November 13, 2012

Gliebers Dresses: Cyber Monday

As you already know, Gliebers Dresses is a fictional serial about an Executive Team dealing with a changing marketplace.  If business fiction is not your thing, then there is nothing to see here, please move on.  If you enjoy a diversion from your regularly scheduled work-based events, then give this a read.

Glenn Glieber (CEO, Owner):  Welcome everybody!  Wow, that was quite an election last week, don't you think?

Roger Morgan (Chief Operating Officer):  You know, I just read a Woodside Research report that says that Nate Silver was the real winner of the election.

Glenn Glieber:  Who?

Pepper Morgan Pressley (Chief Marketing Officer):  Ignore him, Glenn.  That's what the rest of us do.

Meredith Thompson (Chief Merchandising Officer):  Sales are up fifteen percent since the election ended.  It's fun to come to work these days!

Lois Gladstone (Chief Financial Officer):  Yes, we're on our way to the best month against plan we've had since early 2007.

Roger Morgan:  I guess my omni-channel strategies are finally paying off.

Meredith Thompson:  Since business is good, we don't have to discount during Christmas.  The last time we didn't have to discount during Christmas was 2005, right?

Roger Morgan:  You mean the Holiday season?

Meredith Thompson:  Christmas.

Roger Morgan:  Holiday.

Meredith Thompson:  Christmas.

Roger Morgan:  Woodside Research tells us that we have to call it "Holiday".  They say, and I quote, (thumbing through a series of documents) "... in these volatile times, why provoke time-pressed consumers who can easily amplify anger via the social graph, potentially destroying a brand in a heartbeat over something as meaningless as the naming convention of a holiday?"

Meredith Thompson:  I don't want to offend God.

Pepper Morgan Pressley:  Shouldn't somebody from HR be here to tell us what we can and cannot talk about?

Roger Morgan:  Woodside Research has a report on HR excellence, too.

Lois Gladstone:  Can we talk about the next holiday on the calendar?

Meredith Thompson:  Thanksgiving?

Lois Gladstone:  No, Cyber Monday.

Roger Morgan:  I've got this one.  I heard that most of our competitors will offer at least 25% off plus free shipping on Cyber Monday.  I think we need to make a splash.  Why don't we offer 35% off plus free shipping?

Meredith Thompson:  We can't do that.  Lois just said we're having the most profitable month in years.

Roger Morgan:  Of course we can do it, everybody else is doing it.

Meredith Thompson:  My bonus depends on gross margin dollars.  Discounts, like 25% off, count against gross margin.  By running 25% off on Cyber Monday, I cost myself bonus dollars.  I won't be able to buy myself a new Lexus in January.

Roger Morgan:  I said 35% off.  We need to make a statement.

Pepper Morgan Pressley:  Maybe we should offer 100% off.  That would make a statement.

Roger Morgan:  Look, Woodside Research recently issued a statement.  They said, ... wait ... I'll find it (thumbing through a pile of documents) ... here it is, they said that "... brands must remain competitive on Cyber Monday, if they want to pursue relevance and increase engagement in today's highly volatile marketplace".

Meredith Thompson:  What does your report say about brands that want to remain profitable?

Pepper Morgan Pressley:  Roger, does Woodside Research ever offer you research reports at 35% off?

Roger Morgan:  Oh, heavens no.  They don't want to cheapen their brand.

Meredith Thompson:  Pepper, what percentage of annual sales happen on Cyber Monday?

Pepper Morgan Pressley:  1.6%.

Meredith Thompson:  That's what we are arguing about?

Roger Morgan:  Think what we could do at 35% off, or even 40% off?

Meredith Thompson:  Let me get this straight.  Say that we don't discount, and our sales are cut in half because we aren't competing on Cyber Monday.  We'd lose 0.8% of annual sales, is that right?  I'd lose out on a new Lexus over 0.8% of annual net sales?

Roger Morgan:  I don't care about a new Lexus, I only care about Gliebers Dresses.

Pepper Morgan:  Meredith wants to do the right thing to get a new car, Roger wants to do the wrong thing for the right reasons.

Roger Morgan:  I'm thinking that we offer graduated discounts, based on customer loyalty. We'll put 30% off plus free shipping on the website, then we'll offer 35% off plus free shipping to all prior customers, and 40% off plus free shipping to best customers.  Then we'll make this go viral via Twitter and Facebook.  Maybe we'll give an extra 5% if you pin a dress on Pinterest.  Yes!.  This is going to be HUUUUUUUUUUUUUGE.  This is where Cyber Monday meets Social CRM! I'll talk to your team, Pepper, and get this started.  I'll reserve the CYBER30, CYBER35, and CYBER40 discount codes.

Pepper Morgan Pressley:  I'm in charge of marketing, Roger.

Roger Morgan:  That's what every person who ever held your job told me, Pepper.

Lois Gladstone:  I don't see any reason to participate in this nonsense, Glenn.

Roger Morgan:  Word of these discounts will spread like wildfire.  We'd be known as the place to go to celebrate Cyber Monday.  It would be a lot like free marketing.

Glenn Glieber:  I love free marketing!

Lois Gladstone:  Pepper, what is the cafeteria making for our big Cyber Monday meal?  I mean, turkey is popular on Thanksgiving, ham is popular on Easter.  What are we going to eat on Cyber Monday?  Cyber Chicken?

Roger Morgan:  Leading brands are in the game, folks, they aren't sitting on the sidelines.

Lois Gladstone:  We shouldn't openly talk about the Cyber Monday holiday.  It's offensive to people who don't believe in it.

Meredith Thompson:  Gene, help us out.

Dr. Gene Feldman (Vice President of Global Brand Direction):  The year was 1999.  Bill Clinton was President, hobbled by impeachment.  TLC topped the charts with their smash hit "No Scrubs".  And pursued a strategy called "monetized eyeballs".  The theory, as you all remember, was to rapidly gain market share.  In fact, it was considered a best practice to lose money on every single e-commerce transaction.  The theory was that if you were able to grow market share by selling merchandise at a dramatic discount, you'd acquire enough customers to drive out the competition.  Without competitors, you'd be able to harvest downstream profit.  Lose money now, gain market share, make money later.  Of course, if everybody does something stupid, then it accelerates the downfall for all.  We all know what happened, don't we?

Lois Gladstone:  Lisa "Left Eye" Lopes died in a car crash, ending what could have been a hall-of-fame career for the band?

Dr. Gene Feldman:  She'll never be forgotten.  But that's not my point.  Those who built a solid business model generated enough profit to outlast those who recklessly discounted their brands, thereby winning in the long term.  The winning strategy was nearly opposite of the best practice of the time.

Lois Gladstone:  Exactly.

Roger Morgan:  Clearly, there's no right or wrong answer here.

Pepper Morgan Pressley:  Nobody wants to discount except for you, Roger.

Glenn Glieber:  Well, wait a minute, folks.  Last year, we offered 25% off plus free shipping.  We heard that our competitors are offering 25% off plus free shipping.  I say we maintain the status quo, folks.  I don't want to discount too much, and I don't want us to not be able to compete.  Can't we thread the needle here and do something that appeases everybody?  Let's go with 25% off plus free shipping.  That's a reasonable compromise.

Lois Gladstone:  Didn't TLC have a number one song called "Unpretty" in 1999?

Dr. Gene Feldman:  Yes.

Lois Gladstone:  That's what this meeting was, unpretty.

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