ECOMMERCE

Walmart tests new delivery drop-off point — the customer’s fridge

BY Deena M. Amato-McCoy

Walmart’s new grocery delivery program could give it a huge edge in the online ordering game.

The discount giant is testing a concept that will not only deliver fresh groceries, but also enable a delivery person to enter customers’ homes and put away perishables in their refrigerator. Walmart, which announced the news in a blog on its website, is partnering with August Home, a smart locks and smart home accessories provider, and same-day delivery company Deliv, to test the service.

Here’s how it works: Customers place their order online, and when the order is ready, a Deliv driver delivers it to the shopper’s home. If no one answers the doorbell, the driver enters a pre-authorized one-time passcode into a smart lock keypad installed beside the door.

Customers receive a smartphone notification that the delivery is occurring, and they can monitor the delivery through home security cameras integrated with the August security app. Non-perishable items are left in the foyer, and fresh merchandise is placed into the shopper’s fridge. Once the Deliv associate leaves, the customer receives a notification confirming the delivery is complete and the door was automatically locked.

The concept is being tested among a handful of August Home customers in Silicon Valley.

“We want to do more in the future by delivering groceries and other orders in whatever location works best for our customers – inside the house for some and in the fridge/freezer in the garage for others,” Sloan Eddleston, VP, Walmart e-commerce strategy & business operations, said in the blog.

“What might seem novel today could be the standard tomorrow,” she added. “This may not be for everyone – and certainly not right away – but we want to offer customers the opportunity to participate in tests today, and help us shape what commerce will look like in the future.”

The program rivals similar services that use lockers as delivery drop-off destinations, such as those offered by Amazon. To expand its breadth among more shoppers, the online giant also recently launched The Hub by Amazon, a delivery locker system designed for apartment blocks and other housing complexes that may not have services to accept or store packages.

Jet.com, Walmart’s e-commerce operation launched a similar program through a partnership with Latch, a provider of smart building access technologies. The program enables participating residents to use their smartphone as a “remote key” to grant access to delivery companies dropping off packages, even if they are not home. The program is in 1,000 buildings in New York City.

However, neither Amazon nor Jet’s programs are equipped to store fresh merchandise.

To see a video of the new Walmart delivery pilot, click here.

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FINANCE

Finish Line profit, sales down in Q2

BY Marianne Wilson

Finish Line missed analysts expectations for its second quarter amid continued heavy promotion in the athletic footwear market.

The retailer reported net income of $2.8 million, or 7 cents per share, for the quarter ended Aug. 26, down from $22.1 million, or 53 cents a share, a year ago.

Consolidated net sales fell 3.3% to $469.4 million. Finish Line same-store sales decreased 4.5%. In positive news during a disappointing quarter, same-store sales at Finish Line's in-store shops at Macy's same-store sales increased 5.6%.

“Our second quarter results were shaped by a very promotional marketplace for athletic footwear,” said Sam Sato, CEO of Finish Line. “With industry headwinds weighing on our sales and margin trends, we remain disciplined in managing our expenses and inventories. While we are planning for a challenging retail environment in the near-term, we are confident that the merchandise, digital, in-store and operational initiatives currently in place will allow us to achieve our current full year outlook and best position the company to deliver increased shareholder value over the long-term.”

Separately, Finish Line said its board of directors appointed Faisal Masud as a director of the company effective September 19. Masud is chief technology officer for Staples.

The company’s outlook remains unchanged from the update given August 28, 2017, which is Finish Line comparable sales to decrease 3% to 5% versus its previous guidance for an increase in the low-single digit range.

Adjusted earnings per share are now expected to be in the range of $0.50 to $0.60 for the 53-week fiscal year ending March 3, 2018, versus the previous guidance range of $1.12 to $1.23, and compared with adjusted earnings per share of $1.06 for the fiscal year ended February 25, 2017, which was a 52-week year. The company estimates that the additional week will contribute approximately $0.06 per share to fourth quarter and full year fiscal 2018 results.

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ECOMMERCE

The impact of Hurricanes Harvey and Irma on retail sales

BY Marianne Wilson

Hurricanes Harvey and Irma had a similar impact on retail sales and the toll was significant on online spending as well as spending in physical stores.

First Data found that Retail spending plummeted 58.7% week-over-week (43.7% year-over-year) in Houston and its surrounding areas at the peak of the hurricane, according to First Data, released two reports analyzing the magnitude of the impact that Hurricane Harvey and Hurricane Irma had on consumer spending. Across the state of Florida, spending dropped 55.7% week-over-week (or 39.1% year-over-year) at the apex of Hurricane Irma.

“Our data shows that consumer spending in both impacted regions followed a similar trajectory," said Rishi Chhabra, VP, information & analytics, First Data. "Spending increased the week before the hurricanes, with people stocking up on key items like gasoline and groceries, and dropped significantly during the storm. After the worst of the hurricanes, consumer spending rebounded as people began to rebuild.”

Both brick-and-mortar stores as well as e-commerce saw a significant drop in sales, First Data found. In Houston during the week of Hurricane Harvey, online spending dropped 41.4%. By comparison, total U.S. e-commerce business was down only 4.3% during the same week. Post-storm, Houston e-commerce sales continued to drag while national e-commerce sales rebounded.

The same was true for Hurricane Irma. In Miami, online activity started dropping the week before Irma, declining significantly by 39.3% during the week of the hurricane (U.S. online spending was up 3.9%). After the hurricane, Miami e-commerce sales increased 0.6%, dragging behind national spending which was up 12.9%.

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