In 2011, at the TED conference in Long Beach, surgeon Anthony Atala demonstrated an early-stage experiment that could someday solve the organ-donor problem: a 3D printer that uses living cells to output a transplantable kidney. Dr. Atala and his team take an image of a kidney to create an exact 3D image of the organ, then print the kidney layer by layer based on the patient’s kidney using their own living cells. In seven hours, you have an exact replica, ready to transplant. Given that 90% of the people who are on the transplant list in this country require kidneys, it gives new meaning to supply and demand. Out of all the presenters at TED that year, Dr. Atala made the biggest impression on me. 3D printing is a revolution that will transform our society in ways we can’t even imagine. It will give rise to thousands of new businesses, new ways of distribution, new processes of intellectual property management, and create an entrepreneurial and financial tidal wave that will dwarf the Internet in its scale and disruptive power. [Read more...]
“What Your Intern Is Really Thinking, “ written by our staff Millennial, Grace Ehlers addresses the seemingly cavalier and misguided view among most companies about her generation, particularly those with college degrees. The article was justifiably critical, in my opinion, of companies assuming that these “best and brightest” of the Millennials should be available for hire as non-compensated “interns.” She has a follow-up article in which she challenges the misconceptions among many companies about the work ethics and career expectations of her generation.
So, as I set forth my argument regarding the deflation and devaluation of our economy and everything in it, due to our shift from value creation to value consumption, exacerbated by our new, “less-free- market” form of capitalism, it struck me how this shift is, and will continue to have perhaps its greatest negative impact on Grace’s generation. Conversely, it also struck me how this shift is wasting this generation as the greatest asset we have, and if given the chance, they might provide the very solution we need to reverse our economic decline.
Here’s the scenario for these Millennials. On totally reverse trajectories we have an economy that is shifting from higher-paying manufacturing jobs, including those in charge of running those companies, who also happen to require higher intelligence and professional skills, to lower-paying service jobs (feeding a consumption economy), and which require a lower set of skills and level of education. So not only fewer jobs, but lower paying jobs that are well beneath the skills of college graduates.
Furthermore, the theory that once we lost our manufacturing base we would simply move up the “food chain,” creating wealth and higher levels of value through innovation, technology and science has been debunked by many economists. In short, engineering, science and technology degrees are being sought less by students instead favoring MBA’s and liberal arts. And, while thousands of foreign students do seek those degrees from our best universities, they are finding it almost impossible (for many reasons) to obtain visas to stay and work in the US. Thus we not only lose their intelligence for these higher “food chain” industries, we are in fact, exporting these industries to China, India and other countries around the world. And, while all of this is happening, more and more young people than ever before have been graduating with college degrees.
However, most of them are heavily in debt for educational loans, (in the aggregate, about $1 trillion, and the percentage of borrowers who are more than 90 days delinquent has risen to 17%, from 10% in 2004). And the number of young Americans without a job has exploded to 53.4% —a post-World War II high, according to the Labor Department.
So, fewer and fewer jobs and more and more educated young people in dire need of jobs, spells tragedy. It is a tragedy because as I said, we are wasting our most valuable asset, the one cohort of our population who, if given a chance, might figure out how to reverse the economic decline.
Drum Roll Please, Ladies and Gentlemen.
Announcing the three greatest moments of innovation in the history of home furnishings products:
3. Furniture manufacturers, trying to reduce their cost of upholstering with expensive craftsmen and detailed stitching and sewing techniques, invent the staple gun as a way to attach fabric to frame.
2. Small appliance makers, seeking to differentiate their blenders and give them the perception of more power, employ a Spinal Tap-esque technique and increase the markings on the speed indicator of their machines from “10” to “11.”
1. Producers of bed sheets, responding to a customer base that wants to cut corners on making hospital corners, run elastic around the edge of their product and create the fitted sheet.
OK, so innovation has not been the strong suit of the home furnishings industry. Outside of the consumer electronics segment of the home business—and let’s face it, the CE guys don’t consider themselves on the same planet, much less the same industry as companies that make furniture and housewares and home textiles—the industry’s track record when it comes to creating innovative products is pretty dismal. [Read more...]
One fact that should continually resonate in the minds of brands and retailers every minute of every day is that women are responsible for roughly 70% of all purchasing in the retail and consumer products industries. And, since about 70% of our GDP is driven by consumption, women should indeed, be the number-one shopping target.
And, in one category, consumer electronics, I was made aware of the findings of a research project conducted by Cisco called “Retail Orchestration,” that not only are retailers missing a huge opportunity for women’s business, they could simultaneously beat the online sellers in the “showrooming” game, simply by shifting their focus from tech-savvy young college guys (who are into devices), to women (who are into content, and who want attention and education).
Steve Jobs and his team at Apple always understood this. Today, you can observe moms and their kids in an Apple store, and you’ll notice a tiny table full of the kids banging away on iPads while their moms are taking their time shopping with sales associates. Apple gets that you have to keep the kids entertained so mom can look around, (and seek education).
Conversely, if you walk into a Best Buy, everything is geared towards the college and younger segment tech-savvy males, who, by the way, are also the biggest “showroomers.” [Read more...]
The growing emphasis on ever-leaner retailing means the days of hedging inventory bets with colossal surpluses are gone for good. The costs of inventory mishaps—both in terms of actual bottom-line economics and brand experience for customers—have driven many retailers to significantly reduce their inventories.
Meanwhile, it’s grown increasingly difficult to predict the actions of American consumers, whose intentions are less and less correlated to their actual behaviors since the recession.
While most retailers have cut their inventories accordingly, leading retailers are optimizing their remaining inventory to get the most bang for their buck.
1. Aggressively share inventory across channels
Truly sharing inventory across channels creates the opportunity for tremendous customer experience benefits and can help avoid having to mark down large amounts of leftover merchandise.
From a customer experience perspective, shared inventory increases the likelihood that a customer will be able to purchase a product in a particular size or color, regardless of channel. For small bricks-and-mortar locations, sharing inventory can open up a whole new array of choices for customers. [Read more...]
With all due respect to the analysts, journalists and consultants who make a living keeping track of all the companies that comprise the retail industry, it has been my opinion for some time now that the popular measures reported on the first Thursday of every month known as comparable store sales, which so many of us spend at least a day per month thinking and talking about, are like George Clooney’s S.A.T. scores. They just don’t matter.
Only about 20 retail companies – a small minority of the publicly-held merchants who sell discretionary consumer products – report their total and same-store sales on a monthly basis today. This is a sharp decline from 5 years ago, when virtually all publicly-held retailers reported.
Many of them stopped reporting because it was “causing too much volatility in stock prices.” (I guess we should thank them all for reducing the volatility in the stock market.) Others claimed it was “causing management to focus too much on the short term and not enough on longer term initiatives.” Whew. Thank goodness they nipped that problem in the bud, too.
To really grasp how insignificant same-store sales figures have become, let’s consider for a moment the companies who no longer report. Walmart, the largest retailer in the country, representing half of all retail sales, stopped reporting in early 2009, after the news got so bad month after month that someone in Bentonville finally figured out they were important enough to not have to share it anymore. Quickly following Walmart’s lead were Sears, most of the regional discounters, and the dollar stores.
Stealth giant Amazon never did report same-store sales. I guess it’s because they don’t have stores. But they certainly do a lot of sales – sales that used to be done by stores.
Only one warehouse club, Costco, still reports on a monthly basis. Big box retailers Best Buy and Bed Bath and Beyond do not. In the women’s specialty apparel sector, we know how Gap, Limited Brands, and Wet Seal are doing, and that’s about it. About the other major players, like Ann Taylor, Talbots, Chicos, Express, Urban Outfitters, Dress Barn, Charlotte Russe, Charming Shoppes, Christopher & Banks, New York & Co. – we learn nothing.
And it’s not just the women’s merchants who are remaining mum. There’s no news from Men’s Wearhouse, Joseph A. Banks, or Casual Male, either. Throw in Children’s Place, Abercrombie, American Eagle, American Apparel and Aeropostale to that list while you’re at it. The only teen store still reporting is Kearney, Nebraska-based Buckle, whose monthly performance has been so good for so many years they can hardly contain themselves when the first of the month rolls around.
So what are we left with? The department stores, off-pricers, one discounter (Target) and one luxury store (Saks). Big stores, to be sure, but representing less than a third of retail sales, making it impossible to glean from the data whether the market’s growing or shrinking, or which retailer or channel is gaining share from another.
Complicating the situation even further is the fact that some of the big stores, like Macy’s, Penney and Nordstrom, have started to include their e-commerce sales in same-store sales. (Huh?) With online sales growing by double digits, all this does is introduce even more confusion and insignificance to the measure.
I have therefore concluded that those companies who report monthly same-store sales should just stop. Macy’s, Gap, Target, TJX and friends should just post their comps every quarter like the rest of the market does. At least we’ll have something meaningful to look at, especially considering the profitability figures that come along for the ride. It would also give us all an extra day per month – if not more – to do other things, like focus on longer term initiatives.
Or spend more time watching George Clooney movies.
On a Monday evening this past September, I had a bit of time to kill before a press event celebrating the launch of Dr. Fredric Brandt’s new radio show on Sirius XM. And because I’m beauty-obsessed (both personally and professionally), I decided to scoot into Macy’s Herald Square for a quick lap around the beauty department before heading uptown to pay my respects to “The Baron of Botox.”
Who knows, I thought, maybe I’ll treat myself to a little something.
But within seconds of hitting the main floor, I felt overwhelmed, my head swiveling back and forth à la Linda Blair in The Exorcist, between the Marc Jacobs handbags, the tantalizing costume jewelry, the miracle crèmes and the perfumes. Upping the A.D.D. ante? Karl Lagerfeld opining from a video monitor plunked in the middle of the aisle separating the bags from the beauty. In the endless loop, the German design god riffed on his much buzzed-about eponymous collection for Macy’s, a few items of which were also on display, mere feet from the $25 prestige mascara. [Read more...]
Imagine if you crossed a car dealership with a funeral parlor. What you’d have would be a furniture store.
The retailing of furniture may not be the most archaic, antiquated and illogical form of merchandising in American business today…but it’s pretty damn close.
Anytime anyone talks about the best retailers in America, that conversation hardly ever includes a furniture retailer.
Virtually every consumer products category in America has a world-class, national retailer that dominates the category. Not furniture.
Virtually every consumer products category in America has a world-class, national brand that is instantly recognizable. Not furniture.
Think about it. Furniture is usually the third most expensive thing a person will ever buy, after a house and a car. Yet most people visit a furniture store about as often as they stop by a mortuary. With an often similar shopping experience, too. So, what you don’t know about furniture retailing could fill…well, could fill this column.
Last night I had the craziest dream, where I was actually interviewing Martha Stewart herself. Of course it was all just a dream and it never actually happened, but it seemed so real! (Must have been a damn Rachael Ray recipe that made me dream this; I knew I should stick with Martha’s.)
I asked her a lot of questions I’ve been dying to know the answers to, and, well…here’s what I remember from the dream:
Warren: So, Martha – you don’t mind if I call you Martha, do you? You recently announced you were putting your namesake company, Martha Stewart Living Omnimedia (MSO) into play, making several executive changes, and seemingly taking on a larger role in management. Your business has been caught in the twin vortex of both the retailing and media meltdowns of the past few years. Can you tell the readers of The Robin Report why exactly you’re putting the company up for sale?
Check Your Limited “Bandwidth”
It’s over. You want to continue selling your brand simply as a product? Go ahead, and you’re dead. You didn’t learn from the game-changer of all times, Starbucks (SBUX), taking coffee out of a can and turning it into an experience? And, you’re dead twice if you still believe the only way to distribute it is through your forever loyal and supportive retail “partners.”
So, before your brand dies twice and slips into commodity land, competing on price in an oversaturated “share wars” marketplace, and assuming you didn’t learn anything from Starbucks, then I urge you to pay attention to recent activity at the greatest consumer brand company in the world, period: Proctor & Gamble (PG).
P&G is chock-full of brilliant visionaries who totally get it, in fact they practically invented it: the necessity to preemptively get to consumers through new distribution channels and, once there, to wrap them in an unforgettable branded experience.
I just wanted to wish you a belated Happy New Year and say congrats on your results you recently announced from the holiday season. Very impressive.
You’ve certainly had quite a year, what with the passing of Howard Lester, the guiding guru of Williams-Sonoma (WSM) and your predecessor as CEO coming on top of what has been a rough stretch when your company just wasn’t having a whole lot of fun…not to mention making a whole lot of money.
There was of course the economy. After Lehman Brothers, all of a sudden the whole idea of $200 frying pans and retro telephones like Nick and Nora used didn’t seem like such a good idea. It was kind of hard to trade down your merchandise assortment as fast as your customers were trading down their lives.
Edward “Eddie” Lampert that is. Yes, once again the storied chief of Sears Holdings (SHLD) provided me, and therefore you, with yet another perspective on how or how not to run a retail business.
Actually, when all is said and done, and the fate of Sears (and Kmart) plays out, I believe Eddie will merit some kind of industry award. As an incredibly elusive and low profile leader of such a giant retail business, he nevertheless stirs up controversy on a strategic level.
What is he doing and why is he doing it? Well, I take a shot at answering that question in the “Fast Buck Eddie – Brilliant or Bonkers” article. As you will read, even though some of Sear’s visible initiatives might be questioned as ‘bonkers’ ideas, the real though not transparent underlying strategy might well be described as brilliant. And, if he’s successful in pulling it off, the award could be designated ‘Master Magician of The Year,’ for what you see is not what you get. ‘Abracadabra’ – now you see it, now you don’t.
All the ribbing aside, Mr. Lampert is one brilliant individual if he’s doing what I think he’s doing. And, strategically, it’s instructional for any business in a similar position.