BrainTrust Query: Are Wal-Mart’s new ‘fashion merchants’ the answer to improving the retailer’s apparel business?
By Don Delzell, Partner, Retail Advantage
“Fashion Emergency At Wal-Mart” is the title of BusinessWeek’s July 31st edition article. It may be hyperbolizing to suggest alarm bells ringing at Wal-Mart headquarters, but it appears that management has recognized that the company has a sizable image issue when it comes to apparel merchandising. Wal-Mart is addressing the challenge on a number of fronts and spotlighted in the BusinessWeek article is the human component on the battle lines, namely the establishment of 340 new “fashion merchant” positions.
Described as “part business analyst, part fashion expert, part spy on the competition,” Wal-Mart’s fashion merchants are reportedly being given a say in buying decisions based on first-hand observations at competing stores and from in-stock deficiencies in their own aisles.
(One example cited: a fashion merchant spots out-of-stocks in a certain women’s 5-1/2 shoe and alerts headquarters to the fact that Hispanics, prevalent in the area, tend to have small feet.)
Attracting more Target-esque shoppers to its higher-margin fashion departments is a priority for Wal-Mart. And part of its strategy for doing so has been diverting marketing
funds once earmarked for TV advertising into store environs, their “most important media channel,” according to John Fleming, head of Wal-Mart marketing. Along with that commitment,
apparently, is a refocusing on store-level decision making. Some would argue that’s a step backwards for the retailer universally respected (feared?) for it’s headquarters-based
merchandising skills.
Discussion Question: Can Wal-Mart’s new labor-intensive “fashion merchants” approach really work, over time?
For me, this is not much different than the long ago department store practice of “branching.” That was where buyers and assistant buyers were out in the
stores on a weekly basis, making one-by-one decisions based on moment-in-time snapshots of in-stock, presentation, or some other store specific and time specific circumstance.
But in Wal-Mart’s highly automated world, the questions abound. Who trains these people? How do you determine the relative quality of the input they provide? If there
are 300 of these folks, how many of them came off the Wal-Mart floor? Is that a good training ground?
What about the conflict between micro-decision making and buying power, centralized organizational culture versus store level influence?
One of the secrets of Wal-Mart has always been that stores focused on operations and headquarters focused on merchandise. This seems to be a major
step away from that. Veterans of department store cultures can tell horror story after horror story of what happens when poorly trained store personnel, of varying talent
and ability, are provided with inappropriate input or impact into the assortment building process.
This is one of the most frightening things I’ve read about Wal-Mart’s new approach. Not only is it a method and process from the 1970’s, it feels very “wrong” culturally
and economically. Who pays for these people? Why isn’t the technology providing the out-of-stock information about the size 5-1/2? Have cut backs at HQ led to an inability
to manage each SKU at the store level as often as required for optimum performance? Is the right answer eyeballs in the stores?
Dangerous.
It isn’t clear to me that the BusinessWeek “Fashion Emergency At Wal-Mart” article was written by a discerning reporter experienced in retailing. The examples (such as the shoe sizing and display errors) were so unsophisticated that I wonder if Wal-Mart did itself a disservice when it set up the story with BusinessWeek. By giving BusinessWeek more appropriate information, the real issues might be worth considering. There are times when I’ve been very close to a business that has been in the news, and seen reporting that totally misses its target.
One of the recent lessons learned by modern retailers is that everyone needs to focus more on keeping up with changing consumer needs and preferences, i.e., to be more consumer centric.
I certainly agree that some of the examples in the article were pretty basic, but this is still “early days” for Wal-Mart fashion merchants, and:
>The investment in 340 people demonstrates a commitment to getting it right.
>The Wal-Mart culture is focused on continuous improvement, so we can wait and see how they strive to increase the productivity of the fashion merchants.
At this point, they are very few retailers who are successfully “walking the talk” of consumer-centric retailing, but this is one initiative that I think has a good chance of paying off over time.
“Labor intensive” vs. “Low cost” are paradoxical and a signal that cautiousness should appear. Wal-Mart executes its spartan efficiency thing quite successfully. W-M’s customers are well-tuned to shopping to W-M’s music and aren’t seeking personalized aggrandizement. And reaching out with a “fashion merchants” approach to appeal to shoppers who are not now coming into their stores seems like a confused strategic move.
I certainly buy into the idea that for Wal-Mart, with its scale, diverse locations and desire to improve their fashion image, having boots on the ground in their stores and shopping the competition is a must.
From the description, it sounds as if a major role of the fashion merchants is to concentrate on ensuring proper execution of fashion programs at the store level. I would imagine that each merchant is assigned 8-12 stores to monitor in their area.
Converting the other input, such as competitive information and opinions about fashion direction, into good, accurate data that will be useful immediately and for future seasons will be a challenge. 340 cooks in the kitchen is a big number! What is needed is a well-defined upfront process for information collection that allows for timely and ongoing distillation that will make big patterns obvious while not losing the small gems on the back end. If this is possible, the data could be useful as input for corporate decision makers.
I’ve tried to get the local WM to understand that not all stores are “equal.” In my local community there are a disproportionate number of above average height men (6′-6′ 4″+), yet the store does not stock longer inseam pants. I can take the time to find a manager and have them ordered, but they are not carried everyday.
How many lost sales on Khaki’s or jeans, etc. does that add up to in a year? I at least took the time to ask; most people just shop somewhere else.
My daughters prefer Target for clothes, but they shop WM occasionally. Usually the one or two “cool” items they find are OOS on size or color. I’m sure George is a great line in England, but the fabrics and cut on the clothes don’t work in small town Texas (probably why the clearance racks are always full of this merchandise at the end of the season).
You’d think that WM’s Retail Link would provide some of the data I’m talking about, but apparently they want 350 or so additional sets of eyes providing input. It can’t hurt because the current system isn’t getting the necessary changes made or made quickly enough.
Fashion and Wal-Mart aren’t really compatible. The same can be said for Sears, Kmart and scores of other mass market retailers. Fashion is necessarily defined by limited availability. Limits can be imposed geographically, financially, educationally, etc. When something becomes “main stream” (consumer awareness + available to all) it is no longer fashion. No large retailer can keep up unless they develop partnerships with the trendsetter. High end department stores have been doing this for years. Their realization is that when something is “in fashion” they can sell it for top dollar. When something becomes “main stream” it is a commodity and the prospect of selling for top dollar is slim.
Wal-Mart might be able to get into the fashion industry by leasing out space within their stores to “corporate designers” like Hilfiger, Lauren, Combs, etc. but the expense and expertise required to sell fashion in Wal-Mart can’t be justified. They should concentrate on good sturdy work clothes and, if anything, should look at their choice of fabrics. If they want to upgrade, I would suggest they run away from polyester toward cotton, silk and wool. With their contacts in China they should be selling cashmere scarves for $5.00 and Wool sweaters for $10.00. They don’t need Armani and they don’t need polyesther. Classic styles, made well, using natural fibers at WalMart pricing will keep the registers ringing.
I see nothing wrong with the premise of this effort…trendy specialty retailers (Hot Topic, for example) pride themselves on their ability to gather store-level intelligence then quickly relay it to corporate. My recent early fall store sweep confirmed that Wal-Mart is all over it in terms of trend and execution and they have kicked early fall butt when compared with Target. Wal-Mart had all of the hot looks fully stocked and they brought it in like they believed in in – shrugs, cuffed shorts, micro minis, gauchos; not to mention the awesome effort in young men’s, a tight and right launch of Exsto at unreal prices. All collections feature topper cards that show how the looks work together (yes, Mom, your kid is supposed to wear leggings or tights under those shorts/skirts – whew!) Target on the other hand, has the left-overs from their latest Go International program (Tara Jarmon), front and center, on clearance, and with a sign threatening “Departing soon!” Deeper into the store is a hodgepodge of their “M” brands merchandised as a scramble (Mossimo? Morona? Mizrahi? you have to look at the tags to see)…all in summer fabrics.
What I do believe is missing is store level customer interaction. Having credible fashion helpers on hand at brand launch time would give Wal-Mart an extra boost that could last all season.
There is a bottom line here and that is that high fashion and Wal-Mart do not go hand in hand. They can carry “fashionable” apparel but to try to get the public to think that it’s a high fashion retailer is off base. Wal-Mart can’t be everything to everybody. Even Target has a hard time pulling off high fashion. These are discount retailers period. You can’t have high fashion at a discounted price. Staying in their main demographic and appealing to that sense of wanting to be trendy is what they should concentrate on. I just don’t think that anyone who shops at Macy’s or Nordstrom, or any other upper end department store is going to think Wal-Mart = Clothes.