Monitoring the Digital Watercooler

iStock_000023334231SmallEver since the first merchant set up a tent at the Grand Bazaar in Istanbul, the world’s first mall, or Sears met Roebuck, employees have complained about employers.

But there’s a new twist on the old dynamic thanks to that digital water cooler, a.k.a.  social media. It’s where the “look-at-me” or “listen-to-me” generation spews out opinions and every excruciating detail of their daily lives in 144-character rants or selfies.

Companies are wondering about their options when it comes to protecting their reputations from sometimes-libelous comments or disciplining employees who violate social media policy. [Read more...]

Social Networks – Flipping Traditional Marketing on its Head

FINAL-image-for-Robin-Article-to-run-5-7

Attention all: You are no longer in control of your marketing messages.

How many times, and in how many ways, have we declared that today’s consumer has total power over all of commerce? Hundreds? Thousands? I don’t know, but certainly enough that if there are any of our readers who still don’t get it, they need a brain transplant.

Just as retail, wholesale and service business models are being driven by consumers’ shifting desires, these same dynamics are driving an equally fundamental transformation in the communications, advertising and media industries.

Permission-Based Marketing

Reflecting consumer behavioral shifts, technological advances continue to expand an infinite number of distribution platforms for communications, products and services that can literally follow, and access, individual consumers 24/7. Unfortunately for marketers, technological innovations have allowed consumers to block what they don’t want entering their “personal spaces;” and also enable people to invite or grant permission to precisely what they do welcome. [Read more...]

FOMO & the Retail Experience

iStock_000018141330SmallA Nation of Smartphone Junkies

It’s a truism that an overwhelming number of people today are addicted to their electronic devices. According to Pew Research, the cell phone has been the most quickly adopted consumer technology in the history of the world. Over 90% of American adults (97% of the under-35 crowd) own them. It is estimated that by the end of this decade, all but the oldest, youngest, poorest and most technophobic among us will own smart phones.

We use our phones as camera, alarm clock, board game, metronome, magazine, map, bank, GPS tracking device, bank, TV, and more. Mostly, though, we use them for their original purpose: to stay connected. We can reach out to friends and family members instantaneously, and know where our kids are at every moment of the day or night. We can keep up on breaking news while hiking in the Adirondacks. We can watch a revolution unfolding in the city center of a Middle Eastern country thousands of miles away. Increasingly, we can do more than one of these things at a time. [Read more...]

Meet the Millennials

polaroid_1Multi-Faceted, But Not Beyond Understanding

Retailers need to tune into the 18-to-30 crowd that comprises almost a third of all Americans – a bigger population segment than Baby Boomers. The Millennial generation numbered 79 million in 2011, with an outlook to stay at 78 million by 2030. Meanwhile, Baby Boomers will be retracting from their current 76 million to 56 million by 2030. This enormous segment of the population tends to make more transactions, but spend less per transaction. They have discretionary income and are willing to spend it… but the question is how, and where? The answers can be contradictory.

At MasterCard, we have seen data pointing to some varied behaviors within the Millennials category, as well as how they like to shop and how they’ve started to change the nature of shopping itself. Not surprisingly, a comfort level with technology has a lot to do with their ease in navigating the multichannel retail landscape – after all, they’re the ones who’ve made social media into the retail marketing tool it currently is. MasterCard has data from 80 billion anonymous credit card transactions to help better understand the needs of the Millennial consumer segment. [Read more...]

The Harder They Fall

ex_tiger_woods_watchConsumers love celebrities and are more than willing to fork over billions of dollars for things they endorse. But do you want them to land on your product when they fall from grace?

That multi-million dollar celebrity endorsement deal for your store’s organic clothing line is going gangbusters, with sales soaring 20% in just four weeks.

But then your squeaky clean, environmentally-active spokesman is caught in a sleazy hotel room wearing a sequined ball gown, with two underage prostitutes, a German shepherd and a bag full of crack cocaine. What now?

A little over the top? Maybe. But when it comes to celebrities nothing is impossible. As someone once said, “you pay your dime and take your chances.” [Read more...]

What’s Wrong With This Employment Picture?

Last week’s employment data looked pretty rosy. The economy added 175,000 new jobs in May, according to the Bureau of Labor Statistics, more than many economy-watchers and investors anticipated, but not so many that the Fed might be tempted to tighten credit. Retail jobs comprised a sizable chunk of the increase, a net gain of 28,000, indicating an underlying bullishness on the part of retailers about consumer spending, since May is not typically a big hiring month for stores.

Looking behind the numbers, however, particularly in light of other recent economic data, a murkier picture emerges.

Job Growth is Slow

First, despite May’s jump, overall job growth has been painfully slow for the past year, ranging somewhere between 1.5% and 1.7% per month on a 12-month smoothed basis, as the chart below shows.

Click to enlarge chart

Click to enlarge chart

 The unemployment rate, though close to a four-and-a-half year low, actually increased in May, from 7.5% to 7.6%, as news of the improving job situation caused many of the unemployed who had given up looking to reenter the job-hunting fray.

Click to enlarge chart

Click to enlarge chart

And, as is usually the case this time of year, over a million newly-minted college graduates were thrust kicking and screaming into the real world (or at least back to their old bedroom at Mom and Dad’s). This year’s crop carried record loads of student debt.

New Jobs are Low-Level

Yet another problem is that the jobs that are being created are not exactly the most sought-after, and tend to earn less than those eliminated during the recession, a phenomenon that shows no sign of reversing itself any time soon.

For example, restaurants and bars added a whopping 38,000 jobs in May, evidence that people have finally started to eat out more, usually a sign of an improving economy.  However, these jobs tend to pay less than minimum wage – certainly not enough to eat out very often!

Professional and business services added a lot of jobs, too. But despite the media cacophony about a surge in tech and other math-and-science-related fields, only 5,000 jobs were in computer systems, and another 6,000 in engineering – hardly enough to satisfy the hundreds of thousands of recent IT and engineering graduates. The greatest number of new jobs in the professional services sector – 26,000, to be exact, was in the not-so-lofty temporary office help area.

Last month, one in every six new jobs was in retail. In fact, as the chart above shows, retail job growth has been outpacing that of total employment in the US since late 2012. However, most of these jobs are hourly jobs at the store level, and pay at or slightly above minimum wage.

Sluggish Income Growth

Income growth has been sluggish for the past several months, further evidence of the beating paychecks are taking, which means that the rampant price-and value-consciousness will persist for a while, and will continue to wield a huge influence on consumer behavior and retail strategy.

Click to enlarge chart

Click to enlarge chart

Stagnant Spending

Finally, consumer spending is nothing to get excited about. Although sales of durables like automobiles and furniture have been brisk, spending on nondurables like food, clothing and personal care items has slowed in recent months. Much of the slowdown is due to lower prices on food and gas, but nonetheless threatens to intensify the share wars taking place at retail.

Click to enlarge chart

Click to enlarge chart

It’s probably worthwhile to point out that while all this hiring was taking place, the Dow and S&P each continued their upward climbs, bringing year-to-date stock market gains to over 15% and reinforcing the wealth effect among the high-income folks. This has been fueling growth in luxury retailing and intensifying the polarization between haves and have-nots. How long this will last depends in large part on the financial markets. A big stock market correction could put the brakes on luxury spending.

Who’s Hiring At Retail?

Retailers, anxious to gain whatever share they can in this low-growth market, are making sure they are sufficiently staffed. General merchandise stores, including variety and the very popular dollar stores, have added the most jobs so far this year, at 44,000, as shown in the chart below, almost half the 93,000 new retail jobs. Dollar stores have been expanding their brick-and-mortar footprint faster than other channels.

Department stores have added 22,000 jobs, both in-store to provide improved service, and at the corporate level to fill expanding e-commerce and social media departments. Specialty apparel stores, many of whom are closing underperforming doors, have sustained a net loss of 17,000 jobs so far this year.

Click to enlarge chart

Click to enlarge chart

Amid all the uncertainty, though, the tough job market has been a windfall for retailers in one key way. These companies have access today to some of the most educated, innovative, tech-savvy and creative talent ever. Retailers should identify the high-potential employees early in their careers, and begin grooming them to be the next generation of industry leaders.

Innovators Unite!

kennethwalker“I told you so” seems to be the rallying cry of all the retail pundits out there who think they were smarter than Ron Johnson.

Every one is throwing stones and is offering multiple reasons for what went wrong at JCPenney. The reasons for failure are easy to categorize, and I sense a bunker mentality is settling over the retail community.

Beware.

In a business where real change comes very infrequently, the danger of the JCP fiasco may be the end of trying to do anything innovative. Many companies try and fail, but learn their lessons and bounce back by trying again.  The worst thing JCP can do is to go backwards to the status quo.

The vision Ron Johnson brought to the table was revolutionary.  The execution in hindsight was clearly flawed. Unfortunately very few people even got to experience what “the vision” was, as few elements were completed. It could have been a game changer for the retail community.

Current JCP management has a very focused and talented leader. The key investors in the company are smart and have the future in mind.  I hope this team will execute properly and harness the vision and innovation that Johnson began.   It would create a sorely needed new, and unique, customer experience.

Shoppers are always looking for something new. If they try it and like it, they will come back and tell others.   Word of mouth has a very big mouth…it’s called twitter and Facebook, Instagram, Pinterest, and the rest of them.

The poor execution of a vision should not be an excuse to abandon innovation.

Rules of Engagement

Cotton’s 24-Hour Runway Show and Push-Pull 2.0

Click to See Chart Full-Sized

Click to See Chart Full-Sized

The retail universe has long-since expanded beyond the confines of physical floor space and time. Online retail outlets have made shopping a 24-hour option for brands with or without brick-and-mortar complements. Brand marketing, too, is now a brave new digital world in which presence and consumer engagement are essential cogs in the machine. To succeed, there must be a synchronicity of disparate channels that encompass traditional advertising, digital advertising, social media and most importantly, the often-unpredictable consumer.

Hyper-dimensional marketing, or Push-Pull 2.0, plucks multiple messaging strings in the hopes of striking a chord with consumers. In traditional push-and-pull strategy, push referred to offering incentives to the supply chain, and consumer marketing was the pull. Today, Facebook, Twitter and the like, have shifted the strategic emphasis squarely on the consumer; push is now defined as brand outreach to the consumer, and pull is their outreach to the brand. The objective is to enthusiastically engage the co

nsumer in the brand experience; to have them participate, promote, and eventually purchase. [Read more...]

Millennials in the Workplace – True or False

grace_ehlersWe Millennials can be a little difficult to decode at work; our incessant attachment to our phones; our buddying up with senior executives; our loose understanding of office hours. Many of our coworkers ultimately begin to believe that we are haphazard workers and that everything you need to know about Millennials at work can be had from any Girls episode.

I am here to tell you otherwise: Millennials are incredibly dedicated workers—many of us placing work before our relationships and lives outside of work. Here are a few myths about Millennials in the workplace, busted or verified, to help you actualize the potential of your Millennials on staff.

1.They do not have a strong work ethic.

FALSE: This is the top Millennial-in-the-workplace myth I have come up against over and over again as a Millennial brand consultant. There are many reasons for this misinterpretation. They may be lackadaisical about office hours, but they will answer your email at any time of the day, any day of the week. They may be wallflowers inside sales meetings but will lead dynamic, impromptu brainstorms. Give them the benefit of the doubt and encourage them by showing them you have confidence in their work—they will show you their work ethic is strong and sustainable.

2. They feel they are entitled.

½ TRUE, ½ FALSE: While Millennials continue to be humbled by a 68% diminished net worth compared to the generation before them, not to mention crippling student loans, Millennials do feel entitled to a piece of the pie. In their eyes, pay scales should be relative to hard work and productivity, not exclusively based on seniority. Which is to say, yes, your associate is eyeballing your salary and willing it to be adjusted to his or her 20-hour workday.

3. They expect to be promoted without the years of experience necessary to warrant the promotion. They seem to think they can fast track it to the future.

TRUE: This is the #1 point of tension between Millennials and generations past. In our eyes, if we have the skills and can handle the responsibility of our superiors, and have demonstrated that we can, why shouldn’t we be allowed to advance? Why measure experience by time instead of skill level and capability? In your eyes, experience is developed over time. Agree to disagree.

4. They are not loyal and will bolt to another job if they feel like it.

½ TRUE, ½ FALSE: Millennials are very loyal employees, but if they feel stifled, or if the only way up is out, they have less than no problem showing you they know how to use the door.

5. They want to be part of the decision-making process, no matter what level they are.

TRUE: A truism of truisms for Millennials is that they want to be involved in the decision-making process; politically, professionally. What they love about work is seeing how their work ties into the bigger picture. Bringing them into the formation of that bigger picture will not only make their contributions richer, it make them emotionally invested in the company—and you will hold on to them longer because of it.

What Your Intern is Really Thinking

Intern at workI’m here to set the record straight about the Millennial work ethic, by giving you a little insight into the world of internships. They have become the popular alternative to entry-level positions, and businesses have convinced my generation that this is an acceptable way to start a career. If you don’t continue on to graduate school (hoping that the job market will open up when you get that Masters), many of us find ourselves in a job black hole where we can’t practice what we’ve learned, and at the very least, pay back our student loans on time (the average in 2011 was $26k). And all this plays out with collateral damage in terms of Next Gen’s loyalty to employers and desire to build a long-term career with one company. Remember, we are risk averse, want financial stability and a future worth working for.

What’s really happening here? All businesses today, from top corporate hedge funds to design firms to retail stores to your neighborhood nonprofit, rely on interns. And let’s face it, you can get just as much out of an intern as you can from entry-level staffers — right? So why not give some deserving under-employed college grad the chance to beef up their resume, right? You’re really helping alleviate the famed Millennial unemployment rate (now 13%), right? What kind of 20-something really needs job security or healthcare, right? [Read more...]

Are Apparel Retailers Shooting Themselves in the Footprint?

The Shift To E-Commerce May Be Too Much, Too Soon

On a recent afternoon I spent 20 minutes doing errands that a year or two ago would have taken me about eight hours to do.

Instead of jumping into my SUV and taking multiple trips to various big box and discount stores in my town, I strolled into my home office, powered up my trusty PC, and “went to town” in a different way. With a few clicks of a mouse I bought two or three carloads’ worth of stuff ranging from garden tools and patio furniture to office supplies and groceries.

Most of my purchases were made on pure-play e-commerce sites. Comparison shopping helped me get very good prices and free delivery. One category of merchandise failed to figure into my flurry of e-consumerism, however: I did not buy a single stitch of clothing. I am one of those people who prefer to shop for clothes in brick-and-mortar stores. I need to see, feel and try on clothes before I buy them to make sure they fit, look good and meet my quality standards. I do not trust computer monitors to accurately display important details like fabric, color, drape or weight.

It turns out I am not alone in this. According to e-commerce intelligence firm eMarketing, total U.S. e-commerce sales rose to $200 billion last year, or 7% of the total retail business. It is estimated that the portion of total apparel sales purchased online is much smaller—by some estimates only 5%. Making matters worse, returns of online apparel sales are as high as 40% for some retailers.

Online apparel sales, though growing, remain a relatively small part of the business because consumers need to touch, see and try on. Sucharita Mulpuru, analyst with technology powerhouse Forrester Research, feels that “the in-store experience remains a critical part of the buying process for discretionary items like apparel.” [Read more...]

Drexler Hits the Nail on the Head Again

The Robin Report - Mickey DrexlerHey folks, I hate to suck up to Mickey Drexler, and I assure you I am not, because he has once again nailed a major and very dangerous value shift taking place in this industry. He’s said it before in different ways, as have I. And, I’m going to follow him this time, essentially “doubling down” on his points.

I’ve called what’s going on with discounting, which is now on the steroids of the e-commerce “deal machine,” the “lowering of all ships,” “the race to the bottom,” and, I’ve even speculated, and actually built a pretty good case, for predicting our economy drifting into a deflationary cycle. [Read more...]