The exterior of the Spaceship Earth ride at Disney World’s Epcot park is perhaps one of the most recognized landmarks on Earth. Housed in the giant geodesic sphere that serves as the gateway into the Future World section of the park, the ride is one of Disney’s finest examples of audio-animatronic magic. Created in 1982, this ride takes the traveler on a journey through the history of communications technology starting with cave drawings and ending with Disney’s vision of 21st century communications. After 25 years, the ride was updated this past February but its amazing to to consider how accurate the original vision of the future was.
The final scene of the old ride depicts two teenagers talking to each other; not on the telephone, but over an audio/video link using a computer and flat panel display. The kids are neighbors of sorts, although in this future view, they are part of the same “global neighborhood”. One is apparently in the US; the other in Asia. They can see each other and the computer is translating their words into each other’s language.
In 1982 when the ride first opened, this idea must have seemed fantastic, but in the last few years, the technology and bandwidth have become generally available to enable this type of interaction. The realization of the future really being now hit home this afternoon as my family was sitting outside enjoying a warm October afternoon. As teens like to do, mine was pretty much ignoring her mom and I, and was instead, having a conversation with three friends. Of course, teens no longer tie up the landline phone for this activity like they did back in 1982. Mine prefers to use her computer and social sites like BlogTV which enables video streaming. The friends she was talking to were neighborhood kids. Global neighborhood kids to be more accurate; from Norway, Sweden and Austria.
Consider the implications of that for a minute. What was considered part of a fantastic future just a few years ago is now an everyday activity for teenagers. Soon, they will be starting their careers, building families of their own and generally running the place. How fast will their ideas and trends travel as the distance and barriers between different cultures becomes smaller and smaller? How much will they begin to see and respect one another for what they have in common instead being fearful of differences?
Spaceship Earth image courtesy of Jeff B
I’m a frustrated customer. I drove to a local Kohl’s store today to purchase the Men’s Nike Air Tri-D II running shoes that they advertised in their 10/1 – 10/11 sale catalog. The shoe department at that store was a disaster. There were very few men’s athletic shoes on display and the shelves were in disarray. The shoe I wanted and that they had gone to the expense of advertising, was not even on display. I asked someone to check stock and the answer came back that they only had a size 8-1/2 in the back room.
Years ago, retailers used to practice a fraudulent tactic called “Bait & Switch” in which a desirable item was advertised at an attractive price, but in reality, there was little or no inventory to support the offer. When the customer arrived at the store to purchase the item, they would be offered an alternative item which often provided the retailer with higher margin. There are Federal Trade Commission laws that make that practice illegal. If a retailer knowingly advertises a product that has limited availability, they have to say so in the ad (“quantities limited”). I understand that sometimes operational issues come up which can result in advertised products not being available and I’m assuming that is what happened in this case. Nevertheless, it was a frustrating waste of an hour of my time.
Multichannel Retailing to the Rescue (or NOT!)
I wanted the shoes to take on a trip this week, but settled for ordering them on Kohls.com so I could take advantage of the additional discount offered to Kohl’s Charge customers. A search of the site took me right to the shoe, but when I went to put it in my cart I saw that it was only available in sizes (wait for it….) 8 and 8-1/2!
I could understand a single store in a 1000 store chain not having a particular advertised item, but to not have enough product available through a national website is a big problem. Kohl’s Merchandising team has to know about this. Any merchant responsible for a line of products checks to be sure they have sufficient stock chain-wide before advertising something. In this situation a good approach would have been to put a note on the product detail page acknowledging the shortage of inventory and apologizing for the inconvenience.
This is a great example of a really bad customer experience. Kohl’s tells me to “Expect Great Things”, but based on interactions in two different channels (web and store), I “expect” that I won’t be shopping at Kohl’s in the future.
In my last post, I talked about a local grocery store chain’s customer experience. One of their innovations was partnering with National Commerce Financial Corporation in which it co-owns 35 First Market Bank branches. Ironically, this post discusses an on-line banking experience with First Market Bank.
Yesterday, I tried to access my accounts with First Market Bank to pay a few bills. I was able to get to the home page, but when I selected the link to sign in to my account, I got nothing. The site eventually returned a page load error. Frustrating, but since I had a hundred other things to do, I moved on.
This morning, I went back to the First Market Bank site to access my account only to find that the problem had not been fixed. There was no message on the homepage regarding the problem, so I called the Internet Banking support line. The CSR apologized and informed me that “the site was down for maintenance”.
Having an IT background, I translated that to “something has gone terribly wrong with the software and the IT support team is having a hard time fixing it”. OK, I understand these things happen, but while the support team is busy wrestling with the problem, it’s critical that you let you customers know what’s going on.
At a minimum, the home page should be updated with a message that acknowledges the problem and provides direction for customers who need to transact business. If, for some reason, the home page can’t be updated, the account access link should be redirected to a page with the message. Now that the site has been down for more than 24 hours, they might want to consider sending an e-mail to their customers explaining the situation. These are simple things to do, but instead, I’m willing to bet that their call center is handling a unusually high number of calls, which in turn impacts the level of service provide through that channel.
If you walk into a store that’s in the process of remodeling, you usually see a “Pardon our Mess” sign. If you’re web business is dealing with technical problems that impact the customer experience, put up a sign to let your customers know.
Update (9/24 6:30pm): First Market Bank still not working, but they did put up a sign:
“First Market Bank is experiencing some technical difficulties which could impact some of our customers’ ability to access Online Banking. We are currently addressing the issue and should have it resolved shortly. Thank you for your patience.”
Ukrop’s is a 28 store, family-owned grocery chain based in Richmond, VA. All of their stores are located in central Virginia, mostly in Richmond, so you’ve probably not ever heard of them. That’s too bad because Ukrop’s is a very unique retailer. Over the last four decades, Ukrop’s has steadily grown to dominate the central VA grocery marketplace, competing easily against much larger regional and national chains. Instead of taking the “lowest price” approach, Ukrop’s has always focused on delivering a great customer experience. Ever since Joe Ukrop opened the first store in 1937, the operating philosophy has always been “treat customers, associates and suppliers as they personally want to be treated.” That attention to the customer experience coupled with a history of innovation and community engagement has built incredibly strong brand loyalty. In this post, I’m going to share some of things Ukrop’s has done to build their brand.
Customer Focus Differentiators
Ukrop’s does things for their customers that I’ve never seen at any other grocery chain. They’re little things, but as I’ve said before, it’s the little things that differentiate you from your competition. Things like:
- Ukrop’s employees carry your groceries out to your car and load them for you. By the way, don’t bother tipping them. They won’t accept it.
- If you get to the checkout counter and realize you have forgotten your wallet, don’t worry. In most cases, Ukrop’s says to take the groceries and pay them next time you come in.
- Ukrop’s provides in-store “Tot Spots” in their larger stores. Parents can leave their child at the “Tot Spot” while they shop.
- Ukrop’s listens and responds to individual customers. Each store has a Customer Requests board prominently displayed at the front of each store. Have feedback or want the store to carry a new product? Simply write down your request and put it up on the board using a refrigerator magnet. Each note is read and replied to within a week. The next time you come into the store, check the board for your note and the reply. I once asked for a specific flavor of ice cream. The product was in the freezer the very next week.
Ukrop’s has a history of grocery industry innovations that have allowed them to differentiate their brand.
- Like most Americans, you probably carry around some kind of supermarket discount card, but I bet you didn’t know that the very first supermarket card program in the US was launched in 1985 at Ukrop’s as part of a Citicorp Point-of-Sale initiative. Ukrop’s saw huge potential in being able to identify their customers by name and understanding purchase behavior of it’s best customers.
- Research conducted during the mid-1980s revealed that changing consumer demographics and lifestyles indicated a growing demand for convenient, restaurant-quality food. Demonstrating their “sense and respond” competency, Ukrop’s decided to tap into the demand and further differentiate themselves from competitors. The result was one of the grocery industry’s most lauded success stories of the late 20th century. Ukrop’s already had experience with a central bakery, having purchased a well known local bakery to supply bakery items to to their stores. The bakery gave them some experience with manufacturing and logistics. Leveraging that experience, Ukrop’s decided to create a 10,000 sq-ft “central kitchen” to package chilled prepared food, which consumers could then re-heat. On Halloween 1989, the company’s prepared foods line debuted, featuring ten items that included twice-baked potatoes, lasagna, and macaroni and cheese. By 1994, the roster of prepared foods had swelled to a rotating list of 125 items. Ukrop’s foray into prepared foods became the talk of the industry, accounting for nearly 15 percent of the chain’s total sales and adding further incentive to shop at Ukrop’s.
- Don’t feel like cooking? Ukrop’s added an in-store grill to their larger stores in the late 1990’s. The grill serves everything from sandwiches to stir fried Asian dishes to steaks. Of course, the ingredients for all the menu items are available in the store.
- In 1997, Ukrop’s established a unique partnership with National Commerce Financial Corporation in which it co-owns 25 First Market Bank branches in Ukrop’s locations and 10 free-standing branches First Market Bank. Customers who bank at First Market can receive points worth up to $200 in free groceries each year.
- Ukrops’ latest innovation is a partnership with a local gas station operator called Fuelperks. Capitalizing on the concern over rapidly rising gasoline prices, the program rewards Valued Customer Cardholders with a 10 cent per gallon discount (up to 20 gallons) for every $50 spent.
The Other Bottom Line
Ukrop’s is perhaps best known for their community involvement. Each year they commit to giving at least 10% of their pretax profits back to the communities they serve. They sponsor many local events including the Monument Avenue 10K and the upcoming Richmond Folk Festival, but perhaps their biggest community program is the Golden Gift. Started in 1987, the program allows customers to designate a local non-profit organization. It might me a charity or perhaps your kid’s school. Each year, Ukrop’s allocates an amount to the Golden Gift fund. This year it was $400,000. During February and March, Ukrop’s awards each customer with a Golden Gift point for each dollar spent. At the end of March, the fund is allocated to the customer’s designee based on points accumulated. The customer then receives a certificate that they can give to their non-profit which can bee redeemed for cash. Since inception, the program has given back $11.6 million!
These are just a few of the many things that have helps build the Ukrop’s brand. By putting customers and community first and through innovative ideas that have redefined the grocery store, they have been able to stand the test of time.
Do you own or work for a local or regional retailer? Having a hard time competing against the big guys? Perhaps you can take some lessons from Ukrop’s.
Dr. Michael Wesch is the guy behind “The Machine is Us/ing us” video. His recent presentation to the Library of Congress entitled “An Anthropological Introduction to YouTube,” is now available on video. If you have seen any of Dr. Wesch’s other presentations, you know that he both deeply understands new media and its impact on the world’s cultures, and has a gift for communicating that understanding in compelling and engaging ways. This presentation is no exception.
Wesch points out that YouTube is much more than a technology. “It’s a social space built around video communication that is searchable, taggable and mashable,” Wesch says. “It is a space where identities, values and ideas are produced, reproduced, challenged and negotiated in new ways.”
Wesch covers a lot of ground in the hour long video. I’m not going to give a detailed summary here (I’ve included the time index from the YouTube page for reference below), but I highly recommend that you take some time (55 minutes 33 seconds to be exact) and watch it. You’ll be glad you did!
You may also want to check out Gavin Heaton’s very insightful post about this video.
Here is the time index:
0:00 Introduction, YouTube’s Big Numbers
2:00 Numa Numa and the Celebration of Webcams
5:53 The Machine is Us/ing Us and the New Mediascape
12:16 Introducing our Research Team
12:56 Who is on YouTube?
13:25 What’s on Youtube? Charlie Bit My Finger, Soulja Boy, etc.
17:04 5% of vids are personal vlogs addressed to the YouTube community, Why?
17:30 YouTube in context. The loss of community and “networked individualism” (Wellman)
18:41 Cultural Inversion: individualism and community
19:15 Understanding new forms of community through Participant Observation
21:18 YouTube as a medium for community
23:00 Our first vlogs
25:00 The webcam: Everybody is watching where nobody is (“context collapse”)
26:05 Re-cognition and new forms of self-awareness (McLuhan)
27:58 The Anonymity of Watching YouTube: Haters and Lovers
29:53 Aesthetic Arrest
30:25 Connection without Constraint
32:35 Free Hugs: A hero for our mediated culture
34:02 YouTube Drama: Striving for popularity
34:55 An early star: emokid21ohio
36:55 YouTube’s Anthenticity Crisis: the story of LonelyGirl15
39:50 Reflections on Authenticity
41:54 Gaming the system / Exposing the System
43:37 Seriously Playful Participatory Media Culture (featuring Us by blimvisible: http://www.youtube.com/watch?v=_yxHKg…
47:32 Networked Production: The Collab. MadV’s “The Message” and the message of YouTube
49:29 Poem: The Little Glass Dot, The Eyes of the World
51:15 Conclusion by bnessel1973
52:50 Dedication and Credits (Our Numa Numa dance)
Starbucks recently announced they will be closing 600 US company-operated stores. The company said 70% of the cafes slated for closure had opened after the start of 2006. The chief financial officer, Pete Bocian, said that meant Starbucks would close 19% of all US company-operated stores that opened in the past two years.
A funny thing happened on the way to closing these 600 Starbucks locations. Now that the customers closest to the targeted locations (see map) have learned about the impending closure of their local store, many have rallied for the “Save our Starbucks” campaign. They are writing letters, making phone calls and signing petitions begging the company to reconsider the decision. People have even commented on some of my earlier Starbucks posts, asking the chain to not close their store.
Starbucks’ profits may not be so great right now, but they do have something that many companies can only dream of: Customers who are passionate about their brand. Yet with their latest cost cutting decision, Starbucks is turning them into passionately unhappy customers. You see, these folks who are willing to pay $4.00 for a latte on a regular basis, have become quite attached to “their” local Starbucks. Sure there is probably one a few miles away (on across the street, depending on where you are), but to frequent customers, these are not “Their” Starbucks. They have an attachment to the local store. They know the Baristas who make their drink just like they like it (and contrary to Howard Schultz’ direction, consistency isn’t that common).
It’s unfortunate that the necessary cost cutting is coming at the expense of customers, but what else is Starbucks to do? While I can’t claim to know the facts regarding the financial analysis behind the decision, I might suggest a few alternative cost cutting ideas.
Take a Closer Look at Existing Store Saturation.
When Starbucks announced the closing, the CFO said a Starbucks store’s revenue dropped 25 to 30 % when a new one opened nearby. There are no closings planned for my city, yet I am amazed by the saturation of Starbucks outlets in my area. Within three miles of my house, I have no less than ten Starbucks outlets to choose from (including Target, Kroger, & Barnes & Noble locations). There are two company owned stores and a Barnes & Noble outlet which are literally across the street from each other. In a move that seems to go against the CFO’s comments, Starbuck’s is building yet another cafe with a drive-thru on the same corner. This ain’t Manhattan folks. This is downtown Short Pump, VA; hardly a bustling metropolis, and four Starbucks within walking distance seems a bit unnecessary .
Starbuck’s Card Rewards
I think the incentives-based Starbucks prepaid card is a highly innovative idea to cut operating costs. Like most retail today, most Starbucks transactions have historically been tendered using a credit card or cash. Both have expenses (fees and operating overhead). By getting customers to use prepaid cards, Starbucks lowers their transaction costs and it get more cash into their hands sooner. That cash can be held in interest-bearing accounts generating income for the company. In return for customers Registering the cards, Starbucks is offering a number of perks including free WiFi access and free beverage upgrades (syrups, etc). I think this is where Starbucks may be giving up too much. My sugar-free vanilla, breve (half & half) latte in Richmond, VA is around $4.00, but when I pay with the Starbucks card, I get the syrup and breve upgrades for free saving me $.70. That’s more than 20% off. The way I see it, my profitability as a customer has gone down and my transaction volume has stayed about the same. Again, I don’t have the financial analysis behind this plan, but instinctively, it seems like they are leaving money on the table.
In retail (and food retail is no different), you normally want to get the customer to upgrade their purchase (“would you like fries and a drink with that?”. “Have you considered the extended warranty?”). That’s often where the biggest margin is and the Starbucks upgrades are no exception. By giving it away it’s like saying the fries and drink are on the house. It’s really not necessary because you already have me as a regular customer. and I’m going to order the same drink on a regular basis whether you give me the syrup or not.
What are your thoughts? What alternative cost cutting ideas would you explore if you were Starbucks?
Food Lion is a regional grocery store chain with stores in the Southeastern US. I had an “interesting” experience last weekend while making a last minute run to the local Food Lion store for two cans of baked beans, an onion and a green pepper.
I’m in the express checkout line trying to navigate the payment pad when the clerk hands me a pad of preprinted forms and asked me to fill out one explaining why I thought he should be employee of the week. Seriously! So all this guy has done is swiped four items (remember this, it gets better) and pushed a button. Why should he be employee of the week? What things are being measured to qualify one for this honor? Still trying to focus on the difference between the “Yes” and the “OK” button on the payment pad, I told him I didn’t know why he should have that title, and he said, “that’s OK, just put it on the form”. So apparently, collecting the most forms makes you employee of the week. I guess working the express lane is a advantage in this contest.
Needless to say, I ignored the request. After I paid, I noticed that he had not put my pepper and onion in the bag and had, in fact, rung them separately thinking they belonged to the person behind me.
I’m pretty sure this program was something that the local management came up with. I’m sure they had the best intentions: improve performance of the team through competition and improved the quality of the customer experience, but their approach was completely wrong.
This program was focused on the employees, not the customer. It resulted in the employees being more concerned with scoring points that delivering consistently great experiences. The “express” checkout line was slowed down as a result and the overall customer experience suffered. Employee of the week/month programs are fine, as long as they don’t get in the way of what should be the primary objective: taking care of the customer.
Target always puts their outdoor living stuff on clearance around the July 4 holiday, so I made a trip to my local store this morning to see what kinds of deals I could find. This particular store has just been renovated and enlarged to their new format with an expanded grocery section. While the outdoor living secion was a bit picked over (I guess I’m not the only one who knows about this little secret), my wife and I did manage to run the aisles grabbing interesting looking snacks for the weekend. Then I same across this shelf:
I guess having rodents in grocery stores is a pretty common thing and that Target is not alone in deploying traps to keep the population down, but I’ve just never noticed them so prominently displayed like this. Snacks, anyone???
Make a claim which is true only because of a small disclaimer. Then, repeated it to the point that people take it on face value. Its one of the oldest marketing ploys in the book and it’s what AT&T is doing with their “More Bars in More Places” campaign. You’ve seen them. TV ads that present a humorous situation, often based in the US, where someone isn’t receiving an important call because they don’t have AT&T. The disclaimer at the bottom clarifies that “More Bars in More Places than any other Network” is based on Global coverage. So yes, technically AT&T has more bars in more places, but does the target domestic audience really care that I can get AT&T Wireless coverage outside of the US. I don’t think so. Without the disclaimer, their domestic coverage does not live up to the claim. From Ad Age:
Consumers ‘equate bars with satisfaction and quality. It might work if people believe it.’ “Consumer Reports doesn’t. In its 2006 telecommunications survey, which was conducted last September and tallied the surveys of 42,000 readers, AT&T, formerly Cingular, had average or worse scores for dropped calls in the 20 cities it surveyed. As for ‘more bars’ or, as the Consumer Reports survey put it, no service,’ Cingular also was rated as average or worse in each city with the exception of Dallas, where it was rated better than average.
This campaign replaced the “Fewest Dropped Calls” campaign which ended last year. AT&T was unable to support that claim, even with a disclaimer. It seems AT&T has a history of using deceptive marketing tactics to make their product sound better than it really is.
As a customer of less than a year, I am constantly frustrated by seeing “No Service” on my phone in places that should (and according to AT&T’s coverage map, do) have coverage. Perhaps they should have another disclaimer that says “as long as you are not inside a building, like your house”! It’s bad enough that their service does not live up to expectations. What irks me the most is the frequent running of those TV spots which are clearly meant to put lipstick on a pig. Every time I see one of those ads, I feel compelled to requote the tagline, “No Bars in More Places than any other Network”.