LADIES & GENTLEMEN, BOYS & GIRLS, CHILDREN OF ALL AGES…….

I’ve been to the circus a few times over the past 4-5 years and I hadn’t heard those words to start of the show. The reason, of course, was that I had been to Cirque de Soleil and hadn’t given a thought to going to the “Greatest Show On Earth”. Yes, every year I would see the news reports when the circus came to town or left its home in Sarasota to go on the road once again. But I wasn’t the least bit motivated to go and see a three-ring circus filled with clowns, elephants, and trapeze artists all at the same time.

Until I read an article recently in USA Today. The story revealed how this year’s edition of the Ringling Bros . and Barnum & Bailey Circus had been re-imagined. In order to appeal to today’s young families who are living in three ring lifestyles with video games, computer-generated thrill shows, theme parks with high tech rides, and pocket games that they can play everywhere and everyway they want, the circus had to change. With hip-hop music, one big ring with exotic acts, and even its first female ringmaster, the circus has changed. Apparently it is paying off, according to Nicole Feld, the show’s co-producer and member of the Feld Family that revitalized the circus over 30 years ago when they bought it. As he says, they are constantly changing to appeal to today’s kids and in turn, make their parents hero’s for taking them to the circus just like our parents did over the years.

Amazing that more stores don’t get the same spirit of change to constantly appeal to their customers. Sure, Abercrombie, Coach, Banana Republic and others have re-invented themselves in the past successfully and they know that it’s an ongoing process. As more department stores become Macy’s, I ask what have they done to change for their customers? The malls and the stores anchoring them are much like the 3-ring circus—a lot of stuff going on but not many people paying attention or excited by them. Target has added excitement to the discount world, Costco has made food and warehouse shopping an experience. Publix and Wegmann’s have made grocery shopping an experience instead of a chore. The customers are changing faster than most retailers can change the theme lines of their latest commercials. I’ve been working in the furniture industry the past several weeks and am amazed how this industry has stayed the same in terms of shopping experience for the past several decades. Only IKEA and Rooms to Go seem to have noticed that the customer has changed.

The brand is built upon change…changing to build a better relationship with the customers, and like the circus the acts (the people putting on the show) have to change. Out with lion tamers and in with Chinese acrobats who do things we can’t even imagine. Out with old salesman and in with consultants who really understand the customer and what they really want.

So….on with the show!

GOOD BYE MR. SMILEY FACE, HELLO MEDIOCRITY AND COPYCATS??

If you are going to write something about retail marketing you can’t help but discuss Wal-Mart . So the recent announcement that Mr. Smiley Face-- who starred in Wal-Mart price reduction campaign for so many years-- was being put out to pasture is more than just a simple decision to change ad themes.

One of Wal-Mart’s strengths (and there are many) has long been their market-leading perception as the lowest -priced retailer. You name the category, ask a customer and Wal-Mart always comes out first as the store with the lowest prices. That said, and price always being the first criteria for making a store selection, this was certainly one of the reasons for the chain’s growth to becoming the largest company in the world. I’ve always maintained that a good price perception merely gets you on the competitive playing field in retail, but Wal-Mart parlayed their price perception in becoming king of the hill on that playing field. However, it wasn’t just the low prices that has made Wal-Mart the favorite of more consumers than any other store. Their ongoing campaign with real people—customers and associates talking positively (and believably) while building the trust and respect through their many good works with Children’s Miracle Network, Buddy Walks, etc. - was more than just low prices always. It was genius in building customer trust and loyalty while driving prices lower for all consumers. Of course, this was to the dismay of many small retailers and suppliers who couldn’t compete. But it was and is their strength far and above the low prices that old smiley kept promoting.

So sales aren’t growing at the double digit rates of the past, now everyone falls in love with Target (even though they do 20% of Wal-Mart’s volume), and the company decides that the marketing that put them way out in front must change and bring in the competitor’s thinking (Target), packaged goods marketing strategy(FritoLay) and automotive insights(Chrysler). They fire the agencies that worked so hard to bring the success. Now, let's copy the competitors in getting celebrities who nobody believes shop at the store. And while we're at it, let's ex-communicate old smiley face.

It may work. But if all you do is copy the competition and resort to all the great marketing techniques that have made US automotive retailing lag behind the other countries,is that forward thinking? If you forget the key strengths that makes your check outs far more populated than the darlings of the retail press, is that being a leader? I’m not sure there will be any smiley faces in the boardroom in Bentonville or in the portfolios of investors.

What do you think?


Ken

MARCH MADNESS AND OTHER BIG SALE EVENTS

As we wind down from the Sweet Sixteen, Elite Eight to the Final Four, another great sales promotion season winds down to an exciting finale. I was wondering what retailers did for a sale event before the NCAA and the television networks decided to make the college basketball tournament a national reason for yet another series of sales and promotions called March Madness. I guess they were Easter Sales back then when it was politically correct to tie in with a religious holiday (even though the bunnies and chocolate eggs had no religious symbolism at all.)

But here we are with Buick being the official car of March Madness and retailers in every category are trying to capitalize on a basketball tournament to drive people into their stores. As if any store really has a “shot from downtown” to convince a customer to make a trip to the store for “just another store.”

It’s interesting that none of the big box schools who were favored to win it all this year are no longer in the big show. Not so in the retail world where the best brands continue to do well and don’t need to rely on another fake sale to make their numbers. Case in point: Home Depot and Lowe’s. An article in the St. Petersburg Times, asks “who’s your home team?” The article compared the two giant home improvement retailers. Sure, they do a lot of the same things from the size of their stores and offerings to the competitive NASCAR teams that each sponsor. Some say the only difference is that one is orange and the other is blue (Go Gators!). But the article (and the customers) explain that there are a lot more differences that the color of the aprons. Lowe’s developed a brand strategy long that recognized that women were as important –if not more important—in the buying decisions for home improvement than their male counterparts. With an expanded commitment to appliances, a more comfortable environment, and targeted communications, Lowe’s gradually has eaten into Home Depot’s dominant market share and now does just slightly under the sales-per-store volume ($37.7MM vs. $40MM for Home Depot). Both retailers have been outstanding examples of brand strategy and execution- although Home Depot took its eye off the ball in terms of customer service a few years ago thus giving Lowe’s an opportunity to scoop up some share of market. Now Home Depot has recognized the importance of the female customer and is back on track to the tune of $81.5 Billion in sales annually.

Does that mean it’s really down to the Final Two in this retail tournament? What about Ace Hardware, Sherwin Williams, and others? Well, they certainly can’t compete in size, but they can provide the kind of personal customer service and convenience that the big boxes can’t. There’s a reason why chain drug stores prosper even though the Wal-Mart’s ,Target’s and Costo’s sell everything they have for less. It’s called a brand strategy that provides personal service and convenience. If the smaller hardware and home improvement specialists focus on their niche and don’t get caught up in the March Madness of another sale event, they can prosper. Then again, there’s George Mason U.. Who’d a thunk it??
Ken

PS – GO GATORS