Reading time: 5 minutes

September 3, 2019

Happy September! If you’re looking for new fall “idea” books on behavioral science, leadership, and life, Adam Grant has short-listed his recommendations – but if you’re looking for tried-and-true reads CEOs revisit over and over again, check out these.

From Deepak’s neuroscience desk, one behavioral economist investigates what Behavioral Economics reliably and consistently tells us – if anything – about how to build brand value over time.

BRAND & MARKETING

RETAIL, SALES & SHOPPER

  • Nordstrom’s local and digital strategies show promise, and have helped the retailer to foster a loyal customer base around its reputation for differentiated product and service. This comes as Nordstrom introduces a new Sustainable Style online offering; it curates thousands of sustainable products already offered in-store to help customers learn about and find these products offline.
    • Consulting POV – Nordstrom is a smart company that tries smart things. Their share price was recently rewarded for some significant cost cutting.
  • In perhaps the next chapter of discovery shopping and subscription boxes, eCommerce shoppers are increasingly interested in buying “mystery boxes” from online platforms like Etsy and eBay.
    • Consulting POV – Combining long-tail low velocity SKUs into a bundle at a higher price point has some interesting economics for the seller in terms of shipping and product awareness – most of the successful ones here are focused on a very specific niche like BTS or Doctor Who fans. It makes sense where all of those are combined, but probably less well for less well-defined segments or different mixes of items.
  • Puma, as it grows its DTC offerings, is opening a massive flagship storefront in NYC as another way for the brand to talk to and engage with its customers.
    • Consulting POV – It becomes easy to look at Nike’s successful stores and lump something like this store into that mix. Madison Avenue flagship stores are a “commitment to the American market” the way a duty-free shop at JFK is – it’s ostensibly in America but not sure that’s who you’re reaching.
  • eMarketer digs into mCommerce, the potential of texting as a channel and the need to maintain an active conversation with retail customers.
    • Consulting POV – A designer-led brand like Cynthia Rowley can certainly benefit from the brand having a “persona” that’s like an individual, making this type of communication helpful.
  • Wharton and NYU retail experts consider whether luxury is the latest retail casualty in light of Barneys’ recent store closures and other headwinds facing luxury retailers.
    • Consulting POV – Dangerous to take a poorly-run company like Barneys and extrapolate any learnings from it beyond that it was poorly run. Barneys lacks (outside of NY) a distinctive category that identifies it as luxurious to shoppers, and instead just presented brands available in multiple outlets at incredibly inflated price points. Rent isn’t the problem with this business, it’s traffic. Rents are high where potential traffic is high.
  • DTCs are increasingly acknowledging the importance of physical stores and leveraging multiple business models (i.e. “digital native” does not mean “digital only”), perhaps because of the increasing complexity and costs driven by fragmentation in the social commerce space.
    • Consulting POV – Multiple business model management is one of IRG’s seven success pillars, and this is a great example. Using stores as a part of the CRM marketing mix will be a critical success factor for brands that aren’t historically store-based.
  • As retailers invest more in both developing and promoting their own product lines in the form of private brands, the battle between brands and retailers’ brands is heating up.
    • Consulting POV – Jason Goldberg is a smart guy but, like a lot of digital commentators, dramatically overstates what are really incremental changes in the retail ecosystem. Kroger’s Simple Truth brand has been around for years, and Target’s Cat and Jack is 3 years old. There’s no evidence that Target’s success in apparel branding will necessarily translate to food – they’ve struggled in grocery before.
  • Costco opened its first store in China last week, and the fact that they had to close after five hours due to overwhelming crowds is a good omen for Costco becoming a key retailer in China.
    • Consulting POV – There may be no better mix of culture and retail format than Costco in China. Low cost, great stuff sold in a complicated frenzied environment works in China better than just about anywhere. For years, by the way, Kirkland Signature has had some of the top selling SKUs on Tmall (China’s eCom platform).
  • Lululemon’s new in-store restaurant may actually succeed given its clear alignment with the company’s strategic purpose and the reason the retailer’s stores exist in the first place.
    • Consulting POV – If life gives you lululemons, serve lululemonade. Retailers using space for restaurant concepts is a trend that will definitely continue!

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