Confronting My Pessimism

To get a gauge of this "Black Friday" business, I took a stroll around my neighborhood shops to get an idea of consumer enthusiasm. I live in downtown Chicago, so my "neighborhood" shops, along Michigan Avenue, Oak Street and State Street, may differ from yours, but I tried to be as comprehensive as possible.

Please note, Michigan Avenue is universally considered on of the world's top ten shopping addresses, so expectations were higher than normal.

I captured the afternoon on film to share with you and all pictures were taken between 1pm - 230pm, usually the busiest time of day.

Click on pictures to enlarge for better detail:

Pessimism be damned! UGG Australia has a rope line to get in. Average wait: 15 minutes

Optimism squashed, I notice there is not one person in the check out line at Urban Outfitters:

Kate Spade was trumpeting their $50 price point ON OAK STREET!

The undeniable elegance of Trabert & Hoeffer:

Even Luxury houses such as Chanel and St. John were pushing Sale, it's not even December for goodness sake:

Louis Vuitton is always bubbling with enthusiasm:

A While the 6o-foot Christmas tree at the 900 North Mall is always breathtaking,

The Lack of foot traffic to get in the mall left much to be desired, 

For even Santa was feeling a bit forgotten today (notice there is no line at the bottom right of the photo:

People were not fighting to get in Neiman Marcus:

Or Saks Fifth Avenue

But crowds at Apple let me know iPods, iPhones and Macs are still on everyones wish list: 

The overflow crowd at Garmin let me know there are still lots of people trying to find their way in the world:

There were two separate massive protests. One for Chicago Public School Funding picketing in front of Water Tower Place:

Another against wearers of fur marched, about 500 strong, up and down the Avenue:

They had a few escorts too:

But DJ in the window at Nike Town was there to remind everyone, the Holidays are about peace:

There were a few very serious shoppers out:

But the overwhelming majority of people, as evidenced by these crowd shots, were walking around empty-handed. And that's after the stores had been open for well over 5 hours:

So with such photo evidence, I need not wait until Monday's reporting period to say this weekend is hinting at Waterloo. I will post Saturday on "What's Next", so look for that.

Since it is the Holiday Season and I want to end on a high note. Treat yourself to one of life's great treats.

If you are in the vicinity of the Peninsula Hotel, just a block west of Michigan Ave. at Superior, there is no way you should pass up Pierrot Gourmet's, WORLDS BEST HOT CIDER!

They regulate the temperature of the cider to the outdoor temp. So if it is very cold, the cider is made very hot. However, if the temp is more mild like today's lows 40's, the cider is served hot, but at a drinkable temperature.

The crew knows a bit about the temperature because the drink stand is OUTSIDE the restaurant. Warm friendly faces and attitudes to match make this a stop every Chicagoan and tourist should put on your schedule.

The Hot Cocoa, served with a semi-sweet chocolate plastic stirring spoon, also cannot be beat.

Notice also, they maintain their 5-Star standards (hello authentic sterling silver carafes), even outdoors.

So even if you cannot afford the splurges of holiday's past, you can always afford to treat yourself to 10 minutes of civilization, if only in the form of a warm drink in your belly.

The Economy and Violence

Desperate times bring desperate measures.

Why would anyone expect a rational, calm public in the eyes of the worst economic crisis facing the country in seventy-five years.

These are just a few articles plucked from the headlines HALFWAY THROUGH "Black Friday". 

Click the headline to go through to the full original story:

This is only 5 hours into the day. Once editorial staffs report to work and reporters start to file their stories, the list, unfortunately, will grow exponentially. 

If you are a reader of this blog I would like you to remember two things this holiday season: Be Smart and BE SAFE.


The Coldest Winter Ever

"Habit is habit, and not to be flung out of the window by any man, but coaxed down-stairs a step at a time."
-Mark Twain (Pudd'nhead Wilson)

Americans, like all people, are creatures of habit. The greatest difference in the American habit and those of other cultures, is our national habit is shopping. We like to spend. What one owns, or wears, or drives, or goes to school, or lives, or vacations, or get their hair cut, or gets married, or goes to eat when dining out defines them in American Society. 

Oft times we make the mistake of believing it's how much money a person makes that defines them, which may be true to a small few. However, for the rest of us, that too is just a means to an end. We want to make money, so we can turn around and spend it. This is why Americans are the most debt-riddled people in Western Civilization. We know what great is and we deserve it, right?

This is the unshakeable truth that the financial markets have been faced with since late-August, when small fissures in the credit dam began to express themselves. Around the clock internal meetings ensued at most large banks around the world, as their leadership began to prepare reporting 3rd Quarter figures to the world. "My God, we will be the laughing stock of the banking community", they thought. For not even the sharpest of pencils, that means you Jamie Dimon, could have thought their situation was not unique.

As the reporting period began in early-September, the trickle of bad news began to emerge. Massive mortgage debt, record foreclosures, delinquent car loans leading to widespread repossession, individual credit-card payments slowing down, record personal bankruptcy filings, small business loans having to be renegotiated, large commercial real estate loans being defaulted on and massive insurance pay-outs from Hurricane Ike. For the trickle was now a full blown tsunami. 

The markets, being unprepared for such overwhelming bad news, and from so many different arenas, did what anyone would do in such situations, it collapsed.

While I cannot profess to have lived through the market crash that started "The Great Depression", I can say for certain, there were never less stable days in America, financially speaking, than those of September 15-17. That is, of course, excepting those of October 1-10 when they New York Stock Exchange (and thusly the American Investment community) lost 22% of it's wealth.

The uncertainty of those days in mid-September days produced a plethora of bad ideas as to how to fix the problem (hello $800 billion bailout). However, two main ideas that emerged are what now clearly going to have major negative, long-term repercussions for the American public.

The first idea was the focus by the Federal Reserve and the Treasury Department on how to stabilize the markets until Thanksgiving, a time when most Americans stop paying attention to affairs that do not involve their families. Usually, market "corrections" happen in October, which gave rise to this dandy from Mark Twain:
"October. This is one of the peculiarly dangerous months to speculate in stocks in. The others are July, January, September, April, November, May, March, June, December, August and February."
Every economist is trained as to how to deal with such problems and the entirety of their training matrix is based on the dreaded "October Surprise."

What threw Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, was the "surprise" came not only in September, but early-September. This meant all their training on how to control a downturn for 4-6 weeks, was staring down the barrel of a finish line minimally 11 weeks away. This is what created so much uncertainty. And said uncertainty is what really rocked the market harder and harder as time wore on.

The Financial Market's hare is now coasting to certain victory, while the Economy's turtle plods along. 

Well, now that the hare is finally and exasperatedly near the "finish line", prepare for the fan to start kicking out a rather familiar foul odor. Bad news, even in great economic times, is saved and distributed, like so many secret santa gifts, for the period between Thanksgiving and Christmas. 65% of all lay-offs happen during this period, most companies that are going to change leadership do so, companies settle lawsuits that have dragged on for years and the like. All because they know that spirits are high and we are not paying attention. 

Unfortunately for most, attention will be payed like no time in our prior history a a nation. Hopefully, we can bear the weight of what is surely coming.

The second and more unfortunate idea to emerge is the unbelievably misguided theory of the core problem afflicting the economy, bad mortgages. That is a problem, but one that has been silently stalking us since late-2003, early-2004. Bad mortgages were a problem before they starting lending to sub-prime borrowers. Tales of bus drivers taking out loans to buy million dollar homes with swimming pools are greatly exaggerated. Bad debt was spread around in many directions.

Start-up small businesses were given billions of dollars in bad loans. The evidence is on display in every American neighborhood, expressed by the growing number of "Store For Rent" and "Commercial Space Available" signs on display. The unfortunate reality of their failure is a great many of these new small business owners leverage their homes to borrow for the new enterprise, making a bad situation into a crisis, all in one fell swoop.

Large Corporations were given massive loans to re-tool factories and invest in additional materials for a burgeoning market that did not, and does not, exist. This is the problem that expressed itself in the form of the trouble Ford and General Motors finds themselves in at the moment. Both have invested in infrastructure for 2009 model-year cars, when both have seen 2008 inventories balloon well beyond record levels.

These examples are just a small glance at the behemoth clogging the pistons of America's Economic Engine. However unseemly all these scenarios appear to be, the real core issue affecting everyone in this country, every company in this country, every trading partner with this country, is credit.

We are a credit society. We have been a credit society since at least the dawn of the 1980's, and a case could be made for earlier. Before then, people who wanted things, saved up their money and bought those things, or did well enough without them. Television re-runs of Archie Bunker yelling at Edith about her spending the family savings on a new dress, do not ring as credible or accessible to anyone under 40 years of age. Today's sitcom is more inclined to revolve around a wife hiding a credit-card bill for something she has already purchased. Herein lies the problem, fully and naked-as-can-be.

Americans have been resistant to living on a pay-as-you-go economy. Families forced to do so would surely have dramatic lifestyle changes. Older (I'm sorry, Certified "Pre-owned") cars would be di rigeur, hand-me-downs would a more familiar reality and, while I can't say they would not be as beautiful, family homes would be much, much smaller than they are at present. Think about it, when was the last time you met a kid that shared their bedroom with a sibling. How about the last time you saw a kid on television share a bedroom. Large is who we have become, in lifestyle and as individuals.

Businesses are in the same boat. When facing pay-as-you-go economics, the ability to adjust to a rapidly changing marketplace are fantastically diminished, almost to nil. Every bet, and I mean that literally, has to be a correct estimation, which pays off in expected dividends or beyond. The smallest misstep would create a cascading snowball effect, damaging the company in ways that would threaten it's existence. This would naturally lead to much more cautious leadership, less innovation and winnowing of options in the consumer marketplace.

This is a very realistic depiction of the American future should Financial Institutions continue upon the path of "correction they are on. The problem facing this country is the lack of available credit to the individual. Unsold housing inventory, as well as automobile inventory continue to swell, due to the Financial Community's decision to sit on it's hands and not loan money at present.

There is certainly a conversation in the offing for American's and American Business Leaders, about how to manage our existence within new boundaries. However, no is not the time.

This Holiday Season is going to be hard on a bunch of families, which means it will trickle up to have a tremendous negative impact on Retailers. This Thanksgiving weekend is the movie trailer to a new, terrifying Horror classic in the name of December.

Recognizing the "stakes" will not be enough for the Fed and Treasury. Identifying the problem on the ground and re-stimulating those at ground zero is the only way out of this economic morass. 

Turn the pipes back on!


The End of Retail in 401k Portfolio's?

Disclaimer (This article is using information based on end of day figures for the NYSE on 11/19/08).

How can this be?

Is it really possible that I am seeing the very evaporation of the industry I have loved for so long? 

I have written, since this site's inception, about the looming clouds on the Retail Industry's horizon, and have spent much time assisting various companies with their preparedness for the storm.

I was, however, completely overwhelmed when I took a peek at my sample portfolio this evening and noticed the stock prices of some truly bell-weather companies.

Here are a few examples (if your jaw is not already on the floor from peeking at the chart on the right hand side of this post):

  • Revenue: $3.2 Billion 
  • Stock Price: $ 3.12
  • Market Cap: $442.73 MILLION DOLLARS!!!!!

That means this company, known around the world as one of America's premier destinations for luxury shopping, is worth less than Bebe. Bebe's revenue last year was 687.6 MILLION, just over 1/5 the revenue of Saks.

  • Revenue: $ 8.8 Billion
  • Stock Price: $ 8.98
  • Market Cap: $ 1.93 Billion

Seems like a lot compared to Saks, but wait. This company had an $8 Billion market cap on September 19th, that's AFTER the market meltdown started. Additionally, the market cap this February was $10 Billion. 

To illustrate how ridiculous this is, consider:
Urban Outfitters is worth $2.23 Billion today, while they produce LESS than 1/5 the revenue and 50% of the income as Nordstrom.
Expedia (Yes, THAT Expedia!) now has the same market cap as Nordstrom. So world class service, taught, as a model, at every major business school in the world and an inanimate lawn gnome are "equal value"? Give me a break.

  • Revenue: $26.3 Billion
  • Stock Price: $ 5.68
  • Market Cap: $ 2.4 Billion

Macy's. World renowned Macy's! The famous star Macy's! Miracle on 34th Street-Macy's! The one that does OVER $26 BILLION DOLLARS A YEAR - Macy's, now has a market cap of $2.4 Billion?

Would you like to know another company that does around the same amount of revenue?

McDonald's, which does a little less, $22.8 Billion.

Would you like to know McDonald's market cap? 


They, like Nordstrom, could be bought out by the likes of Urban Outfitters ($2.23 B) if they accepted stock swaps in this crazy environment.

Lastly, I would like to discuss perhaps the most perplexing thing taking place in the retail world right now. That would be, "What in the heck is going on with Border's Group?"

Here are the relevant numbers for Border's:
  • 547 Border's Super Stores
  • 476 "Other" Stores, including Waldenbooks
  • 114 Paper Chase Stores

  • Revenue: $ 3.7 Billion
  • Stock Price: $ 1.78
  • Market Cap: $107.8 MILLION!!!

This is a company that distributes media to the world. Books, DVDs, magazines, journals, compact discs, newspapers, maps, toys, calendars, games and everything else the Paper Chase store-within-a-store shops sell. They have, obviously, a quite formidable competitor in Barnes & Noble, however I have rarely been in a Border's store around the country (airports included) that was not packed!

So it strikes me as odd that the market cap on this company now sits at one-fifth of Gymboree and one-sixth of TiVo, even though they do 1/3 and 1/10 the revenue as Borders, and are not in the business of distributing such an essential product.

What is going on here is simple. The market is betting against the futures of these venerable institutions. They trying to tell us what they see the future to be. 

I have been very clear, but cautious in my warnings for all retailers this holiday season. I have even included commentary on a few of the four companies chronicled in this article. However, I have never once imagined a retail landscape WITHOUT any of these companies being included. I just cannot foresee that dark an outlook.

Wall Street may have it right in the end. They are scaring off plenty of fund managers who control the retirement funds of tens of millions workers. They are sending shivers down the spines of the employees of these companies, forcing many to rethink, and extend, the time lines of their planned retirements. In a nutshell people are obviously running in the other direction.

But I say, YOU ARE WRONG! I certainly anticipate a tough road ahead, but in the end, this will all shake out. These companies are not as mismanaged as you believe. And, while you may think you know fighting spirit in the Financial Sector, Retailer's are used to weathering the toughest of times AND coming out on top. 

Anyone that doubts this can look at use my market indicator:

You haven't seen Retailer's asking for bailout money.


Rising to the Occasion

November has, so far, been a better month for Retailers than some (self included) had forecast. There are several ancillary factors that worked in merchant's favor this year. 

For instance: 
  • A very late Thanksgiving (27th) which enabled tamped down expectations for the first half of the month.
  • The market starting it's meltdown in September allowed ample time for stores to cut non-advertised holiday orders and slash prices in time to counter-balance consumer fears about spending.

These things, and others, have led to a better than expected, though still tough, start to the month and has many retailers feeling they may emerge from this holiday season with a "win."

Such thinking is nonsense. As stated in previous posts, this is the toughest environment facing the Retail Industry in over 30 years. Those that are banking on things remaining on the same tracking lines of what has happened in their stores so far in November are in for a rude surprise. They are much akin to those few, grainy people you could barely make out in the videos before the tsunami hit Thailand, walking out on the exposed surf to see where all the water went.

While many can take pride in what has happened thus far, here are a few realities to consider:

  1. There were 240,000 jobs lost in the United States LAST MONTH! This does not include part-time workers, those that saw drastically reduced hours, or those that are considered "contract workers."
  2. Citi-Group has announced plans to cut 52,000 people from their workforce, in addition to the 22,000 already in the works. That is from ONE company. Now they are the first to "jump" in the troubled financial sector, surely others will follow suit rather soon.
  3. The Technology Sector announced 70,000 lay-offs in the 3rd Quarter alone, and expect another 40-50,000 before years end.
  4. Circuit City  is closing 150 stores and has filed for bankruptcy, and Best Buy has issued warnings about holiday expectations. However lost in the chatter is the story of Tweeter. This company with well over 100 stores has gone belly up without any fanfare. All this happening in what many consider to be the strongest segment of the Retail Sector, consumer electronics.
  5. The onslaught of bad press regarding gift-cards this year. Every newspaper and broadcast news program has done a segment warning people of the "dangers" of buying gift cards. This will kill off a significant portion of the late-December to January traffic, of people looking for bargains, we have come to expect in years past.
  6. The tightening credit markets, which have not yet fully expressed themselves with regard to the consumer credit-card market yet, but it is coming.
Add to this:
  • Retailers cutting prices fully 2-3 weeks earlier than any time in recent memory. Forcing stores to sell more quantities to meet the same sales figures.
  • Downward pressures of lower gross margins as a result of price cutting.
  • Heightened consumer expectations of further reductions for the post-Thanksgiving holiday weekend, that must be met.
  • Chronically high transportation costs (though they have contracted lately) to move goods around.
  • Slashed advertising budgets.
  • The unfortunate timing of 401k statements arriving at the end of October - beginning of November, bearing ill news regarding retirement portfolios.

The picture of a dour December, with high double-digit losses, becomes a bit more clear. And for those that make it, an unbelievably tough January.

Those companies with Human Resource Department that have been aggressive and forward-looking in their planning, will be ready for this development. Those without will be left with badly bloated employee rolls, confused and emotional managers at a time when all focus should be on driving business, and most unfortunately, a stress-filled environment full of guess-work and uncertainty about how to handle the situation properly.

Take action now, proactively. You owe it as a leader, to your employees, your management staff and your clientele, to be as professional and up-standing, most especially in tough times, as possible.


Funneling Information

Lunch is great. For me, business lunches are even better.

I have, for the last 2 years, hosted a monthly luncheon with eight retail managers from 4 major retailers and two specialty retailers. These casual affairs are generally an open forum, with my refraining from asking questions, allowing for conversation to flow more freely as opposed to shaped discussion. 

It is during these lunches that I have been able to forecast several retail trends, though strangely, those at the meetings have not had similar success.

 A sampling of such trends include:

  • Tightening Credit- Almost everyone complained in April/ May about not meeting new credit goals.
  • Death of Group Think - No longer were items driving businesses, bespoke is now everything.
  • Guess Work at Merchandising Level - This had more to do with lack of strong item call from consumers.
  • Trouble for Men's Categories - When most companies saw men's shoe business slow in October '07, the rest of the men's business unit was sure to follow. Which led to...
  • Women' Career Clothing Issues - It took until the beginning of the Spring, but nobody doubts how devastating this has been across the board.
Having a group of highly-intelligent, business savvy merchants from so many companies is a luxury I wish upon any consultant/analyst. I am regularly blown away by the shear magnitude of useful information and ideas that come from our meetings. However, the meeting we held last Thursday was both illuminating and troubling.

It was the first time I felt the group was completely out of touch. Not with retail trends, but REALITY!

They spoke of "hiring up" for the holiday season, "loads" of new merchandise flowing into the stores, "huge" upcoming events that "were going to drive business" and the like. I decided to break protocol and ask a few questions.

  1. Had any of the participants been told to watch their staffing levels, especially for post-Thanksgiving business?
  2. Had anyone been talked to about the many challenges that lie ahead after the Holiday season?
  3. Had anyone been given instruction this year that differed greatly from last year's game plan?
  4. Had anyone seen a significant shift in the amount of merchandise arriving at stores so far this season?

The answer for each was a resounding and unanimous NO! I can tell you that I am not easily shocked, but this, literally, took my breath away.

The problems facing the retail industry right now are much akin to a Perfect Storm. An economy that has been progressively slowing, a severely tightening credit market, record household debt, record home-foreclosures, joblessness claims at record levels, new credit-card legislation on the horizon and public promising to spend less than the previous year for the first time in years. Perhaps worst of all, a high profile, historic election that distracted the entire public from these realities..., until now. 

Every major retailer has been disappointing with Sales figures for months, and most have done major downgrades on earning forecasts for the 4th quarter. All of this leads one to believe that the upper-level executives at these companies are aware of the tough environment they are facing. So the question that begs out is, why this sentiment is not being filtered down to the store level?

Keeping the stores in the dark may prove easier, or more comfortable, as nobody wants to cause panic at the disco, ultimately though, the lack of full disclosure will lead to less success this season and failure during the first half of 2009.

What can be done now? For starters, communication between the merchant teams and stores has to take place every day. Floor rotations and staffing levels should be worked out via team effort, and done to reflect short trend lines (3-7 days, max).

  1. Buyers need to STOP BUYING! On hand inventory is the only important factor right now. If sales stay on the track they have been over the last 30 days, there is no chance you will have money or space for new arrivals come January. I have spoken with executives and store managers at several discount/ off-price retailers, the consensus seems to be that they have too much merchandise coming in right now. This is great for the discount chains (Filene's, TJX, Nordstrom Rack), but ultimately the reason for the surplus is bad purchasing decisions in the regular retailers.
  2. Cut store promotions (wine & cheese, celebrity appearances/ signings), as consumers have shown this is exclusively a price-driven retail environment. 
  3. The urgency within the stores, should be similar to what executives feel when they are expressing regret for the continual downward revisions of earnings estimates.
  4. Focus of moving merchandise like the next seven weeks are your last in business. 
You may come out of this holiday season in good shape, ready to take advantage of the tremendous value on new spring merchandise sure to be awaiting the survivors.

There are too many analysts betting against the Retail Sector this season. The winners that emerge will do so stronger, and in better shape to meet the many challenges of 2009.


News That's Fit To Print

This morning I spent the better part of 45 minutes walking around looking for a newspaper to purchase. There are normally plenty of copies of the Chicago Tribune, Chicago Sun-Times, Wall Street Journal and New York Times at the Starbucks just one block from my home in downtown Chicago. Today, I visited no less than 15 resources before successfully acquiring a newspaper of any kind. I tried every 7-Eleven, White Hen, Jewel, Dominick's, news stand and bookstore in the neighborhood before, in desperation, deciding to try a hotel gift shop. 


While walking back to my home, I was stopped no less than 15-20 times by people inquiring where I had found the newspaper. Everyone seemed to be in the same predicament I had been in just minutes before.

The reason was both transparent and obvious, Barack Obama is the 44th President-Elect of the United States of America. And seeing as though I reside in his hometown, which was the site of the biggest election night rally in history, I can clearly understand the enthusiasm.

However there is a MUCH bigger story here. A retailing story, no less. A story being missed by the large conglomerates that run most of the media we have access to in this country. 

It was the theme that catapulted President-Elect Obama to his primary and general election victories. The story is about ...inclusion!

The fact is, young people and old people, rich people and poor people, whites, black, latinos women and men wanted to read a newspaper because they were certain to see articles representing their interests within the pages.
Newspapers have seen massive declines in readership across the country for the last 6-10 years, and at a much more rapid rate lately. Television viewership numbers that would have left Peter Jennings, Dan Rather and Tom Brokaw in tears 20 years ago , is now cause for chest-thumping by the likes of Charles Gibson, Katie Couric and Brian Williams. 

We are told this flight from old media is due to people having "more options for news." This, however, is an excuse, served up by media executives stuck thinking in the Hillary/McCain mold. They are looking at the "classical" ideas of media and not seeing multitudinous opportunities that lie at their feet for the taking. 

"Classical" media looked at the landscape of all that happened in the world and decided to pick and choose, for us, what was fit to print or report. The "new" way is to show the entire landscape and allow the individual to decide what is important to them.

Let me be clear. This is not another article about how the Internet is better, faster, more comprehensive and revelatory than television or newspapers,though I agree they are. It is more about the growth potential that lie in both of the latter mediums. Something that can help to stem the tide of massive lay-offs happening  within these important American institutions.

Inclusion requires that you not only talk about the full spectrum of people, places and events, but that you reflect the full spectrum with who covers such things for your organization. Last night, for instance, a night full of historic achievement,  there was much talk of the broad coalition of various ages, races and sexes responsible for the Obama victory. The reality of who reported that news did not directly reflect the viewing audience or those reveling onscreen in the possibilities of a "new tomorrow."

The age of the principal anchors handling Election Night coverage on each major news outlet were as follows:

Katie Couric (51) and Bob Schieffer (71)

Brian Williams (49) and Tom Brokaw (68) 

Charles Gibson (65) and George Stephanapoulos (47)

Jim Lehrer (74)

Wolf Blitzer (60) and Anderson Cooper (41)

Chris Matthews (63), Keith Olbermann (49) and David Gregory( the oldest 38 you'll ever find)

Chris Wallace (61) and Brit Hume (65)

All of them White. All but one, male. Two septuagenarians, six sexagenarians, four at or hovering near 50 and two other rather marginalized figures hovering near forty years of age.

I genuinely believe each of them brought a wealth of perspective to the evenings events and did their best in covering what was a momentous night. However lack of perspective is what stood out most. They all talked of JFK, RFK and MLK. There was discussion of the 60's and 70's. However, there was little talk of the impact of the Internet on this election. No chronicling of the Obama fundraising juggernaut done primarily online. No discussion of the continuous evolution of the blogosphere, now used for both information and independent fundraising. Little, if any, discussion of Obama's digital "Get-Out-The-Vote" operation that overwhelmed his rival. Most anchors chose to discuss, only, the more familiar (to them) door-knocking operation. All in all, after a while it became that story your Uncle tells to the new person every Thanksgiving. Partially true,  mildly interesting and thoroughly embarrassing. They were literally, just one glaring example of why there is a massive flight from their medium as a source for staying informed 

Are we to believe it would take a search party to find an anchor of Latino, Asian or African descent? Are we to believe there are no souls under 40, or hell even 30, capable of anchoring or co-anchoring the "Big News" desk at any of these companies? Are we to believe that Katie Couric is the only woman with the requisite qualifications and experience to be a part of the "Boy's Club?" I think not.

How can I know? Barack Obama just proved it, that's how. His campaign was run by a diverse coalition of people, and as mentioned previously, won by a diverse coalition of people. 

MSNBC showcased Luke Russert on several occasions during this election cycle, using him to flesh out stories specifically relating the youth vote. These reports were generally well-received because of the freshness of the subject matter and, importantly, the depth and understanding that resulted from the person reporting the story being of  the same generation. What struck me was how many times they cutaway from his report to find an utter lack of professionalism, not by the 23 year-old reporter, but by the in-studio host. Each time after a generally routine "back to you in the studio" from the young Russert, there seemed always time enough to discuss "how proud of him" they were, how "they wish his Dad (their recently deceased colleague, Tim Russert) could see" him, or all-around head-nodding of "how well he is doing". 

We are all proud of how this young man handled the passing of his father, who was a lion in the media world. His transition into his father's line of work has seen a few kinks, but nobody with sense can say that he has seemed forced. Luke Russert is a fine professional, but it took tragic circumstances to get him on air. There are many other Luke Russert's out there waiting to be discovered. But they are being told to, "Go start in Iowa, Idaho or Montana. Then come back when you get seasoned." Like when you are in your 50's or 60's and you can no longer relate to the rest of the population.

The limitations of those currently sitting in the anchor chair are being projected onto the anchors of tomorrow, I mean TODAY!

Newspapers are not immune from the same line of thinking. The best example I can draw from is the continued slide in readership of the Chicago Tribune newspaper (down 5.8% Sundays, down 7.8% Weekdays) at a time when there is continued growth in the Tribune Company's RedEye tabloid newspaper (now up to over 200,000 copies per day, from 0 in 2002).

The RedEye is an inferior product, as far as journalistic content, when compared to it's bigger sister, the Chicago Tribune. However, RedEye drives great advertising revenue for a company that had seen it's readership literally continue to die off over the past two decades. 

RedEye is viewed as a young persons alternative to newspapers. Not an alternative to the Tribune, but an alternative to all newspapers. 

The RedEye meets most standards of a young news reader in today's society, delivering news in small "bursts." An article is rarely more than 3-5 paragraphs long, and many are just an one inch summation of a news story, accompanied by a screaming headline. Additionally, the RedEye discusses topics and people that relate directly to it's audience. While you can expect to read wide coverage of bands like U2, or television shows such as Desperate Housewives in the pages of the Chicago Tribune, RedEye is more likely to feature recording artists like T-Pain on it's cover and dish news on Gossip Girl within it's pages. They are ahead of the curve now, but the goal is clearly to become the curve. One gets the idea the journalist and editors are young or, at very least, young at heart. 

Readers can decide, quickly, if this is a story they should look into more on the Internet once they get where they are going, or if they will take a pass. Once again, you can no longer tell consumers what news is, they decide for themselves.

The Tribune, and other newspapers, could easily boost readership by borrowing the inclusive themes that come with skewing younger, and without sacrificing it's seriousness. Shorter articles that drive readers looking for more to the TRIBUNE website, where fully fleshed out material awaits. PBS does this for every piece of it's original broadcasting. Instead of leaving it to the  reader to investigate their own choice of web news provider, all the sourcing for the article can be delivered at Tribune.com.  This seems a simple solution, held back only by a nasty word that's been the death knell to many organizations, institutions and even civilizations, "tradition."

Big Media has a question to ask itself in the coming months, if not weeks. Do they dare to be at the forefront, skewing younger and more inclusive with their talent? Or will they continue this prolonged blood-letting  by having sexagenarian talking-heads try to explain the merits and intricacies of FaceBook in vain while the most dramatic cultural and generational shift in our nation's history is taking place on the screens around them?

The way forward is to trust in the profound talent that resides in the many cultures and youth of America. Ask of them that thing which has not been asked before, save service in the military during times of war. Let us ask them to take a seat at the table and be a part of developing solutions to the many obstacles that plague us all.

Being inclusive is not only the rational thing to do, it's the profitable thing as well.


Best of Oct: Barney's NY Part II

If you ever want an idea of what to strive for when creating visually compelling windows, start with these.

The artist or, surely, artists at Barney's achieve the spectacular, the odd, the jaw-dropping, the unique and the spectacular in five panes. 

Coherence, clarity, individuality, deep personality, wit, aspiration and, my favorite, relevance are all present.

To take a theme (ostrich) and work it in 5 mediums, from actual plumage, to wire hangers, even suit swatches takes more talent than one can imagine.

All well done, all telling a separate story, and done with depth (both literal and figurative).

This is usage of the window space practiced in it's highest form.

I look forward to keeping an eye out for this team's work in the coming months.

Best Of Oct. Barney's NY (Rush & Oak St.)

Very few people can do what you see in the first image. In one succinct window pane you get:
  1. The hottest topic in popular culture (the Presidential Election).
  2. A humorous nod to local pride in race (Abe of Illinois, just like Obama).
  3. An unencumbered view of the genius that is Dior tailoring.
  4. An uncluttered reminder of your civic duty (Go and VOTE!).
This is one of the strongest simple presentations I have seen, ever. I spent a considerable amount of time taking it in at all angles. 

I came to the conclusion that the single most impressive thing about the entire window, is how the whole visual is authenticated by the small piece of felt pretending to be Abe's beard. Had faux hair been used it would not have been as effective, or gratifying.

This, folks, is damn near genius.

Why Windows Matter

As budgets start to contract throughout the entire retail hierarchy (most especially in support divisions), the usage of window space becomes a critical component of driving your business. 

Let's face it, spending, on advertising in particular,  is dramatically down in the past four months. Retailers, design houses and boutiques are being stretched to a limit not seen in modern retail history. Therefore every function of the company must be lock step in an all-out quest to promote your brand. Every dollar spent on anything beyond inventory must be expected to produce a significant return on investment. 

Display windows, in any store, should be a driving force in that quest. A poor visual display in your window gains little to no interest and thus was not worth the time spent doing them. Good visuals in store windows show the public what you are selling and even drive a specific item in the display to sell much better. Great visual displays are something else entirely. 

Great windows not only drive business, but additionally, they enhance or reinforce your brand and demand contemplation from a public notorious for possessing a short attention span.

Poor Windows are usually done by "a person" working at the store. Good windows are usually done by very competent visual teams that work within the stores, guided by the bureaucratic corporate idea of uniformity. However, great windows can only be achieved through the direction of ARTISTS, whether they are part of a team of visual artists within the stores ,or are contracted out by the retailer. In either case, they are given pretty much complete autonomy, for the retailer hired them for their ability to creatively express themselves.

I saw more than a few examples of each this week.

Here are a few from my most recent walk.