Going Local for Memorable Experiences

You have been working hard and deserve a vacation. If you were told you would have the perfect “dream” vacation but have no memory of it afterwards, how much would you be willing to pay? Chances are, not very much. But, why? Even though the experience of the vacation would be utterly blissful, it would fail to deliver what we really want—memories. In our search for meaning, those memories help us build a personal narrative of our lives and are more valuable to us than the experience itself, and as research tells us, even more valuable than material possessions.

It is not just tourists that seek memorable experiences. Research in behavioral psychology has produced compelling evidence that experiences make people happier than acquiring material possessions. Once basic needs are met, experiences like hiking, taking cooking classes and travel bring us more happiness than buying new cars, clothes or accessories—and this holds true across generations. The relative value we place on experiences also grows along with our income. That is, the more affluent we become, the higher the value we place on memorable experiences over new possessions.

So what does this mean for the makers and purveyors of material possessions? It suggests that retailers should do more to create memorable experiences that deepen the engagement with customers and perhaps even become a part of customer’s personal story. But how? [Read more…]

This Time IS Different

Both Economically and Politically

Stock price declining

Stock markets are crashing around the world, as I write this. China is cited as the culprit — or at least the catalyst. Some $10 trillion has evaporated from the global stock market since a June peak. The DJIA, S&P 500 and Nasdaq indexes continue to drop, now moving beyond 10 percent from that peak, which puts them into correction territory (it takes a 20 percent drop to be defined as a bear market).

And a few minutes following the opening bell of the NYSE on 8/24/15, the Dow lost 1089 points, which has not experienced such a steep loss since October 2008. And it will be the first time in the history of the Dow that it will have dropped a total of 1500 points in three consecutive days. [Read more…]

Crowdfunding: Millennial Trend? Or the Next Big Thing for Your Business?

Oculus_RiftKickstarter in Your Future?

The first question you might ask yourself when starting a new business is: “Am I selling something that people actually want?” This may be stating the obvious, but nowhere is this concept more true than in retail. For entrepreneurial first-time retailers, this is a huge challenge.

Alternatively, instead of making a bunch of stuff and hoping people want it, young, innovative brands are taking upfront orders and hitting minimum goals, ensuring that everything they enter into production is accounted for. [Read more…]

Kraft, Campbell Soup, Nestle…and More

RR_Kraft, Campbell Soup, NestleAll Facing Enormous Headwinds

The newly formed Kraft Heinz food giant’s announcement to slash 2500 jobs is a harbinger of much worse headwinds facing all packaged food companies.  As much as they would like to spin this as a positive cost-cutting move resulting from the synergy brought about by the merger, they and their competitive peers are heading into the perfect storm. In fact, all of the packaged food companies have been struggling for growth over the past couple years, and it is just going to get worse.  Simply, but apocalyptically, they are in the wrong business, selling the wrong products to the wrong consumers.

Perfect Storm Front #1

[Read more…]

Polo Ralph Lauren – Adventures in Brand Architecture

Polo Ralph Lauren flagship store on Fifth Avenue in New YorkA New Take on an Old Story

In 2004, Ralph Lauren launched Rugby, a new brand to appeal to a new customer. The company was serious enough about the brand to attempt to trademark the use of the name in apparel and related categories. The Rugby brand had less to do with the wide striped, white collared shirts associated with the sport than the desire to appeal to a new, younger customer who may or may not have been familiar with the Ralph Lauren brand. Or brands, because there are several in the Lauren stable. More on that later. [Read more…]

Stores Are the New Black

The Grove Shopping Mall - Los Angeles

Terry Lundgren, CEO of Macy’s, borrowed this quote during his opening remarks at the University of Arizona Global Retailing Conference in Tucson back in April, attributing it to NYU-Stern Marketing Professor Scott Galloway, who also happens to be one of the world’s experts in digital marketing.

Calling stores “the new black” is a nod to that old-fashioned expression referring to something that’s come into style. Simply said, it means they are not only not going to be replaced by e-commerce, they will thrive as the “in vogue” standard-bearer for retailing. In fact, even more dramatic than Galloway’s assertion that stores are now in vogue is his prediction that pure-play e-commerce is actually going away. [Read more…]

Fulfilling the Availability Promise

RR_Fulfilling the Availability PromiseEnabling an Omnichannel Inventory Management Strategy

While today’s consumer has dramatically changed, most retailers are still relying on inventory management tactics that are stuck in the past.

Some of the world’s best-known retailers have learned this lesson the hard way and are now leading the way toward truly omnichannel inventory management.

For example, in 2013, Walmart lost $3 billion in sales due to out-of-stock issues, even though its inventory grew faster than its sales. The culprit? Infrequent collaboration with supply chain partners, who were not nimble enough to react to quick changes in demand. To address this problem, Walmart gave key vendors access to its backroom inventory data, leading to significant improvements in replenishment capabilities and on-shelf availability. [Read more…]

Supermarket Disruption and Dissolution

RR_Supermarket Disruption and DissolutionA&P’s Long Goodbye

For the second time in less than five years, A&P has filed for Chapter 11 bankruptcy. Two Chapter 11s in close sequence like that are sometimes cynically called a “Chapter 22.” But this is no joke. By the time it’s all over, a stalwart retailing name that started in 1859 on the site of what is now the One World Trade Center building in lower Manhattan will be gone forever.

A&P — once the nation’s largest retailer, spanning from the Atlantic to the Pacific — already has buyers in place to take over a third of its 300 stores. These buyers include Acme (Albertsons), Ahold and Key Food. Another 25 stores will be closed outright. So roughly half its store fleet, which spreads from Delaware to upstate New York, will be rebranded immediately. A&P operates stores under the A&P, Pathmark, Waldbaums, Food Emporium, Superfresh and Food Basics banners, all of which will be involved in the sale or closure process — and already are. [Read more…]

At Your Service: Two Case Studies

TOP Shop John Lewis combo FinalIn the developed world, retailing remains under siege. As we know, a steady flow of new Internet competitors vie for consumer dollars, frequently undercutting prices of the brick-and-mortar stores. Meanwhile, amidst a sea of sameness with parity products, traditional retailers too frequently compete merely on price. In-store service levels have evaporated in all but the most high-end luxury houses or new entrepreneurial and tech brands, further propelling the “race to the bottom,” an industry trend Robin Lewis coined back in 2012. [Read more…]

There Is No Gap Déjà Vu

gap_RL_RR_7-15-2015More Like A Slow, Sears-Like Descent To The Bottom?

Glenn Murphy exits.  Art Peck takes over.  It matters not who the players are because there has been a revolving door full of them for the past 15 years, all declaring how they would return Gap to its once dominant position as the cool apparel brand for America’s youth.  All of them failed to do so, and there is no reason to believe Art Peck will have any better luck.  Actually, even luck would not be enough to reverse the ultimate fate of this storied brand.

I say this because the brand was driven into ubiquity (the anti-cool for young consumers, and therefore, the beginning of its end) in the late ‘90s and first two years of the Millennium under the watch of then CEO, Millard “Mickey” Drexler.  With a Gap on every corner, so to speak, cool turned to cold and its descent began. Ironically, Drexler would leave the helm of the brand that he guided through two decades of meteoric growth from $480 million in revenues upon his arrival in 1983 as president, to almost $14 billion in 2000, an amazing 2,400 percent increase when he left.  Indeed, his success earned him the moniker of the “prince of all merchant princes.” Unable to right the ship when it started to sink, Drexler retired in 2002. Comp store sales dropped 5 percent in 2000, their first decline since 1989, and then a whopping 13 percent in 2001, with the overall Gap brand down 12 percent. [Read more…]

Small Is the Next Big Story in Retail

Couple standing in front of organic food store smilingBy now, you’ve heard the news that Target is launching new smaller stores under the CityTargets name. Likewise, Walmart continues to introduce smaller-scale stores as it seeks to expand into urban locales. Big-box retailer Best Buy is focused on its “community-oriented retail” concept with a smaller-is-better philosophy. But the downsizing efforts of these big boxes is not the big story that I am talking about. You can make a Target, Walmart or Best Buy store smaller in size, but you can’t make them smaller at heart.

The next big story for retail will be “small,” as in small, independent, local retail businesses. [Read more…]

Disruptors at the Door

blue_apronAnother batch of disrupters is eyeing the retail food industry. And, strange to say, they’re knocking on your door in a cardboard box.

These disrupters are meal kits. The meal-kit business is a fledgling form of retail food distribution that features the direct-to-home delivery of the precise measure of raw ingredients needed to prepare home-cooked meals. Each shipment contains the makings for several meals, generally six or more.

Meal kits are not to be confused with the home delivery of groceries available from providers such as Peapod, Amazon or Fresh Direct. Nor are they deliveries of prepared meals that are ready to heat and eat. Meal kits require that meal components be chopped, mixed, cooked and composed. Each meal kit includes detailed recipes replete with photos of ingredients and step-by-step preparation, making them all but foolproof. [Read more…]