Before we put 2018 in the rear-view mirror, the RTP editors wanted to identify both the retail
industry’s best and worst of the year. And because we like to leave things on a
positive note, we’re starting with the gaffes, goof-ups and unforced errors
that caught our eye. We’ll focus on the good news in next week’s Editor Q&A
column. What was your pick for the most boneheaded play of the year? Let us
know in the comments below.
Debbie Hauss, Editor-in-Chief:
The most significant indication of missteps in the retail industry for me is a
personal experience. I purchased a dress for my daughter’s wedding from a major
department store retailer, then was retargeted online with a 40% discount offer. I reached out via
online customer service and was told they couldn’t help me because I had bought
the item in-store. I then called the sales associate who completed my purchase
and she said there was nothing she could do because it was more than seven days
past the initial sale. Extremely frustrated, I then re-purchased the item
online for 40% less, then returned the original purchase in-store. This very
disappointing customer service experience could have been avoided if the
retailer was fully up-to-speed on omnichannel capabilities — not to mention
that the retailer could have avoided losing 40% of that sale by not retargeting
me online after I’d already purchased the item. This example shows how far the
retail industry still has to go to be able to effectively satisfy today’s
digitally savvy shoppers.
Adam Blair, Executive
Editor: Regular readers of these columns won’t be surprised at my pick for
the most boneheaded action of the year: the Trump-induced U.S.-China trade war,
currently featuring a 10% tariff on up to $250 billion of Chinese goods.
Tariffs add to U.S. manufacturers’ costs, which hurts them, the retailers they
supply and the consumers who shop there — a simple truth that seems to have
eluded the President and his advisers. Trade experts speaking at the Sourcing Journal Summit
noted that tariffs already have increased apparel and footwear prices. Worse
yet, the damage they’re doing will be tough to repair any time soon: “I believe
both China and the U.S. don’t see how they can back down,” said Nicole Bivens
Collinson, President of International Trade and Government Relations for the
international law firm Sandler, Travis & Rosenberg. “We could be stuck in
this for 20 years. As a political candidate, how are you going to sell
[reducing tariffs] if the Chinese are attacking U.S. companies by, for example,
stealing intellectual property?” If this is winning, I want to be a loser.
Glenn Taylor, Senior
Editor: A lot has been said this year about the missteps of major retailers
such as JCPenney and Sears, but GameStop is another retailer that has had to deal with fixing its
own mistakes. Over the past few years the video game retailer underwent a
significant repositioning effort to integrate both collectibles and mobile
wireless products into its offering, by building a Technology Brands division
out of acquired retailers such as Spring
Mobile and Simply Mac. But the
Technology Brands endeavor ended up being a dud from a money-making standpoint,
with the division losing $316 million in 2017. Last month, GameStop essentially
admitted defeat by selling
Spring Mobile for $700 million, the latest of numerous moves to cull
its wireless offering. The move is magnified by the fact that GameStop grew the
Tech Brands division to more than 1,300
total stores…hardly a small footprint to let go of. Let this be a lesson to
retailers: while differentiation is important to any evolving company, sticking
your fingers into as many different pies as possible isn’t always the right
answer. Such rapid brick-and-mortar expansion carries a high risk.
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Bryan Wassel,
Associate Editor: While its downfall lacks the high profile of Toys ‘R’ Us or Sears, Mattress Firm also is facing
bankruptcy, and the retailer doesn’t have any good
options to climb out of its hole. The company is almost the definition of a
dinosaur: in a field dominated by nimble e-Commerce-based players like Casper and Leesa, Mattress
Firm is trundling along with more than 3,000 physical locations, and also is hampered
by the debt of its parent company. Boll & Branch, another bedding newcomer
that recently introduced its own mattress, is beating Mattress Firm on the
social responsibility front with its transparency
and commitment to supporting cotton farmers. The writing is on the
wall for stodgy brick-and-mortar retailers in this space: even the fact that
Mattress Firm is pulling back on advertising has been damaging to overall mattress
industry traffic trends, according to Peter Keith, Senior Research Analyst at Piper
Jaffray.
