Kohl’s Corporation, headquartered in Menomonee Falls, Wisconsin, started with a unique business model: just the soft goods. It offered consumers a comfortable buying experience at lower-than-department store prices. Some people, especially Midwesterners, swore by the brand. My sister-in-law— born, raised, still living in Milwaukee, and likely never to leave — visits Kohl’s regularly for good deals and an easy shopping experience. As it grew, Kohl’s extended its geographic reach to about 1,200 stores, creating a publicly traded stock that made for a good story until it wasn’t. Along the way, the company added more design-driven merchandise, deploying its design center located in the heart of NYC. Kohl’s became omnichannel, as all good retailers must. (Read this report on the retail industry.) Kohl’s. Macy’s. JC Penny. Is there a difference? How can you win in an environment of too much retail for a…
50 ways to lose your customers
Singer-composer Paul Simon’s classic song “50 Ways To Leave Your Lover” is about an emotionally torn man who “struggles to be free” of his wife. He learns, from his mistress, “The answer is easy if you take it logically.” Her advice? “You just slip out the back, Jack. Make a new plan, Stan. You don’t need to be coy, Roy. Just get yourself free.” Companies usually don’t want to slip out the back, leaving their customers feeling dumped. But companies can unconsciously induce their customers to say goodbye to the company’s brands – in ways as swift and sure as the song’s recommendations. I won’t bore you with fifty ways, but here are seven sure-fire mistakes leaders make that lead their customers to “slip out the back” or “make a new plan.” 1. Placing profits before people and customer experiences. Financial outcomes are…
A winning membership business model
The woman wore brown leather hot pants, a beige silk blouse, dangly earrings and over-the-knee black heeled boots. Thankfully, she was thin. Her partner, also in his late 20s, wore grungy jeans and an expensive leather jacket whose collar hit his rock-star-length locks. Next to them was an elderly Hispanic grandmother trying to keep tabs on three grade-schoolers, most likely children of her working daughter or son. An elderly blond women, her face the work of a terrific plastic surgeon, stood comfortably in very high-heeled shoes. Her Channel sunglasses matched the color of her Fendi handbag. Added to the mix was a teenage male covered in tattoos, wearing black flannel Turkish pants and a sleeveless matching top, despite the 72-degree weather. Each shopper’s cart was brimming, all with very different mixes of merchandise and groceries. Welcome to Costco where you feel you are…
Has the drive for efficiency through cost cutting gone too far?
The drive for efficiency has gone too far in my estimation. “But efficiency is always good,” you might protest. True, productivity gains increase incremental profits all else equal. But “all else equal” rarely holds true in practice. Therefore, like all good things pushed too far, gains from incremental efficiency initiatives may not be worth the price paid to secure them. Why is the Efficiency Goddess who brought us big box miracles like Staples, online retailing and record corporate cash balances failing us? Efficiency initiatives usually pay attention only to readily measurable costs, ignoring unintended consequences and opportunity costs. Why do CIOs limit support to only PC-computers? Why do CFOs reduce support staff, forcing administrative work onto revenue-generating managers? Such is the thinking of modern corporate managers: They are brilliant at measuring costs and lousy at measuring professional productivity. Shortsighted trade-offs are magnified as…