Neil Saunders’ Post

INNOVATION WON'T SAVE DEPARTMENT STORES. THE RIGHT PRODUCT WILL The Business of Fashion: Mid-market American department stores like Macy's’s, Kohl's’s and Nordstrom need more than new owners and retail formats to win back customers; they must reinvent their entire value proposition with a selection that can compete with online fast fashion and off-price players. Time is running out. KEY INSIGHTS 🍉 Despite efforts to close unprofitable stores and innovate, department stores continue to lose customers to online giants like Amazon, agile newcomers like Shein, and budget-friendly off-price retailers such as TJ Maxx. 🥝 To survive, these retailers must rethink their entire value proposition by offering unique, fairly priced, and exclusive items that can’t be easily found online. 🥞 Despite challenges, their physical presence remains an advantage. For Terry Lundgren, a former CEO of Macy’s, talk of the possible extinction of department stores is a tale as old as time. Lundgren joined the company, then known as Federated Department Stores, nearly 50 years ago right out of college, his first choice out of a dozen job offers. His roommate could not believe him. “He said, ‘Aren’t they going to be going out of business?’” Lundgren recalls. “Back then, it was because catalogues were emerging and he thought, ‘Well, isn’t everybody just going to read catalogues and shop that way?’” Macy’s survived the catalogue scare, and countless other evolutions in how Americans shopped, from QVC to the rise of e-commerce. But there’s something different today about the cocktail of threats facing Macy’s and other department stores that cater to the middle class, including Kohl’s and Nordstrom. No matter how many unprofitable stores they close or innovative retail concepts they try, they keep losing customers, whether to historic online threats like Amazon, newer, more nimble competitors like Shein or off-price stalwarts including TJ Maxx that are better geared towards stretched household budgets. explore more: https://lnkd.in/g5adBm48 #retail #fashion #ai #investmeent #crisis

🪖In the retail battleground, mid-market department stores like Macy's, Kohl's, and Nordstrom face a stark choice: evolve or fade away. 🔄 With the threat from online behemoths and fast fashion's allure, it's clear that innovation alone won't cut it. The real game-changer? A unique, exclusive product mix that can draw shoppers back into their hallowed halls. 🛍️ As they strategize to reinvent their value proposition, one truth stands out: in the world of retail, the right products aren't just an option—they're survival. 🎯 #RetailRevolution #DepartmentStores #ProductIsKing

Many excellent points raised in the comments. The rise of online shopping, driven by promotions and data-driven marketing, has challenged brick-and-mortar stores. Despite great service, customers often prioritize savings. Brands must innovate to reignite interest in physical stores, whether by aligning online and in-store sales, enhancing in-store experiences for social sharing, or reviving exciting events like in-store fashion shows. Additionally, fostering partnerships with local businesses can create a more vibrant retail landscape. Better yet let’s work together to rejuvenate the allure of traditional shopping experiences.

For Terry Lundgren, a former CEO of Macy's’s, talk of the possible extinction of department stores is a tale as old as time. Lundgren joined the company, then known as Federated Department Stores, nearly 50 years ago right out of college, his first choice out of a dozen job offers. His roommate could not believe him.“ He said, ‘Aren’t they going to be going out of business?’” Lundgren recalls. “Back then, it was because catalogues were emerging and he thought, ‘Well, isn’t everybody just going to read catalogues and shop that way?’ ”Macy’s survived the catalogue scare, and countless other evolutions in how Americans shopped, from QVC to the rise of e-commerce. But there’s something different today about the cocktail of threats facing Macy’s and other department stores that cater to the middle class, including Kohl's and Nordstrom. No matter how many unprofitable stores they close or innovative retail concepts they try, they keep losing customers, whether to historic online threats like Amazon, newer, more nimble competitors like SHEIN or off-price stalwarts including TJ Maxx & HomeGoods that are better geared towards stretched household budgets. Read the full story by BoF's Cathaleen Chen below.

Here are some interesting stories from the world of retail for Saturday, June 15: 📦 Kohl's is introducing a Return Drop service to stores nationwide: in addition to its Amazon partnership, the department store will now accept returns from brands like Carhartt, Hanes and Levi’s. 🎯 Target's total US retail market share, including online and store sales, has shrunk in categories that generate over 60% of its revenue. An indication the chain needs to work harder to retain customers. 👖 Superdry has avoided insolvency after shareholders voted to approve a £10m equity raise underwritten by chief executive Julian Dunkerton. The fashion brand said the deal provides enough liquidity of a turnaround. 👚 Secondhand apparel marketplace ThredUp is continuing to experiment with charging sellers a fee to send in items, as part of a strategy to fill its marketplace with higher-quality items. 5️⃣ Five Below’s net sales surpassed $3.5 billion in 2023, more than double five years ago. Despite an impressive few years of growth, things have taken a turn for the worse in 2024 and stock fell to a year low in the first week of June. 👗 Torrid CEO Lisa Harper said during an earnings call that the company is evaluating its brick-and-mortar footprint and wants to move to a 50-50 split between mall-based and non-mall locations in the future. 🕹️ Over the past two years, Hasbro has suffered from weaker toy demand, leading to layoffs and declining sales. But analysts at BofA said Wall Street hasn’t appreciated the potential of the toy maker’s digital-gaming business. ⛽️ Exactly two years ago Friday, gasoline prices peaked at a record of $5.02 a gallon nationally. Gas prices today are not cheap – but they are miles away from that point with the he national average for regular gas at $3.46 a gallon. 🚙 Advance Auto Parts said a hacker had accessed and was selling certain data that may contain Social Security numbers of job applicants and employees. 📉 US consumer sentiment fell for the third consecutive month in June, as Americans expressed concerns about their finances and persistent inflation, as per a University of Michigan survey. 🚫 SHEIN has unexpectedly canceled its upcoming pop-up store in Perth, Australia, scheduled for June 21 at Lakeside Joondalup Shopping Centre, just weeks before a new tax on fast fashion items takes effect. 🇶🇦 With Eid al-Adha approaching, retailers in Qatar are offering a wide range of promotions and discounts to attract shoppers. Discounts of up to 50% are being offered on clothing, shoes, accessories, and watches. 🏬 Thai retailer Central Group has agreed to acquire the remaining assets of KaDeWe Group, a chain of landmark department stores in Germany. 🐖 American hog farmers are betting on cash-strapped consumers to drive demand for pork as beef prices surge. #retail #retailnews #economy #DailyRetailNews

Can Forever 21 Recover with its SHEIN Partnership? Forever 21 is struggling financially with declining sales and fierce competition from digital-first brands. Will its operational partnerships, like the one with SHEIN, be enough to ensure its survival? Read the full article here: https://lnkd.in/gyZbahtd Georganne Bender "The rudeness of the Forever 21 employees is the real story. If they were rude to the woman on TikTok then they are likely rude to other customers as well. The comments on her TikTok back her up. Forever 21 can’t afford to alienate shoppers." Neil Saunders "At the outset of the partnership, it was always obvious that Shein had the upper hand. It is dealing from a position of strength and is using Forever 21 to help round out its online ranges and to develop more of a physical retail presence via pop-up stores. By contrast, Forever 21 came at things from a position of weakness." Patricia Vekich Waldron "SHEIN can’t be a savior for F21. Margins on super low-cost items won’t generate enough to bail out F21."

Top #Retail stories of the week #IMO that you may have missed (in no particular order): Friday is a WellBeing Day off at #BlueYonder…so publishing early while I enjoy a day on the golf course. ·      I’ve written a lot about theft in retail and having spent 15 years of my retail career in loss prevention roles, I do have my opinions 😊. #Lowe's and #Best Buy are among retailers solving for retail theft with a simple solution. People! While other retailers have chosen to lock items up or take them off store shelves while you press a button for help (which just frustrates customers despite what Target ‘s CEO says), a proactive approach of adding employees which also improves customer service will help reduce losses…and should increase sales. ·      Online fashion retailer Shein has made a confidential filing to go public on the U.S. stock market, according to reports, potentially signaling one of the biggest initial public offerings of the last few years. The company—founded in China but now headquartered in Singapore—is targeting a $90 billion valuation, Reuters and Bloomberg reported. Shein has managed to disrupt fast fashion rivals like H&M and Zara with its wide inventory of low-priced apparel. ·      #BuybuyBaby is back, opening 11 new stores along the East Coast just months after former parent company Bed Bath & Beyond went bankrupt. The baby-products chain, now under new ownership, will add more than 100 stores in the U.S. over the next three years before going international — betting that parents-to-be still want to see car seats and cribs in-person before they splurge. Buybuy Baby isn't the only retailer returning to brick-and-mortar after a long period of store closures: The U.S. will see more than 1,000 net new stores this year, says Coresight Research ·      Amazon is now surpassed only by the U.S. Postal Service in the volume of deliveries it makes to American homes. The e-commerce giant outran FedEx in 2020; it beat UPS just last year. The development — surprising given Amazon’s dependence on the two services a decade ago — was enabled mainly by a franchise program allowing individuals to deliver packages. Quick hits: ·      Tequila was one of the fastest-growing spirits by revenue last year, with sales up some 17%, or $886 million, according to the Distilled Spirits Council of the U.S. In all, Americans drank $6 billion worth of the stuff in 2022. ·      The US notched a Black Friday online-shopping record of $9.8B, exceeding predictions. The turnaround from last month’s slow retail sales could boost hopes for an economic soft landing. ·      In-store traffic on Black Friday (Nov. 24) was up 4.6% compared to last year, according to initial data from Sensormatic Solutions. ·      #DoorDash is teaming up with #BestBuy to deliver everything from tablets to TVs. As electronic sales slow, the companies hope the holiday season (and easy drop-offs) could fuel greater demand.

IS MACY'S "BOLD NEW CHAPTER" BOLD ENOUGH? Is Macy’s ‘Bold New Chapter’ Bold Enough? New CEO Tony Spring’s plan to shutter stores and improve products echoes previous efforts for revitalisation. To pull it off this time, the retailer must deliver transformational changes in the shopping experience. When Macy’s unveiled a new turnaround plan on Tuesday, it came along with a collective sense of deja vu. The American department store chain is set to close 150 stores by 2026, bringing its total down to 350 — nearly half of the 650 locations it operated just five years ago. The hope is that shuttering those unproductive stores will allow the retailer to allocate more than $500 million in savings toward more promising areas of improvement, such as small-format stores and online-offline customer service. But Macy’s has been shuttering unprofitable locations for years, well before new CEO Tony Spring unveiled what the retailer has dubbed as its “Bold New Chapter” strategy. As Bloomberg columnist Leticia Miranda noted this week, former Macy’s chief executive Jeff Gennette embarked on not just one, but two nearly identical store optimisation initiatives in his six-year tenure, which ended at the start of this year. And in closing stores, Macy’s is arguably further diminishing its presence in the lives of American consumers, which could ultimately be its death knell. The same trajectory pushed Sears and J.C. Penney into bankruptcy and liquidation. If Spring were to succeed where his predecessor couldn’t — his modest objective is to deliver low single-digit in-store sales growth by 2025 and increase cash flow to pre-pandemic levels — it will come down to execution rather than direction, analysts said. In addition to scaling back retail, Spring’s plan includes growing a fleet of small-format Macy’s stores; consolidating the merchandising team to bring together owned and licensed brands; continuing to tighten and improve private labels and refining the e-commerce experience. Macy’s will also expand its premium segment with 15 new Bloomgindale’s locations and 30 new Bluemercury stores. Profitability, product improvements and backend efficiencies are perennial concerns for any fashion retailer; for Macy’s to finally pull off a turnaround, Spring’s proposed actions must result in a palpable difference to the customer experience — and fast. Its waning relevance among shoppers, after all, is its greatest dilemma. “What exactly is different this time? I think this round is hopefully informed with more technical data around traffic patterns, and there’s already a big effort underway with product improvements and private label,” said Oliver Chen, retail analyst at TD Cowen. explore more: https://lnkd.in/gtJq58Hf #ai #ar #web3 #innovation #investment #crisis #btc

This interesting article looks back on Sears and how it navigated many hurdles throughout the years from a peak in 2005 of 3500+ stores between the Kmart and Sears banner across several countries to less than 20 stores today. #Retail #HolidayShopping #Innovation

Here are some interesting stories from the world of retail for Tuesday, June 4: 👕 Consortium Brand Partners is nearing a deal to acquire Outdoor Voices, the maker of athletic apparel. The deal is occurring through an assignment for the benefit of creditors, known as an ABC. 🧑🏼🦽 Anthropologie will introduce its first foray into adaptive apparel via a collection of eight of its existing bestsellers reworked to better fit the lives and needs of members of the disabled community. 👩🏼⚖️ Washington state has agreed to pay law firm Munger, Tolles & Olson LLP up to $2.5m for its work on the case to block Kroger's $25bn acquisition of rival grocer Albertsons. The state filed the lawsuit in January. 🥦 What many consumers don't usually associate with today's food co-ops are low prices. However, changing values and economic pressures have pushed natural food co-ops to focus much more on affordability. 🚚 Nordstrom has promoted Alexis DePree to chief operating officer. DePree joined Nordstrom four years ago as executive vice president and chief supply chain officer, after stints at Amazon and Target. 🍌 Banana Republic is debuting a more elevated look at its remodeled New York City flagship store. The 17,000-sq.-ft. two-story space has been redesigned in collaboration with architect and interior designer Noa Santos. 👨🏻💻 Retailers hate that you buy things on your laptop. People often prefer bigger screens and keyboards for pricier purchases—but merchants have more levers to pull on mobile, notes The Wall Street Journal. 🤖 Amazon is using artificial intelligence to scan items for defects before they are shipped. The tech uses a combination of generative AI and computer vision technologies to help uncover defects before products are dispatched. 🍞 Could that slice of Kroger brand carb-conscious bread really contain only 30 calories? The answer, according to a new lawsuit filed by a pair of California prosecutors, is no. 📉 SpartanNash sees weaker results as sales to Amazon plummet. The grocery wholesaler and retailer recorded declining net and comparable-store sales during Q1 for the second quarter in a row. 🇬🇧 The UK's retail sales inched higher in May, rising 0.7% according to the British Retail Consortium. Food sales boosted the headline improvement, while non-food sales were lower on year. 🎶 Spotify is testing the loyalty of its customer base by raising prices for the second time this year as it aims to become more consistently profitable, sending shares higher in early trading. 📈 Neel Kashkari, the president of the Federal Reserve Bank of Minneapolis, said consumers would rather see the economy fall into a recession than to continue to suffer the pain of soaring prices. 🍤 Rubio's Coastal Grill, citing rising business costs, abruptly shuts down 48 restaurants in California. The move came two months after the state’s $20 an hour minimum wage took effect for fast-food employees. #retail #retailnews #economy #DailyRetailNews