Brendan Melly

Thank you SupplyChainBrain for highlighting our work here at New Balance. I always jump at the chance to share the innovative ways our team is tackling supply chain issues head-on. During COVID, we re-imagined how we innovate around supply chain disruptions, creating nimble and agile solutions that have also proved extremely useful for mitigating the impact of natural disasters and violence, such as the Houthi rebel attacks on Red Sea shipping. And since the article interview, we’ve encountered additional challenges with global shipping capacity as an industry and for all shippers…for containers, ports and escalating rates. Just another set of challenges to hit head-on. Leveraging systems, using accurate data and making quick decisions has proved beneficial – although never claiming to be perfect! Furthering our five-year journey on a digital transformation, I look forward to cutting over a new ERP and supply chain planning suite for further supply chain capabilities in the second half of this year – never perfect but always needed. As the only major athletic brand retaining and growing domestic US manufacturing certainly helps to buffer some of those global impacts but not all.    Our NB associates are constantly stepping up as individuals and united teams to navigate through the turmoil for our customers. Here’s to #OneNB! https://lnkd.in/etmyG5HK #SupplyChain #Innovation #Manufacturing #MADE

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“Just Keep It” Nike decided several years ago to sever ties with some major retail partners such as DSW and Urban Outfitters and sell less merchandise through others such as Foot Locker and Macy’s. The theory, apparently first developed by previous management prior to COVID, was that the wholesale business should be phased out. This unforced error in Nike’s long and great history represents a teachable moment that helps explain two fundamental business truths. The first is that, in the words of the great University of Chicago Booth School of Business Professor James H. Lorie, “where money is concerned, more is preferred to less.” No business can afford to rationalize giving up hard-earned revenues with the expectation that it can be replaced with more desirable sales from a different channel. The second fundamental principle is that you don’t bet some or all of the farm on a theory. Yes, the world of great retail brands is moving clearly in the direction of D-T-C. The great brands need to be ready to sell exclusively through their own physical and digital channels should third-party partners disappear. There is no point in hastening this transition. They should just keep the third-party revenue flow as long as they can, and it is presumably in their interest to help their partners stay in business. (At times, it might make sense for a high-end brand to reduce wholesale accounts for the purpose of reducing supply and increasing the aura of exclusivity. That was not the playbook here). Ralph Lauren, for example, is purposefully working to increase both AOV and the percentage of total revenues from its own stores and on-line business. But they have not made the mis-step Nike made. Retail is in transition and great brands like Nike are destined ultimately to get all the marbles as third-party retailers increasingly find they can’t compete with many of their marquis brands’ omnichannel operations. But this is a long-term transition. Nike is absolutely correct to prioritize figuring out how to become more customer-centric and using their mono-brand stores and apps to strengthen customer communications and connectedness. The objective of course is to increase Customer Lifetime Value (CLV), which means focusing on relationships with the top 20% of retail customers and increasing the number of people in that cohort. Of course, D-T-C retail is more profitable and attractive than third-party wholesale sales to struggling multi-brand retailers. Obviously, you prefer to own and control the customer relationship and capture all the data it entails. But what were they thinking? It’s not like Nike was losing money on the wholesale business. The margins were obviously considerably lower than their retail profit but margins they were. It’s called marginal revenue for a reason. It is a big mistake to trade less profitable revenues for no revenues from the same source. Business is not always binary. A swoosh in the hand is worth two in the bush.

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Looks Like Another Rough Year for Department Stores 2024 has been another challenging year for U.S. #departmentstores, with several major players embarking on transformations that could define their future. While department stores remain popular in malls, they’re losing market share to off-price competitors like The TJX Companies, Inc., Ross Stores, Inc., and Burlington Stores, Inc., especially as millennials and Gen Z flock to value #retailers. The story in numbers: Macy's is set to close 150 stores, while Nordstrom closed 23 full-line stores and plans to expand its off-price Rack business—adding 22 new Rack locations. TJX will expand to 5,100 stores this year, Ross Stores plans to have 3,600 stores, and Burlington plans to open 100 new stores yearly. JCPenney is pouring $1 billion into a massive overhaul, and Saks Fifth Avenue’s owner is acquiring Neiman Marcus Group. Adding to the challenger list are the brands that populate department stores with a growing emphasis on direct-to-consumer retail stores and e-commerce. Analysts are skeptical about department stores’ growth potential, with sales only inching upward in select months this year. Will these changes be enough to sustain the iconic retail giants, or are they on a slow path to obsolescence? And, what is the best retail channel for legacy and emerging brands? #RetailTransformation Daphne Howland Retail Dive #RetailTrends #OffPrice #brands #businessmodels

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Q1 2022, Nike stated DTC is and will be their main focus: Chairman Mark Parker didn't rule out future opportunities to partner with other retailers. "We are shifting from a wholesale brand to a brand that's available at retail." https://lnkd.in/dnMJ952H Q3 2024, Nike taps former executive Tom Peddie to return as VP of Marketplace Partners. Means that wholesale is a must for the company. Where is the consistency in Nike C-Suite & Management strategy and vision in terms of B2B and B2C? Switching commercial-operational-marketing directions in less than 2 years simply allowed peers-competitors to gain market share and growth across all channels… #smartbusiness #B2B #B2C #wholesale #omnichannel #strategy Articles courtesy of: Retail Dive Tactic one

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John Donahoe’s exit from Nike offered a brutal reminder to corporate boards: Focus on what a company’s core business is when looking for a new CEO. bit.ly/3MUQw76 As Donahoe took over the top spot at Nike in early 2020, the company touted the former Bain management consultant and eBay CEO’s extensive tech industry chops and Silicon Valley touch. At the time, the sports gear maker claimed it was becoming something of a tech company. But with Donahoe, they chose a CEO who lacked any deep knowledge about sneakers and sneaker culture, and no retail experience in stores, leading to the current disaster. He underestimated the importance of partners like Macy’s, DSW, and Foot Locker in selling its running shoes. And as a former management consultant, cost-cutting proved to be his go-to tactic, but one that only worsened Nike’s problems. Read more: bit.ly/3MUQw76

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On Friday the White House announced new actions to improve enforcement of our customs laws on de minimis shipments, packages entering the U.S. under $800 in value. The #retail industry perspective, in short: As long as section 301 #tariffs on consumer goods remain in place, they should be applied evenly and fairly. See RILA’s full statement from RILA trade expert Blake Harden here: https://lnkd.in/gTMHeDmj #supplychain

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I had an incredible conversation with Eugene Alletto, CEO of BEDGEAR, about how he is additive versus disruptive to the bedding industry! Eugene's journey from a million-dollar salesperson to an industry innovator is nothing short of inspiring. He shares valuable insights on the importance of education, innovation, and being additive rather than disruptive. Tune in, and leave your favorite quote in the comments.

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The US is barreling toward another significant #supplychain disruption. One week from today we could see roughly half of all inbound/outbound ocean freight grind to a halt indefinitely—#retailers are executing contingency plans to keep shelves stocked, but with ILA-USMX negotiations stalled for months it's hard to say how long a possible strike could last. The Biden-Harris administration must help facilitate a resolution before this becomes another self-inflicted hit to the US economy.

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