Industry That I Heart

This is what I love, what I do, what I hate, and what will forever haunt me.

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#LastNightADJSavedMyLife – Top Ten of 2014 – #3

If you haven’t heard this before, you’ll be whistling the tune in no time…
#3 – D’Angelo – The Door
This Album really did save good music at the end of the year. They say that they rushed the album to make it in time before the end of the year. I’m glad they did.

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#4thPersonProse – Do You Remember?…..

The last time that someone intentionally missed Christmas, look what happened. Christmas is a time for family, and a time to put all differences aside. I just weep that your daughter is caught in the middle yet again. Collateral Damage.
I just hope that something doesn’t happen again.
Have a good Christmas, whatever it is that you’re doing.

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10 Things We Learned This Week About Why Sears Is So Terrible

By Laura Northrup July 12, 2013 Consumerist.com

In our posts about Sears, we often observe that the company seems like an anti-capitalist prank, a retail giant that thrashes around aimlessly until the real estate market picks up. It turns out that we were kind of half right. Manifesto-writing Sears Holdings chairman Eddie Lampert has organized the company into battling units that compete with each other for a dwindling pile of money.
You can read about this mess over at Bloomberg Businessweek, and we do recommend clicking over and reading the whole thing if you’ve visited a Sears or Kmart store recently and have wondered why it is so awful.
1. Early in his tenure running Sears Holdings, Lampert brought in some consultants you’ve actually heard of: economics professor Steven Levitt of Freakonomics fame, and Paul DePodesta, the statistician whose work with the Oakland Athletics you may remember from the book and film Moneyball.
2. Lampert doesn’t seem to like the retail business, retail jargon (like the words “vendor” or “consumer”) or, possibly, Chicago. He gets along better with people from the finance world and does his best not to leave his home in Florida.
3. The company was reorganized in an initiative called Sears Holdings Organization, Actions, and Responsibilities, or SOAR, because SHOAR isn’t a word. The company was divided into more than thirty units, each with their own executives and board. Instead of soaring toward greatness, each unit acted only in its own self-interest without much regard for the profitability of the entire company.
4. In theory, units acting selfishly was supposed to be a good thing. “Decentralized systems and structures work better than centralized ones because they produce better information over time,” Lampert explained to Businessweek.
5. This structure is a good thing because it’s totally capitalist. “Clashes for resources are a product of competition and advocacy, things that were sorely lacking before and are lacking in socialist economies,” a Sears spokesman told Businessweek in an e-mail. Wait, so which other privately-owned retailers are socialist economies?
6. In practice, it doesn’t work so well. In 2010, the executive at the head of Kmart and Sears stores had the wacky idea to cut prices on food and drug staples low enough to compete with Kmart and maybe draw some customers inside the stores. Everyone thought it was a great idea, but no other units wanted to sacrifice any of the needed $2 million from their own operating profits to actually fund the idea.
7. The appliances unit had to pay royalties to the Kenmore unit for every appliance that they sold. Kenmore is another division of Sears Holdings, see. Stores could sell other companies’ products for more money, so they pushed Kenmore products aside and pushed other companies’ products more.
8. Competition for space on the weekly circular devolved into screaming matches and a sort of retail “Hunger Games.”
9. Lampert had an employee social network built, joined under a pseudonym, and then logged on to argue with employees.
10. Sears Holdings stores push the confusing Shop Your Way Rewards program heavily, but only 20% of the points customers earn ever get redeemed.

One former executive noted what we at Consumerist have known for a long time. “Ultimately, your customer is going to make a decision about your brand based on the weakest link. If you have a fabulous website and a crappy in-store experience—or vice versa—that’s going to impact your business.” One terrible experience has been enough for many of our readers to swear off Sears forever.

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Should Eddie Lampert Fire the CEO of Sears?

By George Anderson June 20, 2013 Forbes.com

Many failed to see what the big deal was back in January when it was announced Edward Lampert, chairman of Sears Holdings SHLD +0.11%, was taking over as CEO of the company. After all, through leaders both interim and permanent, it was widely believed Mr. Lampert had been calling the shots since merging Kmart and Sears some eight years back. He has certainly been blamed for failing to invest in the company’s stores. He has jumped from one tactic to another, all the while claiming to have a grand strategy to turn the business around — one not readily apparent to retail industry watchers.

As retail industry analyst Ben Ball quipped on RetailWire.com, “Lampert has to be CEO of Sears Holdings because he seems to be the only one who has a clue what he’s doing with it.”

Joking aside, a fair amount of bitterness was evident in the RetailWire online discussion. Consultant and retail trainer Bob Phibbs pointedly wrote, “Activist investors are killing retail brands.”

In an interview by Bloomberg News, Mr. Lampert claimed that his critics just don’t get it. Perhaps the misunderstanding between Mr. Lampert and his critics has to do with how each defines success.

Some, like former chairman and CEO of Sears Canada Mark Cohen, do not seem to believe that words like “merchant” or “retailer” should be used in the same sentence as Mr. Lampert’s name.

“Sears is slowly and steadily failing at the hands of a ruthless, methodical asset-stripper,” Mr. Cohen told Bloomberg. “Lampert will come up with some cash every quarter or two to make sure the balance sheet is still viable. It’s a tragedy because Sears is a legacy brand that needed to be and could’ve been repositioned.”

M. Jericho Banks, president, CEO of Forensic Marketing used a common baseball analogy in explaining Mr. Lampert’s misjudgments. “No one, not even Edward Lampert, can be team owner, and team manager, and ace pitcher. It’s almost too late for Lampert to realize that he must hire competent marketers, merchants, and managers, and then back off and leave them alone,” he wrote on RetailWire. “It seems like it’s not in his character to do so. It’s a shame that a single man’s character flaws can negatively affect so many employees and customers.”

“Kmart and Sears are dinosaurs now,” commented Paula Rosenblum, managing partner, RSR Research. “The department store model is tired and old, especially the ‘low priced spreads.’ Five years ago I might have said the company could be turned around by shrinking the store format and getting out of the apparel business (for one). But that concept (Sears Grand) was killed by Mr. Lampert, and the brand equity of Kenmore, Craftsman and DieHard has eroded over time.”

Even the argument that Mr. Lampert is trading retail profits for real estate profits is failing to hold water at this point. “The problem is, this real estate strategy has also fallen apart,” commented retail consultant Frank Dell on RetailWire. “The real estate is not worth anywhere near what Mr. Lampert expected. As online sales increase every year, real estate loses value.”

In an interview last month with WWD.com, Mr. Lampert offered this definition: “A great company grows without sacrificing quality.”

During his tenure, Mr. Lampert cannot claim to have achieved growth, nor has he avoided sacrificing quality. Perhaps it’s time he looks in the mirror and tells the CEO of Sears Holdings that he’s fired.

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Loblaw’s bulk buy: $12.4-billion deal for Shoppers Drug Mart creates a colossus of retail

by Simon Houpt July 15, 2013

Canada’s biggest grocery chain and the country’s largest pharmacy will become one company, creating a homegrown juggernaut in the face of stiffer competition from the consolidation of existing players and the entry of a major U.S. retailer.

Loblaw Cos. Ltd. announced Monday an agreement to buy Shoppers Drug Mart Corp. for $12.4-billion in cash and stock. The Loblaw deal, which gives the company a dominant presence in urban core markets – no-go zones for big-box retailers – means downtowners who use Shoppers as their local convenience store will be able to stock up on President’s Choice cookies while getting a PC Financial bank account.

Loblaw Maple Leafs supermarket in downtown Toronto May 06, 2013. The grocery giant said Wednesday it is testing a new discount store in Calgary called The Box by No Frills.

Galen Weston Jr., executive chairman of Loblaw, speaks at a press conference in Toronto on Monday, July 15, 2013 announcing that Loblaw Cos. Ltd. will acquire Shoppers Drug Mart Corporation for $12.4-billion in cash and stock.

While both companies will retain their identities, Loblaw customers will be able to buy Shoppers’s Life-brand products and get health and beauty advice.

“I’ve long believed that becoming a Canadian health-and-wellness and nutrition champion represented the most powerful next chapter for Loblaw,” said Galen G. Weston, Loblaw’s executive chairman.

Both companies, which have robust loyalty programs that track every purchase, will use that information to create comprehensive portraits of customers to develop tailored marketing pitches.

For Mr. Weston – the once publicity-shy executive who has become the most prominent ambassador of the family-friendly Loblaw brand – the Shoppers acquisition comes as seven-year effort to restructure the company draws to a close. Now, he is turning his attention to creating a strategy to deal with intensifying competition.

Mr. Weston said he had been mulling a major acquisition for years, but only presented the final offer to Holger Kluge, chair of Shoppers, last Thursday morning. The men said they met in a minivan on a country road northwest of Toronto, prior to a strategic planning retreat for Shoppers.

Loblaw will add 1,242 Shoppers Drug Mart and Pharmaprix locations to its stable of more than 1,000 stores, which include Loblaws, No Frills, Fortino’s, valu-mart, Atlantic Superstore, T&T Supermarket, and others.

Monday’s announcement continues a trend of grocers “bulking up for competition and growth,” said Ed Strapagiel, a retail consultant. In March, Target Corp. opened its first Canadian outlets and last month, Sobey’s Inc., the country’s second-largest grocer, launched a $5.8-billion takeover of Safeway Canada. “There’s a lot of price pressure from the likes of Target, Wal-mart, and Costco. Loblaw can now withstand that pressure a lot better.”

“Health and wellness has been a big interest of mine for over a decade,” explained Mr. Weston, who assumed his current position in 2007. “You can see it in the public comments over the last five years. You can see it in the assortments and services that are going into our stores.” Among other initiatives, Loblaw has been investing in its Blue Menu house brand, targeted at consumers who are mindful of their health.

Loblaw is the country’s largest food retailer, with 2012 sales of $31-billion. Shoppers is the country’s largest pharmacy, with 2012 revenue of $10.8-billion, 47 per cent of which came from pharmacy sales.

“This is one of the smartest and well thought-out acquisitions I have seen in years,” said retail consultant George Minakakis. “In addition to the loyal customer base that Shoppers has, this will further raise credibility to Loblaw pharmacy and make it more challenging for new entrants to acquire customers.”

Though the Competition Bureau immediately signalled it would review the deal, as is customary for any transaction exceeding $400-million, executives of both companies argued that it should not raise any regulatory red flags. “These are two complementary businesses,” said Mr. Weston. “Loblaw has about 5 per cent market share in the pharmacy business, so from a Shoppers Drug Mart perspective, it is not significant. And (Shoppers) have about $1-billion in food sales on top of our $30-billion in food sales, so we don’t think it’s significant.”

When Mr. Weston took over his family’s iconic company in 2006, at the age of 33, he assumed an obligation to re-engineer a failing growth strategy. The plan that Loblaw had put into place a few years earlier to take on Wal-Mart, which included building more low-price Superstores, had gone awry and Loblaw had lost billions of dollars in market value. In response, Mr. Weston embarked on a restructuring strategy that sought to scale back the company’s lineup of non-food products, which it had introduced to combat Wal-Mart. “It will take up to three years to get ourselves back to where we need to be,” he told analysts at the time.

While he did not mention any U.S.-based competitor by name, Mr. Weston’s speech was loaded with references to Canada and Canadians, as he evoked the storied 104-year history of his company.

Analysts noted that the deal is not a fait accompli, as Shoppers may receive other offers from cash-rich U.S. suitors such as CVS Caremark and Wal-Mart.

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At Sears, Eddie Lampert’s Warring Divisions Model Adds to the Troubles

By Mina Kimes July 11, 2013 BusinessWeek.com

Every year the presidents of Sears Holdings’ (SHLD) many business units trudge across the company’s sprawling headquarters in Hoffman Estates, Ill., to a conference room in Building B, where they ask Eddie Lampert for money. The leaders have made these solitary treks since 2008, when Lampert, a reclusive hedge fund billionaire, splintered the company into more than 30 units. Each meeting starts quietly: When the executive arrives, Lampert’s top consiglieri are there, waiting around a U-shaped table, according to interviews with a half-dozen former employees who attended these sessions. An assistant walks in, turns on a screen on the opposite wall, and an image of Lampert flickers to life.

The Sears chairman, who lives in a $38 million mansion in South Florida and visits the campus no more than twice a year (he hates flying), is usually staring at his computer when the camera goes live, according to attendees.

The executive in the hot seat will begin clicking through a PowerPoint presentation meant to impress. Often he’ll boast an overly ambitious target—“We can definitely grow 20 percent this year!”—without so much as a glance from Lampert, 50, whose preference is to peck out e-mails or scroll through a spreadsheet during the talks. Not until the executive makes a mistake does the Sears chief look up, unleashing a torrent of questions that can go on for hours.

In January, eight years after Lampert masterminded Kmart’s $12 billion buyout of Sears in 2005, the board appointed him chief executive officer of the 120-year-old retailer. The company had gone through four CEOs since the merger, yet former executives say Lampert has long been running the show. Since the takeover, Sears Holdings’ sales have dropped from $49.1 billion to $39.9 billion, and its stock has sunk 64 percent. Its cash recently fell to a 10-year low. Although it has plenty of assets to unload before bankruptcy looms, the odds of a turnaround grow longer every quarter. “The way it’s being managed, it doesn’t work,” says Mary Ross Gilbert, a managing director at investment bank Imperial Capital. “They’re going to continue to deteriorate.”

Plagued by the realities threatening many retail stores, Sears also faces a unique problem: Lampert. Many of its troubles can be traced to an organizational model the chairman implemented five years ago, an idea he has said will save the company. Lampert runs Sears like a hedge fund portfolio, with dozens of autonomous businesses competing for his attention and money. An outspoken advocate of free-market economics and fan of the novelist Ayn Rand, he created the model because he expected the invisible hand of the market to drive better results. If the company’s leaders were told to act selfishly, he argued, they would run their divisions in a rational manner, boosting overall performance.

Instead, the divisions turned against each other—and Sears and Kmart, the overarching brands, suffered. Interviews with more than 40 former executives, many of whom sat at the highest levels of the company, paint a picture of a business that’s ravaged by infighting as its divisions battle over fewer resources. (Many declined to go on the record for a variety of reasons, including fear of angering Lampert.) Shaunak Dave, a former executive who left in 2012 and is now at sports marketing agency Revolution, says the model created a “warring tribes” culture. “If you were in a different business unit, we were in two competing companies,” he says. “Cooperation and collaboration aren’t there.”

Although Lampert is notoriously media-averse, he agreed to answer questions about Sears’s organizational model via e-mail. “Decentralized systems and structures work better than centralized ones because they produce better information over time,” Lampert writes. “The downside is that, to some, it appears messier than centralized systems.” Lampert adds that the structure enables him to evaluate the individual parts of Sears, so he can collect “significantly better information and drive decision-making and accountability at a more appropriate level.”

Lampert created the model because he wanted deeper data, which he could use to analyze the company’s assets. It’s why he hired Paul DePodesta, the Harvard-educated statistician immortalized by Michael Lewis in his book Moneyball: The Art of Winning an Unfair Game, to join Sears’s board. He wanted to use nontraditional metrics to gain an edge, like DePodesta did for the Oakland Athletics in Moneyball and is trying to repeat in his current job with the New York Mets. Only so far, Lampert’s experiment resembles a different book: The Hunger Games.

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Ron Johnson: a great plan with a fatal flaw – Kensegall.com

April 12, 2013
Ron Johnson’s exit at jcpenney this week wasn’t exactly huge news to those who’d been watching the company fall off a cliff in 2012. Boards tend to notice when the losses start approaching the one-billion-dollar mark.
Now we get a deluge of analyses from retail experts and amateurs alike. I would only remind you of one basic rule of life:

Don’t believe everything you read.

I’ve been surprised at how many articles either misunderstand the retail industry or conveniently misplace the facts about the challenges facing jcp.
So what the heck, I’ll throw in my two cents as well. I didn’t work for jcp, but as some of you know, I was involved in the jcp advertising that ran on the Oscars this year and last.
To better appreciate how and why Ron failed, you have to go back to the beginning.
Ron became CEO of jcp after a long period of courtship. He was being recruited to be on the board by investor and board member William Ackman. Ron’s great successes in retail (Target, Apple) and fresh point of view were seen as a breath of fresh air. And boy, did jcp ever need that.
Under its previous CEO, Myron “Mike” Ullman, jcp was clearly on a downward slope — yes, even with hundreds of sales each year and its Sunday supplements filled with coupons. It was still profitable, but the writing was on the wall. American shopping habits were changing dramatically. Big department stores were losing their appeal as more people were either shopping online or moving toward the specialty shops in the malls. Despite a core of loyal customers, and despite that “big sale” mentality, the store was fading in the public consciousness.
Concerned about its future, jcp needed to replace Ullman with someone who could reinvigorate the brand. The stores had to continue appealing to old customers, to be sure, but if the company were to thrive, it would need to attract new customers as well.
Ron Johnson seemed to be exactly what jcp needed. Wall Street vigorously approved, and jcp’s stock price rocketed at the news of his hiring.
Just a few months later, Ron unveiled his vision for the “new” jcp at a flashy NY event for retail industry analysts and journalists. jcp would be turned into a collection of a hundred shops, featuring great quality brands. And, instead of artificially inflating prices at the start just to have a big sale later, jcp would offer honest low prices every day. Again, the stock price jumped. People who lived and breathed the retail industry loved what they saw — even as they heard Ron estimate that it would take 2-3 years to complete the company’s transformation. Re-making 1,100 stores is a mammoth undertaking.
So what went wrong? Well, that’s where all the expert opinions come in. Many of which I believe are overly simplistic or just plain wrong.
Here are The 5 Big Mistakes That Led to Ron Johnson’s Ouster at JCPenney as described by Brad Tuttle at Time.com. I have seen others link to it as “a good analysis.” I disagree.

[Ron] misread what shoppers want.
Tuttle says that despite the trickery involved, shoppers love sales. Obviously there’s some truth to that. It’s also true that people love great quality at great prices, which is what Ron planned to offer. Given the right mix of products that people love, low prices, gorgeous stores and a great marketing campaign, it’s hard to say the plan was doomed to failure. Remember again, most industry experts thought it was a winning plan when it was first unveiled. Since Ron’s vision was never realized, it’s sheer speculation that people wouldn’t have loved the new jcp. But there’s a more important reason to dismiss Tuttle’s reason #1. Even with the neverending sales and barrage of coupons offered by jcp before Ron arrived at the scene, jcp’s numbers were dwindling. Catering only to the mindset of the traditional jcp shopper was not an option. Something had to change.

He didn’t test ideas in advance.
Okay, I’ll give Tuttle partial credit for this one. Obviously, knowledge is a good thing. But let’s not forget the support Ron had for his pricing vision. The man has his expert advisors. Wall Street bought into it. And the renowned brands that Ron was bringing into the store were super-eager to be part of what they saw as a winning plan. “Oh yeah?” you say, “well, they were ALL wrong — that’s why testing is so important!” Well, my answer to that is that Ron and all the experts weren’t wrong. The vision was a great one. What wasn’t so great was the road map to get there. Hang with me for a bit.

He alienated core consumers.
This is actually part of the previous point. No further comment.

He totally misread the JC Penney brand.
This is totally silly. True, jcp has a brand. True, that brand has meaning for its customers. But very few brands remain motionless as time goes on — especially when that brand is sliding toward irrelevance. Tuttle pooh-poohs the idea of creating a collection of cool shops, saying that people don’t want “a fun place to hang out.” The reason jcp was dying is that people were less interested in going there. Despite its sales, it was boring. Ron’s plan to transform jcp into a place people might actually want to go was absolutely right on. No matter where you shop, there’s a little thing called “the shopping experience.” It dictates whether you go back to that store anytime soon. To be blunt, the shopping experience at the old jcp sucked. Ron’s plan to turn jcp into a place you’d want to visit — with cool shops staffed by specialists, free wi-fi, fast checkout, etc. — was very seductive. I believe it would have built a bigger, better and more relevant jcp brand. Ron would have been pleasing the core customers as he attracted a wave of new customers.

Overall, he didn’t seem to like or respect JC Penney.
Could not be further from the truth. jcp has thousands of employees, representing thousands of opinions. Part of the CEO’s job is to get employees to rally behind his vision. There were plenty of people at jcp who were excited about Ron’s path to the future, and there were those who were “old school” and resistant to change. No doubt one can dig up plenty of quotes from those who might question Ron’s love of jcp. Unless you hear it coming from Ron himself, it’s all hearsay.

What I heard directly from Ron was a deep, unwavering love of jcp — the brand and its people. He studied the writings of the founder, James Cash Penney, and often quoted him. And here’s a little shocker for you: good old James Cash hated sales and gimmicks. He didn’t believe in “marking up prices just so we can mark them down.” He believed in total respect for the customer — and that’s what Ron played back at every opportunity. Ron did not have a “distaste for the company” — he had a profound sadness that the brand had fallen to such low levels. His greatest goal was to restore jcp to its former status as “America’s favorite store.” Tuttle also notes that Ron had a “disdain” for the customer base, which again is absolutely 100% untrue. The creative team heard one thing from Ron consistently from our very first meeting, that our mission was to “put a bear hug around Middle America.” That’s the jcp customer. With his every idea, Ron was trying to win the love of his customers. He wanted to make their money go further, give them great merchandise and have them enjoy the shopping experience.
So — if Ron was so right about everything, why did it end so spectacularly bad?
In my opinion, there is one very simple reason. I don’t mean to minimize it, because it’s a horrific miscalculation, and I can understand why Ron would be dismissed because of it:
Ron failed because he changed the prices long before he could visibly change the stores.
He did a basic cleanup of the selling environment (eliminated junk and switched to whole-number pricing). Then, before he could widen the appeal of jcp, he took away the one thing traditional customers were hanging onto: sales and coupons.
As noted earlier, jcp sales had been sloping downhill for quite some time before Ron arrived. However, the patient was not yet in critical condition. What Ron should have done is keep the existing pricing policy in place while he more quietly built the “new jcp” in the background. He could have been bringing in exciting new brands and renovating stores more progressively, without forcing customers to go cold turkey on sales and coupons.
He ripped out the old before the customers could really see the new.
That, very simply, is why Ron’s plan didn’t work. There may be other contributing factors, but they weren’t store-killers on this level.
So what’s jcp’s future now? Personally, I’m extremely curious to learn what will happen to (a) Ron’s vision for the physical appearance of the stores, (b) his vision for the shopping experience, and (c) the relationships Ron had nurtured with some great brands (Michael Graves, Jonathan Adler, Terence Conran, Martha Stewart, etc.).
I hope jcp has the ability to right the ship. However, the company’s latest actions don’t exactly inspire confidence.
Ron was hired because the policies of the previous CEO weren’t working. He has now been replaced by that very same CEO. When it was announced that Ron was out, jcp stock rose 10% in after-hours trading. When it was revealed that Ullman was taking the job, the stock dropped 6%. It appears to be a “who is less bad” situation, rather than “who would be great.”
According to this article, Board member Ackman said last May that under Ullman, jcp was “chronically mismanaged.” This week he said Ullman is “the right guy at the right time.” Spin is a wonderful thing, isn’t it?
And what becomes of Ron? If I were him, I’d take a nice long vacation and look at the world of possibilities. Ron is one of the nicest, most inspiring people I’ve worked with. He loves retail, and he loves delighting his customers.
Hard to imagine he won’t be doing that again.

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Target boss jumps as retailer struggles to win over shoppers

Bwahahahahaha, Karma is a B*tch.


Tuesday, 09 April 2013 11:52
CARA WATERS
JB Hi-Fi shares soar 10% on positive earnings guidance: Retail recovery in sight
Financial planning firm with $6 billion in funds under management collapses
Harvey Norman sales boost reflects improved consumer sentiment, recovering retail sector
Gear changes in the road race of retailing
Target announced yesterday that its boss, Dene Rogers, was departing after only 15 months in the top job at the retailer.
Coles store development and operations director Stuart Machin will replace Rogers following the shock departure.
Wesfarmers boss Richard Goyder said Machin would review all aspects of the business, including the range of categories it offered under its apparel, fashion and general merchandise model, as well as its store footprint.
“Stuart will be high energy, and you only need to look at the change in Coles stores to see the impact he will have,” he said.
“There have been quite a lot of questions about whether Kmart and Target can co-exist…they can.”

Industry sources told SmartCompany Rogers did not depart of his own volition and was not out in Target’s stores as much as he should have been.

Pressure was building on Rogers after Target’s flat full-year earnings for 2011-12 alongside the inclusion of a charge of $40 million for a restructure of its supply chain.
Nomura retail analyst David Cooke said he was not surprised by Rogers’ departure.
“Target is in the midst of a turnaround strategy and changing management in the middle of that is not ideal,” he says.
“It may lead to some tweaks to the strategy, but we believe the overall strategy is likely to remain intact.”
Cooke says the primary issue for Target is to identify the retailer’s proposition.
“Quite frankly, Kmart has taken the cheap and cheerful mantle. Where does Target fit in – is it going to move up towards Myer? It has to find its niche in the marketplace,” he says.
“Issue number two is that it seems the supply chain is not as cost-effective as it should have been and rectifying this is unlikely to happen overnight.”
David Gordon, partner at Bentleys Melbourne, says Rogers’ problem was that the management team he put together had gaps.

“He did not surround himself with the right management team,” he says.

Gordon says the resurgence of Kmart has also played a part in the performance of Target.
“There is an understanding in the market that Target has lost its way and strategically it needs to concentrate on deciding and then strengthening its positioning in the consumers’ mind,” he says.
“I think the store-level execution of the business over the last six months has been lacking in terms of incorrect range and the stocking and layouts of stores, whether that was due to ineffective execution or an out of line products strategy, I don’t know.”
Gordon says newly appointed Target boss Machin has a very good reputation even though he is a tough operator.
“From what I hear in the market place, there is a terrific level of respect for him both internally and from various suppliers,” he says.

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I Was Gon’ 911 Them, But They Didn’t Need the Help, And They Did a Good Job Them Boys Is Talented As Hell…..

I walked through a shopping mall the other day and it really hit me that conventional retail is really dying. Shops, stores, specialty shops, big box massive stores, independent shop owners, all of it are just fighting for their lives.
Their biggest fight right now: The Internet.
What’s worse is not so much that conventional retail is not adapting, not changing, and not fighting back, it is that it is killing it’s own damn self.
Customer service ratings are at an all time low. Retail is no longer a career, it is a job. No one has pride in their product knowledge, their service or after service, and far fewer retailers actually care who walks through their doors whether they made a purchase or not. I was always taught, and luckily at an early start in retail, that anyone who walks past your lease line is a customer. Treat them as if they were going to spend thousands that day, that visit, whether they looked like it or not, whether they had the means to or not.
Customer behaviors and the use of the mall are changing. Other than still the mallrat/adolescent hangout, the retail stores are being used for customers who want to try on things, do their inspection on items, touch, feel, see purchases, and then run to the internet (or order them right there in the store) from the internet at usually 30-40% cheaper than the price that’s on the item in front of them.
Retail needs to fight back. Retail needs to find a way.
After working for six months with the company I’m with today, I know that even a fragmented, archaic industry such as building supplies will soon be taken over by the Internet. The percentage of business and purchases done on the internet in my industry today is still relatively small, but if you parallel other industries such as electronics, apparel, and office supplies, the internet is inevitably going to be the biggest player, and soon.
Retail must find a way. Retail must fight back.

Song of the Day: Thank You – Jay-Z

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Some Day We’ll Put It Together And We’ll Get It All Done, Some Day When You’re Head Is Much Lighter…..

Now that Target is up and running, a bunch of old industry people have called me to see what I think. The funny part is that I’ve never been to any of the Canadian stores, and quite frankly after 6 months out of the business, I’m not really paying as careful attention as I was before.
This I know, they’ve just done their last round of major hiring, which means that their rosters have been carefully evaluated for over 9 months, and they have the right people in the right places for their org chart. With Sears just laying off a bunch of people, many of them were scooped up by Walmart or Winners (the killer W’s).
This I predict: of the markets that Target is open, the Walmarts there will take 30% dips in foot traffic and revenue. In those same Markets, Sears would lose about 30-40% in traffic (transactions) and 25% in revenue. The biggest and only advantage Sears has in those markets: Appliances and Mattresses. In those same markets, the Bay, Holts or high end would experience a 15% drop in traffic, but would recover by the end of Spring. Sears would not recover so fast, and may risk losing 20-30 rural leases on stores that just can’t turn over their red books. Walmarts in those markets will fight back with Rollback and Layaway, and look to cut Target where they can. Even stores like Old Navy, Gap, Joe Fresh, Tommy Hilfiger, and private brand houses like Forever XXI and Suzy Shier aren’t safe. Target will fight back with a secret weapon: Designer collaborations. This brings the sexy back into the game.
What’s funny about what’s happening in this retail game is that the size of the pie is not getting any bigger. Retail in Canada has shrunk in consecutive years for the last 12 years. With Target coming in to Canada and about 40-50 locations, you have a player that is instantly going to gobble up market share and their slice of the pie, and with a pie that isn’t growing, someone is going to lose out. Maybe even close their doors and walk away from the pie altogether.
Segment by segment, category by category, Target will surgically go after whomever they can. Right off the bat, they’re going to go after Women’s Fashion, Men’s Staples, Kids Wear, Cosmetics, Consumables, packaged goods, small appliances, and whatever’s left of the brick and mortar store electronics. everything else will only be a matter of time and a fight.
As a customer, it’s going to be fun to watch all of the pricing and sale action. As a former employee of the industry, it’s going to be fun to see who lives, who dies, and what the next evolution of retail will bring!

Song of the Day: Ooh Child – The Five Stairsteps

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3 Reasons Why Performance Ratings Don’t Work

By Andy Porter · 02.04.2013

One of the things we’re known for doing here at FOT is shooting straight with our readers and telling you how things really work in HR. If you’re looking for a sugar coated message you’ve come to the wrong place! So I’m going to let you all in on a secret…the traditional performance rating system that the vast majority of companies use doesn’t work. Not only does it not work, I’d go even further and say in no particular order they are generally meaningless, tend to demotivate people, are rarely understood, poorly administered and a big fat waste of organizational time. Now I suspect there are some of you are reading this and shaking your head in extreme agreement. You can move on to the next post then. But if you don’t agree with my assessment let me give you the 3 reasons why I don’t think performance rating systems work…

1. Ratings are falsely precise metrics. Assigning someone a numerical rating gives the perception that the system is “data-based and objective” and often we go to great lengths to try and convince employees of the system’s objectivity. Well I’ve got news for you – the process is entirely subjective. Yeah, you may have 10 pages of competencies to rate someone on but guess what? A real live human being is making the judgment and their judgment is subjective. Wrapping this natural subjectivity up into a number and calling it objective is at best confusing and at worst demotivating.

2. Ratings distract from what really matters. How many of you out there have ever sat through a “calibration” meeting? Wait – did I say meeting? I should have asked how many of you have ever sat through weeks of calibration meetings? The goal of most calibration meetings isn’t a bad one. Striving for some consistency in how performance is assessed across a division or organization is generally a good idea. That is until you invited the performance rating to the party. In my experience most of the time is spent arguing about of each of us interprets the rating scale and questioning why someone’s ratings are too high. While everyone is trying to understand what it means to be a “5″ we’ve missed an opportunity to talk about what someone actually accomplished. Or worse, since subjective human beings don’t always agree on interpretations we just revert back to the mean (which penalizes actual top performers).

3. Ratings are a crutch for managers. The lifeblood of any successful organization lies in the ability of its managers to provide good feedback to their employees. That means sitting down and really thinking about someone’s performance and offering specific examples and advice on how to improve. In the world of performance ratings a manager has the option to simply tell an employee their rating, assume they know what it means and move on. Which conversation would you prefer? It’s a no-brainer yet we happily hand out this crutch on an annual basis.

Look, I understand that for some organizations performance ratings make sense for a variety of reasons. But there’s also a lot of companies out that who are simply following what they consider to be “best practice” who have an opportunity to do something different. I’ll talk more about what I would do in place of performance ratings in an upcoming post. In the meantime I’m curious what people have to say about “death to performance ratings!