Vet Your Vendors!

It's not hard to understand the basic premise of service driving business results - it's good for business (more revenue) when customers are treated well and bad for business (less revenue) when they are treated poorly. This is my gospel.

So I was absolutely dumbfounded when I read the cover story in this morning's New York Times business section about a seller of faux-designer eyewear who builds sales volume the more he upsets his customers. It recounts the chilling tale of Clarabelle Rodriguez, who purchased counterfeit frames and contact lenses from an online retailer she found through a Google search. The retailer, Vitaly Borker of DecorMyEyes, calls customers "Psychos" who seek refunds (whether they don't like the product or it's not what they're looking for.) He meddled with disputes through credit providers, threatened her with a fake lawsuit and bodily harm, then harassed her by emailing photos of their front doors and a message of "I know where you live" (he claims he merely sent a screenshot of Google's street-view.)

It turns out the bully tactics are his marketing strategy. The worse he behaves, the more these customers vent about his monstrous behavior in consumer-watch chat rooms… and in a truly unfortunate turn, these complaints raise the search-relevance rankings for the front door of his business. Before this story came out, if you searched his business by name, you'd find the complaints. But when you plugged an eyewear brand or "designer frames" into the search box, his business was among the top three results – sometimes ahead of a brand website. The unhappy customers never return, but they unwittingly drive new business his way by complaining online – SEO gone horribly awry.

"When I fly to Las Vegas I look down and see all these houses," he starts. "If someone in one of those houses buys from DecorMyEyes and ends up hating the company, it doesn't matter. All those other houses are filled with people, too, and they will come knocking."

 
The story points out a difficult-to-solve flaw in Google's search algorithm and failings in vendor-quality control of EBay, consumer watchdog groups, credit card companies and issuing banks… not to mention the inability of the New York State Attorney General and criminal investigators to pursue thuggish retailers (it should be noted that Amazon.com's affiliate program came off smelling like a rose in this story.) Mr. Borker found clear incentives for bad behavior and his story lends chilling truth to the old adage that "even bad publicity is good publicity."

This should all underscore the importance of the "Buyer Beware" manta and the need to investigate your vendors before making a purchase.



Photo courtesy of the New York Times

Small Business Saturday

Fighting my way through Black Friday crowds at big box stores for "door-buster" promotions holds little appeal; yet I certainly don't go out of my way to abstain from shopping over Thanksgiving weekend. American Express is promoting the first-ever Small Business Saturday aimed at supporting one of their core market segments: small retailers. If you have time tomorrow, take an hour to stroll down downtown and patronize a local business. If the weather outside is frightful, here are some of my favorite places to find small businesses online:

Etsy: The ultimate affordable art gallery… thousands of artists and craftsmen sell their wares. The selection can be overwhelming, but it's great fun to explore.

Taigan: An online mall filled with some of the finest boutiques from around the country. Each store has a beautifully edited selection of stylish wares.

Desquval: Always ahead of the fashion curve? Here you find quality and value while supporting the ateliers of emerging designers.

Age of Discovery

A few months ago, I discussed the surgical approach internet shoppers take toward making purchases. In contrast, shoppers in the stores channels have the opportunity to linger and discover delightful products they never intended on buying. This is the provenance of product merchandisers who design store windows, build displays and arrange shelves strategically to create a sense of discovery for customers. Until recently, e-commerce sites have used automated suggestions by aggregating data (Amazon's "customers who bought item X also bought Y") or using the brilliant insight that if you're buying sheets, you might also want pillows. The suggestions are usually so predictable that they don't allow space for true discovery of product, which can lead to unplanned (and more profitable) sales.

A new crop of sites is using a potent combination of evolving search technologies and "curated" (merchandised) content to divert the attention of the precision consumer less predictable ways. Nordstrom.com includes a regularly updated sort of e-zine that encourages customers to explore and be inspired by a number different brands and styles. The current issue highlights a stylish couple's unconventional wedding, a city profile of Chicago and a Vogue-worthy event-attire layout. "The Conversation" offers interesting articles and is beautifully photographed – more importantly, it gives customers the chance to spot items (like a pretty Leifsdotter skirt) they wouldn't otherwise through a standard category/brand search.

Perhaps the most exciting new merchant enlivening online shopping is Google's Boutiques.com. The company uses Like.com's (acquired by Google) advanced search technology, which recognizes style genres, shapes, patterns, hemlines, etc. Boutiques.com invited a number of celebrities, stylists, designers and influential bloggers to pull women's merchandise from sellers to create a signature look that is posted in a personalized boutique; customers shopping from the boutique are directed to sellers to complete the purchase. Google tapped into a cultural obsession (and well established product marketing strategy) by hiring celebrities as their merchandisers... each one has a fan base that aligns with a target and position. Site users can also create a personalized boutique by establishing preferences for style genre and product attributes.

Besides being smart and original, both sites are slickly produced and genuinely fun. Best of all, surgical shoppers are encouraged to take time to explore and discover new merchandise.

The Frenzy

Even though it seems like Labor Day was just last week, the holiday shopping onslaught is upon us. In the wee hours of Friday morning, legions of American shoppers will pour into retailers for "door-buster" promotions.

Even though profit margins on must-have items are slim (at best,) Black Friday is an important barometer of the overall enthusiasm for the holiday shopping.  Historically, Thanksgiving weekend accounts for almost 12% of total holiday sales and BF accounts about half that figure. For individual retailers, the stakes are incredibly high: it can be impossible to recover from a weak start to holiday sales. Two years ago, margins quickly evaporated in an attempt to induce spending and move inventory off of shelves… it was a catastrophe. There's cautious consensus out there betting that pent up demand and upticks in both consumer spending this month and optimism about the economic outlook among affluent households will yield a successful holiday.

Much has been made of in recent years of Cyber Monday (horrible name), which is the day Americans return to work and go shopping online. Offers of free shipping and deals consumers may have missed on Friday are made available online. These promotions are being extended as early as the Wednesday before Thanksgiving. This is good news not only for employers who get precious little output on Monday, but also takes significant pressure off retailers' stores channel. Early online promotions are one way to head off stampede concerns at your local Walmart.

So here's a holiday wish for all of you who are braving the stores this year… I hope you find civility and good service in addition to the items you're looking for. When you don't, I wish you the patience and fortitude to blithely smile and keep your sense of humor intact.

Mad for Plaid

Memories of my first semester of b-school came flooding back as I watched Inside Job. The films highlights the enormous negative impact sleazy traders, incomprehensible financial instruments, lazy regulators and misguided mathematical geniuses have had on the world. As I entered school in Fall 2008, no one wanted to work for a hedge fund anymore.

Demand for sterling cuff links and Paul Stuart suits melted along with the global economy. However, an enduring style trend quickly emerged. From Paris to Hong Kong, fine boutiques are stocking heritage brands like Gitman, Woolrich and Red Wing. People are choosing earthy plaids and chambrays over fine English Oxfords. Denim is worn with cuffs rolled up and khakis are comfortably wrinkled instead of neatly pressed. Especially this fall, major American cities look as though they're mostly populated by early 20^th century farm-workers and machinists. Much to my chagrin, facial hair (untamed beards and bushy moustaches) has made a big comeback among the hipster crowd.

It's no wonder consumers are dressing the part of laborers, they are looking to the heritage brands of their childhood in order to associate themselves with people who actually produce things. While it has a decidedly masculine tone, the trend is not limited to menswear. Perhaps the most baffling incarnation of this trend was Ralph Lauren's Spring 2010 Collection, which put a luxe spin on the Grapes of Wrath (one signature piece was a silver lamé overall gown.) The connection to labor doesn't stop with clothes. Moss, the Soho über-chic shelter gallery, just wrapped up an exhibition of aggressively industrial-yet-handmade pieces. Unsurprisingly, the New York Times noted recently that mainstream media has adopted a more masculine version of the ideal male.

I'm sure we'll find a reason to dress to-the-nines again soon, but in the meantime I'm enjoying dressing the part of a lumberjack (sans facial hair) several days a week.

Cookies and Consumer Behavior

Today I'm baking my grandmother's famous (to me) cookie recipe. Grammy made sure not one birthday (neither mine, my siblings nor cousins) passed without us receiving a crisp $5 bill and a tin full of oatmeal cookies. She was not short on grandkids, so this was not an insignificant sacrifice of time nor money. The taste of these particular cookies evokes my happy childhood and my tough-yet-tender grandmother, baking many dozens of cookies in her tiny trailer kitchen.

Consumer behavior experts tell us the most effective messages to potential customers trigger deep associations with the past by tapping into our long-term memory. Think of the moment Anton Ego tastes Remy's creation in Ratatouille… he is catapulted back a happy memory of childhood in the French countryside. Creating these types of deep associations is incredibly difficult (and expensive) for product marketers. Reams of consumer research, thousands of hours of work of talented marketers and brilliantly creative ideas are a start, but don't guarantee a consumer will form the association a company aims to create. Oddly, this is what the cookies reminded me of.

For those of you who want to do some baking, here's the recipe (so easy, an MBA can do it.) Now, not so secret.

Oatmeal Crispies (makes 5 dozen)
1 cube Nucoa (margarine) and ½ cup Crisco (or 1 cup [2 sticks] unsalted butter at room temperature)
1 ¼ cups dark brown sugar
1 cup white sugar
2 eggs
1 tsp vanilla
1 ½ cups flour mixed with 1 tsp baking soda
3 cups quick cooking oats (whole oats are fine)
A generous helping of love (Grammy's words, not mine.)

Directions:
Preheat oven to 350. Cream brown sugar with Nucoa and Crisco (butter), add white sugar and stir until creamy again. Add vanilla and eggs, mix well. Add flour and soda and mix thoroughly. Add oats and Love and stir until there are no dry oats. [at this point, I drop them in teaspoon size balls onto a baking sheet and bake at 350 for 9-12 minutes, until the edge of the cookies are brown, but not burned.] Form in rolls, wrap in waxed paper and chill. Cut into ¼" slices and bake on ungreased cookie sheet 10 to 12 minutes at 350. Makes approximately 5 dozen. Enjoy.