By Keith Geller – Partner at JBCHoldings (JBCStyle, Janou Pakter, JBCConnect, JBCPlatform)
Retailers in every industry are faced with a recurring, yet all too familiar, challenge: deciphering the shopping behaviors of the ever-changing consumer. Consider the days of horse-drawn wagons and the trusted local country store – one could argue that these behavioral patterns are simply part of the normal retail cycle – the more things change, the more they stay the same. While I tend to believe that history does repeat itself in one form or another (generally I choose not to dive headfirst into trends when we have long-standing statistics to support a more traditional approach to business), today’s marketplace demands a more modern and proactive approach.
Choosing to forego the present day trends in favor of old-fashioned logic when operating a consumer-facing business can prove to be somewhat short of a stellar approach. In my opinion, the applicable factors at play here can relate more accurately to connectivity, flexibility and value (in this instance, there is nothing outdated about value). Today’s consumer is more educated, has less conviction behind their loyalty to brands, and simply expects more (much more) for their dollar than ever before.
It’s not enough to attach a label or a logo to a product and expect to retain a customer based on reputation alone. True engagement these days requires constant communication through multiple channels that demonstrate that a brand “gets” their market. Even so, visibility is only half the argument. Operating a store on every corner might help with brand awareness and drive top line numbers, but when it comes to loyalty and moving the needle on the bottom line, it’s best to be nimble and focused on creativity and value.
Let’s take a look at Coach and Forever 21, two complex and well-known US retailers (for varying reasons).
WWD recently reported Coach’s decision to close 70 full-price stores and revamp its outlet business in North America. Executives shared plans to close under-performing stores and to redefine brand perception after a string of disappointing quarters. Once the darling of Wall Street that could do no wrong (actually in the not-so distant past), Coach is now facing challenges stemming from over-expansion in the U.S. retail market and perhaps a somewhat misguided expectation that their customer connection was impermeable. Coach’s newly appointed creative director, Stuart Vevers said his aim is to “redefine and to reestablish Coach’s unique place in the market.” In order to reign in their focus, Francine Della Badia, president of North America retail told WWD: “The overarching objective is to change brand perception from accessible luxury to modern luxury.”
Forever 21 on the other hand is knee-deep in expansion mode according to their founder and ceo Don Chang who told WWD that his “ultimate goal is to double the size of our company within the next three years.” A fast-retailing business model with paper thin margins, execution and customer awareness will be paramount to ensure growth is coupled with profitability. Mr. Chang acknowledges that their customers are more educated and picky than they ever have been. It is for this reason true engagement for their brands requires constant adjustments and a speed to market with product that was beyond unrealistic in years past.
Both of these contrasting examples notwithstanding, we are in fact living in a Brave New World. Don’t rest on your laurels if you have any expectation of being successful in today’s marketplace. The answer is to meld the old ways that have been tried and tested with the new technological advancements and the ability to take a real-time temperature check on what your company is doing right (and more importantly, wrong).
As always, this begins and ends with surrounding yourself with the best possible talent and creating a culture that promotes creativity and proactive thinking. As a trusted partner of mine told me a few weeks ago referring to the individuals he hopes to hire to take his brand into the next exciting phase of growth: “It is better to ask for forgiveness than permission.” These are times for action and execution, most anything can be tweaked or expanded upon, but inaction in this ever-changing dynamic environment is a recipe for disappointment.
