CNBC has a story about why off-price policies are actually a bigger threat to traditional retail than Amazon, despite the fact that the online retailer tends to be the easy whipping boy for companies in trouble.
"As chains like Macy's and J.C. Penney remove 100 or more stores from their fleets, TJX, Burlington and Ross are on the expansion track. Their stores are resonating with shoppers because of their constantly changing inventory, as well as their consistently low prices," Macy's CFO Karen Hoguet told the UBS Consumer & Retail Conference in Boston.
According to the story, "Macy's has already started rolling out two off-price strategies to help boost its business. The Backstage concept operates as a pure off-price shop akin to Marshalls or T.J. Maxx. Macy's has been building standalone locations for Backstage, as well as dedicating branded sections in its stores for the inventory.
"Meanwhile, the department store has tweaked its traditional strategy of marking down clearance goods on the main sales floor, in favor of sectioning off an area meant strictly for these goods. Those sections, called Last Act, have helped Macy's clear through dated inventory quicker and at better prices, Hoguet said."
"As chains like Macy's and J.C. Penney remove 100 or more stores from their fleets, TJX, Burlington and Ross are on the expansion track. Their stores are resonating with shoppers because of their constantly changing inventory, as well as their consistently low prices," Macy's CFO Karen Hoguet told the UBS Consumer & Retail Conference in Boston.
According to the story, "Macy's has already started rolling out two off-price strategies to help boost its business. The Backstage concept operates as a pure off-price shop akin to Marshalls or T.J. Maxx. Macy's has been building standalone locations for Backstage, as well as dedicating branded sections in its stores for the inventory.
"Meanwhile, the department store has tweaked its traditional strategy of marking down clearance goods on the main sales floor, in favor of sectioning off an area meant strictly for these goods. Those sections, called Last Act, have helped Macy's clear through dated inventory quicker and at better prices, Hoguet said."
- KC's View:
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As I've said here before, nobody really knows what things cost, and Americans in general are addicted to promotions and deals. The question is whether there is a bottom to this trend, and what the long-term impact will be to US retail. In a world where the middle class is vanishing, it seems entirely possible that middle-of-the-road retail with middle-of-the-road pricing will vanish as well.
I suspect that the companies that will succeed long term will be the ones defined by their values or value. Occasionally both.
