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Customer Engagement Innovators Series Interviews Value Realization

Innovators Q&A: How Blink Fitness Embraced Digital Transformation During the Pandemic

Can you think of a global event that shook the fitness industry as much as COVID-19 did? With no option to continue business as usual, fitness gyms across the world were forced to contend with digital transformations– and fast – by developing apps, delivering content, and finding new, creative ways to provide value to members that were indefinitely stuck at home. And while some succeeded, for many, the weight of the pandemic was too great, and they were forced to shut their doors.

 

In fact, the IHRSA estimates that the US gym and health club industry lost $20.4 billion in 2020. By May 2020, about 500,000 people in the gym industry had been laid off; and by July 2020, 60% of Americans reportedly planned to cancel gym memberships.

 

On the flip side, brands who invested in and focused on delivering digital-first experiences saw a boom of success. With 74% of Americans reportedly using at least one fitness app during the pandemic, home fitness app downloads saw a 46% increase between quarter one and quarter two of 2020, while companies like Peloton, Beachbody, and Tonal (as well as businesses that produce at-home fitness equipment) reported massive revenue growth.

 

Alas, it was fitness gyms that had formerly relied on in-person experiences and only dabbled or recently entered the digital space that were given an ultimatum: Hurry up and create new experiences that put members’ needs at the core or throw in the towel. One gym that experienced this first-hand is Blink Fitness. With 100+ franchised gyms in 10 different states, Blink Fitness strives to change the narrative – and emotional landscape – often associated with gyms.

“Blink is a motivating space with a staff of mood-lifters. We take pride in challenging fitness industry norms and celebrating every unique body,” their website reads. “It’s what’s on the inside that counts… Blink offers a sparkling clean, spacious design with bright colors, scientifically proven to enhance your workout and elevate your mood.”

 

Sounds cool, right? Well, definitely. Except when you can’t actually access the space.

 

So, as the global pandemic reared its ugly head, Michelle Horowitz – Blink Fitness’s Senior Vice President and Head of Marketing and Communications – was tasked with ensuring that the uplifting, body-positive brand could transcend and traverse new digital demands.

 

To learn how Blink Fitness tackled the challenge, our own Partner Robert Wallace sat down with Michelle for our Innovators Q&A Series to discuss the evolving consumer journey, member-first mentality, data-backed strategy, and the future of the fitness industry.

Q&A with Blink Fitness’s Senior Vice President & Head of Marketing & Communications Michelle Horowitz

Robert Wallace: Hello everyone. My name is Robert Wallace. I’m a partner at we’re a customer experience design company, and I am pleased to an honor to be the host of our fourth installment of the new interview series that we’re putting on called the innovators. I’m really happy to have a conversation today with Michelle Horowitz, which she was named one of Brand Innovators Top 100 Women in Brand Marketing, and she’s a visionary in e-commerce marketing and leader experience in a variety of industries – B2C and B2B. She’s built high performing teams that and [has been] really customer obsessed throughout her whole career in marketing communications. And now she is the Senior Vice President and Head of Marketing and Communication at Blink Fitness, which is a premium and affordable fitness brand that challenges conventional fitness stereotypes. [Michelle is] responsible for leading the brand and digital evolution of the company through innovation and movement.

 

[Michelle], obviously that is a timely industry that you’re in and we’ve all gone through a tough year, and an interesting year. So, first of all, welcome, and thank you so much for taking the time. I just went through [your] standard bio, but I’d love to hear in your words a little bit more about your professional journey. You’ve been through sales and marketing… I’d love to just hear really briefly about your career and your journey and how you landed where you are.

 

Michelle Horowitz: Yeah, for sure. Thanks. Thank you, Robert. I’m super excited to be here and it’s an honor to have this conversation with you. So, thank you for having me. I took a circuitous route to be where I am today and where I am today is completely passionate about the health and wellness industry and obviously the impact that fitness can make. It’s never been more apparent than right now about how important it is for us to stay well. And certainly, you know, it’s not just the physical impact of what we’ve been going through [but] also the mental impact. So, to be with a brand that [lives that] ethos is super exciting.

 

Previous to this, I spent some time in fashion and then retail-specialty area, particularly in lifestyle. So, I’m super proud of the work that I’ve done during that time. And it really was all about customer centricity as we built and developed the Loft brand and expanded beyond the US borders into Mexico and Canada. And then I was part of the team that created the Lou & Grey brand, which was really the first foray from a specialty retail perspective that moved into lifestyle. So, it was a big, bold step that the brand took prior to being acquired, and was part of the growth from a D2C brand into 12 stores. So, that’s been the majority of my CMO experience – in the fashion space – but always with an eye to customer centricity and the impact that a brand can have on its consumer base.

Similar to how people feel about the e-commerce experience, they want [fitness] to be there when they want it to be there.

RW: How would you say you’ve segued that customer and member-first mentality, so to speak, in your new role at Blink?

 

MH: Yeah, it’s interesting. I recently took responsibility of the customer service center, as well. So, I think it really speaks to a marketer’s responsibility of the customer journey and thinking about it from the moment of acquisition through to retention and then, obviously, loyalty. So, to put the consumer at the center of it all, from identifying the issues that come through customer service and then being able to be really thoughtful about how we treat our customers and how we have that sort of member-first mentality. But I would say that, stepping back – as we hopefully are through that gateway of the end of the pandemic – that we really pivoted quite quickly at the beginning of the experience, which is more than a year ago, where we had to close down the business and had to really think about how important it was for not only our employees, but also our consumer base to keep them actively engaged and to put their health and wellness first.

 

So, we were very fortunate that we actually have an app – a fantastic app – that was created in 2019, that has three functional areas. One is obviously about the capability to have access to classes, where we partner with a lot of brands, but also create our own content. And then we have nutrition and rejuvenation. So, to be able to sort of engage fully behind that and share it with the community and really open it up – because at the time, it was one membership that had access – we opened it up to everybody. And then, as an engagement vehicle, we actually worked very closely with our personal trainers to create our own content. We began to host live stream content every day that really allowed people to [make] their health and wellness [a priority] as we transitioned to working at home.

 

That was another example of how we did it. And now, as we come out of this pandemic, or we’re traveling through hopefully the tail end of it… As we reopened the gyms, we actually, again, used [and are using] the app as a vehicle to help people feel more comfortable coming back to the gym. And, obviously, health and wellness was the priority for our employees, our communities, and the members that we serve by following all of the CDC guidelines, as well as local guidelines. But, in addition to that, we wanted to use the as a vehicle to help make it easier for everybody. We had that frictionless entrance where they didn’t have to touch or engage with anything. They could use their app. But, in advance of even doing that, they could still reserve their space in the gym, [and] look at capacity.

 

And if they’re not ready to come back to the gym, which some people are not yet ready… They can actually currently take personal training classes through the app. So, we’re constantly trying to think about the consumer experience. And, I think, a natural evolution of this is: “How are we going to continue to marry the digital world with the in-gym experience?” Which I think, until we find stasis, is definitely an “and,” I would imagine that people sort of live in both of those worlds.

RW: It’s interesting because it sounds to me that it boils down to – or what has happened – is it’s almost what does Blink Fitness really stand for? Meaning what businesses is it really in? And the delivery mechanism has changed. So, it has forced you to think about, “Oh, we’re about accessibility and democratization of really high-end health and wellness and fitness. And that used to be delivered through the gym, and now, when the phone goes away – at least partially goes away or has fundamentally changed – how else are we going to fulfill our brand promise while they can’t get to that particular delivery vehicle?” And it’s really interesting how you’ve thought about that and broadened your perspective. The only way you can do that is by putting [the] customer first.

 

MH: I think, even as people sort of flex and figure out what it all looks like, the nice thing about it is, if you [are] coming into the gym and [are] enjoying – whether it’s the weights or the elliptical or whatever the machines are that you choose, or even the stretch area – you might not have time, or you might be doing it in-between appointments or whatever. [But] you can always go home and continue that journey, whether it’s doing a yoga class or a meditation class or more stretching from home. So, I think, similar to how people feel about the e-commerce experience, they want it to be there when they want it to be there. And the app is definitely a vehicle that gives our members what they’re looking for.

 

RW: That’s fascinating, too. The idea of a 360-degree brand is one that that has come up. It came up in my footwear experience, and you probably saw too, where– and I’m dating myself here – but there was a time when you started selling online or selling catalogue or whatever channel is new, there was this fear that you would be cannibalizing your existing channel. And that never happened because it really just made it a 360-degree brand. I can buy whatever it is I want to buy whenever and however I want. I can do it on my phone. I can do it online. I can order through the catalog, if you still want to do that, or I can go into the store. So, it’s fascinating that fitness is going through that same thing.

 

MH: Yeah. And interesting, too. I remember from my retail days, it’s like that haptic social community feeling that you get when you’re walking through a retail store or you might have the urge or that window of time that you’re able to do it at home through the digital experience. I think there [are] some similarities there, for sure.

When you look at the true customer journey, that's not a marketing thing. That's not a product thing. That's not an operations thing... It's everything. The customer – or the member, in your case – doesn't much care what departments or silos exist.

RW: There’s an emotional connection that you touch on, in some cases from actually shopping, but certainly I think a lot of gyms – you have an emotional connection. How do you cultivate that? First of all, how do you think about cultivating connections with your members, but [also], how have you thought about how that has changed online or how you had to evolve that?

 

MH: Yeah, that’s an interesting question. It’s a very community-focused brand, right? When we come into the community, we are committed to the community and the local members. And we think a lot about local. When we first come in [to set] up the gym, we partner with a lot of nonprofits. We work very closely with local government to really engage and let them know that we’re here and we want them to come in and be part of that community. We have – what we call the people that work in the gym – we call them “Mood Lifters,” and they really set the tone and the feeling for coming into the gym.

 

We want people to come in and feel like they’re part of something… The music sets the tone and the friendliness of the Mood Lifters and the personal trainers really create that local community touch point. And often people obviously establish relationships, whether it’s with their trainers, their Mood Lifters, or their local managers. So that really, in and of itself, was really the ethos of the brand that was built. And when we went through COVID and started to create those live streams, we really began to allow the personal trainers – when they taught the daily classes – [to let] their personalities, their excitement for their brand, and for health and wellness, really shine through. And we actually included the capability for people to ask questions and engage, whether it was during the workout or after the workout, so we could really create that continuity.

 

Obviously, in the digital world, it becomes a little bit more difficult, but in the same way that we want to help people curate or navigate their fitness IQ, we see that as a lot of potential in the digital world to sort of [help] continue people on their journeys in the digital world. So, I think part of it is the content that we provide on the app by curating from the nutritional, from the rejuvenation, and then from the classes. And the partners that we’ve chosen, whether it’s Daily Burn or SworkIt or Aaptiv, it’s been very thought through. Of course, there’s tons of opportunity to continue to personalize that experience and really think of that journey. But we look at one as being an extension of the other.

 

RW: Yeah, fascinating. When I think about personalization, I invariably get to the data issue or the data situation. How are you thinking about data? The collection of data? We may soon be in a cookieless world… How does Blink think about this? How do you think about it?… Tell us a little bit more about the personalized experience that you touched on.

MH: Yeah, I think that’s a great question. And, you know, obviously from a brand perspective, it’s a member-first mentality, right? So, you know, and it’s a value exchange, by understanding more particularly, [it] becomes a lot easier obviously in the digital world – through the app – to understand what content appeals to people, where their interests lie, and we can begin to really curate that.

 

So, for us, it’s all about making the experience [and] constantly evolving the experience to make it better: Being really thoughtful in the data-sense from a marketing perspective – obviously, in addition to focusing on the member experience – we have to be very attuned to the applicable laws, legislations, and I think an ever-changing landscape.

 

Also read: How Johnson & Johnson Is Pairing Data With Creativity to Connect With Customers Like Never Before

 

At the beginning of the week, I was listening to Kara Swisher’s podcast “Sway” from the New York Times and she was interviewing Tim Cook. Tim believes that privacy is at the forefront of what things are going to be about. And certainly, from Apple’s perspective, you know, they’re introducing the ATT – the ability for people to choose their privacy settings. So, I think it’s still an interesting time. There are many different things happening at many different levels, from the policy perspective – around section 230 – and, you know, there are some… Amy Klobuchar is very involved with making refinements [to] – I think she’s calling it the Safe Tech Act. You have Virginia announcing that they’re going to be doing very similar [things] to what California did with the CCPA. That they’ve now adopted their version of that. And, I think, from what I heard, there’s another eight states following suit.

 

So, a brand has a responsibility to align with and be aware of that. And then, in addition to that, you also have the platforms, right? Like, Facebook has a lot of responses to Apple and there’s a lot of activity. I look – from a marketing perspective – the importance of staying on top of it and putting member privacy at the forefront is what we are looking at. And staying in tune, too. But there’s, there’s so much going on from a marketing perspective, we work very much in line with our legal department and technology [teams] to make [sure] everything aligns. So, needless to say, I guess there’s a lot going on, Robert.

RW: The ground is shifting, too. I mean, what you just spoke about is going to be different maybe even by Monday. Every day you see that there’s new legislation, or just new technology, and how companies – all of them – are reacting to it. To me, the brands that at least make it, first and foremost, “Hey, we’re paying attention. And we’re doing our best to put you – the member – first.” That starts to build enough of a trust factor that, “Hey, we may not keep up with every single thing, but we’re trying and your first, so you – the member – are first,” I think that’s critically important for most brands to think about, because it’s not necessarily possible to keep pace with everything.

 

MH: Yeah. But I think it’s our responsibility to, as brands, to do that. But I think it also speaks to, you know, the agility and the cross-functional partnership that takes place now, certainly through this time… We’re in it together and navigating through it.

 

RW: So, for sure. When you look at the true customer journey, that’s not a marketing thing. That’s not a product thing. That’s not an operations thing. It’s all of those things – [including] service. It’s everything. The customer – or the member in your case – doesn’t much care what departments or silos exist.

 

MH: One hundred percent. I love that you say that. I mean, we work so closely together – the Head of Operations – we all work so closely together to create this member-first experience and we’re, like you said, it’s an evolution. Simon Sinek talks about “The Infinite Game“. It’s this constant [goal of] doing it better and putting the member first.

 

Also read How to Holistically Map Your Customer Experiences

 

RW: I think organizations are being forced, especially during COVID – because [the] customer became front and center, whether you thought about it or not – and it forced a lot of companies to think about, “How are our departments interacting with one another? And how are those interactions even touching the customer? How do we need to maybe be more agile?”

Our North Star really is thinking about the member first and that member experience.

MH: Yes, I love that you said that. I was just going to say, I think these keywords came out of the pandemic, right? Like, the acceleration of behavior or technology, resiliency, agility. And, obviously, from a leadership perspective, empathy is at the, at the cornerstone, which I think has only made us better and stronger as individuals and teams. So, I agree with you. I think those are some of the keywords that are definitely coming out of this moment in time.

 

RW: Ultimately, that’s a good thing. So, there’s some silver linings. I think it’s all good. So, we’re almost at time, but if you cast your vision forward a little bit, what do you see in terms of the fitness industry, or technology, or any trends, or any combination of the three? What do you see out there in the market? Where do you see things going?

 

MH: Yeah, I think – just touching back on what we started talking about – I really do believe it’s this constant continuation of the member experience. And what does it mean to offer that member experience? From a technology point of view, from a people point of view. Bringing that all together and continuing to deliver that. And, I think, it’s about understanding this moment of stasis: When, you know, the technology and the digital world and the four walls live together. What does that look like? So, I feel like we’re on a journey that was accelerated by COVID, for sure. I don’t think we’re the only industry. Obviously, there’s many that we can point to that have been [impacted by] this acceleration. But, again, a lot of the behaviors that you’re talking about, and that we’ve touched on – the agility, the resiliency, the cross-functional partnership – will be key in this experience. But I think our North Star really is thinking about the member first and that member experience.

 

Also read: Trends Driving CX Design In the Hospitality Industry: Q&A with Marriott International’s Christine Kettmer

 

RW: Yeah. Awesome. Well, I I’ve been fortunate enough to have a few conversations with you. Each one is awesome, and each one, the time sneaks up on us. We could keep on going for a while. But I do want to thank you, again, for taking the time. This has been wonderful. I know our audience is going to appreciate it and learn a lot from it. Is there a URL for Blink Fitness that [people] should check out?

MH: [Yeah], it’s just BlinkFitness.com. Right now, we actually are allowing people to download the app for 60 days trials, no matter where they live. So, I welcome anybody that would be interested. Just go to our website and download the app, or to the app store and download it that way.

 

RH: Excellent. Everyone go do that, go download [the app].

 

MH: Stay healthy, stay well, right?

 

RH: Yeah. Everyone: Stay fit and stay well. That’s exactly right. This will help you do that. So, I’ll do that when I hang up here. But thanks again. It’s really been a lot of fun.

 

MH: I look forward to continuing the conversation. Thank you so much.

Want to be featured in our Innovators Series? Reach out to us now!

Categories
Strategy

Are Multiple Brands Better Than One?

When companies undergo the process of transformation as they seek to differentiate themselves and solve for ever-evolving consumer pain points, it’s not uncommon for new ideas, product lines or service spinoffs to hatch. Unrealized possibilities tend to be unearthed and opportunities to break into new audience segments are revealed.

 

Many organizations soon encounter the challenge of fitting new brand offerings within the original parent brand. With each addition to the product or service line, do you create a different name, package, and marketing strategy? What is the best way to maximize the value of both the unique offering and the brand as a whole when you introduce something new?

There are several common approaches: masterbrand, endorsed, individual, and hybrid. Each has its own set of advantages and disadvantages depending on your goals and the needs of your customer.

When to Link Brands Together

If your company makes multiple products or offers multiple services that play well together, you’ll most likely have success sub-branding them or creating a brand extension. This type of structure can include the following approaches:

 

  1. The endorsed brand in which each sub-brand may carry the same values, but will have its own distinct brand identity. An example would be Marriott with its JW Marriott, Residence Inn and Ritz Carlton sub-brands.
  2. The branded house or masterbrand in which the parent brand influences the identity of the sub-brand. An example here is Google with Chrome, Maps, Drive, etc.
  3. The hybrid, which is a blend of individual and masterbrand. Coca-Cola Company for example, has multiple individual product brands like Sprite, Dasani, Fanta, etc., but they also have their series of classic Coca-Cola products.

The so-called “halo effect” of sub-branding in the hybrid brand scenario can permeate into new audiences who may not be served directly by the parent brand’s core offering.

Let’s look at Uber Freight as an example.

 

Created by the parent company Uber, Uber Freight looks, feels and performs much the same as the app the company is best known for, but it serves a completely different, and very niche, audience. Based on the needs of this particular audience, the brand was able to take the “Uber experience” and tailor it to this untapped segment while maintaining its core brand principles. Uber didn’t stray from its core offering of better transportation, but the two brands have completely different strategies for attracting users and a different voice, tone and messaging.

 

Uber knew that when it came to truckers, they didn’t have the benefit of brand recognition – in fact, most truckers at that time had never even heard of the app. The company had to take a step back and really learn the market: The pain points, how to get truckers to adopt new technology, and how to communicate with them. The Uber Freight team hyper-focused on a specific region (in this case, Dallas), hired people who were experts in the industry and could speak the language, and began more of a direct outreach approach. A sub-brand with the same underlying purpose as the namesake brand, but a different approach and infrastructure for gaining users.

If your company offers multiple products or services that appeal to distinctly different audiences…

Then, in this case, the individual brand approach might be more fitting. Companies that offer multiple products or services that appeal to distinctly different audiences, so much so that a given customer likely wouldn’t even consider buying one product but would be very interested in another, could benefit from brand individuality.

 

This is not to be confused with brand extension, whereby a company will branch out into completely different product spaces altogether (like Guinness brewing beer and publishing a book of records). An individual brand is more like a sub-brand with a completely different look, feel and even price point. It’s where a parent brand will have a series of unrelated, independent brands under its umbrella. Think Unilever with Dove, Persil, Vaseline, Lipton, Korr, etc.

 

With the individual approach, each brand has vastly different personas they appeal to. Going the individual route is tricky for this precise reason, but the opportunity to increase personalization with each brand in order to reach disparate audiences can be enticing for organizations.

 

Also read: What Is CX & Why Does It Matter?

When To Build From Scratch

Finally, in some cases you’ll find two completely disparate brands that ultimately can be traced back to one company. This is often done if the two brands serve different audiences and have completely different visions and values. If the new product or service aims to fulfill different purposes and doesn’t share a particular stance, it may be best to completely separate the two brands.

If the new product or service aims to fulfill different purposes and doesn't share a particular stance, it may be best to completely separate the two brands.

When this occurs, the originating entity often doesn’t publicize the fact that they are behind the two brands, and in many cases customers of either brand is none the wiser the other exists. This tends to be the least common of the three brand architectures, as most organizations have an underlying vision, purpose or stance that is echoed throughout each of their offerings.

 

Also read: What’s In Store? The Future of Retail in a Post-COVID World

How to Know Which Strategy Is Best For You

The answer on which direction to go often lies within your vision, values and customers. Does your current customer base have a need that this particular product or service solves for? Does the new product fulfill upon your existing brand’s deeper purpose and vision, or does it have a completely different mission of its own? Answering these will help you determine which approach is the best option.

 

Keep in mind, if you commit to the individual branding approach, while it’s not completely necessary to make perfectly clear the brand connection, it is important to ensure you carry the same vision and values through each of your separate offerings.

The answer on which direction to go often lies within your vision, values and customers.

Another advantage of individual vs. pure sub-branding is that one misstep with a individual brand won’t damage your overall organization as much as a sub-branded failure. Because most sub-brands are visually and tonally in line with each other, bad publicity or a colossal failure in even a smaller venture can have disastrous consequences. We’ve seen this play out with well known brands like Samsung with its Galaxy Note 7 and Apple – even the most diehard Apple fans will abandon the brand across the board if one product doesn’t meet their expectations.

 

Individual brands don’t carry quite the same risk, though the lack of obvious association can be a drawback if a smaller off-shoot brand performs particularly well. It’s also worth noting, when a company brand spins off too many offshoot product brands all geared towards a similar audience segment, it can cause a tremendous amount of confusion.

 

An example of this is Centrieva, an accreditation management software for higher education. They launched a series of new products, each with its own brand name and all for a tangential market, and consequently, their customers and prospects became increasingly confused about the offerings. The solution to this problem was to parse out Centrieva as the corporate brand (which would live in the background) and create Weave as the master brand with each product as a sub-brand of Weave. In applying “Weave” to each product name, we helped create brand association and recognition and showed how each product works together as one cohesive platform.

 

On the path to transformation, as you uncover the latent (or obvious) wants, needs and desires of your audience, it will become more clear which brand architecture is best suited for your organization. You may discover, like Uber did, that you are dealing with a completely different audience segment who doesn’t even know you currently exist. If you’re creating a product that addresses a subsequent pain point of your existing audience, your brand name will likely carry levity. And in that case, you could go the route of Virgin, applying your brand name to product descriptions or sub-brands.

 

Note: This article was originally published on October 11, 2017 and updated and republished on December 29, 2020.

Categories
Uncategorized

What’s in Store? The Future of Retail in a Post-COVID-19 World

The lockdown and economic fallout caused by the emergence of the novel coronavirus pandemic has had far-reaching consequences for many industries. While for some industries interruptions to consumption habits may prove to be temporary, some trends affecting the retail industry look set to become more enduring or even permanent.

COVID-19’s Early Impact on Retail

  • Discretionary spending has contracted sharply, down by almost 9% in March 2020
  • Sharply reduced demand for new apparel, footwear and accessories
  • May 2020 retail sales data for the US showed a 17.7% increase—a new record—but more time is needed to understand whether this is an anomaly reflecting consumers unleashing pent-up demand from March and April or if it’s the beginning of a new upward trend
  • eMarketer forecasts US total retail sales will fall more than 10% in 2020 and won’t return to pre-COVID-19 levels until 2022
  • eMarketer is also calling for e-commerce sales to increase by 18% this year
  • Coresight Research predicts between 20,000 and 25,000 store closures this year, of which 55% to 60% are within malls—a new record
  • The previous high was a loss of 9,300 locations in 2019 

Even before COVID-19 came along, retail has been engaged in a gradual, decades-long transformation. However, the pandemic has rapidly accelerated many of the changes that were either already happening or inevitable. Retailers must now quickly adjust and prepare for new customer experiences in a post COVID-19 world. 

The Impacts of COVID-19 on Brick & Mortar Stores

As noted above, traditional retailers were engaged in a battle for survival long before the pandemic emerged. Many vanguards of the brick-and-mortar retail world have been closing stores and shedding debt and lease obligations through bankruptcy proceedings for years. To date in 2020, we’ve seen JCPenney, Neiman Marcus,  J. Crew, Stage Stores, Pier 1 and Tuesday Morning all announce bankruptcy. Other venerable names, including Brooks Brothers, a leading force in apparel retailing for over 200 years, are said to be appointing advisors and may not be far behind.

 

Of course, bankruptcy can be an opportunity to regroup, reorganize, recapitalize and, hopefully, emerge as a more viable competitor. Many of the bankrupt retailers will return with a leaner physical footprint and fewer employees. For those who didn’t get their digital footprint and e-commerce strategy right the first time around, they’ll have a welcome chance for a reset.

 

There are other implications for the brick-and-mortar retail landscape, including issues impacting operational complexity and the supply chain as well as what to do with the overbuilt and now unneeded shopping mall space throughout America.

 

The oversupply of mall space has been worsening for decades. Changes to the US tax code enacted by Congress in 1954 encouraged mall development by permitting accelerated depreciation. As a result of this financial engineering, the growth rate of shopping malls between 1970 and 2015 in the US was twice the rate of growth of the population over the same period. In recent times, fewer shoppers were heading to malls. In the period following the financial crisis of 2007-2008, mall visits declined by 50% and have continued to fall since even as the economy rebounded.

 

Fashion and apparel retailers are now stuck with high inventories of the wrong season’s products, having been forcibly closed since the first days of Spring. This not only drives up storage costs but can also contribute to the tendency for retailers to sweep away distressed inventory through deep discounting. The problem is, when consumers become accustomed to buying at a discount they are less willing to consider paying full price again when the economy recovers, as we saw following the Great Recession twelve years ago.

The Impacts of COVID-19 on E-commerce

As destructive as the pandemic has been for traditional retailers, it’s been the opposite for e-commerce retailers. While there is a long-established trend of switching shopping habits from brick-and-mortar retailers to online stores, COVID-19 has accelerated this change considerably. In just three months, it caused movements that may have taken five years to manifest without the tailwind of a pandemic.

 

Italy, the European country with the highest number of infections and deaths from COVID-19, has seen e-commerce transactions rise 81 percent since the end of February. Across Europe, an additional 13 percent of consumers said they would browse online stores for the first time. While in China, large groups of new customers—specifically those aged 36 and above and those living in smaller, less prosperous cities— have begun shopping online in greater numbers.

 

But for all of its growth and potential, online shopping misses out on at least one aspect of in-store shopping— the impulse purchases that take place in-store. 89% of women and 78% of men report adding additional items to their cart during an in-store visit. 

How are Retailers Responding to COVID-19?

With the decline in in-store traffic, it’s no surprise most retailers have seen a corresponding dip in their sales. But there are opportunities to be found and nurtured with services such as curbside pickup and BOPIS (Buy Online, Pick up In Store).

 

These hybrid marketing approaches offer convenience to consumers by allowing same-day (often within two-hour) collection with no additional shipping or handling costs. However, they also create new challenges for retailers in the areas of labor, inventory management, software and point-of-sale systems and even parking lot space utilization. 

 

Orders placed online for collection by these methods increased by 208% in the first three weeks of April 2020 compared to the same period of 2019. They are proving to be a popular choice with consumers who may wish to continue shopping this way even when regulations can be relaxed and stores can fully reopen. It remains to be seen whether retailers will eventually try to de-emphasize these methods due to their higher costs. 

 

Many of the hundreds of thousands of new jobs created by grocery retailers in recent months have been to staff these hybrid shopping models. And while that’s a welcome storyline at a time when millions of American workers have been furloughed or displaced altogether, time will tell whether grocers will continue to bear the additional costs when other options are once again viable.

What Will the Future of Retail Look Like?

Retailers need to evolve by redefining the role of the store and integrating technology at the right points in the customer journey to streamline and improve the shopping experience. 

 

We hope to see more integration of contactless, self-serve technology that allows customers to navigate the store and find what they need as quickly and safely as possible. Already in some retail environments, such as Apple stores, customers are able to make purchases from anywhere in the store rather than gathering in a line at a register. Integrating voice assistants and mobile technologies can assist customers in achieving their goals inside the store with innovations like wayfinding—directing customers to the aisle displaying the products they’re seeking. Elevating the customer experience and improving customer service will be key.

 

The opportunity exists to better integrate the online and in-store shopping experience. For example, customers could engage with content about a styling experience or menu plan online then be able to purchase everything needed conveniently pre-packaged and ready for purchase in the store.

 

Even once COVID-19 is somehow controlled, consumers are likely to respond well to open spaces, or at the very least the feeling of openness. Store layouts need to be reworked for a better flow of customers.

 

In certain areas of retail, it’s possible we could see wider use of some of the concierge-style services luxury merchants previously reserved exclusively for their VIP customers. Personal shoppers, private or semi-private store access and other exclusive privileges could become additional, optional elements of the shopping experience.

 

At Tallwave, we see the challenges facing retailers as opportunities to reimagine a new shopping experience. If you need help thinking through the evolution of your retail operations, give us a call. We’d welcome the chance to work with you to evolve your customer experience and keep your customers coming back time and again.

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Our Unique Approach to Successful Businesses

Successful partnerships help companies innovate and grow. However, choosing a partner is often an overwhelming process because it’s difficult to differentiate among the options. Most agencies, consultancies, and vendors operate with a mindset of doing exactly what a client asks for, often leading to identical approaches, with little distinction other than price. If you’re evaluating primarily based on price, you may be fine with all your potential partners taking similar approaches, but in the end this strategy is short-sighted, narrow minded, and often backfires in the long run.

 

At Tallwave, we take a different approach. Whether you’re a current or future client, we apply a curious and empathetic mindset to all of our work. This often means we ask a lot of questions upfront, bring in diverse team members from multiple disciplines, and seek to put ourselves in our client’s shoes. At times, we even challenge client assumptions. While this process takes a bit more discovery, it allows us to focus our efforts on the right tactics from the very beginning, which yield better long-term results and help build stronger relationships between us and our clients.

 

Whether you’re a current or future client, we apply a curious and empathetic mindset to all of our work.

Here’s our approach to successful partnerships:

We Ask Plenty of Questions to Understand Our Client’s Needs

From the initial interaction with a potential new client, we seek to understand their unique challenges and needs. We may start with the client’s request, but we also take the time to dive deeper and understand how the request truly meets the needs of the business.

 

For example, one of our media clients, who relies on readers to become contributors, recently asked us to develop a custom application to help them recruit and onboard up to 1,000 new content writers per month. After a few collaborative sessions with their team, we realized their biggest challenge was making the self-serve application more user friendly and intuitive for on-boarding writers.

 

Given this knowledge, we decided to focus on redesigning the onboarding experience and leveraged Salesforce for the backend management instead of building a full custom application from scratch. Not only did this approach speed up their timeline, it also cut development costs in half, which could then be reapplied to other critical areas of the build.

 

Ensuring our client’s success is always our main priority at Tallwave. We achieve this by being mindful of the client’s goals and challenges in order to gain a deeper understanding of their business. In the end, the outcome may not be what the client originally had in mind, but this approach allows them to save time and money while still reaching their business objectives. 

 

Ensuring our client’s success is always our main priority at Tallwave. We achieve this by being mindful of the client’s goals and challenges in order to gain a deeper understanding of their business.

We Switch on a Dime When Circumstances Change

As a strategic partner, it’s our responsibility to adapt quickly as trends and shifts occur in the marketplace, whether it’s a new technology, regulation changes, or something much bigger like COVID-19. Not only do we have to understand the changes, we also have to be able to rethink priorities and help clients adapt so they can reach their bottom line.

 

While all of our clients were impacted by COVID-19, several were impacted more than others. A crisis like this could have been devastating for one of our food distribution clients, whose entire business revolves around providing food supplies, goods, and services to small restaurants. The pandemic forced all restaurants, regardless of size, to completely flip their business models – and when you’re in the business of servicing those restaurants, you really have to flip your business plan.

 

Our client had to quickly become a resource for their restaurants. Working with our client, we quickly created a multi-step action plan and resource center that detailed ways for restaurants to transition to a fully-digital presence. 

 

Our plan included instructions and guidelines for Google My Business (GMB) posts so restaurants could clearly advertise their availability for take-out or delivery, while also informing potential customers of their location and updated business hours. We provided recommendations to prepare restaurants for take-out only services, including prioritizing safety while working with third-party delivery apps, eliminating touch points between employees, remaining transparent with customers, and updating their online presence. We even provided a few strategic ways restaurants could get creative with their offerings. 

We Have a Continuous Focus on Outcomes

We’re always looking for new opportunities to drive growth for our clients.

 

As an example, we recently worked with a commercial printing client on a full-scale rebrand after they acquired several competitors. Through the process of diving into the business, we identified an opportunity to drive revenue by diversifying their customer base.

 

Even though it was not part of the original scope, we did an analysis into our client’s loyalty program and found that two-thirds of the company’s revenue came from only 10-percent of their customers. Going deeper, we found that their messaging, content, and marketing tactics were really only geared to one persona.

 

With this knowledge, we were able to recommend a strategy to build an experience and conversion path for other personas.

 

By helping every client we work with develop a better understanding of their business and the market landscape, we’re able to root out and address assumptions early to bring fresh perspectives and ideas that focus on the right challenges. It’s an approach that takes a partner who appreciates this type of pushback, but we’ve found that the clients who are open to alternative approaches and think outside the box can adapt their strategies to be more successful in their endeavors. Our relationships with clients are always more fruitful when we’re squarely focused on what matters most – making our clients wildly successful.

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Badass CX in the Time of COVID-19

To say that COVID-19 has changed the way we look at things would be a gross understatement. News cycles continue to churn out information, and we —as brands, consumers and humans in general— continue to respond.

 

We’re all human. We’re all being impacted by this. 

 

As marketers, we’re seeing the customer journey change quickly and often across industries and market segments alike – and many of these changes may well be permanent. 

 

The path forward isn’t clear by any means, but the brands that quickly and proactively adapt will survive and hopefully, come out of this stronger. Customers have begun demanding transparency, recognizing, and responding to authenticity and social responsibility now more than ever.

 

Last week, we polled our team to ask if they’ve had any personal experiences with a company navigating changes with them (as customers) really well in a COVID-19 world. Did any brand demonstrate an ability and  commitment to adapt their customer experience to meet the rapidly evolving moment? We wanted to know.

 

The answer was an overwhelming, “yes.”

 

In the responses, we saw four key themes emerge, illustrating just how companies are adapting their CX to meet the needs of their customers.

Theme 1: Adapt  with Empathy

This situation stinks for everyone. Now is NOT the time to nickel and dime. It may feel counterintuitive, but it’s not the time to make things difficult in order to protect your business.

 

Now is the time to break what are traditionally non-customer-friendly practices (ahem…airlines and travel).

 

By the way, this isn’t just a B2C issue. Business owners and business stakeholders are people too.

 

  • Shopify  has shown that it is dedicated to helping small businesses. Amongst other things, the brand made physical and digital gift cards available on all new and existing Shopify plans, and committed to making $200 million in small business funding available to lend some much needed support to the community.

  • OpenTable is recognizing the massive impact the restaurant industry is experiencing. They activated their customer base and sent an email to users encouraging support for the community with examples on how we can help restaurants during these times. It came across as altruistic while providing actionable information.

  • Chicago Cubs/MLB: When the remainder of Spring Training was cancelled, an email went out from the Cubs organization proactively detailing that refunds would be issued for all purchased tickets, exactly how they would be received, and the timeframe refunds could be expected in. There was no action needed from the customer. 

“It was nice to receive everything in one email and not have to worry about contacting anyone to get a refund.”

 

Westin helped tackle cancelling non-refundable reservations with no hassle, in a matter of minutes.

 

After the announcement was made that Broadway would be going dark, Telecharge proactively got cancellation emails out by the end of the day, making clear its plan to issue full refunds with no action needed from the customer.

 

American Airlines flights to New York (that were booked with points, no less) needed to be cancelled quickly, in the eleventh hour.

 

“I had a really long wait time, but once I was on they were nice, quick, and frictionless to get the points returned.”

Theme 2: Adapt Proactively 

Consumer behavior has been changed, for sure in the short-term. Better to be there first, anticipate the changes and make proactive adjustments if you can.
 

  • Blue Apron: With news of COVID-19 beginning to take off, Blue Apron’s business spiked and the brand was quick in communicating with its customers weeks in advance about the changes needed in order for everyone to be served within their dietary restrictions.
    [Blue Apron’s] customer service has also been helpful since I wanted to change the serving sizes on my orders.

  • Costco: “Staffed up for the rush and changed their business workflow to appease the customers and maintain sanity.”

Sanity may be a relative term, but we applaud the company for doing its best in these strange times.

  • Booty’s Burgers and Wings
    “It’s our favorite local wing place and we wanted to help them out. They have a system set up for pickup that limits any contact. Very fast, easy, and tasty!”

     

  • Texas Roadhouse quickly deployed a very efficient system for pickup where you didn’t even have to get out of your car – and had a good takeout deal too.

  • Pat Tillman Foundation: Instead of cancelling their charitable run in April, the nonprofit is transforming it to be a virtual run. 

“It's pretty cool. They're encouraging users to share as they run. Great way to keep the momentum virtually!”

Theme 3: Adapt Altruistically 

Quickly developing an altruistic model, or leveraging one that already exists. 

“Opportunistic” doesn’t have to have a negative connotation if it’s true to your brand, has an authentic voice, and strives to be helpful to the situation.

  • Allbirds quickly spun up a donation model in which they implemented a buy one, donate one model for getting shoes to frontline healthcare workers.

Their statement read: “Beginning March 24th and running while supplies last, you can bundle any shoe purchase with a donation to immediately supply a pair of Wool Runners to a healthcare professional who’s already reached out to us. Don’t need a new pair yourself, but still want to help? That’s an option, too.”

 

  • TOMS has a good campaign running right now centered around how “we can all use some extra comfort” and that we’re in this together. The shoe brand has a sale on sale for its slippers. 

“The messaging was tactful and helped with some normalizing, [giving] a break from seeing only COVID in my news feed.”

Theme 4: Adapt Radically 

The badassiest of all. There are many, many companies who are pitching in to help, but two specific ones came up in our office poll. One, in particular, is a local company that is no doubt further solidifying its already strong brand, but winning new customers and brand advocates.

 

The “doing good is good for business” mantra has never been more true than right now. 

 

O.H.S.O. and Fruit Brands, et al will reap the benefits of doing the right thing today.

 

No doubt, the impact of this virus will continue to grow. And the changes we’re all faced with making today will live on. Since we’re all in this together, let’s continue to make those changes for good.

How has your customer journey been impacted by COVID-19? 

What has your company been doing to adapt  during these times?