Like most people in the retail industry, merchandising is built into my DNA. It means I can’t walk through a store without straightening a shelf, wondering how well something is doing or chatting with a sales associate like they were my best friend. Unfortunately, it never switches off. Not even on vacation. I recently took a weekend cruise with some of my family. We were on a shiny new Carnival ship (Horizon) that just launched in April. There were lots of fun and thrills as most of these floating cities now must keep you and 5,000 of your closest friends busy. The ship had many things I have not seen on a cruise ship before including an IMAX theater, a sky bike (terrifying but fun), smart elevators (more on that later), and a significant amount of space devoted to retail. With limited physical space, the designers of the ship obviously had to think through how to optimize the selling area. There were several small stores- liquor, jewelry, logo merchandise, island apparel, and our favorite- the “Cherry on Top” candy store. Most of these stores had both an enclosed area and open “sidewalk” space. The enclosed part was very small- maybe 10’ X 8’. But outside the door, in the aisle were tables with products at promotional prices. With constant commentary of retail revolutions, the impending death of brick and mortar and the like, it was nice to see good, old-fashioned merchandising and promotion at work. I’m talking about the basic fundamentals that so many companies have lost sight of. Attracting customers with great displays, offering round the clock advertisements for specific items and holding experiential events to draw customers into the store to keep them there. Granted on a cruise ship your audience can’t escape you, but with so many choices of things to do, capturing their attention is no easy task. There was plenty of business in the duty-free shops. The souvenir shops had plenty of traffic, but the selection was very limited compared to the amount of space devoted to it. What really seemed to be doing the best was the candy store. Besides a fresh ice cream parlor in the back where you can pick your own toppings, they have the traditional bins with assorted chocolates, gummies, and hard candies. They also had several boxed gift sets and old-fashioned favorites targeted to my age group (remember pop rocks and bottle caps?). The point is that retail venues come in so many shapes and sizes these days but the simple formula of engaging and compelling the consumer still works regardless of format. Playing to the consumer’s imagination is still a dopamine rush that translates into more sales.
Now on to those smart elevators. I’ve seen them before in some buildings in NYC- you enter the floor number you want to reach, and you are assigned an elevator. There are no buttons inside the elevator. Generally, they work well because fancy algorithms are optimizing the most efficient way to move everyone to where they want to go. Sounds like a great idea for a cruise ship with 5,000 passengers. Not so much. At peak times, they were utterly useless. Waiting for an elevator, you have no idea when your door will open because you don’t see what floor it’s currently on. Am I waiting for a minute or 10 minutes? If there are 5 people in my party do I select the floor I want to go to 5 times, so the elevator can anticipate capacity? One fellow vacationer made the comment that he liked it because kids can’t go inside the elevator and push the button for every floor. About 10 minutes later I watched a kid hit the button for every floor- waiting for the elevator. Talk about killing the algorithm! When there were not large crowds, they worked great. When there were large crowds they caused more frustration than conventional elevators. At ERS we are in the inventory optimization business, so we know a thing or 2 about bias. It’s all about the model and making adjustments.
I commend Carnival for optimizing the retail space and creating something experiential and fun. But please, bring back the dumb elevators!