MOBILITY

Nation’s largest mall is ‘mapping out’ a better shopping experience

BY Deena M. Amato-McCoy

Technology that works like GPS for indoor locations is helping shoppers find their way through Mall of America.

The retail and entertainment center — which features 5.6 million square feet of retail attractions and hotel space, including more than 520 retail stores and restaurants — is hoping to enhance its visitor experience with a sophisticated, app-based indoor positioning system. The StepInside Indoor Positioning System, from Senion, directs visitors to their desired retail, restaurant, or entertainment destination within the huge complex through an app on their mobile devices.

The indoor positioning system (IPS) technology leverages wireless access points from Cisco, with the points positioned throughout Mall of America, The technology detects the smartphone’s movement and radio sensors to provide accurate positioning. Both companies are calling the project the largest retail installation of IPS in the United States to date.

“As a destination that welcomes millions of visitors from around the world each year, MOA is continuously implementing new offerings to enhance the guest experience and make the property more accessible,” said Jill Renslow, senior VP of marketing and business development at Mall of America. “StepInside indoor positioning system, allows us to of-fer step-by-step wayfinding, a more personalized visit that caters to the guest preference, and a way for visitors to more easily connect with our brands and attractions.”

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ECOMMERCE

British online fashion giant doubling down on the U.S.

BY Marianne Wilson

As if American apparel retailers didn't have enough homegrown competition, ASOS, the largest online fashion retailer in the U.K., is making a major push into the American market.

The company has signed an agreement to establish its second North American fulfilment center, in Union City, Georgia, outside of Atlanta. The center, which has an initial investment of $40 million, will be able to handle 10 million items, with the opportunity to expand further. Construction is expected to begin shortly, with operations starting in fall 2018.

"This agreement is a major step forward for ASOS in the US and demonstrates the opportunity we believe lies ahead in this key market," said Nick Beighton, CEO, ASOS. "Our US business delivered 39% constant currency growth in the first six months of the current financial year. Our U.S. fulfilment centre will enable us to significantly develop our proposition for our 20-something US customers supporting our continued growth and future ambitions."

Founded in 2000, ASOS (which stands for "As Seen on Screen") targets young millennial men and women with affordable fast-fashion items and accessories. It features 85,000 different products (including 4,000 new styles every week) to 12.4 million active customers. About 40% of the mix comes from its own brand, and another 20% from exclusive items created for it by other brands. The rest is made up of items from both well-known labels and smaller ones.

According to Business Insider, U.S. sales make up 12% of ASOS's total sales globally, and are growing twice as fast as U.K. sales. The retailer is looking to capitalize on that growth with its new distribution center.

"This fulfilment centre will significantly enhance ASOS' US customer proposition providing more cost effective, faster and more flexible delivery options," the company stated.

The company currently has a market cap of about five billion British pounds, or around $6.5 billion. Sales totaled about $1.8 billion in 2016. With eight local language websites, ASOS sells to customers in the U.S., U.K., Australia, France, Germany, Spain, Italy and Russia.

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FINANCE

CVS Health tops Q2 forecasts

BY Marianne Wilson

The nation's second largest drugstore chain by store count posted a higher-than-expected quarterly profit amid stronger demand for its pharmacy benefits management business.

CVS’ net income rose 18.8% to $1.1 billion in the second quarter, ended June 30. Net revenues rose 4.5% to $45.7 billion, with a 9.5% increase in revenue in it pharmacy services segment, which includes its pharmacy benefits manager (PBM) business and specialty pharmacy services.

Net revenues in the company’s retail/LTC segment fell 2.2% to $19.6 billion, amid softer traffic, increased generic dispensing and reimbursement pressure. Same-store sales fell 2.6%.

“The second quarter results we posted today keep us nicely on pace to achieve our full-year targets," said CVS Health president and CEO Larry Merlo said. "Operating profit in the retail/LTC segment was in line with expectations while operating profit in the pharmacy services segment exceeded expectations. While we are pleased to report results consistent with our expectations, we won’t be satisfied until the total enterprise returns to healthy levels of earnings growth.”

Pharmacy same-store sales dropped 2.8% in the quarter, with same-store prescription volumes remaining flat on a 30-day equivalent basis. Front-end same-store sales dropped 2.1%, impacted by softer customer traffics and the company’s efforts to rationalize promotional strategies.

Håkon Helgesen, analyst at GlobalData Retail, commented that the retail side of the CVS operation is a “neglected part” of the company's business and, as a result, performs well under its potential.

"The blunt truth is that, outside of health care needs, many consumers see CVS as a place to buy essentials when nowhere else is convenient," Helgesen said. "Others buy a few products when they come to pick up prescriptions. Relatively few retail shoppers see CVS as a destination in its own right, even for categories like beauty. Given the scale of CVS, which puts its stores in easy reach of most Americans, this is a massive lost opportunity."

During the second quarter, CVS opened 27 new retail stores, relocated 10 stores and closed three. During 2017, the company said it still plans to close roughly 70 retail stores. In the first half of the year, it has closed 63 stores and taken a charge of $205 million.

The company said Tuesday it now expects adjusted earnings of $5.83 to $5.93 per share in 2017, as it raised the lower end of its previous forecast from $5.77 per share.

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