Archive for the 'Exclusive brands' Category

Is Target’s turnaround on the right track?

A brief comment (below) from RetailWire, regarding Target CEO Brian Cornell’s evaluation of their improved comp sales and operating results. It’s all about the merchandising:

Given his CPG background, I give Mr. Cornell credit for recognizing at the outset that Target’s real niche is “cheap chic” apparel and home goods. This is what the brand was built on, not groceries and commodities. While these categories will continue to be important in-store and online, Target’s destiny doesn’t depend on them. The new brands’ product development didn’t happen overnight, but the strategy is beginning to pay off.

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Macy’s reshuffles the merchant deck

Macy’s new CEO Jeff Gennette announced yesterday the hiring of a new president (with background at eBay and Home Depot) and the restructuring of its merchant organization. The company also announced plans to grow its private brand penetration from 29% to 40%. Here’s my comment from a recent RetailWire discussion:

I’ll start with this point: Growing private-brand penetration from 29% to 40% will only drive Macy’s sales if the company gets the merchandise content right. I’d argue that there are already too many private brands and lack of clarity between them, especially in women’s apparel. Macy’s execs may be able to tell the difference, but I doubt the average shopper can define what Karen Scott vs. Style & Co. vs. Charter Club (and so forth) really stand for. Let’s face it: Most stores trying to grow their private label business are doing it as a margin play, not a loyalty tool, and it’s often moved the sales needle in the wrong direction.

As to the new hires and restructuring: It’s clear that Macy’s is doubling down on omnichannel with the hiring of Mr. Lawton. It’s also clear that streamlining its merchant organization is meant to bring more speed to the decision-making process. Let’s see if the new team can tackle those “clarity of offer” problems after all.

Can JCP keep expanding Sephora?

Penney has been aggressive about expanding Sephora shops to its full- and mid-sized stores, even while rebounding from its missteps in 2012-2013. The question posed on RetailWire is whether JCP should expand the concept to its small-town, small-footprint locations. Here’s my take:

I regularly shop a midsized JCP store in Menomonee Falls, Wisconsin. (The home of Kohl’s headquarters…not coincidentally.) Penney built this and other roughly 90,000 square foot locations before the Ron Johnson era, to see if it could operate Kohl’s-sized off-mall stores successfully. This location does contain a Sephora shop, although not as big as the one just installed at a local anchor store in a Simon mall.

I think it’s essential that Penney and Sephora develop a more “curated” version of their collaboration for the many even smaller JCP stores around the country. It’s arguably the most successful part of Penney’s business for the past several years; in many of the smaller communities where these stores are located, Sephora will be the only game in town for shoppers who want more than their local discounter can offer.

Can Penney apply lessons learned from the Sephora success story?

As JCP expands its co-branding concept to categories like furniture and floor coverings, there is some disagreement about whether its success with Sephora can be applied to even more categories. Here’s my take from a recent RetailWire discussion:

Sephora is not a store-within-a-store idea along the same lines as the branded shops rolled out during the Ron Johnson era. Instead, it gives JCP a chance to be category-dominant in a business (cosmetics) that a traditional department store needs to succeed. And (in JCP’s case) the absence of key brands like Clinique and Lancome made it essential to build the business around a proven concept and name that customers had already embraced.

Macy’s has been quicker to embrace this idea in categories like sunglasses (Sunglass Hut) and athletic shoes (Finish Line). The idea might work in other businesses at JCP but it needs to go all-in with the idea, as it did with Sephora. For now, Penney’s bigger challenge is to convert Sephora shoppers in its stores to apparel and accessory shoppers, too.

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.

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.

Walmart takes a new marketing direction…again

From a RetailWire discussion in early December: Walmart has engaged Michael Francis, formerly of Target and (more recently) JCPenney, to try steering its marketing in a more aspirational direction. Mark me as a skeptic about the hire and the strategic change, especially until Walmart successfully tackles its store execution issues:

Can a tiger change its stripes? Can Walmart successfully try to chase a more upscale, aspirational customer? I’m not so sure that trying to out-Target Target is appropriate to the Walmart brand, when it needs to do a better job executing its core strategy.

As to Mr. Francis being the right person for the job: His experience at JCPenney raises a huge red flag. He tried to turn a lower-moderate, promotional department store into something that its loyal customers categorically rejected. His decisions (in partnership with Ron Johnson) to eliminate sale pricing, to drop the company’s biggest private brand (St. Johns Bay), and so forth, had far-reaching consequences from which JCP is still trying to recover.


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