Four strategies for a better retail holiday season

3 11 2009

Uno degli articoli più interessanti e stimolanti sul tema del Marchandising e del rapporto tra centro e periferia.

Che ne pensate?

Author: Dan Wittner
Date: 30 Oct 2009

Following one of the worst holiday sales seasons in history, retailers recognize the need to prepare for the upcoming season with carefully planned merchandise assortments, inventory levels and cross-channel promotions that drive sales. While some economic reports have shown bleak outlooks, several indicators suggest the economy is beginning to improve. With so much uncertainty, how will retailers prepare?

Retailers may not have control over how much the economy will bounce back, but they do have control over the successful execution of their holiday in-store product marketing campaigns and promotions. <b>In the world of retail, execution is the most important component to any successful merchandising campaign</b>. Unfortunately, it’s also one of the most disorganized and difficult processes to go through.

With 85 percent of purchasing decisions being made at the shelf, the optimization of merchandising and promotional strategies is absolutely critical. However, only 37 percent of retail merchandisers are confident in the ability of store operations to execute these strategies.

Without the proper processes in place, retailers lack the ability to run holiday campaigns quickly and efficiently, and consequently, fail to convert the sale during the critical final interaction with the customer. In fact, tens of millions of dollars are lost each year because employees don’t properly execute on their headquarters’ in-store directives.

So what’s a retailer to do?

In order to help retailers cut costs associated with holiday marketing and merchandising campaigns while significantly improving customer engagements that ultimately drive sales, we’ve included below some key tricks of the trade.

Streamline your Operations:
A critical first step in carrying out any in-store merchandising campaign is to streamline operations and create a single platform to manage all merchandising processes. Companies like Oracle, JDA, SAP and RBM Technologies have paved the way in providing comprehensive and highly-effective merchandising platforms specifically designed to improve in-store merchandising and marketing execution. By simply streamlining operations, retailers are able to significantly cut costs and improve revenue.

Improve your Communications Skills:
Timely communication related to training, in-store execution, and promotions are critical to the success of any retail operation. And in this challenging market where every sale counts, it’s critical that all stores be compliant with corporate direction.

Unfortunately, studies show that most retailers are still using outdated processes — like excel spreadsheets, phone, fax and mailings — to communicate in-store merchandising changes. This is a major driver of non-compliance, which negatively impacts sales performance. Retailers should focus on visual, two-way communication with store employees. This means giving store teams images of how they want displays to appear and where they should be placed within the store.

Store employees can in turn provide faster feedback when a campaign has been executed so corporate has a clear understanding of compliance and the impact an accurately executed campaign has on sales.

Prepare to ‘Get Local’:
A few months ago, Macy’s CEO Terry Lundgren told the attendees of Macy’s annual meeting that their localization plan, which the company implemented last year, will save the company approximately $400 million annually beginning in 2010.

Many other large retailers have jumped on the localization bandwagon for quite a few reasons. Local stores are able to provide insight into a particular market to improve campaigns and sales in those particular areas. Localization efforts will be particularly critical this holiday season because they show how customers are responding to a particular campaign or promotion.

Despite the growth of this trend, localization can be a complicated process. To maximize revenue for each customer that enters a store, retailers must display the exact products and messaging that will compel a purchase. That means tailoring merchandise to unique local consumer needs. Many savvy retailers understand this, but too often leave such localization decisions solely up to the “gut-feel” of local store managers. While these managers do play an important role in the process, retailers must better leverage the data they already have by automating the localization process. The result will be a stronger, more targeted connection with the customer.

Improve your Organization’s Sustainability Efforts:
It’s not only good for the environment; it’s good for your bottom line. While almost every retailer offers recyclable bags or employs energy saving practices in their stores, they often forget to focus on greening their back end as well. In-store campaigns can be a tremendous source of inefficiency and waste. In many cases, retail corporate headquarters don’t have a clear idea of what is happening at each store level in terms of POP requirements. Many retailers are still using generic POP kits for all of their stores, which can lead to as much as 30 percent of received POP not being used. Not only does this process waste time and effort from both a store and corporate level, it also increases campaign costs and produces a great deal of waste.

Visual merchandising management solutions provide the necessary tools to help retailers create a localized POP platform to help take the “guess work” out of the merchandising process and reduce production of POP materials. In addition, retailers are able to significantly reduce paper waste and money, by ensuring all corporate directives and campaigns are being communicated online.

The impending holidays will undoubtedly be a major challenge for all retailers. In order to survive and even thrive, retailers need to be smart, organized and cost-conscious. Implementing the right in-store merchandising technologies and processes will undoubtedly help retailers achieve these goals and prepare not only for the coming months, but for many holiday seasons to come.

The writer is Chief Customer Officer at RBM Technologies.


Saks Chief Cuts Orders to Avoid Stiletto Discounts

23 07 2009

Non mi entusiasma molto l’idea della strategia della “scarsità” intesa come “riduzione del livello del servizio”, soprattutto se realizzata dai retailers.

Un conto è “combattere” per avere qualcosa che è scarso a partire dalla fonte, un altro è trovare poco sugli scaffali perchè poco è stato acquistato.

Se così fosse, dovremmo riabilitare il marketing della vecchia Unione Sovietica dove gli scaffali dei negozi erano sempre vuoti (di qualsiasi prodotto).

Come cliente mi sento “spremuto come un limone“….

Volendola vedere come opportunità i negozi diretti potrebbero controbattere con il “giusto” assortimento e la “giusta” quantità sugli scaffali, non determinata esclusivamente, dal P&L.

Altra opportunità potrebbe essere quella dell’ecommerce che risente meno dei costi di vendita rispetto agli altri canali tradizionali.

Naturalmente occorre produrre la “giusta” quantità con la “giusta” flessibilità.

Questo non sempre riesce a un sistema che, salvo poche eccezioni, non ha la mentalità organizzativa “giusta” per l’ottimizzazione dei processi aziendali che si muovono con molta approssimazione e senza un’armonizzazione comune a tutta l’azienda e che quindi produce in maniera ondivaga, schizofrenica e isterica.

Nella mia esperienza gli interventi di ottimizzazione della logistica hanno sempre prodotto risultati interessanti, anche con piccoli sforzi (spesso solo di buon senso…).

Mi sembra infine che si sta perdendo il concetto di personalizzazione del prodotto che, con le risorse tecnologiche oggi a disposizione è un’arma in più.



By Cotten Timberlake (

Saks Inc., Neiman Marcus Group Inc. and other luxury retailers are reducing orders this year to limit supply and boost profitability.

The cuts may rein in what Saks Chief Executive Officer Stephen Sadove calls the “enormous excess” that existed last year in stores that cater to the wealthy.

“Across the board you are going to find less of the sizes, less of the availability in almost all of the categories,” Sadove, 57, said yesterday in a telephone interview. “You are probably going to see less aggressive markdowns than you saw last year.” Saks operates 53 Saks Fifth Avenue stores.

The company, based in New York, is aiming to order at least 20 percent less from its vendors in 2009 and forecasts a jump in gross margin.

Scarcity drives profit because when consumers fear missing out, chains can sell goods earlier in the season at higher margins, said Antony Karabus, CEO of the retail- consulting firm Karabus Management in Toronto.

Last year, retailers marked down leftover $3,795 Thom Browne suits and $520 Ferragamo loafers.

This year may give way to emptier shelves, fewer brands and styles, Karabus said.

“People are going to have to come in earlier if they want to make sure they get the items they want,” Karabus said.

Total U.S. retail sales will rise 1.1 percent in the second half of 2009 compared with the same period a year earlier, after dropping 2.6 percent in the first half, estimated the International Council of Shopping Centers, a New York-based trade group.

Shares Recover

Saks shares fell 13 cents to $3.73 at 4 p.m. in New York Stock Exchange composite trading. The shares have more than doubled from a low of $1.55 in March.

Seattle-based department- store chain Nordstrom Inc., whose inventory reductions have outpaced sales declines, declined 67 cents to $18.27, after bouncing from $7.81 in November.

Neiman Marcus, based in Dallas, is owned by Warburg Pincus LLC and TPG.

The chain cut orders 25 percent in the quarter ended May 2 and said on June 10 that it is being “conservative” for the rest of the year.

Both Neiman and Saks have said they are weeding out underperforming labels.

Nordstrom and Cincinnati-based Macy’s Inc., the owner of Bloomingdale’s, have said they are buying less, too.

Executives at Neiman Marcus, Nordstrom and Macy’s declined requests for interviews for this story.

U.S. luxury retailers already have been working for months to align inventories with sales trends by offering more discounts, returning merchandise to vendors and canceling orders.

Nordstrom’s inventory per square foot fell 12 percent in the first quarter from the prior year, faster than the company’s sales decline of 9.2 percent, the chain said May 14.


“Luxury has always been about scarcity, about limited distribution, so if you don’t buy it at a certain point in time, there won’t be anymore of it in your size,” Sadove said.

Designer shoes may be hardest to find, according to New York-based research firm Retail Eye Partners. Stores already have cut purchases of new styles, said Sapna Shah, co-founder of Retail Eye.

Jimmy Choo Ltd. is focusing on must-have exceptional styles, such as $1,395 embroidered stilettos, and on the lowest- priced shoes in the collection, CEO Joshua Schulman said at a Monaco conference this month.

New autumn shoes start at $365, according to its Web site yesterday.

The company was founded in London and its shops include locations in New York and Beverly Hills, California.

Gucci, Paris-based PPR SA’s biggest luxury label, said it is cutting production and the number of styles.

75 Handbags

We don’t need 75 variations on the same handbag,” Gucci CEO Patrizio di Marco said in an interview in Florence, Italy, last month. “Two or three are enough.”

In this economy, it is better for retailers to risk missing sales than to have to mark down merchandise as much as they did last year, Karabus said in a June 16 phone interview.

Discounts reached 70 percent on some items, eroding profitability.

Our whole industry is trying to get inventory down to a level that scarcity is a part of the equation that the customer is doing,” Neiman Marcus CEO Burton Tansky, 71, said on a March 11 conference call.

Neiman Marcus’s gross margin — the share of sales after subtracting the cost of goods sold — in the quarter ending in January will widen to 26.4 percent from 23.9 percent, estimated Grant Jordan an analyst for Wachovia Capital Markets LLC in Charlotte, North Carolina.

‘Very Unusual’

Saks forecast that its gross margin will recover to as much as 37 percent in the second half of 2009. That compares with a margin of 27.5 percent in the same period of 2008, according to third- and fourth-quarter sales data compiled by Bloomberg.

Saks’s losses will narrow this year, while Macy’s, the second-biggest U.S. department-store chain, will return to profitability, according to analysts surveyed by Bloomberg.

“There was an enormous excess in the system,” Sadove, the Saks CEO, said. “That was something that was very unusual, and it is unlikely that you will see levels like that again.”

To contact the reporter on this story: Cotten Timberlake in Washington at

Difendere i margini, non il fatturato

9 12 2008

Published: December 3, 2008

“THE world is a strange place right now,” a salesman on the main floor at Bergdorf Goodman said as shoppers pawed through handbags piled on counters like discount merchandise at Century 21. “It’s off its axis.”

The handbags, like a lot else at the Fifth Avenue retailer, had been marked down 40 percent and are likely to go lower as seasonal sale days wear on. “Sixty percent off is the new black,” as Patricia Marx wryly noted in the Dec. 8 issue of The New Yorker.

Yet the discounts at Bergdorf are far from the deepest among luxury retailers around the city.

In a move that caused consternation among its high-toned competitors along Fifth Avenue, Saks slashed the bulk of its fall fashion and accessories up to 70 percent over Thanksgiving weekend — to what some termed limbo lows.

There is nothing new about retailers cutting prices at holiday time, and the discounts have been especially deep in this recessionary year.

But few in the luxury goods trade can recall a time when the price-slashing started so soon or was so severe.

By cutting prices radically, Saks’s chief merchant, Ron Frasch, turned his chain’s flagship emporium into a swank Fifth Avenue version of a discount outlet, moving merchandise in volume and spooking the competition as it struggled to hold on to a traditional mark-down sequence, and even to continue selling certain brands at full price. Mr. Frasch declined to comment on his corporate game plan. “It’s not a conversation I want to get into,” he said.

Even seasoned bargain hunters were startled to see Saks’s wood-paneled main sales floor mobbed with consumers nosing like truffle hounds through shelves of marked-down cashmere sweaters and racks of designer clothes with prices seemingly too good to be true.

Could those columnar Valentino evening dresses in signature red really be 70 percent below the original price of $2,950?

Was one reading the $329 tag right on a cashmere men’s blazer from the elite Italian woolen house Loro Piana, a jacket that typically costs $2,000 or more? What about the $129 price for a black satin skirt from Comme des Garçons? Was the tagged price a misprint? It was not.




Il punto assolutamente centrale è come difendere i margini, piuttosto che il fatturato.

Il danno indotto alle brand dalle scontistiche così elevate (io stesso, ieri a spasso per negozi sono stato quasi sempre accolto all’ingresso da “oggi abbiamo un 20% di sconto alla cassa…”) non riesco a quantificarlo.

Non credo possa funzionare nemmeno la possibilità di addossare al retailer gli elevati margini visto che nella stragrande maggioranza dei casi i negozi monomarca nei dintorni hanno, praticamente, utilizzano le stesse strategie di prezzo.

Indicare questi sconti come assolutamente “eccezionali” e “transitori”?

Ma allora le marche oggetto di queste politiche di prezzo dovrebbero a loro volta scontare, oppure “sganciarsi” dai retailer, non fornendo ulteriore merce, ritraendosi nei propri negozi.


Non credo che i clienti siano stati così stupidi da non sapere che i negozi “cattedrali” nei quali entravano non potevano che essere finanziati da loro stessi attraverso i margini che oggi vengono tagliati in preda al panico.

Un conto è però saperlo avendo un flusso d’entrate “paragonabili” alla struttura dei margini, e un altro è subire un prezzo di vendita non più allineato alla situazione finanziaria o anche solamente al “sentiment” del momento.

La dimensione globale in cui viviamo non può che amplificare e disseminare queste politiche e, anche se in qualche mercato emergente l’acquisto di un brand prestigioso è ancora una questione di status, il passaggio dalla percezione dell’essere “arrivato” a essere stato “abbindolato” potrebbe essere breve.

vacca grassa non ripassa… ovvero in termini darwiniani: “survival of the fittest

Acquisto annuale medio online per luxury goods

29 10 2008

Nel blog del WSJ “The Wealth Report” Rich Shoppers Prefer Their Luxury Online vengono riportati i risultati di una ricerca effettuata da Google e Unity Marketing; in particolare viene indicato che il campione con reddito di 1 milione di dollari (o più) spende $114,632 in media ogni anno per acquisti online di luxury goods.

A me la cifra sembra spropositata (almeno per il mercato italiano); che esperienze avete avuto riguardo a questa misurazione?