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Wednesday, October 13, 2010

WALMART'S ROLLBACK FAILURE

Hey World,
            Remember the Rollbacks at Walmart? Well, the Rollbacks did not get Walmart to the sales target they were introduced for. What does this mean? Has the Rollback strategy failed? The answer is a big NO. The strategy was fine and it did what it was designed to do. I believe that the strategic move by Walmart was not implemented properly and so is Walmart raising prices to make up for the substantial revenue loss.
           Let me elaborate on this. Earlier this year Walmart implemented its Rollback strategy, announcing big cut-down on prices, expecting customers to flood its stores and eventually bring out a substantial increase in revenue. The prices were slashed by really big margins, given the preconceived notion that Walmart gives the cheapest price in almost everything. The word "Rollback" was publicized extensively so much that every Walmart employee wore a fancy batch that said "Rollback." The price-cuts substantiated the move.  Did the message reach out to the customer pool? It definitely did. Did they respond to the price cuts? They sure did. Then what could have possible gone wrong?
            The problem is not with the food. It is with the platter. The inherent Walmart characteristics coupled with the recent changes that happened in the stores created a "Crystal Maze" scenario where every Walmart shopper had to literally hunt their product down. Walmart recently gave a complete make-over to all of its stores ending up with all-new categorized aisles and a new color theme. Living in Starkville, Mississippi, I found this to be a very interesting move. Simply because there are not many stores to buy from here in this fantastic college town that is home for Mississippi State University. But there was an interesting after-effect to this make-over move that created a state of slow yet steady chaos. The whole store got rearranged and every time I went to Walmart, I had to win the "Treasure-Hunt" contest to get the product I went there for. Things are not in the place they used to be. The whole make-over move that was initiated by the then US CEO Eduardo Castro-Wright was implemented rightly but the consideration for a possible "settling-period" was overlooked. New aisles with re-arranged products will impact the customer experience and it did so. All that was needed was some time for the customers to get used to the new Walmart. Any further move should have been taken after the "settling period." Unfortunately the Rollback was already there when the customers were still getting used to the new Walmart. This in my opinion affected the extent to which the price cuts would reach the customers' minds.
            Another issue that complicated things for Walmart was missing brands. I am a music enthusiast. I always made a trip to the musical instruments rack (a corner of an aisle in the "toys" section!!) every time I went to Walmart. One fine day the small rack of musical instruments vanished. I never saw them again. This vanishing of brands was throughout the store, almost in every aisle. Walmart had been removing brands that did not promise a good sale and in the process infringed upon the specialty of Walmart which obviously is variety. It has to be pointed out that around March Walmart started restoring some of the "sacked" brands back into its aisles which in my view is an appropriate solution.
           The question that comes to my mind is "Why would Walmart mix-up store make-over, brand restoration and price cuts at about the same time, given that Walmart had been through consecutive sluggish quarters in terms of sales?" Each of the strategic moves that Walmart did were individually fail-proof and profitable but their blend created contradicting scenarios where the benefits of each strategic move basically ate parts or whole of each other. This is one reason why the Rollback strategy did not pay off as expected.
            Adding to the troubles is (I am not happy to make this point but I consider it true and hence making it) the well-known inferior customer-service that Walmart has always been blamed for. There are numerous employees in every store but astonishingly every time I look for a customer-service personnel, I don't see one. I either have to walk to a corner of the store or to the check-out counter to find a customer-service personnel. I personally know a lot of people who have switched from Walmart to other stores (even in this small college town of Starkville simply because they did not get the help of the customer-service personnel when they needed it. I wouldn't blame them because I myself had experiences at Walmart where I would walk to the other end of the store and get a quick reply "I don't know, somebody working in the aisle will be able to help you." I appreciate the public address system but it is merely being used as an excuse to escape the pain of helping the customers find what they want (which ironically translates into "customer-service").
            I have also noticed that the customer-service personnel are not very happy with their jobs (on more than one occasion). The worker may not be wrong all the time. Sometimes the work may be packaged wrongly that no matter who takes up the work will find it difficult. Motivating the employees is one thing that Walmart should seriously consider because being the cheapest definitely brings the customer into the store but it is the shopping experience that will bring the customer back to the store and this is where customer-service will play an important role.
            Walmart made more than one strategic move and has observed the symptoms as well. It all depends on how the symptoms are interpreted to device a suitable and timely solution. Too many changes with below-par customer service cannot help the customers enjoy the additional price cuts (at least it did not do this time). Walmart eventually had to roll up the prices to make up for the loss of revenue in the past quarters. Price leadership is the most powerful trait any business can have but it needs to be supplemented to bring about a substantial difference in sales. Walmart has been a market leader for long and I believe its management understands this much better than anybody else. As I had stated earlier, the problem is not with the food but with the platter on which it is served. Come on Walmart, you have done it before and you can do it again. The key is to Build, Preserve and then Progress.

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Signing off,

Tuesday, October 12, 2010

HEIGHTS OF POSITIVE ATTITUDE

Hey World,
            This is the last day of the fall break. I felt sad when I woke up this morning because the fall break is coming to an end. 4 days of unbeaten laziness, something I will remember until the end of fall semester. I decided to cheer myself up by looking into the brighter side that there is this day, today, left for me to enjoy. Optimism early in the morning is something I really enjoy. Although I was awake, I decided not get out of my state of extreme laziness and kept thinking about this last day of the fall break and how my feelings changed when I told myself there is one whole day to enjoy. A series of images flashed through my mind and I scribbled it down real quick.
           How far can someone be positive? What would be the heights of positive attitude? Here are some figments of my imagination...enjoy....
Is he challenging Michael Phelps??
He must be a Steve Irwin fan......
He has health insurance...but it doesn't matter anyways....
He uses a smart phone I believe...
Free Fall is always the most expensive fall....
 
Computers can do anything....





On a very different note [a shameless plug], if you are interested in unique tamil short films, feel free to visit https://www.summamovies.com/I couldn't tolerate the mass masala entertainers anymore and decided I will do my best to produce content with substance. I have a long a way to go as a producer and a start-up founder, but I am glad our journey has begun. I look forward to your support. Each film on our site costs INR 15. Thanks!!!

Signing off,

Monday, October 11, 2010

GAP KEEPS OLD LOGO!!!

Hey World,
          Gap got a lot of attention from its customers when it released its new logo. It seems that the massive out pour of disagreement from its customers made Gap revert back to its classic blue box logo it had held for over 2 decades now. Marka Hansen released a statement stating that Gap would continue to have its iconic blue box logo. The statement however made a mention that Gap would replace the blue box with a red box for the holiday sale alone.
          This is quite similar to what happened to coke in 1985 when Coca-Cola came up with a new syrup drink formula replacing the old one. Since it involved a change in the product itself along with the brand, it turned out to be a marketing failure. Any established brand will have a strong attachment with its customers who adopt it as a part of their lifestyle. Gap is no exception to that. This massive response to the new logo tells how deep the Gap brand has penetrated into the premium apparel market.
          By reverting back to the old logo Gap definitely saved a lot of trouble and in the process succeeded in confirming the worldwide acceptance of the brand. But change is constant and Gap will evolve, if not now, later. Marka Hansen also pointed out that the timing for the logo change was not appropriate for a possible crowd-sourcing project. May be the next time the senior management decides to make such strategic, permanent changes to the company's brand, it will begin with a timely crowd-sourcing approach and let its customers decide on how they want their favorite brand to be. Gap customers love the brand so much that they have developed an emotional attachment to the brand itself and changing the brand's identity may jeopardize the world's love for the brand.
          A small incident, no losses whatsoever but a great marketing lesson to the entire business world. Creating a brand is difficult, maintaining it is even more complicated. Gap has set everything right now and the day is safe. Gap has demonstrated that it takes a lot of efforts to improve but more guts to take a step forward and check how deep it is. Big brands learn and evolve. So does Gap. Way to go Gap!!!!

On a very different note [a shameless plug], if you are interested in unique tamil short films, feel free to visit https://www.summamovies.com/I couldn't tolerate the mass masala entertainers anymore and decided I will do my best to produce content with substance. I have a long a way to go as a producer and a start-up founder, but I am glad our journey has begun. I look forward to your support. Each film on our site costs INR 15. Thanks!!!


Signing off,

School Days: A Definite Pass

Saturday, October 9, 2010

GAP CHANGES LOGO!!!

Hey World,
           Gap has changed its logo and this has created an avalanche of critique on the new logo. Some love it, some hate it while the fact remains that a lot of them are not even aware of the brand (let alone the logo change). One would wonder "why care about those who are not aware of the brand or the logo change?"  Well, it is those who are not adopting the brand that decide the success/failure of the brand in the times to come.
            Having existed for decades, Gap definitely has a cemented brand image. Unlike the millions of brands that use complicated graphic designs (comparatively), Gap held on to what may be called as one of the simplest word-marks ever used for branding. In my opinion it added value to the premium aspect of the brand. Simple, bold word-mark that has captivated millions of ardent style-chasers around the world, held onto a strong attitude factor that defined the concept of style for the Gap brand-lovers worldwide. The logo was consistent with the sense of style sophistication the Gap customers always associated themselves to.
            With sibling brands Banana Republic and Old Navy, Gap had covered every corner of its target demographic of 13-45 years, spreading the customer pool over the three brands without any room for brutal cannibalization. Be it the young teenager, college student, young working adult or middle-aged professionals, Gap has an array of apparel to choose from for each group. Although Old Navy would stand for the cheapest of Gap products, it does hold a sophistication in terms of positioning, for it targets the brand-fanatics who like to have their style statement defined more economically.
             Evolution is something that the business world is always going through and every business is required to evolve with the business world. While most businesses adopt the "follow-the-crowd" evolution tactic, looking for the appropriate time to switch to the standardized and currently accepted practices, there are these companies that create the standards for the rest of the market to follow suit. These are the brave market leaders, those who dare to go out, do what they feel is right and try to capitalize on their strengths. These companies are usually the first ones to evolve and in fact mark the beginning and end of a generation for that industry. Gap is definitely one of those market leaders. I believe this logo change is just another brave step that Gap has taken to proceed with its evolution into the next generation of the apparel industry.
             There may be a truck-load of reasons for Gap to come up with a new logo, ranging from changes in the senior management to curing symptoms such as stagnated sales. Irrespective of why the new logo has to be introduced, it is an obvious challenge for Gap to preserve the brand image it has held all these years and further captivate new customers. Gap's new logo, a generic word-mark, with letters in both cases and the symbolic blue box as an accessory, in my view, is definitely new but not quite consistent with the old Gap logo. The attitude element of the old logo rested on the actual "gap" between the letters and the "bold" typography. The new logo is lacking these two basic elements which I believe is the distinct changes that Gap has made. The blue-box of the old logo is included in the new one but not as the whole base-block but as an accessory to the word-mark which although makes sense for the existence but does not serve the purpose of the undertone of the brand image it previously provided.
             Gap has courageously taken the step towards the next generation but will the new logo provide the desired evolution while preserving the brand image in the customers' minds is something that is yet to be noticed. Another question that comes to my mind is will this change affect the sibling brands of Gap or is this just the beginning of a complete makeover of the entire brand family? History has it that all the big brands faced this challenge every time they tried a makeover to their brand logo. Gap is going through the uncertainty phase but rather strongly since the company is considering opinions of its customers worldwide. Being an MBA student myself, I have all the appreciation for the brave and creative move that Gap has taken towards evolution into the next generation. Here are my suggestions on possible Gap logos:




                 Having  pondered over the tip of the iceberg here with the Gap logo, I would like to point out a rather strange coincidence. My high school buddy worked as the merchandiser for Gap apparel in a company that manufactured Gap products and that company is about 2 miles from my home in Chennai, India!!!!!
I know people who have decided what Gap designs would hit the market all over the globe. Next time you think about style & brands, keep this in mind that perception is reality and the best designs may come from any corner of the globe irrespective of which country the company is headquartered at.

All the best Gap!!!


On a very different note [a shameless plug], if you are interested in unique tamil short films, feel free to visit https://www.summamovies.com/I couldn't tolerate the mass masala entertainers anymore and decided I will do my best to produce content with substance. I have a long a way to go as a producer and a start-up founder, but I am glad our journey has begun. I look forward to your support. Each film on our site costs INR 15. Thanks!!!

Signing off,

Hello World!!!

Hey Everyone,
           Finally I decided to become a part of the online version of the human society (let's just waive the social networking sites out of this....we do not get to do what we want there...they are all about options and applications). Blogging sounds more boggling to me and so am I blogging.

          I haven't decided yet what I will be blogging about and that's what makes blogging so interesting to me...the element of randomness. So without wasting time...I will go ahead and get started.

On a very different note [a shameless plug], if you are interested in unique tamil short films, feel free to visit https://www.summamovies.com/I couldn't tolerate the mass masala entertainers anymore and decided I will do my best to produce content with substance. I have a long a way to go as a producer and a start-up founder, but I am glad our journey has begun. I look forward to your support. Each film on our site costs INR 15. Thanks!!!

Have fun,