Embattled department store retailer gets fresh cash infusion from owner
As it heads into its most important selling season, Sears Holding Corp. is receiving another cash infusion from its CEO and largest shareholder.
Sears is borrowing $100 million from units of CEO Eddie Lampert's hedge fund ESL Investments for "general corporate purposes," according to a regulatory filing. The new infusion brings the total of Lampert's outstanding loans to Sears to $499.4 million.
Under the amended terms of the new loan, the retailer can borrow up to another $100 million — if needed — by pledging additional properties or assets as collateral. The loans carry an interest rate of 11%.
Shop.org Takeaway: Three steps to next-gen personalization
Consumers are becoming more digitally influenced on a seemingly daily basis — but omnichannel retailers find themselves hard-pressed to keep up the pace. Retailers need to meet their needs across all touchpoints, and create a frictionless shopping experience despite where the shopping journey starts and ends.
To achieve this goal, successful retailers are adopting a new digital tools that allow them to “connect the dots,” and personally engage shoppers before, during and following the shopping experience. Industry observers discussed this new level of personalization during Shop.org, held in Los Angeles, Sept. 25-28.
Among the top solutions are:
Voice: Conversational commerce is shaping up to be one of the year’s hottest disruptors, and momentum continues to grow. As customers grow more comfortable using digital voice assistants found on devices like Amazon Echo and Dot, Google Home, and others, retailers have a new way to personalize the shopping experience, and remove some of the friction that still occurs via online and mobile transactions.
Jet.com Walmart’s e-commerce arm, is so bullish on voice that it is one of the company’s “top priorities this year,” Marc Lore, president and CEO, of Walmart e-commerce U.S., said at shop.org.
“You have to look beyond the technology and toward what it enables,” Lore added. “It’s more than a tool that helps customers order product for delivery. It gives us the chance to connect with shoppers one-on-one. And we can use data to become better merchandisers.”
Artificial intelligence: Retailers that use AI are essentially adopting programs that teach their computers to learn patterns. Then brands can use results to deliver better customer experiences.
AI is playing a critical role across Disney’s retail channels. Committed to delivering “a more immersive, personalized, and robust omnichannel experience than ever before, “Disney is adding AI to our e-commerce site so we can help improve the guest experience online and in-store,” said Mike White, senior VP and chief technology officer for Disney consumer products and interactive media.
AI is helping Disney understand its best-selling category SKUs searched online, and then using this data to evaluate customer affinities. “Then we can expand online and in-store assortments, which add more value to their experiences,” he added.
Next-gen search tools: Kohl’s is becoming increasingly bullish on the value of its search tools. Why?
“Search is the top way that most of our customers begin their purchase journey — and most searches are happening on customers’ smartphones,” Sarah Rasmusen, the company’s VP, digital/e-commerce, merchandising & analytics.
That’s why the company is already exploring how to expand the value — and functionality — of this important omnichannel tool. For Kohl’s, this could include a new component Rasmusen described as “findability.”
Kohl’s envisions a solution that will bridge the gap between digital and physical stores. It could also solve what she described as “analysis paralysis,” or collecting so much information that the shopper can’t make a buying decision.
By integrating findability functionality within search, customers will “gain specific details on desired merchandise and where to find it inside of a store,” she explained. “This is the next evolution of search — and it will only be successful if it can merge physical and digital retailing.”
Study: Gens Y & Z prefer credit cards over other forms of payments
Following suit of older generations, younger shoppers want to pay for purchases with credit cards.
Specifically, Gen Z (ages 18-24) and Gen Y (ages 25-34) are comfortable using credit to make purchases, and overwhelmingly prefer credit cards to monthly payment options, according to new data from Vyze, a provider of cloud-based financial technology solutions.
A majority of Millennials (80%) and 71% of Gen Z preferred a credit card with 0% interest for six months over a fixed monthly payment plan. Over half (53% of Gen Y, and 55% of Gen Z) will forgo using cash for a credit card that offers 5% cash back.
Gen Z and Gen Y adults are also fairly comfortable with managing a credit card balance. Nearly seven in 10 younger shoppers reported being at least somewhat comfortable carrying a balance on a credit card, and nearly one in 4 are “very comfortable” with the practice.
One important difference between the two generations: Gen Z could benefit from more information and a helping hand. This generation is the least likely to know their credit score (only 42% have a rough idea vs. 73% of Gen Y). They are also more likely to say they don’t have the financial information they need to make a decision about whether to apply for credit online or in the store (47% vs 26% of Gen Z respondents).
According to the study, retailers and lenders have the opportunity to better serve younger shoppers by providing more information on interest rates and promotions, as well making sure credit options are transparent and easy to use. While more than four in 10 Gen Z shoppers characterize retail credit cards as “helpful” or “builds credit,” the remainder find credit equally “complicated” or “misleading.”
While limited by strict regulations around how to present information, companies can make the credit experience less overwhelming. Two suggestions: simplify the experience and add transparency into offers and promotions.
“Despite the hype about Millennials and Gen Z, it turns out there’s not a radical difference between these groups when it comes to credit,” said Doug Filak, chief marketing officer of Vyze.
“Instead, a relatively traditional view emerges across the board and these consumers are right where we’d expect them to be based on age and experience,” he said. “Our advice to retailers is to adjust their programs without overcorrecting based on a mistaken sense that these shoppers are drastically different, for example by simplifying and clarifying credit applications versus moving away from traditional credit entirely.”