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TODAY’S TOP RETAIL NEWS

FierceRetail February 26, 2016
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Today’s Top Stories

1. Walmart, Sears cut staff

2. Macy’s to reduce coupons, limit deals

3. JCPenney finishes with strong sales

4. Whole Foods rolls new food truck

5. Gen Z drives mobile payments

Also Noted

The male shopper defined

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Today’s Top News

1. Walmart, Sears cut staff

Friday, February 26, 2016 | By Laura Heller

Big retailers are reducing staff at headquarters along with store closures in the face of poor financial performance.

Sears has eliminated 250 jobs, mostly at its Hoffman Estates, Illinois headquarters. The company also said that it will not fill 151 open corporate office positions.

Walmart (NYSE:WMT) has terminated more than 100 employees at its headquarters in Bentonville, Arkansas. Most of the cuts were at the company’s information services, or IT, division. This group was merged with the @WalmartLabs division in January. Both now operate under the banner of Walmart Technology, according to Arkansas Online.

Both retailers recently announced store closures. Sears will accelerate store closures in 2016 and Walmart said in January that it would close 154 stores, including all Walmart Express locations.

Layoffs are part of companywide restructuring efforts.

For more:
-See this Chicago Tribune story
-See this article at Arkansas Online

Related stories:
Walmart profit drops 8%
Walmart offers free tech solution to other retailers
Walmart increases pay
Walmart Technology integrates tech teams
70% of Walmart Web traffic is mobile

2. Macy’s to reduce coupons, limit deals

Friday, February 26, 2016 | By Laura Heller

In a move to simplify pricing, Macy’s (NYSE:M) is reducing the number of coupons offered and changing up the way it sells clearance merchandise.

Macy’s typically issued paper coupons that shoppers could stack and use in a variety of ways, including toward already discounted merchandise. Coupons good toward full-price merchandise will still be issued, but going forward the store won’t accept coupons for clearance items.

Markdowns may be deeper to make up for the lack of an additional discount, but the clearance price will be the price. The program goal in a word, is transparency.

It’s a move reminiscent of Ron Johnson‘s elimination of sales and discounts at JCPenney, but with a critical difference.

Macy’s tested the initiative in select stores. In those locations, sales of clearance items were higher and inventory sold through more quickly. Clearance items have been moved to more central locations in those stores, eliminating the scattered racks along with confusing coupon practices.

“With this radical price transparency that’s been enabled through e-commerce, this constant visibility to others’ prices, [retailers] just can’t afford to play games,” Carol Spieckerman, a strategist at Spieckerman Retail, told the Washington Post. “Shoppers are on to their strategies and they’re annoyed.”

Which sounds a lot like what Johnson thought.

For more:
-See this Washington Post story

Related stories:
Macy’s to open 16 Backstage stores
Macy’s restructures to support growth
Macy’s and Etsy partner in millennial-minded shop
Macy’s finds omnichannel success with RFID
Macy’s Lundgren talks digital transformation

3. JCPenney finishes with strong sales

Friday, February 26, 2016 | By Laura Heller

JCPenney (NYSE:JCP) continues a string of strong financial results, reporting today an increase in both net sales and same-store sales for the holiday season and full year.

The department store chain reported sales for the fourth quarter increased from $3.9 billion in 2014 to $4 billion this year. Comparable store sales rose 4.1 percent for the quarter.

For the full year 2015, sales rose 3 percent, from $12.3 billion to $12.6 billion. Same-store sales rose 4.5 percent for the year.

“We are very pleased with our performance for the fourth quarter and full year,” CEO Marvin Ellison said in a statement. “Our focus on private brands, omnichannel and revenue per customer is clearly resonating as we continue to win market share in a competitive environment.”

Not even unseasonable weather or regional differences got in the way of sales for the retailer, which reported that all regions delivered same-store sales gains over the same period last year, although the best performance was in the western and northeastern regions of the country.

Investment into key categories paid off for JCPenney. During the fourth quarter, Home, Sephora, Footwear and Handbags were the company’s top performing merchandise divisions during the quarter.

For more:
-See this financial statement from JCPenney

Related stories:
JCPenney introduces ‘Penney Days’
More executive changes at JCPenney
JCPenney gives millennials more, redesigns the center store
JCPenney to sell appliances
JCPenney’s strategic plan to remodel some stores, close others

4. Whole Foods rolls new food truck

Friday, February 26, 2016 | By Laura Heller

Whole Foods Market (NASDAQ:WFM) is launching a food truck in the retailer’s hometown of Austin, Texas. The effort is essentially a rolling test kitchen to explore new ideas for in-store eateries and chef collaborations.

The truck will roll for the first time on March 10, using the name Tartinette and serving salads and open-faced sandwiches. The concept was created by Tien Ho, Whole Foods’ VP of culinary and hospitality in collaboration with the retailer’s prepared foods team.

         Tien Ho

The concept will be changed every couple of months to explore different food trends, seasonal flavors and vendor partnerships, according to the company.

Two percent of sales from the test kitchen’s first eatery concept will benefit Whole Foods’ nonprofit partner, Austin Food & Wine Alliance.

Whole Foods has long experimented with new in-store concepts and recently announced it was seeking partners to operate inside the growing 365 by Whole Foods Market concept. The new format is intended to offer more value-priced items in a smaller format, one tailored to better appeal to millennials and foods trucks are something of a staple with this demographic.

For more:
-See this Whole Foods announcement

Related stories:
Whole Foods to bring 365 market to Chicago
Whole Foods unveils ‘365’ format
Whole Foods unveils store concept geared toward millennials
Whole Foods expands My Street Grocery
Whole Foods to open 40 new stores

5. Gen Z drives mobile payments

Friday, February 26, 2016 | By Laura Heller

Mobile payments are slow to catch on among the general population of shoppers, but the emerging Generation Z is more than twice as likely than others to make a mobile payment.

Smartphones, tablets and other mobile devices account for just 3 percent of all mobile transactions in the United States, but for Gen Z, that number is closer to 7 percent, according to a new GfK study.

GfK is defining Gen Z as ages 18 to 24. Most accepted definitions of this demographic include those born from roughly 2000 on. The study’s group is closer to a younger cohort within the larger millennial group. For the purposes of this study, GfK identifies older millennials as Generation Y (ages 25 to 34).

According to GfK, more than half (53 percent) of Gen Z have made a mobile payment while using the Internet in the past six months, nearly four times the rate (14 percent) of Baby Boomers. Older millennials made mobile payments at the rate of 37 percent and Generation X (35-49) was predictably in between at 27 percent.

Roughly one third of Gen Z shoppers believe that mobile payments are more secure than other methods. And more than half of the younger group are looking forward to making “more and more transactions” from mobile devices, according to the study.

“Many consumers today do not understand the value proposition offered by mobile payments,” said Tim Spenny, VP of GfK’s financial services team. “This creates an opportunity for the industry to develop its own narrative around why people should use mobile devices to pay for their purchases—with security, speed and ease of use top among the reasons. In 2016, we see mobile payments gaining traction through the addition of benefits such as rewards, discounts and coupons that are integrated into phone payment systems.”

Apps in particular present a big opportunity for those retailers large enough to support them. Walmart and Kohl’s report strong mobile wallet activity, and an earlier study by Verizon showed that 70 percent of millennials used an app to make a purchase last year.

For more:
-See this GfK study summary

Related stories:
Back-to-school puts Generation Z in charge
70% of millennials use apps to buy
Mobile holiday sales reach $13B
66% of consumers more likely to shop stores with in-store mobile technology
Walgreens, The Home Depot, Sephora top mobile in-store experience


Also Noted

The male shopper defined

Men are shopping for groceries in increasing numbers and making just as many store visits as women these days. And while many behaviors are the same—both visit two or more stores per trip and average two trips per week—there are some key differences, according to the Hartman Group. Infographic

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