A Lot of Clams

“One of the best innovation stories I’ve ever heard came from a senior executive at a leading tech firm. His company had won a million-dollar contract to design a sensor that could detect pollutants at very small concentrations underwater.

It was an unusually complex problem, so the firm set up a team of crack microchip designers, & they started putting their heads together.

About 45 minutes into their first working session, the marine biologist assigned to their team walked in with a bag of clams and set them on the table. Seeing the confused looks of the chip designers, he explained that clams can detect pollutants at just a few parts per million, and when that happens, they open their shells.

As it turned out, they didn’t really need a fancy chip to detect pollutants — just a simple one that could alert the system to clams opening their shells. “They saved $999,000 and ate the clams for dinner.”

Greg Satell, Harvard Business Review June, 2017

That, in essence, is the value of open innovation. When you have a really tough problem it helps to expand skill domains beyond specialists in a single field. Many believe it is these kinds of unlikely combinations that are key to coming up with breakthroughs.

The Retail Apocalypse is Old News. Now What?

In 2019, regardless of size, tenure or segment of business retailers, brands and suppliers must recognize that they can no longer navigate the new landscape with old maps.

Tomorrow’s retail winners will be nimble, data-driven, fast-to-market and cost efficient. They will have the foresight, fortitude and fearlessness to disrupt their own identity and legacy models.

“Do or do not. There is no try.”

The rate of change will escalate. There is no time for deep contemplation. Winners will leap, measure and then optimize.

Failing fast will be a requirement, not an option. Succeeding fast will be a requirement, too.

The Alchemist’s Retail Prophecies for 2019:

Warning: One can identify prognosticators who use a crystal ball to predict the retail future. They’re the ones with glass shards in their bleeding hands and smoke issuing from their charred eyebrows.

What Can Today’s Retailers Learn from the Captain of the Titanic? Plenty.

Like the captain of the Titanic, leadership of failed and failing retailers has been publicly, and occasionally brutally, criticized. In some instances, this criticism is clearly deserved, in other cases not.

It may not be as bad as it seems.

Despite the painful passing and decline of retail industry stalwarts including Linens ‘n Things, RadioShack, The Bon-Ton Stores, Toys R Us, Sears and Kmart, retail chains including Macy’s, Kohl’s, Walmart, Target and other major retailers are showing financial improvement. Macy’s stock price is up 40+ percent year-to-date, Kohl’s is up 30+ percent, and Target is up 25+ percent. The rumors of the death of brick-and-mortar retail have been greatly exaggerated. And, Sears, Kmart and JC Penney are still open for business.

Recently, I participated in the Annual Retail Forum at Columbia Business School where a keynote speaker addressed a question from the audience: “

How would the speaker approach the precarious position of a challenged major retailer? What steps would you recommend?”

The response was,

“Shut it down…they don’t deserve to stay in business.”

This, “throw in the towel,” response brings to mind a key question we should ask ourselves. What would we do if we found ourselves as CEO of a retailer at risk of complete cataclysmic failure? One obvious metaphor is that of being captain of the Titanic. You may not remember, but the Titanic had a bonafide captain: his name was Edward John Smith.

Continue reading “What Can Today’s Retailers Learn from the Captain of the Titanic? Plenty.”

Everything That Can Be Invented Has Been Invented

In 1889, Charles H. Duell was the Commissioner of US patent office. He is widely quoted as having stated that the patent office would soon shrink in size, and eventually close, because…

“Everything that can be invented has been invented.”

Charles H. Duell*, 1899

The “Eureka” effect is based upon an ancient myth regarding the Greek mathematician Archimedes, who upon discovering how to measure the volume of an irregular object, supposedly leaped out of a public bath, and ran home naked shouting “eureka,” (I found it).

Most of us would agree that there is still much to be invented and discovered. We tend to think these new “inventions” will be more extraordinary, advanced and innovative than those which preceded them. This is not entirely true. Many prior advances were revolutionary and extraordinary. An invention need not be revolutionary, or even unique, to be significant. Finally, many “new” inventions are derivative of their predecessors.

From door locks to light bulbs, shovels to toilets, and the classic mouse-trap, innovation comes in many forms and from many directions, often right under our noses. Sliced bread? Bottled water?

Nothing is so basic, or so great, that it cannot be made better. Continue reading “Everything That Can Be Invented Has Been Invented”

What I learned from playing a doctor on TV

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Zach Braff as JD Dorian, “Scrubs” — © ABC/Disney

I’m not a doctor, but I really did play one on TV.

25 years ago, I sold consumer products, mostly luggage, to HSN and QVC. I hired a “guest host” to appear on-air, to work with the network “show host” and to demonstrate our products. One day the guest host was delayed, and I ended up with make-up on my face, a microphone up my shirt and an IFB in my ear. Continue reading “What I learned from playing a doctor on TV”

For legacy companies facing disruption, corporate innovation won’t be enough

Today corporate innovation is all the rage. Large companies host accelerators, launch internal startups, and court potential startup partners in a quest to harness young companies’ innovativeness and energy for themselves.

But large legacy companies shouldn’t throw the baby out with the bathwater by neglecting their core business and assuming it has minimal room to grow.

In this article, I will detail how our company, Randa Accessories, grew from 25 to 50 percent market share in several categories and channels by focusing on its core business and adjacent “bridge” categories, and offer some takeaways for other businesses based on that experience. (I will also describe how Randa launched its own successful internal startups — I’m not saying corporate innovation isn’t useful, just that it needs to be one part of a broader strategy to excel.)

First, a little about Randa. You many not know our name, but you know our products. Our products are available under 50 brands, and are sold at over 20,000 points of sale, and millions of digital touch points.

We’re the world’s largest men’s accessories company. We sell ties, and belts, wallets, bags, hats, slippers and luggage.

Randa is completely vertical, business-to-business and direct-to-consumer, with 4,000 employees working from 23 global offices.

Our culture emphasized growth and efficiency and led us to success in revenue, margin, penetration, and market share.

For example, we’re the leading supplier of belts to Nordstrom… and to Walmart, to Kohl’s and to Amazon, and The Hudson’s Bay, Liverpool, Printemps, El Cortes Ingles, David Jones, John Lewis and to Costco.

We spent over $50 million to assure that when a consumer walks into a retail store for pants, they immediately see our belts nearby. Dress shirts? There are our ties…

And then, we hit a wall. 

Continue reading “For legacy companies facing disruption, corporate innovation won’t be enough”

Where Will Tomorrow’s Retail Leaders Come From?

Look at Kohl’s.

  • Prior to joining Kohl’s, new CEO Michelle Gass, spent 17 years at Starbucks and began her career with Proctor & Gamble.

  • Kohl’s recently appointed president, Sona Chawla, spent 7 years at Walgreens as president of ecommerce.

  • Chief Merchanding Officer, Doug Howe joined the company from QVC.

  • And Chief Marketing Officer, Gregg Revelle, served at Best Buy, AutoNation & Expedia prior to joining Kohl’s. 

Really? What do they know about general merchandising?

A lot. Kohl’s shares are up an impressive 30% in 2018 – during a “retail apocalypse.”
Kohl’s has shops where customers can return their Amazon purchases, and buy Amazon Echo, Fire & Kindle devices. Crazy? Like a fox. It’s doubtful that Kohl’s is creating new Amazon customers, and the store is generating increased traffic & loyalty.
Want groceries with your comforter set? Aldi will open supermarkets inside Kohl’s doors as part of a new partnership. Strange bedfellows or clever collaboration? Credit Kohl’s with innovation and a focus on fundamental retail metrics – driving increased sales with less inventory – better turn, less dilution.
Well done.
And, the company is well positioned to gain market share from recently departed retailers Bon-Ton, Toys R Us and Babies R Us.

(c) David J. Katz, 2018

DesignBots and StylistBots, as Good as Humans?

A fashion designer and a stylist work together, and compete with one another, to produce best-selling items.
The stylist ranks the designer’s work while keeping an eye on emerging trends. The designer leverages the stylist’s curation while innovating new creations. Rinse and repeat. It’s the never-ending cycle of fashion. It also sounds a lot like artificial intelligence and machine learning, which use similar cycles for optimization.
Today, A.I. designers, stylists, and planners are hard at work at Stitch Fix, Bombfell, H&M, Gwynnie Bee. Will they be as good, or even better, than their human counterparts?

Annual Retail Forum: “Retail Radicals”

Very honored to speak at the “Annual Retail Forum” at Columbia Business School, Wednesday, August 1st.

Joining “Retail Radicals” including Mickey Drexler, Jill Granoff, Paul Charron, Richard Jaffe, Robin Lewis, Mark Bozek, Alex Brick , Mark A. Cohen, Anne Marie Stephen, and other leaders and luminaries for a one-day interactive summit on emerging brands and macro shifts shaping the future of the retail industry.

This program showcases retail radicalism from a multi-disciplinary perspective, identifying the skills, knowledge base, and best practices required to lead the retail industry into the future…

Date: Wednesday, August 1, 2018
Venue: Uris Hall, Room 301, Columbia University Campus
Time: 8:30 AM – 4:30 PM