Sentimental Journey

Over the recent Thanksgiving holidays, my husband and I traveled to Chicago to visit my parents. The talk of the town was not the success of the White Sox or speculation about political races -- the big topic of discussion was the news that Federated Department Stores had decided to retire the Marshall Fields brand, the storied Chicago-based retailer that Federated acquired recently, and replace it with Macy's. Not surprisingly, Chicago-area residents -- especially those of a certain age (40 and older) -- think this is sacrilege, tragedy, insult, whatever.

When I learned of the planned change, my first reaction was similar: outrage! But then I started thinking about how much easier holiday and birthday shopping for both my Chicago and New York families will be with the Macy's brand in Chicago -- kind of like bringing the standards model to the shopping experience!

It's not clear how much money these bereft consumers actually were spending at Marshall Fields in recent years, but tradition is tradition as far as they are concerned. Even so, local retailers pretty much are an endangered species -- as with insurance, scale, national brand and operational efficiency will trump tradition most of the time.

Meanwhile, in the New York metropolitan area, the event of 2005 as far as baby boomers were concerned was the replacement of oldies radio station WCBS FM --known for shows such as "The Doo-Wop Shop" and Top 40 countdowns from the '50s, '60s and '70s -- with something called Jack that plays an uncategorizable mix of songs from the past 15 years or so and is targeted to listeners in their 20s. But while the research indicated this would be a smart move sure to boost ratings and deliver a more attractive audience, Jack has turned out to be a bomb. Not only has it not drawn the "more desirable" listener demographic, but, of course, the station (and its parent) has completely lost the not-so-undesirable -- and at one time extremely loyal -- baby boomer customer base.

There are a few lessons here for insurers. One, all the research, analytics and segmentation in the world won't guarantee a successful distribution strategy. Two, it's not just teenagers who have strong attitudes about how they do business and with whom they do it -- their parents and grandparents do, too. Three, there may be no room for sentiment in business, but common sense surely is an underestimated quality.

Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio