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TECHNOLOGY

Study: Three companies had 84% of shoppers spend with them in 2016

BY Deena M. Amato-McCoy

Some of the biggest names in retailing and foodservice used experiences to encourage a high percentage buyers to visit at least once last year.

Specifically, Walmart, McDonald’s and Target had more than five out of six U.S. consumers shopping with them in 2016, according to “The Checkout Penetration Index,” from The NPD Group’s Checkout Tracking.

The index, which is based on millions of customer receipts across all retailers and restaurants, both online and in brick-and-mortar, delved into market penetration and performance to reveal the top 25 retailers and restaurants.

Along with these three companies, other highly recognizable brands in retailing and foodservice have also become fully woven into American life. For example, the biggest gainer among the Top 25 was Chick-fil-A, which saw a 5 percentage point increase in penetration in 2016. The biggest gainer among retailers was Dollar Tree, which saw a 3 percentage point increase. Both Chick-fil-A and Dollar Tree have been expanding operations aggressively, the study reported.

“The battle for every consumer dollar is heating up, and we must shift from studying what consumers purchase to how they spend their money,” said Marshal Cohen, chief industry analyst, The NDP Group. “Consumers spending on experiences is overlapping with their purchases of products, making every item and visit so important to competing in today’s rapidly changing marketplace.”

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FINANCE

Amazon CEO reflects on future in annual letter to shareholders

BY CSA STAFF

Amazon Jeff Bezos is certainly not sitting back and relaxing in his company’s success.

As his annual letter to shareholders reveals, Bezos is spending a lot of time thinking how his company can remain vibrant and successful. The letter repeats a theme that the executive brought up in his letter last year: how to keep alive the animal spirits that led Amazon to greatness, reported the Seattle Times.

Bezos is known for saying that every day is “Day 1” at Amazon. In the letter, he wrote that he was asked at a recent meeting what does “Day 2” look like.

“Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1,” Bezos wrote, according to the report.

Click here to read more.

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JoeKefauver
Insights

Washington Spotlight: Retail Caught in the Middle – Here We Go Again

BY Joe Kefauver

With healthcare reform appearing to be placed on the back burner – at least for now – attention in Washington, D.C. is turning to corporate tax reform. Corporate tax reform is much sticker issue and many of the political dynamics that doomed the healthcare effort seem to be falling into place in much the same way in this conversation. And that could be a real problem for retail operators.

A critical component to the Trump-Ryan tax plan is the Border Adjustment Tax (BAT) that would tax imports at a proposed rate of 20 percent while exempting exports from taxation. Proponents argue that it would re-invigorate domestic manufacturing and make our products more competitive overseas.

Critics say it would significantly raise prices on thousands of domestic goods, disproportionately hurting lower income consumers – many of whom are a critical part of the Trump electoral coalition. Generally speaking, retailers are supportive of tax reform but have major issues with the BAT as it stands today.

Conservative groups backed by the Koch Brothers as well as the Club for Growth take issue with the BAT as well, and are gearing up to fight it. The problem for President Trump and Speaker Ryan is that this is same dynamic that doomed health care reform. And this fight won’t nearly be as tough.

Once again, retailers find themselves in the middle of a Republican civil war. That is becoming familiar territory for the industry. The tax nexus issue between online and bricks and mortar retailers split the party; as did the ongoing tussle with the banks and credit card companies over interchange fees; as did immigration reform; as did health care reform.

Here we go again – this time on tax reform. Retailers just cannot seem to avoid getting caught in the squeeze. Constantly being the political football in an ongoing intra-squad scrimmage is putting our brands and business models in the public spotlight in unprecedented ways.

There was hope in the industry that the election results would be a harbinger of good things to come and companies would have political and policy opportunities to grow their businesses. But at least for now, instead of seeing green, operators are still seeing red.


Joe Kefauver is managing partner of Align Public Strategies, a full-service public affairs and creative firm that helps corporate brands, governments and nonprofits navigate the outside world and inform their internal decision-making. Align specializes in service sector industries.

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