Posts

bolotsky-with-coleman-copy

UncommonGoods takes a novel approach to measuring success

David Bolotsky, CEO of UncommonGoods

CEO David Bolotsky and the rest of UncommonGoods works out of a nearly 100-year-old former Army terminal in Brooklyn.

Nothing is inevitable, but the idea that David Bolotsky would end up being a founder of a New York-based e-commerce company comes pretty close.

From the time he was a little kid, growing up on Manhattan’s Lower East Side, the CEO of UncommonGoods was drawn to entrepreneurship and retail. His grandfather owned a candy shop that he’d visit regularly. What’s not to like?

And the internet? He’s been fascinated with its potential since the moment a friend described it to him over dinner in 1994, at the dawn of the digital revolution.

“I thought it was the most interesting thing that I’d seen in my life, in terms of changing the world,” Bolotsky says.

And yet there were turns and twists along the way to the top of UncommonGoods. Today Bolotsky, 54, sits in a cramped fifth-floor office at the end of a hallway in the hulking Brooklyn Army Terminal — a sprawling, concrete, fortress-like complex that in the first half of the 20th century served as the place from which the military shipped out supplies and soldiers, including one Pvt. Elvis Presley.

From that office, overlooking an industrial section of Brooklyn, Bolotsky runs a retail business that is uncommon for reasons beyond the unusual gifts, crafts, jewelry, home goods and accessories that populate its catalog. UncommonGoods is a B Corporation, a designation presented by a third-party outfit that assesses companies’ social responsibility based on policies on workers, sustainability, governance and community involvement.

For UncommonGoods, that means the company has its own minimum wage — nearly 30 percent higher than the state minimum after a recent increase in the state guideline — and a progressive paid family leave program. It means that it offers modest scholarships to college kids studying art and design and that it donates $1 from purchases to various non-profits on customers’ behalf. It means that it has policies in place to minimize its environmental impact.

Those programs are described on the website, sure. But they’re also front and center in the 100-plus-person company that grows to many more than that during the holiday season.

“I’m super proud to work for this organization,” says Heather Thompson, a senior product manager, who’s worked at UncommonGoods for almost seven years. “It’s super awesome that I know that my work isn’t just about driving the bottom line for our business.”

But there is a bottom line. And UncommonGoods is a business — a business in the bare-knuckles retail industry, where department stores and others are closing locations and scrambling for new models; and where pure e-commerce companies, like UncommonGoods, go up against Amazon every day.

Moving from Wall Street to e-commerce

So how did Bolotsky, a guy who grew up on the Lower East Side, studied poly sci at the State University of New York, Binghamton, and went to work on Wall Street, end up switching careers and starting an online store in 1999?

Remember, there was the love of retail and the fascination with the internet. And, it turns out, the Wall Street gig had something to do with it. From the late 1980s through the 90’s, Bolotsky was an investment researcher at Goldman Sachs, leading a team covering retail.

As the internet became a thing, it became clear to him that it was about to turn the retail industry upside down.

Back in his Army Terminal office, Bolotsky reaches over to a bookcase and plucks an old Goldman Sachs report off his bookshelf. It’s called  “Cyber Retailing 1997: Not yet ready to turn stores into dinosaurs.”

Yeah. He wrote it.

“I quickly came to the view that this was a big deal that companies ought to pay attention to,” he says of the 1990s internet. “What I said in this report was that it was going to catch 15 to 20 percent of the retail market. That was a bold statement then. I think it’s going to end up being conservative.”

UncommonGoods operates out of the Brooklyn Army Terminal built at the end of World War I.

UncommonGoods operates out of the Brooklyn Army Terminal built at the end of World War I.

Sure, at the time some scoffed.

“I remember getting grilled by the management of Borders Group about how I was a cheerleader for Amazon,” he says, “and how I didn’t have a healthy perspective.”

Of course, Borders went out of business. And Bolotsky sits in his fifth-floor office, running a privately held e-commerce business that saw sales increase faster than 15 percent last year.

The retail idea had been rattling around in Bolotsky mind for awhile before he launched UncommonGoods in 1999. The question was, what would he sell? What would he care about selling? The answer came when he heard about an upcoming Smithsonian Institution craft show in Washington D.C.

Bolotsky turned to one of the keys to retail success: Listen to the voice of the customer. When evaluating a retail investment idea, his first step was always to visit the store, he says. So, he went to the show.

Listening to customers pays off

“And this craft show was packed with customers, which is always the most important test of the viability of a concept. Are people shopping there?” Bolotsky says. “And I talked to a bunch of the customers and almost to a person they talked about how they were looking for something different than you’d find in a mall or in some mass-produced store.”

They said they were looking for gifts that reflected both the recipient’s personality and individuality as well as their own. Beyond the entrepreneurial opportunity, the artisan and artistic crafts business also appealed to another part of Bolotsky’s being.

Selling artisans’ and artists’ work via the internet would provide a new chance for those being excluded from economic opportunity — including those in developing countries and in remote areas, who created beautiful and inspirational objects, but who had no practical way to bring them to market.

“I thought, wow, the internet is perfect for this,” Bolotsky says. “You can have your craft show open 24/7, 365 days a year; the artists can focus on what they do best, which is creating their work; we can handle the marketing, selling, shipping, what have you; and only keep it in one physical location, much better than a chain of stores, which has to keep at least one piece on hand. So, I thought, this was a great idea.”

For Bolotsky, it was never just about selling, or even just about business success. From an early age, he focused on social issues. He became a vegetarian at 11 years old and volunteered at animal shelters. He’s been a strong advocate for workers rights — higher minimum wage, better family leave policies — an odd position for a CEO in corporate America. His LinkedIn profile lists his long-held board seat on a non-profit that helps disadvantaged high school kids and his founder position with Friends of Gulick Park — along with his Goldman Sachs stint and his time at Credit Suisse.

Bolotsky points to his dad, who worked at the United Nations, and his mom, a social worker, for inspiring him to think about the world beyond himself.

“She was somebody, who as a 22 years old, took a bus down to Montgomery and participated in the bus boycott,” he says of his mother. “She was always somebody with a very strong social conscience and drummed that into my sister and me.”

And there were the bullies. Yes, Bolotsky was bullied as a kid. He says he empathizes with the underdog and those who are mistreated because of it.

“I was a skinny kid with long hair, who looked a bit like a girl,” he says. “And I was a vegetarian, so I was definitely different. And I wasn’t apologetic about it. My dad always taught me not to take any crap from anybody. So, if anybody gave me crap, I didn’t back down, and I got into fights as a result of that.”

UncommonGoods is doing well while doing good

Social awareness is an ethic Bolotsky brings into his business, which is why you’ll find him working in support of more generous family leave policies in New York and the country. And why he spends time thinking about how he can be most effective in influencing public policy.

UncommonGoods is a craft show that stays open 24/7, Bolotsky says

UncommonGoods is a craft show that stays open 24/7, Bolotsky says

“We have been very active in trying to get certain laws changed, or created, and so years ago, I was more active on the federal front,” Bolotsky says. “I’ve learned there is a much bigger ROI to focus on the state of New York. It is a big state. It can have a big impact. As a business here, our voice is heard.”

And it’s an approach that inspires many who work for the company. Thompson, the product manager, says when she thinks about pushing UncommonGoods revenue higher, she is thinking about more than the bottom line.

Her thinking: The bigger the business grows in terms of revenue, the more powerful Bolotsky’s voice when he speaks up on social  and economic issues whether at the state house or the White House.

Jillian Brendlen is a site merchandiser who’s been at UncommonGoods for three years. She says that the social responsibility that the company displays was definitely part of her decision to take a job there.

“I really liked that aspect,” she says, noting not every retailer embraces social responsibility.

Still, Bolotsky doesn’t lose sight of the fact that UncommonGoods is a business, with all the requirements that businesses have.

“Do I want the business to be successful,” he asks? “One hundred percent. I care deeply about our return on capital investment. At the same time, having a positive effect on people, at the end of the day, means a lot more to me than what the business is valued at.”

Sure, he says, doing good and doing well in business can at times be colliding ideals. But the equation is more complicated than some make it out to be. Consider UncommonGoods’ decision to pay warehouse and seasonal workers a minimum of $14 an hour, when the state requires only $9.70.

“I do believe there is often enlightened self-interest, where you can pay people more and you get more from them. There is greater loyalty. Hey, if we’re paying above market, that person is less likely to want to quit their job. They might even work harder because they feel valued by you and respected by you.”

Some of those results are hard to measure precisely, though Bolotsky has another gauge by which he governs his minimum-wage strategy.

“I’m not a believer in socialism or communism,” he says. “At the same time, I think business owners have a responsibility to treat people fairly. And part of it is, I believe strongly in equality of opportunity and providing an opportunity for folks to start out with a seasonal warehouse job and work their way up or get an opportunity elsewhere.”

UncommonGoods is a retailer, not a political platform

All that said, Bolotsky is not interested in using UcommonGoods — neither the website nor the company — as a political platform.

“I want this to be a big tent,” he says. “Just like I want our country to be inclusive, I want  our company to be inclusive. And if you’re a conservative or a liberal, I want you to feel comfortable shopping here and working here. At the same time, I want us to be sensitive to people from all walks of life.”

Late last year, as the November presidential election approached, Thompson began thinking about adding to the post-election home page some acknowledgement of how exciting it was that the country had elected its first female president.

“That was my assumption,” she explains. So she brought the idea up with Bolotsky.

“Dave said, ‘Not everyone loves Hillary Clinton.’”

But, Thompson says, Bolotsky was willing to listen and explain his thinking, though the answer was no. But not just no.

The day after Clinton was defeated by President Donald Trump, Bolotsky sent Thompson a note. In it, the boss included a quote from Martin Luther King Jr.: “The arc of the moral universe is long, but it bends towards justice.”

It was his way, Thompson says, of lending support and encouragement.

“We went back and forth,” she says of the pre-election debate. “There was a lot of back-and-forth. He opens the door and allows for that kind of dialogue.”

Bolotsky has helped foster an atmosphere of openness. Though the company is privately held, he shares detailed quarterly financials with employees.

Thompson describes the atmosphere as being like a startup — a business where people are expected to try new things, move out of their comfort zones and speak up.

“The smartest people I’ve ever met are here,” Thompson says. “You work with incredible people and creative people. If you don’t have a solution, it’s, ‘Let’s figure one out.’ It’s really fun.”

For her part, Jillian Brendlen was surprised that Bolotsky interviewed her before she was hired. Her initial assistant merchandising coordinator position at the company, after all, was “kind of like low man on the totem pole.”

UncommonGoods' CEO David Bolotsky talks with PR person Jennifer Coleman

Bolotsky talks with PR and Social Media coordinator Jennifer Coleman about an upcoming New York Paid Leave Coalition event.

“I thought that said a lot about how much he cares for the staff and his team members,” she says. She soon found herself steering a big initiative to help create an UncommonGoods’ feature under which customers can pre-order items before they’re available for sale.

“I think he noticed that I was kind of stressed out,” Brendlen says. “He called me into his office and said, ‘Just come directly to me if you have any questions.’” As Brendlen left his office, Bolotsky leaned out the door to tell his executive assistant, “If Jillian Brendlen ever needs anything, make time for her.’”

“And that just made me feel, one, they’re very committed to this program, and two, they’re very committed to me leading it,” Brendlen says.

Committed is a good word for Bolotsky and his mission with UncommonGoods. He knows he faces unrelenting competition from upstarts, marketplaces and most of all Amazon. He’s still has a lot of faith in technology as a way to stay competitive.

“I’m a huge believer in technology. If I weren’t, I wouldn’t have started an internet retail business that is built on technology,” he says. “So we are always looking at technology to make us more efficient, make our team members and our customer experience better.”

But technology alone is not enough to fend off Amazon.

“They’ve largely taken over e-commerce and they certainly are setting the standard for customer expectation,” Bolotsky says. “They keep getting bigger and they keep getting better. They’re a ferocious competitor that I have a lot of respect for.”

Bolotsky’s approach to Amazon is to focus on minimizing UncommonGoods’ disadvantage in areas where the Seattle behemoth is hard to beat. Think speed and price of delivery. And then he focuses on ways to set UncommonGoods apart.

“I think you can compete against them by having differentiated product and differentiated customer experience — and we work hard to do it.”

The internet that Bolotsky saw in 1994 has indeed changed the world — in ways predicted and unforeseen. It spawned Amazon, which arguably has changed retail in ways unlike anything since. But Bolotsky is ready to take on that challenge from his fortress in Brooklyn.

After all, in many ways, when it comes to e-commerce, he remains that kid in the candy store.

UncommonGoods is a BloomReach Compass customer.

Photos by Mike Cassidy

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.

 

reporter's notebooks in a trash can

BloomReach Relevance Report: Two bit version

It’s been a long week. How about a short BloomReach Relevance Report? Read it during the commercials.

Who’s buying Macy’s this week?

Macy's and traffic and pedestrians at 34th Street in Manhattan

Last week it was Hudson’s Bay. This week it’s Amazon that’s buying Macy’s.

OK, this week’s Macy’s rumor (or is it this week’s Amazon rumor?) is maybe not even a rumor. It’s more like one analyst’s speculation — intriguing speculation, we’ll grant you, but speculation that doesn’t appear to be attached to any facts on the ground.

In fact, CNN reports that Cowen analyst Oliver Chen laid out the pros and cons of Amazon gobbling up the ailing Macy’s and eventually came out on the side of it not making complete sense.

That assessment was seconded by friend of the BRRR, Carl Boutet, a retail strategist with Canada’s Mega Group.

“Amazon doesn’t take on other retailers’ problems,” Boutet told the BRRR. “When it decides to roll out whatever format of store it chooses, it will do it on its own terms and not look to ‘retrofit’ any existing retailer’s footprint.”

Boutet says Macy’s is the latest star in a series of Amazon-to-the-rescue stories. Radio Shack and Best Buy, among others, have at times been said to be on Amazon’s shopping list.

And it is a little hard to swallow this notion of Amazon swallowing Macy’s. The venerable brick-and-mortar retailer is in a world of hurt, to use the technical term. It’s been pivoting and closing stores and talking about selling real estate, of which it has a lot.

And it’s been laying off thousands and eliminating jobs

The CNN story tries to give the Amazon-buying-Macy’s idea a little shove by pointing out that Amazon is known for making big bets. It started a hugely successful cloud business, Amazon Web Services, and it moved into entertainment with music and video offerings. It also expanded into hardware with the ill-fated Fire phone and the incredibly successful Kindle and Echo.

But that’s just it: Those big bets were in new markets, not a variation on retail, where Amazon has struggled historically to make a profit. Why take on a wheezing brick-and-mortar retailer just when it looks like its retail wing might be on solid (if thin) profit-margin ground?

Then again, Jeff Bezos was crazy enough to buy an old-school newspaper in this era of digital transformation. Why not go for a miracle on 34th Street?

You thought we were going to go a whole Macy’s piece without the MO34thSt. reference, didn’t you? No such luck.

Don’t Dump Ivanka Trump

Nordstrom on Market Street in San Francisco

Let’s set aside the question of whether a plug by someone who dresses like a greeter at Disneyland’s Fourth of July parade is good or bad for a fashion business.

The real question is, when is it OK for the White House to attack a retailer for deciding it was dropping a line that wasn’t performing.

What are we talking about? Half the time we don’t know. But in this case we’re talking about the retail drama gripping the nation. OK, gripping the BRRR. You might recall that Nordstrom announced some time ago that it would no longer sell first daughter Ivanka Trump’s fashion line because the stuff was not a big seller.

This did not go over well with the Tweeter-in-Chief.


That raised some eyebrows — and some questions from ethicists who said President Trump shouldn’t be advocating for his family members’ businesses from the Oval Office or from wherever it is he tweets.

But Trump’s message was far subtler than that of his right-hand woman, Conway. (Wait. Did we just use Trump and subtler in the same sentence?) She basically provided one of those late-night commercials with the screaming car sales guy during an interview on Fox & Friends (and yes, the Trump White House is friends with Fox).

“Go buy Ivanka’s stuff,” Conway, flanked by a U.S. flag and a White House plaque, said into the camera. “I’m going to give a free commercial here. Buy it today everybody. You can find it online.”

What happened next is hard to say. Of course Twitter blew up. It seems President Trump did not. The official word was that Conway had been “counseled.” By whom or for what was not clear.

As for Nordstrom, other than to say that its decision to drop the Ivanka Trump line was based on poor performance, it hasn’t said a lot about how it feels to be attacked by the president of the United States.

Matthew Shay, CEO of the National Retail Federation, was diplomatic in speaking to the Associated Press.

‘‘What we are seeing is that we are living in a world with a different kind of chief executive in the White House,’’ he told the AP. ‘‘He has a strong opinion on issues. We are learning to work in the environment.’’

Maybe if the Seattle-based retailer asked nicely, it could get an administration staffer of its own to give Nordstrom a little plug from the White House.

Quote of the week

“Sales associates are the front-line representatives for retailers, and how they engage with customers can make or break the shopping experience and impact sales.”  — Cheryl Flink, chief strategy officer for Market Force Information, to Women’s Wear Daily regarding the agency’s survey that found Nordstrom to be the most popular retailer in the United States.
Photos by Mike Cassidy

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy. 

Abstract image of the digital future

Analyst: The future of digital experience requires honest self-assessement

 

Digital Future abstract reprsentatioino

As the future of digital experiences approaches and washes over businesses with alarming speed, one thing seems clear: The new reality calls for a new way of thinking.

Those at the center of the transformation of content management systems (CMS) gathered virtually last week for a webinar that sketched out strategies that will allow content management practitioners to keep up with the demands of an ever-more sophisticated audience.

The “Future of Digital Experience” webinar, featuring Forrester Analyst Mark Grannan and BloomReach Chief Marketing Officer Kevin Cochrane, emphasized the need for content management professionals to consider their organization’s place on a maturity continuum before charting their content management course.

“We can’t seem to get out of our own way sometimes,” Grannan said during the webinar. “We sit in our functional silos. We’re merchandisers or marketers or content managers. Maybe we sit a little higher in the organization. We’re a chief digital officer or CIO. But even still, we’ve got some blinders on when it comes to digital experience.”

During his presentation, Grannan offered a good first step, which is framing the challenges and solutions in terms of a “digital experience platform.” He suggested that companies can be sorted into four categories — skeptics, adopters, collaborators and disrupters — based on their investment in and development of content management strategies.

Developing a strategy and deploying a CMS is not a one-size-fits-all affair.  An honest appraisal of a business’ maturity will help enterprises find the answer to the question: What’s our next move?

Moving into the future of the digital experience is best looked at as an exercise in building better customer experiences coupled with creating better operational effectiveness, Grannan explained in his talk. The two pieces work together and feed off each other.

Take an enterprise that is “young” when placed on the maturity continuum, for example, he said during the webinar. It might want to start with a better customer experience by expanding beyond its desktop website to offer a mobile-friendly site. Its next step could be handing off the maintenance and management of its software to an outside vendor, freeing up IT experts to focus on further improving the customer experience, through better personalization, for instance. It’s a virtuous cycle.

A more mature business might be ready to move to a new CMS platform — perhaps a platform as a service model, complete with robust A/B testing capabilities and the ability to provide continuous integration and delivery with the help of automation.

Automation is a way, Grannan stressed in the webinar, to free up time for higher value work; not a way to give up control of key projects and priorities.

“It’s not handing the keys to the robots and saying, ‘You drive,’” he said.

A more advanced step would be embracing a headless CMS that provides a repository of content ready for deployment across channels and devices. Marry that with a level of personalization that delivers that content to the right person at the right time on the right device and the virtuous cycle continues.

While the right CMS answer is not one-size-fits all, one thing appeared to be nearly universal among those who attended the webinar: CMS is a challenge and practitioners are hungry for change.

In a quick survey, attendees were asked to name their greatest pain point when it comes to CMS:

  1. The inability to track and analyze content performance.
  2. Time-consuming web publishing practices that are siloed, limiting agility and speed.
  3. Friction with IT to enhance and scale website functionality and delivery.
  4. Proliferation of tools to manage discrete moments of interaction with online customers.

The winner? You might have guessed: all of the above.

Photo by Steve Johnson published under Creative Commons license.

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.

 

Reporters notebooks

Macy’s meet Saks; Super Bowl LI ads; UPS’ bad good news: The BloomReach Relevance Report

Haven’t you worked hard enough? Of course you have. Why not sit back, relax and fill your head with the BloomReach Relevance Report?

Miracle on 34th Street meets Saks Fifth Avenue

Macy's on 34th Street in Manhattan

It’s hard to know what to make of reports that Hudson’s Bay (better known as the Canadian company that owns Saks Fifth Avenue) is looking to buy Macy’s.

OK,  no it’s not. What it says is: The department store business is as bad as everyone thought it was. True, Hudson’s Bay is in the department store biz, too, and it’s had its hard times, but nobody lately has been out-hard-timing Macy’s, which has been the poster child for ailing retailers.

No question it would be a bold move and an example of a little fish eating a big fish. And Macy’s is a very big fish — some 730 stores, Bloomberg says, about half of them in top malls.

What Macy’s really has is real estate — a lot of it and some of it quite valuable. You’ll find Macy’s at prime locations in cities like New York (the iconic Herald Square flagship), Chicago and San Francisco.

Bloomberg points out that Hudson’s Bay is a retailer and a real estate enterprise that has an interest in HBS Global Properties. The Macy’s stores would plump up HBS’s portfolio nicely, the Bloomberg piece says.

The Motley Fool is down with the real estate theory, pointing out that Macy’s real estate is worth many times the market value of the company itself. That fact could even lead to a scenario in which Hudson’s Bay buys Macy’s and then leases its stores back to Macy’s, MF says. What a world.

Macy’s meantime has been doing everything short of chopping up the furniture to burn in the fireplace for warmth. The company has announced that it’s closing 68 stores and laying off more than 10,000 people — or at least eliminating 10,000 jobs.

Bloomberg says the moves would save Macy’s more than half a trillion dollars in 2017, money that could be diverted to e-commerce, China and other retail divisions.

Department stores have had it rough lately, as empowered consumers relentlessly demand bargain prices and stores comply, feeding something of a death spiral. There are also the pressures brought on by e-commerce, eroding loyalty when it comes to brands and the rise of niche players with unique propositions.

It’s not clear yet what fans of Macy’s (or Hudson’s Bay for that matter) think of the rumored relationship, but the stock market is happy. Macy’s shares jumped 12 percent during the trading day Friday.

Alexa? Help me sell stuff

Amazon Echo, aka Alexa

Amazon has taken another step in hearing the voice of the customer — this time literally.

Marketing Land reports that Amazon has created a developer’s hub for advertisers and marketers to build apps for its Echo voice-recognition device. By now you are probably familiar with Echo, aka Alexa, the handy household assistant that will make shopping lists, play radio stations, tell you the news and weather and play Jeopardy with you.

Now Alexa is turning her attention to helping those who sell stuff sell it to you. The Seattle online seller has created an Alexa Skills Kit to help developers come up with apps (Amazon calls them skills) and has provided ways to connect with agencies that are experts at tracking how consumers interact with Alexa.

The move is a sign both of Amazon’s relentless drive to corner every market in every way possible and the coming importance of voice search. The Marketing Land story says several analysts reported that Alexa ordering really took off during the most recent holiday shopping season — “skyrocketed,” is the word ML used.

“Alexa: Make me some money.”

UPS says OOPS on earnings

UPS Tractor Trailer at Brooklyn Army Terminal

You’d think setting a record for package deliveries would be good news for a company like UPS, which is in the package delivery business, but, well, not exactly.

Yes, Internet Retailer says, UPS moved a record volume of packages in the fourth quarter, also known as the holiday shopping season, but it turns out many of them were gifts being shipped to residential addresses. And home is not where the big money is, UPS CEO David Abney explained on a call to tell analysts what Brown could do for investors, Internet Retailer reported.

Residential deliveries tend to be shipped via less expensive services than business-to-business shipments, the IR story says. And, as it turns out, UPS saw a big bump — an 11.5 percent increase — in residential deliveries in the quarter. In all, home delivery accounted for 55 percent of UPS’ delivery volume, the story said.

Overall, UPS volume increased by more than 7 percent in the fourth quarter. It was up 4.6 percent for the entire year, IR said, and residential deliveries accounted for 63 percent of the company’s deliveries.

If you look at the traditional holiday period, from Thanksgiving through New Year’s Eve, UPS moved 712 million packages (a record), which was a 16 percent increase over holiday 2015, Internet Retailer reported.

For fans of e-commerce, there was a bright side to UPS’s good-news-bad-news quarter. (Does that mean it was a good-news-bad-news-good-news quarter?) The surge in deliveries was caused by a surge in e-commerce sales.

The channel continues its torrid growth rate.

For companies like UPS (and FedEx and the United States Postal Service) what that means is buckling down and figuring out how to make money from those home deliveries.

The Super Bowl of commercials is, well, the Super Bowl

old television set

What kind of newsletter would the BRRR be without mention of the Super Bowl, on this, the eve-ish of the Super Bowl?

So hey, Super Bowl LI kicks off (get it) on Sunday and advertisers are lining up to pitch their stuff to biggest television audience of the year.

Remember when people watched TV? We digress.

Anyway, there is good news for Super Bowl advertisers, CNBC reports. CBS is offering advertisers who buy a minute for $10.4 million a discount. Yep. Two free seconds. (Yes, for free, the amount of time it took you to read this sentence!)

The $10 million ads aren’t just for the Super Bowl, of course. As CNBC points out, the ads, which also cost a mint to produce, run on the web for days, if not weeks before the big game. (We dare you start calling it Super Bowl Lee.) And they’ll run for weeks after on both television and the web

Back in the day the content of the ads was shrouded in secrecy — all the better to build suspense and spring surprise on the SB audience. Now the idea is to get the spots out there early and very, very often.

All of which means there is no danger in heading to the fridge during the commercials. They will live on and on in a digital infinity.

Quote of the week

“We’ve said all along we make buying decisions based on performance. In this case, based on the brand’s performance, we’ve decided not to buy it for this season,” — Nordstrom to The New York Times, explaining its decision to drop Ivanka Trump’s brand.

Photo of Macy’s and UPS truck by Mike Cassidy. Photo of Amazon Echo courtesy of Amazon. Photo of television by Everyone Sinks Starco (using album) published under Creative Commons license

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.

Dan Chester of Foresee

Video: What’s with your customers who don’t buy?

Yes, in-store sales are still a huge percentage of revenue for most retailers. But ForeSee’s Dan Chester says the physical shopping experience just isn’t cutting it for consumers. The experience is flat.

We caught up with Chester at the National Retail Federation’s Big Show this year, where we talked about using data to get at an elusive bit of intelligence: Why is it that those who don’t make a purchase, end up leaving without buying?

This is the second in our ongoing series of NRF videos. See more BloomReach NRF coverage on the blog.

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.

reporter's notebooks in a trash can

Target Pay; Sears tires; Ulta experience Robo Macs; Super Bowl LI: The BloomReach Relevance Report

Target takes aim at mobile pay market

Target store

Target is taking a page out of Kohl’s book and simplifying the process of separating shoppers from their money, Recode reports. (Did we really just use that page/book cliche?)

The mobile payment world is a swirl, with Apple Pay, Android Pay, Samsung Pay, CurrentC (is CurrentC still a thing?) and a host of others. But Target, like Kohl’s, is jumping in with its own thing for a particular stratum of customer — holders of Target’s Redcard.

Recode points out that some of the details of the Target scheme remain unknown. Will it be part of the popular Cartwheel app? Will it integrate coupons and Target offers?

One of the big selling points of Kohl’s program, called Kohl’s Pay, is that it tracks all the deals and promotions that a shopper is eligible for and calculates the price a shopper pays in one fell swoop — or swipe.

Kohl’s Ratnakar Lavu talked at the recent NRF Big Show about how Kohl’s is intrigued by Apple Pay, Android Pay and the like, but that there are complications with integrating promotions with third-party systems.

The store’s mobile payment program, which is available only to Kohl’s cardholders, is a raging success as it is, he added.

“The feedback is fantastic,” Lavu told Jason Del Rey, of Recode, from the conference stage. “We make it more seamless, compelling and engaging because we control the end-to-end experience.”

Yes, the program is currently targeted at the retailers’ best customers (those with the Kohl’s card). But Ratnakar is convinced that the enthusiasm will spread.

“I actually think it will turn our average customer into our best customer,” he said. “Our average customer will also learn about the benefits of it and we’re hoping that they will become the best customer.”

The key to this whole space-race-like rush to mobile payments is in something Lavu said — “control the end-to-end experience.” More than at any time before, retailers are turning their attention to the customer experience, both online and in-store. In fact, ideally, it’s all one experience.

While retailers are still interested in attracting new customers, they are gaining a deep appreciation for keeping the customers they have. Retaining customers, of course, is much cheaper than attracting a new one, something a business needs to do over and over if it’s not hanging on to the fans it has.

Sears continues to fight the good fight

Sears Store

Yes, Sears is struggling, but it’s not giving up. The retailer is looking to the future with experiments such as its deployment of artificial intelligence to help shoppers find the right tires and the right time and place to have them installed.

Retail Dive reports that the venerable department store has teamed up with IBM and Watson to offer a script to those shopping for tires. Those who choose to engage with the technology, will be asked a set of programmed questions to help get at which tires are right for them.

While the Sears program is a relatively limited application of the technology, it does point to the growing importance of machine learning in retail. As the Retail Dive piece says:

“AI capabilities such as machine learning and natural language generation and processing have tremendous potential to to bring quicker and more personalized service and response to just about any app that relies on conversation and customer interaction — which of course means just about any retail app you can think of.”

There are less flashy, but more comprehensive uses of artificial intelligence and natural language processing being used by many retailers, of course, though Retail Dive points out that many retailers have a ways to go to reach a point where they are taking full advantage of available technology.

It would seem that it’s only a matter of time before retailers pick up their AI game. After all, it appears that in retail, AI is where the rubber meets the road.

Sorry.

Ulta powers growth with unique experience and unique products

makeup

Ulta Beauty continues to kill it.

Its stock shot up nearly 40 percent in 2016, Bloomberg reports. It’s opening stores as others are closing them and its buzz is off the charts.

The cosmetics seller has taken what many say retailers must do — provide differentiated experiences and differentiated inventory — and executed nearly flawlessly to become the belle of the ball. (Come on. Not only corny, but borderline sexist.)

CEO Mary Dillon has purposefully made the store less “Amazon-able,” as Fortune put it, by stocking items that aren’t available at the online giant.

As important, as Bloomberg points out, Ulta has turned a trip to its stores into a happening. There are selfies (which shoppers can use to “try out” makeup) eyebrow tweezing, consultations and styling. So, why not make a day of it.

The Ulta story would seem to show that customer experience is not simply the latest shiny object for retailers to chase. Creating a memorable experience works.

We’re not making this up.

A real Big Mac attack

McDonald's Big Mac

OK,  we’re not proud of it, but there was a time that rarely a day went by that the BRRR didn’t indulge in a Big Mac. Yes, we lived to tell about it — and, through some effort, weaned ourselves from the fast-food treat.

And now this: McDonald’s is unleashing a Big Mac ATM that will cough up free Big Macs in return for an automated Twitter endorsement from the Big Mac eater, the Boston Globe reports.

We’re safe for now — and we know you’re glad to hear that — because the BM-ATM is all the way across the country from where we are. The cutting-edge, fast-food technology is rolling out in Boston’s Kenmore Square.

It will operate during lunch-time hours and it’s not an experiment to see whether McDonald’s can get rid of all the pesky people it takes to run the world’s largest peddler of hamburgers.

Micky D’s officials say getting the machine out there is a marketing ploy. No! And in fact the Big Macs it will dispense aren’t regular, old Big Macs, but all-new items called Mac Jr. and Grand Mac. (The Mac Jr. sounds suspiciously small. We’d go with the Grand Mac, which sounds suspiciously large.)

Anyway, to stick with our customer experience theme, the technology strikes us as an attempt to create a unique customer experience while also getting rid of some of the pesky people it takes to run a restaurant.

As the Globe points out, other food service outfits have turned to automation — something called Eatsa of San Francisco takes orders on iPads and delivers food to a cubby that a diner picks up without dealing with humans.

And the BRRR has to say it’s been tempted to try a nearby pizza place where the pies are made by robots. Pie in the sky? Maybe

By the way, any idea what to tip a robot?

The cost of Super Sunday just went down

If you’re sitting in front of the TV for Super Bowl LI rather than heading to Houston for the high holy day of U.S. sports, consider yourself lucky.

The SB will cost you only $75, the National Retail Federation says. Going to the game? Well, tickets are selling for an average of nearly $5,000 on the — ahem — secondary market, according to CBS.

Take that extra $4,925 and get yourself something pretty.

The NRF says total SBLI spending will be $14.1 billion, which is a lot of dough, but not as much as last year, when retailers raked in $15.5 billion on the big day.

Chart showing 10 years of Super Bowl spending by consumers. Source: NRF

(Source: The National Retail Federation)

The federation did not speculate on the reason for the decline. About as many people as last year were expected to watch the game — 188.9 million. So, that’s not it. Food prices are likely to be a little higher this year, which of course doesn’t explain a drop in spending.

Maybe it’s the match-up: New England Patriots vs. the Atlanta Falcons this year; Denver Broncos vs. Carolina Panthers in 2016.

Whatever the reason, the NRF had a bunch of cool statistics beyond the spending figures as a result of a survey it conducted with Prosper Insights & Analytics. A sampling:

  • Of the 76 percent of those surveyed who said they’d watch the game, 80 percent said they’d be buying food and drink for it.
  • Based on the survey, 11 percent will be buying team gear and 8 percent will be buying new TVs. Good excuse as any, we guess.
  • Forty-five percent of those polled said they’d host a party, which, when you think about, leaves the other 55 percent available to attend Super Bowl parties.
  • When it comes to why people watch, 43 percent say they like the game itself; 24 percent watch for the commericals; 15 percent just want to hang out with friends; 12 percent want to see the halftime show and 6 percent apparently forgot what the question was.

Quote of the week

“This is just another cog in the supply chain that they’re putting under their control, as well as creating new revenue streams.”John Haber, CEO of Spend Management Experts, to the Wall Street Journal regarding Amazon taking a bigger role in trans-Pacific shipments.

Photo of Target by Mike Cassidy; photo of Sears store courtesy of Sears; photo of makeup by Emily Cox published under Creative Commons license; photo of Big Mac courtesy of McDonald’s. 

Mike Cassidy is BloomReach’s storyteller. Reach him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.

nrfarrivalscropped

Use data to win at retail transformation: NRF’s Big Show

Retailers need to use data to thrive in a world where consumers decide when, where and how they’ll shop. Five tips on how to do that.

Reporters notebooks

NRF commiseration; retail predictions; Lowe’s low: The BloomReach Relevance Report

Consider this the just-before-NRF quick version of the BRRR. We’re keeping it short enough that you can read it between the time you get in your airline seat and the time the flight deck tells you to power down your phone.

NRF echo chamber

NRF Javits Convention Center main hall

First, we turn to us, and our advance coverage of NRF’s Big Show, because we really do like sound of our own voice.

It’s definitely an interesting time for everyone who is anyone in retail to be getting together to talk about how they can do what they do better. The retail news has been bleak of late, though admittedly it’s been dominated by department store news and department stores find themselves in a very tough spot.

Amazon, niche players and discount stores have been eating their lunch. At NRF 2016, they had the unseasonably warm winter to blame for sluggish sales. (People don’t buy warm clothes when it’s warm out.) This year, that’s no excuse, as your mother used to say.

A few interesting factoids from that Bloomberg story linked above:

  • Last month, when retail sales overall were up 4.4 percent, department store sales were down 7.2 percent.
  • That monthly decline in the department store sector was the 23d in a row. That’s nearly two years, people.
  • The portion of all retail sales online in the third quarter hit its highest percentage yet: 8.4 percent.
  • Perhaps more striking: The percentage of all retail sales online in 1999 was 0.6 percent. Sure, the internet was just getting started, but it’s amazing to think how far we’ve come in so little time.

With luck, those working to turn their brick-and-mortar retail operations around will find some inspiration at NRF — or at least an understanding shoulder to cry on.

If you’d prefer to think about the old days, here’s a photo essay from NRF 2016.

Speakers predict the retail future

Did we mention that NRF’s Big Show is coming up? We know, enough with NRF. But this is a perfect piece for those few minutes or many minutes you’re sitting on the plane at the gate, hoping that door closes before someone comes for the now-empty middle seat between you and the window passenger. NRF had speakers at the event tell them what 2017 would be all about when it comes to retail.

It turns out it’s going to be a good year for customers, which makes sense, since they spend the money. Most of the answers in the NRF SlideShare have to do with building a better customer experience something that’s alway been important, but which has taken on a greater importance in the era of the empowered consumer.

Have a look.

Lowe’s rejiggers workforce, to use the technical term

So, falling somewhere between item one (department store woes) and item two (emphasis on customer experience), comes news of Lowes’ layoff (less than 1 percent of workforce). It’s a reminder that the retail transformation is far from painless.

But to view the Lowe’s move as only a cost-cutting move would be to short-change the significance of the story. The cuts are part of a rethinking of the way Lowe’s does business, particularly when it comes to dealing with customers.

The idea in shifting employees around, the CNBC story says, is to free up people to spend more face time with customers. The story calls the strategy doubling down on Lowe’s efforts to serve customers both in-store and online.

Lowe’s had already announced that it would spend about $1.6 billion on new stores and technology in the next couple of years to improve its customers’ shopping experience.

The CNBC story also answers a question the BRRR had, which is this: We thought home improvement stores were rocking it, given the way the stronger economy is fueling home purchases and remodels. So, what gives?

It turns out, the story says, Lowe’s has been doing well. Same-store sales have been up for 14 straight quarters. The problem? The growth has not been as strong as competitor Home Depot in six of the last eight quarters, CNBC says.

That fact apparently has contributed to Lowe’s stock price sliding.

Quote of the week

“This generation also has a lot of influence beyond their own wallets. They also have influence on family spending beyond their own wallets.”Jay Henderson, of IBM, telling MediaPost regarding the company’s study that found 67 percent of 13 to 21 year olds do most of their shopping in physical stores.

Photos by Mike Cassidy

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.

Charging up the stairs at NRF's Big Show

NRF’s Big Show could be a therapy session for retailers

As 33,000 retail professionals converge at NRF’s Big Show, ominous trends and transformations will confront them. But from the chaos may come answers.

Reporters notebooks

Department stores blues; happy Gap; flipping junk: The BloomReach Relevance Report

Happy New Year! Resolution: Read more. Start with the BloomReach Relevance Report.

 

Department stores have a serious case of post-holiday blues

Macy's Manhattan flagship

We’d be remiss (whatever that means) if we didn’t participate in the annual post-holiday rite of pointing out how e-commerce sales grew by a double-digit percentage, while department-store sales continued to decline.

In fact, it seems we’re in a sort of department-store-aggedon, with Macy’s and Kohl’s turning in sickly holiday shopping sales reports, Sears selling off the iconic Craftsman brand and closing stores and, Nordstrom parting with its key digital hire less than a year after he arrived.

The Seattle retailer, known for grand pianos and even grander customer service, said it was going to take a long look at its long-term digital leadership as it figures out its next move, GeekWire reported.

It’s not a shocker that department stores are struggling in the face of Amazon, fast-fashion retailers and discounters with fast-changing promotions. They’ve been in decline for years, which isn’t to say that the declines were baked into stock prices. Department stores got clobbered on the news.

Many chains have tried many things: Stores in stores; buy-online-pickup-in-store, smaller footprints, exclusive brands, in-store taverns (this seems to hold the most promise, but maybe that’s just us).

There comes a point when you have to wonder whether there really is an answer. The BRRR has some experience working at newspapers, proud institutions that are facing their own department-store-like decline. After years of chasing the answer to declining revenue, it’s beginning to become apparent that for newspapers maybe there isn’t an answer.

Speaking of newspapers, Scott Herhold, of the Mercury News, of San Jose, California, wrote a Swiftian column in the wake of the recent shopping-mall-food-court riots. Herhold’s target? A California mall that banned unaccompanied minors on the assumption that teens cause riots. (No telling what they’ll do when they get a couple of Orange Juliuses in them.)

Herhold suggested, tongue-in-cheek, that the mall would find many advantages to banning all shoppers from their property. Sadly, given the state of department stores, you have to wonder whether Herhold’s vision of shopper-less malls might just happen on its own.

The bright spot on the retail side is that there is much more to retail than department stores.

Online retail is roaring. If you look at the recently completed holiday season, online sales set a record, according to CNBC, as they probably will next year, the year after that and for years to come. MasterCard Shopping Pulse reported that online spending during the holiday season was up nearly 19 percent over 2015, when it was up 17.5 percent over the previous year.

Of course, unless your name is Amazon, the celebration is slightly muted.

About that Amazon

amazonbox

Um, crushed it. Yep. You might have had a good holiday, but Amazon had a really good holiday. Like 2015, the Seattle behemoth raked in about 40 percent of online holiday retail spending in 2016. That’s after nabbing 60 percent of all e-commerce growth in 2015.

It all kind of reinforces the notion that doing the same thing isn’t working all that well for a lot of digital retail. Or as Ken Cassar, an Amazon watcher with market researcher Slice put it to CNBC in an email:

“2017 is clearly becoming the year [once again] that Amazon’s competitors have no choice but to think differently in order to counter Amazon’s dominance in the e-commerce channel.”

There was plenty of evidence that the Prime thing that Amazon does is catching on. Amazon said a record number of people ordered through Prime this holiday season, which makes sense, though Amazon doesn’t reveal actual numbers. Amazon also said more people signed up for Prime this holiday season than in any past season, according to CNBC.

Some other gaudy Amazon holiday facts, courtesy of Amazon:

  • More than a billion items shipped under the Prime program.
  • The retailer sold enough “Hamilton: The Revolution” books and Hamilton albums to give a copy to everyone who attends a performance of the musical at the Richard Rodgers Theatre in New York — for 96 shows in a row.
  • The fastest Prime Now delivery on Christmas Eve took 13 minutes. It landed at a Redondo Beach, California, home at 9:05 p.m. and it included a couple of Tile item finders.
  • Amazon sold enough “Harry Potter: Complete 8-Film Collection” to play for more than 300 years.

Well, you get the idea.

A different kind of Gap accounting

Gap store off Union Square in San Francisco

Did we mention that it’s not all doom and gloom? Of course we did. Clothing retailer the Gap stunned those who get stunned about such things when it reported a boffo holiday season. At a time when the big department stores were reporting more declines in in-store sales, Gap shows up with a 2 percent year-over-year increase in same-store sales for the holiday period.

If you break out December, things look even juicier: December same-store sales were up 4 percent over 2015. Retail-watchers were expecting a 1.7 percent decline for December, not far off what the department stores saw for the holiday season.

Much of the good news is thanks to strong sales at Old Navy, which saw a 12 percent increase in same-store sales in December. Banana Republic, on the other hand, peeled away some of the sales spike, slipping into a 7 percent same-store sales decline.

The overall black ink had Gap execs punching up their guidance for the full year, saying they now expected earnings to be beyond the high end of their previous guidance of $1.92 a share.

The stock market said, “Yes!” Gap shares rose 10 percent in after-hours trading Thursday, after closing down 4 percent, Business Insider reported.

Retailers turn to tech to turn things around

interior shot of layout of a Staples store

So, if you’re a department store or not Amazon, what are you going to do? Innovate or find someone to innovate for you, Retail Dive says. The industry publication ran through a number of specific examples.

Yes, we’ve been on this soap box before. It so happens we find it comfy.

As for Retail Dive’s examples?

  • Staples turned to artificial intelligence and machine learning to help it scale up, by a staggering amount, the number of stock-keeping units (or SKUs) it’s added to its site. Retail Dive mentions IBM’s Watson. It does not mention BloomReach, but we will. (Hey, what’s the ‘B’ for in BRRR, anyway?) It also started accepting Apple Pay on its websites, a payment form it started accepting in-store in 2014, RD says.
  • Sears is partnering with Uber, so that customers can earn loyalty points for Uber rides, RD says. And it’s integrated its Shop Your Way loyalty program with a service that provides paycheck advances, which does offer a hint of the desperate leading the desperate. What could really be interesting, though, Retail Drive says, is something called WallyHome, a home sensor technology company that Sears bought. RD isn’t sure what Sears will do with WallyHome and nobody knows what’s going to happen to Sears, but it will be interesting to watch.
  • JCPenney is working on its mobile app and has put improving its omnichannel experience at the front of the line. Good ideas, but not ones that scream “innovation.” RD rightly notes that these JCP efforts come after substantial progress in other areas.

One lesson here is that anything is better than standing still while waiting for the anvil of Amazon to drop on you.

One seller’s junk is some buyer’s treasure

rv

When the string runs out on this BRRR thing, we know what we’re going to do: retail arbitrage. The Wall Street Journal had a fascinating story in the “news to us” category that chronicled the exploits of shade-tree entrepreneurs who scour the countryside for goods that are selling well-below their value — or what the entrepreneurs believe the value is.

We know that the WSJ story, “The secret to a career in an RV: Always be selling,” requires a subscription, so we’ll give you a run down. (And here’s an old NPR story on the craft.) By the way, isn’t “always be selling” the secret to SaaS sales? Maybe that’s us again.

Anyway, these retail arbitrageurs, as they’re known, buy stuff like toothpaste for 75 cents a tube and then turn around and sell it on Amazon as two for $7.50, the WSJ says. It’s not necessarily easy money.

Finding the cheap stuff means bargain hunting, brick-and-mortar style, driving from town to town (hence the RV thing). It means keeping tabs on markets and pricing, shipping the goods (usually to an Amazon warehouse, which handles fulfillment).

Like we said, not necessarily an easy life — but certainly an interesting one.

Quote of the week

“As e-commerce grows, returns will become an increasingly glaring challenge for retailers.” — Alan Gershenhorn, UPS chief commercial officer, regarding this year’s record number of e-commerce returns, as reported in the Daily News of Memphis.

Photo of Staples store courtesy of Staples. Photo of RV by Daniel Oines published under Creative Commons license. Other photos by Mike Cassidy.

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com. Follow him on Twitter at @mikecassidy.

 

Reporters notebooks

Black Friday is here: The BloomReach Relevance Report

Hey, it’s Friday, black, blue, whatever. No matter the color you designate, take a minute to read the BloomReach Relevance Report — Black Friday edition.

The holiday horse race has begun

Black Friday sale sign

Yep. Just one month of shopping days until Christmas, which means one month of stories about how the holiday shopping season is going. In the world of retail and e-commerce, which are the same thing really, The four-or-so-week stretch between Thanksgiving and Christmas is the Super Bowl, World Cup, World Series etc. rolled into one.

Unless it isn’t.

No question, the holiday shopping season is spreading out, starting earlier, maybe even going later, though that traditional date, Dec. 25, tends to put a hard stop on things. Shoppers, as we know, buy what they want, when they want to, using the device they want to — including their own two feet carrying them into a store.

It’s natural to want an answer right away: Is the holiday season going to be a good one for retailers or not? Are more people going to be shopping online than in years past? Is Amazon going to dominate?

And it’s natural — and part of their job, really — for journalists to pick up every scrap of early evidence and data to try to answer those questions. And so, what we know: Online shopping saw a big bump on Thanksgiving — up 13.6 percent in the last few hours of Thanksgiving (which are the first few hours of Black “Friday”), according to Adobe.

MarketWatch, which was among those reporting the Adobe statistics, also noted that the mobile portion of that $1.15-billion digital shopping spree, was a record $449 million, most of that spent via smartphone.

The general trends have been building, though the numbers are interesting. Thanksgiving emerged as a big shopping day last year, when BloomReach data indicated that the new holiday tradition was to pass the stuffing and the gravy and then whip out the smartphone for some quick shopping before the dishes were done.

And mobile, well, it’s a thing, perhaps you’ve heard.

The danger, of course, is reading too much into the early signs. Let’s face it, it’s pretty easy to find a big line of people on Thanksgiving, relieved to have fled political talk with relatives, waiting to bust the doors at their favorite retailer. The whole story, won’t be known until the season plays itself out.

Speaking of stories, did you ever wonder if the people quoted in those holiday shopping stories get upset that the gifts they’re getting for family members are splashed across readers’ screens? Kind of blows the surprise. Right, Carrie Spicer, of Candler, whose husband is getting a watch, according to USA Today?

Hope he likes it. If not, he better start dropping hints fast.

More than any other, this Black Friday shows changing shopping habits

shopping-apps-on-iphone

Like that “more than any other” headline? Yeah, we’ll pretty much be able to say that every year for years to come. Digital shopping has shaken up everything and as it continues to grow, it will continue to shake things up.

The New York Times will let you live vicariously, if you don’t actually like to go into crowded stores on Black Friday. The NYT has been gathering shopping stories that tell the tale of shopping in 2016.

The very first story reminds retailers of something they already know: There is no more online vs. in-store shopping. Consumers shop whenever they want and however they want to. Exhibit One: Walter Reinoso at Foot Locker. He ordered his new kicks online and then showed up at the store to pick them up.

Order online, pickup-in-store. It’s what some customers want and so retailers need to supply it. Customer experience has never been more important. It’s not easy, but it’s necessary.

We also like how the NYT threw in some shopping tips. There is one we take issue with, however.

“Decide whether you’re going to focus on buying online or offline because it’s difficult to do both,” the tip sheet says.

Whether it’s difficult or not, it’s how people shop. We offer Exhibit One, as Exhibit One. Shoppers bounce back and forth between online and in-store. In fact, they shop online while in the store. They don’t think about it as “online shopping” or “in-store shopping.” To consumers, it’s just shopping.

Trying to beat Amazon at its game is no way to win

Amazon boxes on hotel cart

While we’re taking issue… The Wall Street Journal has a perfectly good story about retailers gearing up and bearing down for Black Friday. OK, nothing is perfect.

The story starts by saying that retailers are offering hefty discounts in stores and earlier deals online to compete with Amazon, among others. And while that might be the case, it’s not the right strategy.

OK, we’re guessing most retailers know what they’re doing and the hefty discounts and earlier deals are not the only thing they’re doing. Just so happens we recently wrote a series that lays out a number of approaches retailers can take to thrive in the era of Amazon.

Because here’s the thing about offering deeper and deeper discounts to score a competitive advantage: Pretty soon, you can’t discount anymore. And, of course, as you discount, you also diminish your profit.

We talked to Deloitte retail expert Kasey Lobaugh recently about this very issue. Lobaugh has presented Deloitte’s work on digital disruption a number of times. His conclusion: The best way retailers can thrive amid rapidly growing competition is to provide a distinctive customer experience and distinctive inventory.

In his conversation with the BRRR, Lobaugh said Amazon is a big threat in three categories: faster, cheaper and easier. Retailers, then, need to look at what they offer through the lens of cost and benefit.

Is the cost of dealing with a particular retailer, for instance driving to location and physically walking into a store, worth the benefit that customer gets from the transaction?

“Those retailers that are winning are retailers that, at least for the time being, still have enough benefit to overcome the cost,” he said.

Maybe that’s offering a product that no one else sells. Or offering a better version of a product that some others sell. Or providing better service after the sale. Or better advice before the sale.

“If you built your whole model around commodity products,” he said, “it’s hard to think of whatever the answer is that makes the store more relevant again.”

Holiday shopping by the numbers

Colorful numbers

Remember how we said earlier that journalists will grab any scrap of information in order to report on the holiday shopping sweepstakes. Well, if you can’t beat them, join them. These are some pretty staggering numbers, provided by Adobe, and covering the holiday shopping season, which Adobe says starts Nov. 1.

Totaling online spending: $29.1 billion

Total online sales growth: 4.7 percent

Total number of days with online spending over $1 billion: 23

Thanksgiving Day online sales increase: 11.5 percent

Share of desktop sales: 60 percent

Smartphone share of sales:  27 percent

Tablet share of sales: 13 percent

Biggest price decrease: Tablets, 25.1 percent

Quote of the week

“This is the largest visual investment of the year, every year.” — Joshua Schulman, president of Bergdorf Goodman, to The New York Times, describing the New York store’s holiday windows, decorated with 7 million Swarovski crystals and dresses that can run five figures.

Photo of Black Friday sale sign, Amazon boxes and Reporter’s Notebook by Mike Cassidy. Photo of iPhone with apps by Jason Howie and numbers by Andy Maguire published under Creative Commons license.

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.

empty store

Expert advice can help retailers outsmart Amazon — sixth in a series

Retailers battling Amazon for sales can seize the advantage by offering consumers expert advice from experienced advocates. How to show customers the way.

Kasey Lobaugh Retail Volatility slide

Beat Amazon by selling what it doesn’t — fifth in a series

One way to beat Amazon is by selling what the Seattle giant does not. Or at least offering inventory that is much better purchased in your store.

Home Depot buy-online-pick-up-in-store area

Five ways to compete with Amazon’s delivery — fourth in a series

Retailers need to get people to products and products to people in a variety of ways to compete with Amazon. Crystal clear communication is also key.

apple-store-at-stanford-copy

How to hurl brick-and-mortar at Amazon — second in a series

Most retailers have one big differentiator when it comes to Amazon: Actual stores. How retailers can use them to take on the retail giant.

amazonbox-copy

How retailers can thrive in a world with Amazon — first in a series

Amazon is a formidable competitor, but there is hope. Smart retailers can differentiate their inventory, experience and use their stores as a weapon.

Reporters notebooks

Donald Trump’s brand; Singles’ Day: The BloomReach Relevance Report

Take the time to say thank you to a veteran. Then read the BloomReach Relevance Report.

A week that was all that America is about

2016 Presidential ballot

The BRRR has had a week packed with civic duty and patriotic emotion. There was Election Day, which resulted in an unprecedented outcome. And of course there is Veterans Day, which is so much more than a day for retail promotions. And on top if it all was jury duty for the BRRR itself.

All of which is making for a shorter BRRR with this somewhat unconventional opening item.

The phrase “jury duty” is often followed by the sound “ugh.” Yes, it is inconvenient and at times tedious. But it is hard to think of a more vital responsibility for a citizen of our great country. We were especially blessed to sworn in on the same day that voters selected the next president of the United States.

The outcome, of course, was a shocker. Donald Trump, man who had never served in the military or the government was selected to be our next commander-in-chief. It was a phenomenally ugly campaign and an incredible divided vote that left nearly half the electorate happy with the result and a significant larger number disappointed or worse.

If you’re wondering what any of this has to do with retail, remember that many have said the election was likely a drag on retail spending.

Anyway, whichever side one falls on, the election was hardly uplifting. Ask Alec Baldwin and Kate McKinnon. Skip to 2:20 if you’re in a hurry.

But this where jury duty comes in. It wasn’t “ugh.” It was uplifting. The BRRR served with 11 other citizens who were earnest, attentive, intelligent, analytical courteous, open-minded and determined to reach a proper verdict.

We came out of the jury room, after the verdict, feeling better than we had all week.

Trump’s journey from Macy’s to the White House

philadelphia-macys

Now on to the president-elect. Turns out that just because nearly half the country’s voters think you should be the leader of the free world, that doesn’t mean your clothing line is coming back to Macy’s.

Speaking as one chief executive to another, Terry Lundgren, commander-in-chief of Macy’s said the retailer had no plans to relaunch Donald Trump’s clothing line just because he won the election.  (OK, Lundgren wasn’t addressing Trump directly. He was speaking to CNBC.)

Macy’s decided to dump Trump after then-candidate Trump said Mexican immigrants were rapist and criminals.

Macy’s decision apparently has to do with more than just the odious nature of Trump’s comments. Lundgren explained in the CNBC interview that it wouldn’t be all that smart to carry a brand named after a political figure.

“You wouldn’t want to have a product that was held by a prominent Republican or a prominent Democrat because 48% of the population doesn’t think that’s a good idea,” he told CNBC.

As an example he said Macy’s wouldn’t have a Hillary Clinton line, though we could see HRC pantsuits being a big seller. And if Macy’s stocked the pantsuits, they could reintroduce Trumpwear without appearing to favor one major party over the other.

It all seems simple enough, but it never is. Consider this: Although the president-elect’s clothes are out, Macy’s does still sell Ivanka Trump’s clothes and accessories. That’s all the more interesting, because D. Trump urged consumers to boycott Macy’s.

After all she’s done for him.

Retail is seeing a post-election glow

Allentown Kohl's Whitehall Mall

Hey, did you hear there was an election this week? Sure was and retailers think that now that that’s over with, they might start seeing people shopping again, the Wall Street Journal reports.

Macy’s and Kohl’s both said they were seeing sales pink up a bit now that much of the nation isn’t engaged in yelling at each other and worrying about how the world was going to end if the wrong person won the presidency.

The votes are counted. Donald Trump is headed to the White House and Americans are headed to the malls — or their computers, smartphones etc.

Kevin Mansell, who runs Kohl’s, said he’s still worried that consumers will be slow to shop given the uncertainty surrounding what Trump will actually do now that he’s the decider. You’ve got to admit, he wasn’t real clear on that during the campaign.

But Macy’s chief Terry Lundgren says pish (does anyone say pish?). The not-quite-half of the electorate that voted for Trump are going to be on an election high, he figures, ready to spend money like sailors on shore leave.

Which raises a question: What about the even larger number of Hillary Clinton voters. Are they going to be too bummed to spend? Apparently not, according to the St. Louis Post Dispatch, which reported on a National Retail Federation poll that had officials there saying a bi-partisan surge was coming.

That take is shared by ForeSee, an Ann Arbor, Mich., company that analyzes customer experience. In a poll taken between the Friday before Election Day and the Thursday after, two-thirds of shoppers of both parties said they didn’t plan to spend any more or less this holiday season than in the past.

That’s not to say the election, among the most surprising in U.S. history, didn’t affect consumers as they went about their buying business. The ForeSee survey asked Democrats and Republicans about their digital retail experiences on Wednesday, the day after the election. On a scale that tops out at 100, Republicans said their online experience was an 81. Democrats said theirs felt more like a 77.

But for those worried that the vitriolic campaign has torn the country asunder to the point where it will never heal, there is good news. As others have noted, it’s likely we have more in common than we think.

Foresee found that 85 percent of Republicans and 88 percent of Democrats would shop on Amazon this holiday season. When asked whether they would do more than half their shopping on Amazon, 32 percent of Republicans said they would, while 36 percent of Democrats said they would.

Singles’ Day is yuuuge

Man alone on a sand dune at Warren Dunes, Mich.

Yes, it’s Singles’ Day and yes the amount of stuff sold in Asia to commemorate being alone is once again staggering. The BBC reports that Alibaba is reporting $18 billion in sales on Nov. 11, which you might know as Veterans Day, or if you’re really hip as Onyx Friday.

Yeah, it’s turned into a super weird day, complete with opening ceremonies hosted by Kobe Bryant and David and Victoria Beckham. Katy Perry had to bow out for “family reasons.”

But nobody is laughing at the concept, which has even retailers beyond Alibaba laughing all the way to the bank.

And no question the Alibaba revenue figures are staggering. The BBC says the total is more than is spent on retail in the United States over the entire long Thanksgiving weekend.

But one other figure is equally as eye-popping. More than 80 percent of Singles’ Day purchases were made on mobile phones, a sign not only of mobile’s popularity in Asia, but also its potential elsewhere (like in the United States).

Oh, bet you wondered how we were going to keep our post-election-day theme going in this Singles Day item. Wonder no more. Did you know that the president-elect even managed to trump Alibaba’s big day?

Yep. The Wall Street Journal reports that the Alibaba media briefing meant to turn up the publicity machine for Singles’ Day quickly devolved into a discussion of Donald Trump.

Some know-it-all reporter asked the Alibaba exec spouting the company line how he thought a Tump presidency would affect the company. Trump, you may recall is not a big fan of China, though he talks about it a lot.

Anyway, Joe Tsai, the Alibaba guy giving the briefing said not to worry, according to the WSJ. He noted that China is a key source of consumer demand for American goods and a key source of capital investment. So any U.S. president who would have to be nuts to beat up on China.

Quote of the week

“Stores are still vitally important. But the influence of digital touchpoints is huge.” — Fiona Swerdlow, vice president at Forrester Research to The New York Times regarding online influence on in-store shopping.

Photos by Mike Cassidy

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com. Follow him on Twitter at @mikecassidy.

 

reporter's notebooks in a trash can

Starbuck’s holiday cups; big, Big Macs; Cubs buying frenzy: The BloomReach Relevance Report

Last chance before we elect a new president. Read the BloomReach Relevance Report — early and often.

Starbuck’s annual cup of controversy

Starbucks community cup

Ah, autumn. The leaves changing. The bracing chill. The anticipation of holidays yet-to-come. And a nation going bat-s crazy over the design on Starbucks cups.

Yep, the annual tradition is underway: People finding Starbucks paper cups not Christmas-y enough, even though this week’s switch to a green cup with a sketched homage to community wasn’t intended to have anything to do with anyone’s holidays.

No matter. Holiday traditions are hard to shake.

Yes, Starbucks had cup trouble last year when they went with a basic holiday red — no Santa, no reindeer, no Christ child etc. The company said the plain canvass allowed customers to create their own holiday story, which makes a lot of sense to us.

It can be hard to remember, as we are bombarded from mid-October through most of December with commercials, print ads and Internet come-ons for Christmas, that not everyone celebrates Christmas. Not even all coffee drinkers celebrate Christmas. So why not leave a little wiggle room in the cup department?

Anyway, one interesting thing we noticed in the extensive news coverage of the 2016 cup controversy is that some of our favorite angry tweets appear to be tongue-in-cheek. Which is a slight chink in our internet-outrage armor.

Emily Keeler’s Twitter feed, for instance, appears to be the feed of someone who enjoys a good laugh. And Jazmine, whose Tweet lacks any clues that it’s meant as a joke, later tweeted that it was meant as a joke.

That said, they’re good, so we’ll share them here in the spirit of being nonsensical.

 


 


Oh yeah, Starbucks actual holiday cup is due out next week. Brace yourself.

The Cubs are the curse for one e-tailer

Cubs Joe Madden

Let’s just say online orders for Chicago Cubs gear are way up from the last time the major league baseball team won the World Series.

Uber and Fanatics came up with a 2016 solution for those looking to hop on the bandwagon: The on-demand ride service and the sports-team clothing and memorabilia retailer set up a deal where Chicago-area fans could order caps and T-shirts on the Uber app and have them delivered within minutes.

No word on whether the Cubs were involved in a similar scheme, perhaps one using horse and buggy, when they last won the World Series in 1908.

 


Our sources, OK Twitter, indicate that the Uber thing is working out OK.

 


 

In fact, the Cubs long-awaited victory was a bonanza for all kinds of retailers, according to Internet Retailer. Even Crate & Barrel, which does not sell Cubs gear, but which is headquartered in Chicagoland, adorned regional websites with Cubs-related messages, IR says.

Cubs gear sold like crazy this season, Internet Retailer reported in a separate story. If you drill into the data, you’ll note that Cubs fans were not born yesterday. Well over half the merchandise sold was sold in the month of October. Nobody was going to go all-in early on the Cubs, which have a long history of, well, blowing it.

Not this year — and the team’s logowear sold at a pace more than eight times the league average. And those numbers were crunched before the Cubs won the World Series.

But not all was well in Wrigleyville in the wake of hell freezing over. Sports World Chicago provided a case study in the difficulties of scaling an e-commerce business when it got swamped with more orders than it could handle, according to Internet Retailer.

overwhelmed website

Sports World’s owner told IR that the operation simply doesn’t have the staff to handle the number of online orders coming in. He added that the online store brought in six figures in sales in a 24-hour period.

The brick-and-mortar operation, across from Wrigley Field, continues to function.

We’re going to guess that Sports World Chicago will be in a better position to handle the rush by the Cubs next world championship in 2124.

Collard green with envy

Collard Greens

Of course we’ve had our doubts about whether “any publicity is good publicity.”

But then along comes Neiman Marcus and its collard greens. Maybe you’ve heard: Among the really expensive things to buy for people you really like that are featured in the retailer’s annual Christmas Book are $66 collard greens ($81.50 with shipping).

Yep. The veggie side, long associated with Southern cooking and soul food, is now apparently the haute-est of haute cuisine. And if you thought Twitter lost its mind over Starbucks’ cups, you haven’t seen Twitter crazy.

 


Face it: It’s a target rich environment. Some were sure that Neiman was oblivious to the place collards play in African American culture. Nicole Taylor, who wrote “The Up South Cookbook,” told the Washington Post that collard greens were considered poor people’s food when she was growing up. Serving collard greens was nothing to be proud of, she told the news outlet.

The $80 price tag might change all that.

And if you’re wondering who would buy collard greens for $66 when you could get the same amount delivered for about $7 (plus shipping) from Good Eggs, you should note that the Neiman Marcus collards sold out.

Not to worry: You could always serve the Good Eggs collards and just say you got them from Neiman Marcus.

Or, as USA Today points out, you could just go ahead and get the Baked Bean Medley for $80, plus $18 shipping.

Hey, it’s Christmas (or it will be in about two months). Why not?

And this Big Mac is just right

Big Mac

It’s long overdue. Long, long overdue these coming changes to McDonald’s Big Mac. We mean, why serve one Big Mac when you can serve three.

Yep, starting early next year, fast-food fanatics can order a Big Mac, a big Big Mac or a small Big Mac, according to Advertising Age. What a country.

When you think about it, the burger with the middle bun is 50 years old. No, not the Big Mac you had for lunch — the idea of the Big Mac hamburger, which launched in Pittsburgh in 1967. Why not shake things up a little?

Micky D’s head honcho says customers have been clamoring for different ways to enjoy the one-of-a-kind taste of the Big Mac, which weighs in (get it?) at 540 calories, AdAge says. Oh and it also reminds us of McDonald’s last attempt to change it up with Big Mac: The Big Mac wrap. No, not a song.

The Snack Wrap Mac, the news site says, was half a patty, special sauce, lettuce, cheese, pickles and onions wrapped in a flour tortilla. Haven’t seen one in years.

Anyway, no reason was given for going bigger, but no real reason needed. More Big Mac for guys named Big Mac (and others who like to eat). Think of the trouble it would save this guy.

The small size, the company line goes, was launched because diners (and we use the term loosely) wanted a Big Mac that was easier to eat on the run.

Just what we need: More people eating fast food, faster.

Some, OK Brian Sozzi over at The Street, are not impressed. Biggering and smallering the Big Mac simply isn’t innovative enough, he says. Besides, he adds, the Big Mac special sauce has always been blech and remains blech.

Here at the BRRR it looks to us like McDonald’s is flailing around, trying figure out how to give people what they want now that they discovered that not everybody wants exactly the same thing.

Remember this guy, who made the biggest McDonald’s hamburger ever? You saw this coming, didn’t you. And yes, the whole point of this item is to post this video again.

Quote of the week

“It has much higher-end items. I always tell people we don’t want to be a Nordstrom’s, we want to be the Nordstrom’s of thrift.” — Goodwill of Silicon Valley CEO Michael Fox told the Resident newspaper, regarding the agency’s new upscale second-hand store.

Photos: Starbucks cup and Reporter’s Notebooks by Mike Cassidy; Joe Madden by Bailey Cassidy; collard greens by stereogab, published under Creative Commons license; Big Mac courtesy of McDonald’s.

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.

reporter's notebooks in a trash can

Target Toycracker; Amazon’s experiment, Macy’s fire sale: The BloomReach Relevance Report

So, the last Saturday in October. Don’t slide into November without reading the BloomReach Relevance Report. It’s bad luck. Or something.

Target targets holiday shoppers starting, well, about now

Target store

Give us a moment as we sift through Target’s holiday advertising plan. There is a lot to like, we think. Of course, we’re saps and suckers for the holidays.

But let’s start with what we don’t like, just to try to lend the BRRR a little credibility. First there’s this eight-minute musical the retailer is producing. It’s just like “The Nutcracker,” the Target folks say, except instead of Tchaikovsky the music will be hip hop.

Oh, and instead of the Sugar Plum Fairy and toy soldiers, Target will be slipping in Trolls and Teenage Ninja Mutant Turtles. (Hey wait. Isn’t Toys R Us using Trolls in its holiday advertising?)

Oh, and, about those swords used in the battle scene? Those will be microphones. And, one more thing, instead of calling it “The Nutcracker,” Target is calling it “The Toycracker.”

So, it will be just like “The Nutcracker,” except nothing like “The Nutcracker.”

We never liked musicals, anyway. They always seemed like good stories, constantly interrupted by singing. Sort of like good TV, being interrupted by commercials, which actually, the Toycracker is. It will be shown in two four-minute segments during the airing of “Frozen,” which is, well, a musical.

But it gets better. Target is bringing back Ginger Breadington, Target’s spokescookie. Honestly, we don’t remember Mr. Breadington, but he sounds pretty cute. Unlike musicals, we like talking food. Best of all, Mr. B is going to show up on Snapchat as a filter, according to website U.S. campaign. That means, U.S. campaign says, people can send “ginger snaps.”

Oh yeah, but it also gets worse. Target is rolling its campaign out before the Nov. 8 presidential election. As in the first week of November. As in really early.

So, get ready.

Will Amazon ever be a retail-profit powerhouse?

Amazon logo

Enough with the Amazon-taking-over-the-world stuff. Sure, we’ve been beating that drum and we figure it’s time for a respite. Here it is: A smarty-pants The Wall Street Journal columnist notes that more than half of Amazon’s earnings come from pursuits other than retail.

Maybe that’s not stunning news, given Amazon’s well-publicized success in the web-hosting world. But WSJ columnist Steven Russolillo has a furthermore: If AMZN wants to continue its gravity-defying (and, at times, logic-defying) stock-price rise, it needs to prove that it can be a killer retail company.

So far, the jury is out, though it’s spent tons on warehouses and delivery systems and the machines to make them hum. Apparently when a lot of money gets spent, investors like to see that much and a lot more come rolling in. And it might.

In fact, it better, Russolillo says, because as juicy as Amazon’s web services business is, it’s vulnerable to other big-name companies that are unleashing big cloud initiatives. The competition will be intense. There will be pressure on pricing, etc.

Amazon might indeed be giving retailers fits, but, Russolillo says, the big competitors in the cloud are not “dowdy brick-and-mortar merchants.”

Ouch.

We want it here yesterday

FedEx Ground truck

It seems two days is the new three-to-four days. CNBC reports that a recent Deloitte survey says that a dwindling number of customers consider three or four day delivery as “fast.”

Last year well over half (63 percent) said getting the goods within four days felt fast. This year, that number is down to 42 percent.

The culprit? Yeah, Amazon and its two-day Prime service, CNBC supposes. But it’s not just Amazon. Other retailers are also upping their game, the story says. More retailers with a physical presence are shipping orders from their stores, cutting down on delivery times, the story notes.

Oh, and, CNBC also points out that Amazon is rolling out same-day delivery to more markets. So, the number who say within four days is fast, slips from 63 percent last year to 42 percent this year.

Are we looking at 42 to 27 percent next year?

What Amazon has in store with stores

Amazon box marked heavy

Turns out those physical book emporiums that Amazon has opened aren’t stores at all.

They’re laboratories. The head of Amazon Web Services told the crew at the Wall Street Journal’s annual digital conference that the bookstores are a way for the company to noodle around with how it might use online customer data to build better experiences in a brick-and-mortar store.

It so happens that building better experiences in a store is a way to make more money. Combining in-store and online data has also been a big initiative for most retailers with brick-and-mortar outlets, given that shoppers increasingly no longer differentiate between online and in-store shopping. It’s just shopping.

Andy Jassy, the Amazon guy who spoke at Wall Street Journal Live D conference, said the Amazonians are pretty darn pleased with the way the experiment is going.

So you might ask yourself: Why would Amazon open stores to conduct experiments to see how it could sell more stuff in stores when it didn’t have stores to sell stuff in, until it opened the experimental stores?

All right, actually, you’d probably ask yourself a far less-convoluted sentence than that. The BRRR has its own syntax problems.

Anyway, after all that: We don’t know. But we could guess. We love guesses.

For some time there has been talk about major retailers selling their wares through Amazon. (Well, OK, Gap talked about it.) And Amazon has been courting fashion brands.

What if Amazon could offer retailers and brands not only its “storefront,” which consumers rush through constantly, but also deep data from online that could be used in-store?

Or what if Amazon created another business unit, ala Amazon Web Services, that somehow provided just the analytics, based on what it learns with its laboratory stores?

Some look at Amazon’s latest moves and ask: Who knows? We prefer to look at Amazon’s latest moves and ask: What if?

Minneapolis’ Downtown Macy’s may be doomed

Marshall Field's sign

Minneapolis’ iconic Macy’s store could be on thin ice, which is a phrase they rarely get to use in Minnesota. The Minneapolis Star Tribune reports that the retailer is far along in negotiations with a buyer who would convert the historic building mostly into office space, the Star Tribune says.

Macy’s isn’t saying anything. The company has talked for some time about unloading some of its valuable real estate and possibly leasing space back from the new owners. The ST story says it’s possible, but not certain, that Macy’s could keep a small retail presence in the building, through which you could trace the history of Minneapolis retail.

The Star Tribune points out that the Macy’s site is huge, 1 million square feet in three adjacent buildings, built between 1902 and 1929. It once housed the flagship store of the Dayton’s chain, the original parent of Target. In 2001, the building became a Marshall Field’s, the iconic Chicago department store that was purchased by Macy’s in 2005.

Quote of the week

“We got to send an important message that we’d rather invite people to go outside with us rather than be fighting it out in the aisles.” — REI CEO Jerry Stritzke, in an email to the Associated Press explaining the retailer’s decision to double down on last year’s Black Friday closing.

Amazon logo courtesy of Amazon. Photos by Mike Cassidy.

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.

baloonarch-cropped

A Hippo walks into a startup…

Can't have a party without balloons. Combining Hippo and BloomReach colors.

Can’t have a party without balloons. Combining Hippo and BloomReach colors.

Today I start work in a new company — and so do all my co-workers, and a bunch of new co-workers.

BloomReach has acquired Amsterdam-based content management system company Hippo and today we formally join forces to build the first open and intelligent digital experience platform.

It’s one of the great things about working at the center of the ongoing digital revolution: Things change all the time. But sometimes, like today, they change in ways that are vastly more significant than at other times.

The combination of BloomReach and Hippo forms a pioneer in the coming phase of commerce and communication on the web — a platform with the potential to dramatically improve every interaction for every web user.

“It’s been awesome to work with these guys,” BloomReach CEO Raj De Datta said, while announcing the acquisition to BloomReach employees. “I think together we’re going to do something really great.”

OK, maybe my calling it a “new company” is less than precise. BloomReach is a bigger company. A company with a significantly wider scope. And it’s definitely a company starting a new chapter. But we are still BloomReach.

In a meeting to discuss the acquisition with BloomReach employees — and with Hippo’s founders present via teleconference — De Datta described the move as the start of BloomReach’s Chapter 3. We’ll get to the first two in a minute.

But the third chapter? It’s big, if we do say so ourselves. It means that digital businesses, which is pretty much all businesses, will be able to harness algorithms and machine learning to offer individually relevant recommendations concerning products and services — and content, too.

hippo-bloom-header

It’s a major step in the direction of “BloomReaching the web,” or making every digital experience personally relevant for every individual digital consumer. It’s been a long-term goal since the company started.

In a world where consumers are in control — where digitally empowered users decide how, when and where to shop and how, when and where to consume information and content — it’s vital to be able to deliver the right content to the right person on the right device at the right time. That’s especially true when the right device might be a laptop, smartphone, tablet, credit-card reader, auto dashboard, kiosk, touch screen, shopping cart, electronic sign or even arena scoreboard.

Milestones provide a time to focus on culture

But the BloomReach/Hippo deal is big for other reasons, too. It is big for the two companies that are becoming one. Nearly three years ago, on BloomReach’s fifth anniversary, I wrote about the importance of company culture as an ingredient in startup success.

There is only so much a manager or executive can control. The bigger the company, the harder it is. Instead, a company needs to be infused with a way of doing things; of treating people, partners and customers. That is culture.

“Culture is absolutely crucial in helping people amplify the strengths of each other and cancel out the weaknesses,” Silicon Valley scholar Paul Saffo told me at the time. “Good culture is where people stand on each other’s shoulders. And bad culture is where people stand on each other’s toes.”

A big day like today, the marriage of two companies, is a chance to re-examine and remember why those values are important. At BloomReach, the company values are often stated in shorthand — Truth, Own, We, Think and No Drama.

Hippo team members conduct their quarterly business review aboard a boat, of course.

Hippo team members conduct their quarterly business review aboard a boat, of course.

And, De Datta said, those values were at the forefront of the talks with Hippo, which was equally focused on connecting with a company that shared its own long-held values. (You’d expect no less from a company that holds “beer and fun” as two key pillars that support the company.)

“The culture has been the driving force behind Hippo. Product and culture at Hippo goes hand-in-hand,” says Varia Makagonova, Hippo’s global communication manager. “For all of us at Hippo, it’s really clear that we wouldn’t have merged with another company if it didn’t match our company values. That’s how important it is.”

Hippo and BloomReach’s culture convergence

In her time at Hippo, Makagonova has written about the culture and camaraderie at the company.

In fact, it turns out, Hippo has a culture shorthand of its own, one that is remarkably similar to BloomReach’s — Committed (Own), Outspoken (Truth), Smart (Think), Together (We), Humorous (No Drama).

Keeping that corporate DNA front-and-center has kept Hippo grounded and growing into a global enterprise still run by its original foundersJeroen Verberg, Arje Cahn and Tjeerd Brenninkmeijer.

And living its corporate values has powered BloomReach through two chapters of its story and to the beginning of Chapter 3. (De Datta talks about BloomReach’s commitment culture in the video below.)

Oh yeah, the first two chapters? While meeting with employees, De Datta laid them out this way:

Chapter 1 covered the first three years of the company’s life, a time when BloomReach had one product that was focused on organic search. Chapter 2 lasted the next four years, years during which BloomReach added two more products — one optimizing site search and the onsite experience and another providing instant and actionable data for site merchandisers.

Chapter 3 starts today.

Back when I wrote about BloomReach’s fifth anniversary, I made the point that the benefit of celebrating corporate milestones (and there was some celebrating, indeed), isn’t so much being able to revel in the congratulatory glow.

It is more a chance to stop and think about how a company, particularly how the people in the company, got the company to the milestone it’s celebrating. It’s a time to think about what went right and what went wrong; a time to appreciate those you work with and their role in the success you all enjoy.

Today, we have dozens of more co-workers to appreciate — and we’ll surely do that. And then, all of us together, will go about the business of writing Chapter 3.

Photos by BloomReach/Hippo.

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.

reporter's notebooks in a trash can

Walmart slows its roll; McDonald’s better burgers: The BloomReach Relevance Report

So, it’s the opening weekend of baseball’s postseason, something that means something to some people and nothing to others. Either way, take a break from the action to read the BloomReach Relevance Report or busy yourself reading it while others around you sit transfixed.

Watch out for falling store openings

walmartbopus-copy

Wal-Mart Stores is pulling a 180 that is more dramatic than the doughnuts hot-rodders spin in the retailer’s ample parking lots at night, USA Today and many others are reporting.

The Bentonville behemoth is going all-in on e-commerce, slowing its new store openings down to next to nothing and pushing to make a big move into Amazon’s territory.

The online emphasis has been a thing now for years for Walmart. But the move away from brick-and-mortar expansion marks a dramatic change. The Wall Street Journal reports that Wal-Mart next year will open only half the number of superstores as it did this year. It’s cutting back on its pint-sized Neighborhood Markets, too.

The BRRR has done the math (with a 50 percent assurance of accuracy): Wal-Mart plans to open 55 stores next year down from 230 this year. One important point: The vast majority of the 230 (161) were Neighborhood Markets, not the gigantic supercenters.

Profits will take a hit, though execs said there still will be profits. The forecast is for a profit flat line next year and bump about about 5 percent the year after that.

The move reflects two big retail trends: The unrelenting online assault by Amazon and the move to marry in-store and online experiences to boost consumer convenience and retailers’ profits.

On point No. 1: Amazon continues to gallop ahead as the place consumers start their online shopping excursions. A recent BloomReach survey, conducted by Survata, found that 55 percent of consumers begin their product searches on Amazon. That’s up 11 percentage points from just a year ago. And this time next year? Well…

And so Wal-Mart is jumping in with both feet, hoping to drive online and in-store sales with a more robust e-commerce offering — including a third-party marketplace.

On point No. 2: Wal-Mart is pairing its ramped up online efforts with a push to improve customer experience both in-store and online. The store is offering a beefed-up employee training program and providing better pay for those who work in its stores.

Turns out, customer experience is a thing and the nation’s biggest retailer is on it.

Opening fewer stores is the answer; unless it’s not

warby-parker

So, Wal-Mart Stores’ move pretty much seals it. Fewer brick-and-mortar stores and a bigger emphasis on online sales is the way forward for stressed out retailers, right?

Well, no. Turns out, online-only plays are now turning to brick-and-mortar expansion. Bonobos and Warby Parker, both of which started as e-commerce operations, are saying they will expand the number of physical stores they operate, The Wall Street Journal reports.

(The Journal story requires a subscription, but this Retail Dive summary does not — and it comes with commentary.)

In fact, a Warby Parker founder told the Journal that he could see a world where the eye-glass seller had 1,000 real stores. And no, he doesn’t need his eyes examined.

It seems that customers actually like to talk to people, at least sometimes. The Retail Dive summary above says that Warby Parker’s co-founder Neil Blumenthal found that out when for a period he was inviting customers to his apartment to try on Warby Ps, if they liked.

Sure, it sounds weird, having strangers plucking specs off your dining table so they can try them on. But Blumenthal found that not only did customers like talking to people, but that Warby Parker could build a better relationship with customers when they dealt with them in person.

That relationship is key, because getting someone to buy a pair of glasses from you once is nice, but getting someone to buy glasses from you over and over again is the goal.

Another sign that smartphones are taking over the world

smartphone-shopping

Yet another study that serves as a reminder to retailers that they need to bring their best game across all channels. Search Marketing Daily reports that nearly half of consumers browsing the web, browse on more than one device.

As important, on any given day, 40 percent of consumers search only on their smartphones, according to the Search Marketing story, which quotes research by Google. The numbers underline the importance in providing a great mobile experience, sure, but they also make the case for retailers being consistent across their various channels.

We are a nation of multitaskers and Marketing Daily says 57 percent of those surveyed said they use multiple devices every day. In fact, 21 percent of those use more than one device at the same time.

One other cool thing: Google looked at the time of day people use different devices. No big surprise: Searches on mobile devices dominate for 15 of a day’s 24 hours. Desktops (which could be laptops, too) hit their peak at 8 p.m. — after the dishes are done and the kids are in bed or getting ready for bed.

The computer use then drops off as the night goes on.

All of which is another sign that there is no reason to believe that the mobile revolution will let up. The trick now is for retailers to figure out how to translate all that mobile browsing into mobile sales.

McDonald’s bad burgers: Do you think fresh beef would help?

Now, you knew the BRRR couldn’t pass this story up, if only for the chance to once again post this video. It’s an all-time favorite — of ours.

Anyway, the Golden Arches are making another move to serve up hamburgers that don’t suck. Turns out consumers are turning to Five Guys, Shake Shack and a place called The Habit, which we’d never heard of, but which apparently has the best burgers going. (Then again, we’re sheltered.)

You can get a deeper dive on McDonald’s hamburger-improvement program in The Wall Street Journal, though it’s available through tiered subscription.

It pretty much lays out the problem in a memo obtained from McDonald’s. Millennials just aren’t that into the Big Mac, which is a big deal for McDonald’s. The memo said the burger is less relevant, which has us almost feeling sorry for the iconic burger.

In fact, next time you see the Hamburgler give him a hug. Anyway, only one in five millennials has even tried the BM. And if you know anything, you know that without millennials there would be no reason to exist.

How bad are McDonald’s burgers? The worst, according to a 2014 Consumer Reports survey that ranked 20 fast-food burgers ahead of McDonald’s.

And so, McDonald’s has convened a panel of experts to come up with a good-tasting burger. They plan to start with fresh beef, which sounds better already. There are likely to be some premium ingredients involved, which couldn’t hurt.

The big worry is that all this goodness will slow things down. It turns out McDonald’s likes to get you your hamburger in 90 seconds and apparently a lot of McDonald’s customers believe they need to get their hamburger in 90 seconds — especially those who use the drive-through and devour the burger while behind the wheel.

The Journal runs down a series of failed McDonald’s attempts to give the public a better burger. There was the Arch Deluxe, there was the Angus beef experiment, there was the premium sirloin burger. Nope. Nope. And nope.

So, we’ll see. In the meantime, you can’t miss with the fries.

Holiday shopping starts when?

macys-holiday-interior

So some experts are saying that this year’s presidential election could slow holiday shopping — at least temporarily.

I’m not sure which is more interesting: that politics might interfere with holiday commerce, or that it’s now a given that holiday shopping will be in full swing by Nov. 8.

No, the BRRR hasn’t had its head buried in the sand. We know holiday shopping has been kicking off earlier and earlier.

It just sounds odd to read a sentence like this one in the MarketWatch report:

“The Nov. 8 presidential election and its outcome will distract consumers, but the retail industry believes that shoppers — well-positioned heading into this holiday season — will quickly get back to purchasing gifts after ballots are cast.”

We mean, it’s not like we’re talking about a few eager beavers getting their shopping going within about a week of Halloween. This story has the holiday shopping season in full swing by the first week of November. In full swing enough that it could actually experience a lull.

And it’s not hyperbole or baseless speculation. The story points out that PwC has released its 2016 holiday forecast, which says that 64 percent of consumers will have started their holiday shopping before Black Friday and that 29 percent will be all but finished shopping by then.

The potential upside? Maybe, given their penchant for getting a start on things, those shoppers will have voted early, by mail. That way their shopping won’t have to be interrupted at all.

Quote of the week

“We’re excited to give this day back to our employees so they can celebrate with their families.” — Mall of America senior VP of marketing Jill Renslow to the Minneapolis Star Tribune, regarding the mall’s decision to close on Thanksgiving.

Smartphone photo by Jason Howie published under Creative Commons license. Other photos by Mike Cassidy. 

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.