Archive for September, 2015

How much merchandising autonomy should store managers have?

The question in my headline pertains to a RetailWire discussion about Abercrombie & Fitch. Apparently, A&F has decided to allow its stores managers to make their own decisions about placing merchandise, as part of an overall effort to boost morale. I have mixed feelings about the unintended consequences of this idea:

This is a tough question for merchants looking for some consistency from store to store, especially in a cookie-cutter format like A&F. Yes, it’s important to give store managers limited autonomy as they see what’s selling — but it’s at least as important for a retailer’s “big ideas” to be given the space and location that headquarters intended when the buys were made. (This is spoken as an ex-merchant, if you couldn’t tell.) Customers need and want some direction about what to buy, too, so the store managers’ changes ought to be data-driven and in collaboration with the merchandising team.

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A bar inside a Target store?

Target is planning to open a small-format store in (or near) the Navy Pier development in Chicago, and their plans include a bar inside the store. I see some brand dissonance here, and so did most of my fellow RetailWire panelists:

I agree with the consensus opinion that this is a misbegotten idea. I understand that a store on Navy Pier (a major tourist destination in Chicago, perhaps less so among the “natives”) requires a different approach to merchandising, especially in a small format. But a location within a “festival” setting like Navy Pier, Ghirardelli Square or Faneuil Hall doesn’t mean that a retailer veers away from its overall brand image. This just feels off-Target to me.

Update: Another panelist pointed out that the Target store is planned for the Streeterville neighborhood, not on Navy Pier per se (for those familiar with downtown Chicago). I’m not sure this changes my perspective about whether the idea is appropriate or not.

Macy’s “Backstage”: Who’s the target customer?

Macy’s is apparently pleased enough with the introduction of its off-price division (“Backstage”) to roll out more locations. Meanwhile, the company is telling investors that the vehicle is aimed at the “Millennial Mom” who is not shopping in its department stores today, in hopes of trading them up someday. My RetailWire comment expresses some skepticism:

Maybe Macy’s research indicates that the “Millennial Mom” is more likely to shop at Backstage than at its traditional stores—but if so, they have a different problem that they need to address. Simply hoping that the “Backstage” customer will eventually shift her loyalties to a full-line Macy’s store ignores the reality that fast fashion and off-price stores are changing shopping habits on a long-term basis. How does Macy’s make its hundreds of mall anchor stores more appealing and relevant to the fastest growing (and eventually biggest spending) segment of the population?

JCP’s new CEO needs to tell us more

After Marvin Ellison had his first earnings call as the new CEO at Penney, it left unanswered some big questions about the sustainability of his company on the expense front. Here’s my recent comment from RetailWire:

I’ve commented to consulting clients that the store count and the high expense structure are the big issues facing Mr. Ellison. Penney has a “legacy” problem of too many unproductive stores (by the sales-per-sq. foot standards of its competitors), and has always run much higher SG&A levels than its biggest national competitor — Kohl’s. The new CEO needs to tell us more about his plans to fix this.

So far, Mr. Ellison has said the right things about catching up on omnichannel, on improvements in supply chain management, and on some of the merchandising improvements started by Mike Ullman. (And the stores I’ve shopped look improved, especially in the re-engineered home store.) But simply rewinding to 2010 and trying to erase the errors of the Ron Johnson era isn’t enough to declare that JCPenney is a sustainable turnaround story, despite its opportunity to pick up share from Sears right now.

Vegas, baby: Starbucks develops a new store design

Starbucks is apparently building a big new store on the Las Vegas Strip with a lot of design elements that will look and feel totally different from their prototype store. Most fellow RetailWire panelists agree with me on this one:

It’s hard to know whether “what happens in Vegas, stays in Vegas.” You can’t blame Starbucks for wanting to have a little fun with its typical design elements in the middle of a sea of over-the-top retail experiences. And there may be some elements (the tiered seating, for example) that would translate to other locations, whether they are high-traffic tourist destinations or not. But I wouldn’t expect Starbucks to deviate nationwide from such a key part of its branding message.

Macy’s enters the private-label wine business

You’ll have to trust me (from the following RetailWire comment) that Macy’s is labeling its new private brand wines as “Macy’s” instead of by another name. I’m not impressed with the idea:

I see from the linked article and photos that the wine is indeed labeled “Macy’s,” complete with the red star logo. I was hoping that Macy’s might have developed a private label with the ability to expand some brand equity to other offerings in its “food halls.” But no such luck.

Macy’s wine may make sense in its restaurants, but is there a business here for self-purchase and especially for gift-giving? Can you picture yourself taking a bottle of Macy’s Cabernet as a “thank you” gift to a holiday party? I can’t.

Target shutters some sub-brands

Target recently announced that it is discontinuing the CityTarget brand (for its high-density urban locations) and its TargetExpress brand (for small-format “neighborhood” stores). It only plans to maintain “Super Target” as a separate sub-brand, and I argue (on RetailWire) that the decision will have mixed benefits:

I agree that CityTarget was not needed as a distinct brand, at least based on my visits to the location in the Chicago Loop. Most customers would recognize it as Target — plain and simple — despite the assortment and space allocation changes geared to an urban (and car-less) customer in a two-level store. The merchandising and presentation will say “city” if the execution is right.

On the other hand, I think TargetExpress is a brand worth keeping. The name communicates “small format” and “edited assortments” very clearly, especially in urban neighborhood locations. In fact, putting the Target name on these stores may raise false expectations about the breadth of products offered to the consumer.


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