Bear Stearns Tenth Annual Retail, Restaurants & Apparel Conference, + + + + +
By Al Berrios (contact Al Berrios)
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> Hot Topic
> Charming Shoppes
> Wendy's International
> Jack in the Box
Retailing is the ultimate equalizer - men and women can be cashiers or CEOs. At this retail conf hosted at the Bear Stearns building on 47th and Madison here in NY on Feb 24th through the 26th, there were plenty of female executives explaining the performance of their businesses and in the process, shattering ceilings and stereotypes.
Hot Topic's Betsey McLaughlin didn't present too many financials, but she made sure we understood how deeply entrenched Hot Topic is in its customers' lives. They purvey lots of licensed merchandise that appeals to punk rockers, goth and metal heads in their teens, mostly girls.
They do an excellent job of keeping up with trends and have an infrastructure, despite also having 550 stores, to almost immediately capitalize on these trends. Besides their website, Hot Topic's mostly young employees are encouraged to attend company-paid- for concerts, then write reports about them. "The internet's a great thing because it let's you know what people are feeling," said Ms. McLaughlin.
In a recent al berrios & co. retail study, Hot Topic was also rated the #1 mall-based retailer preferred by teens, so they're clearly doing something right.
Charming Shoppes' Ms. Dorrit Bern was equally impressive, not because she threw numbers at the audience, but rather because she demonstrated in-depth familiarity with her customer, the plus-sized female. As a result, her PR and marketing communications are aggressive; they've even gotten into magazine publishing because they feel they're the official arbiter of all things for the plus sized lady.
In both cases, women are in charge and provided something completely different than their male counterparts - a deeper interest in what makes their customer tick than the financials resulting from their customers. CEOs after my own heart.
An interesting side-bar is that malls should no longer be referred to as malls, but instead "lifestyle centers". That's right folks, in an effort to draw consumers away from TV, video games, internet, and all other anti-social activities, retail executives have convinced a media-centric assortment of retailers to locate a branch on their property with the promise of doing everything they can to convert their spaces from dreary shopping centers, to centers that encourage socializing, loitering, and other things schools usually reprimanded us for. Although it hasn't caught on with teens to invite their buddies to the "lifestyle center" to see a movie, it's the wave of the future. Check out your local lifestyle center to see food courts being remodeled, extra seating areas added, cool-looking out-of-home media displays, and less department stores as anchors.
I finally got to hear Wendy's International's Jack Schuessler brag about his business. They're on top and they know it, so basically, they took this opportunity to discuss their new healthy offerings. Despite all the hoopla about healthier lifestyles, al berrios & co. has discovered evidence that healthy food isn't a big concern for consumers who visit their favorite restaurants during a recent survey of consumer's favorite restaurants. I speculate that a big reason health is selling at restaurants is because people just enjoy having this new choice. Consumers have ordered so many burgers and fries, why not try the salad?
Jack in the Box is focused on menu innovations, faster, more consistent service and "re-imaged" restaurants, as also stated in their April 1st press release. Not deviating wildly from industry norms, they're also experimenting with various food concepts, specifically Mexican, which is the current bandwagon in the industry. I've been to a Jack in the Box once, about 5 years ago in California and the food was very tasty. Since, none of what they're doing sounds too groundbreaking, I hope they at least keep the same recipes.
One interesting insight I gleaned from all this hob-knobbing with CEOs was that productivity at their level is measured in turnover rate per square footage. Based on my own personal experiences and other in-store analyses, store managers measure productivity in efficiency (i.e. the least number of hours to get the job done good-enough), while regular associates measure productivity in number of tasks they're able to complete in a given shift, assuming they even care about how productive they're being for minimum wage. As you know, there're few incentives for retail-level associates to increase their productivity in any of these terms. In fact, when hourly, it behooves them to take their sweet time. This gap in goals demonstrates an area of opportunity for retailers that wish to get more from their sales force without increasing their costs: retention increases perception of ownership in the store and company, which in-turn 1) may lead to decreases in shrink, 2) permits more advanced training rather than basic retraining, and ultimately 3) increases in sales.
Contrary to what retailers typically believe negates retention strategies, a steady flow of applicants doesn't guarantee a strong sales force mainly because store managers are too busy managing to track and review each application; periodic raises over time can be managed to be less than the cost of hiring and training new personnel; customer service burn-out is less likely among reps enjoy their role as hospitality providers and work with like-minded associates.
And finally, no retail conference would be complete without a competing boutique retail consultancy (which shall remain nameless in this publication) issuing their verdict for the future of retail. The president of this firm was kind enough to send me his research and presentation, so I can tell you confidently that his predictions are interesting, but I wouldn't pay whatever they're charging for their advice, simply because much of their identified trends for the next 6 years are things that are already happening today, and they're basically betting that the likelihood of these trends becoming reality industry-wide is greater than not. An example of what I'm talking about: "Trend #20 - Consumers Call the Shots. In a buyer's market, where technology is changing the dynamics of the buyer-seller interface, the relationship between retailers and consumers will become much more symmetrical and, if anything, tilt in favor of the consumer. Now and forever more, consumers call the shots." Nineteen people had a say in this 33-page, chartless report with advice like this.
Overall, this event merits 5-pluses, + + + + +. As usual, well done Bear.
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