Retail Goes Pop!

When I first wrote about #Pop Up stores in 2009, I noted these temporary brick & mortar locations as responses to important market trends – widespread recession driven retail vacancies and the launch of unique fashion brands such as Gucci sneakers and Rachel Roy.

Nearly eight years later, as more shopping increasingly takes place online – at Amazon.com, Walmart.com or the virtual world of your favorite mall-based retailer – Pop Up stores are providing shoppers and brands with important opportunities to connect.

  • Pop Ups allows brands to create a unique shopping event for their customers, aligning the brand’s positioning with an IRL experience. And we know consumers are more likely to be interested in brands that provide an experience, not just the acquisition of “stuff”. When GOOP (Gwyneth Paltrow’s lifestyle brand) opened a popup location for four weeks in Dallas, brand aficionados lined up around the block to experience the GOOP lifestyle the brand advocates in its online positioning.
  • Pop Ups can reinforce the customer’s connection through exclusivity. E-commerce is mass commerce – anyone with a credit card and an internet connection can shop online, even for the most luxurious products. But a popup Hermès launderette or Armani Beauté styling shop is available for just a lucky few Parisians, helping to solidify consumers’ alignment with the super-premium attributes of those brands.
  • A Pop Up shop can create opportunities for re-branding or re-positioning. Manufacturers can use these temporary retailers as a controlled environment for testing new products or service concepts. Amazon’s popup stores offerings have expanded from locations that focused a data-curated selection of books to outlets now highlighting the company’s devices such as the Kindle and Echo.These brand driven strategies are aligning with increased interest from commercial landlords in taking on temporary tenants. While the general economy has improved, property owners in cities like New York are facing rising retail vacancies. And malls across the US are suffering shuttered stores and declining foot traffic. The result is a greater willingness to consider (and even seek out) popup retail as a way to bring in some rental income.

Some thoughts for marketers:

  • Do you think this sales channel will increase in the future?
  • Are Pop Ups a way for brands to address the desire for “high-touch” among some consumers?

The K-Beauty Revolution: How Culture Drives Innovation

America’s multi-billion-dollar cosmetics industry thrives on consumers’ thirst for novelty—the next new service, formulation, or product—delivered through targeted messaging, packaging and promotion. While the United States is home to the largest cosmetics market in the world, there is perhaps no nation that prioritizes innovations in beauty and skincare as much as South Korea. From BB creams & egg hydration masks to snail cream, the innovations of K-Beauty are now taking the West by storm. At a recent K-Boom symposium hosted by Cosmetic Executive Women, it was reported that Sephora’s K-Beauty category grew more than 70% between 2015 and 2016.

The K-Beauty revolution is built on the willingness to blend cultural tradition and reframing raw materials found in local environments such as Jeju Island. With more than 25,000 beauty brands in the hyper-competitive South Korean market, being distinct takes tremendous creativity. This sense of excitement is evident no matter where K-Beauty arrives around the globe. All you have to do is walk through a pop-up store in Manhattan to experience the way K-Beauty engages the senses with fun, youthful, vibrant packaging and in-store displays. The formulations, and the delivery systems are designed to be distinctive, aesthetically appealing and communicate the efficacy consumers are looking for. Donna was first introduced to BB Cream when she conducted focus groups with users about their experience with this new skincare product. As women discussed the strengths of BB Cream, it was clear that they thought it was unique and, unlike so many skincare entries that promised the world, it actually worked! Women spoke about BB Cream in glowing terms describing it as the optimal blend of skin care and cosmetic attributes—an all-in-one product that combined hydration, sun protection and evening out skin tone. Women talked about the natural, dewy fresh, finished look it provided, which was even more amazing to them given the light texture and consistency of BB Cream. Their enthusiasm for this all-in-one product motivated Donna to give it a try.  Not only did BB Cream simplify her beauty routine, the results were as advertised by the users she interviewed. Today, the enormous appeal of BB Cream can be seen on the shelves, as most major brands have a BB Cream entry in their product line.

The Emergence of AmorePacific: Case in Point

According to Ju Rhyu, a K-Beauty consultant, the K-Beauty producer with significant U.S. presence is AmorePacific, whose North American sales were approximately $48MM in 2016. What’s the key to AmorePacific’s success?

The AmorePacific brand epitomizes K-Beauty innovation. The organization is interesting in its attempt to stay true to its Korean pre-war roots. The brand is built on the home-grown legacy of Yun Dok-Jeong, a mother of six who in the 1940s produced beauty products in her kitchen using local ingredients. This notion of bespoke botanicals underscores an “all-natural” image. Fast-forward to 2007, when AmorePacific’s R&D laboratories produced the ultimate combination, uniting skincare, sunscreen, and foundation into a single product that could be sold in the form of a compact dubbed the Cushion, a product that has since been duplicated by numerous cosmetics companies. By integrating its cultural roots with state-of-the-art processes, AmorePacific has effectively broken through and established a significant presence in the US market.

As a child growing up in Korea, Jane remembers raiding her mother’s makeup bag and playing dress-up with a treasured cache of Amore products. After her family arrived in the United States, it was hard to find Korean beauty products in mainstream stores, and so she naturally adopted the American brands that were more readily available. At the time, her mother’s Amore products began to seem outdated and old-fashioned simply because they had belonged to Mom. Several decades later, AmorePacific has transformed itself into a global brand, and reinvests 3% of its revenue to R&D where their 500 chemists and scientists from around the globe formulate and test new ideas.  Their global success—with $18.8 billion in market capitalization and 28.4% in sales growth in 2015—is a model for any organization that wants to transform its brand and become a worldwide powerhouse. As companies like AmorePacific continue to grow beyond their borders, it is imperative that they are innovative with their management practices, just as they invest in their R&D.

The Linkage Between Leadership and Innovation  

When a company attempts to sell its products beyond its borders, it requires “flexing” on the part of the organization. It needs to leverage its existing assets while delivering tangible benefits to the target audience with which it hopes to grow. The pace of growth also requires leaders who are willing to take risks in order to create new products. To leverage this diverse thinking from their employees, the organization’s leadership needs to provide the resources for new ideas to be generated. And, once the idea is developed, it must have the right advocacy to bring it to market.

It will be critical for the organization to consider two questions:

  1. How much will they invest in preparing their global leaders to demonstrate the cultural adaptability required to succeed in new markets that have distinct cultural norms from their Headquarters?
  2. How will they adapt their global business approach to work with customers based in other parts of the world?

It will require increased cultural awareness about what the employees and customers want in these new markets and increased self-awareness about what they need to do differently to remain relevant. Creating an environment that rewards innovative thinking will require intentional effort to foster the right organizational culture. We look forward to watching the next chapter unfold.

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Donna Fullerton is the founder of DMF Communications, which has conducted consumer research across diverse industries with a specialty in beauty for more than 25 years. A global leadership strategist and executive coach, Jane Hyun, is the founder and president of Hyun & Associates and co-author of Flex: The New Playbook for Managing Across Differences. Chapter: Leveraging Diverse Thinking from Your Teams to Drive Innovation

Does High Touch Still Play in a High Tech World?

Recently, my mother, who is in her eighties and not nearly a tech-nerd, insisted I download the Uber App for her phone against my protests and better judgment. Within a week, she found herself in the annoying predicament of having 3 Uber drivers arrive for the same call. She was at a loss about how to reverse the charges. Her query, “Where do I call for a refund?” I broke it to her that this was not an option which elicited a quizzical, frustrated reaction. Now, I’m agile and technologically savvy as are most of my friends, but who hasn’t had some sort of problem with a transportation app? Sometimes you just can’t register the correct pickup or destination address. Sometimes the app thinks you’re in Chicago when you’re standing in front of Madison Square Garden. After a few seconds of frustration, most of my peers can wait it out, or use an alternative without spending $20 for a ride they never take. The good news about these services, which often have obscure customer service options, is that some of them are rolling out programs for the growing population of elders, as well as disabled people, that include the option of calling a human being for a ride as opposed to manipulating a smart phone. In an effort to streamline, surge forward, pursue the cutting edge, all kinds of businesses can ignore the needs of many customers who still desire (and require) human contact.

This is a concern that cuts across demographics.

23% of millennials, for instance, who recently weighed in on acquiring a mortgage in a 2017 Borrower Insights Survey conducted by mortgage automation provider, Ellie Mae, named “more face-to-face interaction” as the second-greatest opportunity for improvement in the service. It makes sense that when your experience includes an emotionally charged, major purchase like a home, the human touch is still appreciated.

I’m amazed at the way the mail room of my building has changed in the past five years. Online shopping has officially exploded. Every single day now, there are a dozen or more packages of all sizes waiting for their owners to return home, with boxes from Zappos, Amazon, Etsy, Lands End, StitchFix and many more lining the floor. While those are all online shopping sites with reliable customer service, the online clothing retailer, StitchFix has gone the extra mile with a unique modelcombining data science and real human fashion stylists. Each StitchFix customer is assigned a professional wardrobe consultant. After the customer fills out a detailed questionnaire (and often hands over the link to their Pinterest profile) he or she can receive a box of 5 curated items on demand, or at regular intervals by subscription service. Returns are easy, and customers can personally interact with their stylist via brief messages. The data collected and analyzed through the profiles and questionnaires, as well as the returns the customer makes, are obviously critical to the plan. But in the end, a human analyzes the data, and picks the clothing to be sent to the customer.

There’s a lot of support for the combination of high touch and high tech. We haven’t reached the tipping point yet where people don’t need people. While many great companies rely on technology for a percentage of their customer services, they have fine-tuned the issues that can be resolved online, while others still reserve more complicated and urgent needs for a telephone with another human being at the end. They stay in step with their clients’ needs.

The need for the human touch extends not just to the customer. For all the talk of the practice of remote-working from the desert island of one’s choice, the growth of big tech hubs Silicon Valley and Silicon Roundabout in London happened because there are like-minded individuals huddling there, spurring creativity and competition among companies, having actual face-time with peers and employers, and social activities. And most importantly, many startup founders find that being in close proximity from day one is critical to getting the shop cranking. No matter that many startups have abandoned these areas for lower rents—new tech hubs pop up.

Companies as diverse as Paperless Post and The Four Seasons Hotels and Resorts are examples of companies combining high touch and high tech to meet customers’ needs. Paperless Post, which was founded as an innovative and convenient way to send and track eye-catching invitations and announcements online, recently filled the need for actual paper versions of their products by launching “paper.” They offer good quality paper at a variety of price points, and naturally, they offer a designer to help with customers’ individual needs. Some occasions, and enough customers, apparently, still warrant the personal touch of receiving a special announcement by mail. The Four Seasons, conversely, has created an app which serves to enhance their guests’ experiences. For many of the app’s conveniences, there is a human on the other end, analyzing and responding to requests and needs.

That’s a great lesson from a company inarguably synonymous with top of the line, personal customer service. As The Four Seasons brand modernizes and optimizes for both clients and personnel, it continues to distinguish itself as one of the most desirable in the world through the synergy of high touch and high tech.

As our population ages and new hires become younger and more technically innovative, it’s wise to take care to address any gaps between high touch clients and full and easy access to products and services. Have you taken the time to consider just how comfortable your clients are with the pace of technological advances? When clients feel pushed towards high tech faster than they are willing or able to go it can be a matter of educating both sides. Some simple questions and solutions offered in a Hubspot article address the push-pull of these challenges.

No doubt, technology is here to stay! The key is to recognize that it is best to factor in a level of personal touch, along with the convenience that technology provides, to enhance the customer experience.

Questions to Consider

  1. What challenges have you discovered in efforts to integrate high tech and high touch as your business moves forward?
  2. What experiments or solutions have you found that yielded positive results for your company?

The Wellness Movement Goes Mainstream

Traditional Medicine Embraces Health and Wellness Photo: Utah.gov

I find the WIKIPEDIA entry for “Wellness” so curious. It reads: “Wellness (alternative medicine).Wellness is generally used to mean a healthy balance of the mind, body and spirit that results in an overall feeling of well-being.” That seems a very fundamental idea–encompassing a person’s total health–and yet it’s branded as “alternative.” Makes one wonder what the alternative to a “healthy balance” is.

We live in abundant times medically, Western or otherwise, and it’s inarguable that technology has had a profound effect on consumers who are now able to access medical information of the traditional variety as well as within the wellness sphere with a few clicks of a keyboard or smartphone. Technology has made us more informed patients, and proactive in our preventative care. To think, just a few years ago, most people’s assessments of wellness came once a year at their physical! Now, we can track our progress through a variety of digital devices that count steps, monitor medication, and track sleep patterns, among other things. Everyone is looking for information, a holistic alternative, a leg up, a new experience, and sometimes a quick fix.

The medical profession, retail pharmacists, employers, educators and health advocates are responding in a variety of ways to empower consumers. One result is that CAM (complimentary and alternative medicine) and Integrative Medicine (IM) have been making their way into major hospitals and teaching institutions since the early 2000s. While IM draws a very sharp distinction between itself and CAM these two camps embrace some of the same alternative modalities such as Yoga, acupuncture, meditation, massage therapies and herbal remedies, to name a few. IM makes the distinction of using only proven practices based in science.

Consumers are taking good health into their own hands with great enthusiasm, sometimes for better or worse. The good news is there is a plethora of choices for the adventurous or simply the health conscious. The internet is rife with bad information, pseudo-science, expensive supplements (how do you know what’s in them?), innumerable diets, and MoonDust, but along with the questionable, fun, interesting and informative pursuits are available as well to enrich our minds, bodies and spirits. The response across diverse industries indicates the mainstreaming of wellness.

The travel industry has responded with everything from wellness hotels and voluntourism, to yoga and walking tracks at airports. Spas abound, with locations as classic as Golden Door, or as exotic as Ananda In the Himalayas. Progressive consumers often drive the trends, and wellness is a new status symbol.

Technology and healthcare leaders have also capitalized on the wellness trend. In recent years at The International Consumer Electronics show (CES), the yearly extravaganza of everything new in drones, TVs, virtual reality headsets, robots and dozens of other concepts, an increasing amount of square footage has been devoted to the health and wellness sector. This includes not only companies like FitBit and Garmin, but UnitedHealthcare, a company vested in how the intersection of health and technology may empower people to take greater control of their everyday health. In 2017, UnitedHealth showcased mobile applications and health technology products and services meant to provide better tools for bring information to consumers across the platforms they’re becoming accustomed to.

On a more practical scale, some forward thinkers have given a boost to public wellness through policy or investment in healthful initiatives in the last decade. Our former First Lady, Michelle Obama, was a great proponent of healthy lifestyle for both children and adults. She brought much needed attention to childhood obesity, food labeling, exercise and more. The Los Angeles Food Policy Council has enacted one of the most progressive food policy in the nation, adopted by both the City of Los Angeles and the Los Angeles Unified School District (LAUSD), where it’s becoming a model for the rest of the country. The goal is to build a Good Food system for all Los Angeles residents — where food is healthy, affordable, fair and sustainable. Another interesting initiative is an experiment devised by the tech investor Esther Dyson, called the Way to Wellville,wherein five communities around the country have committed to a multi-year, strategic, customized experiment to improve the health of their citizens.

The truth is, that no amount of organic food, nor taking a thousand more steps, aromatherapy, mindfulness, aspirin or acupuncture can guarantee longevity, but good choices can contribute to our quality of life.

What would it look like if good, healthy habits began early for everyone, and healthy food and lifestyle choices were status quo and available and affordable to all? To me, it looks like the world I want to live in.