The Expected World

Continuing each Monday another excerpt from my book:
Aristotle Onassis, the Greek shipping magnate also known as Jacqueline Kennedy’s second husband, once said, “The secret of success is knowing something nobody else knows.” He was right, but I would word it a little more broadly: “The secret of success is seeing something nobody else sees.”
In order to creatively explore the world around us and the opportunities it holds, we must first open our eyes and minds to these opportunities. There are probably a million ways to see such opportunities. In this chapter and the three that follow, we’ll look at some of the most useful techniques. We’ll first look at how to ditch our expectations and then at how to see what others do not see.

It’s amazing how much of our time we spend in ruts. This is “the expected world,” because it is exactly what we expect.

I discovered this some years ago, while developing the BOOKSTOP concept. In the 1970s, it became clear to me that one of the most significant retail trends for the next twenty years would be the rise of the superstore—the “category killer”. The idea, invented by Charles Lazarus and his colleagues at Toys “R” Us, was to sell a wide range of merchandise in a specialty category, sell it at competitive prices, and sell it in large, well-organized stores. Instead of scattering fifteen little stores around a city, build five monster stores.

Large stores have economies of scale. Retailers like Kmart and Sears already understood this, but most specialty stores of the time did not. By operating a large store, superstores reduced real estate, payroll, and other costs reduced relative to sales (the total dollars involved were more, but they were a smaller percent of sales).

Anyone observing Toys “R” Us (and watching its profit statements) saw a company that made millions of customers happy, created thousands of interesting jobs, lowered prices, and made exceptional profits. I believed that this powerful new concept would sweep through retailing. This was the mid-1970s, when Toys “R” Us was going strong but few other superstores had started up. Home Depot, which ultimately built the largest superstore company, did not open its first store until 1979. In later years, these companies were followed by other entrepreneurs who created more superstores, including Circuit City, Best Buy, Bed Bath and Beyond, PETsMART, Office Depot, Staples, and Virgin Megastores.

Thus my study of the retailing industry indicated that my odds of success would be improved if I applied this new technology — the superstore — to some category of merchandise. But what kind of merchandise should I sell? The answer to that question came from studying people. If I could link into some growing or accelerating demographic trend, my odds of success would increase.

The most important trend among consumers was the rise of the baby boom, the surge of children born between the end of World War II and the next low point in births – 1973. People of this generation were better educated and more active than their parents, had broader interests, were committed to continuing self-education, and were children of the television age. They included the Woodstock generation, but in the latter part of the twentieth century, they would be getting raises, buying houses or renting bigger apartments, raising kids, and living in the suburbs.

As longshoreman/philosopher Eric Hoffer said, today’s protestors are tomorrow’s insurance salesmen. Given these trends, I believed that this huge population group would increase their spending as they aged, and that they would in particular spend more on toys, recorded music, sporting goods, home improvement, auto parts, and books.

If I could bring the superstore concept to one of these categories, I would take advantage of both current trends in the retail industry and long-term trends among consumers. Since I love books and bookstores, I chose the book business.

Early in the process of planning BOOKSTOP, I attended the 1981 annual bookstore industry convention, held that year in Atlanta. I thought the gathering would be abuzz with talk about superstores, and I wanted to see how they regarded this coming trend. I went to a workshop labeled “The Future of Bookselling,” expecting a discussion of the coming of the superstore. But all I heard was talk of factors that were already at work — such as the competition from book clubs and from wholesale clubs like Sam’s and Costco. The superstore was never mentioned. It was as though the booksellers had never been to a Toys “R” Us. Certainly they had never looked at the superstore chain’s annual report, which contained the numbers that proved the concept. When talk turned to customers, the primary observation voiced was that “No one is reading anymore.” In fact, this was the opposite of what was happening, and would continue to happen into the 1980s and 1990s.

Why did no one in the industry see what was coming? Were they idiots? Not likely. Was I a genius? Even less likely. The people in the bookselling business were (and are) a very bright, well-read lot. All I could figure out was that the booksellers were a little parochial – they never got out of their stores, they never looked at other types of retailing or studied successful retailers outside of the bookstore business.

My understanding of this phenomenon evolved further several years later when I decided to try to see the future of the travel agency industry. I went to a convention of travel agents. I knew these people were not parochial — after all, their passion was getting out and seeing the world. But my experience there was a recap of my experience with the booksellers. I sat in the room while the guru flipped her charts and talked about competing with the wholesale clubs, by now a familiar song. She talked about how the agents should be concerned because banks were opening travel agencies. (I thought, “Boy, if they’re afraid of banks as marketers, they’re afraid of the wrong people!”) I heard no one talk of selling luggage and travel books in addition to tickets; I heard little discussion of more exciting ways of merchandising and more convenient hours of operation; I heard not a word about the coming of online travel booking.

Sitting in that seminar, I finally realized that the booksellers were neither stupid nor parochial, that the travel agents weren’t dumb or indifferent, but that all of us tend to think in familiar channels. We all get into ruts. It took me years of attending conventions — of everything from bookstores to university fundraisers — to realize that most people never venture outside their own industries. Doctors don’t go to lawyers’ conventions, hardware store owners don’t go to restaurant conventions. Heck, brain surgeons don’t even go to heart surgeons’ conventions! It can be very difficult to see beyond the four walls of your store, your office, your sanctuary. If you’re not looking around, you’re not likely to see much.

Lots of folks would like to become rich. Some of them go to get-rich seminars. I hate to tell them, but when they’re eighty years old, they won’t be rich — they’ll just be experts on get-rich seminars. Why? Because the basic rule of discovery is that nothing has ever been discovered by looking in the same place and in the same way as everyone else.

If you must look at the same things as everyone else, at least look at them in a different way — wear colored glasses or stand on your head.