Business Insights

Every time one of the dinosaurs of retail reports some bad news every news outlet runs to say retail is dead.

And someone forgot to send that news over to Zara. I want to say I read on their website that they are opening a store a week somewhere. Every week!

Maybe the day of the department store is dead, but overall retail seems to be thriving (at least where I have been recently.) It may be part of an economic indicator but Somerset Mall in Troy, Michigan was packed to the gills late on a Sunday evening.

I was in Chicago this weekend and Michigan Avenue made it seem like retail was doing just fine. The Water Tower was so crowded it was annoying to navigate. From the Lego store to Tourneau, every store was jammed.

Exit the Water Tower and walk a bit. H&M was packed, Burberry was busy, even the boring ass Tumi store had people in at.

JCPenney’s, K-Mart, Macy’s and Sears, all are dated and will be forced out by other department stores with a better selection, stronger brand image, and better customer service.

HHGregg, Abercrombie, The Limited, and even Crocs will be pushed out by the newcomers or will fade away in the wind as they didn’t adapt, or their fad has run its course.

Even if traditional retail dies, show-rooming will be the new model.

A good example is Pottery Barn and Restoration Hardware. You want to go see it in person before you buy, but you cannot take it home with you today.

Now what if Lulu offered to stock every size for you to try on, but they won’t stock it at the retail locations, they can deliver it to you tomorrow. This cuts down on store inventory and overhead, but you get to see it in person still and make sure it fits.

A Twist

How about Lulu stocks a handful of each piece, and if you want it right now, you pay more for the convenience? People go to retail because they want it right now dammit! Budget minded people can wait a day. Those that cannot wait will ante up. (Amazon is going to do the same thing to us with same day delivery vs 2 day Prime)

If stores where smart they would release the products in-store only for the first 2 weeks at a higher price so people can “be the first” then release it online.

Retail is doing just fine because people love to shop, touch, feel, and see goods in person, and discover new things along the way. Buying stuff in person often feels better than a brown box showing up at your door while you were at work.

We will see a dozen companies die off, and as each dies off we will see a Zara, H&M, Canada Goose, Lulu, Athleta, Madewell, and more pop up.

If we have over built retail space we may see leasing prices drop, lowering the barrier of entry for new retail startups to get brick and mortar space as well.

Companies are always rising and falling.

Nothing new to see here. Keep moving.

Business Insights

One quick lesson I learned while working a second job as a stock boy at a party store is that people love their glass bottle coke. I was working at a store right around the time that plastic bottles started hitting the market and people were not happy.

Now the plastic bottles with a lid did come in handy and allowed you to keep the beverage fresher, longer and also kept you from spilling it. But many will say it just doesn’t taste the same as a glass bottle coke.

I then watched a surge of canned soda purchases happen. People at that point in time would rather have the can over the plastic bottle, assuming they couldn’t get a glass bottle.

And that brings us to today. From Capital Grille to QDOBA, I now see those glass bottles everywhere again.

If you’re a sommelier of the coke world, what you really want is that small Mexican Coke bottle you often seen at small deli’s and restaurants. This is the holy grail of coke!

And if you cannot find that, you will settle for the glass bottles that come stateside.

What can we learn from all this?

Coke shoved a product down our throats that we didn’t want. Sure, it saved them a ton on packaging costs, freight, returns etc but it wasn’t what the consumer wanted. While it may have made the product cheaper, it still wasn’t what the consumer desired.

And Coke got away with it because, well….. they are COKE. So, when you have a product that is that strong, you can get away with a lot more than other companies can.

Today we have the resurgence of the glass bottle because the customer demands it. They are willing to pay more for it, and for many, they crave it.

This always makes me think twice before I make a big change to a product or service and I ask myself: Is this really what the customer wants?

Ask yourself that same question before you make a big change and if you cannot answer it, poll your customer base before you make a mistake.

Business Insights

Seems like every business owner, entrepreneur, manager and executive is reading or has read this book we have been utilizing as a leadership training book so I decided to give it a read this Saturday evening.

If you have kept up on all the bestselling business books over the last 10–15 years, then you already read this book. Traction really is a culmination of the best points and thoughts of the great business books over the last decade or so. Throw in a Franklin Covey like planner for entrepreneurs (EOS) and a crap ton of acronyms and you have Traction. (I won’t go into all the acronyms and buzzwords)

So if you didn’t read E-Myth and Good To Great and all those classics, Traction may be a good cliff notes version (I still recommend reading all those old books though!) For those companies without a strong operations leader, the Entrepreneurial Operation System (EOS) is going to give the person a strong base to run the business day to day.

Those with strong ops leaders, they likely do most of this already minus the nomenclature.

This book will explain to you why the failure rate of startups is so high.

And it’s simple, a bulk of entrepreneurs don’t give a shit, they procrastinate and most commonly, don’t want to deal with the hard things such as confrontation and firing people.

So often I have run into business owners that don’t want to deal with the hard things. How many restaurants have you walked into and you know the owner is there but the place is dirty, service is slow, and the owner is over in the corner reading the newspaper? We have all witnessed that more than we want to.

The book really hones on on the talent side, which is every companies most important part. From having people in the right seats to cutting those that don’t fit. (remember that old mantra “slow to hire, quick to fire” Yeah, be quick to fire if someone is not producing)

I can recall many business owners that didn’t want to deal with firing people. I knew one case where the person had 50+ people sitting on their Paychex roster but they have low or ZERO hours. Instead of just firing them, he just didn’t schedule the hours because it was sad to fire someone. So if you just ignore them they will go away right???

Sad? Huh? You’re about to go out of business and along with that you signed a personal guarantee on the lease so it’s going to drag you into bankruptcy too, and you’re sad to fire the people that are ruining your business and life???????

Force ranking, “rank and yank” or even the Cravath System, all the vitality curve and up or out type systems have some merit. They are just implemented poorly or done to the extremes. I think you should always be looking at who are the under performers, those that don’t fit your culture or didn’t grow with the company.

You may not need to cut the bottom 20% every year, but you cannot afford to let under performers keep seats warm. This isn’t a personal thing, it’s just business. It isn’t a lack of compassion, you must ensure the business thrives. The people you let go will likely go on to do great things elsewhere, where the work and culture fits them better, it doesn’t have to be a 100% negative thing.

This is even more important at small companies. If you are a 10 person shop, and 1 person is underperforming, then 10% of your team is not carrying their weight. It is easier to hide in big companies, but smaller companies cannot afford to hang onto under performers.

When I am not coming up with new ideas or dealing with higher level issues, I am witch hunting. I am trying to find the one person at that moment in time that is slowing us down. Once I find them, we try to figure out why, try some training and measure progress. If progress isn’t made, we cut them and we must charge on.

If not talent issues, the next thing I am hunting is problems. I hunt these problems based on metrics I am well aware of after being in business for 15+ years. This is where Traction talks about the Scorecard, and if you don’t have something similar, this really is a key point. This isn’t designed to measure everything, just the key indicators that show micro trends before they become problems.

Along with the scorecard, the concept of Rocks is something every business should have as well. We have a strong analytics software that helps drive one of our B2B business units so those goals come easy. For one of our B2C businesses, our ops executive has been developing a set of goals and metrics that are in line with the 90-day goal system.

If I had to give a quick summary of this book:

Give a shit about your business, deal with talent issues head-on, don’t procrastinate, set 90-day micro goals, set long-term macro goals, and don’t waste time in unproductive meetings. And don’t slack on any of these items, ever.

Yes, I missed a bunch of other points, but it’s scary to think that many of the fundamental things you need to do and survive in business are not getting done by a bulk of business owners (look at the failure rate of new business).

Think back to how many times you caught yourself saying “I have no idea how this place stays in business” regarding a business other than your own. From a supplier to a competitor or a local restaurant, we have all said this at some point. Once you read Traction you will realize quickly that for every business you have said this about, they are not doing 99% of the things Traction teaches you.

Overall good read, if you have read this please share your thoughts as I am curious about what others think.

Business Insights

When talking about competitive and saturated markets, I am known to say “Papa John wasn’t listening when everyone said the pizza market is flooded.” And today, Papa John’s Pizza is a $1.5B company.

Even in 2017, I still see so much opportunity to build a better mouse trap. You may not even need a better mouse trap. In fact, you can even make an inferior mouse trap as long as you understand modern day branding and marketing. I have stomped on many competitors in the B2B and B2C spaces just by out branding and marketing them.

And here we have Chick-fil-A. They sell a simple ass chicken sandwich and other products similar to what everyone else has been selling for years. I know all the rage about Blue Ocean Strategies, but Papa John’s and Chick-fil-A didn’t need to venture into new markets, they just made a slightly better product and/or marketed themselves better.

What I find funny is Chick-fil-A is stomping all over KFC who should have had home field advantage with their massive retail reach. I recall a chicken sandwich KFC had in the 80’s that was a buck and it was great! It actually tasted similar to what an original Chick-fil-A tastes like today. Problem is, KFC’s branding didn’t keep up with the times, their stores are dated, some view their food as too unhealthy, and the recipes have been hit or miss.

Everyone wants to have a tech startup, as tech is sexy, with high hopes and dreams of grandeur. For the person out there that wants to become a business owner one day, live the entrepreneur life or just wants to create something, it doesn’t have to be tech for you to succeed. There are many business lines out there that haven’t adapted and they are doing business like it is 1993.

Find those markets, build a better brand image, lean on new marketing concepts and digital marketing strategies. Deliver a slightly better service or product and you will be on the way up.

Gary Vaynerchuk did something very similar. Instead of creating an app or trying to develop a new technology, he jumped into the media game and now has a full-service marketing and advertising company with over 750 people working for him. This was a traditional business line that has been around forever, a real Red Ocean strategy play for Gary and looked at how it worked for him.

I love new markets. They are exciting. But there is a lot of easy money out there with higher rates of success all waiting to be taken.

Red Ocean Strategies may not be as exciting, but I don’t mind the blood in the water, it means it is time to eat.

Business Insights

This video is about a decade old but if you haven’t watched it, you need to. If you did and forgot about it, it is time for a refresher.

Permission marketing really set off the digital marketing boom. At no other point in history did small businesses have a more equal playing field as they do now, well as equal as it can get anyway. From organic search to PPC, any company of any size can be found.

Where you have trained yourself to ignore TV and Radio ads, it is completely different when you’re searching for something on the net. If you’re looking for a 60″ LED TV on Google, and you see an ad or organic search result for a TV that fits your specs, well damn, you don’t mind that so much do you?

Anyway, video is a tad bit long but def worth a watch over lunch sometime.