SPILLED INK

1) Staples launches Staples Worklife newsletter and podcast, but will it be enough to divert them from Amazon for their office needs?

WHAT HAPPENED: As Staples aims to become a “Worklife Fulfillment Company,” a strategy it introduced earlier this year, the retailer launched a quarterly digital and print magazine to help professionals find job fulfillment and reach career goals while highlighting products that could help them get there.

WHY IT MATTERS

  • Rebranding is a crucial step for Staples to maintain its relevance, but targeting the right customer and the timing of doing so is crucial. While a newsletter and corresponding podcast coincide with how Millenials and Gen Z individuals consume information, the chain still operates 305 stores across the U.S., most of which are located in the suburbs, rather than in cities.
  • Instead of focusing on marketing its existing assets—which is like putting lipstick on a pig—this time and money would be better used closing underperforming stores, opening new ones and tightening up the product assortment, especially if the retailer wants to go after younger customers and make the case to shop with Staples over Amazon.
  • With the rise of urban co-working spaces and the culture of working from home evolves, Staples has an opportunity to craft products and services that enables this trend. This means playing a role in the future of work versus simply focusing on the way work used to be done.

CLEAN UP IN AISLE…

2) Toys “R” Us is back after liquidation, with smaller stores fueled by A.I. Will it be enough to resurrect the business in the long term?

WHAT HAPPENED: Toys “R” Us, operating under a new parent company run by the toy company’s former CMO, will be back this holiday season with two smaller stores and technology backing from b8ta, which specializes in building physical, interactive storefronts. Toys “R” Us has plans to open 10 stores by 2020 and will relaunch ecommerce in the future.

WHY IT MATTERS

  • Toys “R” Us publicly attributes part of its demise to the rising presence of ecommerce platforms like Amazon, alongside the lower price point offerings of retailers like Walmart and Target. But the company’s renaissance depends on more than competitive prices and the convenience of ecommerce.
  • Toys “R” Us’ forthcoming b8ta partnership could help shed the image of unkempt and overcrowded stores by carrying less inventory and offering more interactive experiences. In the past, the company operated stores with an average of 40,000 square feet, while the new format will be just 6,500-10,000 square feet, which allows it to carry less inventory. But its decision to launch at two malls in Houston, TX and Paramus, NJ calls into question if the new concept can solve one of the problems behind Toys “R” Us’ bankruptcy: lackluster foot traffic.
  • It’s hard to believe that Toys “R” Us will ever return to the same heights it once attained—the consumer landscape has simply changed too much. Even calling the new locations “toy stores” may be outdated considering the rise of the experience economy. The ability for the company to survive in a new era will depend on shedding tradition and offering new experiences that customers can’t get anywhere else.

BLING BLING

3) DSW addresses its sales slump by introducing in-store nail salons and other experiences, but fails to address its underlying rewards program dependency.

WHAT HAPPENED: Since launching nail salons, CBD kiosks and in-store shop repair services in select stores starting in early 2019, DSW reported a slight uptick in sales and is planning to roll out these experiences to more stores.

WHY IT MATTERS

  • DSW has gone to great lengths to differentiate itself from the popular direct-to-consumer brands (Allbirds & Rothys) and its fellow multi-brand competitors (Macy’s & Nordstrom). While these experiences that DSW is adding are novel and might appeal to its current customer base and new ones, they are not necessarily enduring improvements that will push the needle.
  • DSW built a big part of its reputation on its customer rewards program, which it constantly promoted with discounts for loyal members. While it recently revamped its reward program to coincide with the new experiential initiatives that entice customers to visit its stores, DSW’s reliance on its reward program as both an acquisition and retention tool is a big part of the problem. It conditions consumers to hunt for discounts, which negatively impact profit margins and erodes the brand’s perception.
  • While the multi-brand retailer is already at an advantage due to its cyclical inventory system—its assortment inspires a sense of discovery and creates an urgency to buy—it should not need to use further discounts to drive sales, an incentive system it needs to rebuild to thwart further problems.

DE LA SOLE

4) Saks Fifth Avenue revamped the men’s shoe floor at its New York City flagship— further solidifying the growing importance of the Men’s footwear category, a symptom of the Sneakerhead epidemic.

WHAT HAPPENED: Saks Fifth Avenue unveiled its updated 8,000 square foot men’s shoe space, complete with an expanded product assortment, a 60% increase in square footage and elevated personalization services. Saks says the men’s show floor is one of the largest men’s shoe destinations in the U.S., home to 60 new brands, over 2,000 SKUs and 160 styles that are exclusive to the retailer. Some of the floor will include men’s dress shoes, its bread and butter, but a large portion of the new selling floor space will be dedicated to sneakers.

WHY IT MATTERS

  • Until recently, with women’s wear making up well over 50% of most brands’ overall businesses, many considered menswear an afterthought within the contemporary and luxury sector. Saks Fifth Avenue’s investment within this category is further proof that modern menswear is not a trend but the new normal, a lot of which is fueled by footwear.
  • Saks’ investment in the men’s shoe floor is also a response to widespread competition from not just the Neiman Marcuses and Nordstroms of the world but speciality sneaker stores like KITH, Flight Club or Extra Butter to name a few, in addition to resellers such as StockX, The Real Real, Goat and Stadium Goods.
  • The product exclusives and in-store services are key elements that will help Saks differentiate itself from competitors. This is where the retailer can lean on its long standing vendor relationships to help it source unique collaborations and maintain its status as a marquee luxury retailer—for both women and men.