From a recent RetailWire discussion, I comment on L.L.Bean’s consideration of a less liberal return policy than it has always been known for:
Having worked for Kohl’s for 24 years, I have a bias toward more forgiving return policies. Kohl’s always viewed its return policies as a competitive advantage and marketing practice (even though there was plenty of gnashing of teeth among the merchant ranks) and I believe this is still the case. Stores can maintain this kind of trust with their customers, even if they look at tweaking the policy through issuance of gift cards for goods returned without receipts or after some time has passed.
I’d be very careful if I were L.L.Bean to walk away from part of what has defined its brand for a long time. As another panelist suggests, look for other reasons why costs are rising faster than sales, starting with merchandise assortments.
After the CEO of Gap mentioned the lack of a fashion trend as part of his company’s sales problems, I posted the following (late in 2016) to RetailWire:
To blame soft sales on “lack of a trend” fails to recognize the retailer’s responsibility to help create those trends. Back in the Drexler-led heyday of The Gap, the company helped create the khaki phenomenon by getting behind the item in a huge way and by marketing it on TV as a must-have wardrobe item. The same principle applied to many other items in the store — from my days merchandising handbags, I remember a canvas tote in a bunch of colors that the industry dubbed “the Gap Bag.”
It sounds like Gap is suffering from the suffocating influence of both its creative direction and its data science, making it hard for entrepreneurial spirit to thrive among its merchants. (And it also looks like Gap has been slower to embrace the short-cycle, high-turnover model of its fast fashion competitors.) Gut feeling can still work wonders to drive sales, if a retailer has the courage to react quickly to big ideas.
And (upon further review) some more thoughts as Gap released its 2016 earnings in February:
One quarter doesn’t make a trend, but the 2% gain compares favorably to most of Gap’s competitors. In terms of merchandise content, there seems to be a renewed focus on what I would call “core basics,” which is what brought such success to Gap during the 90’s. Without ignoring the lessons of fast fashion retailers (especially in terms of speed to market and supply chain management), Gap will probably continue to gain traction if it takes a more classic approach to the business.
Published November 11, 2016
Brand management , Investor Relations , Retailing , Specialty retailers , Uncategorized
Tags: Bass Pro Shops, Cabela's, Dick Seesel, Macy's, Retailing In Focus, RetailWire
Bass is acquiring Cabela’s, and one key question it faces is whether to keep separate branding for the two giant outdoor goods retailers. Here’s my thought, as recently posted on RetailWire:
I think it’s arguable that Macy’s made the right call over the long haul, as the only traditional department store with a national footprint. It was important to create brand equity for the “Macy’s” name instead of trying to support a bunch of nameplates with regional appeal. (Bon Ton Stores, on the other hand, decided that “localized” brand identity was a better tactic.)
In the case of Bass and Cabela’s, I think both brands are worth maintaining. These are superstores usually drawing from large trade areas, and not necessarily in direct competition with each other — and both companies with loyal customer bases. There is no point in shutting down the Cabela’s brand in the short term when there will be plenty of other merger-related challenges to deal with first.
An interesting announcement recently about West Elm’s plan to open boutique hotels in selected cities…and here’s my take from a recent RetailWire discussion:
Part of West Elm’s stated motivation is to widen the brand footprint without opening too many brick-and-mortar stores. It’s a creative way to expand a lifestyle brand into a related business. (Of course there is the added benefit of filling several hotels with saleable product.)
Hotels have been in the ancillary business of selling their proprietary mattresses, bedding and towels for several years. This takes the concept into reverse gear, and it may turn out to be a brand expansion opportunity for West Elm’s parent, too — Williams Sonoma Kitchens inside West Elm Hotels, anyone?
There’s been a lot of comment about big mall developers (like Simon) deciding to take ownership in Aeropostale. My question (as posed on RetailWire) is whether they can really turn around the brand or simply hang onto a tenant:
The deal to salvage at least a third of Aeropostale’s stores is a sign of the times. The developers apparently don’t see a viable replacement strategy to fill this space in hundreds of regional malls. The problem facing Simon, GCP and others: This may be the beginning of a game of whack-a-mole, in which they try to rescue one failing specialty chain after another, simply to prevent too many vacancies at one time.
The bigger challenge for Aeropostale’s new owners: How to fix the business model, and provide some kind of spark to the brand’s merchandising? Aeropostale was always trailing behind American Eagle and Abercrombie (who have had their own issues), so they need a compelling strategy to make the company more competitive today.
An interesting RetailWire discussion about whether fast fashion retailers are discovering (just like traditional department stores) that there is too much of a good thing when it comes to square footage and store locations. Here’s my point of view:
Fast fashion retailers (especially Forever 21 and H&M) have expanded very quickly as real estate has become available during the past five years. (This includes Forever 21’s move into some vacated mall anchors.) They are probably finding — like other brick-and-mortar retailers — that there can be too much of a good thing when it comes to square footage. And some of those store openings have been in regional malls that are in decline anyway.
it doesn’t help matters — during this period of overexpansion — that fast fashion retailers are suffering from the same malaise as department stores. (Only the off-pricers seem somewhat immune right now.) Given weak demand for apparel, and the lack of a sales-driving trend, it’s tough for most fast-fashion stores to gain traction.
I commented recently (on RetailWire) on the problems faced by the new CEO at Ralph Lauren. How to be more nimble and efficient while also protecting an iconic brand? Here are a few thoughts:
This is a complex challenge, because the Lauren brand equity has been weakened over the past several years. I believe customers are confused by the price/quality relationship between Ralph Lauren, Lauren, Polo Ralph Lauren and subsidiary brands like Chaps. It doesn’t help matters that the growth of outlet store business has further commoditized the brand.
Smarter sourcing (cheaper and faster) is something that the new CEO can bring to the table…but are quicker lead times really meaningful for iconic items like polos and navy blazers? And will “taking out costs” also mean compromising quality? These are big questions that will complicate the job of restoring some clarity and “polish” to the RL brand.