Kurt Salmon finds retailers fall short on online returns
New York City — Although online sales grew 15% from 2010 to 2011, many retailers’ online ordering, shipping and returns processes failed to keep pace, according to management consultancy Kurt Salmon’s rankings of 50 retailers.
Only three retailers, Amazon, Sephora and Saks Fifth Avenue, achieved Kurt Salmon’s highest ranking. The highest-ranked retailers offered easy online shopping and checkout experiences, on-time shipping, great presentations, and a simple return process — all of which set them apart. But most retailers have room to improve, especially on how they handle returns, which the National Retail Federation expects to have increased 4% during the 2011 holiday season, to $46 billion.
"We found that many retailers got high marks in shopping and shipping, but fell short on returns," said Kurt Salmon retail strategist Megan Donadio. "Some retailers required the customer to fill out tiresome paperwork and wait in line at the post office, while others failed to provide any type of tracking method or took weeks to process refunds.”
As more and more retailers offer free shipping, returns are only going to increase and retailers without a quick, hassle-free return process are going to see a lot of disappointed customers, Donadio added.
“Customers have higher expectations every year and long memories for holiday season letdowns,” she said.
Kurt Salmon purchased products — one with gift-wrapping and one without — from 50 retailers across multiple segments the day after Cyber Monday, when they were most likely to be overloaded with online orders. Each retailer was rated on a scale of 1 to 5 on their online shopping experience, receiving the gift, and later, the return process.
The average overall score was 2.5, with home furnishings retailers and online-only retailers scoring highest and mass-merchant retailers the lowest.
A few standout retailers earned high marks for sending small extras with their gifts — Williams-Sonoma attached a small whisk to its gift-wrapping, while Gymboree included certificates for free classes at its stores.
Other retailers set themselves apart with the quality of their gift-wrapping. Only 60% of retailers studied offered gift-wrapping on all their products. And only 50% of recipients felt that gift-wrapping was worth the extra cost.
"Saks really carried the luxury experience throughout the purchasing and receiving process," said Vinod Rangarajan, retail strategist, Kurt Salmon. "They charged the same amount for gift-wrapping as many other retailers, but they not only let customers choose different wrapping paper for each gift box, they also used very high-quality paper and ribbons. Some retailers skip gift-wrapping because it’s very labor intensive, but it can really make a gift feel customized and special. Modern shoppers are seeing gifts from multiple retailers during the holiday season, so shoddy really stands out, as does breathtaking."
Video killed the Hhgregg star
INDIANAPOLIS — Electronics retailer Hhgregg announced that it has lowered its third-quarter forecast, reflecting weakness in the video category.
The company said that fiscal third quarter comparable-store sales are estimated to have increased 3.9%, with the video category expected to have decreased 4.8%, the appliance category expected to have increased 6.8%, the home office category expected to have increased 91.4% and the other category expected to have decreased 7.1%.
Total sales for the quarter are expected to increase by 26.9% to $829.5 million, as compared with net sales of $653.7 million reported for the third quarter of fiscal 2011.
Hhgregg said it is expecting a drop in net income to approximately $22.5 million, or 60 cents per diluted share, from net income of $26.9 million, or 66 cents per diluted share, for the comparable prior-year period. According to the company, third-quarter earnings were negatively impacted by lower than expected margins in the video category and increased advertising spend aimed at gaining market share and launching its mobile category.
Dennis May, president and CEO commented, "We are pleased to report our second consecutive quarter of positive comparable-store sales, which resulted in market share gains in the appliance and home office categories. In addition, we remain pleased with our performance in the new markets we entered in fiscal 2012 and our execution throughout this holiday season. However, the video industry experienced heavier than expected promotional activity across all screen sizes, which negatively impacted industry average selling prices and margins. While we believe we maintained our market share in video during the quarter, the difficult industry trends negatively impacted our results beyond our expectations."
Due to the expected weakness in third-quarter sales and earnings, Hhgregg said it now anticipates that annual net income per diluted share will be within a range of $1.05 to $1.15 for fiscal 2012. This compares to previous guidance of net income per diluted share of $1.26 to $1.41 in fiscal 2012. The company also expects that fiscal 2012 comparable-store sales will be flatto positive 2%, as compared with previous guidance of flat to positive 3%. Net sales for the year are expected toincrease 22% to 24%, as compared with previous guidance of net sales increase of 20% to 25%
Toys”R”Us raises $4M for Toys for Tots
WAYNE, N.J. — Toys"R"Us has announced that its eighth annual fundraising campaign to benefit the Marine Toys for Tots Foundation was its most successful to date, raising $4 million and collecting more than 400,000 toys to help make the holidays brighter for kids in need across the United States.
To jump-start this year’s campaign, the Toys"R"Us Children’s Fund, a public charity affiliated with Toys"R"Us, Inc., provided a $250,000 grant to the Marine Toys for Tots Foundation. Also, to further demonstrate the company’s commitment to spreading holiday cheer to some of America’s neediest children, Toys"R"Us donated more than $250,000 worth of toys to Toys for Tots.
"At Toys"R"Us, it’s our mission to help kids in times of need, and with more than 16 million children now living in poverty in the United States , raising money and collecting toys was more important than ever before in helping to put smiles on the faces of less fortunate children during this holiday season," said Jerry Storch , chairman and CEO of Toys"R"Us, Inc. "We are incredibly proud that this year’s Toys"R"Us Toys for Tots campaign was the most successful in company history due in large part to the overwhelming support of our customers and our employees across the country. This collective commitment to helping children in need ensured millions of kids – who otherwise might have gone without – had a toy to open on Christmas morning."