Opinions And Ramblings By Adam Kmiec On All Things

Tag Archives: Target

Blurring The Lines Between Virtual And Real Currency

It’s not a surprise that “virtual goods” are big business.  They’re generally cheap to produce, have high margins and are simple to purchase.  The most recent data indicates that the virtual goods market will be roughly $1.5 billion this year.  Most of that market is made up of social games like Poker Rovals, Mafia Wars and the like.  The whole Farmville craze was the tipping point or lightening rod that really demonstrated to society at large, people have no problem paying for something that they only virtually own.

The other day I was meandering through a Target in Omaha, NE and was shocked to see this massive display when I first walked through the door:

Granted, the idea of giftcards isn’t new.  Target and other retailers have been selling iTunes giftcards for years.  However, seeing a retailer selling “real” giftcards that simply redeem virtual dollars (I know Facebook calls it points) that are then used to purchase virtual goods, was a first for me.  While it surprised me, it really shouldn’t have.  For years, I’ve been beating the drum that etailers and web based companies needed to leverage existing retail space and point of sale to grow.  As big as Facebook is, as big as Farmville is and as big as the Microsoft XBOX Live market is, they need traditional channels to grow and flourish.  It’s the reason the folks at Zynga, makers of Farmville, secured a retail partnership with 7-11.

Just like we saw in the post dot-com bubble burst, people still want to touch, feel and experience products before they buy them.  Yes, E-Toys, I’m talking to you.  We’re going to see more examples of companies figuring out how to leverage traditional retail channels to fuel the growth of their virtual goods marketplaces.  Have you seen any other examples of virtual and real worlds blurring?

At The End Of The Day It Comes Down To Human Capital

Time ran a very interesting article about Wal*Mart’s new initiative called “Project Impact.” Sounds cool and somewhat ominous, huh?  So what is “Project Impact?”  Well according to time it boils down to 3 things:

  1. One goal of Project Impact is cleaner, less cluttered stores that will improve the shopping experience.
  2. Another is friendlier customer service.
  3. A third: home in on categories where the competition can be killed.

The first goal makes sense.  Where as Target’s store environment are friendly, open, and inviting, Wal*Mart’s are dingy, dark, and down right scary.  I can’t tell you if making the stores less cluttered will lead to more sales, but it makes sense.

The third goal is a pure prioritization move.  Essentially, why put money and effort behind business units and categories that aren’t in your sweet spot?  Instead focus on areas where you can excel.

So let’s focus on the goal #2; friendlier customer service.  It’s sorta funny when you think about it.  You can optimize your shipping, choose cheaper suppliers, update the store layout, and even decrease the pricing.  But, none of that matters if the in-store experience is underwhelming.  And the biggest contributor to the in-store experience is the people.  But, nobody ever wants to invest in people.

Think about it.  How often have you recommended a program to a client only to be told, “well, we’d love to do it, but we can’t ask the people on the floor to do that.”  It happens all the time.  To really make the customer service friendlier you’re going to need new people.  Why you ask?  Because, changing the personality of people is nearly impossible.  Either you’re friendly or you’re not.  Seriously.  There’s a reason Target has an entire behavior profile driven set of testing that all employees have to pass before being hired.  It’s so they can get a person who embodies the Fast, Fun and Friendly mantra that is the Target culture.

When you’re corporate culture is “VALUE” are you really going to get people who are top notch performers that are excited to come to work every day?  Well given that Wal*Mart has made it a priority to have friendlier customer service, I’d say no.

Make no mistake, the most important asset is human capital.  You can have a great business plan, killer advertising and operational excellence, but if you don’t have the right people in place to carry out your vision, you’ll lose every single time.  Maybe it’s time we start investing a little bit more into human capital from the beginning.

5 Brands “Failing” Despite Social Media

A few weeks ago I shared with you a list of 5 brands that were succeeding without an investment in social media. This week, I want to share with you a list of 5 brands that are doing poorly despite their investment in social media.  The following is being written with sarcasm – please take it as such.

Delta Airlines

Let’s hope the merger with Northwest helps things. A recent Airline Quality Rating Report has Delta ranked 12th. Ouch. The stock price is hovering just over $7.00..sad when you compare it to the $20.00 + it was at 1.5 years ago. But, hey they’re on twitter, YouTube, and have a blog so that should ease the concerns of analysts and shareholders…right?


Sales were down 6.3% in March…but that exceeded analyst expectations. When doing bad is perceived to be “good” you know things are bad. The 2008 holiday season didn’t pull them into the black and they recently had a few rounds of layoffs. But, don’t worry, they’re on Facebook.


A shining of example of hyperbole. Inventor Dean Kamen lauded Segway, “will be to the car what the car was to the horse and buggy.” Only 30,000 Segways were sold between 2001 and 2007. Considering Segway thought they’d sell between 50,000 and 100,000 in the first 13 months, that’s pretty bad. They still aren’t profitable, but they do have their own community network, a blog, Facebook page, and twitter account.


They have a site dedicated to consumer ideas and engage consumers on twitter, yet they continue to close stores left and right. 3 years ago the stock traded above $35, but today it sits at $12. New leadership, new decor, and a new menu haven’t helped. Maybe a blog could be the answer 🙂

Home Depot

As you’d expect, a soft housing market and declining economy haven’t helped them grow. Their stock has decreased nearly 40% in the last 3 years which isn’t surprising when you consider that both revenue and profit are both down significantly. But, maybe their YouTube page will be the tactic that turns that tide.

The sarcasm above is with good reason. Social Media seems to be the recommended solution for all companies. The reality is it takes more than an investment into Social Media to make a business work. Social Media isn’t for every company and even the companies that it’s right for need more than a presence on twitter to be successful.

I hope this dose of reality was helpful.