Report: Consumers to get early jump on holiday shopping
More and more Americans plan to get an early start on their holiday shopping. And they also plan on spending more.
Nearly half (45%) of Americans plan to start holiday shopping before November, with one in four starting before October, according to RetailMeNot's 2017 Holiday Retail Trends and Guide. Retailers are capitalizing on this earlier start: Nearly 80% indicated they will begin holiday marketing efforts earlier this year.
Consumers plan to spend an average of $743 during the Black Friday (Nov. 24) to Cyber Monday (Nov. 27) shopping weekend, up 47% from last year’s average of $505, according to the report. Echoing the trend observed in 2016, RetailMeNot expects that Black Friday deals will start well in advance of Thanksgiving Day, and last beyond Cyber Monday. In fact, the holiday shopping weekend of Thanksgiving to Cyber Monday will likely now expand into two full weeks of deals.
According to RetailMeNot, Cyber Monday is becoming just as important as Black Friday as it gains popularity amongst consumers. Fifty-six percent of consumers said they plan to shop Cyber Monday deals in 2017 versus just 39% in 2016.
“With the expanded shopping season this year, Black Friday and Cyber Monday are no longer single-focus days. It’s now a two-week-long promotional opportunity,” said Marissa Tarleton, CMO, RetailMeNot. “Not only are these two days as important as ever, retailers must consider how to win the two-week period.”
This year’s holiday season gives shoppers an extra Saturday before Christmas Eve for last-minute shopping. Four in 10 retailers are setting aside more than a quarter of their overall holiday marketing budget for last-minute promotional activity. RetailMeNot recommends retailers plan to trigger special “pulses” of savings for maximum ROI. On average, RetailMeNot data shows the ideal promotional length to be about three days — and this data shows a 3x conversion lift when retailers combine short pulse promotions with longer, evergreen promotional content.
Download the full study at rmn.com/holidayinsights2017.
Innovative retail concept in store expansion mode
A tech-savvy retailer with an unusual business model is expanding its brick-and-mortar footprint nationally.
b8ta announced plans to open four new stores, designed by Gensler, with locations in San Francisco, San Jose, Calif. (Santana Row), Houston (Galleria), and New York City. The expansion, which brings the company's total store count to nine, kicks off with the opening of a store in San Francisco’s Hayes Valley neighborhood on Sept. 29.
b8ta stores are designed to give shoppers a hands-on demonstration of cutting-edge tech products and gadgets — most of them from start-up companies that lack the resources and/or know-how for entering traditional retail channels. Indeed, most of the featured companies (or “makers” in b8ta speak) sell products directly on their websites or through crowd funding campaigns. Each store feature a mix of more than 100 products, and customers are encouraged to see, touch and try out the products.
b8ta is different than the traditional retail model in that the company makes its money essentially by leasing space in its stores to the product makers/manufacturers. Proceeds of all in-store sales go directly to the makers themselves.
Data powers the entire enterprise and b8ta’s inventory changes month-to-month based on performance, offering frequent opportunities for new makers — and novel experiences for customers. The product makers have access to detailed data and the ability to test and control the experience of their product in store.
b8ta opened its first store in late 2015, in California. The company was founded by Vibhu Norby (CEO), William Mintun (COO), and Phillip Raub (CMO).
“In December 2015, we opened our first b8ta store in Palo Alto to prove that retail wasn’t dying because consumers had lost interest in shopping, but because the makers behind the best products had lost interest in working with retailers," said Norby. "After opening our first five stores, filling them with hundreds of unique products, and engaging 25,000+ customers a month, we’ve proven our thesis. In the next few months, we’re extending our reach coast to coast, allowing our amazing makers to meet their customers across the country.”
b8ta has also launched its e-commerce platform, giving customers the opportunity to purchase products online from any of the store locations. The company’s growth has been fueled by a $19.5 million funding round led by Khosla Ventures, Fifth Wall Ventures, and TriplePoint Capital with participation from Comcast Ventures and national mall operator Macerich.
Target ups minimum wage—with even bigger hike planned by 2020
Target Corp. is raising the stakes in the battle for retail store talent — and giving its employees a holiday surprise in the process.
The discounter on Monday announced plans to raise its minimum hourly wage for all associates to $11 in October. It also pledged to increase the rate to $15 by the end of 2020. The retailer said the move will help it better recruit and retain top-quality staff and provide a better shopping experience for customers.
The pay increase will go to thousands of Target employees across the country before the holiday season. The increase will also apply to the more than 100,000 hourly team members that Target is hiring for the holiday season. The move to a minimum hourly wage of $15 will be implemented between now and the end of 2020, the company said.
Target's new pay increases put it ahead of rival Walmart in minimum wage increases. Walmart had raised its entry-level hourly pay for workers to $9 in 2015 and then to $10 in 2016.
“We care about and value the more than 323,000 individuals who come together every day with an absolute commitment to serving our guest,” said Brian Cornell, CEO and chairman of Target. “Target has always offered market competitive wages to our team members. With this latest commitment, we’ll be providing even more meaningful pay, as well as the tools, training and support our team needs to build their skills, develop professionally and offer the service and expertise that set Target apart.”
Target noted that it currently pays market competitive rates above the federal minimum wage at all stores nationwide. The chain's last major wage increase was in 2016, when the company moved to a $10 minimum hourly wage, which is higher than the minimum wage in 48 states, and matches the minimum wage in Massachusetts and Washington.
Also on Monday, Target reiterated its most recent sales and EPS guidance for third quarter and full year 2017, signaling that its increased salary expenses are not expected to impact the company's bottom line.