JCP: A new approach to plus sizes?

JCPenney recently announced the launch of Boutique+ (a new private brand for plus-size customers). The news prompted a broader RetailWire discussion of JCP’s women’s apparel business. Here’s my take:

The reshuffling of the JCP merchant team (and the departure of head merchant and former women’s GMM Liz Sweney) signals the new CEO’s dissatisfaction with the growth of their women’s apparel business. I’m not convinced, however, that yet another private brand is the answer — even in an opportunity category like plus sizes. JCP already suffers from too many overlapping brands and a lack of assortment clarity or key items within some of those brands. (And Penney has plenty of company in the department store segment.) Unless JCP feels that the “young plus size” business needs a blank slate, I’m not certain this is the right approach.

Macy’s is looking for a new CMO

Chief Marketing Officer, that is…after letting go a 32-year veteran of the company. RetailWire panelists took the chance to discuss whether Macy’s needs an insider or outsider to fill the position. (And one panelist added that Macy’s could use a new head merchant, too.) Here’s my point of view:

This may be a good opportunity for Macy’s to look at its stale marketing (and especially its sales promotion) with a fresh set of eyes. Macy’s is in a promotional rut where all of its print sale events look exactly the same (red and black, coupons, a bunch of boxes on every page) and the customer is bombarded by the same kinds of overlapping offers they are used to seeing from Penney or Kohl’s. Surely Macy’s has an opportunity to use its promotional tactics as part of an overall re-branding strategy. (What is “The Magic of Macy’s,” anyway?) Without knowing the inside candidates, I’d look outside first.

Menards says “Thanks, Obama”?

Menards, the Wisconsin-based DIY chain, announced that it’s postponing the opening of a new location in Ohio pending the results of the Presidential election. Apparently the family-owned business is hopeful for a different regulatory environment…or something. (The Menard family has donated generously to Republican candidates.) As you might imagine, this topic brought forth all kinds of reactions among RetailWire panelists, depending on their side of the aisle. I’ll let my comments speak for themselves:

It seems to me that the home improvement/DIY sector has done nicely since the Great Recession. I guess Mr. Menard’s memory is short regarding the housing bubble, the unemployment rate above 10%, and so forth.

As I’ve mentioned before, I worked for Kohl’s from 1982 (18 stores) to 2006 (750 stores and much higher now). Kohl’s has opened stores during Republican and Democratic administrations, in times of economic boom and bust, and when the regulatory environment varied greatly. (Remember that the Americans with Disabilities Act was passed by Bush 41, and brought some sweeping design changes to the retail landscape.)

My point: If your company has a valid strategy, go for it. In the meantime, run for office if you want to use your megaphone more effectively.

Kohl’s shuts down its coffee experiment

Kohl’s tested a coffee bar (in partnership with Caribou Coffee) in two of its Milwaukee-area stores. Based on the results, the company decided to kill the concept test. Here’s my recent RetailWire comment on the topic:

I shop the Kohl’s Menomonee Falls store often (disclosure: I worked for the company from 1982-2006), so I saw the coffee concept first-hand. The lack of a seating area was a handicap, and a typical Kohl’s store doesn’t have space to burn at the same time that it is expanding its beauty departments. So the typical Kohl’s shopper making the rounds of the store (with an armful or cartful of merchandise to check out) may not find it easy to balance a cup of coffee while checking her cell phone for the latest coupons.

Kohl’s has other ways to make customers linger and to make the in-store experience more compelling — and it has bigger fish to fry in terms of growth opportunities like Off/Aisle and Fila outlets.

Apple unveils a new store design

RetailWire panelists offered our opinions about a new Apple Store prototype recently opened in Memphis. Here’s my take, among a lot of dissenting opinions:

It’s hard to mistake the Apple Store for anything else, even in its new iteration. (And yes, I’m seeing the same logo on the right side of the storefront.) Apple can certainly afford to experiment with its design concept and functionality, as it faces more and more imitators and as its own assortment of products and cloud-based services continues to grow. Keep in mind that when the original Apple Store rollout began, there were no IPhones, no iPads and no iCloud.

Omnichannel: Driving sales, or just efficiency?

As stores have seen underperforming locations and declining comp-store sales, their response has been a case of circular reasoning. The thought process of converting physical stores to “omnichannel” centers has led stores like Macy’s in some directions that are actually hastening the sales shortfalls.

Just in the past week, RetailWire panelists have discussed the risk of trying to perform multiple functions (including omnichannel initiatives like BOPIS) without adding payroll — putting stress on the existing associates and cutting into expected levels of customer service. I’ve been in several mall anchors recently (not just Macy’s) where the store needs a physical refresh, or more sales associates, or more competent restocking of the selling floor.

It’s not a simple question of how to manage competing expenses, but neglect of a company’s core mission can only cut into its topline sales and profits.

Macy’s sales problems: It all begins with content

To echo the last post (about JCPenney’s apparel business), here is a RetailWire post about Macy’s. I contend that a lot of Macy’s current sales weakness could be corrected if assortment issues were addressed more forcefully:

Macy’s problems are emblematic of some of the issues that BrainTrust panelists have been discussing recently:

1. Like JCPenney, Macy’s has a merchandising problem at the root of its sales issues. Its women’s apparel, in particular, looks overassorted and too deep in overlapping private brands without a clear point of view. Merchandise content is at the heart of most retailers’ sales problems, I believe, regardless of short-term hiccups caused by weather.

2. Macy’s was a leader in “omnichannel” and is still tying its growth strategy in part to this wagon. Like other department stores, Macy’s is learning that it is tough to maintain service levels appropriate to its brand at the same time that it is asking store associates to execute BOPIS and ship-from-store orders.

3. Macy’s is looking at new formats like Backstage to drive sales, instead of finding solutions inside its own anchor stores. It’s a case of “if you can’t beat ’em, join ’em” and chasing off-price competitors instead of focusing on whatever the Macy’s brand is supposed to stand for.

It’s a complex set of issues to address, but it all starts with merchandise content.

Penney needs to fix its women’s apparel business

For all of the good news coming from JCPenney lately, there is still a growing recognition that its women’s apparel business needs a fix. Here’s my recent comment from a RetailWire panel discussion:

John Tighe’s promotion to lead merchant reflects the new CEO’s recognition of (and dissatisfaction with) the JCP apparel problem. Penney has had an historically underdeveloped women’s apparel business (and strength in men’s), long predating the Ron Johnson era. But it’s a tricky equation — the attempts to appeal to a Millennial consumer by walking away from key brands like St. John’s Bay were catastrophic and wisely corrected by Mike Ullman.

JCP is heavily dependent on private and exclusive brands in its women’s area, so the first think I would focus on is the “clarity of offer” between brands. Does ANA have a brand identity clearly different from Stylus, or St. John’s Bay, or Worthington, or Liz Claiborne? (The list goes on…) And within each brand, is there a focused assortment of items?

JCP isn’t the only department store guilty of an overwhelming assortment of brands, colors, prints and styles. But it needs to address this issue (and to continue expanding categories like athleisure) in order to offer clearer choices to its core customer. Then comes the harder work of product development meant to appeal to the same customers buying Sephora at JCP today.

The hidden costs of omnichannel

There is growing discussion (especially at RetailWire) about brick and mortar stores struggling with the cost and complexity of “omnichannel.” In particular, department stores are finding it hard to operate as fulfillment centers and places for customers to shop — as long as they are unwilling to add payroll. Here’s my opinion, gathered from two recent blog posts.

First:

I have an acquaintance who sells shoes in a local department store, and who found herself spending time during the holiday season fulfilling BOPIS orders instead of serving customers in her own department. The company paid her time-and-a-half but the extra income didn’t offset her lost commission on her shoe sales. The program didn’t help the store’s reputation for customer service, nor associate morale.

Retailers (as in this example) need to figure out the true costs of omnichannel initiatives like BOPIS or ship-from-store in an environment where brick-and-mortar sales are flat or worse. They are compounding the sales problem by stealing store payroll to execute tasks unrelated to serving the customer or restocking the selling floor. Companies may push back by saying, “We can’t afford to add payroll”…but growing evidence suggests that they can’t afford not to, either.

Second:

As stores have seen underperforming locations and declining comp-store sales, their response has been a case of circular reasoning. The thought process of converting physical stores to “omnichannel” centers has led stores like Macy’s in some directions that are actually hastening the sales shortfalls.

Just in the past week, BrainTrust panelists have discussed the risk of trying to perform multiple functions (including omnichannel initiatives like BOPIS) without adding payroll — putting stress on the existing associates and cutting into expected levels of customer service. I’ve been in several mall anchors recently (not just Macy’s) where the store needs a physical refresh, or more sales associates, or more competent restocking of the selling floor.

It’s not a simple question of how to manage competing expenses, but neglect of a company’s core mission can only cut into its topline sales and profits.

Marimekko: Expect another sellout at Target

RetailWire panelists recently weighed in on the latest designer collaboration at Target — this time featuring the Finnish brand Marimekko. (You’ve probably seen the commercials already.) Based on past history, Target will sell out of goods online and in-store very quickly. The question is whether it’s good for the brand or the long-term reputation of Target:

The designer collaborations may be good for Target’s brand cachet, but in the long run they have only reinforced the chain’s reputation for poor supply chain management. I fully understand retailers’ desire to buy “too little” instead of “too much” — but the coming feeding frenzy (in-store and online) is not going to please the very customers for updated apparel that Target is trying to draw back to the store on a consistent basis — not just once a year.

Is it any wonder that Target felt compelled to hire away a supply chain executive from Amazon? Will he be able to manage these types of events in the future, in order to sell out in a week instead of an hour? (And bringing the website to a crashing halt…) It requires a commitment to a different mindset on the part of Target’s senior management.