January 29, 2025 • 21 mins
Join host Joe Taylor Jr. as he explores the fine line between customer experience triumphs and costly missteps. From Starbucks’ turnaround to Walgreens’ recent struggles, Joe breaks down what happens when businesses lose sight of what truly matters—delivering a great customer experience at its core. Tune in to hear how plexiglass barriers and impersonal service can drive customers away and why Zappos is still more than just a shoe store. Let’s take a sharp, insightful look at where companies go wrong and how they can course-correct before they lose touch with their customers.
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(00:01):
From the global headquarters ofJohns Taylor in beautiful New Jersey,
it's marginally better.Here's your host, Joe Taylor,
Jr.On the show this week.
I believe that customer experienceand business performance go hand in
hand.
You can and will improve yourcompany's margins by investing in
(00:23):
experience.
So I've got three textbook examples ofcompanies that burst onto consumer's
radar with transcendentservice experiences and they
later paid the price when theydrifted away from those core values.
We'll deep dive into the recent fortunesof Walgreens who placed a bad bet on
locking your most urgently neededitems behind walls of plexiglass
(00:47):
and will examine what your businesscan do to protect itself in case your
favorite social networksuddenly disappears.
That's all coming up after thebreak on marginally better.
Welcome to Marginally Better,
a show about business innovation and theAmerican economy. I'm Joe Taylor, Jr.
(01:10):
My training. I'm a master certifieduser experience consultant,
and when working with ourteam at Johnson Taylor,
I'm helping our clients build websitesor apps at the sweet spot where their
business goals andcustomer's desires intersect.
But I've also reached this point in mycareer via some unusual roots As a radio
(01:30):
producer and journalist,
I've spent years telling stories andfiguring out what entertains audiences.
And I also spent six years working inApple during the transition between the
Steve Jobs and the Tim Cook eras.
So I know what it takes toship outstanding products backed up by transcendent
customer experiences.
So I was inspired to launch the seriesbecause there's a lot of chatter and
(01:53):
pessimism, especially aboutonline user experiences.
And I won't debate that.
I've walked away from plenty of projectproposals where a business wanted
us to goose their revenue numbersby making their experience a little
worse. And I'm proud that ourteams never taken that kind of job.
So as I've experienced them the pastfew decades have been about businesses
(02:18):
figuring out how to disrupt theircompetition through technology.
We're now at the point where everyone'susing the same old growth hacks.
Some tactics that our industrydeclared unethical 20 years ago are
now getting taught as basicprocedures in coding bootcamps.
And if you've listened to or read anyof the work from folks like Ed Tron,
(02:41):
Corey Dro or Molly White,
you know that consumers are getting fedup and they're calling companies out
on bad behavior.
People are waking up to the idea thatthey're not boxed into a single choice
for a particular good or service.And under those conditions,
the next few decades will reveala new cohort of successful
(03:03):
companies that can jumpstart theirfortunes by distinguishing their online
and offline experiences. And sure,
there's still an overarching schoolof thought in business that austerity
maximizes profits,
but you don't have to runyour business that way.
I believe that customer experience andbusiness performance go hand in hand.
(03:27):
You can and will improveyour margins when you invest
in experience, and you don'tjust have to take my word for it.
Let's talk about three textbook casesof brands that exploded revenues
by investing heavily inthe customer experience.
You know that feeling when you walk intoa store or call customer service and
(03:51):
you're already bracingyourself for the worst,
you're preparing for battle withsome mythical bureaucracy that seems
explicitly designed tofrustrate you. Well,
today we're going to tell youabout something different,
something that actually works. In 2008,
Starbucks did something thatsounds almost ridiculous. Now,
(04:15):
they closed every single oneof their US stores for three
hours, not for renovationsor deep cleaning,
but to retrain their baristas tomake the perfect cup of coffee.
Now, their CEO at the time who had justreturned to the company called it their
transformational moment. Andhere's the thing, it worked.
(04:36):
Their customer satisfaction scoreswent up 20% that year. More than that,
their stock price, it tripledover the next five years. Now,
as the New York Timesreported at the time,
Starbucks once a magic name on WallStreet is increasingly seen there
as just another big food chain.So they use the training reboot
(04:59):
to kick off a wave of growth builton their reputation for quality
products and services, andmost importantly experiences.
Should they do it again? Starbuckshas received some criticism lately.
Detractors worry that catering toospecifically to a fickle younger
demographic has increased waittimes when their cues are full of
(05:22):
complex customized TikTok drinks. Now,
there are few months into the tenure ofa new CEO who's promising to once again
bring the company back to its roots thistime by ensuring that they can deliver
a high quality handcraftedbeverage in four minutes or less.
We'll be seeing what happens.
(05:47):
Now,
imagine you're running an online shoestore and you decide to do something that
goes against every principle ofefficient business operations.
You tell your customer service reps tospend as much time as they want on the
phone with customers, no timelimits, no scripts, just talk.
(06:07):
And that's precisely what Zappos did.
They even amplified what is now a prettyfamous story. Maybe you've heard it,
where one of the reps spent over 10hours on a single call with a customer,
not because there was a problem, butbecause the conversation just kept going.
When Amazon bought Zappos in 2009,
(06:29):
they paid $1.2 billionfor a company that started
selling shoes out of a small apartment.
The New York Timesdetailed this at the time,
calling it a testament to the power ofcustomer service in the digital age.
And Zappos continues toexist inside of Amazon
as a standalone brand,
(06:50):
even though Amazon itself oftenbeats Zappo's pricing and delivery
speed,
all because of the loyalty builtfrom those powerful early customer
experiences.
You know what's interesting about Netflix?
They could have stuck with theirDVD by mail service. It was working.
People liked it,
(07:11):
but they saw something coming a shiftin how we consume entertainment.
And instead of fighting it,they did something remarkable.
They disrupted themselves.
They created an impossiblycomplex algorithm that could predict what you want to
watch. But here's what's fascinating.
They didn't just useit to recommend movies.
They used it to decide what shows to make.
(07:35):
And their first major original serieswasn't just a shot in the dark.
It was based on data showingtheir subscribers liked certain actors genres and
similar shows the results.
Netflix went from a companyworth about $2 billion in 2008
to, well,
let's just say its market cap todayhas made those early investors very,
(07:57):
very happy.
Financial Times captured thistransformation in a 2013 piece,
which revealed how the company'sdeep dive into customer preferences.
Reshaped not just its business, butthe entire entertainment industry.
A decade later,
they're facing criticismthat the algorithm has gotten too heavy handed and that
(08:18):
it's focusing too much on second screendelivery instead of letting creative
professionals make great work.
But it was that willingness to commitso fully to the customer experience that
vaulted them from a niche blockbustercompetitor to the kind of company that
can hire Beyonce to mount a footballhalftime show that's not even at the Super
Bowl. It's funny,
(08:41):
we often think about business asthis cold calculating thing, numbers,
profits, bottom lines. But what thesestories show us is something different.
They show us that sometimes themost calculating thing you can do is
care about your customers.In each of these three cases,
there are two possible outcomes.
(09:02):
Those companies can choose to disruptthemselves and regain the reputations for
powerful customer experiences.
Or they can sit back and watch whilesomeone new to the market pushes the
boundaries of thatexperience even further.
We'll be here watching and trackingtogether right here on marginally Better.
After the break,
(09:23):
the button Walgreens can press tounlock a revitalization in their stores.
Stay with us.
Welcome back to MarginallyBetter. I'm Joe Taylor Jr.
It's a story we've all seenplay out in our neighborhoods.
The local pharmacy wants a cornerstoneof the community now with bare
(09:46):
shelves behind plexiglass itemslocked away in cases and store
closing signs in some of the windows.
This is what's happening at Walgreenswhere an effort to stop shoplifting may
have ended up driving away the verycustomers they were trying to retain.
This story goes back to1901. Charles Walgreens Sr.
(10:07):
Worked in the successionof drugstore in Illinois,
eventually purchasing the store he wasworking in embedded in the corner of a
Chicago hotel. Accordingto company historians,
Charles hated the status quoin the drugstore business.
He thought drugstore weredark unwelcoming places.
He had some big ideas that changedthe shape of his entire industry.
(10:31):
Everyone who entered that first Walgreenswas greeted by the store manager and
sometimes by Walgreen himself.He widened aisles.
He added a bigger variety of products.
He figured customers would swing throughfor more day-to-day needs along with
their prescriptions, and hepioneered private label products,
(10:53):
often making better versionsof the things he was copying.
A few years ago, Walgreens had a problem,
like other retailers in theUnited States after the pandemic,
they were losing inventory.
Retailers tracked this witha metric they call shrink,
and it was an alarming rate.
So they did what seemedlogical to them at the time.
(11:16):
They started locking everythingup, deodorant, shampoo, toothpaste.
Items that used to sit innocentlyon open shelves were suddenly behind
plastic barriers requiring anemployee with a key to access them.
The company's CEO Tim Wentworth recentlyadmitted what many customers had
already figured out.
(11:37):
I just met with our head of assetprotection to look at some of the creative
things that we are looking at,
both as a company and as an industry asit relates to the customer experience on
Shrink. I don't have anythingmagnificent to share with you today.
It is a hand-to-hand combatbattle still, unfortunately,
but it does impact how sales work throughthe store because when you lock things
up, for example, youdon't sell as many of 'em.
(11:57):
We've kind of proventhat pretty conclusively.
It's a perfect example of how solvingone problem can create many more.
Walgreens announced it would closehundreds of locations this year,
part of a larger plan to shutter aboutmore than a thousand locations over the
course of a few years.
That'll bring the company's USfootprint from well over 8,000 locations
(12:22):
to slightly more than 6,000.
Wentworth has told investors that theissues facing Walgreens are common among
the entire industry, andhe's been floating plans to take the company private.
However,
the core of this debate extends beyondlocked up merchandise and stretch staffs.
It highlights a fundamental disconnectbetween security and service,
(12:45):
as well as betweenprotection and accessibility.
So what could Walgreens do differently?
We've got three pieces of advice thatcould help them get back on track.
First, customer service as security.
(13:08):
It's not enough to just throwmore people on the sales floor.
Walgreens must consider re-imaginingwhat security looks like in a retail
environment instead of a securityguard standing by the door looking
intimidating.
You can have well-trained employeesactively walking the aisles,
engaging with customers. They'renot just there to prevent theft.
(13:30):
They're there to help you find the rightsunscreen or explain the difference
between cold medicines orsuggest a good multivitamin.
This goes back to the practice thatCharles Walgreens started himself all
the way back in 1901.
This approach has worked remarkably wellfor companies like Costco where engaged
(13:51):
employees and excellent customer servicehave helped keep their shrink rates low
without having to resort to fortresslike security measures. It's very
common at high-end retailers tocross-train floor staff in both
customer service and lossprevention techniques.
But it's more likely that you could hiresomeone from the community who's paid
(14:13):
well enough that they can authenticallyengage with their neighbors who are
regular customers while maintaininga watchful presence over the store.
Now,
that may not be a popular move at apublic company that desperately wants to
report a lower payroll line item.
That may be another reason why they'rethinking of taking the company private,
(14:33):
but this is probably way lessexpensive than enduring that shrink
and surviving an exodus of customers whodon't prefer to wait for attendance to
unlock a bottle of detergent. Second,
let's talk about the Walgreensapp. It's a great first step.
It solves lots of problems by movingsome of the interaction from the pharmacy
(14:55):
counter to your phone and short,
not everyone wants to interact withWalgreens through an app all the time,
but if your competition increasinglylooks like Amazon and maybe Uber,
the app might be the way to go.
Walgreens already has functionality intheir app that lets you pre-order items
from throughout the store andshell them for pickup. However,
(15:17):
if you read employee reviewson Reddit or Glassdoor,
you'll hear a common refrain that thecompany has underinvested in the number of
people it needs to deliveron the app's promise.
Overtaxed workers have to run aroundthe store collecting items like it's a
scavenger hunt even as they're tryingto maintain order at the photo desk.
The app only rewards you for planningahead. It doesn't account for impulse
(15:41):
purchases. The kind that CharlesWalgreen rightly predicted,
would become thefoundation of his business.
So here's where Walgreens mighttake a cue from the hotel industry.
If I can check into a Hilton property,
I can usually request a digital keythat unlocks my room even if I have
bypassed the front desk. So if I'ma trusted customer at Walgreens,
(16:03):
why not let me unlock those cabinetsmyself with my smartphone app?
If you absolutely must keepsome items under plexiglass,
why not just give me the key? And third,
this idea of being a communitytouchpoint deserves much more attention.
Walgreens has over 6,000 locationsleft even after their planned
(16:27):
closures.
That's 6,000 opportunities to be morethan just a place to pick up aspirin.
They can partner with local healthorganizations to offer wellness workshops.
They can create community health hubswhere people can get basic health
screenings, nutrition advice,
or even mental health resources.They can offer telehealth services,
(16:47):
vaccination clinics, ordiabetes management programs.
The pharmacy counter can becomea health education center and a
focus on super foods and wellnessproducts can expand into learning
opportunities.
You could go so far as to doing cookingdemonstrations for healthy meals
sessions with nutritionists or wellnesschallenges that bring the community
(17:10):
together.
These changes would require asignificant investment, yes,
but they are investing anywayin locks, security systems,
inventory control.
Why not invest in something that couldactually grow their business instead
of just protecting it?
Something that can transform theirstores from places people have to go
(17:33):
to places people want to go bettercustomer service creates stronger
community connections.
Digital innovations make healthservices more accessible.
When people see your store as avaluable part of their community,
they're more likely to protect it,
especially in the absence ofindependent local competitors.
(17:54):
It's a vision of retail that's lessabout transactions and more about
transformation.
It's less about protecting inventoryand more about serving people.
And in the end, isn't that what aneighborhood pharmacy should be about
after the break? What happens when yourfavorite internet service disappears?
(18:16):
That's up next on marginally better.
It's marginally better. I'm Joe Taylor Jr.
Do you know that feeling whensomething you use every day disappears?
That's what happened to 170 millionAmericans when TikTok went dark in
(18:38):
response to a law and a wholebunch of political mess.
And we won't get intothat. But here's the thing,
the response wasn't exactlywhat you might have expected.
Zach, a 24-year-oldregular user of TikTok,
I put it in New Yorker saying I wouldprobably forget about it in a short time,
(18:59):
and he's not alone.
While TikTok influencers wereperformatively crying themselves to sleep,
most users displayed a kindof shrugging acceptance,
and it's a pattern we've seen before.Remember when a OL was everything.
You've.
Got mail? That sound was theheartbeat of the internet.
(19:19):
Do you remember when Dig wasthe front page of the web?
Their declines sparkedgenuine mourning among fans.
But we all found ways tomove on. And as for TikTok,
the response has been more like watchinga favorite restaurant close. Sad,
sure, but you'll findsomewhere else to eat.
Even though TikTokreappeared after about a day,
(19:40):
the disruption made many users questionwhether they needed the service.
The real story here isn't aboutloyalty, it's about adaptation.
The influencers and small businesseswho built their livelihoods on tiktoks
algorithm are still scrambling,
but many had already hedged their betsacross platforms, Instagram reels,
YouTube shorts, they're allpart of the same ecosystem. Now,
(20:05):
here's what's fascinating.
The businesses that thrived most on TikTokweren't necessarily the ones with the
most significant budgetsor slickest production.
They were the ones who understoodits language, quick, authentic,
often imperfect. A restaurant showingthe sizzle of a dish, being made,
a bookstore employee's genuinereaction to a new release.
(20:27):
That's the kind of stuff thatcaught fire. So what now,
smart business owners arerealizing something important.
It's not about the platform.It's about the connection,
whether TikTok returns permanentlyor not. The lesson is clear.
Don't build your house on rentedland. Use social media as a tool,
(20:47):
not as a foundation. Createcontent that can live anywhere.
Build your email list, strengthen directrelationships with your customers.
Platforms come and go, but goodstories, those stick around.
And maybe that's the real story here,
not about what we lostwhen TikTok went dark,
(21:07):
but about what we might findwhen we look up from our phones.
Thanks for listening to MarginallyBetter. If you like what you heard,
please help us out. Leave aquick review on Apple Podcasts.
It will help us spread the word aboutthe show to people like you who care
(21:30):
deeply about great customer experiences.
If you want to get behind the scenesnotes from me and the rest of the team,
go to marginally better show.com orfollow the link in our show notes.
Marginally Better is aFRAX radio production.
Our producer is Nicole Hubbard withResearch by Connie Evans. I'm Joe Taylor,
Jr.
(21:52):
Frax Mean Little Planet. I.
From the global headquarters ofJohns Taylor in beautiful New Jersey,
it's marginally better.Here's your host, Joe Taylor,
Jr.On the show this week.
I believe that customer experienceand business performance go hand in
hand.
You can and will improve yourcompany's margins by investing in
(00:23):
experience.
So I've got three textbook examples ofcompanies that burst onto consumer's
radar with transcendentservice experiences and they
later paid the price when theydrifted away from those core values.
We'll deep dive into the recent fortunesof Walgreens who placed a bad bet on
locking your most urgently neededitems behind walls of plexiglass
(00:47):
and will examine what your businesscan do to protect itself in case your
favorite social networksuddenly disappears.
That's all coming up after thebreak on marginally better.
Welcome to Marginally Better,
a show about business innovation and theAmerican economy. I'm Joe Taylor, Jr.
(01:10):
My training. I'm a master certifieduser experience consultant,
and when working with ourteam at Johnson Taylor,
I'm helping our clients build websitesor apps at the sweet spot where their
business goals andcustomer's desires intersect.
But I've also reached this point in mycareer via some unusual roots As a radio
(01:30):
producer and journalist,
I've spent years telling stories andfiguring out what entertains audiences.
And I also spent six years working inApple during the transition between the
Steve Jobs and the Tim Cook eras.
So I know what it takes toship outstanding products backed up by transcendent
customer experiences.
So I was inspired to launch the seriesbecause there's a lot of chatter and
(01:53):
pessimism, especially aboutonline user experiences.
And I won't debate that.
I've walked away from plenty of projectproposals where a business wanted
us to goose their revenue numbersby making their experience a little
worse. And I'm proud that ourteams never taken that kind of job.
So as I've experienced them the pastfew decades have been about businesses
(02:18):
figuring out how to disrupt theircompetition through technology.
We're now at the point where everyone'susing the same old growth hacks.
Some tactics that our industrydeclared unethical 20 years ago are
now getting taught as basicprocedures in coding bootcamps.
And if you've listened to or read anyof the work from folks like Ed Tron,
(02:41):
Corey Dro or Molly White,
you know that consumers are getting fedup and they're calling companies out
on bad behavior.
People are waking up to the idea thatthey're not boxed into a single choice
for a particular good or service.And under those conditions,
the next few decades will reveala new cohort of successful
(03:03):
companies that can jumpstart theirfortunes by distinguishing their online
and offline experiences. And sure,
there's still an overarching schoolof thought in business that austerity
maximizes profits,
but you don't have to runyour business that way.
I believe that customer experience andbusiness performance go hand in hand.
(03:27):
You can and will improveyour margins when you invest
in experience, and you don'tjust have to take my word for it.
Let's talk about three textbook casesof brands that exploded revenues
by investing heavily inthe customer experience.
You know that feeling when you walk intoa store or call customer service and
(03:51):
you're already bracingyourself for the worst,
you're preparing for battle withsome mythical bureaucracy that seems
explicitly designed tofrustrate you. Well,
today we're going to tell youabout something different,
something that actually works. In 2008,
Starbucks did something thatsounds almost ridiculous. Now,
(04:15):
they closed every single oneof their US stores for three
hours, not for renovationsor deep cleaning,
but to retrain their baristas tomake the perfect cup of coffee.
Now, their CEO at the time who had justreturned to the company called it their
transformational moment. Andhere's the thing, it worked.
(04:36):
Their customer satisfaction scoreswent up 20% that year. More than that,
their stock price, it tripledover the next five years. Now,
as the New York Timesreported at the time,
Starbucks once a magic name on WallStreet is increasingly seen there
as just another big food chain.So they use the training reboot
(04:59):
to kick off a wave of growth builton their reputation for quality
products and services, andmost importantly experiences.
Should they do it again? Starbuckshas received some criticism lately.
Detractors worry that catering toospecifically to a fickle younger
demographic has increased waittimes when their cues are full of
(05:22):
complex customized TikTok drinks. Now,
there are few months into the tenure ofa new CEO who's promising to once again
bring the company back to its roots thistime by ensuring that they can deliver
a high quality handcraftedbeverage in four minutes or less.
We'll be seeing what happens.
(05:47):
Now,
imagine you're running an online shoestore and you decide to do something that
goes against every principle ofefficient business operations.
You tell your customer service reps tospend as much time as they want on the
phone with customers, no timelimits, no scripts, just talk.
(06:07):
And that's precisely what Zappos did.
They even amplified what is now a prettyfamous story. Maybe you've heard it,
where one of the reps spent over 10hours on a single call with a customer,
not because there was a problem, butbecause the conversation just kept going.
When Amazon bought Zappos in 2009,
(06:29):
they paid $1.2 billionfor a company that started
selling shoes out of a small apartment.
The New York Timesdetailed this at the time,
calling it a testament to the power ofcustomer service in the digital age.
And Zappos continues toexist inside of Amazon
as a standalone brand,
(06:50):
even though Amazon itself oftenbeats Zappo's pricing and delivery
speed,
all because of the loyalty builtfrom those powerful early customer
experiences.
You know what's interesting about Netflix?
They could have stuck with theirDVD by mail service. It was working.
People liked it,
(07:11):
but they saw something coming a shiftin how we consume entertainment.
And instead of fighting it,they did something remarkable.
They disrupted themselves.
They created an impossiblycomplex algorithm that could predict what you want to
watch. But here's what's fascinating.
They didn't just useit to recommend movies.
They used it to decide what shows to make.
(07:35):
And their first major original serieswasn't just a shot in the dark.
It was based on data showingtheir subscribers liked certain actors genres and
similar shows the results.
Netflix went from a companyworth about $2 billion in 2008
to, well,
let's just say its market cap todayhas made those early investors very,
(07:57):
very happy.
Financial Times captured thistransformation in a 2013 piece,
which revealed how the company'sdeep dive into customer preferences.
Reshaped not just its business, butthe entire entertainment industry.
A decade later,
they're facing criticismthat the algorithm has gotten too heavy handed and that
(08:18):
it's focusing too much on second screendelivery instead of letting creative
professionals make great work.
But it was that willingness to commitso fully to the customer experience that
vaulted them from a niche blockbustercompetitor to the kind of company that
can hire Beyonce to mount a footballhalftime show that's not even at the Super
Bowl. It's funny,
(08:41):
we often think about business asthis cold calculating thing, numbers,
profits, bottom lines. But what thesestories show us is something different.
They show us that sometimes themost calculating thing you can do is
care about your customers.In each of these three cases,
there are two possible outcomes.
(09:02):
Those companies can choose to disruptthemselves and regain the reputations for
powerful customer experiences.
Or they can sit back and watch whilesomeone new to the market pushes the
boundaries of thatexperience even further.
We'll be here watching and trackingtogether right here on marginally Better.
After the break,
(09:23):
the button Walgreens can press tounlock a revitalization in their stores.
Stay with us.
Welcome back to MarginallyBetter. I'm Joe Taylor Jr.
It's a story we've all seenplay out in our neighborhoods.
The local pharmacy wants a cornerstoneof the community now with bare
(09:46):
shelves behind plexiglass itemslocked away in cases and store
closing signs in some of the windows.
This is what's happening at Walgreenswhere an effort to stop shoplifting may
have ended up driving away the verycustomers they were trying to retain.
This story goes back to1901. Charles Walgreens Sr.
(10:07):
Worked in the successionof drugstore in Illinois,
eventually purchasing the store he wasworking in embedded in the corner of a
Chicago hotel. Accordingto company historians,
Charles hated the status quoin the drugstore business.
He thought drugstore weredark unwelcoming places.
He had some big ideas that changedthe shape of his entire industry.
(10:31):
Everyone who entered that first Walgreenswas greeted by the store manager and
sometimes by Walgreen himself.He widened aisles.
He added a bigger variety of products.
He figured customers would swing throughfor more day-to-day needs along with
their prescriptions, and hepioneered private label products,
(10:53):
often making better versionsof the things he was copying.
A few years ago, Walgreens had a problem,
like other retailers in theUnited States after the pandemic,
they were losing inventory.
Retailers tracked this witha metric they call shrink,
and it was an alarming rate.
So they did what seemedlogical to them at the time.
(11:16):
They started locking everythingup, deodorant, shampoo, toothpaste.
Items that used to sit innocentlyon open shelves were suddenly behind
plastic barriers requiring anemployee with a key to access them.
The company's CEO Tim Wentworth recentlyadmitted what many customers had
already figured out.
(11:37):
I just met with our head of assetprotection to look at some of the creative
things that we are looking at,
both as a company and as an industry asit relates to the customer experience on
Shrink. I don't have anythingmagnificent to share with you today.
It is a hand-to-hand combatbattle still, unfortunately,
but it does impact how sales work throughthe store because when you lock things
up, for example, youdon't sell as many of 'em.
(11:57):
We've kind of proventhat pretty conclusively.
It's a perfect example of how solvingone problem can create many more.
Walgreens announced it would closehundreds of locations this year,
part of a larger plan to shutter aboutmore than a thousand locations over the
course of a few years.
That'll bring the company's USfootprint from well over 8,000 locations
(12:22):
to slightly more than 6,000.
Wentworth has told investors that theissues facing Walgreens are common among
the entire industry, andhe's been floating plans to take the company private.
However,
the core of this debate extends beyondlocked up merchandise and stretch staffs.
It highlights a fundamental disconnectbetween security and service,
(12:45):
as well as betweenprotection and accessibility.
So what could Walgreens do differently?
We've got three pieces of advice thatcould help them get back on track.
First, customer service as security.
(13:08):
It's not enough to just throwmore people on the sales floor.
Walgreens must consider re-imaginingwhat security looks like in a retail
environment instead of a securityguard standing by the door looking
intimidating.
You can have well-trained employeesactively walking the aisles,
engaging with customers. They'renot just there to prevent theft.
(13:30):
They're there to help you find the rightsunscreen or explain the difference
between cold medicines orsuggest a good multivitamin.
This goes back to the practice thatCharles Walgreens started himself all
the way back in 1901.
This approach has worked remarkably wellfor companies like Costco where engaged
(13:51):
employees and excellent customer servicehave helped keep their shrink rates low
without having to resort to fortresslike security measures. It's very
common at high-end retailers tocross-train floor staff in both
customer service and lossprevention techniques.
But it's more likely that you could hiresomeone from the community who's paid
(14:13):
well enough that they can authenticallyengage with their neighbors who are
regular customers while maintaininga watchful presence over the store.
Now,
that may not be a popular move at apublic company that desperately wants to
report a lower payroll line item.
That may be another reason why they'rethinking of taking the company private,
(14:33):
but this is probably way lessexpensive than enduring that shrink
and surviving an exodus of customers whodon't prefer to wait for attendance to
unlock a bottle of detergent. Second,
let's talk about the Walgreensapp. It's a great first step.
It solves lots of problems by movingsome of the interaction from the pharmacy
(14:55):
counter to your phone and short,
not everyone wants to interact withWalgreens through an app all the time,
but if your competition increasinglylooks like Amazon and maybe Uber,
the app might be the way to go.
Walgreens already has functionality intheir app that lets you pre-order items
from throughout the store andshell them for pickup. However,
(15:17):
if you read employee reviewson Reddit or Glassdoor,
you'll hear a common refrain that thecompany has underinvested in the number of
people it needs to deliveron the app's promise.
Overtaxed workers have to run aroundthe store collecting items like it's a
scavenger hunt even as they're tryingto maintain order at the photo desk.
The app only rewards you for planningahead. It doesn't account for impulse
(15:41):
purchases. The kind that CharlesWalgreen rightly predicted,
would become thefoundation of his business.
So here's where Walgreens mighttake a cue from the hotel industry.
If I can check into a Hilton property,
I can usually request a digital keythat unlocks my room even if I have
bypassed the front desk. So if I'ma trusted customer at Walgreens,
(16:03):
why not let me unlock those cabinetsmyself with my smartphone app?
If you absolutely must keepsome items under plexiglass,
why not just give me the key? And third,
this idea of being a communitytouchpoint deserves much more attention.
Walgreens has over 6,000 locationsleft even after their planned
(16:27):
closures.
That's 6,000 opportunities to be morethan just a place to pick up aspirin.
They can partner with local healthorganizations to offer wellness workshops.
They can create community health hubswhere people can get basic health
screenings, nutrition advice,
or even mental health resources.They can offer telehealth services,
(16:47):
vaccination clinics, ordiabetes management programs.
The pharmacy counter can becomea health education center and a
focus on super foods and wellnessproducts can expand into learning
opportunities.
You could go so far as to doing cookingdemonstrations for healthy meals
sessions with nutritionists or wellnesschallenges that bring the community
(17:10):
together.
These changes would require asignificant investment, yes,
but they are investing anywayin locks, security systems,
inventory control.
Why not invest in something that couldactually grow their business instead
of just protecting it?
Something that can transform theirstores from places people have to go
(17:33):
to places people want to go bettercustomer service creates stronger
community connections.
Digital innovations make healthservices more accessible.
When people see your store as avaluable part of their community,
they're more likely to protect it,
especially in the absence ofindependent local competitors.
(17:54):
It's a vision of retail that's lessabout transactions and more about
transformation.
It's less about protecting inventoryand more about serving people.
And in the end, isn't that what aneighborhood pharmacy should be about
after the break? What happens when yourfavorite internet service disappears?
(18:16):
That's up next on marginally better.
It's marginally better. I'm Joe Taylor Jr.
Do you know that feeling whensomething you use every day disappears?
That's what happened to 170 millionAmericans when TikTok went dark in
(18:38):
response to a law and a wholebunch of political mess.
And we won't get intothat. But here's the thing,
the response wasn't exactlywhat you might have expected.
Zach, a 24-year-oldregular user of TikTok,
I put it in New Yorker saying I wouldprobably forget about it in a short time,
(18:59):
and he's not alone.
While TikTok influencers wereperformatively crying themselves to sleep,
most users displayed a kindof shrugging acceptance,
and it's a pattern we've seen before.Remember when a OL was everything.
You've.
Got mail? That sound was theheartbeat of the internet.
(19:19):
Do you remember when Dig wasthe front page of the web?
Their declines sparkedgenuine mourning among fans.
But we all found ways tomove on. And as for TikTok,
the response has been more like watchinga favorite restaurant close. Sad,
sure, but you'll findsomewhere else to eat.
Even though TikTokreappeared after about a day,
(19:40):
the disruption made many users questionwhether they needed the service.
The real story here isn't aboutloyalty, it's about adaptation.
The influencers and small businesseswho built their livelihoods on tiktoks
algorithm are still scrambling,
but many had already hedged their betsacross platforms, Instagram reels,
YouTube shorts, they're allpart of the same ecosystem. Now,
(20:05):
here's what's fascinating.
The businesses that thrived most on TikTokweren't necessarily the ones with the
most significant budgetsor slickest production.
They were the ones who understoodits language, quick, authentic,
often imperfect. A restaurant showingthe sizzle of a dish, being made,
a bookstore employee's genuinereaction to a new release.
(20:27):
That's the kind of stuff thatcaught fire. So what now,
smart business owners arerealizing something important.
It's not about the platform.It's about the connection,
whether TikTok returns permanentlyor not. The lesson is clear.
Don't build your house on rentedland. Use social media as a tool,
(20:47):
not as a foundation. Createcontent that can live anywhere.
Build your email list, strengthen directrelationships with your customers.
Platforms come and go, but goodstories, those stick around.
And maybe that's the real story here,
not about what we lostwhen TikTok went dark,
(21:07):
but about what we might findwhen we look up from our phones.
Thanks for listening to MarginallyBetter. If you like what you heard,
please help us out. Leave aquick review on Apple Podcasts.
It will help us spread the word aboutthe show to people like you who care
(21:30):
deeply about great customer experiences.
If you want to get behind the scenesnotes from me and the rest of the team,
go to marginally better show.com orfollow the link in our show notes.
Marginally Better is aFRAX radio production.
Our producer is Nicole Hubbard withResearch by Connie Evans. I'm Joe Taylor,
Jr.
(21:52):
Frax Mean Little Planet. I.
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