OPERATIONS

Report: Always-on consumers, showrooming among 2013 retail trends

BY Katherine Boccaccio

New York — A new report by Experian Marketing Services finds that several key retail trends will impact how marketers shape their messages in 2013.

According to the 2013 Digital Marketer Report, consumers today are multi-device and multichannel shoppers, forcing digital marketers to adapt and evolve their message to reach consumers across channels and all along the path to purchase.

It also found that 74% of marketers surveyed have either coordinated, or are in the process of coordinating, customer interactions among both online and offline channels.

“The way consumers gain information from brands — the means by which they get it, even the ways in which they process it — is constantly evolving given the complexity of our multichannel world and evolving consumer behavior driven by economic variables,” said Bill Tancer, general manager of global research for Experian Marketing Services. “With the recent retail numbers coming out of January, retailers can anticipate consumer hesitation, making it imperative that marketers create integrated customer experiences and maximize digital marketing opportunities and return on investment.”

Among the key findings:

  • Showrooming will continue: Comparison shopping continues to be strong as shopping sites are the third largest driver of traffic to other retail sites. In fourth quarter 2012, shopping sites accounted for 19% of referral traffic on average to the top 500 retail sites;
  • Economic uncertainty will also continue, but online retailers will still benefit as consumers search for better deals and consumer awareness continues to improve with more retail information readily available;
  • Consumers are “always on”: Fifty-nine percent of adults say they email from at least two different devices during a seven-day period. Nearly one-third of adults under age 35 email from three or more devices each week; and
  • Maturing mobile market: 48% of adults ages 18 to 24 say that a conversation via text message is just as meaningful as a telephone call. A similar share of adults ages 25 to 34 feel the same way; in a given month, 8% of all smartphone owners report having shopped from their phones, whereas nearly 40% of tablet owners say they shopped from their tablets.
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FINANCE

Target Q4 slips but tops Street; will open 124 stores in Canada by yearend

BY Katherine Boccaccio

Minneapolis — Target Corp. reported Wednesday a profit of $961 million for the fourth quarter, down from $981 million in the year-ago period. The profit slip reflected expenses related to its Canadian market entry along with a spending slowdown during the holiday period. It was Target’s weakest holiday season performance since 2008. But its adjusted results beat analysts’ estimates and it forecast first-quarter earnings above Wall Street’s view. (For commentary on Target’s results, click here.)

“We believe these results position us well to deliver on significant plans in 2013, including completion of the largest store opening program in our company’s history with 124 stores in Canada and additional Target and CityTarget locations in the U.S., investing in new processes and technology that will improve our guests’ multichannel experience and closing the sale of our credit card receivables.” said Gregg Steinhafel, chairman, president and CEO, Target.

On a conference call with analysts, Target said it will open its first 24 Canadian stores in April, with a total of 124 locations planned by yearend. In the U.S., plans call for 15 to 20 new stores, including three CityTarget locations, and some 100 remodels.

"We expect to open many more new stores this year than in any year in our history," Steinhafel said during the call.

Target’s revenue in the fourth quarter climbed 7% to $22.73 billion, from $21.29 billion in the same period last year. Analysts forecast $22.69 billion in revenue. Industry experts said the chain’s holiday showing was partially hurt by the disappointing performance of its collection of gifts sold in partnership with Neiman Marcus. The line launched on Dec. 1, and Target sharply discounted the goods before Christmas Eve.

As previously reported, sales at U.S. stores increased 6.8% to $22.4 billion in the fourth quarter from $20.9 billion last year. Same-store sales inched up 0.4%.

"We’re pleased with Target’s fourth quarter performance, particularly in the face of a highly promotional retail environment and continued consumer uncertainty," Steinhafel said.

For the full-year, sales increased 5.1% to $72.0 billion from $68.5 billion in 2011, with a 2.7% increase in comparable-store sales combined with the contribution from new stores and one additional accounting week.

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Insights

On Target: Planet Retail’s Take on Target’s Q4 and full-year results

BY CSA STAFF

By Sandy Skrovan, U.S. research director, Planet Retail

Target closed the books on its weakest holiday season performance since 2008, recording a paltry 0.4% same-store sales gain in the fourth quarter. Dragging down Target’s fourth quarter results were weaker-than-planned sales during the critical November/December time-frame, with 1.0% comps in November 2012 followed by a flat December compared with the same year-ago periods.

Walmart proved the victor over Target for the 2012 holiday season, logging a 1.0% increase in its fourth quarter. But Target won the year overall since, unlike Walmart, its affluent shopper base tends to be more insulated from economic swings. For the year, Target’s retail sales were up 5.1% with comparable-store sales up 2.7%.

Fortunately for Target, it ended its fiscal year on a high note, as shoppers sought post-holiday deals in January as well as a glimpse of upcoming spring fashions. Solid January comps helped prop up fourth quarter performance – ever so slightly – giving Target momentum entering fiscal 2013. The biggest initiative, by far, in the coming year will be the long-awaited launch in Canada. It’s been a long time coming, but the groundwork has now been laid and Target is set for its March 2013 debut in Canada.

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