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In my last column for The Anchor, I debuted a new quarterly series, entitled “All The Things I Think I Think About Retail Over The Last Quarter.”
Well, another quarter has come and gone, so that means it is time to dust off the shelves and scorecard past predictions as well as to signal what is most top of mind at present.
Let’s Review – Last Quarter’s Predictions
So, first, the scorecard. Loyal readers of my first column will remember these predictions:
- Kohl’s new CEO Ashley Buchanan has his work cut out for him.
- Costco will emerge unscathed from holding true to its pro-DEI position.
- Sprouts has nowhere to go but up.
- Macy’s first 50 strategy may be “working” but 50 is a long way from chain.
- Bloomie’s is a different story from Macy’s.
- Target will get worse before it gets better.
- Wayfair may be investing in stores at exactly the right time.
- Starbucks may already be righting the ship.
- Sam’s Club is the retailer more people should be talking about.
It has only been three months since I put a stake in the ground on all of them, but on the “Nailed It/Too Early To Tell/Dead Wrong” scale, I am feeling pretty darn good about most of the above.
It is way too early to tell on Macy’s, Bloomie’s, and Wayfair. Same goes for Sam’s Club and Sprouts. And, as much as I would like to take a victory lap on these last two especially, the proof will be in the pudding much more down the road. Though I still am feeling like all six will break my way soon.
Finally, I would be remiss if I didn’t mention Kohl’s. Kohl’s is such a dumpster fire (meme stock, anyone?) that the very same above prediction is also likely in play for whomever gets chosen as Ashley Buchanan’s ultimate successor.
All of which leads me to…
So What Did I Get Right And What Did I Get Wrong?
Over the last quarter, Costco and Target have been a tale of two retailers. One stood strong on DEI, while the other kowtowed to public pressure. Both companies stated their contrasting positions publicly this past January, and the traffic results speak for themselves..
Costco has emerged unscathed, as predicted, while Target now faces concerns that it could become the next Kmart or Sears (and for a whole host of reasons beyond DEI).
The biggest takeaway for me, however?
No matter your personal opinions on DEI, the most important thing retail executives have to ask themselves is, “What matters most to our brand?”
Target and Brian Cornell forgot this one important question. They didn’t do their homework, and thereby took their fingers off the pulse of the Target customer, and clearly the customer has been voting with his or her feet.
It will likely take a regime change with a clear stated purpose to get them back.
The One Major Miss
I missed on Starbucks, and, frankly, I am kind of pissed about it. I was thrilled when Starbucks’ new CEO Brian Niccol announced his intentions to enliven the in-store Starbucks experience. His promise of “4 Minutes or Less” wait times and his introduction of ceramic mugs had me at Frappuccino.
But then something interesting happened on the way to the coffee roaster.
First, few, if any, baristas have ever offered me a ceramic mug at checkout. Plus, the experience of drinking my coffee in said ceramic mug actually adds more friction to the overall Starbucks’ experience because you still have to go back and wait in line to take your coffee to go.
Second, the wait time promise has also fallen flat. When Niccol first made the announcement, I would go into Starbucks, order at the counter, track the wait time on my phone, and, without fail, get served my coffee in under four minutes. I even proudly shared my improved wait time experiences on social media.
I bought into Brian Niccol’s java-flavored Kool-Aid hook, line, and sinker, but, as much it pains me to admit it, I also forgot one important axiom of retailing – never judge anything out-of-the-gate (which, side note, is also why, in contrast, I have not jumped on the Richard Dickson at Gap Inc. bandwagon yet, too).
Any initial promise for Starbucks in Q1 was quickly overshadowed by Starbucks’ Q2 results. Starbucks same-store sales fell for the fifth straight quarter, with U.S. same-store sales down 2%.
Shame on me. I should have known better.
When running stores, it is easy to get store teams behind anything for a short period of time. I simply made the call too early and now worry the pendulum may be swinging back entirely. Part and parcel, people appear to be spending less time, not more time, in Starbucks since the regime change, which doesn’t bode well.
Any Kool-Aid drinking, whether it be for Niccol, for Dickson, or, as Target CEO Brian Cornell has received during his tenure, should always be reserved until one is sure that results are sustainable.
For more data-driven retail insights, visit placer.ai/anchor
