Category: Business

Reflecting on Fortune’s article “Howard Schultz Has Something Left to Prove”

Carl Setzer

I’m an alum of Starbucks, having worked at the SSC (Starbucks Support Center) from the time Orin Smith was at the helm, through Jim Donald’s tenure, and then getting laid off with 300 of my colleagues a few months after Howard returned. Starbuck’s history overlaps with key parts of mine. I still care quite deeply about the company. I make it a point to read pieces like this one that come through my filter: Howard Schultz Has Something Left to Prove.

I remember the hand-off to Jim Donald, and the eventual fallout. I remember wondering if the only way Howard was going to leave Starbucks was in a pine box. The transition mentioned looks like a great opportunity for both Howard and Starbucks.

The article does a good job of looking at the situation, at least from what I can see. Now, I’ve been away from Starbucks for nearly 10 years now, so my understanding of the corporate dynamics are weak. But it meshes with my memory of days gone by.

Besides the internal challenges of succeeding someone who deeply shaped the culture of a major company, though, I’m more interested in their brief look at the state of the coffee sector.

It delights me to see audacious goals. That’s a part of the company I’ve admire and love. I agree with Johnson’s view that Starbucks has two overarching challenges: continually embracing digital culture, and then expanding the coffee expertise elements of the Brand. And I expect the Roastery and Reserve brands will do good work tackling those issues.

The competition will be fierce, though they’ll be quite adept at giving the other players a run for their money. However, it’s important to keep an eye as companies merge, align and garner new assets to apply. I’m thinking of the JAB Holdings acquisition of Peet’s, Stumptown and Intelligentsia as referenced by the article. Well, JAB actually has become a significant player in the Specialty Coffee arena. Besides Peet’s, Stumptown and Intelligentsia, they also control Keurig: Green Mountain, Caribou Coffee, and Mighty Leaf tea. And they control Einstein Noah Restaurant Group (the bagel chain) and Krispy Kreme. I would never have anticipated these companies going private, and becoming united under one investment group. A fascinating development that will help shape the specialty coffee world for years to come.

I don’t envy Kevin Johnson as he steps up to follow Schultz. It’s daunting to consider. However, he’s just the leader. I know many, many of the people bringing the day-to-day Starbucks experience to life. They’re committed, passionate and talented. I have no fears for the future of the Siren.

Sears CEO Lampert blames company’s woes on ‘irresponsible’ media

Carl Setzer

Sears CEO Lampert blames company’s woes on ‘irresponsible’ media

I just had to shake my head after reading this one. This Mr. Lampert is, well, an eccentric chap and, sorry to counter his statement, but either in deep denial about Sears’ states, or a terrible liar.

He spends a great deal of time comparing Sears to Amazon, and in strange, illogical ways.

“The company has not reported a profit for six years, which Lampert compared to Amazon.com Inc’s early unprofitable growth.”

I fail to see this comparison as apt. or even close to related. Sears is no startup, and Amazon has been focused on posting profits for some time (since 2004, I believe). But if their goals is to invest their profits back in the company, do it and then talk about it. Based in reality, it can be a compelling narrative.

Here’s something to mull about, when comparing Amazon & Sears: “Amazon’s total revenues grew 27 percent to $136 billion in 2016, while Sears’ revenues fell 12 percent year-on-year to $22.1 billion.”

This one really puzzled me:

When “…asked if Lampert was in denial about the company’s losses and paranoid”, he “refuted his question, saying there were “behind-the-scenes” counterparties trying to take advantage of the company’s situation“.

Apparently, the reporting is “deliberately unfair”. Wow…serious delusions of grandeur. A whole sector? All the reporters are in collusion against Sears? Sorry, that I doubt. Sears isn’t that big a player in retail anymore, especially as the space got saturated and online started eating everyone’s lunch (in the retail sector).

“”Excuse my rant but a lot of what we’re doing deserves a chance to see the light of day.”

Well, that’s a PR failure, if it’s based anywhere in reality (which I’m having a hard time buying).

Then there’s the reliance on their new loyalty program, “Shop Your Way”. Seems a puzzling thing to bet the farm on. As Erik Gordon (professor at Ross School of Business) puts it: “‘A loyalty program was innovative 20 years ago. Now, it is like saying ‘our stores have electricity.’ Sales still go down, so the loyalty program isn’t turning Sears around”.

Sears is in trouble, an a significant piece of it seems to be leadership. Their ill-fated venture into a Lord of the Flies internal structure was probably the most extreme of their poor choices. Now they’re at a point where they’re destroying their future to stop the cash bleed and keep operations afloat. Cutting hours and pay simply drives your best producing staff to your competition.

With Sears closing stores in solid retails markets (like my nearby Alderwood Mall), it’s hard to put much stake in a turnaround. The retail sector can be scary, and I’m hard pressed to think of a company that’s pulled themselves out of a tailspin like Sears’. Perhaps I’m wrong. I’d like to be. I grew up with the iconic Sears catalog, circling Christmas hints in their holiday catalog. The emotion is there. However, my last few experiences at their stores were of a morosely apathetic crew in dismal, worn out stores. It’s gong to take more than a loyalty program to pull back from that.

On that note, Investopedia has a great piece from last month, “Who Killed Sears? 50 Years on the Road to Ruin“. A solid and detailed look at the history of the venerable brand and it’s turn towards doom.

The Future of Work: Cashiers

Carl Setzer

This morning I read Cashiers’ Last Stand, which covers some thoughts I’ve had about AI recently.

I tend towards the futurist’s view: that these changes will happen (machines will take on more of the rote work of the cashier) and that those displacements will happen relatively soon.

I also think that the service role of cashiers has a long-term place, culturally.

Lastly, I need to invest some time into studying Amazon Go. There’s disruption coming to the retail world.

Here’s their intro video:

What do you think?

Wow, the most annoying email marketing fail I’ve received…and I’ve seen a few

Carl Setzer

With 7 years working in Real Estate, I’m on tons of email lists. I don’t mind this much, as I get to see what’s going on out in the market. Today, though, got one that violates all my marketing skills, understanding and wisdom.

  1. It was a jpg dropped into an email. I’m not a fan (mea culpa: I’ve done that in the past, mainly out of time, or, sadly, that’s all I had to work with).
  2. In the jpg were several urls. Note: I don’t say “links”. The links were NOT CLICKABLE! Simply text in the jpg.
  3. As I was interested in the property in question, I manually typed the links into a browser. Nope! No worky. Not even the bit.ly one. Not a single link worked.
  4. I saw the project name in the email addresses in the “contact us” section. That was the right URL.
  5. The creme de la creme, the piece de resistance (insert cliche of your choice here): there was no address. No city. Not even a state, region…nothing. When I finally made a url work, I could see that it was on the Washington Coast. Please note: this was for a new real estate development. “Location, Location, Location”?

It seemed like the creator of this campaign worked really hard to ensure I not only didn’t connect, but actually ended up annoyed with them. Amazing how well it violated every tenet I have for effective email communication.

So, do:

  1. Location. Events: have a date, location (address, venue…at least a city), and times. Drives me nuts to get an email for a property that looks interesting, or an event that looks really cool and, well, sorry, it’s it Atlanta. And it’s not until I’m in the registration section that I find that out? Geez!
  2. If you can at all help it, don’t just email jpgs. FYI, spam filters hate them.
  3. Links. Oh. My. Gawd! Making me TYPE your link…from an email?
  4. Links, part ii: Links MUST WORK. Test them! Most people won’t do anywhere near what I did. I was curious at that point and choose to dig. They may have got a click, but they didn’t get a sale.
  5. Segment your market and sell accordingly. I’m not working the Washington Coast market. It’s hours of driving away!
  6. Your main call to action cannot fail. If clicking on the link takes you to a Google page saying “sorry, sparky, no frickin idea what website you’re trying to find”, every erg of energy expended was wasted. Your goal is sales, right? Customers gotta get to your page. Gotta!

Keep your eyes on the prize, folks. Sales pitches to the right people, in the right way, is a splendid thing. Spam? Yeah, no.

Go forth and do great things!

PDF Editors And Business Operations

Carl Setzer

At this point, I can’t imagine how anyone operates a 21st century business without a pdf editor.

Not being able to fill out forms, edit docs, transform them to Word or Excel…all rather critical for business today.

Adobe Acrobat is not the only option. Which is good since it’s ridiculously expensive.

I’ve been using FoxIt’s PDF Editor/Creator for some time. A reasonable price ($109).

Here’s a list of low cost options, including 1 or 2 free ones. One of the ones they list, Nitro, is another one I’ve used. It’s pretty good as well. I don’t know they other ones, but it’s PC World, so it should be a good source.

Anyway, there’s no good reason to not have SOMETHING. So, make it work.

 

A few reflections on marketing 

Carl Setzer

A few quick reflections…

Focus!

  • An easy, and dangerous, trap: selling to everyone! That kills sales, unless you’re already at a huge scale. Yes, Starbucks, Microsoft, etc, market to the planet. They didn’t start there. First they focused on a niche, on quality service. Build the relationship, the connection, a reputation for expertise and quality. When we find our gift, our marketing sweet spot, business will grow. Slowly but surely, growth. In Steven Covet lingo, when you focus on your area of influence, our area of influence grows. The
  • I like feeling special, connected and cared for. There’s a cafe close to home where I talk with the owners, they ask about my family, they suggest coffees based on knowing my tastes. Clearly, they do a great job communicating appreciation to me. And I’ve become an evangelist. 
  • Marketing power comes with knowledge. Yeah, perhaps a bit cliche, but hear me out. First element: expertise. Whether it’s a specialized real estate niche, coffee and pastries, burgers…It can anything. Second: know thy customers! What do they like, what makes them happy, what they hate; you get the picture. Lastly, with both bits of power, build marketing tools to grow that connection. There are so many great customer/client relationship tools out there which let you build specialized communication plans. Spend time building out those tools, knowing them, using them to make your customer’s lives better. 

That last line is the key: “make your customer’s lives better”. Every action needs to push that way, drive with that focus.