A story in the New York Times today reports how major retailers are adjusting to the recession. The following eight strategies are mostly about belt-tightening. If you're a marketer, be prepared to deal with the following:
1. For premium priced stores, all bets are off on familiar pricing models, with fewer high-priced and more mid-priced merchandise at stores like Neiman Marcus;
2. for mass merchandisers like Wal-Mart, Target, Home Depot, and PetSmart, less inventory and fewer brands;
3. for mid-rangers like Sears and J.C. Penney, more customer self-service;
4. for Macy’s a rush to tailor merchandise according to customer demand at the local and regional level;
5. for many retailers, a move to exclusivity, with more in-store brands and increased collaboration with top designers;
6. for everybody, greater emphasis on an improved in-store customer service experience;
7. for us all, seamless interface between online and in-store shopping (e.g., in-store computers that let us check competitor’s prices);
8. more just-in-time stocking, resulting in a narrower window for "seasonal" sales;
9. in the very very near future, shopping by cell phone (note: J.C. Penney has serious initiatives to develop systems that will run on a handset.)
For customers, the fallout is likely to be less choice and more “sold out” experiences at the brick and mortars. We won't like it, because we're accustomed to entertaining ourselves by wandering the mall with that one diet coke we bought. News flash: Today's retailers are getting out of the entertainment business. Yes, they want our experience with them to be pleasant ... but only if we're actually customers.
- scrubbed by Marketing Brillo
Saturday, June 20, 2009
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Department stores, stuck in the middle between the prestige stores and disheveled discounters, used to stress value as their rationale: Lower prices than the high-enders, better quality than the low-enders.
But Target, combining low price and ambience, has quietly reinvented the discount store and shaken up the department store value equation.
Even gigantic but not-so-pretty Wal-Mart has taken note and wants us to believe they care about more than just rock-bottom prices.
After the 2008 Crash, many Nordstrom and Bloomingdale customers traded down, but passed by Sears and Macy's, abandoning the big centers for the discounters in the strip malls.
Now the NY Times tells us that the high-enders and the mid-range department stores have come up with an 8-Step Program for the post-recession marketplace.
We wish them luck but fear that this may be a case of much-too-little-much-too-late.
It appears that the main thrust of this recovery program is to be more like the successful discounters. (Point 1) Hardly a strategy of differentiation.
After all, much of Target's success is traced to its in-store/designer brand exclusivity. (Point 5)
Wal-Mart has had their own personal satellite in orbit for decades to monitor and aggregate sales data to address seasonal and out-of-stock issues. (Points 4 and 8)
Amazon (yes, they're a discounter too) reinvented the very nature of customer service with high-tech tools. (Points 3 and 6)
In-store computers to check competitor prices? No, thanks. I've got the entire web on my iPhone. (Point 7)
When there were no alternatives, department stores didn't need a reason to convince us to patronize them. But the world has changed and now "relevance" may be their most important challenge.
Certainly the New York Times understands that...
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