Tractor Supply Co. unearths pricing insights
Rural lifestyle retailer Tractor Supply Co. has been strengthening its IT infrastructure to support growth, and now is turning its attention to pricing.
Tractor Supply Co. plans to grow from 1,500 to 2,500 stores, and has been shifting to a Web-scale architecture and new ERP platform. Now the company is extending an existing partnership with merchandise optimization solutions provider Revionics Inc. through 2019.
Using the Revionics price suite, the retailer has implemented diverse price strategies throughout the country. Tractor Supply has also continued its focus on pricing intelligently based on the needs of its customers, and believes strategic pricing results in customer loyalty while meeting key business goals. The chain seeks to drive additional business impact and ROI through more sophisticated use of Revionics’ price and markdown optimization suites.
Having an efficient IT architecture and ERP platform is vital for any retailer seeking to support increased sales and store growth. However, all that supporting infrastructure and analytical capacity by itself will not drive increased revenue if a retailer does not know how to optimally set or alter prices at a localized level. By deepening its use of price and markdown optimization technology, Tractor Supply is helping ensure its infrastructure investments provide a maximum return.
NRF: Inventory shrink getting worse
If it seems like more if your inventory is disappearing, you’re probably not imagining things.
According to the 2016 National Retail Federation (NRF) Retail Security Study, conducted in collaboration with the University of Florida, retailers’ inventory shrink averaged 1.38% of retail sales, or $45.2 billion in 2015, up by 3% from $44 billion the previous year.
Almost half (47%) of retailers surveyed reported increases in overall inventory shrink in 2015, with shoplifting accounting for the greatest cause with an average loss of $377 per incident (39%), up nearly $60 from 2014.
Robberies continue to be a rapidly growing expense for retailers, costing an average of $8,180, more than triple $2,465 the previous year. NRF data shows the dramatic rise in loss by robberies in 2015 was driven by an increase in jewelry stores reporting extremely high average losses.
The study found a decrease in the average loss from dishonest employee cases, $1,546.83 to $1,233.77. Although the number of employee apprehensions increased, prosecutions, terminations and civil demands for these type of internal incidents dropped.
When it comes to retailers budgeting for the loss prevention sector, the survey reported that budgets remained flat year-over-year as a percentage of sales. However, the total number of loss prevention personnel per $1 billion in sales increased from 32.5% in 2014 to 37.5% in 2015.
“With a constantly evolving retail landscape, loss prevention becomes more complex every day,” said NRF VP of Loss Prevention Bob Moraca. “LP professionals have been working diligently to find advancements in technology aimed at deterring crime in our industry, sometimes even before it happens – but as our techniques get more sophisticated, so too do the criminals.”
The survey of 80 senior retail loss prevention executives from various sectors was conducted March 22 to April 22, 2016.
Study: E-commerce may be over its growth spurt
Internet shopping is extremely popular, but how much room for further growth is there?
According to a new study of more than 3,300 U.S. consumers age 15 and up from The Boston Consulting Group (BCG), the overall move to online shopping is expected to slow considerably during the next three years.
More than three-quarters of respondents have bought something from Amazon.com in the last year. However, in 41 categories from athletic apparel and pet supplies to insurance products and consumer electronics, the vast majority of Americans surveyed, 78% to 92%, depending on the category, said they don't plan to increase their online spending in the next three years. And in many categories, including baby products and food, beverages, fine jewelry, news and magazines, cars and packaged goods, more than 25% of those already shopping online said they will spend less online in the future.
This means more than twice as many people say they will spend less online during the next three years than those who say they will spend more online. The intention to keep online shopping at current levels and slow down in many categories is virtually identical among millennials, Gen-Xers and Baby Boomers.
"E-commerce is a channel, like any form of distribution: growth does not continue at a rapid, double-digit rate forever,” said Michael J. Silverstein, senior partner of BCG. “Most consumer categories have been available online for several years. The 'newness' is gone, and we're looking at mature levels of penetration in many categories. Right now, online shopping growth is similar to the growth experienced in the 1970s and 1980s by catalog merchants.”
The few categories in which the most respondents said they will spend more online over the next three years include airline tickets (20% of Americans), hotel reservations (20%), entertainment tickets and reservations (22%), which BCG said reflects potential sales growth in experiential consumption as opposed to products.