What Can Today’s Retailers Learn from the Captain of the Titanic? Plenty.

Like the captain of the Titanic, leadership of failed and failing retailers has been publicly, and occasionally brutally, criticized. In some instances, this criticism is clearly deserved, in other cases not.

It may not be as bad as it seems.

Despite the painful passing and decline of retail industry stalwarts including Linens ‘n Things, RadioShack, The Bon-Ton Stores, Toys R Us, Sears and Kmart, retail chains including Macy’s, Kohl’s, Walmart, Target and other major retailers are showing financial improvement. Macy’s stock price is up 40+ percent year-to-date, Kohl’s is up 30+ percent, and Target is up 25+ percent. The rumors of the death of brick-and-mortar retail have been greatly exaggerated. And, Sears, Kmart and JC Penney are still open for business.

Recently, I participated in the Annual Retail Forum at Columbia Business School where a keynote speaker addressed a question from the audience: “

How would the speaker approach the precarious position of a challenged major retailer? What steps would you recommend?”

The response was,

“Shut it down…they don’t deserve to stay in business.”

This, “throw in the towel,” response brings to mind a key question we should ask ourselves. What would we do if we found ourselves as CEO of a retailer at risk of complete cataclysmic failure? One obvious metaphor is that of being captain of the Titanic. You may not remember, but the Titanic had a bonafide captain: his name was Edward John Smith.

Continue reading “What Can Today’s Retailers Learn from the Captain of the Titanic? Plenty.”

Investing in Retail Stores

What apocalypse?

The Tiffany & Co. building on 5th Avenue & 57th Street in New York City may be the most enduring example of what traditional retailing looked like before the Internet arrived. So it’s striking that the Tiffany & Co. of 2018, faced with an onslaught of online ecommerce, is responding by making a big new bet on that big old store. It’s investing $250 million in the 78-year-old flagship.

It turns out that all over the disrupted and evolving retail sector, companies are rethinking the mantra that the future is digital, and are pouring money into actual brick-and-mortar stores. 

Three blocks west of Tiffany’s flagship store is the new 47,000 sq. ft. Nordstrom‘s Men’s Store with a full store opening next door. And, Target has committed $7 billion to upgrade operations, and while the Minneapolis retailer hasn’t disclosed how much of that will go to improving physical locations, a spokeswoman said stores are an “incredibly important linchpin.”

Why? Because the bulk of America’s retail is still done the old-fashioned way, in stores…

{An “Apocalypse” is an event involving destruction on a catastrophic scale. Whereas “evolution” is the development of something, especially from a simple to a more complex form.}

For legacy companies facing disruption, corporate innovation won’t be enough

Today corporate innovation is all the rage. Large companies host accelerators, launch internal startups, and court potential startup partners in a quest to harness young companies’ innovativeness and energy for themselves.

But large legacy companies shouldn’t throw the baby out with the bathwater by neglecting their core business and assuming it has minimal room to grow.

In this article, I will detail how our company, Randa Accessories, grew from 25 to 50 percent market share in several categories and channels by focusing on its core business and adjacent “bridge” categories, and offer some takeaways for other businesses based on that experience. (I will also describe how Randa launched its own successful internal startups — I’m not saying corporate innovation isn’t useful, just that it needs to be one part of a broader strategy to excel.)

First, a little about Randa. You many not know our name, but you know our products. Our products are available under 50 brands, and are sold at over 20,000 points of sale, and millions of digital touch points.

We’re the world’s largest men’s accessories company. We sell ties, and belts, wallets, bags, hats, slippers and luggage.

Randa is completely vertical, business-to-business and direct-to-consumer, with 4,000 employees working from 23 global offices.

Our culture emphasized growth and efficiency and led us to success in revenue, margin, penetration, and market share.

For example, we’re the leading supplier of belts to Nordstrom… and to Walmart, to Kohl’s and to Amazon, and The Hudson’s Bay, Liverpool, Printemps, El Cortes Ingles, David Jones, John Lewis and to Costco.

We spent over $50 million to assure that when a consumer walks into a retail store for pants, they immediately see our belts nearby. Dress shirts? There are our ties…

And then, we hit a wall. 

Continue reading “For legacy companies facing disruption, corporate innovation won’t be enough”

Annual Retail Forum: “Retail Radicals”

Very honored to speak at the “Annual Retail Forum” at Columbia Business School, Wednesday, August 1st.

Joining “Retail Radicals” including Mickey Drexler, Jill Granoff, Paul Charron, Richard Jaffe, Robin Lewis, Mark Bozek, Alex Brick , Mark A. Cohen, Anne Marie Stephen, and other leaders and luminaries for a one-day interactive summit on emerging brands and macro shifts shaping the future of the retail industry.

This program showcases retail radicalism from a multi-disciplinary perspective, identifying the skills, knowledge base, and best practices required to lead the retail industry into the future…

Date: Wednesday, August 1, 2018
Venue: Uris Hall, Room 301, Columbia University Campus
Time: 8:30 AM – 4:30 PM

Trust, Mistrust & Antitrust. Amazon is Not Broken. Should it be Fixed?

“In Amazon’s early years, a running joke among Wall Street analysts was that CEO Jeff Bezos was building a house of cards. Entering its sixth year in 2000, the company had yet to crack a profit and was mounting millions of dollars in continuous losses, each quarter’s larger than the last. Nevertheless, a segment of shareholders believed that by dumping money into advertising and steep discounts, Amazon was making a sound investment that would yield returns once e-commerce took off. Each quarter the company would report losses, and its stock price would rise. One news site captured the split sentiment by asking, “Amazon: Ponzi Scheme or Wal-Mart of the Web?”” – Lina Kahn, Yale Law Review

Eighteen years later, it’s no longer a joke. No one seriously doubts that Amazon is anything but the titan of twenty-first century commerce.

Success, efficiency and scale are achievements to be admired. Should they be regulated?

Continue reading “Trust, Mistrust & Antitrust. Amazon is Not Broken. Should it be Fixed?”

What if Amazon is Retail’s Only Hope?

“Retail Apocalypse.” The term has its own Wikipedia entry. This transformation, of “biblical” proportions, is often blamed on Amazon.

What if Amazon is not the brick-and-mortar store killer? What if Amazon is retail’s champion?

To paraphrase Mark Twain, the reports of retail’s death have been greatly exaggerated. The retail industry is not in dire shape, it’s in a different shape. Change is essential: it’s not easy, nor painless.

And, there is an important difference between correlation and causation. Amazon’s success and the disruption of the legacy retail market are certainly related, this does not mean one caused the other. Amazon did not overturn the traditional retail model: Macroeconomics drove this disruption.

Amazon is strategically and significantly investing in mortar-and-brick retail. Further, the company provides valuable tools to third-party retailers to help them succeed. And, critical to its own success, Amazon needs other retailers to thrive.

6 Reasons the Current Retail Transformation Was Inevitable

Continue reading “What if Amazon is Retail’s Only Hope?”

What I Should Have Said, But Didn’t

 

Last week in Las Vegas, during the largest fashion industry trade show, MAGIC/PROJECT, I delivered the keynote presentation for the YMA Fashion Scholarship Fund and UBM Advanstar. It was entitled, “Disruption is the Mother of Invention.”

At the end of my presentation a woman stood up to ask a question. Actually, she made a statement.

“I own a fashion retail store,” she exclaimed. “I’m a good merchant, it’s a good store. It’s been in business a long time. Customers shop my store with their smartphone in their hand… and then they buy the item on Amazon Prime.”

She cried out, “it’s not right. It’s not fair.”

And then she said,

“What do I do?”

My answer was “textbook,” when the last thing needed was a textbook. Continue reading “What I Should Have Said, But Didn’t”

Will Another 80,000 Retail Stores Close?

Take a deep breath… 

UBS Financial estimates that for every 1 percent increase in eCommerce penetration to total retail sales (excluding food & gas), 9,000 retail stores would need to close in order to maintain current levels of sales per physical store. 


This would be the equivalent to shutting down seven Toys ‘R’ Us chains. 


Continue reading “Will Another 80,000 Retail Stores Close?”

Department Stores & Apparel: The Future is Blurry

Morgan Stanley predicts that the department store share of the apparel market will drop from 24 percent in 2006 to only 8 percent by 2022.

Many analysts continue to predict that, this year, Amazon will become the largest retailer of apparel in the United States. 

Top apparel retailers are ranked as Walmart, Amazon, Target, Macy’s, Kohl’s, The TJX Companies, Gap, Costco Wholesale, Nordstrom, Ross Stores, and JCPenney.

Continue reading “Department Stores & Apparel: The Future is Blurry”

“Leadership is Not a Destination” – FutureCommerce Podcast

“No company can afford to stand still” – we sat down with David J. Katz – a LinkedIn Top Voice in Retail – to discuss how technology is changing consumer demands and pushing companies into creating better experiences.

Topics include: Robotics, Retail, Ecommerce, Technology, Fashion, and Jeff Goldblum.

Grab some popcorn, and a notebook.

Continue reading ““Leadership is Not a Destination” – FutureCommerce Podcast”