Retail’s Walking Dead: These Brands Have Been Revived, But Will They Survive?

zombiesThere’s a hit TV show, “The Walking Dead,”  in which a nasty plague wipes out almost the entire human race, then allows some of the decaying departed to get up, roam around, and attempt to eat the few still-living folks, who from then on spend their days and nights in a constant, terrifying quest for survival.

It’s hard not to see the parallels in retail.

Over the past year or so, several defunct retail brands, like Radio Shack, Fortunoff, and others, have been reincarnated. But unlike in the AMC show,  where we don’t know what’s allowing the zombies to keep stumbling forward, we do know what’s allowing these retailers to start moving again: all the cash sloshing around in the coffers of investors who seem to believe these brands still have a future. [Read more…]

Retail Reality Check

retail_realityOn June 4, 2015, The Robin Report and FGI co-hosted a retail symposium focusing on new approaches and technologies that are changing the way retailing is done. The panel moderated by long time industry icon, Paul Charron, with a cross section of seasoned industry veterans representing brand, ecommerce and luxury retail, had a lively discussion. Despite varied points of view and the irrefutable and growing impact of technology on everything we touch, two lasting truisms of retail were underscored: product and service. What has changed is the way retailers and brands address these requisites to meet new consumer expectations and demands; plus developing the new systems that support communications and commerce. [Read more…]

Birth, Life and Death: A Retail Cycle

murraysRob Kaufelt walked into Murray’s Cheese on Bleecker Street in New York’s Greenwich Village in the early ’90s and noticed a sign saying the store was closing after a 50-year run. The owners were tired, the neighborhood was changing, and the lease was up. Rob came from a family of grocers. He was a deli man who was used to getting up early and, at that moment, was out of work. His latest store had failed. On a whim, Rob made an offer on the business and was shocked when it was accepted. He moved it across the street for cheaper rent and started cutting cheese.

One thing led to another: Cheese classes, catering, wholesaling to restaurants, an e-commerce business, an outpost in Grand Central Terminal, a Murray’s Cheese Bar restaurant, and a deal with Kroger. By the end of 2015, there will be some 250 Murray’s Cheese outposts in Kroger stores across the country. Rob and Murray’s are evangelically getting Americans past Vermont cheddar and Wisconsin flavored Jacks. Whoever Murray was, he probably couldn’t imagine cheese becoming so chic, and his family is likely regretting not keeping at least a piece of the action. Rob, needless to say, is doing very well and has more grown-up toys than any man I know. [Read more…]

Target Canada’s Ill-Fated Adventure

target_canadaIn what has to be one of the biggest retailing fiascos of all time, mass merchandiser Target has closed its 133-store Canadian division less than two years after it opened. Billions of dollars were lost.

Target’s misadventure in Canada holds many lessons for all retailers, including the very simple lesson that catastrophe invariably comes close on the heels of a retailer’s failure to offer consumers products they want at the price they’re willing to pay.

How could a retailer as big as Target is in the United States fail to grasp such an obvious concept as it moved across the border to Canada?

The answer is that pressures of competition and real estate forced hasty and ruinous decisions. [Read more…]

Art Twain: Staying Loose and Coloring Outside the Lines

A Personal Retrospective

I don’t know where to begin with this story. It’s about retail, forgotten brand origin stories, advertising, and the golden age of radio. You might say it’s a trip down memory lane, but my instincts tell me it’s really a story that touches upon so many things that are so right now. Every time I hear someone talk about how retail taps into culture, or asks why we are suddenly devouring podcasts, listening to the radio, and enamored with the ’70s, I think of Art Twain.

Right around the time in the ’70s when advertising was changing and creatives took over from account executives, things started to get looser. With little guidance, retailers, brands and marketers were compelled to understand and respond to that cultural shift.

Enter Art Twain. He’s the marketing mastermind behind the original brand development of a little shop called Pants and Discs. He was also the account lead for that brand of “pants” which, at the time, barely sold east of the Mississippi. That shop would become the Gap and those pants were Levi’s. The fact that the Gap was born selling Levi’s and LP records is an origin story that has mostly been lost to memory. [Read more…]

Happy Accidents

happy_accidentsOffering a wider assortment at every store helps increase sales while keeping complexity in check.

Less is more: This is the prevailing wisdom of today’s retail assortment strategies; assortments should be localized, limited, and carefully curated.

But, more often than not, bigger is better. Carrying a wider assortment in each store can boost sales without increasing cost, space needs or inventory. In fact, it’s possible to offer complete assortments while decreasing inventory. This sounds counterintuitive, but there’s logic to the strategy.

Why is the industry so fixated on slashing assortments? The “choice is a trap” and “paradox of choice” arguments — that consumers actually prefer only a few options instead of being confronted with a wall of choices — is gaining traction in popular culture and especially at retail. And, while it may be accurate in certain limited settings, it doesn’t hold true when applied to the industry at large. In fact, as assortment size goes up, sales always increase. [Read more…]

Rent the Runway: Fashion Meets the Sharing Economy

rent-the-runway

Over the years, whenever I purchased a “party dress” — meaning an expensive dress for a specific occasion, mostly black tie — I always thought, why can’t I just rent the dress, wear it, and be done with it, instead of spending so much money on something that, while gorgeous, might be out of style or not look so great when the time comes to wear it again? Two Harvard Business School classmates, Jennifer Hyman and Jennifer Fleiss, had the same thought, but went so far as to turn it into an actual business. The first Jennifer, Hymen, was struck with the idea after her younger sister showed off a $1,600 Marchesa dress she couldn’t afford but bought anyway to wear to a wedding. What’s a girl to do when every event is photographed and appears on Facebook? Wear the same outfit twice? Not anymore is the answer the two Jennifers provided when they launched Rent the Runway in 2009 with $1.5 million of venture funding from Bain Capital Ventures. [Read more…]

Checking the Pulse of the American Shopper

pulseFrom a retail perspective, it’s hard to find numbers or analysis of the past year without also finding the word “cautious” in close proximity. Holiday spending for 2014: Cautious. Consumer attitude from recent gasoline price drops: Cautious. Outlook for 2015…. You get the picture.

Given the depth of the financial crisis in 2008 and the habits of the post-crisis consumer, this attitude can hardly be blamed. For retailers, however, the state of the American consumer might better be described as “tempered.”

It describes a cohort that has been tried, toughened and come through stronger. That’s what MasterCard Global Insights research shows. Our most recent work on the attitude toward credit and debit spending — arguably a leading indicator for retailers — captures a more nuanced portrait of how Americans are feeling about the economy and their own pocket five years into the recovery. In short: The post-crisis consumer has learned some tough lessons and come through with a tempered but tactical attitude toward credit and debit usage, disposable income, and saving for the future. [Read more…]

Retail’s Darkest Secret: The Knowledge Deficiency Gap

Store format redux from retail’s emerging trends in 2015 has proven that retailers are marching ever forward in this disruptive industry landscape. Big format stores are investing in smaller format editions, department stores are dabbling in specialty and online e-tailers are dipping their toes into the sea of physical stores.

However, despite all of the market research, strategic development, capital investment and operational execution of newly designed stores, retailers must not overlook brick-and-mortar retail’s darkest secret — and perhaps largest problem in general — “the knowledge deficiency gap” of associates. Customers are coming through the door armed with an arsenal of researched information on products and pricing. The hidden truth is often the customers know more about the brand, products and policies than the associates in the stores. [Read more…]

Overfranchising: When Category-Killers Just Can’t Stop Cannibalizing

overfranchisingMaybe you’re Maybelline.

And maybe, because you’re Maybelline, you produce one of the most beloved mascaras of all time. Yes, Great Lash is one for the ages, a perennial box-office champ for the last 44 years. In this era of here-today, gone-tomorrow product launches, that preppy pink and green tube of makeup magic is in a class by itself.

In the prestige arena, Lancôme has enjoyed a similarly mammoth success story. Though its Définicils High Definition Mascara is 20 years younger than Great Lash, urban legend has it that one is sold – somewhere, globally, from Boston to Beijing — every three minutes.

Clearly, these two brands have carved-out massive slices of the brutally competitive mascara pie, proffering products women the world over genuinely adore. [Read more…]

An App For Hugging? Never, Ever at Mitchells

mitchellThere should be a Master’s degree in customer engagement (MCE) obtainable from Harvard or any of the other top-tiered universities. It should be as revered and valued as an MBA, including comparable compensation.  And every retail associate or associate wannabe, for both online and off, should be required to obtain that degree. Why? Because it is the most critically important job in retail, even more important than all the hotshot jobs in the C-suite. I use the word engagement, rather than service, because readers’ eyes tend to glaze over upon reading about customer service, a term they have become desensitized to because of its redundant over-use. Plus it has become a “paying-lip-service” term for too many retailers.

In fact, the MCE curriculum could be copied right out of Jack Mitchell’s revised and updated book: “Hug Your Customers,” published by Hachette Books, on sale today. For readers who are not aware of Mitchells Family of Stores, they are a group of five upscale designer and luxury goods stores (Mitchells, Richards, Marshs and two Wilkes Bashford stores) that have total annual revenues north of $125 million and growing. While there are a few other retailers with notably high levels of customer engagement (Nordstrom for sure), Mitchells is legendary for their over-the-top personalized connectivity with each and every customer, starting from day one in 1958 when they were founded. [Read more…]

The Case of the Missing $32 Billion

Missin-32billionMultilevel/Pyramid Marketing Schemes Lure Unsuspecting Consumers through FTC Loophole

Don’t look now, but dozens of companies, starting with Amway back in 1979, and more recently Herbalife, the supplements company being challenged as operating a pyramid scheme by activist investor Bill Ackman, have been diverting billions in sales every year away from traditional retailers across the health, beauty and general merchandise industries.

Multilevel marketing, or MLM, is a simple model that enriches those who start it at the expense of those who join later. The premise is simple, and there are few barriers to entry. A multilevel marketer pulls together a line of products, puts a brand name on it, and develops an enticing sales spiel which has, as its primary attraction, the ability, for those who make a bulk investment in these products, to profit from commissions earned when friends, neighbors, and family members become distributors, make a similar bulk investment, and recruit other friends or family members to do the same. They all will get a commission on those and all subsequent purchases that those friends and their recruits make. Everyone back up the line to the original seller gets part of the commission as well. The process creates an exponential geometric growth pattern which, in theory, would eventually encompass all potential prospects and leave later entrants no one to recruit. [Read more…]