Wednesday, February 29, 2012

Jason Wu

As loyal Target customers, the launch of Jason Wu at Target had been highlighted on our calendars for months with us anxiously anticipating its arrival. Still on a high from the fabulous pieces from the Missoni for Target collection, we arrived on February 5th at 6:50am for the 8am store opening. Needless to say, we were not the only ones with this idea. With an hour and 10 minutes still remaining until the doors opened, there was already a line of 15 people – and not all women! Both men in front of and behind us were in line sans wives in hopes of scoring the perfect Valentine’s Day gift. While waiting in line, we overheard many women mapping out which pieces that they were going after first after studying look books online. At about 7:45am a Target security guard on a Segway addressed the crowd of 150+ eager Jason Wu fans with a message about safety. Like a grade school teacher, he asked us to walk not run and be nice mature adults. This little pep talk did little to curb fashionistas at the front of the line who did their best speed walk/run to women’s apparel when the doors finally opened.

Once the crowds were let in at increments of 100, it was as if the rule book had been thrown out the window. Within seconds the racks were clean with clothing strewn on the floor, leaving only the larger sizes as remnants of what took months of planning and collaborating to create. I was stealth enough to grab the three pieces that I had my heart set on and quickly made my way to the fitting rooms. To say that the pieces were a disappointment would be an understatement. The cute fluffy yellow shirt that I saw online looked more Big Bird than a chic top made by an “it” designer. The adorable stripped pale pink and navy dress that I couldn’t wait to see in person was so poorly constructed and matronly. I had a third piece that I didn’t even bother trying on since I was so disappointed in the quality and styling. When I left the dressing room, it seemed that everyone else had the same reaction as I did. The fitting room attendants had their hands full hanging up the rejects to send back to the floor. This made the entire experience even more frustrating – waking up at 6am on a Sunday when I could have come in by 9am and seen the entire collection since so little was actually being brought to the register. To make the bus trip to Target not a total waste, I picked up solid black and white tank tops and nail polish. Needless to say, I would have much rather picked up these basics at a more reasonable hour on Sunday.

After making the trek back home, I proceeded to call my Mom and girlfriends to tell them to stay in bed and wait for the next designer collaboration. We can only hope that the Shops at Target will deliver and stay true to the upscale stores that they are trying to emulate.

Monday, February 6, 2012

JC Penney's Dramatic Transformation Begins

If you pay any attention at all to the retail scene, it would have been hard to miss the news of JCP's announced transformation. It has garnered significant buzz with its new management team led by Ron Johnson, Apple store's former retail guru and a star-studded cast recruited from Target and others.
The transformation has three main components:
--A "simplified" everyday low price strategy with a few twists, called fair and square
--A new logo (above)
--Planned dramatic changes to the retail environment, with 80-100 well defined shops within shops and a Town Square component

While it will take a fairly long time to create dramatic change within the stores, the new marketing strategy can be seen now, in circulars as well as TV spots...
From the very basic standpoint of marketing, it is already working. We flipped through the JCP Sunday circular, which is the first time we can say that in quite some time. The ads, highly reminiscent of Target in style, begin to demonstrate the new pricing strategy's three elements:
--Simplified everyday prices, all ending in $ price point ($16, $20, etc)--In Red
--A monthly price, which is presumably a savings from the everyday price--In White
--Mark down prices (Best Prices) which will be in store the 1st and 3rd Friday in February--In Blue
The first time through, this seems extremely confusing. It was difficult to understand what a "February" price really is and the everyday prices are difficult to gauge without clear comparisons (most of the promoted items are private label). And, of course, we don't know how great the mark down deals will be (how many, how deep, etc...). The circular format itself is clean and refreshing and a definite breath of fresh air.
In the extraordinarily annoying TV commercial(don't say you weren't warned):, customers rebel against the craziness of multiple pricing strategies, markdowns and clearances. Note: there are much better versions that play off the same theme elsewhere on YouTube.

Simplification of retail pricing in much of the department store channel is desperately needed but has also been historically difficult to achieve for those who have gone down the path before.

Of course, the real test will be the experience once customers get to the store--the transformation in JCP's 1100 stores will be a longer and more expensive process. It will also be an eagerly awaited test to see if simplification can be extended to stores as complex as JC Penney.

We admire the boldness of vision and no doubt JC Penney will be monopolizing retail headlines for some time as their initiatives play out.

As we have always remarked, the great thing about retail is its immediacy: JCP's stock had a very nice run up after the announced new strategy. We'll know fairly quickly if customers beat a similar path to their doors.

Post Script. Had a chance to visit a JCP the other day while on the road. The new pricing policy is in full effect, with every item re-stickered to reflect the new pricing strategy. Some of the everyday pricing seems incredibly sharp--$5 super absorbent bath towels and the like which should certainly grab the customers' attention. They weren't kidding on markdowns either. Blue tagged items took items that were already marked down about 70% and reduced them 20-30% further...
The big miss? Not a scrap of signing explaining the new program to customers, which could have easily been accomplished by replicating the very clear explanations evident in the print ads. And, the intent and purpose of month specials (February specials, in magenta, of course) is not terribly evident in store.