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China, U.S., U.K. top e-commerce opportunity study

BY Marianne Wilson

New York — China takes the top spot in online retail market opportunity, followed by Japan, the United States, the United Kingdom, and Korea, according to a new global e-commerce study by A.T. Kearney. (Kearney’s “2013 Global Retail E-Commerce Index” is comprised of 30 developed and developing markets.)

Developing countries were prominent in the Index, holding 10 of the 30 positions. According to the report, many developing markets have been able to shortcut the traditional online retail maturity curve as online retail grows at the same time as physical retail becomes more organized. E-Commerce is increasingly viewed by retailers as an efficient and effective global expansion vehicle.

“Consumers in developing markets are fast adopting behaviors similar to those in more developed countries,” said Mike Moriarty, A.T. Kearney partner and co-author of the study. “For example, mobile phones per capita in Russia (1.8) and the United Arab Emirates (1.7) are much higher than many developed markets, including the United States (1.0) and France (1.0). Consumers in these countries use their phones to research products, compare prices and seek input from their friends on social media.”

Among the study’s findings:

  • Global online retail has grown at 17%, with growth particularly strong in Latin America (27%) and Asia Pacific (25%). One major factor is Internet penetration; another is payment methods, which vary according to country.
  • Mobile phone ownership and use figures largely into the rating, where countries with one or more mobile devices per capita are clearer winners in the e-commerce arena.
  • Across the board, consumers and merchants have become more savvy – pre-purchase research and showrooming are commonplace throughout the world.
  • Logistical considerations are the biggest hurdle in e-commerce growth, particularly delivery and distribution/warehousing.
  • Electronics and apparel continue to be the biggest online sellers.

Here is the top 2013 Global E-Commerce Index ranking:

Index Rank Country
1 China
2 Japan
3 United States
4 United Kingdom
5 Korea, South
6 Germany
7 France
8 Brazil
9 Australia
10 Canada
11 Singapore
12 Argentina
13 Russia
14 Hong Kong
15 Italy
16 Sweden
17 Slovakia
18 New Zealand
19 Netherlands
20 Chile
21 Finland
22 Turkey
23 Venezuela
24 Belgium
25 United Arab Emirates
26 Norway
27 Ireland
28 Denmark
29 Switzerland
30 Malaysia

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Sears stays focused following third-quarter loss

BY CSA STAFF

Despite its continuing turnaround efforts, Sears Holdings widened its loss in the third quarter after sales fell at both Sears and Kmart.

The company reported a net loss for the quarter ended Nov. 2 of $534 million, or $5.03 a share, from $498 million, or $4.70 a share, a year earlier.

"We are proactively transforming our business to a member-centric integrated retailer leveraging Shop Your Way to benefit from the changing retail landscape. We are transitioning from a business that has historically focused on running a store network into a business that provides and delivers value by serving its members in the manner most convenient for them: whether in store, in home or through digital devices," said Edward S. Lampert, Sears Holdings’ chairman and CEO. "We are driving this transformation by investing in capabilities to enable members access to the broadest possible assortment of products and services, enhancing our membership benefits associated with SYW, developing digital and social relationships with our members, using data and analytics to make targeted offers and decisions delivered in real time and expanding our reach through Marketplace and delivery options."

Lampert is staying positive and pointing to progress, citing “substantive” continued increases in the company’s SYW member engagement metrics. But the investments the company has made in its member-centric model as well as in traditional promotional programs have adversely affected its margin.

Revenues decreased $585 million to $8.3 billion for the quarter, as compared to revenues of $8.9 billion for the year-ago quarter. The revenue decrease was primarily due to the effect of having fewer Kmart and Sears full-line stores in operation, which accounted for approximately $200 million of the decline, as well as lower domestic comparable store sales, which accounted for approximately $170 million of the decline.

Revenues were also impacted by the separation of Sears Hometown and Outlet Stores, which occurred in last year’s third quarter.

For the quarter, domestic comparable store sales declined 3.1%, representing a decrease of 2.1% at Kmart and 4% at Sears domestic. The decline at Kmart reflects decreases in its transactional categories, such as grocery and household and drugstore, as well as declines in consumer electronics and toys. These decreases were partially offset, however, by increases in the apparel and seasonal and outdoor living categories. The decline at Sears domestic reflects decreases in most categories including the consumer electronics, lawn and garden, tools, home appliances and apparel categories, as well as declines at Sears Auto Centers, partially offset by an increase in the home category.

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Men’s Wearhouse investor still pushing for deal with Jos. A. Bank

BY Staff Writer

New York — Eminence Capital which owns 9.8% of the common stock of The Men’s Wearhouse and is its single largest shareholder, on Wednesday released a presentation describing why Men’s Wearhouse board of directors should engage in merger discussions with Jos. A. Bank Clothiers, Inc. Eminence Capital also said that it has retained Moelis & Company as a strategic advisor.

The presentation comes less than a week after Jos. A. Bank said it had withdrawn a $2.3 billion takeover bid for the company. Men’s Wearhouse has steadfastly rebuffed the approaches from its rival for weeks, calling the bid too low and refusing to enter into talks.

The presentation, which was developed with the assistance of Moelis & Company, is available here.

On Nov. 15, Eminence Capital filed a preliminary solicitation statement with the SEC in connection with calling a special meeting of Men’s Wearhouse shareholders to vote on a number of bylaw amendments that, if approved, will permit shareholders to remove directors without cause before the next annual meeting of shareholders. Pursuant to Texas law the special meeting may be called by holders of at least 10%, in aggregate, of all of the shares of Men’s Wearhouse are entitled to vote at the special meeting.

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