Do They Even Know Their Business?

Peter : On Rad's Radar?
| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

Do They Even Know Their Business?

Rich Tehrani and I were having an online discussion about JCP shutting down free wi-fi in their stores to save $7M per year. Who says free wi-fi is free?

I commented that maybe JCP customers don't use it. The key to any business is to know as much as you can about your customers. Isn't that really what the whole "Big Data" thing is all about?


The problem for JCP, Best Buy, Barnes & Noble and malls is that if you just stock stuff, you have to compete directly with Amazon. Let's face it: that is a losing proposition. Period.

I have taken stabs at what B&N should do. I think everyone mistakes Amazon for low price (and cries about it). It's CONVENIENCE!

Low price will kill you. You have to not only provide value and a customer experience, you have to market that. Free wi-fi - even McDonald's advertises it. Who would think someone would sit with a laptop at McD's while chowing on a Big Mac? But parents on an iPad while the kids play...well, yeah. And as Rich points out, bored kids mean less shopping time for the parents. Free wi-fi means they can watch movies and play games. I guess just teaching them to behave would be harder.

Notice that Target commercials showcase fashion and style. Does JCP? No. JCP should take a lesson or two from Target - go get some exclusive designers. Or hit a few design colleges to hold a contest - sign up the winner for a two year exclusive. It would be a cheap way to make noise and drive traffic.

The problem JCP has is similar to Sears - they were both catalog companies but did not transition to the web soon enough. When I was a kid, we would grab those Christmas catalogs - from Sears, JC Penney and Spiegel - the minute they arrived (in August) and start making lists. There is a way to still do that online IF they wanted to just remain a catalog company - and compete directly with Amazon. If you go that route, have some exclusive items and give loyalty points as reasons for people to shop with you. And by all means spend the money on a software platform like Amazon's that is dynamic, tracks every move, makes wishlists and allows for frictionless shopping.

K-Mart is advertising lay-away. They know a little about their customer base. The problem is that all too often, these stores want to break away from the current client base to get others. Well, it doesn't work that way. Own the tribe. Own the niche. Get every dollar you can from that tribe of customers. Know everything you can about that tribe, so you can add more value and sell more to them. It costs way more to go get new customers than it does to sell more to the customers you already have.

Now if I wanted new customers, I would open up a new brand. Re-do a couple of stores as a test with new brand, new colors, new message. Sears did it by making some stores outlets, and by buying Land's End. Luckily, Sears hasn't foisted a Kardashian Kollection or Jaclyn Smith store on us yet.

Best Buy made a smart move by putting kiosks up in airports and other places to see if it could get impulse buys from shoppers. Much cheaper than a store. Best Buy also opened mobile only stores. Niche selling is where it's at. Hat stores anyone? Just look at any mall, it is usually filled with a food court, kiosks (niche products), and niche stores. What is Finish Line or Frederick's of Hollywood but stores selling a narrow selection of product inside a vertical.

Brick-and-mortars and malls - as I have written before - have to start experimenting and have to start being a destination that provides both value and a customer experience - or good bye.

Malls used to have fashion shows, modeling try-outs, concerts (remember Tiffany?) and other exhibits that would drive in traffic. Why did that all stop?

When you look at our celebutard culture, how much would it cost Westfield to bring some reality star on a tour of its malls? I was at a Tampa Bay Fashion Week event Thursday and Kato Kaelin was a guest. (He is partnering with Rhonda Shear on a line of clothes called kato's Kouch Potato). So take advantage of the clock. At minute 16 or so, hire them for some traffic.

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