THE OMNICHANNEL HOLIDAY CHALLENGE WITH STORE INVENTORY AND FORECASTING

Holiday shoppers have just a few more days to get their shopping done. Do they order online and get it shipped? Do they order online and then pick up in store? Or do they go into a store hoping to walk out with the items they want to purchase? Retailers have the challenge of meeting all of these needs, many of them using store inventories as distribution centers to handle online purchases, whether shipping it to the customer’s home or having it available so they can pick up the item in the store.

An online customer who is having their products shipped does not care which store or warehouse handles their purchase. A shopper in the store or on the way to a store does – they expect the item to be available on the shelf. Retailers are using different strategies to manage these needs. Some, such as Target, are holding inventories back from online purchasers in order to keep inventory on the shelf for their in-store shoppers. In Target’s example, an online shopper may try to go online and buy or reserve an item in store but are unable to do so. Other retailers, like Toys ‘R Us, have a “first-come, first-served” strategy. The big challenge is for retailers to determine, by product and by store, how to divvy up the store’s stock, and need to forecast in-store purchases to try to have the right amount of inventory on the shelves.

 

Tracking item-store inventories as real time as possible is the best way for these retailers to make these forecasts. Retailers without inventory systems who can keep up with purchases are having to keep extra available in the store and not online, in order to avoid the mistake of selling the same item to two customers around the same time.

Source: Chicago Tribune.com, Wall St. Journal

BRING ON THE HOLIDAYS….AND ECOMMERCE SHOPPING

To gear up for what is expected to be a very high e-commerce driven holiday shopping period, UPS says it will hire 95,000 seasonal workers this year, and FedEx Corp will hire close to 150,000. Overall retail hiring is expected to be the same as last year’s high numbers, but a shift to preparing for high online sales with those jobs is clear. Target Corp announced plans to hire 70,000 workers at distribution and fulfillment centers, up 15% from last year.

eMarketer announced survey results that found while moderate growth of 3.3% is expected for holiday retail overall, ecommerce is anticipated to make its biggest jump since 2011, up 17.2%. 71% of shoppers polled said they would make some to all of their gift purchases online. Rubicon Project found similar results in their survey, finding 73% of respondents will shop online, and that 22% of shoppers plan to do all of their holiday shopping online. The report shows that online shoppers will spend 64% on gift cards, 57% on apparel and accessories, 46% on toys and 37% on technology.

Cyber Monday is on track to produce higher results than Black Friday. A shift in the holiday calendar this year is also expected to help retailers. Christmas falls on a Sunday rather than a Friday like last year, giving last minute shoppers an extra Saturday to shop. Hanukkah begins 18 days later than in 2015, which should help generate sales in the latter part of December.

Source: NRF Smartbrief, Chain Store Age, Drug Store News, Fortune

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 

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

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

Taking the Guesswork Out Of Online Sizing

It’s a challenge all clothing retailers have to face: excessive returns based on poor fit. According to a 2015 report by The Retail Equation and backed by NRF data, “fit” is the stated reason for nearly 11% of all merchandise returns. The associated costs include processing, sorting, repackaging and remarketing the item, and they’re a headache every apparel retailer would like to avoid.

Now there is a tool that offers help to customers looking for a perfect fit, all while creating an informational bridge between consumers and clothing manufacturers. Fittery.com offers a tool for men that finds clothes that fit them across a wide selection of brands based on their body type, fit preferences and measurements. The site has been live since September and is well positioned for growth.

Upon visiting the site for the first time shoppers are asked for basic information such as weight, height and body silhouette, plus waist and collar measurements. The process also asks them to identify their fit preference through images rather than words.

“We’ve done a lot of research, and found that different people have different concepts of what a slim or a classic fit might be,” says CEO Catherine Iger. “Pictures, as opposed to words, result in greater accuracy.”

The customer’s information is matched to the precise sizes of garments available through Fittery.com such as Thomas Pink, J.Crew, Boden and Lands’ End. Customers are shown choices that are best for their body based on exact product dimensions in the Fittery.com database. Customers can also measure themselves with a tape measure while being coached with a short tutorial video. “Either way, the process is 96.3 percent accurate,” Iger says.

The sizing technology is only currently available for dress and casual men’s shirts.  Future plans include expansion into slacks, sport coats and more. Fittery.com also offers an array of accessory items, including ties, messenger bags and sunglasses, also through affiliated retailers.

Women’s clothing is planned for a future rollout. “We’re careful to expand our offerings slowly so that the data can be gathered completely and the algorithms can be adequately tested so we’re confident in their reliability,” Iger says.

Source: NRF.com

Macy's CEO Thinks Amazon Threat is Overstated

Last year, Wall Street firm Cowen & Co. famously predicted that Macy’s would be be dethroned by Amazon.com as the top apparel retailer in the U.S. But Macy’s CEO Terry Lundgren believes that Macy’s nearly 800 stores offer a huge advantage over Amazon. He noted that shoppers typically order multiple sizes of the same piece of clothing, keep the one that fits, and send the rest back.

According to a Cowen research report published in July, Amazon’s apparel business was on pace to hit $16.34 billion for the year, compared to $22.2 billion for Macy’s in 2015. But as Amazon pushes further into fashion beyond basic clothing, it could get dinged by all that merchandise being sent back.

“They’re going to have an interesting challenge when they start getting all those returns coming back online,” said Lundgren. He added, “The large, large majority of online purchases which are returned in our case come back to stores because they’re so convenient. And so we at least have a shot at selling them something else.”

Despite closing 36 stores this year, Macy’s is now the fourth largest U.S. internet retailer according to eMarketer, with annual online sales in 2015 of about $5 billion. Their position as a leader in the online market is a result of years of multi-billion dollar investments in integrating its stores and its digital business. The ability to handle returns of online orders is key to generating traffic to stores.

Source: Fortune.com

OMNI-CHANNEL SWITCHEROO: ONLINE RETAILERS GET PHYSICAL WHILE RETAIL STORE STALWARTS SHRINK

Amazon.com opened its first brick-and-mortar store in Seattle in November, and announced plans to open another store in San Diego. Macy’s announced it is shutting down almost 40 stores this year. Kohl’s plans to follow suit and close 18 stores, stating its online sales increased 30% in the fourth quarter, causing their reevaluation of its store footprint. Similar announcements of closing stores were also made by Sears, JC Penney and The Gap, as 8% of total US retail sales are now online.

Companies that began their retail lives online, such as Athleta, Fabletics and Birchbox are now adding brick-and-mortar stores. They are moving into prime real estate that was once reserved for top-performing retail stores, such as Birchbox opening its first store in Manhattan.

Is this the new evolution of retail, blending the two worlds? Experts say the trend will continue to grow. The impact will be different in each retail category, such as electronics versus clothing. "For most products, consumers actually prefer to shop in store because they want to see and touch what they're buying," said Dave Parro, vice president of the retail technology practice at Walker Sands, a PR marketing firm. "But they also shop online regularly because of the convenience and range of products available."

The winners of the switcheroo? The consumer. Those who are omni-shoppers know which retail channel and retailer is best to fit their needs.

Source: Philly.com, WSJ

AMAZON EXPANDS SELLING IN MEXICO

Amazon successfully launched its Mexican Kindle store in 2013. Now, the online retailer has launched a Spanish-language Mexican website and mobile app with millions of unique items.

“Our mission at Amazon is to be Earth's most customer centric company, and we strive to be the destination where people can find anything they want to buy online,” said Alexandre Gagnon, director, international expansion, Amazon. “With Amazon.com.mx, customers in Mexico will find more of what they want – the largest selection in the country, low prices, fast and reliable delivery, all with a trusted and convenient experience.”

Customers in Mexico can pick up their purchases from hundreds of locations across the country, as well as paid shipping options. There is free shipping available for certain purchase amounts. Amazon plans to offer more payment options, such as monthly payments.

Source: Chain Store Age

Home Depot Offers Shoppers an Omnichannel Experience

The Home Depot kicks off the Spring season with a variety of omnichannel shopping features. Online shoppers can have purchases sent directly to their home or shipped to their nearest store for pick up. In 2014, 40% of online orders on Homedepot.com were picked up in a local store. Online tools and calculators, such as a Pest Problem Solver and Grass Seed calculator help solve customer problems and assist them in purchasing the right products and the right amounts.

Inside stores, The Home Depot mobile app identifies where products are on the shelves, and offers “expanded aisles” connecting customers to a variety of product options available online.

The Home Depot also has tools in place to help shoppers plan and design their outdoor living space. The Garden Club features tips and expert advice tailored to a customer’s gardening region. The Fencing Project Planner and Decking Project Planner guide additions, upgrades and restorations.

Source: Chain Store Age

Price Waterhouse Cooper Total Retail Survey Online Shopping Results 2015

PwC administered a global survey to understand and compare consumer shopping behaviors and the use of different retail channels across 19 territories. Key findings:

US Consumers Shopping Online

• 39% of US consumers surveyed make online purchases monthly
• Top 3 reasons why US shoppers buy online instead of in store: lower prices/better deals than in stores (52%), ability to shop 24/7 (47%), and no need to travel to a physical store (40%)
• Top 3 reasons shoppers choose their favorite online retailers: “The prices are good”, “They usually have the items I want in stock”, and “I trust the brand”
•  US consumers do their research before buying online: books/music/movies/video games 75%, toys 62%, electronics/computers 73%
• The ability to return purchased items online sways consumers to purchase from certain retailers. Most important to shoppers were paid return labels provided with shipment (86%), online purchase returns available in-store (76%), can return purchase to a convenient location (61%)
•  Even with free shipping, consumers are willing to pay for same day (61%) and 1-2 day delivery (58%)

Source: PwC.com