The Importance of Being In Stock
While many retailers are eager to put the most recent holiday selling season behind them, there are some important lessons to keep in mind for next year from a survey of 2006 holiday shoppers by KPMG LLP. Chief among these: in-stocks and a simple return policy are at the top of many consumers’ lists when it comes to deciding where to do their holiday shopping.
In the survey, entitled 2006 Holiday Shopping Behavior Consumer Research, some 81% of consumers said they sought out the store that had the desired item in stock; 75% said a simple return policy helped them decide which retailers to patronize. Only 19% of respondents cited price as being influential in choosing a retailer.
Other findings of KPMG’s study include:
Early promotions had little effect on when people shopped;
Low prices were considered most important when buying electronics;
Sixty-four percent of respondents said they preferred to shop at a strip mall or freestanding store because they were less crowded and were easier to get in and out of compared to malls;
Overall selection increased in importance as to why shoppers shifted their spending from one store to another.
One important conclusion to be drawn from the survey is that operational execution is critical for any retailer to avoid being sidestepped by consumers. Another is that heavy promotions of sales may not be the most effective or successful method of attracting customers. Both have year-round impact.
“Retailers who focus on price to drive sustained profitable growth are unlikely to achieve their goals,” said Mark Larson, KPMG’s global leader for the retail sector.
Victoria’s Secret Names New CEO
Columbus, Ohio, Limited Brands Inc. on Monday announced that Lori Greeley will replace Grace Nichols as CEO of Victoria’s Secret Stores. Greeley is currently executive VP and general merchandising manager of intimates for Victoria’s Secret.
The retirement of Nichols, a 20-year Limited veteran, from the CEO post was announced in May 2006. She will take a new role supporting initiatives within Victoria’s Secret, including the growth of its Intimissimi brand.
Additionally, Mark Weikel, COO of Victoria’s Secret Stores, will add the title of president.
Wal-Mart to Focus on Expanding Seiyu
New York City, Wal-Mart Stores is open to acquisition opportunities in Japan, but the retailer is more focused on expanding business at its 53%-owned Seiyu chain, according to a report by Reuters. Shares of Seiyu jumped Monday after Wal-Mart vice chairman Michael Duke told the Nikkei business daily that the company might look for more acquisition opportunities in Japan.
The paper reported that Duke welcomed planned changes in corporate laws in May that will enable foreign companies to buy Japanese firms through share swaps.
Wal-Mart last year tried to invest in superstore operator Daiei Inc., aiming to boost its presence in the country, but it lost the chance to Aeon Co., Japan’s second-biggest retail group.
Wal-Mart entered the Japanese market in 2002 by taking a small stake in Seiyu. It has since invested more than $1 billion in the chain, but has yet to return the retailer to profitability.
Wal-Mart spokeswoman Amy Wyatt said Wal-Mart’s focus in Japan is on Seiyu.
“It’s a very sizable business today, so we still think that there are a lot of growth opportunities in the existing business,” she said.
In terms of acquisitions, she said: “I wouldn’t go as far as to say we’re shopping for them.”