Archive for July, 2010

The milkman cometh?

I’m definitely a contrarian at today’s RetailWire on the subject of a startup home delivery “milkman” business in California. The question is whether there is scale (not just niche) and I’m not convinced:

I’m one of those “of a certain age” who vividly remembers Wes the milkman delivering his wares to our back door. Do I think there is a niche market here? Yes…but I’m not sure it is significant. Companies like Peapod have grown nationwide because they provide a combination of broad assortments, convenience and reasonably competitive prices compared to local grocers. But the focus of this operation is on a narrow assortment of dairy and related products, with an emphasis on fresh/local/artisanal as well as premium prices. And let’s face it: As long as the trend toward two-income families isn’t going anywhere soon, the whole concept of waiting for the milkman is largely an exercise in nostalgia.

Bed Bath & Beyond: The strong get stronger

Lots of ideas (at RetailWire) about why Bed Bath & Beyond is enjoying particular success right now. Here’s my point of view:
Bed Bath & Beyond has a big niche practically all to itself — much in the same way that Best Buy “owns” the specialty electronics business despite plenty of competitors in the same space. BB&B benefited greatly from the demise of Linens n’ Things but frankly it out-executed LNT to get there. And very few general merchandisers have been able to capitalize on the loss of a key competitor, with the possible exception of Kohl’s…certainly JCPenney did not have the kind of growth in its home store that observers expected last year.
Bed Bath & Beyond has stayed focused, is compellingly priced, and takes a “headquarters” position in key businesses like dorm supplies. A good lesson learned for other specialty retailers aspiring to the same kind of dominance in their market space.

Pier 1 back in the online business

It’s clear to most RetailWire panelists (including this one) that Pier 1 has made a long-overdue move back into e-commerce:

This makes obvious sense; it’s hard today to picture any national retailer trying to maximize sales without a “clicks and bricks” strategy. In fact, I was shopping recently for some barstools at my neighborhood Pier 1, and I was baffled that the items (out of stock in the store) weren’t available to buy online. Now I understand the rationale behind Mr. Smith’s decision to pull the plug a few years ago, but frankly his return to e-commerce is long overdue.

Mobile apps meet aggressive marketing

RetailWire panelists recently discussed the pros and cons of mobile apps and texts intended to send promotional info to consumers. Not such a bad thing, in my opinion:

I don’t think marketers can jump to any conclusions — one way or the other — about whether text-messaging of ads is a net positive or negative. Does the risk of alienating some consumers get overshadowed by the benefit of targeted reach? Do consumers who are more likely to object have the ability to “opt out” (just as they can filter out e-mail ads or telemarketers)? If so, there is a lot to be gained by the smart use of technology in a “handheld app” world.

What next for Walmart in Chicago?

Walmart recently (and finally) reached agreement with the City of Chicago about wage levels in the stores that it plans to open there. My point, on a recent RetailWire discussion, is that the challenges are just beginning in a big urban setting like Chicago:

It looks like the agreement on base pay was a necessary compromise on Walmart’s part. Without it, the push into urban markets like Chicago was likely to remain stalled. Now that there is apparent agreement on moving forward, it will be fascinating to watch how Walmart approaches a marketplace like Chicago with varying footprints ranging from “big box” to smaller formats focused on food and consumables.
It will also be a challenge for Walmart to find a balance between the lower margin categories likely to drive small-format stores and the higher costs (wages, logistics, shrinkage) associated with an urban market. Will Walmart be able to maintain its “price leader” position given these kinds of competing pressures on the bottom line?

The annual Father’s Day dilemma

Seems like there is an annual discussion (at RetailWire) about Father’s Day retail business. How to make it more men-centric and less dependent on other categories? I’m not sure this is in the cards:

I agree that much more men’s merchandise (apparel, furnishings, electronics, sporting goods) is self-purchased as needed throughout the year, rather than bought for Father’s Day. I also believe that dads are less interested in “stuff” and more interested in time spent with their families…at least it’s nice to think so. Both of these issues converge on Father’s Day and lead to a shopping period where much more women’s and kids’ apparel is sold than men’s. Whether there is a merchandising “magic bullet” to reverse this trend is hard to picture in the short run.

Can Google catch Apple?

Interesting discussion at RetailWire about the cell phone business. The focus is whether Google has a chance at catching Apple. I say no:

I wouldn’t bet against Apple in this race. While Google is making strides in a lot of areas outside its original focus on search, it does not have Apple’s huge advantage in vertical integration. Apple has developed so much hardware to maximize use of iTunes — between phones, MP3 players and computers — that its headstart is similar to the advantage enjoyed by RCA back in the “good old days” when it owned a TV network and sold televisions. At the same time, Google is at the mercy of other companies building Android into their phones and other devices, without a clear strategy to catch up to Apple’s lead.