June 17, 2008

Executive Comments From Leading Brands

Williams Sonoma:
  • "We froze our merit increases for the year for our associates, while at the same time we reviewed every associate's compensation with the market and if they were not in line with the market, we did correct that." KH: Try being an employee with no salary increase and fuel costs rocketing skyward. Long-term, employees nationwide will have to find a way to organize or to gain leverage.
  • "What we are always doing is looking at the productivity of the last catalog mailed versus the next dollar that we can spend on paid search, and over the past couple of years, we have been able to intensify the efforts in search and reduce some of the marginal catalog mailings."
  • "We have eighteen million customers who have opted-in and given us their e-mail address". KH: To the e-mail community --- how do you craft an e-mail program, individualized for eighteen million customers? Any ideas?
Costco
  • "We and Sams continue to be fiercely competitive ... and we are both in each other's warehouses more than once a week shopping key items."
Ann Taylor
  • "Internet is a very profitable business segment for us. Within the Ann Taylor division it represents about 10% of the total division’s sales and something less than that for Loft."
Limited Brands
  • "Although the Direct business is $1.5 billion, it is the fastest growing channel. We will continue to see growth out of that channel. What you are going to see is within the catalog business. We will not mail as many catalogs or pages. It will still be a heavily integrated web-based business. The community piece is continuing to build and how do you play within the community, which is a new marketing target for us. I think also how do you think about step size, like VS - you know we have VSPink.com and how we are linking that back to the mother ship, and there is some exciting things there. We started to test mobile commerce, and it is just beginning touching in the water so, it may not be a great experience but you get on your mobile phone and you can place orders and through Catalog Quick Orders. It is amazing how many people have already responded to that test. You are starting to see a lot of that in Japan. As our technology and zones continue to upgrade in the United States, I still think that there is some interesting opportunities there."
Urban Outfitters
  • "Direct to consumer sales surged by 34% with just 3% additional catalog circulation, with all three brands contributing meaningfully to the result."
  • "All three brands continue to innovate in direct to consumer business. For example, Anthropologie began shipping internationally last quarter, Free People introduced product reviews and Urban Outfitters expanded its use of video, generating more than 17,000 YouTube views on its most successful clip."
Macy's
  • "The key there is that Bloomingdales.com has a huge potential and we think that that is where we should be investing our resources as opposed to the catalog, and it will have a minor impact on sales and no impact on profit as we discontinue that in 2009. ... We are expecting to do $1 billion this year in volume in our direct businesses and we expect it to continue to grow significantly from there."

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2 comments:

  1. Anonymous9:03 PM

    Kevin,
    I noticed you didn't comment on Urban Outfitters nor Bloomingdales. So how does one become so successful to create 34% sales from 3% circulation increase, and the other, established catalog can be dropped without any impact. Are you suspicious of spin on either statement?
    As for labor talk, before you call in the Molly Maguires and Joe Hill, maybe an analysis should be made of the value of associates as they currently being used.
    Currently store associates are placed in a dept with which they have little knowledge, changed from dept to dept daily, and receive very little compensation and a store that strives to ensure the associate has 32 or less hours so they don't qualify for benefits(=high turnover, poor service, and even lower sales).
    Contrast that with GameStop or my local comicbook store that hires and maintains employees that are enthusiasts. Many times I walk in to either with one thing in mind and in conversation with these guys, walk out with related items("if you like this, try that", or even more importantly "don't buy that, not worth money---try this instead").
    In fact my local comic book store owner also has his employees log in the web and visit the comic book forums and chat rooms, to grow their own knowledge, purchase collections, and in their sigs, advertise his Ebay store.
    How often have you walked into a Norstroms or Macys to see associates doing NOTHING. Or a hotel employee at night trying to keep awake as they babysit the hotel? Utilize those employees and their time to grow the other channels and their knowledge. Have them follow up on local emails to customers. Make them EXPERTS or Wizards as you call them.
    Just my two cents. Curious as to your thoughts.
    K

    ReplyDelete
  2. The Urban Outfitters increase likely had little to do with catalog circulation --- so it sounds great to make the comment they did.

    The increase is most likely due to increases in merchandise productivity and web traffic.

    ReplyDelete