SpendingData sees mixed bag for retail sales in April
New York City Consumers bought less clothing and footwear in April than they did in the same month last year, but opened their wallets for electronics, major appliances and status goods, purchase data released Wednesday show.
The month’s rainy weather contributed to mixed results, including a sharp 15.6% increase in online sales, according to the latest numbers from MasterCard Advisors’ SpendingPulse. It was the ninth-straight month that online sales rose, compared with a year earlier.
The figures, which include transactions in all forms including cash, signal that spending is recovering but remained sensitive in April to one-time factors.
Because an early Easter, such as this year’s on April 4, can boost March’s results and depress April’s, analysts combine the two months when trying to gauge consumer behavior.
April figures benefited from relatively easy comparisons to April 2009, when consumers also cut their spending.
Consumers’ confidence in the economy rose in April 2010, but the Conference Board business group’s index remains below the level that’s considered healthy. And unemployment remained high.
Here are SpendingPulse’s figures comparing sales April 4 through May 1 with a year earlier, by product category.
- Clothing: Sales fell 3.9% from April 2009, and sales that month were 8.2% below April 2008.
- Footwear: Sales fell 1.7%.
- Appliances: With increases since September 2009, this category was up 3% in April.
- Electronics: Sales rose 9.7% from a year earlier, helped in part by product launches, including Apple’s iPad tablet computer on April 3.
The data comes a day before many major retailers report same-store sales results for April. Analysts surveyed by Thomson Reuters predict a 1.6% for April. The estimate for March and April combined is 5.4%. That would be the eighth straight increase.
The iPad: Challenges and opportunities
There’s been a lot of buzz about the Apple iPad since it hit the market last month, and many predict it could have a significant impact on the way people shop in the future. Chain Store Age spoke with David Fry, founder of e-commerce solution provider Fry Inc., about the probable impact of the iPad and what it could mean for the retail industry.
What has the consumer response been so far with the iPad?
With about a million iPads sold in one month in the United States alone, you’d have to classify the response as ‘strong.’ However, even Steve Jobs would have a hard time proving that someone really “needs” an iPad, especially with so many iPhones and Kindles already in consumer hands. Nonetheless, it does fill a gap in the electronic-gadget spectrum. It’s a great device for consuming media, in all forms. You can read e-books (both Apple’s iBooks and Amazon’s Kindle books), watch TV and movies, check e-mail, surf the Web and shop online. Plus, the iPad’s battery life — at more than 12 hours — is a game changer and is much longer than a standard laptop.
What is the iPad’s potential impact on e-commerce?
Smaller mobile devices such as iPhones are having an impact on e-commerce already, primarily due to their mobility and ubiquity. Many consumers carry a smart phone with them so they can use it to check prices and availability, comparison shop, find a local store and even place an order. So far, however, a small number of consumers are actually completing a full transaction on their devices. Since the iPad’s usability is far greater, many consumers will complete full e-commerce transactions just as they would on a laptop or desktop computer.
The iPad’s design encourages a more intimate Web experience and newer e-commerce designs. The Gap’s new iPad application is an excellent example. It’s focused on one product line (Gap 1969) and allows shoppers to experience pictures and video in a ‘social’ way and is far more engaging and versatile than any iPhone app would be.
How do you see the iPad impacting retail in the next year? Few years?
The iPad won’t have too much of an impact in the next year, but within two years you’ll see many stores have dedicated iPad applications, and their sites will be changed to reflect some of the design aesthetics the iPad will make popular. This includes larger images and videos, touch interactions and geo-location features. Consumer expectations will also increase. In response, consumers will expect websites to pick up their games.
How could this ultimately change the shopper experience and influence shopper expectations?
A number of retailers are already making plans to have in-store iPad applications. Imagine a store associate, armed with an iPad, guiding a customer around a high-end fashion store, a furniture showroom or a bridal-oriented home goods retailer. The iPad allows the associate and the customer to visualize products not available in the store. They could configure a room layout together, for instance, at Room and Board. They could make sure a blouse and skirt are the perfect match at Ann Taylor. And the luster of the iPad will be a great reflection on the store’s brand.
In addition, remember that time you went into a retailer about five to 10 years ago and realized you knew more about the TV set you were trying to buy than the store associate trying to sell it to you? Consumers are going to feel that way more and more, and they will no longer shop at retailers who can’t keep up with them. I believe it’s all about how we are going to meet our customers’ increased expectations.
Are people ready to make big purchases on iPads and mobile devices or do you think the wave has yet to come?
They’re as ready to make big purchases on an iPad as on a desktop — maybe even more so. The intimate nature of the surfing experience inspires a consumer to do more online research in less time and can add to their confidence about a big purchase. While they may agonize for a week about a large-screen TV purchase, for instance, I think if given an hour with an iPad and the right Web sites and downloadable apps, they could convince themselves to make the purchase while watching ‘Glee’ on their living room sofa.
Do retailers have to do anything to adapt to these new mediums?
They first must make sure their Web site is ‘iPad-friendly.’ That means making sure any Flash video has a HTML5 equivalent, since Flash doesn’t play on the iPad or almost any other mobile device today. Retailers must also make sure that any advanced navigational features they may have (such as dropdown menus, pop-up windows, etc.) work in the touch environment. Retailers should conduct some hard-quality assurance (QA) on their site on an iPad, looking at all the consumer-use case scenarios. After that, retailers should consider if there are some new features they could add to optimize the iPad experience. That could be anything from a drag-and-drop shopping experience on their site to a dedicated downloadable app.
What challenges and advantages does this pose for retailers?
When consumer expectations are raised, it can be a challenge for retailers to respond. But when consumer expectations are raised, retailers have the opportunity to gain new customers by getting ahead of the curve. Retailers who build a killer app, and who respond to the iPad’s launch with some new iPad-friendly features, can lock in customers who appreciate that responsiveness. What can you do to make your business an indispensable part of the consumer’s life? The Amazon iPad app, for instance, is so easy to use, and is so fast and efficient, it makes it hard for consumers to go back to any other Web site.
Are similar devices set to hit the marketplace?
There are a number of handheld devices in the pipeline, and some are planned for launch later this year. There’s some hype about announced but unreleased products such as HP’s Slate and Dell’s Streak, as well as rumored but such unannounced products as Microsoft’s Courier and Google’s Chrome tablets. Except for the Courier, however, those products weren’t designed with a dedicated touch-oriented operating system such as the iPad, and they will never be able to match Apple’s hype machine. Expect many imitations, but the iPad will remain the leader in the consumer’s heart for at least the next year or two.
Dollar General to provide aid to flood victims
GOODLETTSVILLE, Tenn. Dollar General announced that it is providing aid to flood victims in Kentucky, Mississippi and Tennessee through merchandise donations to the American Red Cross. The company is donating a variety of supplies to the Red Cross, such as personal hygiene products, socks, underwear, diapers and other baby products. The company is also donating cleaning supplies to Second Harvest Food Bank.
“Dollar General is dedicated to helping our friends and neighbors recover from this disaster,” said Rick Dreiling, Dollar General’s chairman and CEO. “These much-needed supplies will aid flood victims as they work to rebuild their lives. Our thoughts are with those who have been affected, and we are committed to helping these communities recover quickly.”