“I’m Dying to Make Your T-shirt For You”

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What’s Wrong With That Statement?

Am I wrong to be disgusted over the blatant irresponsibility of some of the largest retailers and apparel brands in the world, as well as the governments and factory owners in the countries sought for the lowest possible manufacturing costs? Not to mention their collective and total disregard of the horrific working conditions; “slave labor” compensation; indeed the very lives of those making the world’s precious apparel? I will answer for you. Not only am I right, we should all be disgusted.

But let me be clear. I am singling out those brands and retailers who have far too long “kicked the can down the road,” avoiding direct responsibility for dealing with a “slave-like” process, albeit a very complicated one. Why am I singling them out, and detaching them from the fraudulent and corrupt governments and businesses they must deal with? Because at the end of the day, it is their supply chain. They control it. They own it. And, they are the only entity in the whole rotten process that has the clout to correct it.

Some are doing it right, and you know who you are. Many have not done anything about it, or at best deferred direct responsibility, and you know who you are.

So, for those of you who have “passed the buck,” “turned a blind eye,” and generally stuffed it down on your priority list, I am “in your face” about your supply chain. And yes, it is your supply chain!

At the beginning of your supply chain there are people literally dying to make your stuff for you, for as little compensation as their greedy factory bosses can get away with. Why? Just so they can subsist at some groveling level, so that you, at the other end of your supply chain, can make a fortune and continue to subsist in “opulence” (certainly a lifestyle beyond what that groveling worker can even imagine). And let’s not forget how attached at the hip you are to your compulsively addicted, and excessively consumptive consumer, who just wants more, more, and more for me, me, me — and oh yes, cheaper, cheaper, and cheaper.

And I don’t have to tell you that in order to continue to give more and cheaper to that consumer, while still maintaining your wonderful lifestyle — and, oh yes, giving Wall Street what it demands — somebody has to take the fall and give more for less somewhere in your supply chain. And where might that be? Just think about the now 1100 dead, plus the injured, disabled, and their extended families now living in horror in Bangladesh. And then think about what the greedy, fraudulent, corrupt, criminal bosses and politicians do to do to keep up their lifestyles by promising to give you “more for less,” regardless of what it takes to make that happen.

Disgusting? It’s beyond disgusting. And, I declare it is your supply chain even though you may share those poor workers with other major brands and retailers.

And while I’m at it, I’m also sick of hearing about how we lift up these third-world economies by importing billions of dollars of stuff, which in turn provides jobs for their poverty-level populace, thus creating a virtuous cycle of growth. Growth for whom? Growth for the bosses and politicians I described above, riding on “the backs” of cheap labor. Indeed, in harsh reality, it’s a vicious cycle of depression and death for those of least value to your supply chain – the workers.

It’s Your Supply Chain – Only You Can Do Something About It

So, I really have no interest in reading or hearing about consortiums, NGOs, and big gatherings of “Mr. Bigs” to figure out what to do about this horrific situation. We know where “designs by committee” end up; much less, committees that are made up, and largely led by, the very same people who have caused this disastrous situation in the first place — and whose interests benefit from keeping this as status quo.

At the end of the day, it is your supply chain, period. So, do something about it on your own. Get “feet on the ground” where this horror is playing out, and do the right thing by forcing those at the beginning of your supply chain to do the right thing. And then keep your people on the ground to enforce it.

And if the bosses don’t adhere to your demands, just plain fire them, as you would any other employee that doesn’t work by the rules. YOU are the money train for the entire supply chain. Only YOU can make the right thing happen. If costs go up and you lose a few bucks on the bottom line, at least you may be saving a life at the very beginning of your supply chain.

So, do the right thing! Or, go live with yourself in a dark closet somewhere filled with clothes made by “slave labor.”

How Do Changes in Brand Loyalty Shift Marketing Responsibilities?

The Robin REportSupermarket retailers are facing a sea change when it comes to how the products they sell are marketed. That responsibility is going to migrate from manufacturers to the retailers themselves before too long.

Why? Because supermarket shoppers are a fickle bunch. And nowhere is that more evident than in their fast-changing attitudes toward brands and their loyalty to them — or, to be more precise, their lack of brand loyalty.

Of course, brand loyalty has been fading for a long time, but for the first time, surveys of motivations behind consumer buying decisions show that a large majority of supermarket shoppers have no brand preference at all. Instead, they are prone to swing between brands, or to opt equally for specialty or store brands.

Several newly issued consumer studies show how dramatic the decline in brand loyalty is. For instance, Deloitte’s American Pantry Study shows that 90% of shoppers at least occasionally will opt for a store brand in lieu of a national brand. That finding is backed by other surveys that indicate a striking 56% of shoppers have no brand loyalty at all.

This lack of brand loyalty gives national manufacturers of consumer packaged goods (CPG) every reason to feel agita. It also means that manufacturers soon won’t have the wherewithal to do all the heavy lifting concerning product promotion.

So, if manufacturers soon won’t promote as effectively, who will? Well, the only player left is the retailer.

Here’s some of what retailers will have to do better on their own:

  • Seize the product-development initiative from national CPG manufacturers. No longer should store brands mimic national brands in content or appearance. Instead, store brands should be high-quality and attractively packaged products in their own right. They should be priced near, or even above, similar national brands’ price points. Supermarkets can also lift a page from Target’s playbook by offering tiers of store brand product ranging from value offerings to high end.
  • Make the supermarket stand for something. It should be conspicuous to shoppers that the store means, say, quality, innovative products, or price. Limited assortment operators including Whole Foods, Trader Joe’s and Aldi, respectively, already do this. Or, like Target, supermarkets can stand for “cheap chic.”
  • Make the supermarket an inviting destination so customers will want to go there instead of viewing shopping as drudgery. That means the supermarket must have high-quality perishables departments, be convenient to shop, and feature high service levels. Supermarket operators Wegmans and Publix already do a good job of this.

Even with those basics under their belts, supermarkets still will face a few challenges. That’s because consumer studies show that huge majorities of shoppers are looking for quality products throughout the store — up to 75% of shoppers say that is what they have in mind.

And, just to complicate things, many shoppers make buying decisions on the basis of whim or desire rather than more rational-seeming reasons.
Finally, retailers must market with this conflicting mandate in mind: shoppers still demand reasonable price points.

Now let’s return to the original issue of the decline of brand loyalty. A multitude of reasons have contributed to the phenomenon, but the longest-running factor is the migration of mass media toward niche media. There was a time when brand owners could blanket the consciousness of consumers with a few strategic ad buys in broadcast and print media. Those days are long gone.

Other factors include consumers’ growing awareness that food and health are intertwined. Consumers also are on constant lookout for new and attractively designed products; some 20% of shoppers seek new-product alternatives during every store trip. Neither of these factors cater to CPGs strong suit.

In the end, maybe it’s just as well that mass marketing is disappearing and consumers are more assertive about what products they want. Retailers using new media to cater to small groups of like-minded consumers or even individual consumers have in their hands the means to present to shoppers just what they’re seeking.

Why All the Fuss About Martha?

MarthaStewartJC Penney, now JCP, and Macy’s are at war over Martha Stewart. The Appeals Court ruled recently that Penney could sell Martha Stewart product temporarily, but, not under the Martha Stewart brand name. The question of why the now-departed JCP CEO and former Apple and Target superstar, Ron Johnson, and the lifestyle guru and home goddess, Martha Stewart, agreed on a relationship under the umbrella of the existing Macy’s contract – kind of like having two husbands or wives at the same time – is best left to other experts. But the question of why all the fuss about Martha, why two major and competing retailers are willing to fight for her, goes well beyond the legal challenges. It goes simply to the strength of the Martha Stewart brand which is arguably the leading non-apparel brand in the country, perhaps rivaling only Ralph Lauren in the strength of its conviction, equity, vision and imprimatur of its founder, the inspiration providing, Non-Executive Chairman, and, convicted felon, Martha Stewart. [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...]

Private Labels, Public Nuisances, and Captured Moments

rr_3-13_private_labelAll the recent hubbub over a certain Connecticut homemaker’s image and brand is only the tip of a major merchandising movement that is starting to consume the home furnishings field. As national brands continue to recede from the category—they are pretty much null and void in soft home categories, like sheets and towels, and hold a tenuous position at best in some smallappliance and housewares classifications—the ascendency of private and captured brands is nearing unprecedented levels.

The spectrum goes from the extreme of Kohl’s where virtually the entire home department is proprietarily branded, to stores like Target, and now Penney, where soft home is all private and hard home is mostly national brands—to ones like Macy’s and Bed Bath & Beyond where the assortments are still…well, assorted. [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...]

The Perfect Fit at Bloomingdale’s

meality_bloomingdales_350We all know about the problem of lousy fitting apparel, but, the percentage of women who can’t find clothes that fit is awesome: try 62%, and online, it’s the biggest barrier for trying new brands. Worse for retailers, $45 billion of it is returned annually from both store and online purchases. Those are staggeringly bad numbers. And we are not just having a “hissy-fit” over bad-fitting apparel. This is reality and has been for as long as I’ve been in the business, which is now way too long. [Read more...]

Hey JCP: We Millennials Will Demand Fair and Square

grace_ehlersRon Johnson’s highly publicized tenure at JC Penney has ended, and perhaps with it, the potential of JC Penney to compete for the middle class Millennial. Sure, they may regain the customers they lost by reinstating the deals-centric retailing of Myron Ullman, but the customer base that JC Penney took losses to acquire, short of their $1 billion loss in 2012, is the lost customer base of JC Penney — the middle class Millennial, from the young family segment all the way to the senior in high school.

Older Millennials will tell you they remember the uncool Target of their childhoods; the deals, the cheap quality, the ducking-out-if-you-saw-anyone-you-knew Target. The pre- (ready your best French accent) “Tar-JSHAY” Target. It was really uncool, and what’s more, it was really uncool to shop there or have anyone shop there for you. Fast-forward a decade, and the Target website is crashing in response to the millions vying for anything from their Missoni X Target collection launch. JC Penney became what Target was, and if significant directional changes are made to Johnson’s visionary long-term plan, JC Penney will stay that uncool store.

Assuming JCP does not stay the course, they will not finally secure their hard-earned, first-time customer. The return of pre-Johnson deals will drive Millennials further from the brand (“fair and square” pricing could not have a better fit for this demographic). Removal of all the brands that Johnson acquired, such as Joe Fresh, will leave Millennials without any reason to try the brand out in the first place. Taking away the innovative tech options, which we’ve come to expect, to enhance the experience won’t go over so well either.

It is impossible to say if Johnson’s plan would have ultimately worked– each quarter seemed to prove otherwise. But there was something happening in Johnson’s tenure that wasn’t yet quantifiable with ROI– the middle class Millennial was reconsidering their disgust for JCP. We were intrigued– we may have not yet visited a store, but we could see ourselves actually doing that. Joe Fresh is in JCP? Really? We might have checked that out. The necessarily slow process of attracting the Millennial consumer was just beginning, the only thing missing was the mandatory push of recommendations from friends – the viral marketing connection. Johnson’s last step, and his most crucial — from a brand standpoint and an investment standpoint — was getting that consumer inside the store, if only to replace the droves leaving the retailer after “fair and square,” which proved to be the undoing of his entire legacy. But what Mike Ullman and the rest of us should understand, is that we were standing there right outside the door, just about ready to walk in.

Crows, Crows Everywhere, and Which Ones to Eat?

robin_lewis_crow_medNote that the crow sitting on my shoulder is not yet on a plate waiting to be eaten. That’s because I’m trying to remember all the reasons for which I should be eating crow, and when I identify all of them, how I might gracefully go about eating all of it.

But before I get into that, I must inform all of my readers who may have been living on another planet, that the subject here is perhaps the most colossal, dramatic, tragic, transparent, rapid and microscopically tracked meltdown in the history of retailing. That being the current saga of JC Penney, along with its producer, director and leading man: Ron Johnson.

I say meltdown because JC Penney is not yet dead (Johnson isn’t either, but regardless, the vultures are picking away at him with glee). In fact, I’m still confident (and hopeful) that one of the biggest reasons for which many of you believe I should be eating crow, is my continuing and steadfast belief in Johnson’s ultimate vision: that of a transformed, uniquely-compelling shopping experience, appealing to a more contemporary-minded consumer who would form a new customer base, perhaps a smaller, yet more productive business, but nevertheless poised for growth vs. maturity.

As I’ve stated before, based on my tour of the mock-up store and some of the real conversions made in other doors, the major component of his vision was off to a good start. Anecdotally, Joe Mimran, CEO of Joe Fresh, commented to me just two weeks out from the Joe Fresh “shops” launch in about 700 doors, that he was surprised at how sales far exceeded their expectations. So, of all the parts of Johnson’s strategy that Mike Ullman will be picking through to determine what is salvageable, my hope is that he and/or his successor will continue to implement that transformation. And, by the way, Ullman, in my opinion is absolutely the right person to come back to the helm during this period of operational disruption and disarray, with financials about to go over the cliff. He will stabilize the business, its culture and will hopefully determine a path to return to positive financial stability.

So, I really won’t have to eat crow over the major part of Johnson’s change-agent strategy until it’s either, played out and proven a failure, or unless Mike Ullman decides it is no longer a viable transformation or a repositioning that will succeed. On second thought, if Ullman decides to kill it, I guess I won’t have to eat crow at all because we’ll never know if it would have succeeded, once fully rolled out.

One Potential Meal of Crow: The One That Brought it all Down

There is one major reason for which I may decide to eat a taste of crow. And Ron Johnson may very well have already eaten several whole birds. And that would be me buying into his pricing strategy, both the way in which he devised it (and without research), but more importantly, the timing. I doubled down on his bet that consumers were ready to be weaned, cold turkey, off of their addiction to coupons, sales and discounting in general. By the way, it reminds me of that movie, “Reefer Madness” (circa 1936).

Anyway, the fact that he chose to lead with “fair and square” pricing, before any noticeable physical changes in the stores; before establishing contemporized new brands and merchandise; essentially before a whole new JCP and its array of experiences could be clearly witnessed by consumers; in my opinion, this was the single most catastrophic component of his overall strategy. This single act, sent his customers packing, spending $4 billion of JCP’s top line elsewhere and contributing to its $1 billion operating loss (along with the other capital and reorganizational expenses), for Johnson’s first year into the transformation.

While he acknowledged his mistake, too little was done too late to reverse the avalanche of sales losses that just kept building. Tragically, in my opinion, this was the major mistake that brought the financial condition of the company to the brink, and threw Johnson over the edge.

Had he not opened with his cold-turkey pricing scheme, and simply proceeded with the physical transformation, customers may have been somewhat disrupted by the construction and changes taking place. Some may have been put off, but not in droves. Some of the older customers may have ultimately been turned off by some of the new, more contemporary brands. But, as the total experience, including the merchandise, evolved over time, new, younger “family” customers would have been attracted, replacing the aging segment of the old JCP core. And as I said, the new transformed space (probably with fewer doors), would be more productive as some of the early “shop” comparisons proved. Furthermore, this added experiential value for consumers would justify some variation of his “fair and square” pricing strategy. And, yes, they would have been poised for growth.

Would Ron Johnson still have a job if the numbers had not tumbled with such ferocity, along with the relentless beating from Wall Street and the media day-in and day-out?

Well, according to the authors of most of the post-mortem articles, blogs and broadcasts, who keep digging up all of the negative residue they can find about Ron Johnson’s character (including hubris), management style, lack of CEO experience, snap decision-making without testing or experienced counsel, and many other questionable strategic and tactical missteps, one could believe there are a multitude of reasons other than Johnson’s pricing strategy that would have eventually led to his demise.

We’ll never know. But, I will stick my neck out once again, (for which I will not have to eat crow), and just repeat what we all do know. Money talks and that’s why Bill Ackman and the Board finally “walked.”

At the end of the day, and Ron Johnson’s last day at JC Penney, it was the pricing that brought it all down.

And at the end of my day, this is what I will eat crow over. And for all of those “I told you so’s” in my over-stuffed inbox, I will savor it and will eat it gracefully, while I hope for Johnson’s successor to continue transforming JC Penney into an innovative store for our times with an eye to the future.

Why Are Handbags So Important?

The Robin Report - HandbagsFunctional, Personal Statement, Self Expression, Fashion Accessory, Status Symbol?

The correct answer I believe is: “All of the above.” I’m not a handbag person, per se, although I own several. I don’t think of status so much when I buy a purse, yet I realize that, in addition to function, which for me means not too heavy and enough room for my stuff, I am conveying something about myself when I tote around my handbag. As Nora Ephron said in her very funny essay, I Hate My Purse, “…your purse is, in some absolutely horrible way, you…”

Whether real, fake, or my new favorite, ‘luxury pre-owned,’ handbags are an expression of who we are and where we belong in social, economic and fashion terms. As our most visible fashion accessory, our handbag is both functional and symbolic, conveying to others the tribe to which we belong. A form of self-expression and signal of personal style, handbags are also an entrée to luxury and glamour. One may not be able to afford that penthouse apartment on Fifth Avenue; or, the private tented safari in Africa; but, one could, perhaps, feel a part of that world with say, a Louis Vuitton bag. [Read more...]

How Trader Joe’s Lures Shoppers With Quirky Products and Brands

Trader Joe's Opening - 08Trader Joe’s is undoubtedly the nation’s most successful limited-assortment grocery chain; lines actually go around the block in New York City’s two outposts during the holidays.

So what’s really going on here? Trader Joe’s uses product and pricing strategies that could easily be emulated by other chains that sell quick-turn consumables. But Trader Joe’s is not just privately held, it is fiercely private, making every effort to fend off any effort to learn how it works.

We do know, however, that Trader Joe’s net sales-per-square-foot are roughly twice those of the similarly situated Whole Foods. And Trader Joe’s performs better in smaller selling spaces, with about a quarter of Whole Foods stockkeeping unit count.

That’s impressive, but the real secret formula is Trader Joe’s product lineup. More than 80% of Trader Joe’s 4,000 SKUs are private brands, most under the Trader Joe’s name, and others under offshoots such as Trader Jose’s (Mexican food) and Trader Josef’s (baked goods), and so on. [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...]