Are J.C. Penney's Problems Behind Them?

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Aug. 14 (Bloomberg) –– Brand Keys President Robert Passikoff and Stitch Fix founder Katrina Lake discuss retail earnings and shopping trends. They speak with Pimm Fox on “Taking Stock.”(Source: Bloomberg)

Francisco, katrina lake, the founder of an e-commerce site called stitch fix.

Robert, let's talk about walmart in jcpenney.

What are the overall trends?

The overall trends are they could no longer stand anything from the consumer except cheap stuff.

The consumer has learned they can get cheap stuff anywhere.

The stores are feeling the pressure.

Is there anything they can do to drive traffic into the stores, or do they just have to accept their business will shrink and they have to deal with just being smaller companies?

I think that is what all signs are pointing to and commentators have already said about going online.

A do better online than brick-and-mortar, but the modern consumer now does not feel there is a need to have to do that on a regular basis.

What about the brands that jcpenney carries?

The liz claiborne brand?

As an old brand that died off years ago.

Now they are in a position where they are trying to sell it upscale to an audience that just does not care, particularly in audience that does not know it.


lake, as a younger audience, describe what stitch fix is and how that fits into the world of retail.

Stitch fix is an online personal shopper for the everyday woman.

They still on a woman's style and size preferences, we have real stylists who will carry a selection of items for her to try on at home.

We deliver the dressing room to her, she tries everything on at home, and the price point is never sure $50. it is affordable to many more women than personal shopping services used to be.

Robert, is that the kind of story all retailers will have to contend with if they want to stay relevant?

They will have to address something that deals with the shopping experience.

I don't think going and looking and trying on for yourself is going to disappear overnight, but who the brand is and how they do that is going to become extraordinarily important.

We have seen that with the gap, which reengineered its store experience, and they are about the only ones doing well.

Let's talk about the in-store experience when it comes to customer service.

If you don't have great customer service, what differentiates you from going online and getting the same wonderful ? article of clothing for less?

Absolutely nothing.

Nordstrom learned that years ago.

People came behind them and tried to duplicate the experience.

Macy's has improve their customer service.

But if you have not got it, there is no real reason to come in and buy in the store.

Katrina lake, i wonder if you could describe in detail what a shopper would get i coming to stitch fixed they cannot get by going to a mainline store?

You hit the nail on the head, really.

It is service.

We are finding at the end of the day, what the customer really wants is a dress that fits her grade.

Which are really wants is a blouse that will make her feel confident at work.

She does not necessarily want a better in-store experience or a better map at the shopping mall or better filtering and e-commerce.

We are finding we are able to cut out a lot of the process of shopping back and be painful and help her achieve her best and result, which is clothing she loves.

Katrina, what have been the actual results of commerce at stitch fix?

We don't share any numbers, but the business has been growing substantially over the last three and a half years.

We have clients all over the country and we have over 1000 employees and multiple parts of the company at this point.

We have really seen a lot of interaction with customers.

They love the idea of a personalize schappert -- of a personalize shopper and they love the end result.

Combining the woman experience with the in-store world, macy seems to have room in a can work.

Is this something other retailers have to improve on or something that macy's is doing specifically well?

Macy's has been doing it specifically well, and other retailers are going to have to at least duplicate the experience for folks war they are just not going to show up.

-- or they are just going to show up.

I realize this is another category, but the high-fashion brands, well over time -- like michael kors, for example?

Exactly right, michael kors is terrific, coaches and other.

-- coach is another.

They need to be able to provide some sense of meaning.

Look, the stores are there.

The basics are there.

The products are ok.

People can go out and shop for you.

There are different levels of quality products, the pricing formula has been exactly the same, low, lower and lowest.

It is come on in and get a discount.

We sell jcpenney's lost 25% of their sales just trying to move away from that kind of model.

The brand that sells ultimately brings an added value.

Macy's has managed to leverage that.

Katrina lake, what is the possibility of you coming out with your own line of apparel?

Is there a way to add to the experience for the online shopper that is particular to stitch fix?

We carry over 200 endors and we have some labels that are exclusive to stitch fix and quite a bit of products.

It is one thing we have learned about our high personalization model is we really understand what customers are looking for the marketplace, and more and more we are finding we can use their preferences and what they are looking for to be able to kind of create exclusive products they will love at we have the datas to back up there is demand for.

Is this using a proprietary algorithm for the company?

Exactly, we combine the best of both worlds, data and algorithms.

We have the guy, eric olson, who had all of the analytics at netflix.

That helps inform our buyers and stylists and we have the right product and get it to the right people.

We are really able to personalize at a level that other peoples have struggled with.

Thank you very much, katrina

This text has been automatically generated. It may not be 100% accurate.


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