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Today’s Top Retail Stories

 

FierceRetail March 04, 2016

1. Saks introduces 24/7 personalized e-commerce

2. American Eagle boasts 100% increase in mobile sales for 2015

3. Barnes & Noble to introduce new store format

4. Bonobos opens second brick-and-mortar store in Chicago

5. Costco raises minimum wage

 Also Noted

Adidas to add 3,000 stores in China by 2020

Stories from around the Web

 News from the Marketing & Retail Industry

Editor’s Corner

Consumers love loyalty; will they stay loyal to Starbucks?

Wednesday, March 2, 2016 | By Laura Heller

More than 45 percent of consumers say the opportunity to earn rewards is a primary driver for purchasing, according to a studyfrom Maritz Motivation Solutions. So what will happen to Starbucks (NASDAQ:SBUX) now that it has changed how customers can earn points?

Starbucks has just restructured its loyalty program. Previously, gold members, those who have made 30 transactions in a year, then earned a bonus item after 12 more purchases. Each purchase was counted as a “star.”

But now Starbucks will award two stars for every dollar spent and issue free items after 125 stars are earned, thus rewarding those who spend more rather than frequent customers with lower check averages. The new program starts in April.

For shoppers like me, this means fewer rewards.

Read the rest of this Editor’s Corner on FierceRetail.

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Today’s Top News

1. Saks introduces 24/7 personalized e-commerce

Friday, March 4, 2016 | By Jacqueline Renfrow

Saks Fifth Avenue (TSE:HBC) has introduced an online shopping experience that lets shoppers connect with a sales associate any time of day or night. The idea is to bring the full in-store experience of personalization to the luxury e-commerce site.

The effort is part of the brand’s omnichannel changes that allows consumers Saks Fifth Avenue’s elevated level of service in any channel.

“This is a highly personalized online solution to selling, merging our highest trafficked channel—saks.com—with our highest converter—our associates,” said Marc Metrick, president, Saks Fifth Avenue. “It is the perfect response to the growing demand for consumer-facing technology. With access to associates 24/7, personalized services and more, we finally have the ability to bring the high-touch Saks experience and store environment online.”

The new offering, in partnership with retail tech company Salesfloor, gives associates the ability to create customizable boutique pages containing curated assortments of merchandise accessible through a dedicated URL. The associates can then interact with customers via live chat, email or scheduled appointments. In addition, associates can showcase their online storefronts through email and social media tools built into a mobile app.

“Today’s all-channel customer wants a high level of service, regardless of channel. Salesfloor helped us address that opportunity and our associates are seeing real success,” said Joe Milano, senior VP,  general manager, digital retail and e-commerce, Saks Fifth Avenue. “Saks Fifth Avenue prides itself on putting customers first. When it comes to luxury shopping, there is no substitute for the personalized experience offered by a knowledgeable Saks associate.”

Just last week, Saks’ parent company Hudson’s Bay announced positive fourth quarter and full-year financial results, driven in large part by digital. Overall, digital sales grew 22.8 percent and 23.2 percent for the quarter and year respectively.

In the way of physical stores, the luxury retailer is performing well in Canada, but has taken a hit in the United States and hopes to gain back some consumers with its new dedicated men’s store in downtown Manhattan.

For more:
-See this Saks Fifth Avenue press release

Related stories:
Hudson’s Bay growth driven by digital and discount
Hudson’s Bay in talks to acquire Gilt
Hudson’s Bay performing well in Canada, hit hard in US
Saks expands Off 5th locations in Canada
Off 5th expands in New York

2. American Eagle boasts 100% increase in mobile sales for 2015

Friday, March 4, 2016 | By Jacqueline Renfrow

American Eagle Outfitters (NYSE:AEO) announced a total sales increase of 7 percent in 2015, a welcomed growth after several years of struggle for the teen apparel retailer. Most notably, the retailer saw a 100 percent increase in mobile sales.

During a conference call with investors, CEO Jay Schottenstein touted the brand’s ship-from-store program, which contributed to about 20 percent of the overall digital business of the fourth quarter. He also noted the 20 percent increase in direct sales, proving that “our investments in technology upgrades and omni tools are delivering.”

The growth is good news for American Eagle, which announced in 2014 that it would close 150 stores in three years. The retailer is attempting to turn around declining sales with the help of e-commerce.

The fourth quarter marked America Eagle’s fifth consecutive quarter of year-over-year sales growth and Chad Kessler, global brand president of AE brands, attributed that to “greater quality and value combined with innovation in fabrics and styles.” Most notably, 2015 was a stellar year for the company’s in-house brand, Aerie, which delivered double digit comps in all quarters.

Moving forward, the teen retailer said it would continue to focus on brand expansion and customer acquisition, while opening 10 standalone and 25 side-by-side stores.

According to COO Michael Rempell, the retailer’s sales on mobile grew nearly 100 percent. Back in January, Rempell revealed that American Eagle wouldlaunch a new mobile responsive site which will be done by the end of the quarter.

“But we’re seeing very nice results including a nice increase in conversion for customers who’re coming to us through mobile devices,” Rempell added.

For more:
-See this Seeking Alpha transcript

Related stories:
American Eagle to launch mobile-friendly site
American Eagle names Schottenstein CEO, again
Forever 21 to open two F21 Red stores in Canada
Forever 21 plans new F21 Red concept
Forever 21 expands in Australia

3. Barnes & Noble to introduce new store format

Friday, March 4, 2016 | By Jacqueline Renfrow

As quarterly losses begin to diminish, Barnes & Noble (NYSE:BKS) announced the coming of a new store format.

During a quarterly conference call with investors, CFO Allen Lindstrom announced that total sales decreased 1.8 percent, with retail down 1.2 percent for the quarter, primarily due to lower online sales and store closures. Online, sales declined 12.5 percent, which was an improvement over the 22 percent decline in the previous quarter.

However, Barnes & Noble reported a comparable store sales growth of 1.3 percent on top of a 1.7 percent increase one year ago. The results were strengthened by increased sales in toys, games and gifts, which increased 12.5 percent, and vinyl music, which was up 2.7 times over last year.

Also during the call, CEO Ronald Boire talked of the company’s priorities moving forward, which include reducing Nook expenses. In the third quarter, Nook expenses were down by $25 million and Barnes & Noble’s planned exit from Nook’s app and video business is expected to result in additional cost savings. In 2014, Barnes & Noble separated its retail and Nook businesses into two separate companies.

In 2015, the company also spun off its college bookstore operator, Barnes & Noble Education, into its own entity.

“While we remain committed to providing a great digital reading experience to our customers, we are exploring all opportunities to reduce costs,” Boire said.

A second priority laid out was growing the core bookstore and online sales. In a long-term view, Boire said improved trends meant a closing of fewer stores than in the past, about eight—the lowest level of store closings since fiscal 2000.

“As we look out to fiscal 2017, we are excited by the work on our new store concept. We plan to open four new stores during fiscal 2017 with the first new concept store opening in late summer. We plan to share additional details about our new stores in the month ahead. Including the new concept stores, our fiscal 2017 net store closings will be approximately 10 stores,” Boire said.

Boire also noted the big opportunity that lies in the e-commerce site and was encouraged by the site’s improved performance during the quarter. He noted several projects to improve the user experience on desktop and “investments to improve our mobile and tablet experience.”

“Today, over half of our site traffic is driven by mobile. We will improve our mobile experience to provide a great experience, whether it’d be on a phone or a tablet,” he added.

For more:
-See this Seeking Alpha transcript

Related stories:
Barnes & Noble Education considering digital acquisitions
Barnes & Noble partners with Flashnotes to beef up college business
Barnes & Noble to separate retail, Nook
Barnes & Noble to add 300 campus stores
Barnes & Noble receives stake offer worth $661 million

4. Bonobos opens second brick-and-mortar store in Chicago

Friday, March 4, 2016 | By Jacqueline Renfrow

Online retailer Bonobos announced it will open its second location in Chicago in April. The store will be located on the second floor of 900 North Michigan Shops in the iconic shopping area the Magnificent Mile.

Bonobos’ first Chicago location is in Lincoln Park near other e-commerce retailers, such as Warby Parker and Tie Bar, who have recently branched out into physical locations, reported the Chicago Tribune.

With the company’s first location thriving, Bonobos is ready to expand its physical footprint and is planning to open another Guideshop in Miami later this year. The Guideshop is a place for consumers to try on samples and then purchased items will be shipped from a warehouse to their homes, meaning the store carries no inventory.

Consumers can still purchase directly through the Bonobos e-commerce site or through partner Nordstrom. In 2012, Nordstrom invested $16 million in the e-commerce company. The department store chain also owns e-commerce company Trunk Club.

Other e-commerce brands that are branching into physical locations in order to capture new customers include Birchbox and Warby Parker, both entities which are trying to marry online with offline expansion. There are even rumors that e-commerce giant Amazon plans to open up to 400 physical locations.

For more:
-See this Chicago Tribune article

Related stories:
Amazon could open up to 400 stores
Online retailers Warby Parker, Bonobos add more stores
Warby Parker marries online with off-line expansion
Warby Parker raises another $100M for brick-and-mortar
Warby Parker opens Chicago concept shop

5. Costco raises minimum wage

Friday, March 4, 2016 | By Jacqueline Renfrow

Costco (NASDAQ:COST) announced it would raise the minimum wage for existing and new entry-level employees. Starting in March, the club’s minimum pay will be $13 or $13.50 an hour.

This is the first raise of minimum wage for Costco employees in nine years, reported CNNMoney. Previously the rate was $11.50 or $12 an hour.

Costco employs around 205,000 people, 117,000 of whom are full-time workers.

“We think this will help, and it’s important to do,” Richard Galanti, Costco’s CFO, said in a talk with analysts, reported CNNMoney. “We want to be the premium at all levels. … And frankly in some markets, this is a physically challenging job. You’re on your feet, you’re lifting cases, you’re pushing carts at these entry-level jobs. And so we thought it was time to do it.”

The highest paid workers at Costco—those who are full-time and have been working there four or more years—make about $22.50 an hour. Many employees also have health benefits and pension plans.

Costco is the second-largest retailer in the country, next to Walmart (NYSE:WMT), which also announced an increase in minimum wage last year.

Walmart recently gave 1.2 million employees a raise, part of a two-step increase announced in 2015. The raises cost the company $1.5 billion this year and $1.2 billion last year.

But Costco’s prospects seem positive, as the company announced it would open 30 new warehouses this year, a vast difference from Walmart’s recent announcement that it would close 154 stores in the United States.

For more:
-See this CNNMoney article

Related stories:
Walmart to close 154 US stores
Costco trades e-commerce for loyalty
Wawa, Costco consumers’ favorite places to fuel up
Costco leads in organic food sales
Sam’s Club looking for wealthier shoppers


Also Noted

Adidas to add 3,000 stores in China by 2020

Adidas announced it will open 3,000 new stores in China by 2020, bringing the retailer’s total to about 12,000 shops across 2,200 cities in the country. The company will focus more on kids’ sports apparel and is counting on a continuing rise of affluence among Chinese consumers. Adidas is in a global battle with rival Nike to capture the Chinese market as the middle class’s awareness of the benefits of exercising continues to grow. China’s sports industry is expected to expand 19 percent annually to 3 trillion yuan in 2025.Story

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