Retail

US consumer confidence dropped in December in response to a faltering economy and a rise in deaths and new cases of COVID-19. The Conference Board reported a December 2020 Consumer Confidence Index of 88.6, a fall of more than four percentage points from November’s 92.9 rating. The Conference Board is an economic research company that publishes monthly reports on public optimism. Its Consumer Confidence Index, based on a survey of 5,000 households, has been published since 1967. The figures often influence stock market fluctuations and factor into decisions of the Federal Reserve. The coronavirus pandemic is responsible for 18.3 million infections and more than 323,000 deaths in the United States. It has led to high unemployment, reduced revenues in many industries, and economic struggles for families and small businesses as restrictions imposed by state and local governments reduce consumer spending. Although an 88.6 rating suggests that consumers lack confidence in a speedy recovery, it is nowhere near February 2009’s rating of 25, which came during a global financial crisis. The Conference Board says 29% of consumers believe the economy will improve over the next six months - an increase from the 26.5% recorded in November. Nonetheless, consumers believe the overall outlook is bleak. "Consumers' assessment of current conditions deteriorated sharply in December, as the resurgence of COVID-19 remains a drag on confidence,” said Lynn Franco, the Conference Board’s senior director of economic indicators. "Overall, it appears that growth has weakened further in Q4, and consumers do not foresee the economy gaining any significant momentum in early 2021."

By Julija A. December 25,2020

US consumers increased holiday spending again this year despite a shorter holiday shopping season.That’s the bottom line from credit card company Mastercard.The holiday shopping season was short this year because Thanksgiving came on November 28. Black Friday, the day that traditionally kicks off holiday shopping, came the next day. That gave consumers six fewer shopping days before Christmas than last year. Even so, they managed to drive holiday spending numbers up.A Mastercard report based on retail sales data collected between November 1 and Christmas Eve 2019 reveals that eCommerce sales grew by 18.8% compared to the same period last year. Online shopping made up 14.6% of total retail sales.Excluding autos, overall holiday retail sales increased by 3.4%."eCommerce sales hit a record high this year with more people doing their holiday shopping online," Mastercard senior adviser Steve Sadove said in a statement. "Due to a later than usual Thanksgiving holiday, we saw retailers offering omnichannel sales earlier in the season, meeting consumers' demand for the best deals across all channels and devices."Retailers, who make as much as 40% of their annual sales during the holidays, have made significant investments to reach the high customer-service bar set by retail giant Amazon. Same-day delivery, lockers for store pick-up, and better online presence are the latest trends many retailers are trying to follow.President Donald Trump boasted about the 3.4% gain in a tweet: "2019 HOLIDAY RETAIL SALES WERE UP 3.4% FROM LAST YEAR, THE BIGGEST NUMBER IN US HISTORY. CONGRATULATIONS AMERICA!"Trump, whose 2020 electoral campaign focuses on the economic gains achieved during his presidency, referred to the retail sales increase as unprecedented.That claim was refuted by Mastercard spokesperson Willian Tsang, who noted in a Reuters interview that 2018 saw a 5.1% increase in retail sales over 2017.The White House did not provide an immediate comment on the discrepancy.

By Ivana V. December 26,2019

Nearly 90% of shoppers say a single negative experience returning merchandise is sufficient to curtail all future purchases from the store or brand.That’s among the data points revealing that product returns have become a new battleground for online and brick-and-mortar retailers alike.According to product liquidators B-Stock Solutions, consumers will return up to $95 billion worth of holiday purchases this year, a 15-20% increase over last year. Nearly half of those returns are expected to come from e-commerce purchases.While the cost of returns has always been a factor affecting retailers’ profit margins, the constant growth in online shopping has raised the stakes for online merchants. Online returns have a more severe effect on the bottom line due to the high costs of shipping, restocking, and potential discounts or write-offs if the products aren’t sold later.In a retail market this saturated, shoppers have grown accustomed to convenience and choice when they shop in brick-and-mortar stores and online. Their next big expectation is a cheap and simple return process.Happy Returns, a company that provides comprehensive return solutions for online and omni-channel retailers, surveyed 1,800 customers about their return expectations. In addition to finding that almost 9 out of 10 shoppers would abandon a brand after one bad experience returning items, analysts queried shoppers about what a “perfect return experience” would be. They learned in no uncertain terms that buyers expect free shipping back to the seller.Consumers want returns to become a no-cost, no-risk part of the shopping experience. And if retailers want to meet these demands, they are looking at substantially lower profit margins.“The way retailers handle online returns for the holiday season is setting the stage for their customer engagement going into 2020,” said Andy Mantis, the chief brand officer at research and consulting firm 1010data.“Return policies once were merely a necessary task of store operations. Now they’re becoming another competitive strategy for retailers to build brand loyalty,” Mantis said.Online sellers deal with a higher percentage of returns than their counterparts with physical stores, partly because consumers can’t see and try the items.This is especially true when it comes to clothing items. As the research by 1010data shows, apparel purchased online is sent back twice as often as items bought in physical stores.Research cited by Statista says this year’s cost of handling returns could amount to $550 billion - a 75% increase from 2016.Omnichannel sellers are at an advantage because they can instruct consumers to bring unwanted items to their physical stores, cutting down on retailers’ shipping costs. What’s more, this interaction gives merchants a second chance at making a sale and delivering a positive shopping experience.Not only is this more convenient for retailers, but consumers seem to enjoy it too. A National Retail Federation report reveals that 80% of shoppers prefer handling returns at the store. At the same time, nearly 75% say they are likely to make another purchase in the process.A new form of collaboration among retailersRecently, retailers with physical presence have been handling returns for eCommerce brands.Nordstrom has set up several service hubs where customers can return items bought in other online stores. The Seattle-based retailer ships the products back to the eCommerce sellers.Michaels Stores, a chain of art supply shop, has partnered up with UPS to let customers pick up and drop off packages at various physical locations, including CVS and Advance Auto Parts stores.FedEx offers the same pick-up and drop-off option at Walgreens pharmacies.Amazon has been in business with Kohl’s since July 2019, routing its shoppers to 1,000 Kohl’s brick-and-mortar stores as a part of its return procedure. Amazon’s additional return points across the country include approximately 10,000 UPS stores and about 400 of Amazon’s Whole Foods Markets.And just as Target and Best Buy caught up with Amazon by offering free shipping for online returns, Amazon upped the ante by expanding the array of products that qualify for the free return program. In the past, Amazon’s customers could ship footwear, apparel, and bedding to Amazon free of charge. Now they can return “millions of items for free” as advertised on the eCommerce platform, including electronics, kitchen appliances, and household items weighing less than 50 pounds.

By Ivana V. December 26,2019

Facebook and major retailers have joined forces to drive sales at the expense of user privacy. On top of mountains of data Facebook already possesses about users, it is now being fed users’ in-store purchasing habits so retailers can target them with ads.If you have shopped at Macy’s or Dick's Sporting Goods stores recently, you may have noticed an increased number of their ads in your Facebook feed. This is because the social media giant has allied with these two retailers to drive profits by sharing consumer data with each other. Retailers send Facebook information about what their customers are buying online and at brick-and-mortar stores. Facebook uses that information to target customers with ads about the products.It’s not just Macy’s and Dick’s. Businesses from many industries send Facebook customer data, including email addresses, names, phone numbers, and records of in-store purchases. The data, shared in secure hashed form, is used to match purchases to individual Facebook users - who then see ads from those companies in their feed.Reddit and Twitter users have noticed and commented on this trend as long ago as last spring,In August of this year, Facebook introduced the Off-Facebook Activity tool, which gives users a summary of the apps and websites that have shared their user data with the social media company. It also lets you disable this sort of data-sharing."The main way that Facebook makes money is by selling ads, and the reason that it's really able to dominate the online ad industry is because it controls so much personal information and data about its users," says Business Insider reporter Aaron Holmes.According to third quarter 2019 results, Facebook earned $17.6 billion in July, August and September. As much as $17.3 billion of that money came from advertising. Facebook’s wealth of demographic information on billions of users makes advertisers flock to it like moths to a flame. No other social network holds as much data on users. No other allows such hyper-targeted advertising. Retailers who have shared customer data with the social media giant are satisfied with the results."We are encouraged by the positive results we saw in-store and are excited to continue testing Facebook's offline suite to fuel our growth," a Macy’s spokesperson told Business Insider."With store visits custom audiences, we re-engaged customers who had visited one of our stores with a targeted Facebook ad," a Dick's Sporting Goods representative said in a statement. "And, using lookalike audiences, created from people similar to those who visited our store, opened up a broader audience of new customers for us to reach, driving incremental foot traffic and sales.”

By Ivana V. December 17,2019

A recent report titled Retail Trends Playbook 2020 identifies four key pillars as being crucial to taking the retail experience to the next level. With data-driven digital technologies at their disposal, retailers can better understand consumers’ needs, design an intelligent supply chain, empower employees to deliver personalized in-store experiences, and redesigning the business model to highlight the most popular products and services. Listening to customers Compiled by Microsoft and US-based media company PSFK, the report asserts that retailers must gather as much data on customer behavior as possible in order to deliver on the promise of personalized shopping. With that data, merchants can design personalized outreach campaigns. Knowing each shopper’s preferences and previous purchases is key to securing proactive marketing and tailored recommendations. According to the report, 80% of US consumers enjoy such an approach, while 58% plan to sign up for personalized offers. Employee empowerment When consumers think “personalized shopping experience,” they expect more than an occasional email. They want the shopping experience to be tailored to their needs in brick-and-mortar shops just as it is online. To accomplish that goal, retail brands have to empower their frontline staff with knowledge about products and customers alike. Sales assistants can deliver a superior shopping experience only when they have access to lots of customer data. For example, Miami-based footwear brand Melissa Shoes gives shoppers the option to use facial recognition kiosks at their physical stores. When a returning customer stops by a store, employees are notified about their preferences as soon as the customer is recognized. That lets the staff provide an exceptional in-store experience. Smart supply chain According to the report, 52% of retailers are struggling to connect the dots between data stored across different parts of their organization. Yet 58% of consumers consider the visibility of inventory status to be important while shopping online. To overcome the disparity of what’s going on inside organizations and what customers want to see, the authors of the report propose cloud-based communication channels powered by real-time data. Intelligent supply chains can share information among factories, warehouses, stores, and key partners. Reimagining retail More than 60% of retailers who have strategically used information gathered through technology say it has given them a competitive advantage. Retailers can figure out which areas need improvement by getting a 360-degree view on in-store behavior. Data lets them understand how customers interact with products and how loyal they are to the brand. Having this wealth of information is an ideal starting point for creating actionable strategies regarding merchandising, rewards programs, and technology investments. Investing in a series of digital solutions won’t automatically translate into higher profit margins. The report concludes that the secret to success lies in retailers having a clear image of their own brand, their shoppers, and the experience they want to deliver.

By Milja December 09,2019

Walmart’s app edged out its Amazon counterpart for the first time to become the most-installed shopping app in the US during the big sales holiday weekend kicked off by Black Friday. According to market data platforms App Annie and Sensor Tower, Walmart got 113,000 new downloads. The figure marks a 23% year-over-year increase. Sensor Tower said 2019 was the first year Amazon’s app did not clinch top spot on the US App Store’s list of most-downloaded shopping apps. The data collected shows Amazon getting 102,000 first-time installs, which marks a 10% decrease from the year before. It was enough to earn Amazon second place. The other companies on the top ten list are, in order: Target, Best Buy, GOAT, Nike, Kohl’s, Wish, Macy’s, and Adidas.However, Amazon still managed to retain the No.1 spot when the apps were ranked globally. The data suggests that Walmart’s numbers were boosted due to recent investments in its brick-and-mortar apps that make checkouts a lot faster and convenient. It’s unlikely that Amazon is too upset about slipping in the app-download rankings. The company rarely releases exact sales figures, but it did tell CNN on Tuesday that shoppers purchased “hundreds of millions” of products between Thanksgiving and Cyber Monday. Representatives said that customers worldwide set a new single-day sales record, purchasing more products in 24 hours than on any single day in the company’s history.

By Dragomir Simovic December 05,2019

This holiday season, U.S. consumers are likely to spend up to 5% more compared to last year, according to a forecast recently published by Deloitte. Low unemployment rates and a growing economy are the leading causes of the projected growth.When the holiday season comes around, Americans go into a shopping frenzy. In the period between November 2018 and January 2019, U.S. consumers spent $1.09 trillion, which presented a 3.1% increase. This year, Deloitte predicts that seasonal spending will surpass $1.1 trillion. While retailers selling goods from brick-and-mortar stores can look forward to a spike in sales, online merchants can expect an even more significant boost. According to Deloitte’s analysts, e-commerce year-over-year sales growth will be between 14 and 18%. During the same three-month period last year, holiday spending increased by 11.2%. If this year’s predictions prove to be accurate, e-commerce holiday sales will reach $149 billion.“The projected holiday season growth is, in part, due to the current health of the labor market. Near record-low unemployment rates, coupled with continued monthly job creation, may encourage people to spend more during the holiday season,” said Daniel Bachman, Deloitte’s U.S. economic forecaster.While some economists fear that the U.S.-China trade war will slow the economy down, Bachman reminds that the economy is still growing, albeit at a slower rate. “We continue to see consumer confidence elevated, which also helps boost holiday spending,” he adds.“Based on a growth in consumer disposable income and spending indicators, retailers, across channels, should expect a strong holiday season in 2019,” said Rod Sides, vice chairman of Deloitte. Sides notes that retailers have been striving to improve customer experience and increase their omnichannel efforts. “But, convenience is the new retail currency. Retailers who offer seamless experiences, have products available, and can deliver items more quickly than ever are most likely to win this holiday season.”

By Milja September 25,2019

Today at Paris Retail Week, a group of companies headed by Global POS has announced that starting in early 2020 bitcoin will be accepted as a payment method in 25,000 stores across France.Point-of-sale technology provider Global POS, EasyWallet application, and payments platform Easy2Play are joining forces to launch this cryptocurrency payment system in the first quarter of next year. They say their goal is to enable the 4 million French consumers to spend their bitcoin in retail stores.Around 30 retailers have agreed to accept the world’s largest cryptocurrency in their stores at more than 25,000 sales points. Among them is the American footwear company Foot Locker, along with numerous French brands such as sportswear giant Decathlon, cosmetics retailer Sephora, and furniture and home decor store Maisons Du Monde."This is an important symbolic step in the evolution of payment methods in France. However, more than a symbol, what we bring to 25,000 outlets is the ability to safely enter the world of the 3.0 economy,” Stéphane Djiane, CEO and Founder of Global POS told a French crypto portal, Cryptonews.Payments made in bitcoin will be automatically converted into euros when the sale is made. French cryptocurrency trading platforms Deskoin and Savitar will provide conversion services. Both companies are currently applying for Digital Asset Service Provider accreditations under France’s PACTE Act."With our partners, we want to simplify the adoption of cryptocurrencies as a real means of payment within the framework defined by the law. Though initially, the service we offer will allow only the use of bitcoin, our goal is to open our solution to other cryptocurrencies in the future," Djiane added.

By Ivana V. September 24,2019

In a recently published report, Deloitte challenges modern retailers to abandon the ineffective retail metrics of yesterday like sales-per-square-foot and same-store sales and embrace a set of new parameters that complement one another.For the last two decades, retail has been in a state of constant disruption due to the proliferation of the internet and online shopping. Though some feared that the digital era would spell the end of brick-and-mortar stores, it has only lead to a change in business and profit models.As more retailers adopt an omnichannel approach, the industry is no longer torn between players with physical and online stores. Retailers and competitors from other consumer-focused companies have developed additional profit models like variations on subscriptions, marketplaces, fulfillment as a service, in-house ad and media networks, web and cloud services, licensing internal technologies, and venture funds.In many cases, these new profit models help businesses maintain or expand their customer base. However, determining their actual value has proven extremely difficult with existing retail metrics.“While retail continues to evolve and adapt to changing consumer preferences and new technologies, it is increasingly critical to develop newer, more relevant metrics to accurately value and measure retailers. The current suite of metrics was built for a time that no longer exists,” Matthew Shay, president and the CEO of National Retail Federation affirms.Looking to present both retailers and stakeholders with new ways to measure performance and define marketplace success, Deloitte has come up with a series of holistic and balanced metrics. They are presented in the report titled The Future of Retail Metrics: Measuring Success in a Shifting Marketplace.Five New MetricsAfter surveying retail CFOs and executives at leading retail companies, speaking with representatives of retail trade groups, reviewing annual reports, and spending time with internet-based and online start-ups, Deloitte defined five new indicators of retail performance.The first two metrics focus on how retailers create value by acquiring customers and capture value by sustaining ongoing profitable relationships.Retail profit per transaction. This metric measures the profitability of a company’s retail operations, on a per-transaction basis. It provides a common way of looking at all retail activities across all channels.Sales per unique customer. It addresses how much wallet share retailers can drive across their consumer base, through multiple purchases per year or through less frequent, large-scale purchases.The remaining three, more traditional metrics compare top- and bottom-line performance with investment efficiency.Revenue growth. It provides a top-line view that accounts for how a company is growing across its various operations and revenue streams, including both core retailing and auxiliary models.Return on invested capital. This focuses on the importance of investing in the modernization of current operations to keep up with industry changes.Free cash flow. It provides insight into an organization’s controllable cash flow reflective of its current investments. This helps identify how much money is available to return to stakeholders and invest in future operations.“These value-creation metrics, combined with revenue growth, free-cash-flow, and return-on-invested-capital, give us a better way to analyze any retail business. Everyone needs to start asking questions about the retail profit thesis and get to this level of detail. Every retailer needs to be held to the same standards,” Rodney Sides, Deloitte vice chairman told Forbes.

By Ivana V. September 15,2019

The newly opened co-working hub in the Linden Hills neighborhood in Minneapolis provides a place for retailers to gather, share ideas, and experiment with new concepts.Twin Cities have always been the epicenter of U.S. retail. Target, Mall of America, Best Buy, and General Mills are great examples of retail giants who have situated their headquarters in this metropolitan area. Apart from these big players who employ thousands of retail experts, the city is also filled with a number of independent marketing, PR, and design consultancy companies who support the industry.Aware of the fact that the city is bustling with great minds from the retail business but lacking a collaborative space where these people can come together and share their thoughts and ideas, Chris Walton and Anne Mezzenga come up with a business plan.These two former colleagues from Target had worked together a few years before on the ‘Store of the Future’ project. However, Target CEO Brian Cornell decided to abandon the project, which resulted in both Walton and Mezzenga leaving the company.After their departure from Target, the duo started their own retail blog and podcast called Omni Talk. It’s an online space where Walton and Mezzenga write and talk about retail news, focusing on innovation in the industry.Passionate about retail and eager to exchange creative ideas with others in the business, after leaving target Walton found himself spending a lot of time at where he would meet with other retail experts. Anne Mezzenga was doing the same. This is how the notion of creating a retail hub came to be.“It was like, well, wait a minute, why isn’t there a place to go if you’re interested in retail where you can meet people and then you might bump into other people, too? Especially when retail is such a pulse of Minneapolis,” Walton told the Star Tribune.They teamed up with Xenia Retail, a point-of-sale technology company based in Minneapolis, and launched Third Haus. Troy Stelzer, the CEO of Xenia, had collaborated with Mezzenga and Walton on Target’s ‘Store of the Future’ project. Stelzer also wanted to create a space where Xenia Retail could continue to develop ideas and showcase the company’s capabilities. “We spent the better part of a year interviewing and selecting potential partners for Third Haus,” Xenia CEO said. “Most are complementary to our platform. But some have aspects that are competitive to Xenia. We have to be OK with that and understand the friction makes us both better.”Located in the Linden Hills neighborhood, the newly opened Third Haus spreads out on 8,000 square feet and is probably the first co-working hub devoted entirely to retail. It’s got the typical characteristics of a shared working space such as large white tables equipped with outlets, coffee stations, a printer, and plants hanging from the ceiling.But what makes Third Haus unique is the lab where retailers can go and test their ideas. Brands, tech startups and retailers of all sizes can come to the “Retail Experience Studio” and find display tables, mannequins, and other fixtures at their disposal, which they can use to experiment. The lab is designed to give retailers a fresh perspective on how to roll out innovative concepts at their brick-and-mortar stores.Third Haus offers its members an opportunity to test the latest gadgets intended for retailers such as internet-connected lighting, donated by Philips, that senses when a consumer is near a certain product. Xenia’s mobile-checkout and scan-and-go technology are also available for a test try.Mezzenga and Walton have moved their recording studio to the Linden Hill location and now create their Omni Talk podcast there. Xenia Retail employees also work from Third Haus full-time now.Members who want to be a part of this collaborative community can choose from three monthly membership options ranging from $15 to $200 a month.

By Ivana V. August 30,2019

Apple seems to be expecting approximately the same demand as last year for its three new iPhone models set to be announced this fall.According to Bloomberg’s anonymous sources, Apple’s suppliers are gearing up to produce parts for up to 75 million new iPhones in the second half of 2019, roughly the same number as the year before. This implies that the smartphone maker anticipates a stable demand, in spite of the U.S.-China trade tensions and the growing market share of Chinese rivals like Huawei.Apple’s suppliers in Asia are preparing to make components for iPhone 11, iPhone 11 Max, and iPhone 11R - the three new models to be released ahead of the holiday season, the people who requested to remain unidentified told Bloomberg.If demand increases, the U.S. company’s Asian partners could accelerate the production to as many as 80 million new devices, an anonymous source familiar with the matter disclosed. Furthermore, the leading iPhone assembler Foxconn Technology Group is allegedly taking on more new workers in Shenzhen and offering salaries about 10% higher than the previous year in order to achieve full staff capacity during the peak production season. However, the fact that Apple expects customer demand to be as high as last year doesn’t mean it will be able to sell all 75 million units. Analysts have projected iPhone shipments to drop by some 13% and reach a total of 189 million in the 2019 fiscal year."Apple's growth has become more cyclical and slowed along with the global smartphone market, leaving it dependent on iPhone upgrades to drive sales," Bloomberg Intelligence analysts Boyoung Kim and John Butler said. "Apple's inability to raise iPhone prices much higher is constraining growth. Weakness in China due to competition and the trade war with the U.S. remains an issue."After unit growth turned negative in the closing quarter of 2018, the tech giant stopped revealing iPhone shipment numbers and began providing data about other, successful metrics regarding its services such as Apple Music, and Apple TV+. According to analysts’ estimates, Apple sold between 70 and 80 million new devices in the second half of last year when it released iPhone XS, XR, and XS Max.The California-based tech firm has announced new iPhones in September every year since 2012 with new models going on sale shortly after, in the final weeks of the same month. Presuming that the trend continues, consumers can look forward to three new iPhone models powered by iOS 13 in September of this year, too. The latest iPhone 11 models will boast a 6.1-inch and 6.5-inch OLED displays and a triple camera system, as rumored by 9to5Mac.

By Ivana V. July 25,2019

J.C. Penney has hired advisers in an attempt to explore debt restructuring options, Reuters reports. The goal is to buy more time in order to try and save the once leading U.S. retailer.The 117-year-old company is $4 billion in debt, and payment will be due in the next few years. J.C. Penney has lost a staggering $1.4 billion over the last five years, and recovery will take a lot of effort.The company’s stocks dropped a shocking 50% in the last year. Current trades are at $1.15, giving it a market capitalization of $342 million.In May sales at stores that have been open for at least a year fell more than expected during the first quarter and the net loss nearly doubled, reaching $154 million, the retailer said.The Texas-based company has been unable to cope with competition in the face of TJX Cos Inc’s, Marshalls and T.J. Maxx chains. J.C. Penney has also struggled to boost its e-commerce business, unable to compete with more established players like Amazon. The retailer does have more than $1.5 billion under a revolving credit line, but investors have continued to sell stocks, in response to financial losses. Its credit rating is deep in junk territory, increasing its borrowing costs.J.C. Penney is exploring options that could include raising additional cash or negotiating with creditors to push out debt maturities. The retailer employs 95,000 people and operates more than 860 stores, despite closing shops over the years and revamping remaining locations.Recent weeks have seen the company hold discussions with lawyers and investment bankers who specialize in advising troubled companies on debt restructurings and other financial workouts.In the short term, the company has taken steps to increase financial breathing room and avoid potential bankruptcy. However, analysts have expressed concerns that J.C. Penney will run out of money and fail to change its declining fortune in time.

By Julija A. July 19,2019