Gone fishin’

After 6 years and more than 500 posts I’m taking a break.

It’s time for me to recharge the batteries, repot the plant, hit the reset button or whatever cliche floats your boat.

For the next several months I’m putting the kibosh on taking on new consulting gigs and generally saying “no” to anything that can be deemed “corporate.”

I’ve begun looking at everything I do–and own–and asking whether it truly gives me joy. It’s leading to a lot of decluttering. I feel lighter already.

I’ve also begun tapping into the power of ‘no’ and the power of ‘now.’ I feel more than a wee bit liberated.

On the other hand, I will be saying ‘yes’ to more travel, to expanding my knowledge of the crazy world we live in, to cultivating maitri and to advancing my work in the social impact space.

It’s fun and energizing. It’s also a little bit scary. Of course that is the nature of anything really worth doing.

So fair warning: if you feel like I’m ignoring you it’s pretty likely to be true. But it’s not personal. Trust me, it will be fine.

Some people that I’ve told of my plans have looked at me like a confused german shepherd. To them I say, well, maybe I’m crazy. But after all, it’s not about you.

Others have said “I’m so jealous, I wish I could do that.” To them I say, well, what’s stopping you?

Anyway, thanks for giving me the gift of your attention. It means a lot.

See you in another life brothers and sisters.

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It’s easy to vote ‘no’

“Fear is a natural reaction to moving closer to the truth.” ~Pema Chodron

It’s rarely the case that organizations utterly lack new ideas or things to try. They just get voted down most of the time.

Many of us when confronted with change are quick to find fault with moving ahead. It might not work. We could look foolish. It just makes me uncomfortable. Maybe I’ll get fired. Best to just say ‘no.’

Most of us are filled with “should’s.” I should finish that novel or start that business. I should speak up more. I should finally make that trip. I should deal with the unfinished business with my family. And on and on. But our fear keeps us stuck and ‘no’ is all too often the seemingly safe choice.

Voting ‘yes’ more often isn’t the path of least resistance and it is far from a guarantee of success. Not everyone will get it, few may have your back and others might shun you entirely.

Stay the course. Be vulnerable. Chase remarkable.

Going out on a limb is where we’re needed, where we’re called to be, where the magic happens.

And your vote counts.

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Coffee is for closers

Coffee may be for closers, but that’s about all the rewarding we should do. The relentless focus on transactions, conversion rates and closing statistics is well past its expiration date.

Sure you could get married on a first date, but I’ll wager that’s not the best idea.

Today the shift must be toward building relationships–and that starts with earning attention and establishing trust, not making a quick deal.

In a new model of retail KPIs we start first with awareness, which is mostly about breaking through the noise and achieving share of attention. We then focus on engagement that is intensely relevant and remarkable in the truest sense of that word. And we accept that one transaction doesn’t count for much, particularly if it’s achieved through uneconomic and unsustainable discounting. What does matter is continued engagement and interaction that, overtime, leads to loyalty (not mere frequency) and brand advocacy.

Brands that adopt this mindset and plan of action will be far better positioned for a digital-first, customer-in-charge world.

For everyone else, well, enjoy the steak knives.

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Shut up and play the hits

Maybe you’ve been to the famous comedian’s show where by far the biggest laughs come from the bits you’ve already seen him do on Fallon. And Kimmel. And YouTube. And his five year old Netflix special.

Maybe you’ve excitedly gone to hear that marketing guru at a big industry conference and grown weary and uninterested when she begins by talking about her just released book, you know, the one you haven’t read. But you instantly light up again when she starts to riff on the ideas from a decade old tome that formed the basis of her TED talk that you’ve watched a half dozen times.

Maybe you’ve attended a concert by an iconic rock band and became impatient with the lead singer’s extended stage patter. And then as soon as they start to play the new stuff–or maybe some deep track from a classic album you’ve always skipped past–you know that’s your signal to head to the rest room or go grab a beer.

For any kind of artist–and we’re all artists now–it’s a whole lot easier to go for the well-tested laugh line, crank up the guaranteed crowd pleaser or simply default to the thing that made you popular (or at least accepted) in the first place. As it turns out, most of us like safety and there is safety in the familiar.

Organizations and brands aren’t a whole lot different. Most non-profits turn again and again to golf tournaments and galas to raise money. In the CPG  world, the core strategy is to churn out seemingly endless iterations of best sellers. And just about every retailer goes back to the well over and over again with minor tweaks to long-standing merchandising and marketing practices.

Yet the evidence is clear. Eventually we grow tired of the greatest hits. What worked well for so long, no longer does. And with more and more art and content and ideas and disruption being produced literally by the second–accessible to nearly everybody at any time, anywhere–what once seemed remarkable is anything but.

Is there an audience who only wants regurgitated versions of what you or your organization has always done, who can’t possibly accept new material, who has no interest in being challenged? Perhaps.

Is that the audience that is going to get you to where you need to be?

 

Pema Nest

 

Pure play e-commerce’s fantastic (and unsustainable) consumer wealth transfer

“Retail disruption” has been a popular buzz phrase for several years now. In fact, most of the retail brands that have received out-sized mentions in the business press–and commanded the adoring attention of industry conference attendees–for the past 5 years or so are somehow or other leveraging digital innovation to fundamentally re-work the consumer experience, gobble up market share and attract truckloads of venture capital.

Amidst this transformative reshaping of the retail landscape three things are clear:

  • Consumers have benefitted substantially from the introduction of new business models through more convenience, greater product access and lower prices.
  • This profound shift in the consumer value equation has put enormous pressure on industry incumbents that lack either the cost structure or agility to respond effectively.
  • A dramatic rationalization is gaining momentum as traditional players are being forced out of business or pressured to close and or shrink the foot-print of their stores, make huge investments in “omni-channel” capabilities and lower costs across the board.

Unfortunately what is lost in tales of this evolution is that most of the “disruptive” pure-play e-commerce brands have completely unsustainable business models and mostly what is happening is that venture capitalists (and other investors) are funding a transfer of wealth to the consuming public. So, on behalf of my fellow consumers, thanks venture capitalists.

Alas, this is unlikely to last much longer.

While many people think digital retail is some sort of license to print money, it’s becoming clear that e-commerce is virtually profit proof in categories with low transaction values, owing primarily to the substantial supply chains costs (particularly when brands offer free shipping and returns). Moreover, while it can be relatively easy and cheap to build an initial following online through public relations,  social media and other forms of peer-to-peer marketing, scaling an e-commerce only brand turns out to be extremely costly. Many of the buzziest pure-plays are now investing heavily in expensive branding efforts (as well as opening their own stores) in the hopes that size engenders profitability. Accordingly, initial expectations of break-evens are now being pushed out several years.

As the ROI of these efforts starts to come into sharper relief, my bet is many funding sources will lose their patience.

I’ve been an on-the-record skeptic for several years now, going back to when I called into question the sustainability of the flash-sales market well before the meltdown. More recently, I’ve been pointing out E-commerce’s pesky little profitability problem. So I’m not suprised that recent valuations of several once high flying players have collapsed. And more folks are starting to take notice. Professional smart guy (and noted wise ass) Scott Galloway agrees and has been on the “pure play doesn’t work” train for some time. Expect more to join us.

To be clear, a few digital-first brands will likely emerge as sustainable value creators. Brands with high enough average order values to overcome high delivery costs are better positioned (though Net-a-porter’s inability to make money after all these years underscores how difficult this is). Those that deftly merge online and offline experiences–think Warby Parker and Bonobos–also improve the odds (though, side-note, don’t be misled by the high productivity of their initial locations and comparisons to other brands’ productivity stats. We need to understand the four-wall profitability of these new stores and make comparisons to traditional retailers averages in like locations, not overall chain averages).

Mostly, however, we need to be careful to declare a brand successful without defining what we mean by success. If we define success as having grown revenues quickly and having been able to raise gobs of capital from investors to enable subsidizing consumers on a massive scale, than clearly Amazon and dozens of others are wildly successful. If we define success as creating enormous pricing pressure and raising the cost of doing business so as to push traditional players into a double-bind than, yes, mission accomplished.

But if we determine success as having demonstrated the ability to deliver a new and better customer experience AND earn a risk appropriate return on capital than I’m not sure any pure-play E-commerce player of any size is yet successful.

I will go on the record as saying far more pure plays will go bust in the next three years (or get sold at valuations well below their most recent funding) than will emerge as truly successful.

Until then, enjoy the low prices and the free shipping, and if you get some time, send the nice folks funding Jet.com and others a sincere and heartfelt “thank you” note.

 

 

 

 

 

The two sides of ‘good enough’

It can be quite dangerous to believe that you are better than the competition when the customer evaluates your product offering in isolation and out of context. When I was at Sears our research regularly told us that our target consumers viewed us as the best provider of appliances and tools. Yet we continued to leak market share.

As it turns out, once customers checked out the appliance or tool offering at Home Depot and Lowes they learned that, while the product assortment wasn’t quite as good as ours, the prices were often better. And if they were doing a DIY home improvement project they could get everything they needed in one trip. Plus, having to jump back in the car and deal with the hassle of shopping in the mall added to the “cost” of buying from us. For many customers, at the moment of truth, Home Depot and Lowes were good enough.

The opposite side of good enough involves brands that managed to thrive for many years despite their mediocrity, despite their peddling rather average products for average people.

When consumers had few alternatives, little access to information about their options and weren’t all that demanding, they had little choice but to settle. Those days are rapidly disappearing. Today, in most instances, folks are faced with a virtually infinite amount of choice, information and access. This reality lays bear the deficiencies of any brand for all to see.

Good enough no longer is.

 

The exits are clearly marked

Maybe we’re in a relationship, romantic or otherwise, that has become highly dysfunctional but we’re too afraid to leave for fear of being alone or hurting the other person’s feelings.

Maybe we’re in a job where personal growth has long since ceased or our contributions are not well appreciated, yet the thought of making a major career shift virtually paralyzes us.

Maybe we’re a long-time member of a group that has drifted from its original purpose or lost its ability to make things happen, but we feel an obligation to try to fix it even when we know it’s neither possible, nor the best use of our scarce time and energy.

Maybe we get behind a leader “for the good of the cause” but come to see that the behaviors that rub us the wrong way–or we feel compelled to disavow completely–are revealed to be his deeply held beliefs and character defects.

Our heart usually tell us it’s time to get out way before our brain does its more careful and deliberate work.

When we let go of the past, the need to be right, the worry about what others might think and the pathological urge to fix everything, our burden is lightened and our path becomes far more clear.

The exits are clearly marked. The challenge is to muster up the courage to walk out the door.