Or Macy's. But yes, it was a fish out of water concept for JCP. Still, there are ways to bring excitement back to these stores, even if not at Selfridges level. E.g. I was only able to run through the store briefly. Their book department was focused on art books. They had a special section on city bikes (I am a transportational cyclist), a food court on the top floor and of course, a "typical" outstanding department store food department on the ground floor. And the restrooms, like restrooms in other stores and Heathrow Airport, were fabulous. Etc.
I'd say that with JCP, the model would not be Selfridges, but the signature Canadian Tire store in Edmonton. Or even, with appliances, PIRCH. You think that's a stretch, but in smaller towns where you still have appliance + home stores (which tended to grow out of hardware stores), when I did a planning study in Brunswick, GA, that store equivalent there had demonstrations with the stoves, etc. -- no different from PIRCH.
While I don't know if this would work/would resonate with most of the locations in suburban malls, there is no question that U.K. department stores like Selfridges on Oxford Street wow the customer. Johnson's initiative was flawed in two ways: 1.) people need "sales" to remind and push them to buy, because so much of what they purchase is discretionary and not necessarily needed; 2.) he needed to come up with a system defining tranches of stores, roll out the changes he made to the stores where that would make sense, and come up with other changes that fit better for different tranches.
In short, he should have picked 10 or more stores depending on how the classification process went, and made them over as landmark or signature stores, like the REI or Walgreens examples, based on the likelihood of success, and worked from there.
Maybe he can join with the group that is selectively reopening stores of various Bon Ton banners. A Carsons opened up in a Chicago suburb in November. It's open Thursday, Friday and Saturday, and sells other stuff, too. (Insurance? Art?)
The Washington Post had an article about the impact of private equity purchases of retail businesses on pension funds when the business goes under. They used the Sun Capital acquisition of Marsh Supermarkets as the prime example. But yes, this isn't a particularly new process. Plenty of regional department stores died this way already (e.g., Wieboldts and many others) over the past few decades, let alone supermarkets, and other retailers like Toys "R" Us.
But I'd say it's not so much "activist investor" as it is private equity/hedge funds with limited motivation to run the companies as going concerns.
I think this is the key point. 1.) Sears had tremendous brand equity and sub-brands/product lines with great strength. 2.) Could they have repositioned/pivoted? Maybe. 3.) But ESL wasn't the person or approach to do it.
Like Nokia, Blackberry, Motorola and others, Sears did some experiments along the way that did show a way forward. But like those companies, they couldn't or wouldn't commit out of a fear of cannibalizing a business model that had been working. E.g., I think one called Sears Grand, moving away from the mall, and having more fast moving categories (a mix of Sears and KMart) predating ESL, could have helped.
The various hardware and appliance initiatives could have worked because of the equity in Kenmore, Craftsman, the Auto Centers and the home repair businesses.
But we'll never know. Because those initiatives didn't move forward in the way they needed to and merchandising was never part of the ESL business model.
True but in my community history/commercial district revitalization days, I was surprised to learn that in the 1950s, S.S.Kresge had a "lower income market" brand called "Jupiter" for where Kresge stores were no longer the right fit.
Yep. The cost per portion is at least twice the cost of buying and preparing food yourself. It seems cheaper though compared to buying a restaurant meal, where it is one-third to half the cost. E-commerce isn't just about reducing item cost. It can be about getting people to pay more for items too.
Besides the reality that there probably isn't a sustainable business in meal kits for any firm (anyone remember the brief trend of "meal assembly stores" in the early 2000s?), merely a line of business within grocery, that is best able to be offered by grocery stores where the cost to prepare and distribute is much cheaper compared to home delivered meals, this makes sense for Blue Apron. But only if the WW relationship isn't one-off; if they can create similar relationships. That being said, there are few such opportunities. (I say this having worked at one time for the nation's largest consumer group concerned with food and nutrition.)
I'm not a Prime member, but go into Whole Foods to buy a particular SKU of coffee and bath soap, and occasionally other specialty items. Because I am on the board of a public food market, I always pay attention to in-store marketing. The special pricing offered to Prime members is significant and could make people want to spend a greater proportion of their food spend at Whole Foods without feeling that it is exorbitant.
(I was just on vacation in Santa Barbara, California, at an Airbnb, and we went to buy groceries at a Vons, not realizing there was a Ralphs just a little further, and it killed me to spend $100 there on a relatively small amount of items. Maybe Whole Foods' pricing isn't so far out of line as we think, at least compared to Albertsons banners.)
I don't think they are. They are looking at the intersection of market demographics that support Whole Foods plus market demographics that support Prime. Likely these are metropolitan areas. Likely there is opportunity to extend the Whole Foods store footprint beyond the current business model, when you add in the effect of Prime. E.g., I remember a couple years ago during an earlier round of store closings, reading an article on Macy's and their decision making -- including the impact of store closings on e-commerce sales within various sub-geographies -- and reading that physical stores help market online sales, etc.
I don't live in markets where there are Fred Meyer, Meijer, Kroger Marketplace, or H-E-B Plus stores. Do these companies have the ability to blend food an other merchandise categories in e-commerce the way that Amazon does? Is that a competitive advantage for Kroger banners and H-E-B going forward?
Because it's about supporting Amazon Prime as a platform, and capturing an increasingly larger percentage of the consumer spend overall from Amazon Prime members. If you look at Amazon as a warehousing company specifically, you miss the point. Presumably, members who buy at Whole Foods spend more than members who don't, etc., hence making this investment in expansion makes sense.
Interesting point. I am familiar with CVS because of its ubiquity in DC proper. It benefits not from being a great retailer, but having stores in great locations. Then again, Walgreens isn't much better, except for their "landmark" stores, which are great, but rare.
WRT this specific initiative, it's smart in terms of keeping current customers. But the advantage that Amazon has is the platform and the platform provides multiple benefits -- online purchasing from the massive Amazon platform, movies/videos streaming, e-books, and now grocery discounts/delivery from Whole Foods. Sure you pay more for your Prime membership, but you get much more too.
FWIW, if you look at the press release, all the stores are in suburban conurbations, "town centers" if you will. They aren't in urban centers. (Another example that "urban" and "suburban" are sometimes terms that aren't truly specific.) The store in Bethesda Maryland is on "Bethesda Row," Federal Realty's first foray into creating urbanized suburban in-city (in this case in-conurbation) lifestyle centers.
The only thing about this discussion is the implication that Sears was not already on a significant downward spiral before it got entangled with/by Lampert. Even if he hadn't got involved with either Sears or Kmart, it's not unlikely they would be at roughly the same point. That being said, there was opportunity within Sears for revival, changing formats, putting stores in different locations in concert with changes in consumer preferences and behaviors, but that was never going to happen with Lampert. Could it have happened with someone else running the show?
With regards to Ron Johnson, I'd say it's not that he had bad ideas, just that they weren't congruent with the business model and structure of J.C. Penney. It's easy to be seen as great when you're selling items that cost between $600 to $4,000 each, which also gives you credit for stratospheric sales/s.f. It might not mean you're a genius though (for what it's worth, on the Market-L e-list in 1994 I suggested that Apple create stores). It's a lot harder to do that selling t-shirts and dresses and underwear.
But even the theatrical department store companies in the U.K. are having a hard time. I'd be interested in seeing a new thread where people offer "counterfactuals" on what should have been done, if only to prick our thinking in terms of retail store and commercial district revitalization opportunities.
E.g. I wrote a piece a couple months ago about how Downtown Silver Spring Maryland has the opportunity to strengthen its outdoor character (non-mall) by adding a department store, even in these times ...