business news in context, analysis with attitude

In yesterday’s MNB, we reported on gender marketing and the varying efforts of Home Depot and Lowe’s, and quite frankly were fairly negative on the whole DIY experience.

MNB user Dan Raftery, of Prime Consulting Group, wrote to set us straight:

“Although the Home Depot near you has rubbed you the wrong way and although I could tell you about many of HD's mis-steps, let me simply relate a few observations from my trip to the Gurnee IL Home Depot yesterday (Sunday).

“My shopping list included a sabre saw and a few hardware items. The number of options for the saw were a bit staggering. As I browsed, an irate customer brought the section clerk over to complain about a sale sign on a saw. He took the wrong one to the checkout and it was $20 more than he thought it should be, based on the sign. The guy was clearly a doofus, the sign was fine but the clerk gave him the lower price. Customer service lesson #1: Doofus customers are always right too, maybe more so.

“After they sauntered off, I was still pondering the choices, and another clerk asked if he could help. He stayed with me, answering my questions, until I had a selection in my cart. Customer service lesson #2: Consultative selling closes the sale.

“Next to one of the items on my list I discovered adjustable folding saw horses. I never knew such beautiful things existed. Two went in my cart (+$40 to my bill). Pure impulse, and it wasn't a salty or savory snack or a beverage.

“On the way to my car, a pleasant young man wished me that old "Have a good day." I didn't know he was an employee until he started shagging carts. He didn't have to talk to me. He was dressed like everyone else and could have gone about this crappy part of his job (25 degrees) incognito. Customer service lesson #3: Be nice, even if you're miserable.

“Major retailer big box lesson: Its not the size of the store, its how you train the employees. Since the first European hypermarkets appeared in the US, research has shown that shoppers approach big stores in smaller, more manageable segments. Heck, they do that in Europe too. That's the whole idea behind the "store within a store" concept. Many sections need available, friendly experts to help shoppers spend more than just their time in the aisle.”

Points taken. And we think those lessons are fairly applicable to almost every forma of retailing.

Also on the subject of Home Depot, MNB user Bob Vereen wrote:

“I am a retired trade magazine editor, still doing some free lance writing in my old field, hardware/home centers, so have been researching Home Depot's current situation--checking with independent retailers who compete with Depot as well as vendors supplying them.

“Most retailers now feel Depot is less competition than under the founders' leadership--service is poorer, prices are higher, housekeeping no better and often worse.

“Vendors tell me that on low-cost items, Depot is now more than doubling cost, which means that even two-step distribution (retailers buying from wholesalers) can be competitive. I thought Depot was supposed to be an advocate of Everyday Low Pricing.

“Almost uniformly, vendors say Lowe’s is the sharper operator today in almost every way.”

We mentioned in passing yesterday that watching CNN over the weekend made us want to hide under the bed and wait for current events to pass,

One MNB user made a helpful suggestion:

“Maybe you should switch to Fox instead of CNN!”

Actually, we’re just hoping that spring training games begin soon so we can avoid the news altogether.

More on our discussion of the merits of loyalty marketing. MNB user Ken Robb, who used to be with Dick’s Supermarkets and was on the leading edge of such programs, wrote:

“It appears to me that those who are irritated by supermarket card programs are shopping in supermarkets that have cards but do not have card programs...those retailers with cards that offer little or nothing to the customer. Perhaps they have not experienced shopping with a retailer on the cutting edge of CRM.

“We may or may not have been on the cutting edge...but there were no coupons, no purchase requirements, and no limits on our advertised prices...ever. Our best customers, those who spent at or above the average weekly transaction, received paperless coupon offers that were unique to their household, targeted against their purchase history, and were automatically deducted from their receipt at the checkout. They also received higher check cashing limits, personal charge privileges, and free home delivery when they needed it...and every so often, we would surprise them with a sincere thank you or an unexpected customer service.

“For sure, we had our detractors, those customers who didn't like our card program. For the most part, they were customers who spent well below the average, and more often than not, divided their spending between us and our competitors, not really spending enough at any store to be considered a "loyal customer" to anyone. In focus groups, these customers complained that they didn't get the price discounts and benefits that their friends and relatives did. That's right. But it would have been different if they would have changed their shopping behavior.

“Our best customers liked our program. Indeed, we had (and they still have) customers who memorized their card numbers, and didn't carry their card with them. I've even had checkout operators who have memorized the first few digits of my card number. And then, I have seen many customers take out their card, and tell a new checkout operator that they had their card since the beginning of our program, asking them, "...have you seen one of card is one of the originals...see how worn it is...?" Amazing.”

A pretty good rule of thumb when it comes to loyalty marketing programs seems to be that if there is a coupon involved, it may not actually be a loyalty marketing program, but a glorified discount program. Which is something else entirely.

Yesterday, we reported that In an effort to combat eroding sales and market share across the globe, not to mention an image for poor quality food and service, McDonald's is making an effort to improve its marketing efforts, telling its various agencies that it will evaluate campaigns not just on effectiveness, but on likeability.

One MNB user responded:

“We think McDonald's has taken their eye off the ball. What has made them profitable and famous in the past is an average quality of food, but delivered in a fun atmosphere for kids. I don't know too many adults who go to McDonald's because they like it. They go because their kids like it. And from about age 2-12 you can bet your kids are going to ask to go there. The only positive for adults was that they could let their kids run (to the play area) and they could sit and have a cup of coffee and talk.

“Having worked in the past in fast food (Wendy's), each restaurant that was successful created their own unique niche. Burger King was char-broiled, McDonald's was for kids and if you had grown up you went to Wendy's.

“Now with the proliferation of fast food and fast casual opportunities, it's even more important for McDonald's to do what they do best. And that is provide kid sized meals with prizes, a playground, and something that an adult can stomach while they are there.

“Even though I'm in the ad biz, I don't think changing their advertising is what will bring them back to their old glory.. (Even if they can get back with all the competition out there today).”

Another MNB user wrote:

“McDonalds just re-built their store in Broadripple (Indianapolis, IN). It has a player Baby Grand piano and a fireplace, plus offers additional menu items like croissant sandwiches, etc. The piano is occasionally provided a real person to play or a patron may play at will.”

Maybe, in certain cases, Mickey D’s is getting the message…but they still have to improve the overall food offering.

Yesterday, we reported that the US Department of Labor reports that the nation's unemployment rate tumbled to a four-month low of 5.7 percent, and that the number of workers on US payrolls rose 143,000, following a 156,000 decline in December.

Our comment was that while there are still the wild cards of possible war and potential terrorist attacks, we're starting to see more positive economic stories lately. Which prompted the following email from a loyal member of the MNB community:

“A Content Guy I know said just 2 months ago, "No matter what the spin, the economy ain't pretty." Nothing meaningful has changed in 2 months.”

Okay, maybe we were having a brief flash of qualified optimism. Sorry about that.
KC's View: