I read an interesting opinion article on how Google should open retail stores in order to successfully sell its hardware products. Here’s the link to the article:
It was interesting how the article claimed that there’s a growing trend of technology companies, such as Microsoft, opening stores in physical locations. This is obviously contrary to what we see today in different industries, where more companies are closing bricks and mortar stores due to competition from online companies such as Amazon. The author claims that Google’s increased involvement in hardware sales means that the company should look into physical locations so that customers can experience products. Through this, it is possible to gain more potential consumers if there are more opportunities to try out products. The author also emphasized how it is important that these physical locations give a good “in store” experience for consumers. And this made me think about today’s lecture and how for Walgreens, it is also important that the in-store experience makes it a differentiating factor for consumers. In regards to today’s lecture, pricing is just one attribute that can make something successful. What’s most important is looking at the bigger picture from the customer’s perspective. I feel it is really important for physical stores to bring an experience that is not attainable through online shopping. The Apple Experience highlights how Apple retail stores do this successfully. And thus, in order for retailers to successfully compete with online players, it is important to not just delivery immediacy and similar pricing. It’s also important to create an environment that makes it more comfortable and appealing for consumers to stop by brick and mortar stores. This way, a company would be able to optimize its multi-channel retailing strategy, as evidenced through Apple and Microsoft.
As a whole, Chipotle has pretty great customer service and, courtesy of Daniel’s recent post, takes advantage of the various customer touch points technology has provided them. However, I was less than satisfied during my most recent trip to the establishment. Trust me when I say that it wasn’t the flavor of my tasty burrito bowl (white rice, black beans, veggies, carnitas, mild, medium, and hot sauce, with lettuce and guacamole – YUM) that let me down, but rather the company’s regulation on incorrectly-made burritos/tacos/salads/bowls.
I was quickly scooted through the line as spoonfuls of good-ness piled onto my oh-so-perfect burrito bowl. My friend, however, got the short end of the stick. She had to patiently wait in line for the steak to be cooked and chopped before it could be scooped onto her burrito. She patiently waited for the steak to be ready as burrito upon burrito passed her by and employee after employee touched her burrito and constantly mistakenly pushed it forward thinking that it was just a plain veggie burrito. As she started seeing the light (the steak was being chopped and scooped into the container), an employee came over and plopped barbacoa onto her burrito after mistaking her burrito for the burrito of the guy right behind her. Now, instead of offering her that incorrectly-made burrito for free and then making her a new one with steak in it, he proceeded to say that he will TRASH that incorrectly-made burrito and then make her a new one. As she was constantly taught the value of food since a young age, she refused to let the employee trash the burrito and just told him to move her burrito along the line and ended up paying the $7.47 for a “customized” meal she wasn’t looking forward to.
Firstly, trashing a perfectly yummy, albeit incorrectly-made, burrito is simply a crime to humanity (especially since food is quickly becoming a scarce resource in this rapidly over-populating world). Secondly, Chipotle seems to have missed an opportunity to introduce a repeat customer to something new she might potentially like and maybe even get her to come more often and/or spend more. And lastly, the company could have gained a lot of “brownie points” from her for giving her a free burrito and making her a new one. What good is it for the company to just throw out perfectly good food? Giving her the free burrito would’ve made for great word-of-mouth buzz for the company, but now, they’re just known as wasteful (especially since a week earlier another friend had this exactly same thing happen to her and Chipotle threw out her burrito bowl and then started anew).
Chipotle, please stop being wasteful. I promise that I will love you even more for it.
After reading the “Making over McDonald’s” article, I wanted to reflect on my own recent experience at C-Ville’s own local McDonald’s in Barracks and its strategy to change consumer perceptions. Originally, I was drawn in to the recently renovated McDonald’s by the promise of their new product item, Fish McBites which were selling for the special rate of $1 per snack size order (sorry guys, this offer has already expired, if you were wondering). But as I entered its grand arches, I was surprised by the contemporary interior. In fact, I thought I had accidentally wondered off into a UVA inspired art museum. The space was very open, artsy, and dare I admit, clean (well, it was clean until I had tartar sauce spilled all over me and the floor). It reminded me more of the McDonald’s that I had seen abroad, rather than the ones I was accustomed to here in the states. In fact, it’s interesting to compare the perceptions of McDonald’s customers abroad with those of domestic customers. Did you know that McDonald’s even does weddings? In Hong Kong, the McWedding package has been available to customers October 10, 2010. According to Chinese anthropologist Gordon Mathews “In the U.S. and other places, middle-class or upper-middle-class people look down on McDonald’s. But Hong Kong is different. A McDonald’s wedding wouldn’t be seen as tacky here.” (read more here: http://www.nytimes.com/2011/02/28/world/asia/28hong-kong-mcdonalds-mcweddings.html?_r=0)
It seems that McDonald’s has taken some service lessons it has learned from abroad and is beginning to apply them to their domestic stores. Its redesign efforts focus on adapting its exterior and interior design to local tastes. President and COO Don Thompson, hit the nail on the head when he said, “People eat with their eyes first. If you have a restaurant that is appealing, contemporary, and relevant…, the food tastes better” (Paynter, “Making Over McDonald’s”). And it could not be more true. Although many of my friends and I had originally gone to McDonald’s for specific purpose of purchasing McFish Bites, many people ended ordering several other food products such as fries, McChicken, Quarter Pounder, and even an order to-go. I guess happier people do tend to buy more. Additionally, seeing the pictures of UVA/Charlottesville landmarks really gave me a sense of pride in my community. I think this type of local adaptation will appeal, not only to the experience of current students (and general UVA community) but also prospective students who may really feel that they are getting the full UVA experience while on their making their pre-college visits. Even I, a double Hoo, felt the urge to mark my journey to the local McDonald’s with a tourist like picture.
In addition to the interior changes, I was also surprised about the changes made to the menu displays. They now display the calorie count of most, if not all, of their food items! Although this method may seem counter intuitive (when was the last time you expected to get healthy food at a fast food joint?), it is strategic. Recently, the U.S. Supreme court has upheld regulations that require restaurant chains with more than 20 locations to post the calorie content of its food products. (read more here: http://www.brandchannel.com/home/post/2012/09/12/McDonalds-Menu-Calories-091212.aspx)
Although a timeline of this regulation is still in the works, McDonald’s has countered by adding this nutritional information prior to the official mandate as part of its new better-for- you marketing initiative. This “voluntary” adhesion pior to the official implementation of the regulation may help fast food power house seem more sincere and counter its “most wanted” by food-police reputation, as consumers and society, as whole, become more health conscious.
Thus, by adding relevant value to its customers’ experiences, McDonald will be able to continue to compete effectively in these changing times.
Pillows are silly expensive– I actually saw one in Bed, Bath & Beyond with a price tag of $156. That’s just for one, hopefully exceedingly comfortable pillow. After coming back from break I realized I hadn’t brought back the two pillows I had brought home and now I was without proper comfort in my Barracks Rd apartment.
I assessed my options. By C’Ville standards Target is just too far away, and Walmart just didn’t feel like the place to buy a new pillow. So I rushed into Bed, Bath & Beyond at 8:30 0n a random Tuesday night kinda surprised it was open at all.
I quickly got lost in the high-ceiling maze of products that inundates a typical BB&B retail store. After nearly colliding with an employee restocking from a high-ladder I took my eyes off my iPhone and committed myself to finding the pillow I wanted. Eventually I found the pillow section, selected the appropriate fluffiness level, and fought my way back through the maze in order to pay.
Only one cashier was on duty at this hour and she was actually restocking shelves nearly the front. As I waited for her to open the cash register we exchanged the general pleasantries of the retail exchange. I generally find that by Southern standards I’m unusually curt, but by my own Northern standards I’m quite friendly.
Midway through the pillow-buying transaction the cashier, Martha, starts into an obviously well-rehearsed spiel about their loyalty card, which I quickly dismiss. In actuality, I rudely cut her off in the middle of the spiel, because I was quite certain that I did not want to save 10% now only to be roped into a relationship with BB&B.
She laughed as she finished and told me “I guess I could have stopped when you said no the first time, but they make sure we ask everyone.” We shared a bit of a laugh over this blanket strategy, but really why does BB&B want everyone in their loyalty program? It makes sense for grocery retail but as a 22 year-old male graduate student I can’t fit the profile of even a typical BB&B customer let alone a loyal one.
I think loyalty programs are leaving behind the basics of any advertising program: Segmenting, Targeting and Positioning.Throwing cards at everyone does not really get at the heart of a good loyalty program and certainly misunderstands the typical consumer.
All I wanted was a pillow, not a relationship with Bed, Bath & Beyond. Next time I’ll drive the extra distance to Target.
After reading a post yesterday on uvacustomervalue regarding J.C. Penny, I wanted to look more into it and found an interesting article on the news about a bold move that the company implemented few days ago. Basically, J.C. Penny had gotten rid of regular sales and had implemented EDLP when Ron Johnson took over as CEO. Now, the company has decided to bring back sales in an attempt to lure back customers who had “left” because they were “turned off” by the department store’s new policy.
Here’s the link to the article if you want to read more about it: http://www.oregonlive.com/window-shop/index.ssf/2013/01/a_part_of_jc_penneys_new_prici.html
I think the company is trying very hard to understand its customers so that more traffic and sales can be generated. Then again, I think this new move is another indicator of the hardships J.C. Penny is facing, and it ties back to our discussion of how the company is really having trouble clearly defining their position in the retail industry. Time will tell if J.C. Penny’s new bold move will work or not.