Monthly Archives: March 2013

Lululemon’s supply chain gets downward dogged

A recent recall by yoga manufacturer, Lululemon, of a batch of pants that were…gasp…see through. Not really something that you want in yoga class, really in any class not done in the privacy of  your own home. The company and stock suffered due to this recall which effects close to 17% of the inventory they carry in their stores and hit the stock with a 5% drop in value. It will be interesting to see how the Canadian company recovers from this recall. This will impact their in store sales as well as potentially drive clients to competitors such as Under Armor, Nike and the Gap.

It is also a PR nightmare. We are talking about a supply chain and design issue that involves a personal garment. It is one thing if Adidas or Nike were found to have a revealing sweat shirt or tank top. Lululemon has attempted to get ahead of the issue, but there is more they can do – what lessons can we learn?

How many pants will be recalled??

How many of these pants will be recalled??

  • Get ahead of the message. Lululemon has put out a large FAQ that answers many questions, albeit not as detailed as one might want – click here for FAQ. They need to do more. Maybe even have some fun with it. Yoga is all about bettering yourself and your mind. Play off this message. Lululemon is practicing good yoga but constantly reassessing and improving themselves. Their design issues and supply chain is part of that process.
  • Get to the bottom of the supply chain issues…ASAP. Clearly there was a break in their supply chain at some point – most likely quality control issues (d’uh). They need to not only resolve the issue, but be transparent about it. Keep your clients aware that you have identified and are taking corrective action. Otherwise we will be left with the thought – you are just going to countries like Vietnam and Taiwan for the low costs and clearly don’t worry as much about quality. Not to be too cynical, but maybe near shore some manufacturing…at least in the short term (sorry I was being cynical there)
  • Love your clients. Again another “d’uh” but sometimes companies forget this. When Apple’s iPhone had antenna issues did they really “love” their clients? I would say no. Jobs responded by blaming manufacturing, see FoxConn, or the way one would hold the phone. Where was the love? So don’t do this. Give a discount for shopping at the store, that could also drive more sales (yes I am again being cynical) make sure you send follow up communications with those clients that were impacted. Oh, and…apologize to those clients for any problems this may have created.

Lululemon will recover from this, I think. But it shows once again how vulnerable we are to any supply chain issues. Add to this social media, and that any issues that strike are instantly public. No company is immune to this, so have a plan on how to deal with this if and when it occurs.

Meanwhile, be conscious of your garment when you are asked to do the table or the wheel in yoga class…unfortunately I have not been able to do either yet. Maybe for the best.

 

 

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Filed under Consumer Product Goods, Current Events, Supply Chain

Big Data – bringing “Minority Report” closer to reality

I read an interesting article about the usage of big data and fighting crime – click here for piece. The basic premise is that law enforcement agencies are taping into the mountains of data that is out there to start determining where crimes might occur. Using predictive analytics coupled with the mountains of available data allows for an improved ability to understand where and even when crimes might occur. The article points out some measurable improvements of using some versions of the predictive solutions:

“the intermediate results look quite impressive. In Los Angeles, five LAPD divisions that use it in patrolling territory populated by roughly 1.3m people have seen crime decline by 13%. The city of Santa Cruz, which now also uses PredPol, has seen its burglaries decline by nearly 30%. Similar uplifting statistics can be found in many other police departments across America.”

Impressive to say the least, even if it remains early. There is even more discussion of how law enforcement could leverage sites such as Facebook to track and anticipate users who might have a higher probability of committing a crime.

Showing up based on your Facebook posts

Showing up based on your Facebook posts

“The police are also finding powerful allies in Silicon Valley. Companies such as Facebook have begun using algorithms and historical data to predict which of their users might commit crimes using their services. Here is how it works: Facebook’s own predictive systems can flag certain users as suspicious by studying certain behavioural cues: the user only writes messages to others under 18; most of the user’s contacts are female; the user is typing keywords like “sex” or “date.” Staffers can then examine each case and report users to the police as necessary. Facebook’s concern with its own brand here is straightforward: no one should think that the platform is harbouring criminals.”

So think twice when you drunk post on Facebook!

So what does this mean for us and our privacy? While there are some positives, what about the potential down side? Remember the movie – Minority Report? Tom Cruise and his police team would be able to anticipate crimes before they happened and arrest the future criminal…before they actually committed the crime. How would one feel to have big data “predict” that you are about to do something against the law…before you even do it. Is it worth to have a percentage of citizens be mislabeled to have a larger percentage of future crimes nipped in the bud? And what happens if big data predicts a crime and law enforcement does not act upon it…and it does happen?

It creates some very interesting issues. I think that this is an another example of Big Data and the potential it might hold, but also the dangers associated with advances in technology.

Another reason to be careful about what you post on Facebook!

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Be good to your customers…especially in the world of social media

There is a story about Lego responding to a client’s letter that has gone viral. The basic premise – a Lego fan builds a set, against his father’s wishes he takes the completed set out and ends up losing a mini-figure. His father suggests he writes to Lego, which he does, and Lego responds by sending him a replacement as well as extra Legos. Great story. And good marketing buzz for Lego. Not only did they make an even bigger fan of the 7 year old, but they got a tremendous buzz about their actions – outlets from Huffington Post to Yahoo! wrote about the story.

Blue Ninja!

Be the ninja of good customer care

So what is the moral of the story? Take care of you customers…d’uh. Okay that is the obvious. But what this really shows is the greater importance good customer care takes with the rise of social media. Before blogs, Twitter, Facebook, Linkedin and other social outlets, the above story might have been picked up by a local newspaper reporter as filler. Good story, but buried in the business section of the Sunday edition. With social there is long tail as well as a wider reach. The originally story came out earlier this year, I just read about it and I am now blogging about it. Long tail.

Of course this sword can cut both ways. Have a bad customer care story and that could hang around your neck for much longer than it took to resolve the issue. Or if your fried chicken actually seems to be a brain or a kidney- aka what happened with KFC – click here, but be forewarned it isn’t too “appetizing” to view. Same holds true for Dell that dealt with huge headaches, both in terms of recall as well as image when one of their laptop batteries caught on fire and was videoed and spread like…ahem…wildfire on the web. This was the catalyst for Dell placing more emphasis on social listening.

These examples demonstrate the importance of being much more in tune with customer service and listening to what your customers are saying, and doing. Social media has given everyone a megaphone. Regardless of how loud or quiet that megaphone is, it is out there. End of the day customers will always vote with their wallets, but now they have another way to vote – with social media. One could argue that when it was only with a wallet, you could always expect to find another “sucker” for your products. The reality was the wallet voting is buried in the aggregate. Social media makes the vote personal and pointed. Take a cue from Lego and always treat your customer well – provide outrageous service and it will come back to you in spades. And take another cue from Dell – make social media key to your customer listening and service.

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Filed under Consumer Product Goods, Current Events, Customer Service, Social media

Brick and Mortar retail – it is about the experience

I recently saw an interesting ad from Guitar Center –

This ad struck me as a great example of the changes we are seeing in retail. Why you might ask. All we hear about is the continuing battle between low cost – brick and mortar – online – home delivery and yes these will continue. And for the most part, the traditional brick and mortar stores are suffering. Stores like Best Buy are becoming show rooms for Amazon – consumers head to Best Buy, look at the products and then order at Amazon. Same goes for Barnes and Nobles – check out a book and order it at Amazon or get an e-version on Apple.

But there are those, like Guitar Center, who have made it their business to provide the experience. Going to the store is as much about purchasing product as it is about getting lessons, trying out new instruments or just hanging out with other musicians. This experiences adds a level of loyalty and stickiness that you cannot get via eCommerce.  Think of how make up counters create an experience in department stores, or how golf shops have all types of services to capture your attention. Another example is how Microsoft, a bit to my surprise, has shown some success with their stores. Why? They make it all about the experience, and they really emphasis the Xbox and the video games. Great way to pull people in and hold their attention.

Now, not every type of retail can offer this experience. Some retail is subject to being a commodity and the experience is not as important. But retailers need to think about how they can make their brick and mortar footprints a destination, a place where patrons want to share in an experience. Otherwise they will simply serve as a show room for Amazon and other eCommerce giants.

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Groupons fall from the mountain top

Andrew Mason, the Groupon CEO, was let go this week due to continued poor performances for the company as well as a stock price that remains in the tank. How things change. One has to wonder, and obviously hind site is 20/20, how different things would be for Mason had he accepted the $6billion offer from Google. Rebuffing the search giant just stirred that hornet’s nest.groupon_logo

What is interesting to me is the following – Groupon never truly defined what they were. A technology company? A glorified email list? A social networking firm? A big coupon? Even Mason seemed to agree that they were not clear as to what they were. At the core, every company needs to understand what they are. Google is a search company, Amazon is eCommerce, ATT a communications player, GM a car company, Apple a consumer technology firm and so on. Define who you are and what you want to be when you grow up. Otherwise you are going to pull yourself in directions you do not and cannot afford to head in…A difficult discipline, no doubt, but one that has to be adhered to.

Of course it does not help that Groupon created and was competing in a space that had very low barriers to entry – creating by some accounts 500 copy cat companies. However that is not the only reason for where Groupon has fallen to.

Mason will join a long list of entrepreneur/CEOs who watched their idea start from nothing, rise to outrageous heights and then crash when expectations (or the public market) could not be satisfied.

Again easy to say now, but sometimes as Steve Miller would say – Go on take the money and run.

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Filed under Coupon, Current Events, Social media