Telling A Story

Look at the home page from Macy's from two weeks ago:

Please tell me what the story is that they are communicating to the visitor? Be honest, please.

Macy's assumes that you already believe that their merchandise is fantastic - that's part of their story - they want to tempt you with discounts and promotions. That's the story.

Now, let's click through to an item.

Read the product details. What is the story you are being told?

Large companies can get away with not telling a compelling, passionate story.

You, however, cannot get away with it.

The industry (not the customer) is going to force you to be "omnichannel". The industry will force you to sell in all channels. The industry will demand that you homogenize all products across all channels at similar prices with the same promotions and the same creative. The industry will push personalization and engagement and content and social and mobile and big data on you. The industry will tell you that "the customer", whoever that is, demands this outcome.

So you'll pursue this outcome. So will everybody else.

What do you do in three years when you are getting closer to achieving somebody else's omnichannel vision - and every other company has done the same thing? You will all sell similar products. You will offer the products at similar prices. You will all have some version of free shipping. You will all have faster shipping.

Why would a customer purchase from you, when there will be twenty other comparable choices?

We're heading toward an environment where the industry demands sameness, across the board. When everything is the same, we are going to have to do something different in order to stand out. That something could be the story we tell.

Don Libey

As news of his passing spread yesterday, a few thoughts came to mind.

Let's go back to January 2005. I was the Vice President of Database Marketing at Nordstrom. We were in the process of terminating our catalog division. Trade journalists called me to mock our decision, telling me how stupid my company and I were. These were the days prior to Facebook, Twitter, and Social Media. It was very hard to get unbiased information, quality information.

For me, the only voice that publicly made common sense was Don Libey. He had frequent columns in DMNews (one of two must-read catalog trade journals at the time), and those columns actually spoke to real challenges.

I don't remember what he wrote about in January of 2005, but whatever he wrote about, it inspired me to reach out to him. Who knows what I wrote, I don't remember, but I do remember that I wrote something passionate, because Mr. Libey responded. Not everybody responds, you know.

We exchanged a few emails, and then, Mr. Libey asked me if I ever considered writing a book? He asked me to write a sample chapter. I wrote the sample chapter. Then, in Spring 2005, he offered to publish a book for me. He took on all of the financial risk.

By the Spring of 2006, the management team that I worked with for the better part of five years at Nordstrom had either quit or been fired as part of what would become a highly positive change in management. I had just downsized my team of twenty-four professionals to just sixteen team members. My job certainly didn't make sense anymore, given that there was no need for the catalog skills I possessed. So maybe it was serendipitous that my book was released in March of 2006. Mr. Libey arranged to have an article supporting the book published in DMNews, and he made sure the book was available on his publishing website, and on Amazon. We agreed that I would write a second book, a book I spent all of 2006 working on. I also launched a blog, at the time designed to support my book. I had no idea how valuable that effort would become.

Go back and Google Don Libey and co-ops, from way back in 2006 (here's an article for you to enjoy). He was saying things back then that nobody but maybe one or two people in our industry will bother to talk about today. He was criticized, loudly. In fact, go read his library of newsletters (click here), you'll probably enjoy the common-sense discussions of his lemonade stand. These newsletters offered must-read content - you actively waited each month to read the content - today, you passively sit there as a 140 character tweet blows by telling your business to be omnichannel or your business will die. Read his content, and compare the depth of information to what you consume today. Something is gained, and something is lost in every technological change.

By early 2007, my job would essentially be eliminated - my department would be assumed by a person who invented the chalupa. It was obvious I didn't have much to do anymore, so I decided to launch my own consulting practice. I asked Mr. Libey for help - not help in getting clients, but help in how to bill clients, help in how to create products, help in figuring out how much to charge clients. Mr. Libey opened up his books, and showed me how he did everything. That kind of information was invaluable. I still use much of his structure today.

By early 2008, as we readied to discuss my third book, Mr. Libey smartly suggested that I self-publish. He saw that the market was changing, and that books were significantly hobbled by the internet. In the year prior, Mr. Libey routinely touted my blog in his newsletter, helping me build an audience. Many of those who became blog subscribers still read the blog today - some became long-term clients. I think he saw the future - a future of smart blog-based content supported by deeper topics explained in booklets.

It is safe to say that my business wouldn't have gotten off to a good start without good publicity from Mr. Libey.

I only met Mr. Libey in person twice ... in 2008 at a Merit Direct dinner ... and in 2009 for maybe one hundred seconds at a Merit Direct conference. That's it. But we did email each other, four or five times a year. He discussed retirement, his hobbies, and his ideas for how to evolve and change a consulting business as times change. If I asked a question, he answered. Advice was always free, and was generously offered. He responded to every single email I sent him, save for one in recent weeks, which sent off alarm bells in my mind.

I think it is good if you can create a list of things you've learned from another person. Here's what I learned from Mr. Libey, or what I believed that his values reinforced in my mind.

1. Always be honest, even if it means you lose business and you anger vendors.
2. Trust is terribly important to success in business.
3. It is important to look at what is happening today, and then project what that means for the future. Mr. Libey liked to look well out into the future, I like to look out into a 3-5 year window.
4. Business is actually simple - focus on the details more than the technology. This concept never changes, by the way.
5. It is important to be able to write.
6. It is equally important to be a very, very good public speaker.
7. Good > Evil.
8. Treat young professionals very well.
9. Freely give.

Mr. Libey had advice for me that was counter to what I wanted to do, or was in my opinion wrong. Still, I always listened. There was a valid reason for the advice he shared, and what he shared wasn't being shared for malicious reasons. So, I listened!

Here's one of the things that I think Mr. Libey did well. He knew that there was a combination of technological change and demographic change, and he knew that this combination of change would have consequences for existing businesses, and for professionals working in existing businesses. I perceive that he knew that it was time for another generation of professionals to deal with the problems.

I expand upon this hypothesis in my current work. I spent a lot of time last fall working with a technology company outside of the catalog industry. The employees were in their 20s and early/mid 30s. They had a very different view of the world than I had. They had amazing energy. They had fantastic ideas. They could self-organize and solve problems. The last thing they needed was somebody like me telling them what to do and how to do it. But they did need help - they needed advice for dealing with Executives. This is something that repeats through the generations ... folks who have been through the wars have knowledge that is helpful to younger generations ... younger generations have technology-specific knowledge that older professionals cannot possibly capitalize on. If you can get the older/younger dynamic to work, you really, really have something! I sensed that Mr. Libey knew this better than most, as he leveraged that knowledge in helping me get my business started.

Change should cause us to pause, to reflect, and to survey the landscape.

Not many of us want to talk about this. But there is a truth, folks, that we have to deal with. We are about to embark on a generational shift. The Baby Boomer generation is in the process of leaving the workforce. My generation, Gen-X, does not have the "numbers", population-wise, to move into all of the positions that Baby Boomers will vacate in the next decade. This means that we're going to have to be proactive at passing our knowledge (only the valid knowledge ... not knowledge of whether to have a 68 or 64 page catalog) to younger professionals, and we are going to have to trust younger professionals with our businesses. Younger professionals are going to make curious decisions, and we are going to have to learn to be patient. Some of the decisions will be brilliant, some will be brilliantly disastrous! We have to do what Mr. Libey did when I started my consulting practice - we will have to exhibit leadership - we will have to give smart guidance without prescribing exactly what an individual must do.

Each time we lose a leader, we have an opportunity to fill the void that is left by the departure of the leader. I believe that Mr. Libey would demand that we fill that void. So let's get busy. Let's get busy freely giving advice when it is asked for, no strings attached, no desire to monetize the advice. Teach. Be kind.

Spring Break

This is an interesting time of the year.

Daylight savings time happens. There's a lot of people that don't like daylight savings time! If you don't like daylight savings time, God help you if you are ever on a non-stop flight from Los Angeles to Paris.

Daylight savings time, which used to happen in late April and then in early April and now in early March, ushers in a fundamental change in how the day progresses. For four months, darkness arrived at or before dinner. A week after daylight savings time, things feel different. The sun sets after seven in the evening. The sun is higher in the sky, so the shadows feel different - more like late September than like winter. Temperatures begin to warm - it isn't uncommon for a swath of late-spring temperatures to move in for a week in March. College Basketball comes to an end with a flurry of tournament basketball games - formally wrapping up the winter season.

As we move through March, hope grows. By the time we get to the start of April, baseball season begins, tulips are in bloom in the north, and leaves are on the trees across the south. Sure, there's a rogue blizzard that paralyzes the East Coast or the Midwest for a few days, but long days and warm temperatures are winning the battle.

Why am I babbling about an obscure topic that you probably couldn't care less about?

On a scale from one to ten, how much hope do you have regarding your profession, or regarding the future of your business? Do you have a season at work, a season that reveals itself slowly, allowing you to feel good about where your business is headed?

I've been analyzing the posts that you read. It's fascinating stuff. 

• You loved this (click here). 
• You hated this (click here).
• You loved this (click here).
• You hated this (click here).
• You loved this (click here).
• You hated this (click here).

Here's what I am observing. You like it when the content is breezy and easy to consume. Like that video from a few days ago. You loved that one. Fifteen minutes of hearing a professor talk about what the future holds for Amazon or Apple allows one to think - you can't do a darn thing about what the guy says - you just consume the content. You like that - my metrics prove it.

You don't like it when I ask you to do something. At all. My readership metrics strongly suggest you get frustrated with a message requiring you to act. Maybe you act and I don't get to see it. Maybe you don't tell me about it. In some ways, it seems like it is March, and fourteen inches of snow have been dumped upon you, and you've spent a whole winter shoveling snow, and you're sick of it ... just sick of it ... you don't need a meteorologist telling you another 4-8 inches are coming, do you?

I sense you are exhausted. It isn't that you don't want to act. It's just that you've been mired in sub-optimal business for eight years.

When I worked at Lands' End and Eddie Bauer, there were short business cycles. I remember them clearly. 1992 wasn't a great year, so we planned 1993 conservatively at Lands' End, and then 1993 was amazing and highly profitable, so we over-planned 1994 and 1994 came in on plan, so we planned 1995 ok, and 1995 tanked and we weren't terribly profitable (and I left for Eddie Bauer, where the same trends held), but then 1996 was planned conservatively and 1996 was great and big bonus checks were paid and then the process repeated in 1997 (overplanned - not great profit) and 1998 (bad business) and 1999 (underplanned & highly profitable). There was this three-year mini-cycle, and you kind of "knew" that spring was coming - there was always hope.

Business tanked in October 2007, and we never really made it back. There's been a few good years, sure, but unless you're one of two dozen tech-centric companies, it's up 5% and down 10% and up 3% and down 4% and the overall trend is all about treading water. I was at a recent conference, and the speaker asked the audience to raise hands if their business grew by more than 5% in the past year, and maybe 15% of the audience raised a hand. That means that 85% of the audience lacked hope.

In business, we need our version of March to come. We need daylight savings time, we need long shadows, longer days, warmer temperatures. I can see this, when reviewing readership metrics.

For most of next week, I'm going to give you a break - let's call it Spring Break. Tuesday - Friday, the content will be breezy. I'll just ask you to think about the story your business communicates to the customer. I won't ask you to formally do anything. You won't have to call a vendor. You won't have to measure test results. You won't have to think about demographics, or omnichannel, or paper, or digital, or closing stores, or Amazon. Just look at the creative I share, and think. That's it.

Let's come back from Spring Break re-charged, ready to pull our businesses out of the muck.

Sound good?

My Omnichannel Thesis Evolves

There's what you read - designed to sell page views for trade journalists - designed to sell research, consulting projects, and products/services for vendors, consultants, and researchers.

Then there's reality.

1. Baby Boomer retailers are being cut-off from younger generations. We've observed this trend over and over and over again (Kresges, Gimbels, Montgomery Wards back in the day). The trend is repeating today.
2. A modest amount of sales are moving out of stores, into the online channel.
3. Albeit modest, those sales moving online from in-store render the bottom third of the retail portfolio unprofitable among Baby-Boomer-centric retailers.
4. Meanwhile, startups use mobile/social to cheaply grow, to build a "proof of concept". Those who shop at these businesses are much younger, of course, and tend to touch dozens of digital channels before doing anything, not because touching channels makes a customer more valuable, but simply because that's how a non-Baby Boomer / non-Gen-X customer behaves. S/he doesn't behave this way when you sell stuff that s/he doesn't want - s/he just quits.
5. When the "proof of concept" is validated, venture funding enables the business to invest heavily in traditional e-commerce, growing to a healthy size.
6. A third trend is taking shape ... Baby-Boomer-centric and Gen-X e-commerce/catalog businesses are running out of growth opportunities. You will see these folks move into retail as well, because online growth (unless you are Amazon) always seems to reach an asymptote. Click here for an example.
7. As the bottom third of the retail portfolio becomes unprofitable among Baby-Boomer-centric retailers, stores will be closed. Go read the financial documents from large retailers ... they are readying the purge. When stores close, sales are not recaptured online. Omnichannel, for existing Baby-Boomer-centric retailers, is going to yield sales declines.
8. As Baby-Boomer-centric locations are purged, the "proof of concept" e-commerce businesses catering to younger customers step in to gobble up the real estate.
9. As locations are purged, technology is seen as a cost-effective way to digitize remaining stores while saving expense that must be saved due to declining sales. Scores of $60,000/year jobs are purged, replaced by warehouse-centric pick/pack/shippers earning $25,000/year. Sales decline, and wages decline. Tech vendors get paid.

That's my thesis, folks. There are three very different movements happening. Vendors, trade journalists, consultants, and researchers tend to average these trends, to create a theme that they can sell in to.

The average of all the trends would, in theory, require a business to embrace "omnichannel or die".

But you aren't an average of the three trends, are you?

So your solution is unique and different, based on the situation you are in.

And that's the problem with the omnichannel movement, as outlined by researchers, trade journalists, consultants, and vendors.

Anyway, that's my thesis. There is every possibility that I am wrong. Regardless, this is my thesis.

What do you think?

Must Watch Omnichannel-Themed Future Of Business Video

Yes, you have fifteen free minutes today to watch this (click here if you do not see a video box below).

Around the six minute mark, the speaker mentions Macy's - he talks about how he believes that pure play e-commerce is dead - that pure-play e-commerce must go into retail to grow - and then he talks about Macy's closing stores and thrashing $40k - $80k per year jobs, replacing them with fewer jobs & very low paying jobs, while killing off unprofitable in-store sales in the process.

#Omnichannel!

But more important - this individual crafted a story ... he knitted together your business and Apple and Amazon and Facebook and Google ... and he predicts where he thinks the short-term (i.e. 5 year horizon) trends are headed.

I am not a fan of the omnichannel thesis, and for good reason. You're being sold a bill of goods. Many of the biggest retailers are talking about closing stores (though you're being told that omnichannel will save your stores). E-commerce businesses are talking about opening stores. What you are actually observing, in real-time, is not omnichannel, but instead is a Darwinian change in commerce ... you are observing the end of the Baby Boomer era ... those retailers are going to be destroyed by the omnichannel movement ... and you are observing the birth of the business models that replace them ... e-commerce brands (and in the next 5-10 years, mobile brands) that cater to Millenials and those who come after Millenials.

Think about it ... this is a change in how to build a business ... you build with low-cost customer acquisition (social + mobile), then you use venture funding to get past $100,000,000 without the fixed-cost retail infrastructure ... and once you get past $100,000,000, you move into retail to get to a billion and beyond. There's going to be a lot of dead retail space that newer companies will be able to get, cheaply, too. To summarize:

1. Develop the proof-of-concept with low cost (free) customer acquisition.
2. Use traditional e-commerce methods and venture funding to build the business without the fixed-cost headaches in retail.
3. Expand into retail at the very time when Baby Boomer retailers die off, allowing you to get cheap real estate.

Everything kind of makes sense, when you think about it that way.

I promise you - this is the best business video you'll watch all month. And it's free. You're not paying $600 to hear a vendor-themed message centered around a product/solution the vendor wishes to sell to you. 

So please, watch the video.

New Project Offering: Hillstrom's Vendor Academy

Yes, you can purchase the booklet now (click here).

A few weeks ago, an Executive asked me if there was a way to create a project to solve the Vendor-centric discussions the Executive was having problems with. In other words, the Executive was having a hard time telling a compelling story about the trajectory of his business, and when he tried to communicate anything, his vendors were unresponsive. The Executive was highly frustrated. He felt he had outsourced the majority of his marketing department to companies that cared more about their products/services than his business.

This is the impetus for the booklet.

And this is the impetus for a new project offering, called "Hillstrom's Vendor Academy".

Here's what you get.

1. A mini - Diagnostics project.
2. A mini - Merchandise Forensics project.
3. Development of Annual Objectives designed to help your business grow profitably. The Annual Objectives come directly from the information learned in the mini - Diagnostics and mini - Merchandise Forensics work.
4. Facilitation of the one-day Vendor Accountability Summit, helping you partner with your vendors to get everybody on the same page. You invite your vendor partners, I help facilitate the day-long session (if you want assistance).
5. Creation of the Vendor Evaluation Dashboard.
6. Monthly assistance with scoring vendors via your Vendor Evaluation Dashboard, for a total of twelve months.
7. Communication guidance designed to help you get the most out of your vendor relationships.

As always, you can click right here for project pricing and file layouts.

This offering is in direct response to so many of the communications we've had in 2015. If you're serious about fixing business challenges, email me now (kevinh@minethatdata.com) and let's get busy. I take on two large projects per month, and my busy season begins in mid-April, so get your request in as soon as possible.

A Perfect Example Of Why You Need A Vendor Accountability Summit

Give this article a read (click here). In the article, vendors are clearly taking advantage of their clients to pad their own profit and loss statements.

I've been there. One of the co-ops that catalogers trust offered to give me a percentage of your money if I funneled business to them.

This means that the co-op is over-charging you, right? If the co-op can afford to take a half-penny of the +/- six cents per name they charge you and deliver it to my bank account, then the co-op can afford to charge you less. It means that you are paying a premium to the co-ops so that the co-ops can fund the vendors they have cozy relationships with. 

Why should you have to fund cozy vendor relationships?

Buy the booklet (click here) and set up your own Vendor Accountability Summit. During the Summit, ask each vendor to publicly announce their financial relationships with other vendors. Watch for changes in body language, red faces, heads hung low, feet tapping, hand wringing, eye glances at each other, that kind of thing.