No Turn On Red

Almost one year ago, I discussed the number of reasons why Gap, Inc. should integrate all of their brands online. Today, they’ve taken the first steps to doing exactly this. They’ve announced upgrades to their website that integrates their brand websites into one shopping session. Now, the customer is able to shop all four brands (Gap, Old Navy, Banana Republic, and Piperlime) using one shopping cart, one checkout process, and one shipping method. Kudos to Gap for making it easier for the user to shop their brands all at once.

I would still like Gap to recommend products across brands - Sell me a pair of Old Navy shorts with my Gap hoodie. I would still like to see them blog about new fashion items and offer ways to mix and match items across brands. But an integrated shopping and checkout experience is a positive step forward for this retailer.

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Was in an Old Navy this weekend, really briefly. Didn’t get much chance to dive into the new merchandise, but it looks like they are starting to transition into Back to School. Saw that the denim has been moved back to the front on the Missy side and is supported with a new graphic package that looks really sharp. Die cut words calling out the “Denim” shop on the Mens side and the different cuts of denim on the Missy side. Looks like they are cut out of foam core or something similar, but did not get a real good look at it. The picture above is an example of what the Mens side looked like.

I’ve gotta give credit to the store I was at (Freehold, NJ) as they were looking real sharp (presentation wise) going into the weekend. Look at the fold on those jeans! Typically, I haven’t been seeing that when I go to the mall on a Friday afternoon - and honestly, it’s not something I’ve seen at Old Navy all that much lately. First thing in the morning, their stores look great but the on-going maintenance, during the day, isn’t always there. But this store nailed it.

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This weekend, the New York Times ran a pretty interesting piece examining how some supermarkets are changing to a one line for all registers approach, versus the traditional one line for each register. Called A Long Line for a Shorter Wait at the Supermarket, they explain:

By 7 p.m. on a weeknight, the lines at each of the four Whole Foods stores in Manhattan can be 50 deep, but they zip along faster than most lines with 10 shoppers.

Because people stand in the same line, waiting for a register to become available, there are no “slow” lines, delayed by a coupon-counting customer or languid cashier. And since Whole Foods charges premium prices for its organic fare, it can afford to staff dozens of registers, making the line move even faster.

This approach has worked well for banks for years and has been adopted by some retailers and department stores. I believe that it (usually) a great way to expedite the checkout process, as I hate when I get in a line and realize that a person is paying by check and making a dozen exchanges and has questions about all of the merchandise.

My local Old Navy usually maintains a single line for all registers - but I’m not sure if it is by Old Navy’s design or whether the customers who frequent the store have adopted the practice on their own. I’ve yet to see the same thing happen at any other Old Navy.

I know Kohl’s has their stores running a similar program during the holiday season and it works. It not only helps to create a (more) efficient checkout experience, but it also cuts down on the confusion that would be created from long lines for each register. On the busiest of busy days, I know it even cuts down on arguments between customers!

So, I support the single line process but I wonder how well it will translate to supermarkets. I can see some supermarkets adopting this policy, but on a whole, traditional food retailers will shy away from this innovation. Fact is that the majority of supermarkets aren’t designed for a system like this and a single line would eventually force customers down aisles and block merchandise. If a retailer redesigns their supermarket layout, with a single line concept in mind, they can get it to work. But the majority of supermarkets will never see this.

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Looking at the Old Navy website to see what’s new, I noticed a box on the side of the main page advertising Crocs from Piperlime. Piperlime is the online footwear website that Gap launched last year. Carrying a range of styles and brands, this website is a very interesting endeavor by Gap.

Up until now, I don’t remember seeing much advertising for Piperlime on the other Gap Inc. properties. I could be wrong on that, but nothing has jumped out at me in the past. After seeing this integration on the Old Navy website, I checked and it is also on the main page for Gap and Banana Republic.

This is a great way to leverage their own brand through multiple channels. I’d venture to guess that a large segment of the shoppers of Gap, Old Navy, and Banana Republic, are not aware of the Piperlime brand. It is very smart to see them expose the brand this way.

I would love to see them take another step and integrate Piperlime even further into their brands. Why not include Piperlime shoes as recommendations to outfits on Gap.com? I realize all three of their brands have footwear selections of their own, but they are very limited compared to what Piperlime is offering.

In order for Gap to continue their turnaround efforts, they need to focus on three different consumer segments for their three brands. It is something they are working on already. But I’m imagine that there is still going to be some overlap between the brands. Why not take things even further and integrate all of the brands? Not one website, exactly, but recommend a Gap sweater to go with a pair of Banana Republic khakis and shoes from Piperlime.

Customers who bought this Gap shirt also bought these Old Navy jeans. I know I’m not the only one shopping at all three of their stores.

A great way for Gap Inc. to do all of this would be with a blog. Put a human face on the company and show off the newest fashions. Show me the new collection coming into my local Gap store and show me how I can dress that up with items from Banana Republic. Using already available technology, like blogging, could be a cornerstone of Gap’s continued regrowth efforts.

Again, I don’t think Gap should combine all of their brands into one. They need to have distinct plans for all of them. But there will be overlap and, I just have to wonder, if there is opportunity to leverage that online.

More Piperlime images:

What do you think? Am I crazy to think this or Gap Inc strengthen their overall brands by integrating them somehow online?

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In an effort to learn some new technology and add something new to this website, I have developed a simple application to track and graph retail monthly comp store sales data. Also known as same store sales, this is a measurement of change in sales in stores that have been open for over a year.

Located at http://www.noturnonred.org/charts, the Retail Monthly Comp Sales Charts is a dynamic application using PHP, Ajax, and MySQL. Still in it’s early stages, it will be updated monthly when the new retail numbers are announced. The database currently contains data for approximately 20 retailers that I cover often in this blog, from January 2005 to present. In addition to viewing the data by retailer, you can also compare two retailers over the same time period. With time, I will get additional retailers into the database and extend the range of information available.

I love looking at these numbers and I created this application for me to better spot trends in retailers’ sales.

For example, does American Eagle’s healthy sales this year make it appear that they could be in for a very solid back to school season? It seems that they have had a more positive trend this year, compared to some other similar retailers in the marketplace.

Could this slight uptick that AE is showing be the foundation for a great BTS season?

These are the kinds of things that I like to look at. While I may not always know the reasons for why things are trending one way or another, I still like to look at these numbers. I hope the application I have developed is useful to others, as well.

Again, the URL for the Retail Monthly Comp Sales Charts is http://www.noturnonred.org/charts/. Let me know what you think.

Note: Motley Fool has a very good roundup of what exactly these numbers are and what they mean to retailers and analysts. They explain all of this much better than I can.

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Today’s Washington Post has a very detailed, in-depth look into teen shopping habits that, I’m guessing, is going to make the rounds at corporate offices of mall retailers today:

Sixty-one teenagers from across the Washington region descended upon Tysons Corner on a recent Saturday. And we were there to capture it all.

We wanted to learn how today’s teens make their purchasing decisions, how they calculate value and how they figure out what’s cool. These teenage volunteers, all between seventh and 11th grade, brought their own money, friends and sense of style. Some came with their parents; some with their parents’ credit card. But all of them brought strong opinions about what they like — and what they don’t.

More than a dozen Washington Post and washingtonpost.com staff members documented the shopping expedition through stories, photographs, audio and video. We gained insight into teen consumer psychology and the latest trends, but we also learned a lot about the teenagers themselves.

With 10 associated articles, photos, video, and an interactive map detailing how many people visited different stores and how much money was spent, this is a rather fascinating read. Detailed, detailed, detailed. Only click on this link if you have time to kill, because it will suck you in with the amount of information available: Tracking Teen Shopping Habits.

I’m not going to be able to sumarize everything that the Washington Post has in that article, but there are a few points that jumped out at me that I’d like to share:

Collectively, the teens spent the most money at Hollister ($498) with Urban Outfitters a distant second ($319). $288 was spent at American Eagle while $198 was spent at Abercrombie & Fitch. Old Navy ranked up there, with over $160 being spent by these teenagers. Non-existant in this group was PacSun, with 10 visits and no money being spent.

These teenagers are smart. One article centers around their price conciousness (When Mom’s Not Paying, Cost Is a Deal-Breaker) and one article is about their shopping strategies (On a Mission to Buy, With a Plan of Attack). These teenagers came equipped with plans, checking out fashion and getting information from the retailer’s websites prior to stepping foot in the mail.

Where’d denim go? These kids aren’t shopping for jeans, apparently.

Teenagers aren’t just shopping at specialty retailers. This group is also looking at Macy’s, Nordstrom, Bloomingdale’s, and Lord and Taylor to find the best deals.

The work put in to this report from the Washington Post is incredible. Like I’ve already said, this is a really fantastic read with a ton of information.

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If you look at the retail comp store sales numbers for the month of April, you are looking at one ugly picture. But this was to be expected when taking into account the early Easter holiday this year.

For the month of April, the mall posted lackluster numbers: Abercrombie & Fitch saw a decrease of 14% (further breakdown of the brands: A&F adult -13, abercrombie, -18, Holister -17, & Ruehl -6), American Eagle down 10, Aeropostale down 14, Ann Taylor -12.8 (further breakdown of the brands: Ann Taylor -8.2 & Ann Taylor LOFT -17.4), Gap Inc down 16 (further breakdown of the brands: Gap North America -14, Banana Republic -13, Old Navy -20, and the International division -5), Hot Topic -9.1, Limited Brands -1.0, PacSun -14.

Some department stores saw slightly better numbers, but not all of them. Winners included Nordstrom (up 3.1) and Saks Fifth Avenue (up 11.7!!). On the flipside, Kohl’s was down 10.5, Federated was down 2.2, JCPenney was down 4.7, and Dillard’s was down 14.0.

Target saw a drop of 6.1 and Wal-Mart was down 3.5.

These numbers are bad, but are the indiciative of a worrisome trend? Look at March’s numbers and remember that these April numbers don’t include Easter. I think there are some retailers who are struggling, but the industry as a whole is just fine. A better picture of retail health will be seen over the next two weeks as retailers release their second quarter earnings results.

More information from Minyanville and the New York Times.

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Same store sales for the month of March are in. Easter fell a week earlier this year and that propelled retailers to a strong month. Across the board, analysts projections were beaten and CEOs are congratulating themselves on a job well done.

Mall based specialty retailers saw a stronger month than they had seen in recent memory: Same store sales were up at Abercrombie and Fitch (up 7.0% vs 1.4% estimate), American Eagle (up 20.0% vs 10.9% est), Aeropostale (up 15.9% vs 9.3% est), Hot Topic (3.4% vs 0.3%), and even Pacific Sunwear (14.1% vs 3.3%).

Gap Inc posted an overall increase of 6%, but look at the brand breakdown: Gap North America was up 4% vs. -13% the same month last year, Banana Republic up 8% vs. -7% last year, Old Navy up 10% vs -15% last year, and Gap International down 5% vs -16% last year. Overall the company showed a strong month, but I am most impressed by the gains at Old Navy. Female shoppers must be responding well to the new line of babydoll dresses (I know my girlfriend has! I’m sure at least 2 of Old Navy’s 10 percentage points increase are due to her March shopping).

Mid-tier department store retailers Kohl’s and JCPenney beat estimates with same store sale increases of 16.8% and 10.6% respectively. Nordstrom’s saw sales rise 15%, while Federated struggled and came in short of estimates (3.8%) with same store sales rising only 2.3%.

Like everyone else in my town, I found myself in my local Target at 9:30 the night before Easter looking for candy and easter baskets for my neices & nephews. With the way that place was cleared out, it’s no wonder Target as a chain posted a same store sales increase of 12%. Wal-Mart came in with a 4% increase. Not good, but not great.

More information from Minyanville and CNBC.

I am traditionally leary of the March or April sales on their own, due to the yearly differences in the date of Easter. I’m interested to see how well these numbers hold up when April’s final numbers come out. It looks like most retailers benefitted from the early Easter, which allowed those sales to get lumped in with March’s overall sales - as opposed to April last year.

Will April be as kind to retailers? Time will tell, but I’m betting that with the cold spell over the Northern part of this country that sales are going to be very, very interesting.

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A mixed bag of results for retailers. Generally positive month for department stores, but a pretty wild range of results for mall-based retailers. More than a few full year outlooks have been cut, prompting investors to react accordingly.

Department stores fared decently with the mild weather. Same store sales for Kohl’s up 3.0%, JC Penney up 2.6%, Federated up 4.4%, Dillard’s fell 5%, Nordstrom was up 9.0%, and Saks was up 11.0%. Mixed bag of results, since even the positive gains for KSS, JCP, and Federated still fell below expectations.

Specialty retailers were generally beat this month. Same store sales for Abercrombie were down 1.0%, American Eagle was up 13.0%, Aeropostale was up 1.7%, Ann Taylor was down 5.3%, Gap down 8.0%, Hot Topic down 5.1%, Limited up 4.0%, and PacSun down 3.2%.

Target was up 4.1% while Wal-Mart same store sales were up 1.6%.

Seems like the mall stores, with space at a premium, were hurt the most by the mild weather nationally. With only so much space available in the store, and most of that devoted to sweaters and cold weather accessories, things can go sour fast when no one is shopping for that.

More coverage from Minyanville.

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