RETAIL NEWS FLASH August 18, 2014
Table of Contents Sales & Marketing ................................................................................................................. 3 Finance ................................................................................................................................. 6 Technology ............................................................................................................................ 9 eCommerce and Online Retail ............................................................................................. 10 Expansion to New Markets .................................................................................................. 17 Cost Reduction Initiatives .................................................................................................... 18
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Sales & Marketing CARREFOUR takes Drive to the beach August 18, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89790 Having recently introduced the Drive concept in Belgium, Carrefour is looking to raise awareness of the format among the local population. With this in mind, this month the retailer has been operating a pop-up Drive location targeting summer visitors at Knokke, one of the country's most popular seaside resorts. Carrefour claims to be pleased with the 500 orders processed over the past three weeks, especially given the restrained collection time slot (5pm–9.30pm). The move should be seen in a promotional context and is unlikely to be formalised. Also, the service at this pop-up Drive was free while its permanent counterparts charge EUR4.5 for orders under EUR150.
Back in the USA: Call center jobs return August 11, 2014 | First Coat http://www.firstcoastnews.com/story/money/2014/08/11/call-center-jobs-return/13908207/ Much has been made the last several years about "Made in America," but how about "Answered in America?" After years of sending call center jobs to India, the Philippines, Mexico and other countries, companies are bringing them back to the U.S. An estimated 5 million Americans are employed in call centers, including more than 1,000 in Brevard County, at such places as eBay Enterprise's Customer Care Center, Percepta LLC and TeleTech Holdings, which recently announced plans to hire 300 people at its expanding Melbourne operation. The trend, industry watchers said, is driven by changes in technology, rising overseas labor costs — and customers demanding better service. For years now, questions from domestic customers — product warranty issues or credit card billing inquiries, for example — have been routed to Brazil, India or eastern Europe, and a language barrier has often arisen as an issue. Moving calls centers back to the United States helps with some of that customer-to-company disconnect. And it's certainly not bad for a company's image to be hiring more people in the United States. "We continue to experience growth in all markets," said Todd Baxter, senior vice president of global operations for TeleTech, "but we are particularly proud to have created nearly 3,000 new jobs in the United States in the last 18 months."
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More companies adding video to personalize online customer service August 11, 2014 | LATimes http://www.latimes.com/business/la-fi-video-customer-service-20140812-story.html#page=1 In a hurry on a sizzling July morning, Veronica Vallejos opted for the drive-through ATM at Visterra Credit Union in Moreno Valley. After pulling under a carport, she leaned out her window and found to her surprise, a screen lit up with Regina's smiling face. "How can I help you today?" Regina, the teller, asked before she processed Vallejos' car loan payments and shared some laughs with her. At a time when automated voices such as Apple's Siri and Microsoft's Cortana respond to questions, customers often think Regina is just another video robot. But Regina is a real teller, communicating with her customers from a cubicle hidden in an office a few feet away. From there, Regina will eventually be able to chat with customers at any of Visterra's five branches throughout the Inland Empire. ATMs, tablet computers, smartphones and store kiosks have become a battleground for companies trying to dazzle customers with instant access to friendly help. Companies such as American Express, Hertz, Activision Blizzard, E-Trade, Bank of America and Target are rolling out one-click access to help via video chat. They're relying on an old adage about customer service: Despite technological advances, a real person, whose smiling face a customer can see, always wins.
Retailers transforming marketing August 8, 2014 | Fierce Retail http://www.fierceretail.com/story/retailers-transforming-marketing/2014-0808?utm_medium=rss&utm_source=rss&utm_campaign=rss Amazon's (NASDAQ:AMZN) new media buying tool coupled with Walmart's (NYSE:WMT) own foray into media buying are prime examples of how retailers are transforming marketing. With this change, marketers will have to recraft their digital marketing strategies to include investing in customer loyalty, developing consumer-centered plans, and partnering with retailers
Google, Barnes & Noble unite for same-day delivery August 7, 2014 | Fierce Retail http://www.fierceretail.com/story/google-barnes-noble-unite-same-day-delivery/2014-0807?utm_medium=rss&utm_source=rss&utm_campaign=rss Google (NASDAQ:GOOG) and Barnes & Noble (NYSE:BKS) officially launched a same-day book delivery service in three markets. Barnes & Noble shoppers in Manhattan, West Los Angeles and the San Francisco Bay Area will now be able to get books delivered from local stores through Google Shopping Express, reported the New York Times.
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The move comes just a few days after rival Amazon (NASDAQ:AMZN) announced that the retailer's "Get It Today" same-day delivery service would expand to six new markets and include as many as 1 million items. Google Shopping, which launched about a year ago, already allows online shoppers to order products from stores such as Walgreens and Target (NYSE:TGT) and have them delivered to their door within hours. Since spring, the company has expanded Shopping Express to new markets several times and added more than 15 local retail partners. The move will not only help Google in the competition for same-day delivery. It may help boost Barnes & Noble sales as well. The book retailer has closed 63 stores in the last five years, and the retailer's Nook business fell 22 percent in the fourth quarter compared with the same period a year earlier. The new delivery service is being called a test to see if Barnes & Noble can increase its online reach. "It's our attempt to link the digital and physical," Michael Huseby, CEO of Barnes & Noble, told the New York Times.
Target opens three new Canadian stores August 4, 2014 | Fierce Retail http://www.fierceretail.com/story/target-opens-three-new-canadian-stores/2014-08-04 Target (NYSE:TGT) announced the grand opening of three new Canadian stores in Ontario and Quebec, bringing the total to 130 stores in Canada. Of the three new locations—Erin Mills Town Centre in Mississauga, Ontario; Park Place in Barrie, Ontario; and Carrefour Candiac in Candiac, Quebec—the Barrie and Candiac sites are new buildings. "At Target we're always looking for ways to enhance the guest experience, including opening stores in new locations that make shopping even more convenient for our guests," said Mark Schindele, president, Target Canada. "We look forward to serving our guests at these three new stores, two of which we built from the ground up." Target has opened six stores in Canada this year, three of which were newly built. Three additional stores are scheduled to open before 2015. The stores will include a licensed Starbucks and in-store pharmacies that provide comprehensive patient health care. Target is in the middle of revamping its image in Canada. Since it entered the market more than a year ago, the retailer has made many mistakes, including inventory mismanagement that led to outof-stock products and uncompetitively high prices. However, following an apology, Target recently replaced the president of Target Canada with Mark Schindele to provide counsel and support to executives in the region.
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Finance DILLARD’S revenue, profits down August 18, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89784 Dillard's became the latest US department store operator to report weaker-than-expected results for the second quarter. The regional retailer announced that revenue for the quarter ended 2 August dipped 0.3% from the prior year to USD1.75 billion, missing expectations. Total merchandise sales, which exclude the company’s construction business, were flat at USD1.46 billion. On a comparable store basis, sales increased 1%. Profits slipped to USD34.5 million, a decline of 5.5%. Gross margin from retail operations declined 33 basis points from the period a year earlier amid increased markdowns. Inventory, though, decreased 2%, compared with a year ago, which pleased management.
Online costs hurt CONVENIENCE RETAIL ASIA August 15, 2014| Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89770 Hong Kong-based Convenience Retail Asia, operator of Circle K c-stores and Saint Honore Cake Shops in Hong Kong and Mainland China, has announced that group turnover increased 3.1% year-on-year to HKD2.24 billion (USD2.89 million) during the first six months of 2014. The group reported low single-digit growth in comparable store sales for the convenience store and bakery businesses in Hong Kong amid what it termed a challenging operating environment. Growth in Hong Kong, the retailer said, was hampered by lower consumer sentiment, the economic slowdown on the Mainland and lower spending by Chinese tourists. Turnover for the convenience store business increased 3.6% to HKD1.8 billion, with comparable store sales in Hong Kong and southern China increasing 3.3% and 8.5% respectively. Turnover for Saint Honore Cake Shops rose 0.7% to HKD472.2 million, with 2.2% growth in comp stores sales in Hong Kong. Group net profit dropped 19% to HKD48.7 million, impacted by start-up losses for the ecommerce platform FingerShopping.com. Richard Yeung, CEO, said: "The retail industry in Hong Kong and the Chinese Mainland is grappling with a very tough operating environment. The increase in operating expenses has outpaced the increase in gross margin. Cost management, operational streamlining and a continued focus on developing online sales and marketing platforms are going to remain the keys to weathering these external challenges and seeding growth for 2015 and beyond."
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Looking ahead, the group expects a challenging second half, with high rental and labour costs continuing to place pressure on operating profit. "Corporate sales during the festive periods such as Mid-Autumn Festival are traditionally strong for us, but we anticipate a slowdown this year," it said, "On the other hand, our business on the Chinese Mainland is expected to yield faster growth and we plan to support it with strong customer loyalty programmes and marketing campaigns."
ROBINSONS RETAIL sees same-store sales surge August 15, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89774 Philippines multi-format operator Robinsons Retail (RRHI) posted a 19.9% consolidated net sales rise to PHP19.6 billion (USD389.2 million) for the second quarter ended 30 June. Growth was attributed to healthy same-store sales growth (SSG) across the board, averaging around 3.9% during the threemonth-period. In particular, it was driven by its speciality stores’ SSG of 10.5% and DIY stores with 5% SSG, offsetting negative SSG of its international fashion brands operations and weak SSG of RRHI’s convenience store business The supermarket segment accounted for the largest net sales share, contributing 49% of total, followed by department stores (17%) and DIY stores (10%). Drugstores (9%), specialty stores (9%) and convenience stores (6%) made up the remainder. Robinsons Retail also posted a 20.4% increase in core net earnings (excluding interest income, equitized net earnings from the 40% stake in Robinsons Bank and other gains/losses) to PHP766 million. As of 30 June, Robinsons’ store network totalled 1,180 outlets, operating under a variety of owned and franchised banners. The latter category includes Toys ‘R’ Us and Daiso Japan, as well as international fashion apparel brands like Topshop and River Island. The company believes it will meet its target of 1,400 stores at year-end.
KOHL'S sales sink, profits up August 14, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89766 A day after Macy’s issued a warning about US consumer spending, Kohl’s announced lacklustre Q2 results, offering further credence to its fellow department store operator’s read on the outlook for the country’s retail sector. Sales for the quarter ended 2 August dipped 1.1% from a year ago to USD4.2 billion, below expectations. On a comparable-store basis, sales declined 1.3% in the quarter, compared with a 0.9% gain a year ago. Gross margin edged downward 10 basis points to 39%. Net income improved 0.4% to a betterthan-expected USD232 million as lower expenses and taxes offset the weaker sales performance. Inventories increased 1.1% to USD3.9 billion. Kohl's CEO Kevin Mansell said, “We are pleased with the improvement we saw in sales as the quarter progressed. The improvement was the most dramatic in the month of July, where we achieved a positive comp.”
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We, however, would like to see Kohl’s have a solid back-to-school and healthy holiday before we are convinced of sustainable sales growth.
WALMART cuts FY forecast August 14, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89765 While Walmart reported Q2 earnings that were essentially in line with expectations, the bigger news coming out of today's financial release was management’s decision to trim its full-year earnings guidance. The company attributed the change in outlook to higher-than-expected healthcare costs and investments in e-commerce. For the quarter ended 1 August, Walmart reported net sales across all divisions increased 2.8% from a year ago to USD119.3 billion. Walmart US comparable store sales were flat versus a 0.3% decline in the same year-ago period. Declining traffic continues to be a problem for the core US business (1.1%), mitigating the impact of increased transaction size (+1.1%). In the US, the Neighborhood Market banner continues to gain momentum, with comp growth of 5.6% off the back of traffic gains of 4.1%. Sam's Club, meanwhile, remains a work in progress. The warehouse club operator reported flat comp sales (excluding fuel), compared with a 1.7% gain a year ago. Membership income increased 11.9% in the quarter. Traffic improved (+0.3%), but ticket size continued its downward slide (-0.3%). The best performance for the quarter, however, came from the company’s International business. After a weak start to 2014, the segment’s sales on a reported basis were up 3.1% to USD33.9 billion. On a constant currency basis, International sales were ahead by 5.3%. Operating income for the segment increased 8.0% year over year, suggesting that the first-quarter reversal of operating income declines may in fact be a longer-term trend. E-commerce sales globally increased about 24% on a constant currency basis, as the US, UK, China and Brazil each reported double-digit growth.
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Technology Target breach cost $148 million; tech hub opens in Silicon Valley August 5, 2014 | Fierce Retail http://www.fierceretail.com/story/target-breach-costs-148-million-tech-hub-opens-siliconvalley/2014-08-05 Target (NYSE:TGT) announced its second quarter results include a gross expense of $148 million related to the December 2013 data breach. Simultaneously, the retailer was reported to have opened a technology hub in Silicon Valley. It has been eight months since Target first revealed a data breach that compromised millions of customers' information. These expenses, offset partially by a $38 million insurance receivable, will pay for breach-related claims, including claims by payment card networks. For shareholders, that amounts to 11 cents cost per share in the second quarter. "Since the data breach last December, we have been focused on providing clarity on the company's estimated financial exposure to breach-related claims," said John Mulligan, interim president and CEO, CFO, Target. "With the benefit of additional information, we believe that today is an appropriate time to provide greater clarity on this topic." Mulligan continued the report on a more optimistic note. "With last week's announcement that the board has chosen Brian Cornell as Target's next chairman and CEO, we are excited to welcome Brian to the team and committed to working together to accelerate Target's transformation and become a leading omnichannel retailer," he said. Also reported today was the opening of a technology hub in Sunnyvale, California, to help the Minneapolis-based retailer explore new digital operations, reported theMinneapolis/St. Paul Business Journal. The hub employs 15 people and is geared toward data analytics and engineering for both online and mobile.
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eCommerce and Online Retail A baby products manufacturer takes a bigger step into e-commerce August 12, 2014 | Internet Retailer http://www.internetretailer.com/2014/08/12/baby-products-manufacturer-takes-bigger-step-ecommerce Munchkin has built its image around innovative products, and wants its e-commerce site to complement that image in retail as well as B2B markets. Online revenue on its e-commerce site more than tripled during the first seven months of this year. Baby products designer and manufacturer Munchkin Inc. only jumps into market opportunities that it figures it can win with innovation. “Munchkin was founded on the premise that we can take something mundane and make it better,” says Jonathan Bradbury, director of global e-commerce. “We go into product categories where we can be No. 1 or 2. If we can’t make it better, we don’t get into it.” And so its baby spoons aren’t just spoons—they’re designed to tell you if food is too hot for a baby to eat. And its special sleepwear for infants isn’t the same on front and back—because infants spend most of their sleeping time on their backs, the garment has a built-in blanket layer on the front. Now, with a new e-commerce site launched in January, “We want to bring our innovation to the web as well,” Bradbury says. The company migrated last year off of a bare-bones e-commerce site that it had built on the opensource Drupal content management system, which included a rudimentary plug-in for an online shopping cart. “The site was not optimized for e-commerce or marketing,” Bradbury says. “It wasn’t a main focus of our company.” Munchkin wholesales its products to some 100 retailers, including small boutiques as well as major retailers Amazon.com Inc., Wal-Mart Stores Inc. and Target Corp., which are Nos. 1, 4, and 18, respectively, in the Internet Retailer Top 500, which ranks companies on their annual web sales. But while its products have been selling on those retailers’ e-commerce sites as well as in their stores— and as overall web sales of its products have been growing faster than stores sales—sales on Munchkin.com’s early e-commerce site weren’t keeping pace. With its new e-commerce site built on the Magento Enterprise e-commerce platform, Munchkin now has more functionality for deploying compelling online shopping features and for running online marketing campaigns, Bradbury says. The difference has paid off. For the first seven months of this year compared with the same period last year, the number of unique daily visitors increased 71%, while average order value rose 111% and daily revenue, 217%, Bradbury says. As a privately held company, Munchkin does not report financial numbers, but Bradbury notes that its total sales are some several hundred million dollars, and its e-commerce site is making an increasingly stronger contribution to the total.
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The new Munchkin.com is for now only for direct-to-consumer retail sales, but the company has plans to soon launch retail e-commerce sites for the United Kingdom and China and other yet-to-benamed markets. And early next year it may launch a B2B e-commerce site, as part of a goal to make it easier for Munchkin’s wholesale clients to order online according to their contract terms and with the services they need for record management and bulk shipping. A main reason Munchkin chose Magento, Bradbury says, was its ability to quickly deploy e-commerce sites tailored to the needs of B2B clients as well as consumers in multiple foreign markets.
Target offers incentives to buy online/pick up in stores August 11, 2014 | Retail Wire http://www.retailwire.com/discussion/17705/target-offers-incentives-to-buy-online-pick-up-instores In late July, Target ran a promotion offering $10 off any online order of $40 or more if the customer chose in-store pickup. By all accounts, it could be the first or possibly a rare case of in-store pickup being incentivized. The deal comes as Target has been ratcheting up its promotions, including offering $10 coupons when you buy a threshold amount in certain categories. But Target spokesman Eddie Baeb told the Minneapolis Star Tribune that store pickup, which debuted nationally in November 2013, already consistently makes up more than 10 percent of Target's online sales. The promotion was designed to "to drive more engagement and use." In an interview with RetailWire, Lee Peterson, EVP, creative services, WD Partners, saw the promotion as a way to test the broad appeal of BOPIS (buy online, pickup in-store). "The thing is, from a retailer's perspective, you don't know how big something like this can be, so you have to get people to try it to see if it has any merit in terms of driving significant volume," said Mr. Peterson, "and then measure its scale." But Mr. Peterson believes it's worth incenting the use of BOPIS. In a recent article inWayfinD, a quarterly e-magazine from WD Partners, he asserts that BOPIS could be a major differential for retailers with physical stores, arguing that service at retail has been effectively supplanted by convenience. To work effectively, however, stores will have to evolve more into fulfillment centers, he argues. "From what I can see from our research, people already like BOPIS a lot, but the 'top 2 boxes' numbers really never cross 60 percent," Mr. Peterson told RetailWire. "Throw 10 bucks in the mix and I'd bet on that number going over 75 percent."
Target opens an e-commerce office in Silicon Valley August 11, 2014 | Internet Retailer http://www.internetretailer.com/2014/08/11/target-opens-e-commerce-office-silicon-valley The retail chain already operates a similar office in San Francisco.
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Target Corp. has opened an e-commerce research office in Silicon Valley. The retail chain’s move follows the opening in 2013 of the Target Technology Innovation Center in San Francisco, which focuses on e-retail technology, and Wal-Mart Stores Inc.’s opening earlier this year of its second e-commerce office in Silicon Valley, the area south of San Francisco that has become a hub of Internet and other technology companies. Target says its new office, in Sunnyvale, CA, will employ up to 70 workers, including “data scientists, software engineers and product managers as part of a commitment to becoming a leading omnichannel retailer.” The office will focus more on data analytics as well as online and mobile engineering, while the San Francisco office focuses more on testing new technologies. Target is No. 18 in the Internet Retailer Top 500 Guide. Wal-Mart is No. 4. Another Top 500 retailer, Staples Inc., which is No. 3, operates an e-commerce-focused Velocity Lab in Cambridge, MA, to help the office supplies chain develop e-retail and mobile commerce programs, along with a newer but similar office in Seattle that today was hiring for software developers, product managers and analytical experts. Target recently hired a new CEO, Brian Cornell, who was CEO of PepsiCo Americas Foods. Target has shuffled its executive ranks and brought in new talent following the resignation of CEO Gregg Steinhafel in May. Steinhafel, who’d been Target’s CEO since 2008, resigned in the wake of amassive data breach that exposed payment card details of 40 million store shoppers, slowing store sales and an expansion of Target stores into Canada that underwhelmed.
ALIBABA ups Brazilian brand presence August 07, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89691 Alibaba intends to launch an advertising campaign in Brazil, focusing on Rio de Janeiro and São Paulo. The campaigns, launching by the end of the year, aims to strengthen the brand position of its wholesale marketplace AliExpress. Alibaba has presence in Brazil through AliExpress and Alibaba.com. In July, Alibaba signed a partnership with Brazil's Postal Service Correios to help Brazilian small and medium-sized businesses sell in China through the Alibaba.com. The agreement seeks to improve logistical arrangements between Brazil and China to better facilitate cross-border e-commerce.
Sony, Samsung and Canon ban stores from selling items via e-commerce sites August 6, 2014 | Economic Times http://articles.economictimes.indiatimes.com/2014-08-06/news/52514332_1_lenovo-indiaoffline-canon-india Sony, Samsung, Panasonic and other top electronics brands are trying to crack down on brick-andmortar stores selling their products online, threatening to cut off supplies or penalise them financially as they look to curb the practice of 'predatory' discounts.
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Lenovo and Canon, along with the three named above, have issued trade advisories banning stores from selling cellphones and other items made by them online directly or indirectly via e-commerce companies. The yawning gap between prices quoted by popular online shopping sites such as Flipkart, Amazon and Snapdeal and their offline counterparts has added to woes of electronic goods makers in India, some of which are grappling with slipping sales at their brick-and-mortar stores. Manufacturers of electronic goods allege that while some offline traders and distributors list products on online marketplaces and sell them at lower margins, others list products at the manufacturer recommended price, but the host website ends up offering deep discounts by way of coupons and cashback schemes, creating a wide gap in pricing between products available online and offline. "We are trying to weed out unhygienic practices to create a healthy environment between online and offline markets," said Amar Babu, managing director at Lenovo India. The company has asked retailers to comply with the trade agreement, which maps out a certain geographical territory where the retailer can sell, he said, adding that Lenovo is also engaging with popular online marketplaces to see how best the impact on offline retailers can be minimised. Panasonic India managing director Manish Sharma said while the online channel is important, the current situation demands a wellconsidered set of terms and conditions. Panasonic is trying to maintain price levels to eliminate the confusion among consumers. Email queries sent to Samsung, Sony, Flipkart and Snapdeal remained unanswered till as of press time. A spokesperson for Amazon India said sellers determine the price of products they list and sell on its platform.
Ratan Tata may invest in e-tailer Snapdeal August 6, 2014 | Economic Times http://economictimes.indiatimes.com/articleshow/39731896.cms?utm_source=contentofinterest &utm_medium=text&utm_campaign=cppst Ratan Tata is said to be considering a personal investment in Snapdeal, an e-commerce firm, at a time when online retail is generating investor euphoria on the back of exponential growth. In a move that would signal his interest in India's emerging consumer internet story, the 76-year-old chairman emeritus of Tata Sons may buy out an early investor in Snapdeal through a secondary sale, people familiar with the development said. Kunal Bahl, co-founder of Snapdeal, did not respond to TOI's query while an emailed questionnaire to Tata's office on Monday remained unanswered till the time of going to press on Tuesday. The 76-year-old, who transformed India's largest private sector conglomerate with a string of marquee global acquisitions, is expected to be a minority investor in his personal capacity in the etailer. TOI could not ascertain the exact stake Tata would hold in Snapdeal if and when the transaction is completed.
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While his holding is unlikely to be high, its real significance would lie in the buzz it would create for the four-year-old firm. Tata has always had in interest in technology; even so, the deal, if it goes through, would mark the ultimate coming together of the old and new guard. People close to Snapdeal said Tata had visited the firm's headquarters in Delhi about a month ago and addressed employees.
Walmart.com eases into a new design August 5, 2014 | Internet Retailer http://www.internetretailer.com/2014/08/05/walmartcom-eases-new-design The mass merchant e-retailer is rolling out a new site with features and functions built on Pangaea, its in-house technology platform. It is also overhauling product pages and the checkout flow. A fully redesigned e-commerce site is coming soon. Some Walmart.com shoppers are encountering a host of new or improved features on the ecommerce site as part of a redesign the mass merchant is rolling out in phases. In addition to a freshened overall look, Wal-Mart Stores Inc. says it is increasing the amount and quality of content tailored to individual consumers and providing shoppers more information about what’s happening at their local Walmart stores. It is also overhauling product pages and the checkout flow. “Aside from a new bold and modern web design, these updates make the site easier to use on tablets, and helps customers shop faster and discover new products through personalization,” a Wal-Mart spokesman says. Walmart.com increased its global online sales by more than 30% in its last fiscal year to more than $10 billion, according to Internet Retailer estimates, and has projected its total online sales will top $13 billion this year. It is the fourth-largest web retailer in North America by sales, according to Internet Retailer’s Top 500 Guide. The new Walmart.com is being built on Wal-Mart’s in-house technology platform, dubbed Pangaea, the spokesman says. Walmart has been developing its technology platform since 2011 to bring many e-commerce functions in-house and have all 10 of its localized e-commerce sites around the world work on the same platform. For example, Walmart.com began using its own site search tool built on Pangaea in August 2012 and last year said it had improved conversions by 20%. Wal-Mart CEO Charles Holley said in May that the company will roll out Pangaea for all of its e-commerce sites worldwide by the end of the year. Walmart’s e-commerce site in Brazil, for example, rolled out its redesign last fall. Wal-Mart Latin America is No. 4 in Internet Retailer’s 2014 Latin America 500. Besides the United States and Brazil, Wal-Mart has e-commerce sites in Canada, the United Kingdom, China, Japan, Mexico, Argentina, Chile and South Africa. In a blog post, Ben Galbraith, vice president of global products for Walmart Global eCommerce, says the e-retailer based the design for how it would render on small tablet computers, then built it out for larger screens. Information about how the site will work on smartphones wasn’t immediately available.
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Consumers, he says, can expect to see much more content and product recommendations tailored to them based on their individual shopping histories with the retailer online and in stores. “We’re able to deliver much more relevant suggestions because we are now able to draw from the massive trove of data from both online and store purchases,” he says. This spring Wal-Mart began offering store shoppers in the United States an option to have their receipt sent to them via text. At the time, Gibu Thomas, Wal-Mart’s senior vice president of mobile and digital media, said that the retail chain would use such purchase data to send personalized offers to shoppers who opt into the program, and that it would also mine the data to provide new services for shoppers.
Retailers scramble to adapt supply chain strategies as growth shifts to ecommerce August 5, 2014 | Internet Retailer http://www.internetretailer.com/2014/08/05/retailers-scramble-adapt-supply-chain-strategies 75% say all inventory is available for all channels, but only 22% have broken down silos between store and online teams. There is an upheaval going on in many retail organizations as they see more of their growth coming from the web and less from bricks-and-mortar stores. The urgency to adapt to this change comes through clearly in a study of more than 500 leading North American retailers by Boston Retail Partners, a retail consulting firm. The study found that 93% of respondents are working toward unifying their operations so that they can serve customers in a consistent way whether they shop in physical stores, on web sites or via mobile devices. But not one of the retail companies claims to have fully unified its operations, and only 22% say they had merged their channel teams into a single organization. While many retailers say they are hopeful that the realignments will succeed, “it is early in the transition,” says the report, “2014 Annual Supply Chain Benchmark Survey,” authored by Brian Brunk, Ken Morris and Walter Deacon. “None of the organizations surveyed are completely satisfied with the organizational changes made thus far to deliver a more seamless shopping experience,” they write. “While the long-term benefits to bottom-line profits and customer satisfaction are significant, implementing a unified commerce model is a big task for retailers and it will not be achieved overnight.” But it’s a task retailers cannot ignore because they see a growing shift to consumers shopping more online. In this year’s survey 32% of respondents say they expect most of their growth to come from the web while 21% say most growth will come from bricks-and-mortar stores. Last year, 52% said stores and only 23% e-commerce. Not surprisingly, more than 80% of respondents say they are expanding their online capabilities. “Online is no longer a strategy to expand the sales channel; it’s now part of a broad cohesive experience where mobile, online and in-store all support and reinforce the brand promise through seamless and flawless execution,” the report says.
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Amazon attempts to slow down shipping August 4, 2014 | Fierce Retail http://www.fierceretail.com/story/amazon-attempts-slow-down-shipping/2014-08-04 It seems Amazon Prime may be too successful and in need of a slowdown. The free, two-day delivery service recently raised the price of an annual subscription from $79 to $99. And now the retailer is offering a $1 credit toward Amazon Instant Video for Prime members willing to wait five to seven days to receive their shipment.
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Expansion to New Markets Upscale US chains moving into Canada August 8, 2014 | Fierce Retail http://www.fierceretail.com/story/upscale-american-us-chains-moving-canada/2014-0808?utm_medium=rss&utm_source=rss&utm_campaign=rss American luxury brands and department stores are increasing their footprint in Canada. After years of ignoring Canadian expansion, Nordstrom (NYSE:JWN) announced its plans to open six Canadian stores by 2017. And they aren't the only ones. Saks Fifth Avenue, acquired by Hudson's Bay Co. (NYSE:HBC) last year, plans to add seven new stores in Canada, reported Bloomberg. These upscale stores are heading north in response to trends in changing shopping habits and the availability of foreign prime real estate. The department stores will compete in markets long dominated by Canadian staples Holt Renfrew and Harry Rosen. In anticipation of the rivalry, Harry Rosen started a $100 million expansion and launched a large-scale brick-and-mortar remodeling initiative. "We believe there's a lack of exciting opportunities for the luxury shopper to do their spending," Hudson's Bay CEO Richard Baker told Bloomberg. "We'll not only capture a large percentage of the existing luxury market, but we're also going to capture a growth that's happening in Canada and the business that's presently leaving Canada to shop in the U.S." Following the recession, U.S. stores have been seizing the opportunity to gain a market share of rising Canadian wealth. Sears (NASDAQ:SHLD) Canada recently closed several of its storefronts, and Nordstrom seized the available spaces as an opportunity to move in.
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Cost Reduction Initiatives Synergy savings boosts Office Depot's Q2 August 12, 2014 | Fierce Retail http://www.fierceretail.com/story/synergy-savings-boosts-office-depots-q2-sales/2014-0812?utm_medium=rss&utm_source=rss&utm_campaign=rss Although Office Depot (NYSE:ODP) noted poor Q2 sales and announced the impending closure of 400 stores by 2016, the retailer reported a better operating profit growth than expected due to its merger with OfficeMax. The two retailers merged last November shortly after the announcment of 2016's coming closure of 400 stores. The company reported that the number of closings for 2014 would exceed the initial expectation of 150 to 165 closures stated in the quarterly report. Savings gained in light of the closures are predicted to increase from $75 million to $100 million, reported Retailing Today. Office Depot estimates that savings will result in annual run-rate synergies totaling $700 million, more than the estimated $400 million to $600 million the company predicted when the merger was first announced, and more than the $675 million estimated at the end of the first quarter. "During the second quarter, our team executed exceptionally well, which enabled us to deliver merger synergies more quickly than anticipated," said Roland Smith, chairman and CEO of Office Depot. "We are very pleased with the integration of legacy Office Depot and OfficeMax as we create a culture focused on achieving our critical priorities in the near and long term. As planned, we have completed our analysis of the North America retail store optimization strategy and have continued to make progress on the development of our unique selling proposition. Based on accelerated synergies and improving execution, we have updated our full-year 2014 outlook for adjusted operating income to be not less than $200 million, an increase from our prior outlook of not less than $160 million." Despite the adjustments, sales remain challenging for the retailer. While combined, Office Depot and OfficeMax saw a sales increase of $3.8 billion, up from $2.4 billion. However, Office Depot's stand-alone results were down from $3.9 million.
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