Category Archives: Reality checks

April 30, 2018 · 11:34 am

A.I. Aye Yi Yi

One of the hottest topics in business these days is artificial intelligence. One can hardly pick up a business publication of any sort and not trip over an algorithm. AI is being used to do everything from writing articles to running chatbots to protecting against fraud. There is one problem with AI, though, and that’s our topic today. 

You’ve probably encountered something that’s the product of AI. A fair number of game summaries one finds in the sports pages (physical or digital) are, in fact, written by machines. Same with many company summaries in the financial section. The main problem with these pieces is that they’re great at populating a template with all the facts and not so great at figuring out the “why.” You might also have used an online chat function to get some customer service support. More often then not, that’s AI at work as well. But that’s not the business problem I want to discuss.

The problem with most of the AI solutions I read about is that they’re all geared toward helping a business but they’re not focused at all on helping the customer. If you’ve ever wandered into an AI-driven customer support phone line you know what I mean. Get outside of what the algorithm can handle and your blood pressure is sure to soar. While the bot on the other end knows all about you if you’re able to identify yourself in the way the AI is designed (frequent shopper number, etc.), if you don’t know what phone number was used to create the account or you’re a frequent shopper without a frequent shopper ID (some folks don’t live being tracked, you know), it’s hard to get support. Humans are still better at solving many non-standard requests.

I get that sharing all your data – what you read, what you watch, where you go, what you eat, etc. – can help a company give you better recommendations. The problem is that many of the companies use that as a pretext to sell you products you might not really need. Can any of us really know how the data was used to create a recommendation? When a fitness app tells us we’re having sleep issues because our data says so and says we need to buy a new mattress, can we trust that or is it an affiliate deal that brings the fitness app a commission? Maybe we just ought not to have that nightcap instead if we want to sleep better?

I think the use of AI in some areas is fantastic. Fraud protection, for example. It’s easy for AI to spot something that’s out of place in your credit card use and send you an alert. That’s customer-centric. Using a bot to cut costs while providing a lesser experience isn’t and that’s my issue with much of the AI work that’s going on now. What’s your take?

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April 23, 2018 · 12:04 pm

Touch Me, Feel Me

I was cleaning out some old stuff on my computer this morning when I came across a receipt for something I had purchased online in 2005. I knew I had been an online shopper for a long time. I can’t recall the last holiday season during which I stepped foot into a retail store. I mean, I don’t like to so shop for anything on the weekend due to crowds and lines so I’m rarely in a physical store between Thanksgiving and Christmas.

Given the explosive growth of online commerce, apparently many other folks prefer not to hit the stores either. I mean, the share online represents of global retail sales has almost doubled from 2015 to 2018, and is projected nearly to triple by 2021. It’s booming! That said, online is still less than 15% of retail and will be less than 20% even 5 years from now. There’s a reason for that and it’s not just shipping costs or the difficulty in finding a product.

Most people – almost 75% according to a recent study – visit stores to touch and feel products. If you’re browsing and come across an unfamiliar brand of shoe or clothing, how comfortable are you buying it without examining it for quality and fit? I’m certainly not, and I share that feeling with the vast majority, apparently. Sure, the return process isn’t as difficult as it used to be with many online stores, but who wants to deal with it? I want to see the product, which I can do on or offline, but I also want to feel it, touch it, and check it for quality.

That’s a significant advantage that brick and mortar stores have, one that they should exploit to keep market share. They can merchandise product in a way that online stores can’t. They can use in-store displays. More importantly, as we’ve said many times here on the screed, they can offer a level of personalized customer service that no online store can offer.

Try it yourself. Before you go on a shopping trip, hit the store’s online presence first. See if the two experiences are equal. If the retailer’s physical presence is doing things right, there won’t be a comparison. Shopping for a golf club or a bat or a racquet online at Dick’s Sporting Goods is nothing like going to my local Dick’s store and swinging it. I can browse through a lot more books in a shorter time at my local Barnes and Noble vs. their online store. I’m on my own online. There are pros in golf and tennis to help me in-store.

I don’t think brick and mortar is dead, not by a long shot. I do think stores will fail if they don’t take advantage of the built-in advantages they have. Cutting staff, not investing in merchandising, and simply becoming warehouses where people pick up their online purchases won’t cut it. Does that align with your thinking?.

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February 26, 2018 · 12:34 pm

New Greens, New Breaks

One of the first things you learn about writing is that you generally want to stick to writing “what you know.” That’s why things around here generally revolve around business, golf, and food. Sometimes those three things intersect (a bad food experience at an obviously failing snack bar on some golf course?) but generally I manage to get two of the three put together, and all the screeds have a business point to make.

Today, as is often the case on Mondays, something occurred to me on the golf course over the weekend. My home course replaced the greens last summer. We went from bent grass greens to Minverde Bermuda greens. I can hear your eyes rolling, but let me explain what that has meant and why it just might be meaningful to you and your business.

One thing with which many businesses are dealing, either directly or indirectly, is climate change. In the case of golf courses here in North Carolina, it’s meant that some strains of grass just can’t take the heat and clubs spend a lot of money trying to prevent them from dying. There are dead spots, root rot and massive fans that are installed near some greens which run up the power bill trying to cool down the grass that can’t take the heat. Our place lost parts of 5 greens two years ago. The takeaway is that you can believe or not believe in climate change but you can’t ignore the effects that whatever is going on is having. I don’t suspect you run a golf course, but you may stock seasonal items or have staffing needs that are weather-dependent and you can’t stick to the calendar as you once knew it.

That, however, isn’t my main point today. One of the other things that happened when they replaced the greens is that everything was different. The speed was different, the way the ball moved on the green was different, and the new greens were very hard, so you couldn’t land the ball where you used to because it would bounce and roll. The breaks (how the ball moved in response to the topography) were completely different, so all of the local knowledge you had was gone. I will tell you that it’s frustrating to have a putt you’ve made many times before suddenly not move as much as it once did. It is also difficult to train yourself to ignore the slope you know is there because you also know the ball isn’t moving the way it used to.

That sort of thing happens in your business. Things change and you can’t operate under your old belief system. I may believe the ball will move three feet left but on the new green, it barely moves. You may think to be on Main Street will assure you of foot traffic but when the new mall opens, your reality will be quite different. You need to do the best you can is reading the new terrain and adjust your thinking. Otherwise, you’re going to be missing the mark quite a bit, sort of like I did this weekend. New greens mean new breaks and that means a new look at everything you do. Make sense?

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