Features, Strategy & Operations

What’s a Specialty, Hard-to-Ship Product to Do in an Amazon World?

The question most frequently asked of people who consult to retail and consumer products manufacturers is: “What can we do in an age of Amazon to get people to shop our (customer’s) stores?” It’s like an image from War & Peace, all the noble families packing up their servants and belongings, leaving Moscow in a panic, as Napoleon, aka Amazon, is on the march, winning one battle after another, General Kutuzov retreating farther back and back and back. Our modern day nobles, the small specialty retailers and manufacturers, wring their hands in despair: What’s to be done? The malls are closing! The malls are closing! But as Kutuzov said, “We may lose the battle for Moscow, but we’re fighting the battle for Mother Russia.”

Too hyperbolic? Imagine for a moment you make bowling balls, or fragile Christmas ornaments, or bottled Cajun hot sauce—in short, nothing that ships all that well. Your business premise is cash and carry. Or imagine you are a mom-and-pop retailer in a mall or shopping strip. Maybe you sell fine jewelry, and that nasty noise you hear is the sound of eBay vacuuming up your business with its seemingly endless offers of “previously owned” Cartier and Chopard watches, David Yurman rings, and somebody’s grandmother’s vintagesque bracelet. Nowhere is the financial value of a brand made as clear as in jewelry. So how does a small, independent jewelry store compete with online resellers of iconic brands?

You’ve addressed all the obvious solutions: Yes, you’ve created a website. Yes, you’ve got a Facebook page (much good may it do you). Yes, there’s somebody working on search engine optimization. Check. Check. Check. But can even the most robust social media presence actually encourage an increasingly couch potato consumer to leave home to go bowling? Can it do it often enough to get them to buy a ball? Or encourage them to think about Christmas ornaments other than in December? Or when they’re free-floating in some resort town, searching for a souvenir during summer holiday wanderings to remind them that yes, indeed, they once traveled to the beach? How much site-specific hot sauce does one family need, really? Especially when the bottle breaks in shipping.

Retail Trends Won’t Be Ignored

There are pressing issues facing retailers and manufacturers alike as retail business-as-usual downshifts out of cruise control. They need to relearn how to drive with the consciousness and nuance required of a stick shift. We can tell the road ahead is filled with hairpin turns as we take in the desolation of the emerging landscape, ever changing in real time. If industrial manufacturing moving offshore gave rise to the term “Rust Belt,” we will need a new moniker for the hollowing out of the nation’s malls. Maybe “depletion” from mining vernacular, as when there’s no more gold or insufficient demand for coal to make it worthwhile, or oil drilling jargon, as when the wells are tapped out. Maybe just Mall Ghost Town will do the trick, as in “an abandoned village or town, usually one that contains substantial visible remains.”

It may seem like the slow motion demise of mass brands and retailers, but it is really happening at warp speed now: Limited (250) gone. Sports Authority (140) gone. Macy’s (100), Sear’s/Kmart (152), Walmart (154) disappearing. Chicos (120), The Children’s Place (200), departed. Men’s Warehouse/Jos. A. Bank (250), Walgreens (200), Office Depot/Office Max (400), Aeropostal (154), vanishing. These are just the ones announced in the last half of 2016. Imagine what territory-shrinking terror lurks in the quarter ahead.

So, let’s look it straight in the eye and see it for what it is. It is time to rethink retail relevance. My favorite dinner party conversation starter has become the essential question facing retail: “When you no longer have to leave home at all—working from home, hanging and tweeting at home, relying on Grubhub, FreshDirect, Alexa, NetFlix, Amazon Prime for the virtually immediate gratification of virtually any need and most wants—what will you leave home to do? Hint: It won’t be shopping in a mall.

The Rx for 21st Century Retail Experiences

Howard Schultz provided me with a profound clue a number of years ago. I’d asked him about the “socialization” claimed by nearly everyone I’d talked to about Starbucks remarkable success. As in, “I go there to socialize.” I personally have never talked to anyone in a Starbucks, other than the barista; so I asked him about that. He agreed, “Everyone says it’s to socialize, but we have the in-store security tapes to prove there’s no conversation going on, table to table. It’s just the idea that you’re there with people who also like good coffee, where the barista—like the bartender at Cheers —seems to know your name, nobody is going to force you to leave before you want to and the bathrooms are clean.”

This provides the template for a great out-of-my home experience: Be surrounded by people separately sharing the same moment; you don’t have to talk with them; you can have the food or drink you want in the moment. Thus, movie theatres are probably survivors, particularly as they upgrade the experience with reserved seating and my family’s basement inspired recliners. Strangely, perhaps, I think the bowling alley survives. All those people, including two or three of your own friends, plus drinks and fried foods. Indulgence masquerading as exercise. What’s not to like? Probably exercise venues win, as well. Sweating among strangers, with a dollop of energy bars and smoothies thrown in. We have to take note, too, of the food and music festivals that draw thousands and thousands off the sofa. Ditto the siren call of museums and live theatre. And yes, of course, mesmerizing, beguiling, enthralling dining-cum-imbibing experiences where you can be amazed by what other diners are eating (and amaze them with your fare), but don’t have to discuss it with anyone until you review comments after you tweet about it later.

Therefore, my delayed response to the sales and distribution conundrum increasingly faced by hard-to-ship specialty products in an increasingly Amazonian world: Context matters as much as content. What does that mean? You know your content. Now, do your own analysis of your context: the shops, malls and other shopping venues. Which ones have the power to attract consumers to their locations—not because they still have a Sears or Macy’s, but because they know how to create magnetizing experiences that draw people individually, autonomously to share in a socially relevant, collective yet anonymous experience.

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Once they have decided to go to the movies, bowling or to a grueling workout followed by a massage—and thence out to a fine (not food court) dinner, they could wander the halls of the mall (where they bowled, watched a movie or worked out) like Strangers in a Strange Land, on the lam from their work-a-day, home alone routine. Find the context people want to leave home to experience, and place your content there. It de-averages price and allows you to showcase your products in an indulgent setting to an indulged consumer. As the Big Box re-imagining artist Julie Christiansen explained to me when I wrote Shopportunity!, “These stores exert the power they do and can be reconfigured for many, many purposes not because of the store, but because of the infrastructure that supports it: the roads, the parking, the accessibility within the sprawl of modern life.” As our sprawl contracts and urbanizes, there is still a need to be in what Howard Schultz called “the third space.” As he says, “you have to go to work, you have to go home, I want to provide the third space,” which may be becoming “the second place” at an accelerated pace.

Mall developers: Don’t try to replace one big nasty retail footprint with another. It won’t work. You can’t drop the lease rates low enough to make it compelling. Big retail brands are shrinking, retreating. They are exhausted and spent. They will not be on the geographic expansion march again. Napoleon has left Moscow and is headed toward his Waterloo. It’s over. Don’t get caught in the winter of our discontent.

You small brands that don’t travel well and retailers who aren’t part of a major chain, break out the vodka and blini. This could well be your time. Not just for the bottom line, but for that poor housebound consumer who’s ready to explore an experience worth tweeting about. Make it yours. Natasha and Pierre returned to Moscow and, gosh, lived happily ever after. Right?

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