Retail companies that are winning 2017

How to thrive, not just survive.

Anjali Krishnan    4 mins

Retail companies that are winning 2017

How to thrive, not just survive.

Enough and more has been said about tumbling retail stocks and the retail apocalypse. 2017 has been a tumultuous year till now but it has surfaced out the good and bad of retail. And in this rapidly changing landscape checking out the companies that have done well is a particularly telling exercise.

Mike Mozart via Flickr

Ulta Beauty

Ulta Beauty is the best example of the wonders of visionary leadership. Ulta was founder in 1990 and since then had continue plodding along as an old school makeup retailer. CEO Mary Dillion who took over in 2013 led a media-makeover that focused on a stellar customer experience everywhere. This included strong loyalty programs, services like Benefit Brow Bar in stores, make-up trial apps like Glamlab and Instagram-only flash sales. She stressed not just a mechanical process of ‘upgrading to ecommerce’ but rather a experiential process that reached her customers through all the channels where they would listen and engage.

Takeway: It’s not about ecommerce or offline. It has only ever been about customer needs and wants.

Walmart Supercenter via Wikimedia Commons

Walmart

In the past few years Walmart has been on a decisive march to catch-up with the new retail world. In addition to a slew of acquisitions they have also invested heavily in ecommerce, moving sharply away from their brick and mortar only structure. These investments are showing results with Walmart continuing to report double digit growth in its ecommerce division but they also come at the cost of lower profit margins. While we won’t know the end of this saga yet it is unquestionable that among big brand retailers Walmart is the poster child for decisive and quick actions.

Takeaway: He who hesitates is lost.

Adidas

Under Armour was the darling of the footwear and retail industry for a while, promising to decimate giants like Nike and Adidas, but it looks like the giants aren’t agreeable to that plan. Adidas reported a revenue growth in Q2 with ecommerce sales jumping an astounding 66%. Adidas is a great example of a established retail company that doesn’t get comfortable about its success. While their running and training sneakers are a core part of their revenue dynamic lines like Adidas NMD (NMD stands for ‘nomad’) are constantly releasing new street style inspired designs which are a key drive of their growth.

Takeway : Even if you are Goliath, it’s always better to behave like David.

Mike Mozart via Flickr

Costco

Costo has always been known for having an employee focused outlook in contrast to rather cut-throat practices common among retailers. Market research firm GfK reported that over 45% of Amazon Prime subscribers also had a Costco membership strengthening analysts’ views that Costco can survive and add value in a world skewed towards ecommerce.

Costco has been a steady growth in the past 5 years and continues to post yearly growth due to a combination of great deals and informed, knowledgable and invested sales associates.

Takeaway: Find your niche, then win at it.

TJX

Where most companies are closing stores TJX is opening more retail stores. TJX, which runs the TJ Maxx, Marshalls and HomeGoods chains has been able to increase retail traffic at a time when most department stores are struggling to increase footfall. The stores are known for offering quality goods at cheap prices. They have a quick inventory cycle thereby ensure things don’t feel stale and the thrill of finding a deal is alway there. TJX alone is reported to work with over 18,000 vendors to buy inventory in bulk and sell it. But such a model requires deep knowledge and finesse because not only are they handling a large volume of small-batch inventory but they also have to ensure that these are distributed across their 2,500 stores with both local and global trends in mind. It’s a hard model to recreate which gives them a very strong position.

Takeaway: Being successful while doing things differently takes a lot more hard work but also builds a bigger moat.

Mike Kalasnik via Flickr

American Eagle & Aerie

American Eagle is definitely a controversial pick. At around $12, American Eagle’s stock is at half the price it was five years ago and it continues to wildly fluctuate on a daily basis. But beyond the swinging stock is the story of what was quintessentially a teen-focused ‘mall’ brand that managed to avoid the fate of other teen retailers like Aeropostale. The key success story underlying American Eagles’s business is Aerie, a lingerie focused sub-brand. While comparable brands are filing for bankruptcies or closing their mall stores American Eagle has managed to grow mainly through the thriving Aerie brand which posted a 24% growth in same-store sales.

Takeaway: One big win could pay for all the bets.

Are there any brands or stores that you believe will be successful in the long-term?

Published at: August 30, 2017

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