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BDO survey: Retail CFOs project 3.9% sales increase in 2015

BY Marianne Wilson

Chicago — Retail CFOs predict a 3.9% increase in total sales and a 3.7% increase in same-store sales in 2015, according to a new BDO USA survey.

While the forecast is about one percentage point lower than 2014’s bullish projections, 66% of retailers expect comparable store sales to increase, and with 71% of retailers including online sales in their comparable store sales reports, a considerable amount of this 2015 growth may come from further e-commerce sales, which grew 16% in 2014, according to eMarketer.

While 54% of retailers expect consumer confidence increases to continue in 2015, there are a number of issues that could hamper gains, including financial market volatility, which roughly 26% of CFOs note as a potential impediment to confidence. Another 26% of retailers expect fuel prices to notably impact confidence levels, compared to just 7% in 2014, as continued rock bottom pump prices help lift consumers’ discretionary spending. Only 23% of retailers cite unemployment as the top factor impacting consumer confidence this year — the lowest amount in the survey’s nine-year history.

“Steadily improving business and labor market conditions helped deliver a strong end to 2014, and as consumer confidence and unemployment are now at pre-recession levels, retail CFOs are upbeat about 2015 performance,” said Doug Hart, partner in the consumer business practice at BDO. “This momentum has already carried into the New Year, buoyed by ongoing recovery in the housing market and a record decline in fuel prices. As they look ahead to what are typically the slower winter and spring months, retailers are hoping these positive signals carry through to the second half.”

The findings are from the ninth annual BDO Retail Compass Survey of CFOs, which examined the opinions of 100 CFOs at leading retailers throughout the country.

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Michaels expands work with Starlight

BY CSA STAFF

Michaels is broadening is involvement with a global charity focused on improving the health of children and families.

Michaels and its subsidiary Aaron Brothers have supported Starlight since 2010. The expanded partnership will increase the company's involvement through a wide range of programs that include corporate contributions, in-store promotions, customer donation programs, associate-driven events and giving, vendor engagement, product donations and more.

"Since 2010, we have supported Starlight's mission to improve the life and health of kids and families," said Michaels CEO Chuck Rubin. "This deeper partnership will bring us the opportunity to reach even more families in the communities where our customers and associates live and work, and generate greater awareness of this outstanding organization."

Michaels has participated in various Starlight programs. The company also has created its own initiatives, such as the annual holiday ornament promotion in which it sold special ornaments at more than 1,160 Michaels stores in the U.S. and Canada to raise money and awareness for Starlight.

"Michaels has been an incredible partner in our mission to improve the life and health of kids and families around the world," said Jacquie Hart, Global CEO of Starlight Children's Foundation. "Starlight programs stimulate a child's creativity through imagination, entertainment and technology, so Michaels is a perfect match for our work to support kids and families from hospital to home. We are genuinely thrilled to be selected as their charity of choice, and we look forward to working with the company and its generous associates on changing the lives of even more kids and families throughout North America."

Michaels Inc. owns and operates 1,168 Michaels stores in 49 states and Canada and 121 Aaron Brothers stores.

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Tech Bytes: Five Tips on Retail App Success from Detroit Labs

BY Dan Berthiaume

I recently had the chance to spend some time talking with Dan Ward, cofounder of app development firm Detroit Labs. Since 2011, Detroit Labs has developed apps in its downtown Detroit center, rapidly growing to 75 employees and serving a wide range of companies including Domino’s Pizza. Here are five tips for developing a successful retail app gleaned from my conversation with Ward:

1. Connect the brick-and-mortar and digital channels
“There is a powerful consumer interest in tying together the brick-and-mortar and digital experience,” said Ward. “It’s what retailers should do with their apps.”

As an example, Ward said the Lowe’s app lets customers preset the app to a local store so they can instantly find out if an item is in stock and if so, the exact aisle and rack where it can be found.

“Retailers are moving that way,” said Ward. “On the front end it’s low tech, but on the back end the technology process involved is huge.”

2. Provide a mobile compass
Ward recommended that retailers leverage technology like beacons to allow consumers to use their mobile apps as a digital compass for the physical world.

“With beacons you can find products and navigate stores,” said Ward. “Consumers want to make purchases with ease, and also want to touch and experience the product in the store. It’s nice to see the product and read reviews on the app, but it’s also important to be able to push the customer to their local brick-and-mortar store.”

3. Accept mobile payment
Ward said accepting mobile payment is also a critical feature that retail apps must provide. “The Apple Pay user experience in fantastic,” he commented. “Not having to dig through your wallet for a card and instead paying with a simple tap is great. I simply scan my cards with my phone and away I go.”

Ward anticipates an increasing number of retailers will start accepting mobile payment through their apps. This will include third-party mobile payment services like Apple Pay and Google Wallet, as well as retailer-led consortiums like Merchant Customer Exchange (MCX) or even proprietary mobile payment services like the one Starbucks is launching.

4. Tailor the experience to customer needs
No two retailers are alike, and no two retail apps should be alike, either. Ward advises that retailers carefully consider the needs of their specific customer base when designing their mobile app experience.

“The Target app has weekly specials featured right up front,” said Ward. “But for a retailer like Zappos, which has customers looking for more of a browsing experience, the app creates a decision tree. The customer can search for footwear, and then break it down by factors such as they are a male seeking boots. The experience should be specific to what you are selling.”

5. Keep it simple
The whole point of a mobile app is that is supposed to offer a straightforward, fast way to obtain information and accomplish tasks. Ward emphasized the need for retailers to keep their apps simple.

“Leverage what the phone has to offer,” he concluded. “You shouldn’t have to waste time logging in. Loyalty programs should feature Passbook integration. The Lowe’s app opens up as you drive by the store. People want to use mobile, but retailers need to be ready to commit the investment and time to make their apps right.”

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