Staples Workbar won’t fix the overall problem

Oh boy. As Staples (and its failed merger partner, Office Depot) tries to recover from disappointing sales, it has partnered with Workbar to set up office spaces for customers in a few stores around Boston.

Staples Workbar
The Staples Workbar space is nice, but who cares?

The space is far back from the retail area where customers can work without having their own real office. Said Evin Charles Anderson, whose video production company has been using the space, “On the weekends when we’re here, we see people peering in through the windows.”

Yeah. They’re wondering what the hell Staples is doing. The office supplies stores are in a free fall with Office Depot closing stores and regulators ending the proposed merger between Staples and Office Depot.

Staples Workbar is a tactic, not a strategy

Both supply stores, in fact, are looking for new CEOs to lead the retailers into a new era where all retailers are becoming more and more irrelevant. The Workbar additions, just in beta stage at this point, won’t hurt but it won’t fix the problem either.

For one thing, who wants to work in the back of a Staples store? FedEx, off its successful merger with Kinko’s, has something similar that has now existed for nearly a decade.

More importantly, however, the working world is no longer dependent on having a traditional office or even one that resembles one, such as the Staples Workbar situation.

As many employees at very large companies will tell you, working from home is the new normal. (The sheer number of them doesn’t even consider freelancers.) You may go to FedEx Office for shipping but you can buy just about anything off the internet. There’s no need to go to a Staples store to work.

That is, unless Staples had a brand that compelled you to seek it out.

But there’s no emotional reason to go to Staples or even the Staples Workbar space, which is the only reason to create preference. As Napoleon said, “You must speak to the soul to electrify men.”

That’s what the office supplies stores are missing. They believe they can out-tactic their way out of their dilemmas, rather than looking at a complete overhaul of what they provide and what they mean.

I’ve been thinking recently that the entire brick and mortar retail market is in serious trouble. Malls are becoming a thing of the past and the industry as a whole is losing their shirts to Amazon.

So, there’s now Staples Workbar. OK. So what?

Amazon’s gamble with planes for Prime Air

Amazon recently showed off one of its new 767s that will ship some of its products purchased through the site, with Prime Air printed on its side. Last spring, Amazon announced that it was going to lease 40 such planes in an effort to curb some of its shipping costs.

Prime Air
Amazon Prime Air planes are soon to be crowding the skies.

Recently, shipping costs have outpaced sales growth, cutting into Amazon’s bottom line. In fact, in 2015, Amazon spent a whopping $5 billion on shipping expenses. Leasing the planes is a pretty clear demonstration of Amazon’s desire to streamline its logistical and delivery network.

Amazon trucks have delivered its products for quite some time, particularly with its 2-hour delivery service, Amazon Now, and its grocery fulfillment, Amazon Fresh. However, manning an airplane fleet is a much bigger and costlier proposition and is sure to disrupt what we know of traditional air shipments. Amazon’s hope is that the Prime Air planes will substantially reduce that $5 billion shipping cost.

Prime Air planes may not be such a gamble.

What does this mean for UPS and FedEx? They both should be extremely worried. Both FedEx and UPS depend on Amazon, with the online retail giant accounting for a large share of its business. But you can’t stop progress and it naturally fits for Amazon to take on those duties on its own.

For it to work, Amazon must secure an internal delivery and logistical system that also makes great brand sense. (Much like when FedEx purchased Kinko’s years ago in part because the brands of FedEx and Kinko’s aligned with each other so well – each were about piece of mind.) Amazon’s brand features a sense of discovery and convenience because it has everything you need that you can get easily. A key component of that is actually getting the physical items to the person who ordered them. That’s where the Prime Air planes fit in.

If Amazon can do it with the same or better efficiency as FedEx and UPS, why would Amazon do anything else?

Think about it. Amazon only has to do it as well as FedEx and UPS for this to succeed. That could be the catch because, if Prime Air can’t match that service level, the Amazon brand could be damaged significantly.

However, my money is on Amazon.

Amazon Prime Day fits the brand

For years, people have teased Hallmark for creating holidays like Valentine’s Day, Mother’s Day and Grandparent’s Day just to sell more greeting cards. While not entirely true, these holidays certainly do boost Hallmark’s bottom line.

Amazon has also created its own made-up holiday. July 12th marks the second annual Amazon Prime Day, a holiday designed to prompt you to sign up to be a member, then buy stuff from Amazon.

Amazon Prime Day
Only Amazon could get away with something like Amazon Prime Day.

According to Amazon, last year’s Prime Day produced more sales than Black Friday (another made-up holiday). This year’s prime members-only holiday will have even more deals with prices either at their lowest ever or the lowest in the past 12 months. So now my $99 year gets me free two-day shipping, Amazon streaming services and an opportunity to buy low?

While I poke fun at myself and the millions of other Amazon Prime subscribers, the reality is that Amazon Prime Day represents Amazon’s brightest move.

What Amazon Prime Day means for its brand.

If you really think about this, Amazon Prime Day is on brand. The Amazon Dash button, same-day delivery and even Amazon Web Services for businesses represent what the Amazon brand is all about – lots of stuff, low prices, as easy as possible and a bit of discovery. It’s the sense of discovery that is missing from other retailers.

Amazon’s promise is so powerful that people will pay to have the privilege to use it. Think bout this: Consumers are still willing to pay Amazon for the future promise that Amazon will live up to its brand. Oh, and Amazon made up a holiday with a single purpose to get people to shop at its site. That is brand power.

Sure, Amazon gets some flack over Amazon Prime Day. It runs out of the really good deals too soon, for example. But those concerns pale in comparison to the numbers of consumers who will shop on July 12th because they have bought into Amazon’s brand.

What retailers can do about Black Friday

It’s their own fault. As forecasts predict declining sales on Black Friday this week, the retailers only have themselves to blame. What was once considered a special event – a social one, even – has been diluted by sales before and after the day, while online sales continue to rise.

Based on a survey by retail consultancy WSL Strategic Retail, only 29% of women (the primary audience for Black Friday) intend to shop that day.

Now that doesn’t mean retailers are going in the tank that day. Black Friday will still exist, but it may never be the special day that it once was. The impact of online shopping is one reason, with 33% of women saying they will shop online (including 71% of Millennial women), which is simply the way of the world now.

Black Friday
Improve the experience and Black Friday may yet return.

The problem for major retailers is that a vast majority of those online shoppers will head over to Amazon, the single biggest threat to the brick and mortar stores that have long been the bedrock of holiday shopping.

But it was the retailers’ own greed that has done them in. In the rush to claim as much space in the holiday shopping market, retailers began Black Friday earlier and earlier. (That’s why our own senior brand strategist, Corbin Rusch, applauded REI for its no Black Friday promotion.)

In fact, one of the reasons why women in the WSL survey said they wouldn’t shop on Black Friday is because sales aren’t as good as they used to be (73%) and, more importantly, because sales are just as good before and after Thanksgiving (78%).

As a whole, retailers may make out OK this holiday season, although I suspect Amazon is going to eat up a large chunk of that market share.

How to fix Black Friday.

So what’s a retailer to do? For one, retailers need to stop trying to “out open” each other by pushing back the clock further and further until the sales start on Halloween.

For another, they need to face the biggest problem in retail: The lack of brand identity for the individual chains and brick and mortar shopping itself.

Black Friday has long focused solely on sales, getting the best price for a gift. That trigger has lost its impact now that sales start when the kids are trick and treating and last until Christmas Eve.

Instead, to re-build the category of Black Friday, retailers need to highlight the fun of the event itself. The social interaction (even though sometimes they lead to fights) should be improved as a whole so that shoppers feel like they are having fun.

Right now, Black Friday feels worthless because you fight crowds for prices shoppers can get elsewhere and at another time. But the day used to be something a little bit exciting. Market the day, not the low prices.

7-Eleven, KFC enter delivery

For almost all of retail – whether you’re talking about consumer goods or ordering pizza – delivery is the river from which all life flows. Because of that, retail stores are closing outlets, convenience stores can’t get customers to come into the store and fast food restaurants are almost solely focused on the drive-thru.

With that in mind, it’s no wonder 7-Eleven and KFC are entering the area of delivery – and I predict doom for one of them and success for the other.

7-Eleven
7-Eleven wants you to enter the store by picking up packages?

The doom is for 7-Eleven, which will add lockers to 200 outlets in North America so shoppers can pick up their packages from UPS or FedEx. This is an obvious attempt to get those that simply gas up to come into the store and buy a Slurpee or some such thing.

7-Eleven has been under siege with greater competition, not just by the many local convenience stores you find in every town and city – but also by rising giant Sheetz, one of the few brands in the category with a unique brand and look. 7-Eleven has been a follower, also offering food like Sheetz and now believes that this shipping option will make it a leader.

Here’s the basic problem. Let’s say you do order something online. Why would you need to have it shipped to 7-Eleven when it can be delivered right to your door? Seriously. Why?

That’s not mentioning that Amazon, which its Amazon Prime membership, just about dominates the online category and can get you what you ordered next day without any additional cost. Why have it shipped to 7-Eleven?

7-Eleven and KFC are desperate.

The move feels desperate; as does KFC’s announcement that it will start delivering in a few select markets next month. There’s a difference here, though. The food will be delivered…what for it…to your door.

I’ve always wondered why other fast food chains haven’t done this before. The pizza brands figured out a long time ago that people would rather eat fast food at home (or in their cars) rather than go into the restaurant itself. It’s the reason why many chains make most of their money in the drive thru. There’s always a little bit of guilt in eating at a fast food restaurant that going through the drive-thru alleviates. Delivery is the natural progression.

Most fast food restaurants fear they will be left with expensive billboards – the restaurants themselves. But it’s already moving in that direction.

There’s no good reason why McDonalds, Wendy’s or Burger King can’t deliver. In a category that seeing sales drop across the board, delivery is a natural option – and it allows those brands to take on the pizza brands of Pizza Hut, Domino’s and Papa John’s.

While KFC has its own problems, this is a smart, leadership move. Ordering packages to be delivered to 7-Eleven is just plain stupid.