THE JOURNEY YO REMARKABLE RETAIL
Steve helps organizations understand and respond to retail disruption by creating customer-centric, memorable and profitable growth strategies.
A Slightly Better Version of Mediocre
The following is excerpted from my forthcoming book Remarkable Retail: How to Win & Keep Customers in the Age of Digital Disruption, which will be published by LifeTree Media on April 14th.
There is nothing inherently wrong with the concept of continuous improvement. We all understand that when we seek to improve something, we have to start where we are. Often that baseline is quite low. For brands in really serious trouble, the first critical step is obviously pulling out of a dive. For those stuck in the boring middle improvement involves multiple stages on their journey to become remarkable.
But what so many get wrong is believing that merely being better gets the job done. Better is not always the same as good. Far too often what is touted as innovation is providing a slightly better version of mediocre. Slowing the rate of descent is, in some sense, progress, but without a major change in direction, eventually we still crash.
Macy’s, the leading US department store chain, is illustrative of this approach. Under CEO Terry Lundgren, Macy’s embarked on a number of major multi-year initiatives to become more customer relevant. Significant investments were made in channel integration, deployment of mobile technology, localization of product assortments, and so forth. When Jeff Gennette took over in the spring of 2017, he upped the ante substantially, redoubling efforts to improve Macy’s e-commerce functionality and digital capabilities more broadly. The Market @ Macy’s, a store-within-a-store concept that takes advantage of the pop-up trend by showcasing a rotating set of new product and services, was rolled out to many of Macy’s largest stores. In 2018, the company acquired retail-as-a-service platform b8ta and “experiential” retailer Story. Both were quickly expanded to dozens of locations.
So, on the one hand, Macy’s is to be applauded for being willing to experiment, to take greater risks, and to challenge many areas of their conventional ways of doing business. Compared to most of their iconic retailer brethren, they are meaningfully more aggressive and creative.
On the other hand, having spent many hundreds of millions of dollars, Macy’s results remain anything but stellar—and few, I suspect, would call the shopping experience remarkable. This is especially worrying, as they were given a huge gift from both JCPenney and Sears— retailers that, through mass store closings and ill-conceived strategies, have literally walked away from billions of dollars of business in product categories where they often compete with Macy’s (not only for many of the same customers, but often in the same malls). During the past five years—a period when the stock market was booming—Macy’s stock lost more than two-thirds of its value. Now to be fair, they have outperformed numerous other major retailers.
But better is not the same as good.
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