High Text… High Tech is Out… and High Touch… Locally Rooted… Is In

A news story ran last week that startled many academics.

Business leadership is asking political leadership to revise the future labor needs in the metros and to place less emphasis on those with 4 year college degrees and more priority on those with 2 year trade degrees.

The business leadership even asked for more high school degrees with specific mechanics skills they learned in “shop” classes.

This request is only the beginning.

The news stories running this week are all about how many national brands from the likes of Walmart, Amazon, FEDEX, Bed Bath & Beyond, Starbucks and Target are scaling back as more national chains are encountering declines in sales.

So many of the corporate leadership in the past cited a labor shortage, but few articulated the rationale of why there was a shortage and even fewer recognized how first-entry Hispanics represent of their labor base.

High Tech, social media and the dot.coms are posting the largest percentage losses ever… lower than experienced during the Great Recession of 2009 and lower than during the onset of the Pandemic.

Last week, I conducted a set of focus groups among upper-middle class Millennial homeowners and retired Boomers.

The roundtable discussions confirmed what a few suspect and are citing that is happening smack in front of us.

Most of the Big Brand corporations have invested in the high tech Millennials who can magically work with datasets and generate Excel reports that they can tap in real time to manage their brand relationships.

Most of the Big Brand corporations are now trying to figure out why when they did what the Excel reports pointed to as a statistical linear choice when they heave yet to see any correction in the decline sales.

I have cited how market drivers are cyclical and not linear.

What’s happening in the American marketplace … even the global marketplace right now… is a fundamental shift away from the BIG chains that have elected to abandon customer service with apps, electronic purchases and digital texting dialogues.

The brands operating in a linear, digital, robotic world are encountering some challenges and most of those doing it cannot see what is fueling their demise.

The Millennials in the focus groups spoke more about local, non-chain, human staffed brands and how they sought out brands that they could have dialogue with vs. the National digital chains “who had no respect for they as the customer” … by the exact words.

An investor asked me whether I was investing in fast food brands.

I replied that I invested to get positive returns and fast food brands are not and will not delivery much positive return.

They went on and asked if it was because people cook more food now at home.

I replied no. It was because fast food brands have elected to diversify to a point where they have no uniqueness to their product offering.

The roast beef brand, Arby’s, offers a selection of so many different sandwiches its hard to wade through the menu board. KFC serves not just chicken as their name defines, but burgers, burritos and even pizza.

When I elected to purchase a lunch at a Zaxby’s restaurant, the staff was so lean that the register inside the store had to be shut down while the person working it got food and drinks to those in the Drive Thru!

Of course that person did not just put chicken strips on a plate and fries… he had to make salads, and Mac n cheese and fish sandwiches and …

I was frustrated and so were the other customers in line and we all left.

When I called the Zaxby’s customer service phone number posting on their website, there was a recording that they had eliminated live customer service and now only using Email.

Later that same day, I had a conversation with a national chain of flooring stores that was seeking to find a customer service high tech person who “could use Excel with customer datasets and daily send out numbers to the store managers that they could use to manage their customer relations in real time.”

I asked did they really want to send out daily stats and the VP I spoke to replied, “Absolutely because we manage our retail sales in real time.”

He went on to tell me that their goal was to get more and more people to purchase online and “not interact with people in the store.”

He went on to tell me that his store managers were not using the numbers his UX (user experience) team sent out each day and he was thinking about transferring some of the tech team out into field and serve as store managers.

I am not making that up.

Ford announced earlier this week that it intends to route more customers to its website vs. making the purchase with dealers and their staff.

When asked why, they replied that it involved less overhead and “all those customers today are purchasing their products online.”

The person making the commentary likely has no idea that online sales have declined and now represent less than 13% of total retail sales.

That person also has not seen how online auto sales brands like Carvana, Vroom, TrueCar and CarMax are warning that they are soon to go belly-up.

Non-personal, app-addicted, Big Box retailers like Walmart, Kohl’s, Macy’s and Target are scaling back.

Their leadership looks in the mirror and asks why.

By damn the high tech stats show that clicks and Google search numbers are up.

In MegaTrends, John Naisbitt cited what he labeled as “High Touch — High Tech.” He went on in the book to should how those trends co-exist together.

What is happening in front of us is impacted in part by Millennials seeking surrogates for their Helicopter Parents… in part by a shift to the authenticity of local vs. a past run of global… in part by new parents seeing the world through the high touch world of their kids.

Just as the working class is what’s hot and the DINKs are not, Wall Street is literally collapsing as Main Street replaces it.

The impersonal digital world of clicks and downloads is being replaced with human dialogue of questions, counsel and options.

While Ace Hardware is a national brand, the hardware stores are locally owned. The average store sales are up and the BIG BOX stores are back on a decline.

The local coffee houses serve mostly just coffee and many of them operate with more space to sit and enjoy a coffee and don’t have a drive thru.

Indy mom and pop grocery stores are coming back.

Even local pharmacies and drug stores are coming back as more of the chains move from being drug stores to what they market as centers of health care.

The Millennials in the focus groups … and the Boomers too … voiced more connectivity with a local lawn care provider than any of the national lawn care brands.

When asked why, the answer was the same expressed by the Millennials as the Boomers… “Because I know their name and they know me.”

If you are reading this and doubting what I share, I strongly advise that you go and check out your investment portfolio. The high techs, the dot coms, the national chains are dropping in value and dropping fast.

This morning, Telsa recalled most of its electric cars because of a high tech glitch.

When I asked the Millennials in the roundtable groups what type of marketing communications did they trust the most, they said “the videos that real people make that promote what are real experiences with the brands on the social media websites”

The insight is not to use testimonials in future advertising nor is it to shift all the marketing dollars to social media.

Instead, advertising that is less high cost production and more personally relatable in the context of the audience groups day-to-day world will likely be more engaging that the high tech, high production cost ads taking place in a contrived, non-real context.

I certainly do not advocate stopping the use of and integration of technology into the brand experience and marketing strategy, but using it as a resource and not allowing it to become the channel and sole determinate of the brand experience.

The marketplace is transitioning right in front of us.

The Millennials are in large part the drivers of it… despite what many misplace as champions of digital and online brand experiences… and many of other key groups of the marketplace are right behind the Millennials.

The Boomers in the roundtable groups expressed nearly the same genre of marketing that they valued and trusted the most.

While we can access global perspectives from the Apple Watches wrapped around our wrist, the global and national perspectives today are way more complex than what the average person can digest.

Local perspectives and interchanges yield much greater customer return today.

I remember so fondly how more than 80% of communication involves more than the actual words expressed.

Just like the Internet today represents way less than 20% of the sales, digital store fronts, customer service desks and check out lanes are very limited in the scope of the brand experience they can deliver.

And the National brands who are seem to invest more into the digital world and less in the human experience are experiencing that non-high tech reality of business economics.

The 2023 Mega Trend emerging right in from of us… High Text… High Tech is out… and High Touch… Locally Rooted… is in!