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A Tale of Two Philosophies: American Apparel and Halston on the Role of IT

March 31, 2013 Leave a comment

American ApparelHalston

A Tale of Two Philosophies: American Apparel and Halston on the Role of IT
03/29/2013
Contrast American Apparel, which caters to the young, hipster market, with the iconic Halston brand and its decades-old heritage of luxury, and you couldn’t find two more different apparel companies. You might say the same when it comes to their cultures of IT.There is not one correct answer to where IT should sit and the role it should play in the growth and success of an apparel business. That was the clear take-home message after hearing Bryan_Timmfrom both Halston’s COO Bryan Timm and American Apparel’s CIO Stacey Shulman, whose dynamic keynote presentations bookended Apparel’s Tech Conference West, which took place March 19 in Los Angeles, and aAA6lso featured a full day of educational sessions and technology exhibits.That’s not to say there aren’t similarities between the two. For both Shulman and Timm, customization is a dirty word, and each would rather reengineer a company’s internal processes than make a custom tweak to software. Both executives are also extremely focused on the evolving role of the consumer as a disrupting force to business, and the need for IT to serve her changing expectations. Finally, both Shulman and Timm are advocates of sweeping old and ineffective practices out of the business to make room for systems that are as integrated as possible, relying on one version of real-time data to maximize accuracy, efficiency, innovation — and profit.But that may be where the similarities end. Because when it comes to the role of IT, for Timm, it’s more about supporting the creativity of the Halston brand. His view is that, relative to IT, what an apparel company requires is not unique from what other apparel companies require. “We make clothes,” he says, “not IT solutions.” Timm’s philosophy is to focus internal resources on what the company does best, and outsource the rest. This not only addresses company needs, but employee needs as well, he says.

Today’s IT departments are expected to have in-depth knowledge about how the company operates and the necessary technical skill sets to support all implemented infrastructure. “IT is often the only department that is literate about the entire company’s business processes,” said Timm. “They are expected to be experts at everything — including the latest mobile device and iPhone app!” His mantra is to go with what’s simple, because “simple is good, and simple is flexible,” and overworked and stressed out IT departments need to be able to simplify wherever possible.

At American Apparel, Shulman has found that for her environment innovation has as much place in IT as in design. When she joined the company two years ago, Shulman said her team felt “beaten up, misunderstood and underappreciated.” At an overall low point for the company — at the time (2011), American Apparel made the list of “brands that would disappear” along with Reader’s Digest and BlackBerry — her suggestion that her team should be more innovative was met with “looks of burning rage,” from a staff that wasn’t even able to “get basic stuff done.” Nevertheless, rather than decrease the workload, the team took on a wide range of industry-leading projects in areas ranging from RFID to mobile, some of it implemented — at little or no cost to the cash-strapped retailer — in pilot projects in partnership with technology providers.

The projects enabled the company to get to the sources of their stream of IT problems, in the process shifting from a “fix-it” mentality to a proactive approach to the company’s entire supply chain. Today, Shulman’s vision for the team to be one of the most technology-forward in the apparel industry has contributed to a turnaround at the company — both in profits and staff morale.

Here’s more on what Shulman and Timm had to say.

Halston: Entering the age of the empowered consumer
Today’s seemingly infinite amount of data — available to both consumers and apparel businesses — is upending traditional retail, says Timm, with access to information responsible for shifting consumer price and value expectations as manufacturers, brands and retailers all now compete globally for the consumer. “Today, my wife pulls out her iPhone, scans the QR code on a product and receives unlimited information about the brand, the pricing, and everything else, and she can share what she thinks immediately via social media with the entire world.”

Apparel companies today are faced with three major challenges, says Timm. First, the newly empowered consumer has changed the rules, and apparel companies must challenge old practices that don’t address today’s realities of fast-fashion dominance, the commoditization of basics, the evolving relationship between e-commerce and brick-and-mortar, and rising commodity prices.

Second, apparel companies are faced with the unique challenges of the fashion industry itself, which is characterized by a constant stream of new product offerings that have a short life and multiple style-color-size combinations — and are developed by creative designers who sometimes have large egos but very little understanding of IT, says Timm. In this fast-paced environment, IT needs to facilitate the process, not hinder it, by using smaller, apparel-focused systems that can handle unique style-color-size requirements, but that require just enough data to execute the product accurately without overloading the system with unnecessary information.

Third, IT departments are expected to have broad skill sets to support all business processes but must do this in an industry that, he says, struggles to attract top IT talent, in part because it rarely invests in IT personnel and also because it tends to be system maintenance-focused vs. project-focused.

Enter Halston. The iconic designer brand re-launched 18 months ago to an environment far different from its earlier heyday in the ‘70s and ‘80s. With so many competing demands, says Timm, “what differentiates your brand are the designs created and how well you execute them.”

He suggests a top-down approach to IT strategy that starts with the business decision process and advises that an IT team have a clear understanding of the goals of its executives before embarking on a project (would they rather improve inventory management, reduce costs or meet regulatory requirements?).

Timm also recommends a simple approach that employs the following eight rules: 1) email is the most important application; 2) ensure the network infrastructure is stable, as it touches everyone; 3) do not customize applications as it takes you off the upgrade path; 4) maintain a consistent data model, and protect it, as it is the glue connecting all applications and serves as the common language spanning departments; 5) assume and plan that the business will evolve; 6) don’t be afraid of audits, instead leverage them to improve IT and to educate executives; 7) don’t make the easy fixes, make the correct ones, as a request for a fix is often a symptom of a bigger problem; and 8) embrace Excel, because people like it, but don’t use it as a data repository.

Halston, which relocated its operations from New York to Los Angeles as part of its re-launch, is targeting 50-plus percent growth per year, and launches its own retail store this week, has honed its strategy to use capital to grow the business rather than to invest in IT. The IT department is focused on its core strengths, letting technology providers do what they do best.

For Halston, that means providing the most up-to-date tools for its technology and collaborative infrastructure (networking, data storage, email, laptops) and outsourcing support. For point solutions, the company selected tools that its team was already familiar with. “We don’t have time to train on patternmaking software,” says Timm. For business applications such as HR and financials it initially maintained its acquired systems, but then transitioned to more robust, vendor supported systems, while a 100 percent vendor-hosted system on a pay-as-you-go model took care of inventory control, order processing and WMS. Planning and decision support tools are on the agenda for 2014. As a relatively small company, Halston currently relies on Excel spreadsheets for these functions.

Results of its approach, says Timm, have been a minimal capital investment, seven-day a week help-desk support and system maintenance and upgrades performed by vendors. “We maintain only one primary skill set in house — project management. … [By outsourcing], my IT department is bigger than I could ever afford [otherwise], and I can pick their brains about how other companies have handled the same problems,” he says.

IT at American Apparel: Driving the company forward
Two years ago, the landscape at American Apparel was very different from today’s. Against the backdrop of an economy at its lowest and cotton prices at their highest, the stability of the retailer was in question, its finances were a concern and it was also confronting a number of lawsuits.

From a technology standpoint, the company was dealing with five separate IT teams, and “all of them fought with each other all the time,” says Shulman. From a culture perspective, some of the teams were more innovation-focused, while others possessed a more “break-fix” mentality. Uniquely, she adds, the CEO was driving most of the innovation in the company.

Shulman re-envisioned the department as a seat of innovation rather than just support. “Everyone was going to want to work for us. We were not going to complain, we were going to be the team that drove the company forward,” said Shulman of her vision for IT at American Apparel. “We had to communicate that vision, and shake everyone out of their comfort zone,” she says. The company started by aligning everyone horizontally instead of vertically, which extended even to its workspace: “We broke down walls, literally. If people were going to complain about each other, I wanted everyone to hear it. That’s how you resolve problems. If you want to change the culture, you have to change surroundings — what people look at and who they’re around.” Old-style wood desks were removed and replaced with modern furniture from IKEA. The space was open, fostering collaboration.

Beyond the physical workspace, Shulman said, she realized the department needed to be offered compelling challenges, as well as multiple projects to work on simultaneously. “It wasn’t enough to tell them to be innovative. We wanted to give them specific problems to solve.”

Shulman insisted on speed and agility. “For us speed is everything. We would rather run really fast and make a lot of mistakes but get there first, than go methodically. We want to be agile, take diversions. We’re not process purists. Results come first. [The rules were that] a person kept [from moving forward on his or her project] was responsible for any block. They had to overcome the problem, and we enabled people to do that,” said Shulman.

In this innovative environment, American Apparel set about solving some of its business challenges, and, two years later, the company has successfully re-platformed its web site, ERP, workforce management, mobile solutions and customer loyalty. Along the way it has made headlines for its innovative use of RFID, not only for inventory management but for loss prevention.

“We credit RFID with our business turnaround,” says Shulman, who calls the technology “transformational.” Currently, the company is developing a map-based solution that will use RFID to locate merchandise that is on the sales floor, but in the wrong spot, which, “from a customer’s perspective, is still out of stock,” she says. It is also performing A-B testing in stores to determine conversion of various “zones” of the store, which can be as narrow as a fixture.

As part and parcel of its technology overhaul, American Apparel has also transformed itself into a paper-free company. Shulman says, “Where you have paper, you typically have bad process.” Although the “green” factor of becoming paper-free is a huge bonus, the real benefit to a paperless environment is the efficiency wrought by data and processes that are well integrated.

Remarkably, American Apparel did much of its restructuring on a shoestring budget. “We had no money. We had to get creative,” said Shulman. The company decided to reach out to technology companies to create partnerships that would be mutually beneficial. The pitch was pretty basic: “We have no money, please give us free services,” jokes Shulman. Still, the approach was effective. In one particularly interesting example, American Apparel partnered with Qualcomm, where, says Shulman, “a bunch of engineers engineer things and then figure out what to do with what they built.” American Apparel offered a real project — the development of a mobile app —with real problems to solve.

On the tech side, the application needed web services to hold content. “The project put Qualcomm’s engineers and product managers side by side with American Apparel’s engineers and project managers. … Working with groups like [Qualcomm’s engineers] gives you a different perspective on where things are going. We thought we understood mobile, and we underestimated it. When you talk to a company really investing in mobile, they’re thinking 10 years from now. That’s their framework, and that’s what they brought to the table.”

“We got groups of people working together. … And in the end we got a great application as well.” The new mobile app allows the company to turn every sign in its stores into an informational or sales channel via image recognition.

The innovation continues. American Apparel is now exploring Gimbal’s geo-fencing product, which, for customers who opt-in, will “wake up” the app when a customer passes a blue-tooth enrobed manikin to tell them more about the apparel it is dressed in. The company is also working on a “plastic-free” checkout experience, as well as a big data project with Intel to understand the impact of social media on the manufacturing facility and on demand planning.

Today, American Apparel is doing “better than ever,” with 21 months of same-store sales increases. The company ended 2012 up 13 percent overall (with online sales up by 30 percent) and plans to grow the web business to be 25 percent of retail.

“Part of our philosophy is, if you’re going to give [your IT staff] something boring, you have to give them something fun to work on as well,” Shulman concludes.

Jordan K. Speer is editor in chief of Apparel. She can be reached at jspeer@apparelmag.com.

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Wal-Mart May Tap Customers to Deliver Online Orders

March 30, 2013 Leave a comment

Wal-Mart May Tap Customers to Deliver Online Orders

 Published: Thursday, 28 Mar 2013 | 7:59 AM ET

Wal-Mart Stores is considering a radical plan to have store customers deliver packages to online buyers, a new twist on speedier delivery services that the company hopes will enable it to better compete with Amazon.com.

Tapping customers to deliver goods would put the world’s largest retailer squarely in middle of a new phenomenon sometimes known as “crowd-sourcing,” or the “sharing economy.”

A plethora of start-ups now help people make money by renting out a spare room, a car, or even a cocktail dress, and Wal-Mart would in effect be inviting people to rent out space in their vehicle and their willingness to deliver packages to others.

Such an effort would, however, face numerous legal, regulatory and privacy obstacles, and Wal-Mart executives said it was at an early planning stage.

Wal-Mart is making a big push to ship online orders directly from stores, hoping to cut transportation costs and gain an edge over Amazon and other online retailers, which have no physical store locations. Wal-Mart does this at 25 stores currently, but plans to double that to 50 this year and could expand the program to hundreds of stores in the future.

Wal-Mart currently uses carriers like FedEx for delivery from stores — or, in the case of a same-day delivery service called Walmart To Go that is being tested in five metro areas, its own delivery trucks.

“I see a path to where this is crowd-sourced,” Joel Anderson, chief executive of Walmart.com in the United States, said in a recent interview with Reuters.

Wal-Mart has millions of customers visiting its stores each week. Some of these shoppers could tell the retailer where they live and sign up to drop off packages for online customers who live on their route back home, Anderson explained.

Wal-Mart would offer a discount on the customers’ shopping bill, effectively covering the cost of their gas in return for the delivery of packages, he added.

“This is at the brain-storming stage, but it’s possible in a year or two,” said Jeff McAllister, senior vice president of Walmart U.S. innovations.

(Read MoreWalmart.com Sells Goods Made by Women-Owned Small Businesses)

Indeed, the likelihood of this being broadly adopted across the company’s network of more than 4,000 stores in the United States is low, according to Matt Nemer, a retail analyst at Wells Fargo Securities.

“I’m sure it will be a test in some stores,” he added. “But they may only keep it for metro markets and for higher-priced items.”

Legal Boundaries 

Start-ups such as TaskRabbit and Fiverr already let individuals rent out their time and expertise to companies and people looking for small jobs to be completed.

Zipments was founded in 2010 as a crowd-sourced delivery network that allowed anyone over 18 years old with a vehicle, a text-enabled phone, and a PayPal account to bid on courier services for local businesses.

Such online match-making businesses often push legal boundaries — and a Wal-Mart crowd-sourced delivery program would be no different, according to Nemer.

(Read MoreHow Mobile Technology Is Revolutionizing In-Store Shopping)

Online packages delivered by customers may never reach their destination, either through theft or fraud, the analyst said.

Such a crowd-sourced delivery service may not be as reliable as FedEx or United Parcel Service, which have insured drivers, he added.

“You are comfortable with a FedEx or UPS truck in your driveway, but what about a stranger knocking on your door?” Nemer said.

Zipments Evolves

While Zipments started out with a pure crowd-sourcing approach, the company now does more screening of drivers before allowing them to be part of its delivery network, Chief Executive and co-Founder Garrick Pohl said in an interview. It now serves big cities including New York and Chicago.

Theft, fraud and late deliveries have never been a problem, but insurance and licenses were an obstacle, Pohl explained.

Drivers often need personal liability insurance to cover package delivery activities. Cargo insurance is also needed. Zipments self-insures this risk up to $250, but the firm encourages its couriers to buy additional coverage for higher-value packages, Pohl said.

In some areas, like downtown Chicago, people also need a courier license to deliver things, he added.

“Zipments now helps people get all these things set up before allowing them to deliver goods,” Pohl said.

Still, he said the issues are not insurmountable, citing pizza restaurants, which have used part-time drivers to deliver pies for years.

“It’s a great solution for large retailers like Wal-Mart,” Pohl said. “We’d like to see them move quicker, but it’s great that they are considering it.”

Zipments is trying to provide such services to retailers, although Pohl declined to say which companies the start-up is talking to about this.

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Opinion: Higher prices at JCPenney means lower prices at jcp

March 29, 2013 Leave a comment
  • Opinion: Higher prices at JCPenney means lower prices at jcp

Opinion: Higher prices at JCPenney means lower prices at jcp

By Robert Passikoff, President, Brand Keys…. March 27, 2013

There’s a wonderful Yiddish reflection, “the difference between genius and stupidity is genius has its limits,” which may explain the difference between Apple stores and JCPenney/jcp. What’s interesting is the strategies for both retailers were set by the same person: Ron Johnson, formerly SVP, Retail Operations for Apple, currently jcp CEO. It was JCPenney when he joined and announced his long and short-term strategies.

Long term: re-do all of the stores in the 111 year-old chain into mini-boutiques-under-one-roof, which sounds really cool, but, alas, to do that you need time and money and jcp is running out of both. Short-term — a plan that was going to reinvigorate the store and restore profitability — stop, what Johnson labeled “fake prices,” and move away from nonstop promotions and coupons with everyday low prices (like Walmart) to “fair-and-square” pricing.

The change didn’t work all that well, but in their defense, the Ellen DeGeneres commercials were fun. Until they cancelled the advertising and strategy, neither of which was working, and the regular sales, that Mr. Johnson had characterized as “simplifying” pricing. If that seems contrary to the previous “fair-and-square” positioning, we think that’s a perfectly acceptable position for you to take, so go ahead.

That was about six months ago and Mr. Johnson finally acknowledged that, “it was clear that withdrawing from our promotional model to a more everyday model has been harder than we anticipated.”

You think? It wasn’t just harder; it was expensive, coming with a price tag of a $552-million-dollar Q4 loss, which is a lot of money and pretty much a sign that your strategy isn’t working. So what’s a CEO with a chain in a death-spiral of same-store sales to do?

We’re glad you asked, because Mr. Johnson has an answer to that question: go back to the original sales strategy they scrapped last year, and restore sales on a weekly basis. But if you do that, how do you protect your already tiny “fair-and-square” margins, where you’re losing money big-time?

Now you might think that was going to be a really difficult question to answer, but not so much, particularly for someone who came from a company where simplicity and elegance were the watchwords. It’s been reported that Mr. Johnson’s elegant plan is to raise jcp prices to their former, higher levels — the ones before the fair-and-square pricing — and then cut them. Simple, huh?

No, no, you read that right. They’re going to raise the prices and then — wait for it — lower them, figuring that will give them the appearance of having provided consumers with a large discount at a sales “event,” so it will appear even more special and of greater value to customers. So, all in all, not so fair-and-square and really fake prices.

If you are as dumbfounded as we, join the club. In a century where consumers are more marketer than fool, speak to each other before they speak to the brand, and have access to more digital information each day, how does Mr. Johnson figure this strategy hoax is going to bamboozle consumers? We’d be fascinated to hear Mr. Johnson’s answer to that.

In the meantime, for those of you interested, the phrase “fair and square” dates back to the 16th century. “Fair” was spelled “faire,” and meant “aboveboard,” and “square,” meant “honest.” So aboveboard and honest. But given the circumstances, with their new, more modern jcp logo, and more contemporary consumers, perhaps jcp should consider a more recent tagline. One from 1941: Never give a sucker an even break!

Dr. Robert Passikoff has 35 years of agency and client experience in all phases of strategic brand planning for a wide variety of B2B and B2C product and service categories. He has pioneered work in the area of loyalty and engagement, creating the Brand Keys Customer Loyalty Engagement Index, the Brandweek Loyalty Leaders List, the Sports Fan Loyalty Index, and the Women’s Wear Daily Fashion Brand Engagement Index.

 

 

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Sustainable Banking for Fashion Technology?

March 26, 2013 Leave a comment

 

The search for a sustainable banking model

To secure future growth, banks must fundamentally transform their economics, businesses, and cultures.

January 2013

Source: Financial Services Practice

Banks around the world still haven’t fully recovered from the financial crisis that roiled the global economy nearly half a decade ago. Efforts to restore depleted capital and reduce costs have partly succeeded, but the current environment is still a challenge: many banks failed to earn their cost of equity in 2011, and the average return on equity (ROE)—7.6 percent—is only half of peak levels before the crisis (exhibit). Global revenue growth stalled too, dropping to 3 percent from 2010 to 2011, compared with 9 percent in the preceding year.

The triple transformation: Achieving a sustainable business model (PDF−1.4MB), McKinsey’s second annual review of the banking industry, finds that this faltering performance has both external and internal causes. Although the operating environment has stabilized since the height of the crisis—most banks do not face a struggle for existence—the current problems are almost as daunting when taken together.

  • Regulation continues to increase in both complexity and stringency across the globe: new rules for capital, liquidity, and funding; surcharges for financial institutions deemed systemically important; and a raft of consumer-protection initiatives.
  • Collectively, the new regulation could have dramatic consequences, including a significant negative impact on ROE.
  • Technological advances are empowering both nonbank attackers, which have gained share in traditional banking domains by offering viable alternatives, and consumers, who have never found it easier to switch banks.
  • Macroeconomic volatility continues to create uncertainty in the business. Particularly in developed economies, the pace of deleveraging seems to be up, slowing demand for loans.

Cyclical change could, of course, eventually weaken—or reverse—today’s macroeconomic headwinds, but banks can’t afford to wait. Senior banking executives should focus on the operational and business-culture forces they can change directly, by throwing their weight behind the following goals:

  • Accelerate the economic transformation of the business by improving capital efficiency, finding new pockets of growth, and embracing industrial-style efficiency to cut costs sustainably.
  • Reinvent the business model to deal with new realities in customer behavior, innovative attackers, and changing global growth patterns.
  • Embrace cultural change and enhance value creation. Rightly or wrongly, the industry’s reputation has suffered in the last several years. To reinforce new approaches to the creation of value, banks must examine their organizational culture across four dimensions: balancing the interests of shareholders and the broader society, creating value for customers, ensuring that internal processes are sound, and influencing employee mind-sets.

Download the full report (PDF−1.4MB). 

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E tail West 2013 Highlights

March 19, 2013 Leave a comment

My Take on eTail West 2013
By Mark Simon, DidIt

It was great to get out to eTail West in Palm Desert last week and get a sense of what’s on the minds of electronic retailers. The show was well-attended, informative, and I had some great conversations about what’s next for etailers in this rapidly changing environment.

Here are some observations about what I saw and heard at the show.

1. The Responsive Web Design Debate is Over.
There‘s been a long debate over the pros and cons over Responsive Web Design, but the “pros” seem to have won the day among etailers. Mobile and tablet traffic has now become such an important component of e-commerce that no etailer hoping to be competitive can ignore the need to optimize site content for multiple screens. True, implementing RD can be tricky, isn’t a cure-all for poorly optimized or chaotically organized sites, and there are cases in which a separate mobile site can outperform a single, RD-enabled one. But the debate – at least for now – seems to have been settled, and the fact that Google has approved the RD approach may have been the deciding factor along with some good early numbers from etailers, one of which reported that its conversion rate jumped by 54 percent after an RD makeover – that’s a success metric that anyone would love to have.

Read More

At eTail West, Artisan claims phone app breakthrough
By Peter Key, Philadelphia Business Journal

Organizations that offer mobile apps to consumers haven’t been able to update the apps once they’re on consumers’ phones.
Instead, they’ve had to notify the consumers that updated versions of the apps are available and wait for the consumers to download them, a process that can take weeks if not months.

Artisan is changing that.

The Old City company today is launching a technology platform that allows users to update apps’ user interfaces even after the apps are deployed on phones.

Artisan, which changed its name from appRenaissance, has been letting developers use a test version of the platform for free since September, but is making it generally available today.
Artisan will demonstrate the platform, which it calls the Artisan Mobile Experience Management platform, at eTail West, a conference for retailers with an online presence that is being held in Palm Desert, Calif.

Read More

Facebook needs more Fabs, Twitter needs more Beckham in underwear
by Teresa Novellino, Upstart Business Journal

When Nicolas Franchet, head of global e-commerce for Facebook, appeared at eTail West to talk to retailers about how they can use Facebook to drive sales, he ran a video on a startup that has maxed out social media from the start: Fab.com.

For Fab, 30 percent of the daily traffic comes from Facebook (Nasdaq:FB), and 50 percent of daily log-ins to the e-commerce site come via Facebook, and the New York-based company has openly discussed the big role of social media for its fast growth. Friends see what friends are buying on Fab via Facebook, they share their enthusiasm, and so on. But it was clear that other retailers are not having the same kind of experience with social media in general when it comes to return on investment.

Read More

Responsive design top-of-mind at eTail West
By Kristina Mayne, Mobile Commerce Daily

Responsive design was one of the key topics at eTail West, with marketers, retailers and attendees recognizing the importance of the technology to the mobile space.

Many marketers are already turning to responsive design to streamline the mobile experience. Furthermore, retailers are incorporating the technology into their initiatives to make the mobile shopping process more seamless across all devices.

According to Greg Schmitzer, president of Mad Mobile, Tampa, FL, responsive design can help marketers – if done correctly.

Read More

MyBinding.com Represents at eTail West
By Jeff McRitchie, MyBindingBlog

This week, two of our marketing professionals are basking in the warmth of the Palm Desert. No, they’re not on vacation. And “basking” is probably the wrong word. “Sitting inside a poorly lit, stale, and crowded meeting room at a national eCommerce conference” is probably a more accurate description.

Our Vice President of Marketing Jeff McRitchie and UX Designer Chris Vander Meulen are participating in the annual eTail West conference. This year the conference is hosted at the JW Marriott Desert Springs in Palm Desert, California. So while McRitchie and Vander Meulen aren’t exactly lounging by the pool all day, they are learning, networking, and even teaching a little.

Read More

eTail West 2012: The Most Comprehensive Conference Recap You Will Ever Read!
By Rick Backus, CPC Strategy

eTail West was a few weeks ago and what started as a simple blog post has morphed into The Most Comprehensive Conference Recap You Will Ever Read!

There are over 600 hyperlinks in this post so in an effort to make it easier to digest, I broke the recap down into 5 distinct sections.

Key Takeaways (5 key takeaways)
Individual Session Recaps (4 recaps)
The Top Tweets (11 tweets)
Conference Photos (11 photos)
Exhibitor List (124 exhibitors)

Key Takeaways:
1. eCommerce Has Chaaaanged
The days of throwing up an eCommerce store and quickly turning it into an ATM are long gone. “Old school” retailers are losing market share rapidly and a lot of them are throwing up the white flag and sending all of their inventory to Fulfillment By Amazon.

2. Differentiate or Die
In Google’s eyes, you are offering no value to their users if you have the same exact content as your competitors. Creating unique titles and descriptions for thousands of products is a HUGE challenge for most retailers, but it’s becoming a requirement if you still plan on being around in a few years.

3. Learn From Amazon
Whether you love Amazon, or hate them – you should be learning from them. Amazon has some of the most sophisticated conversion rate testing tools on the planet so you KNOW their landing pages convert extremely well.

Study Amazon. Learn from Amazon. And try to create an Amazoncentric experience for your customers.

4. F-Commerce Stands For Fake Commerce
I’m actually being polite here, as most attendees used another 4 letter F word to describe F-Commerce. Facebook has not become the direct selling channel that many predicted and a lot of retailers are still struggling to develop their Facebook strategy.

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SUNY Signals Major Push Toward MOOCs and Other New Educational Models

March 19, 2013 Leave a comment

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SUNY Signals Major Push Toward MOOCs and Other New Educational Models
March 20, 2013, 4:55 am

By Steve Kolowich
The State University of New York’s Board of Trustees on Tuesday endorsed an ambitious vision for how SUNY might use prior-learning assessment, competency-based programs, and massive open online courses to help students finish their degrees in less time, for less money.

The plan calls for “new and expanded online programs” that “include options for time-shortened degree completion.” In particular, the board proposed a huge expansion the prior-learning assessment programs offered by SUNY’s Empire State College.

The system will also push its top faculty members to build MOOCs designed so that certain students who do well in the courses might be eligible for SUNY credit.

Ultimately, the system wants to add 100,000 enrollments within three years, according to a news release.

Even before the SUNY announcement, it had already been a big week for nontraditional models for awarding college credit. The U.S. Education Department on Monday said it had no problem with spending federal student aid on college programs that give credit based on “competency,” not the number of hours students spend in class.

Empire State College’s prior-learning assessment programs operate on a similar principle. Students who can demonstrate that they have acquired certain skills can get college credit, even if they did not acquire those skills in a college classroom.

The new SUNY effort will aim to copy the Empire State model across the system, said Nancy L. Zimpher, the chancellor.

“This resolution opens the door to assurances to our students that this kind of prior-learning assessment will be available eventually on all our campuses,” said Ms. Zimpher in an interview.

SUNY is just the latest state system to use novel teaching and assessment methods to deal with the problem of enrolling, and graduating, more students.

Indiana, Missouri, Tennessee, Texas, and Washington have enlisted Western Governors University, a nonprofit online institution that uses the “competency” method, to help working adults in those states earn degrees. Pennsylvania and Wisconsin are building programs aimed at helping their own adult students redeem their on-the-job skills and knowledge for credit toward degrees. And California may soon use MOOCs to deal with overcrowding in some courses at its public colleges and universities.

Ms. Zimpher said the prior-learning expertise at Empire State would make it possible for the New York system to undertake the new effort without calling in outsiders.

“Usually when you have an outside vendor, it’s to deliver something that you don’t know how to do,” she said. “In our case we actually know how to do this, and we know how to do it well.”

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Will JCPenney Fail for All the Right Reasons?

March 12, 2013 Leave a comment

By Adam Blair

RIS News 3/12/2013

The saga of JCPenney’s turnaround (or conspicuous lack thereof) has gripped the trade and business press like nothing since the first cute cat video purred all over YouTube. Editors, analysts and other assorted industry “wise folk” find CEO Ron Johnson’s attempts to turn the 111-year-old retailer into a 21st-century omnichannel shopping destination quite compelling. Judging by the impressive number of readers that click on our stories about the troubled retailer, we’re not alone in being fascinated by what’s either a slow-motion train wreck or a heroic redemption story.

One reason it’s so interesting is that, despite the avalanche of bad press Johnson and JCP have received, it’s still too soon to write his (and the retailer’s) obituary. Yes, sales have plummeted both in stores and online; investors are worried; and JCP is battling with Macy’s in court over the right to sell Martha Stewart’s products. Johnson has certainly made his share of mistakes, mostly to do with attempts to change long-standing price and promotion policies too quickly, and to do so well before improvements in store layout, merchandising and technology have had their chance to make an impact.But what’s truly interesting is that a number of these “mistakes” have also been right in line with what’s considered the best thinking about running a retail business. In fact, JCPenney could almost be a textbook case about whether these business principles actually work in a real-world context.

Let’s take a few examples:

1. “Fail Faster”: Business gurus are fond of saying that it’s more important to try new things out and risk potential failure rather than take a conservative wait-and-see approach, particularly in a fast-changing industry like retail. Here’s Johnson speaking during JCP’s February 27 conference call: “As much as we accomplished last year, we also made some big mistakes and I take personal responsibility for this. Experience is making mistakes and learning from them and I’ve learned a lot.” Sounds like Johnson has taken “fail faster” to heart.

2. Think Long-Term: Retailers, particularly publicly traded companies, are under intense pressure from Wall Street to show constant growth every quarter – or have a good explanation as to why they aren’t on an upward path. But what if the challenges you’re dealing with can’t be solved in three to six months? Take Johnson’s gamble on revamping its home goods department. These products had previously run nearly 20% of JCPenney’s store sales, generating $185 per square foot, but in recent years that proportion had dropped to 10% and less than $80. Johnson saw the traffic-building potential of reviving this department and has partnered with big names (Michael Graves, Sir Terence Conran) and big brands (OXO and Keurig). “Our timing for the home makeover is perfect as housing is clearly beginning to recover throughout our country,” said Johnson during the call. This is the kind of thing that requires patience and planning for a potentially big long-term payoff.

3. Discourage Cherry-Pickers and Protect Margins: A report on NPR’s “Morning Edition” encapsulates the retailer’s challenge. Zoe Chace from the show’s Planet Money team interviewed an old-time JCPenney shopper who used to collect the multitude of coupons the retailer offered and take advantage of its many, many sales. She’d go to the store at 9 on Saturday and shop until 1, armed with her coupons in a store teeming with a similar crowd of bargain-hunters. Well, a packed store is all well and good, but if virtually everyone is using a coupon and taking advantage of a sale, that sounds like a formula for low margins and the slow but steady losses that characterized JCPenney in the pre-Johnson era.

4. Invest in IT: Johnson and his team recognized early on that the antiquated, convoluted legacy systems at JCPenney were standing in the way of virtually all the changes they wanted to make. That’s why it was heartening to hear that the retailer has committed to replacing and/or upgrading both enterprise-level systems (financials, merchandising, planning and allocation) and newer customer-facing technologies (e.g. mobile POS). And Johnson is putting the company’s money where his mouth is, committing to nearly $100 million per year in IT spending.

Like the rest of the industry, I’m keeping my eye on JCPenney. Will Ron Johnson prove the business gurus right and the skeptics wrong? Or will the retailer ultimately fail – but for all the right reasons? Stay tuned.

For related content: JCPenney Cuts 10% of HQ Staff as Turnaround Prospects Falter

JCPenney Forecasts Nearly $100M in Annual IT Spend Going Forward

JCPenney 2013: Year Two for the Turnaround

JCPenney, Best Buy, Sears on ‘Do or Die’ List for 2013

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