Posts Tagged 'Kohl’s'

Is Amazon Prime Wardrobe another disruptive move?

Amazon is introducing a new feature for Prime members: Risk-free trial of several apparel items with the ability to return what you don’t like. (And price incentives to keep more of what you chose.) RetailWire panelists mostly see this as another Amazon “game changer,” but I view it a bit differently as their response to the lack of physical stores:

If Amazon aspires to be the top seller of apparel in the U.S. (and it’s already getting close), it needs to add a “try before you buy” feature to keep driving more Prime memberships. It’s responding to the challenge of concepts like Trunk Club — but it’s also acknowledging its lack of a physical footprint. Think about it — stores like Kohl’s and Macy’s already have huge numbers of brick-and-mortar locations where you can return unwanted clothing that you bought online. This may be a rare case where Amazon responds to a competitive weakness in its formula.

Does Gordmans have a future as an off-pricer?

Stage Stores bought the Gordmans Midwest-based chain out of bankruptcy earlier this year, and announced plans to convert it from a promotional department store to an off-pricer. I commented on a RetailWire panel discussion about the game plan along with Stage Stores’ decision to maintain multiple nameplates:

From my recollection shoppoing a few Gordmans stores in the past, they were a Kohl’s wannabe without the geographic footprint to be sustainable. Now they are aiming to be a TJ Maxx wannabe but will still be saddled with the same problems. It’s tough to enter an increasingly crowded sector without the physical footprint or the buying power to compete against TJX, Ross Store and now Backstage.

Stage Stores is trying to maintain multiple concepts and brands (Peebles, Goodys, Bealls and now Gordman). Why not operate one concept under one brand-name umbrella? It’s the “Bon Ton syndrome” where none of the individual brand names is strong enough to overcome the lack of scale.

Thoughts on Macy’s self-service shoe and cosmetics departments

RetailWire panelists just took on the subject of a new test at Macy’s, in which its shoe and cosmetics departments are being converted to “assisted self-service” instead of the traditional associate-driven model. In the case of shoes, Macy’s is getting more of its inventory out of the stockroom and bulked out on the floor, with apparent early success. I’m raising a caution flag, however:

It’s hard to tell whether the reconfigured shoe department is meant to be a sales driver or an expense saver. JCP recently reconfigured a store that I visited to mass out its shoe inventory — DSW-style — instead of depending on salepeople to find the right size in the back. (And these associates are often paid a commission, just like cosmetics salespeople.) But it gets to the heart of what Macy’s wants to be. As Art put it, are they trying to be JCP or Kohl’s? Are they finding the hidden costs of “omnichannel” (BOPIS and so forth) to be unsustainable for a traditional department store?

And one more issue: By abandoning the Nordstrom model (where the salesperson is trained to bring out three pairs of shoes when the customer asks to look at one), Macy’s may in the long run walk away from the sales and margin potential of “upselling” that shoe and cosmetics departments should be known for. A declaration of victory may be premature.

Why Kohl’s needs a large store count

Amid all of this year’s news about stores closures, Kohl’s maintains that its large location count is a strategic advantage. (At the same time, it intends to re-size some of its existing stores.) Here’s a recent RetailWire comment following Kohl’s announcement:

I’ll start with my usual “full disclosure” that I worked for Kohl’s (and with Kevin Mansell) from 1982 to 2006. Convenience has always been one of the legs of Kohl’s strategy, and its real estate portfolio was intentionally built apart from regional malls. (I think Mr. Mansell mentioned on CNBC that only 80 of Kohl’s stores are located in regionals.) Maintaining this footprint is not only important as Macy’s and JCP continue their strategic retreat — not to mention whatever happens to Sears — but also as a way to leverage the e-commerce business that represents 15% of Kohl’s sales today.

As to the smaller or downsized stores, the trick for Kohl’s will be to keep narrowing its assortments to fit these formats. This is just as true in full-sized stores — when Kohl’s takes a position on a key brand like UnderArmour (or activewear in general), something has to give.

L.L. Bean considers a new return policy

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.

Under Armour follows the sales volume

Under Armour announced in August that it is opening Kohl’s in 2017. This news started a discussion on RetailWire about whether this was good for the brand, or just a reflexive reaction to the closing of Sports Authority. Here’s my take:

If Under Armour wants to gain share at Nike’s expense, why not sell where Nike already has an established beachhead? Without having any insider information (I worked for Kohl’s from 1982 to 2006), I’m speculating that they have a very large and healthy active/fitness apparel and shoe business across all ages and genders. Seems like a no-brainer to me.

Macy’s is looking for a new CMO

Chief Marketing Officer, that is…after letting go a 32-year veteran of the company. RetailWire panelists took the chance to discuss whether Macy’s needs an insider or outsider to fill the position. (And one panelist added that Macy’s could use a new head merchant, too.) Here’s my point of view:

This may be a good opportunity for Macy’s to look at its stale marketing (and especially its sales promotion) with a fresh set of eyes. Macy’s is in a promotional rut where all of its print sale events look exactly the same (red and black, coupons, a bunch of boxes on every page) and the customer is bombarded by the same kinds of overlapping offers they are used to seeing from Penney or Kohl’s. Surely Macy’s has an opportunity to use its promotional tactics as part of an overall re-branding strategy. (What is “The Magic of Macy’s,” anyway?) Without knowing the inside candidates, I’d look outside first.