Over the past decade, "omnichannel" has become one of the most common buzzwords in retail. Retail executives, industry consultants, and analysts all agree on the importance of integrating the brick-and-mortar and online channels so that customers can move seamlessly between them. Yet while there's consensus about what retailers should do, adapting to this new way of doing business isn't simple. Of course, some prominent retailers like Target have made omnichannel look easy. Target got a late start, having made a boneheaded move to outsource …
Luxury Brands Try On Blockchain
Blockchain has taken the financial world by storm over the past decade. The growing popularity of bitcoin and the proliferation of other cryptocurrencies has been the most visible piece of this transformation. Blockchain technology has many potential uses beyond cryptocurrency, though. Earlier this year, three of the most prominent names in luxury goods (LVMH, Prada Group, and Richemont's Cartier brand) announced a partnership to use blockchain to give customers a secure way to learn more about the items they are buying. Most …
Macy’s Off-Price Gambit Is the Only Way Forward
In recent weeks, Macy's has resumed expanding its Backstage off-price chain, following a pause while the department store giant fought through the worst of the Covid-19 pandemic last year. Since the beginning of April, the company has opened 26 new Backstage stores within full-line Macy's locations. That brings the Backstage store count to an even 250. Another eight new locations are set to open on May 15, putting Macy's close to its target of opening 45 new Backstage stores within Macy's full-line stores in 2021. The retailer also plans to …
Costco Doesn’t Need Curbside Pickup
Over the past decade, omnichannel has become one of the most common buzzwords in retail. Retailers of every size and shape have implemented strategies to make their brick-and-mortar and e-commerce operations work together. Common omnichannel fulfillment capabilities include buy online, pickup in store (BOPIS); buy online, ship to store (similar to BOPIS, but the items are shipped to a store for pickup rather than being in the store's inventory at the time of purchase); and buy online, ship from store. The Covid-19 pandemic has driven …
A Smaller Nordstrom Footprint
Retail analysts and executives have long known that the U.S. is "overstored," with far more retail space per capita than other countries. More specifically, one could say the U.S. is "overmalled," with roughly 1,200 malls (depending on exactly how you count). So-called "A" malls have generally remained quite healthy, with high occupancy rates and strong sales per square-foot. Despite representing only about a quarter of the U.S. mall universe, those properties hold around 80 percent of the total value of all U.S. malls. Of the remaining 75 …
Can Off-Price Retail Recover from Covid-19?
Over the past quarter-century, the growth of off-price has been one of the biggest long-term retail trends in the U.S. Neither the 2000 tech bust nor the Great Recession of 2008-2009 interrupted the growth of this market segment. The increasing size of off-price relative to the full-price retail ecosystem (and especially department stores) hasn't hindered growth, either. During the decade ending last year, industry leaders TJX Companies, Ross Stores, and Burlington Stores all roughly doubled their sales. However, that long-term growth trend …
Are Department Stores Getting the Wake-Up Call on Inventory Management?
Amid a disastrous second quarter for department stores (and most apparel retailers, for that matter), one company stood out: Dillard's. Dillard's didn't exactly have a great quarter. Retail sales declined 35 percent year over year, and the company posted a net loss of $8.6 million. However, that was actually a smaller loss than what Dillard's reported for the comparable period in 2019. (The second fiscal quarter tends to be a seasonally weak period for the company.) Aggressive inventory management actions were the reason why Dillard's …
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Why (Most) Brands Can’t Just Go It Alone
Last month, retail analysts at UBS further reduced their ratings for department stores. They declared that it was time for brands, particularly those with premium positioning, to "go it alone" rather than selling through third-party channels like department stores. The analysts also argue that brands can no longer rely on malls to generate walk-by traffic that leads to sales. Instead, they wrote, "Brands have to generate their own audiences and become destinations." There are certainly good reasons for brands to rethink their distribution …