Millenials to outspend Baby Boomers by 2017
New York — The Millennial generation is expected to outspend Baby Boomers by 2017, yet retailers underestimate the size and purchasing power of this consumer, according to a new study by Berglass + Associates and Women’s Wear Daily.
The study, “What Happens When Millennials Get the Wallet,” found that retailers do not fully understand the needs of Millennials and are employing business strategies and tactics that do not apply to this customer.
“Millennials have different motivations, attitudes and behaviors than previous generations, and retailers need to adjust their business strategies accordingly in order to thrive,” said Les Berglass, CEO of Berglass + Associates. “For the first time in several decades, we will see a new member of the C-suite, who will be responsible for driving two-way communication between the Millennial customer and the brand and for developing initiatives that will deliver long-term growth.”
The online survey, which was conducted in September 2013, queried 121 U.S. business leaders in all sectors of retail (including department stores, specialty stores, home shopping and direct-mail catalogs) primarily in the apparel, accessories, footwear and beauty sectors. Key findings unveiled in the survey include:
- Approximately half of respondents are unaware that Millennials are expected to outspend Baby Boomers annually within five years.
- Millennials rely most on their friends to make buying decisions, yet more than a quarter of respondents mistakenly believe that online advertising is the number one influencer of Millennials’ purchasing activity.
- Of the executives that were surveyed, more than 30% are CEO’s or presidents, who plan to significantly increase their digital leadership over the next three years.
- Sixty percent of respondents are not conducting any research or analysis of the Millennial customer.
- Only 36% of respondents from companies with both physical stores and e-commerce sites offer a seamless customer experience, yet Millennials expect the channels to be integrated.
I simply want to contribute some research from Accenture that relates to important article: "Who are the Millennial Shoppers" -- http://bit.ly/16Rtmav. Of course, research is available from other sources.
From Sears Canada to head of Sephora Americas
Beauty retailer Sephora has appointed former Sears Canada and Loblaws executive Calvin McDonald as president and CEO of Sephora Americas, effective Jan. 1, 2014.
McDonald succeeds David Suliteanu, who has led Sephora since July 2000. Suliteanu is becoming the CEO of Kendo Brands, a separate LVMH entity, which creates new beauty brands, as well as acquires brands. The Kendo portfolio today includes brands, such as Ole Henriksen, Kat von D, Formula X and Marc Jacobs Beauty, with others in development.
“Calvin McDonald has established himself as a visionary and highly talented industry leader at two of Canada’s largest and most important retailers. We are delighted to welcome him to Sephora Americas. He will focus on building on the extraordinary growth of the business in new and existing markets and continue Sephora’s exceptional track record of industry leadership driven by David Suliteanu,” stated Christopher de Lapuente, CEO of Sephora Global and a member of the Executive Committee of LVMH. “David is moving on to lead Kendo, an incubator of exciting and creative brands beauty brands. I am delighted that he will continue to contribute to the success of Sephora and LVMH.”
Under Suliteanu’s leadership, Sephora has revolutionized the beauty industry in North America, by creating an entirely new retail shopping experience. Today, Sephora Americas offers in excess of 200 classic and emerging brands. Suliteanu and his team have: expanded Sephora’s base of stores in North America to more than 330; opened the Latin American market; led Sephora’s successful partnership with JCPenney now with more than 400 locations; launched Beauty Insider, Sephora’s client-loyalty program; and driven state-of-the-art enhancements to Sephora’s digital strategy.
“Thanks to a phenomenal team and the support of LVMH, the last 13 years at Sephora have been amazing. Based on his background in creating new and exciting consumer experiences, Calvin will be a great leader for the Sephora Americas team,” Suliteanu stated. “I am excited about the opportunity to continue to work with LVMH and Sephora in growing this new business model that a few years ago was just an idea.”
Added Mc Donald, “It is thrilling to be joining Sephora Americas, which is known across the retail industry for not only having revolutionized the beauty business, but also for delivering a consistent stream of innovation in terms of merchandise, experience and digital capabilities that excite and inspire customers. I am looking forward to working with the exceptional Sephora team to build on what they have accomplished under David’s leadership. Sephora Americas is an amazing success story, and I am proud and privileged to work with our cast members, brand partners and customers and colleagues worldwide as we work to take Sephora Americas to the next level of innovation and growth."
Both Sephora Americas and Kendo will report to de Lapuente.
Prior to accepting the position at Sephora Americas, McDonald was named president of CEO of Sears Canada in 2011. McDonald began his career at the Loblaw Cos., which is Canada’s largest food retailer with more than $32 billion in sales and is known for its private-label products across a variety of categories, including health and beauty, apparel, food and others. During his 18-year tenure at Loblaw, McDonald held various roles of increasing seniority across its many divisions. Among his many achievements was launching the most successful and integrated category campaign for President’s Choice, the most successful private brand in Canada, as well as launching the “Recipes to Riches” TV show.
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Build-A-Bear shrinks Q3 net loss; sets 10 to 25 store closings
St. Louis — Build-A-Bear Workshop shrunk its net loss in the third quarter of fiscal 2013 to $1.4 million from $4.3 million in the same quarter a year earlier. The company announced that it expects to close an additional 10 to 25 stores in fiscal 2013 and 2014 and, along with opportunistic store openings, expects to reach a store count of approximately 250 stores in North America.
Consolidated net retail sales were $83.6 million while operating 31 fewer stores compared to $84.3 million in the fiscal 2012 third quarter, a decrease of 0.9%.
In one bright spot, consolidated same-store sales increased 6.4%. That result included a 7.6% increase in North America and a 2.3% increase in Europe.
“The third quarter marked our fourth consecutive period of same-store sales growth in North America and our third consecutive increase in Europe,” said Sharon Price-John, CEO of Build-A-Bear. “Stronger same store sales productivity, along with reduced promotions and disciplined expense management, drove an improvement in our operating performance. We have a solid plan in place and I expect to capitalize on the upcoming holiday season with compelling product and marketing initiatives. We are establishing a foundation to deliver our stated objective of sustainable profitable growth and will continue to leverage the strength of the Build-A-Bear Workshop brand, our core competencies.”
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