retail news in context, analysis with attitude

The other day we took note of a Wall Street Journal story about Leslie Wexner, the 80-year-old CEO of L Brands Inc., which owns retail banners that include Victoria’s Secret, Pink and Bath & Body Works, and which has increased its store count over the past two years. Wexner believes that e-commerce has not killed the mall, and that online shopping is “not the new norm.”

I commented:

I’m all in favor of trying to create compelling, entertaining and illuminating shopping experiences, but I think any retailer who thinks we’re not in a “new normal” is a little bit delusional. Wexner’s banners have been suffering, and I suspect that it is from a combination of locations in mediocre malls and shifts in consumer habits.

Can a bricks-and-mortar store compete in this environment? Sure … but but facing reality and embracing the future, not by being delusional about the past.

One MNB reader responded:

I'm not going to defend Wexner's statement that phones are a passing fad. But my wife and I have noticed that in this world of constant digital connectivity we need to be thoughtful how our kids (2 girls, 7 & 9) learn skills we take for granted. Because we text so much, our girls might not ever hear us make an appointment or schedule carpooling. Because of grocery delivery, it's less likely our girls will be dragged to the supermarket. Because of Amazon and other e-commerce sites they may never end up browsing the sale rack at Macy's. And between credit cards, smart parking meters, and electronic tolls, who still carries change for panhandlers?

We don't really have answers but this has become a very real conversation in our family. We've consciously made an effort to call our friends instead of email or text, so our girls can hear us make plans. I include the girls in online shopping ("first find the sale section, then filter to your size, then sort by price, now pick out three shirts...") and we try going to physical stores so they can learn to touch the fabric and test the quality.  And I could even imagine taking them to a mall so they have the chance to interact with, and get frustrated by, salespeople and other shoppers. This is definitely something to think about.

We had a story the other day about how Whole Foods is making new demands of its suppliers, pushing for fees and discounts in exchange for better positioning - a slippery slope, I suggested, because it could lead to making money on the buy instead of the sell.

One MNB reader responded:

Your analysis of this becoming a slippery slope for Whole Foods is spot on.  Reminds me of my days calling on Kmart, and we all know what's happened to them.  They were so obsessed with getting a great deal so they could have an attractive retail, that they lost track of the customer and being on trend with the right products.  There will always be a line of companies eager to get shelf space and they will write the big check.  When the focus becomes too skewed on the buy vs. the sell, look out.

From another reader:

Kevin, you couldn’t be more right, trying to win on the buy versus the sell has never worked…absolutely a slippery slope.
Who is kidding who, retail pricing to the WF customer will go up because I don’t know of any manufacturer that is a non-profit. Here’s a little secret, the retailer that wants to simply sell product will have the support of every manufacturer and their billions in Trade and Marketing!
When will they learn that selling is the way! They are playing the games of A&P, Winn Dixie, Kash n Karry as well as scores of other food retailers that no one remembers anymore!

And from another reader:

It has to make you wonder how a vendor can cut costs and pay for space?? Without raising prices?!? Has common sense completely left the grocery business totally. Someone need to tell Amazon that the reason Wal-Mart took over the grocery business in the US is because their prices are fair and they treat their vendors the same way. Are they tough, you bet, but they recognize that everybody has to eat, even vendors!! Oh, and they actually want to sell the product!! Keep it simple people!

Finally, we had a story last week about how Albertsons announced that its new culinary-driven Market Street format, which “invites customers to Eat Life Up,” will open in Boise, Idaho, this summer, with a second store, in Meridian, slated to open later this year.

I commented, in part:

One of the problems that big companies like Albertsons tend to have when they create formats like this is cultural - for something like this to work, it almost has to have a different sort of culture than a fleet of thousands of much larger stores with different priorities. It seems to me that Albertsons has to be careful to allow this to work as a kind of skunkworks - it can be a place where new concepts are tested and, when they work, rolled out to the parts of the rest of the company where they might thrive. But Market Street has to be encouraged, I think, to push the envelope, challenge tradition and company orthodoxy, outright break the rules, and be willing to fail and change and try again … I’d be thinking about how to attract talent with real experience in the specialty food business. For the record, we had a story about one such person - Wendy Collie - who is about to be available, since she’s stepping down from New Seasons.

One MNB reader responded:

Wendy Collie has great experience, but Pat Brown’s 18 years at Central Market and 4 years at New Seasons should give Albertsons at least a start in understanding the specialty food business.

To be honest, I forgot that Pat was at Albertsons; he’s Group Vice President of Merchandising there,

If I’d remembered, I also would’ve said that it is a good thing they have him on board, because he knows how to do this.

Mea culpa, mea culpa, mea maxima culpa.
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