Archive for May, 2011

Note to retailers: The sky isn’t falling

RetailWire panelists weighed in on whether retailers are “glass half empty” to their detriment. My point of view:

The best recent illustration of the “sky is falling” syndrome happened during holiday 2009. This was about a year after the “Crash of 2008,” and consumers pulled back on discretionary spending at an alarming rate. But the stores who played their inventory bets most cautiously also lost market share, because they were overly conservative and ran out of goods. The retailers who found a sensible balance between tight inventory control and having wanted product in the right stores were the winners.

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New developments in bookselling?

The Amazon report is the most significant over the long term. The rate of e-books to printed books has moved very quickly from one-to-one to three-to-one, using Amazon’s reports, with no end in sight as long as e-readers (including tablets) gain popularity. This does not mean the end of the bricks-and-mortar bookselling business, however, and Barnes & Noble is in a good position to consolidate its market share. Liberty Media’s investment in B&N is a bigger puzzle: Are they in it for the long run, simply looking for a short-term win, or intrigued by the e-delivery potential of the Nook?

 

Luxury retail price points: Movin’ on up?

A brief RetailWire comment about the growing trend among luxury and near-luxury retailers to push up their price points:

The same trend is already happening at Nordstrom, although it is more of a “near luxury” retailer than Saks. At least in the men’s area, there is much less inventory at opening prices (by Nordstrom standards) and more “reach” price points. I would expect Saks’s true competitors, such as Neiman Marcus, to follow suit.

 

A retail footprint for Amazon?

From a recent RetailWire discussion about Amazon having an interest in some old Borders locations:

The concept of “the publishing business at retail” is the real issue here. The definition is changing rapidly, as digital content delivery turns traditional bricks-and-mortar retail on its ear. (Just ask Blockbuster.) As I said a couple of months ago when Borders announced its big wave of store closings, there was a Borders, a B&N and an independent within a five-mile radius of my house. Meanwhile, I have not bought a printed book in the two years that I’ve owned a Kindle.

Having a retail footprint may make sense for Amazon, as long as it can cherry-pick the best locations. It apparently serves a tactical purpose pertaining to the looming issue of sales taxes, but won’t be a significant part of Amazon’s overall business.

 

Did marketers just rediscover Baby Boomers?

A fascinating recent discussion on RetailWire about marketing to Baby Boomers. It’s becoming apparent that the media and advertising communities’ love affair with everything “young” is starting to be tempered by the sheer size and spending power of Baby Boomers. Here’s my point of view:

I don’t think that “youth positioning” is a mistake per se, if it helps a brand become more aspirational to a broader audience or if it is clearly targeted to the 25-49 age group. However, it’s no secret that Baby Boomers continue to be the largest and highest-spending demographic out there. We haven’t been ignored in terms of CPG product development or retail formats, but marketing to this audience has been strangely quiet outside of niche products and programming. We’ll see whether the changes described in the article are a passing fad or a long-term trend driven by pure economic interest on the part of advertisers.

 

Say goodbye to the desktop

Whether you use a PC or a Mac, one real issue is the long-term viability of desktop computing. Any laptop worth its salt can do whatever a well-equipped desktop can do, wirelessly. Laptops were the first wave of portability that has led to netbooks, tablets and smartphones. The next issue will be the evolution of tablets: Can they duplicate the functionality of a fully-loaded notebook computer while getting smaller and smaller? And can the typical computer user live with just one device? Probably not.

 

Walmart’s move into C-stores

Regarding Walmart’s plans to test convenience stores, I stated on RetailWire that this concept is bound to be expanded if it works:

I don’t agree with the author’s statement that he doesn’t see Walmart throwing up C-stores all over the place. If the concept is successful, that is exactly what Walmart can be expected to do. The company has been interested in national and even global footprints for its various concepts for many years, and the C-store business seems to be dominated by strong regional players. (At least in my corner of the country, Kwik Trip is a much bigger player than 7-Eleven.) Walmart is starting from a strong brand name and pricing credibility; if it focuses on commodities, its competitors need to be prepared with different offerings, such as fresh and ready-to-eat foods.

 


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