Monthly Archives: February 2012

Back To Strategy

February 23, 2012 By in Luxury, Strategy Tags: , , , , , , , , , , Leave a comment

We have spent the past few weeks talking about the “HOW” of a potential luxury strategy with a focus on buying.  Today, I want to go back and reinforce “WHY” luxury is so important. Here are some recent quotes from articles in The New York Times, Women’s Wear Daily, and Vision Monday – a good cross section of publications and viewpoints.

Eduardo Munoz/Reuters

The New York Times – Wednesday February 22, “High End Retailers Report Strong Profits, but Walmart Shoppers Still Struggle.”

  • The holidays turned out to be a lot brighter on the high end judged by the results of four major retailers.  While Walmart had to lower prices so aggressively that it hurt its profit, retailers focusing on higher-income customers crowed about the solid prices those shoppers paid.
  • “I think there is generally more confidence today than there was at this time last year” – Terry Lundgren, Macy’s Chairman and CEO. He added: “Bloomingdale’s business was particularly strong.  The Bloomgdale’s customer is categorized as one who’s buying more luxury product and that business was very good, and you’ve seen that from the other luxury retailers.”
  • Price cuts meant Walmart’s margin decreased by .4%
  • Saks Fifth Avenue has historically high gross margin rate performance.  Reduced promotional activity and increased full price sales led to a .7% increase in margin.  Net income in Q4 rose 48% while sales rose 7.7%.

Women’s Wear Daily – Friday February 16: “Nordstrom Gains With Rack, E-Commerce.“

  • Nordstrom sales rose 7.2% for their current fiscal year. Net income rose 11.4%.  This year, Nordstrom expects sales to increase between 4% and 6%.
  • “Regular price selling remains at historically high levels” – Blake Nordstrom, President.

Vision Monday – Friday February 17, 2012: “2012 ‘Off to Stronger Start,’ Says Optical Business Barometer from Jobson Research.“

  • “With the January 2012 Jobson Optical Business Barometer Rating, the new year appears to be off to a strong start, and continues a strong showing that began in November of 2011,” In December, the index saw a significant improvement when the Barometer rose 0.3 from November’s index of 3.5. The January 2012 and December 2011 ratings for overall optical business are the highest since March of 2011 and higher than any month in 2010.
  • The U.S. economy isn’t the only thing that seems to be strengthening and stabilizing. Numbers for the vision care industry are on an upward trajectory as well with total U.S. revenue at retail of all vision care products and services generated during the 2011 calendar year growing to $32.8 billion, representing an increase of almost 3% from 2010 when revenue hit $31.9 billion, according to VisionWatch, a research study conducted by The Vision Council.
  • Overall units for complete eyeglasses (frames and lenses) sold increased marginally, with less than 1% gains in both frame and lens sales during the year-ending period December 2011. In dollar revenue terms, there was a healthy growth of 3% for frames and 1% in the lens market. Approximately 67.1 million pairs of frames were sold during the year-ending period December 2011, worth $8.4 billion at the retail level. During the same period, approximately 75 million pairs of Rx lenses were sold, worth $9.6 billion at the retail level.
  • Dollar sales of plano (non Rx) sunglasses increased almost 5% in the year-ending period December 2011—the highest growth rate since the recession started, to close out the year at $3.4 billion for 92.2 million pairs sold. The increase is attributed entirely to rising prices in the sunglass market as the number of units sold did not change from 2010.

What does all this mean for you?  A strategy that includes luxury product will lead to increased sales, increased margins and an overall unique point of view at retail that can help you stand out from the crowded sameness of our market and retail in general.  See the Top Reasons I had printed weeks ago.  It rings very true in light of the recent news articles:

7 key reasons luxury product should be part of your overall retail strategy

  • Luxury sales are growing at a faster pace than other price point categories.
  • Luxury attracts affluent consumers – they are more loyal, they are wealthy, they are networked and thus they tell friends about you if they like you.
  • Luxury usually means local and NOT chain stores.  Americans like to shop. They like to spend money (despite the current crisis). And they like to do it locally and not in chains.  They want something special and they want it locally.  Don’t give the business away to a chain.
  • Luxury means generally higher margins on all sales
  • Luxury means higher retail price points which means greater sales volume.
  • Luxury means higher sales per patient visit/transaction –All of this means you can increase your sales without even increasing your patient base or the amount of people coming through your door.  You can increase sales without increasing any marketing or outreach expenses.  (we will discuss this in more detail in a future post)
  • Luxury product is the best way to stand out from the competition. It’s the best way to stand out from the chain stores that all look the same.  And it’s the best way to fight the ever present internet and all the discounts you can find there.   In short, luxury product is the means to creating your own point of view at retail.

The 54th Grammy Awards

February 15, 2012 By in Culture Corner Tags: , , , , , , , , , , , , 1 Comment

To a music purist, the Grammys are always controversial in that they try to appeal to so many different segments of the listening public and have always been accused of focusing too much on pop music at the expense of rock or rap or other genres that are more culturally relevant at the time.  Having said that, it is still a fun awards show and it is still MUSIC, right?  I stayed up late Sunday to watch the show and thought it would be fun to take a break from luxury eyewear and talk about one of my real passions – MUSIC.

It was very sad to learn about the death of Whitney Houston.  I can’t say I was a huge fan of her music, but I can certainly appreciate her incredible talent.  So sad to see how her life took its turns over the years and so sad for her family and especially her daughter.  Thank you Jennifer Hudson for your tribute.

As LL Cool J said at the show, the best way to celebrate and honor is through MUSIC.  That is what heals and hopefully makes us all smile.  So let’s focus on the fun from the show.

First – is there a better way to start any music show than with Bruce??  For me it was very bittersweet seeing him up there without Clarence but at least the band is still up there.  Read Bruce’s eulogy for Clarence here.  Truly awesome.  Can’t wait for the tour to start.

Second great moment was watching the Foo Fighters.  I always loved Nirvana but never really got into Foo Fighters – however, I have always liked the songs I hear. I have a totally newfound admiration for Dave Grohl and the band.  Like Bruce, he is ALL about the music. No dancing, no tricks, no “show”.  Just hard-core great music.  His acceptance speech said it all.  This is what music should ALWAYS be about:

“This is a great honour, because this record was a special record for our band. Rather than go to the best studio in the world down the street in Hollywood and rather than use all of the fanciest computers that money can buy, we made this one in my garage with some microphones and a tape machine…

“To me this award means a lot because it shows that the human element of music is what’s important. Singing into a microphone and learning to play an instrument and learning to do your craft, that’s the most important thing for people to do.

“It’s not about being perfect, it’s not about sounding absolutely correct, it’s not about what goes on in a computer. It’s about what goes on in here [your heart] and what goes on in here [your head].”

He has it RIGHT.  Music is about your soul – not a computer generated sound.

I still love Coldplay.  The recent album was not as well received but it is GOOD.  And they still play a GREAT live show.  Hard to repeat the energy from their “Clocks” performance a few years ago but they are still excellent and it is great to see great “rock bands” still focusing on albums and making great music.  In the age of iTunes and singles and pop hits you can download (of which I am totally guilty too), Coldplay reminds us of the great “bands” making albums.

We then moved on to a lifetime achievement award for the Allmans.  When did all my favorite bands become the “lifetime achievement” guys?  Nice to see the Academy recognize “the Brothers”.   They have arguably had a lot more influence over music than the majority of performers featured on the Grammys over the years.  And a great way to gear up for the annual Beacon shows this March.

Last but certainly not least — it is the rare album or singer/band that can truly dominate a year in music and really deserve it.  I am 41 years old and in my adult lifetime I can only think of U2’s The Joshua Tree or Nirvana’s Nevermind or Michael Jackson’s Thriller that really foot this bill – that changed the conversation for a year (although there were MANY MANY great albums during this time for sure).  Adele accomplished it and then some this year.  I don’t care how often I hear her on the radio. I do not care how overplayed the album has become.  It is just GREAT and she deserved every award she won.  I saw a great tweet this morning calling her a combination of Patsy Cline and the second coming of Dusty Springfield.  Her voice is so much more.  And she seems so down to earth on top of it all.  Thanks Adele for an AWESOME album.

So go listen to some music this week and remember the important things in life – friends, family, and how you feel when you hear a GREAT song.

Buying IV – Trade Show Season

February 3, 2012 By in Buying Tags: , , , , , , 2 Comments

Trade show season is fast coming upon us.  Mido is a few weeks away.  Vision Expo is less than 2 months away.  And there are MANY smaller regional or state sponsored shows throughout the spring selling season.

Why do we all visit trade shows? To see new products? To buy new products? To efficiently work with our current partners? To get necessary education credits? Because we have been doing it for years? An excuse to travel?

While trade shows can be challenging, as they’re expensive to attend and take away valuable time from the office/practice, they can also be very effective as part of an overall buying strategy IF planned and managed properly.  Here are a few things to consider when planning and then visiting a trade show:

  • LOOK:  Take time to walk around and actually see the trade show.  If you have wall-to-wall appointments at a show you may find you did not really feel like you attended a show….  You just had meetings that could have been held anywhere.  Try planning a half a day with NO appointments or scheduled commitments.  Just walk around and look and talk to people.  You never know what you might see or learn or who you might meet.
  • LEARN: Take some classes on topics that interest you – and always take a business/merchandising class to learn about the newest ideas and trends in the industry.
  • TALK:  Make sure to always meet new people and vendors and see new collections.  You may not have time back at the office so a trade show is a great place to make time and see that new collection you had heard about, or meet the vendor who has been calling you with an intriguing new idea or new collection.
  • OBSERVE: I hate to succumb to trade show psychology, but see what booths are busy.  There is usually a reason.  The booth may not be for you but you should at least know what “all the fuss is about”.
  • ASK:  Ask your patients and staff in advance what they feel is missing from your current offerings.
  • STUDY: In advance of a trade show, make sure to do some planning and research.  Aside from the above, make sure to set the appointments you know you need to make, make sure to research new brands or collections in advance (so you have an idea of what you want to see live and in person), and make sure to leave time for all the above ideas as well.

Is this something with which you have experience?  Please share!  Thank you.

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