RETAIL NEWS FLASH May 02, 2014
Table of Contents Sales & Marketing ................................................................................................................. 3 Finance ................................................................................................................................. 6 Technology .......................................................................................................................... 11 Strategy .............................................................................................................................. 15
2|Sutherland Insights Retail News Flash May 02, 2014
Sales & Marketing Amazon launches Prime Pantry April 25, 2014 | FierceRetail http://www.fierceretail.com/story/amazon-launches-prime-pantry/2014-04-25 Amazon (NASDAQ:AMZN) has introduced yet another new component to the grocery delivery service for Amazon Prime members, this one designed to let them stock up on pantry essentials. Prime subscribers can fill a 4-cubic-foot box with up to 45 pounds of selected items and have it shipped to their home for $5.99, plus the price of the items included. Prime Pantry is a part of Amazon’s ongoing effort to drive more business by selling everyday household products. There are more than 2,000 items on Amazon’s site that qualify for Prime Pantry service. Items ordered with the service take one to four business days to arrive, compared with Amazon Prime’s standard two-day shipping. Prime Pantry is another way Amazon is adding more products and services to its roster. Earlier this month, the company launched a limited test of a barcode scanner, the Amazon Dash, for groceries targeted at Amazon Fresh customers in San Francisco and Los Angeles. The device is a new voiceenabled gadget that automatically adds scanned items to a user’s online shopping cart. Earlier this week, Amazon signed a high-profile deal with HBO, paying a reported $300 million over three years to obtain exclusive streaming rights to HBO programming for Prime members. These new services could be Amazon’s way to lure Prime customers back, who may have been on the fence about their membership after the online giant announced its first-ever price hike for its Prime subscription service. Amazon also on Thursday reported a better-than-expected first-quarter sales increase of 23 percent. The company earned $19.74 billion in net sales, up from $16.07 billion last year. First-quarter net income came in at $108 million, an improvement upon the $82 million reported a year earlier.
Taco Bell to launch an upscale fast-casual chain April 24, 2014 | FierceRetail http://www.fierceretail.com/story/taco-bell-launch-upscale-fast-casual-chain/2014-04-24 Taco Bell is unveiling a new concept this summer called U.S Taco Co. and Urban Tap Room in a move to take a bite out of the $34 billion fast-casual industry. The U.S. Taco Co. and Urban Tap Room is a more sophisticated concept for Taco Bell and features premium tacos, spicy steak-cut fries and shakes. Each taco is a twist on classic regional dishes, from an East Coast lobster roll to Texas-style brisket. The core menu features 10 tacos and daily chalkboard specials such as the “Winner Winner,” made with fried chicken lightly drizzled in “S.O.B.” (south of the border) gravy and wrapped in a flour tortilla. Future locations will also include a menu of craft beer and wine.
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U.S. Taco, opening this summer in Huntington Beach, Calif., is the first of what could be dozens across the country. “Taco Bell is Mexican inspired. U.S. Taco is American inspired,” Greg Creed, Taco Bell’s CEO, told Nation’s Restaurant News. The inspiration to create U.S. Taco came from market research that revealed a large demographic of customers who don’t eat at quick-service restaurants. Instead of convincing these customers to eat at Taco Bell, the chain decided to test a new dining experience targeted toward edgy, higher-income consumers. The new concept should not be thought of as a Taco Bell spin-off, noted Creed. Once inside the restaurant, customers will order at a counter, choosing from a menu of chefdesigned selections. It’s a stark contrast from the “build-your-own” menu concept at Chipotle, which dominates the Mexican, fast-casual space. Last week, Chipotle reported its first-quarter earnings rose 8.5 percent, though food costs were up 33 percent from last year. Tacos will be priced at about $4 each, two for $7, or three for $10. The average check is estimated to be roughly $12. By comparison, Taco Bell’s average check is about $7.20. The first U.S Taco location in Huntington Beach will measure 1,600 square feet on the beachadjacent development known as The Strand. A 400-square-foot patio will offer outdoor seating. Yum Brands, Taco Bell’s parent company, appears eager to introduce new concepts. The company last summer opened a fast-casual spin on KFC called KFC Eleven in Louisville, Ky., and revealed plans earlier this month to open a new fast-food operation in Texas called Super Chix which will focus on premium fried chicken sandwiches and french fries.
WALMART takes online offer offline April 23, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/88527 Walmart first launched its Empowering Women Together initiative in March 2013, as previously reported by Planet Retail. Efforts include featuring a line of products from female-owned small and medium-sized enterprises on Walmart’s website, in an effort to support women’s economic empowerment. When first launched, more than 200 items from jewelry and iPad cases to coffee beans and apparel sourced from 19 suppliers became available on the Empowering Women Together section of Walmart.com. The offer has since grown to 350 items representing over 30 suppliers. Walmart has announced it will now feature select products made by small women-owned businesses in more than 2,600 US stores as well. Nearly 50 products sourced from five different suppliers will be available in stores from this week. Items include scarves, aprons, mugs, chocolate gift sets and greeting cards. Walmart’s Senior Director of Women’s Economic Empowerment said: “We are excited to offer this opportunity to both our customers and suppliers. […] This Mother’s Day assortment allows our customers to give gifts that will not only wow mom, but uplift women around the world.”
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This effort is not only a good public relations move for Walmart, but also provides an opportunity for the retailer to offer unique products in its stores. In today’s intensely competitive environment, having a differentiated offering – while also spreading goodwill – is always a plus.
Private label transition at KROGER April 22, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/88517 In a somewhat quiet move, Kroger has started phasing out its existing private label economy brand Kroger Value - easily identified by its plain white packaging and red, white & blue logo. In its place, the leading US grocer has launched two new brands: p$$t and Check This Out. p$$t is the label used for ambient grocery categories, while Check This Out is a non-food brand predominantly found on household paper and cleaning products. While the company has not yet revealed the motivation behind the change, Planet Retail thinks the move is ‘interesting’. On one hand, it makes sense to remove the ‘Kroger’ moniker from the economy label so product ‘fits’ nicely inside all Kroger stores regardless of banner (e.g. Fry’s, QFC, Ralph’s, Smith’s, etc.). On the other hand, what’s not clear is why two separate brands instead of one. Certainly there must be some cost savings associated with using a single umbrella brand across a retailer the size of Kroger?
WALMART expands financial services April 17, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/88513 Walmart US has initiated a new money transfer service called Walmart-2-Walmart in its domestic stores. The service enables customers to transfer funds of up to USD900 from one physical Walmart location to another. It is designed as an easy, convenient and low-price service, largely targeting Walmart’s ‘unbanked’ shopper segment. Walmart-2-Walmart, in partnership with Euronet-owned Ria Financial Services, will be available from 24 April. Two price points will be offered: USD4.50 fee for transfer amounts up to USD50.00 and USD9.50 fee for amounts between USD50 and USD900. Walmart continues to offer MoneyGram for amounts in excess of USD900 and for international money transfers. Program participants – both on the sending and receiving end – are required to go to a physical Walmart store location to use the service. It will be available at all domestic Walmart locations, including Neighborhood Markets and Express outlets. Planet Retail views this as yet another attempt for Walmart to drive traffic into its stores, something much needed following four straight quarters of declining comparable store sales. That said Walmart’s approach will remove some barriers to wiring funds, i.e. complex and costly fee structures. Could we see Walmart disrupt banking and financial institutions, in much the same way it has done across retailing?
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Finance Cap fits tight for COLES GROUP April 30, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/88588 Australia’s second-largest retail operator Coles Group saw its slowest quarterly sales growth in almost two years for the third quarter ended 31 March. Revenues rose 3.6% in the Coles grocery retailing division to AUD8.6 billion (USD7.8 billion), with Food & Liquor sales up 3.9% and Convenience up 2.4% during the three-month period. The Wesfarmers-owned group’s other divisions delivered mixed results for the quarter. In the group’s Home Improvement & Office Supplies division, revenue climbed 11.3% to AUD2.5 billion (USD2.3 billion), with sales up 12.3% in home improvement and 6.7% in office supplies. Kmart revenue stagnated at the 0.4% mark to come in at AUD845 million (USD766 million) with comps up 0.7%, while department store unit Target slumped 3.6% to AUD699 million (USD633.8) with comps down 5.9%. Richard Goyder, CEO of Wesfarmers blamed the lacklustre sales growth on the deal, formed late last year, with the Australian Competition and Consumer Council (ACC) to cap fuel discounts to supermarket shoppers. Both Coles and Woolworths had agreed to the cap after the ACC threatened legal action over what it described as cross-subsidisation that could hurt long-term competition in the retail fuel sector. The final quarter will show whether Coles will be able to offset the impact of the lower fuel discounts and regain momentum in stealing share from larger rival Woolworths.
AMAZON Q1 beats expectations April 25, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/88557 For its first quarter ended 31 March, net sales at Amazon rose 23% to USD19.74 billion. In North America, sales climbed 26% to USD11.86 billion while international sales were up 18%. The retailer reported a 19% fall in operating income (USD146 million in Q1 versus USD181 million for the same period last year). Net income meanwhile surged 32% to USD108 million in the first quarter. “We get our energy from inventing on behalf of customers, and 2014 is off to a kinetic start,” said Jeff Bezos, Founder & CEO, “Our device team launched Fire TV, offering great content, including our recently announced exclusive deal with HBO, and innovative features like unified voice search, which we’re delighted is being adopted by so many new partners, including Netflix, HBO Go, Hulu Plus, Crackle and Showtime Anytime. The team is working hard to keep Fire TV in stock.” He continued: “Our retail team launched Prime Pantry, a new option available only to Prime members offering exclusive access to everyday essentials in non-bulk sizes — ranging from breakfast foods and popular soft drinks, to cleaning and personal care items. And, our AWS team significantly lowered prices on EC2, S3 and RDS, saving AWS customers hundreds of millions of dollars over the next several months alone.”
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Looking ahead to Q2, the retailer expects net sales to be between USD18.1 billion and USD19.8 billion, or to grow between 15% and 26% compared with the second quarter 2013. The company expects to report an operating loss of between USD455 million and USD55 million, compared to a USD79 million operating profit reported in Q2 last year.
SAFEWAY (USA) racks up Q1 loss April 24, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/88536 Safeway has announced results for continuing operations for the first quarter ended 22 March. During 2013, the retailer divested its Canadian business as well as the Chicago, IL-based Dominick’s chain. Ongoing operations in the US include the Safeway, Vons, Pavilions, Randalls, Tom Thumb and Carrs banners. For Q1, Safeway recorded a loss from continuing operations of USD76.5 million. The biggest hit came from an USD153.1 million loss on foreign currency translation. Sales were USD8.26 billion, up 1.0% from USD8.18 billion. A 1.8% increase in identical-store sales, excluding fuel, was the primary driver. As previously reported by Planet Retail, Safeway has entered into a merger agreement with AB Acquisition, the parent of Albertsons. Safeway President & CEO Robert Edwards commented: “We are working diligently to close the merger with Albertsons by the fourth quarter. While sales met plan in the first quarter, income was slightly below plan, in part as a result of inflation in produce, meat and pharmacy that was not fully passed along for competitive reasons.” He added: “We continue to drive sales momentum through our center of store remodels, as well as merchandising premium, Hispanic and Asian products to meet local demographic needs. In addition, our sales of organic and natural products continue to grow at a rapid pace.”
SUPERVALU swings to profit April 24, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/88537 US grocer Supervalu has announced a profit of USD182 million for its 2013 fiscal year ended 22 February. The annual profit is attributed to lower expenses and a slight uptick in sales. The last time Supervalu showed a profit was in 2009. The company suffered mightily through the Great Recession and in recent years amid ongoing weak economic conditions and intense competition. As reported last year, it sold several banners to AB Acquisition, parent company of Albertsons and an affiliate of investment group Cerberus Capital Management. The company is now finally realizing some benefit from the divestitures and restructuring of the past year.
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Net sales for the year edged up ever-so-slightly to USD17.16 billion in fiscal 2013 from USD17.14 billion in 2012. For the year, Save-A-Lot sales were up 0.8%. The Save-A-Lot network eked out an identical store sales gain of 0.2%, while corporate Save-A-Lot units posted a 2.6% gain. Total sales in the Retail Food segment decreased 1.8%. Identical store sales, excluding fuel, were down 1.5%. Total sales in the Independent Business segment decreased 1.6%. Fourth-quarter net sales were USD3.95 billion, an increase of 1.4% from USD3.90 billion last year. The company recorded a 0.2% identical store sales increase in its Retail Food segment. But it was the Save-A-Lot banner that shined. Corporate Save-A-Lot stores posted a 3.5% identical store sales gain, while the Save-A-Lot network (including franchised units) rose 2.1%. Total sales in the Independent Business segment decreased 0.6%. Q4 net earnings were USD26 million, compared to a loss of USD1.41 billion a year earlier. Gross profit for the third quarter was USD590 million, or 14.9% of net sales, compared to USD557 million, or 14.3% of net sales last year. The increase was primarily driven by incremental fees earned under its transaction services agreements and lower infrastructure costs, but was partly offset by price investments during the quarter. President & CEO Sam Duncan said: “Fiscal 2014 was an important transition year for Supervalu as we stabilized the organization and set the foundation for our future. I am pleased with the direction of our business segments and look forward to the new fiscal year where we can focus our attention on driving sales growth across the organization.” The company ended fiscal 2013 with 190 stores in its Retail Food segment under the Cub Foods, Shoppers Food & Pharmacy, Shop ‘n Save, Farm Fresh and Hornbacher’s banners. The Save-A-Lot network totaled 1,330 stores, including 382 corporate units and 948 licensed stores. In addition, the company’s Independent Business (food wholesale) segment serves approximately 2,240 stores nationwide.
YUM! BRANDS on road to recovery April 23, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/88533 Yum! Brands has recorded a constructive Q1 2014 following a disappointing 2013. Of most interest will be signs that the tide is turning in China. The company recorded a revenue increase of 7% to USD2.7 billion for the first quarter ended 22 March. This was helped by a rebound in sales in China, with revenue rising 20% to USD1.4 billion. Worldwide system sales grew 4% while China and India Division system sales increased 17% and 21%, respectively. KFC Division system sales increased 4%, while Pizza Hut and Taco Bell system sales remained even. Another bright statistic is Chinese same-store sales rising 9% including growth of 11% at KFC and 8% at Pizza Hut. KFC (outside the China and India divisions ) International same-store sales grew 3% in emerging markets and 1% in developed markets, with US same-store sales declining 3%. Pizza Hut (outside the China and India divisions) international same-store sales grew 3% in emerging markets and 1% in developed markets. US same-store sales declined 5%. Taco Bell US same-store sales declined 1%. Yum! Brands’ net income was up 18% to USD399 million. Operating profit also increased 17% to USD571 million, with China operating profit up 80%. Total international development was 249 new restaurants - 86% of this development occurred in emerging markets.
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Yum! Brands delivered a great Q1 with strong financials across all key areas. The results indicate Yum! China is on its way to a major bounce-back, with system sales, like-for-likes and operating income soaring. The turnaround reflects the resilience of the company’s brands, greatly improved performance and speaks to the many steps it took to regain customer trust in the wake of the nearcatastrophic sourcing scandal. Furthermore, the strategic initiatives Yum! put in place, including new menu items and marketing campaigns, has clearly paid off for the company. However, this is not job done for the company, Yum! aims to further build on this momentum to continue to grow and expand in China. Outside China, Yum! has been performing well in international markets, but the US division continues to exhibit below-par performance, something which must be addressed.
MCDONALD’S Q1 quiet again April 22, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/88526 The world’s largest foodservice operator has announced another flat quarter with revenue rising just 1.4% to USD6.7 billion for its first quarter ended 31 March. Global comparable sales for the quarter increased 0.5%. US comparable sales decreased 1.7%, reflecting negative comparable guest traffic and a challenging industry. On a brighter note, European comparable sales rose 1.4%, highlighted by positive sales performances in the UK, France and Russia. Much of this success links to a combination of unique limited-time food events, premium offerings and everyday affordable pricing. APMEA first-quarter comparable sales rose 0.8%, highlighting a solid comp sales performance in China, although this was somewhat offset by sustained weakness in Japan. Ongoing premium product innovation, convenience and affordability options were sales drivers for the region during the quarter. Operating income for the quarter was becalmed at the USD1.9 billion mark, just 0.7% up on last year. US operating income was down 3% while APMEA slumped 10%. However Europe’s operating income rose 6%. For the quarter net, overall income fell 5.1% to USD1.2 billion. McDonald’s Q1 performance indicates the company is still struggling to attract diners to its restaurants. Planet Retail views the main reason for this as being the heightened competitive environment, especially domestically with the likes of Chipotle and Panera Bread expanding. In addition, other key rivals such as Burger King and Yum! Brands are ramping up product ranges and challenging McDonald’s on price. Looking ahead, McDonald’s needs to persist with and even speed up the implementation of its new initiative, including improving the restaurant experience, speeding up service, customer engagement and menu choice in order to drive traffic and sales back to its restaurants.
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Gap to make $300 million digital investment April 21, 2014 | FierceMobileRetail http://www.fierceretail.com/mobileretail/story/gap-make-300-million-digital-investment/201404-21 Gap (NYSE:GPS) is making a $300 million investment in digital as the retailer builds out omnichannel capabilities and focuses on responsive design. Executives talked up technology, innovation and scale as competitive advantages during the retailer’s annual shareholder meeting in San Francisco last week, noting the chain is making progress toward bridging digital with its physical stores. “We have the world’s best collection of American brands coupled with a strong economic model and runway for global growth,” said Glenn Murphy, chairman and CEO. “As the retail landscape evolves, we continue to deliver on our omnichannel roadmap and focus on owning the shopping experience of the future.” New initiatives include offering reserve-in-store, find-in-store and ship-from-store options to be tested later this year. The reserve-in-store service began as a test in June 2013 and will be expanded to all Gap stores in the United States by the end of the second quarter, thus enabling online and mobile shoppers to reserve and pick up items at more than 1,000 Gap and Banana Republic store locations. Mobile is a big focus for Gap going forward. “The opportunity to better monetize the huge amount of incremental traffic coming off of this device we see as very significant, and you will see pretty radical progress in our mobile Web experience, and the experience delivered to this device over the course of the next several months,” Art Peck, president of growth, innovation and digital, said during the meeting, according to Mobile Commerce Daily. Much of the investment will go toward developing websites with responsive design. “Responsive design (is) a big buzzword in the industry,” Peck said. “We are rolling out responsive design as we speak.” The redesigned sites will feature an improved check-out experience and better browsing, features that Peck said will enhance Gap’s ability to drive m-commerce. There will also be a test of mobile point-of-sale technology that will be part of a new loyalty program that the retailer plans to test later this year. Gap has been playing catch-up in the digital space. While many of its competitors have long offered in-store ordering for out-of stock items, Gap is just now talking about implementing endless aisle inventory.
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Technology E-receipts offer WALMART data goldmine April 25, 2013 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/88555 Walmart will begin offering electronic receipts rather than printed ones at the checkout register, reports Internet Retailer. The changeover could happen as early as this week. To receive e-receipts, shoppers must first opt in and create an account with the retailer. Walmart intends to identify shoppers through their mobile phone number, which they will be asked to enter on the debit card reader at checkout. Shoppers can then opt to receive an e-receipt by free text message. A national marketing campaign to encourage consumers to create e-receipt accounts is slated. To go out on a limb here: our guess is a campaign involving Walmart’s goodwill efforts to “save the environment” by going paperless. Imagine the trees the Bentonville Behemoth could save by moving to e-receipts? From a retail analyst’s point of view, there are a couple of things to consider here – the least of which is the potential cost savings for Walmart. We’re sure the retailer pays a substantial penny for register tape needed to outfit checkout registers it operates around the globe (which Planet Retail pegs at about a quarter million instore registers). But the far more strategic reason for moving to e-receipts is Walmart’s ability to collect and then mine hoards of consumer data to better understand its shoppers and their buying habits. Walmart fundamentally is setting the gears in motion to create a card-less loyalty program. According to Internet Retailer, the company intends to use the e-receipt data for marketing purposes, e.g. to create personalized offers to push to shoppers by text message.
Sears debuts ‘Get Advice’ digital shopping service April 25, 2013 | FierceRetail http://www.fierceretail.com/story/sears-debuts-get-advice-digital-shopping-service/2014-04-25 Sears (NASDAQ:SHLD) debuted a new e-commerce personalization service called Get Advice that enables Shop Your Way members to ask questions and receive answers about products and services. With the Get Advice feature, Sears shoppers can post a question to the Shop Your Way online community and get answers to product questions from Sears in-store associates and other members. Members can also vote on the most helpful responses in the forums. “We’re using technology to virtually open the doors to Sears stores across the country giving our members access to the expertise of thousands of our associates,” said Leena Munjal, SVP of member experience and integrated retail at Sears. “This level of interaction is another way we are integrating the digital and physical shopping experience—members can enjoy the advantage of getting great advice from the stores, plus engage the vast Shop Your Way community.”
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The Get Advice features joins another personalized option Sears unveiled in May 2013. The Member Assist lets Shop Your Way members communicate directly with associates in more than 400 stores nationwide through a dedicated website or mobile app. After logging in, they pick their favorite expert associate at the nearest Sears location and can ask product-related questions. Sears’ Shop Your Way loyalty program started in 2009 with a focus on earning points but now the company is now enhancing the program with digital upgrades and personalized incentives to better fit shoppers’ needs. The new Get Advice service could be a major win for Sears, as it attempts to reinvent failing stores. Sears said its fourth-quarter losses were $358 million and same-store sales at Sears dropped 7.8 percent. Sears continues to allocate resources to digital and omnichannel strategies in lieu of remodeling or updating physical stores.
Walgreens teams with Coupons.com on Retailer iQ rollout April 24, 2013 | Chain Store Age http://chainstoreage.com/article/walgreens-teams-couponscom-retailer-iq-rollout Coupons.com Inc. announced that Walgreens has rolled out its Retailer iQ targeting and analytics platform in all 8,000 stores, designed to make the promotions and checkout experience digital, mobile and personalized. According to Coupons.com, Retailer iQ combines several components into one omnichannel platform that is designed to drive consumer engagement, activation and shopping behavior. The components include: digital e-receipt via SMS and email, personalized recommendations for products and coupons, integrated shopping lists, extensive targeting capabilities, real time analytics and a wide range of integrated digital media experiences. The platform integrates into the retailer point-of-sale system to manage the entire flow of digital couponing, including creation, issuance, activation, redemption, validation and clearing. “This technology pushes crumpled, indecipherable receipts and irrelevant coupons into the digital era,” said Steven Boal, CEO and founder of Coupons.com. “It’s an incredibly powerful tool. We spent three years building it and we’re proud to be working with Walgreens and our other brand and retailer partners to lead the future of promotions.” Walgreens’ more than 100 million Balance Rewards members can now access Paperless Coupons and digital receipts, with the ability to clip digital offers from walgreens.com/coupons and within its mobile app. Users can redeem offers at point-of-sale by swiping their Balance Rewards cards. “Our customers live in a digital world and providing them with valuable offerings such as Paperless Coupons or digital receipts is an example of how we make the shopping experience even more convenient,” said Rich Lesperance, Walgreens senior director of Personalization and CRM. Retailer iQ is built on top of a personalization platform that evaluates shopping baskets and shopping history in addition to other data to deliver a highly personalized experience for consumers. Whether it is information from retailers or manufacturers on the e-receipt, recommendations for adding items to the shopping list, or highly relevant coupons, Retailer iQ’s data engine makes every interaction shopper-specific, whether on a PC, on the go with a mobile phone or in the store.
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Michaels Stores confirms data breach, 3 million cards affected April 21, 2013 | FierceRetail http://www.fierceretail.com/story/michaels-stores-confirms-data-breach-3-million-cardsaffected/2014-04-21 Michaels Stores said Thursday that up to 3 million cards may have been affected in a security breach, or roughly 7 percent of all debit and credit cards used at its namesake stores. At the company’s Aaron Brothers locations, approximately 400,000 cards used at 54 stores may have been impacted between June 26, 2013, and Feb. 27, 2014. Michaels confirmed that the incident has been contained, and the conclusions are shedding light on how to help prevent these attacks in the future. The breach at Michaels’ stores occurred between May 8, 2013, and Jan. 27, 2014, the company said, citing analysis conducted by the company and security firms. Like the Target breach (NYSE:TGT), the attack at Michaels invaded its point-of-sale systems. The data theft was the result of criminals using highly sophisticated malware that had not been encountered previously by either of the security firms. Michaels has also been working with law enforcement officials. Data stolen from Michaels included certain payment card information, such as payment card number and expiration dates. There was no evidence that other customer personal information, such as name, address or PIN, was at risk. Michaels said it has received a “limited number” of reports from banks and card companies of fraudulent payments. The company will offer affected customers free identity protection, credit monitoring and fraud assistance services for 12 months. There are more than 1,135 Michaels stores and 119 Aaron Brothers locations, and the company has posted lists of branches that were affected on its website. Michaels is one of several retailers affected by a data breach in recent months. In addition to Target, Neiman Marcus and Sally Beauty Supply (NYSE: SBH) have also reported a breach of their systems. Last week, the National Retail Federation announced that it would create a platform through which retailers could obtain and share information on online security threats.
Domino’s now accepts Google Wallet April 21, 2013 | FierceMobileRetail http://www.fierceretail.com/mobileretail/story/dominos-now-accepts-google-wallet/2014-04-22 Domino’s Pizza (NYSE:DPZ) has integrated Google Wallet (NASDAQ:GOOG) with its ordering app, and Android customers can now pay for their online orders using the service. Google Wallet lets users store debit cards, credit cards and loyalty cards electronically on their mobile phone. Domino’s customers who place an online order of $10 or more using the Android ordering app and pay by selecting the “Buy with Google” button at checkout will receive a free order of Domino’s new Specialty Chicken, now through June 15.
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“This is yet another way Domino’s is using technology to improve our customer experience,” said Patrick Doyle, Domino’s Pizza president and chief executive officer. “Google Wallet is a great technology that allows customers even more flexibility and convenience when it comes to paying for their Domino’s orders.” Domino’s mobile app now accounts for approximately 40 percent of U.S. orders and last year, the company reported $3 billion in digital sales, globally. Investing in, and promoting, mobile ordering is a priority for the chain. Domino’s encourages customers to create profiles and store payment information in order to speed up the process. Domino’s customers can now order a pizza in roughly 30 seconds. The faster customers can order, the more they will order, according to Doyle. Adding Google Wallet as a payment option is just another weapon in this arsenal. The company has been focused on technological innovation of late, approaching new initiatives with the mindset of a startup. “We will continue to come up with every way possible to conveniently order from Domino’s, and use technology to offer the best customer experience possible,” added Doyle. “This is just the latest step, and we are very excited to roll this out later this year.” Domino’s is just one of the many quick-serve restaurant chains to adopt mobile payments. Burger King (NYSE:BKW) and Wendy’s have both recently launched mobile payment apps, and the drive to accept mobile payments continues at a break neck speed.
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Strategy Event shopping coming to EDEKA April 30, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/88589 German grocery market leader Edeka intends to invest EUR1.7 billion (USD2.3 billion) in its store network and infrastructure this year. CEO Markus Mosa said the focus lies on the quality of locations and the shopping experience with independent shopkeepers continuing to initiate change. Edeka plans to increase the attractiveness of outlets by expanding instore foodservice and shopper events like live cooking or wine tastings. In FY 2013, Edeka has seen total sales grow 3.1% to EUR46.2 billion (USD61.3 billion). Sales generated by the co-operative’s more than 4,000 independent shopkeepers were EUR22.6 billion (USD30 billion), up 5.8%. Sales at Edeka’s discount store banner Netto increased 4.5% to EUR11.8 billion (USD15.7 billion). The grocer is currently investing in the modernisation and expansion of the chain. In 2013, Edeka refurbished 250 Netto outlets and opened 134 new discounters. In 2013, Edeka successfully integrated fruit juice producer Sonnländer into its business portfolio. In 2014 and 2015, the grocer plans to invest EUR20 million (USD27 million) in the modernisation of its manufacturing plants, improvement of the product range and in the creation of new jobs.
AMAZON India begins kirana collections April 25, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/88561 Amazon India has started working with kirana stores in Bangalore, India, for instore pick-up of products ordered from its website. It looks like the retail giant is thus expanding a trial programme launched in Mumbai and Delhi with Bharat Petroleum in March. The service is available only for products that are Fulfilled by Amazon as of now. It is unclear whether it will be opened up to other retailers down the line. The option to deliver a product to such stores is offered during the checkout process and users can search for the closest stores using address, postcode or by selecting a landmark. The move can help Amazon overcome the problem of failed deliveries, a pain point for most e-tailers globally, making last-mile logistics less complicated. Combined shopkeeper and customer feedback will likely determine its nationwide applicability going forward.
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Starbucks to add 1,500 more stores, expand menu options April 25, 2014 | FierceRetail http://www.fierceretail.com/story/starbucks-add-1500-more-stores-expand-menu-options/201404-24 Starbucks (NYSE:SBUX) on Thursday reported a strong quarter that beat estimates and said it plans to further its reach with 1,500 new locations internationally by the end of the year and a slew of new menu options. The cult-favorite coffee chain plans to bring made-to-order Fizzio handcrafted carbonated beverages to 40 percent of its U.S. stores this summer. The company is reportedly in talks with carbonatedbeverage company SodaStream to also offer more new beverages. New lunch items will also be introduced, with some salads and sandwiches already being tested, the company said. Starbucks is looking to expand its food menu to bring in customers who normally wouldn’t visit during their lunch hour. This is the second menu update from Starbucks this year. In March, Starbucks announced it will extend its post-4 p.m. Evenings Menu to thousands of stores nationwide as it tries to attract more consumers in the evening, a typically slow time of day for the coffee shops. After several years of testing beer and wine offerings, Starbucks also plans to roll out alcoholic beverages in the evening to shops nationwide over the next few years. The company has been diversifying in recent years from its traditional coffee business by adding more packaged products and food. It recently acquired tea retailer Teavana and San Francisco bakery La Boulange, while also partnering with Danone SA last year to sell Greek yogurt parfaits and other items. As menu options expand, so too, will the store count. This year, Starbucks plans to add another 1,500 locations, including 600 in the Americas. “We are significantly under-stored in many markets, including North America,” CEO Howard Schultz said in an earnings call. He also added that drive-through locations offered particular promise. Earlier this week, Starbucks said it is planning to bring the first full-service La Boulange Bakery to Los Angeles. This will be the chain’s first expansion outside of San Francisco, where it currently operates 22 locations. Starbucks purchased La Boulange Bakery in 2012. Starbucks earned second quarter revenue of $3.9 billion, up 9 percent from the same period last year. The coffee chained reported a profit $427 million up 9 percent from $390 million a year earlier. Same store sales rose 6 percent.
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PayPal expands partner program in POS push April 23, 2014 | FierceRetailIT http://www.fierceretail.com/retailit/story/paypal-expands-partner-program-pos-push/2014-0423 PayPal (NASDAQ:EBAY) is expanding its partner program and is actively looking for partners in the mobile payments space. PayPal plans to roll out a new initiative this summer. The payments arm of parent company eBay announced the effort on its website: “PayPal wants to help you grow your business, drive profitability and deliver better mobile solutions to consumers and merchants, so we are expanding the PayPal Partner Program to include partners offering mobile payment solutions on the go and in-store at the point of sale.” PayPal is looking to partner with solutions providers, systems integrators, processing resellers and hardware developers to help deliver mobile solutions. “As a PayPal partner, we will collaborate with you and help you leverage our collective strengths to deliver differentiating mobile experiences to consumers and merchants,” the announcement said. The company is focused on retailers large, midsize and small, and restaurant operations. Home Depot (NYSE:HD) accepts PayPal payments using a mobile wallet. Jamba Juice, J.C. Penney (NYSE:JCP) and Toys R Us are among the growing list of PayPal partners. Additional details are scarce, but PayPal helpfully points out that its payments system is unaffected by the Heartbleed bug, and the program promises “all the tools and resources partners need to market, sell and support mobile payments.” And it’s coming in summer 2014.
Subscriptions sweeten TARGET temptation April 22, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/88515 In a move that rivals Amazon’s Subscribe & Save program, US general merchandiser Target has expanded its online replenishment and home delivery service available through Target.com. The latest Target Subscriptions efforts build on the scheme launched last fall as reported by Planet Retail, which focused solely on baby supplies such as diapers and formula. Target now is sweetening the deal by giving shoppers a 5% discount on all Subscription orders in addition to free shipping. Shoppers who pay with a Target REDcard are entitled to an extra 5% off reward on top of the ‘standard’ discount. In comparison, Amazon offers 15% off pricing for its Subscribe & Save customers. Target subscribers have the option of choosing delivery in regular four to twelve-week installments. Target will send an e-mail reminder in case any updates of sizes or quantities are needed. Free shipping is offered on returns or shoppers also have the option of returning products to their local Target store.
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The product range available through the Subscriptions service also has been broadened to include more than 1,000 items. Besides baby, seven additional categories are now featured: beauty, grocery, health, home & office, household essentials, personal care and pets. However, digging a bit further, some category assortments are still quite limited. For example, the grocery offer includes just Keurig brand K-Cups (30 SKUs) and Soda Stream flavor mixes (four SKUs) – at least for now.
China on ABERCROMBIE & FITCH radar April 22, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/88518 US clothing retailer Abercrombie & Fitch (A&F) has talked about its Asian ambitions as it opened its first flagship store in Shanghai. The company plans to open at least 100 stores in China in the next 10 years, bringing its “casual luxury” brands to more Chinese consumers. Aside from its main Abercrombie brand, A&F also intends to introduce Hollister and launch a local e-commerce site in the later part of this year. The A&F plan comes as several fashion retailers, domestic and foreign alike, have been scaling back on plans in the face of fierce competition and high rental pressures. China’s booming online shopping segment has also posed a huge challenge to physical retailers.
SEPHORA targets Asia Pacific online shoppers via ZALORA April 17, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/88509 Sephora has partnered with fashion and beauty e-commerce site ZALORA, to bring its beauty products to Southeast Asia. Launching in Singapore and Malaysia, this will be the first time customers can purchase Sephora products online within the region. The retailer intends to expand into Thailand in mid-2014. The partnership enables the retailer to tap into ZALORA’s strong foothold in Southeast Asia’s fashion and beauty e-commerce market. ZALORA receives over 15 million visits to its site monthly, meaning Sephora will launch to an already highly established customer base who are looking to purchase fashion and beauty items online. In addition to this, Sephora will not only introduce its brand into new markets, but also improve the overall customer experience by fusing online and offline shopping. Sephora already operates bricks and mortar stores in Singapore and Malaysia.
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