Martha, Penny, Messi, The Three Big Department Stores Change To Survive, Do Electric Business, Change Executives Confused?

Recently, some representative retail entities started a new mess. Apart from the innovation and pformation in the face of cliche's low performance and survival crisis, they began to manage the internal management of the company. J.C. Penney of the United States has replaced the management on a large scale, and Messi has lost more than 100 executives.

Perhaps this reflects the grim survival crisis faced by the global department stores. After a series of "technological innovation" has no fruit, it has to change the mode to continue to find a way out.

Today, the word "innovation" is probably the most frequently mentioned in the pformation of physical retail, and has even become a new cliche. The giants are unconsciously saying that consumers are listening unconsciously.

Scott, an American writer, said: "people are always talking about innovation, so as to confuse the ways and things that innovation means to express.

Usually, when people want to express something that has not been solved, they will use the word "innovation".

As of February 2nd, the fourth quarter of fiscal year 2018, Penny's revenue fell 8.4% to 3 billion 786 million U.S. dollars over the same period, the quarterly net profit from 242 million in the fourth quarter of fiscal year 2017 or earnings per share of 0.77 U.S. dollars plunged to 75 million U.S. dollars or earnings per share 0.24 U.S. dollars, down to 69%.

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Under the circumstances, the three giants are sad.

Under the impact of the electricity supplier, the traditional department store has never given up its pformation and escape from difficulties.

However, the success or failure of various attempts depends not only on the vision and strength of the enterprise itself, but also on the overall environment of the retail industry.

At the end of February, Marsha general store announced the establishment of a 50% joint venture with the online fresh Ocado Group PLC, and spent 750 million pounds on the 50% stake in the British retail business of the electricity supplier.

Marsha said that cooperation between the two sides would provide a fast growth channel for Martha food through the fastest growing online food industry in the UK, so it is a strategic attraction.

At present, Ocado Group has an average of 50 thousand customers and more than 290 thousand orders per week, occupying 15% of the British online grocery market, and has achieved 13% compound growth rate over the past three years. The group's Ocado Smart Platform system is fully intelligent, and consumers can place their order on their own to enjoy the most convenient shopping mode.

According to the agreement, the joint venture company will start trading with Ocado.com domain name at the latest in September 2020. The website will integrate M&S brand, product and customer database.

Steve Lo, chief executive of Martha's Department, acknowledged the mistakes made in the past's business development, saying that Martha started slowly in promoting the business of e-commerce and was slow to respond to changes in the UK's retail market.

However, in the context of competitors expanding their electricity business, Bloomberg said that costumes and food prices of Marsha's department had lost their competitive edge.

It's not just Marsha, but Penny's too.

According to Penny's Department, 18 stores will be closed in the current fiscal year, of which 3 have been closed and 9 will be closed.

As of February 2nd, the fourth quarter of fiscal year 2018, Penny's revenue fell 8.4% to 3 billion 786 million U.S. dollars over the same period, the quarterly net profit from 242 million in the fourth quarter of fiscal year 2017 or earnings per share of 0.77 U.S. dollars plunged to 75 million U.S. dollars or earnings per share 0.24 U.S. dollars, down to 69%.

At the disadvantage, Jill Sota Soltau, CEO Jill, who has just been in office for three months, has turned her attention to the clothing business, but the market is not optimistic.

Analysts believe that the industry is fierce competition, although the gross profit is relatively high, but it is very difficult for PNY to make differentiated management to win high returns.

Compared with Penny's department store, the days of Messi's department store were not so good.

As of the fourth quarter of February 2, 2019, the Messi Group recorded a net profit of US $740 million, a sharp decrease of 45.1% from 1 billion 347 million US dollars in the same period last year.

After the end of the holiday season at the end of 2018, the group was busy with its annual revenue and earnings outlook in January 10th this year, and blamed the weakness in women's sportswear, household wear, fashion jewelry, fashion watches and cosmetics.

In order to get out of the difficulties, Messi group will invest further in this year's clothing, premium jewelry, large items, men's formal clothes, women's shoes and beauty products. The number of renovated and upgraded stores has increased from 50 last year to 100, and more than 45 stores have introduced Backstage, a more attractive discount business.

Self rescue is never interrupted. It's hard to predict.

Like many department stores, Marsha, penny and Messi have been saving themselves for many years.

However, enumerating these self-help measures can be regarded as a handful of success.

Many department stores have gone through a period of pformation and gone on for a period of time. However, they found that the road was not smooth sailing. The enterprises after pformation did not achieve the desired results but faced more problems.

In 2016, Martha's chief executive changed her face. Steve Lo tried to revive the company and made bold reforms to Martha.

But to date, these reforms seem to have failed.

Not only did Marsha's clothing business fail to recover, but even the food business began to slow down or even decline after a sustained growth.

In the case of resuscitation of Marsha, Steve Luo began to play the number card, claiming that he would eventually sell 1/3 business online, so he had cooperation with Ocado, an online fresh producer.

Penny's department seems to be facing the same problem as Marsha: the same store sales continued to slump, announced the termination of the clothing subscription business, and quit the sale of large household appliances business.

You know, home appliances sales were launched in 2016 before Penny department store's predecessor, CEO Malvin Ellison (Marvin Ellison), began to resume sales.

Previously, the business had disappeared for 30 years in the sales category of Penny's department store.

As a new mode of clothing business, clothing subscription business is also launched by Peng Ni in the end of 2017 with Bombfell.com.

Jill Sota also carried out management restructuring at the same time. In addition to hiring Michelle Wlazlo, a senior vice president of clothing and accessories sales planning of his rival Targe in Taghit as chief business officer, the company's senior vice president of planning and distribution and senior vice president of asset protection also had new appointments, and the company's CFO is still looking for it.

Messi stores began to save costs by reducing the size of management.

Messi group pointed out in the earnings report that the new round of cost reduction plan will simplify the management structure to concentrate additional resources to improve the efficiency of the supply chain, innovate and strengthen inventory management, and build a broader and healthier customer base.

It is reported that Messi group will cut 100 senior management positions, starting from the current 2019 fiscal year to save $100 million a year.

For the Messi group's move, the market does not seem to approve.

Analysts believe that promoting sales is the most urgent problem for the group and even the general retail industry.

Change can not be blindly innovating.

Whether it is Martha or Penny's department store, Messi stores, they are chasing regeneration in the process of change.

In any case, in this era of fundamental changes in the retail industry, if the traditional department store industry is bound to face difficulties and destruction, if it does not change, it may also face death, but it has a hope of rebirth.

However, we must not blindly change and innovate.

The Harvard Business Review says that only by ensuring the essence of innovation can we succeed.

The article summarizes several principles of innovation, and the first half of each principle is familiar to us, and the second half is exactly the other side of the coin that we do not see.

Amazon CEO Bezos once said a famous saying: "we must tolerate failure, otherwise we will not be able to innovate accordingly."

But the Harvard Business Review says, "the other side of the coin" should be tolerance, failure, but intolerance.

Companies should tolerate constructive failures, which can bring new knowledge and experience to the projects behind.

But companies should not tolerate incompetence, especially because of mediocrity, sloppy thinking, bad habits and inadequate managerial capability.

The New York Times has published a report on Amason, which is based on interviews with more than 100 current and former Amason employees, revealing a truth: Amason's employees often cry in office due to performance pressure.

The New York Times even gave a name to this phenomenon, called "contusion culture".

Secondly, we must be brave enough to carry out experiments, but we must be highly disciplined.

The courage to carry out experiments does not mean that some three flow artists can splash paint on canvas.

A high degree of discipline requires the careful analysis and selection of potential experiments before proceeding with experiments, and rigorous design of experimental procedures.

To achieve this, the most important thing is to set clear standards and set up processes and rules at the very beginning.

Flagship Pioneering, a venture capital company, has a famous experiment called "killer experiments", which is to find out the fatal defects and hidden dangers of each experiment project so that we can make a judgement.

If everyone feels bad, give up the experiment and replace it directly.

The advantage of this is that from the very beginning, we can realize that the original hypothesis may be wrong. If we find problems in the actual operation process, we should decisively cancel or give up, which will greatly reduce the risk and cost of trying new things.

With this approach, the company has built dozens of world-class bio innovation enterprises in nearly 20 years of history.

Third, if we want to continue to innovate, we need to have a clear judgement standard, which requires multi party collaboration.

The article points out that an innovation system needs to gather resources from all sides, but ultimately, people must make decisions and take responsibility for this decision, and personal accountability system can promote the effectiveness of collaboration.

One of the classic cases at Harvard Business School is that Amazon was just ready to launch a cloud service in 2003, when Andy Jesse (Andy Jassy), the biggest challenge he faced was to plan what services to launch.

It wasn't easy at that time, because cloud services were new to the whole world at that time.

At that time, Jesse summoned all the resources that could be found to seek advice and support, take it as a basis for judgement, and finally make decisions and move on.

Now Amazon is just a business of cloud services, with annual revenue of up to $12 billion.

Finally, enterprise organizations should be flattened.

Such giants as apple, Microsoft, Google, Facebook and Amazon have a common organizational structure in addition to creating news names.

But the Harvard Business Review says what people do not see is that behind the flat structure, these companies have strong and visionary leaders who can communicate clear goals and core principles to the whole company.

Sergio Marchionne, the automotive industry, has rescued two major auto companies, Fiat and Chrysler, which have made the two companies lose their profits in a very short time and are still on the market in the New York Stock Exchange (Sergio Marchioe).

Marchioe explained this to his own management method: "in these two enterprises, I use the same principles to promote pformation. First, let the organization flatten, shorten the distance between me and the policy-makers. If there are problems, I want to know them directly from the parties, not from their superiors to tell me."