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February 10, 2020

Welcome back to your weekly update on the changes, trends, and movers-and-shakers making headlines across marketing, brand, consumers and more!

From Deepak’s neuroscience desk, how your brain is lying to you about Super Bowl ads, and what brain science teaches us about emotion management and conflict resolution.

Below are a few thought-provoking articles to kick-start your week. Thanks as always for reading, sharing and sending your contributions.

Brand & Marketing

Retail, Sales and Shopper

  • CB Insights maps the current state of Retail Tech, and suggests retailers’ new reality in 2020 as expectations for a more personal, immersive, and automated experience rise.
    • Consulting POV – Retail technology continues to often be a solution in search of commercial vision – retailers that can harness this best will disproportionately win.
  • Amazon is now allowing brands to develop custom and proprietary voices to connect with consumers via Alexa, making it easier for brands to connect with consumers while adding a new level of engagement for voice-based commerce. This comes as Amazon is also seeking to deepen relationships with its partner brands through advertising.
    • Consulting POV – The voice broadening is a good idea, and should allow for much higher levels of engagement in voice applications. In the latest Retail Sound Bites episode, Kantar tackles Amazon’s rising advertising business and its specific implications for brands.
  • Macy’s will be closing over 100 stores and cutting thousands of jobs as it looks to restore growth.
    • Consulting POV – Macy’s remains a business that commands way more share of media than share of retail. They have had 10-20 ideas to restore growth in the 2010s; none have worked because none questions the fundamental problem with Macy’s, which is what is what job this store will do for consumers. As long as they keep shuffling deck chairs and not addressing that core issue, they’ll struggle.
  • Meanwhile, Sephora is preparing for “record-setting” store expansion across North America, planning more new openings that it has in any other year.
    • Consulting POV – Sephora is one of the best retailers in the world. It’s off-mall expansion strategy will be interesting for seeing which categories they emphasize in smaller, lower-volume sites.
  • Forever 21 is set to be purchased by a consortium of buyers amid the chain’s struggles to raise money to exit bankruptcy, poor sales and the founding family’s insistence on maintaining control.
    • Consulting POV – Simon Properties did a good job with its Aeropostale acquisition. The nice thing about a landlord buying a struggling retailer is they can adapt its fixed costs to meet the volume and operating cost of the outlet.
  • In light of this, a look at why in the last decades more and more retailers are filing for bankruptcy…twice.
    • Consulting POV – Bankruptcy allows you to restructure who you owe cash to, but doesn’t fix a business that doesn’t generate enough cash to cover its operations. So generally a retailer that emerges from bankruptcy is broken exactly the same way they were going in.
  • James Shepherd posits that it’s not just the upstarts: everything is actually DTC now, meaning brand marketing strategies, agencies, and other teams must evolve accordingly.
    • Consulting POV – Everything being D2C means everything is retail – demand conversion will be increasingly intertwined with demand creation in the 2020s.

On the Horizon

Powerful Partnerships

Growth Goldmines