Some Retail Therapies More Effective Than Others

By Ellen Cutter, Director of Research.

In my household, there are two distinct groups of magazines that arrive at our house. The first group belongs to my husband and includes *serious* reads like The New Yorker, Harpers, and assorted literary journals. The second group is mine and includes less serious reads things like Vanity Fair, People, and Cooking Light. On a recent foray into the less illustrated world of my husband’s preferred reading, I discovered why the simple thing of purchasing a magazine at a store, or groceries, or gas, or tennis shoes, can sometimes be a maddening experience while other times it is so painless and easy it’s barely a blip on the radar of my day.

In the March 26th financial page of The New Yorker, James Surowiecki noted the ascent of Japanese retailer Uniqulo:

Its success is due in large part to the fact that it has found a way to sell basic stuff that is not only affordable but also stylish and durable. And there’s something else that makes Uniqlo distinctive: it hires a lot of people, and spends a lot of time training them. When the company opened its flagship Fifth Avenue store, last fall, it hired six hundred and fifty people, and pledged to have four hundred people working there at any one time. This is not the way most retailers do business. The general dogma in recent decades has been that, in order to compete on price, you need to keep labor costs down—hiring as few workers as you can get away with and paying them as little as possible. Although leanness is generally a good thing in business, too much cost-cutting turns out to be a bad strategy, not only for workers and customers but also for businesses themselves.

For all of us who have, as I have recently, wandered around aimlessly at a big-box hardware store looking for something as simple and small as clamps, nearly gone Office Space on the automated grocery store checkout kiosk for removing your items from the bagging area before the appropriate time, or could not be assured by the attendant-in-training, alone on duty, at the shady gas station that her credit card machine flub was actually reversed and credited back requiring a follow up visit three days later to have it out with the manager…we say AMEN. It seems that to many retailers customer service is a thing of the past while others are investing in providing superior customer service to help drive profitability.

Surowiecki references a study done by researchers at University of Pennsylvania which found that among retailers with more than five hundred store locations, every dollar in additional payroll induced between $4 and $28 in new sales. That is incredible! And, it is seemingly why no one I know can get out of Costco or Target without spending more than intended. He also points to retailers like Trader Joe's and QuikTrip (a shout out to this fantastic Tulsa-based company, one of our client regions) that invest heavily in their employees, in terms of pay, training, and staffing on the business floor,  often have happier workers, which drive up retention rates and drive down retraining and hiring costs.

While it is doubtful my husband, a writer, was able to draw inspiration for his next blog for The Kenyon Review from the celebrity “who wore it best” pages in People magazine, I thank him for this good read. I suggest you check it out too.                

Can Your Community Go “Viral”?

By Alex Pearlstein, Director of Projects.

One of the great challenges of economic development marketing in today’s wired, information-overloaded world is how to penetrate the noise and get opinion-makers, corporate executives, entrepreneurs, investors, and top talent to notice your community. While site selection and corporate real estate-focused publications and websites still reach a certain percentage of relocation professionals, they will probably not compel a prospect to consider your community or attract skilled professionals looking for a new place to live, work, or start a business. Successfully leveraging a public relations program to seed stories in top publications might get you some play with particular executives and investors, but not necessarily with “millenials.” Putting all your eggs in the social media basket would improve your reach with “millenials” and the more media-savvy corporate folks, but what about those decision-makers who don’t have time to check their online networks every day or sift through the endless stream of postings to Facebook or LinkedIn.

The reality of today’s marketplace is that no one failsafe strategy, program, venue, or medium can cover all the bases of your outreach campaign. The strategies I described in the previous paragraph (maybe with the exception of site selection trade mags) should be considered as components of a holistic marketing program. The degree to which one is prioritized over another might vary by community and target audience; these are questions that should be assessed and answered through thoughtful communication with top volunteers, local companies, community partners, and assessment of best-practice programs from top economic development marketing organizations.

If you are creative and think outside the box in terms of telling your community’s story, you might just strike a vein of gold and get yourself “viral.” In some cases, you’re not so much telling your story as just making a statement about your community or taking a stand against what you feel is an undeserved stereotype. The best example of a city striking back at negative press and seeing its response burn up the internet is Grand Rapids, Michigan. The city’s reaction to being included on a Newsweek list of “America’s Dying Cities” was to film a “lip dub” music video to the tune of Don McClean’s “American Pie” that did nothing more than show Grand Rapids residents of all stripes proudly singing, marching, walking, dancing, and riding through their downtown.

Since its debut in early summer of last year, the Grand Rapids LipDub  has been viewed over 4.6 million times on YouTube, a self-described new world record. Think about that number – 4.6 MILLION. That’s a lot of “eyeballs” as the advertising people say. Not to mention the exposure the video got on NPR, Salon.com, NBC’s “Today Show,” and other outlets. Film critic Roger Ebert even called it “the greatest music video ever made.” The filming of the lip dub involved over 5,000 people, featured complicated logistics and staging, and required the donation of resources from multiple public and private partners. Lesson being, just because it’s YouTube doesn’t mean it’s cheap!

Another viral video – an Iowa filmmaker’s response to perceived stereotypes of the state during the Iowa caucuses – also made national press. The “Iowa Nice” video  (this is the “clean’ version) helped dispel myths and get Iowa noticed by 20-somethings and creatives all across the country.

Will millions of web hits and viewings single-handedly turn around Grand Rapids’ economy or trigger a mass migration of “creative class” talent to Western Michigan or Iowa? Doubtful. Have perceptions about Grand Rapids and Iowa been changed in the minds of thousands of people? Probably. In today’s world, that’s no small feat.                

Don't Call it a Comeback

By Kathy Young, Director of Operations.

Earlier this week, two of our staff (Ellen Cutter and Christa Spaht) were in Joplin, Missouri for a meeting with the Steering Committee of the seven-county Joplin Regional Prosperity Initiative. Even compared to other regional strategic processes that Market Street has facilitated over the years, the Joplin regional effort is an impressive undertaking. The region's seven communities span three states, which changes the dynamics dramatically from a one-state regional process. And then there is the fact that the population core of the region (Joplin and Duquesne) were dramatically and tragically impacted by a massive tornado just 11 months ago.

However, despite the challenges that may lie ahead, and in part, because of the challenges that have been overcome in less than a year, the leaders in this region are forging ahead with the work at hand. Since our first work in Joplin last June, our team has consistently been impressed by the region's optimism and the work ethic of business and political leaders as well as citizens called into leadership roles unexpectedly.

During the Initiative's meeting on Tuesday, Steering Committee members discussed the findings and implications of our team's assessment of their competitiveness. While there are opportunities for improvement, there were also some points that supported  some observations recently shared in a Wall Street Journal online article, which highlighted the speed of the Joplin recovery and reflected on the possible factors that have fostered recovery. I should note here that I wasn't wild about the ease with which the authors drew contrasting opinions about Tuscaloosa, Alabama's progress, but concede the validity of several arguments made in the article.

A couple of highlights from the research included the fact that, despite the effects of the May 22 tornado, Joplin school enrollment did not decrease from 2010 to 2011, but increased by 1.69%. Two weeks ago, a $62 million Joplin Schools bond referendum–the largest bond issue in the City of Joplin’s history–passed. In addition, the region's strong sense of charitable giving, which has been observed often in the national press, pushed the region ahead of two of its three comparison communities in terms of per capita giving.

For all of the big picture statistics, there are dozens of individual stories as well. One of Joplin's small business owners who lost her building during the tornado jumped right back in again to rebuild, like many others. We met this woman during an interview session last July and upon our sharing of her story, a cupcake and lemonade stand fundraiser was held here in Atlanta, sponsored by a lovely child I know very well (my oldest daughter). While the funds raised were not enough to make a huge financial dent in the woman's needs, the gratitude and excitement she showed in return certainly made an impact on us. Ellen Cutter snapped this photo of the newly rebuilt Cupcakes by Liz business  -  it serves as an inspiring reminder of the Joplin regional community's dedication to proving that despite the physical and human losses, the spirit of the community never disappeared.

 

I Believe the Children Are Our Future, Even the Poor Ones

By Ranada Robinson, Senior Research Associate.

Since graduate school, I have had an interest in social norms, how to quantify them, and if it’s possible to intentionally steer them. Today, I came across a report from the Annie E. Casey Foundation, Data Snapshot on High-Poverty Communities and started thinking again of social norms. It’s one thing to live in poverty, and it’s another added layer when concentrated poverty is considered. Almost eight million kids under 18 in this country live in areas of concentrated poverty—or in census tracts with poverty rates of 30 percent or more. Children who live in concentrated poverty are likely to face food insecurities, live in households that have unstable housing, and lack health insurance coverage. They are also more likely than children who do not live in concentrated poverty to have high and detrimental levels of stress and behavioral and emotional problems that become normal to them and become daunting barriers to success. They are more likely to drop out of high school, which leads to repercussions that lead to cyclical or generational poverty, creating the same issues or normalcy for their children.

I still haven’t figured out the answer to my question of if social norms can be steered, but I do know that there are several things communities across the countries can do to buffer some of the effects of concentrated poverty. Here are a few examples:

• Blessings in a Backpack: I’m familiar with this program because my sorority chapter has provided this sort of assistance to elementary schools in the East Point and College Park areas of Georgia. The formal program serves close to 59,000 students in 390 schools in 35 states in the US and three other countries (Canada, Colombia, and Haiti). The premise of the program is to make sure that food insecure students who rely on school to eat have food to take home on the weekends. After the children are identified, they receive backpacks filled with ready-to-eat items such as cereal, juice boxes, and granola bars on Friday and they return the backpacks on Monday to be refilled for the next weekend. This program is one that pulls on my heart strings because research shows that students who have the food and nutrition perform better in school, academically and behaviorally.
• Programs that bring communities together to meet the needs of students: The program that comes to mind is the BRIGHTfutures program in our client community, Joplin, Missouri. To ensure that students were set up to succeed, they realized that building support structures was imperative. This program brings together the business community, non-profit organizations, the civic community, and the faith community to meet identified needs of individual students, from immediate needs such as supplies to more long-term needs such as tutors and mentors. Taking intentional and proactive steps to meeting the needs of students with community resources has helped the school system achieve higher graduation rates.
• Programs that ensure quality early childhood education: Early childhood education has proven time and time again to be an important part of a child’s growth. A client community that values well-rounded early childhood education is my hometown, Jackson, Mississippi. Developed by the Early Childhood Institute at Mississippi State University, the Excel by 5 program is a community-based certification that centers on parent training, community participation, child care, and health to help improve children’s overall well-being in those precious early years. There are 32 communities across the state that are certified.

While these are some best practices that I have seen in my work professionally and civically, there are many other programs out there that seek to address issues that stem from poverty. As John F. Kennedy once said, “Children are the world’s most valuable resource and its best hope for the future.” We have to pay attention today to the needs of our children to affect real change on the future of our communities. 

To Drive...or Not to Drive

By Stephanie Allen, Project Assistant.

I was all ready to write a blog post on this interesting article from the Atlantic last month drawing parallels between US employment and US consumer spending, when I saw a link to this article by Richard Florida posted this morning on the Atlantic’s “Cities: Place Matters” blog about the decline of car ownership among young Americans. It caught my eye. Why? Personal reasons. After years of being carless (and loving it), I’m seriously considering buying a car.

For years after college I owned a car (the 1987 Volvo I bought when I was 17), but never drove it. In fact, it lived in my parents’ garage in suburban Atlanta, while I was in graduate school a thousand miles away in Milwaukee. I never missed it. I lived about 15 blocks from campus, a nice 30-45 minute walk. There were numerous restaurants, bars, yoga studios, coffee shops, three grocers, a hospital, plenty of doctors, and two drug stores within a 15-minute walk from my place. Two bus lines stopped on my corner and another was 2 blocks away. Walking was easy. And, apart from the time commitment, walking is cheap and hassle free.

It’s not that I couldn’t afford a car (I already owned one, granted I wasn’t buying gas and my maintenance fees were low since I never drove it). I sold the car a few years ago because I really prefer life without it. Sure it saves me money (a few grand a year I figure), but the money is just part of it for me. And, according to Florida, it’s the same for many other young people:

"The shift away from the car is part and parcel of a new way of life being embraced by young Americans, which places less emphasis on big cars or big houses as status symbols or life's essentials. In my book The Great Reset, I called it the New Normal. “Whether it’s because they don’t want them, can’t afford them, or see them as a symbol of waste and environmental abuse,” I wrote, “more and more people are ditching their cars and taking public transit or moving to more walkable neighborhoods where they can get by without them or by occasionally using a rental car or Zipcar

At 16, growing up in suburban Atlanta, my car was my ticket to freedom. When I went to a tiny liberal arts college in rural New York State, it was my connection to the outside world. But, I’ve found little need for a car living in an urban area and I certainly don’t miss sitting in traffic or hunting for a parking spot.

So, why am I thinking about buying a car? I’ve been living in LA for three months. I meant it to be a temporary stay, but I’m considering moving here more permanently. Since I telecommute, I can pretty much live anywhere as long as I’ve got a good airport nearby.

The car thing is a big consideration. It’s not the money I’m concerned about, it’s the lifestyle. The need to own a car is a huge con for me. Somehow, these days, I feel more free if I can get everywhere I need to go without a car. I like walking around the neighborhood, pausing to talk to neighbors when I see them, ducking in for a beer on the way home from the farmer’s market, taking a detour through the bookstore to check out the new crop of used books, stopping to smell the roses or lilacs or confederate jasmine…living life at my own pace. That’s something you can’t do in a car (or you can’t do without getting honked at or ticketed). It’s something that those of us in "children of upper-middle class, car loving baby boomers" cohort have the luxury of valuing. We can put quality of life first and in choosing a place to live many of us will do just that.

Higher Education Goes Open Source in America

By Evan D. Robertson, Project Associate.

If you’ve spent more than two straight decades in some form of educational system then there is only one word to describe your relationship with education: ambivalent. On the one hand, the complete dominance of your time, constant stress to perform, and general shenanigans that accompany it begin to wear you out. On the other, there is something truly magnificent about the process of discovery. Upon my graduation, there has, admittedly, been a pull to go back to school. I imagine this is akin to what a prisoner serving a lengthy sentence might feel when they finally get parole: your new found freedom becomes laced with a sort of hesitancy because you know nothing else. Thankfully, there is a new option for the recovering student.

Stanford and the Massachusetts Institute of Technology (MIT) are currently offering online courses. So, why am I writing about two schools that obviously have the technical capability of offering instructional courses over the internet? It’s quite simple: the courses are free. That is, I get the pleasure of being in school without two critical factors: student debt and stress. The former is quite important, as my colleague, Jonathan Miller, described in his recent blog Degrees of Snobbery: ballooning tuition, rising student debt and stagnant median income is creating pressure on higher education to offer degrees at a reduced cost. While Stanford and MIT’s foray into open source education is more guided by their mission to impact global society rather than reduce higher education’s cost, their actions open the gates to what is possible to provide students at no or low cost.

After spending a few weeks going over the features of both institutions’ online offerings, I can only describe it as impressive. The variety of features, replication of social learning, and testing capability far outweighs my initial preconceptions in regards to the limitations of online learning –said preconceptions were regrettably colored after making a student loan payment. Stanford and that other tech school, have come as close as an institution could get in balancing the social atmosphere, learning environment, and one-on-one instruction that one obtains during their postsecondary education. And spending a few days watching course lectures, doing a few homework problems, and reading text books (also offered for free or at low cost), I now understand why, during focus group sessions, every higher education stakeholder voiced deep-seeded concerns about top tier universities offering free online instruction.

With Stanford and MIT’s entrance into territory generally reserved for local community colleges and universities, combined with their multi-billion dollar endowments, it is quite likely that local community colleges and universities will be force to adapt. It may soon be the role of these vital institutions not to teach basic knowledge (the theory and concepts of how a circuit works, for example), but focus on applied “sticky” knowledge that is deeply tied to place. Instead of teaching introductory coursework (now provided online at no cost), local community colleges and universities must further leverage their ties to local business communities and help students better connect their basic knowledge to real-world applications. Such a connection may involve a business which presents a problem currently faced by the organization, creating a duel team of students and employees to approach the problem either cooperatively or redundantly. For now, educators can rest easy: students are unable to obtain a Stanford or MIT degree upon competition of online coursework. For now.

Clackety-Clack, Please Come Back!

By Alex Pearlstein, Director of Projects.

A couple of years ago, the Wall Street Journal ran a piece on the anticipated proliferation of rail cargo as the volume of overland goods shipments skyrockets and our nation’s roads and highways grow ever more congested. It was a convincing article and got me excited again about something I’ve long wondered: why is America’s passenger rail capacity so pathetic? I emailed the reporter about whether he had asked any of the rail executives he spoke to about the potential for passenger travel. He said he asked, but was told that it wasn’t an option due to a lack of trackage capacity, the need to prioritize cargo shipments, and Amtrak’s passenger monopoly.

As someone who travels predominantly by air, I would give my left pinky for a more pleasant option for short-haul trips. Case in point – if I didn’t want to drive from Des Moines to Kansas City (2.5 hours away), I would either have to take Greyhound or else spend about six to eight hours flying a one-stop itinerary through Minneapolis, Dallas, Memphis, or Atlanta. I would pay a premium for a one-hour train trip – heck, even a three-hour train trip! But the odds of being able to connect from Des Moines anywhere in the Midwest via rail are dim; Des Moines doesn’t have an Amtrak station and any hopes of piggybacking on a high-speed rail (HSR) line from Chicago to Omaha, Nebraska were quashed by our governor. I frankly don’t think any HSR will ever get built in the U.S. We don’t even have enough revenue to fix our roads and highways, let alone federalize a massive investment in passenger rail.

So the feds paying for new passenger rail is a no-go; how about privatizing it and forcing Amtrak to grow or go? A couple of recent articles provide a shred of hope for all of us who would like to see rail become a viable travel option again. A piece in Forbes called “U.S. Poised for Passenger Rail Boom” got me certifiably giddy. According to the article, “Of planes, trains, and automobiles, only one can accommodate America’s growing need for urban and intercity transportation.” That’s right, kids – good old railroads! Forbes quoted a Washington, DC-based chairman of French transportation company saying, “If you look at the current dominant modes of transportation—highways and aviation—they are capacity constrained, capital starved, and there is not much in the way of optimism about either of them… Your capacity seems to be pretty much unlimited for rail.” Agreed, monsieur. According to the article, the coming boom in passenger rail is so palpable that traditional rail companies that long ago abandoned passenger service are demanding a return to the business. To quote a movie about cheerleading, “Bring it on!”

A second Forbes article fanned the flames even higher, noting that “America’s leading freight railroads are plotting their return to passenger service as Amtrak faces a threat from privatizing politicians in Congress.”

Wouldn’t it be amazing if we could kill two birds with one stone – provide frustrated fliers a timely and cost-competitive antidote to the hell that is air travel while also creating economic development opportunities for traditional rail towns all across this country. They’ve still got a lot of their old rail infrastructure, either still partly in use or dormant and poised for reinvestment. To see the former rail hubs and nodes that emerged over a hundred years ago during our nation’s expansion return to at least some of their past glory would be one of the great comeback stories of our time.

While the “little engine of passenger rail that could” faces a long and steep ascent up the hill of entrenched interests and transportation monopolies, it’s still a pleasant notion to consider as you imagine the clackety-clack of the rails on your dream jaunt from Des Moines to Kansas City.