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Apple Competition Corporate America Creativity ECommerce Leadership Management Positioning Retail Small Business Strategy Wal-Mart

Is your business stuck in the Dark Ages?

There’s just nothing better than making some grumpy old business obsolete.

This week’s grumpy old business is the Associated Press (AP).

Why? Because they have decided to start charging $2.50 per word when you excerpt their story (even though such excerpts are permitted under Fair Use as long as the excerpt is of reasonable length).

Now, to be sure, if you use the entire story, you should pay for it. You’re being lazy, or you simply like their piece enough that you should license it.

On the other hand, we’re talking about brief excerpts of stories where the original is not only cited, but the reader is invited to go see it in its original location.

Yes, that’s right. They want to charge bloggers for sending viewers to their websites. Anyone with half a brain who is excerpting an article and commenting on it is going to link to the story as a form of proof, not to mention as a courtesy to the reader.

Big, old, crusty media simply doesn’t get it. They are so scared that we don’t need them anymore, when the truth is that the things they do make many people not WANT them anymore.

I can’t remember the last time I watched the national news at 5pm or 6pm or whatever.

Is your business stuck in that old world?

Has your business model changed in the last 5 years?

Has your business model been put out to pasture in the last 5 years?

Some examples to get your attention:

  • 5 years ago, iTunes was a joke in a RIAA board room, much less at Best Buy, Amazon and Wal-Mart. Today, it sells more retail music (In any format, on any medium) than any store of any kind.
  • 5 years ago, Skype was a joke in an AT&T board room. Today, it’s not unusual to see 11 to 12 million people using it simultaneously. It was valuable enough that eBay bought it for $2.6 Billion. Let me remind you that people who have a $3 billion in spare cash are not the types to just waste it on fast women, fast horses and fast cars.
  • 5 years ago, Lifehacker.com didn’t exist. In fact, it wouldn’t exist for 2 more years. Now, it’s in the top 10 most viewed sites on the Internet. In only 3 years.
  • 5 years ago, Amazon.com was about to report their second-ever profitable quarter, about $9MM, after 9 years in business. Last quarter (1Q2008), they made $143MM in profit.
  • 5 years ago, Wimbledon was something you watched pre-recorded and delayed. Usually you see pieces of all but one or two matches, and someone else chose those matches. Today, you can watch EVERY match on streaming video for $25.

So, with those things under your belt…

  • 5 years ago, did you get new clients the same way you do now?
  • 5 years ago, did you communicate with clients the same way you do now?
  • 5 years ago, what else was the same in your business as it is now?

You decide, item by item, if that’s a good thing. And then do something about it. Some things probably don’t need to change. But everything is worth a look.

If five business-savvy 27 year olds bought your business, what would they rip out and replace? Besides the coffee machine, that is.

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China Corporate America ECommerce Marketing Pricing Small Business Strategy Wal-Mart

Fuel Surcharges: Another reason to buy local

My CFO friend does that sort of financial wizardry for a large international importer.

Last weekend, she told me she had been informed by her shipping vendors that the fuel surcharge on seagoing containers was going up at least 30%, to about $1200 for a large container.

That got me to thinking about a number of issues, so I started digging around.

The Westbound Transpacific Stabilization Agreement (WTSA) covers oceangoing freight in the Pacific in and out of the Oakland area. They recently announced a $600 per container increase, which is a brief resting place before Oct 1’s full “floating” charges take effect.

Up in Canada, the news is the same. The Canada Transpacific Stabilization Agreement (doesn’t that sound benign?) recently set their fuel surcharge at $1,260 for a 45 foot container.

There is similar news elsewhere in the industry.

A 45 foot container holds 3000 cubic feet of “stuff” (that’s 86 cubic meters for my overseas readers).

Let’s look at the impact of these fees on imported goods that your store might be selling or consuming.

Let’s say you have a 40″ big screen HDTV. Figure the box to be 2 feet thick, 4 feet tall and 5 feet long (all wild guesses). That’s 40 cubic feet, or about 75 TVs per container.

It might be more or less, but my box size guesstimate will probably be made up for by the space used by pallets and the like. The math isn’t the point.

If 75 televisions have to split that $1,260 fee, then each TV will go up about $20. Or should.

What will the increase be when it gets to you, the retailer? Do the math before you sign that contract.

If you sell imported cars, figure 4 cars per 40 foot container. That adds $315 per car to your cost, if you’re lucky.

It isn’t just ocean-going freight.

You need to be looking at this elsewhere. A simple example: Does a $1 Fedex or UPS fuel surcharge make sense on a 10 ounce overnight envelope? Call your Fedex/UPS sales rep and see what kind of flexibility they offer, if you do the kind of volume that would make this substantial to you.

My CFO friend tells me to expect some things to rise 30%, even though the fee increases don’t appear to reflect that size of increase in the cost of your goods. October’s increase will push you again.

It’s easy to watch this sort of news on CNN or MSNBC and think it doesn’t impact you – but it does. I suggest paying closer attention to it, particularly if you do a lot of international shipping. Maybe that’s another reason why Ian doesn’t buy Chinese.

On Monday, we’ll hit a lot closer to home on these fuel surcharges. And I might even make you mad.

In the meantime, take a long hard look at the kind of value you’re delivering now. Consider whether those increasing international shipping charges might just be better spent elsewhere – like on locally produced goods.

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Amazon Apple Competition Creativity Marketing Politics Positioning Public Relations Small Business Social Media Wal-Mart Web 2.0

Obama and Clinton: “We’re so glad it’s over”

The Democratic Presidential candidates (and for that matter, McCain) are so very glad that it’s finally over.

The pain of weekly battles on the television, in front of huge crowds and in living rooms all over the country is mercifully, finally over.

No, silly, not the Democratic primary elections. That’s still going on.

I’m talking about American Idol.

Wednesday night, David Cook was announced as the American Idol winner.

The 21st century Donny Osmond, David Archuleta, is the American Idol runner-up.

Clearly not the kinds of guys to ignore opportunity, Archuleta and Cook are now immortalized by new Guitar Hero commercials that educates a new generation about the classic Risky Business Tom Cruise Bob Seger underwear lip sync scene.

Archuleta’s Guitar Hero act:

Yet amid the red carpet celebrity love fest at the Nokia Theater, amazingly, there are lessons for the small business owner.

Several of them, in fact.

A lesson about the power of social media

Is 96 million American Idol votes cast in 24 hours social enough for you?

That’s only 4 million less than the total number of votes cast for the Bush vs. Kerry Presidential election in 2000, and it’s 9 million more than voted in the 1996 Clinton vs. Dole Presidential election.

A few more startling numbers:

  • More people voted for American Idol winner David Cook than voted for Bill Clinton in 1996.
  • More people voted for David Cook than voted for either George Bush *or* Al Gore in 2000.
  • More people voted for runner-up David Archuleta than voted for Bob Dole in 1996.

Social media is personal (note the title of the blog).

A lesson about involvement.

Find a way to involve your customers more deeply in your business.

Simon may get to chew up wanna-be American Idols and spit them out – but the voters with their text messages, toll-free calls and web votes are the ones who were brilliantly kept involved by the show’s marketing and structure/design.

Of course, there’s a lesson about the lack of vision of the music industry, except for 3 months on a TV show where customers get to make a choice about what to listen to next and where the show (business) goes next.

We’ve talked about iTunes rise to #1 in retail music sales (CD or online), and how they’ve knocked off Amazon, Best Buy and even Wal-Mart. A website and a music player software sells more music than 4000+ big box stores.

Same lesson. Involvement is personal.

American Idol works because of involvement. Choice. Interaction. And…The psychology behind making a superstar (or at least, a hero) out of a nobody/underdog.

Where’s the choice for your clients?

How are you providing your clientèle with choice, convenience, interaction and control over the experience they have when doing business with you? I don’t mean give them the keys, but you can give them a far more interactive experience without losing the control every small business owner wants.

Study the methods used by American Idol. Celebrity. Interaction. Technology. Choice. Convenience (3 ways to vote – at least).

96 million people, 1/3rd of the United States population just spent 3 months scheduling their evenings around 1 TV show, living and dying 2 nights a week (sometimes more) with American Idol. Can’t get much more personal than that.

How are you going to get their attention today?

On Thursday, American Idol will be the subject du jour at corporate water coolers, bars, blogs and elsewhere.

I’ll bet Barack and Hillary are really looking forward to Friday.

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Amazon Apple Competition Corporate America Microsoft Retail Small Business Wal-Mart yahoo

Change that your business can believe in

In the midst of conversation about change (hard to avoid that word these days), the “kings” of business came to mind.

Names like Woolworth, Sears, Wal-Mart, Barnes and Noble. Technologies like fax, Palm Pilot, Walkman and Yahoo.

Barack Obama Nashua Rally 37
photo credit: No. Nein

No one could beat Woolworth … until Sears came along.

No one could possibly rival Sears … until K-Mart came along (and later…Wal-Mart).

No one could possibly rival Waldenbooks … until Barnes & Noble came along (and later, Amazon).

No one could break into the big three television networks and become the leader in their bread and butter – the news …until CNN came along (and later, Fox News and MSNBC).

Nothing could possibly rival the fax machine … until e-mail came along? And then RSS, Twitter and blogs.

Nothing could possibly rival the Palm Pilot … until Windows mobile Smartphones and the Blackberry came along.

Nothing could possibly rival the Walkman … until the iPod came along?

The music stores were indestructible, until Wal-Mart came along. Recently, iTunes replaced Wal-Mart at the top of retail music sales.

Yahoo, once the 500 lb gorilla in the internet world, is now garage sale material in the eyes of Microsoft and worse, Wall Street. One thing that is consistent about business is constant change. The power of the internet to force that change is even stronger.

But it isn’t just about big monster Fortune 500 and Inc 500 businesses. It happens in small business too. The long-time leader in the studio software business when I entered it was a DOS program… as late as 1998! A few years later, our software and others in the market had that owner moving into real estate sales. I’m sure you can look around in your market and tell similar stories.

Break the mold
photo credit: paper by design

When Wal-Mart started up, you can bet that Sears thought “Who do those guys think they are???” even though they had made Woolworth feel that way only a few decades earlier.

Rain Man was right about K-Mart, but it still took Wal-Mart to put them in their rightful place.

Do you think ABC/NBC/CBS felt they were unbeatable? Palm? Sony and their Walkman?

Complacency is a great weapon for an upstart newcomer. Complacency is dangerous, often deadly. Kmart is the role model for the “totally complacent, dont get it, have no clue” business.

Are you the big cheese in your business niche? Getting complacent, not adjusting to change (in fact, not PURSUING change) and (here it comes), not pursuing the slight edge CONSTANTLY is what keeps you out of trouble and forces your competition to constantly play catch up.

Yesterday, I was talking with a programmer friend about some new mobile technology. He said “My clients never asked me for that stuff.”

I told him it was his job to show his clients why they need to use the technology – if it really does offer them an edge.

If they have to ask for the new tool, it’s likely because a competitor is already there. Someone else is teaching clients about new tools in that market. That’s the player you want to be.

Dont play catch up. Be the lead dog with constant change, constant improvement and pursuit of the slight edge.

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Competition Corporate America Marketing Public Relations Retail Small Business Wal-Mart

5 ways to entice customers to spend their tax rebate check at your small business

The news is full of stories talking about the things businesses are doing to try and get their paws on your U.S. Federal tax rebate check.

Wal-Mart is cashing the Federal tax rebate checks for free, making it easy to spend the money in their store.

five dollars photo credit: skippy13

Kroger, Sears and others are enticing consumers to sign checks over to them, offering a 10% bonus on the face value of the check to do so. Sears shoppers get the bonus when they convert the check into a Sears or K-Mart gift card.

So how do you compete with that?

Here are 5 ways to compete with big box retailers who want to keep your clients’ tax rebate check all to themselves.

  • Have a special tax rebate shopping event. Perhaps once a month from May through the summer until most people have their checks. Really want to push it? Make the ticket to gain entry to event be the check itself.
  • Offer a big box retail type discount, but ONLY for purchases made with the tax check. You’ll note that I don’t talk much about discounts here, but this is a special circumstance, not a weekly habit.
  • Position the purchase as an investment. For example, if you own a home improvement or hardware store, using the tax rebate check as an investment in energy efficiency for your home is a good play. You might even combine this with the tax rebate shopping event, call in some manufacturer’s reps and make it a big deal.
  • Focus on the transaction size. The checks are in various amounts, typically increments of $300. You can assemble a $300 catalog, a $600 catalog, and a $1200 catalog, for example. If you have information on family sizes, mail a “tax rebate gift catalog” of the appropriate price level to families of each size. People who get a $300 check in the mail aren’t going to be looking for “What costs $125?” Instead, they’ll be looking at what they can get for $300. Think about it. You do the same thing when you get a gift card as a present.
  • Offer to cash the tax check – yes, it’s a simple, obvious ploy to get them into your store. Big retail wouldn’t be doing it again if it didn’t work back in 2003. Note that at times your bank will downgrade your account if they find out you are cashing consumer checks (ie: like a pawn shop or money store), so be sure to consult them and make sure they understand it’s a one time deal).
  • In your marketing for the 5 items above, encourage consumers to spend the check locally – even if it isn’t in your store. Economic stimulus, the alleged reason for the checks, is going to be far more impactful when spent locally, rather than at a big box retailer. You could even put together some co-op advertising with the other local stores in your area – and even in your market niche.

Yeah, that’s 6 strategies, I figured you deserved a bonus. And I’ll be happy to cash your tax rebate check:)

What others are saying about the rebate:

Tax rebates dates
Tax rebate checks coming
Make Money on Your Tax Rebate Stimulus Check II
Printed Gift Cards Target Tax Rebate

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Amazon Apple ECommerce Retail Technology Wal-Mart

David Apple wastes no time, passes Goliath Wal-Mart in music sales

Just a few days ago, I was talking about iTunes passing Amazon and Best Buy in 2007 total music sales.

That’s all kinds – CD and downloaded music.

Didn’t take long for that to become old news. On Tuesday, a leaked Apple memo shows that January 2008 music industry numbers from NPD indicates that Apple has now passed Wal-Mart in total music sales (and remember, this includes Walmart.com’s music store).

Goliath has an Achilles heel. You simply have to look a little harder to find it.

Woolworth had one. Sears had one. K-Mart had one. Now, it’s become clear that Wal-Mart has one as well.

How closely have you looked for cracks in the armor of your market’s Goliath?

If YOU are the Goliath in your market – what would you attack, if you were David?

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Montana Retail Wal-Mart

Wal-Mart bails out of Hamilton, won’t build SuperCenter

According to a story in this week’s Bitterroot Star, Wal-Mart has withdrawn their SuperCenter project in Hamilton.

Per the Greg Lemon story, company officials indicated that pulling out of Hamilton was due to a company-wide restructuring and slowdown of Wal-Mart SuperCenter expansion plans.

“We’re just taking a step back and kind of withdrawing for now.” – Wal-Mart spokesman, Josh Phair

Perhaps they’ll be back, perhaps not.

Regardless of what Wal-Mart does, it’s clear that Hamilton-area retailers have a little more time to make their businesses…personal. Let’s see what they do with it.

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Apple Competition Corporate America Entrepreneurs McDonalds Media Retail Small Business Technology Wal-Mart

Is your business ready for disruptive events?

No, I don’t mean the collapse of the global economy, oil prices over $150 a barrel, or even worse, Starbucks closing for three hours.

I mean truly disruptive things in your business. The easy example is fuel.

Increased fuel prices are similarly disruptive to a multitude of businesses, but that has been analyzed to death so I’ll leave it alone.

Instead, let’s look at apples.

A few years ago, McDonald’s started selling apple slices and some sort of caramel-like substance made of high fructose corn syrup and caramel coloring. And they started selling salads with apples in them. And a few other menu items have apples.

This all started at about the same time.

Almost overnight, McDonald’s became one of the largest, if not the largest, U.S. consumer of apples. Billions of apples are suddenly in play that were previously happily shipped to anyone who wanted them.

Disruptive, wouldn’t you say?

If you buy apples for your business, what just happened to your business model, much less your future?

If you sell apples, what just happened?

Now let’s look at Apple.

Late last month, the NPD Group announced that iTunes had passed Best Buy and had become the nation’s second largest retailer of music, only eight months after passing Amazon to become #3. That’s music in all forms, CD or otherwise. The only one selling more than iTunes is Wal-Mart, who has to be looking over their shoulder.

Wal-Mart looking over their shoulder. Bet you never thought you’d hear that. Course, neither did Woolworth or Sears.

Disruptive.

Certainly, the music industry has been in turmoil for years because they have their head stuck up where the sun doesn’t shine, but despite all that, think about how disruptive – even to Wal-Mart, Amazon and Best Buy – the iTunes model and implementation has been.

Finally, let’s look at corn.

The ethanol craze has turned farmers to corn (despite the fact that most grains are way up in market price). Despite the fact that other plants have proven to be more productive for ethanol creation, and easier on the farmland than corn, corn is the industry shining star for ethanol production.

Until you realize that this same corn is no longer going overseas to feed third world countries.

Until you realize that other crops are being supplanted (no pun intended) to plant corn – and again, many of those items either go overseas or cause fewer crops of other kinds to be planted, ergo the higher prices for wheat, etc.

Disruptive.

What kind of disruption could totally change your business? And perhaps more importantly, what kind of disruption can you be the architect of in your market?

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Blogging Management Wal-Mart

Wal-Mart Nation: Is anxiety over box stores taking over your life?

Brian Clark over at Copyblogger called out bloggers today, asking them to take a headline from the metrosexual magazine “Details” and rewrite it (along with a blog post) for something that works on your blog.

He did this not long ago with Cosmopolitan headlines, and that was fruitful for anyone who writes their own blog, ad copy, etc.

I chose “Worry Nation: Is anxiety taking over your life?” and rewrote it to the subject you see above re: Wal-Mart.

Worrying about box stores is like worrying about that giant meteorite that is going to strike the Earth someday. There’s not a damned thing you can do about either one.

If you are a small business owner in a town that is expecting to get a new box store, DO NOT waste your valuable time, energy and brain cells doing anything other than working to position your business to take advantage of the new store.

For example, if you are a small retailer in Hamilton MT dreading the incoming Wal-Mart Superstore groundbreaking this summer, fighting it is most likely fruitless given the zoning situation in Montana.

Instead, use all that hand-wringing, forehead-wrinkling, can’t-sleep-at-night energy to figure out what products to pitch, what products to upgrade (Wal-Mart doesn’t do premium, remember?) and how to make sure that their arrival is a boon to your business.

Having a Wal-Mart next to your store is like having an inbound link from WSJ.com. Traffic, baby. Is it possible for you to move your store into the most advantageous place next to the new Wal-Mart? Or is it better to open a new location in addition to your current one on the main shopping district?

Let Wal-Mart have the price shoppers. Let everyone else worry about them. Spend your time being strategic, planning BEFORE they arrive and take advantage of every possible bit of publicity to draw attention (and buyers) to your store.

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Competition Corporate America Customer service Technology Wal-Mart

Small Retailers, You Gotta LOVE Self-Checkout at Wal-Mart and Costco

selfcheckout.jpgAccording to a September 2007 Eweek.com retail update, consumers spent $137 billion at self-checkout stands in 2006, mostly at superstore-type businesses (Wal-Mart, Costco, etc).

That’s an increase of 24 percent from the year before. At first glance, it seems like a success in the making.

One of the reasons they feel that self-checkout use is growing is familiarity, as noted in this quote:

The survey broke consumers down into geographic and income categories, finding that Southern consumers are slightly more inclined to embraced self-checkout, as are consumers earning more than $100,000 a year. The report theorizes that higher-income consumers travel more and are therefore exposed to self-ticketing kiosks at train stations and airports. In this case, the theory goes, familiarity breeds acceptance.

A lot of possible conclusions were left out of this theory. I think they simply chose the one that they wanted to hear.

I think what big retail won’t admit is the real reason why this growth is occurring:

Fewer and fewer people have the patience to deal with their often surly, undertrained checkout staff and their understaffed checkout area. As a result, they are willing to annoy themselves by using these machines just to get the heck out of the store more quickly.

Isn’t that a wonderful mindset for your customer to have as they leave your store? Positively makes you want to go back next week, doesn’t it?

I admit it – I use them. I use them because there is always a line – a line that is longer than it should be (5-6-7 shoppers or more in each line).

Thankfully, these sophisticated self-checkout machines are rather expensive, and probably more than any small retail or service business would spend on them. That’s a good thing, so you won’t be tempted to buy one.

Let Wal-Mart and Costco keep their self-checkouts. Your customers’ last thoughts should be “Could you believe how nice that store was?”, not “Man, I’m glad THAT’S over.”