Not many people get to sit down and chat with Macy’s CEO & President Terry Lundgren… But its easy when you’re the Talented Blonde!

In this interview, you will learn about Macy’s “M.O.M.” strategy, the power of the Omnichannel, what he considers to be a strategic advantage over his competitors, and the importance of millenials. 

Check out the full interview in all of its naked glory!

or… for an edited version… (as seen in the Bloomberg Economic Brief on 4/30/15… check out page 6)!

In typical “this could come back to bite you” fashion,  Abercrombie & Fitch ($ANF) and CEO Mike Jeffries are in PR hot water thanks to a comment that he made in 2006.

“In every school there are the cool and popular kids, and then there are the not-so-cool kids. Candidly, we go after the cool kids. We go after the attractive all-American kid with a great attitude and a lot of friends. A lot of people don’t belong (in our clothes), and they can’t belong. Are we exclusionary? Absolutely.”

He adds…

“Those companies that are in trouble are trying to target everybody: young, old, fat, skinny. But then you become totally vanilla.  You don’t alienate anybody, but you don’t excite anybody, either.”

So here we have a brand where cargos go to die… with an elitist, out-of-touch CEO telling a huge percentage of american consumers “we don’t want your business”.  Can’t blame a guy for telling it as he sees it… but at what cost to ANF? 

Check out last week’s interview I had with Bloomberg Radio’s Hays Advantage. 

Botox MAY have been brought up. 

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Seriously,  Ron Johnson should have lead with this apology and then rolled out the new ad campaign and it may have had a chance in hell.  Now it just looks like a desperate last gasp for air. This company cannot get out of its own way.  The Langer Research Group published a survey  this week on JCP basically showing the’ve lost 1/5 of their customer base… and  those customers aren’t coming back.

The funny thing about consumers is that their memory is short.  Now, Johnson & Johnson is the Gold Standard for apologizing early and often (with the Tylenol debacle).   However, here no one is losing life… a great american heritage brand simply dropped the ball and quit innovating.  JCP is basically the KODAK of retail at this point.   Problem is, there is nothing for consumers to come back TO. This consumer has already traded down to Kohl’s ($KSS), T.J. Maxx ($TJX), Wal-Mart ($WMT), etc.  There is no unique selling proposition at JCP.

Yes… customers (especially JCP customers) love a deal.  But the deal has to be on product they WANT.   JCP allowed their stores and brands to become tired and lackluster. Plenty of substitutes out there at the retail level for what they provide.

The lesson is stay relevant to your consumer. Provide a constant dialogue with them. Provide value and newness and brands and products they actually want.  JCP is now going the way of Gimbels. The real estate is worth more than the brand equity at this point.

Smart companies are listening to their consumers-via social media–in real time. $WMT actually had their entire marketing team on Black Friday sitting in front of lap tops answering customers questions and comments in REAL TIME. In the new world of the 24 hour news cycle and social media, bad experiences can impact a retailer exponentially if not dealt with swiftly and in realtime.

“Kristin is another former Wall Street trader who now blogs, trades, and shares her insights on television.  She blogs about many retail topics, which I find interesting since retail and consumer spending is such a huge gauge of the economy.  Also, if you enjoy “other media” – video, radio, etc, Kristin’s blog is for you.”

http://thecollegeinvestor.com/6394/top-female-investors/

Many thanks for allowing The Talented Blonde to be part of this wonderful group of ladies!

A tough economy even hits America’s largest retailer, as a reduction in staff has been taking its toll on the selling floor. After a recent Bloomberg article  highlighted the ire of customers across the nation, it appears Walmart, too, is struggling with the “new normal” that is a leaner and meaner work force.

This comes at an inflection point for the company, as it struggles to devote even more floor space to fresh food & consumables in an effort to keep its one-stop destination status for its once-loyal customer base. However, as I’ve mentioned on this blog and on-air numerous times, today’s cost-conscious consumer is in the midst of “trading down” to dollar stores and other venues if the superstore can’t deliver its needs.

Bare shelves and long check out lines clearly don’t help matters. The dollar stores, Family Dollar $FDO, Dollar General $DG, etc., have gotten the message, and are nimbly seizing market share by adding scores of coolers and fresh food-often at better prices–to their selling floor. Even drug stores like CVS and Walgreen’s $WAG are getting in on the act.

However, sometimes being the biggest doesn’t always mean the best, and Walmart should communicate with its consumer sooner rather than later and address these widespread shortcomings of its staffing and shelf stocking, rather than stern denials in the press.

The company even issued debt yesterday, which offered a brief respite from the news cycle.

Today’s consumer could care less about loyalty.  They are opportunistic, cash-strapped, and looking for the best deal–no matter the venue.

We have a saying in retail: “JUST TAKE THE MONEY.”

Remarkably simple, but one would surprised just how many retailers miss it. Walmart would be mindful to get back to basics-and fast.

Really Ford?… Really?!?

http://www.usatoday.com/story/money/cars/2013/03/27/ford-jim-farley-bondage-berlusconi/2024141/

I believe Ford was genuinely shocked by these ads since they are a true American traditional car company. Clearly these were NEVER meant to see the light of day, and no matter how much I LOATHE all things Kardashian, women bound and gagged in the back of a vehicle is NEVER appropriate.

However, it is no secret that Ford sales are struggling in Europe and bringing down the overall profit so this may be a “trial balloon” for them.

Ford lost $1 billion last year in Europe while kicking ass in North America with truck, SUV and sedan sales; F-150, Escape and Fusion have been great for North American sales. Ford is also focusing more on India than China since they see the growth in that market not being serviced. They are basically break-even in Asia and South America but are spending to grow infrastructure there.

Also of note, Ford is chopping heads right now in their European operations so this campaign was probably a “Hail Mary pass” for an Ad Exec. who is headed to the unemployment line.

Bottom line:  Ford knows Europe is a mess for at least 5 years by the actions they’ve taken, but they don’t want to blow their chance in India where disposable income is there and they’ve already done some brand building.

Um…

Some thoughts on Tiger and $NKE

http://www.latimes.com/sports/sportsnow/la-sp-sn-tiger-woods-nike-20130326,0,316300.story

Obviously this advert can be taken in various ways and Nike doesn’t shy away from controversy. Personally I think Tiger is saying what everyone else is thinking.  America loves a ‘come back’, and no one better embodies that than Tiger Woods.

Nike has “doubled down” on golf with a supposed 10 year/$150 million deal with Rory McIlroy, who has been struggling mightily this year since signing the deal.  Tiger’s resurgence has helped divert attention from McIlroy’s slump, but remember that Nike only represents about 7% of the $10 billion golf market and trails Adidas-owned Taylor Made huge on the equipment side.

Taylor Made generated about $1.7 billion in sales (up 20% in 2012) and basically kicked Nike’s ass in 2012.  Nike’s new driver hasn’t dented into Taylor Made’s RBZ series yet, but it needs Tiger to win the Masters or U.S. Open to generate enough buzz in order to make the consumer look to Nike equipment.  Nike is still #1 in the golf apparel market, but new Nike Golf head Cindy Davis has marching orders to cut into Adidas/Taylor Made’s stranglehold (If you notice, all the Tiger and Rory Nike ads feature equipment, not apparel).

Tiger, Rory and Mickelson are the players that drive TV ratings and now Nike has 2 of them, so I think Tiger is more of the Racer X dark hero to Rory or Mickelson’s Speed Racer good-guy foil.

Bottom line: I believe the advert works because the people who hated Tiger before still hate him, and those who don’t care about his private life enjoy seeing him win.

So… Here’s another rant on J.C. Penney. 

OK.  We KNOW the company is a TRAIN WRECK right now.

This latest attempt to alter what we in retail call “EDLP” or every day low pricing (where everything is a $0.99 or $0.97 price point),  BACK to a mark-up to mark-down policy is is a joke. It demeans the very consumer they so wanted to target.

I was on the earnings call when JCP CEO Ron Johnson spent about 10 minutes saying how differentiated $JCP was, because they would “NEVER mark-up to mark-down”, and that JCP “didn’t have to do that “because of the strength of their stable of brands and the unique merchandising plan the company was implementing.”  Oh, how the mighty have fallen!  This is basically a tacit admission that “yeah, we screwed up and have no idea what we are doing, and the customer didn’t get it either.”

Customers will forgive a lot, but they won’t forget you insulting their intelligence (or lack thereof).

This is just another nail in the coffin for Ron Johnson and JCP. Like I said before, if he was ANY OTHER CEO without the “Apple HALO”, he would be on a beach somewhere.

Find the entire document here.

Large Retailers’ Plight May Reflect Shift in U.S. Economy

The recent decline in the fortunes of several large retail chains mirrors the hollowing out of the middle class following the 2007-2009 recession. Lost jobs, falling wages and shifting preferences among consumers reflect increasing income inequality and a bifurcated retail market. The difficulties faced by these mass market retailers, such as J.C. Penney Co. Inc., Target Corp. and Wal-Mart Stores Inc., may be indicative of a greater shift underway in the retail sector and the U.S. economy.

While Hurricane Sandy, lackluster holiday retail sales, and the increase in the payroll tax have presented ready-made excuses for retailers to explain away their woes, the larger issues are lost jobs and falling real wages. According to the National Employment Law Project about 60 percent of jobs lost during the recession can be classified as middle-wage occupations. Meanwhile, 58 percent of jobs created since 2009 have been in low-wage occupations while middle-wage jobs have risen only 22 percent. This has induced a shift in consumer behavior that mass market retailers have yet to adjust to or acknowledge.

The nominal gains seen in retail spending over the past few months are mostly due to spending by upper income earners. The top 1 percent of earners have seen an 11.2 percent increase in incomes while the bottom 99 percent have seen a minus 0.4 percent decline. The inequality in income gains combined with the rebuilding of overall wealth that has occurred since the recession ended in 2009 have restrained consumer spending for all but the upper income earners.

In contrast with the modest increase in nominal sales, earnings for retailers tell a different story. J.C. Penney Co., lauded as a turnaround story early in 2012, ended the year with a fourth quarter loss of $2.02 per share, a same store sales loss of 31.7 percent, a sales decline of 28.4 percent, a 34.4 percent decline in online sales and a 17 percent decline in traffic.

Last year it seemed J.C. Penney had all the makings of a rising retail powerhouse. It had a new CEO, Ron Johnson, fresh from Apple Inc. and who before that had been responsible for turning Target Corp. into the ‘saving-is-sexy’ discount temple it is today. Sergio Zyman, an ex-Coca-Cola Company marketing guru, was brought in to lead J.C. Penney’s multi-channel glossy re-branding campaign. Johnson also added a cadre of sexy new fashion brands, including Jonathan Adler, Oscargown designer Georgina Chapman, and Canadian fast-fashion brand Joe Fresh. This isn’t your mother’s Penney’s.

Yet, the data shows consumer are not connecting with these bold moves. The company’s performance, as well as its equity share price – down almost 20 percent year-to-date – is likely a reflection of severe economic pressures on the middle class and a shift in behavior among consumers.

Penney’s is by no means alone in this plight. Target Corp. has also taken a hit. The company’s fourth quarter same store sales of 0.4 percent were accompanied by negative traffic of 1 percent, the first negative quarterly traffic report since the second quarter of 2009.

Retail behemoth Wal-Mart actually led the bad news, albeit in an awkward way, when Cameron Geiger, Wal-Mart’s vice president for merchandise replenishment, in leaked internal emails, lamented “Where are all the customers?”, “Where is their money?” and referred to February sales as a “total disaster.” Wal-Mart expects its first-quarter sales in the U.S. to be flat year-over-year, compared with 2.6 percent this time last year.

So where exactly has the middle class consumer gone? This cohort has probably traded down to dollar stores due to the loss of income and changed economic status. Consumers initially traded down to Wal-Mart and Target following the 1990-91 and 2002 recessions. They’ve now sought out the next level of trade-down.

Traditionally consumers frequented Dollar Stores as a “treasure hunt” to find deals on gifts and household décor. Due to changing economic circumstances, these consumers are now frequenting these outlets for basics and consumables as a de facto grocery store, creating a sweet spot for dollar stores that target households with incomes of $30,000 to $50,000 per year. As a result, investors may see a continued rise of smaller footprint drug stores and dollar stores continuing to pick up market share from large retailers.

It’s increasingly likely that the customers the large retailers are targeting have moved on and may never to return. Middle class consumers may have fled to greener – and less expensive – pastures.

(Kristin Bentz is executive director, PMG Venture Group)

The Talented Blonde was featured by the Wall Street Journal today as eyes turned to again to J.C. Penney and its partnership with canadian clothier Joe Fresh.  Can the Fresh brand give J.C. Penney what it needs to turn the tides?

Here’s a link to the article.

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