Weapons of massive consumption

In the US, as I suspect most of my readers will know, Memorial Day is a federal holiday for remembering those men and women who died while serving in the armed forces.

So I’m more than a little perplexed by the “Happy Memorial Day!” posts on my various social media feeds.

And, despite my many years working in the retail industry, I truly don’t understand how this somber occasion turned into a day of big sales at the mall and at the strip centers and mega-stores that dot our landscape.

Maybe the festive barbecue on the back porch is a way of showing gratitude for the freedoms we enjoy? Perhaps getting a handbag or golf shirt at Macy’s for 40% off (when you use your Macy’s card!) is the best evidence of American exceptionalism? Or maybe if we don’t buy, buy, buy the terrorists win?

I haven’t lost a loved one in a war. Through sheer luck–and choice–I didn’t serve in the military. Thankfully, I haven’t found myself routinely put in harm’s way and enduring the fear and suffering of those in war zones . I don’t pretend to come close to fully grasping the horrors and sacrifices so very many have made.

I do know that far too many have died, been maimed and traumatized. Some causes have been noble, many others can only charitably be labeled exercises in futility.

Maybe using this day to go out and buy stuff we most likely don’t need is some sort of patriotic exercise.

Or maybe it’s merely an easy way of taking our mind off the brutal reality of conflict, war and death.

Of course, it could be that our seemingly never-ending desire to consume more and more is part of the fuel that leads to more conflict, more war, more death.

In remembering the fallen, I feel a gratitude that is impossible to express and a sadness that no “thing” can erase.

Meanwhile, in Hong Kong, today they celebrate the birthday of the Buddha. Some times the irony is just too rich.

headstones

It’s beginning to look like I won’t get the ‘Tonight Show’

As you are undoubtedly aware, last night was David Letterman’s final show, capping off an amazing and groundbreaking 30 year run.

My favorite line in his last monologue was this: “I’ll be honest with you: it’s beginning to look like I won’t get the ‘Tonight Show.’”

Of course it’s funny, but for me it’s also deeply profound.

Over the years I’ve had any number of things I convinced myself I wanted, deserved, even felt entitled to.

It’s a long list of dreams, desires, people and stuff to be acquired. My inner dialogue told me that if I had them I’d finally be okay. I would be seen as successful. Admired. Loved. Worthy. Valuable. Perhaps even indispensable.

The big house. The cool car. The fancy office. A pile of money.

Maybe I’d even be CEO of a Fortune 500 company.

I’d be the perfect father, married forever, with oodles of friends who looked to me for advice, a soft shoulder to cry on in times of trouble and the perfectly timed witty comment to provide a needed laugh.

Oh, and I’d have abs. Really nice abs. Like, the cover of Men’s Fitness abs.

I’ll be honest with you, it’s beginning to look like I won’t get the Tonight Show either.

But for me, after much to-ing and fro-ing, after crashing and burning, often in spectacular fashion, I started to see that once I let go of the superficial, a world of possibilities opened up. There was beauty in my failures and grace in becoming vulnerable.

I began to realize that the goal wasn’t to stay busy, no matter how many times I got asked if I was. I got to see and appreciate the gifts of imperfection. I started to see that the old adage of “he who dies with the most toys wins” not only is ridiculous, it doesn’t even make any sense. After all, what would I win exactly? More toys? That totally seems like overkill.

A lot of people told Dave that getting the Tonight Show was THE thing. But he never did. And it turns out his destiny was to do something that in many ways was similar, yet ultimately quite different and truly remarkable.

I’m not sure what my ultimate destiny will be, but I now know for sure that it is going to be a lot different from what I originally envisioned.

And it’s not only okay, it’s pretty darn great.

What if omni-channel is too expensive?

There are some who say that all brands must become “omni-channel” as quickly as possible. They’re wrong.

There are those who say that this whole omni-channel frenzy is a bunch of hype perpetuated in the selfish interests of service providers peddling their own solutions. Well, there is definitely an element of truth contained within that view, but they’re mostly wrong too.

Still others suggest that becoming “omni-channel” merely adds a lot of cost and complexity while not demonstrably moving the dial on sales and profits. For them, when it comes to embracing all things omni-channel, the rent is just too damn high.

The stark reality, supported by reams of data, is that consumers are using more and more channels to go through their decision journey. But, importantly, this is not the same as all customers using every possible channel with equal importance and frequency.

Another powerful set of facts concerns the growing consumer expectations that brands offer a seamless experience across all channels. This doesn’t, however, mean that all integration efforts are equally weighted. Your mileage will vary.

Lastly, there is a constant, unrelenting deployment of new technology that lowers the cost of service, innovates some aspect of the customer experience or both. Much of this disruption comes from start-ups not burdened by legacy systems and the often paralyzing decision-making processes of industry incumbents. The pace of change, just in the areas of digital marketing and mobile applications, that allows for a more cohesive customer experience, is hard to ignore.

One obvious problem is that there is no universally accepted, actionable definition of omni-channel. And the vagueness of what we mean when we lift up the term, often mantra-like, tends to obfuscate more than it illuminates.

If we are to move beyond buzz-word bingo and terminology that merely sounds good in industry conferences and press releases, we are called to lay out a strategy and system of customer-centricity, which is, after all, the whole point of “becoming omni-channel” for most brands in the first place.

To do so, requires three key things:

  1. An actionable customer segmentation–who, exactly, are we doing this for, how will we treat different customers differently and what do get when we win?
  2. A frictionless commerce plan–prioritized against our most important customers and designed to eliminate the most clear and impactful points of pain or to create opportunities for competitive advantage.
  3. An amplification strategy. What are we doing to be truly remarkable and to give our best brand advocates a customer megaphone?

If we think about our omni-channel strategy more precisely, along the lines I’ve suggested, then it’s not a silver bullet, it’s not merely hype, nor is it too expensive.

In fact, not embracing it may be the most expensive choice of all.

Creating meaning at scale

In case you haven’t noticed, there is a whole lot of bifurcation going on. And in many markets, the middle is all but collapsing.

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At one end are the Walmart’s, the Home Depot’s, the Amazon’s–the low price, vast assortment guys. Their pitch is easy to understand. We have just about everything you could possibly want, virtually anytime you want it, at the low, low price. Operationally this is incredibly difficult to scale. But from the customer’s perspective, it couldn’t be more simple to grasp. Dominance and value (defined by price) creates meaning.

At the other end of the spectrum are the brands built around market niches, product differentiation and the somewhat intangible “brand personality.” What defines meaningfulness here is built on deep customer insight, emotional connection and, more and more, the ability to treat different customers differently.

Historically, luxury brands thrived by merchandising exclusive products in spectacular settings delivered face-to-face by well-trained sales associates. To the extent companies could replicate this model as they added stores, they could continue to create meaning and deliver it at scale. Yet, as all things digital become increasingly important, the notion of what constitutes a meaningful one-to-one “luxury” relationship is being challenged.

The best specialty stores have succeeded by curating merchandise for a particular “lifestyle” and presenting it in a distinctive environment that reinforced a unique brand image. These companies created a business model that was simple to replicate and led to the ubiquity of many of these brands in affluent malls and upscale shopping areas of most major cities. Now, with product choice and availability exploding and new micro-niche brands emerging online, the concept of “specialty” is being redefined.

The hyper-growth, venture-backed “pure-play” brands that have launched over the past few years–think Gilt, Bonobos, Warby Parker–found it comparatively easy to scale at first. They exploited many of the advantages of a direct-to-consumer model and employed low-cost acquisition techniques to build an initial base of customers–what I like to call the obsessive core.

But it turns out that creating meaning at the scale that will lead to profitability isn’t so easy (or economically viable). Too many newer customers of these high-flying brands have started to equate meaning with discounts. Others, it turns out rather predictably, need the meaning that comes from a physical presence to derive theirs. Many see this hybrid-model as an exciting new area of growth. Others see it as clear evidence that most e-commerce only brands are finding it very difficult to deliver meaning at scale.

In an anything, anytime, anywhere, anyway world, it’s getting harder and harder to break through the clutter, to win the battle for share of attention, to create the all essential meaning that matters for customers.

If you seem to be stuck in a sea of sameness, selling average products to average people, relentlessly promoting just to stay even, it’s time to get off the bridge. The collapse is near.

If your customer is choosing you mostly on price, you had better be the low-cost provider. Otherwise you will lose the inevitable race to the bottom.

If you believe you have the ability to be meaningful to a well-defined set of customers who choose you over the competition for specific, sustainable reasons, good on you.

Just remember, as Bernadette reminds us, it’s not so easy to create meaning at scale, particularly if you need that scale to stay in business.

Confusing necessary with sufficient

We’re told we have to embrace all things omni-channel, yet Macy’s and Nordstrom, two of the acknowledged leaders in this arena, have yet to move the dial much on market share and profitability.

We’re told we have to digitally enable most dimensions of our business, yet Sears, which has been a pioneer in many aspects of e-commerce and digital innovation for more than a decade, looks to be in the midst of the world’s slowest liquidation sale.

The excellent and provocative work by L2 on companies “digital IQ” frequently ranks brands on the top end of the scale that are laggards on many key performance metrics.

Some will tell you that this proves that embracing a digital first strategy is over-rated or that investing heavily in omni-channel is a mistake.  They are mostly wrong.

The error comes in confusing necessary with sufficient.

There are few brands, especially in retail, that can ignore an aggressive move into frictionless commerce. The customer experience must become more unified.

More and more, mass marketing strategies are dying and it’s becoming extraordinarily difficult to break through the clutter. Letting go of one-size-fits-all strategies in favor of creating more personalized programs is becoming increasingly important.

And we can’t keep interrupting customers with largely irrelevant messages at the wrong time and out of context. Deeper customer insight, coupled with an understanding that smartphones and tablets allow the customer to be untethered and addressable at the moment of need, puts a premium on marketing that is localized.

We are entering an era where a high level of competence in the above three principles is necessary just to stay in the game, to be even marginally relevant, to have a crack at the customer’s consideration.

You can be leading edge on all of these dimensions and it’s still not enough.

What we offer the customer needs to be amplified–that is, it must be truly unique, intensely relevant and remarkable in the purest sense of the word. This is where Sears falls incredibly short and where Macy’s struggles to break out from the sea of sameness that characterizes much of the department store world.

Unfortunately too many companies vaguely embrace all things digital and start gulping down the omni-channel Kool-Aid while ignoring this last critical piece.

At the end of the day, if the dust ever settles, they’ll have spent a ton of time and money on merely keeping pace and not enough on the things that ultimately matter.

PurpleCow

The ecosystem of connection

We probably all realize that we are going through a connection revolution.

For many of us, scarcity of information, choice and access has given way to an abundance of stuff. The connection economy means we live in an era where we are literally one or two clicks away from nearly everything and everyone almost anytime we want. Relationships–with people, brands, causes, ideas–that were impossible just a few years ago are increasingly taken for granted.

As consumers, movements and things become more connected, many organizations that exist in their service aren’t keeping pace. Sure, plenty of brands have strong social media presence. Of course, monitoring online consumer sentiment is helpful. And yes, making it easy to share among peer-to-peer networks is a good idea.

Yet, far too many organizations remain internally disconnected in their data, information systems, marketing campaigns, processes, metrics and on and on. As Kevin points out, many brands still measure the success of customer contacts in isolation, not as part of a diet of interactions. But of course, it goes way beyond merely calculating marketing ROI.

Meaningful connection happens within an ecosystem. Seemingly disparate pieces weave together to become whole. Inter-relationships collide in both predictable and unanticipated ways. Relationships and trust build through cumulative effect.

As the pace of change accelerates, as consumers try to make sense of it all in an ever noisier world, brands that don’t line up their messages and capabilities to sync with the ecosystem of connection are falling further and further behind.

And once disconnected, once the customer sees your brand as a disjointed mess of disparate pieces, any hope for relevance is gone, perhaps never to be regained.

A dim signal amidst the noise

We’ve all been taught that successful brands need a unique value proposition and that we must craft a distinctive positioning. And certainly most organizations spend a lot of time honing their business models and churning out sales programs and marketing campaigns designed to one-up the competition and compel the customer to choose us.

But what if hardly anyone is listening? What if only a fraction of our efforts command any sort of attention? What if despite all our strategizing, designing, testing and refining most of what we put out there evaporates in the ether like so much steam from our morning coffee?

Unfortunately, for most of us, there is no what if? There is only what is.

Consumer choices are expanding, sometimes literally exponentially. Competition is only getting greater. The information available to the average person is overwhelming. The distracted, multi-tasking consumer is the norm. We all face a tsunami of stuff.

And, more and more, much of what we do is only a dim signal amidst the noise.

noise

Many companies confronted with this emerging reality respond by throwing more and more out there to see what sticks. Batch, blast and hope email strategies. Greater promotions and discounts. New or revamped–but still largely undifferentiated–loyalty programs. Vague investments in “building the brand.”

Prepare to be disappointed.

If you want to boost your signal you’ll need to do a better job of customer selection. You’ll have to deploy a unified “one brand, many channels” customer experience. You’ll need to learn how to treat different customers differently.

And everything you do must be amplified by being more relevant and more remarkable than whatever commands your customer’s attention.

In the meantime I hope you enjoy your coffee.