Start a management degree at American Public University.
By Dr. Marie Gould Harper
Program Director, Management, American Public University
Over the past four months, I read some articles describing the disruptions going on in the retail industry. Some of those articles have put the final nail on the retail coffin, while others are thinking about possible spin-offs as a way to breathe fresh air into what critics see as a dying industry.
However, in the last couple of days, I have also seen articles and comments that lead me to believe there is a possibility of a retail comeback if the right people focus on the right things that are happening now. How can retailers regain what they have lost while remaining competitive and looking to the future?
Macy’s Embraces Innovation and Omnichannel Sales
Macy’s recently announced a good 2017 fourth quarter, which I expected. Revenue for the quarter climbed 1.8 percent to $8.67 billion, falling just slightly short of analysts’ estimates of $8.68 billion.
In my mind, this organization will probably never go down for the count. This venerable retailer knows how to make a comeback.
Based on my experience with Macy’s, I know that the organization embraces innovation and understands how technology makes a difference in its business. I also believe that Macy’s has successfully mastered the “omnichannel concept” and continues to build on it to differentiate Macy’s from its competition in the retail industry.
As the Centric Digital blog reported, “The digital transformation to online sales required Macy’s to adapt to the market at an increased pace, from adopting new technology to understanding the changing needs of its core shopping demographic. Macy’s restructured its merchandising and marketing silos to support the new singular, omnichannel approach.”
When Macy’s introduced the omnichannel model, a survey suggested that customers loved it. Omnichannel is about “inventory optimization through technology,” said Terry Lundgren, chairman, president and CEO of Macys, Inc. at a global retailing conference.
Inventory visibility across all stores and channels is the key enabler, he noted. “By the end of this year, 500 stores will be ready to pick online orders, and 90 percent of our inventory will be visible to our associates on handheld devices.”
Two other companies that caught my attention this week were H&M and Zara. I was familiar with H&M; I enjoy going into its stores and visiting its online site to see what this Stockholm-based fashion and home furnishing retailer does in terms of marketing trends.
However, Zara was new to me and I like what the company is doing. I saw some opportunities to compare and contrast what each retailer is doing and why they make sense.
Zara Introduces Augmented Reality Shopping for Its Customers
According to Forbes, Zara is the world’s largest clothing retailer. This Spanish company is introducing an augmented reality (AR) experience in its stores.
“Shoppers can engage their mobile phones to see models wearing selected fashions when they click on sensors in the store or displayed on AR-enabled shop windows,” Forbes explained. “Initially launched in 120 stores worldwide, such technology is irresistible digital honey to draw millennials into the store and shop.”
Why is this feature important to me? I am one of those people who hate trying on clothes in the store.
I like to make my purchase and evaluate it in the privacy of my home. I’m a private shopper, and I don’t need a salesperson for feedback or a hard sell. The disadvantage of this practice is that I often have to make returns.
This Zara AR technology would minimize my returns by using my virtual “me” to get a feel for how the outfit will look on me in real life. The article underscored how this concept is focused on pulling in the millennials.
However, as a baby boomer, sign me up, Zara! You have sold me on the concept.
H&M Debuts Discount Marketplace and Website Afound
Although H&M didn’t fare well in a recent comparison with Zara, I think this retailer is going to be okay. Its management knows how to respond to the worst plunge in profits in the past six years. According to the business blog Quartz, H&M plans to make some changes.
“The company announced that it will soon debut a new off-price marketplace called Afound, which will sell discounted clothes and lifestyle items from H&M group’s own labels,” the article reported. “H&M’s move is somewhat unusual in that H&M, itself a fashion brand, will be selling clothes from other labels.”
The company hopes that recent successes in the discount retail market will pay off for H&M as well. The company also plans to launch a website when Afound is launched. Having an online presence as strong as its brick-and-mortar locations will be a nice touch.
Big Data Providing Retail Stores with Greater Insight on Marketing Successes
H&M plans to use data to customize what it sells in individual stores, breaking with its long-standing practice of stocking stores around the globe with similar merchandise. Macy’s was successful with this approach. It used analytics to determine what to sell in each store by analyzing who came into its stores and what customers tended to purchase.
Retailers Moving Away from Traditional Marketing Methods
There is a shift in retailing away from the traditional 4Ps of marketing. Instead of looking at Product, Promotion, Price and Place, some companies are shifting to a new model.
For example, Experience replaces Product and Exchange replaces Price. Similarly, Evangelism replaces Promotion, and Every Place replaces Place.
The new model is customer-focused (i.e., the company and brand revolve around the customer), versus the old model which focused on the company and the brand. I see a market for both models as some people are still tied to buying based on name and brand reputation.
However, there is a growing number of us who want to know what looks best on us regardless of the brand/company producing the product. Do I need something that will last a lifetime or am I trying to make a powerful entrance in the best outfit?
Shelley E. Kohan, assistant professor at Fashion Institute of Technology in New York, says she sees a world in which the customer and company work together so that the customer becomes the “Chief Customer Officer.” I will gladly take on that role and responsibility as I am very much in tune with what works for me.
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About the Author
Dr. Marie Gould Harper is the Program Director of Management at American Public University. She holds an undergraduate degree in psychology from Wellesley College, a master’s degree in instructional systems from Pennsylvania State University and a doctorate in business from Capella University. She is a progressive coach, facilitator, writer, strategist and human resources/organizational development professional with more than 30 years of leadership, project management, and administrative experience. Dr. Gould Harper has worked in both corporate and academic environments.
Dr. Gould Harper is an innovative thinker and strong leader, manifesting people skills, a methodical approach to problems, organizational vision and ability to inspire followers. She is committed to continuous improvement in organizational effectiveness and human capital development, customer service and the development of future leaders.