This is a story about magic, in particular it is about alchemy: taking basic elements and changing them into gold.
So, it’s really a story about change.
As an alchemist, it is my job to transmute brands, products and marketing practices into profitable revenues.
I start by asking, “Why change?”
Once upon a time, manufacturers were king: “if we build it, they will come.” Then it was the retailers’ turn: “if we stock it, they will come.” Today, it’s the consumers that are in charge: “if I want it, you better have it.”
To paraphrase Sy Syms, consumers today truly are “educated consumers” they know all. And, this knowledge requires better products, better values, and immediate gratification. Oh yes, they also want engaging customer “experiences” at point-of-sale, or why bothering going to a store, at all?
Millennials are responding to fewer brands, only the huge powerful “killer” brands (Apple, Levi’s, Polo Ralph Lauren, Nike, and a few others) stimulate them to purchase. I don’t know which brands will be relevant in 2020.
The world is changing at an accelerated rate.
The iPhone was first shipped on June 29, 2007. It launched the Smartphone revolution. 7 years later, 2014, over 1.4 billion Smartphones will be purchased – that is this year alone. Smartphones have transformed, even destroyed, entire industries including cameras, books, music, wallets, television, maps, and even telephones. Smartphones put mobile email, instant messaging and Internet access in the hands of billions of global citizens. This access has already resulted in major economic, political and social change… and mobile shopping. The new Amazon Fire phone isn’t a phone at all; it’s a shopping mall in disguise.
Speaking of the speed of change: same-day shipping is old news, same-day delivery is so last year. Macy’s can ship same-day deliver from over 400 doors, 800 by the end of this year. And, Amazon and Google are experimenting with flying drones, same-hour delivery: Lakeshore Brewing has already delivered cases of beer by drone. Their motto: “Drop Beer, Not Bombs.”
2014 has seen 3-D printed dresses, 3-D pizza for NASA, 3-D Oreos at SXSW, 3-D prosthetics, and 3-D printed human organs.
Today, cars park themselves, brake themselves, and keep us in lane. This technology is the precursor to “driverless” cars.
Google Glass, Oculus Prime, and other magic acts now provide us with wearable augmented reality.
The consolidation of retailers has led to fewer choices at malls. The proliferation of ecommerce has led to greater choices online. And, the Internet provides for total price and product transparency and the advent of “showrooming.” Inventory is moving from stores to drop ship distribution centers, and to vendor warehouses. That’s a major change.
How is this future-view useful today? To be transparent, but not invisible, I don’t know for sure. I do know that I need to be ahead of, or at least beside, the future so that it doesn’t run me over. Look in the rear-view mirror: those are the people, and companies, that waited to change.
LOOK INTO THE CRYSTAL BALL:
While seated on your sofa, connected via high-speed wireless connection, using Google glasses, you take a virtual walk through the Macy’s men’s department, all via augmented reality. Browsing the accessories fixtures, perhaps haptically “touching” the bio-engineered leather belts. You ask for assistance from a virtual MCG in-store sales associate, “May I suggest a tie to go with that new shirt?” The “buy” button hovers in front of you, and you press, “Deliver Today.”
The world is changing and survival depends on our ability to adapt to change. Take the red pill.
PEEK INSIDE MY CAULDRON:
At Randa Accessories, where I practice magic, alchemy is not cult, it is culture; and it requires five essential elements:
OUTSTANDING PRODUCT: The spell starts with compelling product. The consumer has the deciding and final vote. That vote is for product. Our product must be outstanding, in-stock, terrific value and exactly what the consumer desires. We must continue to be the undisputed expert in each of our product classifications.
AGILITY & CREATIVITY: Eye of new. Be quick and entrepreneurial. From top to bottom we are innovative, creative and fast to change. We know that last year’s magic is unlikely to work again next year. We invest in constant newness.
TESTING & OPTIMIZATION: Add seasoning to taste. We are committed to more than creativity, we are committed to assure that our new ideas are scalable and enter the market. Invention is nice. But, without economic or social impact, it is useless. For innovation to be important it must be effective. This requires discipline. Think of Jim Collins, “Bullets followed by canon balls.”
MEASUREMENT: In alchemy, a “pinch of this, a little of that” doesn’t cut it. We measure everything. It is our culture, and a core competency, to be hyper-analytical and highly efficient. Every controllable element, and many that we cannot control, is precisely measured, and with this visibility, our efficiency is thereafter improved. This gained efficiency results in better value for our consumers, greater success for our partners and therefor more business for us.
PARTNER SUCCESS: The gold is not ours alone. Finally, and possibly most important, we are committed to making our partners successful. At Randa, assuring our partners success, at virtually any cost, is not the opposite of putting our own profit first. We do not see profits and success as a ‘zero sum’ equation whereby one party’s gain is at the expense of another party’s loss.
By putting our partner’s success first we gain trust and loyalty. That loyalty is a currency that we exchange for unprecedented access to testing new brands, products and processes. We measure and optimize these tests, which in turn yield new and greater success for our partners, our consumers and ultimately for Randa and our associates. Success is a continuum not a destination.
To non-believers, this wizardry may appear paradoxical: Measure everything; yet be quick to market. Make our partners successful; yet focus on our own success. The secret lays in balance and discipline; most important, it lays in the willingness and commitment to change.
The magic is to turn the base elements of product and intellectual property into gold; gold which is shared with our partners. After all, I’m an alchemist not a leprechaun.
David J. Katz
New York City
September 1, 2014
© 2014, David J. Katz