Latest Retail News, Strategies, & Trends - Retail TouchPoints - Retail TouchPoints Wed, 21 Nov 2018 15:10:31 -0500 RTP en-gb IKEA Will Cut 7,500 Redundant Positions But Forecasts 4,000 Net New Jobs IKEA Will Cut 7,500 Redundant Positions But Forecasts 4,000 Net New Jobs

IKEA Group plans to eliminate 7,500 jobs globally that the company says will become redundant over the next three years. The eliminated positions mainly include administrative staff in central support functions. But the Group, which owns 367 IKEA stores, estimates that it will create 11,500 jobs during the same period, through the opening of approximately 30 new touch points and investments in its fulfillment network and digital capabilities, according to a company statement.

The expected redundancies amount to nearly 5% of the company’s current workforce, according to Reuters.

IKEA is in a transformational period, boosting its digital, delivery and other services while testing new, more accessible store formats. In the U.S. over the past three years, the retailer has opened 12 new stores and five new fulfillment and distribution units. IKEA plans to open two new stores in 2019, in San Antonio, Texas and Norfolk, Va. that will create approximately 500 new job opportunities.

“We need to simplify the way we are organized,” CEO Jesper Brodin told Reuters. “Over the last few years, we have invested resources in many different ways. And, to be honest, now we see that in several parts of our organization we have a bit of duplicate work.”

The job cuts will affect central functions and global service offices as well as local service offices across markets, but are “not geared towards the store operation or distribution units,” said Brodin.

]]> (Adam Blair) News Briefs Wed, 21 Nov 2018 14:05:29 -0500
Lowe’s Plans Mexico Exit Amid Continued Restructuring Lowe’s Plans Mexico Exit Amid Continued Restructuring

Lowe’s intends to exit Mexico as it continues shifting away from its underperforming businesses under the leadership of new CEO Marvin Ellison. The retailer will shutter all 13 of its stores in the country.

The exit will result in $22 million in charges for Q3, but Lowe’s will incur the remaining charges in later quarters. Since the results depend entirely on the plan executed, these amounts are not reflected in the company’s updated business outlook.

The home improvement retailer also will leave its contracting service, Alacrity Renovation Services, and its Iris Smart Home businesses in the U.S.

These exits are the latest moves by Lowe’s to shed operations that aren’t part of its core offering. In August, Lowe’s said it would close all Orchard Supply Hardware stores, the 99-store chain the company bought in 2013 for $205 million. The closing will cost Lowe’s an estimated $390 million to $475 million. Additionally, Lowe’s will be closing 51 underperforming locations by February 2019 — 30 in Canada and 21 in the U.S.

Lowe’s reported the exit in its Q3 earnings report, which also revealed that same-store sales rose 1.5%, while overall sales rose 3.8% from the same period a year earlier, to $17.42 billion. While Lowe’s remains the second-largest home improvement retailer by a large margin, it continues to linger in the shadow of market leader The Home Depot. Home Depot continued to dominate with its results, last week posting Q3 same-store sales increases of 4.8% and a net sales jump of 5% to $26.30 billion.

While Lowe’s saw Q3 net income fall 27% to $629 million due to $280 million in charges related to the Q3 exits and store closings, Home Depot saw a 32% boost of $2.87 billion.

“During the quarter, the favorable macroeconomic environment, combined with great values, drove traffic to our stores and web site,” said Ellison in a statement. “However, continued challenges with inventory out of stocks, poor reset execution and assortment concerns in certain categories pressured our ability to turn those visits into transactions. Rather than chase short-term solutions to these problems, we are redesigning processes and systems to deliver sustainable improvement and expect to see positive trends as we enter 2019.”

The changes Ellison alludes to have been starting at the top, where he has initiated a wholesale reshuffling of the retailer’s management. Under Ellison, the company eliminated four C-Level positions: COO, Chief Customer Officer, Corporate Administration Executive and Chief Development Officer. 

In August, Ellison appointed a new EVP of Stores, Joseph McFarland, who worked under Ellison at his previous posts at JCPenney and The Home Depot. Marshall Croom, the retailer’s CFO, retired in October, making way for former CVS Health CFO David Denton to fill the position.

Most recently, Lowe’s hired Seemantini Godbole, Target’s Senior VP of Digital and Marketing Technology, as its CIO. 

]]> (Glenn Taylor) News Briefs Wed, 21 Nov 2018 12:04:41 -0500
Gap Could Close Hundreds Of Stores In Decisions Being Made ‘With Urgency’ Gap Could Close Hundreds Of Stores In Decisions Being Made ‘With Urgency’

Gap Inc. is planning to shutter hundreds of its namesake stores in malls after same-store sales fell 7% at the flagship chain in Q3 2018, according to CNBC. The company will make a decision about closing low-performing stores “with urgency,” which could include closing some of the retailer’s “amazing flagships,” according to CEO Art Peck in a call with analysts.

"There are hundreds of other stores that likely don't fit our vision for the future of Gap brand specialty store, whether in terms of profitability, customer experience or traffic trends," said Peck during the call. "The range from the very best to the very worst stores is extremely broad."

The retailer operates more than 3,200 stores globally, including nearly 800 Gap stores in the U.S. While Gap locations posted disappointing results, sales at Old Navy stores grew by 4% and Banana Republic stores by 2%.

However, solid growth by the company’s other brands may not be enough to keep the retailer afloat, as Gap accounted for 33% of the company’s sales in 2017, according to Bloomberg. The namesake brand’s results have been steadily worsening this year, from a 4% decline in Q1 2018 to a 5% drop in Q2.

Some analysts are hopeful that cutting the chaff from Gap will help the chain make a turnaround, preventing its poor performance from dragging down the more successful labels.

"We view management's comment on addressing the bottom half of the Gap's specialty store base as encouraging if executed right," said Oliver Chen, analyst at Cowen & Co. in a research note. "Improving profitability of the Gap brand is crucial to making GPS' performance consistent and healthy."

The retailer already had been working on a turnaround before the store closings were announced, including the appointment of Neil Fiske as President and CEO of the Gap brand in June 2018. Fiske is a 20-year retail veteran who previously headed up Billabong International, Eddie Bauer and Bath & Body Works.

Gap may garner some hope from international markets: the brand was one of 237 that exceeded $14.4 million in gross merchandise volume during Singles Day, according to Alibaba. The retailer also is seeking to bolster is Black Friday performance by offering 50% off its entire inventory, with an additional 10% off for online orders.

]]> (Bryan Wassel) News Briefs Wed, 21 Nov 2018 11:49:35 -0500
Subscription Retailers’ Expansion Strategy? Holiday Gift-Giving Subscription Retailers’ Expansion Strategy? Holiday Gift-Giving

Giving a subscription allows a single gift to stretch well into the future, and they are becoming increasingly popular: 32% of shoppers have received a subscription as a gift, and 44% are at least somewhat likely to give one, according to a study by Magid. Introducing a subscription into a household is a crucial step for many retailers, as the intention to renew is 85%.

The average U.S. household has 3.7 subscriptions, and 25% of them currently have more subscriptions than they did six months ago. Gifts may be partially responsible for this rise, and many shoppers are considering giving a subscription out in the next 12 months across a number of categories, including:

  • Kids/Baby Foods: 48% have been gifted subscriptions, 18% are somewhat or very likely to gift;
  • Kids/Baby Non-Food: 40% have been gifted, 19% would gift;
  • Clothing/Fashion: 36% have been gifted, 23% would gift;
  • Home: 34% have been gifted, 22% would gift; and
  • Meal Kits: 31% have been gifted, 23% would gift.

Even for retailers with more traditional business models, subscriptions can provide a sales boost. In the U.S., 41% of revenue comes from returning or repeat purchasers, even though they represent just 8% of all visitors, according to OrderGroove. Repeat orders generate more revenue for retailers while offering convenience for customers.

Subscription services still represent a relatively small portion of the retail industry: the Subscription Trade Association (SUBTA) found that 66% of providers have 1,000 or fewer monthly customers. However, the industry is poised to hit the mainstream. Amazon has launched a dedicated subscription section, where shoppers can sign up for monthly boxes from Loot Crate, Allure and other brands.

Other signs of growth in this sector include:

]]> (Bryan Wassel) News Briefs Wed, 21 Nov 2018 09:57:46 -0500
Exclusive CEO Q&A: How Touch Of Modern Uses Customer Feedback To Drive Merchandising 0aaaJerry Hum TouchofModernTouch of Modern, an e-Commerce retailer focused on selling lifestyle products, fashion and accessories for men, has always strived to introduce merchandise that shoppers can’t find anywhere else, even dabbling in wine sales. After six years in business, that mantra has clearly paid dividends; the retailer now generates $120 million in annual revenue and is profitable going into 2019. So how does Touch of Modern consistently deliver the right goods to its target audience? The retailer uses a strategic combination of customer feedback and merchandising analytics to determine its most loyal shoppers’ preferred products and buying patterns.  

In an exclusive conversation with Retail TouchPoints, Touch of Modern CEO and Co-Founder Jerry Hum reveals:

  • The company’s recently developed national television ad campaign;
  • Curating new merchandise that’s in line with the Touch of Modern brand;
  • How the company balances customer retention and customer acquisition efforts by educating the shopper on the product’s value;
  • Video’s role in educating shoppers on the Touch of Modern brand and products; and
  • Potential partnerships with more direct-to-consumer brands going into 2019.

RTP: Touch of Modern has been profitable going on 12 months. Has this changed your strategic approach to the 2018 holiday season?

Jerry Hum: The strategy that we took [to achieve profitability] was to realize that our largest costs, outside of the cost of goods, were on the marketing side. If we were to become profitable, we had to cut back on marketing, and in order to do that while maintaining revenue we had to make sure that our existing customers will keep repeating.

We did research on customer behavior and also their brand affinity and asked them, “Who are we to you?”, “Where are we lagging?” and “Where do we improve?” The great thing was, our customers actually saw us the way we saw ourselves. They recognized that we bring them high-quality goods, things that are hard to find at traditional retailers, and often, a lot of what we sell can only be found here. That’s why they kept coming back to visit.

One of the things they wished we could do better was shorten the delivery time. That’s a big push that we’ve been working on over the past year. It’s even more important now that we’re in the holiday season and it’s something that we’ll continue to keep working on for the future.

On the other side, when we became profitable, by coincidence, we had just started going into a new marketing channel — national television ads. At the time, we had no expectation as to performance — it was more of a bet. Not only did that perform well for us, it also opened up a whole new channel for us, at a volume that was comparable and larger than marketing on the web. It alleviated the pressure on the existing channels as well. We actually just pushed a new TV spot that first aired in October.

We’ve been testing iterations of it — the first one was a homegrown spot with just our own employees, the second one we pulled in some of our vendors, and the third is shot completely from the ground up.

RTP: How do you keep curating new and unique products that accurately embody the Touch of Modern brand, and how do you expand beyond what you already have?

Hum: When it comes to keeping momentum and staying fresh, the strategy we’ve come up with has always been pretty sustainable, and it’s inherently baked into the model. We email our customers every day, and they tell us through their purchases what resonates with them and what doesn’t. Every day we take that feedback and we use that to inform all our future merchandising.

We do this agnostic of the category. When new categories show up, we’re able to move on them pretty quickly. Because we’re able to be that fluid, we haven’t really had to change the fundamental formula. Through our research, we did find that things our most loyal customers bought were not the things that our least loyal customers bought. We did some pushing into the categories of where our most profitable customers were buying, to increase their lifetime value and keep them engaged.

RTP: How does Touch of Modern balance customer retention vs. acquisition?

Hum: What we’ve seen is that our best customers will spend more with us over time. Part of why we started Touch of Modern is because we felt that a lot of our prospective customers could use a bit of education. The other co-founders and I had a conversation early on about who made the best speakers, and our CTO had all this technical knowledge on speakers, so he won the argument and educated the rest of us on the topic.

That’s the kind of aspect we wanted to bring to our customers. A lot of these products are new or they appeal to a niche audience of enthusiasts. We want to bring them to the mass market to let people know about, not just items exposed in the malls or department stores, but also items that were created with more intention and more purpose. When we looked at that, we thought that if we could successfully educate somebody on why this product was better than your average, they might start to trust us and spend more with us over time. You start to realize that the thing that provides most value isn’t always what’s cheapest, it’s what’s the highest quality for the money.

When we see that our best customers start to spend more with us and their average order value continues to increase over time, then we’re successful at doing that. Between the existing customers and the new customers, we tend to walk them through that education process, first by showing products that are more affordable but still high-quality, and then moving them upward over time.

RTP: In the past, we’ve discussed content as a driver for marketing strategies. How much does that come into play as far as delivering the right information about a product to the consumer?

Hum: It’s an ongoing battle, and it’s something we think we have a lot of room to improve on. One of the things our customer research showed was that a lot of times, customers weren’t aware of the quality of the product from the get-go. They would have to go off our app to do research and find that out. That shows that we could be educating customers better than we currently are.

Video is a strategy we’re taking more advantage of — it’s a format shoppers are gravitating more toward for things that require more information. They don’t like reading big blocks of text. They’d rather watch a video informing them of why a product is special, rather than taking the same amount of time to read a paragraph.

We’re also operationally making sure that we are able to capture why we thought these products are unique and explain that to the customer for everything, and not just the few that stand out to us.

RTP: On the supply chain side, what do you feel has been working to help Touch of Modern handle increasing consumer shipping demands?

Hum: A lot of it is just sharpening the tool in terms of forecasting and then communication with the vendor. There’s no real magic sauce there, it’s more about being on the ball. I wish I could give a silver bullet for that, but there isn’t one, at least not yet.

RTP: Does Touch of Modern have any brick-and-mortar plans, and what would it take for the company to make that leap?

Hum: We actually opened and operated a small pilot in San Francisco just for a month, and we are expanding on it through the 2018 holiday season. We have not yet reached a conclusion about it, but a lot of the unit economics we’ve seen so far are very promising.

RTP: Are there any other trends that have affected Touch of Modern going into the holiday season?

Hum: You probably have seen this for a little while now — more direct-to-consumer brands are gaining traction and getting significant scale, and that’s something that we have to keep paying attention to. We’re actually seeing more of those kind of brands wanting to partner with us as well, so it can definitely benefit us.

Pure D2C is tough. If you had to do all your own marketing and bear the entirety of the customer acquisition costs while only selling a limited number of products, it’s going to be hard to get a return on investment. The beauty of a company like ours is that we have a lot of merchandise we can sell to customers. Therefore, we can stomach higher acquisition costs compared to a lot of pure D2C brands that only have five products to sell.

]]> (Glenn Taylor) Inventory / Merchandising / Supply Chain Wed, 21 Nov 2018 07:41:45 -0500
Chatbot, Please Expedite My Shipping

0aaaAnil Gandharve MindtreeIn the world of online shopping, things are specifically tailored to appease the customer and ensure efficiency — click, select, pay, done, delivered — it’s that easy. However, what is meant to improve efficiency has created a new set of challenges as customers continue to want more out of their shopping experience. Chatbots have been introduced as a way to address certain challenges, but how much do people really want to interact with chatbots?

What Exactly Is A Chatbot?

Chatbots are computer programs designed to simulate conversation with human users and automate simple administrative tasks. When implemented correctly, a chatbot can become an extension of your team; a well-trained store associate that can enhance your shopping experience. Chatbots are enabled by artificial intelligence (AI) and are programmed to simulate human conversations. Varying in complexity, the technology automates various business processes that used to be performed by humans. Basic chatbots respond to specific inputs with predefined replies, as determined by rules-based logic. More advanced chatbots leverage AI, Natural Language Processing (NLP), and possess audio and video processing capabilities to learn actively from previous interactions and replicate life-like conversations.

Retail brands are increasingly using chatbots to engage online customers due to their ability to offer 24/7 support, send tailored messages about specific products based on individual preferences, offer localized promotions/events and more. Chatbots have tremendous potential, but brands must learn to strike a balance between humans and technology to fully meet the needs of the modern shopper. 

The Drawbacks

Personalization is critical for engagement and loyalty to brands throughout the entire purchasing process. While there has been hype around virtual reality (VR), the Internet of Things (IoT) and AI, these technologies cannot be incorporated into retail operations without addressing the needs and preferences of consumers.

In a recent study from Mindtree, the vast majority (78%) of respondents over 55 said they wouldn’t be happy to visit a store run entirely by robots/tech. While incorporating AI technologies is important to helping retail organizations improve, it is clear that today’s existing customer base still requires some level of interaction with human employees. Creating a chatbot without a thoughtful strategy and careful planning will result in an ineffective platform, leading to bad experiences that customers fear with robots. Instead, it is important for retailers to look carefully at building an e-Commerce strategy that seamlessly enhances the benefits of a traditional “human” store experience with relevant technology.

The Benefits

Some call centers use interactive voice response (IVRs) that can often be frustrating for users, as they’re forced to listen to lengthy recordings, making their seemingly simple problem time-consuming. When human agents are involved, they often lack efficiency and knowledge to solve the problem at hand. Chatbots, on the other hand, engage consumers quickly in personalized and relevant conversations rather than presenting a list of predefined options. With connections to various systems at the backend, chatbots offer consumers customized interactions across various communication channels, and also maintain conversation history.

Chatbots handle customers’ problems and requests efficiently, and as a bonus, inexpensively! Rather than scrolling through lists and small images of products, customers can place orders or get their issues resolved by someone who listens to them. Chatbots and conversational commerce — the intersection of messaging apps and shopping — offer a great opportunity to improve customer experience. It is all about delivering convenience, personalization and decision support, allowing brands to differentiate their experience from their competitors.

Conversational commerce gives customers the ability to converse with a bot to shop for things, rather than going through the process of searching, add to their shopping cart, checking out and paying.Just a nudge from a bot can help boost the conversion of searches to sales and build a rapport with people who might not know what they want.

Striking A Balance

When designing chatbots to strike a balance between technology’s advancements and the human touch, the flow of conversation plays a crucial role in a good user experience. Conversations need to be designed to give a natural and enjoyable experience to the user, enabling users to feel like they are talking to a human. In order to maintain a proper flow of conversation, it is key to anticipate what the user is going to ask next, and then design conversations that would trigger an appropriate reaction from the user. Retail customers prefer to speak with humans over computers, but the use of natural language and expressions in conversations helps users feel that they are talking to a human.

The retail industry has an exciting future ahead, but the difference between success and failure will be determined in the balance between humans and technology.


Anil Gandharve is the VP and Head of Retail, CPG & Manufacturing at Mindtree, a global technology services and digital transformation company. He has more than 17 years of experience in business development, operations and consulting. He joined Mindtree in 2010 and has been instrumental in growing Mindtree’s European business since then. Prior to joining Mindtree, Gandharve spent a decade with Infosys leading several areas of responsibility. Gandharve holds a mechanical degree from the Indian Institute of Technology in Delhi, India.

]]> (Anil Gandharve, Mindtree) Executive ViewPoints Wed, 21 Nov 2018 07:34:46 -0500
Neiman Marcus Hires First Chief Transformation Officer Neiman Marcus Hires First Chief Transformation Officer

Neiman Marcus Group has named Katie Mullen to the newly created role of Chief Transformation Officer, according to Dallas Business Journal. In this position, she will drive CEO Geoffroy van Raemdonck’s transformation plan, commercialize new ideas, spearhead growth initiatives, and handle program and change management and corporate communications.

Mullen was most recently a Partner and Managing Director at Boston Consulting Group, where she was responsible for designing growth initiatives, innovating business models and leading growth initiatives for global retailers and others.

“Katie has been a critical partner to our organization over several years and specifically very recently in co-authoring our growth roadmap,” said van Raemdonck in a statement. “Her track record of leadership and insight in our sector makes her the clear choice to oversee the strategic deployment of our company’s evolutionary initiatives. I am confident that she will challenge us with a fresh, external perspective, but will also take care to protect what is special about Neiman Marcus Group as we drive change throughout the organization.”

Neiman Marcus Also Bolsters Wider Leadership

Mullen’s appointment follows a late September shakeup of the senior executive team, promoting three executives and adding two new hires as Neiman Marcus seeks to build a culture of innovation and improve the luxury experience offered to shoppers worldwide.

The three promotions are:

  • Carrie Tharp, EVP, Chief Digital Officer: Tharp will spearhead the evolution of data and digital analytical tools to enhance omnichannel experiences, with an emphasis on customer engagement;
  • Adam Orvos, EVP, CFO and COO: Orvos will oversee a wide range of units across the company, including Information Technology and Cyber Security, Supply Chain and Operations and Legal; and
  • Tracy Preston, SVP, General Counsel and Chief Compliance Officer: Preston will support Orvos’ efforts across Neiman Marcus.

Both Tharp and Orvos were given expanded oversight to help deliver van Raemdonck’s strategy to position Neiman Marcus for future growth. Their efforts will be assisted by two new hires:

  • Stefanie Tsen, SVP, Omnichannel Customer Experiences: Tsen has previous experience as VP of Omnichannel Experience at Sephora and VP, Country Manager, Canada at Louis Vuitton; and
  • Darcy Penick, President, Bergdorf Goodman: A former Neiman Marcus executive, he was most recently CEO of ShopBop.

These personnel changes come during a tumultuous year for Neiman Marcus that began with former President and CEO Karen Katz retiring in February 2018. In October 2018, the luxury retailer was reportedly in talks with a group of creditors in an attempt to restructure debt and avoid a bankruptcy filing. Neiman Marcus is facing $4.7 billion in debt, almost all of which comes due in 2020 and 2021.

]]> (Bryan Wassel) Retail Movers & Shakers Tue, 20 Nov 2018 12:07:27 -0500
Feed Shoppers’ Creativity To Turn ‘White Elephant’ Parties Into Sales Drivers Feed Shoppers’ Creativity To Turn ‘White Elephant’ Parties Into Sales Drivers

White Elephant parties, a gamified gift exchange often featuring unconventional items, are more than a niche tradition: 36 million Americans are expected to participate in these gift exchanges this holiday season, which could account for up to $22 billion in associated gift sales, according to zulily. With an appropriate marketing and pricing strategy, almost any retailer can generate sales from the concept.

“I think there’s room for everyone to get in on this trend,” said Naama Bloom, VP of Brand Marketing at zulily in an interview with Retail TouchPoints. “You don’t have to sell quirky products to have great products for a White Elephant.”

The ever-changing nature of zulily’s product selection makes the site a natural destination for White Elephant gifts and inspiration, and Bloom offered tips to help retailers capture their share of this booming market:

  • Know your audience: Potential White Elephant gifts should appeal to a retailer’s existing shopper base rather than chase outside trends;
  • Price appropriately: Most gift exchanges involve inexpensive gifts, so advertise accordingly; and
  • Inspire creativity: Whether they want something quirky, clever or practical, shoppers want to bring gifts that stand out.

It’s All About Showing Off The Goods

For the unfamiliar, a White Elephant party is equal parts gift-giving, considered diplomacy and ruthless backstabbing. Each participant brings a wrapped, unidentified gift that gets added to a communal pool. Players take turns choosing whether they want to take a new item from the pile or steal something that has already been unwrapped. If they choose an unwrapped gift, that item’s previous owner gets another chance to unwrap or steal. The game lasts until everyone has a gift.

“The best thing about White Elephant is the bragging rights of winning, meaning you got the gift everybody was fighting over,” said Bloom. “From a retailer’s perspective, what you want to do is help your customers win. Show them the product that only they may have thought of, and they walk away with those bragging rights.”

Retailers should use both photography and copy to show off why their product will be the game’s must-have prize. Even everyday items can fit the bill — it’s simply up to the retailer to recontextualize the product in a new light. Social media is a powerful platform for these sorts of messages, as the same kind of item that would be a hit at a White Elephant party has the potential to go viral across the web.

“Copy and language really help to identify new use cases for products you’re already selling,” said Bloom. “As a marketer, one of the ways I like to think about communicating to our customers is really giving them the reason why they would want the product.”

Whether Quirky Or Practical, Gifts Make A Statement

Ultimately, the most important aspect of a good White Elephant gift is that it reflects the person giving it. That can be a hair belly fanny pack, or a wine glass that looks like a full bottle: in a survey conducted by zulily, 46% of shoppers said they wanted to elicit a laugh from their family and friends. However, another 35% identified the ideal gift as quirky but useful, like a hand towel with an amusing phrase.

Of course, a gift doesn’t have to be funny to be successful. Gifts that are “perfectly practical” or “something [their] kids/family [would] love” would each inspire 20% of Americans to steal them. Bloom brought an umbrella to her office White Elephant last year, and the gift was a hit. While 18% of survey respondents said they’d want a triceratops taco holder, absolutely no one likes getting caught in the rain.

“It really depends on if you’re a pragmatist, like me, or if you want people to laugh,” said Bloom. “I like to get something practical, because at the end of the party everyone’s always feeling excited for the practical gifts — but we also had quite an aggressive swap on a prosecco pong game last year.”

Wholesome gifts belong front-and-center regardless of whether they’re useful or humorous, but retailers also must recognize items that have sales potential but may offend some partygoers. For example, even though 8% of respondents were looking for “anything with potty humor,” catering to this small segment may turn off the 35% who see White Elephants as an opportunity to spend time with friends and family.

“The reason people go to White Elephant parties is really for the bonding, and for the storytelling after,” said Bloom. “As a retailer selling these kinds of products, you really want to help your customers be successful. One way, as silly as this sounds, is the success of winning white elephant. Getting the gift that everyone talks about makes you feel great.”

]]> (Bryan Wassel) Digital Marketing Tue, 20 Nov 2018 09:50:59 -0500
Thriving In The New World Of Grocery: Five Keys For Brands

0aaaJim Hertel InmarMuch has been made of the challenges facing retailers in today’s grocery marketplace. However, their manufacturing trading partners are contending with equally pervasive disruption and the effects have been significant, with most of the top 100 brands continuing to lose market share to smaller competitors.

The issues impacting large CPGs are many — and they’re growing. For one, shoppers are increasingly brand agnostic. They’re looking to manufacturers to address a need state and, if they have confidence that the product can meet their  need(s), it matters not the brand.

At the same time, there is growing demand across shopper segments for specialty, healthy and functional foods, as shoppers are moving well beyond “low sodium” or “sugar-free” line extensions in their efforts to eat better and improve their nutrition. As a result, they’re turning to new and emerging brands to help them reach their goal of establishing a better diet. And the barriers to entry for these emerging brands have never been lower. Leveraging available technology, even the smallest food producer can achieve speed to market with enviable alacrity.

Further complicating matters is that at the center of everything is the “mantra of me” — shoppers’ deepening expectations of a personal connection with brands. So what must big CPG brands do in order to address these challenges and protect profitability?

Reclaim Competence At Consumer-Driven Innovation

The current “innovation model” of big brands acquiring smaller, emerging brands and then extending their distribution across vast retail networks is quickly losing viability in the face of rising costs and increasing market complexity. Innovation needs to be brought back in-house and re-established as a core asset.

Being perceived as innovative and in tune with consumers provides a key advantage over competitors; shoppers want to engage with brands they view as helping them address need states and live better lives. By creating small, dedicated teams to act as startups within business units — and informing their efforts through social listening — brands can effectively focus on consumer needs and reignite internal innovation.

Re-Establish Trust In The Consumer-Value Proposition

Along with everything else they’re facing, brands today must contend with a growing distrust of large corporations, including “big food.” Regardless of whether or not the distrust is warranted, it exists and it has to be addressed.

To rebuild that trust, brands must be transparent and forthcoming and their leaders must be likable, believable and accessible. Brands need to understand who they are as a brand — and who they aren’t. And the brand must stand for something beyond profits.

Aggressively Explore All Methods Of Selling To Consumers

This, of course, includes selling directly to them. Engaging in direct-to-consumer sales allows brands to effectively define, and directly express, the consumer-value proposition without it being filtered or changed by an outside party.

The result is a better buying experience that is free of the barriers and obstacles that can complicate and hinder the relationship between brands and consumers. In addition, direct-to-consumer is a proven path to valuable consumer data that makes success easier with new demographic segments and niche markets.

Develop A Culture Of Speed

While it’s not an easy ask for large organizations, big brands must find a way to create a definitive structure focused on driving faster growth. Brands can, and should, take advantage of large-scale operations by placing those closest to consumers, those most closely connected to the marketplace, in decision-making roles. This includes empowering them to stop activities that aren’t contributing to profitable growth.

The “need for speed” can also be met by partnering with emerging players (when internal capabilities are insufficient) to respond rapidly to shifting consumer trends or regulatory changes. Investing appropriately in very early-stage companies can enable big brands to optimize, and accelerate, their response to changes in shopper behavior/attitudes.

Succeed At Smaller Scale

The once tremendous competitive advantage that big brands exercised in producing millions of cases of product and driving production cost down on a marginal basis no longer exists. Succeeding through volume in spite of low margins is also quickly disappearing. Now, brands must concentrate on serving niche audiences/market sub-groups demonstrating demand for niche products.

Although many more startups fail than succeed, they are driving explosive growth and taking serious share from the big players. Large CPGs must match up with these challenger brands, operate with the same sense of urgency and adopt a similar mindset of developing brands that have deep connections with consumers.

According to PwC Global’s study of 2017 CPG trends, small CPGs (those with sales of less than $1 billion) outperformed the competition in 18 of the top 25 categories. This is an undeniable wake-up call for big brands to re-examine their product portfolios, their consumer-engagement mindsets and their plans for future growth.

Achieving greater speed to market, speed to admit failure and speed to shed activities that are not measurably driving success must be prioritized. Dismissing emerging brands as merely “ankle biters” is a good way for large CPGs to lose a leg. But, by identifying and fulfilling consumers’ needs — both physical and philosophical — big brands can thrive in the new world of grocery.


Jim Hertel is Senior Vice President, Inmar. In this role he is responsible for business development, client service, new-solution creation and strategy development for Inmar Analytics’ retail and manufacturer clients. Prior to Inmar’s acquisition of Willard Bishop, a food retail consulting company, Hertel was Willard Bishop’s Managing Partner. Throughout his career, Hertel has developed insight-based growth strategies for companies including Anheuser-Busch, Campbell Soup Company, Kraft Foods, Unilever, Wal-Mart, Coca-Cola and Purina.

]]> (Jim Hertel, Inmar) Executive ViewPoints Tue, 20 Nov 2018 09:09:59 -0500
J.Crew CEO Departs Despite Apparent Turnaround Success J.Crew CEO Departs Despite Apparent Turnaround Success

J.Crew CEO James Brett has stepped down from his position, effective immediately, after 17 months on the job. The retailer declined to elaborate on the reasons for his departure. Brett’s rapid departure is puzzling, since the company is poised to report positive comparable sales growth in the J.Crew brand for the first time in four years when it reports Q3 2018 earnings on Nov. 29.

The leadership role will be temporarily assumed by four senior executives while J.Crew establishes a permanent management structure:

  • Michael Nicholson, President & COO;
  • Adam Brotman, President & Chief Experience Officer;
  • Lynda Markoe, Chief Administrative Officer; and
  • Libby Wadle, President of Madewell Brand.

Brett had served in the CEO role since June 2017. He replaced longtime CEO Millard “Mickey” Drexler, who left at a time of declining sales and foot traffic. Comparable sales at J.Crew fell 6.7% in 2016 on top of an 8.2% drop in 2015. Additionally, the company had more than $2 billion in debt and less than $150 million in cash.

The retailer has since pursued a turnaround by bulking up its C-suite with the hiring of Johanna Uurasjarvi as Chief Design Officer and Brotman, who was previously Chief Digital Officer at Starbucks. The retailer also launched its first customer rewards program in August 2018 and opened a storefront on Amazon in September.

]]> (Bryan Wassel) News Briefs Mon, 19 Nov 2018 17:12:06 -0500