We’re Talking Tech

Lectra-3DWe think Nick Graham, co-founder of Joe Boxer, is a rock star. “The brand is the amusement park, the product is the souvenir,” he says. Well, we are in line to buy both tickets and souvenirs!

You can’t forget about the product! But how do you create a better product? It takes a good team and a good process, and technology has to be the backbone.

Technology is taking the fashion and retail world by storm, transforming the way we work in the design room, during production and at the point of sale.

Technology for design and pattern development is a good place to start but technology can’t compensate for a bad process. In fact, it only makes it worse! But a good process, one that marries retail, design and production from the beginning, for example, can take you from just an “okay” product to a fantastic one that both your customers and you love. One that fits and looks great, but also meets cost and time objectives. [Read more...]

Three Strikes and He’s Out!

FINAL-target-imageStrike One

Spotty performance going into the recession and poor performance coming out.

Target Stores and its web business have been poorly positioned from a merchandise trend and strategic standpoint, and stores have been inexplicably and chronically poorly stocked. Empty shelves in a 200,000+ square foot discount store are as unappealing as dining in an empty restaurant. Frankly, it’s been a very long time since Target exhibited the “mojo” that successfully differentiated it from their competition.

Once upon a time Target was a hotbed of trend and value. Every endcap at the head or foot of every aisle used to tell an interesting story of fashion or value. And the stories were woven into a tapestry that worked as an expression of Target, the brand. No more. Today it looks, mostly, like just a lot of disconnected stuff. Just like Walmart. [Read more...]

Sales Force Transparency: You May Have an Olympian and Not Even Know It!

salesforceBy the time you’re reading this article, the 2014 Sochi Winter Olympics committee will have awarded its last trio of medals. The athletes will have boarded planes back to their respective home countries, and only the elite few will have cemented their places in Olympic history.

On a worldwide competitive stage like this one, the difference between immortality and obscurity is often a matter of microseconds. Events are won or lost by hundredths of a percentage point. And the single factor that separates the winners from the losers is precise and consistent measurement. Without it, the whole system falls apart at the seams.

So what does this have to do with retail? [Read more...]

Millennials: Double Trouble for Retail

Robin Millenials_FINAL imageFor those of you out there who think the Millennials are the “next big thing” for your business, think again. They may not be as big as you had hoped. And for the likes of the three “As,” (A&F, American Eagle Outfitters and Aeropostale), and others who primarily target this cohort, you better start strategically repositioning your brands and your messaging to adapt to the “double trouble” of dying malls (which used to be huge teen hangout destinations) and Millennial shopping behavior, which is shop-until-you-drop…but don’t buy.

As I pointed out in my recent article The Great Retail Demassification, there are several reasons mall traffic is suffering, directly impacting store traffic, particularly in the B and C malls:

  • Every store in the world is literally in Millennials’ pockets; they can hang out with their friends, sip lattes and shop online – all at the same time. So why spend all the time and effort traveling to, and traipsing through, big, old, largely boring malls with a limited number of cool stores that don’t offer any great experience in the first place? [Read more...]

Made Up in the USA

Made In The USAWhen Walmart announced last year it was going to launch a major push on domestically-made products—helping to fund some of the suppliers, in fact – it set off a jingoistic feeding frenzy.

All of a sudden everybody and his shopping brother was envisioning a plethora of product produced right here in the good old U.S. of A. Politicians jumped on the bandwagon, of course, visions of full employment and happy voters in their heads.

It was a wonderful story. And it would have been even more wonderful if it were actually true.

Because any discussion of wide-scale manufacturing returning to the United States needs to be put into context…and reality First off, this isn’t Walmart’s first manufacturing renaissance rodeo. Way back in the days of Mr. Sam, Made in the USA banners hung proudly in virtually every store the company owned. Many went so far as to single out exactly where the products were made, highlighting those in the immediate proximity of individual stores. [Read more...]

You Have 7 Minutes To Create Value For Your Shopper

What Are You Doing About It?

I recently met with the head of marketing for a major UK broadcaster whose career had previously included senior roles in shopper marketing and innovation with P&G and PepsiCo. His path had taken him from working with major grocery retail groups on improving visibility and driving product sales for his brands, to finding ways to create distance between his side and the retailer’s own private label. With a move into broadcast I asked whether he felt he’d leapt from the frying pan of a hyper-competitive consumer product world into the fire of the media industry where advertising is increasingly seen as a secondary investment for brands.

His response was that their challenges were essentially the same: both have diminished roles due to changes in consumer preference and new competition; and neither yet had a clear roadmap for changing the models the industries have been built on.

The More Things Change, The More They Stay the Same

What led us here can be found in a simple review of history: in the 1950s brands were king. Consumers had newfound wealth, a desire to fill their homes with goods, and they weren’t yet jaded. In 80s-America, a TV spot that ran on three networks would reach 80% of consumers, stimulate interest, and drive sales. Retail was simply the only fulfillment channel. In the book, Absolute Value, authors Itamar Simonson and Emanuel Rosen argue that the rise of brands was in response to an information-poor environment; brands served as a proxy for quality. But in the 90s this all changed when Tim Berners-Lee created the early version of the Internet and suddenly the consumer could look under the hood, hear from others, get the straight story – this was the beginning of retail’s great tectonic shift. And today, according to Nielsen, almost 90% of consumers with smartphones use them to price check after making in-store product comparisons. [Read more...]

Amazon Acquires Sears

amazon-sears_Rd.1If you have any doubts, just wake up and think about it. It’s a win-win for both Jeff “Get Big Fast” Bezos and Eddie “Take the Money and Run” Lampert. Amazon gets roughly 2400 US stores (or “buildings”), overnight (1300 Sears, 1100 Kmart). The acquisition becomes Bezos’ answer to omnichannel and the proven revenue synergy of consumers’ ability to shop online and off; the convenience of proximity for pick up and returns; and facilitation of even greater delivery speed. So just as Walmart’s 4500 stores double as distribution centers, so would Amazon’s acquired Sears/Kmart stores.

The real estate assets would be the primary reason for Amazon’s interest in acquiring Sears Holdings. However, there are several other valuable assets and operations, which Amazon could enhance and grow. [Read more...]

Mike Gould on Leadership

MIke-Gould-FINAL-IMAGEWhat makes a great leader? The topic, by all accounts is very close to Mike Gould’s heart, “It is the single most important thing any of us do, regardless of what we do.”

Mike Gould, one of the most accomplished leaders in all of retail, recently retired as CEO from Bloomingdale’s after a 23-year career. He spoke to a group of industry executives, FIT students and faculty on April 8th at a meeting of the Retail Marketing Society in NYC.

During his wide-ranging talk, he emphasized, “At the end of the day, what people remember are the opportunities you gave them to grow and to become more than they thought they could be; not the numbers that mesmerize our daily lives.”

How does Mike lead? He stressed that people come first; nurturing their growth and providing opportunities are the mark of a good leader. [Read more...]

Walmart Can Crush Amazon

walmart-amazon-pac-man_rd.3I described Amazon a while ago, as “PacMan,” gobbling up everything in sight, including big chunks out of Walmart. Well, that’s about to change. Walmart can literally crush Amazon. Or at least it can put a lid on Jeff Bezos’ mantra: “get bigger faster.” Bezos will have to begin quantifying just what getting “big, bigger and faster” means. And it will also be the moment we’ve all been waiting for when Amazon will have to start turning a profit. At this juncture, yes, Amazon, the great disruptor, has created a new retail playing field, that they alone have been dominating.

But Walmart is finally rediscovering and reinventing the part of its DNA that disrupted the industry and created a unique new playing field half a century ago, which it alone dominated and grew to its near- $500 billion in annual sales (Amazon is pushing for $90 billion). Walmart is rediscovering its once-revered distribution genius, not just as an incremental update and improvement, but rather to reinvent it altogether. And I predict it will reinvent itself by “leapfrogging” over Amazon’s model (which still has miles to go), and will redefine what getting bigger, faster really means. Talk about a breathtaking spectacle. What does a gargantuan $500 billion, 10,000-store (worldwide – about 4500 in the US) company look like getting bigger, faster? [Read more...]

Women’s Underwear is Difficult

Playtex_graphic-01A Brief History and Consumer Perspective

Women’s underwear, its euphemistic pseudonym ‘intimate apparel,’ or its more sophisticated sister, ‘lingerie,’ is difficult in so many ways. For all of us women consumers, it is a necessity; a purchase that must be made and replenished regularly. And, trust me, as a consumer who has been buying her own underwear for more years than I’d like to count, it is not always an easy, satisfying, fun, or self validating purchase.

Underwear is a category of apparel that gets us down to the bare bones of ourselves. Our bodies. Our comfort. Our sense of self. Our sex appeal. Our underpinning. The foundation for all of our clothes. Women’s underwear has been marketed to us for generations reflecting deep-seated emotions and attitudes about ourselves, our roles, and our history as women. From long before the time women discarded their bras in the late 1960s as a symbol of second-wave feminism, bras have had a history of women’s emancipation and independence. In 1873, writer and activist, Elizabeth Stuart Phelps, wrote: “Burn up the corsets! … No, nor do you save the whalebones; you will never need whalebones again. Make a bonfire of the cruel steels that have lorded it over your thorax and abdomens for so many years and heave a sigh of relief, for your emancipation I assure you, from this moment has begun…” [Read more...]

Three Dirty Little Secrets

Alexander Mcqueen London, Old Bond Street, London, W1, United Kingdom Architect:  Pentagram Alexander Mcqueen, Showroom, Pentagram, London, 2002, Overall View Of ShowroomGlobalShop, the retail design expo, had its three-day extravaganza in Las Vegas the middle of March. Like Euroshop, its continental counterpart, it is a gathering of brick-and-mortar assets: flooring and mannequin companies; fixture and signage manufacturers; point-of-purchase display companies … and more. There are receptions, cocktail parties and lunches, and lots of meetings to imbibe in adult beverages. VMSD and Design:Retail, the two trade magazines covering the industry, put aside their differences and celebrated the occasion enthusiastically. Still, however happy the gathering was, it is hard to avoid the dark clouds looming on the horizon. [Read more...]

Re-Urbanizing America

Suburban Sprawl Gives Way to the Not-So-Mean Streets of the Big City

The Great American Dream isn’t dead, but it’s certainly on life support.

Shopping street Barfüßerstrasse of Marburg, Germany.After decades of unprecedented growth, suburbia has been surpassed by the inner city. It is — if you’ll excuse an old saying from my quasi-hippie days — where the action is! And that action is attracting an incredibly broad demographic — everyone from young professionals and singles to baby boomers who don’t want to end up living in God’s waiting room.

We have already seen the beginning of an inner city building boom by retailers who want a piece of the action and are willing to embrace the idea that bigger is not necessarily better or practical. Those who are late to the party or ignore this new urbanization should have no trouble finding new careers in the healthcare or dogwalking industries.

But to understand where we’re going we have to look at where we’ve been.

“White Flight”

Most historians concede that suburban life really took off in the late 1940s and early 1950s with GIs returning after World War II. This was the beginning of the so-called “white flight” to bucolic suburban settings where the kiddies were safe, stay-at-home moms traded recipes and child rearing advice across white picket fences and all was right with the world — far from the mean streets of New York, Chicago, St. Louis and L.A.

Those left behind, however, witnessed urban decay, a descent into the heart of darkness where once-vibrant neighborhoods became ghost towns after dark, street crime proliferated, empty stores were boarded up canvases for graffiti and the scent of dinner from apartment windows was replaced by the stench of urine, garbage and despair.

I didn’t read all this in some urban history book. I lived it in New York throughout the 1970s when muggers could elude police by ducking around piles of uncollected garbage. But the pendulum, I’m happy to say, has swung in the other direction.

In places like New York, Atlanta, L.A. and points in between, we are seeing the reanimation of city life and a retail renaissance that has drawn the attention of everyone from Costco and Home Depot to Walmart and a new generation of small but competitive neighborhood stores.

The New Normal

A temporary phenomenon? I think not. I believe the financial crisis of 2008 was a major turning point — a time when the dream of home ownership became a nightmare of foreclosures or at least unattainable for younger people. If you want to add another label to your already overburdened lexicon, forget about Millennials, Gen X, or Gen Y, What we’re seeing is “Generation Rent.”

This isn’t the end of suburban sprawl. Many people still yearn for the pastoral life and the retail industry is happy to oblige. But remember the old saying that retail follows the rooftops. Increasingly, those rooftops are urban high-rises and the impact on people and business will be tremendous.

But reurbanization, gentrification or whatever you call it has its dark side. It often displaces people who have lived in some neighborhoods for generations. For instance, take the Chinatowns or other ethnic enclaves that have been fixtures in cities like New York, San Francisco and London. Young professionals and Millennials are paying rents that have forced out long time residents. Such is the price of urban renewal or, as the novelist and playwright James Baldwin called it, “Negro removal.”

On another front, legal and illegal immigrant populations — now 40 million strong across the country — are growing rapidly and moving from their traditional central-city locations to the inner suburbs or ”exurbs” in order to find affordable housing. They are creating cities within cities.

Chinese Checkers

Of course, if you want an extreme example of reurbanization gone wild just look at China. For decades, millions of people were practically ordered off the farms and into the cities to bolster the country’s insatiable demand for industrial workers. People happily obliged in order to get lucrative factory jobs that would lift them from abject poverty. Now the government is encouraging people to leave the cities for rural areas to alleviate overcrowding and re-populate the interior. It’s like Chinese checkers but with real Chinese.

Reurbanization is an economic issue here as well. Gas and commutation prices and real estate taxes are so high in some areas that you can literally save thousands of dollars annually by moving to the inner city. Besides people like the “walkability” factor and are tired of the sedentary lifestyle that requires one to own a car or two. .Additionally, the number of married Americans continues to dwindle or people are getting married later and having smaller families.

In fact, due to the above factors and lingering economic uncertainly that some call “the new normal,” the US Census Bureau and the Department of Housing and Urban Development (HUD) forecast that by 2025, only 10% of new households will have children. Put another way, only 2.6 million of the 27 million new households to be formed will have children.

Other sources have gone even further, stating that by 2025, families with children will account for only 25% of all US households. Basically, the days of cheap money, cheap mortgages, cheap gas and long-term economic stability are over. As Yale economist and Nobel Laureate Robert Shiller has noted: “the heyday of the exurbs may well be behind us.”

Foundations for Growth

I’m not sure I agree and the reasons may be of interest to retailers formulating expansion plans over the next few years. It’s the far fringe suburbs that are in jeopardy for the reasons previously stated. The exurbs, in my definition are the inner-ring suburbs — places outside of city centers but accessible by public transportation or even bike paths. I believe these areas will be the foundations that support economic growth in cities across America.

Herein lies the conundrum for retailers who have erected those monuments to consumerism called malls and supercenters. They aren’t obsolete. But how many more of these pleasure palaces can you build before reaching the saturation point or the point of no return on investment?

The entire concept of retailing needs a refresh to compete in space-starved urban environments.

Some say retailing is retailing no matter where you are. For years, the mantra was “bigger is better” But urban living means give and take — giving up space and taking less home. Trust me. In New York closet space is scarcer than a parking space.

From the retail perspective, building in a city like New York means dealing with uncompromising union rules, convoluted fire and electrical codes and erratic deliveries. Getting timely deliveries is like planning the Normandy invasion. Only Allied forces never had to deal with parking violations.

Nonetheless, retailers like Target, Walmart, Costco and others have seen the future and are focusing more closely on smaller urban formats.

Urbanization is not a fad or a simple trend. It is an inevitable, unstoppable force. Retail will follow the rooftops in the cities as they have done in the suburbs, creating new jobs and becoming one of the foundations of urban economic growth. This in turn will hopefully contribute to a stronger infrastructure and, in turn, a better quality of life for everyone.

Kind of makes you wonder. America’s Heartland may not be where you think it is.