Friday Aug 31, 2012

Retail CEO Interviews

Businessweek's 2012 Interview Issue has interviews with three retail CEOs that are worth a quick read.  I copied some excerpts below, but please follow the links to the entire interviews.

Ron Johnson, CEO JCPenney

Take me through your merchandising.
One of the things I learned from Steve [Jobs]—Steve said three times in his life he had the chance to be part of the change of an interface. If you change the interface, you can dramatically change the entire experience of the product. For Steve, that was the mouse, the scroll wheel on the iPod, and then the [touch]screen. What we’re trying to do here is change the interface of retail. What we call that is the street, and you’re standing in the middle of it.

When you walk into a store today, you’re overwhelmed by merchandise. There is a narrow aisle. Typically, it’s filled with product on tables and you’re overwhelmed with the noise of signs and promotions. Especially in the age of the Internet, the idea of going to a very large store and having so much abundance is actually not very appealing. The first thing you find here is you’re inspired. I have used the mannequins. The street is actually this new navigation path for a retail store. So if you come in here—you’ll notice that these aisles are 14 feet wide. These are wider than Nordstrom’s (JWN).

Slide show of JCPenney store.

Walter Robb, co-CEO Whole Foods

What did you learn from the recent recession about selling groceries?
It was a lot of humble pie, because our sales experienced a drop that I have never seen in 32 years of retail. Customers left us in droves. We also learned that there were some very loyal customers who loved Whole Foods (WFM), people who said, “I like what you stand for. I like coming here. I like this experience.” That was very affirming. I think the realization was that we’ve got some customers, and we need to make sure we know who they are. So instead of chasing every customer out there, we started doing customer discussion groups. We were growing for growth’s sake, which is not a good strategy. We were chasing the rainbow. We cut the growth in half overnight and said, “All right, slow down. Let’s make sure we’re doing this better and more thoroughly and more thoughtfully.” This company is a mission-based company. This company started to change the world by bringing healthier food to the world. It’s not about the money, it’s about the impact, and this company is back on track as a result of those experiences.

Video of Whole Foods store tour.

Kay Krill, CEO Ann Taylor

You’ve worked in retail all your life. What drew you to it?
I graduated from college, and I did not know what I wanted to do. Macy’s (M) came to campus to interview for their training program, and I thought, “Let me give it a try.” I got the job and fell in love with the industry. The president of Macy’s at the time said, “If you don’t wake up every morning dying to go to work, then retailing is not for you; it has to be in your blood.” It was in my blood. I love the fact that every day is different. You can get to be creative one day, financial the next day, marketing the next. I love going to stores. I love talking to associates. I love talking to clients. There’s not a predictable day.

Monday Feb 20, 2012

F-Commerce gets an 'F'

Bloomberg is reporting that Gamestop, JCPenney, and Nordstrom have all closed their Facebook stores.  That's not the best timing with Facebook's IPO just over the horizon, but I don't think this should really be news to astute retailers.  Duplicating an e-commerce store within Facebook doesn't really offer a different experience, and Facebook users are used to punching out to the Web for all sorts of things.  By simply putting a store on Facebook, retailers have missed the point of F-commerce.

In my mind at least, F-commerce should be more about the social aspects of shopping leading up to a purchase, not the actual purchase itself.  You're not going to get much more convenient than today's Web stores, so efforts should not be focused there.  Instead, focus on ways to move the water-cooler conversations about products to Facebook where its easier to influence people into acting on those conversations.

If you've ever seen me talk about the topic, I usually show a slide depicting three approaches to F-commerce.  There's the "tab store", which is how 1-800-Flowers first approached Facebook.  Then there's the "wall store," which is best represented by JCPenney and ASOS in the UK.  And finally there's the "newsfeed store," which has been successful for stores like The Limited.  The newsfeed store highlights a couple products or promotions within the newsfeed, alongside the conversations with all your friends.  It capitalizes on the social aspects of Facebook, and doesn't try to duplicate an entire Web store.

My friend Wade Gerten, CEO of 8th Bridge, said of stores within Facebook, “it was basically just another place to shop for all the stuff already available on the retailer websites.  I give so-called F-commerce an ‘F.’”

I want to be clear that I'm not criticizing these retailers for their efforts.  They did exactly what innovative leaders should be doing: experiment, and if it doesn't work then cut the cord quickly.  Now that lessons have been learned, its time to move on and capitalize on the knowledge gained.

Retailers should continue to use Facebook to communicate with consumers and drive them to stores and e-commerce.  As always, the best results come from managing all the channels together in a unified way, leveraging the best aspects of each without needless duplication.

Thursday Jan 26, 2012

JCPenney Starts Their Journey

Ron Johnson's contributions to the Apple stores were many, but it remains to be seen if that experience will translate to JCPenney where he's now CEO. After all, the two companies couldn't be more different.  Apple is a technology company with very few products and a loyal fan base.  JCPenney, on the other hand, is a promotions-driven mass-merchant with many products and large stores anchoring malls.

I doubt the genius bar will fly at Penney's.

Yesterday the journey began when JCPenney revealed its four-year blueprint to bring the brand back from the brink.  The focus is on providing what the American shopper wants.  This includes dropping the plethora of promotions and simplify pricing.  The redesigned logo is clearly influenced by our flag, and the in-store experience is changing to better reflect main street, complete with a town square in the middle of the store.  Susan Reda did a fine job describing the changes, so I'll just refer you to her article for details.

Only time will tell if the changes make a difference, but I must say its impressive that JCPenney is willing to make such sweeping changes.  From what I've seen so far, they are on the right track.

I'll close with a video announcing the changes, which are set to begin on February 1st.

About


David Dorf, Sr Director Technology Strategy for Oracle Retail, shares news and ideas about the retail industry with a focus on innovation and emerging technologies.


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