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Gucci launches mobile POS program

BY Staff Writer

New York — Gucci said Wednesday it has launched its own mobile point-of-sale program at select directly operated U.S., Europe and Asia locations.

Through this program, Gucci is leveraging technology to create a unique customer experience and to better serve clients when they are shopping in its stores.

This technology, developed and customized by Micros Retail, enables sales associates to spend more time on the floor while simultaneously providing clients with support and assistance. Sales associates have been equipped with personal Apple iPhone 4S devices on which they can process sales mobily and wirelessly email receipts to their customers. This service expedites the sales transaction by increasing speed of payment and enhances connectivity between the client and the associate. The devices are also loaded with the Gucci Style app, as well as utility applications such as Google translator, Google Maps and currency converter. In addition, sales associates are able to allow clients to navigate the Gucci digital flagship at Gucci.com.

Patrizio di Marco, president and CEO of Gucci, said: “We have a firm eye on the future and this program confirms Gucci’s strong commitment to new technologies. Not only are we setting new frontiers between fashion and technology," added di Marco, "but we are also further enriching the touch points between our customer and the brand, thus enhancing the in-store experience.”

The pilot program launched at the Gucci Flagship store on Fifth Avenue in New York City with additional trials at the Paramus, N.J., and Orlando, Fla., locations.

Later this year, the Mobile POS solution will be deployed in 15 U.S. directly operated stores and approximately 30 directly operated stores between Asia and Europe. Additional DOS locations will be rolled out in all regions throughout 2013.

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Deloitte Consumer Spending Index sees rise in March

BY CSA STAFF

NEW YORK — After projecting that consumers likely would spend the same or more at retail this spring, Deloitte reported Thursday that its Consumer Spending Index climbed in March, marking only the third monthly increase over the past 12 months.

The Index, which comprises four components — tax burden, initial unemployment claims, real wages and real home prices — rose to 1.80 from an upwardly revised reading of 1.52 the previous month. Despite this increase, however, Deloitte noted that several factors may be restricting consumer cash flow:

  • Real incomes fell 0.1% in February even as consumer spending rose and are up just 0.3% from a year ago. Quantitative easing is adding to the downward pressure on incomes as income from interest fell in February for the eighth consecutive month and is down 3.1% from a year ago (not adjusting for inflation);

  • The savings rate has fallen from 4.7% to 3.7% over the past two months, adding roughly $110 billion to consumer spending. Without that decline, instead of rising by 0.7%, spending would have fallen. Real consumer spending is up 1.8% from a year ago; and

  • Gasoline prices continue to rise. The average price of gasoline rose 4 cents last week to $3.97 a gallon up 68 cents since mid-December.

"The warmer weather is helping consumers shake off the winter doldrums, but they remain vigilant about their pocketbooks, particularly in the face of rising gas prices this spring," said Alison Paul, vice chairman of Deloitte LLP and retail and distribution sector leader. "In our third annual spring survey of U.S. households, consumers told us they are feeling slightly better about the economy and their finances, compared to a year ago. While 67% indicate they plan to spend the same or more this year, nearly 80% said higher prices could cause them to change their spending in the months ahead. We also found that consumers’ use of mobile and online continues to grow across the board. This suggests that digital channels should be one of retailers’ strongest competitive plays to capture the consumer, particularly those shoppers keeping an eye on their household budgets."

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Target a Canadian game changer, not so fast

BY CSA STAFF

The Canadian consumer is a value conscious, “tough nut to crack,” who is already well-served by existing retailers, according to Diane Briesebois, president and CEO of the Retail Council of Canada, a trade association founded in 1963 that represents retailers that operate more than 45,000 stores and account for 85% of Canadian retail sales.

Her comments came during a presentation Wednesday night that preceded a Walmart sponsored investor meeting being held today in Toronto. Briesebois was brought in to share her thoughts on Canada in general, the competitive landscape and the consumer. Naturally, Target came up during her remarks, given the company’s acquisition of Zeller’s leases and subsequent entry next year with more than 125 stores is the most significant development the $297 billion Canadian retail market has seen in more than a decade.

“Target is a formidable competitor,” Brisebois said. “For those who don’t know the Canadian market well, it would be a mistake to assume that Target will be a game changer.”

She noted the market already is well served by such large well established operators as Walmart, Loblaws, Canadian Tire, Shoppers Drug Mart and Costco.

“Target will have an impact, but it is entering a competitive market,” Briesebois said.

Later in her presentation, Target came up again when Walmart International president and CEO Doug McMillon asked, “What can we do to improve in this market?”

Briesebois pondered the question and thinking out loud said, “You want me to be honest? I’m going to be honest. With Target coming into Canada, there is a perception that (Walmart’s) service in Canada is not as good as in the United States. I believe there will be an increased expectation around service and the number of people waiting in line.” She added that Walmart will be compared constantly with Target and suggested to McMillon and the audience of investment analysts that also included Walmart Canada president and CEO Shelley Broader and her management team: “I would pay attention to the way to stores look and how quickly customers are served at the checkout, because Target does a good job with that.”

Of course, Target is going to face the same operational challenges in Canada as Walmart, and one of the big ones is the labor situation. Unemployment is lower and the minimum wage is higher so employees can be more selective about where they work, which creates challenges around turnover. Then there are the supply chain issues and expense pressures associated with serving a nation with fewer residents than California, where 90% of the population lives within an hour’s drive of the U.S. border and two thirds of those people live in urban areas. There is also a higher concentration of immigrants, the requirements of two languages and other compliance challenges stemming from the fact that each province has its own unique regulatory requirements.

“It is easier and cheaper to transport goods from one Canadian province into the United States than it is to transport them from one Canadian province to another Canadian province,” Briesebois said. And to highlight the regulatory complexity, she noted the country has 50 different legislatively mandated waste diversion programs. “None of these programs are run the same way, which means you have to run 50 different programs. A lot of people compare (the regulatory climate) with California. We have to deal with a lot of regulations and it has a huge impact on the cost of doing business in Canada.”

Target’s largest concentration of U.S. stores is in California so coping with bureaucracy is familiar territory. The company’s merchandising and marketing strategy should also feed into what Briesebois noted is Canadian shoppers frugality, love of sales and desire to participate in loyalty programs.

“There is nothing that gets a Canadian more excited that a sale,” Briesebois said, adding, “Nine out of 10 Canadians participate in loyalty programs.”

There has been some slippage on the frugality front in recent years though as retail spending per capita now equals that of the United States, due in part to the strengthening of the Canadian dollar and the willingness of confident Canadians to take on more debt with average household debt levels now exceeding those in the U.S., according to Briesebois.

Consumer confidence among Canadians is higher than in the United States, but the higher debt levels ensure that, “Canadian consumers will continue to be value conscious for the foreseeable future,” Briesebois said. “Seventy six percent of Canadians describe themselves as being cost conscious, I don’t think I could repeat that often enough.”

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