Author: Helen Thomas

Speaking at The Home Depot’s 2012 Investor and Analyst Conference in Atlanta, Home Depot EVP Merchandising Craig Menear revved up the power tool rhetoric.  Menear said the company intends to defend its position as power tool market share leader.  He described power tools as a category with a relatively high vulnerability to online competitors. One of the best defenses is a large fleet.

“Our 2,200 stores are convenient for our pro customers when they have a tool go down on the job,” Menear said. “We are now executing a strategy to compete across all channels of the business.”

The company is also playing offense in the category, developing and maintaining strategic relationships with suppliers that bring new products to Home Depot as exclusives, and building its capabilities in the area of product repair.

Online, Home Depot is fighting fire with fire. “Rapid expansion of online assortments and brands has produced excellent results in this channel as well.  We have grown market share the last two quarters faster than the online market leader.”

The online-market share leader would be Amazon, which many believe is benefiting from smartphone-fueled consumer behavior that lets shoppers browse in a store, search online for cheaper prices and buy somewhere else.

Source: retailingtoday.com

While dads usually don’t get the same caliber of gift for Father’s Day as moms do on Mother’s Day, if the results of NRF’s latest survey are to be believed, dads should be pretty pleased with what they receive this year.

According to NRF’s 2012 Father’s Day spending survey conducted by BIGinsight, the average person will shell out $117.14 on dad’s gifts this year, up 10% from $106.49 last year and closing the gap between its biggest competitor: Mother’s Day (consumers planned to spend an average of $152 on the holiday). Total spending for Father’s Day is expected to reach $12.7 billion.

“He may not ever expect the ‘royal treatment’ on Father’s Day, but this year dad doesn’t have much of a say as it’s evident his loved ones want to make sure he has a great day,” said NRF president and CEO Matthew Shay. “For those looking for the perfect gift idea, retailers will have specials on everything from patio sets and grills to ties and gardening tools in the weeks leading up to the holiday.”

With a plethora of options to choose from, consumers plan to splurge on a variety of gifts. According to the survey, more people this year will treat dad to a special outing, such as golfing, eating out or heading to a sporting event ($2.3 billion vs. $2 billion in 2011).  They will also invest in electronic gift items ($1.7 billion vs. $1.3 billion last year) and apparel ($1.7 billion vs. $1.4 billion in 2011). Others will splurge on gift cards ($1.7 billion), sporting goods ($641 million) and books or music ($645 million).

When it comes to the number of men people plan to buy for this Father’s Day, the survey found consumers are likely to consider a variety of “types” of dads this year. Most people will buy for their father or stepfather (53.9% vs. 50.3% in 2011) and their husband (29.2% vs. 26.1% last year). Others will treat their son (9.7%), grandfather (5.3%), brother (6.8%) and friend (5.7%) to something nice.

Mobile shoppers will be out and about these next few weeks as they seek the perfect gift for dad. More than one-quarter of those who own a tablet (25.2%) say they will use their tablet to make a Father’s Day purchase. Overall, more than half (54.6%) of tablet owners will use their device to research products and compare prices, redeem coupons and look up retailers’ information such as store hours and location.

Not surprising, the majority of smartphone owners will use their smartphone to research gift ideas and compare prices (26.7%), but others will look up store hours and location information (18.9%) and use apps to research or purchase products (11.3%). One in 10 (13.7%) will purchase a Father’s Day gift via their smartphone.

Source: retailingtoday.com

By Brian Girouard

People today seamlessly integrate the use of all types of technologies in their lives, including the way they shop – at any time, at any location. As a result, they are more informed and selective about the products and services they want and use, and are more empowered towards the industries that serve them.

In this environment, the growth of mobile features and device convergence, such as smartphones, are driving mobile commerce. At the same time, store visits are being enhanced by dynamic digital displays and personalization through hand-held devices or the shopper’s own smartphone. These changes provide retailers with the opportunity to drive greater value by making the switch from “talking to” towards “engaging with” shoppers and consumers.

A growing number of digital channels, from apps to kiosks to the web, are replacing elements of the shopping experience that would previously have occurred in a physical space, calling for the store environment to evolve. This shift requires retailers to think differently about the shopper experience and service model across all channels and touchpoints, including physical stores. Stores need to offer experiences consumers can’t have in the digital space by becoming destinations of choice. They need to blur the boundaries between digital and physical. And retailers need to re-examine their strategy to provide a seamless experience across the entire customer shopping journey.

Powerful digital tools can be applied in a wide range of ways in a retail environment to provide this more seamless experience. Following is a closer look at some of these digital tools.

1.    Smartphones enable interaction with customers at every step of their shopping journey.

In today’s connected world, retailers should encourage interaction across all channels; for example, encouraging the use of the Internet or smartphones to access a store locator, search product availability and access coupons. By using location-based mobile applications such as “geofencing”, retailers can even identify customers in the vicinity of a store and entice them inside by sending out product messages, promotions and exclusive deals. Retailers can also improve their understanding of the shopper buying journey by tracking smartphone usage in store, which can be a key input for improved store design and layout.

2.    Self-scan and delivery tracking provide consumer convenience.

Encouraging interaction with customers via smartphones offers a host of benefits, including barcode scanning for price comparison, product information, customer reviews and ratings, and for quick in-store and aisle navigation. Shoppers may also use their phones to track product delivery.

3.    Surface computing and multi-touch devices add a new dimension to shopper engagement.

With in-store multi-touch devices, shoppers can locate and select products on touchscreens at an interactive station, download product information on a mobile device or locate items in-store. Touch-based graphical interactive devices allow people to interact with content and information on their own or collaboratively with their friends and families.

4.    Augmented reality (AR) applications can improve in-store communication.

While still in early adoption, AR has the potential to make a great impact on retail. AR apps using object recognition and GPS can help shoppers locate and find their way to or through stores. Management costs associated with AR may currently run high, but this space is ripe for development.

5.    Maximize technology to simplify the point-of-sale.

New apps provide the opportunity to reduce shopper checkout times and abandon rates. For example, “line-busting” applications use wireless devices to emulate the cash register and give credit card shoppers the chance to skip checkout lines, helping to enhance in-store customer service.

6.    Mobile payments and near-field communications (NFC) can help increase efficiency.

Mobile payments is a growing area of attention for retailers and is gaining popularity due to a rise in smartphone adoption. Proximity payment approaches like NFC technology, which lets consumers pay for items merely by waving or tapping their smartphones near a register at checkout, will further enhance the in-store experience.

7.    QR codes provide expanded presence.

With QR codes, innovative retailers can expand their presence through the use of virtual stores on billboards and advertisements. Shoppers can then use smartphones to scan a QR code near the item advertised, which then gets delivered to a location of their choice.

8.    Mobile coupons help leverage key digital trends.

Users of mobile coupons are expected to exceed 300 million globally by 2014 , triggered by increased use of mobile applications. Recent innovations in coupons are leveraging digital trends like geotargeting and group buying to provide customers with exclusive coupons for in-store use.

9.    Social Local Mobile Media (SoLoMo) capitalizes on the convergence of multiple trends.

Increased adoption of smartphones and related mobile apps has driven the convergence of social, local and mobile media. SoLoMo works on the principle of mobile discovery that uses a device’s portability and location awareness to push content, providing retailers with a potential source of real competitive advantage.

10.    Video analytics provide enhanced view of shopper activity. 

Video analytics can enable retailers to study store traffic flow, dwell time, shopper intent and conversion. The technology has reached a point where it can detect how and when shoppers are actively engaged with promotional messaging, determine demographic data, and push relevant content to shoppers in real time, giving retailers crucial customer insights.

Brian Girouard is VP of global consumer products and retail at Capgemini.

Source: retailingtoday.com

Surging profits and a 6.7% first quarter same-store sales increase prompted Dollar General to raise its full-year profit forecast by three cents.

Dollar General shows no signs of slowing down this year, after posting first-quarter results that saw the company’s total sales increase 13% to nearly $3.5 billion and net income increase 36% to $213 million. The 6.7% comp increase was driven by an increase in customer traffic and average transaction size, according to the company.

“Dollar General is starting off 2012 with strong performance in the first quarter due to excellent same-store sales growth of 6.7%, representing the fifth consecutive quarter of accelerating improvement,” said Rick Dreiling, chairman and CEO. “We are pleased to raise our full year financial outlook to now reflect adjusted (earnings per share) of $2.68 to $2.78. Our first quarter was strong, and we are pleased with our May sales performance.”

The company had previously forecast full-year earnings in the range of $2.65 to $2.75.  I believe we are positioned well to invest in the future of our business as we continue to redefine small-box retailing and reinforce Dollar General’s role as America’s general store,” said Dreiling.

During the quarter, the company opened 128 new stores and remodeled or relocated 224 stores. In addition, a new distribution center in Alabama and a new leased distribution center in California began shipping merchandise to stores.

Source: retailingtoday.com

According to the 2012 Retail Outlook Survey, 77% of retail executives indicate that their companies have significant cash on the balance sheet – up from 72% in KPMG’s 2011 survey – and 56% say their companies’ cash positions have increased from last year.  So,what do retail execs plan to do with their cash?

58% of retail executives plan to increase capital spending over the next year. The highest priority investment area is information technology – including data analytics and digital marketing channels – cited by 51% of the executives in the KPMG survey.

Executives say that the use of data analytics is playing a larger role in their strategic decision making – including areas such as customer insight, brand and product management, pricing decisions and market expansion.

“With consumer behavior, spending and demographic profiles changing rapidly, a key to success will be investing in technology to harness the vast amount of data that resides in a company. That data can drive the insights that will allow retailers to interact with consumers more effectively and capture more ‘wallet-share.’ It may also reveal information on new markets, new strategies and new operating models that will ultimately generate growth and profitability.”

Other significant areas of investment for retailers are new products or services (43%), geographic expansion (33%), and advertising and marketing (24%).

When asked about digital marketing channels, retail executives in the 2012 KPMG retail survey indicate that online shopping (59%), social media platforms (58%), and email campaigns (49%) are having the most significant impact on their businesses. Additionally, executives indicate that the incorporation of mobile technology is also having a significant impact, specifically mobile shopping (36%), mobile promotions (28%), and mobile payments (21%).

Quotes – Mark Larson, KPMG global retail leader

Source: retailingtoday.com

The Conference Board Consumer Confidence Index^®, which had declined slightly in April, fell further in May. The Index now stands at 64.9 (1985=100), down from 68.7 in April. The Expectations Index declined to 77.6 from 80.4, while the Present Situation Index decreased to 45.9 from 51.2 last month.

Says Lynn Franco, Director of Economic Indicators at The Conference Board: “Consumer Confidence fell in May, following a slight decline in April. Consumers were less positive about current business and labor market conditions, and they were more pessimistic about the short-term outlook. However, consumers were more upbeat about their income prospects, which should help sustain spending. Taken together, the retreat in the Present Situation Index and softening in consumer expectations suggest that the pace of economic growth in the months ahead may moderate.”

Consumers’ appraisal of present-day conditions deteriorated in May. Those claiming business conditions are “bad” increased to 34.3 percent from 33.2 percent, while those saying business conditions are “good” decreased to 13.6 percent from 15.5 percent. Consumers’ appraisal of the job market was also less favorable. Those claiming jobs are “hard to get” increased to 41.0 percent from 38.1 percent, while those stating jobs are “plentiful” decreased to 7.9 percent from 8.4 percent.

Consumers have also grown less upbeat about the short-term outlook. Those expecting business conditions to improve over the next six months decreased to 16.6 percent from 18.5 percent. However, those anticipating business conditions will worsen decreased to 13.1 percent from 14.2 percent.

Consumers’ outlook for the labor market was also less positive. Those expecting more jobs in the months ahead decreased to 15.8 percent from 16.9 percent, while those anticipating fewer jobs increased to 21.0 percent from 18.4 percent. The proportion of consumers expecting an increase in their incomes improved to 15.2 percent from 13.9 percent.

Source:  The Conference Board

Macy’s reported Wednesday that same-store sales for the month of May increased 4.2% compared with the previous year.  Revenue rose 4.1% to $2.02 billion.

“Growth in May 2012 came from stores and online, and across geography and categories of business,” said Terry J. Lundgren, chairman, president and CEO. “We are seeing the ongoing benefit of the key strategies that have propelled our success over the past several years, including My Macy’s localization, omnichannel integration and associate training to enhance customer engagement.”

Online sales for Macys.com and Bloomingdales.com combined were up 42.3% in May.

Source:  retailingtoday.com

Lowe’s reported net earnings of $527 million for the quarter ended May 4, a 14.3% increase over the same period a year ago.  Sales for the quarter increased 7.9% to $13.2 billion, from $12.2 billion in the first quarter of 2011.  Comparable-store sales for the quarter increased 2.6%, while comparable-store sales for the U.S. business increased 2.7%.

“We delivered solid results for the quarter, consistent with our expectation at the beginning of the year,” said Robert A. Niblock, Lowe’s chairman, president and CEO. “While we capitalized on better than anticipated weather during most of the quarter, demand for seasonal products slowed toward the end.”

Lowe’s results follow a few days after its rival Home Depot announced first quarter sales and earnings increases of 5.9% and 27.5%, respectively.  Included in the results is a charge related to a previously announced reduction in staff at U.S. headquarters. This charge reduced pre-tax earnings for the first quarter by $17 million.

“We continue to maintain a cautious view of the housing and macro demand environment, and are focused on what we can control,” Niblock added. “We are building on our core strengths and strategically investing in ways that will better position Lowe’s for success. I would like to express my gratitude to our employees for their continued dedication and customer focus.”

Lowe’s operates 1,747 stores in the United States, Canada and Mexico representing 196.7 million square feet of retail selling space.

Source:  retailingtoday.com

First quarter profits at Walmart exceeded analysts’ estimates, as same-store sales increased 2.6%, and the company said its strategy of low prices on a broad merchandise assortment is resonating again with shoppers.

Sales for the quarter increased 8.6% to $112.3 billion, compared with $103.4 billion in the first quarter last year. The results would have been even stronger, except for an approximately $800 million headwind related to a negative currency exchange rate. Earnings per share of $1.09 were a nickel ahead of analysts’ estimates and three cents higher than the top end of the company’s guidance of $1.01 to $1.06.

“Our overall performance reflects the success of Walmart’s business model: driving the productivity loop, leveraging expenses and investing in price leadership,” said Wal-Mart Stores president and CEO Mike Duke. “We believe that the momentum throughout our business positions us very well for the rest of the year.”

Strength was evident across all three of the company’s business segments, but it was the performance of the U.S. group that stood out, thanks to a 2.6% same store sales increase that exceed the company’s flat to 2% guidance range and marked the third consecutive quarter of U.S. comp improvement. Total U.S. sales increased 5.9% to $66.3 billion.

“In a highly competitive retail environment, Walmart U.S. is increasing price separation across categories and driving increased traffic to both the grocery and general merchandise areas of our stores,” Duke said.

Source: retailingtoday.com