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Analyst: Build-A-Bear needs to repair damage caused by promotion snafu

With much higher than anticipated demand for its “pay your age day” promotion, Build-A-Bear Workshop has become a victim of its own success. The decision to shut stores and end the promotion early was necessary on both safety and operational grounds, but it will damage the brand.

A lot of parents are now upset that they cannot fulfill promises to their children, and many who made special trips to malls are frustrated that their efforts have come to nothing. In our view, Build-A-Bear is going to have to take some action to remedy this, maybe by offering deals and special offers to those affected. This could have a future impact on profits, although it will be helpful to sales volumes.

The good news is that the high demand indicates that the Build-A-Bear concept remains relevant and popular. While the company needs to plan future promotions far better, there is seemingly an opportunity to stimulate sales with the right deals and offers. But first, Build-A-Bear needs to get its alienated customers back on side.

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J.C. Penney revamps top private label brand—with a social twist

BY Deena M. Amato-McCoy

J.C. Penney is using social media to refresh its popular private label denim offering and better connect with its target audience — teen girls.

Just in time for the second biggest shopping season of the year, the department store retailer has updated its house denim brand, Arizona Jean Co. The collection will feature by more fast-fashion and trending pieces, as well as a more digital marketing strategy.

To better market the line, J.C. Penney updated its Arizona in-store shops with a new logo, lifestyle graphics and signage, as well as mannequin displays that feature the top trends across multiple product categories. The initiative will enable teen girls to find all of the complementary pieces of entire outfit, including tops, jeans, shoes, handbags, accessories and fashion jewelry, available in one location.

J.C. Penney will further engage teens through new social channels. In addition to creating a new hashtag, #AZYouAre, the company launched dedicated Arizona Instagram and YouTube channels to connect followers with the brand, and share selfies in their Arizona outfits. The company also launched a mobile-first design for the Arizona landing page at JCPenney.com.

The retailer also partnered with social media influencers Brooklyn and Bailey to promote Arizona’s new look during the back-to-school shopping season. The identical twin teenagers post about fashion, beauty, friends and family to their loyal fan base on Instagram and YouTube.

J.C. Penney is integrating the social influencers at store level with life-size cut outs of the twins, along with signage calling out each girl’s favorite pieces from the current Arizona collection. Highlighted merchandise will be updated seasonally.

The brand’s refresh is based on a year’s worth of focus groups with its teen shoppers, who shared their thoughts and opinions on fashion trends, what they wear to school and the details they look for when shopping for clothes and accessories. These details were used to update the silhouettes, fabrics and prints, as well as the overall shopping experience, according to the company.

“Back-to-school is one of the most important times of the year for retail. One in three J.C. Penney customers buys Arizona, making it our largest private brand and a key traffic driver,” said Jodie Johnson, senior VP and head of merchandising for J.C. Penney.

“We’re really emphasizing the teen shopper in this brand refresh because we know that once the teen embraces Arizona, her younger siblings – and Mom – will follow,” she added. “With exciting updates to Arizona, along with our new partnership with Brooklyn and Bailey, we are elevating our credibility with teens…”

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Private grocery brands making a comeback

BY Deena M. Amato-McCoy

Grocers continue to ring up sales across their private brands, but supermarket operators have some challenges ahead.

Sales of private-label merchandise has dramatically increased in the past year, hitting $138 billion across multiple retail outlets and convenience stores in the United States. Supermarket operators single-handedly rang up $68 billion in private label sales in 2017, according to data from the Food Marketing Institute (FMI) and IRI. The data was revealed in the first half of a four-part series, called “The Power of Private Brands from the Register 2018.”

While this was a slight decline of 0.1% for supermarkets, private brands represent 16.4% of dollar sales in the grocery channel, and 14.8% across multiple retail outlets and convenience stores.

According to data, 69% of consumers said it’s very important, or somewhat important to have a good assortment of private brands in food and beverage. Generation X is responsible for 31% of all dollars spent on private brands across all outlets, compared to 19% each for older Millennials and younger boomers.

Private brands also influenced 46% of consumers in their choice of where to shop in 2017. However, this can also work against supermarket operators going forward, as retailers outside of the grocery channel, such as mass merchants, dollar stores and club retailers, are all out-performing supermarket operators when it comes to private brand sales. For example, private label is driving 1.6% growth across these three categories, according to the study.

One culprit could be that trips per buyer are down in the grocery channel, and most likely these shoppers are going to other retail channels, such as mass and club, the study revealed.

Sales could also be impacted by grocers pulling back their private label advertising. A year ago, retailers seemed to be promoting too much, as a percent of sales on promotion was up. In fact, private brands increased promotions about twice as much as the overall food business.

“Grocery retailers might need to consider whether they have pulled back too much on promotions,” the study said. “If things were different, reduced promotions might be a healthy response. However, under the circumstances, retailers probably want to examine whether more price and display activity would be successful in advancing their store brand cause against mass, club and other channels.”

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