Wednesday, September 17, 2014

Target's CEO Is Banking On The Past Repeating Itself

It made the news last week. 

Target is going to change its brand experience.  And its brand offering.  And its brand followers. 

Target – the hip discount retailer where the latest style choice in everything from home furnishings to clothing to outdoor sports gear to electronics … shoot even doggie food and toys not only were found on the shelves… but also where they often premièred!

Target – whose advertising you actually took a moment to watch that seldom contained much of any copy, but was glamorized with music and graphics that made most any commercial break something fun to catch.

Yup.  Target is changing.

And their new CEO, Brian Cornell is driving the change.

Many who follow this blog, have heard it many times before…Target is the Millennial generation brand. 

And… as I wrote last week… the Millennials are evolving right before our eyes!

But here’s the gamble that Target is making.

They understand that the Millennials represent their core equity.  They observe that the Millennials are not only nesting, but beginning to form “family” units.

They look around the marketplace and see that the kid & family empires of the past have faded as the ZOOMER generation (GenXer’s kids) is now entering high school.

So Target is stream-lining and limiting its house & home.  Electronic facings are also being pared down to only a few.  Gifts and accessories in some cases being axed.

BUT… clothing – particularly kids and infant lines – will be expanding.  So too will the food and grocery items.

Target is going from being the hip and cool brand of the rising Twenty-somethings to becoming the emerging family brand.

I spend a lot of time talking to Millennials.  I camp out with them, sip coffee, Tweet and interact with them online and shop the grocery aisles with them.

The one observation I can quickly make… they are NOT at all the same headset of the Generation X Cocooners.  They are not hell-bent on creating the nest, making babies and living in the mdist of 24/7 family time.

In fact, when you say the word “kids,” Millennials quickly visualize both watches and pocketbooks.  How much time will raising the kids take and even more so, cost.

Now I have never met Brian Cornell, but there are some quick surface level observations I can quickly make…

1. He’s a trailing Baby Boomer, but sure looks, talks and reacts online and on-screen like a GenXer...BGO Example – “More and more I see moms shopping our stores with a child in a cart in one hand and a smartphone in the other hand”

2. His experience was shaped around Pepsico snack food brands – CPG as they say in the “field”

3. He’s dwelled a lot in the C-Store marketplace... BGO Example – “We’re launching a new concept called Target Express that will be 1/6th the size of a normal one”

My gut tells me that Brian Cornell may not set any records for long-term CEO stay at a corporation. 

But then again, I am the first in line to say, I’ve been wrong.

Most Saturdays now, I get the great opportunity to spend the better part of the day with Zevi, my 5 year old nephew. 

No question, Zevi is one cool little dude. 

Its not only fun to see the world through the eyes of a five year old, the time I spend with Zevi actually makes me a better consultant in my exchange with clients.

Kids see things in a much clearer focus than adults do.

Zevi’s first request when he arrives at my country farm house is simple… when are we going over to shop Target – properly pronounced “tar-jay.”

He loves to go over to the Target down the street and walk the aisles. 

Of course, he goes first to the toy department, then over to the sports department, then over to electronics, then over to find a snack food for the day, then over to check out the latest in Ninja Turtle T-shirts. 

Now of course, I am also having a blast checking out the latest in seasonal specials, outdoor gear and the latest in the sport shirts.

We also shop together at WalMart and Five Below… but we both have more fun when we journey over to Target.

This Saturday, I will likely have to sit down and let Zevi know that Target is going to change a bunch over the next year. 

One thing is clear… at age 5, Zevi not only has moved beyond baby-goods and he cannot stand being near them. 

We probably have to find another place to journey to on Saturday afternoons… and my bet, is that we will not be the only ones out there making the change!

Corporate America sometimes does some dumb stuff.

Maybe Brian Cornell needs to get out from Target’s corporate campus, grab Zevi and take a journey through his store aisles for a good perspective.

Thursday, September 4, 2014

Generational Change Is Never Easy To Accept

Change is never easy to accept.

Abrupt change is often citied as the most difficult and dramatic. 

In the business world we hear that a lot. 

A CEO is removed by a Board.  A marketing VP elects to quit.  An ad agency is fired.  A media publication bites the dust.

In the marketplace, we observe change with job losses, the closing of a retail chain, new elected leadership replacing old elected leadership and sudden price escalations.

Generational change is also never easy to accept. 

And perhaps, its even further magnified in its impact because its not quick.  And its something that is often overlooked and miscalculated.

Generation change is never-ending.  However, its not as predictable as many think.

There are three clients who I am working with right now who are coming to terms with generational change. 

One of the clients is a neighborhood community.

Another is a bank.

And the third is a media group that owns more than 30 newspapers.

Atlanta, like many Southern agricultural and rail line linked communities, clustered, for the most part, around train stations along the rail lines.  City lines extended out a mile or two at the most and after that, it was farmland that was organized the most at a general county level.

For many, many years after the war, Atlanta was the city and the rest of the countryside was the county. 

Yes, there were the cities of Marrieta, Snellville, Roswell and Duluth, but up until 25-30 years ago, those were very outlying cities that most living there, didn't even work in “that urban oasis called Atlanta.”

Up North where I was born, the cities are made up of a continuous flow of one ethnic or national group that butts up to the next.  Cities and suburbs are continuous and often there is no such thing as an unincorporated county neighborhood.

As the South grew fueled by industry moving from the “rust belt” to the “sun belt,” areas between the cities and towns expanded… and generationally are now experiencing change.

Those who settled in the county suburbs in the 1960s and 1970s are now in their own 60s and 70s.

Many have already moved out further into the ‘burbs, up into the cooler mountains or down on the sunny shores of Florida.

Back even 10-15 years ago, the GenXers coupling placed a priority on making babies and cocooning together in their suburban home where the schools were nice. Mom’s could caravan the kids to after-school events and the Dad’s could commute to bring in the money to pay for it all.

GenXers have worked aggressively to give to their kids what many did not experience because their parents divorced.

That said, the intown neighborhoods are now facing the onslaught surge of the Millennials who value less drive time and access to fun more than the frustration of commuting and living in sub-divided developments. 

Millennials are also “hands-on” change agents.  If the public schools went downhill, they are much more engaged in getting their hands dirty and taking on the challenge of making the schools better… and that’s even before they elect to have little kiddies to even send to class.

Millennials also crave that sense of “place.”  A physical dwelling spot that they can touch and feel and become part of… something that GenXers sacrificed for the ability to live all together in the family room.

This generational change is taking effect.  The pace is not overnight… but as more Millennials enter their 30s and more move from Property Virgins to community change agents… that pace will heighten and the impact will rattle many a foundation.

The neighborhood community I work with attempted to organize and create a "new" city last year.  It failed.  It was a model created by the aging Boomers that attempted to grab onto the community dynamic that was there 30 years ago.  Not the one there today.

The last session with them, I asked them a simple question, what percentage of this part of Atlanta do you think is made up of adults age 55+?  They quickly answered that the "Boomers" and "Seniors" who settled in this part of town made up at least 60% of the commuting.  The actual percentage was 12%.

The Millennials now represent the largest age group and its growing the quickest. 

As we hear in the international politics, they are having to re-anchor around the new generational realities!

I really get a kick out of working for my bank client.  They have a brand image that is actually retro-home-grown chic. 

From the viewpoint of Boomers, the bank might not be cool enough.  Shoot… they’re not a national brand that sponsors professional sports teams. Nor have posters in the airport terminals.  Nor advertise in the regional edition of the Wall Street Journal.

And that’s actually a good thing.

Small town banks that reach out beyond their foundation city, but still remain customer focused in the way that banks did before the advent of the ATM, is an essence of cool that Millennials crave… especially as their Boomer parents push them out of the house and they seek surrogate substitutes that can guide them and hold their hand!

My client, the small town newspaper group actually has the ability to look at a glass that is either half full or half empty.

No question that the web has challenged the survival of many city-centered newspapers.  Social media transport news and information perhaps even better than online editions of USA Today… or at least the news that many actually care about reading.

BUT… just as much as Millennials are declaring their own new hometowns, small town newspapers are providing a local anchoring point of connection that old and young alike place value.

The Mature Generation might soon be passing as they quickly enter into the 80s and 90s, but right now, they represent the vast majority of what makes up the population residing along Main Street in the hundreds – maybe even thousands – of small towns that dot the landscape of Middle America. 

Oddly… Millennials are driven to sink down roots… Matures are driven to continue to connect with their roots.

Millennials and Matures are more alike than many marketers might think.

The marketplace is experiencing BIG change. 

Ad agencies fail to see it.  Many entrepreneurs are driven by the expectation that everybody will buy their product. Corporations are too anchored by dated models to adapt to capture it.

I’m in the business to not only accept change, but find ways to embrace it… and capitalize on it.

Are you ready to journey?