Why Eight Major Retailers Need a Holiday Season Miracle
For consumers, Amazon is the gift that keeps on giving.
For legacy retailers, however, the online retail giant is poised to be a holiday Grinch of epic proportions.
With the brick and mortar retail industry in serious trouble, the holiday season has become absolutely critical to the prospects of businesses such as Sears and J.C. Penney. Profits earned during November and December can help keep legacy retailers afloat in a sea of shrinking margins.
This year, the need to prosper over the holidays is even more acute. According to USA Today, 17 major retailers have defaulted on their debt in the last two years, including names such as David’s Bridal, GNC and Payless. Making things even more dire, these brands are struggling while consumer confidence has reached an 18-year high and the federal unemployment rate sits at just 3.7%.
USA Today recently identified the eight major retailers most in need of a holiday miracle in 2018. Let’s take a closer look at how they got there — and how your own brand can learn from their mistakes.
The Problem: Outdated business model, lackluster branding, and deep financial trouble. Though it has strong brand recognition and a rich history, Sears is a case study example in failing to adapt to, and evolve with, the market. The stores are entangled in retail generalist mode, attempting to be everything to everyone. Walking through a Sears is like walking with the Ghost of Retail Past — a sad, wistful experience.
The Prescription: In an age of retail specialization, Sears needs to find a new niche — while updating its in-store experience and advertising for the 21st century.
The Prognosis: Likely terminal, but we may have another holiday season or two together.
Bed Bath and Beyond
The Problem: Overextended (too many locations), underfunded (too little digital revenue) and undistinguished (no cachet). Bed Bath and Beyond’s sales have plunged since 2014, with the company’s stock hitting an 18-year low in September.
The Prescription: An online transformation. Bed Bath and Beyond’s digital offerings (both e-commerce and marketing) have been utterly insufficient compared to those of Target and other competitors.
The Prognosis: Critical but stable. Though Bed Bath and Beyond’s sales figures are in a shocking state, the company doesn’t carry much debt, which could buy it some time.
The Problem: Like Sears, J.C. Penney has struggled to evolve from its original (and deeply dated) model. Unlike Sears, J.C. Penney has thrown everything at the wall in order to change this. They’ve introduced appliances, toys, “permanent sale” pricing gimmicks and in-store Sephora locations. However, nothing has truly moved the needle.
The Prescription: A vastly better retail experience. If you’re not going to give consumers specialization or IKEA-level prices, you’d better offer them a magical in store experience. Can you say experiential marketing?
The Prognosis: Grave. J.C. Penney’s financials aren’t as precarious as Sears, but the company ultimately needs to do more than eke out enough holiday sales to survive. Long-term this is a company that needs to be re-imagined from the bottom up.
The Problem: A debt tsunami and digital despair. Neiman Marcus still has strong luxury branding, but its yet another legacy retailer creaking into a brave new world.
The Prescription: Burdened with debt and teetering on the edge of bankruptcy, Neiman Marcus needs a buyer or an investor to go with a revamped e-commerce strategy and updated brand messaging. It’s a classic brand — but not a particularly relevant one.
The Prognosis: Critical and unstable. The financials are a mess, and a new buyer may be the only way to keep this enterprise afloat.
Your favorite mall chain: Claire’s, Charlotte Russe and J Crew
The Problem: Mall foot traffic is down and mall vacancies are way up, as more people prefer the ease of e-commerce. Claire’s, Charlotte Russe and J Crew are all struggling with debt and declining in-store revenue.
The Prescription: Mobile smartphones apps, location-based marketing, and revamped in-store experiences.
The Prognosis: Critical — and conjoined. The fate of these three stores is tied to the viability of the shopping malls that house them. And malls — much like the stores inside them — are under siege and in need of innovative new thinking.
What’s in store for your holiday season?
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