Thursday, July 24, 2008

Holiday Season Will Be Tough on Retailers

There is another great article in the Chicago Tribune about what retailers should expect (or maybe what they should not expect) this holiday season.

Again, I just took excerpts of the article, but you can find the entire article here.

Even now, retailers see a blue Christmas
by Sandra M. Jones
July 24, 2008

"There's no cheerful way to say it: Get ready for a sober Christmas season.

Yes, it's only July, but retailers already are deep in planning mode for the holiday season, and what they are sensing adds up to potential trouble, with some experts saying this could be the toughest environment in almost 30 years...

J. Crew Group Inc., the high-end preppy retailer, is planning "very conservatively" for the holiday and attempting to simplify its assortments, Chairman and CEO Millard "Mickey" Drexler said in the company's May 29 earnings conference call. December has become "the biggest promotional month in the world," he said, a fact that retailers can't escape.

"I guarantee this year—I guess, it's a personal opinion—that the customers are going to continue to wait [for sale prices]," said Drexler. "I was in the shopping center the last two weeks; there are so many sale signs everywhere. People are smart, they know it, and they will wait."...

Economist Scott Hoyt expects more consumers to rediscover the need to save for the holidays."

I can't say that I am surprised that this holiday season is not predicted to be "wonderful" for retailers. Although J.Crew has acknowledged that they will be impacted by the current economic situation, I wonder if they will still recognize sale shoppers are important to retain. I just feel like some of their actions recently haven't been too "sale-shopper" friendly.

What do you think of the article? What do you think of CEO Mickey Drexler's response? Will his response reflect J.Crew's actions in the holiday season (e.g. more sales at J.Crew)?

49 comments:

  1. I think Drexler is right. Its going to be a tough season. I hope Jcrew can get their act together fast enough to compete I would hate to see them loose so many profits this summer that they cant make it through the x-mas season.

    BTW I love that picture. My Boyfriend almost bought that for me for Chanukah last year as a gag gift that I was free to return. Then I told him if I got it I was wearing it to bed every single night... that ended his plan fast!

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  2. I think fall is going to be tough on them...I don't see things selling very fast...the summer stuff is just sitting there as well...I doubt they will top last years fall/winter line then...Glad I bought last year when the shipping was free and I bought a TON! Won't be buying much except with my rewards and gift cards...and when they are gone...that's it.

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  3. That explains the lower price point on some of the merchandise. The Perfect-Fit Tee's on pg 74 of the catalog range from $22.50-$25.00 (except the henley).

    If they would actually price the FS items at the 'select colors' prices they would probably clean up & clear out their summer stock.

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  4. I don't like the fall colors and nothing really excites me...ruffle cardigans aren't anything original or great. I don't see why everyone is excited about them. I love ruffles but the design is very similar to their other ruffle cardigans from last fall/winter season as well as spring. I already own about 10 of them from JCrew.

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  5. Blumre: That is too funny about almost getting that PJ set as your gift! ;)

    Anonymous at 9:17 AM: I agree that the summer stuff is still sitting on their website. Hopefully they can get their act together (e.g. website) in time for the fall merchandise.

    Rach: good point about the pricing items in the FS section.

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  6. Can I just complain for a minute about my recent order? Sorry, Alexis and everyone else, but I am MAD.

    So I placed an order on June 27, knowing that I'd be moving out-of-state in two weeks. No problem, right? Shipping usually takes 5-7 business days, so even if it took a bit longer, no worries.

    One of the items shipped before I moved; the rest didn't. I called - several times over several days - to request that the items instead be shipped to my new address. Everyone assured me that they'd do their best to make that happen.

    Well, one of the items shipped, and it shipped to my old address, and I have no way of getting it now. Since it shipped UPS rather than USPS (unlike the other part of my order), it wasn't forwarded to me. They didn't change the address, and the new owner of our old house is kind of a jerk and I don't know that he'd send it on.

    And then today, I look up my order status online, and see that the other item in my order was canceled. No email from J Crew. No reason, because it was IN STOCK when I ordered it. And they're sending generic replies - several days late - to all of my emails. And their wait time on the phone is usually 20 minutes now, and they haven't been helpful so far.

    Sorry for the long rant; I'm just so frustrated right now.

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  7. I'm sure the holiday season will be tough for most retailers, but kind of doubt it for j.crew. The way we are all talking about the fall items, I think some of them will sell out before they hit sale. AND the beautiful guava double strand necklace I was watching and waiting for just sold out too...so things are still getting snapped up at regular price...

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  8. Jennifer: Never feel bad about complaining here. this is where you should do it. Esp since Jcrew apparently cant hear us or maybe they refuse to hear us anymore.

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  9. I hope that Mickey Drexler actually acts upon what he says about sale items and offers really great sales at J.Crew. He obviously knows that sale shoppers play a key role in today's retail market, so I hope he keeps us in mind when doing all of his planning for J.Crew.

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  10. Jennifer: Like Blumre said, don't feel bad about expressing your feelings here. What happened to you is awful. I can't believe they shipped the package to the wrong address- I would be pissed off!

    Kater: I was thinking the same thing too- the way we talk about Fall makes it sound like they will do okay. But then I was thinking that as much as I like the Fall collection, I am hesitant to buy anything online until they fixed the bugs.

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  11. FabulousFloridaMommy: I hope Drexler keeps the sale shopper in mind too! :)

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  12. If Drexler wants to compete for our hard earned dollars, he's going to have to structure the sales events that is totally different from other retailers or is way better. JCrew so far hasn't been very creative with their sales--at least not in a way that promotes greater spending from us. Final sale/no returns, eliminating coupon stacking and no minimums on their website sales puts them behind the curve of other, more customer friendly retailers.

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  13. Blumre and Alexis - thank you! :)

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  14. Amethyst: Your comment was excellent and so spot on! I totally agree about finding ways to make their sales better (e.g. eliminate final sales, allow for coupon stacking, etc.) in order to compete with their rivals and retain their customers.

    Jennifer: Good luck with your orders. I hope you get all your items (or at least the credit) soon. :)

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  15. Jennifer, Just this past Friday I called CS place a third reorder on an item that JCrew cancelled on me twice now...no idea why...it is still in stock...told them which address to send it to as it was originally going to my sister since I live overseas and she was going to visit soon...Well, she is here by now:) so told them to send it to my parents-- JCrew sent it to my sister again. I gave them the correct address, spoke with CS...what more can I do?

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  16. I guess if JCrew offers fewer items and less of them and is already planning for a slow season they won't need to worry too much about sales...things will sell out......won't be much left....

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  17. Anonymous @ 10:01 - I don't know! That's the irritating thing; whenever I FINALLY speak to someone at CS - after 20 minutes of being on hold - they're always really nice. But they don't actually DO anything! They just try to placate you and send you on your way without actually solving anything.

    It would be nice if they at least offered free shipping on your next order or something to acknowledge all of the hassle you're going through - I've waited on hold for probably three hours trying to get this one simple order straightened out!

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  18. Jennifer, funny how they didn't give you anything, I've been offered tons of future free shipping and three $25 gift cards.

    I think J.crew will limit stock and run out of key or popular pieces before sales begin and sales might not be as good for us as in the past.

    The Gap has been doing more of this lately where I live. Fewer items and less to pick form when the sale hits. The good stuff sells out and then it reinforces that you need to buy early. It makes sense as they want to sell at full pop. If everything goes on sale and we never buy at the regular price the store could fail and then where would we get our J.crew fix?

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  19. It makes on sense how some people are getting gift cards for the exact same problems and others are getting nothing...doesn't JCrew realize people talk and that is a bad practice?

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  20. NO instead of on.....dyslexia moment...(not to make fun of it though...I am a reading teacher....)

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  21. JCrew Guy in Canada: It is so funny you mention GAP and their stocking issues because I use to do a case for my students on the GAP. One of their issues was they use to have too much stock on the items that didn't sell and too little of their best sellers. So that was the area they "turned around" in the past couple of years.

    Anonymous at 11:30 AM: I know what you are saying. After hearing so many customers getting gift cards, I was a little sad they didn't offer me anything (for my one troublesome, many times charged, order). :) But I am happy that some customers are getting gift cards and free shipping, because we really do deserve it.

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  22. Alexis: Your case study sounds so interesting. I remember in another post, someone mentioned Gap having fewer of the popular items, to "train" people to go ahead and buy them at full-price, for fear of them selling out. Yet it sounds like your case study examined them limiting stock of unpopular items and increasing stock of popular items. Can you go into more detail about the case study? Or maybe provide some good links? :) Thanks!

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  23. Melanie: The case was interesting (it was in the textbook I used). It also dealt with a lot more issues besides inventory that the Gap was facing in the early 2000's (e.g. child labor, advertising, etc.).

    But one of the main issues was inventory management. Gap ended up doing exactly what you mention, getting employees to recognize the proper trends in order to purchase more of the popular items (so they wouldn't run out) and purchase less of the less popular items (so they wouldn't have so many in their bargain price sales). The whole point of the inventory management system was to plan for lean inventories in order to avoid markdown sales. As a result of this new inventory system, they also taught their sales associates to "train" (I know- I can't believe the term either!) shoppers to buy full price if they really wanted an item.

    So far it is has been successful for them. They don't have those massive bargain sales like they use to.

    I am sorry about the rambling on Gap- I could go into more detail but I am sure its not that exciting. I just get really into the stuff. ;)

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  24. I don't know if J Crew "trains" their sa's, but this morning my sa told me that if I wanted an ivory cashmere sweater to go ahead and buy it. He said they always sell out, and that even though J Crew knows that, that they don't make more. The item goes on backorder, and then you never know if you're going to get it.

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  25. Alexis: That case study sounds so interesting! You know Mickey Drexler was at the Gap before joining J Crew and created Old Navy.

    My husband and I were watching this video interview with Mickey Drexler and we came to the conclusion that he may be purposely sabotaging J Crew and the web "update" in order to boost interest (and sales) for Madewell. He has a vested interest in Madewell since it's his own "start-up" that essentially J. Crew is "purchasing for him". (similar to Old Navy but this one is more his own baby). Madewell will address those sale shoppers )(as Old Navy did for the Gap) and in turn, Madewell succeeds and J crew retains its core high-end buyers.

    Interesting that Madewell's new website is slated to make its debut in July/August. This also happens to be when the financial analysts were looking to see improved sales at J. Crew (that most likely will not occur in light of the recent web fiasco).

    Anyway, just a theory...

    http://www.charlierose.com/shows/2008/04/21/2/a-conversation-with-mickey-drexler

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  26. Alexis, it's so true about "training the buyers! I was at my b&m store today and I was talking to the Manager about the items they needed to get since they hadn't received anything I had my eye one. She showed me another item that I might like. I told her that I would wait for that to go on sale because I was sure it would go on sale but the other items I wanted would not last until the sale. She said to me "It's so sad that you know that".

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  27. Math teacher: You and the SA are right that Ivory/white in any form of a sweater is very popular at J.Crew. I would definitely pay full price for that item because they do sell out quickly. :) It's always those hard to wear colors that get left over for the sales. Which isn't bad if you can pull those off. :)

    Sally: I am sure the Gap is missing Drexler since he is doing so well with the Crew! That is very interesting about Drexler maybe sabotaging JCrew to boost Madewell. He does need Madewell to do well now (otherwise they will terminate the brand altogether).

    I also saw that video, which I think is great. I would like to post it on this blog, but am not sure if I should because another blog has used it for their post. ;)

    I also think it is great that you shared your knowledge of stock/inventory with the SA and the SA recognized that you were right! Knowledge is power for the consumers. :)

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  28. this is great! I feel like I always miss the mark on what I buy full price, and what I miss. Got any other tips on things that are going to sell out? What are your feelings on shoes selling out?

    If I see anything more I paid full price for end up on mega sale, I'm going to be really upset...

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  29. Alexis: You should post the video if you want to...don't worry at all about what the "other" blog is doing...you have been and continue to do a FANTASTIC job with this blog, and should post what you want, regardless of what someone else already has done. :) You have loyal readers who may not have seen the video and will only see it if you do post it...just my thoughts. :)

    mathteacher: I have 2 of the Ivory Cashmere sweaters and I have to wear a cami or tank under them as they are too transparent...I personally wouldn't buy another in Ivory because of that issue. :)

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  30. Funny story about "training" the associates... the other day when I tried on the Ecole jacket in the store just for fun, I was holding it to go put it back when the sales associate saw me with it and her entire face lit up. She said, "Ooh, are you going to get that?" I was a little taken back but just assumed it was because she would make more commission from the sale than from the marked-down ballet flats I bought =)

    Who knows, maybe they do "train" them. I just hope that this isn't some ploy for Madewell (which I'm sure is great) but is not exactly "bargain" shopping. It's a different style and not that less expensive than J.Crew.

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  31. FabulousFloridaMommy: Thanks again for the nice words about the blog. :)

    Kater: I have always found that the basics from J.Crew (basic sweaters, cashmere) in the popular colors (like navy, black, white) rarely go down much in price before they are all sold out. But I know what you mean about paying for an item only to see it a week later for $50 less! ;)

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  32. Alexis, I know exactly what video you're talking about, I saw it weeks ago. I especially like the part where Mickey Drexler talks about what kinds of people they hire at J.Crew =)

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  33. Katherine: It is a great video. Perhaps I will post it for tomorrow, because it does have a lot of great info. :)

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  34. Alexis: I think the case study is interesting!! I wouldn't even mind if you went into detail about it. :) Such as, how do they figure out what the trends are to make sure they buy appropriately? I'm glad they're not artificially inflating demand by supplying fewer of the "hot" items.

    Also, I noticed you said that Drexler needs Madewell to do well. Is it because it will really hurt J.Crew sales forecasts if the line fails?

    It seems like Madewell is a bit trendier, to me. I haven't really researched it though!

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  35. ffm: I won't pay full price for their cashmere, especially after reading this blog. If I like the tartine, then I might order it in snow. The sa also mentioned that the ecole is this year's bella. I'm not too sure about that. It's cute, but not special like the bella. And, it was not a good fit on me.

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  36. ffm and math teacher: I'm beginning to think the ecole might be a wait for sale. A couple of people on the blog have said it fits a little funky in the chest, which makes me think it won't be as popular as the ever perfect bella, and might end up going on sale. It might be this year's bella in the sense of jewel tones and a velvet material, but that is it!

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  37. melanie, Madewell is a name that Drexler owns and a company he is building as his own start-up, only with J Crew group helping financially. Madewell is his baby that he wants to build himself for himself.

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  38. The one thing with the ecole - it's more like a blazer than a jacket because there aren't any buttons, just a hook. I do hope they bring back the bella though, it was perfect. They'd be foolish NOT to.

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  39. mathteacher: I agree...I actually purchased my J.Crew cashmere on sale, and I am glad I did. I think the Tartine in the Ivory would be really pretty, especially if you are getting the cardigan, since it would be worn over other clothing anyways, so the transparency wouldn't be an issue for it.

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  40. Sally - I could have sworn that I once read that Drexler owns the name "Madewell" but lends it to J.Crew for $1 a year or something like that... I'm not sure though.

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  41. ffm: I would definitely get the cardigan. I pre-ordered it in the rhubarb, but if I love it, then I'll go back for the snow. Luckily, I've got an sa who will order for me from the store so that I don't have to pay shipping (only for full price items).

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  42. mathteacher: I love the Tartine Cardigan...it is on my wish list of new Fall Merchandise along with the Andrea Jacket...I also like the Lady Day and Tulip Double Cloth Coats, but think they are just too impractical for Florida. Do you have the catalog yet? They are on page 31. :)

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  43. katherine, that's right. He says he looks at it as them buying it from him.

    You know I really can't understand why or how on earth J crew can continue to behave in such a way. I was just trying to make sense of it and I'm sure my theory is probably WAY off..(:

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  44. ffm: yes, I have the catalog which is why I was so disappointed that the tartine wasn't in stock. It's my favorite item in the catalog! I also like the andrea jacket, but not in stock. I do like the coats on p. 31 and also the bow coat in the lookbook. Unfortunately, I need a coat about 1 day out of the year. It's probably about the same for you, right? Yet, I love winter clothes! Maybe because I lived in Ohio for over 30 years? :)

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  45. btw, when I was in my store today, I saw the wool Tuesday trench and, while it did not grab me in the catalog, I LOVED it in person. So drapey and chic. I'm adding this to my list. :) (along with the andrea jacket)

    Also, I purchased the sherpa hoodie in dark cloud. It is SO soft and comfy. This will be one of my main stays once the cooler weather rolls in. :)

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  46. Is dark cloud the gray color? I saw white, gray, brown, yellow, and blue in my store. I couldn't deciide which color I liked best =)

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  47. Melanie: It is a pretty good case study- but it is completely outdated today. There are lots of things related to their website, plus sizes, and maternity that have already been addressed. Unfortunately, it didn't go into too much of the detail you are asking about. But it should have- the question you asked is great!

    As, Sally mentioned, Drexler is very much invested in Madewell doing well. Also, this year they decide whether to expand the Madewell line or close it up altogether. It will be interesting to see which decision they choose.

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  48. katherine, yes, the dark cloud is the gray color. I am so crazy about gray these days. The yellow is pretty too :)

    Alexis: that is so interesting, I can't wait to see what happens!

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  49. mathteacher: I love Fall and Winter clothing, especially coats, but like you...I only get to wear a coat maybe once or twice a year, so I don't purchase them very often. I really love the coats on page 31, though...sigh...I need to convince my husband to move to a cooler state...

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Dear J.Crew Aficionadas & Aficionados: Please feel free (and encouraged) to share your thoughts and opinions. :) However, please note that this is still a personal blog. So comments that are considered inappropriate (e.g. obscene, racist, homophobic, personal attacks, rude, and just plain mean) will be removed.

And now back to J.Crew! :)