So Where is the Innovation?

Think back over the past years - and maybe decades - about exciting retail concepts and retailers that were setting the pace. And then ask yourself - who is setting the pace now?

In the 70's discount stores Target, Wal-Mart and yes back then even K-Mart were re-imagining how their customers wanted to shop. In the 80's we saw specialty store like GAP and Banana Republic along with some of the first big box stores. In the 90's those big boxes like Home Depot, CompUSA, Staples and Price Club went crazy. The early 2000's have seen the resurgence of specialty store as the economy surged: Urban Outfitters, Juicy Couture, Coach and others.

But - what's happening now? Not much. I know that the economy is bad, banks are not lending but now would be the time for a creative retailer to step forward.

I recently had the chance to listen to some ideas that social websites such as YouTube would open brick & mortar stores where you could watch with others and have a coffee or such. Maybe Twitter will open a place where you can watch posts on a big screen or multiple screens.

How about shopping in a store in Milan using Cisco's TelePresence while standing in Los Angeles? Too far out there you say? Ok - what's your idea?

Eddie Baus Out

They finally did it - filed Chapter 11. It's been out there for a long time so it's not a surprise.

Since Holiday time the stores have felt understocked and not in step. Same colors, fabrics, patterns as all last year. Email blasts looked the same and may even have been the same product for all I know. I've gave up on them as you can tell.

And this is from a loyal customer. I call myself that because between Eddie Bauer and Nautica apparel that's pretty much what I wear. I really like EB's quality and I used to like their looks but for sometime I couldn't find anything I actually wanted to buy. Guess there are lots of others out there who feel the same. That's what pretty much what C11 is about. A lack of interest.

Will they come out of it - probably. But if they don't get a new direction, with a new senior merchant and a group of buyers that understand today's active adults and what they want and want to look like - it won't matter much.

For me - I'll wait and see. After all - I'm a loyal customer.

Sear Outlet Stores Face Conundrum

What comes first - sales of new product or sales for outlet stores? That's really the conundrum facing Sears Holding Company as it grows the Sears Outlet stores across the nation. How do you maintain stock levels in outlet stores if you don't have enough "scratch & dent' to go around?

Prices are great in Sears Outlets where washers, dryers, refrigerators that have gone out to someone's home and come back are being sold. These items have been rigorously tested and then sent to what may be referred to as a "hub" store of the chain in a metro or regional market. Once there the "hub" store sends out excess items to other stores it's responsible for stocking. There's the rub - at least as far as the "spoke" stores are concerned. Inventory is a crap shoot. Oh, you might have enough washers in total - just not the right ones. Too many large capacity in a predominately renter/single neighborhood for example. And do you think the "hub" store cares if the "spoke" stores make their sales? Doubtful.

Now, at the even bigger picture level, what happens when sales at top level Sears stores slow down - say in an economic downturn? Not enough going into the pipe means not enough coming out of the pipe for the outlet stores. Makes you wonder just how many is too many doesn't it?

Retailers Cut Back Where It Hurts Most

Spent some time last night talking with a rep that has custom shower doors in one of the big box home stores. My first comment to him was "business must be awful"! While he agreed that it was not living up to LY he did say his company had made many concessions to help the retailer and themselves drive sales.
He talked about how they lowered cost; visited stores routinely to provide training to new associates; faster turn around time on orders. Everything short of subsidizing payroll in the store.
The good news is he routinely finds customers shopping his shower doors and wanting to spend money. But - today he seldom finds associates available to help them. Custom shower doors don't sell themselves. "We could both be doing better if there was someone to help the customer".
The retailer in this case makes a margin of 35% while, according to the rep, they are left with about 10 points on an average sale. "We just don't have any more money to give them" he said.
Retailers need to keep their end of the bargain and provide the customer - and their vendors - the payroll support necessary to make sales happen. Not every category in a store sells itself. Today's technology should allow for associates to be quickly sent to high customer service areas.
There is a way - if there is a will - to balance both ends.

Today's Retailers and Email Marketing

I had the chance to listen to 8 major retailers present to a large audience in Las Vegas last week at ICSC. ICSC is, of course, the international gathering of commercial real estate groups. This "Retail Runway" presentation was meant to reassure the channel that while the economy is tough - there is still plenty of growth planned.
I'm not sure that message got through - or was believed - but oh well.
As I listened to executives from Pinkberry, Auto Zone, Wal-Mart, Darden Restaurants and the others I tried to listen for opportunities that maybe were being seized on now or maybe ones being missed. I heard both from Collective Brands.
Collective Brands as you know is Payless ShoeSource and Stride Rite. John Smith, Exec VP of Corporate Development from the company reminded us that they sell more shoes than Wal-Mart. What really perked my ears up was when he talked about using text messages to drive visits. If you text a certain number from your cell phone the ccompany will send you back a coupon good for discounts in their stores. Sounds like a very good idea! Since Payless leverages their brand on kids shoe sales - and who texts more than kids - this potentially is big. That said there was nothing on their website about this or how to find out - nothing at all. Maybe it is conceptual.
Now, the thing that made me go "hmmmm" was when John said that over 600,000,000 customers cross their threshold every year! A ton of people right? Then he casually mentioned that they use email marketing to reach their house file of 5,000,000 names. What? They have emails on only 1% of all the people that walk through their doors in just one year? That's criminal!
But - all too common in brick and mortar retail. Missing such a big opportunity is just wrong.