Tag Archives: business model

Walmart Finally Gets It: Employees Matter

19 Oct

For years, Walmart has had tough labor practices and been heavily criticized for them. For example, it has been sued by many women for unequal pay and promotion opportunities, fought hard against employees unionizing, paid low wages, etc. But, now Walmart is loosening up; and it realizes that happier employees can mean happier customers due to better customer service. It has even brought back store greeters in many locales where they had been eliminated to reduce costs. Yes, this comes at a time when U.S. revenues have been weak.

As Neil Irwin reports for the New York Times:

“A couple of years ago, Walmart, which once built its entire branding around a big yellow smiley face, was creating more than its share of frowns. Shoppers were fed up. They complained of dirty bathrooms, empty shelves, endless checkout lines, and impossible-to-find employees. Only 16 percent of stores were meeting the company’s customer service goals. The dissatisfaction showed up where it counts. Sales at stores open at least a year fell for five straight quarters; the company’s revenue fell for the first time in Walmart’s 45-year run as a public company in 2015 (currency fluctuations were a big factor, too).”

“To fix the situation, executives came up with what, for Walmart, counted as a revolutionary idea. As an efficient, multinational selling machine, the company had a reputation for treating employee pay as a cost to be minimized. In 2015, Walmart announced it would pay its workers more. Executives sketched out a plan to spend more money on increased wages and training, and offer more predictable scheduling. The results are promising. By early 2016, the proportion of stores hitting their targeted customer-service ratings had rebounded to 75 percent. Sales are rising again.”

“An employee making more than the market rate, after all, is likely to work harder and show greater loyalty. Workers who see opportunities to get promoted have an incentive not to mess up, compared with people who feel they are in a dead-end job. A person has more incentive to work hard, even when the boss isn’t watching, when the job pays better than what you could make down the street.”


Click the image to read a lot more from Irwin.


A Walmart trainee perfecting a cereal display in Fayetteville, Arkansas. Credit Melissa Lukenbaugh for The New York Times

A Walmart trainee perfecting a cereal display in Fayetteville, Arkansas. Credit Melissa Lukenbaugh for New York Times.


Is Yahoo a Good Buy for Verizon?

17 Oct

When it began in 1994 and for many years thereafter, Yahoo was a Web dynamo with tons of viewers, a leading search engine, lots of content, multiple points of contact, and more. But in recent years, Yahoo has fallen on really tough times. Hopefully, it will still have something to offer Verizon after the latter’s recent purchase of Yahoo (click here to see the current URL).

Consider the title of this Forbes article by Brian Solomon — “Yahoo Sells To Verizon In Saddest $5 Billion Deal In Tech History”:

“Yahoo was once the king of the Internet, a $125 billion behemoth as big in its time as Facebook or Google are today. Now it’s being sold to Verizon for comparative chump change. But the biggest story is how Yahoo squandered its massive head start and let each wave of new technology in search, social, and mobile pass it by. Yahoo remains largely the same company it was a decade ago — a portal that hundreds of millions of users rely on for everything from news and weather to key functions like E-mail and games like fantasy football. Yet Yahoo missed the opportunity of a generation to convert its early lead and millions of users into more than just a portal. As the attention of the world shifted to smartphone apps, Yahoo’s last advantage in the desktop world has faded.”

“The one thing that kept Yahoo afloat for this long is Jerry Yang’s risky $1 billion bet on Alibaba in 2005. That bought 40% in what would become China’s E-commerce king. Yahoo sold parts of that holding over time, but its current stake is still worth more than $30 billion at today’s prices. However, the investment was so successful that it became worth far more than Yahoo’s flagging core business.”

Now, eMarketer reports still more bad news for Yahoo and new parent Verizon:

“Yahoo is looking at sizeable decreases in ad revenues according to eMarketer’s latest forecast of worldwide ad spending. And recent news about issues with the company’s E-mail service, including both hacked passwords and news of an undisclosed surveillance program, isn’t helping. eMarketer expects Yahoo’s ad business to decrease in size this year—and not for the first time. After a 3.5% drop in worldwide ad revenues in 2015, in September, eMarketer predicted a further 10.2% decrease for 2016. We expect growth of under 1% next year, and 1% in 2018.”


Improving E-Commerce Results

30 Sep

Would you be surprised to learn that only a small percentage of E-commerce sites gain any traction at all? Most dwell in obscurity.

Consider these observations from Cent Muruganandam, writing for Business2Community.com and check out the infographic shown below his quote:

“You might be astounded to know that there are between 12-24 million E-Commerce websites online. But what’s even more intriguing is the fact that only about 3% of them (650,000) ever make it past $1,000 in annual sales, according to Internet Retailer. What’s the point I am trying to establish here, you might wonder? Well, from where I see it, a whopping majority of E-Commerce outlets fail to make a significant amount of money. It’s not that there’s no money in the E-commerce industry. It means is that majority of online retailers are not doing things right, because if they had been successful in doing them right, the number of outlets making more than $1,000/year would have been way more than a mere 650,000.”



How to Get Digital Media Right

29 Sep

MillardBrown Digital has produced an excellent report and Webinar on how to best engage in digital marketing:

It’s no longer about traditional or digital. It’s all marketing. Digital marketing has emerged as a vital part of the marketing landscape, forcing marketers to grapple with scaling across a variety of engagements. And while there’s a surplus of data available to help inform decisions, selecting the right data, and combining, analyzing, and creating actions from that data is challenging. With input from over 300 senior executives across advertisers, agencies, and media companies, our 3rd annual Getting Digital Right study identified four key findings for getting digital right and creating extraordinary marketing in a connected world.”

Click here to access the full report. A free login is required.

Click here to view/hear the Webinar.

Here are two charts from MillardBrown Digital.  To view a larger version, click on each chart. The first chart identifies the steps necessary to undertake a great digital strategy.


The second chart highlights the ease/difficulty of measuring ROI (return on investment) with various media platforms.  [This shows why E-mail marketing is NOT dead. It ranks first in measuring ROI.]


The Fascinating Evolution of Blogging

27 Sep

Blogging has come a long since its humble origins in the 1990s. Based on Tumblr data, we estimate that there are about 310 million blogs worldwide, with millions and millions of posts each day. So, how has the blogosphere evolved over the years?

Recently, HubSpot’s Amanda Zantal-Wiener helped us answer this question:

“We’ve found that there’s quite a history behind blogs. According to the documentation we uncovered — and will share with you below — they’ve been around since 1994. They looked a lot different back then, and had many different names and meanings.”

  • 1994-1997 — “Many original bloggers, despite not having yet earned that title, were the same people who first understood the value of the  Web in the 1980s. One of them was then Swarthmore College undergrad, Justin Hall, who created a site called links.net in January 1994. It was essentially a review of HTML examples he came across from various online links, but it was enough for the New York Times Magazine to dub him the “founding father of personal bloggers’.”
  • 1998-2001 — “The later part of the 1990s saw an uprising in resources created for bloggers. Open Diary launched in October 1998 and became one of the most pivotal blogging platforms. The name was a nod to its community approach to blogging; it was the first to have a membership model that allowed members of the community to comment on the work of others.”
  • 2002 — “Technorati, one of the first blog search engines (but today a company of “advertising technology specialists”), launched in February 2002. That month, blogger Heather B. Armstrong was fired for writing about her colleagues on her personal blog, Dooce.com. While it’s not clear if she was the first blogger to be terminated because of her personal Web site’s content, it sparked a conversation about privacy and freedom of expression for bloggers.”
  • 2003 — “TypePad and WordPress launched in 2003, offering new platform options to a growing number of bloggers. That year, live blogging was estimated to have started — the Guardian was one of the first outlets on record to make use of live blogging during the 2003 prime minister’s question time.”
  • 2004-2005 — “It wasn’t until the middle part of the decade that visual content really had the opportunity to take root. In February 2004, videographer Steve Garfield , who went on to be one of the Web’s first video bloggers, declared it to be the “year of the video blog.” YouTube launched only a year later in February 2005, shortly thereafter inviting the public to upload their own videos. It actually began as a short-lived dating site. YouTube turned its focus to general video uploads (which seemed to take effect by June 2005). Huffington Post launched that May.”
  • 2006-2007 — Microblogging was introduced (sharing stories, news, and other content in the smallest format possible). “The start of life in 140 characters (or less) began in March 2006, when Twitter co-founder and CEO Jack Dorsey sent out the world’s first tweet. Microblogging continued to gain momentum in February 2007 with the launch of Tumblr — yet another blogging platform that encouraged users to be brief. Being able to comment on blogs was becoming less of a novelty, and more a point of contention.”
  • 2008-2011 — “During this period of four years, there weren’t many major events that propelled how or why people blogged. By 2010, 11% of bloggers reported earning their primary income from blogging.” Google  made some changes that would impact bloggers in 2011 with its rollout of the “Panda” algorithm change. A lot of that had to do with bloggers having a lack of inbound links — a link to your Web site that comes from another one.”
  • 2012In August, a co-founder of Pyra Labs — the creators of Blogger — Evan Williams, created Medium, one of the newest blogging platforms. Today, people can use it to write and publish original content, like most other blogging platforms. But Medium is continuing to blur the line between news reporting and blogging. On its Web site, the company describes itself as serving up ‘daily news reimagined, straight from the people who are making and living it.’ That year, LinkedIn introduced its Influencers program, which recruited notable business figures to guest blog on LinkedIn’s publishing platform.”
  • 2013-present — “Recently, the creators of WordPress announced they would be rolling out the .blog domain. Until November 9, 2016, users have to apply for one of the highly-coveted domains. [and it won’t come cheap]. But here’s the cool thing about .blog — even though it was made by the creators of WordPress, you don’t have to use the WordPress platform in order to build a blog on that domain.”
  • Forecasting the Future — “How blogging continues to change will determine what our careers look like, and  all marketers, corporate or otherwise , are encouraged  to blog on behalf of their respective brands. It might seem like a lot of work, but if the evolution of blogging has indicated nothing else, it’s that the sphere will only continue to expand. And that’s something marketers should continue to pay attention to — not just the growth of blogging, but how many different interpretations [platforms] of it exist.”


Click the image to read a lot more by Zantal-Wiener.


How Scenario Planning Influences Strategic Decisions

31 Aug

Scenario planning involves planning for the future by understanding that different marketplace outcomes may occur in response to any strategy and that each possible marketplace outcome must be planned for to avoid the worst case scenario.

Here’s a simple example: Suppose that a major soda company introduces a new non-carbonated cola beverage into the marketplace. These are just a few scenarios that are possible:

  • The sales of the new beverage meet expectations and do not cannibalize the sales of other company products. Overall company revenues and profit rise.
  • The sales of the new beverage meet expectations, but slightly cannibalize the sales of other company products. Overall company revenues and profits rise slightly.
  • The sales of the new beverage meet expectations, but greatly cannibalize the sales of other company products. Overall company revenues stay the same, and profits fall somewhat due to the investment in the new item.
  • The sales of the new beverage do not meet expectations and do not cannibalize the sales of other company products. Overall company revenues rise very little, and profits fall a lot due to the investment in the new item.

The premise of scenario planning is to anticipate the possibility of each of these outcomes occurring and have in place a pre-planned framework (contingency plan) to deal with each scenario.

Recently, Shardul Phadnis, Chris Caplice, and Yossi Sheffi wrote an article for the MIT Soan Management Review titled “How Scenario Planning Influences Strategic Decisions.” The authors reached three major conclusions:

  1. The use of multiple scenarios is not necessarily an antidote for overconfidence. One should not assume that simply using multiple scenarios to evaluate a long-range decision will help alleviate the negative effects of decision makers’ overconfidence in their own judgment.”
  2. Scenarios influence judgment — and their content matters. More than half the judgments in our studies changed after single-scenario evaluations. Scenario users became more favorable of investing in an element — either by increasing confidence in their original recommendation to invest, decreasing confidence in their original recommendation to not invest, or changing their recommendation to favor the investment — when they found the element useful in a scenario.”
  3. “The use of multiple scenarios can nudge executives towards more flexible strategies. Executives often choose strategies optimized for a particular environment. While such strategies may perform well in the environment envisioned at the time of their implementation, they may not be easily adaptable to new opportunities or in response to unexpected threats.  Under such circumstances, evaluating strategic decisions using multiple scenarios can help executives appreciate the importance of choosing more flexible assets or approaches — even if doing so is not the most optimal choice for present-day conditions.”

Click the image to access the article.



The Consumer’s Path to Purchase by Category

22 Aug

We know that consumers shop differently for various goods and services. But we can always learn more.

Millward Brown Digital recently produced a report entitled “Demystifying the Consumer Journey?” A free download is available with a simple login.

The chart below summarizes the average length of a shopper’s journey (in days) and  the level of involvement accompanying a purchase decision (in other words, how hard the consumer was willing to work to make a purchase decision). Millard Brown concluded that:

“The risk of making the wrong decision is a powerful thing. When a wrong decision could result in significant financial loss or impact personal safety, consumers invest more time and care in the decision-making process. As a result, the average journey length for an auto purchase, for example, is nearly 10 times longer than that of a beauty purchase.”

“A ‘marketer-centric’ approach to budget and resource allocation is often the easiest option. However, by placing the consumer at the center, marketers can tailor budget allocations to the digital touchpoints that drive real consumer action.”



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