Episode 26: Retail Space – The Final Frontier

Don’t forget to subscribe on iTunesGoogle Play Music, or Stitcher! If you enjoy this podcast, please leave us a review on iTunes.

You Need Space

  • Too little attention is paid to space management within the retail sphere, which has a negative impact on the supply chain, Retail Leader reported recently.
  • Aligning supply chain managers, store supervisors and planners in order to optimize space helps shape each store’s merchandise to its particular market. Retail stores should seek to simultaneously make room for merchandising, promotions and incoming inventory, according to a recent Martec International report.
  • Integrating space, assortment, forecasting, and replenishment enables retailers to respond effectively to shoppers in each individual store and maximizes sales.



Is Data Making Us Dumber?

  • Les Wexner, founder of Limited Brands, defined the skill of merchants as having a nose for finding latent demand and knowing what’s next. “Sometimes market research is like giving radar to a hunting dog. It makes him dumb,” he added.
  • It should go without saying that fashion isn’t reducible to a spreadsheet or a database. But our era’s obsession with data-driven decision making demands it be said.
  • Innate, gut-based knowledge has given way to data-driven decisions almost across the board, and not only in the fashion and retail industries, but consumer-package goods, advertising, media and entertainment.
  • “Data can never predict what is next, only what has been. “ Or consider Nike’s flagship stores. If it had followed the data, if it had listened only to the accountants about ROI on sales per square foot, it never would have dedicated selling space to basketball courts.
  • “The data on consumer behavior available, in specific industries, is available to almost everyone. Your competitor is likely trying to make sense out of the same piles of data.”


Grocery Store on Wheels

In Shanghai, a prototype of a new 24-hour convenience store has no staff, no registers, and the whole thing is on wheels, designed to eventually drive itself to a warehouse to restock, or to a customer to make a delivery.

The startup behind it believes that it’s the model for the grocery store of the future–and because it’s both mobile and far cheaper to build and operate than a typical store, it could also help bring better access to groceries to food deserts and rural areas.


Episode 25: 2 Walmarts = 1 Amazon

Don’t forget to subscribe on iTunesGoogle Play Music, or Stitcher! If you enjoy this podcast, please leave us a review on iTunes.

Walmart + Walmart = Amazon

  • Wal-Mart Stores Inc. last week said it’s “testing new approaches in two recently opened supercenters” in Tomball, TX, and Lake Nona, FL featuring new layouts and technology to improve the shopping experience, according to a corporate blog post written by Jeff Muench, senior director of Business Development.
  • The layouts bring services like beauty salons and tech repair near relevant merchandise. Health and wellness departments are consolidated, and baby, toys, kids’ apparel and kids’ shoes “form a single destination to ease mom’s shopping journey,” Muench said.
  • The stores also include Wal-Mart’s revamped “Scan and Go” checkout technology, which works with smartphones and handheld devices provided by Wal-Mart. Plus, interactive information projected onto tables and walls allow customers to learn about connected devices like Google Home, Apple TV, Nest, baby monitors and connected thermostats. Interactive screens also provide an “endless aisle,” featuring items available online but not necessarily found in stores, according to the blog. Customers can also page store staff via WiFi-connection buttons throughout the store.
  • It took Amazon 18 years as a public company to catch Walmart in market value. It took less than another two years for Amazon to be worth twice as much.
  • On the 20th anniversary of Amazon’s IPO, Amazon’s market cap stands at $459 billion before the market opens for trading. Walmart’s? $228 billion.



IoT Becoming Mainstream

  • Gartner anticipates that in 2017 there will be 8 billion connected devices — 26 billion by 2020; other forecasters anticipate 50 billion, even 100 billion.
  • Chris Kozup, vice president of marketing at Aruba, a Hewlett Packard Enterprise company, says retail is at the leading edge of industries looking to adopt IoT use cases. “It’s not the leader,” he says, “but it certainly is within the top five industries that are finding and using different IoT applications.”
  • RFID – E-commerce and omnichannel have made it vital that retailers know where inventory is, and Mitchell says retailers are putting their money into RFID and inventory tracking. “I was always enamored by the promise of RFID, but it seemed there were so many barriers to entry,” he says. “Now it seems it’s mainstream.”
  • Touchpoints – “The value comes from enabling new touchpoints, and enriching relationships through prescriptive engagement. Sensors improve transparency to goods in motion,” Hand says. “But connecting that information to where the customer is in their shopping journey informs engagement, relationships/loyalty and conversion rates.
  • Energy Savings – Mitchell also sees retailers adopting energy savings initiatives through IoT. “Any new lighting going into stores now is smart lighting,” he says. “It will pay for itself with savings out of the gate. It’s an easy investment for the retailer, and it represents the start of building an in-store sensor platform for us to do much smarter things.”

Analyst Knows Best

According to Kenny Yeo, there are three key technological drivers — automation, awareness, and immersion — that traditional retailers should focus on.

Firstly, automation helps with basic standard tasks, such as stock-taking, which allows for more time for staff to interact with consumers.

Awareness allows retailers to use technology such as online trackers to detect both the physical interaction of customers in stores as well as shopping habits on websites. This allows them to understand the consumer’s buying behavior.

Lastly, immersion gives retailers the power to influence customers’ buying habits in store and online by using previously collected information from tracking services. This can happen through the use of apps, location services and even augmented reality.



Episode 24: Retailers Have Lost Their Minds

Don’t forget to subscribe on iTunesGoogle Play Music, or Stitcher! If you enjoy this podcast, please leave us a review on iTunes. Helps a ton!

Retailers Have Lost Their Minds


Coach Shrinking to Grow


  • The luxury handbag retailer reported better-than-expected profit before the bell Tuesday, fueled largely by the company’s efforts to cut back on discounts and promotions in U.S. stores.
  • “We believe that the rampant conversations around the ‘Death of Retail’ have bolstered the profile of a small group of companies that have emerged as the structural winners, boosting their valuations to levels previously reserved for growth stocks,” Siegel’s firm, Nomura, wrote in a recent note to investors.
  • An important takeaway from Tuesday’s earnings report: Coach is one of the only companies today that is successfully “shrinking to grow,” Siegel said, referring to how Coach’s shuttering of some stores has helped boost profits.
  • Rumors continue to swirl that Coach is considering buying up more luxury retailers, such as rival Kate Spade or shoe manufacturer Jimmy Choo. This could help the company grow profits even higher, analysts are saying.

Alexa is Now Your Fashion Stylist


  • Amazon has added the Echo Look, a device with a voice-controlled camera that helps users assess their outfits and track what they wear, to its ever-expanding family of Alexa-powered Echo devices.
  • The narrow, oval-shaped Echo Look can take full-body photos and videos, and logs them in a “Lookbook.” The device also includes a “Style Check” feature that allows users to choose two photos of outfits to compare. Alexa then delivers a judgment based on an automated assessment of factors such as fit, color, styling, seasons and current trends.
  • For now, consumers who want to purchase the Echo Look need to request an invitation from Amazon and pony up $199.99. The company didn’t announce when the device will become available for the broader public.

Episode 23: Jeff Bezos and the Book of Secrets

Don’t forget to subscribe on iTunesGoogle Play Music, or Stitcher! If you enjoy this podcast, please leave us a review on iTunes. Helps a ton!

Wal-Mart Paying for Store Traffic

  • Wal-Mart to offer discounts for orders picked up in store.
  • Marc Lore (Founder of Jet.com), head of Wal-Mart’s e-commerce operations, told Reuters on Tuesday he expects the move to boost transactions online and improve in-store foot traffic — and take market share from Amazon in the process.
  • Starting April 19, Wal-Mart will offer pickup discounts on 10,000 items and on more than 1 million products by June.
  • Online orders picked up in store already qualify for no shipping charges since the retailer saves on shipping fees. The latest discounts come on top of that. For example, a Vizio 70-inch 4K Ultra HD television priced at $1,698 for store pick up will qualify for an additional discount of $50.
  • Lore said Wal-Mart is able to offer these discounts as it is able to eliminate delivery costs by leveraging its fleet of more than 6,700 trucks to deliver products from warehouses to stores.



Bed Bath & Below

  • Bed Bath & Beyond Inc.’s CEO Steven H. Temares said the company is getting better at digital, adding to its assortment and improving search, content and speed at the backend. But is this cannibalizing the brick-and-mortar store?
  • The company is still opening more stores than it’s closing, opening 29 and closing 13 stores in 2016, and planning to open 30 new stores and close 15 to 20 in 2017.
  • Gross margin declined to 38% as compared to approximately 38.6% in the prior year period. The decrease was primarily due to shipping expenses, including a change in the company’s free shipping thresholds from $49 to $29 and free shipping promotions.
  • “We are leveraging our improved predictive modeling tools to optimize our direct mail and print campaigns, including our newest seasonal home catalog titled Spring Refresh which was mailed a few weeks ago to a select group of customers and prospective customers,” said Temares.
  • Bed Bath & Beyond expects fiscal 2017 net sales to increase in the “low to mid single-digit percentage” range. Management likewise expects comparable sales to rise, although the forecasted range is from “relatively flat to slightly positive,” driven primarily from digital channel growth.
  • Additionally, gross and operating margins are likely to decline further in fiscal 2017, due to anticipated increases in shipping, coupon, payroll, and technology expenses. In turn, earnings per share are projected to decrease as much as 10% in 2017.




Jeff Bezos and the Book of Secrets

Notable excerpts from his shareholder letter last month:

At Amazon, we’ve been engaged in the practical application of machine learning for many years now. Some of this work is highly visible: our autonomous Prime Air delivery drones; the Amazon Go convenience store that uses machine vision to eliminate checkout lines; and Alexa,1 our cloud-based AI assistant. (We still struggle to keep Echo in stock, despite our best efforts. A high-quality problem, but a problem. We’re working on it.)

But much of what we do with machine learning happens beneath the surface. Machine learning drives our algorithms for demand forecasting, product search ranking, product and deals recommendations, merchandising placements, fraud detection, translations, and much more. Though less visible, much of the impact of machine learning will be of this type – quietly but meaningfully improving core operations.

Put all the pieces together, and Bezos’s key message is that data can be incredibly valuable in filling in the blanks, or in helping companies execute current strategies faster and more effectively. But at the highest levels, the best new products and new strategies can’t emerge from the numbers alone.


Episode 22: The Sky is Falling

Don’t forget to subscribe on iTunesGoogle Play Music, or Stitcher! If you enjoy this podcast, please leave us a review on iTunes. Helps a ton!

Changing of the Guards

  • Some call this a retail apocalypse – 3,500 stores expected to close over the coming months
  • Better looked at as the “change state” of an evolutionary period
  • Mall traffic is through the floors and the old guard fashion retailers are hurting



What’s Happening to Fast Fashion?

  • Hennes & Mauritz AB said price cuts to clear inventory over the next three months may exceed last year’s, sending the shares tumbling to a four-year low.
    • H&M’s inventory levels are up 30 percent year-on-year and profit will be hurt should the retailer have to offer deeper discounts
  • Sales in the year to date (10-15%)haven’t lived up to H&M’s expectations, Chief Executive Officer Karl-Johan Persson said in an interview
  • The Swedish company is struggling to keep pace with Zara owner Inditex, which has put a greater emphasis on e-commerce and has proved more adept at responding to shifts in consumer tastes
  • The retailer said it will open its first Arket outlet in London in the fall, selling clothing and a limited range of home furnishings at prices slightly above the company’s main brand
  • Arket is the company’s first new label since the launch of & Other Stories in 2014 and will include products for men.



Growth Amid the Apocalypse

  • The first three F21 RED stores will open in April in key retail markets across the U.S. including San Antonio, Texas, Bronx, New York and Chicago, Illinois. New locations will continue to open throughout the year in key cities and will bring F21 RED total store count to more than seventy locations by year-end.
  • A new concept store for Forever 21, Inc., F21 RED delivers a deeper inventory of the trend-led staples Forever 21, Forever 21 Men, Forever 21 Plus and Forever 21 Kids is known for carrying, at a great value to customers.
  • F21 RED launched in 2014 and aims to create a convenient shopping experience for the entire family with an assortment of fashion staples from Forever 21 and its sub-brands, including Forever 21 Men, Forever 21 Plus, and Forever 21 Girls.
  • Forever 21,  is a fashion retailer of women’s, men’s and kids clothing and accessories and is known for offering the hottest, most current fashion trends at a great value to consumers. This model operates by keeping the store exciting with new merchandise brought in daily. Founded in 1984, Forever 21 operates more than 815 stores in 57 countries


Episode 21: The Iconic Advantage. An Interview with Soon Yu, former Global VP Innovation VF Corp

Don’t forget to subscribe on iTunesGoogle Play Music, or Stitcher! If you enjoy this podcast, please leave us a review on iTunes. Helps a ton!

In this episode, José interviews Soon Yu, former Global VP Innovation at VF Corp and book author. We learn about his background in retail building and innovating brands for 20 years. Soon’s new book is called The Iconic Advantage – more info can be found at www.soonyu.com.

Episode 20: Know it alls, Store No. 8, The fall of the mall rats

Don’t forget to subscribe on iTunesGoogle Play Music, or Stitcher! If you enjoy this podcast, please leave us a review on iTunes. Helps a ton!

Know it Alls

  • About 83% of shoppers believe they’re more knowledgeable than retail store associates, though 79% say being able to engage with knowledgeable store associates is “important” or “very important,” according to a new survey from Tulip Retail.
  • Meanwhile, 63% of consumers prefer to shop both in-store and online, and 64% of respondents said physical retail locations will be part of their shopping journeys in the future.

Store No. 8

  • Wal-Mart is creating a Silicon Valley-based retail startup incubator designed to nurture and accelerate to market cutting-edge technologies including virtual reality, drone delivery and personalized shopping.
  • Store No. 8 is somewhat like corporate venture arms at other companies and will be charged with identifying emerging technologies that could prove useful.. It will also strike strategic partnerships with other promising young e-commerce companies.
  • Marc Lore, the president and CEO of Wal-Mart’s U.S. e-commerce unit, announced the incubator — dubbed Store No. 8 in honor of an early Wal-Mart location home to some of founder Sam Walton’s most ambitious experiments
  • ‘’startups that have a responsibility to change the course of retail,” “The focus is not just on today,” Lore said. “Think bigger.”
  • Adds onto recent purchases post-Jet — Moosejaw, Modcloth, and Shoebuy
    • Head of Jet.com is the head of e-comm. All of these are e-comm transactions.

The Fall of the Mall Rats

  • There are 1,221 malls in the US today, according to the International Council of Shopping Centers (ICSC). The number of malls increased by more than 300% from 1970 to 2015. Given the oversaturation of malls in the US, we believe that at least 30% of malls—mostly within the C and D classifications—need to be closed.
  • Malls classified as A properties are the most productive: they account for only 20% of all malls, yet represent 72% of total mall sales.
  • Even though retail traffic at malls has declined, retailers such as Tesla Motors and Apple are choosing to locate stores in malls in order to expose their brands to meaningful traffic.
  • The top 10 malls in the US see average sales per square foot of over $1,000. Four of these malls are located in Florida and two are in New Hampshire, which has no sales tax. Two are in tourist locations and two are outlet malls.
  • Other reports in this series will analyze department stores in malls, trends impacting malls, malls’ evolution and store concepts that are expanding.

Full report here




Episode 19: Gen Z loves brick & mortar, High-end dept stores getting creative, TJX ‘home market’ stores

Don’t forget to subscribe on iTunesGoogle Play Music, or Stitcher! If you enjoy this podcast, please leave us a review on iTunes. Helps a ton!

Gen Z Loves Brick & Mortar

Sixty percent of Gen Z shoppers still prefer to purchase in-store, and 46% will still check in store to get more information before making an online purchase. In the U.S., 77% of Gen Z respondents said that brick-and-mortar stores is their preferred shopping channel.

The research also revealed that Gen Z shoppers are interested in new shopping methods. Nearly three-quarters (73%) of Gen Z shoppers are interested in curated subscription-type offering for fashion, and 71%  are interested in automatic-replenishment programs, with an overwhelming majority willing to shift more than half their purchases to a retailer offering this service.

Some takeaways:

  1. The majority of US consumers have purchased apparel both online and offline, however, brick-and-mortar is still the dominant transaction channel.
  2. In fact, US consumers’ attitude towards fashion and their purchase behavior has changed little over the past five years.
  3. We expect brick-and-mortar to remain the dominant store format for US apparel and footwear retail in the near future.
  4. As retailers have shifted their budgets to digital advertising, the influence of all major media channels has decreased in the past five years, except for social media and mobile video.
  5. Among millennials, the influence of social media on apparel purchases is on par with traditional media like TV and magazines.

High-end Department Stores Getting Creative

Like many retailers, the high-end department store’s sales have suffered from a dwindling number of in-store shoppers. Rather than disappear, they are making an attempt at bringing people back into their stores through interactive tech. Will it work? We don’t know.

Some examples of efforts Neiman Marcus is making:

  • Memory Mirror
    • The Memory Mirror is a full-sized shopping mirror where shoppers can record themselves twirling in an outfit and then share on social media (a video demo can be seen here).  It’s been such a hit with consumers that this past December, the technology moved into the beauty department, with Neiman Marcus rolling it out at Le Métier de Beauté beauty counters in at least 20 locations, with plans to expand further this year.
  • Shazam for shopping
    • Neiman Marcus is also introducing Snap, Find, Shop; what they call Shazam (the music discovery app) for shopping. Essentially, consumers can take a photo of a piece of merchandise that they like—say a friend’s pair of shoes—and then the app will find similarly styled items to purchase directly from NM.
    • While the project hasn’t been a success yet, Emmons hope that it will pay dividends in the future as the use of augmented reality becomes more commonplace.
  • Voice recognition
    • In a similar vein to Amazon’s Alexa and Google Home, Neiman Marcus is testing voice-command technology that will help streamline employee communications with the backroom.
    • “It’s a little wearable computer about the size of a key fob and when you press the button you give a voice command. It might be, ‘Hello shoes,’ and it’s going to connect you to an associate in the shoe department or you might say, ‘Hello register help’ and it sends out the all-call for register-trained associates to come man the registers in the store,” Emmons explained. “With future enhancements, it could be things like, ‘Hello SKU lookup,’ and I could then read a SKU and it could tell me which stores had that item in stock.”

TJX to Launch New ‘Home Market’ Stores

TJX Companies — Marshalls, T.J. Maxx, HomeGoods & Sierra Trading Post — is planning to launch a new off-price chain of home good stores. CEO Ernie Herrman told analysts on recent earnings call that the new stores will not compete directly with HomeGoods.

“While we are proud to have grown HomeGoods’ customer base for many years, we believe we remain significantly underpenetrated in the total U.S. home market and enormous opportunity remains for us to gain share in this space.”

The company plans to open four of the new concept stores this year. TJX has been testing many of the home categories that it plans to sell in the new stores for the last year-and-a-half.

Episode 18: WDA Brand Marketing CEO, Dr. William D’Arienzo

Don’t forget to subscribe on iTunesGoogle Play Music, or Stitcher! If you enjoy this podcast, please leave us a review on iTunes. Helps a ton!

Interview with Dr. William D’Arienzo

Dr. William D’Arienzo is the founder and CEO of WDA Brand Marketing. They help clients achieve their brand strategy objectives and business goals. In the past 25 years WDA Brand Marketing has worked with: Burberry, Brooks Brothers, Kohl’s, Walmart and many other retailers. They develop brand management strategies that generate measurable results.

Brand Management Strategies – Luxury and Mass MarketsWilliam D’Arienzo Phd. Published by Bloomsbury. In his book he explains how a brand can successfully drive global business development using a rigorous analytic and an applied approach, with supporting examples from current fashion apparel and non-fashion brands including: Hermes, Prada, J. Crew, Apple, BMW, Ritz Carlton and many more.