Kevin Hillstrom: MineThatData

AI Recommended the QR Code and Associated Text

Which brings me to this bizarre commentary of modern retail.

"Macy's CEO balances wartime agility, long-term vision".

Sure he does.

Who, specifically, describes their leadership style as "highly adaptable"? How specifically do you know that you are "highly adaptable"? Did you ask your employees? And "wartime agility"? My goodness. The worst thing is that some Lemonhead is going to embrace this vapid nonsense.

Did Macy's pay to get this pabulum published?

I get all the teasers ... back in the day it was trade journalists asking for feedback ... then it was trade journalists asking for money ... now it is third party content harvesters offering to help me craft articles that get published in Business Insider or Forbes ... "YOU ONLY PAY IF YOUR CONTENT IS ACCEPTED". Well of course it is going to be accepted, that's how everybody makes money ... except for me.

Anytime you see a retail thought leader publish on Substack that they contribute to Forbes, run away ... don't walk away from the content. As the kids say, the content is "sus".

Overcontacting The Customer

Here's how one company targeted me with email discounts/promotions.

Sunday = 2 times.
Cyber Monday = 7 times.
Tuesday = 5 times.
Wednesday = 4 times.
Thursday = 2 times.
Friday = 2 times.
Saturday = 2 times.
Sunday = 2 times.

During the same window, this brand posted just six (6) messages on Instagram, imagery of products.

I asked AI to convey the vibe ... not sure what one of those signs represents or what happened to Tomatohead's legs, but here you go ... this was the fifth attempt at getting it right and AI failed.

Sending twenty-six (26) email campaigns in eight days could well be a failure of imagination ... of course, if you frequency test your email campaigns you know the answer to that question, right?

Do you frequency test your email campaigns? If not, why not?

Competition / Cooperation

In 2005, retail brands thrived via mall-based retail, classic cooperation between competitors. Having a Nordstrom anchor on one end of the mall and a Neiman Marcus anchor on the other end of the mall benefitted Nordstrom, Neiman Marcus, the food court, Sunglasses Hut and Talbots. At Nordstrom, we knew that when Neiman Marcus built a store at one of our locations, our sales increased. Neiman Marcus customers walked across the mall and purchased from us.

The catastrophic outcome of the omnichannel thesis soon followed. When the Nordstrom customer bought online from Nordstrom, there were no ancillary purchases at Neiman Marcus, because the customer didn't have to visit the mall anymore. The absurd silliness of "buy online pickup in store" did not push the customer to the mall - my clients simply pushed the customer to the digital ecosystem and the mall emptied.

When traffic disappeared, the weakest clients, those with pre-tax profit < 5%, those businesses suffered first. They closed locations, which meant even less traffic. As locations closed, the cooperation that once caused businesses to thrive became untenable. Better to protect your p&l than to protect J. Crew.

Eventually (i.e. 2024-2025), a semblance of equilibrium finally existed. The Lemonheaded omnichannel experts moved on to their next pursuit ... AI. I was always amazed at how little these omnichannel experts knew about actual retail and actual customer behavior. They simply could not conceive how encouraging online shopping (which was going to happen no matter what) would destroy in-store mall-based consumerism, even though it was their job to understand this simple outcome. Do you trust these Lemonheads with a fusion of vision, strategy, and AI?

No. You do not trust them.

What do you think happens when ChatGPT or Shopify or others offer viable ecommerce "cooperation platforms" fueled by AI? It likely only takes a 10% drop in shopping traffic on Google / Facebook for those forms of cooperation to collapse. Just like that, you've got less traffic and you've done nothing to cause less traffic. It'll be like a digital mall collapsing.

We saw catalog brands emptied out by ecommerce.

We saw retail brands emptied out by the omnichannel thesis.

Imagine what happens to traditional ecommerce brands when AI actually takes hold?

It's going to take awhile and hundreds of billions of dollars will be incinerated in the process while we run low on water powering data centers, but a new form of commerce is coming ... and this time, the cooperation-based digital world of marketplaces / Google / Facebook / ecommerce is the one that will likely be transformed. Not eliminated (there are plenty of malls and there are many catalogers still in business), but transformed. Transformation is a difficult process for Lemonheads to deal with.

Disruption

Consultants can take a path favored by hyperbole. DISRUPT OR DIE! REAP THE REWARDS OF AI!

A few retail gents come to mind on this front. The rhetoric is exhausting.

It's one thing to point out that a business needs to change. It is quite another thing to get a hundred or a thousand or fifty-thousand employees to move in concert in a direction that results in change, much less change that is appropriate. Ask a consultant to work for a company and make change actually happen and you'll quickly see that there is an enormous difference between a Thought Leader and a Leader.

Thought Leaders are plentiful.

Leaders are likely plentiful as well, but aren't always given opportunities to lead.

Thought Leaders want you to take big swings. Of course they do! They're not accountable, are they? If the idea doesn't work, it's your fault, you are an idiot who cannot be agile enough to thrive at the "speed of disruption".

If the idea works it's because they are brilliant.

Who have you met that had success transforming how multiple brands executed marketing? The individual must demonstrate significant sales growth and even better profit growth ... not be a transformation expert on a strategy team at JCP or Kohl's. Who have you met? What was it about that person that led to transformative results?

January

January can be a "blah" month from a marketing standpoint. The thrill of achieving an order at 60% off is replaced by the tepid response of a customer getting 70% off liquidations products.

Why not use January as your "experimentation month"? Try many different ideas, see what works and doesn't work.

We need more experimentation in ecommerce. Anything something gets "optimized", as ecommerce unfortunately is, there is an opportunity to experiment, to try new ideas. Use January as a month to experiment and learn.