What a sad state of affairs for retail. Considered once as a leading retailer has now become a vulture circling dying retailers. Good for the customer? Hardly. If it did not sell and keep another retail alive what is going to make if more successful at Kmart? Price, but the consumer will be purchasing faulty, inferior, out of fashion items and to those who hard press to buy family essentials, I get it. But now think about the impact this has on the Vendors that supply Kmart with product. Their orders are not cut to zero which will put that level of retail into a need to sell off manufactured goods. So Mr., Vendor, we know Walmart was built on Vendor relations and that is why they were and remain great. Vendors need to give TJX, Marshalls, Family Dollar and those retailers their deliveries first, their best items and focus on a partner retailer not a retailer that is desperate to stay alive.
Kmart selling product obtained from Bankrupt retailers.
February 19th, 2016Jerry Birnbach & Associates Announces they are the First Store Planning Firm to incorporate a mobile app to provide clients real time updates on their design and construction projects.
February 8th, 2016Now our clients will be able to review on their smart phone or iPad at any time the design drawing, schedules, budgets, planograms, correspondence, quotes, contracts, and other vital information on their store projects while on the go.
“With the ability to see the entire new store design and construction information” said Jerry Birnbach Partner, you now can will be able to receive and post updates immediately. This feature enables store owners to stay on top of their projects to what any degree of detail they require. The bottom line results to the retailer will be cost savings, time savings and an overall outstanding solution to their new stores renovation or start up projects.
Jerry Birnbach & Associates believes that a client who can capture all the facts and figures of their store project will realize the importance of daily interaction with the project criteria and dynamic factors and benefit greatly from the application.
https://www.dropbox.com/home/app%20ad?preview=App+Ad+2.pdf
J C Penney announces they will be testing Appliances. Say it ain’t so Joe
January 21st, 2016J C Penney announces their latest cry for help, We’re selling Home Appliances
I have been close to the JCP culture since Mr. Johnson had, what I considered, a
well conceived plan to turn the business around. The rollout of the idea was difficult to execute due to funding and a commitment by Vendors to dig in and support the effort.
Johnson was relieved of his duties and the old regime became the new old regime. In their tenor multiple law suits for misleading advertising among others continued to blemish the brand name that for years was gold. JCP was conceived to be the Department store for middle and remote America and was good at servicing that demographics.
Of recent JCP has continued to slip into an abyss due to a lack of creativity and a playing field including online sales which are proving to be too strong for them to ward off. Now out of the blue, the retailer mainly known for Home accessory products and apparel, some branded departments come out with “we are selling appliances” as a test.
Let’s see what is involved with this idea based on my firms experience in this field.
Space, a commodity in retail estimated at 36’ x 30’ (1080 square feet) that once housed soft goods that had a five turn projection, with an average gross profit margin of 45% product which generated $300 per s.f. on a yearly basis is giving up $324,000 in sales. Now replace soft goods with Appliances that have maybe two to three turns a year, with a gpm as low as 15% generates does not come close to meeting the dollar profitability of the prior item. Maybe if the Hair salon is replaced with appliances, there is a chance to beat the prior departments total profit and impact to the bottom line.
Competition, Well Sears has been selling appliances since appliances were invented. They have support, trained sales staff, maintenance, and years of doing it right. With the Kmart acquisition they expanded their dominance in the category. Home Depot and Lowe’s have every piece of the equation well greased and generating vast profit. Zero finance for two years a big plus, comes with Home Depot appliances.
In addition, all the accessories that are required with appliances are found under the same roof. The internet is loaded with price driven, inventory intense, quick delivery and branded offerings which low overhead allows for price to rule the sale.
Unless JCP has a lease department with a group that can provide all of the services that the rest of the retail world provides. What are they doing in this category? Bring in a new demographic?
In my opinion, another concept that will not get past a test unless they have a new concept of selling that will set the world on fire. The handwriting on the wall indicates yet another life preserver designed by Svengali to keep them afloat.
Radio Shack appears to be shorting out due to bad wiring
January 13th, 2016Radio Shack was a powerhouse at one time for electronics. Over time they allowed their staff training, assortment, inventory on hand to fall into an abyss. This concept needs to grow up and what is apparent, and financially driven is the stores remain same old, same old.
The success of Radio Shack will fall on the public’s perception that this store can provide anything and everything, a category killer, otherwise you can cherry pick Rado Shack on line.
The biggest advantage they can offer the customer is the ability to easily shop the store with informative signing, out posting product to improve the multiple sale and joining this century with mobile device drive sales techniques.
The investment is too great to become innovative, the staff are not knowledgeable about the product, the breath of assortment is too vast to control and area and then conquer others so why surge without the weapons in place?
In all due respect the captain of this ship although coming with great credentials lacks the background of retail savvy. A former vendor cannot direct a retailer when the revitalization for Radio Shack depends on product sold in a manner that it becomes the reason to shop the store, i.e.: Apple.
Ahrendts’ luxury background shapes Apple store changes
December 9th, 2015I applaud Apple to go into test mode. We all are familiar that most of Apples innovative ideas were met with sceptisism by many when they were first introduced, only to have to eat “crow” once the sales figures came in.
This test may not be about sales figures but yet another great item to experience and draw in curiosity seekers. I am not sure that the Apple formula of $5000 per foot will be met with this product having a 2.5 turn ratio. I would guess that space is a commodity and whatever item will be consolidating to make room for this item will not suffer as a result of the move.
I do find it interesting that Ron Johnson who had a great success record with Target and brought that knowledge onto Apple moved on to a soft goods JCP. His tenure was short and his concept was actually innovative but did not fit the JCP financial position, and put vendors in an awkward position. I was intimately involved with this concept through vendor participation and was not surprised when the concept could not be executed. One could conclude that when you go from hardwoods to softwoods the playing field is way different.
Now what happens when Softwoods Burberry goes to Electronic hard goods? Are we going to see a disappointing results? Time will tell, but my bet is that Apple has the ability to fine tune any dilemma or opportunity as Sam Walton would position a challenge.
I look forward to the test roll out and progress because Apple is one of the few companies willing to try, willing to fail, and willing to get right back on the horse and continue to look for opportunities.
Jerry Birnbach Interview on You Tube by Expert.com
December 7th, 2015
Recently, A.R.E. Designer member Jerry Birnbach Assoc. A.I.A. was interviewed by Expert.com. Jerry is the owner of Jerry Birnbach & Associates a Top 40 Retail Design Firm.
In addition to his Store Planning services Jerry provides Expert Retail Witness opinions for attorneys nationwide with their retail liability cases.
His interview addressed how manufacturers are often challenged to value engineer the display cost which often opens up liability issues due to cutting corners.
The interview was posted on You Tube and the link is http://xprts.us/1lUwRpo.
“Our industry is in need to establish safety issues at store level and display manufacturing and A.R.E. can provide a valuable service to assist in this mission.
Rhinebeck Department Turns to Jerry Birnbach & Assoc for Design effort
December 7th, 2015
Historic Rhinebeck Dept Store
Rhinebeck Department Store has selected Jerry Birnbach & Associates the retail design firm to renovate this landmark building.
“It is a great opportunity to work on a project with such integrity and a client with an impressive understanding for retail,” per Jerry Birnbach.
Rhinebeck Department store located in the quaint town in the foothills of the Catskills continues the retail tradition that was started with the former Hudson Valley Store 1946.
We are committed to keeping our values as traditional as our
merchandise selection of Authentic Country Classics.
The design challenge is to preserve the spirit of a traditional shopping experience while designing a relevant solution for a high
demographic customer in todays world.
Nick Cannon named Chief Creative Officer at Radio Shack – Have they lost their minds?
December 4th, 2015I am in disbelief that Radio Shack who has to realize they had a grade of “F” for Sales help knowledge, Sales help selling ability, Inventory control so there was product in the store, Poor product quality does realize they need to work on basic before they try to become creative.
Having close association with the Isaac Mizrachi brand at Target and Better Homes and Gardens for Walmart, each had amazing volume because the retail machine was well greased, smooth procedures, and a solid foundation for the Celebrity factor.
Radio Shack if they are to make another run at survival needs to get their act together or it is destain to fail. Back to basics friends.
FOR EXAMPLE: This is an electric item, my staff are knowledgeable about its use, applications, auxiliary accessories, it has a real guarantee besides a useless warrant policy without twenty exclusion voiding the warranty or replacement, it is priced well, it will run perfectly for several years, there are always the correct days of inventory on hand. Once the above is mastered, then we can talk about Nick Cannon.
I am happy that Macy’s will follow my advice and keep off price within the main store.
November 16th, 2015I am glad that Macy’s took my advice in my blog and linkedin post. Stay true to your core customer and moving off price to a remote locations is not a good idea for a multitude of reasons.
The thought to lead your core customer out the door and down the street to an off price location was against all retail principles.
Now to provide an area in the store where price driven shoppers who want branded items ( Marshal’s customer and TJX ) will appreciate this option. And most probably while in the store will pick up a few full price items as well.
The logistics to get vendors to buy into selling Macy’s closeout items over the Marshall’s volume potential due to the bulk of their locations would have been interesting.
Now Macy’s does not need to worry about filling an off price store off location with product similar to Target or Walmart due to price point restrictions. Another battle Macy’s would not win nor set up to wage.
I like this new reversal and believe it will be a winner.
design:retail magazine simply the best
November 2nd, 2015It was critical to subscribe to these journals in order to remain current. Today times have changed and design:retail remained ahead of curve by keeping up with relevant ways to communicate with the retail industry. As a contributing editor in this magazines former life I appreciated and still do the amount of work required to get the story right and offer productive insight. Congratulations on your recent accomplishment and wish you continued success.