Archive for the 'Promotional strategies' Category

Men’s Wearhouse and Joseph A. Bank: Finally, a deal

Again, a brief comment (from a RetailWire discussion) now that the back-and-forth between Men’s Wearhouse and Joseph A. Bank has concluded. (With Eddie Bauer looking in from the outside…) The big question in my mind is whether the combined company can maintain each brand’s quite distinct image, targeting and promotional strategy:

There are economies of scale to be found, from sourcing to IT to media buying, that will make sense for the combined company. But it will also pay to maintain each brand’s separate focus in terms of customer profile and merchandise direction. This may require leaving two buying organizations in place, even with the expected back-office efficiencies.

How do marketers reach Millennials?

The question in the headline was a recent topic at RetailWire. The issue is that “millennials” are driven more by word-of-mouth than by traditional advertising media. Conventional ways of shaping opinions (and affecting consumer behavior) may not work for marketers and retailers as this segment of the population grows in importance. Here’s my comment:

It’s become a cliche to describe Millennials as “tribal,” but there is some truth to it based on their consumer behavior patterns. The most obvious sign that word-of-mouth matters is the importance of social networking and review sites as tools to spread opinions to a broad audience. Some marketers have clearly done a better job than others — either using Facebook and Twitter as “new media” ad tools, or exploiting customer reviews on sites like Yelp and TripAdvisor.

Best Buy: On the comeback trail…or not?

Here’s an appropriate followup to my last post (about the “premature burial” of big box stores). There is a lot of attention paid to the turnaround efforts at Best Buy, and justifiably so. Here’s a recent comment from RetailWire:

Best Buy was declared dead far too early, considering its size and its niche. And Hubert Joly’s hiring — at first met with skepticism — turned out to be a smart way to refocus the business on customer satisfaction.

I give credit to Mr. Joly and team for focusing on the fundamentals at Best Buy: First, embrace the challenge of “showrooming” by converting store traffic into transactions. Second, recapture at least some of Best Buy’s reputation for customer service, which slipped after the demise of Circuit City. Finally, find some new merchandising strategies (Samsung and Microsoft “shops,” for example) to use the center of the store more productively.

Best Buy still faces plenty of challenges, including robust competition from Walmart and Amazon among others, some unproductive sites and the cyclical nature of consumer electronics demand. But there is no doubt that the company has taken some important steps forward.

POSTSCRIPT: Since I published the comment above, Best Buy reported very disappointing holiday sales and their stock priced has fallen from the upper $30′s to the mid-$20′s as of January 24th. Obviously they are not out of the woods yet. I still think Mr. Joly’s initiatives are the right ones, but it’s hard to drive demand in consumer electronics without an influx of new products.

2013 Promotions: When do retailers hit bottom?

Every year on RetailWire, panelists have a chance to discuss stores’ promotional candence in comparison to previous years. This year’s heavy promotions may have been triggered by the short calendar between Thanksgiving and Christmas — or the perceived weakness in consumer spending — but did retailers go too far this year? Here’s my point of view:

It’s hard to imagine retailers being more promotional this year than in past years, but it does seem that the “layered” discounting (to charge customers, to “friends and family” and so forth) is deeper this year. Some of these events were obviously preplanned, others look like a late reaction to soft Black Weekend sales. (And stores’ e-commerce sites make it much easier to trigger this kind of extra promotion quickly.)

The statistics on apparel selling are interesting, because they would represent a meaningful uptick in discretionary spending. There is no doubt that cold weather is driving better-than-expected sales of coats, sweaters, gloves and boots…but with all the extra discounting ahead of “clearance season,” will stores be asking where the gross margin went?

Cyber Week vs. Black Weekend

It’s no surprise that extended hours on Thanksgiving took the wind out of the sails of “Black Friday” volume. (No sense of urgency.) It’s also not shocking that more and more consumers avoid the malls as long as they can get better deals online before or after the holiday weekend. This year’s “Cyber Monday” results were strong, and I comment at RetailWire on the outcome:

I’m not sure you can read too much into the Cyber Monday numbers, except as a counterpoint to the NRF-reported decline in weekend sales across all channels. It’s likely that brick-and-mortar numbers dropped even more, with retailers’ extended hours draining any sense of urgency around Black Friday sales events.

Meanwhile, yesterday’s big number underscores the overall health of e-commerce, even though many retailers have turned “Cyber Monday” into “Cyber Week.” (My e-mail box is full of extended Cyber offers today.) So the same sense of urgency is put at risk, often by the same retailers who mismanaged their brick-and-mortar results over the weekend.

Target walks a tightrope

From a recent RetailWire panel discussion, here’s a brief comment about Target’s brand positioning. Trying to reinforce the “cheap chic” brand image isn’t easy when the company is also caught in a downward pricing spiral:

Target’s value-driven offers are a tightrope act. Yes, the chain does need to compete vigorously against Walmart, Amazon and the big box stores with which it competes. And Target has often struggled to communicate its value equation, despite the RedCard program. But “value” is not always equal to “lowest price,” and Target must continue to improve its product development and in-stock execution if it wants to escape the downward spiral of falling prices and falling margins.

“Values” shopping: How powerful a trend?

On a recent RetailWire panel discussion about the trend toward values-driven consumption (not to be confused with “value”), I make a distinction between drivers such as “environmental awareness” and more typical consumer behavior such as “early adaption.” Here’s my comment:

I’m not sure whether there is an exact correlation between self-described “values” shoppers and actual market share, but there is little doubt that green-friendly “values” in particular drive a lot of consumer behavior. But the phenomenon of “early adapters” of new foods and technology shouldn’t be confused with “values” consumption. This has always been a subset of the consumer population, and is likely to grow as Millennials’ spending power also increases.

Is “Black Friday” really over?

A heated debate at RetailWire on the importance of Black Friday for the retail calendar. While it’s not all about Friday early hours any more, the Thanksgiving weekend still serves a purpose. Here’s my take:

Relentless deal seekers are a fact of life, although they are just a part of the larger population of value-oriented consumers. (That is, most of us.) if anything, mobile technology has made it easier for deal seekers to cross-shop at a variety of stores.

So Black Friday still serves a purpose, even if the definition of “Friday” has gotten pretty loose. It drives a huge amount of sales, and it represents a “stake in the ground” for the large number of stores seeking market share from each other.

Christmas for Labor Day? Really??

A few weeks ago (right around Labor Day), the panelists at RetailWire commented on Kmart’s new campaign, promoting holiday layaway. I didn’t have a big problem with the timing, because of the nature of the ad:

The complaints get louder every year about retailers who start promoting Christmas even before Halloween. Kmart has them beat by almost seven weeks! The difference here — and why I think the idea behind the ad is effective — is the focus on layaway rather than seasonal merchandise. This has become one of the few competitive edges left for Kmart to offer its target customer, so putting a stake in the ground ahead of its layaway competitors makes sense.

Walmart and the “Twinkie defense”?

Today’s RetailWire discussion was triggered by the weekend news about Hostess relaunching Twinkies, and Walmart apparently breaking the “embargo.” (I know…there are more important topics in the world.) The question is whether large CPG companies favor large retailers, and the answer (shared by other panelists) is a clear “yes”:

I’m shocked — shocked! — at the idea that CPG manufacturers and other large vendors provide preferential treatment to their biggest retail customers. These can range from early launch dates to exclusive product designs to co-branded marketing plans. Industry consolidation (on both sides of the business) has only made this trend more apparent. The onus falls largely on smaller retailers to work proactively with their vendors on product development and other two-way benefits, or to develop deeper relationships with CPG companies that may not be “household names.”



Follow

Get every new post delivered to your Inbox.

Join 44 other followers