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IBM report: Consumers defer back-to-school shopping in favor of home-related purchases

BY Staff Writer

Armonk, N.Y. — Study results released Tuesday by IBM revealed that while U.S. consumers shopped this July and August, they were not buying clothes and notebooks for their children but rather items for the home.

According to IBM’s findings, the biggest retail gains this back-to-school shopping season came from home goods purchases which increased 30% in July and more than 25% in August over their respective months in 2012.

While experts speculate that consumers were holding off on BTS purchases to eye the choices of their peers, social networks appeared to drive purchases with social sales increasing 69.7%. The social influence was especially apparent when it came to apparel, where shoppers referred to online stores through social networks generated 2.2% of all sales in August, an increase of more than 113% over 2011.

Mobile commerce also continued to grow with sales increasing 15.7% in July and 15.4% in August. For home goods, mobile sales reached a high of 20.1%.

"Back-to-school season is proving to be a trigger event that spans across categories beyond just notebooks and backpacks,” said Jill Puleri, global retail leader, IBM. “Retailers that are cashing in are those who understand how this trigger drives sales for home furnishings, as well as for apparel, and can target their inventory levels and promotions accordingly.”

The IBM benchmark revealed the following back to school trends:

  • July online sales increased more than 11% year-over-year while August slowed with sales up 3.9% percent compared to last year;
  • In July, shopper referrals to retailer sites from social networks generated 1.6% of all sales, an increase of 25.1% over last year. This trend continued in August, reaching 1.8%, an increase of 69.7% over the previous year;
  • Mobile commerce remains strong with sales from mobile devices reaching 15.7% in July and 15.4% over the month of August. As for vertical industries the following categories experienced success over this time frame;
  • By category, department store online sales grew 22.1% in July and 28.7% in August. Over this period mobile sales were strong, hitting 19.2% in July and 18.9% in August.
  • Apparel online sales were up 9.2% in July and 9.8% in August. Over this period mobile sales reached 15.1% and 16.4% in August. Apparel stores also experienced strong social commerce, with shoppers referred to their sites from social networks generating 1.4% of all sales in July and 2.2% in August, up more than 113% over 2011, more than any other category.
  • Office supplies/electronics online sales grew by 6.3% in July while dropping by .92% in August. Mobile sales reached 5.7% in July and remained steady in August at 5.9%.

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Survey finds that retail fraud is taking a great financial toll

BY Katherine Boccaccio

Atlanta — The “True Cost of Fraud” study by LexisNexis found that retailers incurred $2.70 in costs for every dollar in fraudulent transactions. The cost incorporates charge backs for merchandise, the fees and interest to financial institutions and payment processors as well as any replacement, redistribution or restocking fees incurred by a merchant.

The study, conducted by Javelin Strategy & Research, examined how fraud affects retail merchants, financial institutions and U.S. consumers, as well as identified and quantified the losses involved in a fraudulent retail transaction.

Findings from the study showed the cost of fraud is on the rise compared with last year. This year’s cost of $2.70 per $1.00 in merchandise is up $0.40 from last year’s level of $2.30. One of the areas of major fraud growth is the mobile sector. This year, mobile merchants paid $2.83 for every $1.00 lost compared to just $2.00 for 2011, an increase of more than 40%. The analysis in the study showed that criminals are shifting more attention to merchants that use a broader array of sales interaction methods, including browser, applications, text and evolving near-field communication methods.

The study also found:

  • The LexisNexis Fraud Multiplier among international merchants has risen from 2.2 to 2.5 since last year, an increase of almost 14% per dollar of fraud;
  • Only 39% of merchants believe that lower fraud rates can increase customer loyalty, meaning 61% don’t relate fraud reduction to improved customer loyalty; and
  • 33% of consumers who fall victim to fraud avoid certain merchants. Thus, customer confidence is critical in maintaining and improving reputation and translates into return customers for merchants demonstrating they have earned that trust.

“With the size and pattern of fraud significantly impacted by global economic conditions and the move to mobile payments, this turbulent time requires merchants to be more vigilant than ever,” said Jim Rice, director, market planning, retail and e-commerce markets, LexisNexis Risk Solutions.

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99 Cents Only amps up sustainable efforts in Southern California

BY CSA STAFF

CITY OF COMMERCE, Calif. — 99 Cents Only has leased 40 new compressed natural gas-powered tractors from Ryder.

The new CNG trucks will operate exclusively in the Southern California market, making store deliveries and picking up goods from vendors. As part of its full-service lease, Ryder will provide both the CNG tractors, as well as maintenance for the vehicles. The chain said the tractors will replace its oldest diesel burning units with cleaner CNG rigs, making it one of the largest private Class-8 CNG fleets in Southern California.

"We are pleased to announce that we not only plan to continue offering our valued customers the best selection of products at the lowest possible prices, but have also made a commitment to our community and global environment by converting a significant portion of our delivery trucks to compressed natural gas," 99 Cents Only CEO Eric Schiffer said. "We expect to reduce the carbon footprint of the fleet and its CO2 emissions by up to 25%. This will positively impact both our customers and the communities our stores serve."

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