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Today’s FierceRetail Rundown

February 7, 2017 Leave a comment

 

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This week’s sponsor is Shoptalk.

  1. Abercrombie reveals new store concept

  2. 56% of U.S. shopping done in physical stores

  3. Macy’s approached by Hudson’s Bay for acquisition

  4. EMS, Bob’s Stores file for bankruptcy

  5. Amazon planning for technology, not staff, to run grocery

  6. Tiffany drops CEO

Featured Story

Abercrombie reveals new store concept

February 7, 2017 | By Jacqueline Renfrow

For the first time in 15 years, Abercrombie & Fitch is changing up the look of its stores to offer a more omnichannel experience that encompasses the latest technology. Now, mallgoers will get a more personalized experience with Abercrombie’s innovative fitting rooms and a carved-out space for shoppers to pick up online orders.

 

Top Stories

56% of U.S. shopping done in physical stores

Tuesday, February 7, 2017

Despite the growth of the omnichannel experience, 56% of U.S. shoppers still consider physical stores their main shopping channel, as opposed to 10% who shop mainly online, according to new data from market research agency Lightspeed.

Macy’s approached by Hudson’s Bay for acquisition

Tuesday, February 7, 2017

Hudson’s Bay is in preliminary talks with Macy’s about a takeover offer. The two companies are also exploring additional cooperative moves outside of the merger, such as Hudson’s taking on some of Macy’s real estate. The Canadian brand’s portfolio currently includes Saks Fifth Avenue and Lord & Taylor. The deal could help a struggling Macy’s, which has faced declining sales and a series of store closures, including 68 locations announced last month.

EMS, Bob’s Stores file for bankruptcy

Tuesday, February 7, 2017

Eastern Outfitters, the parent company of Eastern Mountain Sports and Bob’s Stores, has filed for Chapter 11 bankruptcy protection. British sportswear company Sports Direct International is engaging in talks with the flailing retailer to become a bidder at the bankruptcy auction. Eastern Outfitters is owned by private equity firm Versa Capital Management, which bought the company out of bankruptcy from Vestis Retail Group just last year.

Amazon planning for technology, not staff, to run grocery

Tuesday, February 7, 2017

As Amazon prepares to unveil its latest supermarket plans, with stores that could span between 10,000 and 40,000 square feet, the retailer let on that its bigger stores may operate with as few as three and no more than 10 employees at one time. In the automated prototype, a half-dozen workers could staff an average location. Duties for staff would include signing up customers for Amazon Fresh, restocking shelves, working drive-thru windows and assisting robots in bagging groceries. This prototype of limited payroll could lead to a huge profit boost.

Tiffany drops CEO

Tuesday, February 7, 2017

Luxury jeweler Tiffany & Co. announced the replacement of CEO Frederic Cumenal after disappointing financial results. Cumenal, who has held the position since April 2015, is being replaced by chairman and former CEO Michael Kowalski in the interim. The shuffling in the executive office comes just three weeks after the company’s top designer left and not long after the reporting of weak holiday sales.

This week’s sponsor is Response Expo.

Events

LESS THAN 90 DAYS TO SHOPTALK

March 19-22, 2017 | Aria, Las Vegas

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Nasty Gal: What Went Wrong?

February 7, 2017 Leave a comment
Nasty Gal store in Santa Monica | Source: Nasty Gal
Nasty Gal store in Santa Monica | Source: Nasty Gal
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Trade Report Feb. 8, 2017

February 7, 2017 Leave a comment

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Feb. 8, 2017 About l Federal Register

Conflict Minerals Disclosure Rule Could be Scaled Back

Acting Securities and Exchange Commission Chairman Michael Piwowar has directed SEC staff to consider further relief from the SEC’s conflict minerals rule. Interested parties are encouraged to submit detailed comments to the SEC by March 17.

Mexico Begins 90-Day Consultation Period on NAFTA Changes


Trade Deficit Falls in December, Sees Slight Gain in 2016

 
CBP Reviewing Info Collections on Import Bonds, Temporary Exports

AD/CV: Request Administrative Reviews, Citric Acid

Full Article ››

Potential IPR Probe of Hybrid Vehicles Evaluated for Public Interest Issues

Full Article ››

New and Amended Maritime Agreements Filed

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The New York Times BITS

February 7, 2017 Leave a comment

 

Satya Nadella, the chief executive of Microsoft. Seventy-six of the company’s employees were affected by Mr. Trump’s ban.
Satya Nadella, the chief executive of Microsoft. Seventy-six of the company’s employees were affected by Mr. Trump’s ban. Divyakant Solanki/European Pressphoto Agency

Daily Report: Dizzying Regulatory Changes for Tech Industry

The checklist of Trump administration worries continues to grow.
Let’s start with the executive order that limited immigration from seven mostly Muslim countries. As David Streitfeld writes, technology companies were slow to have an aggressive response. But prodded by their employees, they appeared to find their voice in recent days.
Now, nearly 130 companies, most of them in tech, have filed an amicus brief in a federal court, siding with state officials in Washington opposing the ban. The United States Court of Appeals for the Ninth Circuit in San Francisco scheduled an oral argument in the case for Tuesday.
But the immigration ban is just the start. The industry is also bracing for changes to the H-1B program that brings highly skilled workers into the United States.
Tech companies say the program is integral to building a talented work force, but even its most vocal proponents say some change is needed. As Daisuke Wakabayashi and Nelson D. Schwartz write, the program has also been used to make it easier for big Indian outsourcing companies to operate in the United States — in some cases costing American jobs.
Finally, there is the Federal Communications Commission. Mr. Trump’s new chairman of the F.C.C. appears to be setting his sights on net neutrality rules intended to ensure equal access to content on the internet, as Cecilia Kang writes.
Those rules, created under the Obama administration, have been a bedrock of internet services like Netflix and YouTube. If they should be changed, the playing field could be tilted in favor of the carriers that own the networks.
For consumers, the likely consequence is the price of viewing content on the internet will go up.
Jim Kerstetter
Read More
A protest outside Google’s headquarters in Mountain View, Calif., last month. Google and other Silicon Valley companies said that a ban on visitors from seven largely Muslim countries could hurt the economy.

Tech Opposition to Trump Propelled by Employees, Not Executives

In a court filing, nearly 100 technology companies cited the “tremendous impact” of immigrants on the United States in opposing the Trump immigration ban.

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More From The Times
ECONOMIC SCENE
A rally at Battery Park on Jan. 29 protested President Trump’s executive order restricting immigration to the United States.

Restricting Immigration Would Make America Smaller, Not Greater

While President Trump promises to curb immigration, research suggests a straightforward way to bulk up the economy would be to let more immigrants in.

ITINERARIES
Mark A. Boyer, the executive director of the International Studies Association, said President Trump’s travel ban was causing disruptions in the increasingly global business of corporate travel.

Trump’s Travel Ban Hits Close to Home for Corporate Travelers

The executive order has had repercussions for the professionals who oversee and coordinate everything from small board meetings to huge conventions.

TECH TIP
In iOS 10, you can export a voice mail message as an audio file by tapping the Share icon and choosing where to send the recording.

How to Save iPhone Voice Mail Messages

Recent versions of Apple’s mobile operating system let you archive a voice mail message on your iPhone as an audio file.

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Just-Style Daily Report

February 7, 2017 Leave a comment

 

just-style's daily headlines
News & Insights | Companies | Sectors | Research | Advertise | Contact us

Leonie Barrie, just-style editor

February 7, 2017

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On February 9 at 10am EST, boutique denim sourcing show Kingpins will broadcast an expert panel discussion live from Washington, D.C in partnership with just-style, focusing on what the current political climate has in store for the global and US denim and apparel industry.

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Are Agencies Killing Their Programmatic Golden Goose?

February 7, 2017 Leave a comment

 

Ad agencies trying to lure marketers to use their programmatic ad units were tempted by short-term revenue gains at the expense of long term client relationships, one analyst says. And now agencies are paying the price.

Programmatic groups or “trading desks” have proved a bright spot for holding companies over the past few years, as marketers have steadily increased their spending through automated ad systems. But the opaque practices and pricing models of some of these agency groups have recently led marketers to question how their money is being spent, and in some cases to shun the groups completely in favor of building their in-house alternatives.

“Agencies didn’t really see the potential long-term implications of their decisions,” said AdExchanger director of research and former Forrester analyst, Joanna O’Connell, in reference to the trend. “Marketers’ hands are being forced because of the way holding companies and agencies are behaving… I feel that agencies essentially created this situation for themselves.”

In a new AdExchanger research report titled “How to Pick the Right Programmatic Media Management Model,” Ms. O’Connell suggests six major reasons marketers are questioning the role of agencies when it comes to programmatic ad buying: Their inability to invest in staff with suitable skills; their lack of transparency around pricing; ownership of data; the emergence of “alternative service options” or independent trading desks; the rise of self-service tools; and new efficiency pressures within marketers’ organizations.

Now more than ever clients are evaluating if and how they can minimize agency involvement in the media buying process, Ms. O’Connell argues: “Holding company-level decisions… have set the stage for a major upset in agency-client media relationships.”

No two trading desk models are the same, of course. But the fact they’re structured as independent entities separate to agencies has always made clients uncomfortable, Ms. O’Connell noted. “I don’t want to paint them all with the same brush… but even if a desk has a transparent model it’s still an alternative option to the agencies themselves. That’s always struck clients as a bit strange,” she said.

The report goes on to suggest a range of considerations marketers should make before choosing a programmatic strategy that’s appropriate for them. Its content was based on interviews with more than 20 marketers, agencies, and technology and services providers, AdExchanger said.

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How to get the most from your agency relationships in 2017

February 7, 2017 Leave a comment

McKinsey & Company

Article February 2017

By Thomas Bauer, Jason Heller, Jeffrey Jacobs, and Rachael Schaffner

Executives who know how to set up and manage agency relationships are best positioned to improve their marketing ROI.

As January draws to a close, many of our New Year’s resolutions have already faded. But as marketers look for new ways to drive growth in 2017, they should take fresh stock of their agency relationships.

Marketer-agency relationships are more important than ever. While the shift to digital channels and technologies has created the opportunity to personalize communications with the “always-on consumer,” it has also made it harder to stand out. This has led to a complex and ever-expanding ecosystem of creative, media, analytics, social, and other agencies that can access specialized expertise. Managing a broader set of agency relationships, however, comes with its own significant challenges. Not only is the digital landscape more fluid, but matching the right content to the right channel demands different ways of working with and across agencies and new ways of measuring performance. Questions around media transparency, viewability, ad blocking, and even fraud have also sown confusion.

Here are five questions to help keep your agency relationships on the right footing.

1. Do you have a clear view of the platforms you will need for future success, and are you clear on the implications for marketing mix?

Marketing leaders have lots of places to direct their spend—the key is knowing how to measure which will be most rewarding. Although Facebook and Google account for roughly 73 percent of total digital ad revenue today,1they are complex ecosystems that require active management. In addition, the media landscape is changing. Amazon, for instance, is no longer just a sales channel. It’s also functioning in some ways as a search engine. Last year, 55 percent of consumers began a product search at Amazon.

For this reason, marketing leaders need to ask if their agencies have the experience to navigate emerging channels and if they’re adding capabilities and planning for growth based on where the market is moving. A number of companies are addressing this by conducting joint exercises with their agencies to test different digital media and social platforms to tease out which next-generation platforms are likely to yield the best results. These exercises helped one company rebalance its spend from a 70+ percent concentration in TV and traditional channels to a 50+ percent concentration in digital. It also helped distribute digital spend more strategically from a few popular sites to nearly 20 websites, networks, and programmatic platforms.

2. Are you building an agency ecosystem and agile operating model that will cover this new mix without overlaps, redundancies, or gaps?

Marketing leaders spend much of their time managing a bewildering array of agencies, but they often shortchange the assessment of whether they have the right resources for the right kind of work or the bandwidth and capability to orchestrate their agency ecosystem as a whole. We’ve seen companies sign agencies without first clarifying roles and responsibilities among new and existing partners. That won’t work in today’s complex media environment. The agency management plan must define clear swim lanes that outline what each agency is expected to do, how they are expected to work together, and how they should coordinate with in-house teams (exhibit).

Agency relationships/processes are undergoing dramatic change to adapt to new ways of reaching consumers.

That definition of roles should extend to thinking through which capabilities are best left to your agencies and which can be better developed internally. Many companies are developing their own newsroom-style approaches to generate content quickly, and building programmatic trading desks. Many are also engaging with their agency holding companies in unique ways, requesting, for instance, that agencies carve out dedicated teams—or agencies within agencies—to optimize spend and customize their resourcing, particularly on the nonworking side.

In addition, we see a number of companies collaborating with their agencies on agile working methods including co-location and multichannel content. Many of our clients now ask their agencies to shoot all formats for their commercial, Instagram, Snapchat, and YouTube channels in one day, which shaves cost and production time and allows these companies to negotiate the rights for everything in one fell swoop. Workflow practices from traditional media to content development are all evolving to support this more integrated approach.

3. Are you measuring and incentivizing your agencies on the metrics that matter most to you?

The old ways of commission-based compensation don’t align with today’s needs. Marketing leaders need to ensure that each agency has incentives to improve results for your brand. Many of our clients now bring agencies in for integrated ideation sessions and expect them to work together as a team. They’re also evaluating and paying agencies not just on their ability to increase awareness, clickthroughs, and site traffic within specific verticals, but also on their contribution to sales growth across the business overall. Some are even requiring agencies to review each other as part of a 360-degree evaluation. The CMO of a large CPG company, for example, asks agencies to rate each other based on how well they “play on the team . . .” This feedback has a direct impact on each agency’s performance pay.

4. Are you getting the transparency you need and the oversight you want?

As you negotiate with your agencies, transparency on costs needs to be at the forefront. If the agency has negotiated certain rates on different media placements, for example, you need to be sure you’re getting the rates and views you’ve been promised. Agencies should be helping you track working and nonworking spend and be open to coordinating with the relevant individuals on your team or third-party auditors.

Companies need to go beyond top-level reporting and get a detailed understanding of what they have purchased and the value their media spend is generating. That applies to media and agency contracts, rates per role, and incentive structures. Many companies ask their agencies to report on their hours and burn rates to monitor spend against plan and make it easier to “follow the money,” especially in digital-media purchases. It’s also important to know how intermediaries are being used—and at what cost—so that the maximum amount of digital spend goes toward working media. And if you don’t feel you’re getting the transparency and cooperation you need, make sure you’ve woven the right to audit actual media costs into your contract so you can track and reconcile your media investments at any time. In some cases, running the program directly may improve speed, quality, and overall performance if one has the capabilities required to do so.

To get that granular transparency and foster more active engagement, most high-performing companies have hired full-time media leaders whose job is to track, understand, and optimize spend as well as coordinate with agencies on marketing mix modeling (MMM), attribution, and their implications.

When companies maintain rigorous oversight over the noncompliant parts of their buys, they extract better program performance and more effective CPMs. Doing so forces agencies to pay more attention to those factors and allows companies to become more educated about where they can push their agencies for improved results.

5. And finally, are you doing everything you can to be a great client, providing the leadership and the flexibility needed for success?

Building effective agency relationships is a two-way street. Part of being a great client is having a very clear internal operating model to avoid rework and to ensure that different parts of the business aren’t asking agencies for the same thing. In addition to setting clear objectives, you also need to establish a regular and ongoing dialogue with your agencies that goes beyond quarterly business reviews. A frequent cadence allows you and your agencies to be proactive and to test, refine, and optimize performance on a continual basis.

Being a great client also means giving partners the breathing room to do their best work. While quick turns are sometimes essential, to produce high-caliber work on a consistent basis, agencies need time and space to be creative. In addition, while the competitive drumbeat can make accessing the most sophisticated, bleeding-edge developments a necessity, those advances only work if your organization has the skills and resources to take advantage of them. Take the time to consider whether you’re sufficiently resourced to get the most from your agency services and if you’ve dedicated the right internal resources to partner with them in strategy formation, creative development, and managing and reporting on spend and outcomes.


Agencies are crucial partners in driving growth and navigating a complex and still-expanding array of technologies, channels, and platforms. Clear answers to these five questions will help you build stronger and more effective relationships with your agencies this year and into the future.

About the author(s)

Thomas Bauer is a partner in McKinsey’s Munich office, Jason Heller is a digital partner in the New York office, Jeff Jacobs is a partner in the Chicago office, and Rachael Schaffner is a senior knowledge expert in the Washington, DC, office.

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