Archives For Retail

I am always on the lookout for entrepreneurs who are creating new businesses and unique independent brands. If it involves food it is even better. Last week I attended a reception for Shoot Out For Soldiers, a 24 hour lacrosse game benefitting wounded soldiers. More on Shoot Out For Soldiers in another post.

The Shoot Out For Soldiers event was catered by a company called MISSION BBQ. The food was donated. The barbecue dinner was outstanding. I instantly asked the question, What’s the story?

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MISSION BBQ was founded by Steve Newton and Bill Krauss, a couple of 50 something friends who shared a passion for great barbecue and a desire to build a business with meaning and purpose. The pair opened their first store on September 11, 2011 in Glen Burnie, Maryland, ten years after 9/11. Their idea was to serve good old-fashioned American barbecue while giving back to the community. A portion of their profits go to the Wounded Warrior Project, which helps veterans and their families. It was a way to thank soldiers for their service.

MISSION BBQ and its employees are inspired by the following beliefs which are posted on their website. “We believe there is nothing more American than BBQ. And nobody more American than the brave men and women who have sworn to protect and serve our communities and our country. We do what we do for the love of our soldiers, firefighters, police officers, first responders – all our loved ones in service”. What a great focus. Mission BBQ knows who their customer is and who they want to serve. Each day at noon, they stop for a minute and play the national anthem through the loudspeakers at each location. They have create a unique brand and customer experience.

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MISSION BBQ is an inspiring story of two entrepreneurs who followed their passion and created a business with a purpose of giving back and thanking the hard-working people who serve our community.  I wish them will.

Have you eaten at MISSION BBQ?

 

 

I am a big fan of the “Better Burger” concept. Better Burgers are one of the fastest growing segments in the fast food restaurant market. “Better Burger” restaurants provide upscale fast food that beats the chains on food quality and customer experience at reasonable prices. There are many regional chains emerging with exciting growth prospects. I have written in this blog about the product and marketing innovations of “IN N OUT BURGER”, “Five Guys“, “Smashburger” and “Shake Shack“.

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I am now working in Baltimore and recently discovered BOARDWALK FRESH BURGERS & FRIES in the Hunt Valley Mall in Cockeysville, Maryland. Boardwalk Fresh Burgers and Fries was founded by Dave and Fran DiFerdinando in White Marsh, Maryland in 1981. They were inspired by the legendary fresh-cut fries that they had eaten on the Boardwalk in Ocean City, Maryland. The brothers had vacationed there as children. Their idea was to make the fresh-cut french fries they discovered at the Maryland shore available to people around the country. The brothers offered their french fries with a high quality fresh burger that was hand formed every morning and made to order.

I had lunch last Sunday at BOARDWALK. My meal was delicious. My burger was made to order. I enjoyed a 7 ounce Bacon Burger with cheese and fried onions. The fries are outstanding and worth the hype. The employees were enthusiastic and helped provide a pleasant customer experience. The stores are designed in an ocean boardwalk theme which adds to their appeal.    

Boardwalk has a simple menu. Customers have two options when ordering their burgers. They can choose one of the 3 signature burgers, or build a burger totally customized to their liking. The famous fries are hand-cut every day and only made to order.  They are cooked in 100% peanut oil. Boardwalk recommends dressing them the way they do in Maryland with loads of vinegar and Old Bay seasoning. I will try that option next time. Other menu items include beef hotdogs, chicken, shakes and funnel cake fries for dessert.   

Boardwalk currently has 18 stores in seven states. Plans are under development to add 200 restaurants across the United States in the next couple of years. Boardwalk has built a unique brand and concept with strong recognition in its local markets. Others have noticed. The New York Times ranked Boardwalk Fries on their baseball stadium culinary report. Boardwalk Fries are available at Oriole Park in Camden Yards Baltimore.

Have you tried Boardwalk Fresh Burgers and Fries?

I am always on the look out for new and emerging brands that have unique stories. I also keep my eyes open for brands that also have the potential to be good investments. A couple of nights ago I was watching Jim Cramer on CNBC’s “Mad Money” and he did a comparison of the investment potential of two recent Initial Public Offerings, The Container Store (tcs) http://wp.me/p2zj1x-D9 and Zulily (zu). I was intrigued by his comments on Zulily and thought that I would do some of my own research to better understand their story and value proposition.

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Zulily was founded in 2009 by Darrell Cavens and Mark Vadon. It is headquartered in Seattle and has offices in London, Columbus, Ohio and Reno, Nevada. Zulily is an online shopping destination for moms. Zulily offers daily deals for moms, babies and kids. Each morning Zulily offers a fresh selection of hand-picked quality children’s apparel, women’s apparel, toys, infant gear and home décor—all at an average savings of 50%. The flash sales include over 4,500 items and typically last 72 hours. It creates an impulse-driven shopping experience while helping move excess inventory sourced from a variety of vendors.

Moms are a highly lucrative market. According to the U.S. Census Bureau, 39 million U.S. households have children under the age of 18.  Women manage most household spending and account for almost two-thirds of all online shopping. Zulily has over 2.6 million active customers who have purchased at least once in the last 12 months. There is tremendous potential for future growth. 83% of orders were placed by repeat customers

Zulily has created a proprietary system that delivers 10 million daily emails to consumers who have opted in to receive notices of 72-hour sales.

Zulily went public on November 15th at an initial offering price of $22. On Friday the stock closed at $41.02 up 86% in less than two months. For investors it is a very unique and fast growing company.

In the first nine months of this year, sales more than doubled to $438.7 million from $202.8 million. Another unique aspect of their business model is that Zulily doesn’t purchase a product from a supplier until a customer places the order. This help boost cash flow. Everything in its warehouse has been paid for. There is little inventory risk.

It has stocked its flash-sales with product from “smaller boutique vendors” and “emerging” companies—12,000 different sources in all. This allows Zulily to offer unique merchandise not featured at “Big Box” retailers. Zulily has also focused on creating an enjoyable online shopping experience.

Do you think Zulily will continue to grow at a fast pace?

John Lewis has built one of the most loved retail brands in the United Kingdom. People are attracted to the John Lewis Brand because of its purpose, core values, unique business model, emotional advertising and employees (partners) who deliver a great customer experience.

The John Lewis Partnership is an employee-owned company which operates John Lewis department stores and Waitrose supermarkets. The company is owned by a trust on behalf of all its employees — known as Partners – who have a say in the running of the business and receive a share of annual profits. John Lewis is one of the largest private companies in the United Kingdom.

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The John Lewis Partnership puts the happiness of Partners at the center of everything it does. The goal was to create a different type of company owned by Partners dedicated to providing customers with great service. Happy empowered employees with ownership in the company who have a vested interest in providing high levels of customer service.

John Spedan Lewis formed the partnership in 1929 and began distributing profits to employees. His goal was to create a company that gave every Partner a voice in the business they co-own. His combination of business acumen and corporate conscience was ahead of its time.

The Partnership’s ultimate purpose is the happiness of all its members, through worthwhile and satisfying employment in a successful business. The Partnership is owned in trust for its members, they share the responsibilities of ownership as well as its rewards profit, knowledge and power.

They have won a number of awards as Britain’s favorite retailer because they provide a better customer service experience than their competition. Their advertising including this years holiday campaign builds a strong emotional connection with consumers.

The success of the John Lewis Partnership retail operations can be attributed to a focus on the following:

1. Partners Who Care About Providing Great Customer Service
None of the 70,000 people who work at John Lewis is an employee. They are “Partners” who jointly own the business. They earn profit-sharing based on how much profit is generated by the business. This encourages them to give great service because they feel a sense of ownership. John Lewis believes that if you treat your partners well, it will lead to good customer service.

2.  Providing Great Training For Their Partners – But Empowering People to Make Decisions
Allowing Partners to think for themselves gives them a sense of responsibility – which, as a rule of thumb, they tend to want to live up to.

3. Encouraging Feedback from Customer Facing Staff on what Customers Really Want
John Lewis involves customer facing staff in improving the way things are done. They leverage their unique insights to improve service.

4. Be Exceptional
Partners at John Lewis have strong product knowledge and embrace every opportunity to provide great service.

5. Provide Great Customer Service Levels Online
John Lewis has a user-friendly website. They also make it easy for customers to contact a real person as soon as they want to.

Can you think of another retail brand where employees “live the brand” and create a great customer experience?

The C.F Hathaway Company was founded in Waterville, Maine in 1837. The company made shirts for Union soldiers during the Civil War. The company built the ready to wear shirt business in the United States.

For over 100 years, the company succeeded without advertising. In 1951, Ellerton Jette President and Owner decided it was time to expand Hathaway and build it into a national brand. Like other small business owners, he didn’t have much money. However, that did not prevent him from thinking big. He had heard about the advertising talents of David Ogilvy. So he scheduled a meeting with Ogilvy. Hathaway’s ad budget was only $30,000 so his account was not that attractive to major advertising agencies. He knew he had only one chance to forge a relationship with one of advertising’s most creative thinkers. To convince David Ogilvy to handle the account, Jette promised that he would never alter his copy or fire him. The agreement stood for over 20 years. Jette was smart enough to think beyond his own goals and understand the problems that advertising agencies face, clients that change copy and fire them at a moment’s notice.

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While working on the ad campaign, Ogilvy became inspired by photos of politician Lewis Douglas sporting an eye patch and as a last-minute decision at the photo shoot decided to photograph a distinguished looking man wearing a white button-down Hathaway shirt and a black eye patch. The eye patch was a great story and created an emotional connection with consumers. Consumers wondered how the man had lost his eye. The story of the “The Man in the Hathaway Shirt”  advertising was very successful. When the ads ran in The New Yorker, Hathaway’s entire stock sold out. The company’s sales doubled in less than five years. The “Hathaway Man” campaign was selected by Advertising Age as #22 on its list of the greatest ad campaigns of the 20th century.

I have owned several Hathaway white button-dress shirts over the years and appreciated their quality. It’s hard to find a Hathaway shirt today.

The Hathaway Brand has struggled in recent years and has faded from most retail shelves. The brand has been sold several times. Its decline has been blamed on competition and the rise in the trend to casual wear. In 2002, Hathaway closed its manufacturing facility in Waterville, Maine. It was one of the last companies to manufacture shirts in the United States.

From my perspective, Hathaway is an iconic American Brand with a great story. It seems time for a re-launch.

Did you ever own a Hathaway Shirt?

Restoration Hardware has repositioned itself to be a luxury lifestyle brand. It has a great story.  The brand was founded by Stephen Gordon in 1980 in Eureka, California. The idea for the company came while Gordon was restoring his Queen Anne style house. He had great difficulty finding period hardware. He recognized a need in the marketplace. The brand was initially about addressing the need for authentic period hardware. The initial store was founded in Gordon’s house in Eureka. Over time, Restoration Hardware expanded product offerings to include 1920s-themed lighting, bathware, curtains and furniture. Fifty percent of the business was novelty type items. The company expanded rapidly and went public in 1998. By 2001 Restoration Hardware was close to bankruptcy. Its stock had gone from $37 a share to $.50. It problems could be blamed on the lack of a focused merchandise assortment. In 2001, Restoration Hardware did not have a clear point of view.

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Gary Friedman, former President of Williams Sonoma, stepped in and over time saved the company. He spent six years remaking the business, slowly and methodically getting rid of the novelty items and bringing in furniture, linens and lighting. He made Restoration Hardware relevant. Restoration Hardware repositioned itself as a retailer of luxury home furnishings. Restoration Hardware’s sofas, chairs, tables, bureaus and other products are largely modern updates of classical designs. Its target market: households with incomes above $200,000 or “aspirational” customers trading up from department stores and other retailers.

The company struggled when the housing bubble burst in 2008. The company was forced to restructure, close stores and went private in 2008. The company lost money from 2008 to 2011. The company went public again in 2012.

This year it announced plans to transform itself from a high-end brand in home furnishings to a luxury lifestyle brand. The brand has evolved to become RH, which is positioned to curate a lifestyle beyond the four walls of home.

Not only is the company branching into “curated” collections of contemporary art, antiques and kitchen ware, it also plans to launch RH Atelier, a luxury brand of apparel, accessories, footwear and jewelry. Key to Restoration Hardware’s ongoing transformation will be the opening of much larger stores called Design Galleries to better showcase all of its products.

Five full-line Design Galleries have opened since 2011 in Los Angeles, Houston, Scottsdale, Ariz., and most recently Boston and Indianapolis. With an average of 21,600 square feet of selling space, they are about three times the size of the company’s legacy stores, not to mention more productive.

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The Boston outlet is the largest at 40,000 square feet. Besides displaying new product categories such as tabletop goods and “objects of curiosity,” the four-story historic building features a wine bar, beer pub, billiard lounge, library, club rooms and conservatory.

One strong point is the brand’s positioning. It’s above mass-market players such as Crate & Barrel, Williams Sonoma and Pottery Barn, but below top-end designer showrooms used by decorators.

The jury is still out whether the company can make a go of all of its ambitious undertakings. However recent results have been very positive. In the last quarter same store sales increased 26% and earnings jumped 48%. Its stock price has more than doubled since its IPO last year.

Have you shopped at a Restoration Hardware Store?

Michael Kors is one of the hottest fashion brands in the world. It is an overnight sensation that has been 30 years in the making. Persistence pays off. Michael Kors was founded in 1981. Michael Kors has become a  strong global lifestyle brand with a broad appeal. The brand’s products have a “jet-set” aesthetic that is both stylish and sporty. Michael Kors sells affordable luxury. The affordable luxury segment has bounced back strong in 2013. The company sells accessories, footwear and apparel in upscale department stores and its own stores. Michael Kors is the “it” brand in this segment of the market. Michael Kors has surpassed Coach as the number one luxury fashion brand.

Success in the fashion industry is often fleeting. However Michael Kors is currently enjoying fame and success. The brand has done a great job connecting with the American fashion consumer. The brand has excelled because it has stayed focused on the market’s sweet spot — people with money who aren’t rich yet. Michael Kors has a strong understanding of the consumer he is designing for.

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Michael Kors has generated a strong buzz in the market. Kors was a judge on “Project Runway” since it first aired in 2004. The exposure has been very important for the brand. It has built brand awareness with young fashion consumers. When Project Runway started in 2004, the Michael Kors Brand had brand awareness that was under 20%. Today over 70% of Americans are aware of the brand.

Michael Kors is also one of the fastest growing stocks in 2013. The stock price is up over 50% year this year. The brand went public in 2011. It had already surpassed Ralph Lauren in market value. The company has delivered impressive earnings growth the last few quarters and a recent pullback to its 50 day moving average may represent a buying opportunity for aggressive investors. Strong brands that understand their target audience continue to be a good investment.

It will be interesting to see if Michael Kors can continue its rapid growth. It is difficult to maintain that competitive edge. The key will be designing relevant products that meet the lifestyle needs of his target consumer and continuing to market in innovative ways. There is always a market for great design. In the short-term, I wouldn’t bet against Michael Kors.

Do you think the Michael Kors Brand can continue its explosive growth?