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From July 2008
By Walter F.
Loeb
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Sponsored by
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| Innovators
possess a great drive to bring something
new to the table. They constantly fret
about their last change – yet want to
fine-tune it some more. They are never
sure that the latest improvement to any
new widget is good enough. |
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According to online magazine eWEEK, happy and
satisfied people have no drive to innovate: In
essence, it writes, misery and unhappiness are
the real drivers of most, if not all,
innovation. I am not sure that Thomas Edison and
Henry Ford were constantly grouchy, but I am
certain that every step they took was tested,
retested and finally, perfected.
Retailers are very much like some of the
inventors of yesterday. They hatch new concepts
and perfect them after the first test units are
developed. There are really three areas of
development in retailing: merchandising, store
development and customer enrichment. In each
area, retailers try to innovate and change.
Defining image
We have seen many innovations in merchandising,
ranging from enhancement of fashion to the
definition of style. The introduction of any new
collection of merchandise by Macy’s, Kohl’s or
JCPenney is gutsy and represents the store’s
efforts to define its image and contrast it with
that of the competition.
Whether it is Very Vera, Martha Stewart or
American Living, the products are often
aspirational to the base customer but help
define the quality image of stores. Macy’s
recent announcement that it will bring FAO
Schwarz into its children’s department, for
instance, gives its stores even more panache.
Store developments are equally important; I
frequently take tours with clients to point out
what’s new. Department stores, particularly,
understand that they have to renew themselves
every five to seven years — or perish. The
Bloomingdale’s store on New York’s East Side is
evidence of constant renewal.
However, it is specialty stores that truly
breathe new life into retailing. Monogram, which
grew out of Banana Republic, marks an evolution
into a contemporary lifestyle concept; Neiman
Marcus’ new Cusp units, which seek to attract
college students, define a new space for young
fashion customers. Similarly, I think that Lucky
Jeans stores are unique in defining a sporting
image.
Customer enrichment
Customer enrichment takes many forms. The
rewards that Nordstrom gives its customers are
effective in maintaining their loyalty. The
special communications are informative and
immediate; they create a quick response,
maintain a steady dialog between store and
customer and are similar to programs at other
chains, including Bloomingdale’s and Target. (It
was funny when Macy’s ran a “secret sale” on the
Internet: It was not very secret but it was very
effective.)
Every shopper loves a bargain — and these days
sales are everywhere. As a courtesy to
customers, many stores now open early for a sale
event, adding a sense of urgency. At the same
time, I believe that holding a one-day sale with
an additional “preview” sale day damages a
brand’s credibility; the customer must trust the
marketing as being truthful. I also believe that
stores must remove sale merchandise when the
event is over. |
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