Author: Helen Thomas

According to the Customer Growth Partners’ 16^th Annual Holiday Forecast, retail sales for the November-December holiday period will reach $632 billion. The record figure represents an accelerating 4.1% year-over-year increase in holiday sales and significantly exceeds 2015’s tepid 3.6% growth.

Rising incomes and deflation in food prices, apparel and electronics are fueling the growth.

“Consumers remain cautious, shop close-to-need and focus on value — but retail spending is now gathering momentum, and is about to unleash years of pent-up demand,” said Craig Johnson, president, Consumer Growth Partners, a retail and consulting firm. “Holiday 2016 is poised to turn out better than many expect—and may well turn out to be a lot better.  After a long slow spell, retailers may finally have some real holiday cheer, to cheer about.”

Key finding in this year’s survey include:

• Boosted by the ongoing housing recovery and led by the home improvement category, home-related categories will shine with growth of 5.7%.

• Health and beauty retailers, from drug stores to specialty stores, will pace all other merchandise categories with year-over-year growth of 7.4%.

• Accelerating from last year’s already strong pace, online and other direct-to-consumer sales will grow 13.9% year-over-year, and will comprise more than 17% of total holiday spending.

• Though outerwear sales are flat with this fall’s warm weather, apparel will see robust unit growth approaching 4%, though deflation will hold dollar sales growth to a weak 1.5%. Key fashion trends this year include bomber jackets, long sweaters and wraps, denim and footwear.

• With sluggish mall traffic and a value proposition far less relevant to millennials than to their parents or grandparents, most department stores will struggle again this year. A 2% year-over-year decline is expected.

• After a poor year for luxury, “hard” luxury such as high-end jewelry may at least see a late-season rebound.

Source: Chain Store Age

Lowe’s has successfully tested the Microsoft HoloLens in its stores in Raleigh and Seattle – so successfully that it plans to expand the technology to three more yet-to-be-disclosed locations.

The HoloLens brings high definition hologram images overlaid to real world surroundings. A customer can use the technology to visualize their home improvements. For example, a customer can go into a Lowe’s store and design their kitchen while sorting through Lowe’s assortment of appliances and material samples. To take it even further, a customer can select an item they saw and liked on Pinterest, and a similar item sold by Lowe’s will appear.

Kyle Nel, executive director of Lowe’s Innovation Lab, told USA TODAY in a briefing: “Mixed reality takes some getting used to, because we’re all used to pinching to zoom to get closer to things instead of just walking forward. The idea of using small samples and swatches to try and imagine what a room looks like seems very antiquated now.”

To try out the HoloLens in the store requires an appointment, especially on the weekends. Lowe’s Innovation Lab is looking for ways to stay ahead of technology, and stay ahead of rival Home Depot.

Source: Investopedia

The National Retail Federation (NRF) annual survey reveals this Halloween should reach an 11-year high in retail spend, to $8.4 billon. US shoppers are expected to spend an average of $82.93, up $8.60 per person compared to 2015.

While candy sales ($2.5 billion) are always attributed to Halloween, retailers should see an uptick in sales of costumes ($3.1 billion), decorations ($2.4 billion) and greeting cards ($390 million). Home improvement retailers, such as Home Depot and Lowe’s, have increased their decorations inventory versus previous years.  Homedepot.com has Halloween at the top of their web page and an entire section of their site dedicated to Halloween. Lowes.com does as well, and storefronts are covered in Halloween lawn and home decorations.

Consumers surveyed plan to spend the most in the first 2 weeks of October (44.4%).

“After a long summer, families are excited to welcome the fall season celebrating Halloween,” NRF President and CEO Matthew Shay said. “Retailers are preparing for the day by offering a wide variety of options in costumes, decorations and candy, while being aggressive with their promotions to capture the most out of this shopping event.”

Sources: NRF, CI News

Home Sales: Existing-home sales dropped .9% in August, marking the second month in a row of decline. However, year-over-year sales are up .8% over last year. While new home sales have been steadily rising, existing-home sales make up 90% of the home sale market. The National Association of Retailers reports that with the housing market in 2016 being the strongest sector of the economy over the past two years, the market may be a “victim of its own success”. Sales early this summer reached the highest levels since 2007, which has led to an increase in prices and a shortage of inventory. The average home price is $240,200, up 5.1% from 2015. The NAR feels an increase in home building would solve the issue. A Commerce Department report this week indicated building permits for single-family homes, the largest segment of the housing market, increased in August.

Manufacturing: The Conference Board reported its leading economic index, weighing 10 different economic indicators, dropped .2% in August. The decline in attributed to the average workweek of production workers and the amount of new orders. However, in the six-month period ending in August, the index increased .9% to an annual rate of 1.8%, which is in line with slow growth reported in gross domestic products. It is forecasted to grow at a 3% pace.

Retail Sales: US retail sales were up 1.9% in August, which was down from 2.4% in July. Retail sales had shown strong gains in the spring but has slowed through the summer months. Sales at department stores fell .6% and general merchandise store sales were flat. Building and garden equipment store sales dropped 1.4%. Retail sales are expected to be on the rise, with Halloween sales expected to boom and the 2016 holiday outlook expected to be positive, especially in e-commerce sales.

Sources: Wall St. Journal, Market Watch

To gear up for what is expected to be a very high e-commerce driven holiday shopping period, UPS says it will hire 95,000 seasonal workers this year, and FedEx Corp will hire close to 150,000. Overall retail hiring is expected to be the same as last year’s high numbers, but a shift to preparing for high online sales with those jobs is clear.

eMarketer announced survey results that found while moderate growth of 3.3% is expected for holiday retail overall, ecommerce is anticipated to make its biggest jump since 2011, up 17.2%. 71% of shoppers polled said they would make some to all of their gift purchases online. Rubicon Project found similar results in their survey, finding 73% of respondents will shop online, and that 22% of shoppers plan to do all of their holiday shopping online. The report shows that online shoppers will spend 64% on gift cards, 57% on apparel and accessories, 46% on toys and 37% on technology.

Cyber Monday is on track to produce higher results than Black Friday. A shift in the holiday calendar this year is also expected to help retailers. Christmas falls on a Sunday rather than a Friday like last year, giving last minute shoppers an extra Saturday to shop. Hanukkah begins 18 days later than in 2015, which should help generate sales in the latter part of December.

Source: NRF Smartbrief, Chain Store Age, Drug Store News, Fortune

The National Retail Federation (NRF) reported today that Canadians are spending more on clothing, footwear and accessories. Statistics Canada released a report that total retail sales in the clothing segment totaled $41.9 billion in 2015, a 38% increase from a decade ago.

During that decade, many retailers exited the Canadian retail market, such as Maxx Canada and Aeropostale. Stores still in the market that primarily sell clothing and accessories made up for 67% of the sales. Retailers of sporting goods, books and music saw their clothing business increase by 50%.

The Statistics Canada report noted that although many retailers closed, most were replaced by higher-end stores. Women’s clothing and accessories totaled $17 billion of the $42 billion, while men’s clothing and accessories were at $9.4 billion. Footwear was right behind at $7.1 billion and luggage and jewelry had $4.4 billion in sales.

Source: NRF Smartbrief, CTV News

Vera Bradley has plans to open a pop-up shop in NYC, replacing a shop occupied by Kate Spade through the end of last May. Opening in September, the pop-up shop will be 2,700 square feet over 2 stories and will carry the entire Vera Bradley collection. The store will also be the grand debut of Vera Bradley’s redesigned logo and store concept.

The store is geared toward an omni-channel customer experience, with interactive touchscreens allowing customers to participate in the “It’s Good to be a Girl” campaign over social media. Three digital wall displays will display virtual patterns. A kiosk in store will open shopping on VeraBradley.com.

“We are thrilled to open our first Vera Bradley store in New York City,” said Robert Wallstrom, CEO, Vera Bradley, Fort Wayne, Ind. “We look forward to showcasing our iconic collections and signature in-store experience to both the local community and tourists.”

Accelerated Analytics has worked with Vera Bradley to provide POS sales and inventory reporting and analysis for their key retailer accounts and independent specialty retailers since 2013.

Source: Chain Store Age

Beginning this fall in Lowe’s locations in the Bay Area, customers will have a new resource to answer their simple questions. Meet the LoweBot. A NAVii autonomous retail service robot that will be rolling out in 10 stores over the next 7 months.

The LoweBot will be capable of scanning inventory and capturing real-time data, and will be there to answer simple questions so that Lowe’s employees can focus on offering project expertise and personalized service.

“We designed the NAVii robot to make the shopping experience easier for consumers – simplifying the process of finding the product you’re looking for – while also managing the back-end and keeping shelf inventory up-to-date for the retailer,” said Marco Mascorro, CEO of Fellow Robots. “Leaving the data and simple recommendations to NAVii allows Lowe’s employees to devote their attention to the Lowe’s customer, to provide them with thoughtful advice and personalized service.”

Source: HBS Dealer

In an effort to get out of this year’s retail doldrums, department store retailers have been reducing prices on fashion brands they typically do not run promotions on. Promotions reached an all-time high in the last quarter, and in July over 2,000 emails advertising specials were sent to shoppers across the US. Some prices in May, June and July were reduced as much as 80%.

Luxury brands most heavily discounted included Michael Kors, Ralph Lauren and Eileen Fisher. Michael Kors is trying to rectify the situation by ending all coupons and friends-and-family sales at department stores. Ralph Lauren is reducing excess inventory. The brands hold the power with the ability to push sales in their own stores and online web sites.

How much are department stores discounting? Saks is leading with an average discount of 60%. Neiman Marcus’s average is around 50% and Bloomingdale’s and Nordstrom are averaging 40% discounts. 

With massive discounting, consumers will expect these luxury brands to be available at the lower price points, bringing down the value of the brand.

Source: Bloomberg Pursuits, Chain Store Age

Even before the Olympics started, the retail industry has experienced a big spike in athletic apparel. The growing popularity of “athleisure” clothing have helped athletic apparel see an increase this year of 14% to $45.7 billion as of the end of May.

Now the Olympics are in full swing, and the athletes are all decked out in sponsor apparel and logos. Many retailers are selling specifically to the Olympics market. While these retailers may not separate out specific Olympic-driven sales, several are counting on its popularity to drive sales. Athletic apparel in the children’s department is expected to be successful, as younger viewers look up to the athletes. Patriotic colors of red, white and blue are also expected to be popular.

Dick’s Sporting Goods will have specific Olympic displays. Dick’s CEO Edward W. Stack, announced his company’s plan to donate $1,000 for every medal won by Team USA. Macy’s has an exclusive partnership with Ralph Lauren to sell opening and closing ceremony outfits in its stores. Nike, as an official Olympics sponsor, has over 100 Team USA products for sale, and Under Armour has a “country pride” collection.

Retail sales for June will be announced this Friday. May saw an uptick in sales. Retailers are hoping June and July were positive with back to school shopping, followed by buoyed sales in the athletic apparel segment this week. Check back to our blog page to see how the summer retail news is shaping up.

Sources: USA Today, Forbes