Sunday, December 13, 2015

Finding the Truth Behind the Numbers

The news Friday that Dow Chemical and DuPont are seeking approval to merge brought back memories of my first meeting with Leo J. Shapiro, whose expertise in social science research was instrumental in enhancing my journalism career and in making Chain Store Age unique, informative, must reading for retailers in the last two decades of the 20th century and the first 10 years of the 21st. Leo passed away in Tucson last month. He was 94.

The first time I met Leo, in 1979, in his firm’s then offices on the 37th floor of Lake Point Tower on the edge of Lake Michigan in Chicago, he observed that companies often choose a branding message in conflict with their everyday functions. 

Dow Chemical’s slogan back then was “Common Sense - Uncommon Chemistry.” DuPont’s was “Better Things for Better Living … Through Chemistry.” Yet both companies produced napalm and Agent Orange, the notorious herbicide used by the American military to defoliate much of Vietnam and consequently, tragically, causing “serious health issues—including tumors, birth defects, rashes, psychological symptoms and cancer—among returning U.S. servicemen and their families as well as among the Vietnamese population.”

In 1979 I had recently taken over as editor of Chain Store Age, inheriting a tradition of publishing a full-issue study in December on what we called a Great Retail Institution. The retailer we profiled always cooperated. For 1979 it was the F.W. Woolworth Corporation. 

Cooperation would not be the case for our 1980 profile—Kmart, at the time the second largest general merchandise retailer in the world with $14.8 billion in sales, behind Sears’ $16.9 billion (by comparison, Wal-Mart was a minuscule though growing chain with sales of only $1.6 billion. For 2014, Wal-Mart’s sales exceeded $473 billion; for the now combined Sears/Kmart, sales reached just $31.2 billion, of which $12.1 billion came from Kmart). 

Without Kmart’s cooperation we had to devise an alternative plan to secure information about the strengths and weaknesses of the chain. Publication director Paul Reuter spotted Leo’s name in an article in Advertising Age. It said his research firm, Leo J. Shapiro & Associates, had been following Kmart for many years. 

During that first meeting Leo explained that retailers, as do many companies, persist in doing things the same old way instead of moving on to the next wave of innovation. Sears, he opined, should have started a discount chain à la Kmart. Kmart, in turn, should have evolved into the more upscale Target or the more rural Wal-Mart. 

With Leo’s help Chain Store Age produced a publishing home run—more advertising than ever before and an editorial product recognized for its clarity and insight not only within the retail industry but also by our publishing brethren. The Kmart full-issue study was one of five finalists for a National Magazine Award, a rare achievement for a trade publication. 

Success in 1980 meant 1981’s December issue would be more challenging. Rather than profile a retailer we opted to work with Leo to produce the retail industry’s “1st Consumer Buying Intentions Study: Who, What, Where & Why They’ll Buy.” The study did not, as we expected, sell as well as the Kmart issue. 

But I almost fell off my chair when Stewart Orton, then chairman and CEO of Foley’s Department Store in Houston, in his speech accepting the Gold Medal Award of the National Retail Federation at its January 1982 annual luncheon, exhorted the thousands in attendance to read Chain Store Age’s December buying intentions study issue. 

Over the 30 years I worked with Leo and his partner, George Rosenbaum, Chain Store Age expanded the role of trade publishing. We innovated and published monthly and annual buying intentions studies as well as surveys on technology, credit trends, payment systems, loss prevention, store atmospherics, logistics and other topics never before distributed by a publication for the retail industry. Moreover, by including topical questions in their omnibus monthly national polls, Leo and George provided Chain Store Age with up to the moment insights on consumers.

“Garbage in, garbage out” is a widely held adage for anyone doing research. I always thought I knew what I wanted to study, but it was only after talking with Leo or George that I discovered what was truly worth researching. 


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