Author: Helen Thomas

Data released Friday indicates consumers are more skeptical about the economy. May sentiment unexpectedly fell to 88.6, down from 95.9 in April and an 11-year high in January of 98.1.  Economists surveyed by the Wall Street Journal projected the May index would stand at 95.5.

“Confidence fell in early May as consumers became increasingly convinced that there would be no quick and robust rebound following the dismal (first) quarter” even if the underperformance was exaggerated by inadequate seasonal adjustments, said Richard Curtin, chief economist at Michigan’s Survey of Consumers that compiles the sentiment index.

So far this year, consumers have not rushed to increase spending. Retail sales were flat in April. The one-year inflation expectations are now 2.9%, up from 2.6% in April. Consumers have chosen to save money or pay down debt.

Source: Fox Business.com

Kohl’s, Dillard’s and Nordstrom’s released Q1 sales results yesterday, on the heels of announcements of Q1 losses from JC Penney and Macy’s.

Despite launching a loyalty program and expanding advertising, Kohl’s reported weak consumer spending, but did report a gain. Kohl’s reported a profit of $127 million, up slightly from $125 million a year earlier. Sales grew 1.3% to $4.2 billion. Kohl’s operated 1,164 stores this year versus 1,160 last year. Kevin Mansell, Kohl’s chairman, chief executive officer and president, said: “Sales were modestly below our original expectations for the quarter, but accelerated in the March/April combined period after a weak February. We are very pleased with our earnings results, with a more balanced promotional calendar driving merchandise margin combined with strong expense control.”

Dillard’s reported Q1 sales at $109.6 million compared to $111.7 million prior year. Same store sales decreased 1%. Net sales were $1.574 billion, up 1.5% from last year. Sales were strongest in junior’s and children’s apparel, followed by shoes and ladies’ apparel. Sales were weak in the home and furniture category. The company noted that sales in Texas were below company average for Q1. “We are disappointed with our first quarter performance. Our 1% sales decline hampered our ability to leverage operating expenses and to drive net income growth,” said Chief Executive William Dillard. “Although inventory is higher than we would like, we believe the levels are manageable.”

Nordstrom’s also reported a drop in earnings for Q1. It reported a profit of $128 million, down from $140 million a year ago. However, Nordstrom.com and NordstromRack.com had a combined 70% increase in sales. Net sales increased 9.8% and same store sale increased 4%. Nordstrom’s loyalty program contributed greatly to its results. Members shopped 3 times more frequently and spend 4 times more on average than non-members. With 4.4 million members, sales from members increased 11% in the first quarter and represented 38% of sales.

Source: Retailing Today

JC Penney Co. exceeded analysts’ estimates for Q1, showing smaller than expected losses/ Penney posted a loss of $167 million in the quarter ending May 2, compared to a net loss of $352 million Q1 2014. Women’s apparel, men’s and home were the company’s top performing merchandise divisions. Sephora inside JC Penney, available in 515 locations, also showed strong performance.

“Our exceptional customer experience, when combined with our strength in private brands, national brands and points of differentiation like Sephora inside J.C. Penney and the Disney Collection, give us confidence in our ability to earn customer loyalty and deliver on our long term goals,” he said. “In fact, based on our results to date, including a strong Easter and Mother’s Day, we feel confident in raising our 2015 expectations for sales, gross margin and SG&A.” The company expects same store sales to increase 4-5%.

Macy’s net income fell 13% to $193 million from $224 million in Q1 2014. Same store sales declined 0.7%.

“We fell short because of a confluence of factors,” said Terry J. Lundgren, Macy’s chairman and CEO. “Delayed merchandise shipments from the West Coast port slowdown and severe winter weather early in the quarter restrained business levels. Moreover, sales were negatively affected by lower levels of spending by international tourists visiting major U.S. cities with flagship Macy’s and Bloomingdale’s stores, including New York City, Chicago, Las Vegas and San Francisco.”

Macy’s is still pursuing a new store strategy, planning to open 32 new stores by 2018. Macy’s expects total sales growth of 1% and same store sales growth of 2% in fiscal 2015.

Source: Chain Store Age

Walmart announced earlier this week its decision to acquire 13 Target locations in Canada. Lowe’s followed suit, announcing it will also acquire 13 Target Canada leases as well as a distribution center in Ontario. The Lowe’s deal is worth $125 million.

The store sites are across Canada and include markets where Lowe’s has low penetration. The distribution center is strategically located to serve Lowe’s current and the new proposed stores in Canada. The acquisitions are subject to court approval and the process should be completed by June 30.

“Since opening stores in Canada in 2007, we have developed a successful model for providing the Canadian customer with outstanding service and quality products for the home,” said Sylvain Prud’homme, president of Lowe’s Canada. “These additional locations will accelerate our expansion across the country, enhancing our presence in Western Canada and strengthening our base in Ontario. We are excited to bring Lowe’s to more customers in more communities in Canada, further demonstrating our commitment to this important market.”

Source: Retailing Today

An early Easter did not cause a drop in store visits in April. Shopper traffic increased 12% compared to April 2014. However, storefront conversion increased less than1% year-over-year, as more targeted shopping trips were seen in a more promotional environment.

Several retail verticals saw a decline in sales versus same time last year: 1.15 decline in general merchandise, apparel and furniture; 2.1% decline in clothing and apparel; and 1.6% decline in general merchandise.

Duration of shoppers in stores increased 18% from last year, but consumer caution around spending tax refunds are attributed to the decreased sales results.

Source: Chain Store Age

Canadian Tire is three years into a total digital transformation that includes investments in agile technology solutions to advance its digital strategy, improve store operations and digitally power customer and employee interactions. It is opening a new facility, “Digital Garage” in Waterloo, Ontario. This innovation lab will give the company’s top digital innovators an opportunity to develop new in-store and online technologies at a faster pace.

In addition, Canadian Tire will open a new “showcase Store” in Edmonton, Alberta, offering an expanded assortment and dynamic digital experiences.

“Becoming a world leader in digitizing the retail experience is a top priority for the company,” said Michael Medline, president and CEO, Canadian Tire. “To be a world-class retailer, we are building a strong foundation and implementing the right resources that will successfully take us from the old world to the new. In the Digital Garage, we will create and test cutting-edge software, products and apps in our own environment to take innovation at CTC to the next level.”

Source: Chain Store Age

Accelerated Analytics was proud to visit Swarovski’s flagship store in Las Vegas this week. Swarovski is a customer of Accelerated Analytics, obtaining POS sales and inventory data and analytics for its retailer partners. Analytics include sales and inventory levels, out of stock, sales to stock ratios, sell thru percent and more. Accelerated Analytics was in town participating in the National Hardware Show convention, visiting its customers who sell into Home Depot, Lowe’s and other DIY stores.

Swarovski is the centerpiece of Las Vegas’ newest retail destination, Grand Bazaar Shops. The store has limited edition items such as crystallized Beats Headphones and black and pink skulls. Inside the store is a large video screen with scenes from exotic bazaars, alongside specially crafted panels as platforms to display their jewelry and décor.

Outside, the store is designed to look like a cut crystal. Towering above the store is a 14 foot diameter starburst made of 911 custom-cut Swarovski crystals. The tower puts on a three minute light show every night at midnight, choreographed to music.

A new report from Branding Brand’s Mobile Commerce Index released Wednesday indicates that revenue from shoppers on smartphones rose 73% over last year. In April 2015, smartphone revenue accounted for 13% of total online revenue, which represents a 63% year-over-year increase.

Identifying retail trends for 50 US mobile websites, smartphone conversion increased 31% since April 2014 and smartphone visits increased 29% year-over-year. Conversely, desktop conversion decreased 2% since April 2014, with visits decreasing 8%.

The 50 mobile sites in the index produced a total of 72 million visits and $86 million in revenue.

“This is the second month in a row where desktop conversion has declined,” said Branding Brand CEO Chris Mason. “Because retailers have more ways to interact with consumers than ever before, they must continue optimizing their experiences to keep up with shopping’s increasing complexity.”

Source: Chain Store Age

Based on overwhelmingly positive shopper response to its store pickup for online orders service, Kohl’s is rolling out the service to all of its 1,164 stores in the US. The service allows shoppers to pick up in store within hours of placing an order online.

Kohl’s piloted the service at more than 100 stores in 2014. While the service is currently available for consumers shopping from their desktops and laptops via Kohls.com, it will be rolled out to tablets and mobile phones later this year.

When customers shop online, they have the option to see if the specific item is available at their local store. Two email messages, one to confirm the purchase and the second to indicate the item is available for pick up, are sent. Customers can park in a designated spot and find their items waiting at the customer service desk or fine jewelry counter.

“At Kohl’s, we are committed to putting our customers first, and we know our customers and their families expect an easy shopping experience, regardless of how they choose to shop,” said Krista Berry, Kohl’s executive VP, chief digital officer. “With the rollout of Buy Online, Pick Up In Store to all Kohl’s stores, not only are we are providing our customers greater access to the amazing products they know and love from Kohl’s, shoppers are able to get their items even faster than ever before in the way that’s most convenient for them.”

Source: Retailing Today

As Americans increased their borrowing in March, retailers hope this will result in increased sales. For retail planners of major supply chains, a big question is whether consumers will come back to the stores or get back to buying by going online. Online commerce is far outpacing storefront sales around the world, creating competition for traditional retailers. It is also creating a supply chain upheaval at brick and mortar stores. Walmart, Home Depot and others are trying to determine how to serve that online market as their own online sales are growing.

Moving truckloads of goods to stores is very different from putting together a lot of small shipments and parceling them out to buyers directly. Brick and mortar companies need to figure out how to make the logistics work without cutting into profitability. Many are testing the use of pickup centers in their stores, to see if customers can solve the logistics question themselves.

Source: The Wall Street Journal