Archive for July, 2012

Is the “youth market” losing its luster for retailers?

Retailers’ fascination with “youth” (sometimes ignoring the truth of an aging demographic) is a double-edged sword. My recent comment on RetailWire points out that some stores are broadening their appeal better than others:

Retailers’ focus on the young customer will never wane completely, but smart apparel companies are trying to broaden their appeal. (The “fast fashion” retailers like H&M, Zara and Uniqlo are probably doing a better job than their U.S.-based counterparts like Aeropostale and Abercrombie.) There will still be a place for junior trend retail: After all, “Millenials” will be the parents of teenagers someday too.

Repurposing the mall to combat e-commerce

It’s true that adding dining and entertainment venues to malls and lifestyle centers can provide experiences not available online. But there are plenty of other good reasons to pursue this idea. Here’s my comment from a recent RetailWire discussion:

Malls and lifestyle centers need to drive “experiential” traffic, but not only to compete against online shopping. More importantly, they need to find ways to keep consumers onsite longer and to let malls return to some of their original purpose as the social hub of the suburbs. And, let’s face it: With the consolidation of mall anchors and struggles of specialty apparel chains, there is plenty of space available for this sort of repurposing.

CityTarget: A new concept for urban locations

The latest discussion at RetailWire about “small format” retail centers on CityTarget, a new idea being rolled out in Chicago and elsewhere. I see Target as particularly well-positioned to make this work if it gets the merchandise content right:

I do expect Target to get the CityTarget concept right over time, although even 80,000 sq. feet may not always be easy to find. It will take some well-focused assortment planning to make this work: Not just fewer items like lawn furniture, but more product geared toward the urban lifestyle. Apparel is a particular opportunity to “get it right,” although that looks like a challenge for the entire chain right now.

The Shopkick app: A way to combat showrooming?

Here’s a brief comment from a recent RetailWire discussion about Shopkick. This is a mobile app that encourages store visits with targeted offers. My thoughts:

For all the hand-wringing about showrooming, this is a perfect example of how to turn location-based smartphone technology to a retailer’s advantage. It’s noteworthy that Best Buy and Target (two of the biggest complainers about showrooming) are on board with Shopkick, along with Macy’s and other major retailers.

Shopkick’s challenge is to deal with the likely proliferation of competing apps aligned with other stores — it doesn’t need to turn into another Groupon.

USOC uniforms made in China

RetailWire panelists (including me) added their two cents’ worth to the recent controversy about U.S. Olympic uniforms being manufactured in China:

It would not be difficult for the USOC to source Olympic uniforms domestically, instead of manufacturing in China, Burma (really??) or elsewhere. It’s not surprising that a tone-deaf decision is met with political outrage in the middle of the current conversation about insourcing or outsourcing.

But will consumers willingly shift their allegiance toward US-made goods on an everyday basis? Not likely, given the pricing benefits of manufacturing overseas.

Amazon approaches same-day delivery?

Interesting speculation on RetailWire about whether Amazon is planning to offer same-day delivery as it expands its network of distribution centers. Here’s my take:

There is a growing movement among Amazon’s competitors to merge online shopping with the convenience of in-store pickup (Walmart) or using its stores as mini-distribution centers (Macys). Amazon needs to react to these kinds of developments to sustain its mastery of logistics as one of its key strengths (along with price and assortments).

To make this an achievable goal, Amazon is reaching deals with various state governments (New Jersey, for one) to open new distribution centers. This will enhance the states’ tax revenues at the same time that Amazon expands its supply-chain advantage.

Nordstrom partners with Topshop

I commented recently on RetailWire about the announced rollout of Topshop locations inside Nordstrom stores. It’s planned for a slow rollout but I expect it to become a chainwide initiative:

Nordstrom, like many US retailers, is trying to find ways to emulate the best of the “fast fashion” retailers. Adding Topshop is certainly a shortcut in that direction. It’s easy to foresee the success of this test and its eventual rollout throughout the U.S.

Nordstrom has proven before (with Faconnable) that it can execute a branded shop concept and make it a win for both parties. I expect the same sort of success from the Topshop collaboration, which has already worked well for Selfridges in the U.K.

Where does Supervalu go from here?

I don’t often comment on this blog (or at RetailWire) about grocery retail. However, Supervalu’s recent announcement that it is considering alternatives to its current business model is worth noting:

I don’t see Supervalu surviving simply by lowering prices in its midtier stores. From my experience shopping in stores like Jewel or Star Market, there are stronger grocery operators out there (Kroger, for example) who would be smart to look at selected acquisition targets in the Supervalu store portfolio. Meanwhile, the best breakup value for investors might lie in a spinoff of Supervalu’s original supply chain business.

Target, meet Neiman Marcus

A lot of comment recently on RetailWire (and elsewhere) about the planned holiday collaboration between Target and Neiman Marcus. (Both stores will feature a co-branded collection of American designer “gifts” in December.) Most people see this as a win for Target, less so for N-M, but I take a slightly different position:

The Target/N-M partnership is quite an imaginative leap. There is little doubt that the goods will sell out quickly in Target stores and online, and will burnish its reputation. (It’s hard to conceive of a similar partnership between, say, Saks and Walmart.) Whether the move is good for Target’s value equation is a different matter.

Looking at the other side of the coin, this experiment is a way for Neiman Marcus to combat its own reputation (“Needless Markup”) in a very limited way, and without driving enough sales to disrupt the rest of its business.

Market prospects for a “mini-iPad”?

There is plenty of buzz about what Apple is developing next, including a RetailWire discussion about the merits of a smaller, less expensive tablet. Here’s my view:

Apple seems to own the high end of the tablet market, as long as it keeps adding features (such as retina display) for the same price. The move to a smaller, less expensive iPad is a flanking move that will affect the Kindle Fire, Google tablet and other competitors. (And nobody knows what Microsoft will sell its tablet for this fall.) The risk, however, is in cannibalizing sales of the full-sized iPad, so this will present some marketing challenges to Apple at the same time that it works on the iPhone 5 and “smart TV” concepts.