Wednesday, February 29, 2012

Five Radical Ideas for Saving Hallmark Stores

Apple Store 
A critic of Apple's move to open bricks-and-mortar retail stores once famously said, "I give them two years before they're turning out the lights on a very painful and expensive mistake." Of course Apple proved the naysayers wrong and are now the most successful retail story of the last 20 years. Not only are their stores cult destinations for Apple fans, they are also the most profitable retail stores per square foot in America. Other retailers that blend great brand experiences with profit includes Coach and Lululemon Athletica. As Business Insider notes, four of the six most profitable retails stores are also on the fastest growing list. Their success certainly makes sense. But how did they accomplish it?

Let's use Apple as an example. First, they rightfully looked past their retail and technology competitors. They based none of their retail positioning or experience on Best Buy, Comp USA or others. Remember, the "prudent" plan would have been to compete with the big box stores that were the market leaders, and incredibly successful at the time.

Second, they looked not at the then current user of Apple products, but rather at the huge potential audience. They then reinforced their brand by modeling their experience after their product: clean, fresh and intuitive. 

Third, they kept the retail footprint small, allowing them to enter higher traffic, more "upscale" developments. 

Finally, they created the entire in-store experience to connect with their online experience. The Genius Bar is the human face of their online support.

Hallmark Gold Crown Store
This brings us to Hallmark, the grand dame of the greeting card industry. They are the industry leader and a near universally known brand. They are sporting a newly refreshed tagline, Life is a Special Occasion. Life is indeed a special occasion, but why does a visit to a Hallmark store make me feel decidedly not special? In fact, most Hallmark stores make me feel downright dreadful. Judging by the declining sales and changing demographic trends, I am certainly not alone. A November 2011 Los Angeles Times article explains away a lot of it as lost sales to online business. But to shore up that business while growing their specialty product business having a physical retail presence has never been more important. So, how can Hallmark use fresh retail thinking to salvage their eroding retail business? 

First a few facts. In a Retail Info Systems News article, Hallmark says that it has over 4,000 principle stores called Gold Crown, 500 of which are owned by the company and  the rest are franchise operations. The real revenue is generated from the 43,000 other outlets that sell their greeting cards and gifts, from Walmart to gas stations. This accounts for an estimated $4.1 billion in revenue annually. The greeting card industry is facing a monumental consumer shift as fewer cards are mailed and people move to more electronic and social media for celebrating major "life events." Hallmark has some very smart people tackling these issues around how to keep Hallmark relevant in the 21st Century. But as they innovate with product, they seem to be neglecting arguably the most important part of their brand experience, the store. 

As their retail experience has languished, it has reached a point where a fresh coat of paint or a new retail end cap will not do it. Hallmark retail needs a radical makeover. One that will reposition them for the future and highlight their product innovation in the proper way. 
Here are five ideas to kick start that process. 

1. Stores as Brand Tool: Recognize that the Gold Crown Stores, especially the company owned ones,  are primarily a brand marketing tool. Launch a "blue sky" rename and rebrand of these stores to  position the brand well beyond its current perception. Think uncluttered, fresh and contemporary. Let the product be the pop of color. Rethink the signage and overall look and feel and approach it from a fashion, art and design direction.

2. Smaller and Higher Profile: Move to smaller retail footprints in high traffic, urban and power centers. Open up the exteriors to be primarily glass and corner activated. This will compel the casual visit and generate a higher pass-through volume.  

3. Curate Product Content: The trend of "buy local" continues to grow and evolve. Hallmark should serve as the leader in providing the best in emotional messaging. This goes beyond their own creative materials. In fact, Hallmark already has an entire trend department dedicated to tracking and recording trends within their industry. Instead of identifying what products in the marketplace are competitors and then attempting to counter them, Hallmark experts should be hand-selecting cards, posters and gifts that are designed and made locally in each market to feature in their stores. This would allow them to bring the latest trends to the consumer faster and better reinforce their new tagline and campaign theme that "Life is a special occasion," challenging consumers to stop and enjoy life's perfectly imperfect, unplanned moments. 

4. Idea Think Tanks: As local bookstores continue to struggle, Hallmark has the ability to capture a portion of the "third place" for social gathering that is being lost. These newly minted Hallmark stores should work to host creative events that are in fitting with their brand promise. Become a place for writers and poets. Highlight their work and engage them in how their art directly ties to the Hallmark vision. Some stores should consider having a coffee shop as well.

5. Social Media Connectors: Each store should then activate a localized online "Genius Bar" of sorts by becoming the local hub via bricks-and-mortar and social media for celebrations. Both in the store and online, the staff of that store will be dedicated to proactive management of customer relationships. Guide customers to in-store product and various online product via Hallmark.

The above ideas are simply those of a brand and retail marketing expert who loves Hallmark. I am looking from the outside and crafting suggestions as an example of how a large retail brand could (and should) reshape how they operate in order to be more relevant in the future.

Feel free to share your feedback here or better yet, mail me a Hallmark card.


Friday, February 24, 2012

The Best 12:21 of Your Day: The Happy Secret to Better Work

This TED talk delivered to us all the way from TEDxBloomington is on rethinking how we view work and happiness.
Shawn Achor is CEO of Good Think, Inc. a corporate consulting firm. A former Harvard instructor, he explores positive outcomes and human potential, especially what he has coined the "Happiness Advantage."

Fundamentally, Mr. Achor believes that instead of working productively to gain happiness, we should work to be happy in order to increase work productivity. He uses his study of "positive psychology" and the belief that we need to escape the cult of the average in order to maximize our happiness. This makes complete sense once you look at it that way, but it is seldom done in any industry.

Let us consider a key piece of research that Mr. Achor references. When gauging success in the workplace only 25% of success is based on IQ. A full 75% of job success is due to optimism, social support and viewing stress as a challenge instead of a threat. 
This is huge for several reasons. First, we need to consider hiring and how we evaluate people. Considering there personality and attitude more than their IQ or educational attainment. How will they respond under deadline? How will they work with their peers? What overall attitude will they convey?
25% of success is based on IQ
75% of success is based on optimism and support 
Second, we need to consider how we manage. As a small business owner and someone who has spent a career in high-stress, high reward industries, this positive outlook is seldom used. Take for instance the advertising agency environment. Most agencies motivate their staff through winning of accounts, deadlines and the work hard - play hard system. Thus, the motivation is based on the success or failure of clients, revenue and projects delivered. The current model of, "hard work = success = happiness" simply forces employees to reset their goalpost of success to meet the next client deadline or next new business win. You never feel happy because there is always another goal to meet. 

But what if we followed Mr. Achor's philosophy? How do we make people feel positive in the present?
What if we focus on instilling happiness as a basis and then letting that happiness and optimism carry the individual to success?
It is a great thought that all leaders should consider.


Tuesday, February 21, 2012

Bringing Back an Authentic Place, Turned Fake: 18th & Vine

The Atlantic Cities, a website of The Atlantic magazine recently published a very interesting article entitled, The Jazz District Authenticity Problem, by Kansas City based writer Brandon Reynolds. He is referencing the Historic 18th & Vine Jazz District just east of downtown Kansas City, Missouri. The area that was the center of African-American life for decades, serving as an alternate to the highly segregated downtown. The impact of the music, art and culture that emanated from these few blocks was felt globally. From Charlie Parker to Negro League Baseball, it is still revered as the place were great artists and athletes honed their skills as they prepared to take the world by storm. As with many inner-city neighborhoods, it declined rapidly in the 1960s through the 1980s.

The road back to life began in 1989 when then Mayor Emmanuel Cleaver (now U.S. Congressman Cleaver) focused attention on the decay and worked tirelessly to direct resources toward a revival. Today we have a stable, if not thriving, historic district. A world-class jazz museum and a baseball museum dedicated to the Negro Leagues anchor the area. Both have struggled for years with gaining traction and support locally to the level that they deserve. Additionally many millions more have been invested to build a new community center, apartments and several store front retail locations. But as Mr. Reynolds points out, the area still feels more like a movie back lot than an authentic neighborhood. But why?

Obviously the remaining faux facades that dot the area from a 1996 film shot there creates an air of in-authenticity. But it goes deeper than the building facades. Simply put, the area is trapped in time. In it's desperate attempt to preserve the history of the area it is overlooking it's future. 18th & Vine became a place of innovation and legend in the early 20th century not because it was trying to preserve something of it's past, but because it was looking to the future. It was, at it's core, a place of entrepreneurship and of innovation. A creative think tank that served as a melting pot for crossover ideas. While it was a true African-American neighborhood, it was open to all. This was in sharp contrast to the white dominated areas that sought to keep non-whites out. Naturally, a wide-open place like the Jazz District attracted the creative class of whites, immigrants, Jews and more.  All learned from, and contributed to the scene there. What was exported was nothing short of genius. So how do we recapture this big idea?

"18th & Vine became a place 
of innovation and legend in 
the early 20th century not 
because it was trying to preserve 
something of it's past, 
but because it was looking 
to the future."

The Jazz District will return to prosperity when it thinks less about being a museum and more about being a hub of revolutionary arts and culture. Make no mistake, the heritage and the museums are crucial to this occurring. They need to think more like a modern art galleries, and curate the explorers. The neighborhood should become a place that recruits new immigrants to Kansas City. Create global art and technology incubators and offer restaurant incubators. The leaders of the District have started to embrace this. They should double down on this idea and push forward like never before. 18th & Vine is where culture and new ideas are created and where the world discovers them. The physical neighborhood must continue to be restored too, of course. More sidewalk retail and residential must be built. Millions more must be invested in infrastructure. Better connectivity and transportation must be established. However, the biggest change could simply be in marketing, branding and communications. Stop thinking of 18th & Vine as just a historic place that should be placed under glass, and start thinking of it as a place that has always catered to the revolutionaries and the creative class. Life for the future with the past as inspiration.      

Friday, February 17, 2012

The Best 1:58 of Your Day: Buenos Aires

We usually don't plug specific products or companies on this site, but today's inspiration comes from Black Sheep Films. We have never worked with Black Sheep, but when we discovered their reel it went well beyond thinking they had some nice commercial work. No, it was more of "WOW! Have you checked this out? How cool is that!?!" Thus we had to share their work "Buenos Aires."

Why is this so engaging? It obviously is very well shot, with great editing and great effects. However, it enters the sublime with the beauty of the build, the pacing and the incredible backing track by the very talented Langhorne Slim. If you are like us you will watch it twice, then view their other work, then go back and watch it again. We love Escalas too. Yes, it has the same song usage, to less degree of success. But the opening is exceptional.

Happy Friday. Enjoy a bit of beauty and creativity as you start your weekend.

Buenos Aires - Inception Park from Black Sheep Films on Vimeo.

Tuesday, February 14, 2012

Creating America's Most Entrepreneurial City

This past year the Greater Kansas City Chamber of Commerce rolled out their Big 5 Ideas for improving the Kansas City Region and making it great. One of those "big ideas" is the bold goal of making Kansas City "America's Most Entrepreneurial City." To advance that vision, they appointed a committee headed by Peter DeSilva, CEO of UMB Financial. Mr. DeSilva has organized a series of Community Conversations, comprised of small business owners, academics, educators, corporate executives and more to discuss and form some tangible plans for achieving the goal.

Recently I attended one of these sessions and came away impressed. Many of the same old ideas and challenges were bandied about of course. But between the 90% of same, there were some new and exciting ideas. One of the ideas that came from the team I was on sought to look at barriers to entrepreneurship from a different perspective. We chose to look at it from a human perspective. Think about the life of an entrepreneur outside of their business plan. From this the beginning of a big idea was formed. The Entrepreneur's Safety Net idea seeks to remove barriers that make founding a start-up, growing a new company and even selling and starting over possible.  

Hopefully, these ideas will be added to the well of ideas that come from these sessions. They will grow, evolve and become something great and meaningful for current, and future, innovators in our region. I simply left too inspired by these ideas to just sit and wait for the larger committee to take them on. I felt starting a virtual dialogue might help. 

Thus, you have the forming ideas of the the Entrepreneur Safety Net Program

1. Healthcare
Creation of a community-based healthcare program that is portable and affordable for small businesses and individuals. It could be portable and consistent, as individuals change employment status or even employers within the region. It would be preventative-based and use technology to keep costs low. Cerner as a global leader in healthcare technology should play a leading role in creating a regional healthcare program. Ideally there would also be a shared pool created were the business community could help to subsidize healthcare for some start-ups while in their early launch phase and they would contribute back to the pool as they grow. 
2. Childcare
Much like healthcare, childcare is a major barrier to many small innovators. Kansas City is known as a great community to raise a family, but the childcare network is sporadic and expensive. Using the model of the larger corporations and universities that have created their own highly successful childcare centers, we would propose a civic network of childcare centers that are designed to accommodate the children of the creative class and the start-up business owner. Flexible hours, tiered cost structure, community activities and more. 
3. Advanced Entrepreneur Education
One of Kansas City's great assets is how the city's non-profit organizations and universities have created exceptional programs for entrepreneurs. From the Kauffman Foundation and their FastTrac program, the Helzberg Entrepreneurial Mentoring Program, the various great university programs, such as the UMKC Bloch Business School and the Kansas City Art Institute; there is no lack of opportunity. There is however a problem with cohesion and selection. All of these educational programs need to create a clearinghouse and sharing program with the student in mind. What program or combination of programs are best for an individual? Then help that student craft a course of study that benefits them and sets them on the best path for building and growing a business in Kansas City.    
4. Primary Education
Like most mid-size and large American cities, Kansas City has a serious problem with urban education. Many other initiatives are underway to attempt to address the challenges facing our educational system and I wish them well. For improving entrepreneurship, we need to look at current realities, and how we can create a school (or school network) that appeals to those considering our city to start a business or are already here. These women and men are generally highly educated and creative and want to find great schools for their kids. Currently, they are limited. Why not create a "district" that spans state lines and district borders and focuses on creative high-quality education? Use the new Kauffman School as a basis, but for K-12 and not limited to the current Charter School constructs.       
5. Continuity of Resources (Entrepreneur Concierge)
This is perhaps the easiest one of the eight ideas to accomplish. All of the government entities need to put aside their differences and work with the local non-profits to create one simple gateway for all new business start-ups. The Area Development Council has had some success with this, but they are not conducive to the small start-up. There should be a singular point of contact throughout the entire life cycle of a company, regardless of the location in the metro or the type of business. Have one "concierge" that is there to assist and guide a business.  
Additionally, our region has several great small business incubators such as Office Port. What the region needs is an effort to connect and unify the incubator programs. Tie together and leverage resources across for-profit facilities and university facilities.   
6. Community-Based Venture Capital
We have one of the great philanthropic community funds in America. The Greater Kansas City Community Foundation currently administers over $1-billion in assets that benefit countless programs in the region. We also have several great venture capital funds in our region. The great missed opportunity is the creation of a community-based venture capital fund that is designed to support and fund early stage start-ups for the benefit of our community. A fund seeded by the philanthropists and local corporations and administered by a board of local leaders.  
7.  Start Up Neighborhood
All great cities known for innovation have one particular area or neighborhood especially known for the vibrancy of the entrepreneurial spirit. This becomes the hub from which the identity grows. Businesses may start in that area and then move to other areas within the region as their needs change. By designating and aligning assets to help create one key innovation hub, we will be able to better craft our message and story to the rest of the world. This benefit then spins off to the entire region. Creating an energetic center of innovation also reinforces the idea of the "Third Place" for individual interaction and idea exchange. Richard Florida does a great job explaining this in his book Who's Your City.   

Hopefully these thoughts will coalesce into something tangible. Perhaps they will spur new ideas, debate and perhaps even real action. I am excited to continue to be an entrepreneur, while also pushing this greater discussion of how we can create a true American Entrepreneurial City.

Now I want to hear from you. Please share this article and leave your thoughts on this first draft of ideas. I will edit and refine as we continue a virtual dialogue.

Thank you.

Article first published as Creating America's Most Entrepreneurial City on Technorati.