J.C. Penney’s recent issues highlight a trend that I’ve been seeing for some time—retailers placing more of an emphasis on finances and real estate while focusing less on the customer. Retail used to begin and end with the customer, but for many brands, it’s clear that customers are no longer the focus. In this edition of my Retail Rap column, I take a look at some brands who could benefit from shifting their focus back to customer satisfaction, and brands who are already doing this very well. Retail isn’t about just selling goods that customers want or need. Now, it’s also about the experience that customers get in stores, too.
JCP is hardly the only culprit. When Hudson’s Bay announced the purchase of Saks Inc. for around $2.4 billion in June, one of the biggest messages that came out of the deal was that much of the “value” of the acquisition was in the real estate. There was significant talk about real estate positioning and not enough about what this would mean for the customer. I think even real estate professionals understand that the value of a retail real estate portfolio is both distinct from and dependent on the value of a retail brand. Neglecting the latter for the former is a recipe for disaster in the long run.
Check out the full article from my recurring column, Retail Rap, at Chain Store Age.