retail’s top ten brand fortresses

Today’s impenetrable retailers always have two things in common: One, beyond service alone they understand that a brand is a promise wrapped in an experience. And two, that people, whether they be called associates, cast members, employees or even geniuses, remain the single most important variable in brining that retail experience to life. Do these brands deliver scalable and sustainable profitability? Sure. But stakeholder value is the key measurement here and the more constituents you examine, the more you see the value that these brands deliver and deliver big.

Apple Store: Any and all lists of best retailers starts with The Apple Store: $7,500 per square foot in an average location, with one store (5th Avenue and 59th Street in NYC) doing $35,000 per square foot which in that store’s case amounts to $35MM in revenue per year. Yowza. Also the number one employer in the country, was first to embrace to end of the cash register, displays no inventory, encourages play and interaction, and hires geniuses to help. From the beginning, Apple brand built on design and innovation, never more on display than in its brick and mortars… Apple Stores are more than a store… they are a retail event on a daily basis.

Virgin: This airline makes long distance air travel aspirational without aspirational pricing: Richard Branson’s approach of dogma heresy means putting every sensory element of airline travel up for debate and scrutiny and building from there. And while the lights, the sounds, the technology all contribute, it’s the people that make the difference:  From a 250 question screening survey to a gauntlet of interviews and 5.5 weeks of paid training, Virgin sets a very high bar when it comes to choosing the people who will deliver its brand on a daily basis. Today, like Steve Jobs, a good question when evaluating your retail experience is asking, “What would Richard do?”

Southwest Airlines: A second airline but a forever worthy addition to the list based on a model that to this day other airlines, especially the majors, can’t seem to replicate. Built on love, not fear; built on being humane, not glib; democratizing flying in America, and was Fortune’s top rated employer for so many years, it finally opted out of the list. Still offering no food, assigned seating, TVs or other perks, Southwest proves that being a low coast provider can be fun, welcoming, and after all these years and with other options, the more desired choice.

Zappos: While dozens of book on successful retailing practices preach the people – service – profits hierarchy of principals, few companies can commit. But show us a successful retailer like Zappos (now owned by Amazon), and we’ll show you a company that puts its people first, or has a disproportionate commitment to preparing its people to provide an unbeatable experience. Specifically, Zappos provides up to seven weeks of associate training on how to make the customer happy: “Insane” and “fanatical” about how it treats customers, and like Nordstrom’s, Zappos never agues about returns, and accordingly has a hugely loyal customer base.

Costco: The concept of bulk-packaged goods in a warehouse would sound exclusively like a one-sided value proposition, but Costco has truly transcended that model as the brand is now known for sampling, experience, and incredible loyalty: More than 60 million members and renewal rate greater than 87 percent. While growing their private label Kirkland brand (named after its founding hometown of Kirkland, Washington), Costco is also spending $1,3 billion in new and renovated stores. And although this great American brand has “beer drinker” segment written all of it, Costco is America’s number one wine retailer, with deep expertise and a truly entrepreneurial culture.

Amazon:  Dominating and only getting stronger: More than their peerless regression model that allows them to continue to customize the user experience, their compression of media as product mix, now down top 40%, means more people signing up for Amazon Prime and ordering dog food, cameras, cereal, eye wash, and everything else that allows Amazon to take 10% of all ecommerce dollars off the table for everyone else. Add wish lists, instant video, and the Kindle, and plans to probably open their first brick & mortar this year, and Jeff Bezos continues to prove that Amazon is one of the most world’s most visionary companies.

Dollar General/Dollar Tree/Family Dollar: Just as Walmart continues to push value over price (Save Money. Live Better. v. Always Low Prices), these three exploding retail plays solidify the dollar store economy: Honoring the mother of all table stakes, convenience, they take the closest 7-10k Sq. Ft. to a Walmart or Target and steal share in a hurry. Surprise: 22% of their customers earn $70k per year or more, and it’s their fastest growing segment. Look for more than 2,000 additional dollar stores in the US in 2012 – that’s easily 15,000 new jobs, as the march of the dollars stores continues to roll.

Papa John’s: The world didn’t need another pizza chain when John Schnatter opened his first restaurant in Louisville in 1984, but in the past ten years they’ve gone from owning 1.9% of the market to 7.9% despite being out spent by at least 3:1 by Domino’s and Pizza Hut and with only 20% of the footprint. From a loyalty program that in 28 months went from having 50 thousand members to 4 million today – customers who order more and spend more – Papa John’s amazing success speaks to world-class marketing to match peerless merchandising. At this point, very few industry analysts doubt that Papa John’s will eventually be America’s number one pizza maker.

Disney Parks: Two of the top ten retailers use a variation of pixy dust as secret sauce. In this case, it’s beyond magic or characters or thrills: In a world where retailers strive for operational excellence, Disney often achieves operation flawlessness. Cast members perfectly on cue, world’s class incremental lift from licensed merchandise, and operations that seamlessly hide the logistical challenges of handling more than 130,000 visitors a day in Orlando’s four parks alone. Disney reminds us that sometimes disruption doesn’t work, and a winning formula means one foot planted firmly in the past and the other in Neverland.

Ollivanders: Is a fictional retailer still a retailer? Let’s put it this way… the money they collect at this (barely) 1,500 sq.ft. one off is very real indeed. Sure, Ollivanders is located in the very target rich acreage known as Universal’s Wizzarding World of Harry Potter, but still, the store conservatively generates close to $20,000 per square foot. Moreover, it’s the margins that make us believe in wizards: Ollivanders is basically selling sticks of wood, a.k.a. magic wands for between $40 and $70 a pop. Not every store is built on magic and folklore or cross-generational best selling books, but the power of an Ollivanders or even a Disney must serve to remind us that every great brand tells a story

the analog swingers

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Here’s the thing about a pendulum: It’s gonna swing.

Today’s lesson in gravity and momentum starts with the simple acceptance that while the world of media started with analog (facial expressions, cave drawings, smoke signals), digital media is not the end game. Instead, it’s merely another dot on the continuum, another swing of the pendulum.

Print begat outdoor which begat broadcasting, which turned into narrowcasting which swung to guerrilla and buzz before shifting to social and mobile. (Consider that the history of advertising media in 23 words).

Now as ad budgets pour into digital, let’s remember that the world we see and consume on a daily basis can’t be relegated to the screen in your pocket: It’s a tableau of spaces and sounds, both big and small, subtle or obtrusive, but all have one thing in common. Every single one is… for… sale.

Coming off the heels of Morgan Spurlock’s documentary The Greatest Movie Ever Sold, where we saw Broward County, Florida school buses being fitted for transit posters, the Dallas Morning News now reports that cash-strapped Dallas area schools will start selling ads on buses, scoreboards, as well as parent newsletters.

Elizabeth Ben-Ishai, the author of an analysis released last month by Public Citizen, a nonprofit consumer interest group, speaks for the opposition: “Schools should be a place where students grow into critical thinkers and develop skills that enable them to question established ideas.”

Thank you Elizabeth…may I introduce you to the 21st century?

Here’s the reality: Not only will ads on school buses continue to sprout like weeds (or flowers when executed properly), ads on classroom walls are merely months away. They may not feature a garish BOGO or QR code for Budweiser – we’ll start slowly with a sponsored mural or PSA – but this is gonna happen.

It all serves as a reminder that media ROI trumps principles, clutter, or noise: Every space, every airway, everybody is buyable: To prove the point, ask yourself this… if Anheuser-Busch paid you a million dollars, would you change your name to Bud for one year?

So knowing that your very identity is for sale, what makes you think that your local hospital wouldn’t sell its birthing ward’s naming rights to Gerber? Or the towel your newborn is wrapped in? Or the delivery room? (Although FedEx should probably get that one).

Why is it so hard to accept that the wall in your kid’s English class will soon be sponsored by Amazon’s Kindle? If it buys better educational facilities do you really care? Especially since children are better prepared than ever to filter out advertising’s BS vs. worthy content.

When it comes to ad budgets, digital as media is hot and digital as medium is cool: We get it. But just as broadcast advertising is still proving to be the best way drive to site, those who look at the world and see analog opportunities – space that transcends the phone, pad and laptop layered with digital media will drive greater ROI.

It’s just the nature of the pendulum… understanding that it’s not just the very screen you’re reading this on that’s for sale, but the desk it’s sitting on as well. Because when the price is right, we’re all swingers.

2012 on the retail richter scale

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Presenting retail’s four seismic shifts… dramatic changes that will at once reward and modify our shopping behavior and alter the retail landscape forever.

 For retailers, every conversation will continue to start and end with analytics-based e-tailing: How to convert us into loyalty members and digital device shoppers, leverage emotional membership and functional points, earn mobile access, capture facebook follows, activate shopping apps, pump laser targeted price and items, and generally optimize the signal-to-noise ratio on a million and one BOGOs. Say hello to my little regression analysis.

The payoff for consumers will revolve around the one attribute to rule them all… convenience. The last word in table-stakes, convenience means Amazon exponentially building on their already ten percent of all North American ecommerce through their five new million plus square feet super centers. It means Walmart’s more than 140 million customers per week gobbling up $125 million in groceries to avoid an extra stop. It means packing-up-the-family-car trumps waiting-for-the-delivery truck (IKEA v. Ready to Assemble Furniture). It means curbside service expanding beyond the restaurant sector. It means Walgreens, CVS and Duane Reed preparing to carry quick and easy meals along with more perishables. It means gas stations continuing to expand their footprint and meal offerings, using their locations to negate the need for longer trips to the market. And as gas prices threaten to climb into painful $5 per gallon levels, convenience means more moms, a.k.a. the home’s Chief Spending Officer who is already in the car more than 22 hours per week, searching for more ways to drive less. (Already we see gas station mini markets offering at-the-pump discounts when you buy inside the store.)

While convenience is glacial, slowly but surely flowing across the landscape, wiping out all retailers who under staff or can’t adapt fast enough, these next four trends are disrupting our very definition of retail at a much faster clip:

1) It’s Ringing, It’s Vibrating… It’s Your Wallet:  Smartphone enabled Google Wallet, Isis and retail brand quick-pay apps will finally allow us to carry no cash and change the way retailers engineer their POS systems: The data that retailers collect alone will drive all the ROI they’ll ever need to justify the tech upgrade. From Starbucks’ mobile payment app, which is linked to their loyalty program and already available at 7,000 locations, to restaurants like Jamba Juice and Jack-In-The-Box (both testing Google Wallet in multiple locations), to Walmart and Target and two dozen other retailers who have joined forces to develop a mobile payment system, the end of cash is near. RIP ATMs.

2) The Rise of The Everywhere Store: Just as both best-of-class brick and mortars continue to benefit from their unbeatable combination of instant gratification and tactile experience, and top ecommerce pure plays take more consumer spending off the table through (what else) convenience, the big winners will be cross-platform retailers as they push themselves into multiple and integrated consumer touch points. The best of these will orchestrate advertising, media, and operations to form a value proposition that succeeds on a multitude of layers.

Imagine: You’re watching a football game and a consumer electronics retailer using drive-to-site broadcast – knowing that 86 percent of all smart device users are “on” while watching TV – hits you with a compelling offer. A quick visit to the retailer’s site or app on your iPad and you find that the content of retail offer ties directly into the game you’re watching. Cool. The call to action is a one-click purchase that also enters you into their loyalty program. This all happens while watching the 1:00 p.m. game in 2D knowing that the new 3D TV will be delivered from the local store or distribution center by the 4:00 p.m. kick-off (for a premium). A follow-up text asks how the delivery experience was as a bonus service touch point and way to collect even more data. Broadcast to iPad, iPad to the cloud, cloud to the store, store to your den, one more mobile ping from the cloud and all of it cataloged in the database. Somewhere Pavlov is smiling.

3) Cloud, say hello to gravity: While the emphasis has been the rush to e-tailing and social and digital integration, even the best ecommerce pure plays still understand the need to offer live shopping experiences to model the poster child for retail destination brands… Apple stores and their mind-blowing 7,000 per square foot juggernaut.

Amazon will likely open their first store in Seattle as speculated and highlight high-margin items, act as a fresh portal for the brand, offer Kindle support, and enable 24-hour delivery when you swipe your Amazon Prime app. eBay already had a pop-up store in London’s West End last December, and other top ten web sites could soon morph themselves into straight up retailers. Think Twitter Café – a virtual third place, or the YouTube store, 4,000 square feet dedicated to helping users set up their personalized YouTube pages and manage their content (and perhaps unwittingly see a few third party ads while there.) It’s the era of the small box.

4) Pop Goes The Retail Lease: The ultimate pop-up sensation of 2011 – Food Trucks – will also continue to roll. And although Food Trucks accounted for only about $1 billion in sales last year, perhaps a mere pittance compared to the restaurant industry’s $620B+ in total sales, they seemed as omnipresent as Jeremy Lin T-shirts and combined the ultimate in convenience with the best of the restaurant industry’s love of new, fast concepts. 2011 Favorites? Schnitzel & Things, Baby’s Badass Burgers, and Me So Hungry.

Don’t look now, but mall and strip center real estate merchants are going to have to get used to the high-margin short term lease as “pop up” blows up in 2012: Think of the already $6.8 billion in Halloween dollars flowing through more than 2,100 temporary outlets, or the neighborhood Christmas Tree center. Now imagine a $22 billion in Back-to-School dollars being spent at stripped down Back-to-School outlets. And given that Black Friday now hits the radar almost seven weeks early (Cyber Monday ads for Target began last September) and extends into December, The Black Friday store will no doubt show up in 2012 to claim a piece of the holiday’s $10.68 billion in revenue.

Retail experts and brand pundits like to spend their time evaluating what’s come before, always believing that perhaps the great retail shake-ups are behind us. But not so fast buckaroos. This is it. Right now. Technology is becoming more than just an enabler, and instead retail superglue… a limitless digital bonding agent for consumers and retailers. And as retailers tweak their value propositions to keep up… more for less, quality for less, speed for less, better for less, ad nauseum, the winning retail propositions will be built on convenience, enabled through technology, delivered to our fingertips, available to touch in store, but to purchase anywhere in the world. And all of it creating consumer digital footprints that are more reliable than DNA and more valuable than A+ real estate.

Yes, the ground below us shifting. And it’s going to keep shifting until the earth is no longer two thirds water and instead 100% retail.  Hold on.

love shack

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Ever wonder what Bryce Harper would do in a neighborhood softball game? Or the kind of tree house Frank Lloyd Wright would build for his son? How about Danica Patrick in a car pool lane?

Yes, it’s always nice to fantasize about the masters tackling the chores of us mere mortals. Even better is when you can see (or in this case taste) the results for yourself.

Enter Danny Meyer into the world of (relatively) fast food. Fast in this case only in that from counter to first bite is not the event meal of relaxed luxury that you’d find at Danny’s Union Square Café or Gramercy Tavern.

To a degree, Shake Shack is a story about timing. And in the restaurant world, good timing means everything.

Panera’s foundation may be foolproof, but the recession-led “drive to the middle of the category” sure didn’t hurt.

Red Lobster’s greatest comp gains correlated with America’s seafood wake-up call, along with shrimp passing tuna like it was treading water as the suddenly most populous fish in America. (There may be no more shrimp in Thailand, but a quick look at the menus of Olive Garden, Red Lobster and Chilis would suggest that we’re not even close to farmed out).

Yet even as McDonalds now serves coffee and pastry, the pendulum has once again swooped across the restaurant landscape and better burgers are all the rage, led in numbers by cinco amigos, i.e. Five Guys.

But the best of the betters is not one of the “heads of state”, a mom and pop, hidden one off or regional favorite like Whataburger or BurgerFi. The fact is, the best burger is specifically designed to be the best burger by those who – when it comes to food for sale – generally bat 1000% right out of the kitchen.

The best burger right now is Danny Meyers’ Shake Shack.

In the same way that if Apple said it was designing a re-imagined iPhone, when Danny Meyer and company open their first official Shake Shack in 2004, the industry buzz was indeed palpable and for good reason. Aside from Shake Shack’s winning physical, emotional and spiritual design, created to deliver on the promise of Joe Pine’s Experience Economy, the star is still what’s on the tray. And in this case, it is, yes, the best-testing, scalable burger on the planet. Smother it in toppings if you will, lick up the Shack Sauce, add extra cheese or too much catsup it will still delight to no end. But fresh toppings aside, one taste of even the Shack’s naked patty on a plate is all you need to acknowledge the quality and culinary artistry of the USHG (Union Square Hospitality Group) that runs the Shack.

According to August’s New York Times cover story on the Missouri magic man himself, Meyer’s attention to the beef is profound:

The meat comes from Pat LaFrieda, a third-generation butcher who produces a blend of sirloin, chuck and brisket designed by Richard Coraine, former general manager of Wolfgang Puck’s Postrio in San Francisco and now one of Meyer’s partners. As Meyer put it: “There are a zillion variables to a hamburger. What part of the animal went into it. What coarseness. What temperature.” Coraine spent months “tasting and modifying the blend to hit the right chord.”

Sure, there are plenty of reasons to love the Shake Shack model… the focus on interns, the off-the-menu offerings, the dog bowls, allergen information, the imaginative and mouthwatering frozen custards, the beer and wine menu, etc. But the category isn’t called better extras. It’s all about the beef.

I’m sure the folks at USHG want to think of themselves as beyond categorization, lest they be clumped with a deep and getting deeper bench of inferior category players. But consumers who may be unaware of category designations like “fast casual” and “QSR” certainly know how much money they have in their pockets and how many options populate the restaurant map.

Which brings us to the Shack’s value proposition: Just as Papa John’s gets its unfair market share in the form of a significant premium through quality in a category where quality never mattered, there are hordes of new citizens enlisting in Foodie Nation every day: Two Whoppers for three dollars in a dirty restaurant that has a 50% chance of getting your order wrong is far less appealing than a single Shack Burger at twice the price. When the food and experience is this exceptional, the price is always right.

But of course this is about far more than beef for the buck. This is about a psychographic. Apple users. Mini Cooper drivers. Cult like devotion en masse to a brand that is indeed worthy. It’s the new and improved In-N-Out… one for a new generation.

Danny Meyers’ now more than 200 Shake Shacks have become USHG’s cash cow. And while the “F” word (franchising) may be far off or in never never land, I say the more Shacks the better. Because if as Danny implies better burgers makes for happier people, then the question is, can the best burgers, burgers this good bring us world peace? Maybe, maybe not. But it’s a thought certainly worth chewing on.

 

 

 

 

Just another manic sundae

 

It’s generally considered bad form to burry something while it’s still alive. Even if the grim reaper is waiting by the back door, collection notice in hand, bank note out of patience.

But the restaurant landscape is no place for an identity crisis and a report from The Wall Street Journal Thursday said Friendly Ice Cream Corp., the parent to the 500-unit Friendly’s family-dining chain, could seek Chapter 11 bankruptcy protection as early as next week, and hold an auction to sell the chain.

Friendly’s first opened in 1935 selling double dip 5-cent cones when five cents was a lot for a scoop of ice cream. But it was darn good. And with a name like Friendly’s, the value proposition was elegantly simple and the American retail landscape had a good reason to smile.

Unable to fight what appeared to be a deadly crisis of confidence, Friendly’s Ice Cream put entrees on the front burner, and ice cream became formally known as their…. wait for it… happy ending.

If only it were true.

Over its final decade, Friendly’s followed every trend it could find from artesian salads and sandwiches to Angus burgers, burying its lead further and further down stream. A VC swooped in. A PR grab in the form of a heart-attack-on-a-plate sandwich – the Grilled Cheese Burgermelt – came and went. Three new CEOs appeared in the last four years, a couple of new CMOs, all with their own agendas for cutting costs and righting the ship. But this was one leaking hull that suffered from two fatal hits:

1) The aforementioned manic loss of focus. The apparent chase after anything but their own DNA. Americans haven’t stopped eating ice cream (180,000,000 gallons consumed last year), but that didn’t prevent Friendly’s from a nasty case of Panera envy.

2) What murders any restaurant brand in its path: Dirty stores and unreasonably slow service. In 2008 Friendly’s was rated one of the slowest and dirtiest restaurants in America, with Consumer Reports flat out ranking it last out of 23 other casual dining establishments. A new COO resorting to the classic “white glove” and flashlight shtick didn’t move the needle enough.

Slow and dirty doesn’t work for American diners, especially when the home’s Chief Meal Officer plans on going out for dinner an estimated 55% less this year.

And while Friendly’s tried their hand at a leaner, cleaner, faster concept over the past few years (Friendly’s Express), there remains just too many of their larger brick and mortars to languish away in Fast Casual’s shadow.

Yes, Americans love the new… (Five Guys, Pink Berry, Firehouse Subs, etc.), but our heritage brands (Denny’s, White Castle, Friendly’s, etc.) needs us too and we need them. They’ve just got to find away to balance the need to stay fresh and relevant with the understanding that DNA matters.

Goodbye Friendly’s. Welcome to the world of Howard Johnsons. A world where we know you’re out there, perhaps even dirtier, left for dead, but open for (somebody’s) business. We’ll always remember your Monster Mash and Jim Dandy and your one of a kind Supermelt. But given the new restaurant world of a hundred and one cleaner, newer, more relevant options, it’ll only be Friendly’s most loyal and ardent fans who will truly miss it.

The Fribble is dead. The Fribble is dead. Long live the Fribble.

retail sustainability gets smoked

 

The masters of retail value something even greater than profit, and that’s sustainable and scalable profit.

In the case of Russ & Daughters, the sustainable is legendary, but the scalable is heresy.

We’re talking about (just under) 100 years of serving smoked fish, caviar, cream cheese, Jewish soul food, and all associated wisdom out of 400 wall-to-wall square feet on Houston Street on New York’s gritty frozen-in-time lower East side.

A bagel with caviar cream cheese is painstakingly wrapped in heavier-than necessary grade of wax paper. The fish is sublime, the bagel itself okay, but the experience 100% bona fide unique.

In a world where retail experience wins, the old world experience of Russ & Daughters wins hands down, mouth watering, and stomach smiling.

Could fourth generation owner Josh Russ Tupper turn pickled herring into a chain worthy phenomenon? Who knows and who cares. The very fact that Russ & Daughters is such a rare bird/fish is what makes it so rewarding. And in the same way that a single Five Guys in town is an attraction, but when the supply is equal to McDonalds the demand flattens out, this single Russ & Daughters location has more authenticity in its refuse than an iHop contains in a thousand and one pancakes.

Probably the best mass retailer at scaling (inauthentic) authenticity is Anthropologie: Planned randomness yes, but so well planned that each store feels like it houses a series of one offs, unique finds, and all that is eclectic but worthy. But for the most part, true authenticity is extremely hard to scale. And so while we accept the Cracker Barrel’s general store as a logical extension of the brand, we well know there’s another one exactly like it 60 miles up the highway, and that fact diminishes the very experience they so painstakingly created.

In Russ & Daughters, New Yorker’s find the pickled herring capital in the western hemisphere. And a reminder by virtue of New York’s originals… Junior’s, Katz’s, Serendipity, and Carnegie Deli that a retail establishment that mirrors the neighborhood where it resides becomes part of that city’s vibrant living body, not an artificial limb.

May Russ & Daughters never succumb to the gravitation pull of scale, the Vegas or Miami one off (small scale is still scale). May it never carry wraps and egg whites. May it never sell smoothies are frozen yougart and fruit. May it never carry breakfast wraps and egg whites. May it never attract a cool Indy crowd.

May Russ & Daughter’s sustain forever.

 

 

 

jet blues

And another cult bites and another cult bites and another cult bites the dust…

Is it possible that jetBlue suddenly feels a bit old? Now that Virgin has re-set the bar, JB’s stone leather seats and dish TV are, well, they’re okay. But the passenger engagement that once saw the dish TV click on to a message that said “don’t tell anyone but you’re our favorite customer”, has given way to the new JB end line – you above all – directed followed by a series of commercial messages (AOL, etc.). More like revenue above all.

Amy Curtis-McIntyre, jetBlue’s inaugural Chief Marketing Officer, helped craft the brand through such pearls as “You need to over-stress your most basic brand DNA every day.” And her four step process for success: (1) Create a great product (2) Market it right (3) Take really good care of it and (4) Repeat before necessary.”

But Amy is long gone, now at Old Navy. And David Neeleman, who piloted JB’s creation with a hefty serving of his Southwest secret sauce is now running Azul Brazilian Air.

And so the future of jetBlue, while not necessarily up in the air, is certainly more pervious to innovative competitors.

JB’s flight attendants get the job done, but the snap in their step is gone, gratified merely for employment perhaps, and certainly no longer enamored with the once shiniest penny at 30,000 feet.

Interesting is that when Jim Collins delivered Good to Great, he surmised that it was far more interesting to examine not those companies like jetBlue that exploded out of the box, great from day one, but rather the organizations who were at parity in their field before taking the quantified steps that propelled them to category leadership.

But thinking about jetBlue’s case, a new phenomenon warrants closer study: Great to greater. Think Walmart, from brand clumsy category killer to brand smart good corporate citizen. Apple, from software magician to hardware legend. Bono, from $250M rock phenomenon to cause ambassador. Las Vegas, from successful gambling and drinking vacation to sex and secrets destination. These are brands that opened big and just kept ratcheting up.

What will become of wunder-brands like Zappos? Five Guys? Jersey Shore? Will they keep climbing, re-inventing, paranoid to the core, value going from great to greater? Or will they almost imperceptibly become tired, frayed, or potentially irrelevant when our backs are tuned? Like jetBlue.

In JB’s case, it’s true that on any day you can fly out of their state-of-the-art terminal at New York’s JFK airport, get a good seat and all is well. But is there any doubt that something new is waiting to happen in the airline business? An airline that stows your carry ons for you – facilitating boarding. An airline that segments flights for business and families. An airline that downscales the Virgin model for short-hop corridors like LGA to FLL, or ORD to EWR,

None of us frequent flyers and brand pundits are ready to bury jetBlue just yet, but Chairman Joel Peterson and team are just not paranoid enough, and now focused on managing the bottom line without inspiring elevation on the top line. Consequently the buzz and cult has died down, along with the once fresh ideas that Neeleman and McIntyre pioneered – TVs “to keep the kids quiet”, no first class to avoid the coach flyer’s “walk of shame” et.al.

Good to great brands remain go-to lessons in decomoditization and pack-busting strategies. But the great to greater brands, the ones that never stop building or innovating remain the most compelling cases of all. They may or may not be the fastest flyers, but they never stop climbing.

train wreck culture goes off the rails

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In 1982, a boy king programming genius at NBC named Brandon Tartikoff was asked if there was anything he wouldn’t do in pursuit of ratings.

“If there were a show akin to Battle of the Network Stars called Battle of the Races, don’t tell me everybody in America wouldn’t be watching. But that concept is so ugly and divisive that no network will ever put it on.”

Sorry Brandon… never say ever. In 2006 the CBS reality show Survivor decided to divide the show’s contestants into four groups — a White tribe, an African-American tribe, an Asian-American tribe and a Hispanic tribe. Eek.

The Tartikoff prophesy is less about what networks are willing to do right now to attract viewers, and more about – like the Survivor example – how effectively the specter of a train wreck is cultural flypaper.

Today’s it’s the absurdity of Charlie Sheen. Tomorrow it’s next the felony from Lindsey Lohan. Yesterday, it was Russell Crowe and Naomi Campbell tossing consumer electronics at people’s head. And in between, a million and one Survivors, Paris’, Nicoles, Demis, and celebrity rehab wannabes.

Welcome to Train Wreck Culture.

While seemingly easy to dismiss as a cultural anomaly, a one off in an otherwise grounded and centered world, we know better: We’ve always been a society obsessed with celebrities, violence and sensationalism. All of it dissected and promoted over decades, whether it be through the keyboards of Hedda Hopper and Perez Hilton, or the newsreel and ubiquitous gotcha media. So omnipresent is this spotlight that there’s a legit allure of infamy, a.k.a. Warhol Economics going on. The coup de grace is that most track wrecks aren’t just prospering, but accumulating eff you money.

Our obsessions aren’t just about whose dating whom or the amusing fender bender. And in fact this trend’s voyeuristic undertones are much more insidious: Look up “fatal accidents” on YouTube and you’ll discover that the top 7 clips have accumulated 14.7 million hits. This is not advertising, pushed or broadcast content… these are opt-in views of death and destruction, plain and simple.

If you believe that only “consumer controlled” media vehicles like YouTube share this kind of carnage, think again: On October 4th, 2008, the vaunted network CBS broadcast a mixed martial arts fight featuring the street fighter Kimbo Slice savagely biting off a piece of his opponents ear during prime time. CBS, the air once shared by legends from Edward R. Murrow and Walter Cronkite to Lucille Ball and Ed Sullivan. Shame.

Macro-trends like the gentlemanly art of boxing ceding ground to The Ultimate Fighting Championship are inevitable. But what we’re blithely tuning into is literally assault (an act that creates an apprehension in another of an imminent, harmful, or offensive contact) and battery (a harmful or offensive touching of another), both of which are illegal in all 50 American states and most civilized countries in both hemispheres.

There is no chicken and egg debate here. This programming exists because we want it. The tabloids at the grocery checkout highlight these train wrecks because we buy them. And what is on today and what know will be broadcast tomorrow surely proves those prognosticators right who predict that someday a public execution will be beamed live, right into our homes.

Are we repulsed but can’t turn away? Or are we just fascinated? Either way, supply and demand mandates that the spotlight on train wrecks will breed more train wrecks and the like a warped möbius strip there will be no end in sight.

Quick, somebody put on the Disney Channel. As long as Demi Lovato is out of rehab.

788 million reasons to take a twitter break

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Most people believe their plate is full. That there aren’t enough minutes in the day. That if they just had an extra afternoon, or just a few hours more, they could move mountains. Then, as the mountain sits and sits, nary a handprint on its back, those same people somehow find time to air, share, and otherwise tweet about it instead.

Is this a call for Twitter’s head? Another rail against social media? Not really. But in the same way a pack of cigarette’s comes with a warning label, alerting us that they will indeed cause cancer, or the stamp on the side of a bottle of baby formula states that “breast milk is better for babies”, where is the disclaimer on every Twitter log in page that clearly states: Actually doing something might be more beneficial than writing about it.”

Agree or disagree, this is no trivial matter: We’re talking a collective 788.4 million hours each year spent tweeting.

There are clearly those who tweet more than others – Emma Patel (@shoeemporium) and her 649,412 tweets in 23 months, for instance. There are those with more followers – @ladygaga #1 at 8.7 million and climbing. And in terms of whose doing the most following (6.6 million), think POTUS, i.e. the Twitter and Chief, @BarakObama.

How nice to see everyone expressing himself or herself, connecting thoughts and ideas, sharing photos and videos.

But earlier this week the statements of one David Stern, oddly enough, struck a chord. Stern is a whip smart executive out of Columbia Law School who at the moment and for the past 27 years has been the commissioner of America’s National Basketball Association. Stern’s not some crusty technophobe: He knows the numbers – the NBA and its players have about 30 million followers, 52 million Facebook “likes” and 400 million YouTube views. Yet Stern himself declines to have a Twitter account, saying that he’d rather live life instead of documenting it, and more pointedly states “If you’re going to spend all your time thinking about what you’re going to say about what you’re doing, I don’t think you do as well as you should.”

Startled, I counted my current tweet total (about 1,105 to date) and calculated how much time I’ve spent thinking, writing and posting. Given an average typing speed x 140 characters + at least a moment to ponder one’s thoughts, let’s say a conservative estimate is one tweet per minute: With that math, I’ve spent 17 hours tweeting, which certainly doesn’t include the hours I’ve actually spent on Twitter reading and sharing other people’s tweets. (The average Twitter user only spends about 1.52 hours per year Tweeting).

But what about the former student of mine – the outrageous @copyrider – and her 19,000+ tweets? That’s 316 hours (I bet she wished she had back). Or Damir Tankovic (@tankovic) and his 469,475 tweets equaling 7,800+ hours?

According to Twitter, 5,000 tweets per day in 2007 turned into 4,064 tweets per second (TPS) during the Superbowl, with a record 6,939 TPS on New Year’s eve as the clock struck midnight in Japan. The current average numbers are 51.8 million tweets per day/600 TPS.

With our one-tweet-per-minute math, we’re looking at 2.1 million tweeting hours every day, or 788.4 million hours per year. Which begs that one, stunning question… what else could be accomplished in that time? What tradeoffs are there when people spend 788.4 million hours a year documenting instead of doing?

It took a mere 7 million hours to build the Empire State Building, for instance. It took only 175,200 hours to build the Great Pyramid of Giza. Even if 1,000 workers were on the job for all 20 years it took to construct, that’s still just a few months worth of tweets: About the same with the Chunnel actually. The polio vaccine took about 40,000 manpower hours, or the time it takes to send about a billion tweets.

And, of course, if the world was created in 7 days/168 hours, then the 4.6 million worlds that could otherwise be created by cutting out Twitter for one year seems like a pretty noble alternative. (Caveat: not all world builders are created equal).

In truth, I would not have otherwise written the great American novel in my 17 tweeting hours, or invented a cure for cancer. But what if the Twitter collective of 200 million people actually spent just one single hour doing something positive instead of tweeting about it? One extra hour a day doing, thinking, focusing, sending out positive energy, sharing love, making love, making progress, making money, giving back, paying forward, paying attention, calming down or looking up… what would happen?

Think about it. But whatever you do, don’t tweet about it.


commoditized to death

1pinkberryRetail’s been commoditized. Commoditized to death.I can get an iPod at Target. I can get it at Walmart. I can purchase a Ford Explorer, the same exact Ford Explorer, at any one of five Ford Dealers within a 25 miles radius. (And every dealer will exert the same commoditized type of pressure).

I can get a large iced latte from McDonalds or Starbucks next store. I can pick up an almost identical grilled chicken from Burger King and Wendy’s, through an identical drive thru lane. And I can watch pretty much the same movies on any one of my 50+ cable channels, without even knowing what channel I’m actually watching

Windows has commoditized the PC, with every black laptop a veritable hard shell clone with the same screen shot.

My iPhone felt new, fresh for a bit, but now the Android also has soft keys, a sleek black slab design, multi-media and a GPS.

Do you really know the difference – real differences that aren’t just window dressing, too minute to highlight or impossible to articulate – between a Sony plasma TV and its Samsung counterpart? Or Tide and All? Breyers and Edy’s, Nike or Adidas?

How about department stores, all touting a variation of brands for less, or some nebulous promise of owning the style I want? One store says Expect Great Things. Another announces Never Pay Full Price for Fabulous. There’s Something Unexpected and The Style of Your Life. It’s all an homogenized blur for already overwhelmed citizens, out of time and being barraged with 4,000 marketing messages a day.

What about loyalty you ask? With 70% of all decisions being made on impulse or within 3 feet of the shelf, loyalty is constantly getting sucker punched.

Finally, in what has got to be the most profane irony of all time, even books on branding strategy with the expressed purpose of teaching de-commoditization, are becoming commoditized themselves. From W. Chan Kim’s Blue Ocean Strategy and Marc Gobe’s Emotional Branding, to Al and Laura Ries’ The 22 Immutable Laws of Branding and Youngme Moon’s new book Different, the same ground is hashed and rehashed, brand nauseum. They’re all well reseached and prepared, and they might even have some value if any of us had time to actually read an entire book. But 22 laws? I guarantee Steve Jobs can’t name one except his own: It’s my way or the (effing) highway.

Differentiation is the only way out. Fearless, hardcore, laser focused differentiation. And if it’s not organic, so be it. Invent it. From the inside out. Find the consumer truth in your category and deliver on it. Anything else is missing the point.

Can’t muster the vision to execute? Don’t know how to make it cheaper, better, or unlike anything else in the category? Then the Labor Research Council has a little commoditization math for you: Competitive environment + process homogenization + rising cost of goods + advancing and affordable technology = market share erosion. Erosion that will be exacerbated by fresh players. Erosion that will be amplified with the next wave of recession. Erosion that will leave you pervious to disaster.

That’s the good news.

According to the SBA, 90% of small businesses go under within the first year. Yes, that includes all the home office start-ups and webtrepreneurs.

On the big business side, just know that 80% of the Fortune 500 from 20 years ago are MIA. (On the NASDAQ, no one can hear you scream).

Commoditization is inevitable. And like a black hole, it’s an inexorable force where incremental change, industry compression and fear suck up everything in its path.

Jamba Juice knows what I’m talking about. So does Apple, Panera, Bose, Scion and Lady Gaga. It can be done so do it now. Differentiate big or die slowly. That’s the game. Play to win.

More importantly, play to survive.