Archive for November, 2011

Is Cyber Monday the new Black Friday?

From a recent RetailWire discussion…The apparently strong results on Cyber Monday show three trends at work:

1. Consumer spending is in a genuine recovery mode. The numbers have been modestly stronger than the “sentiment” all year, but the past five days show evidence of stronger demand.

2. E-commerce and multichannel retailers are getting a lot smarter about pitching online “doorbusters” and connecting with shoppers multiple times during the day.

3. It’s harder for employers to control online shopping at the workplace when a huge number of employees have handheld computers (aka smartphones) within reach.

The best news for retailers is that the holiday shopping season appears to have a tailwind. We will encounter the usual post-Thanksgiving lull, but many stores will report healthy comp sales later this week.

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Black Friday 20/20 hindsight, part 1

My initial response (on RetailWire) to post-Thanksgiving business follows…and (as I’ve been saying all year) consumer spending is fairly healthy given the overall state of the economy. It’s unclear until we see what the entire month of November looks like whether the past weekend was a trend or an anomaly:

Until stores report comp sales this Thursday, we have an incomplete picture of winners and losers. However, it’s clear from the early evidence that consumers spent robustly over the weekend. Whether driven by early hours, doorbusters, “Small Business Saturday” or other marketing angles, customers were motivated to spend. (And slower traffic over the weekend vs. Friday should not come as a surprise to NPD or anyone else.) This is consistent with the narrative throughout 2011…consumer sentiment is persistently negative but actual spending behavior is less cautious.

 

New sheriffs in town at JCPenney

One of the most intriguing retail stories in the years ahead will be the evolution of JCPenney. Ron Johnson (from Apple) has assembled an impressive team but they have their hands full trying to “reinvent” the company. Here’s a recent analysis I wrote for RetailWire:

Ron Johnson and the team that he is hiring have impressive backgrounds, but turning around JCPenney won’t be easy. It’s one thing to start with a blank slate (The Apple Store) and a narrow assortment of most-wanted merchandise. It’s another thing entirely to turn around a company with an entrenched way of doing business in a very competitive space. Rather than promising to reinvent the department store experience, Mr. Johnson and his team will be smart to focus on one key improvement at a time…in particular, the overassortment of lackluster private brands putting JCP at a competitive disadvantage vs. Macy’s and Kohl’s.

 

Customer Service: The art of exceeding expectations

Many of the retailers listed on a recent “honor roll” of great customer service are not traditional department stores or even bricks-and-mortar operators. What they have in common — from my recent RetailWire comment — is an ability to exceed expectations. Driving loyalty through great service (however it’s defined for your type of store) can help move customers from satisfied to committed:

The list of winners proves that you don’t need to be a “high-touch” bricks-and-mortar retailer like Nordstrom to get high marks. But you do need to exceed expectations for the type of store or website that you are operating. Easy return policies and good execution are important as “silent salespeople,” in the absence of a live sales associate.

 

A robot made my ice cream

As a RetailWire panelist, it’s fun to comment occasionally on something totally out of my “wheelhouse” of general merchandising. Case in point is the following comment about the new Robofusion robotic ice cream vending machine:

I saw a Robofusion machine (or something like it) at Logan airport in Boston. It was getting plenty of use and an acquaintance who tried the product was happy with it. This plays nicely into the growing consumer preference for customization, and one can envision plenty of retailers (think C-stores) who can use it.

Can Starbucks juice up the beverage business?

From a recent RetailWire discussion about Starbucks and its more aggressive move into juice. My brief comment follows:

Starbucks was instrumental in turning a commodity product (coffee) into an “experiential” beverage. In the process, Starbucks has been able to command premium prices for its offerings. The same concept should work equally well in other areas of the beverage business, especially if Starbucks can “brand” its juice concepts with a wellness message.

More early color on Black Friday

In hindsight (after Black Friday weekend), the tactics used by most retailers last weekend drove results…if NPD and NRF numbers are to be believed. (We’ll learn more on December 1st when stores report November sales.) In the RetailWire comment below, I express some skepticism:

As I mentioned recently when panelists discussed Macy’s and Target’s midnight openings, I can see most big retailers opening on Thanksgiving Day within five years. But there is a degree of “mutually assured destruction” in the early-opening arms race. The CEO of Best Buy recently commented that he was planning to open at midnight on Black Friday — begrudgingly, and in response to the competition — but was deeply concerned about the effect on store managers’ and associates’ morale.

And the “doorbusters” that have traditionally driven early Black Friday business lose all sense of urgency if they are available all day Thursday in stores and online. We’ll have to see what sort of color is provided along with November comp-sales reports to see whether this tactic works or not.


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