Archive for October, 2011

Does Walmart have its pricing magic back?

Most RetailWire panelists feel that Walmart’s “Christmas Price Guarantee” (in which they match competitors’ prices) is a sign that the giant discounter has its “mojo” back. I disagree:

The “Christmas Price Guarantee” sounds like an extension of the “Match It!” campaign that has run on TV for the last several months. As such, it inadvertently reinforces the message that there are competitors out there actually beating Walmart on price. It would be more compelling if Walmart relaunched its “Rollback” campaign with a new wave of price cuts. Layaway is likely to have a bigger impact on recapturing market share in the next two months.

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Too early for retail “panic mode”?

Interesting recent discussion at RetailWire about free shipping and other tactics being used by retailers this season to drive share. The question under discussion: Are retailers panicking already? I say no…

I don’t believe retailers are in “panic mode”…it’s way too early and consumer spending has been modestly healthy this year despite the troubled economy. However, every year becomes a bigger challenge in terms of taking away market share from competitors. With higher commodity costs, apparel retailers are going to have to deal with slimmer margins since consumers seem unwilling to pay higher prices. And with the prevalence of coupon sites and “deals of the day,” most stores — whether bricks or clicks or both — will need to be very creative in order to break through the promotional clutter.

Does JCPenney have holiday gifts “WRAPT” up?

JCPenney recently announced plans for a new “gifts to go” outpost featuring distinctive gifts from Dylan’s Candy Bar, Glamour Magazine and other licensing partners. It feels like a win to me, although (as I commented on RetailWire) it is not necessarily a reinvention of the wheel:

The “gifts to go” idea has been around for many years in department stores, but the JCPenney “WRAPT”¬†shop is distinct in a few ways:

1. It pulls together a well-edited assortment of gifts in one location instead of just positioning tables of items throughout the store.
2. It avoids the trap of “pre-wrapped” gifts that can’t be seen by the shopper.
3. There is an element of uniqueness and “buzz” to many of the items, instead of more of the “same old” boxed watches and cologne gift sets.

If JCP pulls this area together in an impactful way, prices it appropriately and owns enough inventory for last-minute shoppers, this could be a winning strategy.

Amazon and its e-commerce competitors: Who’s winning?

It’s clear that there are four companies dominating the e-commerce landscape today: Amazon, Apple, Facebook and Google. Each is taking a different approach to consumer businesses, but each is overlapping the others’ core competencies right now. RetailWire panelists discussed which of the four has had (or will have) the greatest influence. Here’s my opinion:

Of the four companies, Amazon has had the greatest impact on retailing…so far. It has set a standard for what makes a great website (broad assortments, competitive pricing, easy navigation and good execution) and has raised the bar for other e-commerce and multichannel retailers. Amazon also refuses to rest on its laurels, whether by expanding its variety or by moving aggressively into the “mobile” business.

Of the other three companies, Apple has been hugely influential in terms of its store experience but has had the benefit of selling its own remarkable products. It’s clear that Facebook and Google are working hard to become comprehensive e-commerce portals, so the answer to the question may be different in another five years.

Does “brick and mortar” retail have a future?

A provocative discussion at RetailWire about the impact of e-commerce and mobile technology on the future of brick-and-mortar stores. The writer’s premise (which I do not completely agree with) is that the personalization and empowerment of new technology make “status quo” retail a thing of the past. I say it depends on the type of store and product category:

I agree that “smart” mobile technology is changing the retail landscape, but I also agree with the conclusion that “physical retail” is here to stay. Yes, you can buy a book digitally while riding on the bus and start reading it on your mobile device…but there are still plenty of merchandise categories that demand physical interaction even if they are bought through e-channels. You can’t wear a sweater on your smartphone, nor can you use an iPad to toast a bagel…yet.

As long as consumers still want to “touch & feel” merchandise before they buy it, and as long as they enjoy the social interaction of shopping, there is still a big role for physical stores. And as long as customers clamor for value and convenience in some of their shopping trips, the importance of “unique and memorable experiences” may be overstated.

Family Dollar not welcome here?

From a RetailWire story about a small town trying to keep Family Dollar (and other chain retailers) out of town…here’s my take:

Ridgway, Colorado¬†is about 25 miles south of Montrose, which has not just a Family Dollar but also a Walmart and presumably) other big-box stores to choose from. Perhaps there is a desire to keep chain retailers out of town, perhaps there is some “snob appeal” going on here since dollar stores are perceived (rightly or wrongly) as retail bottom-feeders.

But is Family Dollar really an economic threat to the specialty stores (including a lot of art and antique dealers) in Ridgway? And can the town use a viable employer? It seems to me (to answer the original question posed to panelists) that anti-chain sentiment is not especially high given unemployment rates around the country and the benefits of retail development.

Remembering Steve Jobs

Among many other observers of the passing of Apple’s Steve Jobs, I made a couple of comments at RetailWire approaching the issue from two angles:

As I mentioned in August, Steve Jobs brought an uncanny taste level and design skill to his company’s product development — along with remarkable brand-building ability. It’s an almost unique combination in the business world, so it’s hard to replicate as a management lesson. The biggest “lesson learned” lies in Apple’s future: How did Mr. Jobs develop a succession plan and a team that will allow the company to thrive in the absence of his talent and personality?

Surprisingly, retailing has not benefited as much as you might expect, because most retailers have not fully embraced the model of the Apple Store:
1. Keep the assortment simple, focused and appealing;
2. Use technology to make the store more efficient;
3. Make the store design and associate skill set part of the overall branding message.


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