Warehouse club giant tops estimates in August
Costco Wholesale Corp. turned in a strong performance in August, helped by a big increase in online sales.
Net sales rose 10% to $9.8 billion for the month of August, from $8.9 billion during the similar period last year. Total same-store sales rose 7.3%, higher than the 6.1% Wall Street expected. Same-store U.S. sales rose 7.4%, easily topping estimates for a 4.9% to 5.3% increase. Costco's comparable e-commerce sales jumped 26% in August.
"In recent months, Costco has experienced an improvement in online sales due to various factors including an improved merchandise selection, member value, greater website awareness, reduced delivery times and a better user experience," Barclays analyst Karen Short said in a research note on Thursday, reported The Street.
For the first 52 weeks of its 53-week fiscal year ended Aug. 27, Costco reported net sales of $123.5 billion, an increase of 6.4%. Same-store sales for that period increased by 4.3%.
Costco opened its ninth warehouse in Australia on August 31, 2017, and will open its 26th warehouse in Japan later this week. The company will end its fiscal year on September 3rd with 741 warehouses in operation, including 514 in the United States and Puerto Rico, 97 in Canada, 37 in Mexico, 28 in the United Kingdom, 26 in Japan, 13 in Korea, 13 in Taiwan, nine in Australia, two in Spain, one in Iceland and one in France.
Leslie’s Poolmart CEO to retire
The chief executive of the nation's largest specialty retailer of swimming pool and spa supplies and related products is stepping down.
Leslie's announced that chairman and CEO Lawrence Hayward will be retiring and transitioning from his role as CEO, effective September 30, 2017. He will continue to serve as chairman.
As part of the company's long-term succession plan, Steven L. Ortega, president and COO will succeed Hayward and assume the additional role of CEO, effective October 1, 2017.
Ortega joined Leslie's as CFO in 2005 and has served in his present role since 2015. His career spans 35 years in the retail industry which included a 16-year career at American Stores Company and seven years as executive VP and CFO of BI-LO Supermarkets.
Leslie's markets its products through over 900 retail store and commercial service locations in 35 states, a nationwide mail-order catalog and several internet e-commerce sites, including In The Swim. It is based in Phoenix, Arizona.
Retail Revolutionized: Three ways to profit from artificial intelligence
Whether we’re receiving coupons based on our spending, or product suggestions based on other people’s spending, artificial intelligence (AI) is transforming how consumers shop and experience brands. For retailers, meanwhile, AI could increase profits by almost 60%1. It could be a game-changer in this labor-intensive sector, augmenting the workforce and enabling employees to become more productive.
Some retailers already recognize ways for AI to complement their human workforce and boost profits. Stitch Fix is a clothing retailer that combines the expertise of fashion stylists with algorithms that analyze unstructured consumer data to deliver hand-picked items based on their preferences2. Another forward-thinking fashion company is Original Stitch, which deploys AI to analyze customers’ photographs of their favorite shirts before custom-tailoring and delivering a brand-new piece of clothing3.
Yet some retailers are hesitant about AI, and unsure how they can keep up to speed with the technology – let alone make the most of it. We have identified three ways for these retailers to revolutionize the retail experience using AI.
1. Understand the consumer
AI allows companies to find out more about how customers behave and what they want, giving them confidence that they are stocking the right products, targeting them at the right consumers, and building the right loyalty programs.
The data they gather from their Web and mobile channels already enables online retailers to develop more detailed and accurate customer profiles. But this sort of insight does not have to be exclusively Web-based: physical retailers could use AI technology to learn about customer activity as they walk around stores. Which displays do customers linger over? Which products do they take off the shelves but then decide not to buy? This sort of data will tell retailers when, where and how to nudge customers toward purchases, and give them the insights they need to improve the customer experience.
2. Guide them to what they want – and don’t know they want
Similarly, retailers can use AI to make it easier for customers to find what they are looking for – and, crucially, help them find things they don’t yet know they want.
This is especially valuable for the largest online brands, with their vast range of products. Consumers who feel overwhelmed by the sheer quantity of items will go elsewhere, so retailers that can guide customers in the right direction have a serious competitive advantage. And it is the online retailers that were first to recognize the value of nudging customers toward further purchases by using machine learning to anticipate their needs.
Used sensitively, AI makes customers feel that retailers understand what they want. Progressive retailers are already using AI to provide more sophisticated online recommendations, but they are also looking into tailoring the homepage to each user so they are presented with the items they desire most.
Consumers already know that the adverts they see online are personalized to them; Google uses AI to tailor its search results for individual users; and some online retailers use structured data to adapt what they show customers according to what they have searched for in the past. What is stopping retailers from customizing each person’s experience of the entire site?
3. Knock their socks off
Online shopping impresses customers with its ease and efficiency. As AI makes online shopping easier, customers are less likely to go to stores for commodity products such as laundry detergent. But as far as providing memorable experiences goes, physical stores have the upper hand. So, this is the time to start exploring how to use AI to dazzle customers.
Grocery retailer Coop Italia is a great example. Customers can simply wave a hand over a box of grapes to see nutritional and provenance information on a raised monitor. It also uses “vertical shelving”: touch applications that enable customers to search for other products and find out about related products, promotions, and even waste-disposal4. At some Neiman Marcus department stores, meanwhile, customers can try out a “memory mirror” – a virtual dressing room to compare outfits, see them from 360 degrees and share video clips with friends5.
With so many of us consulting our phones while we shop – to read reviews and research product information – it is only a matter of time before retailers answer these queries on the shop floor, using bots. AI lets them carry out multidimensional conversations with customers through text-based chats, spoken conversations, gestures and even virtual reality.
This is not hype. AI advances have already given some retailers increased customer loyalty and higher profits. Now retailers have the opportunity to boost their profits further by using AI alongside the human workforce – producing even greater efficiencies, and truly revolutionizing the in-store experience.