Lessons from the Retail Apocalypse



Legends of Marketing Series by Gary Hoover


Lessons from the Retail Apocalypse


As a student of retail trends and strategies for over 50 years, I believe true understanding of the rise and fall of companies requires a look at each company and industry segment, always seeking patterns.

The impending death of bricks-and-mortar retail stores has been heavily reported.  While a look at the facts indicates a more nuanced analysis, there is much to be learned by physical retailers and ECommerce sellers alike from the decline of so many formerly prominent retailers.

As these retailers have declined, “easy” but inadequate answers are quick to be voiced.  First the cause was Walmart.  Yet as far back as the 1960s, discount retailing was the fastest growing type of store, with Kmart racking up billions in sales and growing rapidly.  Walmart was insignificant.  By 1990, Kmart was as large as Sears in domestic retail sales.

Next came cries about Amazon and online selling.  While their impact varied greatly by category, being especially tough in books and recorded music, today online represents only 11% of total U.S. retail sales.  That is a big dent, but still 89% of consumer purchases are made in bricks-and-mortar facilities.

These “easy answers” have been part of the challenge to retailers like Sears and Macy’s, but much can be explained by other factors which receive far less attention.  The following thoughts are applicable to other businesses and industries, including ECommerce.

It is hard to start anywhere but Sears, Roebuck.  Their mail order catalog was the equivalent of Amazon in its time.  In the 1920s the company began building stores, and from the 1950s through the 1980s was the world’s largest and most profitable retailer by a large margin.  (To understand how they achieved greatness, read this.)

Today Sears is in its final death throes.  So what happened?  Unfortunately, many things.

First, they did not understand a broader concept of what their catalog represented.  They closed it down the year before Amazon was created.  While Sears can be excused for not foreseeing the power of the Internet, perhaps they should have understood the power of ordering from home coupled with efficient delivery, things they had pioneered and dominated.  Every leader should ask, “Do we really understand the principles behind our success?”

Second, Sears did not defend its greatest strengths.  The company was dominant in auto parts, batteries, tools, and hardware.  It “owned” the major appliance business.  It was strong in sporting goods.  In the same years that Sears went “down the drain,” each of these categories have grown, giving rise to the tremendous success of Home Depot, Auto Zone, and other companies.  Yet Sears tried to find a “softer side” in high-margin apparel and a “financial side” by acquiring stockbroker Dean Witter and realtor Coldwell Banker.  They made no aggressive moves to defend their “moats” until it was too late.  Every company needs a deep understanding of its real strengths, what customers most love about it.

Third…and the cause of most big company failure….was success itself.  Prosperous large companies strongly tend toward bureaucracy, complacency, and arrogance.  Sears built the world’s then-tallest building, which did nothing to serve its customers.  Headquarters became rife with executive squabbling.  By the time Edward Lampert bought control of Sears (and Kmart), both were sick companies, though his leadership (or lack thereof) likely accelerated the decline of these formerly great organizations.    

(An aside on Kmart: just as Walmart was rising to surpass them, they bought BizMart, Builders Square, Sports Authority, Waldenbooks, and Borders Books.  Management appeared to think there was no future in discount stores, allocating human and financial resources to these distractions.  Sam Walton had a very different perception of the future of discount retaiing, and remained focused on his customers.)

The story of the American department store industry, today dominated by Macy’s, is different.  Unlike Sears, Macy’s is relatively healthy.  Yet the department stores as a group have lost dramatic market share over the last 40-50 years.  Their story offers more lessons.

In the late 1970s, I did strategic planning for an industry leader, May Department Stores, headquartered in St. Louis.  At the time, we closely tracked the performance of the other six big players: Federated Department Stores, Allied Stores, Associated Dry Goods, Dayton-Hudson, R.H. Macy, and Carter-Hawley-Hale. 

Each of these companies owned the largest general merchandise retailer (outside of Sears) in the cities where they operated.  Famous names included Macy’s in New York and San Francisco, Abraham & Straus in Brooklyn, Wanamaker’s in Philadelphia, Filene’s and Jordan Marsh in Boston, Rich’s in Atlanta, Burdine’s in Miami, Hudson’s in Detroit, Dayton’s in Minneapolis, Kauffmann’s in Pittsburgh, Famous-Barr in St. Louis, Foley’s in Houston, Bon Marche in Seattle, the Emporium in San Francisco, the Broadway in Los Angeles, and many others.

These companies had dominated American retailing in their markets since the 1890s.  Sears sold hardware and focused on male customers.  These department stores carried a wide range of products, but focused on selling apparel and home furnishings, primarily to women.  They were extremely profitable.  America’s great malls were anchored by the locally-famous department store at one end and a complementary Sears at the other.

Yet today, all seven of those “big players” listed above are part of Macy’s, and Macy’s share of total U.S. retail sales is far smaller than what those companies had 40 years ago.  What happened?  Was it Walmart?  No, Walmart has not been strong in apparel, the heart of the department stores.  Was it Amazon?  Not really.

The place to start in understanding this decline is differentiation.  When these companies were strongest, all merchandise buying was done by category expert buyers in each city.  They knew their market, often varying their product assortment by neighborhood and branch location.  These buyers searched the earth looking for items that their competitors did not carry.  In any given city, one store might be strong in china and glass, another in toys, yet another in high fashion apparel.  And most had distinctive, interesting restaurants to keep their shoppers in the store longer. 

Over time, in seeking efficiencies and economies of scale, this system collapsed.  The stores increasingly abdicated their roles as “merchandise curators,” turning over valuable floor space to suppliers like Tommy Hilfiger and DKNY.  Seeking the higher gross profit margins of apparel, they dropped booming categories like stationery, toys, and sporting goods.  (Note that Walmart and Target did not drop these.)  Chasing cost reduction, they eliminated local buyers and removed those decisions from local markets.

Those decisions combined to result in lookalike stores.  By 2000, it became impossible to tell one department store from another.  Hence, why even have all those stores?  Through a series of mergers, the vast majority are now Macy’s.

Nothing in marketing matters as much as differentiation.  When General Motors, Ford, and Chrysler cars looked alike, Toyota and Honda offered something different.  When American, Delta, and United all behaved the same way, Southwest, Virgin, and JetBlue offered something different.  When Kroger and Safeway felt similar, Whole Foods, Wegman’s, Trader Joe’s, WinCo, and Aldi offered interesting alternatives.  In the eyes of your customers, is your company deeply and clearly differentiated from your competitors?

Along with these stories of decline and ruin, it is important to note that America is full of strong, vibrant retailers.  Companies which continually innovate and differentiate.  Companies which deeply understand and listen to their customers.  Companies which don’t hide under excuses. 

Home Depot continues to grow rapidly.  TJX, the owner of TJ Maxx, Marshall’s, and Home Goods, is booming and adding new stores.  Dollar General is opening 900 new stores in the U.S. each year.  New concepts like Five Below flourish.  Grocers including Wegman’s and HEB compete successfully with giant Walmart every day.

As a lover of retailing, it saddens me to recite the preceding stories of decline and decay.  Yet, despite the never-ending intensity of retail competition, those bricks-and-mortar and ECommerce companies which think and learn can prosper.  As has been said many times, it is not about what happens to you so much as how you react to it.



Gary Hoover is a serial entrepreneur.  He and his friends founded of the first book superstore chain Bookstop (purchased by Barnes & Noble) and the business information company that became Hoovers.com (bought by Dun & Bradstreet).  Gary served as the first Entrepreneur-in-Residence at the University of Texas at Austin’s McCombs School of Business.  He has been a business enthusiast and historian since he began subscribing to Fortune Magazine at the age of 12, in 1963.  His books, posts, and videos can be found online, especially at www.hooversworld.com. He lives in Flatonia, Texas, with his 57,000-book personal library.

To get updated information about the team at Apogee Results, please follow us on your favorite social media channels.


Cutting through the Clutter: Reaching Your Prospects Online During the Holidays


Cutting through the Clutter: Reaching Your Prospects Online During the Holidays

by Lena Sidhu

The holiday season is upon us. Black Friday, Cyber Monday, fall clearances, winter specials, end of year liquidations, and so many more names are given to the various sales that companies will have to incentivize consumers during the holidays. And why not? Consumers spend on average over $1,000 on gifts and non-gift holiday purchases. One-third of shoppers report holiday purchases are driven by promotions. What can you do to cut through the clutter? How do you reach your prospects when it seems like their inboxes are jammed with promotional offers from a multitude of companies? The answer is zeroing in on your prospective customer.


Who is your ideal customer? Someone who visits pages about computers? Homeowners or people that rent? A couple with children interested in toys or a single female interested in women’s clothing or cosmetics? Where do your prospective customers live and what time of day are they more likely to purchase from you?

Most digital marketing platforms have a multitude of targeting options. You can really cut out a large portion of consumers who would not be interested in your product in order to better focus on those who would. Why waste spend trying to reach everyone, when you can use that spend to reach more relevant consumers who are more likely to purchase your product?



However, targeting is just one piece of the puzzle. Next, think about what differentiates your product from other products on the market today. Try to put yourself in the consumers’ shoes. Is your ad clear and direct? Furthermore, is it enticing enough to click on? Be sure to emphasize any sales you may have or new products you just got in stock. If you can make product recommendations, this is an ideal way to boost sales.

Channel Distribution

If your company is not as well-known and you want to increase awareness of your product, try using digital marketing platforms that focus on impressions. If your product is well known and people may search for it, search ads can be great. Display ads on websites, apps, social media through banners or other ad formats can be another great way to reach target customers. Regardless of which ad type you decide to use (you can also use multiple) you can target your ads to your ideal audience.

Here’s an example. Let’s say you’re a popcorn company selling in only one state and your average customer typically visits a certain set of websites and is in a specific age demographic. You have competitors in the area that are larger than you. In this scenario, search ads may be a bit expensive to run. Display ads would be a great option. You can target your ads to the specific state or even city/zip code you are able to sell in. You can also target specific age demos. Lastly, you can target people who have visited your competitors’ websites or websites like their websites. This way, when someone is searching for popcorn and happen upon a similar site to your competitors, they will potentially get served a display ad for your popcorn later.

Targeting can save you money – money that is better spent when it presents ads to consumers that are more likely to buy from you.

When fighting the holiday clutter of ads, remember: You don’t need to compete against every competitor for every ad space. You just need to compete for the most relevant ad space for your business and target customer. Set up takes a bit longer, but this makes things much more manageable and cost effective for you in the long run.

How Can Apogee Results Help you?

Do you need help figuring out the best way to promote your products this season? Curious about paid digital advertising? We have proven results in digital advertising over 20 years across a broad range of businesses. Request your complementary assessment of your digital advertising strategy and results, with recommendations on how to get the most from your ad dollars.

Lena Sidhu is a part of Apogee’s paid marketing efforts. She has previously managed multi-million dollar per month campaigns with positive results. Lena worked in-house at a large insurance company prior to starting her career at Apogee. In her current role, she is responsible for developing strategy for clients and the subsequent implementation of that strategy.

To get updated information about the team at Apogee Results, please follow us on your favorite social media channels.

8 Common Ways Your Agency Is Mishandling Your Ad Dollars

8 Common Ways Your Agency Is Mishandling Your Ad Dollars

by Patrick Dunn

It’s no secret that the world of Paid Media Marketing is growing faster than ever. This is especially notable within everyone’s favorite necessity, Google Ads. With all the platform changes and constant shifts in best practices, it can become overwhelming for a small marketing team to keep up with. It is in this state of confusion that most businesses turn to a digital marketing agency to help them stay relevant in a space where it is so easy to fall behind. Let’s face it, we all turn to Google for answers these days, and if your business is not showing up for your key search terms, you’re losing customers to the person who is. While there are lots of really great agencies working honestly and passionately every day, there are also a lot of really bad ones (really, really bad ones). These are the type of agencies that give digital marketing a bad rap because they not only waste their client’s time, but they are also wasting their ad dollars. Below are 8 common ways your agency is mishandling your ad dollars.

Photo by rawpixel.com from Pexels

Search Partners

Did you know that not every click/ad dollar in search campaigns go toward searches done within the actual Google Search Engine? Whenever a search campaign is created, Google will automatically opt you into their Search Partner Network. This means your search ads could be shown on any one of the thousands of Google Search Partner sites, often wasting ad dollars on very low-quality clicks and conversions. When was the last time your agency spoke to you about the amount of money spent within the Search Partner Network and how they have performed?

Automatic Placements

Whether you have created a Display, Remarketing, or Search with Display campaign, Google, by default, will opt you in to automatic placements that will serve your ads beyond what you are actually targeting in hopes they can show your ad to users similar to your audience. Unfortunately, similar to Search Partners, we have found very poor performance from these settings and Google Ads does not make it easy to turn off. How much of your yearly ad spend went to poor performing placements?

Location Settings

Do you know where your ads are actually being served? Did you know that even if you are targeting specific cities, states, or countries, you can still end up spending a large portion of your budget outside of these regions? I can’t count how many times we looked at an agency run account and found, due to mishandled settings, that their ad dollars were being spent in areas they do not even serve. The fix is simple, but is your agency utilizing it correctly?

Faulty Tracking

It is very important to make sure the metrics your agency is reporting to you are correct. Whenever they report “conversions” and “cost per conversion,” what are they actually reporting? I can’t count how many times I have audited an account and saw faulty tracking resulting in double-counted conversions or unimportant actions such as button clicks being attributed as conversions. This can greatly mislead the direction of the account and result in wasted ad dollars.

Keyword Malpractice

Using correct keyword match types and regular addition of negatives are some of the most basic common practices amongst agency beginners. Even with that being known, this is still commonly overlooked. Either the agency has assigned someone very junior to the account who has not grasped the importance of keyword management, or the account manager is simply too busy to take their time and show each account the attention it needs to run most efficiently. This can result in thousands of dollars in wasted spend if not fixed over a long period of time.

Not Using Advanced Bid Adjustments

While most people understand device bid adjustments (although, you’d be surprised how many don’t), there are a ton of other useful places where bid modifiers are commonly overlooked. Whether it’s location, demographics, time of day, or specific audience segments, Google provides in-depth data about the users interacting with your ads, and if that data is not being utilized properly, you could be far overspending what you should be.

Inefficient Bid Strategies

There is a constant pressure to turn over bidding strategies to Google’s automated bidding strategies, but is it the right decision for your specific business? We see a lot of agencies toss one of Google’s automated strategies on an account without much thought given to it. However, these strategies are not one-size-fits-all and can leave much on the table if not utilized correctly.

Baseless Campaign Strategy

It seems like each month Google unveils a new campaign, ad, or bid strategy, and then there’s a rush to be a part of the latest trend. While it’s crucial to stay up to date with industry trends, not every campaign type is for every business. I’ve done countless account audits where thousands of dollars were being wasted on poorly set up video, Gmail, display, remarketing, search with display select, and more, campaign types. While these campaign types have their own place within the marketing funnel, depending on your budget, there may not be room to be in all of these spaces and it is important to focus your ad dollars on what is driving the most success.

The world of paid digital advertising can be mystifying. Do you need help figuring out if your digital marketing dollars are being spent effectively? Would you like an expert opinion on how your campaigns and analytics are currently set up, and what you could do to improve your results?

Apogee Results offers a complimentary Paid Search Report Card. We look at a half dozen key metrics and provide you with our analysis and recommendations at no cost or obligation – simply a 30-minute debriefing to help you better understand where you are and where you might be able to improve.

Patrick Dunn leads Apogee’s Paid Search department. His team is responsible for the strategy, implementation, and growth of all Paid Marketing efforts. He has experience working both in-house and at agencies in both Houston and Austin. He has successfully managed campaigns across multiple industries including several multi-million dollar a month campaigns.

To get updated information about the team at Apogee Results, please follow us on your favorite social media channels.

Humanizing Your Business


Legends of Marketing Series by Gary Hoover

Humanizing Your Business


The Internet can be an impersonal world.  As much as we love Amazon and eBay and know that somewhere behind those facades are real workers and real sellers, the customer experience can be pretty cold.

On the other hand, the recent passing of former Southwest Airlines CEO Herb Kelleher reminds us of the power of putting people at the forefront of your business.  For a great look at Herb, one of the best CEOs in American history, and his principles, see:




While most leaders understand the importance of people, that is often not reflected in their web presence

A friend once asked me to evaluate a consulting firm he was thinking about hiring, directing me to their website.  When I looked, nowhere did a find anything about the people at the consulting firm, their backgrounds or accomplishments.  Yet all a consulting firm is, is people and their skills.  While the consulting firm’s website bragged about how much they had helped other companies, I could tell nothing about the people who did the work.  This surprised me, and I told my friend I would not consider hiring them, based on what their website told me.

On the other hand, even giant organizations like Walmart and Target give great emphasis to their people on their corporate websites.  The “About Us” section is the perfect place to really talk about us.

There are other ways to humanize your website and online presence, to celebrate the human nature of your business, your employees, and your customers.

Think in terms of a bricks-and-mortar parallel.  Back in the days when record stores were still important, Richard Branson’s Virgin Music retail chain had a great website.  Instead of saying, “Contact Us,” the link was labelled “Get me a manager!”  All of the brilliant Branson’s businesses place a great emphasis on a sense of humor and humanity.  His airlines are far “friendlier” than most competitors, even in the signs and words they use.  Do you have a sense of humor?  How could your website and apps stand out from a boring crowd?

Great companies often use human stories, with real people and all their flaws.  Videos of your employees, their families and pets, and your customers and how they use your products and services can be very powerful.  I am sure you can find many examples on the web; here is a company that does a nice job of being deeply human:

Few things are more powerful than storytelling.  It is the foundational principle of the Walt Disney Company, and most great filmmakers, authors, and speakers.

Do you tell your story?  Are you proud of your history?  How did your company get started?  Who are or were the founders?  Your company does not have to date from 1806, like this great American company, to cherish its history:

Of course, the truly human enterprise goes well beyond the Internet.

How often do you talk to your customers?  At one of the companies I co-founded, Hoovers.com, one of our later CEOs spent each Friday talking to customers.  Every week, the sales team would give him a list of people to call, ranging from the smallest home office customer to the biggest enterprise subscriber.  At Build-A-Bear Workshop, the founder and original CEO Maxine Clark personally answered every single customer email, even when such emails numbered in the thousands.  One great Coca-Cola CEO spent something like eight hours a week in supermarkets, talking to workers and inspecting displays.

And Herb Kelleher always placed every single employee on a pedestal, spending what others considered inordinate amounts of time with them.

It is easy to get caught up in the big deals, working with investment bankers, venture capitalists, accountants, and flying along at “30,000 feet.”  But so often this altitude does not result in soft landings, because the real work of serving customers and leading and celebrating people gets lost in the shuffle.



Gary Hoover is a serial entrepreneur.  He and his friends founded of the first book superstore chain Bookstop (purchased by Barnes & Noble) and the business information company that became Hoovers.com (bought by Dun & Bradstreet).  Gary served as the first Entrepreneur-in-Residence at the University of Texas at Austin’s McCombs School of Business.  He has been a business enthusiast and historian since he began subscribing to Fortune Magazine at the age of 12, in 1963.  His books, posts, and videos can be found online, especially at www.hooversworld.com. He lives in Flatonia, Texas, with his 57,000-book personal library.

To get updated information about the team at Apogee Results, please follow us on your favorite social media channels.


The Power of Cross-Promotion


Legends of Marketing Series by Gary Hoover

The Power of Cross-Promotion


The idea of working with other companies to build your sales has been around a long time in many situations.

Most of my life has been in retailing.  My friends and I built the first chain of giant bookstores, Bookstop, in the 1980s.  Barnes & Noble purchased the company and then expanded the giant store idea in a big way.  One of the most important parts of retail strategy has always been site selection.  In each of the 20+ stores we opened from Miami to San Diego, our first question was, “Who will be our co-tenants?  Will they appeal to the same customers who shop bookstores?”  Restaurants, movie theaters, and The Container Store were some of the co-tenants we sought.

Our first store was in a new shopping center in northwest Austin, Texas.  Two doors down was a young company’s second store, called Whole Foods Market.  I went to every store in the shopping center, maybe 15 of them, and offered to share in our grand opening campaigns.  Only Whole Foods’ management was interested.  We set it up so that if I customer bought enough at Whole Foods, they got a free book, and if they bought enough books, they got a free steak at Whole Foods.  All I clearly remember is that Whole Foods ran out of steaks in the promotion.

At the level of big companies, McDonald’s has worked with many others, including the makers of Monopoly.  But their greatest partnership is with Coca-Cola.  The inability to capture the business of fast food chains led PepsiCo to buy their own chains and create the second biggest fast food chain group.  Later, they spun those operations off as Yum Brands, which includes Pizza Hut, Taco Bell, and KFC.  Pepsi made sure they signed long-term contracts to have their products in those restaurants.

One of the most successful co-marketers is Intel, which sells nothing to end consumers, but backs the advertising of those computer makers who use Intel “inside” with their logo and sound bite.

And of course, the movie companies use co-marketing heavily, from James Bond and Aston-Martin to E.T. and Reese’s Pieces, from Burger King in Men in Black II to Mini Cooper in The Italian Job.

There is no marketing organization which can’t use cross-promotion to their advantage.  It’s just a matter of being creative.  When everyone else is just running low prices for Black Friday and special sales, surprise people with the unexpected, something different!

Starting questions include:

  • Who is our customer? (You gotta know that already!)
  • What else do they buy? (Think hard, do surveys or focus groups, look for the unusual or surprising.)
  • Which companies are best in those categories?
  • Which companies are most interested in tying-up with us, which are easiest to work with? (Especially if they already do some co-marketing.)

From a variety of sources, here are a few ideas – it’s up to you to figure out how to adapt them to your business:

Pool your marketing budgets and human resources to co-sponsor an event, from a marathon to a webinar to a museum exhibit.

Share in a contest – any contest.  Fill in the missing letters from famous quotes or movie dialogs, to spell out your company or brand name.  Find hidden codes in each other’s websites or email campaigns.

Have customers submit videos of themselves using both your products or services.

Exchange premiums – a gift of wine with cheese and vice-versa, a gift of cosmetics with clothes, a gift of consulting time with a valuable report or study.  Look for unusual combinations!

Create bundled products and packages that you both sell – a restaurant discount with a hotel stay, shoes with socks, website creation and social media marketing tools, and again cheese and wine.

Selectively combine frequent customer, loyalty programs, or points.  Buy ten things from us and get one from the other company.

Create affiliate programs where other companies earn commissions for driving traffic to your site or products and services, wherever they are sold.

Share content – if your food site has recipes tips, share them with the people who make the ingredients and vice-versa.

Share customer lists (within the rules and with the customers’ approval, of course!).

Get creative, look at every industry for more ideas.

Even without telling the other company, you may be able to promote their product without them objecting.  Tie something you sell to a popular TV show, movie, song, or book.  When our Bookstop employees tired of receiving book discounts as a perk, we added gift certificates from the largest local record store and people loved them (remember record stores?).

Any such program needs strong joint promotion and social media campaigns to work.  Tweet, Instagram, Pinterest, Facebook, Yelp, and TripAdvisor a lot!  Review each other’s products on Amazon.

With the right partner and creative thinking, you can both accelerate your business!

Here are some links for further research, inspiration, and idea generation:









For small businesses:




(The link sounds wrong, but this is about marketing, not parenting.)

For bricks-and-mortar, local:








Gary Hoover is a serial entrepreneur.  He and his friends founded of the first book superstore chain Bookstop (purchased by Barnes & Noble) and the business information company that became Hoovers.com (bought by Dun & Bradstreet).  Gary served as the first Entrepreneur-in-Residence at the University of Texas at Austin’s McCombs School of Business.  He has been a business enthusiast and historian since he began subscribing to Fortune Magazine at the age of 12, in 1963.  His books, posts, and videos can be found online, especially at www.hooversworld.com. He lives in Flatonia, Texas, with his 57,000-book personal library.

To get updated information about the team at Apogee Results, please follow us on your favorite social media channels.