The difficulties major brick and mortar retailers are experiencing is not news. The stocks are being hammered, stores are closing, and I suspect it is crunch time in the C-Suites. Yet they still don’t get it. And the “it” is not about e-commerce. It’s about retail.
In a recent Advertising Age article on the topic, a major retail analyst is quoted as follows:
“”The problem with some of these stores is too much sameness — the brands aren’t special enough,” said Oliver Chen, retail analyst at Cowen & Co. “These stores need to reinvent themselves.” He noted more personalized marketing, better products and radical changes to the store experience could help the situation.”
The article focuses on three retailers, Macy’s, Kohl’s, and JC Penny. One of the ironies in the story concerns JC Penny. This retailer realized several years ago that they needed to reinvent themselves. They hired Ron Johnson, former CEO of Apple retail, and then fired him when sales dropped. I wrote about this back then. They rehired a former CEO, went back to their old format and have been sliding even faster.
The second irony in this situation is that each of these retailers excitedly proclaimed what they are going to do to “fix” the situation.
Macy’s is going to stop screaming at their customers about their promotions. (They really don’t get it, as I posted about their root cause problem a while back.)
Kohl’s is going to focus on “personalization, simplification and clarity in our marketing strategy.” They really mean their marketing communications strategy.
Meanwhile JC Penny “is also leveraging the much improved mobile app as a way to drive awareness and retention.”
Putting lipstick on a pig. Their root cause problems are not communications problems, they are customer experience problems. Trying to fix this with a better marketing communications strategy (even if you call the person doing it your CMO, it doesn’t make them a CMO, when in fact they are your CMCO, Chief Marketing Communications Officer), will not work.
These are big retailers, so predicting their demise is probably premature. After all it took GM 60 years of stupid to finally go bankrupt. When you have a lot of glide path, it can take longer to hit the ground.
These retailers, and they are not alone, need to realize that physical locations can be a competitive advantage and a value add. Right now they are just a cost add.