April 23, 2020

Kara ... The Future of Retail

In the next month, you're going to read a TON about how retail is finished (department stores in particular). Pundits will tell you that a hundred thousand stores will close in the next five years. They'll paint a story of doom and gloom, for doom and gloom generate clicks, clicks generate ad dollars, and ad dollars fund more articles about doom and gloom ... articles that generate clicks, clicks that generate ad dollars. You get the picture. An endless and pointless loop.

No solutions. None.

Yesterday's discussion about Future Stars (click here) also revealed something interesting ... you liked Kara, the intrepid fictional employee cited in the article. You also liked Jamal (click here). But you liked Kara because she has solutions.

I realized that Kara is the face of who we will be when we are finally liberated from our homes. And that day is coming (click here).

Until that day comes, we're all going to work our way through the decision tree featured below.

Do you know who causes us to visit a store in the future? Kara!!

Kara is the person who provides a safe work environment. Been in Target recently? Kara is everywhere with a squirt bottle of disinfectant. Kara makes sure there are wipes for the shopping cart. Kara is stocking shelves at 2:30am.

Kara is also making $12/hour today, and that's going to change, because Kara is about to be appreciated for how invaluable she is.

In three months will you trust Conrad, the lone employee left at Macy's, or will you trust Kara, the personal shopper you call because you need a bluetooth speaker solution for your bike and she recommends this item (click here) ... not only does she recommend it to you via text, but she tells you to be at Best Buy at 11:15am ... just drive up and she'll run it through checkout for you and will put it in your trunk. Easy!

Yeah, Kara will do all that for you. And you'll pay Kara a modest $5 concierge fee that Best Buy will allow Kara to keep all to herself, because Best Buy is going to need to make a ton of gross margin dollars going forward. All of a sudden Kara is making $40 an hour. Think other people will want a job like Kara has? Think you'll have a competitive advantage that will allow you access to the best labor on the planet?? Everybody wins.

Would you trust Conrad to walk you over to the Cosmetics department at JCP? Do you trust him to spray fragrance in your face from three feet of distance? Or do you trust Kara, who just texted you from Ulta? She loves you, so you get an 11:45am personal appointment so you can have a nice lunch immediately after. Kara makes sure that the security guard at the door knows you are coming. You show your ID to the security guard, and you are welcomed into the store. Kara has everything ready for you to try, on your own, at your pace, at a safe distance from everybody else. Of course you're gonna pay Kara the $10 concierge fee, and Ulta will allow Kara to keep every penny, plus she'll keep 7% of whatever she sells you. At 2-3 appointments an hour, Kara is taking home $65,000 a year in concierge fees and commissions. And Ulta stays in business, pocketing gross margin dollars.

Sports are coming back (someday) ... and when they do, you might not want to sit in a restaurant next to people you aren't sure are healthy or not. But Kara has you covered ... her email marketing campaign performs the heavy lifting (click here) ... and her co-worker, also named Kara, will have your order ready to take home at 4:30pm PDT ... just a half hour before the draft begins. You'll gladly pay Kara the $5 concierge fee for taking care of this ahead of time. The Kara who manages the Email Marketing Program earns a bonus for any campaign generating at least $0.25 per email delivered. All of a sudden the best Email Marketing Kara's of the world are managing programs that deliver a safe and enjoyable experience.

You see what is happening here? 

Money that used to go to an omnichannel vendor is going to ... Kara!!!! Kara works so darn hard. She deserves to make $100,000 a year hustling so that your have a safe shopping environment.

Kara reinvents retail. Yes, JCP and Sears and Macy's all struggle and potentially fail ... because they didn't hire Kara, because they don't care about Kara, because they aren't willing to share any money with Kara, because they don't value the concierge business model that Kara employs.

But Ulta and Best Buy and BJ's Restaurant get through this (they're use symbolically here, as you already know). They employ Kara in every sense ... there's a merchandising Kara, there's a creative Kara, there's a finance Kara, there's an army of marketing Kara's, there's all of those in-store Kara's making $60,000 to $100,000 a year by hustling, by pocketing commissions and $5 concierge fees that allow the customer to feel safe.

Kara isn't the Uber driver or Instacart Shopper ... Kara is the person who was an Uber driver but got fed up with Uber keeping all the money at scale without providing a ladder up. Kara left that job because of the gigantic labor reshuffling of 2020-2021. She climbed the ladder offered by retail ... yes RETAIL ... that dead channel that the pundits buried in March/April 2020.

Kara gets full health care benefits - heck, she delivers enough gross margin dollars to more than cover this benefit. Kara gets 4 weeks of vacation ... paid ... and she's gonna need it given how hard she works.

Will Kara change retail?

Will we reinvent retail by giving the keys to Kara ... so that in 2025 there is a viable in-store channel that survives what is coming?

Only if we provide the leadership necessary to allow Kara to get paid. It's on us to do something completely different. It's on us.

In the image above, most of us only sell something that the customer "wants". We're desperately going to need Kara to bridge the gap between something a customer wants and the virus that stops the customer from getting what she wants.

I've been on a lot of Zooms over the past month. There's one thing that continually gives me hope. In all of these meetings, there's a thirty-something year old woman or man who, in the midst of chaos is filled with optimism, energy, hard work, and initiative. They're keeping the wheels on the bus, from home, while dealing with everything crazy that happens when you at home at 2:00pm on a Wednesday afternoon. 

It happens in every Zoom. These are the people that are going to save retail.

Kara is coming. She's you ... and she's gonna transform retail.

P.S.: I do believe that you are gonna see "concierge fees" ... you'll gladly pay Kara $5 or $10 or $15 to keep you safe. You'll get good "free" service too ... Total Wine will roll out a case of wine to your car at no cost ... but that's not what I'm talking about. You're gonna miss people (you already miss people), and somebody like Kara will make your experience entertaining, safe, and worthwhile.  Think about what you'll tip your hair dresser in two months when you're allowed a hair cut?? Your hair dresser is Kara, and the tip is essentially a concierge fee. Retail works better when somebody like Kara is taking care of you.

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