Macy's won't report its monthly same-store sales today, joining Home Depot, Sears, and other retailers in throwing this important branding metric out the window.
Branding metric, you say?
Most retailers would tell you that it's more like an albatross. Having worked in the business, I remember all too vividly having to admit to the world every few weeks whether people were still visiting the stores that you???d so proudly opened in months and years prior.
They???ve been doing so since the 1970s, when a financial analyst invented the metric to measure an older retailer???s performance. You can imagine the reasoning: old name, established reputation, but a need to avoid waiting an entire year before finding out whether or not any of that ethereal value was getting translated into cold, hard cash.
The objectively-verifiable behavior of people returning to a store month-over-month would suggest that the business was benefiting from that name awareness.
In other words, it would be proof of the value of the brand.
Not a complete measure, of course, but a very useful indicator. Same-store sales don't take into account any of the variables of time, place, economics, political situation, or wind direction. The metric is impossible to apply to Internet retailing, though it can be replaced by measures of site purchases correlated with time.
But nobody seems to see it this way.
Retailers as diverse as Jos. A. Bank Clothiers and CVS Caremark Corp. have abandoned it. You can imagine why most retailers who still do it...still hate it.
Retail brand gurus still commit millions to branding campaigns, like JC Penney's "American Living" clothing line, that seem almost purposely intended to have absolutely no impact on the sales that the company will report next month.
Yet we consumers live in real-time reality of constant interaction, searching, shopping, returning, yadda yadda. What is brand if it isn't evidenced in each of these behaviors, and thus its metric a measure of those moments?
We can contemplate what consumers might think or feel until we've wasted much money and many minutes, but all that time consumers are busy acting on those intentions. It seems that those certainties certainly would be more accurate proof of whether a brand works or not.
Monthly reporting is too onerous? I don't understand why we don't have brand metrics that are ongoing. Investors should probably question any retailer that isn't willing to step up and admit to what's going on in the business.
Macy's is not just ducking a responsibility, but perhaps missing a forward-looking trend.
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