Lowe's Improves Lowesforpros.com Website for Professional Customers

Lowe’s used feedback from professional customers to test and launch an improved LowesforPros.com website. Professional customers can make and track purchases of more than a half a million items via computer, tablet or smartphone. Customers can choose to buy online and pick-up in store or have their orders delivered directly to their business or job location.

Lowe’s intent is to make their LowesforPros.com a complete online solution to develop requisition lists, access purchasing reports and create custom catalogs that enable their customers to maintain their brand across multiple buyers and locations. The site also provides customers with purchase approvals and ability to process tax-exempt purchases.

The site also provides industry resources and gives 5% off online purchases with Lowe’s Business Credit.

"LowesForPros.com helps Pros save time, money and run their businesses as efficiently as possible," said Mike Horn, Lowe's vice president of ProServices. "Pros have the ability to buy online and pick-up in-store or have orders delivered directly to their business or jobsite while taking advantage of the 5 percent discount every day wherever they choose to shop with us – through their mobile device, tablet or computer. This new website was designed by the Pro, for the Pro."

Source: Retailing Today

Retailers Ramp Up Imports to Prepare for 2015 Holiday Season

The volume of import cargo for major US retailers is expected to increase 3.6% in August 2015 from August 2014, as retailers prepare to stock for the holiday season. Imports for the year, according to the National Retail Federation, is expected to be up 4.2% from 2014.

Some retailers are paying less to transport their merchandise due to larger capacity ships. Import levels in May were normal, showing a recovery from the port issues in 2014 and the beginning of this year.

“Consumers might be out buying back-to-school supplies but toys and sweaters are starting to show up on the docks,” NRF VP for supply chain and customs policy Jonathan Gold said. “There are still some lingering congestion issues, but retailers are working with their supply chain partners to make sure all of that merchandise flows smoothly to store shelves.”

Source: Chain Store Age

Analysts Project Retailer Earnings Trends Before Announcemnets This Week

Dropping tourism numbers and consumers saving rather than spending money saved from lower gas prices will affect retailer earnings announcements, say industry analysts.

Several retailers will be making earnings announcements this week: Macy’s on Wednesday, Dillard’s, Kohl’s and Nordstrom on Thursday, and JC Penney on Friday. Analysts report that value retailers with loyalty programs like Kohl’s should report better results than others.

Although retailers saw a weak first two quarters of 2015, analysts are optimistic about the second half of the year looking better. In the apparel and general merchandise category, jewelry is doing well and cosmetics are doing extremely well.

Source: CNBC

US Consumer Spending and Retail Spending Decline in July

US consumer confidence declined 5.3 points in July, dropping to the lowest point since November 2014. The majority of those surveyed, 70.8%, believe the economy is fair or poor, and 41.4% believe it is getting worse. The perception of personal finances remained stagnant, a greater percentage this month felt finances were getting worse. 47.2% report they do not expect added expenses or a shortfall in the next 30 days and 36.8% believe that they will.

Retail spending also decreased in July, down to the lowest level since January. Household improvements still has the largest percentage of adults that say they will spend more this month with 19.8%, but this percentage was 22.9% last month. While spending in household improvements and discretionary spending has gone down, expected spending on clothing, footwear, or accessories, and household expenses has gone up. Change in August is not expected, as 46.8% reported expecting to spend about the same amount next month.

Source: Chain Store Age

US Labor Costs Rise at Slowest Pace in 30 Years

US labor costs rose a seasonally adjusted 0.2% in the spring, the slowest pace in three decades. It is the slowest quarterly gain since record keeping began in 1982. Economists were expecting a 0.6% increase. The slow wage growth could affect the Fed’s decision to raise short-term interest rates. Fed officials anticipated an acceleration in wages to signal the labor market is healthy after the recession and could withstand an increase in borrowing costs.

The figures suggest that slack remains in the labor market despite signs that workers’ wages were picking up and a sharp drop in unemployment.

“At this stage of the business cycle, with significant improvement in the labor market, wage growth should be accelerating,” PNC economists Stuart Hoffman and Gus Faucher said in a note to clients. “Weak wage growth is also somewhat puzzling given recent announcements from big companies, such as Wal-Mart and Target, that they are raising workers’ pay.”

Source: The Wall Street Journal

US CONSUMER SPENDING IN SECOND QUARTER INCREASES AND MAY HELP THIRD QUARTER

US economic growth in second quarter 2015 saw a 2.3% increase in gross domestic product over first quarter. This gain was boosted by 2.9% growth in consumer spending.  Also, consumer personal savings rate went down to 4/8% from 5.2%, showing that consumers are starting to open their wallets and start spending again. 

Business investment for the period contracted and inventories remained flat. However, consumers and transportation companies are benefitting from lower oil prices. A growth in consumer spending in the third quarter will get more product flowing through supply chains.

Source: Wall Street Journal

Lowe's Canada Expansion

Lowe’s Canada is expanding, announcing that in addition to completing the acquisition of 12 former Target stores, they will also open 2 new locations in Ontario. This expansion will increase Lowe’s Canada total store count from 40 to 54.

Lowe’s acquisition of Target’s former stores was for a total purchase price of $113 million. Lowe’s construction plans will be an investment of approximately $38 million. Over 2,000 new jobs will be created. It will have 37 stores in Ontario, 3 in Saskatchewan, 9 in Alberta and 5 in British Columbia. Many of these areas were currently unsaturated by Lowe’s.

“These 14 new locations are a tremendous win for us in Canada, accelerating our growth across the country and bringing our total store count to 54 locations," said Sylvain Prud'homme, president of Lowe's Canada. "We continue to receive a positive reaction from our customers on our store experience and this helps us reach additional communities more quickly."

Source: Chain Store Age

CVS Will Expand its Beauty Category

CVS has announced it will be expanding its beauty offerings with three new exclusive collections. CVS will introduce 13 products from Jouviance, a Canadian biotechnology skin care brand, which range from $22 to $69. It will also unveil blemish control and eye treatment products from European-inspired brand Wilma Schumann. Wilma Schumann products range from $18 to $64. Its third new brand will be Promise Organic, featuring skin care, body care and multi-use oil for skin and hair products.

Health and beauty sales grew 25% faster over the past 3 years than the pharmacy’s general merchandise and consumables. CVS plans to bring in 1,200 new products over the next few years, and see its exclusive brands portfolio double by the end of this year.

CVS is shifting its focus to the beauty aisle, planning to update displays to educate customers on skin care products and provide easy navigation through the department. CVS will also offer services from in-store beauty consultants. CVS has partnered with a psychologist to study the role of beauty on overall health.

Source: Retailing Today

The Home Depot Acquires Interline for $1.6 Billion to Meet Needs of its Professional Customers

Jacksonville, Florida based Interline Brands, Inc. is being purchased by The Home Depot for $1.6 billion. Interline is a distributor and direct marketer of broad-line maintenance, repair and operations products (MRO) for professional customers. The acquisition is expected to be completed in The Home Depot’s fiscal third quarter this year.

Interline’s assets include an outside sales force, fulfillment capabilities in the MRO market and a distribution network in more than 90 locations in the US, Canada and Puerto Rico.

"Addressing the needs of our Pro customers is a top priority for The Home Depot," said Craig Menear, chairman, CEO and president of The Home Depot. "Interline is a well-run company that has achieved impressive financial results over the last few years. With their seasoned leadership team, we will enhance our ability to serve the Pro – both in the store and at any desired location outside of the store – driving significant value for our customers and shareholders."

Bill Lennie, president, The Home Depot Canada, has been selected as VP Outside Sales and Service and will be charged with leading The Home Depot’s Pro, MRO and installation services business.

Source: Chain Store Age

US $527 Billion Personal Accessories Industry See Decline in Consumer Spending, But Expect Growth By 2020

Personal accessories are set to decrease by 1% in 2015 to $527 billion. Fashion trends are driving stronger growth for jewelry, but other personal accessories categories are seeing a slow growth rate in 2015. Factors in this slow growth are a decline in consumer spending, heavy reliance on European markets and unfavorable US dollar exchange rates.

International companies are hoping to cast a wider net in their channel strategies and reach more consumers with their omni-channel presence. Currently the Asia-Pacific market is 53% of the world’s personal accessories market.

By 2020, the global personal accessories industry is forecast to reach $645 billion, which would be a 4.1% annual growth rate.

Source: Business Wire

JUNE CONSUMER SPENDING REPORT SHOWS OVERALL DECREASE BUT HOME IMPROVEMENT SPENDING IS STRONG

The US Consumer Spending Index increased 0.4 points in June. The percentage of consumers who rate the economy as excellent or good has continued to increase each month, at 30.9%, though is much lower than the 68% who felt the economy is fair or poor. When asked if personal finances were getting better or worse, 30.7% answered better, 33.1% answered worse and 35.2% answered the same.

The Retail Spending Index decreased 0.5 points in June. Expected spending for July slightly decreased in every category except discretionary personal entertainment expenses, which increased to 14.9% in June versus 13.7% in May. The category with the largest percentage of expected spending was household improvements at 22.9%. Expectations are that spending next month will remain about the same as 51.3% expect to spend the same. However, 28.2% say they will spend more in July, the majority being adults with children.

Source: Chain Store Guide

BACK TO SCHOOL SHOPPING EXPECTED TO RISE THIS YEAR

A Consumer Pulse survey of parents of K-12 and college students found that 56% of respondents plan to spend more money per child this year on back-to-school supplies.

K-12 parents plan to spend an average of $873 per student, while parents of college students plan to spend more than $1,100 per student. 38% of parents intend to purchase technology products, on average spending $400 compared to $278 on apparel. Technology products are needed as student use of technology in the classroom increases, requiring parents to buy laptops, tablets and mobile phones.

61% of those surveyed said store sales and promotions will be the main determinant of when and where they will do their back-to-school shopping.  74% of parents said they prefer to shop at big box retailers or chains to get a better deal.

Online shopping and mobile shopping are increasing with parents. 50% of the parents had clicked on an online ad in the past 7 days and 48% had clicked on a mobile ad. Over 40% of parents stated they made a purchase within the past week based on a mobile or online ad.

Source: Retailing Today

LOWE’S COMPANY SHARES RAISED TO OUTPERFORM

With an improvement in housing and overall economic activity in Southeastern states, Lowe’s is expected to witness accelerating sales and potentially narrow its comp store sales with Home Depot in the region. A report this week forecasts a 4% growth at Lowe’s following disappointing Q1 2015 sales of $14.1 billion versus $14.26 billion. However, Lowe’s Companies’ revenue was up 5.4% compared to Q1 2014.

Several equities research analysts issued positive reports for Lowe’s stock, setting buy ratings over $80 per share. Experts expect Lowe's to complete the year with $3.94 EPS. 

Source: The Legacy

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

NRF SURVEY REVEALS INVENTORY SHRINK IS A $44 BILLION PROBLEM FOR RETAILERS

Inventory shrink, or the loss of product due to shoplifting, employee and vendor theft and administrative errors, costs retailers billions of dollars. The NRF and the University of Florida provided survey results this week stating that in 2014 inventory shrink averaged 1.38% of retail sales, or $44 billion.

Shoplifting accounted for 38% of the loss, followed by 34.5% in employee theft. The rest consisted of 16.5% administrative errors, 6.8% vendor fraud or error and 6.1% unknown loss.

While grocery chains have the highest shrink rate, home center/hardware/lumber/garden reported average shrinkage of 1.09%.

Tracking inventory effectively is key to managing shrink. Actual and accurate inventory counts eliminates the over/under counting in the results. Verifying product delivered is what was ordered and is accurately described in systems is also paramount – if an expected-sized item was not available, and the vendor ships a different size, but that difference is not noted, a retailer can end up with a surplus of one size, a shortage of another, and a dent in their inventory valuation. Inventory measurements should be looked at in both units and dollars. A retailer could be 99.5% accurate in dollars but only 94% accurate in units.

Shrink-related data is stored in different applications such as POS/point of sale, inventory, receiving and store applications. Having the ability to obtain reports that combine point of sale and inventory data in a timely fashion is imperative to take action quickly before the data becomes outdated.

Accelerated Analytics is a comprehensive service for collecting, analyzing and reporting on POS point of sale and inventory data, to increase sales, optimize inventory, recognize inventory shrink and respond faster to this information.

Source: Chain Store Age, ProSales

CVS TAKES OVER TARGET PHARMACIES

CVS Health and Target announced a $1.9 billion sale of Target’s pharmacy business to CVS. CVH will rebrand Target’s 1,700 prescriptions departments as CVS and CVS will acquire Target’s 80 clinic locations and rebrand them as MinuteClinic. Both companies also announced plans to develop 5-10 small format stores in the next 2 years that will be branded Target Express and contain a CVS Health pharmacy.

Both companies have stated goals of core business investments to drive growth, and focus on wellness as a signature category, focusing on consumers eating well, being active and finding natural and clean label products. The rollout will take place over a period of several months to ensure the smoothest possible transition for their pharmacy and clinic patients.

"This strategic relationship with Target supports the highly complementary customer base, brand and culture we share," said Larry Merlo, CVS Health president and CEO. “This relationship with Target will provide consumers with expanded options and access to our unique healthcare services that lead to better health outcomes and lower overall healthcare costs.”

"At Target, we've talked a lot about the evolving preferences of our guests and this partnership demonstrates that we're committed to putting them at the forefront of everything we do," said Brian Cornell, Target chairman and CEO. "By partnering with CVS Health, we will offer our guests industry leading healthcare services, and at the same time, sharpen our focus on elevating the way we deliver wellness products and experiences to our guests."

Source: Chain Store Age

HOME DEPOT IT INVESTMENTS IN OMNI CHANNEL FOCUSES ON CUSTOMER EXPERIENCE

The Home Depot discussed this week its IT investment and strategy that focuses on the customer buying experience. The company’s Common Order Management system, or COM, is the largest IT project in the history of The Home Depot.

COM is an inventory visibility platform that looks at millions of deliveries through small and large delivery trucks, direct fulfillment to DCs and in-store pick up transactions. COM will help identify the best fulfillment option for a customer, while allowing Home Depot to leverage its omni-channel options.

The focus on this area is based on the fact that 1) the retailer’s fastest growing ecommerce channel is buy-online, pick up in sore, 2) the average ticket for ecommerce transactions are considerably higher than physical in store transactions and 3) ecommerce chat and email are growing  in product information exchange.

“The IT investments we are making are really to optimize the whole supply chain offering,” said Home Depot Senior VP and President-online, Kevin Hofmann.

Source: Chain Store Age

LUXURY GOODS SALES ARE UP, BUT DESIGNER FLASH IS DOWN

Within the designer luxury brands market, some brands have seen increased sales while others showed decreases. While the overall market for luxury goods has grown steadily since the end of the recession, the trend for wealthy shoppers is to purchase their products in a subtle way, steering away from flashy logos.  Gucci sales were down 1.1% in 2014, Prada saw sales decrease 1.5%. Louis Vuitton/LVMH also saw sales slow in their fashion and leather goods division.

The current trend for luxury goods shoppers is to continue to purchase these goods, but show sophistication by not flaunting their wealth. Social media is also affecting the luxury brands market, as new items are becoming exposed quickly, desensitizing luxury goods shoppers to things that used to feel special to own. Smaller luxury brands like Yves Saint Laurent and Miu Miu saw 2014 gains of 27% and 4%, respectively. A professor at New York University, who teaches luxury marketing, stated, “These are brands that really control the supply, and therefore they manipulate the market and the desire for their products.”

Experts also say that high-end consumers are increasingly diverting their dollars to experiences, such as lavish vacations or extravagant dinners. To adjust to this, Louis Vuitton added a rooftop champagne bar to their Rodeo Drive store. Gucci and Prada have similar locations in Los Angeles and Las Vegas.

Source: Washington Post

RETAIL SALES DROP IN MAY

May 2015 showed a drop in retail sales by 7.6% versus May 2014. Driving the sales decline was a 9.8% decrease in store traffic and an 8.3% decrease in number of transactions.

Some metrics did show year-over-year improvement. Average transaction value rose 0.8% and sales per shopper increased 2.5%.

The highest day of selling in May was May 9, the Saturday before Mother’s Day. This day is consistently highest in sales, traffic and transaction figures. The lowest traffic and sales were at the end of the month, after the Memorial Day weekend, which was earlier on the calendar this year.

Source: Chain Store Age

FOSSIL GROUP EXECUTIVE MOVES TO VERA BRADLEY, INC., AS CMO

Vera Bradley, Inc., has hired Theresa Palermo from Fossil to be its new Chief Marketing Officer. Ms. Palermo will start at Vera Bradley on June 22.

"Theresa comes to Vera Bradley with an accomplished retail marketing background," said Vera Bradley CEO Robert Wallstrom. "She has a terrific blend of creative and analytical skills and a solid track record of building brands, engaging consumers, and driving sales through designing and executing comprehensive marketing programs. Marketing is a key focus for Vera Bradley as we work to create excitement around our brand and introduce consumers to our myriad of new products. We are anxious for Theresa to get started." 

As CMO, Palermo will be responsible for marketing strategies and initiatives that build brand awareness and revenue growth across all of Vera Bradley’s product channels.

Palermo was VP, Global Marketing and PR for Fossil Group. Prior to Fossil, she held key marketing roles with Collective Brands, The Timberland Company and the J.Jill Group.

Vera Bradley, Inc. designs women’s handbags and accessories, luggage and travel items, eyewear, stationery, gifts and baby products.

Both Fossil Group and Vera Bradley, Inc. are customers of Accelerated Analytics, using their POS and Inventory analytics and reporting tools to manage stock levels, store performance, sell thru and sales activity.

Source: Retailing Today