The Breakfast Champion Goes Down for the Count

BreakfastWhat Happens When an Entire Consumer Segment Suddenly Loses Interest in a Brand or Product Category?

Ugly results happen, that’s what. Just take a look at Abercrombie & Fitch, the retailer of upscale apparel to teens. Over the space of a year or so, teens have been abandoning A&F in droves as the retailer lost its design edge and cash-strapped teens found cheaper and more fashion-forward alternatives at other retailers. Maybe also, teens now self define status more by the mobiles they carry than the jeans they wear.

That’s powered sharp declines in A&F’s same-store sales, its net sales volume, and the fortunes of Michael Jeffries, its autocratic and gaff-prone chairman and chief executive — or to be more precise, its former chairman who is now chief executive only.

What that retailer experienced in a comparatively short period of time has been happening in slow motion in the food industry for a long time. For a decade or more, a huge consumer segment shifted away from a core supermarket category: breakfast. And the component of the breakfast category that’s taking the biggest hit is its former champion, cold cereal.

Let’s take a look at what’s going on. [Read more...]

You Have 7 Minutes To Create Value For Your Shopper

What Are You Doing About It?

I recently met with the head of marketing for a major UK broadcaster whose career had previously included senior roles in shopper marketing and innovation with P&G and PepsiCo. His path had taken him from working with major grocery retail groups on improving visibility and driving product sales for his brands, to finding ways to create distance between his side and the retailer’s own private label. With a move into broadcast I asked whether he felt he’d leapt from the frying pan of a hyper-competitive consumer product world into the fire of the media industry where advertising is increasingly seen as a secondary investment for brands.

His response was that their challenges were essentially the same: both have diminished roles due to changes in consumer preference and new competition; and neither yet had a clear roadmap for changing the models the industries have been built on.

The More Things Change, The More They Stay the Same

What led us here can be found in a simple review of history: in the 1950s brands were king. Consumers had newfound wealth, a desire to fill their homes with goods, and they weren’t yet jaded. In 80s-America, a TV spot that ran on three networks would reach 80% of consumers, stimulate interest, and drive sales. Retail was simply the only fulfillment channel. In the book, Absolute Value, authors Itamar Simonson and Emanuel Rosen argue that the rise of brands was in response to an information-poor environment; brands served as a proxy for quality. But in the 90s this all changed when Tim Berners-Lee created the early version of the Internet and suddenly the consumer could look under the hood, hear from others, get the straight story – this was the beginning of retail’s great tectonic shift. And today, according to Nielsen, almost 90% of consumers with smartphones use them to price check after making in-store product comparisons. [Read more...]

Ralph is the Greatest!

ralph_lauren_store_frontOk, I confess, I am in love with Ralph Lauren. Not the man, whom I’ve seen up close only once, but the brand, which I think is by far the greatest and most iconic American brand in the both the retail and apparel space and beyond. Ralph Lauren has created a world in which his brand lives. The brand is referred to as “The World of Ralph Lauren.” This is how the company refers to it, and, this is how we, as consumers, have been educated, by Ralph to think about and experience the brand. The World of Ralph Lauren is a place of elegance and luxury, of classic and rugged American style. The World of Ralph Lauren has its roots in a rich and glamorous American past. In an old world “WASP” lifestyle with touches of the American West; of polo players and yachts; of country houses, of Palm Beach, Nantucket, Southampton and the Maine coast; of old-school Boston and the New York establishment; of the Virginia hunt country and the ski slopes of Colorado, Utah and Idaho.  The World of Ralph Lauren presents very specific images of effortless and timeless style and taste. It is not pure fantasy. The images are rooted in an other-worldly reality that some people have actually lived. Picture the extended Kennedy family tossing a football in Hyannis on a fall afternoon, and then dressing for dinner at Downton Abbey. [Read more...]

A Secret (Sensual) Garden

tropicalFor more than 40 years, I’ve been making the pilgrimage to the greenhouses on the campus of Wellesley College. Named for the eminent Horticulturist Margaret Ferguson, the 16 interconnected greenhouses contain some 1500 different types of plants. The Brooklyn and Bronx Botanical Gardens may be bigger in size, but they cannot match the solitude and accessibility of this facility. It is as fast and inexpensive a world tour of nature as you can pack into 7200 square feet. As a troubled teenager in Massachusetts, I’d visit the “tropics” on a cold winter afternoon and experience the rich smells of my youth spent living in Asia. It was as close to the sentiments of The Mamas & the Papas in California Dreaming as I could get.

The greenhouses, then and now, contain rare collections of caudiciforms, mangroves, floating aquatics and my favorite, carnivorous plants. The Desert, Tropic, Hydrophytes and Fern greenhouses are distinctly different climate zones where the look, scent, feel and touch are as sensual and distinctive as any environment I’ve ever experienced. Each is a temple to the synergy of contemplation and botany. [Read more...]

Shoes Are Complicated

shoes_featuredShoes are not that easy to buy. Or wear. If you find the style you like they are often out of stock in your size, don’t fit, are uncomfortable or too expensive. Shoes are the one item of clothing I almost never purchase on sale. Well, I do try to find shoes on sale especially at the twice-yearly Bergdorf markdowns when the high-end shoe department on the second floor of that usually staid and elegant emporium is turned into a partially self-serviced frenzy for a few weeks. But, for me, the calculus of a shoe sale doesn’t work. It is just too difficult because there are so many variables. Like most consumers, I am looking for style, fit and comfort. Especially now, as heels have risen to ever greater heights; five-inch stilettos are de rigueur among stylish women (myself excluded from that category). Finding a shoe that is comfortable, fashionable and fits at the price you want to pay is a tricky business.

Today, we ladies need shoes for every occasion, function and style. A range of sport-specific athletic shoes; mud covered outdoor shoes for gardening and general mucking out; business and evening shoes in a variety of heel heights, colors, finishes and textures for different outfits and occasions; sandals, also in a variety of heel heights; rubber flip-flops, the go-to, all purpose beach and summer shoe; boots for all varieties of weather and fashion in various lengths and heel heights, leathers, patents or suedes; slippers and slip-ons for at-home wear. It seems that only yoga, practiced barefoot, requires no footwear at all.

[Read more...]

Mike Gould, Unplugged

Michael_Gould_RRAn Interview with Robin Lewis

Robin Lewis What do you think about the economy, how do you think it will be for the rest of the year?

Mike Gould I’m cautiously optimistic, but I’m always cautiously optimistic. You know, we’re in a business that if you’re a retailer and you’re not optimistic, you’re not a retailer. It doesn’t work. One of my beliefs, and one that I always tell the Bloomingdale’s team, is that my role is balancing hope and reality.

Where are our opportunities that are driving the business, and what is the reality of the moment? So to me, I think there are some really bright things in the economy right now. But I also think it goes back to the great comment by Charles Swindoll who said, Life is 10% what’s given you; 90% how you want to deal with it.”

For example, let’s take last March. It turns out to be the coldest March we’ve had in, I don’t know how many years, up against the warmest March in 100 years, a year ago. All right, that’s the 10% given us. So do we want to talk about that? Do we want to complain about it? It won’t do us any good. But that’s the 10%. So how you want to deal with it, that’s the 90%. So what do I think? I think there are so many good things out there right now. The Stock Market is obviously, touch wood, in terrific straits. The S&P is at an all-time high. The housing market has had an incredible comeback. Our car sales are at a high point over quite some period of time; so, you have to say there are a lot of good things going on. [Read more...]

Rules of Engagement

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

Click to See Chart Full-Sized

Click to See Chart Full-Sized

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...]

The Green Marketing Act

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...]

Hogwash

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...]

The 10 Commandments of Home

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...]

Michael Kors – A Tale of Two Brands

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...]

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

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...]