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Adobe: Cyber Monday will be biggest online shopping day ever

BY Marianne Wilson

Online sales are expected to go through the roof on Cyber Monday, growing 16.5% over last year.

That’s according to a report from Adobe, which predicts that Cyber Monday will generate $6.6 billion in sales, making it the largest online shopping day in history. Online sales on Thanksgiving Day are expected to increase 15% to $2.8 billion.

Adobe expects that total online sales for the holiday season will be $107.4 billion, an increase of 13.8%. In-store retail is expected to grow 10%.

Large retailers (more than $100 million in annual revenue) will see higher order values and desktop conversion rates than smaller retailers (less than $10 million in annual revenue), according to the report, which is based on data from Adobe Analytics. But retailers are expected to have the mobile advantage with a higher average conversion rate of 1.9% by attracting more shoppers with an intent to buy.

“This year’s record-breaking online holiday shopping season is built on the strength of the big players,” said Mickey Mericle, VP, marketing and insights at Adobe. “We predict the biggest retailers with wide selections, easy shopping experiences and free shipping, to drive online holiday growth this year. Still, there is opportunity for savvy small retailers to win, specifically with mobile experiences.”

Here are some key findings from the Adobe report:

• Mobile shopping: While desktop purchases are predicted to account for two-thirds of revenue this holiday season, mobile is serving as a starting point for many consumers. For the first time, Web traffic on smartphones and tablets is predicted to be higher than for desktops, at 54% and 46% respectively.

• Less big-ticket spending: Consumers are expected to buy more items, at lower prices. Four out of five product categories measured show higher unit growth than revenue growth. Huge unit growth seen in toys (39% vs 24% revenue growth) and apparel (20% vs 17% revenue growth), while jewelry trails (down 3% for both unit and revenue growth).

• Most anticipated gift items: Based on social buzz, the most desired electronics this holiday season include Apple Air Pods, Sony PlayStation VR, as well as home assistants such as Amazon Echo and Google Home. Nostalgia reigns supreme with toys and video games, as Hasbro NERF Guns, Nintendo Switch and Super Mario Odyssey are expected to be among the top-sellers.

Additionally, the top toys from 2016 are capitalizing on their success with updated products that are expected to perform well this year, including Moose’s Toys’ Shopkins and Spin Master Hatchimals.

• Best Dates for deals: The sharpest discounts are expected to occur on Black Friday, with televisions (23.7%), tablets (23.6%), jewelry (12%) and appliances (17.7%) showing the largest price decreases.

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Ralph Lauren Q2 beats Street; profit surges

BY Marianne Wilson

Ralph Lauren Corp.’s effort to streamline and restructure its business, which includes cutting back its exposure in department stores and reducing shipments to off-price channels, is beginning to pay off.

The company reported fiscal second-quarter net income of $143.8 million, or $1.75 per share, up from $45.7 million, or 55 cents per share, for the year-ago period. Adjusted earnings were $1.99 per share, ahead of the FactSet consensus of $1.89 per share.

Revenue fell 9% to $1.66 billion, down from $1.82 billion, but better than analysts had expected. Revenue in North America fell 16% to $877 million. The company said the loss was driven by initiatives to reduce promotional activity, brand and distribution exits and lower consumer demand.

“I am pleased with the progress we are making as we continue to strengthen the foundations of our business and elevate the expression of our iconic brand,” said Ralph Lauren, executive chairman and chief creative officer. “Patrice has already proven to be an invaluable partner who is embracing our core values, bringing unique expertise and uniting and empowering our capable teams.”

It’s been a period of transition for the company. In July, former P&G executive Patrice Louvet took the reins as CEO following the departure of former CEO Stefan Larsson. Larsen, the company’s first chief executive besides Ralph Lauren, left after 15 months on the job, reportedly after clashes with Lauren over the restructuring program.

In comments, Neil Saunders, managing director of GlobalData Retail, noted that one of the positive takeaways from the company’s first and second quarters is that Ralph Lauren and Louvet seem to be working well together. “The dynamic between the two gentlemen is crucial as it will ultimately determine whether the turnaround plan succeeds or fails,” Saunders said. “As the founder and iconic head of the brand, Ralph Lauren’s input and vision are vital, but it remains important that he allows a CEO to steer the business towards more fruitful waters. After some false starts, this now seems to be happening.”

Looking ahead, Ralph Lauren is maintaining its guidance. It expects revenue to 8% to 9% for fiscal 2018, and a 6%-to-8% decrease in third-quarter revenue. But the company boosted its operating margin guidance for the full year to 9.5% to 10.5%, up from 9% to 10.5%.

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Hudson’s Bay gets offer for its German retail chain

BY Marianne Wilson

An Austrian property and retail group has made an offer to buy Hudson’s Bay Co.’s German based department store chain.

HBC said it has received an “incomplete, non-binding and unsolicited” offer with “no evidence of financing” from Signa Holding to acquire its German department store operation, Galeria Kaufhof, and other retail estate assets. Signa is the owner of Kaufhof’s principal German competitor, department store retailer Karstadt.

Signa tried to buy Kaufhof in 2015, but was outbid by HBC in a $3.9 billion deal. As part of the deal, HBC acquired 103 Kaufhof stores, and Belgian subsidiary Inno.

The HBC board intends to review the Signa offer. The company cautioned that the offer is subject to many assumptions, conditions and contingencies.

“As we’ve previously stated, our European business is an important element of the company’s strategy,” HBC stated. “HBC remains focused on executing its strategy and plans for the upcoming holiday season.”

The offer comes a week after HBC announced it would sell its flagship Lord & Taylor location in Manhattan to WeWork Cos.  And more recently, HBC was reported to be considering the sale of its flagship store in Vancouver.

HBC operates multiple banners across North America and Europe, including Hudson’s Bay, Lord & Taylor, Saks Fifth Avenue, Gilt, Saks Off 5tj, Galeria Kaufhof, the largest department store group in Germany, and Belgium’s only department store group Galeria Inno.

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