JC Penney from a stock perspective has had quite a turnaround. Its shares have seen quite a spike since it announced that it may save nearly 900 million over the next few years, thanks largely to a modified and revamped marketing structure. Having hired the former boss of the Apple retail stores,as well as the marketing for Target stores previously, JC Penney is trying to simplify the shopping experience for the customer, save themselves much needed capital in unneeded marketing campaigns, and allow themselves to project sales in an easier manner. The premise behind this move is to, for the most part, eliminate sales and discount days, by offering a program they call: "Fair and Square" pricing, ultimately meaning that instead of offering a product for sale during promotion, or through coupon, they will offer an everday low price of the product, ultimately keeping the sale lasting forever.
This is an interesting proposition to say the least, essentially shifting the mindset of its consumer, and raises a very thoughtful debate of the consumer seeking fair priced sale items versus the actual hunt for a good deal. Resultantly, consumer reaction has thus far been mixed with some loving the idea, while others not understanding its merits.
JC Penney has said that they will continue to offer sales from time to time, but one has to admire a company that has taken quite a beating over the past few years, even recording deep losses for the most previous fiscal quarter, making a concerted effort to reinvent the way they do business. It may in fact be evolutionary, and interesting to pay attention to nonetheless.
McDonalds restaurant chain has had global appeal for decades and contantly been the subject of business case studies. Consumers have long followed the arrival of McDonalds as the mark of a city catching up to its peers, and from an innovation standpoint, the chain has never stood still. Sure with an economic slowdown in the US, penny pinchers predicted a resurgence in the consumption of low priced fast food, but the truth is that is not the reason for their recent successes or the fact that their stock has hit several highs lately. Simply put, their business internationally is outclassing that of their American origins, and their abilty to innovate and expand their food offerings has made them as competitive as ever. They have expanded their menu to include healthier options and a greater variety of selection, as well as perfected their McCafe concept particulary recently in Canada. Sure it helps, when you can offer free coffee before 10am for a month (as they did in a recent marketing campaign), but only the revamped quality will keep customers coming back, and it seems to have done just that. This article highlight some of these successes over the past year. No doubt this will put pressure on coffee stalwarts like Starbucks and Second Cup, to revamp, expand and ultimaltey provide their consumers with better experiences. Stay tuned.
For the most part there seem to be many new stores opening, and a heightened interest in vacant space, so I don't prescribe to the theory that the media is entirely spinning an economic recovery. However, the fact is the stock markets are still down, and the store closures list for 2010 (so far), seemed interesting, as some big names still populate the list.
Landlords and retailers have been hearing these rumors for years. This time it sounds as though someone has at least thought about it seriously, even contemplating store size and format. The opportunity in this market segment definitely exists and demand is there, perhaps it is now up to the landlords to make it a reality.
Worth reading for some retail nostalgia and perhaps future case studies in MBA programs. I saw this on CNN today about 6 iconic American businesses, retailers among them, that have closed after 100 years of service. The interesting part to think about is that the article tries to spin the fact that they were casualties of the economic downturn, but shouldn't one also look at the evolutionary degradation of how these businesses were run?
Canadian Black Friday, the day the Queen opens her presents, the last chance to increase sales for the year.
Boxing Day in Canada, which has ultimately become boxing week, not to mention the boxing week sales that are extended until January 7th, has long been a way for Canadians to scour for remaining shopping deals and bargains, and the final chance for retailers to unload the remaining inventory from the passing year.
It is still too early to gauge percentages regarding sales from Boxing Day, however all indications are that it was quite successful, with retailers now quite optimistic for 2010.
One interesting thing I saw though that is definitely worth mentioning as it no doubt will shakeup marketing and product positioning for the future, is the continued exponential increase in Internet sales during Christmas, as compared to last year, reported to be somewhere over 15%. Naturally without an explanation of this statistic it is tough to determine exactly what store or stores are doing well, and what consumer apprehensions are dissipating among certain product types. It is though easy to pay attention, that more and more consumers are enjoying and taking advantage of Internet convenience where suited.
I can think of several challenges and opportunities this creates, not only for retailers, but for brick and mortar shopping center owners and developers such as TGS, in that the manner of getting a customer to your center may indeed be different in a few years, not to mention convincing a new retailer why a tangible site is necessary. Ultimately the shopping center experience and the Internet experience should complement each other not compete with each other, and several new concepts have been developed by TGS already.
The key that this blog has discussed over and over holds true especially now: Service.
Retailers and landlords should be asking themselves what have they done to improve service, and differentiate the service at their store/center to keep the customer coming back.
The 2009 market correction will be well served if we all sharpen our pencils and become more efficient in 2010.