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Game Shack....desperation or genius?

September 21, 2007

Analysis of:Radio Shack may dive into video games | www.dallasnews.com

Radio Shack's merchandising positioning is clearly in need of adjustment.  Faced with a difficult road in the traditional consumer electronics arena, is management turning to fast bucks from the game business?  How is Radio Shack positioned, other than location, to compete effectively in this new market? And what characteristics of this business are attractive enough to warrant the inevitable change impact on the company?

No Reason for Optimism at Pier 1

September 21, 2007

Analysis of:Pier 1 Shares Fall on 2Q Miss | www.forbes.com

Pier 1 apparently continues to flounder as it attempts to find a competitive niche to survive in.  And "survive" is the operative term, not "dominate".  The most recent results were disturbing across the board.  Gross margin erosion, deep cuts in marketing, and a questionable approach to merchandise strategy seem to imply a continuation fo poor performance.  With negative cash flows, how long can this go on?

WM's brand message accurately reflects the consumer value proposition it delivers

September 13, 2007

Analysis of:Wal-Mart plans to roll out new ad campaign | www.msnbc.msn.com

Effective retail marketing involves communicating a simple and easily executed message with emotional relevance to the targeted consumer group.  The brand statement should celebrate the competitive strengths and advantages of the retail organization, highlighting an aspirational benefit the company is currently delivering, and can continue to do so well into the future.  "Save Money.  Live Better" does all of that for Walmart.

Online retail is NOT heading for a significantly lower growth rate!

September 6, 2007

Analysis of:Online shopping growth to slow in next decade | www.msnbc.msn.com

For anyone following pure play or multichannel retail investments, the "analysis" in the referenced article is absolute garbage.  Analysts have been wrong about online retail volume, about the categories which translate well, and about growth rates since e-Commerce first started.  This article is absolutely no exception.

Customer Service is too broad a phrase

September 6, 2007

Analysis of:How To Fix Wal-Mart? Ask Its Managers | money.aol.com

One of the hidden elements of the Big Box model is virtual self service.  The economic model is built around the ability to merchandise compelling and easily shopped assortments without requiring a great deal of customer service.  And yet analyst after analyst bemoans the lack of customer service in Big Box players. They are right, and they are wrong.  Going forward, getting "customer service" in it's correct meaning will be vital to long term health of any current player.

Is Ann Taylor in trouble or is this just retail cyclicality?

August 28, 2007

Analysis of:Ann Taylor Plans To Cozy Up To Boomer Broads | publications.mediapost.com

Ann Taylor has a recognizable brand position in the market place.  Consistency of execution over time has led to a well understood position in the market.  Merchandise focus, consumer identification, and macro economic trends are not conspiring to support strong immediate results.  However, no other competitor in this field is making significant inroads on the brand equity.  It is entirely likely that the GM drop is related to exactly the sources management attributes, and that AT remains a long term play with potential for low but sustainable growth.

Acquisition path unlikely in WM's new format game

August 28, 2007

Analysis of:REPORT: WAL-MART SEEKING M&A EXPERT | www.retail-merchandiser.com

WM's commitment to "doing things right" is supported by the job posting referenced in the article.  It's only good business to explore all options.  However, an analysis of the C-store market does not support a high probability of growth through acquisition.  In fact, the low probability of such an acquisition implies significant insights about the possible growth curve for any new WM format.

Are comp store difficulties in Office Supply sector linked to growth of ecommerce divisions?

August 23, 2007

Analysis of:Staples Meets Expectations | www.thestreet.com

Hidden in the Staples numbers is a growth of 20% in eCommerce sales, from $1.1 billion to $1.3 billion.  Unless I did my math wrong, this more than compensates for the comp store decrease.  The key point here is that for multi-channel retailers, inclusion of ecommerce results in calculating comp store performance gives a much deeper insight into true health.

YouTube 2.0: IPTV finally realized?

August 23, 2007

Analysis of:YouTube's InVideo Ads: Smart Move, But Far From Final, Say Experts | publications.mediapost.com

The dream behind IPTV has taken quite awhile to materialize.  Mis-steps in repurposing content, old ideas in advertising monetization, and a lack of critical mass for eyeballs has kept the potential for true IPTV greater than the reality. Google and YouTube may have found the correct alchemy.  YouTube has critical mass in both content and eyeballs.  They understand about what content works and what doesn't.  And now they have a method of monetization which is least intrusive, partially user controlled, and infinitelly targetable. Forget the historical basis for YouTube.  See it as TV for the Internet.

Has Google forced YouTube to completely lose sight of the nature of their content community?

August 23, 2007

Analysis of:Analyzing YouTube's Revenue Potential | www.alleyinsider.com

Googles monetization plan may be extremely limited in it's revenue generating potential.  Limited to "signed content partners" for now, this plan may always be limited to "signed content partners".  Huge issues exist in applying this plan to the greater YouTube community.  If applied inappropriately or without regard to that community, YouTube could find the content it relies upon moving to more philosophically aligned sites.

Can't this simply be seen as a shift in the delivery mechanism for published news?

August 21, 2007

Analysis of:Online Ad Spending to Overtake Print by 2011 -- Study | internet.seekingalpha.com

Newspapers became a cost-effective and user-friendly method of dessiminating information.  For a relatively small amount of money, the consumer got the opportunity to inform themselves, and to do so on-demand.  On Demand?  Isn't that a buzz word in the Internet World?  Perhaps that's the big point here.  What is the real business of a newspaper company?

Kohls results may hide trouble

August 20, 2007

Analysis of: Kohl's 2Q earnings up 20.3% | www.retailingtoday.com

Hidden in the second quarter robust increases in sales and gross margin basis point improvements are two cautionary results worthy of note.  First, July was flat in comp stores.  This is disturbing in that fiscal July this year is widely acknowledged to benefit from a calendar shift to include what was essentially the first week in August last year.  Potentially, given that shift, the flat comp results may have truly been a decrease in comparative calendar days. Second, the sales and operating income per store, based on the number of stores in operation at the end of fiscal July, show decreases of a little over 3% for July and 2% for August.

Does Macy's make sense as a national department store or not?

August 20, 2007

Analysis of:Macy's costs continue to bite as Q2 sales fail to impress, dreary outlook sends shares to new low | www.wgsn.com

The fundamental question which should be troubling investors is whether the core strategy makes sense or not.  Is a national chain, with all that this implies, a winning strategy in the market Macy's is attempting to serve?  The nature of the target customer, and the means necessary to serve them, imply that a radical change to the Macy's strategy is necessary for long term profit growth.

Pursuing US Comp Store growth may not be the best use of WM resources

August 16, 2007

Analysis of:REFILE-UPDATE 5-Wal-Mart misses profit view, cuts outlook | today.reuters.com

A continued focus on US store performance to drive WM stock value appreciation may be an inherently flawed strategy, particularly when overall stockholder value and long term profitability are factored in.   A coherent and pervasive effort to improve US comp store growth would almost have to focus on those product areas in which WM underperforms:  soft goods and apparel at the top of the list.  Generating greater share in these areas is clearly possible.  However, the impact to the organization in terms of resources and management focus may create an "investment" disproportionate to the "return".

Back To School seems to be "late" only at Walmart and Sears

August 15, 2007

Analysis of:REFILE-UPDATE 5-Wal-Mart misses profit view, cuts outlook | today.reuters.com

Recent financial results are indicating that a late BTS season is not the core drive behind July comparatives at either Walmart or Sears Holdings.  J.C.Penney recently announced significant increases for July, although it is unclear if the retail calendar shift impacting Penney results was in place for WM or Sears.  Even adjusted, the Penney results are much stronger than either WM or Sears, indicating that BTS shopping is proceeding on pretty much the same calendar it has for a very long time.

JCP's Back To School Microsite Connects and Drives Volume

August 13, 2007

Analysis of:Back-to-school season boosts Penneys sales | www.retailingtoday.com

JCP's investment, for the  second consecutive year, in a stand alone BTS site is a strong indicator of strategic awareness around the potential inherent in multichannel marketing synergy.  The site, www.jcpenneybts.com, is a mash up of social networking, entertainment and integrated merchandising targeted directly at the junior/young men's business JCP has traditionally struggled with.  Not only will the site serve to drive BTS apparel volume online and instore, it serves as an extraordinarily effective brand connection with a highly influential and gross margin positive demographic.  It's this later benefit which offers the greatest potential for corporate bottom line impact.

Contemporary Brand Portfolio Strategy an entirely different game

August 10, 2007

Analysis of:VF Buys Way into Upscale Jeans | online.wsj.com

Certainly the acquisition of contemporary brands by VF can be expected to balance earnings fluctuations caused by the performance of their mature brands.  Further, both of these purchases open the door for VF to an entirely different segment of retail, one which tends  to run countercyclical to department stores.  The problem with trend fashion brands is they seldom translate into longevity plays.  The question most often is not whether the brand will lose legitimacy, but when.  This is particularly true when a brand is associated with a given look or lifestyle.   Luxury jeans are to this period what surfwear was to the 70's and skatewear most recently.  Yes, both trends evolved, and remain present in assortments (skate more dominantly).  But the ecosystem brand die-off was extreme, and the losers outnumbered the winners by a significant margin.

The Real Role of a Retail CEO is.....

August 8, 2007

Analysis of:Analysts undecided on GAP CEO with no apparel ties | today.reuters.com

Retail CEO's do not create assortments, develop planograms, or execute brand campaigns.  They create a vision for the organization, and empower that vision with appropriate resources.  Often the worst choice for a CEO is an ex-hands on merchant, one who will micromanage, second guess and otherwise interfere with the normal operation of a successful retail business.  As yet we have no idea what vision Mr. Murphy is articulating, or has articulated to the Board.  We have no idea how pervasive or disruptive the changes associated with that vision will be.  Assuming there is or will be a vision.

Commitment versus Compliance

August 6, 2007

Analysis of:Toy Recall Shows Challenge China Poses to Partners | online.wsj.com

True quality control, in any industry, in any supply chain scenario, requires the corporate culture be fully committed to it's standards.  Blaming this problem on China ignores the true locus of responsibility:  the importer of record.  Toy safety standards are not voluntary; rather they are imposed by various government bodies because the industry, left to its own devices, has failed to inculcate the commitment required. China is "involved" in this problem.  Mattel is "committed".

Does the Kohl's customer really aspire to look like the Vera Wang shopper?

August 2, 2007

Analysis of:Vera Wang Set to Dress Up Kohl's | online.wsj.com

One of the biggest risks in merchandise strategy redirection is to move too far and too fast for your customer, and to do so in a loud and public way.  Walmart lived this experience recently, and can probably give Kohl's management some much needed advice. Upmarket shifts are about aspirational merchandising.  Identify who your customer aspires to be like, associated with, or has as her ideal self image.  Vera Wang is sold at Neiman Marcus, Saks, and Nordstrom to name a few larger chains.  Does the Kohl's customer (any segment) really aspire to be the Saks shopper?  The article sites "awareness" of Vera Wang.  Did the market research indicate identification or aspiration?  I question that there is an unserved market of Neiman Marcus wanna-shops who see Kohl's as an alternative. The Kohl's experiment has more in common with Walmart's George/Metro programs than Target's Mizrahi.  Target didn't substantially change price points, Walmart did, and so is Kohl's.  

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