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An intensified focus on branding might be the single most important step a retailer or supplier can take to cope with the economic crisis, as well as the eventual recovery.
“The brand is the be all and end all,” Peter Boneparth, former chief executive officer of Jones Apparel Group and now a director of Kohl’s Corp., said Tuesday during a panel discussion, “Innovate/Reinvent Your Business,” at the Harvard Club of New York.
Other speakers were Michael Gould, chairman and ceo of Bloomingdale’s; Jill Granoff, ceo of Kenneth Cole Productions Inc.; Kent Anderson, president of macys.com, and Adam Rifkin, senior vice president of the global retail/consumer group at Barclays Capital. The seminar was sponsored by Emanuel Weintraub Associates Inc. and moderated by Emanuel Weintraub, the consulting firm’s ceo.
With increased emphasis on value, quality and price, the playing field among competitors has leveled, Boneparth said. If customers don’t find what they want from one store, they simply go to another.
As a result, he said a store’s mix of brands, its own and those from outside, is more important than ever and retailers can benefit from the differentiation that their own brands provide. As costly as development of a store’s private brands can be, failure to make that investment will make it harder for stores to grow once the economy recovers, he said. “Women will continue to react to uniqueness,” Boneparth said. “If you are commoditized, you’ll be gone.”
Gould agreed, and said one of his top priorities was trying to see the business from a fresh perspective.
“The challenge is if we don’t bring in newness, we’re dead,” he said.
However, Gould didn’t downplay the need to preserve cash. “There’s no expense line we’re not going to look at,” he said.
Acknowledging difficulty in the high-end sector, Gould said even the men’s business, which has been outperforming women’s apparel, was starting to “soften.”
Foot traffic has slowed, he said, and conversions and transactions are not going up.
But Gould was optimistic that the right leadership combined with the product would get the customer shopping at his store.
With consumer confidence at its all-time low and many businesses showing top-line declines, Rifkin said: “Growth is not the goal today.”
Instead, companies are looking to hold back on opening new stores, closing inefficient ones, reducing inventory, refurbishing old stores and reducing general and administrative overhead, he said.
“Liquidity and cash are king right now,” he said, adding that desirable merchandise remains critical.
Rifkin said many retailers are shaking up merchandising leadership, as well as working to introduce value-focused products. That merchandise doesn’t come without risk, however, since disappointing sales could lead to overstock situations and heavier markdowns.
Kenneth Cole’s Granoff said, “It’s now more important than ever to be proactive, not reactive.”
She stressed the need for a company to envision its ultimate goal, and then begin taking the steps necessary to achieve it. This includes evolving the brand and, most importantly, knowing the customer.
“Great brands don’t stand still,” she said. “They look to their customers as a source of inspiration.”
Weintraub said the weak economy has intensified the concentration on the consumer, shifting the tried-and-true business model to a service model.
This new focus has made retailers aware not only of product quality, but also of marketing and sales initiatives, he said, adding that organization, sourcing, distribution logistics and technology will also need to be streamlined.