Brick & Mortar v. e-Retailers...Heed the Need for Change

Brick & Mortar vs. e-Retailers...Heed the Need for Change

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Change is an arduous task.  When one, no many, have been doing things a certain way for years...and successfully...it makes it all that much harder to accept change.

For change to occur, one first needs to accept that change is a necessity.  Once accepted, don't delay...spring into action, then review and retool if needed.  It's basic Six Sigma strategy.

Note to the "physical" retaill store community....STOP trying to compete on price.  The time to change is now.

Brick & Mortar retail will never be able to compete against the web retailers on price.  The facts are conclusive:  due to lower costs, web retailers can profitably sell products more cheaply than physical stores — and with a few clicks, it's often more convenient for customers to buy online.  

Retail stores have been trying mightily & creatively to fight off the emergence of the low-price web retailer, but with little luck.

Target is a perfect example.  Over the holidays Target announced that their stores would a "match any price" offered by the online retailers such as Amazon, Best Buy & Walmart.  It is now a full time store policy.  Wait, doesn't Target also have an online web site?  Sure, and that's just the point.  Why fight it?  Just realize that the two buying experiences are different and position yourselves to win in BOTH.



Recently we've had a multitude of conversations regarding retail vs. online orders, and the changing consumer preferences.  This hot topic has many large retail companies searching for answers, as they try to compete in this e-commerce space. 

So how does a retail store, indivdual or a large chain, compete in BOTH spaces?  Whether you are an office supplies store, print shop, book store or cosemetics retailer...how do you remain competitive?

The answer is "Omni-Channel" marketing.

In his June 3rd HBR Blog post, "Brink & Mortars (STILL) Can't Beat The Web On Price, author Rafi Mohammed proclaimed the following:

"When first challenged by the on-line retailer, brick and mortar stores responded with a nebulous rebuttal of "we'll offer better service" as a counterweight to their price premiums. That hasn't worked very well.

Next some retailers (like the Target example above) have tried a Hail Mary tactic: "We'll match the best price you can find on the Internet." The logic here is that without the price-match guarantee, the retailer was going to lose the sale, so sales gained by this policy are incremental revenue (which results in gross profit as long as the price at least covers merchandise cost). The downside is customers become trained to play the game of checking prices on the Internet first, which has negative long term effects — you can't make money when more and more of your customers start paying incremental prices.

The allure of cheap web prices has recently blossomed due to mobile phone apps that direct users to a lower price on the same product, generally at an Internet retailer. Many of these online retailers offer free shipping and, for the moment at least, many don't charge sales tax (which at 9.25% in Chicago, for instance, adds up). These apps encourage "showrooming," the practice of customers checking out merchandise in physical stores and then purchasing at a discount on the web.

Brick and mortar retailers need to realize that selling the same products as established web retailers do, even with price match policies in place, is not a viable long term growth strategy.  The following four categories of merchandise create reasons — hence, value — for customers to visit stores:

Well-branded, highly differentiated, and exclusive: This was a centerpiece of Ron Johnson's plan for J.C. Penney — a strategy that I argued was brilliant but ultimately derailed due to other factors.
Non-exclusive with a twist of differentiation: Adding some type of uniqueness — even to common products — creates value and minimizes price comparisons. Target tried this last year, but no reports have since surfaced regarding its success.

Non-exclusive and non-differentiated but at a discount: With showrooming, manufacturers benefit from consumers being able to see and touch their products in physical stores. I've argued that stores should demand a physical store equalizer discount from manufacturers so at the very least, they can profitably compete on price against web retailers.

Non-exclusive, non-differentiated, no discount, but advantageous to buy at a store: Some products are easier to purchase in stores. Fashionable clothes, for instance, benefit from being tried on prior to purchase. The lower the product price, the less likely the web vs. store price differential will result in showrooming. "It's only a 10% difference" is more manageable on a $100 product than, say, a $1,000 one.

The optimal merchandise assortment is a mix of the above products as well as generic items that are also available at Internet retailers. And counter-intuitively, these generic products can be priced higher than what web rivals are charging. How is this possible? First, a large segment of customers simply prefer to shop in stores. As gas stations do, retailers can charge more for "full serve." Just as important, even discount-minded customers drawn to stores for unique products may out of convenience pick-up a few premium-priced generic products. After all, how many times have you visited a grocery store to purchase loss leaders but ended up loading your cart with products that aren't deals?

This is the KEY point of Rafi's article....
"The brick and mortar vs. web battle has long been portrayed as one based on price. Viewed through this lens, physical stores simply can't win — it's time to forget about competing on price. Instead, the mantra for brick and mortar success should be "creating and capitalizing on value." Stores should offer products that provide reasons for customers to visit stores, leverage this differentiation to sell additional generic products, and focus on customers who prefer shopping in stores."

So...how does all of this apply to the concept of Omni-Channel Marketing, and what exactly is it?

Wikipedia has a great description, as it relates to retailing:
"Omni-Channel Retailing is very similar to and an evolution of, multi-channel retailing, but is concentrated more on a seamless approach to the consumer experience through all available shopping channels, i.e. mobile internet devices, computers, bricks-and-mortar, television, catalog and so on. Retailers are meeting the new customer desires by deploying specialized supply chain strategy software."

Omni-channel is definitely an iteration of multi-channel, and the good news is that this part of our industry has a tremendous amount of white space; nobody is doing a particularly good job, and that means opportunity, hopefully for our current and prospective customers. 

Reign Print Solutions is focused on helping its clients properly balance the communications, so that their "customer experience" is seamless. With awareness of what a consumer is doing, marketers can start to tell a continuous story that plays out whenever and wherever the consumer interacts with their brand. The premise here is that customers and targets are going to move from platform to platform on a regular basis, often to perform the same task, and that they have expectations that their behavior in one place will influence the experience in another.

In future posts we will provide more specific examples of Omni-Channel Marketing Solutions, and how these concepts may help you compete in the ever-morphing world of e-commerce ordering.  Clicks vs. Bricks, as we fondly refer to this "customer experience" model.
The focus, truly, is on maximizing the customer experience...regardless of which channel they are visiting.  "Differentiation" and relationships with the end customer are the keys to success.

If you'd like further information, please contact either Bill or Sean @ Reign Print Solution's offices ~ 800.853.3552.

Change: Best Practices vs. Better Practices

  
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           Change:  Best Practices vs. Better Practices

Throughout my career, I've heard the line "we are looking for BEST in class or BEST Practices".  The need to focus on benchmarks, set by other people has really never made sense to me.  It seemed to make more sense to set the bar ourselves and seek to continually become the "leaders in the field", rather than have someone else set the bar. I could never quite figure out how to best put that into words until recently.

Mark Sandborn, author and renowned Leadership and Teamwork expert puts it this way...

He explains that the concept of best practices always needs a qualifier – best practices … for now …that we know of…given this set of  circumstances….

He goes on to point out today’s best practices are next week’s second best practices and next month’s obsolete practices.

Sanborn suggests rather than  a focus on best practices we should seek to establish better practices and next practices.

Better practices: how can we do what we (or the competition) are doing now, but simply do it better?

Next practices: how can we change the game?

Change is not easy, as we've discussed.

Many companies become hamstrung by this fixation on having BEST practices.  This can be crippling for growth as management often cannot agree upon what is "best", by definition by application.

So what happens?  They send their people off to keep looking.  This fosters non-decision, stagnation, inefficiencies and frustration among the ranks.

It is easy to do what you have always done. It is easy to do what you claim is industry best practices.
It is tougher to do what Sanborn suggests, and that is to continually set the bar by establishing better practices and next practices.

What if the focus was more so on BETTER practices...keeping the company moving forward, using "continuous improvement" and Six Sigma methodolgies? 

Six Sigma Improvement Process = Define, Measure, Anaylze, Improve, Control 

Isn't BETTER practices an improvement over never finding BEST?

At Reign Print Solutions, we are driven to help our clients navigate operational and marketing print/communication processes...so that change can be scalable, measureable and deliberate, and not based upon fear of the unknown (which results in stagnation).

Managing Change: Managing People's Fears

Managing Change:  Managing People's Fears

 change (chanj)  v. 

1. To become different, or to ALTER

2. To make radically different, or to TRANSFORM

3. To shift in another direction, or to SWITCH sides.

change management n.

Minimizing resistance to organizational change through involvement of key players and stakeholders.

Change management is an approach to shifting/transitioning individuals, teams, and organizations from a current state to a desired future state. It is an organizational process aimed at helping change stakeholders to accept and embrace changes in their business environment or individuals in their personal lives. In some project management contexts, change management refers to a project management process wherein changes to a project are formally introduced and approved.

Change management uses basic structures and tools to control any organizational change effort. The goal is to maximize benefits and minimize the change impacts on workers and avoid distractions.

What the structures are, how they are presented, how they are implemented and measured...that is the ultimate challenge.  Employee "buy in" will be the difference between succcess and failure.

How the Best Organizations Make It Happen:  Per McKinsey research, "the most successful organizations, over the long term, consistently focus on “enabling” things (leadership, purpose, employee motivation) whose immediate benefits aren’t always clear. These healthy organizations, as we call them, are internally aligned around a clear vision and strategy; can execute to a high quality thanks to strong capabilities, management processes, and employee motivation; and renew themselves more effectively than their rivals do. In short, health today drives performance tomorrow."

The 3 Paradoxes for Fostering Change:
The first is that change comes about more easily and more quickly in organizations that keep critical things stable. The second is that organizations are more likely to succeed if they simultaneously control and empower their employees. And the third is that business cultures that rightly encourage consistency (say, in the quality of services and products) must also allow for the sort of variability —and even failure (the "black swan" events we talked about previously) — that goes with innovation and experimentation. 

Balancing stabilty and change is the true testament of success.  Organizational change, obviously, is often imperative in response to emerging customer demands, new regulations, and fresh competitive threats. But constant or sudden change is unsettling and destabilizing for companies and individuals alike. Just as human beings tend to freeze when confronted with too many new things in their lives—a divorce, a house move, and a change of job, for example—so will organizations overwhelmed by change resist and frustrate transformation-minded chief executives set on radically overturning the established order.

At Reign Print Solutions, we are driven to help our clients navigate operational and marketing print/communication processes...so that change can be scalable, measureable and deliberate, and not based upon fear of the unknown (which results in stagnation). 

In following posts we will examine how the healthiest organizations recognize the cultural challenges and fears, yet "enable" their employees to welcome, embrace and drive necessary change.



Black Swan Events: Navigating The Uncertainty

Getty Images

Stunned traders on the New York Stock Exchange floor in 2008

Learning to Love Volatility:

In a world that constantly throws big, unexpected events our way, we must learn to benefit from disorder, writes Nassim Nicholas Taleb.

“Best practice” models, risk management, ROI metrics, SOX compliance, Governmental Policy and such are considered critical tools for success these days.  Why, because these modern-day practices attempt to micro-manage, minimize risk and maximize stability…based upon theories, statistics, and staunch controls.

In previous posts we've talked about the fact that it is far better to change when you want to...not when you are forced to (as in the wake of a tragedy).  

Unfortunately, as much as the best of the best would like to think…there really are no predictable absolutes.  We’ve seen that with the most recent economic, government and climatic tragedies. 
Stuff happens.  If we cannot truly and unequivocally measure the risks of potential blowups, what are we to do?

Per the author of the below WSJ Journal article (link), the answer is simple: We should try to create institutions that won't fall apart when we encounter “black swans” —  or that might even gain from these unexpected events.  Note:  "Black Swans" are large events that are both unexpected and highly consequential.  We never see black swans coming, but when they do arrive, they profoundly shape our world: Think of World War I, 9/11, the Internet, the rise of Google or natural disasters such as the 2004 Tsunami or Hurricane Katrina & Sandy.

The moral of the story here?  Fear & uncertainty can be paralyzing.  But remember, NOT changing to the world and business climate around you can be equally paralyzing.  Change is good.  Falling down is good too.  You need to fall & should expect to do so.  Just make certain you have band-aids in hand, and are willing to learn from that fall.  You’ll be better because of it.  This is how you will truly minimize future risk and maximize sustainable stability. 

The author, N. Nicholas Taleb, provides some cutting edge concepts on how best to deal with these “black swans”.  5 Rules that can help us to better navigate around & survive potentially unknown and fragile situations.  Interesting food for thought.

Consider this message for your own business…although every company likes to think of itself as pro-active, are you?  If you are more re-active, operationally speaking, is your company built to handle “black swan” events?  The “what if” kind that could severely re-shape your business?

At Reign Print Solutions, we are driven to help our clients continually evaluate operational and marketing print/communication processes...so that change can be scalable and deliberate, and not based upon fear of the unknown (which results in stagnation).

CLICK THE BELOW LINK FOR THIS WSJ ARTICLE:

http://online.wsj.com/article/SB10001424127887324735104578120953311383448.html

Through tragedy, comes change

 

As the old saying goes, "through tragedy...comes change".

Egads, who wants to hear that line though?

It is far better to change when you want to, versus when you HAVE to.

That's a fairly easy statement to make.  However we often fail to follow this wise advice.  Especailly in big organizations.

Major league baseball knew it had a steriod problem, The NFL knew concussions were a growing concern.  The USA knew it had heightened concerns with terrorism and Al Qaida.  Congress, banks and investment companies knew there serious problems with the sub-prime loan market.  Eastman Kodak knew its key patents were running out.  General Motors knew it lost tremendous market share and needed to correct costs and the pension plan.

So, why wait?  Why sit on it until it explodes?

It's easy...it is human nature to procrastinate.

Our tendancy as human beings is to keep repeating what works. Only when it stops working do we, by nature, try another behavior.

Too often tragedy needs to occur before REAL change can take place.  Won't happen to us.  Things will eventually correct themselves.  Yes, but we have more critical things to handle.  Low hanging fruit...we will get to it later.  We've all said these things.

Sure, through tragedy comes change.  But not the kids of change anyone wants.

Continuous Improvement.  Six Sigma.  Sarbanes Oxley & "Best Practices".  All of these organizational measures were put into place to help minimize the chances that "tragedy" does not strike.

Through foresight, readiness and a realistic sense of urgency comes true desired change.  Sustainable change.  Listen to those around you.  Listen to your trusted business partners and associates.  Heed the warning signs.  Always be looking for a better way to do things, or improve upon something that does not appear "quite right".

Regardless of its size or relative importance...it is far better to lead the change, than be forced into it.

At Reign Print Solutions, we are driven to help our clients continually evaluate operational and marketing print/communication processes...so that change can be scalable and deliberate. 

Change Is Hard: Part 2 ~ What Can We Learn From Theo & The Cubs?

 

Change is Hard ~ Part 2:

What Can We Learn From Theo & The Cubs?

The Chicago Cubs have not won the World Series since 1906, making them the longest running "losers" in North American Sports.  Their last World Series appearance in 1945, was marred by the infamous Billy Goat curse. In 1969 it was the "black cat" that ruined an otherwise stellar season.  Then, when it appeared the Cubs were finally headed back to the World Series in 2003, the Steve Bartman incident sent the Cubs home again.

  

Enter Theo Epstein, Change Agent.  Epstein helped erase the 96 year "Curse of the Bambino", while General Manager of the Boston Red Sox in 2003.  The Sox won again in 2006.

The Chicago Cubs hired "Theo The Great" in 2011, with hopes that Epstein can repeat this heroic feat in Wrigley Field.

Good luck Theo.  Why?  Because REAL change is hard.  The kind that makes a sustainable difference.  That allows you to not only win more games, but also multiple World Series.

Change is not just hard work.  Change is not just vision.  Real change is hard work and vision working together in harmony.

Change is a process.  A mindset.   It is an evolving, continuous fluid process. 

Epstein's long-range stratgic plan for the Cubs is involved.  Hundreds of pages "involved".  It is focused not just on the big picture, but also the small pieces; the fundamentals and culture that begin at the front end of the organization.

Much like any large company, the Cubs Major League Team functions like the Corporate Office.  A place where upper management & top sales people (players) make it all happen.  The minor leagues are much like the field personnel, the satellite offices and warehouses...where the groundwork or foundation is laid for this success.  What Epstein has learned is that the Cubs have been missing two mission critical items for years; (1) harvesting of talent (proper player development), and (2) one unified vision, one grand plan.  Without this in place, The Chicago Cubs will continue running the bases in futilty for another hundred years. 

Imagine this.  Each Minor League manager working on their own goal ~ to win games and move up the corporate ladder.  Does it sound wrong or bad?  No, not really.  However, if the real goal is to build up minor league talent and focus on the fundamentals, and not just winning games...then the organizational culture needs to change.  

The Chicago Cubs minor league farm system has historically been one of the most unproductive in the Minor Leagues.  There is a reason for this.  Lack of communication, leadership and focus.  Theo understands that to create sustainable change, the small fundamentals need to be in place to meet the organizational goals.

Somewhere, long ago, the small stuff like the communication and fundamentals got lost.  This wrecked the Cub's culture, the harvesting of talent and the ability to foster change...and a winning attitude.

What exacty does all of this have to do with critical documents and printing? 

Fundamental change can be hard.  Assessing and revising processes can be a challenge in any organization. 

Document driven processes & communcations are the lifeblood of any company.  Documents (printed or electronic) enable the workflow that drives the marketing engine, that moves the products (operations), so that finance can collect the money.  These are the small fundamentals. 

EVERY communication your company sends out is an opportunity to connect with the end customer in a meaningful and relevant way.  Marketing collateral, advertising,  packaging/shipping documents & communcations, billing.  All of these items touch the customer.  If all "communications" are not working in unison, a "black cat" event can be catastrophic for any organization.

 

Are your communications an area of competitive advantage for your company? 

Whether your company is in need of change, is in the process of changing, or has already changed...Reign can help your organization evaluate and measure the communication processes (documents, print, electronic) that drive the organization.  Using a consultative approach, Reign has the ability to look across the enterprise and make certain the "small things" connect with the corporate goals...and enable sustainable success in this ever-changing marketplace.  

Let us help you make certain all communications are cross-functional, on the same page and working in harmony to contain costs and maximize the message results. 

Call us today for a free assessment ~ Reign Sales @ 800.853.3552.



Change is Hard: Part 1 ~ Theo and the Chicago Cubs

Change is Hard: Part 1 ~ Theo and the Chicago Cubs

Whether personally or in business, change is not an easy process.
Just ask Theo Epstien(new President) and the Chicago Cubs organization.

It is hard to believe, but baseball spring training is just around the corner.  MLB teams will once again be posturing this year to reach the top ~ the World Series.  A place very unfamiliar to the Cubs...and their loyal fans.

It's no secret that the Cubs are the epitome of an organization forever stuck in neutral.

Like any organization needing change, it may appear that the answer is to look @ the obvious.  The cut that is bleeding, or the area in need of the most repair.  Hire a new manager.  Or sign a new scorer or clean up hitter.  Get new uniforms, change the logo or marketing, cut payroll...some teams and companies look for what might appear to be the quick immediate answer.

And some large organizations can't help themselves, because they are forced to live in the present.  Need to hit numbers this QTR...need to win THIS season.

But in many cases, the need for change may be much deeper than that.  It may require a more strategic look at the underlying problem...the culture and processes that drive the organization & the daily operations.

This is why Theo Epstien is here...he was hired to become the Chicago Cubs' new "Change Agent".  He was part of a like organization/situation (the Boston Red Sox), that finally got out of neutral.  Can Theo reproduce that success here?

Now the Cubs' futility is somewhat unique...however what is not unique is that real change is a process, not an event. 

Cutting costs, winning a few more games, hiring a new manager, signing a power hitter or getting a new account...those are all events.

Sometimes it's the fundamental changes what will bring you more long term success.  Many times the short term changes, or quick fixes, can bring about greater problems for the future.  Slashing budgets & hiring a new manager may help get you a few more "wins" this year, but keep you stuck in the quagmire of mediocrity for the next 3 years.

Reign Print Solutions can help you look at your long range communication goals.  Reaching your customers in a more relevant and meaningful way.

We are talking about laying the groundwork for sustainable success....not just a few more wins in 2013.

Coming next..."Change is Hard: Part 2 ~ What Can We Learn From Theo & The Cubs?"

Embracing Change in 2013

Change.

The way we communicate is forever changing.

The way we move information, market or advertise an idea, communicate a message, distribute and store data...changes daily. 

Technology has played a large role in how we communicate & distribute information...and also how we measure its effectiveness.

What hasn't changed is the need for messages to remain relevant, timely and well communicated.

Consumer behavior has also changed, and has become a more fluid & evasive target.

The proper blending of data, technology, innovation and instinct will be paramount in communicating and growing this ever changing consumer relationship.

Change is critical for any company who wishes to maintain relevancy in our ever morphing, technology driven climate.

Successful Change cannot occur without the proper information.

It is in this spirit, on the day of our 25th anniversary, that we dedicate this new Reign Blog to our founder ~ Bill Jourdan Sr. ~ who's firm belief was that "an educated customer was a satisfied customer".

Embrace Change.

 

Here's to a prosperous and happy 2013!

 

~ Your Reign Print Solutions Team ~

"Innovative People Transforming Print"