Carol Spieckerman's Brain On...Does J.C. Penney's Plan Forget the Rank and File?

In her latest contribution as a Retail Wire panelist, Carol posits that Ron Johnson may not have left people out his plan for J.C. Penney (or perhaps they will be beside the point).

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Here's what she had to say...It remains to be seen whether Mr. Johnson's strategies left out the seventh "P" (people) as the article suggests, or if the other six (Price, Promotion, Personality, Product, Presentation and Place) intentionally obviate the need for a talent topgrading plan. On the surface, Penney's new scheme would seem to simplify rather than further complicate in-store execution and customer interaction.

Nikki Baird's original article is a terrific read, by the way, and a spot-on depiction of J.C. Penney's previous pricing and promotion "strategy."

Carol Spieckerman's Brain On ... Ralph Lauren's Relevance

In her latest contribution as a Retail Wire panelist, Carol lauds Ralph Lauren for keeping it real and relevant.

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Here's what she had to say ... Ralph Lauren is the quintessential global lifestyle brand(s) and it has enjoyed an enviable run of success through retail's roughest waters. The company has done a fantastic job of mixing tradition with modernity (although I still see Burberry as setting the standard in that regard), and its carefully-curated brand portfolio addresses multiple generations and demographics without (too much) cannibalization. You won't find digital touch screens and DJs at the flagship Rhinelander mansion re-do on Madison Avenue, for example, yet you can design your own Rugby shirt on the brand's website. The next generation (David) is ensuring that the brand portfolio stays head of the digital times.

The only major misstep seems to have been the company's creation of its Global Brand Concepts division a few years ago which promised to leverage RL's extensive design, production and marketing capabilities to create Lauren-esque brands for retailers. When GBC launched its first (and to-date only) lifestyle brand with J.C. Penney (American Living), it seemed to be Penney's big brand move but alas, many more came after (including its mega-deal with Liz Claiborne), diluting the brand's impact. American Living also fell victim to Penney's on sale-out-of-the-starting-gate antics which killed the value proposition from the get-go (too bad they didn't get in post-Ron Johnson, but I digress). Ralph may not have one upped Li & Fung on that one but the rest of his record speaks for itself.

I see many good years to come.

Planning your 2012 sales, marketing or licensing event? Want to schedule a meeting with Carol to discuss your 2012 retail and brand strategy? Carol is currently scheduling meetings in the following cities:

New York area

Denver, CO

Atlanta, GA

Charlotte area, NC

Las Vegas, NV

Berlin, Germany

Contact Carol directly at carol@newmarketbuilders.com for details.

Carol Spieckerman's Brain On...Promotions vs. EDLP

In Carol Spieckerman's latest contribution as a Retail Wire Brain Trust panelist, she comments on a recent study from the Stanford Graduate School of Business that makes a compelling argument against everyday low pricing (EDLP) for retailers attempting to compete with big boxes.

Here's what she had to say..."Interesting findings considering that this year, Walmart, J.C. Penney and Lowe's all made various vows to end promotional shenanigans and either return to (Walmart) or initiate (the others) EDLP-ish models. With the big guys zigging to price consistency, smaller-scale competitors would seem to have a mighty zag in moving toward promotional pricing."

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Additional thoughts from Carol...

I agree with the study conclusions that pricing strategies aren't to be taken lightly since variances will tarnish consumer trust and the process of re-educating consumers about new strategies can be long and costly. Although the study focused on grocery, I see this applying to all categories and retail tiers.

Walmart learned that when last year's "atomic rollbacks" backfired. Far from being grateful, Walmart's loyalist customers questioned whether they had been getting the best deal all along and in the meantime, dollar stores' massive scale and convenience factor tugged away at Walmart's base. It's journey back to price leadership has been fraught with foibles but a recent quote from Walmart's Chief Merchandising Officer, Duncan Mac Naughton, hints at the real reasons why more retailers are abandoning promotional high-low games in favor of uniformity.

In his fourth quarter presentation in Bentonville, Mac Naughton stated that Walmart is committed to delivering price leadership "community by community, store by store, category by category." Why so specific?  Because as difficult as it has always been to manage promotional strategies across a few thousand stores carrying the same brands and products, it is nearly impossible to do so as retailers localize the brand and product profiles of individual stores, explode online offerings, and ramp up site-to-store capabilities, all under the watchful eye of smartphone-wielding consumers who can exercise their right to tap out a price comparison and/or make an online purchase on a whim...and do so while visiting an alternative retailer's physical or virtual space.

Among the most promotionally-driven retailers in the country J.C. Penney announced in November that it will move toward an everyday low price strategy beginning in spring 2012. Not coincidentally, Penney simultanously announced its plans for a significant relaunch of its e-commerce site which will include adding to its online-unique assortments and enhanced mobile interactivity.

One of my 2011 Earth-shattering Events that Escaped (Almost) Everyone is retailers' mania for online marketplaces which promises to further complicate the pricing and promotion picture. Lowe's is portraying its announcement today that it will acquire online retailer, ATG Stores as an example of its committment to provide an "endless aisle" of products. I'll say. ATG's virtual portfolio contains over 500 websites featuring 18 category divisions. Over 3.5 million products from more than 3,300 manufacturers are featured on ATG websites.

Let the limber and land-based have a go at promo. 

For the scale-busting behemonths? EDLP, please!

Carol Spieckerman Talks Lifestyle Branding, Acquisitions, (and Mad Men) with Iconix COO, Yehuda Shmidman

In September, I had the pleasure of sharing the podium with Yehuda Shmidman, Chief Operating Officer of Iconix Brand Group, at LIMA’s inaugural Retail and Brand Conference in New York. Iconix (NASDAQ: ICON) is the second largest licensor in the world and, in the aggregate, the company generates over $12 billion in annual retail sales by managing and marketing a diverse portfolio of more than 25 consumer brands including PEANUTS / Snoopy, London Fog, Royal Velvet, Mossimo, and Joe Boxer. Mr. Shmidman also heads up global business development for Iconix and this year he was included in the “40 Under 40″ list by Crain’s New York.

In the first of two parts, Shmidman discusses lifestyle branding, Iconix’s diversification strategies, and the company’s recent brand acquisitions. The following is an excerpt

Carol Spieckerman: You’ve certainly been busy since I last saw you in New York in September. Just in this last week, we’ve heard about another exclusive deal with JC Penney, as well as the big announcement that you’re acquiring Sharper Image.

Yehuda Shmidman: That’s right.

Spieckerman: I think that’s a good place to start. Sharper Image is following Borders and Linens ‘N Things as the latest retailer to go from being store-based to more of a pure intellectual property model, and now you guys own it. In the old days, these brands would have just faded away. If the stores went away, the brand went away. What do you see as the possibilities today?

Shmidman: I believe that brands are valuable. So, regardless of whether a brand started as a retailer at one point, or as a shoe brand, like we did with Candie’s, or started in some other form, the intellectual property behind it has tremendous value and that’s what we look to leverage, to grow, and to continue to market. So for us, it’s not so much where a brand came from but where it can go, what it means to consumers, and what the emotional connection is.  Read the rest of the interview...

Read Part II