Carol Spieckerman's Brain On ... Tesco's Carbon Footprint Fail

In her latest contribution as a Retail Wire panelist, Carol gives Tesco props for dropping its carbon labeling program. Better to fail fast than to soldier on under stressful conditions.

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Here's what she had to say ... I give Tesco props for pulling the program rather than forcing it through, particularly as its share of the UK grocery market hits a seven-year low. Remember when Walmart announced that carbon footprint labeling of some kind would be the culmination of its phased sustainability initiative? Helen Fleming, Tesco's climate change director, would seem to be spot-on in her assessment that others haven't taken up the mantle as planned. 

New Year Brings Decision Time

Thomas Lee of the Minneapolis Star Tribune asked Carol Spieckerman to weigh in on where retail will go in the New Year . . .

In 2012, less will be more, according to retail expert Carol Spieckerman.

Struggling chains like Sears, Christopher & Banks, and Gap will continue to shut down stores to save cash. At the same time, retailers like Wal-Mart, Target and Best Buy will experiment with smaller formats instead of building big-box stores, said Spieckerman, president of newmarketbuilders, a retail management-consulting firm based in Bentonville, Ark., home of Wal-Mart.

As consumers continue to flock to online shopping, traditional brick-and-mortar retailers have been seeking less-costly areas of growth instead of spending gobs of money on 125,000-plus-square-foot boxes.

Best Buy, based in Richfield, is rolling out Best Buy Mobile stores, while Minneapolis-based Target experiments with CityTarget in dense cities like San Francisco, Seattle, and Los Angeles. The smaller stores, which focus more on everyday essentials, are about half the size of normal Targets.

Still if shoppers also subscribe to the less-is-more philosophy, the economy could continue its anemic growth. Consumer spending accounts for about 70 percent of economic activity.

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Copyright © 2011 Star Tribune

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!

Earth-shattering Events that Escaped (Almost) Everyone in 2011

In Carol's latest article for the International Licensing Merchandiser's Association (LIMA), Carol calls out a couple of retail developments that barely made a ripple and gives her take on how they will transform retail in 2012 and beyond.

Global Power Launches State-of-the-art Satellite

Grabble, Kosmix, OneRiot…What may sound like adult parlor games are actually a series of acquisitions made by Walmart under its newly-formed @WalmartLabs division. Headed up by the braniacs that came as a part of the bargain when Walmart acquired Kosmix back in April, @WalmartLabs has already more than made up for any of the virtual time that Walmart lost futzing with its physical assets during the much-maligned Project Impact era. A Facebook-mining gifting app and all manner of personalized shopping and couponing capabilities have already been conjured up.

Make no mistake though, the steady stream of incubation and innovation coming out of this lab isn’t just transforming Walmart’s “social web” trajectory, but raising the social, mobile, and big data bar for everyone in the retail orbit.

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