Year-End Review: Retail’s Missteps And Missed Opportunities In 2018
Before we put 2018 in the rear-view mirror, the RTP editors wanted to identify both the retail industry’s best and worst of the year. And because we like to leave things on a positive note, we’re starting with the gaffes, goof-ups and unforced errors that caught our eye. We’ll focus on the good news in next week’s Editor Q&A column. What was your pick for the most boneheaded play of the year? Let us know in the comments below.
Debbie Hauss, Editor-in-Chief: The most significant indication of missteps in the retail industry for me is a personal experience. I purchased a dress for my daughter’s wedding from a major department store retailer, then was retargeted online with a 40% discount offer. I reached out via online customer service and was told they couldn’t help me because I had bought the item in-store. I then called the sales associate who completed my purchase and she said there was nothing she could do because it was more than seven days past the initial sale. Extremely frustrated, I then re-purchased the item online for 40% less, then returned the original purchase in-store. This very disappointing customer service experience could have been avoided if the retailer was fully up-to-speed on omnichannel capabilities — not to mention that the retailer could have avoided losing 40% of that sale by not retargeting me online after I’d already purchased the item. This example shows how far the retail industry still has to go to be able to effectively satisfy today’s digitally savvy shoppers.
Adam Blair, Executive Editor: Regular readers of these columns won’t be surprised at my pick for the most boneheaded action of the year: the Trump-induced U.S.-China trade war, currently featuring a 10% tariff on up to $250 billion of Chinese goods. Tariffs add to U.S. manufacturers’ costs, which hurts them, the retailers they supply and the consumers who shop there — a simple truth that seems to have eluded the President and his advisers. Trade experts speaking at the Sourcing Journal Summit noted that tariffs already have increased apparel and footwear prices. Worse yet, the damage they’re doing will be tough to repair any time soon: “I believe both China and the U.S. don’t see how they can back down,” said Nicole Bivens Collinson, President of International Trade and Government Relations for the international law firm Sandler, Travis & Rosenberg. “We could be stuck in this for 20 years. As a political candidate, how are you going to sell [reducing tariffs] if the Chinese are attacking U.S. companies by, for example, stealing intellectual property?” If this is winning, I want to be a loser.
Glenn Taylor, Senior Editor: A lot has been said this year about the missteps of major retailers such as JCPenney and Sears, but GameStop is another retailer that has had to deal with fixing its own mistakes. Over the past few years the video game retailer underwent a significant repositioning effort to integrate both collectibles and mobile wireless products into its offering, by building a Technology Brands division out of acquired retailers such as Spring Mobile and Simply Mac. But the Technology Brands endeavor ended up being a dud from a money-making standpoint, with the division losing $316 million in 2017. Last month, GameStop essentially admitted defeat by selling Spring Mobile for $700 million, the latest of numerous moves to cull its wireless offering. The move is magnified by the fact that GameStop grew the Tech Brands division to more than 1,300 total stores…hardly a small footprint to let go of. Let this be a lesson to retailers: while differentiation is important to any evolving company, sticking your fingers into as many different pies as possible isn’t always the right answer. Such rapid brick-and-mortar expansion carries a high risk.
Bryan Wassel, Associate Editor: While its downfall lacks the high profile of Toys ‘R’ Us or Sears, Mattress Firm also is facing bankruptcy, and the retailer doesn’t have any good options to climb out of its hole. The company is almost the definition of a dinosaur: in a field dominated by nimble e-Commerce-based players like Casper and Leesa, Mattress Firm is trundling along with more than 3,000 physical locations, and also is hampered by the debt of its parent company. Boll & Branch, another bedding newcomer that recently introduced its own mattress, is beating Mattress Firm on the social responsibility front with its transparency and commitment to supporting cotton farmers. The writing is on the wall for stodgy brick-and-mortar retailers in this space: even the fact that Mattress Firm is pulling back on advertising has been damaging to overall mattress industry traffic trends, according to Peter Keith, Senior Research Analyst at Piper Jaffray.