POINT#1. THE PIVOTAL MOMENT
• Chris talked about a lot of deep topics lately. Topics ranging from negotiation, sales, marketing, or stories related to these.
• Chris thinks that where we are at today is such a pivotal moment. This is the opportunity that companies have to really think strategically before they get hit with a break in the face.
• Chris was reminiscing his time in retail when he worked for Walmart a little more than 15 years ago. He was in a semi-management position in logistics in modular planning. He stepped back, he got his MBA, then he came back out on the supplier side and did category management, analysis, business field management, he was a Director of Sales, and then a Senior Director of Sales.
• He managed big, strategic, and profitable accounts (depending upon the company). Chris said that Stanley was massive – Stanley was very small. Depend upon Timex and Infantino, it was a big amount of the company’s profitability or maybe 40%. Chris does not know the specifics, but he knows it was big. Chris said that he held the keys to the kingdom in a sense (but note that this not the reference of Chris for this podcast).
POINT #2. INCREASE YOUR SPACE
• Chris says that some of the biggest things that we plan every year are Christmas and Black Friday. This represents such a large portion of sales. If you can get 2, 3, or 4 different promotions in the store, you can take the space from your competition and get the sales that they would get. The better you do, the more space you gain on the planogram.
• Chris explains that it is important because the more space you have on the shelves, the better you do. This does not always hold true, but the relationship between the space that you hold and the percentage that you do for the company.
• Once that relationship starts slipping, let’s say another brand has better marketing, branding, products, and pricing, you will lose space.
• At one point, when he was still working in Walmart, he increased their space by about 40%. Then he got promoted over to Target as Director of Sales running the team and the office and they set up a new office in Minneapolis.
• Chris said that it was an amazing fun time of his life when he was working for Target in Minneapolis. Back then, Target was a fun company, very young, a lot of cool people, and they were doing weekly office in the building of Target. He had built a great relationship with Bayer in Minneapolis.
• When he left, the guy who took over the position did not do so well and lost a lot of space and a lot of volumes. 2 years later, Chris was tapped to come back to manage Walmart again as the Director of Sales.
• He kept it at status quo with an industry that was down turning – it wasn’t just a lot of good marketing in that industry. They are still stuck in the legacy marketing thinking that a one-page article in the New York Times or the Wall Street Journal would drive traffic.
• Chris at that time did not understand direct response marketing and Facebook marketing. If he knew what he knew today, it will be a totally different world for him.
POINT #3. THE SEISMIC SHIFT
• He said on one of his podcasts that there is a seismic shift in the consumer patterns like how we think and operate.
• Black Friday, Thanksgiving, and Christmas season is going to be part of that shift. People have not gone as they did before. Walmart now can only have 2/3 people in the store. Literally, before, the stores were packed, and you cannot get a parking spot. There were thousands of customers in retail stores during Christmas and Black Friday. Now, everyone is shying away for many different reasons.
• The seismic shift does happen and retails don’t even have it. Walmart stood phenomenal because they shut down on their competition. They had food; they did great. People are so pent up and they buy things they don’t normally buy. It’s just a weird psychological feeling when you’re pent up and you are looking for something to get you out.
• Chris says that we all have a form of sedation with need and his is cigars, and the news.
• Retail has changed. The consumer is inclined to change and with that being said, things are moving online.
• Chris says that Amazon is a massive company, and they are going to continue to get more share because it’s just super easy. Will customers gravitate towards the other brands? Will they go to Walmart dot com?
• Before, it’s about footprint in those stores. Now, online, there is no limit to the footprints that the stores can add to the assortment because there are already thousands of items. Like watches, there are probably so many. So, you have to narrow that from the brand, color, price, or depending on how you shop. There’s no longer that strategic advantage for a brand.
• Chris used Timex as an example as that was his old world. There’s no longer a strategic advantage for them to be on Walmart with a footprint because now their footprint isn’t completely there. What’s going to happen is, if they are smart, they are going to drive traffic to their site – multiply this after all these different brands.
POINT 4. CUT THE MIDDLE MAN
• Chris continues to say that when you drive traffic to your site, you make more profit. There’s a middle person in there that you have to pay; you give it to them for the market price and they mark it up to the retail price. If you cut them out (the middle person), you will get the retail and all profit will go to you. This is a major shift in retail on how consumers are going to think.
• The best brands already got this, and they have already implemented it. Now, the legacy brands, that were living in retail stores, have a massive wake up call because if they don’t pivot and shift, they will potentially go out of business.
• Chris cited Walmart as an example. The level of inventory that retailers hold, Walmart has 4000 stores, in this gives a big sucking sound. On top of that, you are putting stuff on distribution, that’s another sucking sound that brings inventory, and then you are turning it. But these are real orders for businesses.
• Now you shift to that model just in time in one or 2 central locations. Chris says you do not need as much. You don’t need to have a whole shelf full. All you need is what you are going to sell for 2-3 weeks.
• As these stores move to that model, it’s going to impact customers and brands. Chris does not think it’s going to be slow and they got hit super hard.
• Chris’ philosophy as a domain broker is that this shift, this monumental shift’, in Q4 with stores reducing the volume of customers that are coming in for Christmas, they have already drastically reduced their promotions. Most likely, most brands already saw this because big retailers did not order. They probably have a head-ups and Chris is just seeing it now.
POINT #5. KNOW WHAT WORKS
• Chris says, as a domain name broker, what is happening is great for domains because it means that companies have to pivot – they have to for their own survivability.
• Chris wants you to understand branding and domain names, the interaction, and direct response marketing telling compelling stories, the authenticity, all these things that they were able to get away within the legacy system.
• A marketer once said: “Half of the marketing works; we just don’t know what half it works”. Like how print ads and tv ads, and people would say: “they drive traffic, they drive volume!” but we do not know what part it does. Those days are over.
• Chris says that this is going to exacerbate but the silver lining is that brand can take control of the situation – you can be the captain of your ship. You will no longer have to rely on a retailer.
• That is good and bad because part of that means that you have to educate yourself. The flip to that is there is limited opportunities that are out there as far as branding and domains and scaling.
• Chris continues to say that often said, the categories that define domain names are leadership, leveraging, and scaling. Once these are gone, they are gone forever and there’s no opportunity for you to acquire them.
• Let’s say that you have gone through a strategic acquisition, are you going to turn around and sell it to your competitor? Of course not!
• This varies to the level of domain names and brand. Some companies had so many acquisitions that are no longer relevant. In that case, that is great that they have an opportunity, potentially, a very small opportunity. Do not miss the opportunity!
QUESTION OF THE DAY
“Are you the captain of your ship?”
QUOTE OF THE DAY
“Do not miss the opportunity!”.