An Ad That I Love Vol. VI

I’m going to take this opportunity due to a power outage at work to do one of my favourite things! An Ad That I Love post! Today’s ad came out almost two months ago but I doubt that many people have seen it on the TV. It appears to be an internet only ad and definitely making some waves especially from such a large player in the market.

The company is Kmart and it is currently the 3rd largest discount chain in the world (behind Wal-Mart and Target). I know I haven’t personally heard much from Kmart in the last couple of years besides financial troubles, especially after the company purchased struggling Sears* (date was 2005 according the sources). They have a convenient pharmacy which I believe is the last time that I really went into the store for anything. It brings to mind a saying that was tossed around in business school, something along the lines of “If you’re not in the top two, then you should not compete in that industry.”**

*There is a point to be made here that traditional brick and mortar department stores have struggled with other retailers with more and more people shopping online. These electronic retailers (Amazon, ebay, Zappos) do a great job of keeping costs lower than department stores but do have an issue with clothing wherein most shoppers still want to physically touch and try on clothes before purchasing. (Side, side note: Universal sizing, can that be a thing already? See: The 7 Most Baffling Things About Women’s Clothes) Sears has been able to pull through by aligning itself strongly with a tools/hardware as Kohl’s or Macy’s with straight to wear fashion and home goods. Department stores showing surprising resilience and maybe making a comeback? 

**A problem that I run into frequently is that I keep great quotations in my head but have no idea where I heard or read it. This is a problem cause I feel like 40% of the time when I’m having an intelligent conversation and want to incorporate information that I learned (or a great quote) I don’t put in that potentially excellent point because I think I have about a 60% chance of misquoting or misinterpreting the information and/or using a less than reliable source (see: reddit). 

So in the discount chain area, Kmart is in slow decline but with thousands of stores still open and a hefty network of suppliers and great some notable in house brands (Martha Stewart collection?), what is a company to do? Viral video ad campaign?

Oh boy, that made me laugh so much the first time I saw it. So it is an old established brand resorting to what really is the lowest common denominator. It is unexpected, crass, and very funny. Let’s break it down:

First things first, the service Kmart is advertising is having items shipped directly to stores for pickup. This has proven to be a particularly effective generator of sales for rival WalMart and Target as these brick and mortar retailers seek to tie in online presence to the store. The idea is simple, if you find something that you like when you’re shopping online, you can have it shipped for free to your local store where you can pick it up (usually within a day or so) and try it on and touch the item. At the same time, that is bringing you into the store with the opportunity for additional purchases (“while I’m here” type of thing). And it really doesn’t cost the company all that much extra as the lines of shipping between stores is existing at some level or another anyway.

The presentation is fantastic, while Wal-Mart and Target may have had established systems in place, both failed to make such a splash in the market, with the video above scoring nearly 19 million views on the official Kmart channel.***

***It is important to note that, especially on youtube, once a video begins to become “viral” several copies will be made on various channels in order to take advantage of the popularity. People will “repost” these videos in order to bring attention and views to their own channel which generates the channel owner revenue (through ads). Therefore any given video, such as the above ad, may have several million views outside of the “official” channel. 

Does it work?
Hard to say. According to this ABC report at the end of May, Kmart is showing a decrease in sales for the quarter but there really hasn’t been enough time to evaluate its effectiveness. There is a lot of buzz around the ad and personally, it is the first time in a long time that Kmart has really done something to stick out. I look forward to seeing how much of an affect this campaign has not only for the bottom line for Kmart but for the industry as well. How cool would it be if this helps Kmart sweep to some sort of fantastic resurrection?

Here is the latest ad:

::

As always, let me know if there is an Ad that you love and it might be featured here!

Advertisements

Faith in Retail

We are right in the middle of a yet another swingin’ holiday season which means good times for most retailers as US consumers are out and spending. Stores have spent the last month or so bringing on additional seasonal staff for help as the customers increase and taking on extra inventory (if possible) of all the hottest toys and gadgets that have been aggressively pushed out of various manufacturers’ warehouses. This is capitalism at its best, with money circulating through the system, employment numbers dropping (if only temporarily), and the public generally optimistic, a perfect storm of sorts for a sluggish domestic economy.

In the midst of this, thousands, if not tens of thousands, of university students are prepping for mid-year commencement ceremonies and steadying themselves for what looks to be a bleak outlook in some fields. Business majors come a dime a dozen in today’s competitive landscape, specializations outside of Accounting or Finance will be the ones with the most sobering realities. What once was dreams of managing global strategies or working as part of sharp, new age analytic teams will be hammered down to a longing for middle management in just a couple of years.* There are several avenues that people are taking to avoid this, which I support wholeheartedly. One is continuing education. In the current academic model, we have what many experts are referring to as the “Higher Education Bubble” more specifically focusing on student loan debt. This will dramatically change the education landscape within my lifetime but as for now students who are already X amount in debt, may as well tack on another two or four years for a masters or doctorate. As one professor told me quite frankly, “It’s a paper chase. Get the bachelors, get your masters, and then consider the doctorate to set yourself apart.”

*Much like creativity in grade school students being squashed out for test score superiority in what is laughably referred to as a great evaluation system for school effectiveness. Probably address this in more detail in a later post, but for those curious, I found this presentation to be right on point.

Another popular choice among business students is entrepreneurship, which is deliciously entertaining in my opinion. What better way to make a living than taking all the business school education which, frankly, is tailored towards corporate integration, and use it to launch small businesses? It is fantastic that there are more and more entrepreneurship classes being offered and more information and help than ever before for new business makers. Locally, Henry Bloch (of H&R Block) made the largest single donation to UMKC to fund the construction of an Entrepreneurship and Innovation building. I see this as a positive direction for encouraging more dynamic ideas and economic growth here in Kansas City. Much like endurance races gives people a feeling of accomplishment and control, much of the same feeling can come from owning your own business, plus money! But what I want to focus more on in this post is the plight of the Marketing major.

::

I will be graduating very soon and will look for full time, sustainable employment, not unlike many new graduates and frankly more than 15% of Americans. I would wager that it is not altogether uncommon for Marketing majors to end up doing sales. Many career paths for Marketing majors actually write in 2-5 years in sales before moving up to the next level. What they don’t say is that enthusiastic high school graduates have about 4 years jump in that particular field. Now, sales is like waiting tables. I’ve waited tables, you present your stuff, if you are friendly, work hard at building relationships, sure you’ll do alright. But when it comes to marketing strategy or marketing analysis or consulting, that seems a far stretch for the new graduate. I understand the mindset, you can’t form a strategy for the product until you’re out in the field with it. Learn intimately who is buying the product, where you are selling it, how you can sell it and put in your time as a peon before climbing the ladder and helping make decisions. I don’t mind that system too much. But I hate retail. People are terrible. I think I’ve said it before, everyone should be required to spend a year waiting tables and/or working in retail. That way we can bring up a new generation that is not horrible to service people.*

*I want to be clear here. This is not to say that there are not horrible people working the service industry or in retail. In an earlier post I wrote about how waiters have had their jobs broken into smaller and smaller parts so that it is easier to put in a replacement in what is already an industry of high turnover. This leads to less specialized skills and an overall regression of the level of service at many businesses. Still, customers can be really, really terrible people and that is generally not warranted. Generally.

Recently I have been interviewing a couple of local small business owners in Kansas City, more specifically, of two running shoe retailers; the Running Well Store and Gary Gribble’s Running Sports. This was to fulfill a two part need academically; one for MGT 301: Business Communications project in which I needed to interview someone and do research about a company I was interested in and do the paper/presentation bit. The second was primary research for ENT 460: Creating the Enterprise, where we need to write a business plan for a new business venture (mine is a minimalist/barefoot training program). I had the pleasure of speaking to owner Gary Gribble for about an hour a couple of days ago and was pleasantly surprised with the interview.

I came in with a general outline on business and business practices for a local footwear retailer but was treated with quite a bit more. Gary is a very kindly man and willing, as most people are, to share some knowledge with those who are asking. To put it simply, men like Gary Gribble restore my confidence in the US retail system and makes sales look a bit better as an alternative. Gary had a passion for teaching but while student teaching he came across what he called “an unacceptable situation” where one teacher would teach with passion and hard work and the other just went through the motions. Both were teaching the same subject and both received identical bonuses at the end of the year. This pushed Gary to change to some other career that he saw as more fair, sales.

Sales rewards you for hard work and it is probably the job most easily measurable; Did you make a sale or not? Gary Gribble’s stores gross somewhere around $7 million annually and his philosophy is focused on customer service. He places a lot of emphasis on employee training and trying to make the store a great place to work, even paying his sales staff almost 50% higher than mass retailers. He has seen negligible turnover because of it. Furthermore, there is a focus on tying into the local community. Not only is there support of local races but advertising at a lot of them. Also lending help to the local high school cross country teams in order to build a continuing customer base. Doctors, podiatrists also have a sort of exchange agreement for runners so it is a fascinating network for Gary Gribble who seemed to take a particular amount of pride in being tied into the community.

I don’t think you have to be a business major to see the beauty of this system.
1) Niche focus for which you have a passion (Running)
2) You’re not big, so you have to have something that makes customers want to come to the store (Expertise and Customer Service)
3) Build resources around those core competencies (Employee training/set guidelines)
4) Maintain resources (Employee retention, environmental scanning)
5) Growth strategy? (Community building strategies)

It reads like a simple case study out of any general business text but I think you see it so lacking in a business industry and environment that has a cost-cutting, aggressively expanding focus. I find it so refreshing to meet successful business people who are down to earth, hard working, and customer-centric. And all of that without an online store. Gary said he wanted people to come into the store to get that customer service, he (correctly) summarized that the internet is a cold place and you really need to come in and try on shoes or clothes before you buy them. It gives me hope for a future of friendlier, more ethical, and less imperial business environment. As we become closer and more connected to foreign peoples and cultures, I hope that it forces business to be less about domination and more about cooperation, a strategy that sadly is not as popular in business schools today.