Category Archives: Industry Trends

by Retail Pro

Retail marketing insights in CVS’s tobacco decision

CVS recently announced that it will stop selling tobacco products by October. Despite some backlash on social media networks, retail customer trends indicate that the pharmacy's decision might have been as strategic as it was health-conscious. The store's effort to stay ahead of changing consumer demand and re-brand itself as a comprehensive health center exemplifies how retail insights can lend a competitive edge.

"Ending the sale of cigarettes and tobacco products at CVS/pharmacy is the right thing for us to do for our customers and our company to help people on their path to better health," said Larry Merlo, president and CEO of CVS Caremark. "Put simply, the sale of tobacco products is inconsistent with our purpose."

While a desire to promote healthier habits may be at the core of CVS's decision, the move was also strategic. The number of regular smokers in the United States has fallen below 20 percent of the population, due in large part to the success of ad campaigns and studies linking smoking to cancer, FoxBusiness noted. By pulling out of a declining market, CVS can focus its resources elsewhere and appears as a leader in the industry. Much of the positive feedback has recognized CVS's commitment to health, according to the news source, an association CVS has fostered by expanding its services to include immunizations, clinic services and consultations with pharmacists. 

by Retail Pro

Retail customer trends reveal struggling middle class

During his 2014 State of the Union address on January 28, President Obama focused on the middle class. He described new opportunities for entrepreneurs, initiatives for better education and advances in universal healthcare. However, retail customer trends point to a different shift: a shrinking, struggling middle class left behind by the elite.

According to The New York Times, businesses that traditionally cater to the middle class, such as discount clothing stores and mid-line restaurants, are struggling as high-end stores profit from the increasing wealth of the upper 20 percent. Economists Steven Fazzari, of Washington University in St. Louis, and Barry Cynamon, of the Federal Reserve Bank of St. Louis, explained that the economic recovery is being driven by the upper class, the source added.

In fact, recent Pew research found that fewer Americans consider themselves middle class, identifying instead as lower class. From 2008, the percentage of people who identify as lower class rose from 25 to 40 percent, the survey revealed, and middle class declined from 53 to 44 percent.

For retailers, these trends may indicate a need to reconsider their store operations and marketing strategies. Growing economic disparity may make it difficult for businesses to cater to both the elite and more economical consumers, The New York Times said.

by Retail Pro

Retail technology bolsters fashion industry

From retail customer intelligence to exciting in-store technology, advancements in merchant resources have provided new opportunities for fashion marketing. Industry experts are seeking ways to optimize their sales through enhanced retail technology.

At the Digital-Life-Design Conference, which took place January 19-21 in Munich, Germany, technology and business experts converged to discuss the latest innovations and inspirations in their fields. A panel of fashion leaders offered insights on how omnichannel marketing is transforming the industry, according to Business of Fashion (BoF).

Panelists included Imran Amed, of BoF; Paula Reed, fashion director of Harvey Nichols; Chris Kyvetos, founder of Sneakerboy; and Ulric Jerome, chief operating officer of Matchesfashion.com. The experts described efforts to integrate ecommerce and offline platforms in order to provide more consistent, engaging experiences for shoppers, the source said.

At an earlier fashion retail technology forum held by GILT, industry leaders similarly point to the ways innovative marketing tools are aiding fashion businesses. For example, Stylitics CEO Rohan Deuskar explained his company's digital closet concept, as reported by Decoded Fashion. It compiles consumer data through an app that shoppers use to create looks with friends. The service then sends trending insights to retailers, which is particularly valuable in the world of fashion.

by Retail Pro

U.S. Department of Commerce encourages exports to Latin America

Retail industry leaders know that finding diverse and lucrative markets for their goods is key to their success. To encourage more U.S. businesses to take advantage of fertile ground in Central and South America, the U.S. Department of Commerce announced its new "Look South" initiative.

According to the Department, 58 percent of U.S. companies export to a single market, relying heavily on Canada and Mexico, despite evidence that diversifying markets improves profits. In fact, Secretary of Commerce Penny Pritzker noted that exporting to two-to-four markets can triple the sales of exporting to only one.

In her speech at the World Affairs council in Los Angeles, where she unveiled the initiative, Pritzker tied the push for exports to Latin America to President Obama's larger National Export Initiative. While U.S. exports have increased, the LA Times reported that only one percent of U.S. companies sell to foreign markets. Pritzker said that many new export opportunities were within industries in which U.S. small and medium businesses excel.

The Commerce Department identified 11 Latin American countries with low tariffs, growing economies and good trade practices: Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama and Peru. Companies can use ecommerce software and retail business intelligence to strategically tap into these markets.

Business leaders can find more information about the initiative and actions the U.S. government is taking at www.export.gov/looksouth.

by Retail Pro

French Senate restricts discounts and free shipping to aid local booksellers

France is taking measures to support independent bookstores and less popular book titles. In a unanimous decision on January 8, the French Senate approved a bill that limits online discounts to five percent of the book price, and permits free shipping only if the total amount saved does not cross the five percent threshold, Bloomberg Businessweek reported. Consequently, online giants like Amazon.com will lose part of their advantage when competing with smaller businesses.

The French book market is the second largest in Europe and the fifth-largest worldwide, Internet Retailer noted. While independent store operations accounted for more sales than ecommerce, the source reported, they were down 28.5 percent since 2003. 

Overall, 5.3 percent of France's purchases happen online, which makes it the third leading European country in terms of ecommerce. However, even though high street retail has suffered under the financial crisis and a disappointing holiday season, the French bill does not necessarily indicate a trend in the European retail industry to discourage online shopping. Rather, France has a history of treating book sales with special attention. Since 1981, France has singled out books as a "cultural exception," worthy of separate pricing rules, Bloomberg noted. The new law aims to make sure all books are held to the same guidelines, regardless of the purchasing channel.

by Retail Pro

Omnichannel a winning strategy for department stores

Although omnichannel sales are important to the retail industry, achieving the organization-wide integration and communication necessary for it requires a considerable degree of cooperation throughout all levels of the business. This can be done with versatile retail software that can follow inventory and the point of sale regardless of whether an item is sold in person or online. 

The actual advantages of omnichannel are not always as visible, however, and even merchants who are ready to make the move may doubt the decision. As a relatively recent trend, practical results may not be available, at least not among all types of retail. 

Achieving omnichannel integration
Macy's recent success with the omnichannel trend may shed some light on its effectiveness. According to The Wall Street Journal, the retailer has been experiencing notable sales growth that is strongly attributed to its omnichannel strategy. Through its "My Macy's" initiative, it has integrated Internet, in-store and warehouse operations into a seamless unit that can provide customers with wanted items in a swift period of time. Using its approach, Macy's believes it could be a leader in same-day delivery. All told, the company's fourth-quarter profits were up 7 percent year-over-year, with online, same-store sales proving a considerable part of its gains. 

"We continue to see significant upside opportunity ahead in those strategies that have worked so well since we reorganized the company in 2009," CEO Terry Lundgren told the source. 

Standing out from other retailers
Other companies operating in a similar retail market have not seen the boost that Macy's has. MSN noted that Sears has run into trouble of late, suggesting that Macy's management plays strongly into its recent accomplishments. 

However, omnichannel may not be the sole source of its success. The Wall Street Journal also noted that Macy's has focused on the millennial market, which could be a key part of its achievements. 

As more businesses grow to understand the intricacies and obstacles of omnichannel retail and how to overcome them, providing the service will be even more critical for merchants. For now, those that can bypass the challenges related to the strategy have the potential to lead in their respective markets. Doing this will require retail management software that covers all aspects of a company's sales and inventory, regardless of whether shoppers are using online channels, in-store delivery or the other options open to them. 

by Retail Pro

The holiday shopping season starts earlier every year

For the past few years, retail industry professionals have seen the holiday shopping season start earlier and earlier, be it by hours or days. Some stores are opening at midnight on the day after Thanksgiving to capitalize on Black Friday, but for some of the largest retailers, even that is too late in the season. USA Today recently reported that the top eight retailers will let customers in on Thanksgiving Day, rather than wait until the holiday is finished. Walmart's specials will go on sale at 6:00 pm on November 28, and Target's doors will open for customers at 8:00 p.m. and only close come 11 p.m. the following day. Meanwhile, Best Buy, Sears, Macy's and other merchants will be running on similar hours. 

The trend is understandable, because for many consumers, the holiday shopping season already began. According to the National Retail Federation (NRF), 53.8 percent of U.S. customers have started buying gifts, and many promotions began in early October. The NRF noted that some patrons have smaller budgets this year, and getting out early may let them find better deals to purchase just as much as last year while still saving on how much they spend. 

by Retail Pro

Will the upcoming holiday season be all about mobile commerce?

School is back in session and fall is almost in the air, which means that retailers around the world are preparing for the busiest shopping period of the year – the holidays. Although there are still a few months left until its official start, merchants are already gearing up for what they hope will be an excellent and successful holiday season.

BizReport explained that one trend expected to be seen throughout the retail industry in the coming months is mobile commerce. Citing research from IMRG and Capgemini, the source stated that mobile shopping has become increasingly prevalent within the United Kingdom, and this is sure to be reflected in other markets around the world.

The study revealed that in the second quarter alone, purchases made from mobile devices accounted for 23.2 percent of all retail sales. This represents an 11.6 percent increase from the same time last year. Additionally, visits to merchants' websites through mobile gadgets rose from 21.1 percent in last year's second quarter to 34 percent this year, the source noted.

For brands that want to leverage mobile commerce to boost sales during the upcoming holiday season, taking the time now to update point of sale systems and find out what customers want from mobile shopping options can help them successfully accommodate device-carrying consumers.

by Retail Pro

You’re Going to Lose: Five Reasons Why Showrooming Always Wins

Prepared in conjunction with Merchant Warehouse

1. You ignore it and, therefore, do nothing. You may not realize it, but showrooming already has a direct impact on your bottom line today. According to L2, 58% of smartphone owners regularly go to a store with the sole intention of trying on or testing products before buying them online. This also means you can't ignore e-commerce, either. People want to be able to buy from any channel, and they want a quality customer experience wherever and whenever they choose to stop. Did we mention they're always keeping an eye out for that best deal, too?

2. Skip the training. Sales staff will be gone in a week anyway. Yikes, big mistake. The reality is this won't save you any time or resources; knowledgeable associates are what keep your real estate investment working for you. Train and cross train them. Empower them to be there for your customers and help with what is needed. In some cases, that might even include deploying a mobile POS.

3. You panic when you see people on their phones. It's easy to assume a customer checking their phone when standing in front of a big ticket item means they're checking prices elsewhere. Don't panic. This actually presents you with a very unique opportunity to share more information about the product you're selling and why buying it in-store makes a difference. Offering coupons and loyalty programs is something to consider, as well.

4. Loyalty cards? Smoyalty cards. What a waste of paper. Differentiating your in-store shopping experience with perks like loyalty programs and rewards can sometimes be the deciding factor between shopping online or in your store. There are plenty of options available to make the customer feel appreciated beyond loyalty programs, too, like free shipping on orders placed in store or easy returns.

5. I did fine last year; I'm just going to do the same thing. I don't need any new technology capabilities. This is nearly as bad as ignoring showrooming all together. As the retailer, you have the ability to dictate the customer's experience, and customer preferences are changing. So why not leverage new technologies and capabilities to enhance the shopper's experience, making it fun and interactive? Combine the expertise you offer with in-store technology like digital signage and virtual tools, and leverage things like QR codes that automatically send 'price-advantage' coupons to your shopper's phone. This can make all the difference.

by Retail Pro

Back-to-school season not as strong as retailers hoped

The back-to-school shopping season is in full swing, as children across the United States prepare to head back to class for another year. This means that retailers are stocking their shelves with the necessary classroom supplies and are holding out hope that their revenues increase significantly. However, during what is the second busiest shopping period behind the holiday season, merchants are not seeing the turnout they were hoping for.

The Wall Street Journal reported that several big-name retailers are already showing disappointing back-to-school sales. While the final numbers have yet to be produced, brands such as Wal-Mart, Kohl's and Nordstrom's are seeing lower than expected sales figures. The source cited research from the National Retail Federation, which forecast that back-to-school sales will decrease 12 percent this year from 2012's figures.Overall, the NRF estimated that merchants will bring in a total of $26.72 billion during 2013's back-to-school season.

PYMNTS.com also echoed retailers' concerns regarding poor sales, citing the SpendingPulse survey by MasterCard. The research found that retail sales grew 4.5 percent year-over-year last month, and while any increase is positive, it is less than the 4.7 percent boost seen in June.

Despite these dismal projections, retailers are hoping that the back-to-school season and holiday shopping period will result in a successful 2013.