Kreme was by no means an upscale brand like LOVE, but it was just as special in its own way. It will be interesting to see if Cirque du Soleil LOVE remains special.

Brand loyal-tee

Conventional wisdom says brand loyalty is dead, and yet a recent discovery I made at a nearby Target store indicates we are still willing to pledge our allegiance to a logo, at least. Shoppers in the mens department are apparently willing to shell out good money for the privilege to flaunt T shirts advertising their love of products ranging from Coca-Cola to Ford, as these snapshots I took at Target show:

And of course you can find plenty more online:

So what gives? Well, I am not so sure the T shirts are about brand loyalty but rather nostalgia and hipness. The logos represent venerable consumer brands that say “Americana.” The logos (as well as the T shirt designs) have a retro feel to them. Also, I don’t think it’s any accident that the products are stocked next to tees with images of Pac Man and Sesame Street characters adorned on them. Some clever marketing going on here — making corporate logos legitimate by showing you that the SpagettiO’s smiley face can look just as cuddly as Big Bird.

Buy it?

U2 and the revenge of “old media”

Have you noticed U2’s gutsy distribution strategy for the newly released No Line on the Horizon? I don’t mean the predictable release of the album on MySpace prior to its March 3 launch in stores — but rather the heavy reliance on an allegedly dead medium, the compact disc.  At Best Buy, you can find the album available in five formats:

  • Regular CD
  • Limited edition digi pak that includes CD, color booklet, poster, and exclusive downloadable film access.
  • Limited edition magazine that includes a CD, 60-page magazine, and exclusive downloadable film access.
  • Vinyl LP
  • Limited edition box set that contains a digi pak CD, DVD of an exclusive film by Anton Corbijn, a 64-page hardback book, and a fold-out poster

At a time when digital downloads have all but rendered the CD an afterthought, what gives?  Here’s what U2 is doing:

  • Leveraging the power of the brick-and-mortar retailer.   We’ve recently seen the Eagles and AC/DC successfully move CDs through Wal-Mart.  And Prince just struck a deal for Target to be the exclusive retailer for a disc set to be released March 29.  Why?  Not because the CD is obsolete — but rather the old ways of distributing content are dead.  The Best Buys, Starbucks, Wal-Marts, and Targets of the world can act as DJ, distributor, and marketer rolled into one.  During the release of Black Ice, AC/DC provided the soundtrack for the Wal-Mart shopping experience, and well-placed displays opened up the band’s back catalog  to shoppers, too.  All told, Black Ice moved 2 million units in 2008.
  • Fighting the commoditization and degradation of music.  Rock has always been as much about image as it has the music.  Sleek packaging creates an experience that helps build image and differentiate one band from another.  By contrast, digital marginalizes a band’s image and degrades the quality of its product through inferior downloads.  It’s well known that MP3 compression causes a loss of sound quality, and the slightest glitch in your broadband connection is a total buzzkill for streaming songs.  Superior packaging and well-produced sound captured on disc are two weapons in favor of a band like U2, which understands the power of image and the relationship between its image and sonic power.

U2 isn’t the only band embracing the “old.”  In 2008, David Gilmour released at least five versions of his Live in Gdansk, for instance.  Both Radiohead and Beck have released music in playful packages with stickers that consumers can use to deocorate the CD sleeves.

Soon I’m going to learn more about how artists are seizing more control of content distribution when musician and producer David A. Stewart appears at the 9th annual Razorfish Client Summit April 21-23 in Las Vegas.  (I’m putting together the agenda for my employer Razorfish.)

He’s going to discuss how artists like himself are dropping “a neutron bomb” on the current entertainment distribution model.  I can’t wait to hear him speak.  And I hope we see more bands like U2 giving us experiences we can touch and feel.