August 04, 2014

J. Crew - A Point Of View

Omnichannel ... I get it, you have to somehow coordinate all this different content across all these different platforms. It's not easy. Take a look at J. Crew.

That's a lot of social platforms to create content for, don't you think?

You have to admit, J. Crew seems to do a very credible job of creating interesting content, of interacting with customers, don't you think? More than "content", J. Crew has what I call a "point of view". That's important. The "point of view" supports the merchandise they sell, and differentiates J. Crew from comparable businesses.

Two good lessons here, folks.
  1. It is very important to have a point of view. It's more important than a "content strategy".
  2. Having a strong point of view may result in positive business results.
In the first quarter of 2014, J. Crew posted a -2% comp store sales change (click here to see), coupled with a total sales increase of 5% and a net loss. Gross margins declined from 44% to 38%, suggesting that customers did not want to purchase the merchandise, so J. Crew had to heavily discount products to move through unwanted inventory.

I understand why the focus of retail has shifted so significantly, to the full digitization of the business. We all get it. But there is an elephant in the room. That elephant, of course, is that all this content and social stuff and mobile stuff and aligning channels and improving supply chains results in almost no incremental increase in total sales

Increasingly, we're seeing two types of retailers.

  1. Those who focus on marketing, channel alignment, content, social, mobile, and supply chain (omnichannel).
  2. Those who focus on merchandise.
The customer will pick the path that makes the most sense to the customer. It's sure going to be an interesting next five years, don't you think?