IS A ‘POKEMON GO’ GYM OR POKE STOP AT YOUR FAVORITE RETAILER?

As you look around your local restaurants, convenience stores and retailers, do you see people hard focused on their phones, and looking for something at that establishment you cannot see? Most likely these are users of the new, very popular, Pokemon Go app, getting explorers to go out into the real world with their avatars.

The game is so popular that it has already doubled the engagement of Snapchat and is beating Twitter in its percentage of daily active users. People are spending hours at a time traveling around looking for Pokemon.

Since the game maps out locations where players can find Pokemon, gather rewards at Poke Stops and battle each other at Gyms, retailers can take advantage of this major bump in foot traffic and convert gamers into shoppers. Retailers can pull up the map and find the Pokemon location closest to them. Smaller retailers can purchase “lures” on the app to increase the number of Pokemon that are virtually around their physical location. Larger retailers can determine if a Gym is nearby, and advertise incentives or give away Pokemon badges with their custom logo or business name.

While the game is not promoting specific retail sales, retailers should take advantage of the relevant, social aspect of the game to draw in traffic. The game’s developer is overwhelmed by requests from businesses who want to be included in the game – and will be announcing soon sponsored locations opportunities. Reports are out that Pokemon are hanging out in top retail brand stores including Macy’s, American Apparel, Sephora and H&M and lots of malls.

Source: Forbes, Retail Customer Experience, NCS

FOURTH OF JULY SALES KICK INTO GEAR: WHAT WILL THE BEST DEALS BE?

School just got out, and everyone is gearing up for the big Independence Day summer holiday. But retailers are already thinking about Back to School, wanting to clear out summer inventory to make way for Back to School sales that will start right after July 4. So where will the biggest savings be, and on what products?

The best deals will be on summer items such as swim and beach wear. Also, as trendy teen and youth apparel sales have suffered in the past few months, these retailers are offering extreme deals for the 4^th of July. The holiday is expected to shatter travel records due to lower gas prices. Also, as consumers spend more on experiences than on merchandise, retailers are promoting items shoppers need to have those road trips and experiences. The holiday weekend will be a great opportunity to stock up on active wear, camping gear and outdoor gear.

Wait until Back to School sales, after the holiday, for denim and electronics, when these items will have deeper discounts. Popular beauty products are not expected to be discounted, as this category is doing well and are high-margin goods for the retailers.

Source: Forbes.com 

IT’s DAYS OF SUPPLY INSTEAD OF WEEKS OF SUPPLY FOR DIY RETAILERS LIKE HOME DEPOT

While the DIY retail segment is currently booming – Home Depot is targeting a 15% sales growth by 2018 – their strategies for inventory in their stores is changing. “Get comfortable with days of inventory, not weeks,” Tom Shortt, Home Depot’s senior vice president of supply chain, says is the message going out to stores. 

Rather than filling its warehouse stores with inventory, Home Depot wants fewer items on its shelves and wants those items within customers’ reach. Online shopping is making retailers think of better ways to profitably serve online shoppers and have inventory in stores, as well. They need to decide if they will ship to consumers from a distribution center or store.

WalMart and Target have also made changes to in-store inventory levels. WalMart’s inventory levels rose slower than sales, helping to improve their gross profit margins in the first quarter.  Boosting sales and stocking less items increase the percentage of cash they get back from the amount they invest in inventory. The strategy is to put less inventory in the stores and replenish more frequently based on demand instead of a forecast.

Home Depot’s strategy is called “Project Sync” which includes such changes as seeing suppliers send 2 trucks five days a week, versus 5 trucks 2 times per week.

Monitoring the return on invested inventory capital and tracking consumer demand closely in order to manage inventory and replenish based on demand can only be accomplished with frequent analysis of POS data in stores, looking at SKU-Store sales and on hands, trending days of supply and sales to stock ratios.

Source: Wall St. Journal

HOME DEPOT AND LOWE’S ATTENTION TO PROS SHOW DOUBLE DIGIT SALES INCREASES

Both Home Depot and Lowe’s report that they have increased sales to professional customers by double digits. They have taken several steps to seek out professional and MRO buyers, including adding products to their pro business lines as well as offering new services, making it easier for pro customers to order and receive supplies. “We continue to strengthen our pro business, driving comps well above the company average, by further advancing our products and services offering to better serve the pro customer,” said Lowe's COO Ricky Damron during the company's Q1 earnings conference call.

Lowe’s has developed an omni-channel approach to pro business, using Account Executive Pro Services with more than 180 representatives in the field. They also have a targeted marketing strategy aimed at the professional customer and buying events in store to generate new business.

Home Depot offers pros private label cards with extended terms and special return policies. They are also expanding a flexible delivery program seven days a week and next-day delivery, as well as in-store pick-up in 2 hours. Home Depot says it currently has a small percentage of sales in building and maintenance and Menear said “we think there’s lots of opportunity to grow.”

Source: Inddist.com

ACE HARDWARE RANKS #1 IN CUSTOMER SATISFACTION FOR THE 10th YEAR IN A ROW

The J.D. Power 2016 Home Improvement Retailer Satisfaction Survey awarded Ace Hardware top ranking for their 10^th straight year. The study surveys 2,995 customers who purchased home improvement-related products from a home improvement retailer in the last 12 months, and was conducted in January and February 2016.

On a 1,000 point scale, Ace Hardware scored 810 in overall customer satisfaction, followed by Menard’s with a score of 803. Lowe’s placed 3^rd at 799. The overall average across retailers was 795, up from 788 a year ago. The Home Depot was just at the average with 794. The study found that average drops significantly when an initial greeting in the store takes longer than 2 minutes. Customers also want the retailer to provide advice, and be able to answer their questions effectively in the store. "The retailer's staff is most critical to differentiating the experience provided to customers, especially when it comes to the timeliness of greeting customers, answering their questions or providing advice," said Greg Truex, senior director of the at-home practice at J.D. Power. "Retailers that train their employees to engage with customers proactively and assist them are more likely to provide them with a satisfying experience during these moments of truth."

Ace scored 855 in staff and service compared to 811 average.

According to the Home Improvement Research Institute, home improvement consumer spend is on the rise, with an expected 4% increase this year to $332 billion.

Source: Chain Store Age, JD Power.com 

TAKEAWAYS FROM ACCELERATED ANALYTICS’ GS1 CONNECT 2016 SESSION: ‘The Importance and Value of Data Sharing – Using Point-of-Sale Data to Deliver Outstanding Customer Experiences’

I had the opportunity to lead this session last week and came back with some takeaways that I wanted to share, as I feel they are reflective of the state of retail today and how retailers and vendors are using point-of-sale data to manage their business in this time of OMNI-channel, customer-experience driven retail.

Customers want a single-vision of brands and be able to have a consistent, complete and winning experience every time they shop, in whatever channel they shop in. To ensure products are available when and where the customer shops, retailers need real-time inventory visibility, a seamless order management system and the ability to deliver. Retailers and brands realize they need to work together to have both a single view of the customer and a single view of their data in order to be successful.

Some interesting, yet not surprising, statistics were gathered from the retailers and vendors represented in the room. When asked about managing their POS data week to week, 66% were using POS data that was not provided via an EDI 852 file, eliminating their ability to automate the collection and processing of the data electronically, and instead having to work with multiple sources and formats of data. This process of data management and then trying to create usable reports to have meaningful partnership conversations between retailer and vendor is extremely time consuming: 83% of the retailers in the room spend 11-50+ hours per week managing and processing their POS data. More staggering was 95% of the vendors in the session were spending 11-50+ hours per week: 30% spending 11-20 hours, 40% spending 25-50 hours and 25% over 50 hours per week!

The good news is over half of the attendees in the room felt they are getting better at managing and using POS data each week, but 30% still admit to ‘Barely Using’ their POS data. Recognizing that heavy resources are needed to use POS data, especially on the vendor side, is making vendors ask, “Do we build an in-house solution to manage this, or outsource it?” CLICK HERE for an infographic detailing the pros and cons of each, and the differences in resource and financial investment.

Based on the time and effort being made by most of those represented, it is clear that POS data sharing is important for effective collaboration between retailers and vendors to “get it right for the customer”. POS data can be used to not just track units sold overall, but can give product/store level details on out-of-stocks, weeks of supply, sell thru %, average sales, geographic trends, inventory investment and lost sales opportunities. CLICK HERE for our industry sell thru % guidelines infographic.

We need to do everything we can to exceed our customers’ expectations and deliver an outstanding experience for them when they come across our brand. Sharing POS data and then using it to partner together to analyze it will help shape the customers’ experiences and give us inventory visibility and fulfillment across channels to meet customer expectations.

Want to learn more? Contact Jennifer@AcceleratedAnalytics.com to start a conversation. CLICK HERE to download whitepapers on analyzing POS data like a pro.

- Jennifer Freyer, Director of Sales and Marketing, Accelerated Analytics

US MANUFACTURING INDEXES TAKE A DIVE; STOCK LEVELS REACT

The New York Empire Manufacturing Index dropped to -9.02 from April’s positive 9.56 in May, missing estimates for a slight decline to positive 7.0. Stocks reacted negatively to the news, but were offset by gains in the energy and industrial sectors. Domestically oriented US manufacturers are seeing steadier business with bright auto, housing and job markets, while global manufacturers are struggling in markets from Brazil to Europe to China.

“Domestic demand is what has been supporting the manufacturing sector overall and preventing a sharper downturn,” said Gregory Daco, chief U.S. economist at Oxford Economics. “Domestic-oriented sectors are faring relatively well.”

Earlier in May, the Institute for Supply Management also reported its index results, but showed manufacturing activity already falling from March. A strong US dollar and low oil prices, plus weakness overseas, depressed demand for US exports.

The Philadelphia Federal Reserve also reported a decline in its index, reporting that mid-Atlantic manufacturing activity declined for the 8^th time in 9 months.

These reports maintain the overall picture of sluggish economic growth, and a newfound possibility that the Federal Reserve could raise interest rates as soon as June.

Sources: WSJ, Nasdaq.com, Investors.com, CalculatedRiskBlog.com 

CONGRATULATIONS 2016 GRADUATES! GRAD GIFT SPEND HIGHEST IN 10 YEARS!

The National Retail Federation (NRF) reports that 2016 graduation spending will reach a 10-year high this year, with spending expected to reach $5.4 billion. Americans celebrating high school and college graduations give special gifts, and retailers are offering a lot of options for the best gifts possible. Retailers will need to keep graduation gift items up front and in stock, and advertise locally for shoppers who look online before going shopping.

NRF’s 2016 Graduation Spending Survey revealed the average person buying graduation gifts will spend $106.45, up 3.9% from last year. Each individual graduate should not get too excited, though – the average shopper is buying for 2 graduates this year, so the spend is higher but spread out among more recipients.

Not helping retailers is the fact that cash is the most popular gift, given by 56%. Greeting cards, with the cash inside, will make up 39% of spend. This is followed by gift cards at 31%, clothing at 14% and electronics at 11%.

While the amount of spend averages $106.45, the age group of the gift giver makes a difference. Spending by those aged 45-54 will average $120.74, compared with $78.08 from those 18-24.

Source: NRF.com 

HOUSING GAINS AND MILD WEATHER KEEP HOME DEPOT GOING STRONG

The Home Depot’s stock opened at a record-high level today, after announcing they topped first quarter expectations. Mild weather and a strong housing rebound are attributed to their successful first quarter. Revenue increased to $22.76 billion from $20.89 billion. Same store year over year sales rose 6.5% overall,up 7.4% in US stores.

Chairman and CEO Craig Menear said the company saw “week to week demand spikes caused by weather variability”. Home Depot originally forecasted 2016 earnings of $6.12 to $6.18 per share, with revenue predicted to increase 5.1-6% and same store sales to rise 3.7-4.5%. With its positive first quarter, Home Depot now predicts 2016 earnings of $6.27, sales to rise 6.3% and same store sales to rise 4.9%.

Having cited a strong housing rebound as another reason for a strong first quarter, steady growth for the housing market looks like it will continue. The National Association of Home Builders reported continued strong sentiment in May. Low mortgage rates are fueling demand that have boosted expectations for home sales in the next six months to the highest level of the year. More housing data is due out later this week, including housing starts and existing home sales.

Source: US News & World Report, Wall S. Journal

APRIL RETAIL SALES REBOUND. WILL RETAILER STOCKS RECOVER?

Wall Street analysts are calling last week “Retail Wreck” due to numerous retailers’ news of poor sales, profits and future outlook on consumer spending. April retail sales came in higher than expected with a positive 1.3% gain, the highest gain in a year. Will strong sales in the first month of the second quarter help with a stock rebound for retailers?

Last week’s poor results were reported by many retailers, including Macy’s, Kohl’s and Nordstrom’s. Department stores are also responding to the strong online sales versus in-store that was reported, with online sales soaring 10.2% over last year. They are struggling with putting inventory in the right place to meet their increasingly complicated inventory and distribution demands.

Investors are waiting for home-improvement results this week from Home Depot, Lowe’s, Target and Wal-Mart to try to determine if the profit misses in the retail space is a problem just for department stores and apparel makers, or if it is a broader problem ahead for the consumer-driven US economy.

See the Accelerated Analytics’ blog from last week, reporting on the stock decreases across several retailers and apparel manufacturers: http://www.acceleratedanalytics.com/blog/2016/5/12/retail-stock-market-was-a-bear-yesterday-dropping-to-worst-l.html and continue to monitor our blog http://www.acceleratedanalytics.com/blog/ page this week as additional retailers report on Q1 results.

Sources: The Wall Street Journal, USA Today

RETAIL STOCK MARKET WAS A BEAR YESTERDAY, DROPPING TO WORST LEVELS SINCE 2011

There were stock declines all over the retail spectrum yesterday, as consumers spend less than expected and shift spending from traditional department stores and retailers to nontraditional online retailers. The SPDR S&P Retail ETF closed down 4.44%, the worst since August 18, 2011 and down 15% over the last 12 months.

Macy’s is getting the most news of the day, closing down 15.2%. This caused CEO Terry Lundgren to lower its full-year forecast. Quarterly earnings for Macy’s exceeded expectations, but revenue came in below estimates.

April retail sales will be announced on Friday morning, and analysts are waiting to see what stock impact these results will have.

Other retailers with dropped stock levels yesterday include Wal-Mart, Home Depot, Nike, Fossil, and Disney, who dropped 4.04%, its worst day since January 15.

Source: CNBC, Wall St Journal

JC PENNEY’S BRINGS DIY COMPETITION TO HOME DEPOT, LOWE’S, BEST BUY AND SEARS

JC Penny’s announced Monday that they will be doing a major expansion into home appliances. Starting in July, JC Penney’s will add an appliance showroom to almost 500 of its stores. The showrooms will feature kitchen and laundry appliances from Samsung, LG, GE Appliances, and Hotpoint, with over 100 appliances on display.

“Since launching major appliances in 22 stores last February, the response has been outstanding,” said Marvin R. Ellison, CEO, JC Penney’s. “The pilot confirmed that we should not limit our business to apparel and soft home in order to achieve significant revenue growth.”

The retailer also plans to allocate additional 25% of floor space to window coverings in about 500 stores, and pilot a new furniture line, Signature Design by Ashley, from Ashley Furniture, in 25 stores.

JC Penney’s is also testing an in-store flooring concept with Empire Today in stores in Tampa, Florida, and Washington, D.C., beginning this summer. "The current housing market presents a lucrative opportunity to diversify our Home assortment and strategically align with consumer spending patterns,” Ellison said.  “By combining our soft home and window coverings merchandise with the industry`s leading brands for appliances, furniture and flooring, JCPenney will become a destination for home design and redecorating, allowing us to weather-proof our business during seasonal periods of the year."

Source: Chain Store Age

TARGET’S NEW RULES FOR VENDORS TO TIGHTEN UP SUPPLY CHAIN AND INVENTORY

Target Corp is tightening its supply chain requirements for its vendors as part of a multi-billion dollar plan. The rules, effective May 30, include tighter deadlines for deliveries to warehouses, and fines for late deliveries and inaccuracies in product information.

Says Target’s COO, John Mulligan, vendors need to help keep shelves stocked, maximize sales and control costs. A letter was sent to suppliers. In the letter, Target stated the goal to keep products stocked to “lower missed sales for all of us.” Target US stores in 2015 held 8 to 9 billion items on store floors, in transit or in warehouses at any point in time.

The new rules will be phased on over the summer, with household, paper, and pet products needing to comply in June, health and beauty complying by July and apparel, home and electronics in August.

Source: Reuters.com

PARLEZ-VOUS FRANCAIS? RETAILERS IN QUEBEC MANDATED TO APPLY FRENCH SIGNAGE TO CANADIAN STOREFRONTS

The government in Quebec announced a proposed modification to the province’s sign rules that would require businesses ibn Quebec to add French to their outdoor signage. They did agree to retailers not having to alter their registered trademark names or logos. These retailers would be required to add a French word, description or slogan to their outdoor signage. The French words are not required to be larger than the non-French trademark name.

The government is requesting public feedback on the new proposed regulations for the next 45 days. WalMart’s regional president, Xavier Piesvaux, said the regulation “gives our companies the flexibility to communicate in French while keeping the integrity of our brand”. In 2014 major retailers, such as WalMart, Costco, Best Buy, Gap, Old Navy, Guess and Toys ‘R’ Us won a court battle ruling that storefront signs with their trademark in English does not contravene the Charter of the French Language.

Source: CBC CA NEWS

WILL IT BE A HAPPY MOTHER’S DAY FOR RETAIL? WILL IT TOP 2015 RECORD-BREAKING TOTALS?

In 2015, 84.2% of American celebrated Mother’s Day, spending an average of $173 per person, totaling spend of $21.2 billion. This was the highest spending per person, up from $163 in 2014. Will 2016 be a strong year for retail Mother’s Day sales? Expectations are that Mother’s Day spending will be similar to last year’s record-breaking totals. 7,000 consumers surveyed by the NRF (National Retail Federation) said they will spend the most on jewelry, followed by outings (lunch/dinner/brunch), flowers and gift cards.

Department and Specialty stores had the highest retail traffic in Mother’s Day sales last year, followed closely by online sales and discount stores:

Source: Fundivo, MarketWatch

BUILDING SUPPLIERS SEE BEST QUARTER IN ALMOST A DECADE

Amid reports from the Commerce Department that housing starts in March were up 14.2% from last year, paint, drywall and other building suppliers are seeing an uptick in sales. Sherwin Williams reported on their investor call forecast-beating first quarter profits. They reported an 11% increase in sales revenue from its stores and a 44% improvement in profit.

USG Corp., manufacturers of drywall and ceiling tiles, reported the “best quarter we’ve had in almost a decade”. Sales increased 7% to $970 million.

Great weather is attributed to work on homes starting earlier in the year than usual. Illinois Tool Works Inc., supplier of screws, fasteners, nail guns and other items improved its operating margin to 21% from 17% last year. Says CEO Scott Santi, “We certainly exited the quarter in pretty good shape. We’re not seeing anything slow down.”

Building materials, garden equipment and supply dealers show estimated sales increases of 11.9% over Q1 2015. Analysts are predicting that Home Depot and Lowe’s may post stronger than expected sales for their quarters ending April 2016.

Source: Wall St Journal, Seeking Alpha

RETAIL SALES FALL UNEXPECTEDLY IN MARCH

Although economists projected a 0.1% gain in retail spending in March, sales fell 0.3%. Of the 13 retail segments tracked, 9 of the 13 saw spending growth, but 3 categories dropped significantly enough to create the loss: autos, clothing and dining out. Sales decreased 0.9% at clothing chains, the biggest loss since October.

The labor market is robust, so the trend of less spending comes as a surprise. The value of sales is also being hurt by low prices, as retailers are offering discounts to clear unwanted merchandise in their warehouses. Sales at online retailers dropped 0.1%.

Of the 9 categories that saw increased spending, sporting goods and hobby stores rose 0.2% and electronics and appliance outlets rose 0.1%. Building materials and garden equipment stores increased the most, up 1.4%.

Source: Bloomberg, CNBC

2015 ONLINE RETAIL SALES GREW IN SURPRISING CATEGORY

For the first time in a decade, online sales spending on apparel and accessories surpassed computer hardware sales in 2015. For the year, clothing generated $51.5 billion in online sales, over the $51.1 billion spent on personal computers and tablets, which held the highest sales until now. In Q4 2015, apparel and accessories sold $17.2 billion.

Retailers’ efforts to make it easier to shop online and return with less risk is a big factor. Shoppers are getting more comfortable with the fact that if a pair of pants does not fit right or a blouse is a different color than they expected, it can be returned with little hassle and little to no cost. Online shopping of apparel and accessories also grew due to the fact that, unlike a laptop or tablet purchase, these products do not require a lot of research by the consumer before they buy, and are easy to buy with an image on a small mobile screen.  E-retail sales of the apparel and accessories industry is expected to continue to grow, with total online sales estimated to grow up to $434 billion by 2017. 

Source: Internet Retailer

UPSCALE COSMETICS SALES ARE BEAUTIFUL

The upscale beauty business continues to shine. In 2015, prestige beauty - makeup, fragrances and skin care products that are not found typically at drug stores, saw a 7% increase in sales. Sephora and Ulta each posted phenomenal sales results. Estee Lauder raised its sales forecast as demand for their product line are growing. The makeup subcategory was the strongest, with a 13% increase last year.

In a “selfie-ready age” and YouTube and Pinterest an easy way to get product tutorials, makeup trends are growing the sales. Thicker eyebrows are trendy, so products such as brow-enhancing serum and eyebrow mousse are becoming more popular. In our health-conscious society, products with natural or clinical orientation, which are pricier, comprise the largest share of prestige skincare sales.

JC Penney plans to accelerate its Sephora Inside JC Penney locations, and Kohl’s has redesigned its beauty area on 900 of its stores. Macy’s acquired $210 million Bluemercury, and plans to grow to 150 locations in the next 2 years. Target acquired Sonia Kashuk brand, and L’Oreal is opening brick-and-mortar locations of its NYX Cosmetics concept.

Accelerated Analytics works with a large percentage of beauty brands, such as L’Oreal, Anastasia Beverly Hills, Estee Lauder, Parlux Fragrances and LVMH. Click here to see our full list of beauty vendors, who utilize Accelerated Analytics’ POS reporting tools to track sales and inventory levels at their retailers, such as Dillard’s, Macy’s, Sephora and Ulta.

Source: Washington Post

NRF SAYS CONSUMERS PLANNING TO SPRING INTO RETAIL SPENDING ON ST. PATTY’S DAY AND EASTER

With two big spring holidays upon us in March, the National Retail Federation reports that consumer spending appears to be on the rise. The NRF conducted two consumer surveys that indicate that trend is coming. According to its annual St. Patrick’s Day Spending Survey, over 125 million Americans will spend $4.4 billion on today’s holiday. 56.5% of those celebrating will purchase food and beverages, 28% will buy apparel or accessories, 23.3% will buy decorations and 17.2% will buy candy.

According to the NRF Easter Spending Survey, consumers plan to shop at 13-year high levels. The holiday is expected to reach spending of $17.3 billion. Half of that spending will be on clothing, gifts and flowers. “Retailers are beginning one of their busiest times of year and are more than ready as consumers shop for Spring essentials, “NRF President and CEO Matthew Shay said.

58.4% of shoppers will head to discount stores, followed by 41.4% in department stores. Online shoppers grows to 21.4%, up from 18.8% last year.

Source: National Retail Federation