ONE CHALLENGE, TWO VERY DIFFERENT REACTIONS: There’s little doubt that Amazon is having an effect on the entire Retail landscape. This year alone 19 retailers have declared bankruptcy and over 6,000 B&M locations have closed. Not all of this is due to Jeff Bezos & Crew, but you know they’re a big part of the disruption. When facing this challenge you’d assume the two biggest Mass Merch retailers, Walmart and Target, would have a similar reaction. But that’s not the case. In a fascinating pair of Fortune articles both retailers lay out completely opposite strategies. Target’s position was articulated on Tuesday by its CFO Cathy Smith in the attached link. The key takeaway . . . “We are going to win when we’re the best Target, and not trying to be a competitor against Amazon or anyone else.” So basically Target is going to ignore Amazon and just keep running its own play. By contrast take a look at this Fortune article, which appeared just one day later. It showcases Walmart’s effort to go all in on an eCommerce strategy to compete with Amazon. Over the last 12 months they’ve successfully acquired and accelerated online sales at Jet, Bonobos, Moosejaw, etc.. They’ve also charted a course to integrate the best of their on/off-line assets as described by Walmart CEO Doug McMillan when he said . . . “We’re combining the accessibility of our stores with eCommerce to provide new and exciting ways for customers to shop.” Seems like Target and Walmart are taking the exact opposite worldview on eCommerce, doesn’t it?
IS CLOTHING ON YOUR SHOPPING LIST?: So with all the challenges in Retail these days, what’s going right? One of the bright spots is Hispanic gifting purchases, especially for clothing items, as noted in the attached MediaPost link and image below. It turns out that US Hispanics are much more likely to give the gift of clothing then the average consumer. This has to do with cultural identity and the demographic composition of Hispanic households. Hispanic women use clothing as a cultural touch point, so it’s usually higher up on the holiday shopping list. And 57% of Hispanic families have children under 18 in the household (which is about 10 points than other ethnicities), so the chances of parents/grandparents buying clothing for their children are much higher. These are terrific insights for retailers who are looking for pockets of marketing opportunities in the upcoming holiday season.
A REALITY CHECK FOR THE 1ST AMMENDMENT: In this blog I really try to stay away for political issues, but yesterday’s Twitter post by President Trump can’t be ignored. For some background, Trump was upset about news reports from NBC which said he was demanding a significant buildup of the US’s nuclear arsenal. As a pushback he went to his usual #fakenews narrative, but then took it one step further by suggesting that NBC should have its broadcasting license revoked. The idea that a news outlet’s license should be shut down just because it ran negative stories about the Executive branch of our government is pretty disturbing. It directly goes against the 1st Amendment of the Constitution which preserves freedom of the press. Beyond the shock value of this suggestion, there’s a mechanical and legal issue to consider. The licenses are held by the FCC, so they would be the ultimate arbiters of NBC’s fate. Technically the NBC Network itself isn’t a licensed entity, so there’s nothing to revoke. But NBC’s affiliate stations do have licenses, and must reapply every five years. Could you imagine a scenario where these TV stations are denied license renewals based on their political coverage? If you want more details on this story the attached link from Money.com has some fairly balanced coverage. In the meantime I’m just hoping President Trump doesn’t try to shut down the Daily Gabe too!
Have a great Thursday guys!