Beverly Hills on $1 or less?

Everyone loves Julia Roberts in “Pretty Woman”, and one of the most memorable scenes is where she is snubbed by a saleswoman while trying to buy a dress at a fancy store on Rodeo Drive. Rodeo Drive in Beverly Hills has long cultivated an aura of luxury and elegance, home to such stores as Dior, Prada and Cartier. However, all that might change if Eric Schiffer, CEO of 99 Cents Only Stores, is successful in opening a store on Rodeo Drive.
The 99 Cents Only chain has been a business success story during the US downturn. Their best performing store, right outside Beverly Hills, made $12MM in sales last year, compared to average store sales of $5.2MM. The success of that store is due (in part) to Beverly Hills residents driving there to pick up bargains! During the recession, consumer affinity for the dollar channel has increased, with new consumers surprised at the national brand offerings and the dramatically improved in-store experience. The chain has seen a trend of wealthier consumers either coming into the store for the first time or coming more frequently.
This seemingly new shopper behavior that was highlighted by the sluggish economy reveals an important insight — that shopping is about mind-set and we are not comprised of just one mind. There is oftentimes a discount diva inside a wealthy shopper; and, likewise, someone on a tighter budget still has a taste for fine things and finds a way to budget to have them.
So, will the opening of a 99 Cents Only store help drive traffic on Rodeo Drive or degrade the brand value of the other stores on the street? Recent successful openings in West Hollywood and on Santa Barbara’s State Street suggest the former, yet planning commission heads think the store is best located elsewhere in Beverly Hills. It remains to be seen whether or not Schiffer will be successful in piercing the veil of luxury on Rodeo Drive and opening his store. However, if the economy continues to struggle, a mixture of high-price, high-concept retail with more accessible options might be just the trick to drive traffic and keep a mix of consumers shopping and buying!


Peapod reimagines itself again…and again

As you can imagine, I have a fascination with anything that takes retail into fresh new territories. One company I’ve always admired is Peapod. The online grocery delivery service reimagined retail with its debut in 1989 – way back in the day, when modems were newfangled devices and AOL was the craze. They weren’t the first to offer the service – but they’re the one that has lasted by understanding that the business isn’t solely about convenience, but also hinges on “quality fulfillment” and “customer service”. Nothing’s “convenient” if you get blotchy produce delivered late. Peapod got it right about what customers really wanted and needed right from the start.
Recently, they’ve again reimagined retail – twice. This spring Peapod set up an interactive grocery store in the tunnel of Chicago’s State & Lake “L” station. Commuters shopped using their smartphones to scan products pictured on shelves in train station posters. Purchases were delivered the next day. Peapod wasn’t the first with the idea, but I suspect that, once again, they’ll be the ones to make it an ongoing and viable offering by truly meeting shoppers’ desires. (Tesco pioneered the concept last year in subway stations in Seoul, South Korea.)
In early October, the program returned, expanded to 17 Chicago train stations and, now, also offers 30 items from area restaurants and hometown brands, such as Lou Malnati’s pizza, Garrett’s Popcorn and Eli’s cheesecake. The program was also introduced in Boston, Connecticut, New York, New Jersey, Philadelphia and Washington.
Next, in a fresh feat of re-imagination, the company that is synonymous with home delivery, has opened a pick-up store – Peapod Pick-Up – in a Chicago suburb and plans to open another in December. Customers order online, then come during an assigned time window to pick up their groceries. A Peapod associate puts the groceries right in your car. No schlepping required until you unload at home.
This is the kind of change and re-imagination that keeps retail so exciting for me. I’m inspired by their nimble approach and curious to see what future reinventions Peapod has growing on the vine. 

What Can an Agency Learn from Miles Davis?

I have a new book on my nightstand. Yes to the Mess – SurprisingLeadership Lessons from Jazz” by Frank J. Barrett.
Mr. Barrett is a professor of management and global policy at the Naval Postgraduate School. He’s also the former pianist of the Tommy Dorsey Band. He makes the convincing case that the experimentation, individual creativity and spur-of-the-moment improvisation found in jazz are also vital to any successful business organization.
One part I love about Barrett’s thesis – he explains that, unlike classical musicians with prescribed parts, jazz musicians take their cues from each other. Working together, they create something new on the spot. That’s inspiring, whether you’re a fan of jazz or not. Barrett’s comparison of jazz to a successful business organization couldn’t be truer. At TPN, we truly believe that working together and letting people do what they do best create better results for our clients.
And, from Jazz, we also learn that some of the best pieces of work are a result of free form, straying from the lines. What agency couldn’t use a little more spontaneity and creativity? By bravely embracing new ideas and ways to achieve them (what Barrett calls “the mess”), leaders empower their people to find awesome and innovative harmonies.