Insights

The struggles of brick-and-mortar retailers have dominated industry headlines over the past few months with an unprecedented number of store closings announced. However, while the bad news has come from all corners, specialty retailers as well as general merchandisers, it has been department stores that have perhaps attracted the most headlines.  

With healthcare reform appearing to be placed on the back burner – at least for now – attention in Washington, D.C. is turning to corporate tax reform. Corporate tax reform is much sticker issue and many of the political dynamics that doomed the healthcare effort seem to be falling into place in much the same way in this conversation. And that could be a real problem for retail operators.  

With Congress in recess this week, legislators can finally take a break from the grind of D.C. politics – fighting with the other party, fighting with their own party, and of course, the spotlight of a relentless national media. But in a lot of cases, members may have it better in D.C. than back home.   

Consumer expectations in retail are changing more rapidly than ever. As e-commerce takes ever-larger shares of retail and redefines customer expectations, retailers are hard at work developing stronger online presences, seamless links between their online and brick-and-mortar offerings, and faster and cheaper delivery to meet rising customer demands.   

On a recent trip to Seattle, my luggage was lost and I found myself without anything to wear except for the clothes on my back. I urgently needed a suit for a business meeting and decided Nordstrom was the best place to start given I was in the retailer’s hometown.   

In light of Target shares dropping 15% after their latest earnings announcement, Target CEO Brian Cornell said executives would be detailing moves for greater pricing aggressiveness and increased merchandise differentiation, both tactics that Target has been known for historically. Cornell’s pricing reference led to speculation about a price war with Walmart, which many experts surmise Target simply can’t win. Speculation aside, is a price war poised to erupt between these two mega-retailers?    

On March 7, Edward Stack, CEO and chairman of Dick’s Sporting Goods, announced the company is dropping 20% of its brand offerings. This news is part of a larger redirection for the sporting goods retailer, one designed to optimize its inventory for increased sales.  

Later this week, the nomination of Alexander Acosta to be the next Secretary of Labor will likely be voted out of the Senate HELP Committee and head for confirmation on the Senate floor. The administration made headlines just prior to his confirmation hearings outlining cuts to the Department of Labor budget in the neighborhood of $2.5 Billion or roughly 20%.   

Shoppers want their favorite brands to know who they are, feature their preferred merchandise, and overall, offer an “experience” that appeals to them — and only them.    This point was driven home at Oracle Industry Connect, held in Orlando, Florida, March 20-22. During the conference, industry observers defined how retail is undergoing a “transfiguration,” or a shift to providing an elevated customer experience. What’s at the core of this change? In a word: personalization.