Author: Helen Thomas

A survey of over 5,700 consumers found that Nordstrom ranked first among retailers in customer satisfaction. It specifically ranked highest scores for atmosphere, checkout speed and finding the correct size/product the customer was looking for. One in five customers surveyed indicated they were dissatisfied in general with their fashion retail experience across all retailers. 40% of these customers indicated that the sales experience was very important to them, and that less than half of them were approached by a sales associate, which was key to their satisfaction. Nordstrom’s sales associates assisted customers the most and received the highest satisfaction scores.

Coming in behind Nordstrom were Marshalls, H&M, Ross, Kohl’s and Macy’s.

With merchandise selection and ease of finding items and size selection the top of customers’ needs, retailers and vendors recognize the importance of partnering to share point of sale and inventory data in order to optimize store assortments. Many vendors, such as Brahmin Leather, Anastasia Beaute and The Sak, utilize Accelerated Analytics to monitor and act on inventory levels and customer buying patterns in Nordstrom and other retailers to maximize their effectiveness in this area.

Source: Chain Store Age

By Chad Symens

This article recently caught my attention and the wheels started turning: https://www.cnbc.com/2016/02/11/is-the-us-economy-running-out-of-gas.html.

The current economic situation is confusing to the casual observer.  On the one hand, President Obama regularly speaks about the US economy being the strongest and most resilient economy in the world, and yet articles like this create doubt in the minds of the average observer.  Gas prices are at historic lows, and the unemployment rate is back down to pre-recession levels.  Yet polls consistently show that Americans are unhappy with the the direction of the economy and the leading presidential candidates are outsiders running campaigns against the “establishment”.  Q4 earning and full year earnings are also confusing. Home improvement stores are doing very well, but department stores and large mass merchants are struggling.  Today the Federal Reserve sent conflicting messages about the economy being strong, and the possibility of a recession is still out there.

What are we supposed to make of all this?

I’m no economist but my observation is the average American consumers are pulling back on discretionary spending and focusing on paying down debt and putting some extra money into their savings.  Home improvement retail sales clearly show consumers are investing into their homes and taking the savings at the gas pump and putting it into their homes or their savings accounts. Depending on your point of view this can be both positive and negative considering US consumers have historically had higher levels of debt than other countries. But the debt level of the US consumer is rapidly decreasing. Does the generally conservative approach to finances mean consumers, who drive the economy, are pulling back and won’t help to sustain the economic recovery?

Business at Accelerated Analytics has been expanding exponentially in the last 90 days. We are seeing companies across multiple retail channels invest into analytics and reporting because they understand that to win at retail they have to be smarter and faster than their competition.  Those businesses are investing into productivity and technology, not pulling back.  These businesses are small, medium, and large. They represent a good cross section of the economic landscape and watching them invest makes me optimistic.  I believe the economy is going through a routine cycle of smart and successful companies growing and investing and conservative companies that only risk and fear pulling back.  To me it seems to be a very Darwinian cycle where the smartest and strongest will thrive and the weak will struggle and possibly fail.

I’m bullish on the economy’s prospects.  What do you think?

The NRF forecasts a 3.1% increase in retail sales growth in 2016, which will exceed the 10 year industry average of 2.7%. The National Retail Federation also forecasts ecommerce growth to be between 6-9%.

The NRF makes this forecast based on assumptions on employment gains. It believes that prospects for consumer spending are going to be higher as it expects a continued growth in the labor market.

“Wage stagnation is easing, jobs are being created and consumer confidence remains steady, so despite the headwinds our economy faces from international developments, particularly in China, we think 2016 will be favorable for growth in the retail industry,” said NRF President and CEO Matthew Shay.

The NRF’s chief economist indicated that with lower gas prices creating more discretionary income, more jobs, and with retailers continuing to find ways to compete and succeed in a cost-conscious environment, 2016 should be a good growth year for retail.

Source: Chain Store Age

by Chad Symens

Lowe’s acquisition of Rona could be game changer for the home improvement market. Home Depot has 2,273 stores with 182 located in Canada. Before the Rona acquisition, Lowes had 1,840 stores including Orchard Supply stores. The Rona acquisition will add 496 stores to Lowe’s portfolio which means that once it’s finalized, Lowe’s will have 2,336 stores compared to Home Depot’s 2,273.

Nearly half (238) of the Rona stores are in Quebec which represents nearly 25% of the entire Canadian home improvement market; a market where Lowe’s does not currently operate any stores. The Canadian home improvement market is estimated at over C$45 billion and is forecasted to grow at a CAGR of 3.9% from 2014 to 2018.  Lowe’s will be very well positioned to capture an oversized share of the growth compared to Home Depot with their 182 Canadian stores. In 2015, Home Depot acquired Interline Brands as a strategy to expand the pro division sales.  It will be interesting to see which strategy – investing in the pro business versus acquiring more physical store space – will turn out to be the better strategy.

In a new report titled “How We Shop Now: What’s Next?,” Westfield London has unveiled five key trends that they believe will shape the retail industry of tomorrow. Combined, the trends paint a picture of what the store of the future is likely to look like, and the report reveals that customers will be looking for richer shopping experiences and will expect physical retailers to go beyond the transaction. The five key trends identified are:

People are increasingly interested in retailers adopting the “sharing economy” made popular by companies like Uber and Airbnb. The trend is strongest among Millennials, and exercise equipment, cars, consumer electronics, bikes and clothing top the list of items people want to rent.

Classroom Retail: Stores are not just for shopping anymore. Increasingly, shoppers view retail stores as classrooms where they can learn new skills and build their social networks. Examples include health and fitness sessions at the local sporting goods store and cooking classes at a home goods store.

Lifestyle Loyalty: There is a new consumer demand for loyalty programs that reward good lifestyle choices rather than just monetary transactions. As many as one fifth of UK consumers find lifestyle rewards appealing and would like to be rewarded for recycling, exercising, spending time with family, getting enough sleep and volunteering.

Enhanced Assistance: Consumers are interested in using new technologies, such as virtual reality, to bring in-store products closer to their everyday lives. 41% of people in the UK would like to use technology to experience how products would look in their homes and 33% would like to use technology to see how clothes would look on them.

Inside-out Retail: A sensory retail experience is becoming increasingly important to consumers. All five senses were deemed to enhance the shopper experience with vision and touch coming out on top.

Download the full report here.

On Wednesday, home improvement retailer Lowe’s made a $2.3 billion bid for Quebec-based home-improvement chain Rona. The deal comes 4 years after an attempted hostile acquisition that faced opposition from major political parties. Initial indications point to a friendly deal this time around with approval from the Rona board of directors.
“One of the big differences between this and last time is obviously this time we have the unanimous approval and support of the board of directors of Rona as well as the management team” said Robert A. Niblock, Lowe’s chairman, president and chief executive. “We’re in a much better place than we were in 2012.”

Under the terms of the deal Lowes is expected to acquire all of the issued and outstanding common shares of Rona for C$24 per share in cash, and all of the issued and outstanding preferred shares of RONA for C$20 per share in cash. The total transaction value is C$3.2 billion (2.3 billion in US dollars).

“We believe the time is right to take the next step in the evolution of the RONA family. The team at Lowe’s has presented us with an excellent plan that enables our company to maintain its brand power while at the same time leveraging Lowe’s global presence to build upon and expand our reach. With commitments made by Lowe’s to our employees, potential new markets for Canadian manufacturers and product offerings for our independent dealers, this transaction presents the ideal opportunity for the continued growth of our company while delivering an attractive premium for our shareholders,” said RONA’s Chairman, Robert Chevrier.

Lowe’s has identified over C$1 billion of opportunities to further increase revenue and operating profitability in Canada. These include: expanding customer reach and serving a new portion of the market by applying Lowe’s expertise in certain product categories, such as appliances; enhancing customer relevance, utilizing Lowe’s strengths as a leading omni-channel home improvement company and drawing on its customer experience design capabilities; and driving increased profitability in Canada by leveraging shared supplier relationships and enhanced scale, as well as Lowe’s private label capabilities, in addition to eliminating RONA’s public company costs. Given these opportunities, Lowe’s believes there is potential to double operating profitability in Canada over five years.

“The transaction is expected to accelerate Lowe’s growth strategy by significantly expanding our presence in the Canadian market through the addition of RONA’s attractive business and excellent store locations across the country,” added Niblock.  “Importantly, the transaction also provides Lowe’s with entry into Quebec, where RONA is the market leader and we have no presence.

Retail veterans Ronny Shmoel and Albert Liniado are bringing back Circuit City, once the number one big-box tech chain in the marketplace before filing for bankruptcy in 2008. Their ambitious plan includes retail outlets, web sales, branded and private-label products, licensed kiosks, mobile shops and franchise opportunities, all under the iconic red and white banner. The first store is expected to open in June, most likely in the Dallas market, and the relaunch of circuitycity.com is expected to happen at approximately the same time.
We want to bring profitability back into retail,” said Liniado, Vice President of Business Development. The stores will range from 2,000 to 4,000 square feet and the product mix will be targeted directly at millennials. According to Shmoel, CEO of the enterprise, they expect to have 50 to 100 corporate-owned stores up and running by the end of the year and eventually an additional 100 to 200 franchised locations.

Source: Twice.com

>After the market’s close on Thursday, Amazon.com Inc. reported fourth quarter earnings that missed expectations and the company’s stock plunged 13%. Wall Street analysts were forecasting record revenue of $35.9 billion for the company. Amazon did hit a new revenue record, but it missed expectations with sales of $35.7 billion.

That’s despite successes that were in stark contrast to their competitors. Amazon posted record profit last quarter and double-digit sales growth over the previous year. Prime memberships grew by 51% last year and according to a Consumer Intelligence Research Partners study, just under half of all U.S. households subscribe to prime.

Amazon Web Services, which boasts big name customers like Netflix, Airbnb, Major League Baseball, Expedia and Yelp, grew from 1.4 billion in 2014 to 2.4 billion in 2015, a 71% increase.

The biggest part of Amazon remains its retail business, and it’s smart home assistant, Echo, is poised to become the company’s third billion-dollar business soon. Echo has only been widely available for about 7 months but it consistently ranks high in Amazon’s best sellers list. It is a virtual assistant and audio speaker that lets you control and connect with other services through your voice. Echo was one of the surprise stars at this year’s Consumer Electronics Show and will be prominently featured in the online store’s first-ever Super Bowl ad.

In its report series “Taking Stock of CPG Past and Future: Gear Up Now for a Year of Growth“, IRI reflects on the lessons learned in 2015 and provides insight into several key trends that will drive growth in 2016.

Growth is still a significant challenge for the CPG Industry. Faced with conservative shopper behaviors and a challenging economy, the industry is struggling to generate solid volume growth. And the trend is similar across retail channels.

According to the IRI report, several new and existing trends will shape the CPG industry in 2016, but three trends “hold particular promise for growth.”

• Circle the Wagons: The internet will account for approximately 50% of industry growth in the next several years and the CPG industry can’t afford to wait if they want to capture their fair share of this opportunity. While online CPG sales are still small – only about 2% of the total – the average annual growth of online CPG spending has topped 15 percent since 2010. Additionally, according to IRI, e-commerce plays a significant role in defining how consumers approach shopping. Over three-quarters of all shopping trips now begin online as consumers conduct research and plan their shopping trips. To solidify their understanding of the online path to purchase, CPG marketers must invest in digital marketing programs and “elevate their digital expertise”. CPG marketers who don’t will suffer.
• Melting Pot Gets Hotter: With more than 54 million Hispanic consumers in the US and population growth at three times the national average, the Hispanic population has been a key target for marketers for the past several years. According to the IRI report, the key to successful growth in this market will be an investment to understand Hispanic shoppers “across a deep and wide spectrum of attitudes and behaviors.” As the Hispanic population grows, marketing to the segment as a homogeneous group is ineffective. Marketers need to see the diversity within the Hispanic market and demonstrate a detailed level of understanding within it.
• Do More With Less (Media): Forty years ago consumers viewed an average of 500 ads in a given day. Today, consumers view an average of 5000 ads a day! The result is information overload for consumers and a lot of wasted effort and dollars for marketers. CPG marketers have an opportunity to move away from the “more is better” approach to media and focus on impact over exposure, or in other words, maximum media efficiency. Though difficult, getting there isn’t impossible with the right data, analytics and insights. Marketers need to effectively communicate with high-value shoppers and employ impactful micro-targeting methods.

Click here for the full IRI report. To receive Accelerated Analytics’ own monthly Retail Industry Briefing Book (RIBB) full of key retail industry data compiled by our team, click here to request a copy.

The first winter storm of 2016 slammed the Northeast and Mid Atlantic last Friday and Saturday leaving much of the area paralyzed. Despite warmer temperatures early this week, many areas are still recovering and some schools and businesses remain closed as local governments and residents dig out from up to 2 ½ feet of snow and ice.

While the economic cost of the storm due to structural damage and business interruption will likely reach into the billions, the net impact on the retail industry will essentially be neutral according to Weather Channel meteorologist and business analyst Paul Walsh. The demand generated by storm predictions creates a surge for for grocery stores, home improvement retailers and discount department stores like Walmart. This pre-storm boon essentially balances the losses experienced during the winter storm.

Whether winter weather impacts an Individual retailer positively or negatively, they can prepare for the next winter storm by analyzing historical data. Retailers can use “forecasts and analytics to understand how past storms have impacted sales so they know what kind of products to feature and the inventory needed,” explained Walsh. Accelerated Analytics can provide that data so that vendors in the retail sales and supply chain markets can tackle large weather events head-on.