Target: Targeting Canada

Target will officially open its Canadian stores in just a few months. 

Instead of a traditional ad blitz, Target is unleashing an avalanche of initiatives to build goodwill and positive brand buzz, all across Canada.

For example, the company's holiday caravan bus recently left Toronto for a high profile coast-to-coast tour. 

Its first stop in Halifax will feature free special events and product sampling . . . and then the bus rolls westward for more than a dozen stops. "Our goal is to create a fun, family-friendly experience to celebrate the holiday season and the caravan enables us to make stops along the way," explains a Target spokesperson.

Showcasing corporate citizenship, Target is asking its Canadian Facebook friends (430,000 strong) to vote for the causes and nonprofits to receive up to $1 million in donations, with timeline posts in French and English.

Finally, Target is seeking LEED environmental certification to demonstrate that its 124 stores are eco-friendly. The bulls' eye may be red and white, but Target knows many shoppers have an eye for green marketing as well.

Needless to say, Canadian retailers are watching Target carefully to see how this new competition will affect their customers.

Meanwhile, Target is saying "Joyeux Noël" and "Bonjour Canada" with personality as it readies for the grand openings in 2013.

Marketing Movie Rentals: Risk and Reward

With 35,000 bright red kiosks (not to mention 5 million Facebook likes), Redbox virtually rules America's on-the-spot DVD rental business now that Blockbuster has closed its US stores.

Redbox also has a deal with Verizon to offer monthly subscription access to streaming movies. Redbox CEO Paul Davis hints to Fast Company that curated content will be its point of differentiation: "I think there's a point where as consumers, I mean, do you really need 100,000 titles? I mean, really?"

Of course, market dynamics change day to day. When the NPD Group compiled the chart at right, just a few months ago, physical DVD rentals still dominated the market overall. The implication: Redbox should keep plugging in those free-standing kiosks wherever they can. Costly, but convenient for customers.

However, in a survey by ConsumerReports.org conducted a few weeks later, streaming was named the rental method of choice by most respondents, followed by DVD rental and then video-on-demand (VOD). Redbox's Verizon alliance would be critical in this situation.

Disney has tried and failed to gain traction in the streaming segment, one example of the risk in this hotbed of activity.

Netflix has been steadily building a massive library of DVDs and streaming movie content, following the CEO's long-term strategy of "grow membership, increase content, repeat." In other words, Netflix's direction conflicts with the Redbox idea about reaching a point where buyers simply have too many choices. Plus, Netflix lets buyers subscribe to streaming-only content or DVDs-by-mail, as they prefer--at least for now.

Amazon's latest test of monthly pricing for streaming movie content brings the price in line with Netflix's streaming-only subscription price and with Hulu's price. YouTube is testing on-demand rentals (streamed of course). The market is also seeing some experiments like the UK Domino's Pizza/Lionsgate movie rental streaming option being offered to buyers who order pizza.

Where is the market going? Which strategies will pay off? Tune in tomorrow.

Strategy or Execution? Both!

Booz & Co. asks the question Strategy or Execution: Which Is More Important? Its conclusion: You can't have good execution without good strategy. Strategy is a broad road map for driving decisions about which customers to serve and how. Apple's strategy is distinctly different than Samsung's strategy and from Microsoft's strategy. Amazon's strategy isn't the same as Macy's strategy, or Walgreen's strategy.

Still, as a practical matter, the best strategy in the world is useless if it can't be implemented or if it can't be implemented effectively (two different things). A Harvard Business Review article points out that companies need to look at how their managers and employees make decisions and are held accountable, not just at symptoms of poor execution such as out of control costs. Fix the underlying problems, and you'll be better able to transform strategy into reality.

In a recent interview with Fortune, Bank of America CEO John Stumpf tells Geoff Colvin: "We always say we could leave our strategic plan on an airplane, somebody could pick it up, and it wouldn't matter. It's all about execution." Well, in an industry like banking, his statement may have a lot of validity, but Bank of America also works hard at crafting its strategy and updating it as circumstances change. It's not just execution, clearly, that helps B of A compete.

In general, highly-trained managers may be excellent at strategy but unable to execute because the company resists changes needed to make the strategy work . . . or because they focus on the wrong things . . . or because the corporate culture is in conflict with the strategy. In the past, another reason for ineffective execution was that execs didn't properly track implementation of their plans. Those days are gone, thanks to key performance indicators and metrics.

When Adobe introduced tools for digital marketing, it started a campaign to dispel the mistaken idea that marketing lacks hard facts and figures for performance analysis. Now marketers can back up their projections and plans with solid data to connect the dots between good strategy and good execution. One without the other? Like a car without wheels--not going anywhere.

Marketing to Millennials: Value, Shared Experiences, Sustainability

One-third of the world's population can be classified as the Millennial generation (roughly, those born after 1980), according to recent research by Viacom. Not surprisingly, the economy stands out as an important factor affecting their use of credit cards and buying decisions in general. This segment has a unique attitude and perspective on the world, shaped by the economic turmoil of recent years plus their upbringing, their cultural backgrounds, and their life experiences.

As a result, marketers are targeting the Millennial generation with distinctive, value-rich products for their preferences, using quirky, nonconformist communications that avoid the hard sell (unless tinged with irony, of course). Even the shopping experience itself is different for this generation, often mobile or digital, often shared, and heavy on the search for local and/or unique "personality" products to express personal values.

Take the Chevy Spark, for instance, a sub-compact car that comes in eye-catching colors/designs (see above) and is also available with an electric motor. The car is affordable, the design grabs the eye, the size is just right for city driving and parking, and the gas efficiency makes sense for a Millennial buyer making a first or second new car purchase. This is not your grandpa's car--it's clearly a "now" model designed for tastes and preferences of the target market.

Then there's the market for travel services, such as airline tickets, lodgings, and tourism. Research presented at a travel industry meeting  shows that Millennials like to travel with friends and expect value for the money (not necessary budget, but value for the money). Unlike traditional "group tours," the goal is to have a shared experience, and sustainability is a major factor in many travel decisions made by this cohort.

Although some experts suggest that Millennials are anything but brand-loyal, remember that they're very open to trying new brands and products (no-brands included!) and like to share the results with friends. Any brand or product that makes the grade has a good chance of being in the consideration set next time around.

Marketing the Company via Its Museum

Company museums are a wonderful way to engage customers and their families, deepen knowledge of the company's heritage, and encourage loyalty. Plus, as The Economist points out, these museums can also teach employees about corporate culture, not to mention products of the past.

Here are a number to check out when you're out and about:

• Harley-Davidson Museum (Milwaukee)
• SPAM Museum (Austin, MN)
• Kohler Design Center (Kohler, WI)
• Mercedes-Benz World (Surrey, England)
• The World of Coca-Cola (Atlanta)

Happy 50th to Target, Walmart, and Kmart

Way back in 1962, three discount chains opened their first stores. Today, Walmart, Target, and Kmart are well known for their suburban discount stores filled with aisles and aisles of low-priced merchandise. Over time, this high-volume, low-price approach to retailing would reshape the entire industry and do a lot to reset consumers' expectations and buying patterns.

Target, a discount chain founded by the owners of Dayton's department store, opened its first store in the company's home state of Minnesota in 1962.

Why "Target" with a bulls' eye? "As a marksman's goal is to hit the center bulls-eye, the new store would do much the same in terms of retail goods, services, commitment to the community, price, value and overall experience," management explained. By 2000, the discount side had become so successful that the company was renamed Target.

Kmart was the brainchild of management at S.S. Kresge, a five-and-dime retailer. Eyeing the rise of discounting (and the changes that would ultimately doom five-and-dime stores), the company opened its first Kmart in Michigan in 1962.

Within four years, Kresge was operating 162 discount stores...and by 1977, the majority of the firm's revenues were coming from discounting, which is why the name was officially changed to Kmart in that year.

Sam Walton brought discount retailing to Arkansas in 1962 when he opened his first Wal-Mart store.

Five years later, the company had 24 stores and was growing rapidly.

Today, Walmart (no hyphen in the name any more) is the world's largest retailer and as controversial as it is innovative.

Will discount stores survive the Internet age? Or will they morph into showrooms where shoppers can examine merchandise and then click to buy online?

Small Business Saturday 2012: Shop Small

Saturday, November 24, is Small Business Saturday, a concept originated and promoted by American Express. The idea is to support small and local businesses during this very busy holiday shopping weekend. American Express provides free downloadable and customizable marketing materials plus campaign ideas to help small businesses reach out to shoppers. It also offers $25 credit to its cardholders for shopping local.

This is the 3d annual Small Business Saturday, and the Small Business Administration is only one of many organizations getting involved. Across the country, chambers of commerce are sponsoring special events, downtown merchants' groups and community organizations are hosting receptions parades, and newspapers are providing coverage to get the word out.

Already, the Small Business Saturday Facebook page has more than 3 million likes, the Twitter account has nearly 11,000 followers, and a YouTube page (autogenerated by YouTube) has a few dozen videos related to this event.

So between Black Friday and Cyber Monday, sandwich in a bit of shopping at an independently-owned retailer or business near you.

Competitive Pricing, Hour by Hour

With the holiday buying season almost in full swing, retailers recognize that consumers are doing more comparison shopping than ever before.

Shopping search engines like Nextag are still popular, of course, and offer marketing opportunities for retailers to reach consumers who are trying to make a buying decision.

Retailers are using sophisticated technology from Mercent and other firms to monitor competitors' prices and, if necessary, adjust their own prices--daily, hourly, or whatever it takes to remain in contention.*

To quote Mercent's CEO: “If your competitor re-prices daily and you do it hourly, for 23 hours a day you are in position to own the [purchase] decision.”

Stores are also price-conscious, keeping an eye on their competitors' tags. Nebraska Furniture Mart (above), owned by super-investor Warren Buffett's Berkshire Hathaway, keeps abreast of competitive pricing and changes as many as 800 prices every day. Remember those printed shelf price tags? Gone, replaced with electronic e-ink tags for clear and up-to-date prices in all of the branch locations.

* According to today's New York Times, online prices over the Thanksgiving weekend were changing hourly at Amazon, Walmart, and Target, sometimes by a matter of pennies, so that one retailer or another could trumpet the absolute lowest price on some popular item.

The World's Most Innovative Company Is...

The company behind the iPad Mini heads the 2012 list of the most innovative companies on the planet, as compiled by Booz & Co.

For the third year in a row, Apple remains at the top of Booz's list (see below), although its R&D spending is far from the top.

Fast Company's list of the world's 50 most innovative companies also puts Apple at the top, followed by Facebook, Google, Amazon, and Square. The Forbes list of most innovative companies shows Apple as #5 (Salesforce.com is #1 in this list).

Holiday Retailing 2012: The Challenge of Showrooming

What does the trend toward showrooming mean for stores and online retailers this holiday season? Showrooming occurs when shoppers examine products in a nearby store but then buy from an online merchant (using a mobile phone or their tablet or personal computer). So many shoppers have smartphones in hand when they visit stores that retailers should expect showrooming to be a way of life from now on.

Remember last December, when Amazon's promotion of its price check app angered store competitors? The company not only encouraged consumers to compare prices when they were at the mall, it also offered a discount for ordering the item from Amazon instead of buying in the store.

Here's how retailers are gearing up for the showrooming challenge in 2012.

• Target and Best Buy have already announced they will match the prices of online rivals during certain periods. 
• Some stores are equipping employees with tablets or other devices to help shoppers compare products, understand features, check inventory, and even place orders for same-day pickup (in the store, of course). 
• To combat showrooming, a number of retailers are offering exclusive merchandise assortments and improving in-store service.

One final consumer behavior point in favor of store shopping is that once a buyer stands in front of a merchandise display and makes a buying decision, he or she may put a higher value on being able to take the product home right away instead of paying less but having to wait a day or two for an online order to be delivered.

What's Happening to Flash Sale Sites?

When the Gilt Group took its first online orders for upscale apparel in 2007, the cofounders envisioned a kind of virtual sample sale rather than a retail website. Soon they realized that "the big and exciting change in our model was the feeling that you had to move and act really quickly on making a purchase because it was fleeting," cofounder Alexis Maybank told Adweek.

That's the appeal of the flash sale site: Quantities are limited, time is limited, so click to buy what you like when you see it, or you'll miss out on the item/size/color/price you want. Flash sale sites like Rue La La (apparel) and One Kings Lane (home furnishings and decor) specialize in marketing luxury products to members, consumers who've signed up to receive offers.

Now, with the economy poised for improvement and fewer status brands selling off excess  inventory, flash sale sites are taking a second and third look at how to attract and retain members as this type of marketing evolves. In addition to branching out beyond clothing, some sites are reevaluating local operations and pursuing global expansion.

Finer segmentation (such as on purchase occasion) is helping some flash sale sites grow. Fab.com, for example, creates limited-time pop-up shops on its site to focus on seasonal or holiday gifts and merchandise.

Will flash sale sites flourish or fizzle as competition intensifies?

Black Friday, 3 Weeks Early

Amazon has decided to push Black Friday marketing up to the first Friday in November, a full 3 weeks earlier than usual for this "traditional" first and biggest Christmas-Hanukkah shopping day of the season.

Above, Amazon's home page, as it looked on November 3, with a link to "Countdown to Black Friday Deals Week." Each countdown day comes with its own deals, of course.

Walmart is promoting its own preholiday, online specials here, calling them "our lowest prices of the year." And the store is also reminding those who love to shop online not to forget Cyber Monday!

Dell has its Black Friday specials ready for shoppers right now. And if you want the inside info on Target's Cyber Monday specials, sign up for its e-mail news.

'Tis the season to comparison shop.