Author: Helen Thomas

The NRF’s Big Show wrapped up on Wednesday after record attendance, and, as we unwind from an exciting week in New York, we find ourselves reflecting on the event as a whole and on the key takeaways that will impact Accelerated Analytics in 2016.

Matt Shay, President and CEO of the National Retail Federation, opened the trade group’s annual Convention and EXPO with a state-of-retail message, highlighting the event’s transformation under the strategic guidance of Shay and the NRF board.

“We’ve invested in attendee experiences, added a third day of exhibits and gained exclusive control of the entire convention center.” Shay said.

The event saw record numbers, with 35,000 people in attendance and roughly 580 exhibitors. While the convention was dominated by technology companies, both those facilitating consumer-driven change in the retail industry and those designed to help retailers replace, upgrade and modernize their systems, very few occupy the niche market of POS data and analytics. “There were about 50 companies in the Data and Analytics section of the expo, but very few that do what we do,” said Jennifer Freyer, Director of Sales and Marketing for Accelerated Analytics.

As customer expectations continue to rise, it’s imperative that vendors and retailers have access to their data –  down to the item level –  quickly. Accelerated Analytics is well positioned to meet that need via our one-click access to SKU/store level sales to identify trends, optimize assortments and track promotions. Plus, our forecast reports and low inventory and out of stock alerts help our clients ensure the right inventory is at the right stores.

Our visit to the Big Show also provided the opportunity to participate in several meetings with GS1, as we work with them toward standardizing POS data sharing in the retail industry. This is crucial in expanding the retailer and vendor partnership for better joint planning, store execution and sales performance.

The event returns to New York again next year, January 15-18, 2017.

Twelve major retailers released holiday results last week confirming what was arguably one of the most unusual holiday shopping seasons in recent history. A combination of economic factors, evolving consumer behaviors and an increasingly competitive marketplace provided a challenging and unpredictable backdrop for holiday sales this year. The following are some of the most notable results.

Ascena Retail Group: A total company decline of 4% during the six-week period ending January 3 was largely due to a 15% same store sales decline of 15% at the company’s Justice brand stores during the holiday season. However, performance at other brands such as Ann Taylor, Dressbarn, Lane Bryant and Maurices was much better and allowed the company to affirm its full year profit forecast.

Build-A-Bear Workshop: CEO Sharon Price John expects “fiscal 2015 to deliver our third consecutive year of positive consolidated comparable sales and our third consecutive year of improved profit performance,” despite fourth quarter expectations that same-store sales would decline 5.5%.

Genesco: Same store sales increased 5% for the quarter ending January 2^nd for the parent company of Journeys, Lids and Johnston & Murphy. “We are especially pleased with the strong performance at Journeys, which delivered another exceptional holiday season,” said chairman, president and CEO Robert Dennis.

Lululemon Athletica: CEO Laurent Potdevin said “Sales for the fourth quarter are exceeding expectations.” The retailer announced a successful holiday season with fourth quarter same store sales increasing in the mid single digits.

Ollie’s Bargain Outlet: A 5.6% same-store sales increase during the 9 weeks that ended on January 2 led chairman, president and CEO Mark Butler to comment that he is “Thrilled,” with the discount retailer’s holiday sales. The retailer had only predicted 4% growth and now expects total annual sales of $760 million in 2016.

Source: Chain Store Age

There were 12 major retail acquisitions in 2015 in the apparel specialty, department and shoe store industries. See below for the details including the effective date and the number of units.

With many Americans suffering from a holiday-spending hangover, it’s not surprising when we see a lull in spending in January. Coupled with abnormal weather conditions across the country and an uncertain economy, consumer spending is likely off to a slow start this month.

The Chain Store Guide (CSG) Retail Spending Index saw its largest decrease since July of 2015 when it dropped 1.4 points to 101.3 in December. This decline led CHG to forecast low spending in January and an overall slow start to 2016.

The long-term outlook for 2016 is more positive, according Kiplinger’s. They predict that retail sales will expand by a healthy 4.4% in 2016, up from 2015’s 3.2% growth.

Disappointing holiday sales prompted iconic department store Macy’s Inc. to announce major cost-cutting moves on Wednesday.

During November and December’s uncharacteristically warm weather, Macy’s same-store sales declined 4.7%. “The holiday selling season was challenging, as experienced throughout 2015 by much of the retailing industry,” said Macy’s chairman and CEO Terry Lundgren. “In the November/December period, we were particularly disadvantaged by the historically warm weather in northern climate zones where both Macy’s and Bloomingdale’s are especially well-represented. About 80% of our company’s year-over-year declines in comparable sales can be attributed to shortfalls in cold-weather goods such as coats, sweaters, boots, hats, gloves and scarves. We also continued to feel the impact of lower spending by international tourists as the value of the dollar remained strong.”

In addition to previously announced closure of 40 stores in 2016, the retailer announced job cuts that total over 3500 positions across the remaining 770 Macy’s and Bloomingdales stores. The company will also implement voluntary separation agreements for approximately 165 senior executives and consolidate their four existing Macy’s credit and customer services center facilities into 3 after they close the St. Louis location in the spring.

Consumers are shopping 6% more with their desktops this year versus last year, with desktop spending at $35.36 billion in the first 36 days of the shopping season (Nov 1- Dec 6). This figure sets a new record.

Cyber Monday week saw $9.7 billion in desktop spending, up 7%. Spending reached $1 billion + per day for 5 days straight during Cyber Week. 

Holiday spending appears to be on pace to reach forecasts of 9% annual growth in desktop spending and 14% growth overall for the holiday shopping season.

Source: Chain Store Age

Vera Bradley, Inc. has added Mary Lou Kelley to its Board of Directors, bringing extensive e-commerce experience with her. Kelley had served as President, E-Commerce of Best Buy since 2014. Prior to joining Best Buy, she served as SVP, E-Commerce for Chico’s and Marketing VP for L.L. Bean. Previously, she also held key marketing positions with Ashford.com and Ben & Jerry’s.

“We are so pleased that Mary Lou Kelley has joined our Board of Directors,” said Robert Wallstrom, CEO of Vera Bradley. “Her vast omnichannel experience, counsel, and insight will be invaluable as we continue to transform our business, which includes elevating our marketing efforts and growing our own verabradley.com digital flagship.”

Source: Retailing Today

The National Retail Federation’s Consumer Holiday Spending Survey shows that 56.6% of holiday shoppers already started shopping by early November, up from 54.4% in 2014. 60% of shoppers still plan to purchase apparel or accessories, 46.2% will buy books/CDs/video games, 41.2% will buy toys and 21.8% will purchase jewelry. Over 50% of those surveyed felt that retailer promotions offered so far have been excellent or good.

“Thanksgiving weekend shopping has evolved tremendously over the past few years and can no longer be seen as the ‘start’ of the holiday season, though there’s no question it’s still important to millions of holiday shoppers and retailers of all shapes and sizes,” said NRF president and CEO Matthew Shay. “There is a real sea change happening in retail when it comes to the how, when, where, and why of holiday shopping. Consumers today are looking for great prices and value-add promotions earlier than ever before, and retailers have answered these demands in several different ways already this holiday season.”

Many retailers are hopeful this trend will result in positive earnings results in Q4. Q3 earnings results for several retailers were lower than expected. Macy’s reported earnings of 56 cents per share, down from 61 cents a year ago. Revenue fell to $5.87 billion from $6.2 billion in 2014, the third-straight quarter of declining sales. Dillard’s and Nordstrom also experienced lower than expected results. For Dillard’s, weaker performing categories were men’s apparel, accessories and home, as they reported a 4% decrease in comp stores. Nordstrom sales grew in the third quarter but comp store sales only rose .9% missing the forecast of 3.6%. JC Penney, however, reported higher than expected results for Q3, stating that Sephora and home goods helped them be successful.

Sources: Chain Store Age, Wall Street Journal, Business Insider

Mark Twain famously said, “get your facts first, then you can distort them as you please.”  As data analyst we have a responsibility to provide an accurate and complete picture when we poor through numbers and create reports.  The labor report released on Friday provides a great example of an incomplete reporting of the facts.

If I told you sales for last quarter are up 5% from the prior quarter that would be good news right?  But what if I failed to tell you sales for the company’s three new products had fallen 35%.  That would be a key piece of information that might change your view on the company’s performance last quarter.  Friday’s unemployment report, while good news, only tells part of the story.  Here is the positive part –  nonfarm payrolls rose a seasonally adjusted 271,000 in October taking the unemployment rate down to 5%.  Average hourly earnings of private sector workers rose at a 2.5% annual pace in October.

However, here is the part which was not included in most of the news stories… the labor force participation rate remained unchanged from September at 62.4, and the labor force participation rate has not been that low since 1978. (see accompanying chart)  94,513,000 Americans who are working age are not working or actively seeking a job.   Retiring baby boomers explains about half of the drop in the participation rate and that trend will continue. The second factor is that people are choosing to go back to school or stay in school longer. The number of individuals enrolled in post-secondary degree granting institutions ballooned to more than 52 percent between 1990 and 2014 according to the National Center for Education Statistics.  Another factor is a sharp increase in the number of Americans on disability.  With an aging labor force that trend is also expected to continue.

As data analysts our job is to tell the entire story – the good and the bad – so that quality decisions can be made.

The Consumer Spending Report (CSR) released in November indicates that consumer spending in October increased slightly by .9 points to close to 103 points, but still sits below the current twelve month average of 105.6. The overwhelming majority of consumers rated the economy as fair or poor, continuing this trend from September.

Retail spending decreased in October to 99.4 points. This continues a five month steady decline. Consumers indicated adults are spending less in every retail category: 40.5% spending less on household expenses, 39% spending less on home improvements and 32.8% spending less on clothing/footwear/accessories.

With Black Friday and Cyber Monday coming, 60% of consumers will shop in a retail store, while also using mobile devices and personal computers as part of their sales research and shipping products. In November, consumers indicated they will spend about the same or less than in October, regardless of the upcoming holiday shopping.

Source: Consumer Spending Report