costco

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If you visit big box stores like BJs, Costco and WalMart, no matter where you walk outside the food aisle you are going to find some really low cost products. Izod shirts for $16. Patio furniture for $399. Plastic hose winders for $14. Most of this stuff shares one thing in common.  It has a shelf life of about 3 months. Then it will be put out with the trash. You just know the colors will fade, the nylon  unravel, the legs will be uneven and the handles fall off.

When all this stuff — imported from other countries, stuff that low earning families buy to fill the American dream — breaks, they go out and buy more.  Because it’s so cheap. When the new administration puts a border tax on this “stuff,” adding, who knows, 40% more to the price, what will people do?  No longer will they be able to send their kids out in the snow in a $22 ski jacket.

It will change consumerism. It will force to people to spend more wisely. On better quality. I will force makers of dreck to become makers of goods. (There’s a reason they were once called goods.)

This isn’t a political statement. It’s a quality statement. We need more quality. We need less crap in the land fill. Less is more.

Peace.

 

 

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I write a lot of sales training stuff for one client.  The company does a good deal of cold call intercepts at stores such as BJs and Costco.   As someone who never really did any direct product selling – ads and brand strategy don’t count – I needed to get out of my comfort zone and into the selling zone. It took some time — but looking fast-moving custies in the eyes and learning how to “pitch” by trial an error, was quite a learning experience. David Ogilvy would have been proud.  

First there is the approach — customers walking toward you. Then the engage, getting them to slow, stop and talk. Then the position and sell.  And finally the close…get the fish off the hook and into the boat.

One tenet I’ve long believed in that works across all these sales steps is “education.” All people like to learn. They may not like sitting in a class room, but there isn’t a brain on the planet that doesn’t want a little stim. A little new information. We are curious animals. So, all you salespeople out there, subscribe to the unbeknownst, the never seen, and the inheard of.

It works. Peace.                   

 

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On Long Island where I live we lost 1,200 grocery store jobs year-over-year. Where did those jobs go?  Costco I am betting — a much more efficient and price-favorable retailer. This is the way of the world, this big box approach. Yet as we know, what goes around comes around and even Amazon is experimenting with brick and mortar retail stores. And big consumer packaged goods companies like General Mills and Campbell’s and even Anheuser-Busch InBev are investing in start-ups and small participants in the craft economy.  The craft economy dabbles in small batch, high-value products with an artisanal bent.

I suspect the craft economy will also result in a resurgence in small specialized retailers popping up in towns again.  In our little town, Crushed Olives opened a year or so ago offering assorted olive oils and balsamic vinegars.  Kilwins is offering specialty fudge. And our second independent coffee barista just opened. They’re premium priced but seem to be worth it. The craft economy will by no means be in every neighborhood. But it’s here for those with a little extra cash who like to savor the flavor.  It is fueled by people tired of selling junky or pedestrian quality products. And there is demand.  The craft economy is a multi-billion dollar category.

Peace.

 

 

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purple carrot

Mark Bittman makes my mouth water. As a New York Times critic he excited the food world for many years. It was just announced he’s moving to start-up Purple Carrot as content creator. In this case the content will be recipes and comms. Purple Carrot is a meal delivery and some-assembly-required service.

What I like about Mr. Bittman, along with his recipes and writing, is his current mission. Quoted in today’s NYT his goal is to get “people to eat more plants.” Can’t get more focused than that. Great brand strategy.

He and start-up founder Andrew Levitt are smart marketers and brand builders. Purple carrots sounds intriguing. The “meal kit,” is an awful and un-tasty food classification, but it’s descriptive and appropriate for the time.

I spend a good deal of time in Costco and BJs and must tell you the percentage of overweight people with poor feeding habits is appalling. Obesity may be a class thing and a money thing, but if the price point of these vegan meal kits can be made elastic enough, it may open up new markets for Purple Carrot and do some real good.  I’ve done enough marketing strategy in the obesity space to know that good tasting plant-based fare has a nice economic upside. I believe Mr. Bittman’s hire will be a good one.

Peace.

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The promise of the craft economy is higher quality products. There’s little question that the love that goes into craft beer (or batch beer) is exponentially greater than that going into mass produced brew like Bud Light. Sir Kensington Ketchup is another example of a craft product in search of a sliver of market share. With less sodium and sugar and no genetically modified ingredients, the product has a built in market. So long as the taste is there. Hampton Creek’s Just Mayo is a successful craft product. The craft economy is growing.just mayo

Here’s the thing about the internet age. A craft product can go from zero to 3/5th of a mile in ten seconds like that. Distribution channels aside, if a craft product “hits,” demand can soar in hours. New product producers and manufacturers need to have a “soar” plan.

And not all craft product people want to mass produce (wink wink), but those who do shouldn’t be caught off guard. It takes months and lots of money (in stocking fees) to get consumer packaged goods onto a grocery store shelf. That’s too long. You need a plan. Costco? BJs? Direct to consumer via the web? Options all.

New product people in the craft space – crafty they must be.           

Peace?

 

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Tomorrow Apple is announcing a lower cost iPhone along with its latest version of the new iPhone – what will that be the 6?  (Were he around, Steve Jobs would have killed the number thing.)  Anyway, as mentioned last week and long before, I think the Nokia/Microsoft strategy will be to cover the planet with Windows-based smarties and the way to do that will be, though a nice phone at a low, low price. Sold at cost (or a hair below), these Windows phone 8 Nokia hardware devices will be cheaper than two rounds of drinks with your signif. at a NYC hotel bar. Before tip.  I’m thinking US$49.  That’s my price point and I’m sticking to it.

Messrs. Ballmer and friends will create a Costco-priced, beautiful smart phone and price it in a way that the ROW (rest of world) will be hard pressed to ignore. It will offer the cool tiles interface, a good camera and enough design panache to bump iPhone and Androids growth aside for a while.

Rather than pay taxes or sit on the billions in the bank, MSFT is going to be bold and give people without smarties an affordably priced piece of hardware (and software) — effectively buying market share.  It will lose then make them billions. It’s a nuh-uh brainer.  (Go Geno and the Jets.)

And, of course, peace!

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I’m a man. Here’s how I shop: I go to a store, walk around, talk to a salesperson, maybe another shopper and I buy.  If the store doesn’t have what I want, I either go home or visit another store.  More often than not, it’s a one store and buy experience.  Price is important, but usually only when comparing choices in the store.  Convenience.

As technology wends its way more and more into the shopping process and the best price on a skew (product number) is only a click away, (#bestpricesamsungTV) many of the shopping choices we make will be made for us. And price variation will be minimized.

There will be Amazon for eshoppers and for those who want instant gratification there will be SuperRetailStoreCo or something.  Variability will be minimized in marketing. All that will be left, variability-wise, will be the brands. But marketers who spend too much on branding, will have reduced margins and will likely fall off.  Will it be a brand new marketing world in 2050?  Oh yeah. Should be exciting. Peace!

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Stop the presses! I saw a Wal-Mart commercial last night that had some personality. It made me, dare I say, laugh out loud.  A mom was putting on some facial cream in front of a mirror with her children splayed at her feet. “What are you doing mommy?”  “Trying to look a little younger, kids” was the warm response.”  They type of truthful, self-effacing response you rarely see on TV.  As kids do, they sponge up the info and do something with it — applying the same lotion to grandpa’s sleeping face in the den.  In big gobs. Doing a really good job.  “Grandpa is going to be so happy when he wakes up!” giggle the children.

Wal-Mart needs a makeover. The class action case against it. The big box coldness.  The smell of bad pizza wafting through the check-out lines.  Not that all these things will drive shoppers away; shoppers need Wal-Mart. But the company just lacks a special connection with its audience…something that advertising can foster.  This ad is a step in the right direction.

If Wal-Mart could be a bit more like Costco, it would do even better. The YouTube videos of Wal-Mart shoppers folding out of their clothes do not help.  Those videos probably have more views than the TV ads.

Wal-Mart is the world’s biggest anything. And growing.  You’d think they could grab hold of a powerful brand idea and build their image. This spot may just be the start – the idea to have an idea. Peace!

PS. Anyone know who did the work?

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Barnes and Noble just appointed the head of its web business CEO. Does that tell you something?  Yeah, yeah…it says increased digital emphasis.  But let me ask you a question: Do you shop at Sam’s Club, Costco or one of the other big box warehouse stores? How about Wal-Mart?  If so, does that store have a greater share of your wallet (SOW) than other stores?  I suspect so.

When Stephen Riggio the vice chairman of Barnes and Noble says that for the next 2 years the “net number of stores will not change much” and after that “we’ll have to see” what does that tell you? Certainly a push to digital, but I’m also thinking he’s referring to a retail square footage play.  Some of the cheapest books I ever bought were at Costco.

Future of Retail.

Here’s the future of retail – and we may see it happen first in China.  The Costcos of the world will create low cost mall like mega stores under one roof with branded experiences for companies such as Barnes and Noble throughout. The experiences will be much less elaborate than at home stores.  The floors will be concrete, the mobile search sublime, prices wonderful and it will all, no doubt, occur under a vinyl banner with a bird or two circling overhead. Check-out will be done with scanners and the hardest part of shopping will be getting to your car.  This isn’t the Jetsons, it’s the retail future.  I think Messrs. Riggio and Lynch are already there, in mind.  Peace!

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What’s the idea with @15

 

You’ve got to give Best Buy credit for trying to do something in social networking. And Cause Marketing. And Market Research. And Customer Relationship Management (CRM.) And Youth Marketing. But this effort is going to be a million dollar dud. As my drunken mentor Dick Kerr once said though, “The idea to have an idea is often more important than the idea itself.” (I told you he was a tippler.)

 

Best Buy may indeed extract its million back thanks to some unforeseen consumer insight, but targeting 15 year olds with a “what’s important to you” social net, is not the way. It doesn’t support a viable branding idea.

 

I know Walmart and the big box stores like Costco are dinging Best Buy and (RIP) Circuit City, but slapping a social net together isn’t going to win the youth market. And yes, kids aren’t exactly price shoppers and they do care about brand, but there are other ways for Best Buy to earn brand points than positioning itself a generic one-stop entertainment and technology shop. They need to dig deeper and not go all tactical. Peace!

 

 

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