Category Archives: Small Business

In Love With Retail

 

“You only get one chance to make a first impression.” Know who said that? My father, often. Doesn’t matter if the quote is attributed to Will Rogers, Oscar Wilde or Mark Twain. When I was growing up, my father said this frequently and it was a valuable lesson learned. To me, it will always be his wise words.

How do stores and retail establishments make a first impression to customers? By providing an environment where consumers want to continue shopping. Imagine walking into a store that doesn’t restock, doesn’t have available staff members, and the cashiers yell at you at checkout. If you provide a headache and a half, it’s unlikely the buyer will want to return. And this relates to any retail outlet, whether it’s a brick and mortar or an online store. Speaking of which, at the end of 2011, we revamped our website to make the store a more valuable experience for our customers. To keep providing a user friendly interface, we are continually updating products, reorganizing categories and making it easier to order custom printed bags and boxes. Check out our Valentine’s Day wrap and other items. We’re offering free shipping on standard orders over $200 between now and February 14th.

Come On, Get Happy

Out of the Top 50 “happiest places to work” for 2011, only two retail outlets made the list: Costco, where consumers buy in bulk, and Albertsons, the grocery chain. More than 100,000 employees submitted reviews to come up with this list. Does that mean that any company outside the Top 50 is an unhappy place to work? Of course not. But it brings me back to my first point: making the impression. If employees are walking around with chips on their shoulders, it doesn’t help your business bring in business.

In a much smaller survey earlier last year, MSN teamed up with Zogby International to ask consumers what they thought of customer service at 150 companies. Criteria included knowledgeable staff, friendly employees and service after the sale. The actual product sold was a small factor in how consumers determined customer service. It was far more important for sales staff to be available and answer questions than products be available on the shelf. A lot more retailers made the list.

Which brings me to the “Enough is Enough” campaign by J.C. Penny. Did you see any of these ads on television this week? Consumers are screaming, literally, about missing sales and getting boatloads of promotional flyers in the mail. On Wednesday, Feb. 1, J.C. Penny is changing the way it does business. By eliminating deep discounts, the 1,100-store chain will reduce prices by about 40% across the board, and offer such lower prices on an everyday basis. I honestly wonder what the chain’s competitors are thinking. Are they waiting in the wings, laughing like Nelson from the Simpsons? Or are they getting ready to implement their own “regular pricing” system throughout the seasons. Let’s see how this goes. Because most retailers know the psychology behind consumers looking for bargains. Anyone walking around the mall the day after Christmas, or Black Friday, sees the effect of deep discounting. I’ll write more about this in my next post.

Making the Catch

 

Ever go fishing? You can choose to sit back and relax, plopped comfortably on a boat in the midday sun, leisurely waiting for the line to bite. Or you can be aggressive, using luring tactics and techniques geared towards what’s in the water that day. When it comes to fishing, it’s a personal preference and what works must work for you. When it comes to business, sitting back and passively waiting for customers to find you is a surefire way to sink your ship.

Black Friday sales topped $11.4 billion, with Thanksgiving Day weekend shopping seeing $52.4 billion in transactions in-store and online. Did retail establishments take a passive approach, waiting for consumers to hopefully stop by and perhaps purchase an item or two? No, there was a glut of aggressive advertising, promoting sales and particular products. And the consumers came, in droves, with each shopper spending an average of $398. Despite current unemployment levels, retail sales actually increased sixteen percent from last year.

I’m not just stating the obvious: as the seasons change, we adapt. Unless you feel a great urge to experience frostbite, cold weather generally sees the return of warm winter clothing. Businesses that do not adapt to the times do not survive, whether large or small.

On a similar note, At The Movies, a show that has seen generations grow up, is a sneeze away from getting canceled, if not already. Why? Are movie reviews no longer needed? Can’t say that, as consumers will still read reviews to learn about new films and make decisions about which movies to watch. But that information is readily available online, at a moment’s notice, with instant feedback from numerous fans in the comments section. The message is not dead, but the medium is, in this specific example.

Adaption is critical to survival.

I’m not talking about changing core values or practices that help your company grow and flourish. I’m not talking about changing niches on a moment’s notice because it’s the trendy thing to do. I am talking about augmenting a product or service that the marketplace demands, and upgrading your performance to improve the consumer experience.

Here at Packaging Specialties, we have thrived on offering solutions to our customers, fulfilling their packaging needs for more than six decades. Over the years, we’ve built many long-term relationships with thousands of small businesses in retail and restaurants and other industries across the United States, all from the ground up. Back before text messaging, instant downloading, and even dial-up.

In this day and age, it’s impossible for a company to ignore the internet, either the power of the platform or just the convenience to consumers looking for a new supplier. Simply having a presence is a MUST for most firms, regardless of what products are sold or what the company offers.

So I am happy to say that as we head towards 2012, Packaging Specialties has a new and improved e-store. We recently renovated our website to make online buying a more efficient, user-friendly experience, as we continue to expand our business relationships offline. If you ever have any suggestions for our website, feel free to contact me directly. In the meantime, enjoy the holiday season and make that catch.

Following Up

 

Last month, I talked about the Netflix debacle. Customers were rightfully angry with the company’s split in service: partitioning off the movies by mail from the online streaming service, creating two divisions, two price plans and two separate websites. This came complete with a questionable name change (Qwikster), inconvenience and an unexpected price hike to its customers who balked en masse, sending stocks plummeting.

Within three weeks of the announcement, a half-hearted apology for the announcement, and consumer outrage burning up the internet, Netflix reneged. The company decided to keep its price increase for the two service plans but dumped the second website, kissing the separate brand Qwikster a hasty goodbye.

Did anyone cry?

Perhaps the user who squatted on @Qwickster on Twitter is crying. He was hoping for a huge payday because Netflix was not quick enough to grab the name. Anyone else shedding a tear? Unlikely.

It takes companies years to build trust. Brand destruction takes one bone-headed decision, a decision that fails to take into account the company’s core customers and mission for being in business in the first place.

Whether Netflix subscribers continue to stay with the service is still an ongoing decision. A number of subscribers opted out altogether and went with competitors after the initial announcement. Netflix is supposedly contracting with different content providers to beef up its offerings but many long-time customers are simply fed up and not impressed.

Is it simply the increased cost that annoyed consumers? Not really. It’s the perceived value. Am I paying for something that is worth the price of admission or is the entire process just a headache in return? If two stores located miles apart are offering the same product at the same price, but one is a hostile environment and unorganized mess, while the other is a clean, friendly store with attentive employees and easy to find items, I’d rather drive the few extra miles for the experience.

That is why small businesses are routinely advised not to compete on price but on value. Netflix customers saw no value in two separate websites which required different accounts and logins. Not to mention, there was a noticeable disparity in movie selection. (Online streaming for Netflix is simply not up to snuff, either in comparison to its own movies by mail service OR with fellow competitors.) Let’s see. Poor product selection, extra hassel, and higher service fees. Yeah, now that’s a winner.

Inconveniencing and alienating your customers is a surefire way of losing them.

Taking your customers seriously, on the other hand, will always separate your establishment from the rest. Packaging Specialties did not stay in business for more than six decades because we make it hard for customers to do business with us. Customer service is our priority, and our clients are never taken for granted. Never take your customers for granted! I think that is one of the biggest blunders Netflix made this year, and the costs for such a mistake are immense.

What’s the Point?

 

The point of difference, that is. Or more specifically, what separates YOUR company from every other competitor? Is it the particular benefits associated with your product or service? Is it more convenient to use, more available, more accessible?
Are you known for consistently quick turnarounds, exceptional problem solving, or innovative design? Whatever the difference is, the potential customer must be made aware of it.

Does your company offer a product not just unique to its field, but unrivaled, not available from anyone else? For example, are you selling home-made gelato while everyone else on the block has frozen yogurt? And if you are selling a service offered by five other shops in the area, how do you stand out? Define the difference and there’s the point.

It goes without saying that marketing gets you in the door, but a great product/service is a must for retention rates. And all marketing materials, from your website to business cards and of course, packaging, should be consistent and complementary to each other, always reflecting your company’s vision and values.

Companies that twist and turn in vision and goals tend to offer only confusion.

Let’s take Eastman Kodak as an example. Kodak has been in business for more than 131 years. Known primarily for its line of film, Kodak has been trying to reinvent itself as a company that makes printers. Do you or have you ever associated Kodak with printers?

Stocks for the company recently plunged, rivaling lows not seen by the company since more than half a century ago. Last week, the Wall Street Journal announced that Kodak hired a restructuring firm. Uh oh. What happened? Well, shareholders balked, driving stock prices not seen since 1935, during the midst of the Great Depression. Not exactly a confidence boost.

Kodak started losing market share back in 2009 when the camera company dumped its famous Kodachrome brand. That probably would’ve been okay if Kodak had already adapted to digital photography by then. After all, Kodak’s mission was to “capture moments” – not just manufacture film. However moments are captured, the actual technology is irrelevant. In fact, companies should routinely adapt to emerging technologies to stay ahead of the game. Unfortunately, it took a while for Kodak to catch up to the digital future and it can cost them in the end.

What does Kodak’s problems have to do with you, the small business owner? Look at is as reminder: Remember your company’s core values, and build your goals around them. Companies that forget their origins or why they are in business in the first place don’t always fare well and some simply fall off the earth.

One For the Books

 

Ever judge a book by its cover? It’s not metaphorical, most marketers will agree that consumers make quick judgements by the outside image. I tend to judge a book by its format. Meaning, if I’m going to read the book, the book has to be readable.

I’m not talking about uninteresting subject matter or bad editing. Those two things are always going to turn off many potential readers and give the author a bad rep. I’m talking about the actual layout, from legible type to style. Yes, despite Kindles and Nooks and as other digital competitors become ever more popular, many consumers still buy hardcopies and paperbacks. (As a side note, bookstore sales in the United States remained flat for the first half of 2011, but still a $7 billion industry for that time period.)

If the typeface is hard to read, set in ludicrous fonts or distracting sizes, I won’t read the book no matter what the topic.

Just this week I was perusing through business books at the local book sale and found a great selection. There were several I refused to purchase just because the fonts and formats were incredibly distracting. I don’t care if it’s a bargain basement price and filled with infinite wisdom. Am I supposed to take a business author seriously when information is presented in squiggly scripts, highlighted by too many drop shadows and organized as if I had a short attention span? Yeah, maybe I missed out a wealth of information, a hidden treasure trove of advice, by not buying these particular titles. But if I can’t get through a paragraph without feeling annoyed or attacked by typography, I don’t think I’m missing out on anything.

Customized packaging always takes this into account. The right image captures the public’s eye, not turns it away. The right image complements your products, not negates the theme or contradicts your company’s mission. A cosmetics shop offering an array of makeup in assorted bright colors is probably not going to showcase its products with a gloomy grey shopping bag.

The perfect packaging is also a perfect fit for YOUR business, appropriate to YOUR products, whatever those may be.

Packaging is not the be-all, end-all in this world, but it certainly makes a difference to customers and sometimes a big difference directly to the bottom line. As one example, the grocery-chain Kroger experienced sales growth after repackaging its poorly performing store-brand products.

And, since we’re now in the most financially lucrative season for retailers, the matter becomes ever more important. Remember, customers not only expect attractive packaging, but gift boxes and shopping bags on hand as they begin holiday shopping.

What’s in a Name?

 

All the talk these days is about the economy. Retail sales were flat in August and unemployment continues to lag.

Is job creation coming from the large corporations and conglomerates? Turn instead to the privately owned firms less than five years old. While Bank of America plans on laying off 30,000 workers this year, about 400 smaller firms started since 2007 have hired more than the same amount. Check out Inc. for a list of those companies. The magazine also lists the top 5,000 companies, which accounts for more than 370K jobs in the last three years.

Small businesses are the foundation. Entrepreneurs set things in motion, often putting their own financial lives on the line by investing personal savings, using homes as collateral, paying bills with credit cards and foregoing paychecks for several years until the business takes off.

Every small business that stays in business should be commended. The five-year mark is a major milestone, as many companies fail within the first year.

On the other hand, some businesses become incredibly successful and lose sight of their beginnings. Netflix comes to mind. The movie rental service made major waves this summer, enraging its sizeable client base, after announcing that online streaming and hard-copy DVDs would be split into two companies. And two separate fees. And two separate queues/websites to select movies and geez, two separate headaches. That sound you hear is the voice of millions of subscribers who immediately took to the streets, well, internet, and complained.

This week, the CEO and founder of Netflix, Reed Hastings, sent out an apology. Not to apologize for the decision, but to explain the decision and the way it was announced.

For the past five years, my greatest fear at Netflix has been that we wouldn’t make the leap from success in DVDs to success in streaming. Most companies that are great at something – like AOL dialup or Borders bookstores – do not become great at new things people want (streaming for us).

The last part is correct. Many big companies that run off track, trying to become a catch-all or hop on every trend, fail if they renege from the core business.

What is Netflix’s core business? Providing entertainment on demand. So streaming and DVD rentals actually go hand in hand, as they complement each other. Subscribers look forward to new releases on DVDs while catching up on older films available via streaming.

Let’s face it, the streaming option just does not feature a ton of recently released films. It actually takes months before a new film is streaming, although available via DVD. Subscribers cancelled in droves when presented with the new price change: either pay for one, the other, or both.

Now that the split is in place, do you think an explanation will placate the subscribers who are angry? I’d still be angry because this is a fundamental flaw. The company is veering from its core purpose and alienating its own customers who will likely seek other rental options.

Plus, the company name itself is changing. The hard-copy DVD rentals will be known as Qwikster while the streaming option will remain Netflix. As someone said, why are they taking a well-known brand name and cheapening it? Netflix is well-known. The new name sounds like a copy-cat, an imitator, or a fake.

If Netflix gets its act together, and starts offering more newer releases online, perhaps this snafu will be just a blip in its company history. Or maybe not. As you may have noticed, the stock price continues to tank.

Monday Musings

 

The other day I was walking past a row of restaurants and noticed a pedestrian carrying a shoulder tote with the words “medium brown bag” printed in a plain sans serif on the front, in brown block lettering of course. “Did you see what that bag said,” I asked my friend, a resident of New York for the last twenty years.

“Medium brown bag?” he repeated. “I don’t know where that’s from.”

Exactly.

Look up “medium brown bag” on your friend, Google, and come up with 166 MILLION results, none of which may answer where the pedestrian had originally bought the bag.

Although many seasoned shoppers will recognize it as coming from the world famous Bloomingdales, many others will not have a clue and mistake it for a generic catchphrase. My friend, who routinely wears Ralph Lauren, Tommy Hilfiger and Perry Ellis slim-line suits, is not immune to shopping in Herald Square or wearing clothes by brand name designers. However, he still wouldn’t remember where the bag is from without the store name. Is that just him? I don’t think he is an anomaly. Most people have too much on their minds to remember items that don’t interest them.

And it’s not like the bag is new, having been around a few decades already. Designed by Massimo Vignelli, the Big Brown Bag first appeared in 1973, followed by the Little Brown Bag and Medium Brown Bag one year later. The shopping bag series is considered both iconic and a status symbol. Rob Pruitt’s sculpture of Andy Warhol, (on view at NYC’s Union Square through October 30) even features Warhol carrying a Medium Brown Bag.

Bloomingdales can afford to be cute and catchy as it has been in business for almost 140 years and still retains millions in customers. The bag didn’t even appear until after the store celebrated its 100th year in business. Small companies, especially start-ups, do not have that luxury. Small companies MUST make a name for themselves through consistent and recognizable branding, not hoping that a slogan takes off on its own without a company name attached. That means that packaging MUST promote the business first and foremost with appropriate imagery and company name.

Also, just because a particular image is well-known, does not mean the logo is well-liked. Burger King just announced that it is going through a major design overhaul, switching its focus from previous ad campaigns to ones more related to ingredients and food in general. Thank goodness. Yes, the fast-food chain will finally get rid of the creepy King character which showed up in ill-thought out television ads. In fact, the King was thought to be so creepy, it actually drove potential customers away.

Start Spreading The News

 

Many small businesses, along with the biggest and best large firms, rely on word of mouth marketing to promote a product or service. Who wouldn’t want such promotion, especially when it’s free? With social media and instant internet access available to more than two billion people, with 272 million users in North America alone, a good word of mouth campaign or a video gone viral can make a product or person well known within hours.

Not to be a crank, but all p.r. is not good p.r., despite the saying to the contrary. A recent survey of 3,295 consumers from around the country shows that more are likely to promote that product, negatively, if the consumer suffered a bad experience.

I recently spoke with a hair salon owner who was badly reviewed on Yelp. Most of the reviews of her salon were positive, from clients pleased with the service. One recent poster was not. The anonymous user decided to bash the owner in particular, by name, with over the top complaints. (In the same review, the poster fawned over a stylist at the salon, so it’s likely a friend of that employee and none too transparent.)

Regardless, the review is up for the world to see, and anyone checking out reviews before deciding on a new salon may be primed to think the owner is a lazy, ignorant sloth, if they don’t bother to scroll down to read the other, more accurate reviews.

Why am I mentioning all of this? There is no way to stop a naysayer from posting nonsense all over the net. But that naysayer can be discredited with the help of positive comments, the more the merrier. Ever see reviews on Amazon? When a book has thousands of five-star reviews and a handful of negative low ratings, it’ not going to adversely affect sales.

Which leads us back to word of mouth. Shopping bags, take out boxes, any merchandise bag that bears your company logo, all serve as positive or negative word of mouth campaigns which can lead to potential sales from new customers. How? By being catalysts to conversation. For one, hopefully these customized bags or boxes are reflective of your company, with appropriate images and eye catching designs. Two, it prompts questions when someone notices an attractive bag or box, wondering aloud what’s in it and where did it come from.

If the client or customer hated every moment in your establishment? Well that’s not going to be a positive conversation. If your client or customer was pleased with the service or store or product, which is more likely the case, they will gloat about the item inside and where it was purchased, a big plug for your business.

Motivating Presentation

 

Summertime and the skies are blazing. Normally, the shining sun causes many to head for the outdoors, whether to consciously or not soak up some Vitamin D and get fresh air. But when the heat waves take over, crowds crawl back inside for much needed air conditioning. Some days are perfect for backyard barbecues and some days are just scorchers, but you might not know until you take a step outside. (If you forgot to check the weather forecast that is. I personally like my WeatherBug app.)

Yeah, I like getting sun as much as the next person, but not really interested in being baked to a crisp. Is anyone motivated to run a marathon when it’s 115 degrees outside? I’m not motivated to take a walk down the block, can’t imagine going for a jog. Similarly, many people won’t make plans for outdoor parties when the clouds are dark and overcast. Even if not a single drop falls, you’ll see less families and pedestrians at the park when the skies are grey. Why? Do you want to take a chance that it will rain on your parade?

Basically, we tend to make many decisions based on appearances. How many candidates get far in job interviews if they show up unshaven, unclean and disorderly? The interviewer most likely writes that person off as a slob even before they have a chance to speak. If the resume was submitted on a crumbled up envelope, that candidate doesn’t even get an interview, period. No matter how brilliant the person may be.

This premise is the same for packaging. Whatever the contents, the box or bag has an immediate impact on the buyer. Appearances matter.

The University of Southern California conducted a packaging study, with results published in October 2010 in the Journal of Consumer Psychology. The university’s research shows that consumers will consciously choose a product based on its aesthetic design, even if the product is higher priced and lesser known than other brands. Why? Because “beautiful packaging” ignites a response in an individual, similar to the emotions felt when receiving a reward or getting paid.

Remember, this study was conducted and published well after the economy was already in the tank. And still, consumers are willing to pay more for products that are packaged better than their competitors. A purchase placed in an aesthetic, customized shopping bag reinforces the decision to buy even more.

Visionary or Blind Direction?

 

No matter what the industry, great companies have a main reason for being in business. Not just for making money. Sure, most everyone enjoys making money. Who doesn’t? Do you wake up in the morning happy to have an empty wallet? Of course not. But money is usually not the primary mission or reason to start a company, no matter how small or large your business may be. There is usually a goal, a need to fulfill, a dream. Every day, entrepreneurs and small business owners have an idea, act on that idea that either becomes great or languishes because of one fundamental vision, or lack thereof.

So what is your company’s vision and how do your customers see it? Is your message, mission and values getting mixed up with a half a dozen competitors? I’m not judging what your message might be, just, do you have one? And if so, is your message unknown, misunderstood or lost? Worse, is it a falsehood? By that, I mean, are you practicing what you preach, walking the talk and all that.

Conscious consumers do not purposely flock to stores with contradictory business practices. No one wants exercise advice from a steroid user, consults a dentist with missing front teeth, or crave financial tips from a twice bankrupt accountant in tax arrears. Here is another extreme example. Say a small grocery store positions itself as an organic deli, claiming to offer a variety of pasture-fed meats and natural foods. The store happens to be in a market looking for exactly those kinds of products. So the store thrives. Except in reality, the “free-range chickens” are actually cloned in a lab, hormonally injected and repackaged. What do you suppose would happen? Customers looking for actual grass fed chickens, not to mention truth in advertising, would revolt with torches and pitchforks (once they found out about the trickery.)

Most people would also be weary of hiring a housecleaning company that sent out disheveled, unkempt employers. Do you want a smelly slob brightening up your living room?

Likewise, if a company’s mission is to promote exceptional customer service, such service should be reflected in the day to day operations. Saying you put the customer first does not mean doing so, especially if a company fails to solve consumer complaints or doesn’t care either way. Disney World wouldn’t be touted as a family friendly vacation spot if its employees made riding Dumbo a miserable experience, now would it?

So now only does your company need a message but it needs to be pronounced, known and prominent, every day. Albertsons LLC, a Southern and Western U.S. grocery chain, has recently decided to chuck the self-service checkout lanes. The p.r. rep said the company wants more opportunities to interact with customers, by having live cashiers instead of automation. So the company has announced its message. The point now is to follow up. (Hiring rude, surly or non-committal types isn’t going to sway anyone into believing the statement.)

Let’s see how it goes.

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