I'm no Andrew Sorkin, who given the chance, could probably make another blockbuster book, Too Big to Fail: JCP the Sequel. However, he would probably have to give the story a massive spin. While the notion of "too big to fail" might peak interest in the retail world, it most certainly doesn't contain the kind of drama, suspense, the edge of crisis and sheer magnitude of a potential economic collapse of Great Depression proportions, as Sorkin was able to brilliantly narrate in his famous book. So, I will take a shot with a mere article-sized …
Operations
What to Do About Gen Z’s Consumer Power
Generation Z never did what marketers told them to. This is especially true when it comes to where they spend their hard-earned cash during a global economic meltdown. Gen Z consumers are still the largest consumer demographic, falling between the ages of 7 and 22 and controlling 143 billion in spending power pre coronavirus. However, the members of Gen Z that are still making money during the pandemic are bifurcated into those that have been consistently spending online, and those that are holding off in hopes of eventually spending what …
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 …
Are Department Stores Getting the Wake-Up Call on Inventory Management?Read More
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 …
“Anchors Away” Foot Locker: Full Power into the Neighborhood
In a sentence: Is Foot Locker possibly shedding its mall anchors and accelerating the rollout of its neighborhood Power Stores? For what reason? To escape antiquated malls? To get closer to its consumers? To personalize and localize the brand by becoming a part of, and contributing value to their communities? To create experiences that are cool and awesome to their sneaker culture? Try all of the above. Survival of the Fittest Prior to the pandemic, many experts were predicting that roughly two-thirds of the 1200 major malls in the U.S. would …
“Anchors Away” Foot Locker: Full Power into the NeighborhoodRead More
Malls Wedded Department Stores: Now a Collapsing 64-Year Marriage
The wedding took place in 1956 in Edina, Minnesota with the opening of Southdale Center, the first enclosed mall in the U.S. Its beloved anchor spouse was Dayton's department store. At the time, if an astute marriage counselor had defined the term "anchor" as a grip on the bottom of a vessel to restrict its movement, the world might have foreseen the eventual collapse of what was once a beautiful marriage. Here's how it worked in 1956 and up to 2000: the department stores attracted traffic (paying little to no rent) and the malls brought in a …
Malls Wedded Department Stores: Now a Collapsing 64-Year MarriageRead More
Chip & Joanna Gaines Build Out Magnolia
Not too long ago if you were to tell anybody that the center of the American home furnishings design world was in Waco, Texas they might have looked at you like you were…well, wacko. But despite the allure of New York, the magic of Los Angeles and the appeal of Miami or San Francisco, it's this little town in the flats of central Texas, halfway between Dallas and Houston, that has become the design mecca for shoppers. And it's only about to get more so. Waco is the home of Chip and Joanne Gaines' Magnolia Home empire that encompasses …
Covid’s Accelerant on the Future of Retail
Everyone is looking for a silver bullet. I've argued forever that understanding the data leads us in the right direction for running a business that has a profitable future. Good news: A quick snapshot of July's retail performance could be a bellwether about the pandemic's impact on the future of retail. Let's not get too excited, but the increase in total retail sales of 6.8 percent (excluding auto, gasoline and restaurants) from the same month last year may be surprising, all things considered. Discretionary Spending However, there are two …