Archive for the 'Promotional strategies' Category

Cacique: The Anti-Victoria’s Secret?

RetailWire panelists recently discussed the new Lane Bryant campaign for its Cacique intimates brand, which pokes some fun at the “unattainable” body image of the typical Victoria’s Secret model. Here’s my opinion about how well this campaign works to target a plus-sized customer for intimate apparel:

Victoria’s Secret has for many years capitalized on what some might consider “idealized” rather than realistic body types. (I know I’m treading on sensitive ground here.) And they have built up an enviable brand position as a result. Over the last few years, Cacique (and to a lesser extent Soma) have tried niche-building around an older or plus-sized customer who doesn’t want what VS is selling — either the merchandise or the brand position.

Whether the “I’m No Angel” campaign will drive Cacique’s sales is hard to say, but I’d rate it as a success in terms of brand positioning. Lane Bryant should be applauded for recognizing that its core customer is just as entitled to be comfortable “in her own skin” as a Victoria’s Secret model.

Farewell to deep discounting? I don’t think so…

The following comment from RetailWire was triggered by a Washington Post article about stores’ promotional cadence. The premise of the article: The “glory days” of 40% off discounts (and more) are over. I’m not seeing it:

I agree that retailers need to do brand-building on the basis of merchandise content, customer service and loyalty marketing (benefit-driven, not price-driven). But I don’t see much evidence to back up the Washington Post premise that stores’ promotional cadence is losing any steam. Judging from our mailbox and e-mail offers, there are plenty of retailers (Macy’s, Kohl’s, Penney and just about any specialty store you can name) continuing to drive promotional sales with extra coupons on top of other sale offers.

There are two bigger questions that retailers need to grapple with: First, is price a sustainable loyalty driver? (I’d argue “no,” because somebody can always beat you on price.) Second, does the store’s expense structure provide enough breathing room for the promotional impact on gross margins?

The recent results of JCP and Kohl’s provide a good contrast: Both operate with a similar promotional cadence and both stores’ gross margins are in the same ballpark, too. The difference is that Kohl’s has a far leaner expense structure than Penney and delivers a better operating profit as a result. So the real “sustainability” question surrounding discounting comes down to whether a store’s overall operating discipline can support it.

The one “right” pricing strategy? Let’s lay that one to rest

In a recent RetailWire discussion, the topic of everyday low pricing (EDLP) came up in the context of food retailing. The issue is whether “the best” strategy can even be defined. Although I put the spotlight on general merchandise, there is certainly no “one size fits all” answer to this question. It all depends on the rest of your retail strategy:

It’s probably valid that too many overlapping promotional strategies only serve to confuse the customer. In the world of general merchandise, Kohl’s (for example) is working to simplify its multilayered promotions through its new loyalty program and mobile app. But there’s no doubt that “the thrill of the hunt” drives department stores’ business, and JCPenney learned the hard way about the cost of switching to an EDLP approach.

Meanwhile, other retailers depend on EDLP as a key piece of their overall strategy, whether in groceries, consumables or apparel. It’s not just Walmart that avoids sales on top of EDLP, but off-pricers and some fast fashion stores. So choosing which is the “best pricing strategy” depends — as usual — on the rest of your strategy and what drives your sales and profits effectively.

Praise for Target’s holiday TV campaign

RetailWire ran a weekly series of face-offs comparing holiday TV spots for various retailers. The “finalists” included everybody from PetSmart to Radio Shack. In my view, Target’s campaign came up the winner this year:

There were several effective ads among the weekly winners, but I still vote for the Target commercial as the overall champ. This spot turned out to be the kickoff of a well-sustained, consistently themed campaign that ran through Christmas. The focus on category dominance in toys never got lost in the creative execution, while the ads struck a nice balance between emotion and “attitude.” (See the followup commercial with the “naughty boy” getting a lump of coal in the form of an antique cell phone.) Well done, Target, and consistent with the brand position you are trying hard to recapture.

Thanksgiving 2014: A post-mortem

I posted the following at RetailWire on the Monday after Thanksgiving. The “punch line” is that Cyber Monday sales were soft, too. Despite a lot of positive tailwinds, this holiday may be another squeaker:

It can’t come as a surprise that sales on Friday itself fell in brick-and-mortar stores, although the size of the decrease was bigger than I expected. Every year that sales are pulled forward by earlier openings — first from 6am to 4am to midnight on Friday and now to 6pm or earlier on Thursday — takes the sense of urgency out of Friday morning. The entire four-day weekend has to be considered disappointing.

This year’s decline was more pronounced than usual because of the rapid shift to e-commerce and mobile commerce (not reported in the overall weekend numbers) and the probability that some sales shifted to the early part of November this year. As the consumer becomes more empowered each year by the information at her fingertips, she is also less likely to believe that Black Friday pricing is really the lowest of the holiday season.

Add it all up, and it probably made for a more pleasant, and less crowded, shopping experience on Friday. But the sheer size of the numbers will leave retailers sweating it out — as usual — for the next couple of weeks.

And still more on “new Black Friday”

Again — in hindsight — the effort to spread out Thanksgiving shopping from a one-day event to weeklong has not paid off in incremental sales. Here’s a RetailWire comment that I posted about a week before Thanksgiving:

“New Black Friday” is simply a marketing handle meant to acknowledge the new reality of shopping patterns from Thanksgiving morning through Cyber Monday. It’s hard to say whether the idea is likely to drive additional sales, but it should help address the operational challenges of early-morning doorbusters even at the cost of some sense of urgency. Most importantly, it is an omnichannel-friendly approach to a key shopping weekend that has evolved dramatically over the past decade.

More on “Black Thursday”

I published the following comment on RetailWire a couple of weeks before Thanksgiving. In hindsight, it’s apparent that early openings only cannibalize Friday sales. (More on a later post.) My point of view:

The relevance of earlier (and earlier) openings will fade as more stores provide ways for shoppers to “buy online, pick up in store” in the future. (Not to mention, the continued growth of e-commerce and m-commerce to begin with.) But, for now, the stores racing to beat the clock are just gearing up their BOPIS efforts. As long as there is peer pressure to open earlier and earlier, we will inevitably see stores open all day on Thanksgiving in the near future.

The stores choosing to stay closed on Thanksgiving Day are making a more vocal effort this year to align their decision with their brand. Costco has always led the way, since they also close on several Federal holidays throughout the year, but it’s significant that stores across the retail spectrum — from Dillards and Nordstrom to TJX to big-box stores — are keeping them company.


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