Holiday 2012 – Supply Chain Madness!

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Shopping!  It is a necessary evil of the holiday season.  This year, in particular, as I am fulfilling my buying commitments, I have observed some Supply Chain madness that I feel obligated to rant about.

First is a follow up from a post back in July about a new Supply Chain partnership between two retail giants, Neiman Marcus and Target.  The business proposition sounded interesting and I promised to share the outcome with you.  In one word – Disaster!  After reading this WSJ article “Hype Better Than Sales for Target-Neiman Marcus Tie-Up”, I decided to do my own personal research – tough duty, but someone had to do it.  So I ventured out to Neiman Marcus and here is what I observed:

  • A display of co-branded merchandise on the second floor; stuffed in the children’s department (which is adjacent to designer shoes and women’s couture apparel)
  • Merchandise that was WAY below Neiman’s low end price point and of inferior quality
  • No first floor visibility at all – I happened to run into the display by accident
  • Racks that were stuffed with numerous pieces in the same size; opposite from the way Neiman’s merchandises its  own apparel

I also talked to one of my good friends that is a personal shopper there and she explained that the store had staffed up with dozens of additional sales associates for the opening day and no one showed up!!!

The original value proposition for Neiman was to become more accessible to a broader range of customers, specifically those that are younger and less affluent and to attract customers that might be otherwise intimidated to enter their stores.  Brilliant, yes! Executed poorly!  First, it was insulting to see the co-branded merchandise displayed like a clearance sale at Woolworths (many of you are too young to remember this company).  Second, if the goal was to expand their customer base the merchandise needed to be showcased on the first floor, elegantly merchandised and adjacent to Neiman products that the new customers could actually afford.  It felt like this store in particular went out if its’ way to reinforce the snooty image that Neiman already has.

On the Target side, the display was almost impossible to find as it was positioned in the back of the 100,000+ square foot store.  Again, I was disappointed that the merchandise was virtually inaccessible and poorly displayed.   As a result, sales have not been nearly what Target had forecasted.  Target had huge success with its’ Missoni collection last year and was hoping to replicate that with this partnership?  What went wrong???

Here’s a thought.  Both retailers have very different customer bases and different supply chain / merchandising strategies and yet both are extremely successful.  The partnership could have worked if both companies stuck to their original value proposition and leveraged their individual strengths.  The partnership was an interesting idea just executed poorly.   Better luck next year!

Ok, one more issue and it’s time to wrap up my rant.  I can sum it up in two words – Macy’s coupons!!!  I must admit that I am still angry that Macy’s not only purchased Marshall Fields, the jewel of Chicago, but then had the audacity to change the name.  But putting that aside, how many of you receive the 25 coupons a day in the mail from Macy’s?  How many of you have stood in line (10 -15 people deep) behind a shopper in Macy’s that whips out their 5 inch rubber banded stack of  coupons for the sales person to sift thru to figure out the best possible deal on that already marked down item?  How many have witnessed the pure frustration of the sales person as they are doing so?   In my opinion this is Supply Chain gone awry.  If discounts are the draw, which I know they are, give the buyer a process that is simple to adopt and create a mechanism that removes the pain for the sales person.   For me, the current process is too complex and not worth the effort.  In fact when I took my son to Macy’s last week I did not have a single coupon and the sales person gave me an automatic 20% off –  worked for me!

 

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Anne Kohler
Anne has been leading consulting and financial management organizations for over 25 years. She has extensive expertise in Strategic Sourcing, change management, contracting & contract management (both the buy side and sell side) organizational design and supply chain management. Anne has a passion for collaborating and educating her clients while helping them to uncover hidden value in their organizations. In addition, Anne has been named by Supply & Demand Chain Executive as a “Top 100 Provider Pro to Know” every year since 2007 and a 2013 Top Female Supply Chain executive.
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  1. Pingback: Are You Ready for Some . . . . . .Shopping? - News You Can Use

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