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Travel security concerns, the threat of the SARS virus, a spike in gas prices and relentless angst about the economy continue to pound apparel makers and merchants. If bad times call for bold actions, then this would be the right time to start innovating.
Unfortunately, when the going gets tough, the first impulse for many executives is to play it safe. But growth in any environment — especially one as cluttered and competitive as this — depends on carving a unique identity with distinctive products and services.
The smartest retailers and manufacturers aren’t biding their time until the next bull market, however. They’re testing new products and store concepts and assembling strong management and creative teams. That way, when the economy rebounds, they’ll be ready to meet pent-up consumer demand. In the spirit of discovery, WWD asked some of the sharpest minds in the business to share their thoughts for achieving growth in an unprecedented new age.
Here are some their ideas.
1. BUILD FROM THE INSIDE OUT
One of the most important investments a company can make is in its employees. But simply finding the right hires is only part of the job. Creating fertile ground for new ideas to germinate can have the most profound effects on a company’s long-term results and future. "Build a strong, focused team and a culture where innovation and free thinking are valued," said Ed Burstell, vice president, general manager of Henri Bendel. "Everyone here is young at heart. Pulling from a lot of different people’s experiences makes for a very well-rounded company. It also translates to the shopping experience."
J.C. Penney has been rebuilt from the top down. The company hasn’t simply tweaked product or presentation, but focused on the most lasting legacy: building the next generation of leaders. "What’s been magical about what ceo Allen Questrom has done is post near-term performance improvement while making investments in the long-term success of J.C. Penney," said Angela Selden, managing partner of Accenture’s North American retail practice.
2. DEVELOP UNIQUE PRODUCTS
This goes without saying. But in a sluggish economy, it’s sometimes easier said than done. Consumers are trading down and nervous retailers are playing it safe. "There’s too much same-looking merchandise out there," said Terry Lundgren, chief executive of Federated Department Stores Inc. Rather than basics, Lundgren said he’s building the company’s private labels into bona fide fashion brands.