Out of ignorance or fear?

There are all sorts of reasons we stay stuck, fail to take action on the things we tell ourselves really matter, spin on items big and small.

Whether it’s deepening (or ending) a personal relationship, finishing our book, quitting a soul-crushing job or starting that new business we keep talking about, there is an aspect of our evolutionary biology that holds us back.

Vulnerability is scary.

Bringing our ideas, wishes and dreams into the light risks criticism–or even ridicule.

All too often, The Resistance is real.

Half the battle in overcoming our fears is to accept the reality that we crave both growth and safety at the same time. Yet there is simply no talking ourselves out of the fact of our hard-wiring. Our job, then, is to learn how to quiet the lizard brain and press on.

Ignorance is a different matter entirely.

Ignorance is often a major contributor to stoking our fear and anxiety. One needs neither an advanced degree–or any degree at all–nor dedication of substantial time and effort to see how much our society is burdened by irrational fears borne largely out of misinformation, misunderstanding and verifiable mistruths.

The fact is, in the developed world at least, most people have plenty of access to all the information they need to be reasonably well informed. Most folks have the tools to apply a decent level of discernment.

If it matters to you and you don’t know, your ignorance is a willful act.

In fighting our stuckness, in being willing to put our art out into the ether, in exposing who we are to another person, in contributing to a better world, it’s important to understand what holds us back.

Fear is a dragon to slay. Ignorance is a choice.

 

This post was simultaneously published on my more spiritually driven blog I Got Here As Fast As I Could.

Choosing the race to the bottom

It turns out that most retailers that find themselves at–or edging ever closer to–the precipice have much more of a revenue problem than having expenses that are fundamentally too high. And yet so many relentlessly focus on cutting costs, often leading to a further reduction in customer service.

It turns out that when the major lever a company has to drive the top line is deep discounting, they mostly end up attracting the promiscuous shopper while simultaneously lowering the margin on the customers who once were willing to pay a higher price. Over the long-term, that math never works.

And while it may be true that retailers can often do the same amount of business with a smaller footprint, it turns out that many of brands that are closing outlets in droves don’t actually have too many stores. Instead they have a value proposition that isn’t sufficiently customer relevant for the stores they have. Shuttering locations en masse may seem like the wise move to improve profits, yet it is typically the first sign of a downward spiral.

By now it should be obvious that trying to stake out a winning position by being a slightly better version of boring is untenable. The notion of cost cutting your way to prosperity is a fool’s errand.

Once we fully accept that selling average products to average people no longer works and that to make meaningful progress we must zero in on solving the right problem, we realize that for most of us the choice is clear–or should be.

We can choose to treat different customers differently, create intensely relevant and remarkable experiences and tell a story that deserves to be told time and time again.

Or, we can choose to join the race to the bottom.

Just remember, as Seth reminds us, “the problem with the race to the bottom is you might win.”

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Retail’s new fork in the road: Understanding ‘buying’ vs. ‘shopping’

As I pointed out in my last piece, it is all too easy to be misled by high-level statistics and narratives that paint an incomplete picture of the retail landscape. Similarly, many fail to appreciate the underlying dynamics that (increasingly) separate industry winners from the losers and that which will ultimately determine when online shopping starts to mature. Much of this, I believe, can be understood by focusing on the difference between “buying” and “shopping.”

I’m hardly the first to make this distinction. Seth Godin got me thinking about this with his 2015 post. Since then it has become more and more clear to me that delving into the differences is extremely useful in ascertaining what is next for the retail industry.

Understanding ‘Buying’

Buying is mostly transactional. More mission, than journey. More search, than discovery. Most times buying tilts toward being need-driven rather than motivated by want. At heart of buying is efficiency. When we are in buying mode we care primarily about speed, convenience and a broad, yet easy to navigate, assortment. Buying tends to be highly-value driven. When transacting digitally it must be easy to compare prices. When buying in brick & mortar stores, customers come to learn which brands consistently deliver the best value and often start their process with these favorite stores.

With this lens, it should be easy to see that e-commerce is optimized for buying. The categories that do the best online are those where there is a strong, though not necessarily exclusive, buying dynamic. Unsurprisingly, this is where Amazon has the greatest market share and growth. When it comes to being remarkable in the realm of buying, much of it is about eliminating friction in the path to efficiency, be that on price, assortment and/or convenience.

Understanding ‘Shopping’

Shopping is far more experiential. When shopping many customers fundamentally enjoy the process of exploring and discovering, whether online or in a store. Shopping can be highly social. Shopping takes more time, but the value is there in finding just the right item, the right outfit or solving a more complicated problem–like furnishing a room or completing a home improvement project. When shopping, typically the risk of making a mistake is greater, so the ability to get sales help, shop with friends, try something on, touch and feel the product, and so on, is paramount.

While a strong digital presence can greatly facilitate the shopping process, the share of online shopping is dramatically lower than online buying. Categories with strong shopping characteristics (higher-end home furnishings, fashion apparel, non-commodity grocery items like produce and meat, etc.) have very low e-commerce shares.

Apocalypse No

There really is no retail apocalypse, but certain sectors of retail are clearly being radically transformed. Much of this can be best understood by understanding the difference between buying and shopping. By far the greatest disruption is occurring where buying is being reinvented, online and offline. The first wave of massive share shift occurred in the buying of entertainment when music, books and games could be digitally downloaded. This wave was, in fact, apocalyptic to the likes of Babbage’s, Barnes & Noble, Blockbuster and Borders–and that’s just the “Bs.”

More recently, platform businesses like Alibaba and Amazon have made the buying process far more efficient in many categories, leading to major market share gains and the demise (or teetering on the brink) of many brands that could not keep pace. But let’s be clear: Amazon is not “the everything store.” It is, however, quickly becoming the anything-you-want-to-“buy” store. Absent a far greater brick & mortar presence, Amazon will continue to struggle in its quest to dominate shopping.

Innovation and growth in “buying” has occurred outside of the purely digital world. Brands such as Aldi, Lidl, Dollar General, Ross, TJX and others have re-worked and expanded their business model by delivering ever greater “buying” value. If there is a retail apocalypse, someone needs to tell these brands. They will collectively add thousands of new stores this year alone.

The same is true in the “shopping” world. Sephora, Ulta, Apple and many others that continue to offer a remarkable shopping experience are growing both online and offline. Moreover, many high profile pure-play e-commerce players have basically started to run out of customers that would approach their brands in “buying” mode and thus they needed to go seek out “shoppers” with brick & mortar locations In fact, several once stated that they would never open stores. This is because they didn’t understand how the buying vs. shopping dynamic would inevitably play out over time. It now turns out that Warby Parker, Peloton and Bonobos are seeing the majority of their incremental growth come from their physical locations.

Stuck In the Middle With You

It’s increasingly untenable to attempt to stake out a middle ground between buying and shopping. The middle is collapsing. Trying to be sort of good at serving the customer who is firmly in buying mode is like being sort of pregnant. Being boring and unremarkable for customers in shopping mode is equally foolhardy.

The Fork In The Road

Certainly not every brand or every category has a clear cut, all or nothing, buying vs. shopping pattern. But it’s critically important to understand how this plays out for each and every retailer. While the ridiculous amount of debt Toys ‘R’ Us amassed was the proximate cause of their downfall, a strategic and financial crisis was inevitable as they wrong-headedly decided to be more about buying than shopping. Many struggling brands are similarly confused. This will not end well.

The fact is retailers must choose a clear path. If a retailer wishes to grab share (or insulate themselves) from the Amazon buying tsunami than it is pretty clear what that implies. Good luck and Godspeed.

If a retailer wishes to reimagine their business model to become a more remarkable shopping experience than that is an entirely different thing.

Choose wisely. Pick a lane. Step on the gas.

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A version of this story appeared at Forbes, where I am a retail contributor. You can check out more of my posts and follow me here.  

On May 2 I will be keynoting the Retail Innovation Conference in NYC, followed by Kibo’s 2018 Summit in Nashville and Retail at Google 2018 in Dublin.

Compelling, creepy, annoying or just bad? Retail’s personalization opportunity

It’s hard to believe it’s been over 20 years since Martha Rodgers and Don Peppers’ seminal book The One to One FutureAt the time, Dr. Rodgers and Mr. Peppers (not to be confused with Mr. Rodgers and Dr. Pepper!) offered up the radical notion that mass, one-size-fits-all marketing would begin yielding to a brave new one-to-one world. Followed just three years later by Seth Godin’s classic Permission Marketing the more intrepid among us started to make “treat different customers differently” our mantra and advocate for a shift to more targeted and personalized campaigns. Alas, we were a bit ahead of our time.

Despite years of missteps and hype, some two decades later the business case for greater marketing and experiential personalization remains strong. Fortunately, lower cost data storage and more effective technology solutions, along with general advances in know-how and the ability to reach customers through digital channels, now make it possible for most retail brands to realistically differentiate themselves on the basis of deep customer insight, data science and advanced targeting strategies. From where I sit, it won’t be long before advanced personalization skills become table-stakes in the battle for customer share of attention. To remain relevant — to become the signal amidst all the noise — retail marketers will have to get good at one-to-one marketing and in delivering more personalized experiences both in the store and on the web.

Yet, despite the strong business case, advancing capabilities and many years of experimenting, personalization’s potential remains largely untapped. For every success story, it seems as if there are dozens of weak efforts or outright debacles. In fact, a recent study by Accenture estimates that personalization failures cost US firms $756 billion and a total of $2.5 trillion globally. While I have a hard time getting my head around the accuracy and magnitude of those numbers, there is no question poor data management and far from stellar personalization can chase away business as well as leave a lot of money on the table.

As we start to understand how to both avoid problems and seize on opportunities, I find it’s worth asking a few basic questions.

Is it compelling?

The essence of good personalization is two-fold: is it relevant and is it remarkable? Delivering intensely relevant one-to-one (or mass customized) experiences is predicated on deep customer insight and the ability to target the right interaction (or offer) to the right customer at–or as close as possible–to the right moment. Retailers that are getting it right use data science to ascertain customer needs and wants and to better predict the next most effective marketing action. Stitch Fix is a great example of a company that has built predictive analytics and targeted marketing into the fabric (heh, heh) of their enterprise. The other key element is “remarkability.” Even if an offer is relevant, simply serving up the same old tired promotional tricks is unlikely to get a good response and help enhance the brand’s image. According to the Accenture study, 44% of all customers feel that brands fail to deliver relevant personalized experiences. Plenty of untapped opportunities here.

Is it creepy?

In my experience, the vast majority of customers have no idea how easy it is for marketers to purchase potentially useful pieces of data to better inform their targeted marketing strategies. Moreover, many customers fail to grasp how their lack of attention to privacy settings on places like Facebook allows marketers to glean all sorts of insights from the data breadcrumbs left behind by our traffic, likes and so on. Advances in statistical techniques and artificial intelligence allow for powerful inferences to be made by analyzing behaviors, transactions and demographic information. Walking the thin line between delivering surprisingly useful recommendations and something that smacks of Big Brother –or that raises unnecessary privacy concerns–is challenging. In the bloodthirsty quest for incremental revenue, it is all too easy for undisciplined marketers to step over the line. Resist the temptation. Strong brands are based on trust. Tread lightly.

Is it annoying?

I’ve met few marketers that believe less is more. For most, more is more, often to the point of going well beyond diminishing returns. Since email (and certain other digital messages) are often quite cheap at the margin, retail marketers often take the bludgeon approach to their campaign messaging. They dial up frequency until we yell “Uncle.” They chase us all over the internet with retargeting ads. They offer us products we just bought (oh yeah, sure I often buy a second dishwasher or espresso machine the week after I bought my last one). The holiday shopping season is a particularly bad time of the year where frequency goes to 11 and many promotional strategies look like they were created by Jackson Pollock. Just because you can, doesn’t mean you should.

Is it just bad?

In 2011 I started pointing out when bad personalization happens to good people and it’s become a bit of a hobby for me (apparently I have that kind of time). A certain airline (I won’t tell you which one, but their initials are “AA”) regularly sent my teenage daughters offers “specially selected” for them which included deals for mortgage financing. We were nicely generous with their allowances, but not enough for any real estate speculation. Neiman Marcus (where I once, ironically, oversaw our customer insight and personalization efforts) often encouraged me to redeem my InCircle Rewards points. Which would be great if I actually had any. Citibank still pitches me a credit card I already have, while AT&T, um, well where to start?

The first rule of personalization club is to not ask a customer to provide information that you already have (unless it’s to verify identity). The second rule is to demonstrate that you know the customer and understand their relationship with your brand. Any offer that belies that is likely to make a brand look dumb. The third rule is to show the customer that you value them: value their time, their spending, their loyalty, the exchange of information they may have provided you. Don’t waste a customer’s time by misusing their data, failing to protect their privacy, trying to sell them stuff they already own and not making a real effort to treat different customers differently. Don’t mistake simple or cheap for useful or effective.

Personalization is not easy. But the revolution sweeping retail demands that brands get more relevant, more differentiated and more remarkable. And fast. For many, delivering more personalized experiences and marketing may be the difference between success and being roadkill in the age of Amazon and digital disruption.

The changes that many brands need to make are not insignificant. They typically require new technology, new people, new processes, new metrics, material incremental investment and a willingness to aggressively experiment. But to paraphrase Eric Shinseki, “If you don’t like change, you’re going to like irrelevance even less.”

A version of this story appeared at Forbes, where I am a retail contributor. You can check out more of my posts and follow me here.  For information on keynote speaking and workshops please go here.

Heads you win

As we celebrate Thanksgiving in the United States, many of us will engage in some practice, formal or otherwise, to name that for which we are grateful. Our health, our families, a roof over our head, the delicious food we are about to eat, and so on. You know the drill.

This is mostly an exercise in naming “the what” of our gratitude, and recognizes little of “the why” or “the how.”

Clearly plenty of folks have worked hard to achieve levels of wealth, connection and safety that millions cannot even fathom; some of us overcoming childhood trauma, poverty, illness or other very challenging circumstances. That is to be acknowledged and admired.

Yet it also true that the sheer serendipity of our birth can play a significant role, and working hard may have rather little to do with whether on this day we experience abundance or scarcity or somewhere in between. This is what Warren Buffett refers to as the “Ovarian Lottery.”

Heads you win. Tails I lose. Or vice versa.

The fact is that the zip code or particular family situation we just happened to be born into is often a huge determinant of our future. In the United States inequality begins in the womb. So as Barry Switzer famously said, if we were born on third base we shouldn’t go through life thinking we hit a triple.

As I sit down for our Thanksgiving meal, I am extremely grateful. But I am also humbled and filled with compassion. Yes, I worked hard, but I also got lucky. Very, very lucky.