Ken Morris

Principal, Boston Retail Partners

Ken was CEO and President of LakeWest Group and founder of CFT Consulting and CFT Systems, a retail software company. Earlier in his career, he held retail information technology executive positions at Lord & Taylor, Filene’s (Macy’s), Talbots, Stop & Shop Supermarket Company, and Sears. His experience is with strategy, selection development and deployment of retail management systems and processes.

  • Posted on: 05/24/2019

    Do the benefits of using facial recognition in retail outweigh the risks?

    While facial recognition may create creative marketing and sales opportunities, the risk of alienating customers may outweigh the benefits. Just because you can, doesn’t mean you should. Regarding regulation, I suspect that we will see legislation that will require retailers to be fully transparent and inform customers that they are being filmed and offer them a way to opt in or opt out. With pending regulation a big unknown today, it is risky for retailers to invest in this technology that can and will change in an instant. I believe we will continue to see tight regulatory limits on privacy and investments in this type of technology would be a highly speculative.
  • Posted on: 05/22/2019

    Should retail boards include seats for store associates?

    It is an interesting idea that seems to make sense. High level executives don’t have a grasp of what is going on in the store on a daily basis and having a store associate or two on the board may bring another perspective to the decisions the board makes. Some executives may make routine store visits, but it isn’t the same as walking in the shoes of a store associate. Walmart is one of the most innovative companies and it wouldn’t surprise me if they follow-through with this idea. It would also go a long way in improving goodwill with its employees and enhance public perceptions. I hope they try it, some of the best ideas filter up from the stores.
  • Posted on: 05/21/2019

    When the going gets tough, the tough get transparent

    Being upfront, honest and quick is the only way to deal with a crisis such as what Rothy's experienced. The longer a company waits to tell the whole truth the worse the repercussions. Transparency is the only truth here. Customers have many choices today. Why would they shop someone who is less than forthright? The communication needs to be quick, truthful and include a pledge to change the people, the process or the technology that created the crisis.
  • Posted on: 05/20/2019

    Should Kohl’s buy At Home?

    Adding a home goods store will help Kohl’s diversify its portfolio with an attractive adjacent product category which is currently 20 percent of its business today. It will enable Kohl’s to infuse itself with some of the private label home goods products from At Home to expand this product category with potentially higher-margin products. Kohl’s can use its e-commerce platform to help At Home launch e-commerce to expand sales as well. The success of Wayfair is a clear bellwether and with Kohl’s Amazon play it would be a smart move to add e-commerce to the At Home mix. This seems like a smart addition for Kohl’s.
  • Posted on: 05/17/2019

    Do treasure hunt experiences provide the key to discounters’ fortunes?

    It is not easy for an online store to replicate the thrill of the hunt experience that successful off-price retailers have perfected. Consumers love the surprise deals they find and it is much more entertaining when they can see, touch and try on the merchandise. The treasure hunt mentality has spread across all age groups and socioeconomic groups, even very affluent shoppers, which is why we have seen upscale department stores open off-price branded stores (Nordstrom Rack, Macy’s Backstage and Saks Off 5th). The success of the dollar store has also been driven by the treasure hunt and these high volume stores are some of CPG's top sellers of products, which enables them to request specially sized products to fit within the margin requirements of $1 priced items. The winners of tomorrow will be the brands that have successfully refined this product mix and shopping experience today – TJX Companies (T.J.Maxx, Marshalls, and HomeGoods), Ross Stores and Citi Trends.
  • Posted on: 05/16/2019

    Is Crazy Cazboy’s pricing too crazy or just crazy enough?

    This automatic markdown pricing strategy is similar to what we did at Filene’s Basement back in the 1980s. We would print tickets that included markdown dates and prices that included price drops every 15 days. The ticket would indicate the date the price will drop and customers would come back on that date that the price drops. The system would automatically adjust the price based on the date. The product didn’t have to be reticketed, which reduced labor costs. Crazy Cazboy’s pricing strategy and refreshed product mix on a weekly basis appeals to consumers' love of the “treasure hunt.” The scheduled markdowns gets people to return for items to see if they are still available at the discounted price they are willing to pay for the product. This is a clever strategy and I am surprised that more retailers haven’t adopted this pricing strategy.
  • Posted on: 05/15/2019

    Why is Amazon paying employees to quit their jobs?

    Winning the last mile is a serious retail competition and Amazon is taking this seriously. Offering employees incentives to join its Delivery Service Partner program is a creative approach. It will be interesting to see if the $10,000 is a big enough incentive for employees to take the entrepreneurial risk of starting their own delivery business. It is a helpful financial incentive, but it will take a lot more to get their business off the ground and it is not a risk-free endeavor. It will be difficult for other retailers, except maybe Walmart, to tackle an initiative to develop their own delivery fleets. Amazon continues to be a disruptor.
  • Posted on: 05/14/2019

    Did Walmart just one-up Amazon on next day deliveries?

    Combining multiple items into one box and transporting shorter distances certainly has some efficiency and cost benefits for Walmart. With stores as distribution centers across the nation (within 10 miles of 90 percent of the population) Walmart has an advantage over Amazon from a speed of delivery perspective. However, if more people opt for free one-day delivery, it will start eating into Walmart's margins. Without a membership fee to offset these costs, Walmart may need to adjust prices or charge at least a nominal delivery fee. The shipping/delivery game is heating up and it will continue to raise the bar on consumer expectations.
  • Posted on: 05/10/2019

    Will Farmstead’s ‘Smart Shopping List’ give it an edge in online grocery competition?

    The purpose of online shopping for groceries and building shopping list is to make shopping more convenient. However, it is often a cumbersome process. The traditional approach to building your order or shopping list includes sifting through long lists of products or multiple clicks to narrow down your options. A “smart shopping list” that uses AI is a smart idea if it truly makes the list building easier and faster. The advances made in AI have been tremendous and this is a perfect use case. Grocery is one of the most rapidly changing segments in retail and it is prime for automation as its products are replenished by consumers on a fairly predictive schedule and product affinities are also very predictable. It will be interesting to see what the grocery shopping experience is like in the next 5-10 years.
  • Posted on: 05/09/2019

    Are machine learning and AI the path to enhanced personalization?

    You can view personalization through the lens of a maturity model with triggers at the basic/foundational level, rules based as advanced and AI as distinctive. Personalizing customer communications and recommendations based on customer context is key to optimizing revenues. The problem is there is too much data for a human to analyze and synthesize for each customer. Taking the expertise from the best associates and incorporating these processes into a system that is triggered by rules and/or algorithms to optimize the experience (just like the Amazon experience) is the concept of AI. Obviously, it is critical that the inputs are accurate information to ensure accurate communications and recommendations. Garbage in, garbage out. That old phrase is as appropriate today as it ever was. Retailers need to be aware of the potential mistakes that AI can make based on historical data and biases and monitor the results of AI to help catch faulty logic. Humans are not perfect and neither is AI.
  • Posted on: 05/08/2019

    Will Walmart’s new online pet pharmacy and vet clinics draw more pet parents?

    They don't call Walmart a category killer for nothing! Two-thirds of U.S. households have a pet and pet products, services, insurance and prescriptions are a big spending category - $75 billion in 2019 (according to the American Pet Products Association). With pet medicine and vet care comprising half of this spending, this is a great opportunity for Walmart to drive incremental sales with its loyal customers and potentially attract new customers that are interested in lower priced pet care and medications. Adding pet prescriptions to its pharmacy should be an easy addition, however, carving out space for a vet clinic may be a little more challenging for Walmart. Demand for these services should be high, as it will make it convenient, with 90 percent of the U.S. being within 10 miles of a store, and cost effective for Walmart’s current customers.
  • Posted on: 05/07/2019

    H&M will cease printing its catalog after 39 years

    While many retailers are scaling back or eliminating print catalog, others are continuing or launching new print catalogs. Catalogs are not dead. The decision to offer print catalogs depends on the product you are selling and the shopping preferences of your target audience. It is important to also understand the impact of a catalog influencing the decision to purchase products through other channels. The idea of what we call catalogrooming is a phenomenon we at BRP have discussed for years. Many consumers still like to peruse catalogs as they research products and contemplate design or style ideas. According to BRP’s consumers study, 45 percent of consumers “catalogroom” – shop a catalog and then purchase a product either in a store, online or via a mobile device. While digital shopping is becoming the norm, for many people creating wish lists has historically been done by perusing a catalog and folding corners or circling items they like. Some consumers still like the tactile nature of catalogs. I love the example of Restoration Hardware, with their RH Gallery showroom stores and high-end catalog, complimented by an excellent help desk experience as an example of a firm that truly gets the value of print.
  • Posted on: 05/06/2019

    What companies need to know before using AI

    Explaining the algorithms and math underlying AI is not realistic, but explaining the source of data inputs and the objectives of the output is important to get acceptance from retail executives and the practitioners that will be relying on AI to guide decisions. With AI, retailers can reassess models and reevaluate the data, all without the intervention of a human. AI is able to test and retest data to predict every possible customer-product match, at a speed and capability no human, or team of humans, could possibly achieve. The result is far more accurate decisions. However, don’t forget the concept of “garbage in, garbage out.” That old phrase is as appropriate today as it ever was. Systemic bias and bad data needs to be scrubbed out so neural networks will apply the proper framework of algorithms to make AI unbiased and accurate. Retailers need to be aware of the potential mistakes that AI can make based on historical data and biases and monitor the results of AI to help catch faulty logic. Humans are not perfect and neither is AI.
  • Posted on: 05/03/2019

    H&M sells supply chain transparency

    While most consumers will not read the details of the source of the product and make purchase decisions based on this information, there is a growing segment of consumers that are passionate about sustainability. Environmentally and socially conscious consumers will continue to gain traction and retailers are responding with sourcing decisions that are more responsible. The negative press from sourcing products from unsafe ingredients or factories that have unethical labor practices can be disastrous for a brand’s reputation. Product sourcing decisions for retailers will continue to be more transparent, which will influence how products are sourced. Electronic receipts technology allowing linked video content aimed at sustainability are available off the shelf today, I'm not sure why this has taken so long to happen. This is a good thing!
  • Posted on: 04/30/2019

    Is PetSmart barking up the right tree with its IPO?

    Going public should be a good thing for, assuming they use the proceeds wisely. Chewy said in its filing that “it plans on using IPO proceeds for working capital and general corporate purposes. That is a pretty vague statement. I suspect that investments in technology and process improvements are needed to improve profit margins. Free 1-2 day shipping on orders over $49 may be eating into Chewy’s profits, especially for items that are very heavy (like dog food) and expensive to ship. Finding ways to cut costs out of order processing and shipping processes and refining pricing are probably top priorities to achieving profitability.

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