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TECHNOLOGY

Report: Retailers are running in place when it comes to IoT

BY Deena M. Amato-McCoy

Retailers remain stuck when it comes to Internet of Things (IoT) initiatives, according to “The Internet of Things in Retail: Getting Beyond the Hype.”

The second annual report from RSR shows that retailers are increasingly aware of the impact of IoT on customer engagement and competitive advantage. Yet, they are still hesitant to invest in cutting edge technologies due to operational challenges and a lack of supporting infrastructure.

The good news is 70% of retailers acknowledge that IoT will drastically change the way they do business in the next three years. This is in stark contrast to the mere 74% who have deployed one or less sensor-based projects in the past 12 months.

“2017 is a critical year for IoT in retail. Early adopters are seeing good ROI from pilot programs around connected inventory due to the needs of inventory understanding to support omnichannel commerce,” Oliver Guy, global industry director of retail for Software AG.

“Many brands, however, are falling behind by not making the leap to deployment and customers won’t wait much longer,” he said. “They are starving for fresh offerings that enhance their shopping experience. For retailers, the biggest ROI comes when these technologies are connected together.”

For some, IoT is viewed as a “Swiss Army Knife” technology — a tool that can be applied and benefit many parts of the business. IoT has the potential to automate and optimize a vast number of retail processes, most importantly, productivity.

Respondents stated that there is much to gain from deploying IoT, with almost 70% say they see the potential impact on inventory management and store operations. Meanwhile, 68% believe IoT will boost profits by deepening customer engagement through monetizing data, the study reported.

Advanced technologies from machine learning, augmented reality, drones, 3-D printing, blockchain and other emerging solutions will play into this evolving IoT ecosystem in creative and exciting ways. The combination of these and other technologies will also enable rapid innovation and value creation for those retailers who can imagine the possibilities, the study reported.

“The IoT has the potential to create business value that goes far beyond operational cost savings, indeed it can become the foundation for crafting new ‘smart’ services that can significantly enhance a customer’s journey,” Guy said. “However, the IoT ecosystem comprises many hundreds of new players offering one or two parts of the IoT puzzle, which can muddy the waters for retailers. What is apparent is that no single vendor in the IoT ecosystem can do it all.”

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P.Brasket says:
Apr-20-2017 04:31 pm

IoT & Retail
Good article -- Beacons for store ops, merchandising, and customer engagement that interact with apps connected to SAP represent a great IoT starting point for Retailers. We cover our Beacon Management System for retailers using SAP at the 10 minute point of this video: https://www.youtube.com/watch?v=WzkoGUvnlPQ&t=27s

P.Brasket says:
Apr-20-2017 04:31 pm

Good article -- Beacons for store ops, merchandising, and customer engagement that interact with apps connected to SAP represent a great IoT starting point for Retailers. We cover our Beacon Management System for retailers using SAP at the 10 minute point of this video: https://www.youtube.com/watch?v=WzkoGUvnlPQ&t=27s

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FINANCE

Neiman Marcus exploring options — including sale

BY Deena M. Amato-McCoy

Seeking relief from its heavy debt load, Neiman Marcus Group announced Tuesday it has hired financial advisors to explore strategic alternatives, which could include a sale of the company or other assets.

The luxury department store retailer also reported its sixth consecutive quarter on sales declines, posting a 6.8% drop for the second quarter.

Neiman Marcus has 42 namesake stores and 27 Last Call outlet stores. The company, which also operates the Bergdorf Goodman and MyTheresa brands, was acquired in 2013 by Ares Management LP and Canada Pension Plan Investment Board for $6 billion. It is carrying a debt load of approximately $4.9 billion.

For the second quarter, Neiman Marcus reported total revenues of $1.40 billion, down 6.1% compared to the year-ago period. Same-store sales fell 6.8%.

On the retailer’s quarterly call, CEO Karen Katz said problems with new systems, which included inventory tracking, have resulted in some sales losses over the past six months.

Neiman Marcus reported a net loss of $117.1 million for the quarter, ended Jan. 28, compared to net earnings of $7.9 million the period. The company also took a $153.8 million impairment charge.

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FINANCE

Footwear retailer’s sales rise, but fall short on expectations

BY Deena M. Amato-McCoy

DSW credits inventory management and more focused campaigns for its profit growth during the fourth quarter.

For the period ended January 28, 2017, the chain’s sales increased 0.4% to $674.6 million, including $27.9 million in revenues from Ebuys. This profit of 20 cents per share was four cents better than analysts were expecting for the quarter, however sales missed their estimates of $695.5 million.

Adjusted net income was $16.5 million, an increase of 43% over last year.

The footwear and accessories retailer’s same-store sales decreased 7%, compared to last year's 0.7% increase. Net income was $30.5 million, which included a net favorable adjustment of $0.18 per share related to the reduction of its contingent consideration liability, the amortization of acquired intangibles and inventory step-up costs related to Ebuys, and restructuring expenses.

"Our fourth quarter continued our return to year-over-year profitability growth, with top line results that met our comp guidance,” said Roger Rawlins, the chain’s CEO. “Inventory management and a product-focused campaign drove significantly higher gross margin, which, cou-pled with better expense control, resulted in a 22% increase in adjusted earnings per share this fall season."

For the year, sales increased 3.5% to $2.7 billion, including $83.9 million from the company's acquisition of Ebuys. Same-store sales decreased by 3% compared to last year's 0.8% increase, and adjusted net income was $120.1 million, or $1.46 per diluted share, a 5% decrease from last year.

"After making fundamental changes to our core business last year, we are laser focused on driving comp growth through our merchandise and allo-cation initiatives and the elevation of our customer's digital experience,” Rawlins added. “Furthermore, we are building a foundation to support the growth of Ebuys and Town Shoes and to leverage synergies across all of our retail brands.”

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