Monday, July 17, 2017

Is Traditional Retail Dead?

In Manhattan, there are always a bunch of stores -- aimed at tourists -- that hang huge banners proclaiming "Going Out of Business Sale -- huge discounts."

Some of those stores have been in business, it seems, for decades.

The overall retail sector may have a lot in common with those stores.

According to "The Death of Retail is Greatly Exaggerated,"

As of early May, S&P Global Market Intelligence tallied a record 18 retail bankruptcies, al­ready matching the total for all of 2016. The carnage is on full display in the new Fortune 500 list: Household names like Macy’s, Sears, and Kohl’s all took tumbles down the list, as did other struggling chains like GameStop (GME, -0.37%) (falling 19 spots, to 321) and Dillard’s (DDS, -0.94%) (which fell 37, to 417).

We began seeing/predicting the fact that retail would go through a rough 2017 back in Q1, and feel that it is a big issue because:

  • The U.S. retail sector contributes $2.6 trillion annually to U.S. GDP, according to the NRF, approximately 15% of the total economy. That includes retailing companies along with other companies that support the retail industry, such as logistics, including trucking and shipping; warehousing; construction and maintenance; agriculture; manufacturing; technology; and health care. Basically, if the retail sector takes a hit, the rest of the economy will suffer.

Does this mean the retail sector is dying? Not really. The parts of the retail sector is somewhat cyclical and other parts are very sensitive to external factors -- like the weather or other trends. So a downward trend, by itself, is not necessarily troubling. And some retailers continue to do well, including Walmart, Home Depot, Costco, TJ Maxx and Best Buy, according to Fortune. 

What is troubling is that there's a fundamental shift going on, towards online and mobile. Bricks-and-mortar stores may no longer be about buying but sampling and community, according to another Fortune article. Instead, retail may seek to leverage: "newly available real estate to experiment with boutiques, showrooms, and pop-up shops." If that trend continues, it will mean a further decline in the number of full-time retail jobs and a further decline for companies that support retailers.

While reshaping retail to better meet the needs of consumer is good news, and more efficient, that's not good news for the long-term health of the sector. A lot of retailers that sell fashion commodities such as basic Ts and jeans will likely not survive in an e-commerce playing field. 

And one more thing, which has been overlooked by retail reporters: According to the NRF, 98.6% of businesses employ fewer than 50 people.  In a world in which most retail transactions take place online or via an app, these local mom-and-pop stores don't stand a chance. They may not have the skills and resources to move their business online, and may not be able to compete on price. They won't be able to survive the Amazonification of retail. This could decimate small retailers and small towns around the country.

That's going to be a big story the rest of 2017 and going forward.

Wednesday, July 12, 2017

Is Your Organization Social Media Responsive?

What seems like a long time ago, the news cycle was about 24 hours -- from the time "news" happened to when it would appear in newspapers and then on TV and radio. (At that time, cable news didn't really exist.)

Now, the news cycle is probably an hour -- tops -- before it hits social media.

It used to be that if you were in a crisis, you had hours to assess and determine how to respond.

Hours is a luxury.

Six years ago, during the Arab Spring, Kenneth Cole, a clothing designer also known for provocative ad campaigns, posted a provocative tweet in the morning and didn't check back until late in the afternoon when he realized Twitter was in an uproar because he didn't update or apologize in the initial blow back.

The fact that he was in meetings and busy was seen as no excuse.

Companies no longer have hours -- they didn't even have that back in 2011 -- to contemplate a response.

We see the implications of this everyday, whether it is a tweet rant from Trump or a poorly executed tweet from a brand or media property.

Unfortunately, most companies aren't social media responsive, by which we mean: able to respond quickly to a problem involving them on social media.

Here are some steps to consider:

  • Don't rely on apps that post content to also alert you to a potential problem. Posting content is very different from monitoring and generating alerts. Consider subscribing to an alert service so that you don't find out about a problem only the next time you log on to the app. Too many services -- even Twitter -- do a better job of capturing mentions without doing a good job alerting you. (We're not going to mention specific potential suppliers since some of these companies and a lot of their functionality can change very quickly.)
  • Make sure appropriate trusted people within your organization have the username and passwords for all major social media platforms, and are comfortable posting onto them. Too often, the login information for a company's social media accounts are held by different people so that if a problem happens, and the person managing Twitter is in an all-day off-site, there's no one else who can access the site to try to put out a fire. Sometimes, we've seen, the person in charge of, say, Facebook, has left the company without designating someone as the administrator, only as someone who can post. It's important that trusted people can back up the main driver if that driver is out of the office. Also, for this reason, it's important to know when key people -- whether it's the social media guru or the executive to be quoted -- are on vacation or otherwise unreachable for long periods.
  • Do scenario planning to practice how to respond. One hopes to never have to use a crisis plan but it really is helpful to develop one, even if just for social media. In this case, you would look at likely areas for concern -- could it be a customer complaint? A rogue tweet (meant, perhaps, for someone's personal account)? A hacked account? A legal issue? What should you do to address this issues? Without a scenario planning, you may not have an idea of what to do when seconds count.
By the way, the same should be done with a look to how to respond to the media. 

For example, there used to be something known as a "day-two" story -- a story that provided a different aspect of the story getting media's attention. On the first day, the news breaks. On day two, one might pitch a story that provides more context to yesterday''s breaking news.

As with everything else, the time to develop and pitch day-two stories has shortened considerably. Now known as "news jacking," the idea of responding to breaking news and inserting your company in an appropriate and positive way, you need to respond with a contextual pitch within hours, not days. The context to the story that former Uber CEO Travis Kalanick started hitting as soon as the initial stories began hitting. 

While it's true that stories still appeared about a week after he was pushed out, the names of the executives who were being quoted were big name celebrity executives like SalesForce CEO Marc Benioff and former Yahoo! CEO Marissa Mayer. 

If you want to be able to position yourself as an expert to the media on a breaking news topic, you need to respond much faster than you used to in order to get coverage.

Of course, you still have time to write a blog article for your corporate blog (like this one) after the fact but that's not the same as being quoted in a reputation-making outlet, blog or podcast. Your team and the executive(s) in charge have to have a sense of urgency.

Without that urgency, you may be able to respond but you won't truly be responsive.

As a caveat: Not every organization can or should move that quickly. But we're speaking to those organization whose marketing director is looking for quick hits by news jacking without providing the resources or the ability to move as quickly as you have to secure coverage.

Thursday, July 6, 2017

Internal Communications When an Acquisition Deal Does Not Get Completed

A few years ago, I wrote an article, "Three Stages of Merger Communication" for IABC's online newsletter. Recently, I was asked if I had any advice when a merger does not go through. Here are some thoughts, that were originally published in CommPro.Biz.

It seems to go unnoticed but a portion of announced merger or acquisition deals do not go through. Reasons range from regulatory issues, such as antitrust issues; management retention issues (the length of time they are to remain in current or similar positions, non-competes for senior management, etc.) as well a pricing issues, working capital requirements, deal-related and non-deal-related lawsuits, and other due diligence issues.

After a company has announced it has come to an agreement to purchase another company, typically the CEO and management team of the acquirer will convene a town hall meeting at the target company’s headquarters to address employees to explain the rationale for the deal – why the two companies will be stronger together than on their own – and what changes new employees can expect.

If the deal falls through, the target CEO and management team need to again meet with employees and discuss why the deal fell through (with input from legal counsel). Management shouldn’t delay getting in front of employees because they’ll already have a sense of whether or not the acquisition or merger is working out. Again, with input from legal counsel and the company’s communications staff and advisers, management needs to address the following:
  • How to address any rumors that might be circulating prior to the official announcement that the deal fell through. There certainly will be rumors flying around.
  • How to address the company’s future. Management needs to discuss its new road map – will it continue as a standalone or will it search for a new, better partner.

o   If the future is to remain a standalone, management needs to explain why that makes sense in light of the fact that it had recently been ready to be acquired or to merge with another company.
o   If the future is to find another partner, management needs to discuss what lessons it learned, what it will now look for in a new partner.

Mostly, employees want to know – and management needs to reassure them – that the company’s future is assured, that employees should be focused on the future, proud of what they will continue to build.

Though this is not an internal communications issue, management needs to also reassure customers, partners, vendors, investors and other stakeholders – as well as current and prospective employees – that the company is stable and has a future. This may be a challenge if the target company had stated during the initial acquisition announcement that a primary reason for the deal was to access the necessary capital to expand. So management will need to find a way to credibly walk back that reason.

Mostly, the once-target company needs to be prepared that others may start circling the company, looking to offer a lower price because the target is considered damaged (since the deal did not go through – even if the problems was with the acquiring company). It is crucial to be able to discuss a stable, strong future.

Some things to keep in mind:
  • Don’t wait too long to announce that the deal will not move forward. While no company, especially publicly held companies, want to address rumors, management needs to get ahead of the news rather than for it to come from outside. If you wait too long, you’ve lost control of the narrative.
  • Be clear on what you’re communicating. Your answer needs to be consistent and accurate. It undermines employees’ faith in management if conflicting messages are offered up by management.
  • The almost-acquiring company and the nearly acquired company will continue to have different goals at this point, especially since people may want to point blame to one party or another (which can include management teams, attorneys, bankers, etc.) While communications teams of both companies worked together to prepare for the initial announcement to coordinate priorities, next steps and goals – that almost won’t be the case here. So one company may want to go back to reporters who originally covered the announcement while the other company may want to let the news fade. Ultimately, you need to be professional and act in the best interests of your company.
  • There could be lawsuits as a result of the failed deal, certainly from shareholders and possibly from one company suing the other. If there is a lawsuit, the company needs to reassure employees so they don’t get distracted by the lawsuit (and any coverage of that suit) so they can stay focused on the company.
  • Internal communications needs to help reassure employees – rather than give them reasons to bolt to another company, which could include  the former acquirer. As you develop your communications plan, keep asking: Does this address employees’ concerns and fears? Does it speak to them in a way that seems authentic (as opposed to legalese, which does not reassure parties of either the first or second part).
  • Don’t ignore employees (or customers, partners, vendors, investors and other stakeholders) and hope everything will be okay. Now, more than ever, they need to feel that management has things under control and can deliver on a steady, stable future.

Monday, June 26, 2017

What's Your Story?

I realize that might sound aggressive? "What's your story?" may sound like, "What are you looking at, bub?"

But what we mean is this: Do you know your story? Are you communicating it effectively?

A recent AdWeek article talked about "taking the brand out the branded content," saying "marketers must be confident enough in their own storytelling not to cast themselves in the leading role." The example of putting the brand in a leading role, which backfired, is the recent Pepsi ad featuring Kendall Jenner.

Written by Molly DeWolf Swenson, the article urges brands to "believe the story is worth telling and that people care about it and want to hear about it."

That's an important point so I will highlight:

  • The story must be worth telling.
  • People will care about it.
  • People want to hear about it.
Too often, the story we want to tell is about ourselves. And it may be a story worth telling.

But it may not be a story people care about.

And even if it's a story they might care about, that doesn't mean they want to hear about it. At that moment. 

You don't want to be, or your organization to be, that guy at a party whose small talk is boring everyone else. Who's clearly working on a angle without really interacting with the people he's speaking to.

What that means is that we need to figure out not just what our messaging and positioning is but what is our story. And once we figure out our story, we need to ask: "How do we make sure people will care about it."

We recently heard about a client who desperately wanted to break into a new category, and ahead of doing so, wanted to speak to reporters covering that category. The reporters weren't interested. Not surprisingly. That's because the client didn't have much of a story to tell yet. It had a good story from its internal perspective -- we've been successful in category A and now want to enter category B. But with no clients, no experience directly in category B, reporters in category B don't care yet. 

If the client (not one of ours but this is true for every company in a similar position) does get a customer in category B or has some true insight into the category, then reporters are likely to be somewhat more interested. But their readers won't care until the client has a story that is relevant and compelling to them.

That's the part of having a story people often forget. 

Without developing a story that's relevant and speaks to your key audiences, you're a bit like asking someone to see your vacation photos. They may be great photos. You may have had a fantastic time. But there's not much of a story there, unless it's a place I want to go to or have been to before.

Look, companies (like people) need to believe in themselves and their stories. But in a social media world, they need to make sure their resonate outside the company. And if it doesn't, they need to work on developing a story that connects to their audiences. 

Without that, it shows you don't understand your audience. That you don't really care about them -- except in terms of making a sale. That's what's in it for you. They want to know what's in it for them.

So make sure your story does that.

Tuesday, May 16, 2017

Why Has It Gotten Harder to Reach Reporters & Four Questions about Working with Reporters in An Age of News Distraction

I've been noticing that it's been harder to reach reporters live, on the phone. My suspicion has been that a lot of people are being distracted by news from Washington, DC. and yet I've also been concerned that I'm grasping at straws and that the problem lies elsewhere (such as possibly poorly written pitch letters that are too long or poorly delivered pitches delivered on voicemail that go on too long).

Mostly I've been trying to figure this out to improve what we're doing on behalf of clients.

I've checked with other colleagues outside my firm to get a sense of what they're seeing. Checking with people working with different clients across a range of industries.

They've been reporting the same sort of things. It's harder to reach reporters, more difficult to get them interested.

The thing is: all the people I checked with are PR professionals. They've been in the business for decades, have strong relationships with the media, and know how to tell a story and how to pitch. They're seeing the same thing.

Here's how I know I'm at least partially right that the news from DC is sucking up the oxygen and attention of reporters.

I tried calling an education reporter at a Florida newspaper for a story about a local EdTech client. Couldn't reach her live -- and I tried several times without leaving a message (because, after leaving a message, I can't call back for a couple of days).

What's going on?

When I checked her Twitter feed, I found confirmation of my theory.

Of her last 10 tweets and retweets, going back to May 13, one was a retweet about a compelling story in her paper, one was about an education reform bill being considered in the FL. legislature (so very work related), one was about a story in the Atlantic (about slavery) -- and the other seven were about DC news. Of the seven tweets today, only one (the Atlantic story) was not about the swirl of news coming from DC.

Keep in mind, I am not criticizing her or any other reporter about this -- I find many PR people I know to be equally concerned, preoccupied and distracted -- but none of today's tweets/retweets dealt with her beat.

I also checked out a Culture Desk reporter at the New York Times, and he posted 11 times today. Of those, one was about cultural news, one about Star Wars, and one about a boycott of ABC for cancelling Last Man Standing -- so those three are work related for that reporter. But the rest? All about the news from DC.

I checked out the tweets of a consumer tech reporter, and of his 19 tweets today, only one was about his beat area (about the latest trend about fidget spinner, one was in response to something else entirely, one about Trump and the economy, and the rest about the news from DC.

I also checked the Wall St. Journal investing columnist whose tweet about the economy was retweeted by the tech columnist. His nearly 30 tweets/retweets covered a broader range of topics: most were about investing and the economy, some not at all related to politics or possibly his beat area (manuscripts of Emily Dickinson; police spying on those texting and driving) -- but even he wrote about the latest presidential news.

So that's a total of four reporters, an admittedly small and random sampling. Two of them are reporters I've pitched, two are not. The vast majority of their tweets today -- I didn't have time to do more thorough sifting of tweets -- were about the political storm in Washington.

This is not about politics. This blog is about, at least for today, confirming that there's something distracting reporters, making it harder to be effective and productive. (when reporters are glued to the news feed that has nothing to do with the news they cover).

Perhaps today's news was especially distracting. I get that. But we've been having a lot of days like that recently. I call it news distraction or DC addiction. (I don't mean to be insensitive to those with real addictions; people who track the news hourly seem to have similar symptoms to real addiction.)

Which means, we as PR professionals need to discuss the following:

  1. How to reach reporters when they are distracted by news outside their beat areas.
  2. Should we try to reach them when they -- and, presumably, their readers -- are also distracted by the news? 
  3. Is anyone really paying attention to other news?
  4. What can we do to get out our news when reporters who cover the beat aren't able to focus on it?
What do you think? Let me know if you think I'm overstating things or if you have suggestions of other questions we should be asking as PR professionals trying to do our jobs.

Friday, April 21, 2017

TrendReport 2017: Additional trends to expect

Each year we post our annual list of trends and predictions, as we did in Dec. 2016. We only posted our top five trends but, as usual, we actually identified many more. We recently added a new one about boycotts, with the twist being the boycotts were conducted by big brands not by consumers against those brands.

But each year, we typically identify more than a dozen trends, and we felt we should post the rest of these here (actually, we meant to post them a couple of weeks ago but have been busy).

Here are the rest of the trends we think will have an impact in 2017.
1.    2017 will be a tough year for traditional media. Financial sustainability used to be print media’s primary challenge. Not anymore. While still an issue, it has been replaced by the ascent of fake news, which has attacked traditional media’s most important value: credibility. In the last three months of the campaign, according to BuzzFeed’s Craig Silverman, fake news stories outperformed and were shared more frequently than real news. Publishers need to figure out how to re-establish their own credibility, make facts relevant and attract readers (and revenue) who may or may not care about whether news is fake or real. We expect to see declining circulations and revenues at real news organizations, followed by more layoffs and smaller papers.
2.    Social media addiction becomes recognized as a thing. It’s not just kids who can’t put down their devices. It’s everyone. We expect more stories (spread on social media) about how to break the social media/device addiction. Here’s the problem: You can’t live without your smartphone: You don’t know anyone’s phone number without it. You can’t text them without it. Meanwhile look at all you can do with it: pay for things, shop for things, turn on and off devices in your home, much less use it to not have to interact with anyone. Taking a break from your device is healthy but impossible, and we expect more content in 2017 about this as an issue.
3.    Virtual Reality and Augmented Reality still won’t be everywhere. Many newspapers feature VR content. And the NBA is now testing VR. But we don’t think VR or AR like the faddish Pokemon Go will be ubiquitous yet in 2017. Solvable problems include VR headsets that offer an improved immersive experience than the cardboard headsets (that resemble cereal-box prizes) distributed by some newspapers so readers could access VR content or the current high-end headsets. Providing a feedback loop from user to the headset/content could be around the corner – a real corner. As with other tech, VR and AR need more content to encourage people they need to have it.
4.    Expect a cloudier 2017. Cloud computing has been a full-fledged trend for several years now. But we expect that it will evolve, to reduce the costs of cloud computing and to enhance capabilities.
5.    Artificial intelligence will continue to surge. AI become the big tech trend covered in the media in 2016. While there is overblown fear that AI-enabled robots will take over humanity, we expect to see AI built into all sorts of consumer and B2B environments – and to be featured in more Hollywood movies and TV shows.
6.    Drones still won’t take off. Consumer drones look like fun – for a couple of hours. We think the real market will be B2B, not just for deliveries (which we think is still a couple of years off). We expect B2B drones to help do things that are hard or risky for humans to do such as checking train tracks or oil pipelines in rural, hard-to-otherwise-reach locations. B2B use of drones, like B2B use of robots, will drive the market.
7.    Globalization will be a hot topic. From free trade agreements to tariffs, job losses, Brexit and the U.S.’s relationship with other countries, and the nature of globalization itself will be a very hot topic in 2017 and beyond. 

8.    Interest in voice speakers will turn up. Farhad Manjoo at the Times says gadgets are dead but there’s one area that he’s wrong: digital voice assistants like Amazon’s Alexa and Google’s Home. These two assistants/speakers are designed to be more helpful than digital assistants, and we believe this will be a big year for them, and that IoT connectivity will likely operate through them. Alexa and Home are the killer app for smart home technology in the living room, like lighting, home Wi-Fi networks, and thermostats but also may be the key to IoT in kitchen appliances.

Ongoing trends:
1.  NFL ratings will continue to decline.
2.  Drug pricing will get a lot of attention
3.  Wearable tech will still not be as mainstream as people in the industry were hoping.
4.  Progress to a driverless-car future will slow down – but not for the reason you might think. The closer we get, we will recognize that aspects of driving that we took for granted are more complicated to solve when a human is not driving. These tech issues must be solved even before we get to solving liability issues.
5.  3D printers will continue to proliferate in schools but remain unnecessary in the home.
6.   Eventually consumers will realize they can’t easily, more efficiently or more cheaply cut the cord to cable – since the bandwidth comes from the cable company. But it might not matter. People watch on many devices – but usually not on their TVs – so streaming services will continue to be popular, even if duplicating cable offerings.
7.  eBook sales will continue to plateau while traditional book sales increase slightly. (Meanwhile, sales of vinyl records will continue to climb but will remain a niche market.)
8.  e-Wallets still won’t be as widely adopted as some were projecting. They will go mainstream but not in 2017 or 2018.

This now completes the list of most of the new and ongoing trends we identified in December. We purposely did not want to add new trends that came to light as a result of changing global political realities or predictions that only would have been obvious after the fact (like Bill O'Reilly's departure this week from Fox). 

Let us know what you think about our list -- what we missed (not including political or unlikely predictions like one about O'Reilly). As always, we will issue a report card on these trends later in November.

Thursday, April 6, 2017

Why Advertising Boycotts Are Being Conducted By Corporations

Last week we made a prediction about boycotts with a difference -- those conducted by big brands by withholding their ads that support now-controversial media outlets.

This weekend (after we made our prediction), the New York Times wrote about Fox News' top-rated personality, Bill O'Reilly, host of the $100 million-generating "The O'Reilly Factor," in an article with the headline, "Bill O'Reilly Thrives at Fox News, Even as Harassment Settlements Add Up." He's been sued multiple times and has paid out more than $13 million to settle cases -- and there are new allegations him.

Although the Times reports that O'Reilly "denies the claims have merit," this time something's different because advertisers are pulling their ads from "The O'Reilly Factor," according to a Times article, "Fox Losing More Advertisers After Sexual Harassment Claims Against O’Reilly." As of Wednesday, nearly three dozen companies had decided to pull their ads.

According to HuffPost, what's going on this time is:

The O’Reilly boycott seems to have accelerated more quickly, both in terms of advertisers taking the initiative ― some announcing their decisions on social media ― and in terms of sustained coverage online, which wasn’t as much of a factor in 2009, much less 2004. 
Here's another article about the situation: "Advertisers want their Google ads off offensive content" (that appeared in the Boston Globe courtesy of the New York Times).

Social media is playing a role, allowing people to vent about controversies that a decade ago might not have lasted past the initial news cycle. Now, the news covers the outrage -- that becomes the news. 

But that's not the only reason. 

We've had pervasive social media for the last five years but what we think is happening may be that Americans on all sides are already upset (again, this is across the political spectrum) and now more easily and quickly express their outrage. And that's something brands have to take seriously.

So we think top brands will be more responsive to avoid controversies that don't play well to their customers. (Talking to you, Pepsi and Kendall Jenner.) In some ways, these are preemptive boycotts: brands boycott to avoid contact or relationships that will anger their customers so as to prevent a consumer boycott. 

There will be some brands that will decide to take on the controversy, much the way some small companies take a risk by purchasing an ad during the Super Bowl. But we do expect these preemptive boycotts to continue.