The Future of Retail (no answers here, just thoughts)

Would you buy this online?

I have read multiple articles lately about the impact on offline businesses of online retail. I know this topic has been kicking around for a while, however these articles got me thinking about the future of retail.

When I was young, my family shopped at a range of local butchers for our meat. Slowly, we started buying many of the basic items at a large supermarket. The quality was not quite as good, but when cash is tight, how do you ignore a 20%-40% saving.

Pretty much everyone else did the same thing and most of the butcher shops closed down.

Some of them survived and thrived however, on the back of specialization – providing goods or services that the supermarkets couldn’t (or didn’t want to) compete on – specialty items, game, restaurant supply, super high-end steaks etc.

So the world turns, business models change – you get on board or you get left behind.

But what do you do when your business competes with huge online retailers who can sell everything you sell, for less?

Increasingly, customers are using offline sales options for research, and then buying online. I know this isn’t new – electronics shoppers have done this for ages – but as more and more products move online, and western economies remain gloomy, the habit is spreading to other retail products.

This article, in the NY Times, is about booksellers pulling their books out of Amazon. The company in question sells children’s books, mostly through a network of sales agents who sell to friends and contacts. The sales agents talk about introducing people to the books, almost closing the sale, and then losing it because the buyer jumped on amazon and saved a few bucks.

What’s the solution to that problem? The sales agents are already doing everything that consultants recommend – building relationships and offering service that the online retailers can’t match. The publisher’s solution is to not offer their books to amazon, and not deal with wholesalers who try to sell the books online. The publisher accepts lower sales numbers, in order to not have to compete with amazon. Will it work in the long run? Maybe.

In Australia, clothing stores floated a proposal to charge a ‘try on’ fee for people using their change rooms. This fee would be deducted from purchases, to discourage people from trying on clothes to nail their correct size, and then leaving to order the product online.

Predictably, industry consultants told the retailers to focus on ‘building relationships’ instead.

Building relationships is the right advice. The theory of Obligation tells us that if a salesperson goes out of their way to provide great service, the customer feel obligated to make the purchase (or will at least feel bad about ordering the product online). Similarly if you can establish a personality for your brand that can connect with consumers, they can begin to see as a ‘friend’.

But is it enough, when an online retailer has EXACTLY the same item for less?

Will clothing and bookstores go the way of butchers and corner-store supermarkets – selling specialty or convenience items for people who don’t mind paying more? It is a tough call for a retailer – in the face of shrinking sales – to ponder the option of hiring better, more expensive staff, or investing in the training required.

And what if your product simply isn’t suited to that new world? Do you focus on cutting costs and staff to maintain your margins, or focus on discounts, until the shopper’s additional time and effort to go online is no longer worth it?

Is some of this simply a symptom of the global economic crisis?

Shrinking budgets are forcing people to ignore obligation theory (they accept feeling bad because saving money makes them feel better).

Maybe it’s just me, but I go into a bookstore, or a clothing shop, because I need to buy something urgently. Instant gratification is a powerful force. I can have the book I want now and be reading it tonight, or I can go home and order it online and wait a couple of days for delivery, spending those days wondering when my book will turn up, just to save a few dollars.

When money is tight, people will make that sacrifice, and plan ahead for purchases. But when the economy picks up again, will shoppers return to offline purchases and instant gratification?

Maybe  retailers just need to learn how to play a new game.

Seth Godin seems to be driving sales with a strategy of offering an ebook for free for a certain amount of time. This creates a flood of great reviews (everyone loves free) and puts the books into the bestseller lists. Once the normal pricing clicks back on, the books already have enough momentum to generate sales. It’s a great model, but doesn’t work if everyone does it.

As an interesting side note: living in India, Amazon can take a long time to deliver and shipping charges can be ridiculous. The local alternative for books, Flip Kart, is fast and efficient (even offering cash-on-delivery) but lacks the research tools that Amazon offers. The result – I have often used Amazon for browsing, viewing ratings and pictures and reading reviews, but then purchased the item from Flip Kart.

Now that I read on a Kindle, however…

My Three Words for 2012

Over the last few years I’ve watched as bloggers (notably Chris Brogan) have pushed the new-year technique of selecting three words that will drive you for the year to come, rather than making resolutions.

Resolutions tend to be limiting and a bit rushed in the making, which is why they have such a reputation for fast failure. Conversely, Three Words are about the direction in which you want to grow and success can be measured in many ways.

The concept of three words also resonates closely with a concept that we teach our film students, which is Theme. Great films have a unifying theme that ties together every camera shot, character, location, dialogue and plot direction.

A way to describe it more succinctly is “theme is what the movie is really about”.

  • What is Godfather really about? “Power Corrupts”.
  • What is Chinatown really about? “Power wins over justice because it is more ruthless and aggressive”.
  • What is Jurassic Park really about? “Man cannot control nature”.

I see the concept of Three Words as a theme for the year. Each day and month, and in each action or project that I undertake, I can ask myself, “is what I am planning to do ‘on theme’?” Rather than fixed new year resolutions that can only be either done or not done, these words are designed to move my life in a particular direction in 2012.

So what are my three words for 2012?

Focus. Create. Measure.

 

Focus.

I’m going to stop trying to do a thousand things at the same time. I’m going to block my calendar throughout the day into chunks and focus on one thing at a time.

I’m going to try to stop jumping ahead into the newer, more exciting projects until I have wrapped up what I am already working on.

I’m going to keep asking myself, “Is this idea/project/activity important, or just fun/easy”.

Create.

2012 will be a year to make things. It is easy to come up with thousands of ideas for how to make my life/work bigger, better, greater. The challenge is making these ideas real. 2012 will be about taking ideas off the drawing board and ‘shipping’ real products.

Measure.

In the standard business learning-loop (plan, do, measure, improve) measurement has always been my weakest area. By measurement, I mean building careful records over time that can be used and shared by other people.

2012 will be a year of making my intrinsic knowledge extrinsic so that I can teach other people what I know. I will stop doing the measure-improve cycle in my head. My ultimate goal for this ‘word’ for the year will be to build a formal marketing model for our school, so our testing and measurement can become focused on refining the model, rather than trying to understand ‘marketing’ in general.

If you want more information on the whole Three Words thing, check out http://www.chrisbrogan.com/3words2012/

Best of luck for your own 2012!

Music Themed Hotel–Escaping Blah!

I travel a lot for work, and stay in plenty of very blah hotels, so any cool hotel concept catches my eye.

Obviously concept isn’t everything. The hotel has to be good at the basics. A great mattress and bedding. A soft fluffy towel. A good desk with enough power points. Good food. Quick service etc. But after that, you can layer on a concept to make the hotel unique.

India is years behind developed countries when it comes to hotels. Until a few years ago, the only choice was between great (lovely 5 star hotels) and crappy (old, run-down, usually overpriced).

A new generation of hotels is popping up. The 3 trends are:

  • Cheap ‘business’ hotels. The leading chain in this is the Ginger group. Rs.1000-3000 per night for a basic, but new/clean room with a proper mattress, 24hr hot water, self service pretty much everything, small gym, Wi-Fi etc. It’s a great vision for how to run a hotel – strip out all the non-essentials, make whatever is left work really well. These hotels are aimed at domestic business travellers.
  • Cheaper luxury brand hotels. This are things like Marriott ‘Courtyard’ hotels. They just leave off some of the higher end luxury features, and drop the room rates by about 20-40%
  • Boutique hotels. These are small, luxury, stand-alone hotels, usually opened by someone who has always wanted to run a hotel (or has a great building and doesn’t know what else to do with it :-) these might have 4-12 rooms and offer personalised service. Often the owner lives on-site.
    This first category is the one with the most potential. Ginger is building some pretty big hotels, but some of them are getting 100% occupancy, booked over a week in advance. To be clear, 100% occupancy is not the best thing for a hotel. It means the rooms have no natural down-time for maintenance, so the management has to refuse revenue in order to work on the rooms. That’s turning down short-term profit for long-term value, a trait for which Indian businesses are not famous.

It also means that demand outweighs supply. More people can build similar hotels, and there are enough guests for everyone.

The one thing that I don’t like about these hotels, is that they are bland. There is nothing distinctive or memorable. In these cases that is what they are aiming for, but once the basics are in place, there is plenty of scope for concept to be layered on top.

A great example of a concept hotel is the new Nhow Hotel, in Berlin, Germany.

The theme is music, here’s how they have created it:

  • All rooms with IPod connections and vast entertainment options
  • Guitar hire through room service
  • Top DJs playing in the bar
  • Live music in the hotel’s open spaces
  • 2 professional music studios,
  • Hotel staff include a full-time music manager, and many ex-students of local music colleges
  • Filling out the ‘Lifestyle” offerings are clothing sales from local designers, a headphone and streetwear store, and an art space.
  • The architecture and interior design are both striking and were created by star designers.

This is the sort of place that you could stay in, and would still be telling people about a decade later!

Other than the recording studios, guitar hire, and musical staff, most of this stuff is not uncommon at good hotels around the world. What these guys have done differently is grouped everything together into a THEME. Creating a narrative that weaves around their offerings helps to market the property and help to guide future business decisions regarding services and expansions.

720 Degree Evaluations–Are You Serious??

Someone emailed me today with some questions about 720 degree performance evaluations for their staff. An HR consultancy had pitched this to their company and they wanted to explore how this would operate.

To be honest, I had never heard of such a thing. This is how it is supposed to work:

 

  • 360 degree – assessment from someone’s boss, peers, and direct reports (i.e. everyone around them)
  • 540 degrees – feedback also sought from external customers and vendors
  • 720 degrees – you perform 360 degree assessment, wait a while and then do it again.

I openly admit that i think most annual evaluations are a huge waste of time and provide little benefit to the company. Staff hate them, managers hate overseeing them, and HR gets no other work done that month. I have no idea why companies persist with them.

In place, I prefer on-going assessment and feedback.

The simplest and most logical way to manage anyone is in 3 steps:

  1. decide what is important for that person’s success in that role
  2. regularly measure these aspects
  3. provide the person with feedback and coaching to help them develop and improve

My rationale is that if something is so important that it is worth measuring, worth acting upon, and worth deciding the pay of an employee, then why measure it once a year?

Figure out how to do this daily, weekly or monthly. Then provide feedback loops within the company so that people can act on the information. Not only will the company become more responsive, but you will save lots of money on silly appraisal consultants. 

If you need feedback from customers on their interaction with an employee, ask them regularly. Then set targets for the employee to improve their rankings each month. But ask the customer for their opinion because you care about the customer and want to serve them better, not because you have to figure out how much bonus to pay your staff.

If it is not important enough to ask about regularly, then don’t ask at all.

That’s my take, but I’d love to hear from anyone who thinks that annual appraisals are important?

Giving Awesome Customer Service – StudioPress Style

I’m in the middle of moving house, which means a thousand address changes with banks, insurance, home services etc. Dealing with the customer service divisions of these companies is driving me a bit nuts, mostly because: They have no idea what customer service means.

All the call centre training they give their staff is pointless if they can’t solve my problems quickly and efficiently. I don’t want to hear a long introduction about how happy they are that i called. I don’t want them to use my name in every line and assure me that they will resolve my issue every time i say a word. I don’t want to be thanked for my call and asked if there is anything else they can help with, if I find out a few hours later that my initial problem hasn’t been solved.

Today I stumbled into some awesome customer service.

I send an email to a company called StudioPress, with a list of questions about their products.I quickly received an answer. The first line was:

“See responses below…”

Then, after each of my questions, they had inserted a simple and concise answer. Sometimes it was just a couple of words.

StudioPress had quickly and efficiently answered all my questions, but what really struck me was that they treated me as a person, rather than a ‘lead’. The way they answered my email is exactly the same way i would answer a list of questions from a friend or colleague. No fancy greeting or company pitch or invitation to follow-up slotted in there. Just my answers.

It was so refreshing I wrote a blog post about it!

Customer service should be about reducing the customer’s pain.

The pain of searching for a product, the pain of worrying if they are making the right decision, the pain of dealing with problems.

Smiles and pleasantries are pointless if they don’t treat pain at the source.

Think about how this could work for your business?

6 Simple Tips For Winning at Job Interviews

This is a bit of an HR rant. I am currently recruiting lots of staff, and the process is driving me a little insane. It is one of those things that is just so much harder in India that in other countries.

Whenever I had to hire people overseas, I generally got a range of good candidates, and had to pick the one that i thought best matched the culture of the company, or work team.

My current experience is about finding someone who can do the job. So many candidates fill up their CVs with junk that pre-screening is much harder. At the interview stage, many are poorly presented. One candidate walked in, shook my hand, and then turned around and slipped his pre-tied tie over his head, tightened it, and then turned back to me, as if he had been invisible the whole time Smile. Seriously, why would I send you out to meet my clients?

For anyone who is looking for a job, here are some tips to help you stand out.

1. Almost 75% of the CVs I receive are those ‘competency’ based ones, where the CV begins with a list of skills and illustrations of those skills. This CV type is really only useful if you have gaping holes in your career, or are changing industry, BUT even then, you have to illustrate each skill with real examples from your experience, not just blah blah blah (lots of descriptive important sounding words that you have never really done. I would steer clear of these CVs if you can, as most recruiters will just skim past to the employment section. Just jump into your work experience. Also, keep your CV as short as possible – no one is going to read 7 pages from someone with 3 years of work experience. They skim it, and your important points are missed.

2. The ‘Objective’ statement. I would only include this if you are looking for something specific and want to inform the employer upfront. Don’t just write something about results oriented teams blah blah your contributions blah blah grow with company blah blah. No one cares or reads this. If you feel that you have to use this space on the page, put a one-paragraph pitch about yourself, that actually describes you (not who you wish you were).

3. Turn up for your interview. If you really can’t make it, call and tell me. Yes, I’m serious. It sounds so simple, but i am amazed at how many people just don’t come to pre-confirmed interviews. I’ll sometimes follow up with candidates who’s CV’s look really promising, just in case there was a communication error by the recruiter, but usually i get some really bland excuse such as “I’m sorry, I couldn’t come due to some reasons”, (Yep, that’s a real quote.) followed by pleading for another chance to come. Even if you do come, and deliver a great interview, I’m still going to wonder about your professionalism.

4. Understand the job properly before you rant about your skills. If you are unsure, then ask me questions. A candidate yesterday went on for 30 mins about his amazing team leadership abilities (including his strategies for ‘micro-managing’ his staff), until i told him it was an independent position with no one reporting to him. I want you to ask me questions. I want to see that you want to understand the role in detail, and that you are interested because it is the right job for you.

5. Use the interview to show off your skills. If I am interviewing you for a sales position, then sell yourself. Try to close me. I want to see you controlling the conversation. If i challenge something on your CV, spin it into positive, and bounce on to the next point you want to discuss.

6. Follow up. Some people seem to believe that you shouldn’t show that you are actually interested in a job, because it make you look desperate and the company will offer you less money. In reality, a recruiter would much rather take a candidate who really wants to work with their company, that one who doesn’t seem interested. The only caveat here is to follow up politely. Call twice a week for a week or two, then once a week. Email with about the same frequency. Understand that the interviewing process might go on for a month or two before we finalise on a candidate, so your goal should be to keep your name in our top-of-mind awareness.

That is for now. This is half about about making my job as a recruiter easier, and half about helping you to present yourself better. Either way, it will help you find a job Smile

Commonwealth Games Tickets – What Went Wrong.

There are lots of sad things about the Delhi Commonwealth Games. The massive waste of taxpayer money, the corruption, the embarrassment to India etc etc that we have already heard lots about. For me, however, one of the saddest things was that there was almost no effort to involve Indians (the people paying for it all) as spectators.

I was in Sydney for the Olympic games and have incredible memories of the atmosphere in the city. There were cultural festivals, entertainment zones, big screens set up in public places. Everyone knew what was happening and everyone wanted tickets. I think there was actually a lottery system to get tickets, because so many people wanted to see events.

The week before the CWG I was interviewed over the phone by ABC radio. The host asked me if I was planning on attending any events, and I realized that I didn’t even know how to get tickets, or what the timetable was for events. I wasn’t even sure what the dates were. I read 3-4 newspapers and multiple websites every day. If I don’t know these things, I don’t know how anyone else will.

Ultimately, the tickets were quite affordable, starting from Rs.100 (about $2.25, or less than the cost of a movie ticket) and horribly undersold. The worst case I have read about so far is a hockey match with 100 out of 17,000 seats filled

Here are a few of the mistakes that were made:

  • Ticket details were announced at the last minute. It was possible to purchases tickets thought the CWG website (if you had internet and a credit card)but this was never advertised. Additional purchase points were opened far too late, and the staff at these places (banks, post offices etc) were not trained or prepared for the ticket sales. Confusion and frustration ensued.
  • No publicity on timetables or ticketing details.
  • No encouragement for Indians to attend the games.
  • No real effort to distribute tickets for free when it was clear they weren’t going to be sold.

Here’s what I would have done:

  • Ticket policies and availability should have been announced at least 3 months in advance
  • Media partners in TV, radio, and print could have been roped in to educate people about the sports, the timetables, and ticket availability.
  • There should have been a wide network of purchase points, with dedicated staff trained in advance
  • Travel packages that included travel, accommodation, and games tickets should have been designed and offered through travel agents across the country. Paying them commission on sales would encourage them to actively sell games tickets
  • An effort should have been made to ‘celebritize’ the athletes that were representing India. Local politicians and community groups in the home towns of each athlete could have been asked to encourage their area to support that athlete.
  • Use of social media, especially Orkut and Facebook.
  • Sports festivals should have been arranged around the country to expose Indians (perhaps school children) to different sports and allow them to try out the ones that aren’t popular in India
  • Sports clubs/schools/community groups/housing societies would be offered discounted group rates to encourage their members to attend.
  • Companies could avail of employee reward packages that could include tickets and food coupons
  • A percentage of the tickets should have been distributed free of cost to NGOs, government schools etc to ensure everyone is included in this.
  • Free outdoor screening points where people who couldn’t travel to Delhi could gather to watch the games, with promotions regarding the Indian athletes, so the crowd knew who to cheer for :-)
  • What else?

Make it Easy! (Webforms Are Annoying)

Today I was reading the results of a new report by Allot Communications that tracks how people are using their phones for data communication. They survey multiple countries and then report global averages. For example, “Video streaming now makes up 35 per cent of data carried over the mobile networks, with YouTube supplying 40 per cent of that” etc etc

The problem with this is that the averages don’t really tell you much. Usage in India will be very different to Korea, and different again to European countries. So I thought, they probably won’t respond, but why not ask them for the country-wise data so that I can see how India stacks up to the other parts of the world.

I clicked on the contact us link.

You have to fill out a 10 field web form, before you can type your question, and before you fill out a Capcha box!!!!

No email address, no phone number, nothing else. I straight away gave up.

Would it have been so difficult to just put an email address?

I’ve seen a couple of cases where bloggers have released E Books and sometimes made them a free download from a link, and sometimes made them a free download, after filling out a form. In every instance, the download numbers without a form were massively higher. Having to fill out details just turns people off. Of those that do fill out a form, lots put junk information which someone has to weed out later.

Unless there is a particular reason why asking for a piece of information is worth the lost downloads from people who can’t be bothered answering the question, its best to do without it.

Make things simple!!

How to Become Awesome at Almost Anything

In the last couple of years new research and books have been released on the topic of learning, talent, and success. As it turns out, much of what we assume about learning and talent doesn’t hold up. Two common fallacies are that some people are just naturally talented at certain things, and that “you can’t teach an old dog new tricks”.

According to the studies, pretty much anyone can become awesome at pretty much anything, it just depends on whether you are willing to make the commitment necessary.

This interesting thing for me is that reading these books came at the same time as i started learning a new skill – playing the Indian Bansuri flute – so it was a great opportunity to understand how my own learning happened in reference to these new ideas.

The key concept to understand is called Deliberate Practice. Most of us have many skills that we can perform reasonable well – swimming, cooking, giving presentations, a sport, business negotiations, Sudoku etc etc. When we were learning these skills, we practiced, and we made mistakes and we learnt. The reason that most people never take their skills from a ‘fun’ level to an ‘expert’ level is that they stop practicing, and stick within their comfort zone. They swim laps the way they know how, they play piano for pleasure by performing entire pieces, they give the sale sales pitch that has worked in the past.

Taking that skill to the next level requires Deliberate Practice. This means identifying a weak area, and practicing that area intensely. It could be correcting a swimming stroke, accuracy in hitting a backhand, delivering a sales line convincingly, correct timing of a musical piece. Anything. You figure out what is lacking and practice that skill again and again, without interruption, for up to 90 mins at a time, until it improves. And they you pick the next weak area and do the same again. Why don’t people generally do this? Because it is not fun and it requires draining concentration, and typically people want to use these skills for pleasure.

I’ve been able to utilise this in my own learning. When i just play for fun, i don’t get better. When I pick something difficult, and play the same thing again and again (like a tricky scale) it shows up as improvement in other parts of my playing as well.

To become truly awesome at something, requires about 10,000 hours of this type of practice, but we don’t necessarily have to go that far :-)

To push yourself through this process, you need to be seriously motivated towards success. There is no way you will be able to apply Deliberate Practice in an area in which you are not really that interested. There are a million tips and tricks on how to motivate yourself, but for those times that you are really struggling…..

You need a great support network. Part of the reason that kids learn so much is that parents force them to learn, making them go to classes, no TV until homework is finished etc etc. The same thing holds true even as an adult, the more people you have around you who will push you in the right direction, and stop you missing practice, the faster you will learn.

Finally, you need coaching and advice. There are many problems in your performance that you will never notice or understand until an expert tells you how to make yourself better. The better your coach/advisor/mentor, the better you can become.

And that is pretty much it. There is a lot of science behind all this – including changes to your body that result from Deliberate Practice that increase the speed of signals travelling along your nerve fibres.

In some ways it’s great to know that you can succeed at whatever you choose, but it also removes the excuse that “I’m not talented at that”.

A couple of references:

The Talent Code, by Daniel Coyle

Talent is Overrated, by Geoff Colvin

Exciting Uses for Unused Mall Space

Lots of malls, both in India and around the world are facing the situation that they have unused space that no retailer is currently interested in leasing.

With a bit of imagination, these spaces can be put to all sorts of uses. The trick is to see your space as a media proposition. Create an exciting use for it and the benefits can be – a richer customer experience, a revenue stream, footfall growth, word of mouth buzz in your target audience, and publicity.

- Orchid City Centre in Mumbai turned a quiet section of the mall into a mini aquarium. A local fish breeder moved his tanks into the mall space, put up information cards on each type of fish. Visitors pay Rs.40 each as entry charge. The result is lots of school groups and families with children visiting the mall.

- One of the malls that my company works with, Mani Square in Kolkata, had an underused section of car park that was situated close to the mall entrance. We developed the idea of using this space as a furniture exhibition as there was no furniture retailer in the mall. The result was not only an extra retailer for the mall and a new revenue stream for the developers, but the retailer also invested into advertising to drive footfalls to his exhibition, which increased the mall footfalls.

- Many malls around the world have experimented with ‘Pop-Up Stores’. These are temporary stores that can wither be used by a big retailer who wants to promote and sell a single product (such as a new t-shirt line, or a new car) or for a new retailer who wants to test out their product in a mall environment. Spaces can also be used by artists to exhibit their work.

This is a US example, but it is the one that got me excited about writing this post.

Sorrento Hotel in Seattle is exploring exciting ways to use their facilities while also generating PR and word of mouth:

- Midnight symposium series: A reading and discussion club featuring leading writers, performers, thinkers and academics. Those interested book in advance for around Rs.2000 and are emailed a pdf of the reading. On the night, the group meets in the hotels largest suite to discuss the reading. Dinner and drinks are provided, alone with a copy of the author’s latest book.

- A series of cooking and cocktail making classes

- Chamber vs Chamber 1: music performance and discussions wherein a classical musician is paired with a rock musician. Entrance is around Rs.500

- A mini book store that sells only books related to that region of the country.

The Sorrento Hotel says that since they began these events a year ago, both F&B sales and room bookings are up by 25%. This can be attributed both to more people choosing to stay in the hotel because they know there will be activities, but also local residents experiencing the hotel and then recommending it to friends.

Much of the same strategy can be applied to a mall. At one mall with which I previously worked, we had a goal that there should be an interesting activity, either free or low cost, in the mall everyday. Visitors should choose our mall over a competitor’s, because there will always be something additional for them to do once the shopping has finished.

Select City Walk mall in Delhi has managed this really well. They often have concerts or interesting seasonal events, and their weekly flea market shows how a flea market can be so much more than just a line of tables selling cheap junk.

I’d love to hear about other examples of this?