A Point of View

Data capture, analytics, and predictive analytics are helpful, even vital, in the creation, planning, and management of assortments. Assortments are, by my definition, the aggregation of all merchandise that a retailer purportedly intends to sell. But the underlying and elemental challenge of assortment creation, building, and maintenance is the absolute need for a retailer (or any consumer-facing brand) to imbue a congruent point of view that embeds the essence of their store, something that LLM will never adequately provide.

What then, is a point of view?

• It is the underlying basis of a store’s brand identity and brand equity
• It is the “sight picture” that an actual or prospective customer has, even before arriving at a store (or opening a website)
• It is an expression of taste level, tone, and image; the kinship, if you will, with design elements that define a store’s brand
• It is an expression of surety of price, value, fit, function, availability, customer service, and continuity
• It is an attribute that reinforces a belief that a customer holds that a decision to shop with a specific retailer, whether in store or online, will be successful

Creating a Point of View

So, how does a retailer form and sustain a point of view? Clearly it emerges readily when an entrepreneur (a creator if you will) launches a store or brand. It’s their taste level, aesthetic, value proposition, and target customer, all of which inform their underlying go-to-market strategy. Add to that a founder’s sense of differentiation from competitors in the marketplace. But the simplicity of brand positioning in a startup quickly disappears once a business proves its viability and begins to grow. It’s true that for some time a creator can continue to make all decisions that are customer-facing and single-handedly supervise the work of others. But soon, that work must be carried out by those others who hopefully have accepted, adopted, and are able to maintain the business’s point of view. This is an ever-evolving and changing process—it certainly is never a “one and done” effort.

Actualizing a Point of View

Whether an organization calls its process of establishing and maintaining its point of view as line reviews, style outs, or something else, this effort should be a regularly scheduled gathering of a cross-section of managers (preferably in person rather than via Zoom). Starting initially with a review of current and comparative performance and market conditions, this meeting should focus on inclusive presentations of opinions, ideas, samples, and scenarios that will help propel the company’s next assortments from one selling season to the next and the next. The primary intent of this meeting and the process it represents, then, is to consider and ensure that future actions and decisions are congruent with the company’s point of view and, in addition, that they are in lockstep with the company’s design, planning, sourcing, procurement, distribution actions, and timelines, which easily stretch out well into the future.

This effort should be led by a principal or founder of the business, with support from trusted fashion, operational, and store leads. If left on its own, no matter how “bought in” management in an organization may be, there will always be divergence and loss of congruity in product, presentation, and service without this kind of oversight and review. This singularity of actions and outcomes is relatively straightforward for a specialty retailer or brand, particularly a mono-brand. It is much more challenging for a multiclassification business. Oversight, if not consistent supervision, is mission critical. There is, of course, a fine line between encouraging talented and committed team members to fully express themselves in the decisions they must make while at the same time keeping everyone in the organization on the same page of the hymnal. This balancing act must encourage innovative thinking and action, while at the same time protecting the business’ underlying point of view.

From a merchandise point of view, style, fit, finish, utility, and quality must all be congruent. From a store (or web) design point of view, style, layout, presentation, and adjacencies must be in harmony with the business’s point of view as well. When designers and merchants are permitted to do their own thing, regardless of how talented they may be, store assortments quickly devolve from appearing to have been crafted by one person to an inconsistent collection of just “stuff.”

Though obviously constrained by a two-dimensional format, a web presentation must feel like it is at one with the physical store. In addition, customer service, whether self-select, departmental check outs, central check-out formats, or consultative selling models, must also conform to the store’s overall point of view. Add to that, in the last few feet or last mile where an interaction occurs (whether in store or via web fulfillment), the customer’s takeaway must reinforce rather than diminish the store’s image and consistency. Think of the damage to a retailer’s point of view that invariably occurs when an expensive item is poorly packed in an obviously flimsy, cheap box and arrives as if it was haphazardly handled during delivery.

The Loss of a Point of View: A Case Study in Dysfunction

A personal digression here illustrates the value of congruity in point of view or the damage that a lack of it poses to a business. In 1987 I joined Lazarus Department Stores, then a division of Federated Department Stores. Federated was made up of seven or so regionally based moderate to better stores plus Bloomingdale’s and I Magnin. I came on board, first as President, then shortly thereafter became Chairman and CEO. My immediate reaction to Lazarus (a disorganized and disorderly consolidation of Lazarus, Shillito’s, Rike’s, Block’s, and Herpolsheimer’s) was that these 50 or so Midwestern stores were a confusing jumble of all things from low-end, to moderate, to better and even designer merchandise. I quickly discovered that the organization was completely siloed with regard to merchandise assortments and marketing strategies. The Men’s GMM was a down and dirty promotional merchant who was also intent on supporting designer brands; he used newspaper and magazine advertising promotions with whatever money he could get from vendors without regard to imaging or overall positioning. In contrast, the Women’s Apparel and Accessory GMM was focused on better and bridge assortments and directed his marketing toward high-profile fashion ads principally in magazines. To round out the madness, the Home GMM, a highly experienced merchant, whose team created disciplined and congruent merchandise assortments, advertised Lazarus’ Home Store exclusively through promotions placed in newspapers.

My first and most arduous task was to eliminate the autonomy that my predecessor had granted these three leaders. Through a series of intense and challenging sessions, these individuals and their teams’ buying behaviors, including their marketing practices, were moved toward a unified strategy. For those who may recall, this became an investment in a full-color weekly newspaper insert which we referred to as a “magalog,” that supported fashion, promotion, and overall store imaging and positioning.

But there were still a whole host of organizational inconsistencies and behaviors, at all levels throughout our stores and regions. Slowly, then quickly, congruity began to take hold. At the risk of sounding self-serving, Lazarus’ performance, which had perennially run 7^th in a seven-horse race among its Federated Department Stores peers, steadily moved into a first position in most of the categories that the corporation regularly measured. All this was achieved by reclaiming and resetting Lazarus’ original moderate-to-better point of view with regard to regular and promotional pricing. In our first full year of focus on this new unified strategy, Lazarus added almost $100 million in volume on a $1.0 billion base.

Wayward Retailers Who Lost Their Point of View

The garden of retailing is littered with examples of retailers who once had a singular point of view, but have lost their way. I’m talking, for example, about Macy’s/Federated, JC Penney, Kohl’s, and Target, to name just a few.

• Macy’s, after closing hundreds of stores, badly neglected by prior management, is now busily cleaning up its act, creating congruity that had largely vanished over many years of cost-cutting, organizational consolidations, and financial manipulation. Once this process of remediation is completed, Macys will still have to establish a suitably appealing new fleet-wide point of view.
• JC Penney, once the epitome of a successful low- to moderate-priced store, first tried to upscale its assortments by mindlessly emulating Macy’s. Failing that, it became unsustainably promotional and then, incomprehensibly, attempted to contemporize its assortments by moving abruptly and catastrophically upmarket. It’s anyone’s guess today what point of view current management is now trying to create. Whatever it is that management is trying to accomplish, improvement in performance continues to elude the company.
• Kohl’s, which for many years feasted on competitive weaknesses and business failures in the junior department store channel, has completely lost its way. From highly successful, disciplined assortments of moderate merchandise carefully selected for mainstream moderate customers, in well-presented easy-to-shop stores, Kohl’s, over a period of years, became an ungainly mess. Assortments lost focus, stores became jammed with excessive inventory, and marketing began to rely on unsustainable comparative pricing; Kohl’s became completely adrift. Can current management (after quite a few rounds of failed leadership) restore Kohl’s? Can the company regain its original point of view or acquire a new one? We’ll have to wait and see. Early indications, IMHO, are it is not happening.
• Target is the poster child for the creation of an incredibly successful and highly differentiated point of view. The emergence of “Tarjay” was no accident. It followed an aborted attempt many years ago to take on Walmart on price. Failing that, Target immediately realized that future success would have to come from highly regimented assortments, careful store presentation, and exceptional customer service. After years of success, though Target lost its point of view and went to sleep having foolishly rested on its laurels. The store simply lost its focus. It then rose back up a decade or so later, only to fall right back down again. Did Target’s merchant, marketing, and store’s organization lose their skill and devotion to excellence? No, but the company’s leadership certainly did. Now, an attempt is being made to repair the damage that has been done. Whether Target can reacquire its formerly successful point of view or needs to create a new one, we’ll have to wait and see.

Retailers With a Sustained Successful Point of View

Are there paragons of virtue in retail whose behavior and performance have consistently belied the failures and struggles that I’ve cited? A resounding yes, with two undisputed examples.

• At one end of the retail spectrum, there is Apple. Apple—its stores, customer service, ecommerce site, marketing, and at the heart of the company, its products—have never wavered from a point of view that Steve Jobs and his team singularly created years ago. Successive management has preserved, protected. and enhanced his vision. It is of course a mono brand, but then look at how many similar mono brands, once successful, have fallen by the wayside, e.g., The Gap, J Crew, Circuit City, Linen ‘n Things, Bed Bath and Beyond, and even Lululemon.
• Then there is Costco, a multiclassification warehouse retailer which I believe is the best multiclassification retailer in the world. Costco’s two founders built the company on a then-new emerging format, warehouse stores. They installed at the very outset a very specific point of view with regard to assortments, price/value, and service that continues to withstand the test of time. An example of Costco’s devotion to consistency in its point of view is the manner in which the company manages its $90+ billion portfolio of private label products, all under the banner of Kirkland Signature. No private label product is ever allowed into the company’s assortments until the company’s CEO has personally reviewed and approved it. (FYI, Kirkland Signature is reported to be the largest private-label brand in retail, worldwide, and is an underlying pillar of Costco’s success.)

A Successful Point of View

The assortments that make up a retailer’s brand are easy to define and describe from a clinical view. The behaviors of a store’s presentation and service easily lend themselves to strategic direction by way of intent. But a point of view must be a living, organization-wide, ongoing, self-sustaining effort. A successful point of view is a truly lasting manifestation of success that is consistent and uninterrupted through fastidious, constant oversight and execution. This level of success is coveted by all retailers, but as we can all see, few are actually able to deliver or sustain it.