UPS: International online shopping is on the rise
More U.S. online shoppers are buying items from international retailers. To compete against these lower prices, U.S brands to step up personalization efforts.
This was according to the sixth annual “UPS Pulse of the Online Shopper” study. The report is based on a comScore survey of more than 5,000 U.S. online shoppers. Almost all avid U.S. online shoppers (97%), made purchases on marketplaces — up 12 points from 2016 — and 81% said price was the most important factor when searching for and selecting products online. Among respondents who purchased from an international retailer (47%), 43% were driven by lower prices on U.S. marketplaces, and 36% wanted unique products not available from U.S. retailers.
Among the U.S. consumers who purchased from an international retailer on a U.S. online marketplace, these retailers are based in China (61%), the U.K. (23%), Canada (15%), and Japan (14%).
The top considerations that online shoppers make when purchasing from international retailers include clearly stating the total cost of the order, including duties and fees (77%), stating all prices in the shopper’s native currency (76%), the retailer being reputable (74%), and reasonable speed of delivery (66%), data revealed.
“The lines that separate domestic and international retailers continue to disappear,” said Alan Gershenhorn, chief commercial officer for UPS. “Retailers are now competing across the globe. In order to win, retailers can distinguish themselves by providing value through personalized experiences.”
Personalized experiences include the physical store. Many online shoppers find stores important to touch and feel products (59%), solve immediate problems (54%), receive superior customer service (52%), and participate in rewards/loyalty programs (52%). Half of shoppers (50%) have used ship-to-store this year, of whom 44% made additional purchases in store, and 41% plan to use ship to store more often in the next year.
Yet, the average percentage of purchases made in physical stores by avid online shoppers decreased from 53% in 2014 to 48% in 2017. Comparatively, online sales increased from 47% in 2014 to 52% in 2017.
While online shoppers prefer to talk with sales associates when shopping in stores, when online they prefer self-service options such as email (55%) and live chat (42%). They are also comfortable using chatbots to get product information (42%), new product updates (39%), and completing their order and returning products (39%).
This also includes how shoppers are immersed in the store experience. Virtual reality is appealing to online shoppers interested in visualizing furniture and home décor (42%), seeing products brought to life through product demos (40%), and browsing through a store (39%).
Smartphones are also increasingly important whether shopping online or in-store. Eight in 10 online shoppers use retailer apps, often preferring apps to websites because of faster speed (51%) and better user experiences (35%).
The convenience factor is key as “on the go” mobile shoppers seek efficiency at every turn. Mobile coupons (50%) and high-quality product images (50%) are two of the most important app features, the study revealed.
Despite the overall growth of m-commerce, consumers are hesitant to use mobile in-store payment methods. While 59% of smartphone users research on their device, only 28% have used a smartphone to make an in-store purchase.
The number of shopping apps a consumer will use is also limited. Many rely on between three to five apps, mostly to conserve memory on their device.
Specialty apparel retailer Q1 sales up 22%
Duluth Trading Company continues to grow its sales and store footprint.
The retailer of men’s and women’s workwear, casual clothing, and accessories reported that net sales increased 21.9% to $83.7 million in the quarter ended April 30, up from $68.6 million in the prior-year first quarter. It was the company's 29th consecutive quarter of increased net sales year-over-year.
Net income fell to $0.4 million, or $0.01 per diluted share, compared to $3.2 million, or $0.10 per diluted share in the year-ago period.
“Our first quarter results were in-line with our expectations and we remain on track to deliver on our 2017 financial guidance,” said Stephanie Pugliese, CEO of Duluth Trading. “We made several investments in the business this quarter that impacted SG&A in the short term but will benefit us long term."
On the retail side of the business, the retailer said it continues to make "great progress" in expanding its geographical footprint and omnichannel presence.
"This quarter we opened four new stores to serve customers in the Indianapolis, Boston, Detroit and Providence markets, and these new stores are performing exceptionally well," Pugliese said. "In fiscal 2017, we now expect to open a total of 12 retail stores and one outlet store."
In addition to the expansion of retail, Duluth launched a women's TV advertising campaign in the first quarter as it continues to grow that part of its business.
The company reaffirmed its fiscal 2017 outlook, forecasting net sales in the range of $455.0 million to $465.0 million.
Duluth describes itself as a lifestyle brand for the modern, self-reliant American, offering high-quality, solution-based apparel for men and women who lead a hands-on lifestyle and value a job well-done. The company strives to offer customers an engaging and entertaining in-store experience.
Macy’s warns profit margins are shrinking
Already navigating tumbling sales, Macy’s is preparing for even tighter margins.
At the company’s annual investor day, Macy’s CFO Karen Hoguet said that second-quarter gross margins are running about 1 percentage point below what they were last year. The company is slashing costs in a bid to maintain its earnings forecast, which it reaffirmed on Tuesday, according to Bloomberg.
Coinciding with the announcement, the department store chain’s stock fell by 7.5% to $22.08 — marking the worst intraday drop since May 11, the day Macy’s released its results for the first fiscal quarter. The chain is already down 33% this year, the report added.
For the first quarter, Macy's posted a profit of $71 million, or 23 cents a share, down from $116 million, or 37 cents a share, in the year-ago period. Excluding some costs, Macy's adjusted per-share profit fell to 24 cents from 40 cents, below analysts' expectations for 35 cents.
Revenue fell 7.5% to $5.34 billion, versus analysts estimates of $5.47 billion, which Macy’s attributed partly to store closings. Same-store sales fell 4.6%, more than expected. The retailer did not break out its online sales but said its digital platforms showed “continued strong growth” in the quarter.
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