Posts Tagged 'Lowe’s'

New management at Lowe’s

Marvin Ellison recently left JCPenney (see comments above) to take over the chairmanship at Lowe’s. This is probably a better fit, given his background at Home Depot, and he was quick to reorganize the C-suite. My comment (on RetailWire) raises the question of whether these were the right steps to take:

Mr. Ellison is finishing his second week on the job, so it’s premature to judge the reorganization or anything else he’s done. The newly created positions (stores and supply chain) may be needed but they appear from the outside to be more operations-oriented than customer-facing. It’s too early to tell whether this kind of approach is meant to improve operating margins or to truly recapture some of the market share being won by Home Depot. That may take a deeper dive into Lowe’s strategy than what we’re seeing so far.

What should the new Penney CEO do first?

Here are a couple of related posts (from RetailWire) about the future of JCP. The first one notes the departure of CEO Marvin Ellison for Lowe’s, and the second post joins the debate about whether Penney can appeal to both Boomers and Millennials:

JCP continues to have a sales problem; its comp-store sales for 2017 and the first quarter of 2018 lagged its competitors and failed to take advantage of the continuing decline of Sears. Kohl’s experienced similar weather issues in Q1 but managed to deliver a 3.6% store-for-store sales increase.

It sounds like 20/20 hindsight, but Mr. Ellison operated in a comfort zone since joining Penney, based on his long background at Home Depot. (And now he is really moving back into that comfort zone.) The push toward home goods — especially major appliances — appears not to be the answer to Penney’s lackluster sales.

When Penney finds a suitable replacement, I expect the company to accelerate its store closure program — unless there is opportunity by heading in the opposite direction and picking up sites from Bon Ton, Sears and so forth. But Mr. Ellison’s strategic retreat (while Kohl’s pushed to maintain its store base as part of an omnichannel strategy) looks like a mistake from here.

And another post more focused on customer segmentation:

JCPenney has presented its investors (and consumers) with a false choice over the past several years, even predating the Ron Johnson era. Either “cater to our current core market of aging Baby Boomers” or “figure out how to attract Millennials.” Any store expecting to be sustainable in the long run needs to figure out how to do both.

It’s possible to carry robust assortments of both Liz Claiborne and brands targeted to younger shoppers, especially in women’s apparel. Without those younger consumers with increasing spending power to accompany their sheer numbers, the “old” JCP base will continue to shrink.

It will become clear that Marvin Ellison made a mistake shrinking the footprint of Penney’s “softlines” businesses in order to squeeze in major appliances and more furniture. In hindsight, JCP could have used this space to offer broader and deeper assortments of apparel and accessories targeted to both Millennials and their moms.

Some corporate cowardice from Lowes

Lowes recently received plenty of publicity (mostly negative) for backing out as a sponsor of the reality show¬†“All-American Muslims.” Apparently Lowes and other sponsors succumbed to the threat of boycott from various pressure groups. I agree with several RetailWire panelists who feel Lowes mishandled this situation at several points along the way:

Not for the first time, this issue treads on hot-button politics as well as marketing “best practices.” The correct action from Lowes would have been to ignore the xenophobia in the first place, once it made the decision to sponsor the show. At this point the PR damage is done, so it would be pointless for Lowes to reverse its position. But succumbing to this sort of pressure in our multicultural society is a slippery slope, indeed.

Do appliances make sense for Walmart?

RetailWire panelists recently discussed a new venture by Walmart to pump up its comp-store growth. My point of view:

Appliances make sense in the same way that an expanded assortment of electronics have helped Walmart capture market share from Best Buy and other competitors. But the category requires commitments to floor space and trained customer service. What business does Walmart plan to exit in order to make room for appliances, and what is the volume risk?

Bottom line: Walmart has the sheer number of stores and formats that allows it to experiment with new categories, and online groceries seem like a natural extension of its food business. But here’s a word of caution: Until Walmart can convincingly return to its position as the low price leader — instead of being beaten by Target, Amazon and others — no amount of experimentation will help it recover lost sales momentum. If Walmart plans to sell appliances, it had better plan to beat Sears, Lowes and Home Depot on price every day.

Martha Stewart meets Home Depot

A brief comment on today’s Retail Wire blog about the new agreement between Martha Stewart Living and Home Depot stores. New categories like home decor and office organization will start appearing soon at Home Depot under the Martha umbrella. My opinion? It’s a good move:

A good move for both companies: It gives the Martha Stewart brand a more credible outlet (by far) than Kmart, and it gives Home Depot a strong umbrella for launching new product categories. Moving into organization and other “soft home” businesses also helps Home Depot push back against Lowe’s more upscale brand positioning. Finally, it looks like one more step in the continued irrelevance of Kamrt.

Sears…too early for a post-mortem?

One of the favorite Retail Wire topics is the demise of Sears Holdings. It may be premature for the funeral, but it is never too soon for the diagnosis of what went wrong. There are so many issues at play here, it’s hard to know where to begin. Many of my fellow panelists have had plenty to say on this subject going back to the Sears/Kmart deal five years ago:

1. The original deal looks more and more like a financial “play” rather than a legitimate attempt to make something strong out of two weak players, and Kmart should have been killed a long time ago;
2. From everything reported about Lampert’s leadership style, he’s made it impossible to hire a CEO with real autonomy or merchandising chops…and has now made it impossible to fill the job at all;
3. The lack of capital investment in the business, as sales have spiraled downward, has only fed the negative comps. There are so many category killers (Lowe’s, Best Buy) and midtier retailers (Target, Kohl’s) providing more attractive shopping options to the worn-out neighborhood Sears store.

I could go on and on…but the other panelists will have plenty to say on this subject today.

Home Depot: Missing a multi-channel, multicultural opportunity

The Wall Street Journal reports that Home Depot has shut down its Spanish-language website. My comments today on Retail Wire:

This seems like an odd decision on the part of Home Depot. A huge amount of website traffic is geared toward drawing customers to the brick-and-mortar store by providing product information and pricing before they shop. So shutting down the Hispanic site seems disconnected from a key strategic purpose for any multichannel retailer. It’s worth noting that the website provides easy links not only to a Spanish-language version but also to Chinese, Vietnamese and Korean versions. Lowe’s is apparently paying attention to the rapid growth of Hispanic and Asian consumer populations, especially as it continues to penetrate many of Home Depot’s key markets. Maybe Home Depot ought to demonstrate more patience with its strategy.