Storming Retail: How Home Depot, Lowe’s & Sears Miss Opportunities

October 27, 2012 · Posted in content, content strategy 

A hurricane of missed opportunities in retail and content strategy.

If I had stock in Home Depot, Lowes, or Sears, I’d be pretty annoyed right now. I’d be looking at the impending storm that’s about to hit the East Coast, and think, “why aren’t these retailers ready for Hurricane Sandy?”

To that, I’d add, “again.”

Yup, this is the second year in a row that retailers are not ready for the consumer demand in times of emergency. Last year, we were hit with an epic, freak storm that knocked out electricity for four days. The folks with generators were just fine, but the rest of us were, well, very cold.

You’d think that people would learn from last year and already have generators, batteries, bottled water, canned goods, gasoline, and other things like that. But they don’t. People are people. They don’t usually do a good job of taking care of themselves and typically wait until the last minute to do their Christmas shopping. People are like that and will always be like that.

Retailers, however, have the benefit of business analysis. Specifically, there are people paid to review their business plans, analyze what they did right/wrong last year, and adjust for next year. This is why some retailers are rolling out Christmas displays before Halloween. We roll our eyes at the marketing and merchandising, but apparently some shoppers also take out our credit cards. The analysts know this.

Sears.com on 10/27/12.

They have, in essence, figured out how to market effectively to specific targets, including early birds who get their shopping done by Black Friday.

What they will not see on their spreadsheets is missed opportunity. They do not see the lines of nervous people hoping to spend $1,000 or more on a large portable generator. They do not market to these people because they are not taking their money, so they appear on no spreadsheets.

But they are out there. For the past three days, people in the North East are driving store to store, credit card in hand, trying to buy a generator. Or batteries or anything else that you’d need when the electricity goes out.

Many large retailers emulate the Walmart model, which means keeping the perfect amount of product on the shelves. Many factories do this as well. This probably works best when there are holidays and no storms.

Right now, shelves are bare and retailers like Home Depot, Lowes, and Sears have all missed the opportunity to sell high-priced generators. No sales, no discounts; just people with credit cards happy to spend $1,000 for a generator. Or two.

HomeDepot.com on 10/27/12.

This isn’t just happening here in North Jersey, it’s happening all over the East Coast. Literally hundreds, maybe thousands of people who are ready to spend their $1,000. And if they’re electricity gets knocked out, they’ll huddle together for warmth, attempt to save the frozen foods, and curse the darkness.

And when the storm passes, they’ll intend to buy a generator, but life will get in the way. Most won’t go spend that $1,000, since they already spent a night or three in the dark. Once the storm is passed, they will go back to life-in-progress. That’s the nature of missed opportunity.

That is, until next year, when we repeat the same circle of failure. Procrastinating consumers are unable to buy exactly what they want, no matter how much money they have. Retailers should know how to prepare, but apparently do not. Every year, the generators, batteries, candles, flashlights, and canned goods sell out.

Quick Links:
Generators in short supply as Hurricane Sandy looms
Battery-Operated Items Flying Off the Shelves at Lowes
New Jerseyans recalling Irene stock up on supplies, again

As a consumer, yeah, I may regret not getting enough emergency supplies, but hopefully the most I’ll lose is some ice cream and a few Omaha Steaks. I’ll be fine, but the shareholders of those companies? Well, maybe they’ll be complaining how nobody can compete against Amazon and WalMart.

Loews.com on 10/23/12.

This storm is big, big news. People are motivated by fear and need more than just generators. They need advice on how to survive power outages, floods, and other weather related calamities. And yet, nobody bothered to update the websites of these top retailers.

So not only is this a gigantic missed opportunity in terms of retail dollars, it is a missed content strategy opportunity. That’s right, the content on HomeDepot.com, Sears.com, and Loews.com could actually reflect the regional needs of shoppers, not just some random promotion.

For example, all three of these retailer websites were able to determine that I was in the Northern New Jersey region. They all personalized the page in a way that identified the retail store closest to me. Yet not one of them served me a message advising me to prepare for the storm.

These retailers have one major advantage over Amazon. Yet their websites don’t have any location-relevant content.

Why doesn’t their content strategy include weather-related messaging that can be placed on their home page? Even if they don’t sell me a generator, they might want to remind me to buy batteries, a chainsaw, a cooler, and other stuff they sell.

To win in the web wars, you need to use your content and analytics to identify additional products your customers need, especially in times of emergency. A proactive content strategy plans for this, has this content already written, and shares it to customers likely to be impacted by a storm. Heck, they have huge mailing lists that include email addresses. This is an opportunity to remind people that they need stuff, including information on basic survival.

It’s good retail, it’s good content strategy, and it’s part of being a good citizen.

Hurricane Sandy (aka FrankenStorm) is coming and we hope we’ve prepared appropriately. And right after this, I’ll go spend a $1,000 and buy a generator! Definitely. Maybe.

Then again, knowing me, probably not.

 

 

Comments

  • http://twitter.com/the_xaraan xaraan

    Well, as someone that worked in retail (through various levels and positions for one of the companies mentioned) and right smack dab in the middle of the east coast, I can say it’s one of those things that is “easier said than done”.

    I agree with the points on having a webpage regionally reflect something, that’s a good idea, but the rest just doesn’t work that easily.  All of that merchandise is inventory and for the hundreds of stores along the coast, knowing where a storm will hit and where that inventory will need to be is not an exact science.  It’s for this reason they often hold merchandise in the central warehouse so they can ship it where it needs to go after the fact.  As someone that has been through one big hurricane and a ton of warnings and close calls, holding that back for where it goes and not where people are afraid it will go is a big deal.

    As for people that might want to buy something ahead of time, sure that’s a great idea.  But reality is a large number of people tend to order something like a generator and leave it in the box unless they need it.  Then if the storm doesn’t knock out power, then those get returned – and they aren’t as easily sent back to central inventory.  (This might be a different discussion as to those issues) But if your store/department is suddenly sitting on tens of thousands of dollars of merchandise that isn’t moving and will essentially go clearance when model change occurs you just lost a bunch of money.

    The reality is, if most consumers honestly wanted to be prepared, they would already own a generator or a chainsaw and leave the last minute spending sprees for water and canned food or something.  But the reactionary buyers, that only want it when they desperately need it can often still be satisfied.  That hurricane I mentioned that we got hit with, that knocked out power for days, even without power we had our store open, central shipped us deliveries of nothing but generators, chainsaws and gas cans (there the day morning after the hurricane hit) and we spent the days after the hurricane putting those items into the hands that needed them because they were not sitting in a store in Florida where the hurricane was expected to hit directly and didn’t.

    Sorry for the long winded message, just trying to explain it as best I can.  Marketing wise, you are right about them making better use of their websites.  That market has always been secondary for brick and mortar stores and shouldn’t be.  But realizing the dollars spent on inventory is a huge factor, especially in the current market for these stores.

  • http://www.cullmanndesign.com cullmann

    XARAAN: Great comment, but I disagree. Changing consumer behavior is VERY hard. The fact that everytime a snowflake falls on the east coast there is a mad dash for bread and milk is ridiculous-BUT that is never going to change. 

    Buddy’s post is about the opportunity. I’ll also add that big box retail would benefit from using predictive technologies to help map weather and other environmental influences to manage inventory and shipping. After last year (NJ, NY), not having geographically relevant warehousing for winter weather stores is insane. 

    In the end strong (and well publicized) responses, will effect the stock price and the long-term viability of these franchise.

  • http://www.wordspicturesweb.com/ Buddy Scalera

    Actually, I appreciate the longer comment. It gives me insight about retail that I do not have, since I do not work retail. 

    Part 1
    My view is colored by the fact that I have money and no generator. As the consumer, I just want to spend my money. I’m sure retail is very competitive.

    I will tell you this. My wife spent part of the day calling stores. Loews orders (approx) 36. Home Depot (approx) 20. Sears 0. Sold out.

    Then she got a mom & pop store. They ordered 250. They charge more money than the big box retailers, and all 250 were sold out. They were ordering more for Monday, and those were already pre-sold. And you can bet that a mom & pop retailer outfit doesn’t have a very easy return policy, so no next-day returns.  :)

    Part 2
    Yeah, I am a bit dismayed about the missed opportunity on their website. I work in content strategy and see a huge opportunity for them to post relevant content to customers.

    It’s not fear mongering, it’s not taking advantage of consumers. It’s actually a good customer service. 

    You can rest assured that there are lots of people working on those websites. Why don’t they have relevant, timely information up there? That’s a big missed opportunity. 

    Thanks for the comments. What you’ve added to this conversation is valuable and very much appreciated.

    Buddy

  • http://www.wordspicturesweb.com/ Buddy Scalera

    Those retailers would have a win on their hands if they just posted content on their websites. Put the inventory thing behind for a moment, and think about how easy it is to create content.

    We live in a big country. Every part of the country is suffering from some kind of weather-related event that would benefit from some kind of relevant, regionalized content strategy.

    Snow? We’ve got shovels, salt, snow blowers, and some handy tips on keeping warm.

    Flood? We’ve got generators, pumps, and some handy tips on checking for mold.

    Locusts and frogs falling from the sky? We’ve got big brooms, trash bags, and tips for surviving the apocalypse.

    The more I talk about it, the more I think I should have just written about the missed opportunity on the website. It’s all about the content strategy.

  • http://www.cullmanndesign.com cullmann

    That’s true, but all of those retailers require that you input zipcode (or use a location services) before you get to pricing or inventory. They are already creating location relevant content (or have the ability to do so). Being able to push messaging is available and being used for these retailers. They would have no credibility to send an email featuring snow-shovels and salt to Florida or Southern California. And if they can’t do it via emarketing, they sure can leverage social to do what you’re suggesting. Great post Buddy!

  • http://www.cullmanndesign.com cullmann

    Take a look at Home Depot’s homescreen (I haven’t signed in in 3-4 months). Note the local store is picked up and featured. They have bleach and paper-towels featured-which are somewhat related to current events.

  • http://twitter.com/the_xaraan xaraan

    I can’t argue with the parts about missed opportunities (especially in using the internet) with these types of stores because of how hard it is for them to turn that ship around or shift it sometimes. It really kills them.

    My main point was there is a disconnect between marketing and operations sometimes (in fact that is one of the jobs I worked with – making sure stuff that marketing came up could be realistically rolled out).

    None of it changes the point though about where storms hit and how much product is available. A business (all the way from store up to manufacturing) can’t stock solely based on what might happen. Would you rather have 20+ generators at fifty or a hundred different stores across the coast where a storm ‘might’ hit or have them in a warehouse and have a thousand arrive the next day where the storm actually hits.

    One is a discussion about actually having product a community will need and being helpful to that community. (Long term marketing in my opinion) The other is a discussion about marketing to people that normally don’t want the product. Buddy is right in that the mom and pop store probably has the best setup since they might not take returns. But the fact is, you sell those products to people that are buying them for a once in a decade emergency (depending on what part of the coast you are talking about) and nothing happens to them, those items will get returned to big box stores. Not only is that a huge problem for the stores, but then, where ever the storm does hit – that product is now not available.

    What Buddy was talking about with online setup would be great though. Make an announcement to those communities in those areas using your website, tell them you’ve stocked up a certain amount in store and are holding back “X” number of items to emergency ship to wherever the storm hits day after. Then you are letting people know that if their area gets hit, to check with their local store about incoming product. Using their websites to better communicate and manage info with consumers would go a long way. And that ability to adapt will hurt them more than anything else.