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Wegmans, Amazon.com top corporate reputation list

BY CSA STAFF

Wegmans Food Markets, Costco, Publix and CVS are among the highest ranked companies in terms of corporate reputation, according to a new poll.

The 16th annual Harris Poll Reputation Quotient study ranked the reputations of the 100 most visible companies. Scores range from excellent (scores of 80+) to poor (scores of 50 to 64).

"Reputation is far from static and is a business asset that is earned every day as people evaluate companies through the lens of what matters most to them. Wegmans has spent years building a sterling reputation in the communities they serve, through its employees, one shopping experience at a time," says Carol M. Gstalder, Reputation & Public Relations Practice Leader for Harris Poll. "Samsung has steadily climbed up the ranks in recent years with consumers rating it among the 5 best on key reputational dimensions of products and services, emotional appeal, financial performance and vision and leadership. Apple's performance, while still excellent, has fallen 5 points since 2012."

Ranking third on the list, Samsung outperformed all other technology companies, surging past Apple and Google, at No. 9 and No. 10 respectively, and achieving a near-reversal in position from 2012 when Apple was No. 1, Google was No. 2 and Samsung ranked 13th in corporate reputation.

Harris Poll expanded the list to 100 companies this year, up from 60, to offer deeper insight by industry. As a result, three of the top 10 companies are debuting on the list, including No. 1 Wegmans, No. 7 L.L. Bean and No. 8 Publix Supermarkets.

"Expanding the study allows companies to see how they stack up within their industry as well as compared to best in class reputations across industries," Gstalder said.

JC Penney showed the strongest improvement in the past year as its turnaround strategy gains traction. The Coca-Cola Company, Honda, Hyundai and General Motors experienced the largest declines. Unprecedented automotive recalls explain the reputation hits suffered by General Motors, Honda and Hyundai. Coca-Cola, whose reputation score is in the "very good" range, fell 6.8 points this year, largely due to public perceptions of its products and declining intent to purchase.

"The American public strongly believes reputation matters and acts on that belief. This year's results show that more than half of the public actively seeks out information about companies they hear about or do business with, and 36% say they've decided against doing business with a company because of something they learned about its conduct," Gstalder added. "Companies need to evaluate and understand the increasing expectations consumers have when it comes to corporate reputation, specifically what they think, say and do, as well as how best to engage with them."

A complete ranking of the RQ's 100 most visible companies can be found in the 16th Annual RQ Summary Report.

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Why the Marketplace Fairness Act Beats the Alternatives

BY CSA STAFF

By Jonathan Barsade, CEO of Exactor

Today in the U.S., e-commerce businesses are “more equal” than their brick-and-mortar peers. The Internet remains a tax-free zone, and the Marketplace Fairness Act (MFA) remains shelved in the House of Representatives. The MFA, which was passed by the Senate in May 2013, would grant states the power to collect sales taxes from online sellers. Of course, the bill is viciously contested. Meanwhile, brick-and-mortar businesses continue to shoulder the burden of state taxes, and opponents of the MFA continue to spin new reasons why this inequity should continue.

MFA detractors argue that it would create ‘new’ taxes; that it would subject businesses to tax policies of other states, where they have no ability to influence policy; and that it would force businesses to pay for infrastructure they don’t use. In reality, the Marketplace Fairness Act has been operating successfully in 24 states for over seven years under its predecessor, Streamline Sales Tax, without any of these ramifications. Rather than debate these flimsy arguments, I suggest we ask a better question: What’s the alternative? Do opponents of the MFA have another solution, or is “no” the extent of their vision?

Very few people argue that the Internet should remain a tax-free zone. Even Speaker Boehner and Chairman Goodlatte, staunch opponents of the MFA, agree that some kind of Internet sales tax bill must pass. The question is what the bill will contain.

Legislators disagree about the location of an online transaction (a.k.a. “sourcing”) because that determines where a business will report and file the taxes. The MFA says that the transaction should be sourced to the buyer’s location. Opponents of the MFA argue that the seller is not located where the buyer is located and should therefore not have to file taxes in that state. Never mind that seller uses state infrastructure to deliver goods to the buyer.

Many MFA opponents, aware that a pure seller sourcing rule is untenable, are promoting what is known as the “mixed” sourcing rule. This concept is the centerpiece of the draft bill released by Chairman Goodlatte for discussion, titled “Online Sales Simplification Act of 2015.” The draft bill provides that transactions will be sourced to the state where the seller is located, and then the seller state would remit the taxes to the buyer’s state (through a clearing house, to be created). This way sellers would only be subject to the tax policies of their home states. MFA opponents claim that this is the least burdensome approach because sellers already collect sales taxes under their home rules.

This hybrid solution would be a disaster for state governments and sellers.

First of all, implementing the hybrid solution would be virtually impossible. With each state tax return, the seller would have to submit a comprehensive report detailing each transaction. The state would then have to reconcile which transaction gets reported to which state, determine how much is owed and transmit the payments. State taxing agencies already have enough difficulties collecting their own taxes. They have no incentive and no capacity to develop systems that would remit tax payments to other states.

Second, the hybrid solution wouldn’t relieve sellers of the compliance burden. Under the hybrid solution, they would still need complex systems to track and report sales by taxing jurisdiction. The reporting would need to be accurate and detailed enough for the state to divide the tax payment among other tax agencies. Under the MFA, a large portion of this reporting capacity would be provided by commercial companies, which in turn would be compensated by the recipient states. Under the hybrid solution, the entire cost of reporting systems would fall on the commercial retailer. Compliance would be significantly more expensive.

Third, the hybrid system would result in higher taxes because it would incentivize sellers to relocate to low tax states. The recipient state (where the buyer is located) would receive taxes collected according to lower state tax rates. Because the buyer’s state would collect less revenue, it would have to raise taxes to make up any shortfall. For example, if a seller were located in a low-tax state, and the buyer were located in California, the seller state would remit reduced taxes to California. Unable to collect enough taxes from the seller or buyer, California would realize a shortfall in taxes collected from online sales and would have to compensate by increasing other state taxes.

Fourth, the hybrid solution would encourage arbitrage between states. Just imagine an enterprising middleman located in a low rate state such as Colorado. He could purchase goods on behalf of the buyer, and because he made the purchase for purpose of resale, the purchase would be tax free. When the middleman turns around and resells the item to the buyer, he would only collect the Colorado rate of 2.9%, saving California buyers nearly 7% in sales tax. Now, imagine if the name of that enterprising middleman was “Amazon”.

Many readers will object to these arguments on the grounds that I, the author, am associated with Exactor, a company that stands to benefit from MFA. The truth is that Exactor would benefit regardless of which bill passes – MFA, source-based or hybrid rules. We’re a technology company that helps businesses navigate the complexity of state and local sales taxes. Because we’ve been in the trenches, we know what sellers need and how states operate. The above arguments are informed from experience and my hope for a functional sales tax system.

Proponents and opponents of the MFA both acknowledge that the Internet cannot remain a tax-free zone. While I contend that sellers and states will be far better off with the Marketplace Fairness Act than a hybrid solution, the debate will continue until the President signs a bill. For opponents of the MFA, either it’s time to propose a realistic alternative, or it’s time to let Congress adapt our tax system to the digital age. Until then, some business will remain less equal than others.


Jonathan Barsade, is CEO of Exactor.

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Retail Real Estate Insights. For Retailers. By Retailers.

BY Katherine Boccaccio

For Los Angeles-based fashion retailer Forever 21, the journey from a single location on Figueroa Street in L.A. in 1984 to more than 680 global locations today has been transformative. Over the last three decades, the brand has not shied away from innovation and experimentation, implementing a range of different store sizes and concepts along the way: from smaller 5,000-sq.-ft. layouts in its early years, to larger 9,000-sq.-ft. concepts in the 2000s and a range of big-box stores that range up to 40,000 sq. ft.

The latest development from Forever 21 is something else entirely, however—a new branded concept that adds a fresh dimension to the company: F21 red. F21 red was designed to respond to growing customer demands for Forever 21 staples, delivering an increased depth of product at a significantly lower price point. The F21 red concept is intended to create an easy shopping experience for the entire family with an assortment of fashion staples from each of the Forever 21 lines, including Forever 21, Forever 21 Men, Forever 21 Plus and Forever 21 Girls. The concept makes it possible to stock that deeper inventory of options, and makes F21 red a natural fit for power centers and similar locations.

Providing greater quantities of the styles and trends customers are looking for is just part of the F21 red equation, however. F21 red not only maintains the value and entry-level category price points Forever 21 is known for offering, it brings them front-and-center. F21 red shoppers can find jeans for under $8, tank tops for less than $5 and camisoles for $2. From affordably priced fashion to floor plans, everything about F21 red is designed around accessibility and convenience.

From a store layout perspective, Men’s, Women’s and Kids sections are clearly identified. Shoppers will notice a wider customer path designed to accommodate strollers, further enhancing the image of a store designed with a smooth and seamless customer experience top of mind.

The first F21 red store opened its doors in May 2014 in Azalea Shopping Center in South Gate, California — and it rapidly became a popular destination. Currently, there are three operating F21 red stores, with stores in Oakdale Mall in Johnson City, New York, and The Shoppes at Arbor Lakes in Maple Grove, Minnesota, joining the original South Gate location. While the pace of new openings has been modest in the early stages — a strategic decision designed to give the company an opportunity to gauge consumer response and fine tune the operational details — the success of the initial locations has validated the concept and made it an easy decision to move forward with expansion plans. “We are very pleased with the positive response to our Azalea store and are excited to expand the F21 red concept to meet customer needs in new markets,” said Linda Chang, Forever 21 VP of merchandising.

As part of the ongoing F21 red rollout, a larger expansion of stores is slated to begin in 2015. F21 red will be expanding both domestically and overseas, and, while specific markets will be strategically targeted, the company will also be flexible and move to capitalize on emerging opportunities.

Jonathan Lapat, X Team International President and principal with Boston-based Strategic Retail Advisors, who is handling the brand’s northeast expansion, says that because the F21 red concept manages to bridge the gap between high fashion and low prices, there is a welcome degree of flexibility available when targeting markets for new locations.

“This is an exciting retail concept with outstanding potential for expansion, both throughout the northeast and nationally,” commented Lapat. “The mass appeal of the brand and the high demand of the product F21 red is offering makes it a great fit for a wide range of markets and project types. We’re energized by the opportunity to help this new concept make a splash in our region.”

And because F21 red stores generally slot into a different category of retail and mixed-use destinations than traditional Forever 21 stores, there is less risk of market redundancy and competitive overlap. For an exciting new concept from a successful national brand, those look like the ingredients of winning recipe.

Watch for more installments of “Retail Real Estate Insights. For Retailers. By Retailers,” an exclusive Chainstoreage.com real estate series.

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