A Walmart “reality show”: Really?

Apparently Walmart is planning a PR-marketing campaign done in the style of a TV reality show, to focus on the positive things that the company brings to consumers and its associates. I’m among several RetailWire panelists who look at this with somewhat jaundiced eyes:

Is Walmart an “American success story”? Absolutely, and its remarkable growth should be celebrated. But, at the same time, it struggles with image problems for a reason.

From its predatory pricing tactics that earned market share as it spread geographically, to its relentless pursuit of the lowest costs possible from its vendors and supply chain, Walmart has been dogged by a reputation for ruthless business tactics. At the same time, it has never completely shaken its image as the “lowest common denominator” place to shop, with lesser quality and service practices (checkout lanes, restocking the shelves).

Any attempt to portray Walmart in a positive light through a so-called “reality show” lens ought to acknowledge a few of the blemishes, too.

Does “sequential pricing” stand a chance?

There was a lot of mixed opinion on RetailWire this week on the subject of  ”sequential pricing.” This is the concept that retailers can charge more for an item once they determine that a shopper is more likely to buy it by observing consumer behavior. (This can include using RFID technology to figure out whether somebody has taken an item from a shelf.) Count me as a skeptic, for a couple of reasons:

From the article, here’s the flaw in the premise: “Not apparently explored in the study is whether altering prices based on buyers’ intent will be acceptable to consumers.” The “empowered customer” would find at least two reasons to object to this pricing practice.

First, the growth of “price transparency” makes it harder and harder for retailers (especially in e-commerce) to disguise the price for goods and services. Second, state attorneys general or bureaus of consumer protection (not to mention the FTC) would have a real issue with multiple in-store prices that conflict with “shelf prices,” especially if they are driven by RFID.

Bottom line: I would not expect “sequential pricing” to get off the ground.

JCP apologizes, but is it enough?

By the time you read this, you have probably seen the new JCPenney ads asking customers for another chance. Here’s my take, from a recent RetailWire panel discussion:

The “mea culpa” ad isn’t nearly enough, but it’s a start. JCPenney (note that they ditched the new JCP logo in the spot) has been swamped by so much negative publicity in the past few months that some sort of acknowledgement of missteps was in order. The creative problem with this spot is that it was put in place before Ron Johnson and his team were fired, and has too much of the “new JCP” flavor and focus on a young consumer.

But a more fully developed marketing campaign needs to follow whatever changes Penney decides to put into place — keeping some of the shops, ditching others, returning to a promotional cadence, and so on. I would expect and hope to see a stronger branding effort later in the year, once Penney decides who it wants to be and what consumer it is trying to reach.

Can Radio Shack stay relevant?

Radio Shack has recently started a TV campaign to promote “Beats” headphones and wireless speakers, and it’s quite a departure. RetailWire panelists discussed the potential impact of the spot, and here’s my opinion:

Radio Shack has a long way to go in order to rebrand itself. The ad (and the focus on “Beats” product) is one step in the right direction, but much more needs to be done. Right now Radio Shack is plagued by an image as “the store in the local strip center carrying a bunch of random tech supplies that I can buy cheaper at Amazon”…not a good place to be. But some focus, narrowing of assortments and specialization do allow Radio Shack to take advantage of its “non-big box” format. One bold place to start a repositioning campaign might be with the company’s brand name itself.

The “black hole” of inventory management

RetailWire panelists spent time recently discussing the interlocking issues leading to chronic out-of-stocks, even in today’s era of improved technology solutions. My comment (which follows) points to inaccurate inventory tracking, which is a problem well within retailers’ ability to solve:

The promise of new technologies like RFID inventory tracking has not been met yet, since many retailers have not made the investments needed to make them work. So many retailers continued to be plagued by what I call the “black hole” of inventory management.

Specifically, stores may book receipts into their on-hand systems at the point of receipt at a distribution center (or even upon receiving an advance ship notice electronically from a vendor). There can be a gap of days between receipt in a store’s “system” and actual delivery of goods to a store. There may be additional delays if tight store payrolls (Walmart, anyone?) cause a breakdown in replenishment between the truck, the stockroom and the selling floor. Meanwhile, the buyer (or the replenishment system) thinks that goods are in stock and can’t figure out whey they aren’t selling.

Retailers are decades past the days where the solution to the “black hole” problem was out of reach. But it requires investments in technology and manpower to fix it.

JCP and Martha: Was the “juice worth the squeeze”?

It may be premature for RetailWire panelists to weigh in on the JCP/Macy’s/MSLO trial outcome, but we didn’t hold back. Here’s my point of view:

Without knowing exactly how the judge will issue his final ruling in this case, the JCP/Macy’s trial seems to be headed toward a “split decision.” I expect that JCP will be allowed to sell Martha-branded merchandise in non-exclusive categories like window treatments, but will need to sell Martha-designed products in “contract” categories under the JCP label. If I’m correct, this raises multiple questions:

1. Was the risk of infringing on the MSLO/Macy’s agreement worth it? Was the “juice worth the squeeze” in terms of how the Martha brand resonates with the new customer that Ron Johnson was trying to attract?

2. What does the entire chain of events say about Ron Johnson’s judgment? Clearly his recent firing by JCP reflects on a wide range of bad judgment calls, but this may have been the biggest public embarrassment.

3. If JCPenney ends up filling its new home stores with “JCP” product (instead of Martha Stewart), what did it gain?

On the last point, JCP has managed to develop product for which it is probably paying a rich licensing fee (and pricing it accordingly) after spending the cash to buy an interest in MSLO. “JCP at Home” could have been developed and sourced internally, for lower costs, sharper retails and better margins than this program is likely to produce.

Amazon targets the over-50 set

Amazon has set up a “store within the store” called 50+: Active and Healthy. It pulls together several categories and products aimed at the aging Baby Boomer (myself included). RetailWire panelists gave this idea mixed reviews, but I think it’s well worth the effort on Amazon’s part:

Great idea, and there’s no doubt that Amazon has the patience and IT expertise to find out what works and what doesn’t work, and to adapt accordingly along with their vendor providers. While the sheer number of Millennials is starting to surpass the Boomer population, there is no doubting the older group’s buying power.

Outside of chain drug stores — who have an opportunity to appeal to Boomers in a more focused way — it’s hard to see a brick-and-mortar concept that can offer the breadth of assortment found on Amazon. But there are certainly any number of specialty retail and service concepts that could do a better job catering to this population instead of always chasing the young.