Why change is the name of the game
Will replacing leadership promote impactful, strategic retail changes?
London billboards in the early 2000s were plastered with Sarah Jessica Parker in her Gap attire. She even starred alongside Lenny Kravitz in a video highlighting the 2004 Fall collection and has maintained a close relationship to the well-known brand. However, even a Sex and the City icon wasn’t enough to salvage a store full of basic basics, and in September 2021, Gap pulled out of all its European stores. An equally significant overhaul occurred in early July 2022 when Gap CEO Sonia Syngal stepped down. Those who have continued to love the brand have been left wondering if these changes mark the beginning of the end or are a new beginning.
With a less-than-desirable macroeconomic outlook, retail C-suite renovations in the retail industry are becoming so commonplace, it hardly feels like news to report it. But while it may sound cliché, a setback can be a set up for a comeback. What remains to be seen is if the high-profile changes will produce the creative approaches requisite for these retailers to make a strong comeback. Brick-and-mortar still holds a significant edge over e-commerce, and with new blood often comes new game plans. If the innovative strategies of these retailers hold up to quality in-store testing, the outlook for all these brands looks promising even in the wake of the current macroeconomic storms.
Who, what, why, and opportunities for retail change
Here’s a quick summary of brands giving senior leadership a new face.
What: Stepped down
With Stranger Things making retro the new fad, using iconic Gap attire to appeal to Gen Z and Gen Alpha has great potential. Already a brown Gap logo hoodie from yesteryear went viral in late 2021. Additionally, the younger generations care about social causes and full inclusion, meaning the plus-size initiatives still have teeth. Bodequality, as their plus-size campaign has been dubbed, failed because of inventory miscalculations not because the premise itself was faulty – something that easily could be adjusted with adequate in-store testing prior to rollout.
Who: The current Chief Operating Officer, Jeffery Owen, will replace Todd Vasos as CEO
What: Vasos chose to retire
Why: Vasos has been with the company for 14 years, having been CEO since 2015. His departure comes at a time of growth for the company, enabling him to leave on a good note.
Opportunities for change: The Popshelf test-stores have proven a successful concept. Appealing to mid-income, suburban women, they are now poised for significant expansion. The question then turns to the current dollar-store algorithms and ways to keep the stores already in place profitable. Merchandising and innovative pricing strategies could prove beneficial. With inflation still rearing its ugly head, the budget concept connected to dollar-store models carries great appeal. Testing to know how to capitalize on consumer preferences during the economic downturn will be key.
Who: Amy Hauk named as CEO for Victoria’s Secret and PINK
What: Combining Victoria’s Secret, PINK, and Beauty into a single organization.
Opportunities for change: Undergarments are a staple essential. Even in recessions with high inflation, women are going to need them. Finding the right messaging to get women to buy them from Victoria’s Secret will be key to navigating through the current macroeconomic jungle. Already the brand is changing focus to inclusivity over exclusivity, appealing to women from every clime – a note sure to resonate with younger generations. As the company continues to rebrand and become customer-centric, testing will need to be an integral part of their decision-making strategies. To meet customers’ needs, it is essential to know what customers are drawn to and what deters them – not only on a universal, global scale but also on a store-by-store geocentric scale.
Who: CEO Mark Tritton has been replaced by interim chief Sue Gove
What: Stepped down
Opportunities for change: While change can be a good thing, too much change all at once is problematic. The Wall Street Journal notes, “Mr. Tritton ushered in changes faster than the retailer could build systems to support them.” The brand has failed to connect with changes in consumer behavior during the pandemic and misread consumer preferences – all of which can be identified through effective in-store testing. The company needs to identify where market gaps are occurring and what consumers are willing to go out of their way to buy in the current inflationary climate. Then it can focus on the right marketing and promotion strategies to draw customers to those products. The only way to achieve this is through systemic testing, from the top down.
What: Recupero was terminated
Opportunities for change: GameStop is a one-of-a-kind store. No other store exists quite like it, targeting the niche but lucrative e-sports fanatic. However, it has seemed conflicted in choosing between brick-and-mortar and e-commerce options and likely would do well finding a strong omnichannel format, as gamers are equally drawn to both arenas. The opportunities for creative video game promotions that resonate with its devoted audience are limitless. But crucial to the success of those promotions will be reliable in-store testing.
Using data-backed decisions over gut decisions in change implementation
Testing ideas before implementing them feels like a no brainer, but many brick-and-mortar retailers still prefer to go with their gut when it comes to making decisions. This can have catastrophic consequences. Poorly-backed initiatives come with a high price tag – as do missed opportunities. In a time of great macroeconomic flux, testing is essential; it definitively shows which ideas will produce a positive, neutral, or negative lift. And companies who create a culture of testing, where all initiatives are measured and verified before rollout, can end up saving millions as well as retail C-suite positions.
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