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In Between the Numbers: Penney’s Big News

 Thinking about the hiring of Apple’s Ron Johnson as the next CEO of J.C. Penney Co.

 I think it’s a brilliant move. for these reasons:

 Because – most of all – it signals that  J.C. Penney has determined that its future will be more dependent  upon its ability to create value through the  delivery of a differentiating, sustainable, and omni-channel brand experience than by the differentiation of its products.

 It signals an acknowledgement that apparel and domestic product is largely commoditized.

 It signals an acceptance of Wall Street’s insistence that the same-old merchant prince approach to the business is not going to move the dial.  

 Bravo, Penney’s.

 Johnson inherits a business that has declined some 11% in revenues since 2006, that doesn’t have iPhones and iPads to dazzle shoppers and drive traffic, and which has a brand aura more akin to Sears than to Apple. 

  He has huge challenges in front of him.   Like – it should be said – most of US retailing.

 But I like the odds.

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The changing luxury retailing market in China

 Recently I sit down with Bertrand Pellegrin, president of b. on brand and author of the book “Branding the Man: Why Men Are the Next Frontier in Fashion Retail”  for a conversation on global retailing trends.  We had both just finished reading KPMG’s   Luxury Experiences in China report and the Economist article on Retailing in China  titled “Walmart v Wumart”. 

 We recorded the following short Q&A about the subject.  Hope you enjoy our converation.


Key points made during our conversation include:

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The Global E-Commerce Gold Rush Is On!

E-commerce is going global as retailers from around the world take advantage of faster growth trends to discover riches overseas. For many brick-and-mortar and pure-play retailers, however, expanding e-commerce into a foreign country is unknown territory.

The common questions I get from retailers who want to start new country website operations include: Where should I expand, and in what order? How do I adjust my practices to meet different cultural norms?  Which functions should be located at headquarters versus locally? How should the entire operation be governed?

To address these concerns and more, Cisco IBSG conducted in-depth interviews with leading e-commerce executives at many of the top global retailers and suppliers to understand the best practices they use to ensure online success globally. The resulting information described in a recently published paper titled, “The Global E-Commerce Gold Rush: How Retailers Can Find Riches Overseas” is pure gold for retailers wanting to grow global revenues with e-commerce.

Best practices include:

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In Between the Numbers: Demographics, Destiny, and the Great Evaporating American Middle

 35%, 25%, and $20 an Hour:

Demographics, Destiny, and the Great Evaporating American Middle

 Reading this morning about Walmart, and eight quarters in a row of comp-store declines.

 Reading last week about Sears Holding, with annual revenues down from $53B to $43B in five years.

 Reading recently about Gap Inc., with US sales down 32% since 2004 in its US Gap-branded stores.

 And – reading a few weeks ago (The Economist, 30 April) about the decline in employment among US men – blue collar men in particular.

 According to the US Bureau of Labor Statistics, the EOM April unemployment rate for US adult men was 8.8%.

 However (as The Economist points out), the unemployment rate for US 25-54 year olds without a high school diploma is nearly 35% – up from around 10% in the 1960s. Of those with a high school diploma  but no college, today’s unemployment rate is almost 25% – up from less than 5% in the 1960s.  

 The odds are that neither group will find work at pre-recession levels. In each of the past recessions, the percentage of poorly educated men in work has fallen sharply – and not recovered to prior levels economic expansion returns.  

 Or, if they do find work, the odds are that the job will pay less than before.  According to the Bureau of Labor Statistics, the percentage of workers at $20 or more-per-hour jobs in the United States – a wage rate equivalent to at least $41,600 per year – declined more than 20% from 1979 to 2007.

 Don’t get me wrong.   There are dozens of reasons why Walmart, Sears, and Gap Inc. are in the situation they’re in.

 But demographics is destiny.  

 As a retailer, you can change assortments, beat up vendors, and find new merchants.  You can open and close new formats and rapidly expand your presence on the internet.   God forbid, you can even hire consultants and change logos.

 But if the personality of your brand is irrevocably wedded to the great American middle, and that great American middle is evaporating before your eyes, there’s going to be a problem.

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Cisco Plans at NRF Loss Prevention Conference in Dallas, June 13-15,2011

For retailers, shrink is a significant issue impacting the bottom line, in some cases up to 2% of sales are lost to shrink up and it is a 107 billion dollars issue  globally. 

Shrink can come from many sources from theft, fraud or procedure errors, and loss prevention techniques is an ongoing subject of strong interest to retailers. 

Today I talked to Rick Simon, Cisco retail technology partner manager working with partner Agilence  about the National Retail Federation Loss Prevention Conference at the Gaylord Convention center in Dallas, TX June 13-15.


The exhibit hall for the conference is open June 13-14 and Agilence will be at booth #1601, demonstrating their point of sale video auditing solution on reducing shrink at the point of sale checkout.

Cisco will be the technology provider for the Agilence booth including video surveillance technologies, Cisco Cius and UCS Express.  Instead of separate digital video recorder, router and servers in each store, Cisco will combine all the functionality in a single hardware platform combined with IP-based video camera technologies.  This helps retailers reduce the technology complexity and costs in the stores which allows deployment of new capabilities in the future.

Qualified retailers can download a free expo pass form for NRF Loss Prevention Conference at and schedule meeting with Agilence and Cisco through their account managers.

Cisco partner Agilence develops Hawkeye, an industry leading POS video auditing solution that enables retailers to quickly identify losses caused by operational errors, promotion execution, systemic errors, and associate fraud. Hawkeye efficiently identifies store-wide losses at the point-of-sale before they can erode profit margins and provides retailers with a 6-to-1 ROI in less than 12 months.  For more information please visit or Cisco point of sale video auditing solution web site.

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