Insights from a merchant’s merchant

by Karen Alberg Grossman
Joe Cicio
Joe Cicio

Joe Cicio is one of the smartest guys we know. His many exec positions have included chairman and CEO of I. Magnin, corporate SVP at Macy’s, and president of retail development at Donna Karan International. Here, part one of our conversation with him on the current and future state of retailing.

Q: What’s your assessment of the current state of retail? Which merchants do you most admire and why?

A: It takes no genius to see that retail is in a time of dramatic transition. “Big” is no longer better. “Less” can often be “more”. Online, brick-and-mortar and direct mail are all facing challenges. How we meet those challenges as business leaders will establish the pluses and minuses of survival. Today, brand loyalty (what we buy and where we buy it) does not exist. And yet for me, it’s the most exciting time to be in retailing given the availability of advanced technology.

Competitively, the transitional state of retail today can become a major advantage for but a few creative thinkers who successfully reinvent themselves. It must still start with product plus an appreciation of what technology continues to offer. But it should always end with people.

Unfortunately, I don’t really see it happening. In this country, I see very little inspired merchandising that could be considered commercial. That’s what it’s all about. It’s a business. I see few risk takers. I see little creative innovation. I see retailers spending great sums chasing what they perceive as the competition. Obsessed with the competition all too often, instead of strategizing where they feel their brand should go and acquiring the right talent to make it happen. With few exceptions, I don’t see merchandise visionaries. Here are my picks for the exceptions:

**I think SELFRIDGES in the UK is doing a great job. You just feel the intense merchandising energy when you walk I through their doors.

**CRATE & BARREL has been consistently focused since its inception and amazing growth. They offer great value and impactful item merchandising. They support each SKU with outstanding presentation and point of sale product information. It’s difficult not to be taken in by impulse merchandising when walking their stores.

**I’ve watched ZARA for some time now. They also have consistently offered fashion-right items at very good value. They instinctively know how to get in and out of their inventories with perfect timing.

**UNIQLO is the king of item classification merchandising today. They seem to do just about everything right from merchandising to value to presentation to lighting and service. Uniqlo (and Crate and Barrel) understand impulse purchasing hands down. They understand their core business.

**But after all is said and done, how could anyone not admire AMAZON? Considering the short time they’ve been in business, they’re success if amazing. I find it difficult to understand why some of the struggling brick and mortar retailers of today can’t learn more from Amazon. Operationally no one comes close. I consider myself a serious Amazon shopper yet I still see opportunity for them: if you study their website (and as they embark into brick and mortar), they still have a good deal to learn about on-line presentation.

**I was very excited to learn of the long overdue shot of visual and merchandising energy administered to TIFFANY recently. When I first entered the first floor off Fifth Avenue I was filled with positive anticipation. But as I walked floor by floor I started to feel that excitement diminish. By the time I reached the top floor I realized that the excitement I’d experienced was more about the creative presentation than the merchandise. How much of the wrong blue do we really want in our homes? As a merchant, I just didn’t feel that category dominance that Walter Hoving first established so brilliantly. As a consumer, I was very disappointed: too much display and not enough product excitement to make you want to buy.  

**The new RESTORATION HARDWARE flagship downtown was a total disappointment that I was unprepared for. I’ve admired them for some time and even became a club member. The new store must be one of the great ego trips of all time. From what I can see, if they’re planning on turning a profit, just about everything is wrong from the minute you step inside. If they intended to take the Ralph Lauren mansion approach from 72nd St, they’re missing the most important ingredient: Ralph Lauren.

**BROOKS BROTHERS has come light years with their merchandising in recent years. No longer should they be perceived as just a traditional brand for the mature male or female. Great merchandising, great styling that addresses both millennials and their loyal established clientele. Great value and great service. Wonderful boys’ clothing. The best out there for back to school. Their stores need more selling floor energy and a more updated approach to store design but they really deserve credit for never alienating their core customer while attracting a new demographic.

Q: What’s the best advice you’d now give to Pete Nordstrom or Jeff Gennette, both of whom are making bold moves but neither of whom are scoring big with Wall Street?

A: I would not pretend to be in a position to offer either gentlemen advice. (I’ve never met Pete Nordstrom and have had little contact with Jeff Gennette.) Both men have daunting responsibilities. They also have golden brands with different strengths and weaknesses. Hang Wall Street: that will turn after a few good seasons. If pressed, I would say both brands are in dire need of creative energy, appreciating that it takes more than one element to make a business successful. But be careful: awareness is one thing, obsession is another.

I worry that Nordstrom’s NYC strategy might not live up to their expectations; staying focused on your core business is always the first best approach. We’ve all made business decisions we regret. A good leader accepts that and knows when to walk away. In today’s retailing world, the silver bullet is more than creative talent and good taste; it’s a time established culture starting at the top. If today’s retail leaders view their responsibilities as purely bottom line, they’re in the wrong business. The world of merchandising, of dealing with consumers, is so much more, and not for the faint of heart.

Q: What might you have done to save Lord & Taylor’s flagship?

A: Hindsight is cheap as they say but surely this could have been anticipated. I would never have sold it to a real estate firm for very obvious reasons. Had I been in a position to influence this iconic brand, I would have been absolutely sure that I had the best possible team starting with a proven CEO merchant leading the charge. I would have had a strategy that brought in ready-to-wear leaders as partners to help reposition Lord & Taylor as the “American Sportswear Store”. Then I would have had my organization search the globe to find merchandise newness, talent, and innovation to enhance its position as a retail destination for both distinctive brands and private label.

Why the CFDA did not take a position of industry outrage over this unnecessary closing of Lord & Taylor is more than I can understand. It would be staggering to read a list of revered international brands that got their start on Fifth Avenue and 39th St! And don’t think the very same scenario can’t happen to Saks Fifth Avenue. A great deal of capital investment is being poured into that building but sadly, I question their overall retail strategy. A fancy artisan restaurant will not save the day. Spending money cannot guarantee success. The right people can.

Joe Cicio is a merchandising/retail consultant; he can be reached at untoldvalue@gmail.com.

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