Tag Archives: Sharmila Chatterjee

With better leadership, Sears could’ve been a contender – Sharmila Chatterjee

MIT Sloan Senior Lecturer Sharmila Chatterjee

MIT Sloan Senior Lecturer Sharmila Chatterjee

From The Hill

When I arrived in the U.S. for graduate school in the mid-1980s, I asked my host family in a Philadelphia suburb where to shop to outfit my dorm room. They didn’t skip a beat: “Sears,” they said. “It has everything you need.”

To say that I was in awe of Sears would be an understatement. Having grown up in small cities in India that were dominated by mom and pop stores, I’d never seen anything like it. I bought pillows and bed sheets; a hot pot, microwave, a mini fridge; and also rain boots, socks, and a pair of earrings. I remember thinking, “This is the American store of my dreams.”

So last week’s news that Sears filed for bankruptcy struck a personal chord. The company has been under pressure for years: shuttering stores, jettisoning assets and taking on ever more debt. Finally, facing a $134 million payment that it could not afford, Sears capitulated.

The main culprit, according to media coverage, was the rise of online shopping and Amazon. Amazon, of course, has become the familiar villain in these tales — allegedly responsible for the death of many once-dominant American retailers, from Toys “R” Us to Sports Authority to Radio Shack.

But considering e-commerce accounts for only 9 percent of all retail sales, that explanation rings hollow. The truth is, Sears’s bankruptcy is of its own making. Its management, led by Eddie Lampert — Sears’s chairman and its biggest individual creditor and shareholder, made a series of missteps that ultimately crippled the iconic chain.

These include focusing too narrowly on cutting costs at the expense of investing in the in-store experience, spinning off key brands and competing on price.

Read More »

Lyft’s subscription plan is a rare stumble as the company takes on Uber – Sharmila C. Chatterjee

MIT Sloan Senior Lecturer Sharmila Chatterjee

MIT Sloan Senior Lecturer Sharmila Chatterjee

From MarketWatch

It appears that Lyft, the hail-by-smartphone car service that last year earned $1 billion in revenue, wants to be the Netflix of ride-sharing.

Last month, the San Francisco-based company announced it would continue testing its All-Access plan, a monthly subscription service for rides. The service, first made available to a select group of customers in March, charges an upfront monthly price of $200 to secure $15 off 30 rides. The price represents a savings of $250, assuming a customer takes a set of 30 $15 rides per month.

Price discounting in pursuit of market share is nothing new, but it’s a curious move for Lyft, a company that positions itself as a feel-good, socially minded brand. The deep discount not only conflicts with the warm, fuzzy image that Lyft has cultivated, it also endangers its relationship with customers.

Read More »

What Blue Apron needs to do to survive the threat of Amazon – Sharmila Chatterjee

MIT Sloan Senior Lecturer Sharmila Chatterjee

MIT Sloan Senior Lecturer Sharmila Chatterjee

From MarketWatch

For a while, it looked as though Blue Apron was destined to become a culinary juggernaut in the American kitchen.

Founded in 2012, the company APRN, +1.89%  carved out a clever business model by mailing perfectly portioned, pre-packaged ingredients and recipe cards to home cooks in need of handholding. It’s not yet profitable, but growth is impressive. Last year, the company had $795.4 million in 2016 by delivering about 8 million meals per month to customers.

Recently, though, there have been challenges. Shares that the company had hoped to sell between $15 and $17 apiece in June were priced at just $10, hurt in part by Amazon’s AMZN, +0.23%   announced acquisition of Whole Foods WFM, -0.02% earlier that month. They now trade for less than $6, pummeled in part by Amazon’s plans to launch its own meal kits.

The twin revelations about Amazon are no doubt unnerving to Blue Apron’s executive leadership team and investors. And yet, they should also see them as encouraging signs. That Amazon sees so much potential in the industry is proof positive that the meal kit represents a new American staple, and not just—pardon the expression—a flash in our collective pots and pans.

True, Amazon is a formidable rival. And yes, the meal kit business is increasingly crowded. (Current contenders include: Plated, HelloFresh, Purple Carrot, and Sun Basket.) But Blue Apron has an opportunity to differentiate itself. To do so, it must focus on the needs, wants, and values of its target audience: mainly millenials.

Read More »

How traditional retailers could lure you back this holiday season – Sharmila Chatterjee

MIT Sloan Senior Lecturer Sharmila Chatterjee

MIT Sloan Senior Lecturer Sharmila Chatterjee

From Fortune

It’s beginning to look a lot like Christmas everywhere you go. Take a look in the five-and-ten—and while you’re at it, look at all the other store windows advertising spectacular sales, holiday discounts, and clearance extravaganzas. The markdowns are as widespread as they are substantial. This year on Black Friday, for instance, the average advertised discount across 17 major retail categories was 45%, according to the price-tracking firm Market Track.

As ecommerce continues to eat away at traditional retail, brick-and-mortar stores seem to believe that the best way to compete is to slash their prices. This tactic might be understandable if, say, the country were in a deep recession. But GDP has been growing for eight consecutive years, the unemployment rate is at a 17-year low, wage growth is strengthening, and the stock market is in the middle of a nine-year bull run.

In this economy, it is not necessary for retailers to pander to bargain hunters—nor is it wise. Sure, some holiday shoppers may be lured to the shops in search of a great deal, but if that’s what they’re looking for, they can easily go online. Brick-and-mortar stores cannot match the price-comparing capabilities the Internet offers.

Instead of competing on price, stores should invest to entice customers. By focusing on their core competencies—one-on-one, human-to-human customer service, sensory-stimulating in-store experiences, and promise of instant gratification—traditional stores have an opportunity to excel where websites falter.

There’s good news and bad news for retailers this year. On a positive note, consumer confidence is strong and customers are feeling flush. According to data from the National Retail Federation, sales for November and December are expected to clock in at about $682 billion, which would make 2017 the strongest holiday season since 2014. But on the flip side, department stores as a shopping destination placed a distant third behind the Internet and mass merchants, according to Deloitte’s annual holiday retail survey.

Read More »

How companies will make you want a mobile wallet in 2015 — Sharmila Chatterjee

MIT Sloan Senior Lecturer Sharmila Chatterjee

MIT Sloan Senior Lecturer Sharmila Chatterjee

From Yahoo! Tech

One of the most fascinating business stories this Christmas season isn’t about how much people are spending or even what they’re buying — it’s about how they’re paying. Although a lot of people are familiar with using their phones to pay for a latte — think Starbucks — few people in the United States have started using a “mobile wallet” to any significant degree. The biggest players in the field are trying to change this by offering up holiday incentives to bring customers into the fold.

Google Wallet, the mobile payment system unveiled by the tech giant in 2011, is trying to entice customers by offering those who purchase gift cards using its system a $5 coupon in return. Customers who link the competing Apple Pay system to a Chase credit card can opt for a free music download. Softcard, the telecom companies’ mobile payment system, has also been attempting to woo customers with a variety of incentives and discounts.

Read More »