There’s no denying that together they defined a moment in the way Americans dressed, and that Drexler did what he was hired for, which was restore J.Crew to relevance and make it a financial success. Here’s a look back at the Mickey Drexler era, and a blow-by-blow on the incredible rise and fall of J.Crew:
The Takeaway: In this model the most effective and scalable publisher is faceless: atomized content creators, fueled by social media, build their own brands and develop their own audiences; the publisher, meanwhile, builds scale on the backside, across infrastructure, monetization, and even human-resource type functions. This last point makes a faceless publisher more than an ad network, and crucially, I suspect the greatest impact will not be (just) about ads.
The Takeaway: Farfetch — a fashion e-commerce platform which connects consumers with a curated global network of about 200 independent boutiques and 500 single-brand partners — cleared $800 million in transactions in 2016, up from $500 million in 2015. It generates revenue — an estimated $150 million last year — by taking a commission (averaging between 20 and 25 percent, according to retail partners) on those transactions.
The Takeaway: Preppy labels have been jostled by fashion trends in recent years, but most have stayed true to the country club aesthetic that defines them. L.L. Bean Inc. embodies the New England countryside; Sperry Top-Sider Inc. owns the yacht club. Vineyard Vines LLC, the fast-rising Connecticut-based retailer, sells vibrant, simple clothes that belong on a tennis court or aboard a yacht. The style is nostalgic by design, but even classics need a reboot sometimes.
The Takeaway: Digital display advertising was disrupted by programmatic technologies because of the operational efficiencies gained from automating manual processes. But TV is a completely different animal. The TV advertising space is entrenched in traditional processes that largely depend on direct negotiations between ad buyers and sellers. By incorporating more data, TV advertisers can fine-tune their targeting beyond broad consumer groups, and potentially see higher returns on their ad spend.
The Takeaway: There’s no longer a back-to-school shopping “season.” Rather, there is a series of mini-seasons with distinct timelines that attract different types of buyers and involve varying types of products. The data knows everything. And it shows that, back-to-school shopping is marked by multiple, standalone events and a collection of smaller “seasons.” In today’s highly competitive retail environment, there is advantage in understanding and planning for the new timelines of back-to-school shopping. And there is danger, for both retailers and manufacturers, in viewing back-to-school as a single, albeit long, season.
The Takeaway: Kleiner Perkins Caufield & Byers has invested $30 million at an estimated valuation of $200 million in UNTUCKit, a maker of shirts designed to be worn untucked. The New York-based company was founded in 2011 as an internet retailer, then began opening physical storefronts in 2015 as part of its so-called “clicks-to-bricks” strategy. With the new financing, the startup plans to open 15 stores in the US.
The Takeaway: On Wednesday, the company is unveiling its own iOS shopping app — SHOP/Who What Wear — featuring a curated selection of products for sale from retailers like Bloomingdales, Barneys New York, Neiman Marcus and TopShop. Digital-native retailers like Revolve and Reformation are also participating, marking the first time they have sold goods through another company’s app, a spokesperson said.
The Takeaway: The Cannes Lions festival announced the Lions Innovation shortlist Wednesday, recognizing branded projects around the world that use data and technology in creative ways to bring game-changing products to life. Below, we look at 12 of the 13 U.S. entries.
The Takeaway: The obvious hope for a company like Snap is that advertisers will spend more if they can see that their Snap ads lead to real sales. And Snap isn’t the only company trying to figure this out. Other services that generate billions in ad revenue, including Facebook and Twitter, are doing the same.
The Takeaway: Apple could eventually open the HomePod up to outside developers, much as it did the iPhone and, eventually, Apple TV. But it's not clear if it will. For now there doesn't appear to a toolkit that third-party programmers can use to create apps for the gadget or any way to distribute them to consumers, and Apple hasn't said anything on the subject (we've asked). And with Apple pushing its own music service these days, it doesn't have a big incentive to open its new home speaker system to rivals.
The Takeaway: The new Prime offering takes direct aim at Wal-Mart, which counts on shoppers who receive government assistance for a large percentage of sales. Wal-Mart generated about $13 billion in sales last year from shoppers using the Supplemental Nutrition Assistance Program, or SNAP, accounting for around 18% of the money spent through the program nationwide. Those customers also spend additional income while in Wal-Mart stores.
Letter to the Editor
American Retail Failure: Perspective From Cape Town
The retail job losses have not become a political hot potato due to the lack of a retail version of UAW (United Auto Workers). The large labour unions have ensured that mining and other manufacturing jobs have been getting more political attention.
In saying that - in all honesty there a few things at play with this situation:
There are way too many retail locations in the US - locations were seen as capital generation instead of capital expenditures. Best example of this for me is when Howard Schultz came back to lead Starbucks they closed under performing locations - I don't know of any retailers who have done that.
Retailers have signed leases that were not properly forecasted. A 20 year lease is a significant investment that has little validation from sales etc.
As ecommerce has grown retailers have not invested properly. Target, Nordstrom are but a few that have been future proofing their businesses. I believe their headquarters being in less populated areas Seattle and Minneapolis has lead to them being more nimble than normal retailers.
Retailers have forgotten that they are a community asset and employ local breadwinners - they have not evolved with the de-urbanization of retail.
Your point on logistics staff being the new low income job champion is spot on and is driven by the location of warehouses of online retailers.
Retailers have also lost focus - an experience for customers does not mean having a branded coffee shop or pizza shop inside your location. This hit me while I traveled in the US in October 2016.
On demand services have added value that should have been driven by retailers. Instacart, Curbside, etc. are retail functions that were neglected.
The retail board of all major retailers have struggled to attract younger members. I hate playing the age card but the progressive retailers (Target, Nordstrom and lately Walmart) they have young blood.
Retailers have not adapted the roles that their staff plays. Nike and others have made sure that their staff are helpful, knowledgeable and approachable. This for me boils down to founder DNA and some retailers have struggled with stock price declines and thus have been forced via financial performance to make changes.
Off-price retailers are not online but provide customers with pricing that makes purchases and repeat purchases a possibility. Why are TJMaxx able to show good yearly performance? A smaller footprint, I believe.
It is a complicated story that needs data and graphs to communicate this sad tale. Amazon is not the only factor.
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