June 02, 2010

Fetzer's Footwear: The Executive Team

I enter Lauren Fetzer's office. As always, she's listening to her iPod Touch.

Kevin: "What are you listening to?"

Lauren: "Bonnie Raitt: 'I Can't Make You Love Me', it reminds me of things that happened in college."

Kevin: "I'm sorry."

Lauren: "Moving right along, today you're going to get to meet with my Executive team. We'll have you sit in on some of our meetings. Feel free to offer your opinions, I won't censor them. And don't let anything Bart Cox says offend you. Every good Executive team should have one crusty individual with a contrarian point of view. All viewpoints are welcome at Fetzer's Footwear. Let's go."

We enter the Executive Boardroom.

Lauren Fetzer: "Good morning everybody. I want to introduce Kevin Hillstrom to you. Kevin will join us from time to time to review our current strategies, analytics, and help us achieve our goal to craft a vision for the future"

Bart Cox (VP, Stores): "Who is this guy, again, no offense?"

Lauren Fetzer: "Kevin is a direct marketing industry analyst, and Bart, Kevin previously worked at Eddie Bauer and Nordstrom, so he does know something about stores."

Bart Cox: "Sure he does."

Lauren Fetzer: "Let's start our meeting. Penny, please share business results from yesterday."

Penny Parker (VP, Marketing): "Comp store sales were up 2.8% yesterday, led by Bellevue with a +8.3%. Alderwood was at -6.5%. The website was up 14.5% from last year, and was up 9.5% vs. budget. The Mountain-ariffic e-mail blast was responsible for the entire increase yesterday, that was an outstanding campaign."

Lauren Fetzer: "Bart, what happened at Alderwood yesterday? That's three consecutive weeks of negatives at Alderwood?"

Bart Cox: "We've talked about this for two consecutive weeks, the mannequins are too athletic, and as a result, we're not drawing customers into the store."

Ashley Zimmerman (VP, Merchandising): "Bart, we have the same mannequins in Bellevue and Bellevue is running positive comps."

Bart Cox: "The Bellevue customer is different, she is more likely to hike in the Cascades. The Alderwood customer is functional, she's going to wear her shoes to Red Lobster. You already know this, just look at the taper reports that show what sells by store, the best selling styles are totally different."

Bill Bledsoe (VP, Logistics): "Penny, do you see these customer differences online? In other words, do you have online taper reports that show what sells by geography?"

Penny Parker: "Now that's a great idea, we'll go back and take a look at that!"

Connie Simpson (VP, Finance): "Year-to-date, retail is trending at +3.3%, online is +11.4% to last year at +6.8% to budget. I'd say that we're having a very nice year. Your teams deserve kudos for their hard work."

Lauren Fetzer: "Let's talk a bit about our vision. Penny, what did you learn about where the experts think online retailing is headed?"

Penny Parker: "I purchased a Woodside Research report that predicts 88% of businesses will generate up to 22% of their revenue in 2015 from a combination of mobile and social."

Bart Cox: "You know, folks have been saying all of this virtual stuff will wipe out retail for at least fifteen years now. And it never does. Retail keeps plugging along. Last time I checked, retail comprised 90% of all purchases, just like it did fifteen years ago. So, yes, keep thinking visionary thoughts, folks, but remember that from a net sales standpoint, almost nothing has changed in the past fifteen years. Back then it was telemarketing and direct mail, then it was the internet, now it is mobile and social."

Ashley Zimmerman: "That doesn't change the fact that we have to change with the times, Bart. You probably didn't envision a customer walking into your Downtown Seattle store with a Fetzer's Footwear iPhone app back in 1995, did you? Today she walks into the store, and if the item she saw online isn't available in the store, she punches up her app and gets the item shipped to her home. So you have to adapt and change."

Bart Cox: "And I want credit for that sale, too, because I generated that sale. Bill, when are we going to make the reporting changes necessary to show that I drove that sale?"

Bill Bledsoe: "Who cares who drove the sale, just be thankful that somebody bought something! In that case, the website, the store, and the app all contributed to the sale. That's the future. Trying to parse out that combination and assign weights to each channel is nothing short of fool's gold."

Bart Cox: "Or a lack of analytical imagination."

Lauren Fetzer: "So the future involves more channels and more analytical complexity. That's what we need to focus on. Kevin, where do you see the customer in five years?"

Kevin: "I think she'll have moved away from static websites. I believe that the traditional e-commerce website is already a 'dead man walking' if you will. So much of what a customer does today has nothing to do with the traditional e-commerce website. She's on Facebook, Twitter, Foresquare. He's on a mobile app that basically shifts eyeballs away from a traditional website. All of the things we deal with in e-commerce, our entire knowledge base, is dying. We need to learn to be really good at being there for our customer. When she needs us, we're there. When she doesn't need us, we quietly disappear. We cannot assume that she will visit us like we are some sort of destination that she desperately needs."

Bart Cox: "That's just hokey theory."

Ashley Zimmerman: "Sure it is, but we need to think about it, because you can see it happening already. We worked so hard to get user generated comments on our website, only to realize that we get a hundred comments on Facebook and Twitter for every user generated comment on our own website. User generated content on a website is so 2008. My customers love my product, and they talk about it all of the time in their social circles, they don't come back to our site to chat with us, we have to go out there to chat with them."

Bill Bledsoe: "I don't want brands following me out into my 'solar system', if you will, to chat with me, that's just plain creepy."

Connie Simpson: "So that speaks to our future, doesn't it? How do we follow the customer out into the 'cloud' without announcing that we are right there next to her, screaming at her every five minutes to buy something?"

Bill Bledsoe: "That's why I like our our series of apps for all mobile devices. We're essentially following the customer in an invisible manner. When she needs us, she just punches us up!"

Penny Parker: "That's where my job becomes challenging. Somehow, I have to encourage the customer to carry our apps with her without sounding like a snake oil salesman."

Lauren Fetzer: "Good discussion, folks. I want for us to honor our meeting requirements. We have ten minutes left before this meeting ends, and as you all know, we end all meetings at five minutes to the top of the hour so that nobody is late for the next meeting. Thanks to Kevin for being here, he's going to join us a lot in the future as we flesh out where we think we want to take Fetzer's Footwear."

Bart Cox: "I think we want to open a bunch of stores!"

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