Kevin Hillstrom: MineThatData

Losing

You're painfully aware that I have three time-consuming hobbies.

Headphones.
Weather.
Pickleball

There are different disciplines within Pickleball. You have gender doubles (i.e. I partner up with another guy). You have mixed doubles (I partner with a female player). And then there is singles. I enjoy playing singles in tournaments.

On Saturday, I won two games 11-0 and 11-2. I didn't learn anything there. I lost two games 3-11 and 3-11. I didn't learn anything there either. The other three games I lost 7-11, 9-11, and 11-13. I learned A TON in those games!

Yeah, this relates to your business.

Let's pretend you are a $70,000,000 business that generated $500,000 of profit. Honestly, you are on a losing team. Yes, you made a profit, but you should have made a $7,000,000 profit. What are the mistakes you made along the way? Did you have good business in early June and fail to do anything to take advantage of what you learned? Did you learn why business was good?

Did you run out of a key product and feature it in an email campaign anyway? Did you have huge successes in Marketplacces and choose to not spend any additional money? All of these are like the 9-11 game that I lost on Friday. You're close to doing the right thing, but you choose to do something else. And at the end of the year all those little losses add up and you have a losing season.

When you have a losing season, you'll have good days and bad days. It's all those close losses that make a difference. How many close losses did your department and/or company have in 2025? What will you learn from the close losses?

P.S.: This is what losing looks like. "Irreparably harmed". My goodness, they spent fifteen years pursuing the failed omnichannel thesis, that's what caused "irreparable harm"!!

Behavior: Past 10 Years

Bad behavior has happened forever. I spent nine months in the dot.com era at a retargeting startup. It seemed like every-other-week my company issued a press release suggesting that the fired individual was leaving "to spend more time with his/her family".

All sorts of awful behavior have been sprung on society in the past decade. These things go in cycles ... there will be bad cycles and then there are the horrific cycles we experience today. There aren't many good cycles. Go back four thousand years ago, there weren't many good cycles back then, either.

Always remember that when society goes bad, your business can represent good. There is a strong business case to be made for being good. Unfortunately, it's too easy to profit from being bad.

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.