Archive for January, 2012

Can retailers learn from a winning sports team?

OK, the following RetailWire post was written before Green Bay lost to the Giants yesterday. But the point is the same: An organization with a “culture of winning” (such as the Packers in this example) has something to teach businesses and esepcially retailers. Here’s my opinion:

Here’s a topic dear to my heart. (Go, Pack, Go!) Frankly, some of the “culture of winning” in Green Bay comes from its history and tradition, and it’s not necessarily something easy to replicate. In fact, the Packers went through a long dry spell (about 20 years) during which the “culture of winning” was absent. So any organization trying to capture this attitude (or recapture it) can’t just rely on past glories.

One of the unspoken keys to the Packers’ organizational strength right now is the sense of “ownership” (both real and intangible) by all of the stakeholders — fans, players, team leaders, the community. The Packers have a unique business model as a publicly owned team with thousands of shareholders, but it’s an attitude that many other organizations — retail or otherwise — should aspire to. In short, make sure that your executives, hourly associates, customers, vendors and other stakeholders are literally or figuratively “invested” in the success of the business.

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Target: The rest of the news

As a followup to my post about Target and Apple, here’s a RetailWire comment about the other part of the story. Target is rolling out several specialty concepts to all of its stores (and online, I assume) in an ongoing effort to provide differentiated products. Here’s my point of view:

Selling unique, exclusive merchandise has been part of the Target formula for a long time, and this venture is certainly true to the brand position. It moves Target further away from the pure price-and-commodity positioning of the past couple of years (complete with its own mini-dollar store at the entrance).

But there are a couple of cautions for Target to consider: First, can the company forecast demand (and execute) more accurately than with some of its recent missteps like Missoni? Second, do “the Shops” truly reinforce Target’s value position, not just the “coolness factor”? If Target can succeed on both fronts, this looks like a winning idea.

Un-changing of the guard at Urban

After a tough year, Urban Outfitters reported that its CEO is being replaced (at least for now) by his predecessor, the founder of the company. It’s hard to know where this move will lead, but my RetailWire comment suggests that it can be tough to fill an entrepreneur’s shoes:

It’s obviously a period of uncertainty for Urban, not just because of its recent sales performance but also because of a failed transition at the top of the company. It’s also hard to say whether Mr. Hayne (the founder and former CEO of the company) is in place as a transitional figure before turning over the reins, or plans to stick around for awhile.

We’ve seen this sequence of events in many other companies: The founder can’t find a suitable successor, or he is unwilling to walk away. Without knowing the internal politics at URBN, it’s clear that the company is losing share in an environment where many other junior/trend retailers are doing well.

The Apple of Target’s eye?

Target has been in the news recently…first, with its announcement about expanded Apple “store within a store” setups in many of its locations, and more recently with its news about an array of specialty categories being rolled out nationwide. Here’s my RetailWire comment about the Apple initiative:

This looks like a win for both companies. There is nothing in the joint history of Apple and Target to suggest that a better in-store presentation will tarnish the brand. (After all, the product is already there and Target is not discounting it.) Provided that Target can execute close to the service standard of the Apple Store (maybe not complete with a Genius Bar), it’s a good way to expand Apple’s distribution in a controlled way.

Best Buy botches holiday fulfillment

A news story at the end of December got plenty of attention from RetailWire panelists: The failure of BestBuy.com to fulfill Black Friday orders in several categories and (worse yet) their failure to notify customers until just before Christmas. Here’s my take on the situation:

While it’s not likely that Best Buy planned some sort of “bait and switch” maneuver, it leaves a disagreeable taste in its customers’ mouths. This is a failure on so many fronts: The worst offense is the lag time between order placement and cancellation. (At least Best Buy acknowledged this problem.) But it’s almost as negligent for Best Buy to have accepted orders in the first place — at narrow gross margins — that it was unprepared to fill.

Is the company’s inventory forecasting or IT management that bad? (Perhaps Best Buy hired the person that mismanaged the Missoni launch at Target in September.) An online apology and gift card is not going to rebuild trust in Best Buy anytime soon.


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