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Fierce Retail’s News Roundup

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Today’s Top Stories
1. Urban Outfitters to add more in-store restaurants
2. Retail sales drop 9% in September
3. New Latino-focused brand opens in California
4. Karl Lagerfeld to launch global e-commerce store
5. US cargo volume to increase 3% this month

Also Noted:
Spotlight On… Still no bidders for remaining A&P stores
Stories from around the Web and much more…

From clicks to bricks: a new path for retailers

E-commerce is growing at a much faster rate than physical store sales. In 2014, Web sales grew 16 percent in the U.S., while total domestic store sales grew 2 percent. Physical stores need a digital presence, for both research and sales, but what about the other way around? Can the pure-play e-tailers continue to exist in the future. If so, what will it take for them to survive?

Content is king, but so is the customer

PHILADELPHIA—Content is becoming king in several different industries, and retail is no exception. If used correctly, content can drive customer engagement, shopper satisfaction and, perhaps most importantly, sales.

More News From Across the Retail Industry
1. 7-Eleven bets on the unbanked with mobile payment app
2. 40% will switch retailers for better security, payments convenience
3. Taco Bell builds e-commerce website on mobile app’s success

Today’s Top News

Marketplace

1. Urban Outfitters to add more in-store restaurants

By Jacqueline Renfrow

Specialty retailer Urban Outfitters (NASDAQ:URBN) plans to add eateries to some store locations. As part of the transition of the millennial shopping locations into lifestyle experience stores, acclaimed chefs like Marc Vetri, Michael Symon and Illan Hall are now working with the company.

Hall, the winner of “Top Chef” season two, opened a second outpost of his concept, the Gorbals, inside an Urban Outfitters in spring 2014, Eater reported. Now, the brand’s Space 24 Twenty, opening in Austin, Texas, will be home to two or three restaurants run by Vetri and Symon, and possibly Josh Besh and Aaron Sanchez as well.

The lifestyle concept aims to bring a heightened experience to shopping. Retailers have started offering all kinds of services in brick-and-mortar stores such as hair salons, coffee shops and personal stylists.

Urban Outfitters’ first experience store opened in Los Angeles’ Space 15 Twenty in 2008. Beyond apparel, the store includes a nail art studio, skateboard shop and a performance stage, not to mention a restaurant, Umami Burger.

In Brooklyn, New York, Space Ninety 8 has a staircase that opens up to a third-floor restaurant, the Gorbals, which services higher-end small plates and includes a rooftop bar.

Similarly, the new Austin store will be focused on bringing in the local college campus crowd. Vetri, who is opening the second location of his Pizzeria Vetri in Space 24 Twenty, will use produce from farmer’s markets and serve local beers. Vetri will also curate a lineup of food trucks in the retailer’s courtyard.

The stores and the restaurants do operate separately, essentially giving the chefs free range to do whatever they like. However, Urban Outfitters helps with the actual look and feel of the restaurant aesthetics.

The announcement about the eateries comes just days after the specialty store chain asked employees to work some extra hours for free on the weekends as the busy holiday season approaches.

Related stories:
Urban Outfitters opens new concept store, Space Ninety 8
Urban Outfitters CEO Ted Marlow steps down
Urban Outfitters asks for gift of free labor
Urban Outfitters CEO Ted Marlow steps down
Nike’s newest concept store is built out Of 100 percent trash

2. Retail sales drop 9% in September

By JacquelineRenfrow

In-store traffic fell 8.1 percent year over year in September. But the drop in traffic was actually the smallest decrease seen since January in the retail industry, according to RetailNext’s monthly Performance Pulse.

After shopping conversions into purchases were increasing all year, they fell 0.1 percent in September, which contributed to an 8.7 percent drop in sales for the month. The drop was the largest since April, even though consumer confidence was higher than in August and economic indicators were positive.

The first part of the month, which encompassed Labor Day, was strong. However, warm temperatures later in the month—the warmest weather in more than 55 years—delayed consumer interest in purchasing fall fashions. Then, hurricane-related stormy weather slowed sales in the southeast part of the country, although drove up the purchase of emergency preparedness items on the East Coast.

Although all regions in the country suffered, the largest dip in sales occurred in the Midwest, down 11.5 percent.

The first Saturday of the month, Sept. 5, earned the most sales, indicating a big push in Labor Day and back-to-school shopping. The day after Labor Day, Sept. 8, was the lowest day for sales, traffic and transactions, and the day of highest returns.

Sales also dipped in August, 2 percent, driven in large part by a late Labor Day. In fact, as of Aug. 19, only half of back-to-school shopping had been completed, with many consumers waiting for the Labor Day weekend sales.

Related stories:
August sales drop 2% in wake of late Labor Day
BTS shopping only halfway done
Walmart adds 30% more BTS discounts via mobile app, online
Back-to-school puts Generation Z in charge
Retailers concerned about fall sales

Read more about: Sales decline

3. New Latino-focused brand opens in California

By Jacqueline Renfrow

Star World, a new retail store geared toward the Latino consumer, has opened its first storefront in Huntington Park, California. The new brand is offering a revolutionary shopping experience, driven by technology, in the heart of the No. 1 Hispanic market in the country.

Star World aims to bring in tech savvy Latino consumers and their families by fusing brick-and-mortar with online selections and convenience. Executives are comparing the store to Apple, with similar tech amenities and knowledgeable staff members.

“We are confident in our approach to put our customers center stage and offer them a shopping experience that reflects how society and shopper expectations have changed in the last 10 years,” said Jerry Azarkman, Star World founder and president. “Waiting in line and limited product selection is a thing of the past. Using technology we will give shoppers expansive selection and make each customer transaction seamless, quick, easy and fun.”

Star World will host in-store “World of Click” kiosks where shoppers can go online for more selection. The new store will be two levels and offer technology, home and fashion products. Customer assistance for technology will span to cover devices purchased in other stores, as well as video walls that display the latest products in action.

“Our ultimate goal is to be a great company that customers can trust and believe we are committed to providing a great experience,” said Rick Hutton, Star World CEO. “We set out to blend the best technology with atmosphere, premium products, financing and superior customer service. We want to raise our customer’s expectations of a retailer.”

Hispanic consumers have become a strong force in the retail world and many companies are making an extra effort to reach out to this growing demographic. For example, JCPenney (NYSE:JCP) created a campaign specifically geared toward Hispanic shoppers last summer during soccer’s World Cup frenzy. CVS Health (NYSE:CVS) recently rebranded 11 Miami stores and opened one new one, all named CVS/pharmacy y mas (CVS/pharmacy and more).

Related stories:
Retail clinics hit 10 million annual visits
CVS rolls out updated app
CVS Health sets $10B buyback plan
CVS to acquire Navarro, largest drugstore in Hispanic market
CVS rebrands 11 stores to attract Hispanic shoppers

Read more about: grocery, in-store technology
back to top

4. Karl Lagerfeld to launch global e-commerce store

By Jacqueline Renfrow

Fashion brand Karl Lagerfeld is launching a global e-commerce store in 97 countries and in five languages.

As part of the debut, online art market Artnet.com is auctioning off three one-of-a-kind bags and original sketches by Karl Lagerfeld for the November launch, which is in partnership with Italy’s Yoox Net-a-porter Group, Women’s Wear Daily reported.

Pier Paolo Righi, CEO of Karl Lagerfeld Group BV, expects e-commerce to represent double-digit figures of the company’s revenues right off the bat.

The brand relaunched in early 2012 on Net-a-porter, which agreed to a merger with Yoox in April. In the last year, the company has started selling to sites such as Stylebop.com, Zalando.com and other Web stores. But the new Karl.com will have a wider assortment of women’s products including accessories, ready-to-wear products, fragrances, watches, eyewear and novelty items. Menswear and children’s clothing is scheduled for launch in spring 2016.

Righi said the brand chose to launch e-commerce now because of high engagement on social media, gaining more than 1.6 million followers on Instagram in two years and 100,000 monthly visitors to its site.

On average, visitors spend more than three minutes on the Karl Lagerfeld site and almost 40 percent have gone searching for a buy button—currently linked to third-party vendors.

The online store will unveil new designs every two weeks. The Web will work cooperatively with the brick-and-mortar stores, including a new flagship in Dusseldorf, Germany. The brand first launched brick-and-mortar locations in 2013, and now owns 20 direct stores and 20 franchised locations.

Related stories:
Yoox, Net-a-porter agree to merger
Net-a-porter founder resigns abruptly before merger
Amazon in acquisition talks with Net-a-Porter
Google, Net-A-Porter, Walgreens top speedy delivery list on Cyber Monday
Net-a-Porter CEO steps down

Read more about: Yoox
back to top

5. US cargo volume to increase 3% this month

By Jacqueline Renfrow Comment | Forward | Twitter | Facebook | LinkedIn

Cargo volume in major retail ports in the United States are expected to increase 3.3 percent this month, compared to the same time last year.

The increase is part of retailers’ preparation for the holiday season, according to a monthly Global Port Tracker report released by the National Retail Federation and Hackett Associates.

“The holidays are almost here, and retailers are ready,” said Jonathan Gold, NRF VP for supply chain and customs policy. “Merchants have been stocking up since summer, and there should be plenty on the shelves as consumers begin their holiday shopping.”

The announcement comes just 24 hours after the NRF predicted that holiday sales in 2015 would grow 3.7 percent over 2014. The cargo volume serves as a barometer for the season, but does not directly correlate to sales since each container is equal regardless of the value of its content.

September had about 1.62 million Twenty-Foot Equivalent Units (TEU), up 2.1 percent from the same month in 2014. And October’s forecast is around 1.61 million TEU, up 3.3 percent from 2014. For the final two months of the year, the NRF is predicting TEU to reach 1.49 million in November, up 7.2 percent from last year, and 1.42 million TEU in December, down 0.9 percent.

In total, TEU would reach 18.3 million in 2015, up 5.7 percent from 2014.

January 2016 is already predicted to have 1.44 million TEU, up a huge jump of 16.5 percent from the beginning of 2015, which was negatively impacted by West Coast dockworker contract disputes. Inventory-to-sales ratio still remains high because of the influx of cargo that came through after the dispute ended.

“We would have thought that by now the aftermath of the disruption at the West Coast ports had worked its way through, which would help to reduce inventory,” said Ben Hackett, founder of Hackett Associates. “This is not the case.”

Over the summer, the NRF lowered its annual sales forecast to a 3.5 percent rise, down from its original February predication that sales would grow 4.1 percent, due in some part to the strike among dockworkers.

Related stories:
Sales growth forecast for 2015 lowered to 3.5%
Retail sales to rise 4% in 2015
Apparel and experience gifts top Father’s Day giving lists
Retailers concerned about fall sales
Mother’s Day boosts online sales 15%

Read more about: Holiday Season
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Also Noted

SPOTLIGHT ON… Still no bidders for remaining A&P stores

Thus far, 11 northern New Jersey A&P stores have been sold off and will be changed over to Acme and Stop & Shop stores in the coming weeks. But six stores under the A&P, Pathmark and Food Basics brands remain, and the future looks grim as no bidders have stepped forward to acquire the stores. Outside of northern New Jersey, at least 65 other stores are without bidders, which, if unsold, would mean the loss of at least 500 jobs. Story

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