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    Published on: December 2, 2014

    by Michael Sansolo

    Steve Jobs was once asked which of his creations made him proudest. For all of us armed with iPhones, iPads, iPods, assorted Macs or similar products from other companies, it is a question we could ponder and possibly not answer.

    Yet Jobs had an answer, according to his biographer, Walter Isaacson, and it was a surprise. Jobs didn’t select any of the products his company had created. Instead, he said it was Apple - the company itself - and the team of people whose creative genius has continued even after the founder’s death.

    The difference is people, not products, even at a company like Apple and that makes sense because it’s a lesson for any business. The best retailers always seem focused on this very issue understanding that the essential difference in the shopping experience always comes down to people. And even the best manufacturers, who traditionally were not customer facing companies, agree.

    I remember Stew Leonard Sr. tell me years ago that there was nothing in his company that competitors could not copy except for how his people did their work. Likewise, there was a famous story at Proctor & Gamble about executives asking first about people, then about products.

    But my favorite bit of wisdom came from Norman Mayne of Dorothy Lane Markets. Mayne told me more than once that associates were his top priority, even above customers. Norman would say: how he treated his associates would be directly reflected in how his associates treated the customers.

    No doubt that holds true whether you treat associates well or poorly. The experience is reflected through the customer.

    Since the publication of my new book, “Business Rules: 52 Ways to Achieve Business Success,” (more information about it is always down below) I keep getting asked the same question. What do I consider the most important rule?

    Incredibly, I keep flubbing the question as I try to hunt for the specific rule that I think will best appeal to whoever is asking. Rather I need to do exactly what great business people do and stick with my bedrock principle. After all, I made it the introduction to the book itself.

    In that intro I cite a legendary story about the Hebrew prophet Hillel, who was once challenged to explain all the lessons of the Bible while standing on one foot. According to the story, Hillel (on one sandal-clad foot no doubt) essentially uttered the Golden Rule: that we should treat others the way we wish to be treated ourselves. Everything else, he said, was simply commentary.

    It’s hard to disagree with that. After all, we have countless rules in business to guide virtually everything we do and how we do it. Yet the essential truth is that if we keep in mind the treatment we want in return it guides us through even the most complex issues of health, working conditions or you name it.

    So it’s interesting that Steve Jobs, who admits in his authorized biography that he was a difficult person to work with and for, cites his team as his most important accomplishment. But it could be argued that the continued success of that team (despite ups and downs of specific products and stock prices) speaks to his point. The brand has continued even without the man who personified that brand.

    Despite his personality flaws, Jobs created an environment that just works.

    The sports cliché may suggest that nice guys finish first, but for business people there may be more to learn in what Jobs suggested and guys like Leonard and Mayne see to get so well.

    How you treat others is more than a Biblical suggestion. It’s an inviolate rule for business success.

    Michael Sansolo can be reached via email at . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available on Amazon by clicking here. And, his book "Business Rules!" is available from Amazon by clicking here.
    KC's View:

    Published on: December 2, 2014

    by Kevin Coupe

    The San Francisco Chronicle has a piece noting that Best Buy had to shut down its website on Black Friday - the traditional beginning of the holiday shopping season - because of what it called “a concentrated spike in mobile traffic.”

    "This is different from what we’ve seen of previous retail website crashes," the writes. "Pundits have long predicted mobile devices will play a big role in how consumers shop. That Best Buy specifically cited mobile traffic as the primary culprit behind its online hiccup suggests that smartphones have finally reached critical mass for brick and mortar chains."

    And while Best Buy's site may have gone down on one of the busiest shopping days of the year, the Chronicle suggests that this may be entirely a bad thing: "Given the reason behind the outage, the company — and indeed all retailers — should feel good about what it means for the future of their business."

    It is an Eye-Opener. (Though, to be fair, it would have been better for Best Buy if it had managed to keep its website operating…)

    KC's View:

    Published on: December 2, 2014

    The Washington Post reports that Cyber Monday appears to have seen "a robust increase in sales this year. Adobe forecasts that Cyber Monday sales hit $2.65 billion on Monday, a 16 percent increase over last year.  The technology company projects that large retailers had the healthiest bumps in sales:  The top 25 retailers in the U.S. saw 25 percent year-over-year online sales growth on Monday, while smaller retailers had growth of only 5 percent."

    The story goes on to say that "the growth for Cyber Monday was outpaced by the sales growth for the broader period of Thanksgiving through Cyber Monday, which Adobe said had a 20 percent increase in online sales.  This may be an indication that online shoppers are no longer holding out in hope that Monday is their best chance for digital deals.  It seems the offers on Thursday and Friday were enticing enough to get them to open their wallets."

    The Post notes that " Adobe analyzed 400 million visits to 4,500 retail Web sites to make its projections."
    KC's View:
    I'm sure the projections and the results will be all over the map, depending on who is doing the analyzing and how the numbers are being sliced. I have to admit that while I usually avoid Black Friday and Cyber Monday like the plague, I did a bit of shopping yesterday, only because I got an email promising me free shipping and a discount, and it sparked an idea I hadn't had before. So I guess you'd call that a successful email campaign.

    Published on: December 2, 2014

    The Boston Globe reports that the Girl Scouts of America have announced that "the 2014-2015 cookie run will be sold both door-to-door and online via its 'Digital Cookie' e-commerce platform, allowing each scout to expand her cookie sales beyond her neighborhood and parents’ office."

    The move reverses a longtime prohibition on internet sales of cookies by Girl Scouts.

    According to the story, "The organization says the new initiative aims to inspire online entrepreneurial and sales skills within this next generation of scouts, much as it has in years prior with its traditional door-to-door method. (That’s still happening too, by the way: scouts may still ring your doorbell, but now they’ll have a mobile app allowing them to take credit cards. So you can’t use the 'I’m sorry, I don’t have any cash on me' excuse to get out of buying cookies anymore.)"
    KC's View:
    I think it is very interesting that the Girl Scouts are using the cookie campaign to teach kids about online marketing … though it is a pretty good bet that a lot of the girls probably know more about digital than the people doing the teaching.

    Published on: December 2, 2014

    The Financial Times reports that a coalition of US retailers - including Target, Best Buy, Home Depot and JC Penney - has launched an advertising campaign that takes aim at Chinese e-commerce behemoth Alibaba, warning that the company will benefit from a sales tax loophole and has the potential of decimating local retailers.

    The ad calls for a national online sales tax is the only way to prevent Alibaba from having an enormous impact on bricks-and-mortar US retailers. It is the same charge that often is leveled at Amazon, though the US online pioneer is on record as supporting a national online sales tax.

    FT notes that Alibaba rejects the group’s allegations: “This advertisement is not fact-based … The Alibaba Group pays its taxes according to the laws in the country [in which] it does business and the US is no exception. The Alibaba Group remains focused on providing US-based companies the opportunity to bring their products and services to the Chinese market through our various online properties.”
    KC's View:
    Getting a national online sales tax would require Congress actually agreeing on something and then acting on that agreement. Not likely.

    Published on: December 2, 2014

    Excellent piece on the New York Times blog, looking at two different ways of evaluating Amazon's current situation.

    One interpretation of Amazon's status, framed by the losses it has been suffering, is that, "for all its heft, (it) is starting to lose momentum. It was rejected by some customers who were put off by its acrimonious dispute with the publisher Hachette over e-books, while others found its prices less compelling than they once were.

    "But few things about the retailer are ever clear-cut, so here is another interpretation: Amazon is intentionally cannibalizing some major product lines — offering free or nearly free music, video and e-books — to draw tens of millions of people into its ecosystem.

    "Far from being weak, Amazon in this view is so strong that it is disrupting not only other retailers but also itself, knowingly and eagerly, as it seeks to leverage its powerful e-commerce operation to become a retail and entertainment colossus. It wants to sell devices, entertainment and services as well as basics like milk and toilet paper."

    It is all a matter of interpretation, and you can read the entire story here.

    One quick note … it is worth mentioning that CNBC is reporting that Moody's Investors Service "cut its outlook on from 'stable' to 'negative' on Monday, prompted by the online retailer's announcement that it was issuing new debt … The size of Amazon's new senior unsecured notes is yet to be determined, said Moody's Vice President Charlie O'Shea in a release. It is the agency's expectation that the funds will be used for corporate purposes that will support growth initiatives, rather than for shareholder returns."
    KC's View:

    Published on: December 2, 2014

    • FTI Consulting, which describes itself as an enterprise value advisory firm, is out with a study projecting that "2014 online sales will hit $300 billion, rising to $335 billion next year and $512 billion by 2020 … despite sluggish retail sales over the past year, FTI Consulting's Retail & Consumer Product experts believe online sales will continue to grow at a double-digit rate for the next several years."

    The report goes on to say that "the online channel's share of total retail sales (excluding autos and gasoline) is now approaching 11 percent compared with 7.4 percent in 2010. The online channel also accounts for approximately 15 percent of General Merchandise, Apparel and Accessories, Furniture and Other Sales category spending during the holiday season. FTI Consulting believes that nearly three-quarters of the growth in sales will accrue to the online channel. The continued momentum of the online channel is led by mobile devices, which are today a driving force in holiday shopping."
    KC's View:

    Published on: December 2, 2014

    FierceRetail reports that Walmart "kicked off Cyber Week on Saturday after the store's highest three-day stretch of online traffic and orders of all time over Thanksgiving Day, Black Friday and Saturday. Though traditionally a day for online deals, Walmart announced an expansion of its Cyber Monday deals to include more than 100 items that can be ordered online for same-day pickup in stores." Store pickup of online orders reportedly doubled on the first day of the promotion over a year ago.

    In addition, the story says, "At Walmart, mobile shopping dominated online sales over the Black Friday weekend, accounting for more than 70 percent of traffic to Traffic from the retailer's app grew fastest. Between Thanksgiving through Saturday, traffic from the Walmart app increased more than four times versus the same period last year."

    Reuters reports that Walmart is laying off 250 employees from its Chinese business, "as the retailer moves to restructure its business, contain costs and improve slumping sales in the country … (Walmart) is closing its northern regional office in the city of Dalian and is consolidating its management structure."

    Walmart, which has 400 stores in China, said that it still plans to open nine new stores there this year, as well as one new distribution center.
    KC's View:

    Published on: December 2, 2014

    Bloomberg reports that Tesco CEO Dave Lewis has assumed direct responsibility for the company's core UK business "as the British retailer seeks to recover from the fallout of overstated earnings estimates.

    "Lewis will take over running the unit on an interim basis from Robin Terrell, who had been in charge of the business since the company in September divulged the accounting irregularities."
    KC's View:

    Published on: December 2, 2014

    Yesterday's Wake-Up Call cited two New York Times stories that I thought taught an interesting lesson. One had to do with how movie theaters are seeking new ways to attract customers (like undulating seats, scent machines and 270-degree screens) to compensate for the fact that young people simply don't go to the movies like they used to.

    Part of the reason is that they have options like Netflix, which was the subject of the other Times story that examined how its entire global strategy - including spending hundreds of millions of dollars on original content - is keyed to getting people to stay home.

    I commented, in part:

    It is very simple, in my view. Successful consumer-driven businesses have to provide unique content in a compelling and differentiated environment. Do that, and consumers will come. Be a "me, too" business, and people will find other places to spend their money.

    One other thing. I'm willing to go on record right now as saying that movie theater companies are going to have a better 2015 in terms of box office receipts than they experienced this year.

    The reason has nothing to do with undulating seats, scent machines and 270-degree screens.

    Nope, it has to do with a little movie coming out next year called "Star Wars: The Force Awakens."

    Because differentiated content is the key to differentiated success.

    I got a fascinating email from Gerry Lopez, who for the purposes of this email should be identified as the CEO of AMC Theaters:

    I completely agree with your point on content.  Totally.  It would be silly, and impossible, to argue otherwise.  The evidence is overwhelming in this regard.  Some of those alternatives that younger folks are choosing to spend their time on are, make no mistake, all about content.  Case in point: video games.  They may have, at one point, been about technology.  today... all about content … in fact, content the user controls, which we can't (yet, anyway) say about movies.

    We call it "the experience".  More specifically, the customer experience when the movie going. Is the theatre clean?  Are the chairs comfortable?  Is the popcorn warm and the Coke cold?  Is parking convenient?  The list goes on, and it starts even before the customers arrive at the theatre... how convenient / easy were showtimes to find and tickets to get?

    Combined, great content and a great experience make the only case we have for relevance.  and, at the end of the day, that's the holy grail... we have to stay relevant.

    To stay relevant, at AMC, we have embarked on a significant push to improve the guest experience.  we have five strategic action fronts to that effect:  a) comfort and convenience;  b) enhanced food & beverage;  c) guest engagement & loyalty;  d) premium sight and sound;  and e) targeted programming.

    The most notable of these, so far, is a) comfort and convenience.  this is what has led us to fully remodel almost 50 buildings and 550 screens with plush, fully adjustable, electric recliners, not to mention re-vamped lobbies, bathrooms, box offices and in most cases, full service bars. Those all address comfort, and we've also tackled convenience:  today our showtimes and tickets are available on more websites than ever before.  Reserved seating is being rolled out across the circuit.  I'm sure you saw the "Unlimited Ticket" we put in place for Interstellar.

    The impact?  In those 550 screens, the attendance gains this year are in the 50% range.  That's up 50% year-on-year for those 50 buildings, this at a time when the industry is down mid to high single digits.  There is in the neighborhood of a 60-point swing between the industry and where these theaters are as a group.  That's attendance and Box Office, never mind revenues and profits, but you can imagine what happens there when suddenly 50% more human beings are coming through the front door.

    Why those results?  Because we're relevant.  Those kinds of gains can not be achieved if we're not bringing along all segments of our audience.  All segments.  Focusing on a well laid out strategy, executed relentlessly, spearheaded by comfort and convenience, has helped up build relevance with all segments.

    All of which sounds pretty close to what a lot of customer-facing businesses need to do.

    FYI…I'm a big AMC customer. I probably see 35-40 movies a year, and the majority of the time I go to the AMC/Loew's theaters in Port Chester, NY.

    From another reader on the same subject:

    I think one of the obvious issues for the decline in movie attendance, besides the fact there have been too may re-treads of old movies/themes, is the simple fact that the prices being charges are too high. When you factor in the ridiculous prices being charged for a glass of pop and a bag of popcorn (which cost only pennies to make), it is costing $40+ to get two tickets, a bag of popcorn and a couple of pops to go see a 1 ½ - 2 hr movie – as much as going out to dinner. If you want to throw in dinner and a movie, I think it has gotten to a point of simply being more than a lot of people want to pay, especially when there are so many other options, like Redbox or Netflix.

    True, prices are up. I guess I pay about $12.50 per ticket … and while that's a lot more than what it cost when I was young, I think it is fair to say that gasoline, books, clothing, and pretty much everything else costs more, too. When the movie is good, the $12.50 is a bargain. When the movie is lousy, not so much.

    My other lead piece yesterday was about how Black Friday was less busy, presumably because retailers have turned the day after Thanksgiving sales into a week-long or even month-long event. One MNB user wrote:

    All the drops in TG Black Friday and cyber Monday are due to the Millennials watching more digital movies and shows and the Boomers going to the movies?

    Not sure that's exactly what I said.

    Yesterday, I also took note of a report about how Meredith Corporation is bringing out a new quarterly magazine, Eat This, Not That! that is based on the longtime column in Men's Health magazine, which features articles on topics like recipes to maximize nutrition and weight-loss impact and a guide for making smart decisions when dining at well-known restaurants."

    I commented:

    Because what the world really needs is another magazine. Not to mention another diet-oriented magazine.

    Which led MNB user Dean Balsamo to write:

    For someone like yourself who relies on  print-even if electronically delivered and who has such a strong love of movies- it was surprising to hear you take such a cheap at another vehicle for printed information.

    Should we stop making movies about subjects that have already been covered in movies:  American Revolution, WW 1 and 2, Korean War, Vietnam War, anything having to do with rape, relations between different races, religions, political systems, cab drivers, gangs in New York, Chicago, Mexico City….., any kind of love story between men and women, men and men , women and women, space travel, astronauts who get lost, die, rescued in space…

    Maybe you like many others subscribe to the notion that the Web has all but destroyed the magazine industry and that publishing new magazines is futile waste of time, money and the paper to print it.

    Yet people still do it. Why?

    Your comment suggests that we’ve learned all we can about diet and implies anything else relating to the mission magazines have-the dissemination of knowledge, stimulation of discussion and controversy (remember the general fired in Afghanistan over comments he made or the Boston bomber cover in Rolling Stone?), and contribution to a store’s sales-even same store comps-when the selection of magazines - tailored to the retailer’s clientele-drives sales on the topics and products featured in magazines devoted to food for instance-and when those magazines with the higher cover prices sell-and they do.

    You yourself are constantly presenting links to or commenting on articles you find talking about the need for retailers to delve deeper in the mysteries of consumer behavior, the buying habits of different generations and so on. If no one thought they could do a magazine (or anything else) better by bringing so new insight or approach-where would we’d be? How would new approaches come about?

    And that’s on macro level. What about the changes and the things the people doing this magazine will go through? What will their experiences with this project do for future endeavors they might be involved with?

    Since when has human society felt it had learned everything that had to be learned, said everything that had to be said, said and presented everything in some definitive way eliminating the need for anyone else to try their hand, put their own voice out there, tried their hand at disseminating information in their own style?

    Why design and build new cars, appliances, write new newspaper articles about the same subject of topical interest, or even do another email newsletter?


    I was really just being a wisenheimer.

    Maybe I was being a little glib, though I'm also thinking that maybe I hit a nerve.
    KC's View:

    Published on: December 2, 2014

    In Monday Night Football, the Miami Dolphins defeated the (pathetic) NY Jets 16-13.
    KC's View: