Eye-on-Retail Tipsheet 3/22/13: Tesco’s US Disaster; Mixing Bricks with Clicks
“Five years in, Fresh & Easy markets are a flop” by Shan Li at LA Times. “British supermarket giant Tesco thought it had the Yanks all figured out. Determined to crack the U.S. market, it dispatched executives to live with American families, peek into their refrigerators and trail them on trips to the grocery store. It boasted of revolutionizing how Americans shopped. But slightly more than five years after it opened its first Fresh & Easy Neighborhood Market in California, Tesco is considering selling the money-losing chain and leaving the United States altogether.” Read more: https://www.latimes.com/business/la-fi-fresh-easy-woes-20130321,0,197757.story
“Target Taps MillerCoors Alum to Lead Brand, Category Marketing” by Natalie Zmuda at Ad Age. “Target has tapped Rick Gomez, an alum of MillerCoors and PepsiCo, as its senior VP-brand and category marketing. Mr. Gomez will lead marketing for all merchandise categories and brand initiatives, such as exclusive artists and licensing, as well as creative collaborations. He will also oversee multicultural marketing and Target’s owned brands, which include Archer Farms and Up & Up. He fills the role vacated by Will Setliff last year.” Read more: https://adage.com/article/news/target-taps-millercoors-alum-lead-brand-marketing/240470/
“Mixing bricks with clicks” at The Economist via @RetailProphet. “Pure online retailers do not pay rent but their variable costs eat up much of that advantage, says Sophie Albizua of eNova Partnership, a consultancy. Without storefronts to lure in customers they shell out to buy ads linked to Google search results. Delivery, especially of bulky goods, is a headache. Couriers show up at empty houses, and fees often fail to cover the full cost. Shoppers return a quarter or more of clothing they buy, another big expense. All this looks easier if you have real shops. With “click and collect” customers can order with, say, a smartphone but pick up the item at a convenient outlet. Often, they linger to shop more. Britons pick up something extra about 40% of the time, says Ms Albizua.” Read more: https://www.economist.com/news/business/21574018-some-online-retailers-are-venturing-high-street-mixing-bricks-clicks
“To Beat Amazon, Walmart Is Treating Its Stores Like Apps” by Marcus Wohlsen. “Walmart is a technology company. Let’s just put that out there right now. The company has crushed all competitors through its mastery of supply-chain logistics and inventory management, which above all are engineering problems. But until recently, most of Walmart’s tech has lived behind the scenes. That’s changed because of smartphones. As Walmart pushes mobile as an integral part of shopping at its stores, the company has started to treat changes at those stores much like app makers handle the rollout of new features.” Read more: https://www.wired.com/business/2013/03/walmart-treats-stores-like-apps/
“Canadian Tire to launch digital hub, roll out in-store tablets for smoother shopping” by Hollie Shaw at Financial Post. “It is part of a broad leap into the digital realm this year for the veteran retailer, which famously killed its online shopping website in 2009 because of low productivity. Since then it has been trying to find a modern way to broaden its loyalty program — beyond folksy paper Canadian Tire money — to track its customers’ buying habits, and has no uniform system to track inventory in its stores without a confirmed visual check.” Read more: https://business.financialpost.com/2013/03/21/canadian-tire-digital-hub/
“When Walmart Gets Mad” by Burt Helm at Inc. “So-called chargebacks such as Akasha’s are common in retail, says Curtis Greve, a retail consultant based in Wexford, Penn., who spent twelve years working in Walmart’s supply chain department. Big box stores’ vendor agreements hold suppliers financially responsible for shortfalls. Technically, that means they can sue for damages. In reality, deals are often worked out informally. “Everything’s negotiable,” says Vanessa Ting, a consultant at Los Angeles-based Retail Path, who previously worked in merchandising for Target. “There were a lot of times when I was justified in getting all of the lost profits back, but I would either waive it or just split the difference.” Read more: https://www.inc.com/burt-helm/when-walmart-gets-mad.html
“Supervalu Completes Sale of Chains to Cerberus” by Elliot Zwiebach & Mark Hamstra at Supermarket News. “Supervalu said it would transfer operations overnight and would “open for business on Friday as a more efficient wholesale and retail company with annual sales of approximately $17 billion.” It will continue to operate and license the Save-A-Lot limited assortment banner and five regional supermarket chains: Cub, Farm Fresh, Shoppers, Shop ‘n Save and Hornbacher’s.” Read more: https://supermarketnews.com/retail-amp-financial/supervalu-completes-sale-chains-cerberus#ixzz2OCaSGy6G
“Target Canada’s Grand Opening Disappoints Loyal Border Shoppers” by Renee Alexander at Brand Channel. “It’s not that Target Canada’s prices aren’t competitive against other Canadian retailers—they’re on par with what Walmart Canada, Canadian Tire and the Loblaw’s grocery store chain charge—but in many cases they’re more expensive than Target locations in the U.S…The company defended its pricing strategy in Canada by noting transportation and labor costs—two factors driving higher Canadian prices. Higher rental rates are another.” Read more: https://www.brandchannel.com/home/post/2013/03/21/Target-Canada-Launch-Flop-032113.aspx
“JC Penney Says Turnaround Could Take Longer” at Reuters via CNBC. “J.C. Penney said in an annual report filed that fixing its performance could take more time than initially expected, and it suggested that any change in strategy could be expensive.” Read more: https://www.cnbc.com/id/100576620
“Over half of luxury fashion brands lack Chinese e-commerce” at CPP-Luxury. ““Due to continued counterfeits, cannibalization and issues with logistics, most major luxury brands have been reluctant to invest in ecommerce,” said Emma Li, research lead at L2 Think Tank, New York. “Over the past year, retail investment slowed down in China as brands took a more wait-and-see attitude due to the country’s slower economic growth and crackdown on public spending on luxury goods,” she said.” Read more: https://www.cpp-luxury.com/over-half-of-luxury-fashion-brands-lack-chinese-e-commerce/
“National Retail Federation Applauds Introduction of the JOLT Act” ““By expanding the Visa Waiver Program to cover more citizens from emerging economies and markets like Argentina, Brazil, Chile, Israel, and Poland, and reforming our antiquated visa review and approval processes, the JOLT Act will work to entice more foreign travelers and shoppers to our shores.” Read more: https://www.businesswire.com/news/home/20130321006162/en/NRF-Applauds-Introduction-JOLT-Act?utm_source=dlvr.it&utm_medium=twitter
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