Author: Helen Thomas

Accelerated Analytics Customers L’Oreal and Coty Ink Big Business Deals in the New Year

Posted on January 12, 2017 by - Blog

L'Oreal and Coty DealsThe string of beauty deals continues in the new year with significant beauty acquisitions for Accelerated Analytics customers L’Oréal and Coty, all within a 48-hour period earlier this week.

L’Oréal will almost double the size of its Active Cosmetics Division with the acquisition of CeraVe, AcneFree and Ambi for a reported $1.3 billion. Founded in 2005, CeraVe develops cleansers, moisturizers and baby products and is one of the fastest-growing active skincare brands in the United States, L’Oréal said. AcneFree provides acne treatments and skin cleansers, while Ambi makes products to treat dark spots and brighten skin. The new trio of labels generates yearly revenue of about $168 million combined, and puts L’Oréal head-to-head with Nestlé’s blockbuster brand Cetaphil.

“Although the price is very high,” said Eva Quiroga, an analyst at Deutsche Bank, “it is supported by the strong growth the business will likely achieve, initially in the U.S. and eventually on a more global basis. It is the kind of global expansion that L’Oréal has historically excelled at.”

Coty is the latest consumer-products maker to acquire an online start-up with the purchase of Younique, a Utah-based company that makes its own line of skin care, body care and makeup products that are sold via peer-to-peer social selling. Coty will acquire 60% of Younique for $600 million in cash and Younique founders Derek Maxfield and Melanie Huscroft will own the remaining 40% and stay with the company in executive roles. Younique’s sales are made mostly online through virtual parties on Facebook and other social platforms. Modeled after more traditional direct-selling models, Younique is part of a group of young companies that have adapted the model to the internet age.

Sources: Reuters, Women’s Wear Daily

Stanley Black and Decker to buy Craftsman

Posted on January 6, 2017 by - Blog

The latest in a recent flurry of moves to raise cash, Sears Holding announced Thursday that it will sell its well-known Craftsman tools brand to Stanley Black and Decker. The value of the deal could top $1 billion.

Stanley will pay $525 million up front – the deal is expected to close later this year – and another $250 million at the end of year three. Stanley will also pay Sears a percentage of its new sales of Craftsman products for 15 years, and Sears will continue to sell Craftsman-branded products through a perpetual license deal, which will be royalty-free for the first 15 years, and royalty-bearing after that.

“This agreement represents a significant opportunity to grow the market by increasing the availability of Craftsman products to consumers in previously underpenetrated channels,” said Stanley President and CEO. “We intend to invest in the brand and rapidly increase sales through these new channels, including retail, industrial, mobile and online.”

Sears, once an icon of American retail, has reported declining sales for years. In addition to the Craftsman deal they also announced plans to close 150 more of their struggling Kmart and flagship Sears stores.

Sears CEO Eddie Lampert said that Sears “will continue to take actions to adjust our capital structure, meet our financial obligations and manage our business to better position Sears Holdings to create long-term value.”

Sources: CNN, Chicago Tribune, HBS Dealer

Robert Lighthizer Named Chief Trade Negotiator

Posted on January 4, 2017 by - Blog

Yesterday, President-elect Trump named veteran Washington trade lawyer Robert Lighthizer as his chief trade negotiator in a move that confirms Mr. Trump’s intention to get tough with China, Mexico and other trade partners.

Lighthizer, who is with the firm Skadden, Arps, Slate, Meagher and Flom and was deputy trade representative during the Reagan administration, would replace Michael Froman, the Obama administration’s representative who led negotiations on a Pacific trade pact that would have covered nearly 40 percent of the global economy and was seen as a counterpoint to China’s rising clout.

Trump, however, argues that deals such as the North American Free Trade Agreement and the Trans-Pacific Partnership kill American jobs. He has vowed to make smarter deals and has signaled a tough stance on trade with China, including levying a hefty tariff on Chinese imports.

Lighthizer has previously accused China of unfair trade policies and has long advocated protectionist trade policies. In his role during the Reagan administration, he helped to stem the tide of imports from Japan in the 1980’s with threats of quotas and punitive tariffs. In public testimony in 2001, Lighthizer argued that China has failed to live up to commitments made in 2001 when it joined the Word Trade Organization and that more aggressive tactics are needed to “force change in the system.”

The Wall Street Journal’s William Maudlin writes that the choice of Lighthizer as U.S. trade representative signals a sharp shift in trade strategy that “will include a move away from multilateral deals, a tougher approach to China and Mexico and the threat of duties to impose higher costs on imports”. Mainstream economists warn that protectionist policies like import taxes could impose higher prices on consumers and slow economic growth.

Sources: Wall Street Journal, Bloomberg, Rueters

The Omnichannel Holiday Challenge with Store Inventory and Forecasting

Posted on December 20, 2016 by - Blog

Holiday shoppers have just a few more days to get their shopping done. Do they order online and get it shipped? Do they order online and then pick up in store? Or do they go into a store hoping to walk out with the items they want to purchase? Retailers have the challenge of meeting all of these needs, many of them using store inventories as distribution centers to handle online purchases, whether shipping it to the customer’s home or having it available so they can pick up the item in the store.

An online customer who is having their products shipped does not care which store or warehouse handles their purchase. A shopper in the store or on the way to a store does – they expect the item to be available on the shelf. Retailers are using different strategies to manage these needs. Some, such as Target, are holding inventories back from online purchasers in order to keep inventory on the shelf for their in-store shoppers. In Target’s example, an online shopper may try to go online and buy or reserve an item in store but are unable to do so. Other retailers, like Toys ‘R Us, have a “first-come, first-served” strategy. The big challenge is for retailers to determine, by product and by store, how to divvy up the store’s stock, and need to forecast in-store purchases to try to have the right amount of inventory on the shelves.

Store Inventory Forecasting

Tracking item-store inventories as real time as possible is the best way for these retailers to make these forecasts. Retailers without inventory systems who can keep up with purchases are having to keep extra available in the store and not online, in order to avoid the mistake of selling the same item to two customers around the same time.

Source: Chicago Tribune.com, Wall St. Journal

2016 Was a Great Year for DIY Retail

Posted on December 16, 2016 by - Blog

The holiday season is upon us, and how DIY retail will fare remains to be seen, but 2016 by most accounts has been a great year for DIY retail. The North American Retail Hardware Association (NRHA) is estimating industry growth for 2016 to end at 5.8%. The Home Improvement Research Institute (HIRI) is estimating a little higher, at 6%. The US Census Bureau reports home improvement industry sales through September at 6.7% growth over 2015.

Building materials and home improvement retail sales are 3 to 1 higher than overall retail sales increases for this year.

What has led to the success, and which areas in the DIY space have seen the best results?

Most economists agree that the renewed housing market seen in 2016 will continue into 2017. Add to that higher consumer confidence rates, multi-family housing construction has led to higher sales at home centers and lumber dealers. Remodeling projects and big-ticket purchases are stronger. Big ticket items, such as appliances, have seen the biggest sales uptick in the segment.

Accelerated Analytics DIY customers, using their retailer POS data to analyze sales and inventory, are experiencing the same trends. Across the Accelerated Analytics customer index, June and July showed poor results, followed by an improving August and strong September. 20% of Accelerated Analytics customers’ sales tickets are big ticket items, over $900 per sale. These items were identified as appliances and other expensive items, along with supporting/supplemental products.

The NHRA is predicting 2017 sales to continue this trend and that home improvement product sales should continue to outpace overall retail sales in 2017, anticipating DIY industry growth in the range of 5%.

For more industry stats and observations, download the Accelerated Analytics Retail Industry Briefing Book, which is a monthly publication of key retail industry trends, published to over 7,000 subscribers per month.

Sources: Accelerated Analytics, Hardwareretailing.com

Confessions of an Amazon Prime Junkie

Posted on December 14, 2016 by - Blog

I think my family set a new record yesterday. As we were pulling into the driveway last night after our daughter’s high school chorus concert, I looked at the house, admiring our holiday lights, and spied a package on our front porch. I laughed and told my husband that I think that brought the day’s total to seven – surely a record. But when I opened the front door to retrieve it, I saw that there were actually two packages on the porch, bringing the day’s grand total to eight packages delivered. And they were all from Amazon.com.

My husband and I have been members of Amazon Prime for as long as I can remember. We joined years and years ago, back before they streamed music, tv and movies and way before e-commerce and Cyber-Monday were an integral part of holiday shopping. In fact, I can’t really remember life before Amazon Prime. And if you tell me you’re not a member I’ll likely react with a stunned look of disbelief and feel kind of sorry for you. You mean you wait more than two days for your packages AND you pay for shipping?

Suffice it say we’re fans of the e-commerce giant. It’s not uncommon for me to place multiple orders in one day, because, well, I can. And as I do, I often think to myself “Gosh, the people at Amazon must hate us.” I imagine the holiday elves at the Amazon warehouses cursing our family and wondering if we’re just trying to make their lives difficult. If they had a naughty list, I feel sure we’d be on it. But . . . they make it so easy. In reality, my guess is we’re not so different from all of the other Amazon Prime members out there this holiday season and anytime for that matter.

In a blog post this fall, we reported that ecommerce in general continues to grow at a rate that outpaces retail growth. We detailed that according to eMarketer, while moderate growth of 3.3% is expected for 2016 holiday retail overall, ecommerce is expected to make its biggest jump since 2011 and post growth of 17.2% this holiday season.

With an estimated U.S. ecommerce market share reported anywhere between 40% and over 65%, Amazon.com is the biggest player in the ecommerce market. Amazon Prime was launched in 2005 for $79 a year as an unlimited express shipping membership program for about 1 million products. While Amazon doesn’t disclose the exact number of Prime members, today it’s estimated to be about 80 million worldwide and about 65 million in the US alone. According to Statista.com, that’s an increase of 10 million subscribers since December of last year and more than double the estimated 25 million subscribers in December of 2013. Clearly, Prime’s growth has ramped up over the past few years as they have added more benefits, and content, expanded to new markets and introduced new membership options. Earlier this year Amazon Prime began offering monthly Prime membership plans for $10.99 a month and a monthly Prime Video plan for $8.99 a month, giving consumers more options and attracting new subscribers.

Amazon Shopping Data

According to Consumer Intelligence Research Partners (CIRP), just over half of Amazon customers – 52% – are Prime members, each of whom spend an average of $1200 a year. That compares to approximately $600 per year spent by non-Prime members. And if you look at the frequency with which Amazon shoppers make a purchase on Amazon.com, Prime members are far more likely to shop more frequently than non-Prime members. According to a survey reported on Statista.com, 18% of responding Amazon Prime members said that they shop on the website at least once a week and 11% of responding Amazon Prime members said that they shop on the website at least twice a week.

 

So while my family’s delivery record seemed extreme yesterday, it sounds like our Prime-junkie tendencies place us in good company with a boatload of U.S. consumers. Hopefully we aren’t irritating the heck out of the Amazon shipping employees, and maybe they even just smile and shake their heads when we place our third or fourth order of the day. I hope so, because I just thought of another gift I need to order.

Retail Value Chain Federation Annual Fall Conference Kicks Off Sunday, Nov. 6th

Posted on November 4, 2016 by - Blog

RVCF’s Annual Fall Conference is just a few days away! We’re working on dozens of last minute details and are looking forward to seeing our customers and partners as well as make new connections.

Attendees can find us in the exhibit hall at booth #30. You’ll have the opportunity to learn more about us andRetail Value Chain what we do and will have two opportunities to win one of our grand prizes – two Merge VR Virtual Reality headsets! Entering to win is easy. Stop by the booth and spin our prize wheel to earn an entry into the drawing for the first headset. To earn an entry for the second headset, post a picture from our booth on Twitter, tag us (@AccelAnalytics) and include the hashtag #ToolstoWinatRetail.

POS ToolsOn Tuesday, November 8th, Director of Sales and Marketing Jennifer Freyer will present our session “The SOP of POS” at 1:30 pm. Join us in Salon C,D,E to find out how retailers and vendors can FLIP the usual process of managing point of sale data around to get results. Whether you’re a retailer or a vendor we’ll help you understand the value of POS data and how it can help your business.

If you have questions or would like to meet with us at the conference, please click here to set up an appointment.

Accelerated Analytics Luxury Fragrance Vendors Poised to Grow 5.9% by 2026

Posted on November 4, 2016 by - Blog

Future Market Insights released a report today that estimates the global perfume market is estimated to reach $39.67 billion by the end of this year, and expects growth of this segment of 5.9% over the next ten years. The firm looked at several Accelerated Analytics beauty and fragrance companies for its report, including Estee Lauder Companies, LVMH, Coty Inc., L’Oreal International, Elizabeth Arden Inc., Shiseido Co. Ltd., Puig and Parlux/Perfumania Holdings Inc.

Perfumes Market Revenue

The reports found that demand is being bolstered by the millennial consumer segment, as well as increased online retail strategies from these companies. Female fragrances are leading the increase, with year-over-year increases from 4-5.2% over 2015 to 2026. While online retailing is the most attractive shopping means to this segment of consumers, in-store remains 80.5% of the market share, due to the personal and olfactory nature of fragrance marketing.

Millennials are drawn to products that have natural ingredients. Fragrance vendors are offering more “Eau Fraiche” (alcohol free) products.

The Western Europe market is the largest consumer, and expected growth consumer, of fragrance products, followed by North America.

To get more retail insights from the Accelerated Analytics team, register for our (free) monthly Retail Industry Briefing Book here.

Source: Luxury Daily

Are Consumers Waiting Until After the Election to Shop?

Posted on November 2, 2016 by - Blog

Holiday ShoppingThe National Retail Federation (NRF) conducted a survey last week, and found that more than 25% of shoppers say the election will affect their spending.  43% of consumers also state they are being more cautious with their spending because of election uncertainty.

Retailers are seeing this effect and are making adjustments. Target and Wal-Mart are adjusting their holiday season marketing ahead of November 8.

In addition, retailers are challenged to get their marketing messages out amid all of the election noise. “Everywhere you turn — whether you’re picking up a newspaper or watching television — political advertisements are taking up ad space that retailers typically use to get holiday shopping on the minds of consumers across the country,” NRF President and CEO Matthew Shay said.

Once November 9 rolls around, the NRF predicts the holiday shopping season will kick up. The NRF is still predicting a 3.6% increase in retail spending in November and December, which would make 2016 the most successful holiday shopping season in years. This forecast is in alignment with other predictions from Deloitte, RetailNext and Kantar retail, reports CNBC. This spike is expected regardless of who wins the presidency.

Source: WSJ, NRF, CNBC