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Rules of Engagement

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Cotton’s 24-Hour Runway Show and Push-Pull 2.0

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The retail universe has long-since expanded beyond the confines of physical floor space and time. Online retail outlets have made shopping a 24-hour option for brands with or without brick-and-mortar complements. Brand marketing, too, is now a brave new digital world in which presence and consumer engagement are essential cogs in the machine. To succeed, there must be a synchronicity of disparate channels that encompass traditional advertising, digital advertising, social media and most importantly, the often-unpredictable consumer.

Hyper-dimensional marketing, or Push-Pull 2.0, plucks multiple messaging strings in the hopes of striking a chord with consumers. In traditional push-and-pull strategy, push referred to offering incentives to the supply chain, and consumer marketing was the pull. Today, Facebook, Twitter and the like, have shifted the strategic emphasis squarely on the consumer; push is now defined as brand outreach to the consumer, and pull is their outreach to the brand. The objective is to enthusiastically engage the co

nsumer in the brand experience; to have them participate, promote, and eventually purchase. [Read more...]

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Posted April 24, 2013

The Green Marketing Act

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cell phone sales_greenYou got rid of the landline three years ago because two-thirds of your calls were from telemarketers. Then you downgraded your cable service wondering why you were paying so much for so little. Now you watch stuff on your Tablet and laptop more and more. And when the price of a New York Times went up to $2.50, you decided to read news online from a wider variety of sources, and like it decidedly better.

Today, you live a new kind of life than you did five years ago. You have several e-mail addresses so that you can filter the spam. The snail mail is more than 90% junk so you’ve even stopped opening it; the envelope gets a glance and often gets chucked. When you drive, it’s commercial-free Satellite Radio since traditional ads, with their crazy voices and incoherent offerings, drive you crazy. You loved Marc Gobé’s film, This Space Available, downgrading billboards, and outdoor media in general, to visual pollutant status. You take a pleasure in buying the store’s house brand, not because you have to, but because the ‘superiority’ of branded products is something you seriously question. We watch commercials at the Super Bowl and Oscars for the entertainment value and once in a while on YouTube; the rest of the time you conspire to avoid them. [Read more...]

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Posted April 18, 2013

Hogwash

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iStock_000000315739_ExtraSmallAnd if You Believe It, I “Have a Bridge to Sell You.”

Hogwash is a great word, as I was reminded by my colleague, Judy Russell, CEO of consultancy Markethink. First used in the 15th Century, it referred to swill, slop, nonsense and balderdash. And it’s particularly appropriate when describing the findings of a recent study conducted by none other than the Boston Consulting Group, as well an earlier survey conducted by NPD in the fall of last year.

Up front and to be clear, I am not attaching the “hogwash” description to the methodology, and how the research was conducted by these two revered institutions; and not even the accuracy of the findings. I am describing as “hogwash” what the findings indicate would be consumer behavior in making a purchasing decision based on patriotism and a “made in America” label over price. [Read more...]

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Posted March 11, 2013

The 10 Commandments of Home

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tencommandmentsTO: Ron Johnson, Plano, TX
FROM: A Higher Authority
RE: The Way to the Promised Land

Cecil B. DeMille, where are you now that we need you?

The expedition that Ron Johnson is leading the Penney-ites on will not last 40 years – he’ll be lucky if he gets 40 months – but in just about every other way, the trek is of biblical proportions. Johnson is trying to free one of the most enslaved retailers in the business from what seems an eternity of lackluster merchandising, dysfunctional buying and a generally disjointed business strategy that seems to go in every direction but forward.

Frogs and pestilence have nothing on this saga.

Whether he can lead the company to the Promised Land remains to be seen. Frankly, 2012 was just a warm-up and the real test comes this year when JCP has to start anniversarying its lame numbers that started last February. If they can’t beat those comps, Bill Ackman – the hedge fund honcho who has been manipulating this whole thing from the other side of the balance sheet – is going to show why patience is not one of his virtues and there’ll no doubt be a new

sheriff in Plano before long. So, as Johnson tries to part the retail seas and find a route for JCP to succeed, I say it is his Home business that is going to help lead the way. More so than at any other national general merchandise retailer, JCP Home is a larger percentage of overall sales, led by soft home. That has always been a core strength of what those in the trade still call “The Penney Company,” and regardless of the name over the front door these days, if Home doesn’t work, JCP doesn’t work. [Read more...]

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Posted February 12, 2013

Michael Kors – A Tale of Two Brands

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MK_Charm-01I’ve long been a Michael Kors fan, buying gorgeous double-faced wool dresses on sale at Bergdorf Goodman or in the Michael Kors store on Madison Avenue—only at 70% or more off, after Christmas and in the early summer.

These dresses, and some pants, skirts, jackets and wonderful cashmere sweaters, are lined up like so many soldiers in my closet ready for almost any outing. The styles remain basically the same year-in and year-out. Beautiful fabrics such as the double-faced wool, along with heavier wools and tweeds, matte jersey, raw silk, satin, and cotton twill for summer. All styled classically and elegantly. Feminine. Flattering. Simple sleeveless sheaths and separates with some accessories, handbags and shoes to round out the collection. Wearable, luxurious, classic American style.

But now, since Michael Kors has gone public, the positioning of a lower tiered line, Michael by Michael Kors, into a global lifestyle brand seems a distinctly different brand proposition and one that is, perhaps, at odds with the couture line. Of additional concern is the thought that the couture line has suffered as a result of the greater attention to, and investment in, the lifestyle brand.

The lifestyle brand is designed and merchandised for a different and younger customer who likely has never seen, heard of, or cared about the Michael Kors collection or its understated, classic American positioning and style. These customers know Michael Kors from his successful appearance on Project Runway; from Michael Kors advertising; and from Michael Kors licensed watches, handbags and small leather goods featuring a prominently displayed MK logo in shiny brassy, brass. The new Michael Kors brand is described by management as a “global luxury lifestyle brand with a multi-channel strategy, unique design and strong infrastructure…a compelling assortment of luxury merchandise and exceptional service in a Jet Set store environment.”

The term “Jet Set” appears often in company communications. As a child of the 60’s when ‘Jet Set’actually meant something—picture Princess Margaret flying off to Mustique, Bianca Jagger going anywhere. And before international travel became so much more like getting on a bus at the Port Authority than departing in style at the Eero Saarinen designed TWA terminal at Kennedy— “Jet Set” was defined as: “An international social set made up of wealthy people who travel from one fashionable place to another.” [Read more...]

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Posted February 12, 2013

Q&A with Ed Schlossberg, Founder & Principal of ESI Design

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Robin Lewis: What in the world was Best Buy thinking when they discontinued their Studio D and Escape small store concepts several years ago? You designed these neighborhood boutiques to customize these stores for specific niche demographics and lifestyles. What’s the backstory on this?

Ed Schlossberg: I had this idea in 1998 to do something called a Digital Playground. I thought if these technology companies were going to be successful, they needed to let people play using digital stuff so that they could see what would work. So I made a presentation to Brad Anderson who was CEO of Best Buy, and he said, ‘This is fantastic, we would love to do this.’ He hired us to design the first Digital Playground. It took some time to get it going. When Brad hired James Damien as their visual merchant, he was really excited about it, and we kind of became his team.

RL: What was the design strategy?
ES: Each store was designed and imagined differently, with customized merchandising and service strategies, and all were highly educational. Our design strategy was to work from the customer’s perspective into the design and not from the product or store out to the customer. It was to create a model based on the needs and interests of the customer and then create a way to meet those needs in the store using physical design, staff, virtual tools and an online component. [Read more...]

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Posted October 23, 2012

lululemon: A Cult, a Phenomenon or Just a Great Brand

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The Robin Report - lululemon

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A few years ago, I noticed a woman in Central Park with what I thought was a tag or store sticker on the outside of her pants. “You still have the tag on your pants,” I told her as I passed her on the track. “That is the label, it belongs there!” she explained. This was the first time I noticed the Lululemon brand icon. The logo is featured on pant legs in a way that looks like it was stuck there. An rounded A shape that appears like an upside down U, it is inconspicuous, but, for those in the know, it is the sign of membership in what is one of today’s most powerful brands.

Lululemon was founded in 1998 in Vancouver, British Columbia by Chip Wilson, a 20-year veteran of the surf, skate and snowboard business, who noted a need for a more technical and performance-based product after he took, and loved, his first yoga class. Wilson, now a Forbes ranked ‘Yoga Billionaire,’ stepped down from his role as CEO and passed the reins to Christine Day, a former Starbucks executive. Wilson remains Chairman. Together Wilson and Day hold approximately 32% of the company’s outstanding shares. “We like that management has skin in the game,” a Morningstar report noted recently.

Lululemon opened its first store in 2000. The company now has 147 stores in North America. Lululemon is one of the fastest growing companies in the retail and apparel space and is outperforming the industry on almost every level. Lululemon management is projecting FY 2012 growth of 25% with same store sales growth at 25% and direct to consumer growth, which accounts for 14% of sales of 179%. Last year the company reached a billion dollars in sales; this year the company is projecting revenue in the range of $1.3 billion. And it holds no debt. [Read more...]

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Posted October 23, 2012

QA with Eric C. Wiseman, Chairman, President and CEO of VF Corporation

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The Robin Report - Eric WisemanROBIN LEWIS So, right off the bat, how the heck can one person run a $10 to $12 billion company?

ERIC WISEMAN You can’t! VF has been, and I hope always will be, a team sport. When I look at the leadership teams around VF there’s no question that we have really talented people, but we don’t have “superstars.” What we do have is people who work extremely well together, who compliment each others talents, and who are committed to the teams success. That dynamic drives whatever success we’ve had. And, since you know me pretty well, you obviously know that I’m not capable of “running” VF….if I was I’d have a much different balance in my life.

RL So, Eric, the numbers on VF under your watch as CEO speak for themselves, and they would say you’re doing a great job.

EW For about five years now, since we’ve changed directions corporately, we’ve been executing on the right things. So, when you execute against the right things it generally works for you.

RL Going into the last half of this year against a rather negative global and U.S. economic backdrop, do you want to revise your earlier 15% growth projection for 2012, or at least hedge your bets, and if so, in what areas of the business? [Read more...]

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Posted September 10, 2012

How to Get a Bigger Share of Foreign Visitors’ Wallets

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The current economy poses challenges for all merchants, but stresses on brick and mortar stores are particularly heightened. The wave of closures that accompanied the Great Recession was only the start of a protracted move for chains to reduce their excess amounts of retail square footage; according to many retail analysts, America remains significantly “over-stored.” At the same time, the rapid and steady rise of e-commerce makes for greater displacement, with increasing numbers of Americans preferring to do their shopping from their homes or offices, or even from their phones. Brick and mortar stores, it seems, are left to duke it out for their share of an at-best limited domestic pie.

Fortunately, that domestic pie is not all there is. Foreign tourists and business travelers have been finding America to be the Golden Land — of shopping, anyway — and overwhelmingly they are not doing that shopping online but in person, in brick and mortar stores. What this means is that merchants can leverage cross-border spending to drive U.S. domestic sales as well as share growth, if they can find a way to target and keep those foreign customers. Key to building a cross-border strategy is an understanding of where to focus merchant efforts. That is, merchants must now put the same kind of effort into identifying and understanding their foreign customers as they do their shoppers here at home. [Read more...]

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Posted July 17, 2012

The ‘Do Nothing’ Avon Board…Too Little, Too Late — Dividend in Jeopardy

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Rarely has a new CEO jumped into a big-time, high-profile turnaround situation such as Avon Inc. presents. And if history is any guide, the ‘Do Nothing’ Avon Board of Directors will not be of any help.

Sherilyn S. McCoy who took over the CEO slot on April 23rd must hit the ground running. And not only must she put out short-term fires, she also has to develop a long-term strategic plan — on the run. Simultaneously, she must learn a new (for her) direct-sell business model. Plus she has to deal with SEC probes of bribery charges in China; insider trading accusations; and a myriad of operational malfunctions. In fact, many are questioning her first major judgment call concerning Avon, and that is accepting the job in the first place.

McCoy, who was formerly Vice Chairman of Johnson and Johnson, was passed over for the CEO job at the $65 billion pharmaceutical giant in February. McCoy gets high marks for  reinvigorating the pharmaceutical division at J&J facing patent expirations on major drugs. She did not have as much luck when she took over J&J’s consumer business that was hit hard by manufacturing problems leading to the recall of products ranging from Tylenol to baby lotions.

Andrea Jung, former CEO and current Executive Chairman, who has controlled the ‘Do Nothing’ Board for over a decade gets the blame for Avon Products’ current sorry state of affairs, and she deserves more than her fair share. But the real culprit is the Board of Directors. Inexperience cannot be the explanation. The majority of the Board has had some experience with the direct selling model, as six of them have been members for 10 or so years. How deeply they understand the model is another question.

By the time the ‘Do Nothing’ Board acted, the company was already spiraling out of control. Unless Avon’s McCoy turns out to be Houdini, and can pull a rabbit out of a hat, it may well be too late to save the 125-year-old direct-selling beauty company. [Read more...]

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Posted July 17, 2012

Think Global, Act Local Goes Organic – And Then Some

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Most people know that you need to adapt your business, products and marketing to local tastes and cultures when you’re expanding globally. What fewer understand is that, increasingly, the same applies to marketing in the good ole U.S. of A.

The so-called “foodie” movement that continues to gain momentum and traction in this country has become defined by the appetite of many consumers, called “locavores,” for locally produced (not to mention organic, free range and grain fed) farm fresh food products. It now also has a number of local beer, wine, and liquor followers all becoming agents of continued change in where, what, and when we produce and buy food.

Although the localized production and consumption movement is looked upon as something new and different in the U.S., it of course dates back to before the early 20th Century, when processed foods became the norm. The crux of the proverbial biscuit though, is that this lifestyle is centuries old for the rest of the world, and ironically it’s now coming back around to us.

Locavores embrace the availability of organic, local, seasonal, and same-day fresh produce as well as seafood, baked goods, poultry, and various meat products. They have their own language, using terms like artisanal, biodynamic, grass-fed, heirloom, line-caught, market table, and terroir. The movement has even impacted urban centers like New York City, where large rooftop gardens are emerging and succeeding as small businesses. Urban farmers rent the top of commercial rooftop buildings to grow local, organic produce. Landlords benefit from the free insulation, saving on energy bills. These urban farmers sell direct to restaurants, stores and street shoppers. [Read more...]

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Posted June 5, 2012

When is a Sale Really a Sale? A Shopper’s Perspective

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I am a sale shopper, taught at an early age by my mother and aunts to look for bargains. We needed to get the most value and style for our relatively limited means, but I soon became drawn by the sport of it. Why pay more for what you want, when you can pay less?

The Robin Report - SaleI belong squarely in that segment of shoppers who do not want to pay full price for anything. Fortunately, there are so many sale shopping options today that I can almost always get what I want for at least 50%, if not 75%, off the full retail price. Just googling “sale shopping” yields nearly 2 billion results – and that doesn’t even include eBay. When I came of age there were only a few ways to get a good bargain. One was to wait for the semiannual department store sales.Yes, there were only two: one right after Christmas (and before retail inventory season), and the other after Easter or Mother’s Day. If you had connections, you could also try to “get it wholesale.” That meant if an item cost $75.00 you could get it for $37.50. Occasionally, if your connections to the manufacturer were particularly good, or, if you were a sample size, you might get the item for the wholesaler’s cost which would be about $18.75, or 75% less than full price.

There were also manufacturer’s outlet stores. These were ‘real’ outlet stores, filled with goods that were actually manufacturer overruns or mistakes, not outlet stores filled with merchandise made exclusively for outlet stores. There were also off-pricers like Loehmann’s, the cathedral of deals in the Bronx, with its legendary community dressing rooms where you could buy a Bill Blass or Calvin Klein (when those were actual designer clothes, not licensedbrands) for about one third the retail price. And, there was the original Filene’s Basement located in downtown Boston. I can remember the excitement I felt when I made my first trip there. [Read more...]

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Posted June 5, 2012