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Two Great Retail Lessons: One Positive, The Other Not So Good

BY CSA STAFF

By Robert Gordman, president, The Gordman Group

(Editor’s Note: Retail consultant Bob Gordman offers some interesting insights into what he calls “two of the most dramatically opposite” retail case studies in recent years: lululemon athletica and J.C. Penney Co.)

First the positive study, lululemon athletica. Christine Day and her team have redefined the term customer knowledge. They not only know their customers and their customers’ rules, they continue to become more knowledgeable all the time.

Any retailer who has not studied lululemon is missing a once in a lifetime opportunity to improve their own business. This is not a story about exercise wear or the affluent consumer; it is a story about intense customer knowledge. The reward has been the greatest growth, profit and productivity story in the history of apparel retail.

On the other side of the ledger is JCP (J.C. Penney). This is a great study of a company having a total lack of knowledge about their customers. There is no question that Penney’s needed to change. The company was dying a slow death by using a fake promotional strategy to sell less than desirable merchandise.

The lessons learned are numerous. First, lower prices on undesirable merchandise do not make the merchandise more desirable. Next, hip, confusing advertising does not increase store traffic, particularly when your customer base is generally conservative and middle of the road. Finally, when changing your strategy, change the advertising last. The bleeding edge advertising campaign JCP launched had absolutely no relationship to their current merchandise, their stores or most of their customers.

Can JCP be successful? ABSOLUTELY. But first they need to take a few steps back, accept the reality of where customers currently positions the company and develop a customer relevant plan to evolve to a new market position. It may take an additional year or two, but they can get there.

Robert Gordman is president of The Gordman Group and the author of "Do You Know What You Don’t Know?" and "What it Costs You," "Secrets of the $uper $weet $pot: Building Sustained, Profitable Growth" and "The Must-Have Customer: 7 Steps to Winning the Customer You Haven’t Got." As a consultant for almost 20 years, he has helped executives think creatively to develop well-thought-out, executable strategic plans for their companies.


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Bed, Bath & Beyond tender offer for Cost Plus shares is successful

BY Staff Writer

Union, N.J. — Bed Bath & Beyond Inc. announced that its tender offer for the outstanding shares of common stock of Cost Plus was successful.

The company said Friday that about 20.8 million shares representing about 92% of Cost Plus’ outstanding stock were tendered. The company currently has approximately 22.5 million outstanding shares, according to FactSet.

Cost Plus will become a Bed Bath & Beyond subsidiary and will stop trading on the Nasdaq the first business day after the deal closes.

Bed Bath & Beyond announced its $495 million acquisition of Cost Plus in May.

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J.C. Penney launches new charitable program

BY Staff Writer

Plano, Texas — J.C. Penney Co. has launched a charitable initiative, called jcp cares, that will support a new cause each month by inviting customers to round up their purchases to the nearest whole dollar and donate the difference to the company’s featured charity partner. The retailer will join its customers in giving back by making a contribution to its charity partner each month.

The program will be supported by a robust, integrated marketing campaign which will include digital, social, mobile, in-store and direct mail and e-mail components.

Jcp cares will kick-off July 1 with J.C. Penney’s support of the USO (United Service Organizations), a nonprofit, congressionally chartered, private organization dedicated to lifting the spirits of America’s troops and their families. Along with round-up donations raised by customers throughout the month of July, J.C. Penney will be making a $1 million donation to the USO. J.C. Penney will also donate $1 — up to $50,000 — to the USO for each customer that checks in to a J.C. Penney store via foursquare from July 23 to July 31.

Other announced charity partners will include 4-H and Boys & Girls Clubs of America (September) and the Breast Cancer Research Foundation (October).

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Apr-23-2013 11:11 am

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Apr-17-2013 06:26 am

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Mar-29-2013 12:32 pm

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