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…]

Why Kale Will Save Retail…

kale_new …And Other Lessons From European Retail’s Foodie Heroes

As many of us remember, the 2014 Chanel Fall/Winter show was a foodie dream for those who love fashion. A monumental moment celebrating the merging of fashion and food, Lagerfeld transformed the Grande Palais into the chicest of supermarkets, with over 100,000 products, ranging from Coco Flakes to Chateau Gabrielle wine.

An ode to the most fashionable trend of the moment? Or perhaps the more literal…food is fashion is food.

The fashion world’s biggest names have embraced food in a big way. NY-based Related Companies revolutionized the concept of retail dining with its 2002 launch of the NYC Time Warner Center, a fashion mecca on the West Side, anchored by Whole Foods and chef superstars. Les grands magasins of Europe have elevated food to a level of epicurean artistry with open kitchens showcasing the top chefs at work alongside thousands of food products from around the world. [Read more…]

Old McDonald’s and Its Youngest Customers

mcdonaldsWhile everyone is trying to figure out how to fix the troubled fast food chain, they are missing one very important ingredient…and it ain’t pickles.

My nephew David’s first word was “fries.” He learned it at McDonald’s. Two generations later, McDonald’s is the one getting fried.

The most ubiquitous export brands in America – Boeing, Levi and Walmart not withstanding– and the greatest ambassador of American culture to the rest of the world, McDonald’s is facing perhaps its biggest challenge since it was trying to figure out how to cut a sesame-seed bun into three slices. [Read more…]

Youth Retailers Rebounding in 2015…or Not?

youth_2015_driscollWhat’s happening in the tumultuous youth market? The way youth retailers are faring reflects the typically fickle trend-sensitive nature of this market. Based on recent earnings reports, I think Aeropostale could derail this year. While their international opportunity is real and growing, they could shutter half their stores … and they wouldn’t be missed. Express? I think the outlets will help. American Eagle is the furthest along to success.

My vision for two years from today is that Abercrombie will be half its size in the U.S. and Aeropostale may be potentially shuttered in the U.S. with international franchises still generating profits. American Eagle glides into profitability and Urban improves, and then encounters the typical fashion trends risks that have been a part if its uneven history. [Read more…]

Journey of the Chosen Ones – JNCO Jeans Are Coming Back

JNCOOr if you don’t like that original acronym, JNCO (Jean Company), it also now stands for “Judge None, Choose One.” I’m not sure I get either one of those lines, but, then again, I’m way beyond the age of which the owners of JNCO care whether I understand them or not. Furthermore, as I’ve said before, I’m not even an amateur fashionista, so all I can do is ask questions.

What I do know is that JNCO brand ultra-baggy jeans, reaching up to 50-inch leg openings at the height of its popularity in the 1990s, is making a comeback this fall. Along with new styles and designs for cargo pants, T-shirts, plaids and “joggers,” which are a cross between jeans and jogging pants, JNCO (still headquartered in LA) will re-launch its “heritage” brand of baggy jeans. So the first question I must ask is what does that mean for skinny jeans? While they are not creating 50 inch leg openings, its re-launched signature jeans will feature openings of 20-23 inches. [Read more…]