Retailers reeled from all manner of missteps, blunders and outright fiasco’s this year – from Abercrombie & Fitch’s image battering no-large-sizes ethos to J.C. Penney’s sales hemorrhaging coupon elimination strategy crafted by its ousted CEO.
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But stores also made some shrewd hiring, merchandising and strategic decisions this year. Here’s a look at five of the smartest retail moves in 2013.
Apple Snatches Up Burberry’s Biggest Asset
Apple, which has been muddling through somewhat of an identity/innovation funk since the death of its iconic leader Steve Jobs, tapped a darling of the fashion world to lead its retail business.
In October, Apple named Angela Ahrendts, the high profile CEO of Burberry, senior vice president of retail and e-commerce.
Ahrendts spearheaded a revival at the brand known for its iconic plaid pattern, tripling revenues during her tenure with a strategy that included an embrace of technology.
Burberry’s Store of The Future in London, for example, which bowed in 2012, was designed to “blur the lines between physical and digital” retailing so that when shoppers walk into the store, “they actually feel like they’re walking into the web site,” Ahrendts said in a video.
Look now for Ahrendts to bring her tech-enhanced fashion acumen to Apple, which could mean an expansion of the brand to apparel and accessories such as handbags, jewelry and watches, said Scott Galloway, founder of digital think tank L2. It’s all part of Apple’s unstated bid to be the global prestige brand of record, Galloway told me in October.
Macy’s Prepares For The Biggest Demographic Shift To Hit Retail
In 2013, Macy’s hastened its pursuit of Millennials, the generation born between 1980 and 2000.
In the spring, the retailer launched and expanded more than 20 fashion brands targeting the demographic such as MADE Fashion Week and Teen Vogue.
And a few months later, the department store formally outlined an initiative to grow its Millennial business, calling the demographic the “largest and most diverse generation.”
The plan, which will be rolled out over the next three years, includes initiatives aimed at a group shaped by the digital revolution and social networks, such as Macy’s first Instagram ad in October.
Macy’s is on to something.
A generational shift is about to reshape the retail landscape, and stores that have failed to court this demographic are in for a rude awakening. By the end of the decade, Millennials will replace baby boomers as the biggest consumer-spending group in the United States.
EBay Expands Retail-Partner Driven Delivery Service
This year, the online marketplace set plans to expand eBay Now, its same-day delivery service that partners with retailers such as Macy’s, Target and Home Depot to deliver orders from local stores to shoppers’ homes via human couriers.
The service, which eBay launched in 2012 in a handful of markets, will reach 25 geographic markets by 2014, including London.
EBay is one of several retailers such as the Gap and Wal-Mart that are wisely leveraging brick-and-mortar stores to fulfill online orders.
One need only look to the shipping debacle that played out this holiday season (U.P.S. and FedEx, for one, failed to deliver many retail packages on time) as evidence that stores must test a variety of ways to get e-commerce orders to shoppers when they want them amid the surge in online shopping.
J.C. Penney Brings Unsexy Back
Just as J.C. Penney’s ousted CEO Ron Johnson introduced highbrow, trendy brands to the department store like furniture from modernist designer Terence Conran, he also nixed a number of the retailer’s private-label lines.
Shoppers protested, so returning CEO Mike Ullman reintroduced the unsexy-yet-popular proprietary brands, such as St. John’s Bay apparel and JCP Home, to Penney’s shelves.
The move is already paying off. The restocking of private brands, “the engine of profit margin growth,” have been “key to improving sales,” Ullman said during a November conference call with analysts to review its third quarter results.
Best Buy’s Repricing Push
In early 2013, pundits were readying Best Buy’s obituary, predicting the chain’s demise amid the rise of low-price online giant Amazon.
But Hubert Joly, the consumer electronic chain’s new CEO, was setting the stage for a comeback with a new strategy.
In February, for one, Joly opted to make Best Buy’s 2012 holiday ploy to match competitors’ prices a permanent policy.
The pricing adjustment seemed to help the retailer unfurl from its defensive crouch.
Best Buy started to show off its newfound confidence this holiday season.
The retailer invited consumers to showroom, when shoppers browse a brick-and-mortar store for an item, only to later buy the product online for less – a practice many thought would destroy the chain — in its holiday campaign that was playfully dubbed, “Your Ultimate Holiday Showroom.”
Although Best Buy still faces an uphill battle, the changes appear to be bearing fruit. Best Buy posted its first quarterly profit in a year last August, and “webrooming” – researching a product online, and then buying it in a brick-and-mortar store — is on the rise.
We’ll see what 2014 brings for the nation’s last remaining big box electronics chain.
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