Archive for the 'Business books and articles' Category

Amazon vs. The New York Times, part 2

Amazon chose to respond to The New York Times reporting (from last August) about the company’s relentless employee culture — two months after the fact. And the Times, naturally, responded to the response. Today’s RetailWire discussion asks the question: Was it smart on Amazon’s part to stir up the controversy two months later, either from an HR or PR perspective? Here’s my take:

Jeff Bezos’s initial response was, essentially, that the Amazon described in the original article was not the company he knew. But the reporting painted a convincing picture of his company’s culture — fair or unfair in his view — that might have caused a period of introspection.

Amazon chose not to take that route, but instead to re-ignite the controversy with Carney’s comments. It’s not surprising that the New York Times moved quickly to defend its reporters and reporting, although Amazon may have been caught by surprise by the speed and forcefulness of the reponse.

Bottom line: Amazon may have been smarter to look in the mirror first, and to announce some reforms, but that doesn’t appear to be the Bezos way. “Take no prisoners” is more like it.

Happy “Take your Child to Work” Day

RetailWire panelists had a chance today to discuss the annual “Take Your Child to Work” Day event, and to reflect on how exposure to their own parents’ work lives helped shape them professionally. Here’s my recollection:

My dad (and my grandfather before him) owned a specialty department store, so I had many exposures to the family business while growing up. (And my retail roots go back five generations.) Superficially, the chance to work all over the store as a teenager and college student caused a spark that led to my own retail career. Nothing was more gratifying at that early age than “making a sale” while dealing with customers face-to-face in the men’s department…something of a lost art today.

But the biggest life lesson was to observe a great role model (my dad) in a professional setting outside of the bounds of daily family life. The mutual respect between his employees and him made a lifelong impact. I hope everybody who has had a similar opportunity with their mother or father (including today’s “tagalongs”) has the same kind of experience.

Ignore Millennials? Good luck with that!

RetailWire recently held an online panel discussion around the provocative findings of the “Forrester Report.” It’s premise is that marketers and retailers should focus on Boomers, not Millennials, because the older consumer has the spending power. I disagree:

The Forrester report creates a false choice between Millennials and Boomers. Unless your business model is targeted to a specific age and lifestyle demographic, you ignore either one at your own risk.

Yes, Boomers today have more disposable income than their children, after decades in the workforce and building up home equity. But statistics also suggest inadequate savings among this age group as they head into retirement age and as their lifestyle becomes constrained by fixed income.

Meanwhile, the sheer numbers of Millennials will overtake the Boomer generation in 2015. There is a vast difference between younger members of this age group (working their way through college, renting, not awash in disposable income) and the Millennials in their early-to-mid 30’s who have been in the workforce for a decade. As this population matures, has children and buys homes, its impact on spending patterns will be profound.

Too early to be bullish about 2015 sales

The National Retail Federation issued its full-year forecast at its annual gathering in January. The NRF is projecting sales over 4% for the full year — which, in my view (per the following RetailWire comment), is on the high side:

As usual, the NRF is very optimistic (too much so) about a year that has just kicked off, and not with the greatest sales momentum so far. While improving employment numbers and low gas prices continue to provide tailwinds, there is still not enough evidence that consumers are spending at the rates the NRF suggests. (Usually they hold their optimism for their holiday forecast.)

Shoppers continue to be very selective about where they spend their money: No problem buying the latest iPhone in huge quantities, but this kind of purchase takes customers out of the market for a lot of other goods. So the joy among other electronics, home goods or softlines retailers may be a little more muted than the NRF suggests.

Retailers continue struggling to recruit

The issue (discussed below and on a recent RetailWire post) is why retailers struggle to hire college grads. This conversation has been going on as long as I can remember (almost 40 years in the industry), and it’s hard to lay all of the blame on industry consolidation. Here’s my point of view:

Consolidation isn’t unique to the retail industry. It’s the same challenge faced by the airline industry, the financial services industry and many other examples over the past 25 years. To some degree, retailing faces the same recruiting challenge that it always has: For B-school grads (BA or MBA), are there better-paying industries with bigger growth potential, especially now in the tech sector? Until this chronic issue is addressed, the revolving door of familiar CEO faces will look a lot like the “usual suspects” coaching NBA teams.

Amazon finds another industry to disrupt

An interesting RetailWire panel discussion this week, on the topic of Amazon. The issue is whether CPG manufacturers need to adapt faster as Amazon moves to take share away from brick-and-mortar food and consumables stores. Given Amazon’s track record — first in books, then in almost every other category they sell — the answer is a clearcut “yes.” Here’s my point of view:

For some perspective, it’s worth reading an article in the new issue of The New Yorker, about the impact that Amazon has had on the book publishing business. (Obviously huge, but arguable that without Amazon it was a “dinosaur” industry.) There are really two questions here: First, can the CPG industry survive over the long haul as their sales continue to migrate from conventional bricks-and-mortar to providers like Amazon? (Clearly, the answer is no.)

The second question is more complex: Can CPG companies sustain the sort of negotiating power they may have in their current relationships with retailers, while dealing with a completely different logistics and demand model? This is much harder to forecast, but younger consumers’ decreasing loyalty to specific brands may be a complicating factor over the next several years.

2014: Year of the omnichannel “tipping point”?

While the CEO of Starbucks has less to worry about than the heads of more traditional retailers, he made the point recently that the industry in general needs to figure out multiple platforms for selling to consumers — and figure it out fast. Here’s my brief comment on RetailWire:

Howard Schultz is absolutely right about the shift, and he has a right to be concerned about the strength of his mall-based locations although his business is less vulnerable than a conventional retailer selling general merchandise.

Part of the “omnichannel” challenge is for retail executives to figure out how to leverage their tangible assets (storefronts and inventory) more effectively, given consumers’ migration to e-commerce. For some stores (Macy’s, for example), their forward-looking strategies are delivering results. For others (such as Best Buy) it’s a continuing struggle despite their efforts to execute the fundamentals better.