Top Retail Trends Identified
New York City, Looking ahead at the top five trends for 2005, Customer Growth Partners (CGP), a consulting group, came up with the following: Speed Rules. Across the retail landscape, winning companies are not simply those that offer the best price/value equation—but those that do so quickly and conveniently.
• Wal-Mart Is Not Waning. CGP believes that WMT is evolving to a pricing strategy that may not always beat the lowest—or the irrational—competitor; and is upgrading its lines to higher-price/higher-margin goods, ranging from gourmet prepared foods to $5,000 plasma TVs.
• HIP Is Hip. The Home Improvement sector—despite still being overlooked by traditional retail statistics and analysts—is exploding, and its $321 billion in annual sales dwarfs the $178 billion in sales at apparel retailers (Census Bureau 2003 statistics).
• Charity Is Chic. Even before the South Asia tsunami disaster, leading retailers had discovered the “softer side of altruism.”
• Product Pandemic. The notion that some categories of merchandise are available only in certain kinds of stores is rapidly becoming obsolete.
Holiday Sales Flat at Williams-Sonoma
San Francisco, Williams-Sonoma said same-store sales over the eight-week holiday period were flat compared with a year ago. Total sales for the eight weeks ended Dec. 26 rose 7.3% to $775.9 million, which the retailer said was below its expectations, largely due to a weaker-than-expected response to holiday marketing of its Pottery Barn brand. Retail sales for the holiday period increased 6.9% to $501.1 million from $468.9 million last year.
“While our overall same-store sales results were below our expectations, we were encouraged by the retail sales momentum in the Williams-Sonoma brand in the holiday period,” said Howard Lester, chairman.”
Williams-Sonoma said that a significant year-over-year increase in pre-holiday gift-card sales and a greater-than-expected shift in retail sales into the week after Christmas also drove results below plan.
Looking ahead, Williams-Sonoma said it expects fiscal 2005 revenue to grow by a low double-digit to mid-teen percentage, with earnings up by a mid-teen to high-teen percentage.
Survey Sheds Light on Holiday Spending, Advertising
Troy, Mich., Selection is the main factor that determines where consumers shop for apparel, according to a new survey by advertising agency Meridian. Selection was picked as the most important factor by half of the consumers polled.
Other findings of the survey include:
• One quarter of respondents said price is the top reason for shifting holiday spending to other locations from the stores they shopped last year.
• Affluent consumers spent more of their holiday budgets with department stores in 2004 vs. 2003, reversing a pattern of declining spending established over the past few years. Meridian says this reflects more upscale merchandising and advertising strategies on the part of some department store chains.
• Mass retailers and mid-line retailers are twice as successful as department stores in creating store traffic through advertising.