Results Count ... everything else is conversation.

Best Buy Needs a Makeover from the Body Shop

CE consumer experience pales in comparison to facials

The IMS Retail University curriculum has grown beyond the foundation course focused on fundamentals.  In the “Experiential Retailing” workshop, participants evaluate different retailer’s ability to engage consumers by personalizing their experience.  Last week’s class yet again validated that the “ladies of body care” are heads and shoulders above the experience levels in consumer electronics.

 

The 5 Ps of Consumer Experience

Previous posts have highlighted the 5 Ps of experiential retailing.  In view of the low ratings for consumer experience by last week’s Retail U class, the 5 core principles bear repeating:

· People

· Process

· Personalization

· Place

· Products (Solution)

The whole is greater than the sum of the parts.  To truly create a “wow” consumer experience, the retailer must be able to execute the first four P’s in order to be able to earn the right to offer a product solution.

One of the tenets and principles of Retail University is that you must get “on the floor” to fully understand the dynamics of retailing.  This is particularly true for best practices on how to engage consumers, and how to differentiate through experience and service.

Retail U shoppers rate CE experience at the bottom

Not surprising, the Retail U class found the consumer experience to be woefully lacking in retailers like Target, Walmart, and Sears.  Indeed, it was just a challenge to find any store staff on the floor.  When an employee was found, the typical response to a question was to point to an aisle … with some words of encouragement to search “over there”.

Best Buy is the last national US CE retailer with an assisted sales floor.  Indeed, the new CEO, Brian Dunn, has made numerous statements about differentiating Best Buy through personal service via the “Blue Shirts”. 

Therefore, it is quite remarkable to hear the “mixed reviews” of Best Buy from the Retail U shoppers.  The best engagement and execution came from some of the Magnolia staff who did execute the 5 Ps.  But even in Magnolia, a number of shoppers were never greeted … and simply left standing in aisle, trying to use some of the power items on display.

The Ladies of Body care blow away Best Buy on Experience

In the Experiential Retailing class, we ask the class to go out and shop for something they know, and for something outside of their comfort zone. When you shop for something you know and have researched, it is very easy to ask informed questions and guide the selling process.  Said another way, when the shopper understands what they need, they make up for a lot of deficits in the sales person, process and merchandising.

When asked to go shop for something they know nothing about, the courageous males of the class go to The Body Shop, or Bath & Body Works to inquire about skin care.  Inevitably, these shoppers are the last ones back, but the first to raise their hands to share their experience.

In fact, you can’t get the males or females, who shopped for skin care, to stop talking about their experiences!  They rave about how they were greeted and made to feel comfortable in the store.  Some are even offered tea.  But, what is most compelling for the shoppers is how the “ladies of the store” take the time to ask lifestyle questions to personalize a solution … and a regime (process) for each individual consumer.

Results Count – The Proof is in the Bag!

While all Retail U participants are asked to complete a mystery shop evaluation for the 5 Ps, they are specifically told not make a purchase.  What happens?  In each class, several bring back “body bags” … and they can’t wait to show off their new skin regime purchases!  It’s never a single item.  In meticulous detail, they describe both why they need a total solution, and how the ladies customized skin care just for them!

Clearly, the “ladies of body care” are head and shoulders above “Blue Shirts”.  They have “people skills” that make them highly successful in engaging consumers, in non-threatening ways, to sell very personal solutions.  They also have a process and the training to execute a personalized experience consistently across different consumers.

Why aren’t there more women on the CE retail floor?

The enlightened CE retailers are trying to appeal to the CPO – the woman, who is the Chief Procurement Office of the home.   Best Buy has even created a special pilot store appealing to women, designed by women.  Best Buy store managers would do well to recruit some of these talented “ladies of body care” to balance out the male dominated blue shirts across all stores. 

While people skills are necessary for engagement, they are not sufficient to create best of breed consumer store experience.  The “ladies of body care” would not be as successful in any CE retailer without the other 4 Ps. Why is so hard for CE retailers to create an environment, and the process to personalize the experience for consumers based on lifestyle needs, versus tech specs?  Perhaps, it is because many CE products are now commodities, sold as components on the basis of low price.

To execute Brian Dunn’s mission of differentiating on the basis of consumer experience will require a complete makeover of “Big Blue’s” ability to execute all 5 Ps at the same level of consistency as the “body shops”.

 

The little “Redbox” rewrites movie rental retail

Kiosk success underscores the retail fundamentals

The definition of retail is: a place where consumers buy a product or service one at a time off the “shelf”.  While much has been written about the advances of internet retailing, there is little attention paid to the lowly vending machine.  Redbox vending kiosks are generating serious cash and have changed the perspectives on movie rental retailing.

The counter intuitive trend of Redbox kiosk retailing

When we first highlighted the concept of “Redbox” kiosks, it just still that … an early retail concept in fact piloted by McDonald’s.  There was considerable debate about whether consumers would rent a movie while at the grocery store, drug store or “Micky Ds”.  Many also postulated that the convenience of movie downloads or rentals from cable/satellite TV would quickly wipe out movie rentals on DVD.

Redbox is essentially a vending machine about the size of large side by side refrigerator.  This kiosk can hold up to 700 DVDs, with typically 200 popular titles.  Something must be working.  Redbox has grown from a handful of locations to over 15,000, with 5000+ more planned this year. 

Both Blockbuster and Netflix are scrambling to come up with some kind of kiosk alternative.  Perhaps, it is because the ubiquitous Redbox can generate as much as $50,000 annual revenue per machine, with no staffing present and minimal infrastructure.

What makes Redbox so successful?

From the eye of the consumer it’s as simple as:  “milk, shampoo … and a $1 movie rental.  Redboxes are strategically located in the highest traffic areas, where consumers shop for consumables like groceries, health and beauty or fast food.

The naysayers quickly point out that Redbox success comes at the time of recession, when consumers are shopping for bargains on everything.   The movie rental price of just $1 drastically undercuts the competitor pricing models.  Won’t this business simply go away when the economy turns around?  Perhaps, but there significant consumer experience factors with Redbox that go beyond pricing.

Redbox consumer experience & execution factors that make it work

·         Location, location … location – Redbox is where consumers shop for mainstream consumables every week / day

·         Redbox was piloted and rigorously tested by McDonald’s

·         Redbox was purchased by Coinstar, who is a specialist in vending machines, locations and servicing them

·         Assortments are carefully managed and replenished based on both hit and classic titles

·         Consumers can quickly find hot and preferred movie titles … literally right in front of them

·         Consumers can swipe a credit or debit card to rent

·         Consumers can easily return the movie rentals to any Redbox regardless of where they rented

Will Redbox meet the demand of all consumers? No.  But, the Redbox concept and brilliant execution have radically changed the movie rental business for “spur of the moment” renters who literally “bump into” the opportunity for a movie night.

From the consumer point of view, Redbox is a “killer app”! It enables a very efficient experience of finding, renting and returning at a movie for just a $1.  No hassle with finding movie guides, scheduling downloads or recordings, or returning DVDs in the mail.

Let’s see now … should I order the fries from the $1 menu, or get a movie?  Redbox has made the choice incredibly easy for busy shopping moms and many overweight dads like yours truly.

Will the US Retail Malls Come Tumbling Down?

The fundamental retail metrics for retail malls to survive

US malls were designed as “destinations”, complete with ice skating rinks, amusement parks, and a wide selection of specialty shops and department stores.  Analysts now classify more than 100 of these centers as “dead”.  What can the retail metrics tell us?  Will this become a worldwide trend?

The Malling of America

During the 1950s and 60s, the ubiquitous shopping mall sprang forth in the population centers of the US.  By the 1970s, every city of even a few hundred thousand people had to have a “mall”, or even two.  They were designed as “retail meccas,” where Americans could drive their cars and shop a wide variety of large “anchor” stores, as well as a dizzying array of specialty shops carrying the latest in fashion.  In short, they were huge, multi-level, self-contained super structures designed to pull consumers.

But, US malls were more than a place to “shop”.  They were designed as “destinations”, complete with food courts, movie theaters and other forms of entertainment.  The largest malls even had ice skating rinks and amusement parks featured in the center courts.  Kids became “mall rats” and went to malls to hang out, meet friends and to shop.  The Mall of America in Minnesota even had satellite hotels so that families could plan extended stays to shop the hundreds of stores.

Inside the center of Mall of America, Minnesota

So what changed? … Why are US malls dying?

These economic times have increased pressure on all retailers. But, the malls started struggling even before the recession hit the US.  There are fundamental trends in both consumer shopping habits and retailer strategy that have put the US malls at jeopardy:

1.     In these economic times, consumers are spending less on luxuries and fashion featured in mall shops.

2.     Growth of big box retailers with stand alone stores and discounted prices have lured cost conscious shoppers away from malls.

3.     The internet is everyone’s competitor not only on price, but convenience … why go fight the traffic to shop the mall when you can get the same item cheaper shipped free to your home?

4.     Key mall “anchor” stores are finding the mall rents too high in the face of double digit declines in sales, so they are building stand alone stores or focused on the internet.

What do the key retail metrics forecast for US malls?

One strategy is to revitalize old malls with new openness and courtyards to make them more like open air markets found in Europe.  But, this takes significant capital.  With the current recession, there is a critical credit crunch, especially for real estate and refinancing.  General Growth Properties owns more than 200 US malls and just filed for bankruptcy. They are unable to refinance the billions of debt still coming due on the existing properties, let alone generate new money to revitalize malls.

There is an industry rule of thumb that any large enclosed retail mall must collectively generate significantly more than $250 of sales per square foot of retail space, or it is in high risk of failure.  The current US average for all malls has already dropped to $381 per square foot.

Does this mean that individual stores in malls are failing?   Apple mall stores have certainly beat the average and set new benchmarks, often exceeding more than $3000 sales per square foot!  But, even at Apple there is worry that sustaining revenue will be difficult if store traffic goes down due to drops in overall mall traffic.    

The large mall “anchor stores” in the US often occupy two, three or more levels.  These major department stores are suffering double digit drops in sales, with very expensive mall leases for retail space.  When they leave, there is a very noticeable empty void and significant loss of customer traffic.  Literally hundreds of these major US mall anchor stores are in jeopardy, many not renewing their mall leases. 

According to Green Street Advisors, US malls posted a 6.5% overall decline in tenants’ sales.  Analysts project that there are already at least 80 “dead malls” with dangerously low sales and high store vacancy rates.  With no investment capital, this number will easily exceed 100 US malls by the end of the year.

The bottom line retail metric – Traffic!

After several decades, the big destination US malls have lost appeal, and financial viability.  Customers vote with their plastic.  They are going to “Wally World”, “Big Blue” and their computer screens to shop.  If the big anchor stores in US are suffering double digit loses and pull out of expensive leases, there is a death spiral in overall traffic for the mall and all shops suffer.

Key retail metrics like conversion rates, attachment of accessories and building the market basket are core drivers of retailer profitability.  But, there is nothing to “convert” if the customers stop coming.  If the malls don’t reinvent ways to get consumers to come back, they are doomed.   When US malls become “ghost towns” with empty parking lots, there are no other retail metrics that matter.

Will the failure of US malls spread worldwide?

First, not all US malls are failing.  The more recent ones built as more open air centers continue to drive traffic.  Instead of enclosed mega structures, the open air malls incorporate ball parks, green spaces and other attractive ways to get consumer to come stroll, shop and stay.

The large multi-level mega malls built in the US are not typical worldwide.   Many European “shopping destinations” are really a collection of shops built around a city center, or even historic districts that by nature draw traffic.

No lack of shops or shoppers in open concourses of historic City Center of Munich, Germany

 

From what I witnessed in my travels to Asia Pacific, the malls there are not destined to fail anytime soon.  While they are multi-level and even high rise, they are a collection of much smaller shops.  There are few, if any major anchor stores taking up a whole end of a mall.  While there are some shop vacancies on the very top floors, the vacancy is merely a “stall” waiting to be filled by a new vendor.

Singapore fashion malls are more compact with smaller shops

And many of these malls are built at natural traffic centers and crossroads. Often, the Asia Pacific malls are clustered together in close proximity making it easy for shoppers to walk between them.  

The bottom line:

The US built malls as elaborate destination locations with entertainment enticing shoppers to drive their cars to come shop.  The shoppers are now going elsewhere for entertainment and to shop.

Shopping malls in other countries, particularly in Asia are built at natural crossroads and centers with natural traffic, and accessibility.  These malls are built as a “mosaic of smaller shops”, that ebb and flow based on consumer preferences. 

In this economy it is far better and more profitable to build mall shops in proximity to consumer centers with traffic … than to build expensive destination malls with enough pizzazz to draw long distance traffic, with the hope they make the trek back.

Traditional Retail is a Left Brainer …

Apple’s success comes from the right

Left and Right aren’t just about politics or which way you “lean” on issues.  Left and right are about the two hemispheres of the brain and how they process information differently.  The people with left side dominance tend to be logical, methodical and detailed.  People who are right brained tend to be holistic, creative and tend to focus on the visual or big picture mental images. 

So how come all the left brain people wound up running consumer electronics retail stores? 

A bit of Science first:  Lefty = Verbal, Right = Visual

Nobel Prize Winner (1981) Roger Sperry is typically credited for the discovery of how the brain hemispheres process information.  Through "split-brain" experiments Sperry isolated that certain modes of thinking are dominate in the left or right half of the brain.  The left hemisphere tends to focus on the verbal while the right tends to focus on the nonverbal and creative.

Your genetics and how you grew up, determine whether you are either left brain or right brain dominant.  Although not a perfect correlation, more right handed people tend to be left brain dominate, while left handed people tend to be right brained.  Being a left hander, I’ve always enjoyed the old saying:

Left-handed people are in their right mind.  Right-handed people are in what's left of theirs.

Only about 10% of the population is left handed … so Sperry may be right about society discriminating against those that are right brained!

So what are YOU … a Left or Right Brainer?

It is easy to identify your dominant hand or side by how you write with a pen or swing a racket.  Chances are if you are right handed like 90% of the population, you are left brained dominant, but not always.  

There are a number of “tests” you can take to determine your hemisphere dominance without having someone split your brain!  One of the most popular out there is the “spinning dancer”, although its accuracy has been questioned.  If you don’t like the results, take another.  Regardless of the “test” there is a strong case to be made for hemispheric dominance.

Click here or on the picture to take the spinning dancer brain dominance test.

Why traditional retail is left brained

The old axiom about retail is still appropriate:  Retail is Detail!  Like most of today’s business, senior managers in retail tend to be fact based and financially driven.  Hence, most of large organized retailing tends to be dominated by left brained, detail oriented managers.

But just look at traditional CE retail stores.  Products are lined up in “logical categories”.  The focus in store, as well as in most retail print ads, is largely on the verbal … the details … the speeds and feeds.  Large big box retailers epitomize the dominance of left brain analytical planning and execution. 

Al Reis – Marketing success comes from the Right

Al Reis posted a great article in Ad Age on Feb 3^rd outlining why marketing success tends to come from right brain thinkers.  He offers one of best, most concise summaries I’ve seen on the state of management, especially for retailing:

What works in marketing today is simplicity, not complexity.  But a simple idea can get lost in an overproduced, overdramatized marketing presentation designed to impress management … [dominated by left brain thinking]

In these economic times there is even more pressure on the details of inventory, pricing, turns, GMROII, etc. “Retail Survival is the New Normal”.  The danger here is that the retailer focus becomes exclusively left brained … focused entirely on cost and risk containment.

Why Apple’s success comes from the right!

Just look at an Apple store … it is the epitome of right brain dominance.  The stores are visually compelling, organized around consumer experiences of how to use the devices in their lives:  music, photos, and movies.  Rather than logical, analytical categories, lined up in rows … products are marketed simply with the focus on consumers having a visual, interactive experience.  The “necessary details” are on very small, discrete tags.

While the “devil may be in the details” of retail operational execution, Apple’s growth and stats show that consumers are drawn to right brain marketing, merchandising and holistic “ecosystems” such as i-tunes and i-phone apps which transcend products with visually appealing design.  

Lest Apple grab all the right brainers and some “leftys”, big box CE retailers need some right brain balance right now!

Retailers need a new Four Letter Word for “Sell”

Don’t sell me something … Help me buy something that fits me and my lifestyle

Over the last several months, I’ve had the opportunity to spend weeks on the retail floors in consumer electronics stores observing how Associates “sell” and how consumers “buy”.    Based on hundreds of observations, it is not rocket science to conclude that there are fundamental disconnects that most retailers (and their vendors) simply don’t understand:

·         Consumers don’t want or have to be “sold” on “specs”

·         75+% already researched key specs and prices on-line   

·         They came to the store to touch, feel and test drive

·         They are not looking for a regurgitation of “techno babble”

·         They are searching for help to buy what fit’s them best and their lifestyle

So, why would you go to your local CE retail store?  If you are trying to decide whether to buy a feather weight notebook that is less than 3 pounds, you need to know if you can see the screen and if you can type on the smaller keyboard. You might also want to explore how to deal with the nagging problems of network printing and all of the neglected data backups of music and family photos you have not been doing.

Typical Big Box CE Experience = None … so “Sell” becomes “Tell” what it will be like

Big box retailers have turned “sell” into “tell”, because there is almost no hands on experience possible for the average customer looking to tryout products in ways they would use them.   

·         Notebooks are locked up or locked down so you can’t lift them to feel the weight

·         Many are not turned on or in sleep mode requiring a password to access anything

·         Few are connected to the internet, almost none are connected to a network that works

·         There is virtually no content on the PCs to play with other than what came with Vista

·         There is no way to actually show even the basics of backing up data files or burning DVDs

The irony is that in most big box CE retailers, the Associates start their greeting with “can I help you?” The all too obvious answer is NO – I can’t help you by showing you how it works or letting you test drive … so, let me tell you about the whiz bang features and how cool this might be when you pay to have our tech guys get it working in your home.

The Secret Sauce and Results of Helping Customers Buy

The ultimate irony is that Associates in retail stores that “help you buy” don’t start with the trite “can I help you question”.   They more typically start with W questions focused on: what you want to try, be able to do, where you want to go, what you are solving for.   The best Associates follow with helping you to actually “road test” the ways you will actually use the purchase at home, right there on the actual equipment in the store.

Results Count!  Don’t believe it … Just look at the tremendous growth in $/sq. ft Apple stores and the recent gains of Sony Style stores.   People are voting with their plastic … for help in buying solutions that they can test drive right in the store.

The Bottom Line of Replacing “Sell” with “Help”

Sell the customer based on specs and price and you might make a sale, or even an “upsell” today.   But, future sales will depend upon winning their comparison shopping for specs / price.

Help a customer to test drive … and help guide their decision to buy what best fits their needs, and you earned the on-going right to help them buy expanded solutions, plus their loyalty to recommend your “help” to family and friends.

Will you be crying over spilled milk?

If you buy milk in a “green jug”, better take the “demo” pouring class at Sam’s

Have you seen the new “milk jug” at Wal-Mart or Costco?  More importantly, have you tried pouring milk on your cereal from the newly designed jug?  All of your savings from the new packaging might end up on the table or floor if you don’t go to “pouring class”.

While the old plastic milk jugs can be recycled, they are not “green” in terms of what it takes to fill them and ship them.  Leave it to the logistics leaders Wal-Mart and Costco to promote an innovative square jug design, which can be vertically stacked in less space on pallets and in the cooler.   A simple innovative packaging twist that results in considerable savings”

·         Cuts labor costs of filling the jugs and water usage at the dairy by 60%

·         Pallets cut shipping costs and square jugs save cooler space

·         Reduces the cost of milk to the consumer $0.40 per gallon

If you buy milk in a “green jug”, better take the “demo” pouring class at Sam’s

Have you seen the new “milk jug” at Wal-Mart or Costco?  More importantly, have you tried pouring milk on your cereal from the newly designed jug?  All of your savings from the new packaging might end up on the table or floor if you don’t go to “pouring class”.

While the old plastic milk jugs can be recycled, they are not “green” in terms of what it takes to fill them and ship them.  Leave it to the logistics leaders Wal-Mart and Costco to promote an innovative square jug design, which can be vertically stacked in less space on pallets and in the cooler.   A simple innovative packaging twist that results in considerable savings”

·         Cuts labor costs of filling the jugs and water usage at the dairy by 60%

·         Pallets cut shipping costs and square jugs save cooler space

·         Reduces the cost of milk to the consumer $0.40 per gallon

What’s not to like about the new square jug? … Old habits die hard!

Obviously, Sam’s and Costco are promoting the “green” aspects of the jug, as well as the cost savings for the consumer. So, if you can save $0.40 cents per gallon by going green, why not buy milk in the new container?      

Old habits die hard!   After decades of using plastic jugs with a spout, consumers are used to lifting and pouring their milk.  But, the new jug eliminates the spout for stacking. So, when you lift and pour milk, it tends to “overshoot” the glass and slop the Cheerios from the bowl.   Not surprisingly, many customers want their old milk back in their old jugs they can pour.

The Power of the Demo!

      

Who would have thought that you would need to create a “demo” on how to pour milk!

Give Wal-Mart credit … they figured out savings are not enough for many customers.   At Sam’s, they are enticing consumers with chocolate chip cookies so they can teach them how to “rest and tilt” the new jug to pour without spills.   When in-grained habits are involved, personal experience with using the product becomes an essential requirement for conversion.

If it takes first-hand consumer experience for conversion to a new milk jug, imagine what consumers will need to adopt HD radio or other consumer technology breakthroughs!   Consumer electronics manufacturers and retailers need to learn the fundamentals of consumer experience requirements for adoption … maybe they need to go to “milk pouring class” at Sam’s.

(Credit: Pictures are from the New York Times.)

Grandma kicks the family’s butt on the Wii

The power of the Ps personified by Grandma’s own Mii

There are plenty of recent articles and YouTube videos on “Seniors” responding to the Wii gaming console.   But, nothing prepared me for my 80 year old mother’s reactions to the Wii family bowling tournament during a recent family reunion!  She will never let anyone in my family forget she won the bowling tournament.

My son-in-law asked, no make that “demanded”, a Wii for his birthday present.   I couldn’t quite understand why a Masters Degree student would want a gaming console, let alone a Wii with its poor graphics.   But to his credit, he wanted to get the Wii in time to engage the family in an entirely new way at the typically boring family get-togethers.

Now, you have to understand that my mother has never touched a computer, let alone a gaming console, in her entire life.  Not surprisingly, she wanted to just “sit and watch”.    With sufficient coaxing, she quickly “rolled a few” Wii bowling balls … and there was a noticeable smile on her face, not to mention a competitive glint in her eye!  Within 2 minutes … pure participation and enjoyment.

In Retail University we review case studies on 5 Ps of consumer experience.  I often get asked for more examples of how “Product” and “Personalization” impact customer experience.   In short, the Wii controller personifies how “product” can create  and sustain consumer engagement at a very personal level.

Mom doesn’t care about the quality of the graphics on the Wii versus Xbox or PlayStation.    She just wants her own Mii (avatar) so she can record her high bowling score of 238 when she beat the whole family.   Now that’s personalization and brand loyalty at the highest level.

Unless Sony and Microsoft start getting the concept of personalization over technology … Wii like interfaces will continue to kick butt and gain share with casual gamers (and Master’s students)!

Swarovski’s Smart Promo For Sex and the City

Blog Epilogue – I finally found a retailer who capitalized on the movie and event

In the last posting, I ranted about how no one, including the movie critics, seemed to get the phenomena of Sex and the City as an “event” for women.   Most puzzling was the total absence of retailers that capitalized on the event as an opportunity to market to women. 

There may have been some high end fashion retailers that I missed, but until last Friday I hadn’t found one retailer that had any marketing or promotions to tie into Sex and the City.   While the malls were strewn with Kung Fu Panda banners and promotions, only the Swarovski store had marketing specifically capitalizing on the movie and the event.

Give Swarovski credit … they “got it” from the beginning.   They did product placement in the movie, which could be featured in the store to capitalize on the movie event buzz.   They featured movie posters throughout the store … which helped drive traffic inside for Swarovski … and in turn helped create viral buzz for the movie. What a partnership!

Power of Personalization!

There are several factors that make Swarovski’s promotion powerful and effective:

• Alignment of both the movie audience and event with retailer’s target retail audience
• Specific product focus – “you too can wear what the gal pals wore in the movie”
• Personalized Promotion tied to the movie … On the poster, it states that you don’t win a trip just anywhere, you win a night out in your city … so you can take your gal pals with you.

Of course, I had to ask the measurement question regarding the effectiveness of the promotion.  And of course, the nice store staff could not give me the “numbers” … but they said that the posters and Sex and the City had been a phenomenal traffic driver.  Women “just had to come into the store” after they had their personal experience around movie event.

Was the store staff required to go see the movie?  No.  Did they?  Yes, 3 times and counting.

“Sex and the City” is not a movie … it is an EVENT!

A personal witness to Power of the Purse that will prove the pundits wrong!

Ok, so I knew this would be a “chic flick” and a premier, but I wanted to surprise my wife with dinner and a movie.   So, I thought I would be savvy and go “on-line” to purchase tickets.   

I had no idea that every female in Omaha had apparently already thought of this idea … and all of the late shows were sold out.   No problem, we could do dinner after the 6 p.m. show … it couldn’t be that crowded.  Wrong!   

So to be safe, we went to theater 45 min early with printed e-tickets in hand.   There were limos lined up at the door!   Women in their “designer wear and strappy shoes” were exiting the limos in groups of 6, 8, 12 … and streaming in the doors. The attendant said we had better get in line or we would not get a seat, even though we had a ticket in hand! 

I knew that there was “a disturbance in the force” when there were only two people in the popcorn line, which is usually a 20 min queue.  It was then that I started counting male heads in a “sea of femininity” … just 6 other “brave” males beside myself at this “Sex” premier. 

More than a movie … this is an event!

Despite my wife’s pleas, jabs to the ribs and “the look” … I viewed it as an amazing opportunity to ask questions.  Inquiring male minds need to understand this phenomenon.  But guys, we are just never going to “get it”.   Here’s what I learned from Friday night’s “research”:

1.       Women had planned attending the movie weeks, and even months in advance.

2.       They carefully planned who they would attend with, as well as pre and post parties.

3.       They made special shopping trips to purchase an outfit or accessories for the movie.

4.       They tried on as many as 10 to 15 outfits before deciding what to wear to the “event”.

5.       Women attending the “event” planned to call 6 to 20+ friends after the show.

I have never witnessed a movie crowd standup and cheer for Indiana Jones, or at the end of any action movie that I have ever attended.   This female audience cheered at beginning, middle and ended with a standing ovation.    And, every woman leaving that theater was buzzing within her circle, on the cell phone, or texting someone. The limos were heading out in search of “pink Cosmos”.  This is an epicenter and epitome of loyalty marketing at its finest!

The Critics are Wrong … “Sex” will kick Indiana’s butt this weekend

Critics, especially male pundits, predicted that this movie will never breakeven and bring in the $65million production cost.  They argue that it is targeted just for women, too long and rated R.

Based on what I witnessed at the premier, this is a “movement” … a female event, not just a movie.  My prediction after the premier is that “Sex” could easily break $65 million box office the first weekend.   

What does this have to do with retail?

Where are the retailers?   Where is the in-store merchandising for “event” outfits and what to wear to the show? Where are the marketing and cross-promotions on how to win a trip to the Big Apple and attend the premier there?   

The only really smart marketers for this movie seem to be the restaurants catering to the before and after parties and events, and most of that was driven by the women organizing the events themselves.    I haven’t noticed any concerted effort on the part of major retail chains, beyond some promoting “Sex and the City” HBO collection DVDs.  Did I miss something because I’m “male”?

Sex and the City isn’t going to win any academy awards as “best movie” or best acting.   It’s all about “the experience” … and especially connecting with women through the experience.  It is the “poster child” and case study of how to engage women via “event” and viral marketing.

While there have been all kinds of “tie-ins” for Indiana Jones movies, “Iron Man”, and male oriented action flicks, marketers and retailers woefully missed the opportunity for “Sex” (pardon the pun).   

Home Depot and Lowes … you GUYS totally missed millions of $ by not showcasing opportunities for females to get at least a their own version of THEE CARRIE CLOSET!    (If you males don’t go see the movie, just ask any female who has … she can describe Carrie’s closet with intimate details).

Don’t believe in the “Power of the Purse”?  Guys, you don’t even have to go to the movie.  Just ask any woman about her EXPERIENCES around attending Sex and the City EVENT!   Even better, do it over some “pink cosmos”… just be prepared to sit and listen while nodding politely, at least pretending that you understand.

Can an Apple Store survive “Ethel”?

Will the Apple Store’s Personalized Training be a formula for success or failure?

Ethel is just pulling up in her big Buick at the Apple store as I arrive.  She waves as her Apple “personal trainer” helps her unload her bulky 24” iMac from the back seat.

Ethel has arrived for her personal one to one session that she schedules from home every week.   This week she is at the store to learn about building a slide show for her quilting group.   Just like the quilters who bring their own machines to sewing group, Ethel brings her desktop iMac to the store, so she can work on her own computer with her one to one coach.

Ethel is just one of a quarter of a million participating in the Apple one to one sessions, which can be scheduled every week for $99 / year.   For 3Q 2007, Apple reported 270,000 annual memberships generating almost $27 million in annual revenue.

While Ethel is “pushing 80”, she is representative of the diverse group of individuals and small businesses who have signed up for sessions.   The owner of Ethel’s favorite quilt shop usually schedules sessions on the same day ... today she is working on how to run QuickBooks for her business.

However, consider these amazing but alarming stats for just one Apple store in Omaha, Nebraska:

One to one training sessions scheduled per week last year:  30/week

One to one training sessions scheduled per week this year:  220/week

That’s a 7X increase in individualized customer sessions requiring staffing!

Can Apple sustain this “personalized” model … or will it implode?

Revenue is one thing, sustainable labor costs are another.  Has Apple adequately planned for 7X increase in user rates?  How can this model be sustainable, let alone profitable, if users continue to schedule more and more one to one personal sessions and pay only $99 per year?

Obviously, Apple is getting smarter about how to schedule sessions in alignment with store traffic.  But, when I visited the Apple stores in NYC, I was already hearing grumbling about the two week wait to be able to schedule a session.

On the face of it, the one to one model is not sustainable or profitable … UNLESS … it drives something else.

I’m betting on Ethel, Beulah …

During my mystery shop, I asked the trainer about Ethel and her one to one program.  The trainer just winked when I asked if Ethel ever bought anything as a result of the sessions … and added that is why he helps her unload her iMac every week.  Ethel has also scheduled her friend Beulah for sessions, and is bringing in her quilting group to explore how to build their web site.   And, you thought Apple zealots were just people under 30.

I wouldn’t worry about Apple’s success or profitability in their stores just yet.  Managing the success of one to one training sessions is a “high class” problem compared to challenges in other retailers.