Thursday, February 28, 2013

Thursday Retail News & Notes

Thursday's Reading List:
  • The party's over for Fashion's Night Out (AP)
  • Buying stuff with your phone: Not coming soon to a store near you (CNN Money)
  • J.C. Penney Lowest Sales in Decades Show Johnson Stumbles (Bloomberg) and J.C. Penney overhauls pricing strategy as sales plummet (Morningstar) and Chief Talks of Mistakes and Big Loss at J.C. Penney (NY Times)
  • CPG/Retail Food Industry predict 13% sales increase in 2013 (WeiserMazars)
  • A look at digital's role in the retail model (
  • Why retailers are pinning hopes on Pinterest (Reuters) and Sephora says Pinterest followers spend 15X more than its Facebook fans (VentureBeat)
  • K-Mart Missing Millenials (POPAI)
  • American Express Pushes E-Commerce to TV Commerce (AdAge)
  • Study Reveals Most At-Risk Retailers for Showrooming by Amazon Customers (Placed)
  • The Rise of the Well-Dressed Man (T Magazine)
  • TJ Maxx Will (Finally) Launch E-Commerce Later in 2013 (Boston Herald)
  • Fresh From TED: A Mind-Blowing App That Could Remake Mobile Retail (FastCo Design)
  • Wal-Mart Struggles to Restock Shelves as Sales Drop (Businessweek)
  • Can Coinstar Reinvent the Vending Machine? (WSJ)
  • The Evolution of Brick & Mortar as Retail Real Estate Continues Transformation Into Multichannel Enterprise (CoStar Group)
  • Facebook to Serve Up Ads Based on Your Offline Shopping Habits (Mashable)
  • BCBG Max Azria explores $1 billion sale (FT)
  • Retailers focus on flash sales as mobile changes how consumers shop (Mobile Commerce Daily)
  • Walmart Sales Near Half a Trillion Dollars, But Amazon’s Still Winning (Wired)
  • Infographic: E-Commerce in China Poised To Top $265 Billion, Higher Than The U.S. (ReadWrite)

Just over 13 months year ago, Ron Johnson announced his arrival at JC Penney with bold steps to revolutionize department store retailing:
"The department store is the number one opportunity in retail today. We are going to rethink every aspect of our business, boldly pursue change, and create long-term shareholder value, as we become America's favorite store. Every initiative we pursue will be guided by our core value to treat customers as we would like to be treated - fair and square. Beginning February 1, we will have Fair and Square Pricing, making every day a great day to shop. We will create tremendous excitement through monthly promotions that are in sync with the rhythm of our customers' lives. And we will transform each and every jcpenney store over the next four years with a month-by-month, shop-by-shop roll-out of exciting new merchandise initiatives,"
Yesterday, JCP announced fiscal 2012 year results, and to say they were not pretty would be quite an understatement:
  • Total sales for 2012 fell 24.8% to $12.985 billion, as same-store sales fell 25.2%; sales have now fallen 35% from their peak in 2006 and are nearly 30% below levels from a decade ago
  • E-Commerce sales declined 33% to just over $1 billion, below online sales levels from 2005 and less than one quarter of the $4.2 billion in combined online and catalog sales the company had 12 years ago
  • Sales per square foot dropped 24% to $107, 35% below peak levels from 2006 and ranking 24th out of the 26 U.S. discount and department stores we track

Wednesday, February 27, 2013

Big Mid-Week Reading List

  • Study Reveals Mobile Devices Key Driver of Online and Offline Consumer Electronics Spending (IAB)
  • Retailers’ National Customer Satisfaction Sees Sharp Rise (ACSI)
  • Burberry's Secrets to Successful Brand Reinvention (Forbes)
  • Shoppers reducing number of channels they shop, remain intensely focused on value in 2013 (Chain Store Age)
  • Amazon’s Customer Q&A Is Social Commerce Done Right (Multichannel Merchant)
  • The Future of the Subscription Service Economy (Entrepreneur)
  • Pinterest For Products Wanelo Raises Funding Round At Valuation North Of $100 Million (TechCrunch)
  • Fashion Buys Into Social Tools (NY Times)
  • Always-on consumers, showrooming and economic uncertainty among key retail trends for 2013 (Experian)
  • Best Buy takeover attempt by founder in jeopardy (Reuters)
  • How Brands Leverage Influencers' Reach Online (eMarketer)
  • Google Denies Plans To Build Retail Stores (AllThingsD)
  • Retailers turn to M&A to survive (FT) and Expect the Flurry of Retail Deals to Continue (Barron's)
  • Q&A With Online Home D├ęcor Retailer One Kings Lane CEO (Inc.)
  • The "2013 Mobile Future in Focus" Report (comScore)
  • Nasty Gal wants to conquer fashion, and the online retailer's growth rate is raising eyebrows (Fortune)
  • 20 Facts About Shoppers You Shouldn't Ignore (POPAI)
  • Wal-Mart says its e-commerce push is working (Internet Retailer)
  • Here’s How People Are Shopping With Their Phones And What Business Can Do To Grab Them (Business Insider)

Tuesday, February 26, 2013

Tuesday Reading List

  • For JC Penney's Heralded Boss, the Shine Is Off the Apple (WSJ)
  • Rich, Poor Consumers Hit by Clashing Forces (Fox Business) and Why Consumers May Be On Crash Course (CNBC) and Too Soon To Blame Payroll Tax For Stagnant Retail Sales? (NPR)
  • Infographic: What Are the Benefits of In-Store Mobile Commerce? (Business2Community)
  • Amazon May Seem Unstoppable, But Google Is Powering the Counterattack (Wired)
  • MasterCard aims at mobile payment market with launch of "digital wallet" (Reuters)
  • Invest in Your Customers More Than Your Brand (HBR)
  • Macy’s CEO Lundgren Says He Was Shocked to Learn of Martha Stewart Deal (Bloomberg)
  • Retailers expect strong M&A wave to continue in 2013 (MarketWatch)
  • Eyewear Innovator Warby Parker Attracts More Big-Name Investors (DealBook)
  • 63% of consumers used more than one device to holiday shop (Mobile Commerce Daily)
  • Are 3-D printers the appliance of the future? (Star Tribune)
  • Apple Can't Build Stores Fast Enough To Keep Up With Sales & Traffic Growth (GigaOM)
  • Brick-and-Mortar Stores Targeting Tech-Savvy Startups (WSJ)
  • What Barnes & Noble’s Retail Arm Might Be Worth (NY Times)
  • Foursquare Partners with Visa & MasterCard to Give Discounts When Users Shop (AdAge)
Today's Retail Quick Fact: Abercrombie & Fitch grew e-commerce sales 26.8% to $700.7 million last year. Online sales have increased at a 25.9% compound annual growth rate over the past 7 years, from just 5.1% of total revenues in 2005 to 15.5% of revenues in 2012.

Tuesday Retail & Consumer Roundup

The Energy Information Administration (EIA) reported that prices at the pump rose 3.7 cents to $3.784 for the week ending 2/25, and have risen a cumulative 53 cents over the past 10 weeks. However, gas prices are still only 1.7% higher than at this point last year.

The Conference Board Consumer Confidence Index jumped to 69.6 in February, up 19.2% from January as worries over payroll tax cuts and the fiscal cliff eased, but the index still sits 2.8% below year-ago levels. The Present Situation Index rose 12.6% from last month and is 36.4% above last February, while the Expectations Index rose 23.2% from January but is 16.5% below year-ago levels.
Lynn Franco, Director of Economic Indicators at The Conference Board, said "Consumer Confidence rebounded in February as the shock effect caused by the fiscal cliff uncertainty and payroll tax cuts appears to have abated. Consumers’ assessment of current business and labor market conditions is more positive than last month. Looking ahead, consumers are cautiously optimistic about the outlook for business and labor market conditions. Income expectations, which had turned rather negative last month, have improved modestly."

The International Council of Shopping Centers (ICSC) reported that chain store sales rose a slight 0.1% for the week ending Feb 23rd compared to the prior week, but increased a sharp 2.9% over the prior-year period, which was the strongest gain in 5 weeks.

According to the ICSC‐GS consumer tracking survey, the week's improvement was driven by strength at department stores, apparel stores and wholesales clubs

Sunday, February 24, 2013

Monday Morning Briefing

Economic & Retailer Earnings Calendar for the Week of 2/25 - 3/1

Retail & Consumer Reads to Start Your Week
  • Why Brands Are Already Looking at Google Glass, and Why Apple Should Be Worried (Adweek)
  • Despite late refunds, higher payroll taxes & gas prices, consumers look surprisingly resilient (USA Today) or Strike Three! The American Consumer Is Out (CNBC)
  • J.C. Penney and the Future of Retail (Forbes)
  • PayPal’s New U.K. Mobile Card Reader Exposes Inferior U.S. Tech (Wired)
  • Abercrombie & Fitch to close up to 50 U.S. stores this year (FT)
  • More Evidence That Tablets Are Slowly Killing the PC (Businessweek)
  • In the slow-growing sporting-goods market, Dick's Sporting Goods looks like a winner (Barron's)
  • How the $60 billion diamond industry thrives on symbolism (CBS News)
  • Barnes & Noble Weighs Its Digital Future (NY Times) and Barnes's & Noble Chairman Mulls Store Buyout (WSJ)
  • Mobile's Retail Power Comes From...The Couch? (Marketing Daily)
  • These Charts Explain Exactly How Americans Spend $52 Billion on Our Pets in a Year (The Atlantic)
  • Google’s plan to eat Amazon’s lunch and dominate retailing (GigaOM)
  • Commerce technology is a massive opportunity (and retail is not dead) (PandoDaily)
  • The Irreversible Decline Of Sears Can Be Blamed On One Thing: Customer Service (Business Insider)
  • Why Brick-And-Mortar Still Beats E-Commerce (TechCrunch) and Why Bricks-And-Mortars Will Live Forever (SiliconANGLE)
  • Safeway Envisions Future Without Print Ads (AdAge)

Monday's Retail Quick Fact:
Ulta Salon, Cosmetics & Fragrance more than quadrupled its store count over the last 10 years, growing from 112 stores to 550 stores, and grew sales from just $362 million in 2002 to $2.22 billion in 2012, for a 10-year compound annual growth rate of 19.9%

Friday, February 22, 2013

Friday's Big Reading List

  • 18 Walmart Facts That'll Make Your Head Explode (Business Insider) and Wal-Mart eases investors fears, but U.S. shoppers feel pain (Reuters) and Wal-Mart expands self-checkout in stores via iPhone app (Internet Retailer)
  • Facebook Testing Ad Targeting Based on In-Store Purchases (AdAge)
  • The Secrets of Smarter Shopping at J Crew (Businessweek)
  • Are checkout counters headed for extinction? (The Globe and Mail)
  • Google Glass Searches For Fashionable Frames With Warby Parker (NY Times)
  • Euclid, The Google Analytics-Like Tracking Solution For Brick-And-Mortars, Raises $17.3 Million (TechCrunch)
  • The 10 Myths of Multichannel Retailing (MediaPost)
  • Michael Kors Tops List of Most Sought-After U.S. Brands Online (WWD)
  • Creating A Physical Internet To Save Money And Energy On Logistics (FastCoExist)
  • Dear Best Buy: Why Price-Matching Isn’t Enough (POPAI)
  • Zappos Takes a Close Look at Consumers' M-Commerce Patterns (eMarketer) and Glance Is Zappos's Gamble On Curated E-Commerce (FastCo)
  • Is Your Store Ready For The Mobile Shopper? (A Smarter Planet Blog)
  • Office Supplies Merger Likely to Present Challenge to Landlords (Retail Traffic)
  • The Plus Size Revolution Is Upon Us, And It Can't Be Ignored (Business Insider)
  • Retailers Adjust as Higher Taxes & Gas Pices, Stagnant Wages Bite Consumers (WSJ)
  • Nordstrom store expansion, e-commerce plans dent profit forecast (Reuters)
  • Fashion Houses Turn Streaming Runway Shows Into Research Labs (NY Times)

Retailers Adjust as Higher Taxes & Gas Pices, Stagnant Wages Bite Consumers (WSJ)

Thursday, February 21, 2013

Thursday Retail & Consumer Reads

  • Seven In 10 Americans Adjusting Spending Plans To Cope With Recent Payroll Tax Changes (NRF) and Fast Food Chains, Discount Retailers Say Rising Taxes Hurting Low-Income Americans (HuffPost) and Higher Payroll Taxes Seen Having Subtle Impact on Retail Sector (Nasdaq)
  • Wal-Mart’s Profit Climbs 8.6%, but Outlook Is Wary (NY Times)
  • The demographic evolution of U.S. households (SmartBlog)
  • $600 Million E-Commerce Behemoth Wayfair Launches Flash Sales (Forbes)
  • Google Shopping Beats Amazon Product Ads on Costs & Traffic, but Not Conversion Rate (Search Engine Watch)
  • Buffett Track Record Boosts Brooks Sports With Running Shoes Surging (Bloomberg)
  • Boomers up Their Online Shopping, Millennials Steady (Progressive Grocer)
  • Office Depot/OfficeMax Merger: Another Nail in the Coffin of Traditional Retail? (Time) and Retail Landlords Cheer Office Depot/OfficeMax Merger (WSJ)
  • Innovative Companies Giving the Fashion & Beauty Business a Digital Makeover (FastCo)
  • JC Penney’s dark tactics revealed in Martha Stewart feud (NY Post)

U.S. Mall Sales Productivity Hits Record High in 2012

According the the International Council of Shopping Centers (ICSC), productivity at U.S. malls surged to a record-high of $448 in sales per square foot in 2012, an increase of 6.9% from 2011 and up nearly 21% from just 3 years ago.

The trade group said this was the largest annual productivity increase since the inception of the report in 1996, driven by strong gains at electronics stores (+19.5%), children's (+15.5%) and athletic shoe stores (+13.6%), and home furnishings stores (10.7%).

Wednesday, February 20, 2013

Mid-Week Reading List

  • Staples May Be Big Winner in Office Depot-OfficeMax Merger (Bloomberg) and Can office stores replace paper profits? (MarketWatch) and The Death of Retail: The Economics of the (Doomed) Office Depot/OfficeMax Merger (The Atlantic)
  • For Omnichannel Retail, The Future Is Now (ApparelNews)
  • Square Wants To Be The Cash Register Of The Future. Can New "Business In A Box" Help Now? (FastCo)
  • "Amazon tax" payoff starts to arrive in some U.S. states (Reuters)
  • Radio Shack’s Future in the Amazon Era (WSJ)
  • Key Trends that Will Shape the U.S. Digital Industry in 2013 (comScore)
  • Mobile payments on the front burner (FT)
  • Google Poised to Take Over the World of Retail, In-Store & Out (POPAI)
  • Digital Influence: How the Internet Affects New Product Purchase Decisions (Nielsen)
  • Cash-strapped Postal Service to launch new clothing line (Fox News)
  • Amazon, eBay use celebrity, personalization to boost retailing efforts (MarketWatch)

Digital Influence: How the Internet Affects New Product Purchase Decisions (Nielsen)

Will Surge in Gas Prices Crimp Consumer Spending?

It seems consumers are already feeling the pinch from the one-two punch of higher payroll taxes and delayed tax returns. Last week, Bloomberg obtained internal emails that showed Walmart had its worst sales start to a month in seven years in February:
"In case you haven’t seen a sales report these days, February MTD sales are a total disaster," Jerry Murray, Walmart’s vice president of finance and logistics, said in a Feb. 12 e-mail to other executives, referring to month-to-date sales. "The worst start to a month I have seen in my ~ 7 years with the company."
This followed disappointing results from January, according to Cameron Geiger, SVP of Walmart US Replenishment, based on a separate internal e-mail obtained by Bloomberg:
"Have you ever had one of those weeks where your best-prepared plans weren’t good enough to accomplish everything you set out to do?" Geiger asked in a Feb. 1 e-mail to executives. "Well, we just had one of those weeks here at Walmart U.S. Where are all the customers? And where’s their money?"
According to Walmart’s Global Customer Insights & Analytics report, as reported by Bloomberg News, about $19.7 billion less in federal tax refunds had been returned to its shoppers this year relative to the same time last year, and higher payroll taxes are paring about $8.5 billion of disposable income per month from consumer’s paychecks per month compared to last year.

If that's not bad enough, AAA reported yesterday that gas prices have risen for 33 consecutive days, having jumped 46 cents, or nearly 14% during this stretch.

According to the Energy Information Administration (EIA), the national average price at the pump hit $3.75 for the week ending Feb 18th, up 14 cents from the prior week and 49 cents higher than Christmas Eve.

While this is the third straight year the national average has approached $4/gallon and prices are just 4.3% higher than a year ago, the surge is much earlier and more rapid than in prior years. AAA said

Tuesday, February 19, 2013

Tuesday Retail & Consumer Reads

  • Why Amazon should just buy RadioShack (Quartz)
  • What every retailer needs to know about social media (SmartBlog)
  • Macy’s and Martha Stewart Head to Court Over JC Penney Pact (Bloomberg)
  • Luxury Brands Still Lag in Mobile (OnlineMediaDaily)
  • OfficeMax, Office Depot in Advanced Merger Talks (WSJ) and Office Depot, OfficeMax Said to Discuss Merger Amid Pressure (SF Chronicle)
  • U.S. Consumer Technology Retail Sales Declined 2% in 2012 (NPD)
  • Gilt Groupe's Kevin Ryan on What Works, And Doesn't Work, in Flash Sales (Inc.)
  • Are 3D printing shops the future of retail? (Conversations by Nokia)
  • What It's Really Like To Work At Lululemon (Business Insider)
  • The "2013 U.S. Digital Future in Focus" Report (comScore)
  • Same-Day Delivery Darling Shutl Takes on Amazon’s Ground Game (Wired)
  • Strategy missteps could cost these luxury retail brands (MarketWatch)
  • Why Emerging Technologies May Hold the Future of Fashion (Entrepreneur)

Tuesday's Retail Quick Fact: Sales at U.S. department stores fell 1.1% in 2012 to $182.8 billion, the 8th consecutive annual decline, and are down 21.4% from the 2000 peak of $232.5 billion.

Monday, February 18, 2013

President's Day Reading List

  • Wal-Mart had the worst sales start to a month in seven years (Boston Globe)
  • Google will open its own retail stores by the end of this year (9to5Google) and Why Google's stores shouldn't look so much like Apple stores (CNET)
  • It's Cool Again to be 'Made in America' (AdAge)
  • Best Buy Makes Price Matching Permanent to Win Back Shoppers (Bloomberg)
  • The Story of a Surprisingly Pleasant Trip to the Microsoft Store (New York Magazine)
  • Why is Facebook’s e-commerce offering so disappointing? (GigaOM)
  • Reed Krakoff - The creative director and driving force behind the phenomenally successful Coach brand (The Guardian)
  • Traditional Florists Struggle Against Online Competition (Star Tribune)
  • How an Amazing Corporate Culture Took Zappos to a Billion Dollars in Revenue (VentureBeat)
  • Future retail stores will focus on experiences before products (bazaarvoice)
  • The Hidden Empire: How Amazon managed to dominate the retail industry (faberNovel)
  • The "2013 U.S. Digital Future in Focus" Report (comScore)
  • A Lot Rides on Topshop’s New Los Angeles Store (FT) and Topshop Plans 10 New U.S. Stores in Next Two and a Half Years (CNBC)

Friday, February 15, 2013

StoreIntel Research: Feb 15, 2013

Some comments ahead of President's Day weekend:

  • Ascena Retail Group (ASNA) - We still have reservations about both Lane Bryant and core Dress Barn. Lane bryant is still suffering from a lack of a laser focus on who their plus size demographic is. During multiple store visits during the past 8 weeks, we have been witnessing a true separation from the value perspective which has always been their trademark. Poly chiffon printed tops with an initial retail price of up to $49.99 felt too rich for both the fabrications and styling. The denim assortments, though strong, seemed a bit short of a full bright-color assortment. Having said this, the real issue is whether Lane Brant is a younger or older demographic. With a new president from The Limited coming on board, we will wait and see before we jump on the bandwagon. Coming off a holiday sales decline of minus 9, we don't feel much has changed from this downward trend based on our recent mall walks.

  • Abercrombie & Fitch (ANF) - All hands on deck. We are comfortable from multiple store visits over the last week that both core Abercrombie and Hollister are going to provide upside surprise on the conference call slated for Feb 22. We have been impressed with the traffic, fashion and most of all inventory control throughout the holiday period and into early 2013. Consensus seems to be for slightly positive sales, with concern on the margin side. We are far more bullish on both counts. We feel they are the front runners today in the teen space and are all in on this name. Since we have been touting the name the stock has traded from a low on 12-24 of $45.44 to yesterday’s high of $51.29. Jump on board the ANF train!

  • Chico's (CHS) - A name which StoreIntel has always strongly supported. We have been overly impressed with their assortments at both White House|Black Market and Chicos, but unfortunately nothing is forever. Over the holiday period through last week, we have been concerned with a buildup of inventory at both of these divisions. The stores feel a bit too heavy in the sale department. The complications arrive once some of the new product arrives, which we are less than enthusiastic about, combined with what we feel is too much inventory, which can lead to unwanted markdown pressure and potential gross margin pressure. Ann Taylor reported sluggish sales recently, and we feel this will have a spillover effect for Chico's since the customer demographic is essentially the same. Earnings are scheduled for Feb 28th, so we will provide some more color after the holiday weekend. At this point, we have a red flag up on the Chico's name.

By the Numbers: The Incredible Growth of Michael Kors

E-Commerce Sales Increased 15.8% in 2012 to $225.5 Billion

The U.S. Department of Commerce reported this morning that e-commerce sales increased by 15.6% year-on-year to a seasonally adjusted $59.5 billion in the fourth quarter of 2012, representing 5.4% of total retail sales (excluding restaurants), which grew by 4.0%.

For the full year 2012, e-commerce sales jumped 15.8% to $225.5 billion, or 5.2% of total retail sales. From 2000 (the first year the government started tracking online sales) through 2012, e-commerce grew at a compound annual growth rate of 19.1% compared to just 3.2% for total retail.

Friday's Top Retail & Consumer Reads

  • Maybe JC Penney is just one of those companies that can’t be saved (Quartz)
  • State online sales tax bill revived in U.S. Congress (Reuters)
  • Barnes & Noble: Nook Business Will Lose Even More Money This Year (Mashable)
  • Institutional Investors Likely to Increase Allocations to Retail Real Estate in 2013 (Retail Traffic)
  • Under Armour Finds Feminine Side to Go Beyond $2 Billion (Bloomberg)
  • How Retailers Learned to Beat the Flash-Sale Bubble (The Atlantic Wire)
  • Despite Holiday Struggles, Target Says High-Fashion Partnerships Will Continue (Pioneer Press)
  • Touchscreen T-Shirts Only A Few Years Away (PSFK)
  • Apple’s Retail Strategy Proves That If They Build It, You Will Come...And Spend (TechCrunch)
  • Why investors in retail should learn to love digital (The Globe and Mail)
  • Q&A With Whole Foods Co-Founder John Mackey (Businessweek)
  • Why Macy's is spending $400 million to renovate its iconic flagship store (Fortune)
  • Why do retailers under-invest in labor, when good jobs are good for business? (HBR)
  • Welcome to the House That Gucci Built, the Fashion World's Most Unlikely Headquarters (WSJ)

Consumer sentiment improves in February on job outlook (Reuters)

Thursday, February 14, 2013

Thursday Reading List

  • Recession-proof pet industry now generates almost $53 billion in annual sales (Reuters)
  • payPal Expands Bricks and Mortar Presence to Gas Stations & Convenience Stores (TechCrunch)
  • Price Matching: How Far Should You Go? (Forbes)
  • Amazon Now Most Reputable Company In America (Harris Interactive)
  • Survey Finds Retail CFO's Forecast Modest Sales Increases for 2013 (BDO)
  • Retailers' Teen Lingerie Offerings Lures Ever-Younger Girls (Bloomberg)
  • Mobile commerce in the bricks-and-mortar context (Mobile Commerce Daily)
  • Eye-Popping Stats on Valentine's Day Spending (AdAge)
  • How Apple Stores Beat Disney Parks (Mashable)
  • Video: Value Retailers to be The Shopping Destination of Choice in 2013 (TheStreet)
  • Mobile and Social Grab Spots in Moms' Grocery Carts (eMarketer)
  • Does eBay hold the key to same-day delivery? (AllThingsD)
  • Digital And Mobile Speeds Retailers' Shift to Paperless Receipts (MediaPost)
  • Best Buy founder Schulze may scrap buyout bid (Reuters)

Wednesday, February 13, 2013

Mid-Week Retail & Consumer Reads

  • How Mobile Payments Will Transform The Shopping Experience (ReadWrite)
  • A Multi-Mix Media Approach Drives New Product Awareness (Nielsen)
  • Apple CEO on stores' biggest problem: They're not 'big enough' (LA Times)
  • Shopper Marketing: A Strategic Investment (POPAI)
  • What Recession? Americans Regain a Craving for Luxury (WSJ)
  • Michael Kors is no Louis Vuitton; It's Not Coach Either (Robin Report)
  • "E-Commerce Quarterly" Sheds Light on Shipping Offer Effectiveness & Holiday Shopping Behaviors (Monetate)
  • Sheetz and Wawa Divide Pit-Stop Partisans in Pennsylvania (NY Times)
  • Email Marketing for the Overly-Connected Consumer (ClickZ)
  • Eight retailers that will close the most stores in 2013 (MarketWatch)
  • Startup aims to bring shopper analytics to bricks and mortar retail (Mashable)
  • To Beat Showrooming, Retailers Must Think Outside The Box (Forbes)
  • Retail industry top cybercrime target in 2012 (ZDNet)
  • Tablets Poised to Become Key Driver of E-Commerce (Marin Software)
  • Target tries to build buzz with 12-page sponsored style guide in Sports Illustrated swimsuit issue (Businessweek)

U.S. Retail Sales Post Modest Gains in January

Retail sales in the U.S. rose for the third consecutive month in January, as the increase in payroll taxes that has taken a bite out of consumers’ paychecks has been somewhat offset by an improved job market, higher property values and stock prices.

The U.S. Department of Commerce reported that Advance Estimates of U.S. Retail and Food Services sales for January increased 0.1% over the prior month to a seasonally adjusted $416.6 billion, while sales increased 4.4% compared to the year-ago period. Year-over-year, this was the 39th straight gain after 14 consecutive months of declines during the recession.

Total sales excluding Autos were up 3.6% in January from the year-ago period and rose 0.2% from the prior month, while total sales less Autos and Gas Stations showed a 4.0% year-on-year increase and were up 0.2% from December.

Results were mixed in January, with only 6 of 13 sectors posting growth over the prior month, but we wouldn't read too much into the relative weakness as January and February are typically the lightest-volume months of the year.

Tuesday, February 12, 2013

Tuesday Reading List

  • Mobile payments forecast to hit $1 trillion by 2015 (PC World)
  • Amazon, QVC, Apple Dominate ForeSee Mobile Retail Satisfaction Index as Customer Experience Improves (ForeSee)
  • The Payroll Tax Hike Isn't Slowing Retail Sales (Business Insider)
  • E-Commerce Will Not Replace Physical Retail, But Rather Transform The Experience (Linkedin)
  • Game Over? Why Video Game Console Sales Are Plummeting (Time)
  • Michael Kors Posts 70% Revenue Growth on Growing Brand Awareness (Bloomberg)
  • Solid Results for America's Largest Shopping Center Landlord (TheStreet)
  • Profits at US clothiers seen lifted by lower cotton prices & technology investments (Reuters)
  • Top 5 Consumer-Driven Retail Trends (RISNews)
  • Twitter, American Express to Collaborate on E-Commerce Sales (WSJ) and Pay-by-tweet service launched on Twitter (CNN)
  • 10 Tips For Powerful Shopper Marketing (MarketingDaily)
  • Retail 2.0: the technology is on its way, but are brands ready? (The Guardian)
  • Airports expand shopping options beyond duty-free with high-end retail (USA Today)
  • It's Time to Ditch the Demographic, and Focus on Consumer-Purchase Behavior Instead (AdAge)

Quick View: U.S. Retail Sales Growth 1992-2012

Tomorrow morning, the Department of Commerce will report January retail sales as well as e-commerce sales for Q4 and the full year. The report will finalize 2012 figures and provide much more insight into sector performance, but today we take a quick look at 20 years of growth rates across multiple sectors of the U.S. retail industry:

Monday, February 11, 2013

Retail Reads to Start Your Week

  • America’s malls seek a life beyond retail (FT)
  • Startup Nomi Raises $3M To Help Retailers Understand Their Customers, Online And Offline (TechCrunch)
  • Retail Sales in U.S. Probably Rose in January on Improving Job Market (Bloomberg)
  • For Mobile Marketing That Really Works, Just Look to Asia (Adweek)
  • Mobile Rewards Apps That Lure Shoppers Back to Stores (AllThingsD)
  • U.S. Postal Service tries to get smarter on routing to grow e-commerce market share (Chicago Tribune)
  • The World's Top 10 Most Innovative Companies in Retail (FastCo)
  • Valentine’s Day Survey Shows Time Together Trumps Spending Sprees (Discover Financial) and Valentine’s Day 2013: Couples to Spend, Knees to Bend (American Express) and More online and mobile shopping for Valentine’s Day 2013 (
  • At Gap, Sales Gains Are Back in Style (WSJ)
  • Why It Took So Long for Many Retailers to Embrace E-Commerce (AdAge)
  • As Seen on TV' Brand Success Stories (CNBC)
  • CEO Ron Johnson lives it up at the Ritz as JC Penney flounders (NY Post) and J.C. Penney CEO Ron Johnson says changes will return retailer to growth (Dallas Morning News)
  • To Prod Men to the Grooming Aisle, Retailers Use Digital Tactics (eMarketer)
  • Video: Bringing Fashion Week From Runway to Retail (Businessweek)

Monday's Retail Quick Fact: From 2000-2012 total U.S. retail sales grew 3.2% compounded annually, while e-commerce sales posted a 19.1% compound annual growth rate. Online sales increased from just $27.8 billion, or 0.9% of retail sales in 2000 to to $225.5 billion, or 5.2% of total retail sales in 2012.

Friday, February 8, 2013

Friday Retail & Consumer Reads

  • The Myth That Clicks Are Better Thank Bricks (POPAI)
  • Are JC Penney Store Closings on the Horizon? (Retail Traffic)
  • In-Store Shopping Still Center of Retail Experience (PwC)
  • How Amazon Could Save the U.S. Postal Service (Wired)
  • Shoppers Overwhelmed by Retailers' Promotional Email Bombardment (Fortune)
  • Will This E-Commerce Startup Oust Lululemon From the Market? (Mashable)
  • Brand Marketers Totally Miss Social Media Influencers (ReadWrite)
  • Technology Aims to Help Retailers Understand Shoppers' In-Store Behavior (The Economist)
  • Online clothes sales reach ‘critical mass’ (FT)
  • Men's Fashion: 5 Start-ups to Watch (Inc.) and Men’s Fashion Site JackThreads Is Blowing Up On Mobile (TechCrunch)
  • RadioShack's 4th CEO in 3 Years Faces Major Challenges (Bloomberg)
  • 2012 US Retail E-Commerce Spending Increased 15% to $186 Million (comScore)
  • Lessons Traditional Retailers Can Learn From Macy's (Businessweek)
  • The State Of Tablets In Shopping (Business Insider)

January Same-Store Sales Gain on Bargains

Most retailers posted strong same-store sales gains in January, the final month of the fiscal year on the retail calendar, as shoppers were lured by post-holiday bargains in what is typically the lightest volume month of the year.

Total net sales for the 20 chains we track (adjusting for a 5-week fiscal month this year vs 4 weeks last year) increased 5.7% from a year ago to $32.8 billion in January, while same-store sales rose 4.7% compared to a 2.9% gain last year – this was the 41st straight monthly rise, and the strongest comp gain since September 2011.

Excluding drug stores, total sales in January increased 6.1% and same-store sales rose 5.2% from the year-ago period. For the full fiscal year ended January, the 18 chains (excluding drug stores) increased sales 7.6% to $304.5 billion and comparable store sales rose 4.5% following a 5.7% gain in fiscal 2011.

It looks as though spending held up last month, as the positive effects of a better job market and higher home and stock prices offset the negative effect of higher payroll taxes and gas prices.

Unfortunately, going forward we will have a much harder time keeping up with trends in between quarterly reports as another 6 chains - Target, Macy's, Nordstrom, Kohl's, Stage Stores and Wet Seal - announced they will no longer report monthly sales. This will leave only 14 major retailers reporting on a monthly basis, down from over 40 chains 5 years ago and more than the 100 retailers that used to report monthly sales a decade ago.

Macy's, which discontinued monthly reporting in February 2008 only to reinstate the practice 8 months later after investor outcry, explained they are just following the lead of their peers:
“What we are going to is really the industry standard,” Jim Sluzewski, a Macy’s spokesman, said in an interview. Getting rid of monthly sales reports also will prevent the misinterpretation of results when shifts in the calendar around holidays such as Easter make it difficult to compare months to the same periods a year earlier, he said.
Coscto, on the other hand, has long been one of the most shareholder-friendly companies and has always provided more detailed information than almost any retailer about it's operations:
“Some choose not to do it because of the nuisance factor, and it’s one more thing you have to explain when you are already giving out quarterly results,” Richard Galanti, Costco’s chief financial officer, said in a telephone interview. “At the end of the day, it is useful information, and we’ve done it for a long time.”

Wednesday, February 6, 2013

Mid-Week Reading List

  • Clothing Factories Go Hi-Tech For The Age Of Fast Fashion (WSJ)
  • What America's "Best Retailers to Work For" Have in Common (Retail's BIG Blog)
  • 24 of the World’s Fastest Growing Retailers in Emerging Markets (POPAI)
  • Tourism Spurs New York Retail Growth in 2012 (Commercial Observer)
  • The Endangered Fate of Barnes & Noble (The Atlantic)
  • 51 Companies That Are Revolutionizing Retail And Changing The Way We Shop (Business Insider)
  • U.S. Athletic Footwear Sales Grew 4% to $13.8 Billion in 2012 (NPD Group)
  • Online sales threat to American malls (FT)
  • The Walgreens path to omnichannel success (
  • From Corsets to Skinny Jeans, Denim Takes Center Stage at New York's Fashion Week (Businessweek)
  • The Future of The Retail Store (Retail Prophet)
  • Big Retailers Attracted to Harlem's Main Shopping Hub (NY Times)
  • Publishers Look to E-Commerce to Turn Browsing Consumers Into Buyers (Adweek)
  • Want vs. Need: A 5 year look at shoppers' buying habits (STORES)
Wednesday's Retail Quick Fact: Costco sold 109 million hot dog & soda combos at food courts in 2012 at $1.50 each, a price held constant since 1985 (see '10 Things About Costco You Probably Didn't Know')

Tuesday, February 5, 2013

Tuesday News & Notes

About 20 chains will report monthly same-store sales on Thursday morning. January, the final month of the fiscal year for most retailers, is typically the lightest month of the year in terms of volume (followed by February) - the focus is mostly on gift card redemptions and clearing out holiday/winter inventory ahead of the full roll-out of spring merchandise.

Redbook Research said its Johnson Redbook Index increased only 1.8% in January (relative to a target of a 2.3% gain) and fell 0.6% compared to December (relative to an expected flat reading), as sales rose 1.5% in the latest week.

Redbook said "Clearance should continue to dominate sales activity for several more weeks as old merchandise is moved out and fresh early spring goods arrive. Food and Super Bowl related merchandise sales got a lift this week." The company expects sales in February to rise 2.2% over last year driven by Valentine's and President's Day spending.

The International Council of Shopping Centers (ICSC) reported that its ICSC-GS Index increased 2.6% over last year and 2.4% compared to the prior week.
"The end of the fiscal month and fiscal year posted an up-tick as business was stronger for specialty stores, wholesale clubs, dollar stores and apparel stores, in particular, and steady on a year-over-year basis for most other segments," said Michael Niemira, ICSC's vice president of research and chief economist. "The solid performance at month’s end continues to support that the overall retail industry is improving and showing signs of overall recovery."
ICSC expects chain store sales (excluding drug stores) increased 3% in January, and will also show 3% growth during the full year 2013.

Tuesday's Top Retail & Consumer Reads:
  • How Mobile Technology Will Change the Retail Store (STORES)
  • Cash Strapped, Global Consumers Spent and Saved Less in Q4 2012 (Nielsen)
  • Microsoft to expand retail store presence this year (CNET)
  • Study Highlights Digital Wallet Market Potential and Current Adoption Barriers (comScore)
  • Dime a Dozen: Dollar Stores Pinched by Rapid Expansion (WSJ)
  • Global E-Commerce Sales Topped $1 Trillion for First Time in 2012 (eMarketer)
  • Other People Might Be Selling More on Amazon Than Amazon Does (Wired)
  • Beyond daily deals: How the store next door can reach shoppers online (Internet Retailer)
  • Survey Says: Retail Workers Feel Least Connected To Employers (Consumerist)
  • Americans Are Spending $900 More Per Year On Gas Than In 2009 (The Atlantic)
  • How A New Wave Of Mobile-Social Commerce Has Powered Online Retail (Business Insider)

Monday, February 4, 2013

Retail Reads to Start Your Week

  • Why the Customer Is (Sometimes) Wrong (Inc.)
  • How Fab Built A $600 Million Company In Less Than 2 Years (Business Insider)
  • Retailers are Losing the Battle for Consumer's Time (WWD)
  • Whatever Happened To Google Wallet? (Forbes)
  • Gap’s Banana Republic Makes Fashion Blogger Star of Spring Campaign (Bloomberg)
  • Retailers Rethink Shopping Cart Abandonment (eMarketer)
  • Pinterest's Retail Problem (Adweek)
  • Shoppers’ smartphone use not all bad for brick-and-mortar stores (Washington Post)
  • Retailers that will close the most stores in 2013 (USA Today)
  • Purchase portal: The Internet as the shopper’s tool (McKinsey & Co.)
  • Amazon, Apple, and the beauty of low margins (Remains of the Day)
  • The Retail To E-Tail Impact (MarketingDaily)

Monday's Retail Quick Fact: At the end of its fiscal 3rd quarter, Abercrombie & Fitch had 131 international stores and non-U.S. operations accounted for 29.7% of total company sales, up from just 17 stores and 9.9% of sales just three years ago

Friday, February 1, 2013

Friday Reading List

  • Facebook unveils retail gift cards (Reuters)
  • 2012 Was a Banner Year for U.S. Retail & Consumer M&A Deals (PwC)
  • Tablet Shipments Soar During Strong Holiday Season (IDC)
  • Ambitious Startup Wish Aims to Outsmart the Business of Online Shopping (AllThingsD)
  • Building Luxury Brand Loyalty via Exclusive Experiences (Businessweek)
  • Mobile shopping apps generate less than 5% of total e-commerce revenue (VentureBeat)
  • Amazon’s Future Is Not in Selling Stuff...And That’s a Good Thing (Wired) and How Amazon Trained Its Investors to Behave (HBR)
  • Consumers are getting more comfortable shopping on tablets (Internet Retailer)
  • Big Retailers Try Smaller Stores, Tailored To Succeed In The City (IBD)
  • Marc Andreessen predicts the absolute death of traditional retail (PandoDaily)
  • Consumer sentiment gains in January on fiscal deal optimism (Reuters)
  • In-store Mobile Commerce During the 2012 Holiday Shopping Season (Pew Research Center
  • Retail Real Estate Investment Sales Up 20% in 2012 (Retail Traffic)

Valentine’s Day 2013 Spending by the Numbers

Cautious Consumers Keep Cupid At Bay This Year (NRF)

The National Retail Federation’s 2013 Valentine’s Day Consumer Intentions and Actions Survey projects total Valentine’s Day sales will rise 6.2% this year to more than $18.6 billion, 3rd highest among holidays behind only Christmas and Back to School, with the average consumer spending $130.97 or 3.9% more than in 2012. Some highlights:

  • Men will spend an average of $175.61 on jewelry, flowers, a romantic evening out and more, while their counterparts will spend approximately $88.70
  • Shoppers still prefer to browse in stores, but 26.3% will shop online this year, up from 19.3% last year and 16.3% in 2010
  • Mobile and tablet shopping activity will be prevalent, with 23.9% of smartphone owners researching and comparing prices and 12% making purchases, while 30.8% of tablet owners will research and compare prices and 19.6% will use their tablets to make purchases

Valentine’s Day Sales Up 3.2% in 2013: Traditional Gifts Like Candy and Flowers to Rise (IBISWorld)

IBISWorld expects consumers to spend $20.8 billion, an increase of 3.8% from 2012 with average spending of $134.08 per person this year, led by strong growth in flowers, candy and romantic getaways:
  • Flower sales are expected to increase by 5.7% this year, aided by the fact the holiday falls on a Thursday, as people are more likely to have flowers delivered to the workplace. Consumers are turning to online flower retailers, where they can browse and compare prices against brick-and-mortar flower shops
  • Candy sales, a small luxury that can be enjoyed without much financial guilt and can be delivered easily to offices, will rise 4.3% over 2012. Because the holiday is on a weekday, children in schools will give candy to their teachers and peers, helping support an overall increase in sales
  • Following a 4.9% jump last year, jewelry sales will falter in 2013 with an expected gain of just 2.2% as consumers spend less on big-ticket items due to higher payroll taxes
  • Clothing and lingerie, far less popular than traditional Valentine’s Day gifts, will rise just 1.8% and and greeting cards continue to suffer as customers either switch to digital alternatives or to cheaper homemade cards, and will only see a sales increase of 0.4%
"Although overall spending will increase slightly, consumers are still watching their wallets, and spending on expensive items will suffer as a consequence," said IBISWorld industry analyst Lauren Setar. "Due to these trends, Valentine’s Day purchases are expected to trend toward conventional gifts, giving candy and flowers an edge this year."

Society of American Florists (SAF)
  • Estimated number of roses produced for Valentine’s Day in 2012: 224 million
  • Valentine’s Day the No. 1 holiday for florists in fresh flowers, capturing 36% of holiday transactions and 40% of dollar volume
  • At all outlets, Valentine’s Day represents 20% of transactions & 25% of dollar volume for fresh flowers & plants