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Survey: Mobile is dominating increase in e-commerce traffic

BY CSA STAFF

More and more consumers arebrowsing, creating baskets and making purchases from their smartphones, according to the latest Demandware Shopping Index.

Globally, phones accounted for 94% of the year over year increase in e-commerce traffic, 74% of the increase in basket creation and 47% of the order growth.

“Demandware is advising retailers that it is essential for brands to seamlessly integrate mobile into their global growth strategies, but local preferences and behaviors must be considered when entering new markets,” said Rick Kenney, industry principal at Demandware.

For example, retailers in the UK are seeing the largest boost in phone orders – with 25% of all transactions coming via phone, a 45% increase year over year. UK consumers are also most likely to buy on tablets. Tablet order share in the UK was 24% in Q2 2015, 7% higher than in any other region. Conversely France and the U.S. experienced the lowest rate of tablet orders globally with only 12% and 14%, respectively.

Shoppers are also creating more baskets than ever. Globally, basket creation is up 26% year over year. Phones are the primary driver of this trend, with the percentage of shoppers adding an item to a cart via a smartphone up 15% year over year.

With their wish lists now at their fingertips, shoppers are able to access saved items whenever they like. This means there is an opportunity for retailers to turn previously idle moments into a time for customers to make a spontaneous purchase from their basket.

Additional global findings:

  • 3’s a Crowd for Tablets — The ubiquity of the phone is driving all activity on tablets down. Traffic share is down 10% year over year and order share is down 2% year over year.
  • Cross Device Patterns Emerge — The shopper journey is increasingly beginning with phones and ending with computers. Mobile browsing accounted for a 94% increase in traffic year over year, while 65% of all digital commerce orders still take place on computers.
  • The OS Battle Royale -– iOS trumps Android when tablets and phones are both factored in. But looking at phones alone the gap is starting to close – with iOS only 15% higher in order and traffic share, compared to Android. iOS devices deliver only a slightly higher AOV over Android, $107 to $96.
  • Home Sweet Home –- Home goods accounted for the highest phone order share (23% globally). Health & beauty brands drove the most phone traffic (46%), but the least amount of orders (17%). Active apparel brands saw the biggest jump year over year in phone orders (+76%).

“What’s clear from this quarter’s data is the relentless move towards phones for browsing and purchasing,” said Elana Anderson, SVP Worldwide Marketing, Demandware. “As we move into the holiday shopping season, retailers must enable personalization at every touch point – whether on mobile, online, in-store or on a social platform. The winning brands will crack the code to best engage with their mobile shoppers via highly personalized content and promotions no matter where they are in the world.”

Get the full Q2 2015 Shopping Index here.

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Christopher and Banks misfires during summer

BY CSA STAFF

A “merchandising misstep” took its toll on Christopher & Banks in its second quarter as sales decreased more than expected.

The company posted a net loss of $710,000 in the quarter, compared to earnings of $3.36 million in the year-ago period.

Sales totaled $94 million, down 12% from $106.6 million a year ago. The chain’s store portfolio was about 5% smaller than it was a year ago due to the company’s ongoing makeover project, which has resulted in some closings, and consolidations of its main store with its misses and petite-size outlets.

Same-store sales fell 12.4% in the quarter.

In the wake of the disappointing results, Christopher & Banks said it would slow its store conversion program and focus on maximizing the performance of its existing stores.

During 2015, to retailer expects to open nine new MPW stores and 33 outlet stores and to end the year with approximately 525 stores, of which 320 are MPWs, as compared to 518 stores at the end of fiscal 2014.

“Our disappointing second quarter performance reflects a combination of both macro headwinds, as well as company-specific factors that impacted our business, particularly in late June and in the month of July,” said CEO LuAnn Via. “While we have taken immediate action in a number of areas to address certain merchandising missteps and have seen trends in the business improve somewhat since July, much of the benefit from these initiatives is expected to drive improved sales for holiday 2015 and spring 2016.”

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Kroger’s winning ways continue in Q2

BY Michael Johnsen

Cincinnati — For almost 12 years, Kroger has reported same-store sales growth every quarter. And they did it again Friday.

The supermarket giant reported net earnings of $433 million, or $0.44 per diluted share, and identical supermarket sales growth, without fuel, of 5.3% in the second quarter of fiscal 2015.

“We are pleased with our second quarter performance. Our core food business continued its strong performance and we benefitted from fuel margins that expanded throughout the quarter,” said Kroger chairman and CEO Rodney McMullen.

The chief noted that that the company is working toward achieving its 48th consecutive quarter of positive identical supermarket sales growth, excluding fuel, three months from now.

“We are investing to grow our business for the future while delivering on our promises today,” McMullen said. “For example, our stores are hiring to fill 20,000 new, permanent jobs and we are expanding our digital and ecommerce offerings. Our confidence in Kroger has never been stronger.”

As a result of lower retail fuel prices, Kroger total sales increased 0.9% to $25.5 billion in the second quarter compared to $25.3 billion for the same period last year. Total sales, excluding fuel, increased 5.7% in the second quarter over the same period last year, the company reported.

Based on its strong year-to-date results, Kroger raised its net earnings per diluted share guidance to a range of $1.92 to $1.98 for fiscal 2015. The previous guidance was $1.90 to $1.95 per diluted share. This range exceeds the company's long-term net earnings per diluted share growth rate guidance of 8% to 11%, plus a growing dividend.

Kroger raised its identical supermarket sales growth guidance, excluding fuel, to a range of 4% to 5% for fiscal 2015. The previous guidance was 3.5% to 4.5%.

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