How work-life will change after coronavirus

With the experience of  coronavirus COVID 19 lockdowns work-life will change forever. With 91% US kids at home parents are spending more time than ever with children. Some parents have jobs that allow digital work and these folks are so lucky. Then there are the  struggling 25 million unemployed in the travel, tourism, retail and any type of jobs that require a physical presence. At the other end of essential workers are the beleaguered medical worker, true heros, who show up every day to work. No less valiant are factory workers, grocery retail workers, law enforcement folks who are keeping essential services working. For everyone in each of these situations the pandemic has been trying as the USA tries to reopen. Going forward here is how work life will change:

  1. Residential real estate and families will be more important: For those who enjoy a lifestyle where most time is at work or out of home leisure – homes were just a “place to sleep” . For these folks “stay at home”  has been particularly trying. In urban settings living quarters are cramped, and it’s hard to stay indoors. Moving forward there should be an uptick in residential real estate as folks realize that the next pandemic should place them in better situation. Also there should be an increase in renovations and upgrades and the associated industries. But perhaps the lockdown has had the greatest impact on the bonds within families. Never before have parents and kids spent so much time together. The situation has been stressful but unexpectedly joyous!
  2. Work from home and digitization will increase: Wherever possible, all types of organizations will encourage work from home. People realize that if you can eliminate “set-up” time for face to face meetings then you can really enjoy very productive meetings. The “set-up” time is your drive time, stuck in traffic time, waiting for the person you went to meet time etc. However, the face-to-face meeting will assume new significance. People will try and meet face-to-face to allow continuity in their interactions.
  3. Share your screen and share what exactly you are going through: A big  advantage of video  (eg. Zoom meetings)  are that you can share your screen. For teaching and learning it’s just incredible. For those of our readers who have used Facebook Marketing support -you know why the ability of sharing your screen is so incredible. The starting point  becomes the experience and understanding of the customer. Above is a fun example of a home services company who is trying to understand the customer’s problem. Perhaps some “paid” telemedicine in plumbing could be a revenue source.
  4. Leisure will become purer: Although travel and tourism is in a tough spot right now – things should turn around soon. Cruise lines are taking bookings for August 2020. In fact Carnival Cruises are reporting  a 600% increase in booking for August 2020.
  5. Take out restaurant food will boom: As a  market segment take out food will increase a great deal. Restaurants who are trying to stay in business during the pandemic have innovated a lot. Innovations include meal configuration that move well in take-out containers and touch-less curbside pick up. The delivery piece should also be a growing opportunity that Uber is trying to grab with the $6 Billion acquisition of GrubHub. The large 20-30%  commissions of order by app folks is a matter of concern for restaurant owners. Perhaps for self pickup Uber could charge a much lower commission

The need of the hour is to re-open safely and prudently. Local,State and Federal leaders have to balance “lives and livelihoods”.

About StratoServe.

Coronavirus: Why is the panic so acute?

MonaLisa Coronavirus StratoServe

Note that this post was written on March 3,2020 – trying to be cheerful. Update March 19, 2020. Stay home even if you are not sick. Stop the spread!

It’s hard to remain calm when one was expecting the Dow index to cross 30k and it’s in the 26K range. – in a matter of days despite interest rate reduction.. If the Louvre museum is closed and Mona Lisa has a mask things are getting serious. Coronavirus is dangerous but the panic is even more dangerous. Why is the panic so acute? Here are some thoughts:

  • The world is global: People travel – a lot- and economies are intertwined through business, education and tourism. People to people contact has increased tremendously in the last decade with the increase of social media. Even when you are not travelling you are in touch with whatever is going on. For inquiring minds who want to know “Coronavirus – (name of country)” on Google will reveal more than what you want to know.For the TV minded legacy media folks – the news channels are fanning the frenzy. Mike Mulvaney the Trump Chief of Staff suggested stopping watching TV, to calm the stock market. Great idea, but hard to do….. because…
  • Slow motion Horror Movie: The Horror movie genre has crossed $1 Billion and is a high growth segment of the movie industry as per Variety magazine. And you are getting a slow motion movie unfolding on TV complete with a global cast, reporters all over the world trying to keep that right “panicked but brave” look.
  • Politics is local: Politics is local because local people vote.  Politicians are held accountable and taking action like closing schools,quarantine seem like forceful actions and the watch words seem to be “we are doing enough”.
  • Supply Chain Risk: is one of the fundamental concepts in managing risk in supply chains. The basic idea is that you never source any physical goods from any one factory. Naturally larger factories become cheaper and it’s hard for supply managers to justify why they source more expensive product from a different country or location. In the digital world – things are simpler because you can have software in the cloud and that is physically backed up in different places.
  • Value Chain Impact:  The back end of the value chain to the organization is the supply chain and the front end  of the distribution channel including the wholesaler and retailer to consumer is the distribution channel. If people don’t travel then industries from airlines, cruises,  sporting events are all affected. And this slows down the back end supply chain and the all associated economic activity. The run on face masks, liquid soap and sanitizers is not helping calm the panic.
  • Social Media Frenzy: Just open your social media including Whattsapp and be surprised by the amazing types of cures and prevention techniques that are being shared around.

On  a more serious note a 1.4 to 2 % mortality rate for the coronavirus COVID-19, is very serious when compared to the 0.1% mortality rate in the seasonal flu. It turns out that most of the mortality is among older people with underlying health conditions. But if you are older and have health conditions there is the Framingham score of your cardiac risk in the next 10 years.

One guesses  that the prospects of 2% mortality within weeks does sound more scary than 2 % cardiac risk in the next ten years! It is probably the imminent threat is what is causing the panic. Younger people at lesser risk seem more worried about quarantine uncertainties.

We will overcome this soon and as the Corona virus slows down, maybe we’ll all become more alert to respiratory infections and be more amenable to taking  timely flu shots that should hopefully contain an antidote by the next flu season. Meanwhile washing hands frequently and staying home if you feel sick is all that is needed.

About StratoServe.

Is your business Instagram ready? Lessons for “foot traffic” marketers on main street

Go to any event and observe dressed up folks taking selfies. Or folks asking someone else to take a picture for them. Also observe how younger people are examining the background- i.e. the photo frame. The purpose of those photos is not to take a print and make an album. But to post on instagram!
To make all this photo posting more high quality, newer smartphones offer 2 and 3 cameras.
Pop-up museums have caught on to this trend. Here is a great video that explains the Art museum pop-up phenomena from Vox.

The need for everyone to take selfies is disrupting traditional museums. who did not allow photographing for copyright and damage to artwork from flash bulbs. Major museums like the Louvre,Paris now allows photographs without flash. Hotels too have got into the Instagram friendly game. See the pop-up breakfast visual in the food and wine article below. You can be sure that carb conscious guests are not consuming all those bagels. Instead, guests would be posting images of the bagels and waffles on instagram !

Pop-up Breakfast
If you have a business that has foot traffic Instagram promotion is a great option.All types of organizations with some “experience marketing”  including healthcare, education, gyms, apparel  and jewellery stores,restaurants,takeouts, home appliances, home repairs, insurance agencies,financial planners, lawyers  can benefit. Here are some inexpensive ideas:

  1. Observe your customers: In clothing and jewellery stores you see customers trying out stuff that they can’t do online. It might be easy to designate a space for tryouts. The only requirement is an attractive “Instagram worthy” backdrop or photo frame.
  2. Backdrops or photo frame ideas can be very inexpensive from balloons and pendants to the more expensive printed point of purchase stuff you see in grocery stores.
  3. Lighting is critical- the tryout corner should look like a photo studio in terms of lighting.
  4. Your Instagram hashtag needs to be displayed on the tryout corner and should invite the shopper to take a selfie and post on instagram.
  5. ‘Even when the shopper does not buy- if you can encourage an Instagram post.It spreads your word.

About  StratoServe for Digital Growth.

Resolve to change your web content fast in 2020

Change your website fast- StratoServe
Cyber Monday 2019 has had a record US online sales of sales of $9.4 billion out of which one-third is on mobile phones. It’s not surprising because if you see a bunch of people waiting anywhere – you see them buried in their cell phones.
We have advocated in earlier posts to make your website mobile friendly. Do the Google mobile friendly test. This post is about why you need to be able to change your website fast in 2020. But first:
Why is it so hard to change your web content? Here are some top reasons that we have observed:
  • There are many people involved- on the technical back end side. These could be an in-house tech team or a vendor agency.
  • Technical folks don’t seem to have clear instructions from their bosses. If you are the person doing the changes, your boss seems to give more priority to some managers than others.
  • Organizational politics play a big role. A less powerful department manager asks for a “contact us” form on a particular page. “The contact form is already there on another page”, the tech person reasons. He/she now needs to discuss with the technical boss. And this could take weeks unless the requesting manager keeps reminding. In case the requesting manager forgets and the tech folks forget- it never gets done. Meanwhile, the advertising agency keeps spending money driving traffic to the department page. The results are lackluster.
We urge our dear readers to resolve that they’ll work on improving web content change speed in 2020. Here are some suggestions to convince your colleagues:
  1. What does your audience do first? Before calling, emailing they go to your website. Usually through a search engine like Google.
  2. Address any initial questions that your audience has can on your website. Why? because people first research online as the 2019 online sales confirm.
  3. No one we have met, is “happy” with their website. This is strange, because website owners and the audience have conflicting needs. While owners like to “look good”, audiences need answers to questions. Before they start talking to you.
  4. So useful content is much more important than “looks”.
  5. If you are a line manager, responsible for any type of results . develop a routine to follow-up. Be relentless to follow-up for changes is necessary in 2020. Take your web folks for lunch- friendships help.
  6. Do not fall into the website “re-design” trap. It makes your organization “look” better but does not help your user. There are too many re-design stories of lost SEO (Search Engine Optimization) ranking. Because the old content now has a great look but a different url. Search engines take time to index your “new” pages.
  7. Ensure that your website is mobile friendly. If the 2019 mobile sales don’t convince you- ask your colleagues to look around. At how many people are on their mobile phones at lunch, at the theater, game or any public place.
In 2020, resolve to change your website fast !

Giving Tuesday: Why Non-Profits must focus on marketing their impact

Giving Tuesday
Today is Giving Tuesday, the Tuesday after Thanksgiving. It’s timely think about the impact that a non-profit is able create and communicate . With 1.5 Million non-profits in the US, it’s hard for both beneficiaries and donors to find the non-profit that will actually make a difference. Most beneficiaries are incapable (eg too sick or too poor) or unaware (eg US opiate epidemic) that there are helping hands around.
Governments worldwide award non-profit status (in the US 501 (c) 3) to spur civil society engagement in social service. The non-profit status gives a tax break to the non-profit and also give some kind of a tax break to the donor. Governments hope that non-profits will take charge of the many social challenges of the time.
If you think about it, the only difference between non-profits and for-profits (businesses) is the tax break. Otherwise, both sets of organizations are trying to serve a customer or beneficiary. Businesses are more accountable because if customers don’t buy, lower profits turn off investors. Hence Wall Street earning calls are stressful for company leaderships.
Non-profit donors do not have the benefit of all the data that business investors have. For larger non-profits there are rating agencies like GuideStar and Charity Navigator who value things like low overheads vs impact. If you are a non profit and have high administrative costs, you can expect to get a poor rating despite the excellent impact you may have. This traditional rating approach leads to two problems:
  • Non-profits can’t pay employees as well as private business- for the same skills.
  • Results or impact is poorly managed. Most non-profits will not be able to tell you how many beneficiaries they touched in the last week. You can be sure that the smallest business will have a good idea of their recent sales and revenue.
So it was nice to see that a new start-up “Impact Matters” is trying to measure non-profits by impact. Adding to the existing methods of rating charities the start-up focuses on efficiency. So as a donor you know exactly what impact your individual donation would have. The methodology relies on a variety of data sources and the larger charities should be able to take advantage of this new service. But it is a great start. Check out Impact Matters.
Charity rating agencies like Charity Navigator are able to rate less than 10,000 of the 1.5 million US Charities. So for the rest of almost 1.5 million charities they need to get the word out about the impact they have. Here are some suggestions on how to do so:
  1. Do you have a prospective beneficiary list? This is the target market you are trying to serve. Developing a list is a great way to start as any B2B marketer will tell you. Once a beneficiary starts receiving your services – you now have a data point and – a story of your impact to share.
  2. Make sure you have your website up and running. If you have a website – check that is mobile friendly. Create a non-profit Facebook and Instagram business page. We notice that it’s hard to make quick changes on a website but easy to make changes on a Facebook business page.
  3. Empower your field staff to post on social media. It is your field staff who works with your target beneficiary. Most of your field staff are on Facebook already. Encouraging them to post impact stories on your non-profit Facebook web-page on a daily basis can help. Check with your legal folks if you need a waiver from your beneficiary. Think of sales and service people in business who have to file a daily report. Wouldn’t it be great if non-profit field staff filed their daily report on social media?
  4. The Google for Non-Profits grant is great. It gives you $10,000 ad money to spend a month to spread your message.
  5. Spend on marketing. Be bold in making marketing investments. If you can hire in-house marketing staff who can manage communications with beneficiaries as well as donors, do so. A good model to manage your digital outreach is to hire a competent agency. The agency should work with your field staff to to fine tune your outreach to both beneficiaries and donors. So long as you spend 65%  or more of your budget on programs that help your target beneficiary, you would be considered an “effective” non-profit. By consistently investing in your marketing  efforts you can ensure that you have a growing budget for the important work you do.

About StratoServe for Growth Strategy.

Why marketing attribution continues to be a problem

Attribution-StratoServe
Ask any business about which marketing effort connects them with a new customer- and you’ll get a variety of answers
. “It’s all word of mouth (WOM)” , some friends lett us. Others say: “its face-to-face sales”, its “search advertising”, its” social media advertising”, its “social media posts” etc.
The backstory starts in the pre-internet age. Back then, sales folks were very reluctant to adopt technology because they wanted to keep their leads to themselves. After all, commissions depended on who “closed” the sale. In direct mail and catalogs, the coupon code and a mailed in order form identified which mailing worked. As digital and internet marketing developed, the legacy metrics were adapted and “last click attribution” became important. If you think about it “last click” or the ad that you clicked mirrored the “sales closing” and fitted neatly with the old direct mail coupon code model. All you had to do was to put some tracking computer code on the ad, email. At checkout, if the transaction had a web visitor who arrived from the ad, it was “Eureka” you had attributed the ad spend, specific email or ad to the purchase.
The trouble was that marketing and sales does not work on a last click basis. You do not buy on a single ad. As early as 2016, Search Engine Land had an excellent article by Christi Olson that explained the attribution challenge. Here is how to think about attribution in marketing:
  • What are customers doing today? It all starts with a customer need and your value to the customer. Sometimes the customer does not realize that there is a need and Steve Jobs invents the iPhone. In doing so, disrupts the phone industry, killing the phone booth. Remember, carrying coins to use at the phone booth? While at it, mobile phones also kill digital cameras, GPS devices, music players etc. Asking what the customer is doing today is a great place to start.
  • Are customers really doing nothing? Not true. It is surprising how many organizations rely on shuffling excel sheets instead of relying on a software system. Advanced excel skills are most valuable for fresh out of college employees. If you are selling software systems, there is no point in mocking rampant excel use. Accept, that there is something the customer is doing till they hear about your great product or service.
  • Do customers need to be educated? Yes, yes and yes. And this goes to advertising’s core purpose to inform, remind and persuade. The process of educating the customer is also called the “customer journey” starting at the top of the sales funnel (I didn’t know that I needed Alexa). For low cost items that involve only the customer (eg. a soda) the sales funnel can be pretty quick. As soon as more people are involved ( in most B2B) or the value is high (eg. a car with the family involved) the sales funnel can be long and run into years in complex sales.
  • What about multi-channel ? This Cyber Monday (2019) will be the biggest single day of retail sales online. Estimates are that 85% of the US is comfortable shopping online. While the order may come through on a desktop, the customer does most of her research on a mobile phone. Her research includes investigating a brand on Instagram in response to a friends post or an ad, and lots of video viewing on YouTube. Think of the customer journey as continuing beyond buying . You do want the customer to be happy and become your champion. Sometimes the customer checks out a YouTube video from you or your happy customer who explains a use question. Think of attribution as being multichannel. When a use question finds answers on Google or YouTube it goes towards progressing the buyer through the sales funnel. Each bit helps!
  • Why review, review and review? It’s useful to think about all forms of reaching the customer in the continuum of inform, remind and persuade- the objectives of advertising. Because you have a “Buy Now” call to action button in your ad does not mean the customer will buy immediately. However, when the customer just sees the ad,clicks on it or lands on your website- there is progress being made.Platforms like Facebook report (attribute) sales across platforms like mobile and desktop provided the customer is logged into Facebook. Google Analytics in contrast, relies on devices. So if you saw the Google ad on a mobile phone but bought on the desktop – the (poor!) ad does not get any credit. The important thing is to have a review meeting on a regular basis to see what results you are getting. Tracking tools like Google Tag manager, email tracking code, Facebook pixels are available for free. But they don’t help unless you review results regularly – they  just can’t help. And it just takes an hour a month to review for our clients.

About StratoServe for Growth Strategy.

Forever 21 : What is your strength – that customers value?

It is sad to see that Forever 21 filed for bankruptcy. Their backstory is fascinating and the 5 minute video backstory of Korean immigrants achieving the “American Dream” by Business Insider is worth watching. 

Unlike the typical sad “decline of US malls”  story and rise of “online retail” the Forever 21 story has important lessons for all businesses. It is also an eerie reminder of the New Coke fiasco,  To recap, Coca Cola did not realize in the eighties that customers did not drink Coke for taste but  it was all about “being American” – a much deeper meaning.

Here is what the Forever 21 backstory tells us:

  1. Understand what “value” customers see in your product: Businesses are constantly working on getting “new” customers.In doing so, businesses lose sight of why their loyal customers buy from them ? Thus Forever 21 expanded stores and product lines within the mall as the video explains. Their main strength was new clothing designs – frequently changed- at affordable prices. That is why customers visited their stores.
  2. Be careful about scaling: Unlike McDonalds, Starbucks  or Coca Cola where your goal is to provide a  uniform product and experience , Forever 21’s strength was rapid changes in product assortment- depending on the fashion of the day. The supply chain was agile and used to working at short notice. As soon as stores started expanding – something probably went wrong in the supply chain cost structure. Our guess is that the core strength of rapid fashion changes was forgotten. Scale in number of physical outlets and the focus on keeping prices low made the company forget its core strength that their customers valued most. Namely, current fashion at low prices. Like New Coke, shopping at Forever 21 was not equal to shopping at the mall but went deeper. People wanted latest fashions to the extent that the next time they visited the store they would see completely new designs. This had stopped….. yet Forever21 could not pick up the signals….
  3. Test changes small-Listen to Social MediaThere is a reason that McDonald tries out new products (like the Impossible Burger) at a few stores first. They have ways of measuring customer response. If successful, they’d roll out the product nationally. Similarly,  Forever 21 could have tried the new business model (of static fashion i.e. not changing offerings for second visit of the customer) at a couple of stores and seen the response. They also did not pickup social media signals as customers returned unhappy in seeing “nothing new”. Yes, competition from niche online retail was another thing to address but probably that was a lesser problem for them. Since their old model of rapidly changing designs had a supply chain that worked, it only needed online alignment. 

We do hope that our readers will pick up something from the Forever 21 story. We wish the very best to Forever 21 in their efforts to restructure with Chapter 11. 

About StratoServe for Growth Strategy.

Purpose of a Corporation : What every American needs to know

One of the most exciting things for business over the 2019 summer was when the Business Roundtable put out a Statement on the “Purpose of the Corporation.” Signed by 181 American CEO’s all of whose brands are well known to consumers or businesses, the statement reflects the changing times. Here is the  Roundtable Statement and check out the 181 signatures from many CEO’s of companies you are already familiar with.

American politicians have been telling us what we know to be true – the “American Dream” eludes most folks today due to rapid changes in globalization and technology. Thankfully, leaders of American businesses have taken notice and have decided to move their focus from the “next quarter” to “long term shareholder value” on the shareholder element and have included all stakeholders in the “Purpose of the Corporation”. The times have truly changed in the last decade with all stakeholders having a voice on social media and the old dictum of “just focus on shareholder (short-term) value”  can no longer work.  See Eric Posner’s article “Milton Friedman was wrong” in the Atlantic.

This blog assumes that the Round Table CEO’s have positive intent and they really do want to switch from a next quarter approach to long term value for shareholders. So why have CEO’s collectively become so pious? That question deserves an entire post but three quick thoughts. (1) As Warren Buffet has been saying investors should think long term and Americans are listening with increasing appetite for index funds. It makes sense for CEO’s to align with the changing investor.(2) Politicians worldwide realize that only citizens in their country can vote and if unhappy then the election results can’t be good. The politicians of all persuasions are pressurizing companies  to look out for their voters (3) There was no social media when Milton Friedman suggested that if companies focussed on dividends then individual investors would have the freedom to choose what charity they would like to support. Although more efficient if companies directly engaged in charity through Corporate Social Responsibility (CSR)  – Friedman thought that the individual investor would be disenfranchised in not being able to decide on which stakeholder causes she/he would like to support. Today all stakeholders can speak out easily and do so with speed and vehemence, unimaginable even ten years ago. The CEO’s are forced to address stakeholder’s problems – after the fact -with a lot of collateral damage to their reputations (eg. big brands caught up in the opiate crisis ). The times are changing too rapidly to stay only with short term shareholder value….

In any case,  assuming that the CEO’s have positive intent here is how Americans in private life and in their roles as employees, consumers and as public  need to think about each element in the Corporate Purpose statement.

About StratoServe.

The recycling crisis -what should you NOT be putting in your recycle bin

Monday was   Earth Day and it’s a good time to think about the recycling crisis facing the US. Last year China that took in most of the developed world’s recyclable trash decided to up it’s quality standards.  Do recyclables going into  the recycle bin have quality standards ?– the surprised reader might wonder. Yes they do as this article in Mercury News explains. It is timely for all to understand what you should NOT be putting in the recycle bin.

In the US there has been a move from multi-stream recycling to single-stream recycling. Multi-stream refers to different recycling containers for paper ,plastic, metal, glass with the consumer doing the sorting upstream. Multi-stream recycling had a consumer adoption problem in that people were just not using them enough. To improve recycling adoption by consumers there was a massive move to go to single stream recycling where you had all types of recycling in one container. The idea was that recycling facilities in the US would manually (yes manually) sort out paper, plastic, metal and glass and put them into bales before shipping to China. Since there was a lot of mixing up of different categories of plastic only 25% of a plastic bale could be recycled and 75% went to a landfill in China. With a booming economy and 1.38 Billion people being rapidly westernized in consumption habits – China had its own waste to dispose off. Since last year China has refused to pick up contaminated bales beyond a 0.5% mix up or if it has liquid. As the Mercury News article explains, Chinese inspectors are inspecting consignments in the US before shipping because if a consignment is rejected in China there is a huge cost for the US exporter.

The US seems to have a still functioning (not totally globally outsourced) metal and heavy glass recycling industry and  the big problem seems to be paper and plastic that come not just from the grocery store but also from all those packages from Amazon.

StratoServe-How Cardboard Recycling WorksTo understand how recycling works in a factory sense one needs to go upstream in the supply chain for each packaging material and better understand how each broad category of paper and plastic work in packaging. Here is a recycling diagram for cardboard boxes and it is similar for plastic bottles and those cartons plastic bags that may be a combination of plastics/metal/paper. Plastics and aluminum foil tend to be in contact with the product and are particularly useful in preserving food freshness.  The boom in online sales has added a whole lot of outer packaging that’s needed in two separate rounds – the first is shipping to the retailer (or online retailer) and then a different box to mail to the online buyer. These paperboard cartons can be made with recycled paper but tend to be less stronger than those made with virgin wood pulp from trees. Buying the correct cardboard cartons that survive transportation but don’t cost too much is something that purchasing and supply managers give a lot of attention. Normally retail stores are well trained to properly dispose off outer cartons that tend to be for both transport and retail display. 

The consumer however, does not realize that there is no magic in the sorting of all the stuff we put into that recycling bin. Towns collect recyclables and have a detailed list of what to put into the recycle bin. Every member of a household needs to read their recycle list from their town and follow it exactly. And that is not easy to do or expect.

However, US towns are remarkable in their excellent self Government through elected officials. Communicating the recyclable list through schools, local newspapers, facebook groups and online and offline ads can get all residents to understand what to put into the recycle bin. 

If there is clarity on what   you should be putting into your recycle bin then there are two big benefits:

  • The perceived low value paper-plastic recycling industry will revive in the US and create many jobs
  • The environment will benefit 

Here is a list of what recycling our town allows– ( please check your own town website- Google “what I can’t recycle -name of your town”)  because they might have a different list depending on their recycling contractor.

About StratoServe for Growth Strategy.

How TJX and Costco drive foot traffic in the digital age

Costco and  TJX Group (including brands like TJMax, Marshalls, HomeGoods etc.)  seem to be always crowded. And when you look at long checkout lines you know they must be doing something right to drive foot traffic in the digital age. TJX describes itself as an “off price” apparel and home fashions retailer while  Costco  is a paid membership bulk retailer focussed on quality products for their members, a commitment to employees and suppliers as mentioned on the Costco About Us section.

No matter what your brick based organization (including  healthcare and banks) – if customers can receive services online. They will avoid the friction that comes with visiting the store. For example, in medicine,  tasks like appointments, test results, refill requests, billing are digitized and patients extensively Google before meeting the doctor. Think about banking – when was the last time you went to a bank branch?… you get the picture.

Here are some video tips on shopping at TJMax  :

We were thoroughly intrigued by the observation that there is substantial traffic in TJX and Costco while US malls tend to be desolate. Here is our take:

  • Surprise and Delight  This seems to be the mantra for both TJX and Costco. The TJX shopper feels the excitement of  a flea market except that the brands are top names and the merchandise is new. The aisles are pretty stable so you would see the pants in the same place except that seasonal changes might be upfront. Costco follows a horseshoe layout (see first video above) but moves things around to add to the “surprise ” element.They seem to put out the most recent and fashionable stuff on the front of the aisles. the assortment is as expected, every time, but the specifics are a process of discovery and everyone seems to take great delight in finding deals.   For Costco , you know that you’ll get milk, eggs and toilet paper but the aisles of random stuff like “Coconut Clusters” with tastings makes buying easy. 
  • Encourage returns: At TJX you can try out whatever you want to and the fitting room counter lady (in most stores!) seem to be a little intimidating. Wonder if this is a strategy for you to simply buy and take the stuff home. If it is already reached home – there is an exponentially better chance that you’ll keep it ! Costco is famous for its return policy – but if it has reached your basement store- then the likelihood of hanging on to stuff increases. We don’t have access to data but it is  likely that people buy more than they return on a visit. Only a small fraction of shoppers seem to bring in returns that must be tagged after you show your membership card.
  • No in-aisle customer service: There is really no in-aisle customer service. While Costco has loyal members TJX seems to have perfected the art of making shoppers feel like members. This transfer of “responsibility” (to shop!)  to the customer is quite amazing. Educators and healthcare needs to pick up some ideas here. Perhaps it is the full package that encourages such “ownership”.
  • Can’t beat the price: Try searching online for a better price and you’ll be disappointed at both TJX and Costco particularly for under $10 items. There must be a whole lot of research going into setting store prices.
  • No way to look at store inventory before visit: This is absolutely brilliant. You cannot look for inventory for a particular item in a particular store at TJX without physically visiting it. You can leave an online store in seconds but if you enter a physical store between parking and searching you are looking at an hour or more- that many actually like to spend.  At Costco the in-store prices tend to be better than online prices and there is a different assortment in both particularly for the “long tail” surprise-delight items.
  • Email and Text: Both companies are active in reminding you that the “discounts” are disappearing- so it’s not that they are lagging behind in digital marketing.
  • Hours and Directions available online: For both TJX and Costco hours are quickly available on your mobile phone. They do want  you to come in but enjoy the fun of a visit while actually visiting.
  • Employee Focus: You really can’t do the above without employees who are very engaged and thinking about improving the customer experience. And lot of the hard work is done behind the scenes working with suppliers and systems. It does appear that the employee page at TJX  and the employee section  at Costco are not just “company speak”.

Clearly, something to learn for all  organizations that have products or services delivered from physical buildings. 

About StratoServe for Growth Strategy.

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