Archive for April, 2011

What is a retail “curator”?

RetailWire panelists recently discussed an article focusing on the concept of merchants as “curators” of the products in their stores. To me, this is an old but core idea (assortment planning) dressed up in more contemporary lingo:

I agree with the other panelists that the idea of curation as “selecting content for the benefit of the visitor” is the fundamental job of any merchant. Whether in a bricks-and-mortar or virtual storefront (or both), retailers are responsible for offering thoughtfully edited assortments aimed at their core and targeted consumers. So there is an element of new-speak in the concept of “curation,” but if the idea returns retailers’ focus onto the products they offer as the heart of the business, so much the better. No amount of design sophistication, cost-cutting or other strategies can disguise the lack of a pointed assortment.

Can private labels develop more focused target marketing?

Short answer to the question posed in the headline: “Of course!” Here’s my thought from a recent RetailWire discussion:

Private labels need “brand management” just as much as national brands. In fact, a lot of the evolution toward “exclusive brands” rather than private labels is an effort to move away from one-size-fits-all marketing. Any brand should try to reach a targeted audience, whether through demographic or lifestyle segmentation. Even a full-line retailer trying to draw a broad customer segment needs an array of brands with targeted appeal within its overall assortment.

Customer service: An unconventional “top ten” list

As part of an ongoing discussion of what defines “customer service” in today’s new world of retail concepts, RetailWire panelists weighed in on the latest survey where (among other things) Amazon topped the list. (And there wasn’t a single traditional department store in the Top Ten.) My point of view:

As many panelists have pointed out (today and on other discussions), “service” is really being redefined as “good execution.” In the case of most of the retailers on the Top 10 list, the issue isn’t whether they offer “high-touch” contact by a sales associate (like a traditional department store) but whether they execute their mission well. Does the store do a good job staying in stock? Does it operate the “front of the store” effectively? (In the case of Amazon…a virtual storefront.) Does it make the return process relatively hassle-free? Most of the stores on the list meet these expectations–and offer value. I’d question Walgreens from my own experience but in their case the convenience factor is a key element of the customer experience.

New impressions of the Microsoft Store

I visited the Microsoft Store at the Mall of America, a couple of months after commenting about it on RetailWire. (I have also made it a study topic for the undergraduate class in retailing management that I teach.) While the store had good foot traffic (not surprising the week after Christmas at the MOA), it suffered from the “identity crisis” that many of us predicted last fall. What, exactly, does Microsoft stand for other than a software supplier for other brands’ hardware? The store was dominated by “demonstration” spaces (like an Apple store) where customers can try out laptops and other equipment. But some of Microsoft’s proprietary “wins” (Xbox Kinect and the new Windows phone software) seemed curiously underplayed. Understanding that this is a work in progress, there is plenty of thinking to be done especially in contrast to the Apple Store next door.

Kindle: With or without advertising?

Interesting discussion at RetailWire about Amazon’s latest idea to get the Kindle into more hands: A $114 version that includes advertising (on the screen savers, etc.) I’m in favor as long as the consumer has a choice, as with a “free” vs. paid app:

Reading a book may be the only form of entertainment left beyond the reach of advertising — at least in its dead-tree form. So the e-book reader needs to make a choice: Save $25 and deal with (hopefully unobtrusive) sponsorship, or spend more for the ad-free $139 Kindle with WiFi? Personally I think this is a good way for Amazon to continue driving the price of the Kindle down and capture more market share vs. other e-readers and tablets. (Not to mention driving more e-book purchases to its own site.) The key is to present sponsors’ ads in a way that doesn’t disrupt the immersive experience of bookreading.

Walmart’s growth problem: Assortments or pricing?

It’s debatable whether SKU rationalization was a good idea or a bad one. Walmart had a deserved reputation for carrying “too much stuff” and making its stores difficult to navigate. To lay the blame on the assortment planning process is missing the point, but to add back SKUs that can carry their weight makes sense as long as Walmart continues to focus on the store experience.

The real issue is pricing, and Walmart has lost share not because of SKU rationalization but because it has “given away” its key pricing edge to Target, Costco and others. Walmart had arguably the best sustainable competitive advantage in the history of retail, with an entire company culture and supply chain focused on low-price leadership. Refocusing on price leadership is long overdue, especially with consumers pinched more than ever by rising gas prices.

Do appliances make sense for Walmart?

RetailWire panelists recently discussed a new venture by Walmart to pump up its comp-store growth. My point of view:

Appliances make sense in the same way that an expanded assortment of electronics have helped Walmart capture market share from Best Buy and other competitors. But the category requires commitments to floor space and trained customer service. What business does Walmart plan to exit in order to make room for appliances, and what is the volume risk?

Bottom line: Walmart has the sheer number of stores and formats that allows it to experiment with new categories, and online groceries seem like a natural extension of its food business. But here’s a word of caution: Until Walmart can convincingly return to its position as the low price leader — instead of being beaten by Target, Amazon and others — no amount of experimentation will help it recover lost sales momentum. If Walmart plans to sell appliances, it had better plan to beat Sears, Lowes and Home Depot on price every day.