Nike store showing retail how to look ahead

If you’ve been reading the new articles on this site (and blog), you’ll notice that we’ve been digging deep into the retailer industry. Stores are closing. Sales are dropping. And all retailers are looking for solutions.

You can find our recommendations here, along with a complete study here. But most brick and mortar stores are scrambling to find ways to transform their locations into destinations shoppers will actively seek out.

Nike store
A new Nike store in NYC is showing retailers how to join the technological age.

A new Nike store in downtown New York City is offering a template for just that future.

The shop is a complete interactive experience. Shoppers can try out new products in actual sports settings, such as on treadmills while sensors record the best fit. A personalization studio allows shoppers to laser engrave on their shoes and touch screens mimic the online experience of choosing product.

It’s not exactly what we’ve recommended, but it’s very close. We believe the in-store experience has to join the technological age, recommending digital measurements so shoppers can browse clothes that actually fit.

The Nike store overcomes many retail issues.

Right now, most brick and mortar retail stores feel and look like something from the Eisenhower era. The world has simply passed them by and few integrate their online experience with their in-store one.

That’s how you become irrelevant. (And watch Amazon eat your lunch.)

The Nike stores are a step in the right direction, with the right kind of thinking. There are land mines here, though. A Nike store like the one in NYC – a 55,000 square foot monstrosity – is costly to replicate. (Nike will replicate one in Miami soon.) But the thinking behind such improvements is exactly what retail needs.

There’s another reason why I think this will be a success for Nike. It has a meaningful brand, one of the most meaningful in the world, which says its customers “just do it.” That’s a leadership position.

Retailers must re-think what they do in stores, but they also need to ensure they have a differentiating brand that gives them permission to do all those things. And make them important.

Department Store Rebranding: Mandatory

Department Store Rebranding
Merchandise is too crowded

Why talk about department store rebranding? Because the department store market and the retail industry needs a complete reset (read a detailed market study of the entire retail category here). Department store chains are closing stores.

Malls are empty, traffic is down 5.8% from last year nationwide. Consumers spend their money on experiences (hold that thought), such as dining or travel rather than shopping. And too many retailers count on bountiful holiday sales to save their year.

Department Store Rebranding What the retail industry truly needs is clear: Department store rebranding— a complete rethinking of the model.

Department store rebranding is the highest priority. Change is needed. Without change, retailers that depend on sales from their brick and mortar locations are irrelevant.

It is worse and more desperate for major department stores. They will become extinct. This is especially the case for the legacy department stores. In a nutshell this is the entire argument for department store rebranding. Change now or die.

Amazon in particular and the web in general is the new normal for shoppers, dominating the retail industry. Amazon dominates by being an online portal for items ranging from electronics to toys to apparel. You would be hard pressed to find anyone who has not purchased through the online giant.

Department stores. What’s next?

Department Store Rebranding So what are retailers to do? More specifically, what are department stores to do? There are all sorts of tactics they can employ to stem the plunge of market share. But they will fail.

Department store rebranding from the ground-up is a needed strategic decision and not just a tactical one. Without this complete overhaul of department store rebranding initiatives and the total repositioning this means the vaunted old brands are finished.  And finished soon.

We’ve dissected many retailers, including a report written for the Retail Customer Experience which encourages retailers to merge their in-store and online personalities.

We’ve also said “stop trying to be everything to everybody”. But tactical changes won’t save department stores. They need strategic change. They must redefine the value proposition for the target shoppers and convince them that their brands are relevant.

Department store rebranding restores relevancy.

Department Store Rebranding One way you recapture relevancy in a market — and even succeed — is rebranding. Department store rebranding pulls them out of the ditch because, done properly, they are meaningful to target audiences. And the store is more important than simply restating product or category benefits.

Without that preference, no tactic or strategy can ensure the brands future success. If you are a department store, rebranding is the only way you can survive.

Rethinking is more than just rebranding department stores and their messages.

Department Store Rebranding Rebranding department stores is more than just a new name, logo and tag line. It is fundamental change— real changes in operations and structure. Changes implemented to magnify and support the new brand strategy.

Even traditional rebranding does not go far enough. Retailers must rethink everything.

The market, especially those large department stores like Macy’s, Belk’s, JC Penney, Harrods, Bergdorf Goodman, Lord & Taylor, Bloomingdale’s, Sears, Debenhams, Meijer, Von Maur, Boscov’s, The Bon-Ton, and the like, are sliding into irrelevancy and, in many ways, are already irrelevant to the new shopper.

Department Store Rebranding Shoppers vote with their dollars. And the department stores feel like they have passed their own time limit on this earth.

Right?

Probably right. Department stores: Be something different than what you are today. That’s how you survive. The ongoing sales promotions and specials that you rely on don’t do the trick. Black Friday won’t save you.

Their stores are overcrowded with product, there are no sight-lines, crowded shelves does not say variety rather it creates a feeling of being hurried. As a result shopping for apparel is boring at best and harried at its worst.

Department store rebranding for experience.

Department Store Rebranding Remember, earlier on when we spoke about consumers spending money on experiences? Shopping in department stores is mundane and it does not get the pulse rising. Part of department store rebranding is to revitalize the experience and make it deeply personal.

It’s especially problematic for women. There is more selection and yet more difficulty in finding clothes that both fit and are appealing.

Men walk into a store, know their inseam, waist, arm and neck sizes and, voila, there is a suit. As a result, men are free to purchase based on the look, style, price and brand. They find what is available in their size and they buy it. Minor alterations are acceptable and easy to accomplish. Many times, off the rack is a real phenomenon.

Department Store Rebranding
The problems at Macy’s are systematic of the retail space.

Women shop on size and department, which varies by store and by brand. Go into a Macy’s, for instance, and find a size 4 that’s a size 2 at another department store. It’s even worse than that. Shoppers shop in that same Macy’s, find a size 2 that fits and another size 2 that doesn’t.

That variation in experience is confusing and…dull. Women look at overcrowded and jammed racks in poorly set up departments. And all this to find a garment that appeals to them aesthetically.

As a result they are forced to search the jammed racks for that design or style in their size – even though they know that label size is no guarantee of proper fitting. This means they try on everything and sort through all sorts of retail disappointment. This is not an experience. It is a nightmare.

That’s not shopping, either. It does not translate into purchases. That’s solving the Pythagorean theorem.

An example of rethinking everything at department stores.

Department Store Rebranding Large department stores must rethink everything, from their brand to their operations to really rebrand effectively. Rethink the in-store experience. Attract more women shoppers. REAL preference is job number one.

Ladies apparel is a $225 billion business; so preference, not just dropping in, is immensely profitable and increases relevancy in a dying industry. It is optimal to make the department store the destination. And not just for Christmas.

Is the solution transitioning to on-line?

That still raises important business facts. Department stores own large amounts of real estate. They have expensive long-term leases. What does it do to profitability if the great department store chains are forced to retreat and rely on web sales only?
Can they survive that sort of apocalypse? There is another answer. There has to be.

Department Store Rebranding and AmazonIf the Amazon model IS the future then bankruptcy and chapter 11 is the interim step to treading water and waiting for the merciful euthanasia. Any numbskull can suggest the move to on-line sales.

The problem is it won’t work with the current structures. Department stores desperately need an answer that lets them protect the brick and mortar investments that revitalizes shoppers today and in the future.

Success leaves clues. Shoe department retailing.

Department Store Rebranding
Shoe departments hold the clues to success

So back to the problem of finding the right fit. That is not a problem when shoppers shop for shoes or handbags. Consumers easily see what’s offered without the clutter, find the style they like in the right size and are off with it.

Shoe sizes are universal. The shopping experience is positive. Shoes are displayed on roomy racks and displays and the shopper scans all the shoes (including style, color and form) and then the shoe salesperson bring the shopper the shoes in their size.

Funny how simple it is. How civilized the experience, despite being in the morass of other crowded and jammed departments of clothing.

Department Store Rebranding Why can’t women’s apparel be like that? Department stores rebranding is possible building on that successful model.

Rebranding requires retailers to rethink their stores operations and how technology is utilized. Sadly, the highest level of technology in retail today is a copy of Amazon’s model. Order online and pick up.

But apparel is a different animal, especially in women’s apparel. The sizing of women’s garments is useless. A standard that unifies sizing everywhere sounds like the big answer. Is it?

Yes, absolutely. The sheer amount of returns because clothing does not fit is an issue for Amazon too. There is no regulatory agency to govern sizing so that changes takes real effort from the industry.

Use digital tailoring software. Make the experience personal.

Department Store Rebranding Instead, we recommend retailers of women’s apparel adopt the sizing structure that works in the shoe department model. That is, just use measurements. Display style samples and have sizes in the back warehouse.

Even that is unmanageable because women, unlike men, don’t share a basic shape.

However, the playing field changes as shoppers provide a profile of their exact measurements. Can high-end apparel stores  digitally measure the consumer and privately store those measurements in a private file? Of course they can.

Is it then possible to alter custom fit clothes to their specifications? Yes, but that is not the best model. Executing that on a mass scale so a Macy’s or Dillard’s use it is a challenge.

Department stores can afford to automate it. Do it digitally.

As a customer visits your store for the first time, direct them to a private dressing room and digitally scan their measurements. Their exact measurements are stored in their personal and branded app.

Department Store Rebranding
Use technology to customize customer service

As customers shop in the newly designed departments with newly redefined department titles based upon lifestyle rather than the traditional Juniors, Petite etc., departments.  Shoppers can look at every offering, all displayed in a size 4. They now shop by cut, fabric, color, brand and style. Not size because only one size needs to be on display (just like the shoe department model we discussed earlier).

The convenience of their smart phone is utilized, They scan the code of the item of interest and the app stores the choice. The store is no longer jammed with every offering in every size. The result? The branded experience of shopping is civilized.

The racks are not crowded and the styles themselves are highlighted. The retailers use their merchandising skills to highlight offering. Suddenly, there are sight lines in the department store and an opportunity for the retailer to practice their skill at displaying wares and merchandising.

How it benefits you.

Department Store Rebranding
High-End stores have the right merchandising model

Here’s how this complete department store rebranding works. Simplify the offerings on the store floor much like high-end retailers. Customers actually see the garments in lengthy and leisurely glance. Consumers develop a digital profile on their measurements that is part of the retailers database. Because you know them and they now know you, a relationship is established.

When they return to the department store, consumers open the app to say they are in the store and what, in general, they are looking for.

Department Store Rebranding If the garments are bar coded by actual measurements, then a warehouse employee gathers those garments in real time from the back warehouse (remember the shoe model) that actually fit that customer.

When shopping is done, the shopper tells the app and are assigned a dressing room. The promise is that, in 10 minutes, everything they scanned will be in their dressing room and in their size.

Better yet, customers could use the app to say they are coming to the store and to get their personal rack ready and pre-placed in a dressing room.

Think about this. If implemented, it creates a preference for the department store brand (which reflects the change in the retail experience) and a database is established to enable more effective buys from designers and better PERSONALIZED service (read how affinity programs fail here). The customer chooses if they want the clothing in the dressing room or if they require human assistance.

The newly branded department store experience.

Department Store Rebranding
It is about the experience of shopping

The new experience reconfigures the department store experience and decreases the display space and increases the warehousing. It requires an investment in logistics and warehouse systems.

But the new department store is now an adventure in experience and we know that customers covet that. The department store rebranding process combined with new thinking provides new preference.

Think it’s not possible? Amazon can do it, and Amazon is the retailer that terrifies the rest of the industry. The online retail giant, who just announced plans to open brick and mortar stores, is threatening to take over the entire industry while its players stand still and watch.

Amazon transports product anywhere in the world overnight. Is a tight logistics system that creates in-store logistics providing results in 15 minutes impossible? Believe that and you are doomed.

The future in department store rebranding is in personalized automation.

Department Store Rebranding All it takes is an automated, software system that makes it easy to find the right clothes at the right time from your warehouse space. It, therefore, allows the shopper to buy and shop based on taste, style and color, just like they do with shoes and handbags. It means sales improve because shoppers see the entire inventory.

Plus, in the spirit of discovery, the store adds a few surprises— a few alternatives for that shopper based upon the customer profile and design preference. All of this accomplished by an algorithm.

Department stores, don’t get caught up in — “That can’t be done.”

Department Store Rebranding Change or die. That’s the simple truth. This is just one idea. The point is that department store retailers, whether they are in apparel or not— let go of age-old habits. Dead brands are full of leaders who once said, “That can’t be done.”

Department store retailers must do two things. 1) Consider a total rebrand because few retailers position the brands against the competition and as a result are not meaningful enough to target audiences. (Here’s how we rebrand for our clients.)

2) Rethink everything. Ask the right questions in brand research that goes beyond simple usage and attitudes. The current model is a rapidly dying one. And given the current trajectory, there will only be room for one of the major department stores.

There is a third strategy retailers can adopt (and many are). Do nothing and watch Amazon destroy your business. But, as in most things, victory belongs to the first mover.

 

Read more about the retail market and department stores here:

Amazon and Black Friday

Macy’s loses importance

Another retail casualty the CEO of Stein Mart

Macy’s National Hiring Day

Macy’s should have known better

Which retailers will survive?

Retail in a nutshell

The blinding of Sears and JC Penny

Brookstone needs rebranding

Staples is not fixed

Promotions and Millennials

Bad experiences at Best Buy

Why Sports Authority Died

What about Black Friday?

Amazon Prime Day 

Here are some articles and blogs on REBRANDING

Rebranding GlenGuard

Grocery Rebranding and Amazon

Rebranding of Mastercard

Rebranding Electrolux

Rebranding is all about mindset

Rebranding Steven Colbert

Rebranding Constantly

Stealing Share. Rebranding Experts.

Choosing a rebranding company. The rules.

Rebranding Newspapers. Finding new importance

Analyzing a brand for rebranding opportunities

A Brookstone rebrand is desperately needed

I did something that I really detest the other day — I went to the mall.

My wife and I were away for a few days and had an afternoon to spare. Being a bit of a pushover when it comes to my wife, I gave in. Most times, this means I hang around clothing stores with her in the hopes that I can locate a comfy chair to park myself in and peruse the apps on my phone. Sometimes I get lucky, like at a DSW, and there’s a chair in front of TV with ESPN airing. If I am not a stereotypical guy, I don’t know who is.

Walking around with my wife, I was reminded of a time — long, long ago — where there were stores that met the liking of the tech geek in me. Now, not so much.

Brookstone rebrand
A Brookstone rebrand is needed for it to regain relevancy.

FYI, a music and DVD store, sells a modicum of titles an exorbitant rate. Best Buy Mobile has phone cases and a tablet or two, and Brookstone is filled second rate technology.

Brookstone was once a store I coveted to visit. Before Apple, Microsoft and Amazon were making the coolest gadgets, the outlet shop’s goods would give me butterflies. I’d soak up everything on every single shelf and pick up and tinker with all of it.

Now, the goods at Brookstone are like the cheap goods on display just prior to the register at TJ MAXX.

A Brookstone rebrand is a must.

There is enough lingering positive connotation here that a Brookstone rebrand would be most welcome. In fact, it’s needed or the brand will go away. Just recently, the company announced it will introduce its products in Macy’s (although Macy’s has its own problems.) I’m not sure if that will fix the problem. Macy’s is also flirting with irrelevancy and I don’t see the synergy between the two brands.

In fact, it’s probably a weakening of the Macy’s brand. What does its brand stand for now? Talk about the need for a rebrand.

What better time for Brookstone to examine its brand more closely, weed out the inferior technology and bring back the state-of-the-art merchandise that put it’s name on the map? It’s time for Brookstone to regain its importance to tech nerds like me.

Right now is the time for Brookstone to reimagine itself as a visionary company, not just a trendy one where teens can hang for an hour and sit in a massage chair.

NFL ratings dip and concern increases

Pundits are coming up with all sorts of reasons for the dip in NFL ratings, even though the league remains our nation’s popular sports league.

Many are pointing to the current presidential election as the reason for the lower NFL ratings. This is the sort of campaign that we’ve never seen before and it has created record ratings for the cable news networks. Others are pointing to a lack of stars (Peyton Manning has retired, Tom Brady just returned to the field). Others say the National Anthem protests have turned some fans off, while others point to a handful of teams that haven’t been good for at least a decade. (Think Cleveland, Miami, Tennessee, Jacksonville, Chicago, etc.)

NFL ratings
NFL ratings are down and the reason is an oversaturated market.

The presidential election is an interesting answer because, as Peter King of Sports Illustrated reported this morning, NFL ratings tend to sag a bit during presidential election years.

However, the drop has been even greater this time. Ratings are down 13.4% from last season, nearly double the drop of the worst election year decrease of 2000 (the Bush-Gore race). Is it just because Donald Trump has turned this election into a carnival act that’s accomplished the decline?

Over saturation has created the NFL ratings drop.

I don’t think so. I think there is something else brewing here. Mark Cuban predicted this NFL ratings decrease a few years ago because the league has oversaturated the market.

I agree, and think the NFL needs to think about what it can do to make its games more important. Right now, you practically get the NFL 24/7. There’s the NFL Network, there is a game every Thursday night and, last Sunday, there were four back-to-back games with an early contest airing from London in the morning.

Scarcity is actually a value, and one that’s hard to come by in today’s world. The internet and social media gives us access to anything at any moment, so scarcity is hard to come by. To be scarce enough to create importance means you must take control of your brand.

Think about Krispy Kreme. It held a cherished spot because access to it was hard to find, becoming the darling of Wall Street and southerners. I had relatives visit me (here in North Carolina) who wanted to go to a Krispy Kreme first thing.

Then Krispy Kreme went on an expansion kick, and the value of the brand quickly became diluted. The NFL has been on a different kind of expansion kick, and its lower ratings are the result.

Now, maybe we see returned spike after the election (although don’t think the news cycle will completely go away) and as the playoff races heat up. But the larger problem still exists. For the NFL ratings to return to normal levels, the league needs to slow down its plans to expand into Europe, eliminate the Thursday night games (which are usually terrible anyway) and realize that scarcity is a value.

Fatigued football fans is the result.

Home2 Suites by Hilton is the worst

I am a Hilton Diamond member. This puts me into elite status as a customer of their brands. It also means I travel so much on business during the year that I spend my life in airports and sleep in unfamiliar beds, sheets and pillows. It entitles me to a free breakfast (believe me, you get what you pay for), complimentary Wi-Fi and a bottle of water when I check in.

I am in Seattle on business today and I am staying in another Hilton property (I hesitate to call it a brand) called Home2 Suites by Hilton.

Home2 Suites
Hilton can do better than its Home2 Suites.

It is quite seriously the dog ugliest hotel I have ever seen. It looks like it was built from corrugated metal and scrap. From the outside, you would expect to enter the lobby and find folding chairs.

When I checked in last night. I told the very nice desk attendant that the hotel was the ugliest thing I had ever seen. Her reply was interesting. “Yes,” she said. “We are an extended stay hotel.”

I guess in order to qualify as an extended stay hotel it has a prerequisite of being hard on the eyes.

The limited service at Home2 Suites.

As I write this blog from my hotel room, please excuse any ramblings or tirades. I am not quite myself. You see the rooms are not soundproof and the gentleman in the next room apparently can’t sleep with the TV on full blast with a never-ending parade of action movies. I have the opposite affliction and was not able to sleep with explosions and bad acting ricocheting around my room all night.

Despite telling the front desk about this, that TV is still in a continual loop here at breakfast time. I am assuming that limited services in extended stay also apply to front desk help.

Home2 Suites is poor excuse for a hotel and has no place in the Hilton brand. (And I know something about the Hilton brand, having done brand work for Hampton Inns, Doubletree and Homewood Suites.)

This is a terrible industry for branding because the chains slice and dice the category into such fine segments that you can see through them. They think we know the difference between their descriptors of those who stay at their brands. Here I am. Staying at Home2 Suites. Who am I?

Hilton has no brand permission to be in this low tier segment. It is a boil on the brand’s butt.

So who am I? Well, I am a chump, according to this past stay. Let’s see if they have that as a market segment.