Retail finance study finds execs cautiously optimistic; healthcare and energy costs big concerns
New York City — A majority of retail executives expect business to improve in the coming months, but they remain cautious when it comes to increasing staff levels, building inventory, and assessing the availability of credit — especially for their customers, according to a research study by CIT Group, a leading provider of financing to small businesses and middle market companies. The study, prepared in association with Forbes Insights, surveyed more than 100 middle market retail executives.
The study, “Retail Finance Outlook 2011,” found that, more than any other topic presented, healthcare costs and regulations appear to weigh most heavily on the minds of retail executives. Over the next 12 months, nearly two-thirds of executives believe changes in health care costs and regulations will be negative (38%) or strongly negative (25%) for their businesses. Just 6% of executives view them as positive for their businesses.
In other findings, retail executives remain cautiously optimistic about their outlook for the coming 12 months. Nearly 60% predict sales will either grow (51%) or grow significantly (8%), with just 9% of executives predicting a sales decline in the next 12 months. Compared with the Retail Finance Outlook 2010 study, however, retailer optimism has been tempered. Last year, 22% of executives foresaw significant growth, and 68% predicted overall expected growth. The number of executives who predicted any decline in sales was just 2% in 2010.
“Retail executives maintain a sense of optimism about their own business growth prospects, even while they continue to sour on the idea of a quick recovery of the U.S. economy,” said Burt Feinberg, group head of CIT Commercial & Industrial. “This study highlights some of the key factors affecting the retail sector, including the price-conscious consumer, waning consumer confidence, the increased influence of social media, rising commodity costs, and consumer access to credit.”
Some of the study’s key findings include:
Holiday Optimism: Nearly three-quarters of executives see sales improving slightly (38%) or staying about the same (36%) as last year for the overall season. Sensing that price-conscious consumers will be looking for bargains this year, 37% of executives predict an increase in last-minute shopping, while 38% expect post-Christmas shopping days to be stronger. On a related note, nearly half of executives believe both broad discounting and the price of fuel will be driving factors in consumers’ decision to spend.
Shift to New Media: Nearly six in ten executives report their companies are shifting marketing dollars away from old media toward new media, such as social media campaigns. As part of that shift, 68% of respondents report increases in marketing and deals through social media channels, including Facebook and Twitter. In addition, 63% report that their web sales are growing (28%) or growing faster than other channels (35%).
Retail Financing: Nearly half of retail executives say their ability to secure financing has not improved or has worsened in the past year. For the year ahead, half of executives expect the availability of financing to be stable, while 30% expect availability to improve and only 10% expect it to worsen.
Energy Cost Concerns: More than half of retail executives see rising energy costs as being negative (47%) or strongly negative (8%) for business in the 12 months ahead. When asked about raw materials costs, 59% of executives said they feel either negative (48%) or strongly negative (11%) about non-energy commodity costs in the coming year.
Apple closes stores for Steve Jobs memorial
New York City — Apple is closing its stores for several hours on Wednesday so employees can watch a webcast of a memorial service celebrating the life of Apple co-founder and CEO Steve Jobs, the Associated Press reported.
The service is scheduled for 10 a.m. Wednesday at company headquarters in Cupertino, Calif. It will be webcast to employees worldwide.
The service reportedly will take place in the campus’ outdoor amphitheater, according to Cook’s email.
The event follows a memorial at Stanford University last Sunday for family and friends. Among those in attendance were Microsoft’s Bill Gates, former president Bill Clinton, and U2’s Bono.
Urban Outfitters rolls out social media sales tool from Needle
Salt Lake City — Needle announced that Urban Outfitters will use Needle’s Guided Shopping Platform to serve its customers with a personalized online shopping experience. The platform provides a rich chat toolset for agents to assist online shoppers to make a purchase decision including the ability to interactively demonstrate features of products, cross-sell and up-sell with an outfit builder and cart builder, and create social coupons to share with friends via Facebook.
“We chose Needle over other providers because their platform provides tools for a creative, high-touch collaboration between fashion experts and with our customer online,” said Holly Devine, director of eCommerce, Urban Outfitters. “Features like in-chat social networking and the Needle Outfit Builder make improving growing critical KPIs like AOV and social impressions easier for us while making our customers feel highly valued.”
Needle provides e-commerce websites with expert shopping assistance.
Click here for More Technology News