Archive for September, 2012

Amazon: Friend or foe?

Here’s a recent comment from RetailWire about Walmart, and its decision to drop the Kindle family of products from its assortment. This says more about the perceived threat from Amazon than it does about carrying the right merchandise:

I have the same reaction as I did a few months ago when Target announced its move: This has everything to do with e-commerce competition from Amazon, and very little to do with carrying the right merchandise. There is no doubt that the Kindle family of readers and tablets is the share leader in the category, so it sends a mixed message for the two largest discounters to drop the product. It’s all about the big box stores feeling Amazon breathing down their necks.


What’s the plan for 4th quarter payrolls?

At this writing (late September) several retailers have announced fairly aggressive hiring plans for holiday. My point of view, from a recent RetailWire post:

Retailers may be finding that they have leveraged expense cuts to the point of “diminishing returns.” The reported increases in hiring signal not only an improvement in the spending climate (and consumer optimism), but also a strategic decision to focus more on the top line. That being said, smart stores will pick their spots carefully for the added payroll, from e-commerce call centers and DC’s to checkout lanes, not necessarily overstaffing specific merchandise areas.

The iPhone 5: Another winner, or hampered by short supply?

RetailWire panelists weighed in a few days after the launch of the iPhone 5, especially to discuss the limited supply offered to Apple’s retail partners. My take:

My neighborhood Best Buy store has no idea when it will be receiving more supplies of the iPhone 5 and I’m not sure whether it received any in the first place. (On the other hand, my college-age daughter stood in line for 10 minutes at her local Apple Store on Friday and bought her new phone.) The “short supply” tactic seems to work every time for Apple by whipping demand into a frenzy — but, curiously, some of the evidence suggests that sales were not quite as high as expected. Hard to tell whether this is an outcome of how Apple seems to treat its retail partners or whether they were truly caught flat-footed by demand. And it will also be interesting to see whether the “Google Maps” backlash (and Apple apology) has any long-term effect on unit sales in the coming months.

Beyond Whole Foods?

The following comment from RetailWire points to Trader Joe’s and Fresh Market as a couple of grocery concepts taking a different tack from Whole Foods. Based on my observation of both stores, they have done a good job differentiating from each other, too:

I wouldn’t describe Fresh Market or Trader Joe’s as “natural food chains,” precisely…but they both serve a different market than a conventional grocery chain or supercenter. (And they both differ from Whole Foods in some key ways, including their location strategies.) Both stores offer tightly focused assortments in relatively small footprints, and neither store is trying to compete in the low-margin world of the traditional food retailer. (Joe’s specializes in a vast array of its own packaged goods, Fresh Market in produce and other categories meant to be cooked and eaten today.) Both stores have a chance to expand and thrive if they stick to their brand positioning instead of aspiring to be “the next Whole Foods.”

Crystal ball, anybody?

It’s fun to peer into the future of retail, as in today’s RetailWire discussion about the look of the industry in 2020. I focus on the trend away from big box stores that seems to be the topic of the moment:

I don’t agree with the premise that combination food/discount stores are doomed (both Target and Walmart are both committed to the food and consumables businesses), but the giant footprint under one roof may be another story. On the other hand, the “category killer” big box store (toys, electronics, office equipment) is definitely struggling with the effects of technology on its business.

Think about Best Buy, Staples and Toys R’ Us as examples: Both Amazon and the discounters provide plenty of price and assortment competition. More importantly, many of these stores are still devoting space to products (CD’s, DVD’s, printers and paper) that are quickly losing steam with consumers. It pays for stores like Best Buy to keep rolling out small-footprint stores focused on a single category like mobile.

Target and Campbell’s co-branding effort

A brief comment from RetailWire about the collaboration between Target and Campbell Soup on a “limited edition” of Andy Warhol-inspired soup cans. Inspired, indeed, in my opinion:

It’s hard to imagine anything more prosaic than a can of Campbell’s tomato soup, which is what made the Warhol paintings so iconic in the first place. Hats off to Target and Campbell’s for infusing some fun and “design” (Target’s buzzword) into a boring category. Campbell’s in particular will benefit from the halo effect of this promotion, even if a lot of buyers turn out to be “collectors” instead of consumers.

Merchandising or “brand management”?

I weighed in on a recent RetailWire discussion about different types of merchandising organizations. In particular, I argued the merits vs. flaws of “brand management” as an organizing principle, and come down on the side of category management instead:

I’m not sure that the CPG concept of brand management — which has been in place for many years — is totally applicable to retail merchandise management. There is still a place for category managers (i.e. buyers) who can put together assortments of disparate brands, to make sure that each brand has a point of view so the department (and store) is coherent to the customer. Do private brands and exclusive brands need their own advocates in a retail organization? Absolutely, but not at the expense of redundant assortments and a confusing shopping experience.