TECHNOLOGY

Holiday sales better than expected; data reveals winners — and losers

BY Marianne Wilson

It was a less than merry holiday for some retailers, especially in the department store sector, but total sales still managed to beat industry projections, fueled by a strengthening economy.

Retail sales (excluding autos, gas stations and restaurants) during November and December rose 4% over 2015 to $658.3 billion, according to the National Retail Federation. The group had forecast sales would rise 3.6% to $655.8 billion.

Non-store sales (which include online) saw the biggest increase, with sales rising 12.6% to $122.9 billion. The other categories posting year-over-year increases were furniture and furnishing, health and personal care, and clothing and accessories. But department stores clearly did not feel the holiday glow, with sales down 7.0% over last year.

“There has been a lot of talk about online versus in-store retail in the past few months, but that comes from people who don’t realize that online and retail today are the same thing,” said NRF president Matthew Shay said. “In the new distributed commerce world that allows consumers to buy any product, anytime, anywhere, it really doesn’t matter whether a customer shops in a company’s store or on its website or mobile app. It’s all retail.”

The NRF’s numbers are based on data from the Commerce Department, which said that overall December sales — including automobiles, gas stations and restaurants — were up 0.6% seasonally adjusted from November and 4.4% unadjusted year-over-year.

NRF chief economist Jack Kleinhenz noted that consumers were more active during the holiday season than they had been earlier in the year.

“Economic indicators were up, retailers offered great deals, confidence improved and all of that empowered consumers to spend more,” he said.

Kleinhenz added that average hourly earnings were up in 2016 over 2015, job gains remained strong and unemployment, although up slightly in December from November, remained low. Home values have also increased and the rising stock market has increased the value of consumers’ investments.

A few specifics from the report include:

• Online and other non-store sales increased 12.6% unadjusted year-over-year.

• Sales at clothing and accessories stores increased 2.5% unadjusted year-over-year.

• Sales at general merchandise stores decreased 1.5% unadjusted year-over-year.

• Electronics and appliances stores’ sales decreased 2.3% unadjusted year-over-year.

• Furniture and home furnishings stores’ sales increased 4.8% unadjusted year-over-year.

• Sales at building materials and supplies stores increased 4.5% unadjusted year-over-year.

• Sporting goods stores’ sales decreased 1.7% unadjusted year-over-year.

• Sales at health and personal care stores increased 6.7% unadjusted year-over-year.

• Sales at department stores decreased 7.0% percent unadjusted year-over-year.

• Food and beverage stores' sales increased 3.6% unadjusted year-over-year.

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TECHNOLOGY

Survey: Shopping in stores a ‘chore’ for many consumers

BY Deena M. Amato-McCoy

When did washing dishes become more attractive than shopping?

In-store shopping has lost its allure for many shoppers, who are increasingly frustrated with brick-and-mortar stores that lack the convenience of online players, according to a new global report from Capgemini’s Digital Transformation Institute.

In the study, “Making the Digital Connection: Why Physical Retail Stores Need a Reboot,” which surveyed 6,000 consumers and 500 retail executives from the United States and eight other countries, 40% of consumers claimed shopping is a chore, and (32%) said they would rather be washing their dishes.

The report reveals a growing divide between retailers and consumers on the importance of physical stores. The most obvious disconnect is that 81% of retail executives see the store as important, while only 45% of consumers agree. Shoppers are frustrated by in-store experiences that have failed to keep pace with developments in online shopping and are also disconnected from online stores, according to the report. In a bit of good news, Chinese and American shoppers (29% and 31% respectively), are the least dissatisfied among the groups surveyed.

More than half (54%) of the retail executives surveyed admit that they have been slow to digitize their physical stores.

Shoppers’ biggest pet peeves include:

• Difficulty comparing products (71%)

• Long lines at checkout (66%)

• Irrelevant promotions (65%)

• Failing to find the product they want (65%)

Increasingly, consumers expect to see the same — or more— features that they find online implemented in stores, including ability to check stock availability before arriving at the store (75%), and same day delivery of products ordered in-store (73%).

Fifty-seven percent (57%) want social spaces, learning experiences and inspiration, such as cooking or DIY workshops; 68% expect loyalty points for spending time in store and repeat visits, while 61% want store memberships that offer lower prices.

The lack of these features are driving shoppers to alternative channels, with 57% open to buying directly from manufacturers in the future, and 59% to buying from technology players such as Google, Apple and Facebook if they partnered with local retailers for last-mile delivery.

While in-store digitization is a top management priority for the majority of retail executives (78%), only 18% of the executives have implemented digital initiatives at scale, and generating significant benefits. Meanwhile, 43% said they are unable to measure the return on investment from in-store digital initiatives despite high usage, the study said.

“The industry is going to see a fascinating struggle take place in the next few years to decide what exactly the new breed of retail store looks like,” said Kees Jacobs, consumer goods and retail lead, Insights & Data Global Practice, Capgemini. “The battle to create the modern retail experience, between traditional retailers with a long, successful history of high street store building and new digital entrants built around the Internet and mobile technology, is finely poised."

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TECHNOLOGY

Retailer gets caught in political crossfire

BY Marianne Wilson

L.L. Bean has been drawn into something that it has always shied away: the political spotlight.

It all started with the news that Linda Bean, granddaughter of company founder Leon Leonwood Bean and a member of the Bean board, had made a substantial donation to a pro-Trump PAC during the president-elect's campaign. Trump then thanked Bean for her support via a tweet that ended with “Buy L.L.Bean.”

Trump’s tweet drew attention to the low-profile, Maine-based brand, which has always enjoyed a sterling reputation, donating millions of dollars over the years to an array of conservationist and educational causes. It is now facing a boycott by Grab Your Wallet, a group that calls for people to avoid buying products made by companies that support Trump, companies with owners who have publicly supported Trump, and companies that sell Trump products, according to Business Insider.

L.L. Bean executive chairman Shawn Gorman responded to the boycott in a Facebook post in which he said the company was "deeply troubled by the portrayal of L.L.Bean as a supporter of any political agenda.” He also noted that Linda Bean is one of more than 50 family-owner members of the company.

"L.L. Bean does not endorse political candidates, take positions on political matters, or make political contributions,” Gorman wrote. "Simply put, we stay out of politics. To be included in this boycott campaign is simply misguided, and we respectfully request that Grab Your Wallet reverse its position."

Click here to read more.

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