Archive for December, 2015

The online “shopping cart” problem: Can retailers fix it?

RetailWire panelists recently discussed the phenomenon of “abandoned shopping carts” at e-commerce sites. Apparently shoppers walk away from other 2/3 of their transactions. The question before retailers: How to re-engage the customer (and close the sale) without being overly intrusive? Here are some of my thoughts:

Display ads containing abandoned items are so commonplace that most consumers are unlikely to find them disturbing. Likewise for followup e-mails…I’ve gotten many e-mails from travel sites in particular showing lower prices on hotels that I may have searched for. I do think more intrusive types of followup (especially unwanted text messages or phone calls) probably cross the line.

The bigger question is whether these follow-up methods (especially the first two) are effective in closing the sale? If so, was an added price incentive involved? If not, why not? And why were the carts abandoned in the first place? Retailers have a lot to learn about how to cut down on this issue, or to view it as a “cost of doing business.”

Black Friday 2015 observations

Many RetailWire panelists and others have commented on the relative lack of mall traffic, on the day after Thanksgiving. While some of this can be blamed on the rapid growth of both e-commerce sales and Thursday openings, I still lay part of the blame on merchandise content. In short, the lack of newness in women’s apparel is hurting sales right now, and not just on Black Friday:

One mall doesn’t make a big sample size, but the Simon mall that I shopped on Friday morning is anchored by Macy’s, JCP, Sears, Bon Ton and Kohl’s. So it’s a good place to look for areas of common ground. I noted the same thing that many observers saw nationwide: Mall traffic was not impressive around 10am on Friday, at what should be the height of “doorbuster” sales.

Yes, the growth of omnichannel, Thursday openings and weeklong “doorbusters” (instead of for a few hours on Friday morning) have all affected After Thanksgiving volume. But these tactics didn’t just start in 2015…they have been gaining strength for the past several years. So how to account for the visible dropoff on Friday? I believe it still comes down to merchandise content, especially in the women’s apparel areas that have been troubled all year. In my observation, this was consistently the quietest area of the stores.

That being said, it’s too early to write off the weekend (or the season) until somebody adds together the brick-and-mortar numbers with the e-commerce sales and what is likely to be a robust Cyber Monday (or “Cyber Week”) this year.

Does Petco have a story to tell?

Petco is apparently changing hands, from one private equity investor to another. This follows unsuccessful attempts at an IPO or a merger with PetSmart. My brief comment (at RetailWire) suggests that Petco is trying to trade on the “omnichannel” issue to make its strategic future look brighter:

“Omnichannel” is a useful buzzword to suggest that any retail company is on top of its strategic game right now and therefore a good investment. This may or may not be true in Petco’s case, but the previous owners weren’t successful in merger talks with its bigger competitor nor with an IPO. The previous PE owners seemed determined to get out from their investment, one way or another.

What’s the matter with Macy’s?

Here are two back-to-back posts at RetailWire, following Macy’s disappointing 3rd quarter earnings announcement. I’ve had plenty to say lately about the underlying problems with merchandise content that are plaguing many traditional department stores — not just Macy’s — especially in their women’s apparel businesses:


Perhaps the biggest problem facing Macy’s and its main competition is the merchandise content in women’s apparel. Kohl’s has openly acknowledged this issue and J.C. Penney tacitly admitted the same thing by restructuring its merchant team.

Walk Macy’s today: Too many brands, too little brand clarity, too much private label proliferation, too much duplication of assortment. For all of Macy’s advances in omnichannel, they need to get this right. There are simply too many strong competitors on the fast fashion and off-price front to ignore this.


We seem to be in a cycle where off-pricers and discounters are outperforming traditional department stores…but in a sense, the segment has been in a slow decline for many years. Macy’s acquisition of May didn’t happen because it was a growth industry but because there was strength in consolidation. And both fast fashion and e-commerce have had a more serious impact on apparel market share than once anticipated.

But Macy’s results in particular did appear to swamp the entire sector last week, including both Penney and Kohl’s who announced better-than-forecast sales. At the heart of the current department store malaise? Customers aren’t shopping for women’s apparel — the core business in this sector — perhaps because of the lack of any meaningful or exciting trend.

Colored denim and puffy coats are still selling but are not driving the shopper’s search for newness. And department stores’ dark, dreary approach to “fall merchandise” stands in stark contrast to stores like Uniqlo right now, who are in the business of selling bright color 12 months a year.

Kroger’s to buy Roundy’s: More consolidation on the horizon?

The announced acquisition of the Roundy’s stores (Pick N’ Save, Mariano’s, Copps) is of special interest here, because Roundy’s is a hometown Milwaukee retailer. I describe it (on RetailWire) as a “tale of two companies,” including some valuable assets for the Kroger’s portfolio as well as some underperforming stores:

The success of Mariano’s certainly gives Kroger a foothold in the Chicago market, and a vehicle for brand positioning much different from Jewel or the big discounters’ grocery operations. Mariano’s may be the prize posession but is a relatively small part of Roundy’s portfolio.

Roundy’s still generates most of its sales from its mid-market Pick ‘n Save and Copps locations here in Wisconsin. These stores have steadily lost market share to Woodman’s, Walmart, Aldi, Costco and now potentially Meijer. And, frankly, Roundy’s has been slow to expand its Metro Market concept (the local version of Mariano’s) fast enough while the upscale (and locally owned) Sendik’s chain has expanded rapidly.

As a shopper at my neighborhood Metro Market and Pick ‘n Save (about five miles apart from each other), I hope Kroger management brings better operating attention to detail to the market. Long checkout lines, expired dairy, and an overabundance of private brand have not helped Roundy’s win the market share war. Meanwhile, Mr. Mariano has been more focused on his personal re-entry into Chicago, having lost his job at Dominick’s to another takeover several years ago.

JCP parts ways with Mango (or vice versa)

The partnership between Penney and Mango (in the guise of its MNG brand) outlasted both the Ron Johnson era and the company’s recovery under Mike Ullman. But the two companies are parting ways, after several years of trying to bring a fast-fashion model to JCP. Here’s my recent RetailWire comment on the topic:

I’m surprised that the MNG initiative lasted as long as it did at JCP. It’s one of the few recent initiatives that preceded and then outlasted the Ron Johnson era, along with the more successful Sephora shops. Many stores continue to struggle with their “fast fashion” offerings, perhaps because their product development and sourcing models are different from the specialists in this area like H&M or Zara.

But JCP is taking another whack at fast fashion with the introduction of its Belle + Sky line, rolling out this fall. Maybe Penney feels that the upside potential on the margin side is higher without a partner requiring licensing fees and perhaps a share of revenues.

Starbucks’ holiday cup causes a minor stir

Amazing that Starbucks’ redesign of its holiday cup (solid red plus its green logo) stirred up controversy, at least for a few days. But RetailWire panelists joined the fray:

Starbucks’ mistake (if it was one) was in redesigning its cups to eliminate winter motifs, but these were not Christmas-specific in the first place. So it’s a stretch to look for signs of the “war on Christmas” in this case. Retailers do need to be sensitive to those customers who celebrate other holidays in December (mostly in terms of their product offerings) but I see very little evidence of an “anti-Christmas” feeling out there. Most retailers don’t shy away from either secular messaging (red and green decor) or “Merry Christmas” graphics throughout their stores and in their sale circulars.

The so-called “war on Christmas” is an example of reverse political correctness run amok.