MORE EVOLUTION THAN REVOLUTION

   As the year draws to a close, many of us focus on family, festive gatherings and food.  As we wrap up Christmas shopping and the presents we buy, retailers and manufacturers are wrapping up 2013 and looking to the future.

   Amazon recently announced plans to use drones to swiftly deliver some goods to their metropolitan clients within the next five years and are expanding their reach into grocery delivery too.  Carrefour, the world’s second-largest retailer, announced the purchase of 127 European malls.  Many of North America’s larger retailers have only modest plans for growth in 2014.  Consumer packaged goods companies, retailers and those that serve them continue to evolve as they seek profitable means of delivering value.

   Drones notwithstanding, selling through store environments continues to be the primary means of moving products from manufacturers to consumers.   Stores engage consumers’ senses, meet their desires for immediacy, provide social stimulation and represent the most economical means of delivering products to homes.  

   Not too many years ago, cellphones and overnight package delivery were the things of science fiction.  Today, 80% of 18-to-34-year-old Americans own a smartphone.  There are more cellphones than toothbrushes in the world.  Technology keeps getting better, faster and cheaper; retailers and consumer goods manufacturers are using it all to serve their customers.  Technologies may change quickly but human nature won’t change so radically in our lifetimes.  

   So, calm down, Jane and George Jetson: groceries and most Christmas gifts are still coming home in your trunk for the foreseeable future.  

LEADERSHIP

   The Pro Football HOF game ushers in the return of football season this weekend.  OSU head coach Urban Meyer looks forward to the new season and the chance to vie for a national championship, too.  From Maine to Hawaii and Florida to Alaska, high school kids are gearing up for the fall campaign. 

   Meyer believes that, though talent, coaching, training and tactics matter, the key to success is leadership.  That’s why he teaches a class on the subject for a select group of his Buckeyes.  Part of the class centers on this simple equation:  E (event) + R (response) = O (outcome).

   “You can’t control the event,” Meyer explains in the Columbus Dispatch.  “You can’t control the outcome.  But what you can control as the leader is your response.  Your response as a leader is the other people’s ‘E’.” 

   We each have an opportunity to lead in our work, in our relationships and in our hobbies.  When we live and act purposefully, not impulsively, we set an example for others, create a culture of accountability and improve our chances of building a consistent winner.

BETTER INTERACTIVITY

In-store marketing is rooted in bringing the consumer and product together in one place.  Improving that interactive experience remains a focus of in-store marketing professionals.  This technology shows the direction in which we are all moving as we bring the power of connectivity and the point of purchase together.

INSOURCE TO BE IN SYNC

The Atlantic magazine features an article this month that highlights the transformation in thinking at one of America's greatest industrial powerhouses.  GE has remade their Appliance Park (KY) facilities to return much of their appliance manufacturing from other countries to the United States.  They're doing it because it makes economic sense.

The same benefits that accrue to a GE benefit buyers of custom store fixtures and point-of-purchase displays, too.  Chasing the cheapest labor has costs.  Too many consumer package goods companies, retailers and fixture producers have learned this the hard way.

We see more store equipment destined for North American stores with "Made in America" today and expect to see more because (a) transportation costs have grown; (b) Asian labor rates have climbed while American labor rates have stagnated; (c) American workers are objectively the most productive in the world; (d) project time lines are compressed and will only become more so; (e) US manufacturers have invested in labor-saving technologies and processes, e.g., Lean, to reduce costs as a matter of survival; (f) non-labor factors of manufacturing - raw materials, energy, space, equipment, capital - are relatively plentiful and affordable in North America; and (g) seamless coordination makes for better outcomes.  Insourcing lets us better synchronize and meet the needs of retailers, CPGs, designers and manufacturers.

North American manufacturers can compete with anyone in the world - and are only getting better.

OLYMPIC DREAMS

The Olympics captivate us, don’t they?  We marvel at the feats, strain to see our nation’s athletes compete, hope for success.  None of us may expect to compete at that level but we can still learn from it.  Here are a few ways to apply Olympic lessons to our lives.

1.    Persistence pays.  How many stories did we hear of athletes overcoming tremendous odds to succeed?  Look no farther than the Paralympics which start this weekend for more such inspiring stories.

2.    Set goals.  If you don’t know where you’re going, what you’re trying to achieve, how will you know when you get there?  How many athletes reached London without explicitly making it their goal?

3.    Feed your passion.  Dreams are not enough; passion pushes people to perform.  Just “keepin’ on keepin’ on” doesn’t lift your game to winning heights.  Find your passion then feed it.

4.    Teamwork trumps talent.  Think of the sand volleyball duo of Misty May-Treanor and Kerri Walsh Jennings.  There may have been better, younger, faster athletes across the net but no better team in the history of the game.  Their teamwork was their advantage.

5.    Have some fun.  Performance takes a great deal so you better build in some fun or what you’re doing will become drudgery.  

None of us may be Olympians but we can all be champions.  

At Tusco, we had a client who needed some in-store equipment in their London flagship store.  Their Chinese supplier had failed them.  Our team sprang into action, went to Olympic lengths, worked around the clock and met this emergency need in record time.  We helped our client win in London.  We received no medal but we showed our mettle.

James "Cash Mob" Penney

Poor ol' JC Penney can't buy a break lately.  They hired Ron Johnson from Apple to revitalize their marketing.  They quickly settled on an approach to remake the customer experience with a thoughtful approach to pricing and periodic sales.  But their sales are well below forecast and they have suspended their earnings guidance for investors based on a sizable sales volume drop.

Retraining customers who have grown up only buying on markdown has been neither easy nor swift.  And it's not being done in a vacuum - competitors are gleefully licking their chops at the prospect of carving off JCP shoppers for themselves, especially during the crucial Back-To-School period.  

As their website proclaims, "Over 110 years ago, James Cash Penney founded his company on the principle of treating customers the way he wanted to be treated himself: fair and square. Today, rooted in its rich heritage, J. C. Penney Company, Inc. is re-imagining every aspect of its business in order to reclaim its birthright and become America’s favorite store." 

When was the last time you visited a JCPenney's store?  See for yourself what they are doing.  I think that you'll find the merchandising much improved, their pricing indeed "Fair and Square," and their approach to brand curation - from Sephora to Levi's to Liz Claiborne - a far cry from what JCP has been doing or what most other retailers are currently doing.

If you believe that they are now headed in the right direction, consider being part of a slow-rolling Cash Mob to save James Cash Penney's namesake chain.  Sure, they aren't the typical target for local support but supporting a company that's trying to shake up the retail world with more straight-forward pricing seems a worthy project to me.

CONSUMER INTERACTION AT THE POINT OF PURCHASE IS ALIVE AND WELL

Despite the fact that internet sales are way up over this time last year or even in the last three years, people are still attracted to and interact with point of sale and are willing to do so even at the expense of their own pride and dignity. Australian snack maker Fantastic Delites prove that human interaction at the point of sale can be accomplished with nothing more than a big red button, a video screen, and some music.

Obviously I am over simplifying things and if this experiment wasn’t a staged publicity stunt it further underscores the notion that point of purchase advertising and displays are not going away or even on their death bed. Watch the video and let me know if you think bricks and mortar retail are going to dry up and go away anytime soon in the comments section.

 

Here at Tusco Display we continue to see hands on innovations and ingenious customer interactions as an evolving trend in consumer behaviors and continue to create point of purchase displays that excite, inform, and compel shoppers to buy your products today, not Next Day Air or 2nd Day Ground shipping.

ORGANIZED BRAVERY

On this day 68 years ago, tens of thousands of Allied troops landed on Normandy and began the march to Berlin to end World War II.  As anyone who has read history, spoken with a survivor of D-Day, or watched "Saving Private Ryan" or even "The Longest Day" knows, many brave men fought and too many perished.  We should never forget.

I thought of that day as I read a recent post from marketing phenom Seth Godin.  I append it here.

GREENWICH VILLAGE RETAIL

Here's a fascinating look at a microcosm of American retail.  The author shares a touching review of "creative destruction" in this iconic place.  http://www.nytimes.com/2012/06/10/magazine/can-mom-and-pop-shops-survive-extreme-gentrification.html?pagewanted=2&_r=1&hp

The times, they are a-changin'...

NOT JUST METAL BENDERS

   The Tusco Display story started over 60 years ago when we printed advertising signs.  Producing the metal substrates on which the signs were printed came next and we became metal benders.  Along the way, the business morphed into industrial sewing, stadium seating, storage tanks and eventually the production of permanent displays and store fixtures.
   Today, we produce products in fiberglass and various plastics, we work in wood and laminates, and we even dabble in fabrics and graphics.
   We still bend lots of metal, of course, to produce displays and fixtures as well as everything from aluminum fire truck doors to stainless steel control cabinets, tandoori ovens to bingo machines.  But the heart of what we do is far more than cutting, bending, welding and coating metal.
   We are mental benders.  We help consumer packaged goods (CPGs) companies – many famous name-brands – effectively present their wares in retail environments throughout N America.  We help them connect with shoppers.  We influence stores to carry products and shoppers to buy them.  We help shoppers find what they need and want.  We understand, design and produce to meet the needs of the CPGs, their retailer partners and shoppers.
   Understanding how people interact in-store, how they approach purchase decisions, how they are attracted or not attracted to products in stores is far more of what we do today than simply printing signs or building shelves.  Tusco helps create in-store inspiration.

RIFF ON SETH

Seth Godin is a web powerhouse, a brand unto himself.  He recently wrote about online v in-store  retailing in a post you can read here.  One disagrees with Seth with trepidation because this guy thinks deep thoughts and has proven highly successful in influencing others with those thoughts.


But Seth's missed an important aspect of retailing.  He suggests that "end caps and promotions and speed tables and other interactions will not be there because they are in the direct interest of us the shopper, but because they were placed there by the retailer to help generate income."  


He goes on to say, "Online merchants have done an extraordinary job of honestly presenting relevant information and drawing a bright line between editorial and merchandising. Which means that they’ve given up a huge amount of power. Since online merchants can’t make a particular item sell, they have far less leverage. They make up for it by selling everything, indifferent to which item you choose. In short, they’ve traded their power to you, the customer, in exchange for volume."

Though some power has been ceded by the merchants, I believe that many consumers would prefer if the online world exercised a bit more power than they sometimes do.  And this is where in-store can beat online almost every time.  I go to that dress shop or that bookstore or that salon because (a) they know me and (b) they curate for me.  Yes, yes, I can read reviews and do my own searches and spend loads of time delving into my options and evaluating them but what I really want is for that merchant to know me and serve my best interests.  The ones that do this well win.

RETAIL EVOLUTION

   When we think about how retail continues to evolve, many people fixate on e-tail vs retail, clicks vs bricks, digital vs analog.  Though Amazon no doubt gets a lot of attention in places like Bentonville AR, more than nine out of ten dollars are still spent in stores.  Bricks click in part because they never stop changing.
   Dollar General has opened some new DG Market stores that offer fresh food as well as their standard stuff.  Drug chains are doing the same, especially in areas underserved by grocery stores.  RiteAid has announced that they’re revitalizing all of their 4700 stores this fiscal year.  NYC drug chain Duane Reade (part of Walgreens) is transforming their 250+ stores, too.  Gap is brightening their stores – and seeing results.  JCPenney hired CEO Ron Johnson away from Apple store last year and is making sweeping changes to their stores, pricing, merchandise and almost everything they do. 
      We live in a dynamic, ever-changing world.  Retail knows that it adapts or dies.  Changing a store’s footprint or location can be costly, time-consuming and difficult but revitalizing the floor plan, graphics, lighting and fixtures to upgrade, refresh and revitalize can work well and quickly.
      Effective at-retail marketing may change the perception of any product or brand and determine success or failure.  Same goes for retailers.

THE BIGGEST RETAILER

Can you name the most dominant retailer of the 20th Century? Wrong. It was the Great Atlantic & Pacific Tea Company or A&P. From humble beginnings in NYC before the Civil War, A&P grew to 200 stores by 1900, hit $1 billion in sales in 1930 and was the largest retailer in the world from 1915 until 1965. In a Dec 2010 Wall Street Journal editorial, they said that "A&P was as well-known as McDonald's or Google is today" and that A&P was "Wal-Mart before Wal-Mart."

Why bring them up? They emerged from bankruptcy last month as a privately-held – and much smaller company – than they once were. Though still a major food retailer on the East Coast, A&P long ago fell behind newer, bigger and bolder retailers like Walmart, Target and Aldi.
Unlike A&P, successful retailers stay attuned to shopper interests and make investments in their retail environments to meet the needs of shoppers today. We may be fundamentally loyal people but we are not afraid to find better value in the ways we buy our necessities of life. A&P lost that edge to other formats and approaches.

Successful companies like Tusco Display have changed too to remain attuned to our clients’ current needs with broad, modern capabilities, highly-responsive systems and up-to-date knowledge of consumers, shoppers and the way they buy. We don’t plan to dominate retail of the 21st Century but we DO have the means to help our clients dominate their in-store channels and serve their shoppers better than ever.

DYNAMIC

GlobalShop, North America’s largest showcase for anything that happens in stores, happened two weeks ago. Attendance registrations were up 11% over 2011, a promising sign of renewal and growth in our industry.

I have attended these events for years. My, how times have changed! The events have become better-attended, more educational and more international. Ours is a vital, dynamic industry.

Why is our industry so dynamic? First, people buy in stores. Yes, yes, more and more online buying occurs but still 92%+ of every American consumer dollar in spent in a store, not online or through the mail. Stores matter to both buyers and sellers. It remains the only place where the shopper, product and mindset to buy coexist simultaneously. Instant gratification!

Second, while we serve the largest consumer packaged goods companies in the world, ours is a deeply entrepreneurial industry. Companies large and small compete on the basis of creativity, responsiveness, execution and value. Competition drives dynamism.

Third, buying and selling is rapidly evolving. Technology-enabled shoppers surf for information, seek & share recommendations and comparison shop. Online and in-store are converging. Stores deploy new technology to communicate and employ data-mining technology to predict and spur purchases. In-store dynamically unites consumers with the products they need and want.

The oil and gas industry is having a dynamic impact on our eastern Ohio region but in-store dynamism spans the globe. Ours remains a great industry with great opportunities.

FEED YOUR HEAD

Few of us would purposely skip a meal, let alone fast for an entire day. We need to be fed to function. The same logic applies to our minds.

During a recent meeting with our sales team, I asked them to consider what they feed their heads. Are you feeding yourself information to enhance the value you deliver to your clients? Are you continually learning what’s new, what’s relevant and what’s changing in our industry? Are you stoking your curiosity and starving complacency? Are you paying attention to what’s affecting your clients, prospects and competitors? What are you reading, watching and hearing?

Just as you know that a diet of Twinkies, cookies and energy drinks isn’t good for you, consider the quality and variety of what you feed your mind. Watching sports or sitcoms, reading comic books or People and listening to music are all innocent diversions but don’t consume those things to the exclusion of meatier, more nutritious fare.

Learn. Grow. Improve. What you feed your head becomes the fuel that propels your career and your life. The right diet makes all the difference.

“WE MAKE THINGS HERE”

That’s a phrase people in northeastern Ohio will soon see and hear more often in advertisements and promotional materials. After decades of “Rust Belt” hell, manufacturing is enjoying a renaissance here. Many old-line industrial operations have fallen by the wayside while industries like aerospace, materials sciences and health sciences are growing. Industries that apply world-class technologies and techniques are flourishing here. That’s why the state’s regional economic development group, Team NEO, has chosen that phrase as their new tagline.

The phrase reflects new economic research showing that, between 2010 and 2015, manufacturing in the region’s 18 counties is expected to far outpace manufacturing growth in the rest of the country.

This phrase aptly describes Tusco Display, too. Unlike many display producers who may design and sell but outsource all of their manufacturing, Tusco Display has consistently reinvested in our manufacturing capabilities, even during the tough years of the recent past. That’s why we can say, “We make things here” today, too.

With modern production capabilities and skilled associates, northeast Ohio manufacturers are winning business and finding growing success. At Tusco Display, we’re proud to count ourselves among them.

OCCUPY AISLE STREET

I haven’t slept well in weeks. Colder weather and unfriendly natives have dampened my spirits. Is it really worth it? Ever since I decided to camp out in the aisle of (name your least favorite store here), I’ve teetered between feelings of accomplishment and despair. We’ve been hassled by store security but, hey, this store is open 24-hours and I know my rights! Can we make these people listen? Don’t they know who we represent?

We are the 70%! Study after study confirm that, on average, shoppers make decisions on exactly what they will buy while in the aisle and at the shelf. We are the decisions made on what deodorant to buy, what brand and size ketchup bottle we purchase, what flavors of juice boxes we pack in our children’s lunchboxes, what style and package size of toilet paper we take home.

Marketers would rather we weren’t so loud. Why can’t we go home, let TV ads and radio spots and newspaper inserts and internet pop up ads work their magic? They’d rather we were invisible because we’re hard to track, difficult to define. Many of them just don’t know what to do with us.

But some people listen. Some people know where to put their marketing dollars. It’s right here. On-shelf, near-shelf, end of aisle, in the aisle. We are aisle violators and we won’t be denied.

ON THE MOVE

One hundred years ago, American society started to go mobile as automobiles entered mass production (200,000 units in 1911), roads got paved, and traffic lights were deployed. Fifty years later, the interstate highway system accelerated our mobility and changed the way we perceive and interact with the world.

Today, a new form of mobility dominates. Worldwide, there are 5.1 billion cellphones for 6.8 billion people. There are more cellphones than TVs – or toothbrushes. These and more stats can be found here.

This new mobility impacts at-retail marketing. Quick-response (QR) codes, augmented reality (AR), mobile coupons – redeemed at 10X the rate of traditional coupons – and mobile search increasingly drive in-store behavior. And when people search online while shopping, 70% of those searches result in action within one hour.

Just as cars changed our culture and our buying habits (e.g., Holiday Inn, McDonalds, suburban malls), so too smartphones are changing how we perceive and interact with the world. Understanding and responding to these changes in-store is driving a great deal of marketing creativity today. How are these things impacting product merchandising? Look for those impacts all around you.

Tasteless Tomatoes

Marketing guru Seth Godin posted something today that rang true with me (as his posts often do). Just as in the case where his local supermarket "stocks waxy, tasteless tomatoes from Chile and Mexico and Florida" when local produce is truly amazing this time of the year, too many marketers today deliver "good enough." They've abandoned delivering truly memorable, valuable and inspirational products and services. This isn't universally true, of course, as patrons of Nordstrom, Zappos, Ritz Carlton and even little guys like Bread Head Bakery can attest.

As a company that helps marketers present wares in hundreds, even thousands of stores, we can fall prey to the same malaise. It's tough to wow when you're using the same tools for the same products in a c-store, supermarket, drug store and mass merchant.

Finding the wow on a budget is the trick. When you do, though, marketing magic happens.

WHERE'S THIS ECONOMY HEADED?

In the wake of a shaky summer, the US consumer confidence index has reached its lowest point since 1980. Though mortgage rates are at a 60-year low, few houses are selling and many people are still coping with home values below their mortgage values. News reports today claim that the American family income has dropped for the third year in a row – to roughly 1996 levels (in inflation-adjusted terms).

Things are tough out there, right?

Yet, many area manufacturers continue to hire and invest in their businesses. Tusco Display recently opened a new facility in New Philadelphia. In a Tuscarawas County Chamber of Commerce survey of 43 of our larger manufacturing concerns, 26 of them plan facility or workforce expansions. And we’re on the cusp of a natural gas boom here that will bring many new businesses, people and dollars to our regional economy.

Why the disconnect? It’s two-fold. First, people are still hurting from the Great Recession of 2008-9 and feel insecure. They lack confidence to take risks, e.g., switch jobs, buy a home, start a business. They are playing things close to the vest. They’ve learned from past excesses.

Second, both federal and state governments are making many changes that make us uneasy. From ObamaCare and debt ceiling brinksmanship to SB5 and restructuring state agencies, change makes people uneasy. We like stability and predictability, things in short supply these days.

Times will improve and we will not see a repeat of 2008. Until people see it, feel it and believe it though, our lack of confidence will impair our ability to take advantage of the opportunities before us. At Tusco Display, we’re moving forward with confidence.