Mickey Drexler left the helm of Gap in 2002, after he had guided it through almost two decades of meteoric growth from $480 million in revenues upon his arrival in 1983, to almost $14 billion in 2000 (including his launch of Old Navy and Banana Republic) — an amazing 2,400 percent increase. In contrast, its revenues over the last two decades have grown to a paltry $16.5 billion in 2019. And roughly $1 billion of that increase was generated by Old Navy under its CEO from 2016 to 2019, Sonya Syngal, which likely earned her the appointment to the …
What Do Circuit City and Best Buy Have in Common?
How ironic it would be if the same decisions that drove Circuit City into extinction ultimately will do the same to Best Buy? Circuit City was a poster child for customer service, until it wasn’t. They cut costs by minimalizing full-time, well-trained associates and mixed in more part-time workers (of course there were other reasons as well). When Hubert Joly took the helm of a very shaky Best Buy in 2012, he did just the opposite to turn BB around. Flanked by three fierce competitors, Walmart, Target, and Amazon, all offering convenience and …
Distribution Always Overrules
My overused statement that this is the distribution century still dramatizes the point that in a world of excess (short-term supply chain disruption aside), only those who have powerful and/or unique distribution strategies will succeed. I first began to describe the distribution century in 2015. In the early 20th century the U.S. cycled through a production driven economy when a rapidly growing population needed lots of stuff. Mid-century, a slower growing population spawned a marketing-driven economy with “Mad Men” creating compelling reasons …
Will Covid Heal an Industry Disease?
For over three decades of giving industry presentations, and after three co-authored books The New Rules of Retail (plus a revision) and Retail’s Seismic Shift, one core fact remains that too much supply has been chasing too little demand in the mainstream retail industry. The disequilibrium continued year over year. “Share Wars” became a PPT fixture, and a major opening chapter in our most recent book, published in 2017. In fact, we posited it would never end. And the over-stored conundrum became accepted by most retailers, to the extent, that …
Supply Chains in Free Fall
The global supply chain disruption and destruction has been widely covered here in the U.S., obviously chilling retail C-suites to the bone. However, as it gets increasingly worse by the day, exacerbated by the looming Holiday season, none of the coverage is redundant. Each day, the broken supply chain portends lumps of coal, as opposed to toys, frocks and “all of those wonderful things.” Because of the horrific rising costs up and down the supply chain, price hikes promise to be equally horrific. In turn, this dual slam on retailers’ top and …
Is Delta the 2021 Holiday Grinch?
In our September 18th podcast we discussed six major issues that retailers and brands are wrestling with going into the 2021 Holiday season. At the top of the list, and the one that significantly affects how to deal with the other five, is what will consumer behavior look like now that the more virulent Delta variant has emerged and is wreaking havoc...all over again. Disruption Accelerated Even prior to the first wave of Covid-19, the industry was living in a world of major disruption, triggered by the internet and ecommerce. Digital …
Primark’s Now Questionable Value Proposition
When Primark, the next-gen’s fast-fashion retailer of choice, opened its first U.S. store in Boston’s Downtown Crossing in October of 2015, I said, “Primark’s value proposition sets the pricing bar so low that it will be almost impossible for competitors to crawl under it. And they’ve set the experience and trendy merchandise bar so high, relative to their pricing, that competitors will find it an enormous challenge to simply match it, much less beat it. They own this space.” And indeed, Primark’s value proposition did own its space as it …
Two Things Changing Retail Forever
Triggered by Walmart’s recent announcement that they are launching a delivery service called Walmart GoLocal (that can be shared with any, and all other retailers, including competitors), I suddenly realized that we are witnessing a breakout moment that will forever change the face and defining characteristics of retail. And it’s not just Walmart’s delivery service, because there are several other previous models such as Target’s Shipt. My point regarding these two transformative drivers of change is that they were only visible as mere …