Home » Blog » Blog » Archives for August 2008
Bob Phibbs' Retail Sales Blog

Archive for August, 2008

Urban Outfitters Shows Recession In Retail Is Not A Given

Philadelphia’s upscale specialty retailer continued to defy the consumer downturn, thrilling investors with a 79 percent increase in second-quarter profits. The profit surge came off a 30 percent increase in sales, which reached $454 million, compared with $348 million a year ago.

Customers bought a lot of merchandise at original prices — not on clearance racks — which is the most profitable way a retailer can sell clothes. Internet and catalog sales were up 42 percent, while sales at stores open at least a year were up 13 percent.

The strongest performance came from the company’s namesake Urban Outfitters stores, which saw same-store sales spike 19 percent. The company’s two other apparel store lines did well, too, with comparable sales up 7 percent at Anthropologie and 10 percent at Free People.

These are the types of stories to look for, not more doom-and-gloom.  Success is out there – make it yours!

Macy’s Hires dunnhumbyUSA: Putting Lipstick On A Pig?


Macy’s wants to better understand its customers. That’s why the department store announced today it has hired dunnhumbyUSA to analyze its sales data, develop customer segmentation models and help the chain develop more targeted programs to drive same-store sales.

Terry Lundgren, CEO of Macy’s, said in a joint press release, “For Macy’s to continue to build a sustainable competitive advantage, we need to fully understand our customers and mold our offering to satisfy each customer’s specific needs. Leading retailers worldwide have benefited from the insights developed through dunnhumby’s expertise, and we believe that experience will be invaluable to Macy’s.”

Why is it that retailers pour more money in hopes of understanding their customers –while looking the other way to how their business is actually being performed?

I’ll tell you why. It’s tougher. It’s more complicated. And it isn’t sexy.

Case in point. I went to Macy’s Herald Square to look for a tie last week. That’s when I noticed the power of threes. Everywhere you looked, there were three employees gathered and talking. Three in front of the Clinique counter, three in back of the Levi’s counter, three in jewelry and two sets of three in ties.

Mind you, the store was FILLED with shoppers. I had to ask one of the three leaning on the tie table to please move so I could look at one. Their response? Not a word.

You want to know how to understand your customers? Get out and work on your floor, mystery shop, or just shop your store. I’ll guarantee surprises.

Because only if you are willing to connect the dots from the promise you pay megabucks for agencies to create and the actuality your customers experience, is your money wisely being spent.

If not, you may be just putting lipstick on a pig.

Retailing In A Recession: There Is Good News Out There

After you sift through Reuters five paragraphs yesterday reporting how the US Commerce Department’s latest figures proves how awful retail sales were off in July (mainly due to autos,) you find that sales at department stores and other general merchandise stores rose 0.3%. Sales at furniture stores, hurt by the slump in housing, rose 1% in July.

The news isn’t all bad; you just have to look for the silver lining. Stay focused and brace yourselves for the pundits to predict a horrible back-to-school and holiday.  If there is something to fear – they’ll find a way to attach it to retail.

Hopefully, the sales numbers will continue to prove them wrong, even if the encouraging news is buried several paragraphs down the page. 

Live From Beijing? Nope It's Video Fireworks

The news waves and NPR were full of talk yesterday about NBC’s coverage of the opening ceremonies for this summer’s Beijing Olympics.  The joke, it turns out was on us as nearly 70 million viewers in the US who thought we were seeing real fireworks burst across the nighttime sky Friday – were actually watching computer generated graphics.

NBC didn’t create them — the footage was provided and controlled by Beijing Olympic Broadcasting, a Chinese company. A Chinese Olympics official told The Daily Telegraph of London that it would have been too expensive and too dangerous to tape the actual fireworks — though there were actual fireworks set off that night.

So, the vivid fireworks on the broadcast were really computer graphics created by a team of hundreds of Chinese visual effects specialists who worked for nearly a year to pull it off.

Critics carped that viewers were deceived, but NBC Sports spokesman Adam Freifeld shrugged it off. “It’s not our production,” Freifeld said. “Our guys are very clear that this was animation.”

Hey, it’s marketing – it’s all smoke and mirrors.  Who doesn’t realize magazine ads are airbrushed to reduce wrinkles, add abs or reduce waists? TV is entertainment – it doesn’t have as much reality as we sometimes believe. 

This was not a case of putting lipstick on a pig – it led us to wonder at the enormity of the production in a “gee whiz” way like all the 2000+ drummers and the moveable type actors from the same night.  I wasn’t cheated; I was uplifted, and thrilled.  They gave me what I wanted to believe was real.

Wouldn’t it be great if all marketing were like that? 

Newer Entries »