OPERATIONS

Walmart announces three U.S. manufacturing projects

BY Marianne Wilson

Washington, D.C. — Walmart U.S. president and CEO Bill Simon and Secretary of Commerce Penny Pritzker announced at the SelectUSA 2013 Investment Summit on Thursday that three suppliers have made new domestic manufacturing commitments that will create 385 jobs. The move is part of the retailer’s previously announced pledge to buy an additional $50 billion in U.S.-made products over the next decade.

Walmart said that Elan-Polo, Louis Hornick & Company and EveryWare Global will produce footwear, curtains and glassware, respectively.

“Today’s announcement is a great example of the progress that’s being made, and it highlights opportunities that exist for manufacturers to invest in the USA by re-shoring or expanding their manufacturing in America,” said Simon. “Companies, government officials and industry leaders are working together to increase manufacturing, and these efforts are helping more Americans get into good-paying jobs and more businesses reinvest in the U.S. economy.”

"For retailers like Walmart, who they choose to buy from makes a difference,” said Pritzker. “Since Walmart announced its commitment earlier this year to buy an additional $50 billion in U.S.-made products over the next 10 years, manufacturers have committed to investments in the U.S. that will create more than 1,600 jobs.”

Elan-Polo, a global footwear and 35-year Walmart supplier, will start production of injection-molded footwear in March 2014 at a factory in Hazelhurst, Ga., as part of a joint venture with McPherson Manufacturing. Once at full capacity, this new facility will create 250 jobs and produce 20,000 pairs of shoes per day. Previously, the company manufactured the shoes overseas.

EveryWare Global, which manufactures bakeware, beverageware, tabletop and household glassware, will produce Mainstays Canning Jars for Walmart in the supplier’s Monaca, Pa., facility. The company is investing $1.8 million to expand factory capacity and establish a new product line made in the U.S. Founded in 1905, Anchor Hocking, an EveryWare Global brand, has been supplying products to Walmart for over 25 years and has 1,811 employees in the United States.

Louis Hornick & Company, a leading manufacturer and importer of window coverings and home textiles, will invest $2.5 million to establish a new manufacturing facility in Allendale County, S.C. The investment is expected to create 125 new jobs over the next three years. The company has been supplying Walmart for 40 years.

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Toms deploys Oracle Commerce platform

BY Marianne Wilson

Redwood Shores, Calif. – Toms — the company that gives a pair of its shoes or provides eye care to a person in need for every corresponding purchase — has deployed the Oracle Commerce platform to support its rapid business growth and international expansion.

“Toms is changing daily to meet new challenges,” said Hilda Fontana, VP global Web development, Toms. “Oracle Commerce immediately enables our team to better serve a variety of international markets. We know Oracle has the flexibility and scalability to meet the demands of our growing business.”

Toms is using Oracle Commerce as part of a strategic initiative to deliver its “One for One “charitable message to new markets and support global demand for an expanding product line that is constantly refreshed with new colors and styles.

The Oracle platform helps Toms personalize the customer experience by delivering relevant content and recommendations to customers, providing a faster, easier checkout and a more visual, content-rich shopping experience with integrated ratings and reviews.

It also enables Toms’ business users to have better control over the customer experience by allowing them to target promotions, personalize content, customize search results and recommendations, and update product information across multiple sites on the fly.

Deloitte, a Diamond level member in Oracle PartnerNetwork, helped Toms to leverage the full functionality of the Oracle Commerce solution while launching its first ecommerce site for Toms Netherlands in just seven months. Throughout the implementation, Deloitte worked side-by-side with Toms’ staff in a “train the trainer” approach that prepared the company to begin immediately moving its U.K., U.S., and Canada sites to the Oracle platform.

“Toms is rapidly evolving and growing their digital presence globally and the Oracle Commerce solution helps provide Toms with the ability to offer leading commerce capabilities on a global, flexible, scalable platform,” said Belinda McConnell, principal, Deloitte Consulting LLP.

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Customer Growth Partners Forecasts Humbug Holiday Sales, With Anemic 2.9% Retail Growth

BY CSA STAFF

By Craig Johnson, president, Customer Growth Partners

Continuing a two-year slide in retail spending momentum, American consumers will generate only a lackluster 2.9% year-over-year increase in holiday sales, the slowest pace since the recession, according to Customer Growth Partners’ 13th Annual Holiday Forecast. Retail sales for the November-December Holiday period will reach $575 billion — a new record, but the anemic 2.9% growth represents further slowing from the robust Holiday 5.1% pace in 2011 and 3.8% last year. [ CGP’s Holiday forecast is based on DOC/Census definitions, excludes autos/auto Parts, gasoline/oil, and restaurants; unlike some forecasts, e-commerce sales are included.]

Contrary to conventional wisdom, most shoppers are tuning out the noise coming from Washington, and are continuing to spend at the same pace as prior to the government shutdown. Unfortunately, the pace of retail spending was sluggish well before the partial shutdown, and remains so now.

CGP maintains a 15-member nationwide field team that conducts primary research and detailed store checks in over 50 major shopping venues. Based on findings from the back-to-school season and now through most of October, there has been no significant impact on retail sales — which were already stagnant, reflecting an apparel-focused slowdown after the 4th of July, and a further step down after Labor Day, affecting all categories, including big ticket items. In the metropolitan Washington, D.C., area, store raw traffic levels edged down in the first half of October, but the number and size of transactions showed no significant change. Only a few company standouts bucked the retail downdraft, such as Apple with its sell-out iPhone 5s model.

The key drivers behind the retail weakness are lagging income growth, and the declining share of the population with full-time jobs. The most recent government data show that real disposable personal income has been rising only an abysmal 0.7%, in contrast to growth rates of about 3.7% in the mid-2000s, when the Retail industry enjoyed its healthiest growth of this new century.

Relatedly, barely 47.5% of the working age population now holds a full-time job, the lowest in decades, and down from 54% as recently as 2006. In addition to depressing overall retail expenditures, the shift to a ‘part-time economy’ has caused spending to rotate from discretionary categories to non-discretionary goods. Households with full-time jobs spend against both needs and wants — but consumers with part-time jobs spend only against needs.

Other key findings of CGP’s annual Holiday forecast include:

  • E-commerce/Direct-to-consumer sales are decelerating, after two decades of double-digit growth, to just under 10% at Holiday 2013 — but will comprise 15% of total sales;
  • Among merchandise categories, home improvement sector sales will outpace other sectors with growth of 4.1% YOY, reflecting the housing recovery — but slower than the 10% pace earlier in the year, mirroring the current pause in the housing rebound;
  • Apparel sales will lag the already sluggish growth levels, with YOY growth of only 2.6%, down from 4.2% holiday growth last year; and
  • Consumer electronics and appliances will be weak, with growth under 1%, despite the new generation of tablets, smartphones and videogame consoles — due to the weakness in big-ticket purchases, rampant TV price compression, and cannibalization of laptops, digital cameras and other products resulting from the growth of tablets and phones.

In short, consumers — at least those with full-time jobs — will still do their Christmas shopping this year, but at a smaller and slower pace than the last few years. For retailers, particularly those dependent on solid discretionary spending, however, this will be a ‘Humbug Holiday’ — the worst since the recession — and more so for stores who placed their Holiday orders earlier in the year, when sales were still healthy.

Holiday 2013 will mark the first time that retailers see an actual decline in store productivity per square foot since the recession, by about 1%. And, because of the steep promotional pace this year, earnings will be weak, leading to a decline in “TOP” ratios, the true operating earnings generated per square foot, an even worse sign. The Grinch may not steal Christmas, but he may spoil it for a lot of retailers.”

Craig Johnson is president of Customer Growth Partners, a consulting and research firm serving the retail and other consumer industries. Johnson has 30 years of experience in market research and demand forecasting, has testified as an expert witness on forecasting and economic issues, has spoken and published worldwide on consumer trends, and appears frequently in the media. CGP’s 15-member field team conducts primary research weekly in over 50 major shopping venues coast to coast.


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