Latest Retail News, Strategies, & Trends - Retail TouchPoints - Retail TouchPoints https://www.retailtouchpoints.com Wed, 21 Feb 2018 02:01:27 -0500 RTP en-gb Walmart’s Online Growth Slows During Holiday 2017 https://www.retailtouchpoints.com/features/news-briefs/walmart-s-online-growth-slows-during-holiday-2017 https://www.retailtouchpoints.com/features/news-briefs/walmart-s-online-growth-slows-during-holiday-2017 Walmart’s Online Growth Slows During Holiday 2017

Walmart has been used to generating enormous e-Commerce growth rates since purchasing Jet.com in August 2016, but the 2017 holiday season saw some cooldown. While Walmart had 60% and 50% online growth in Q2 and Q3, respectively, the retailer saw e-Commerce sales increase only 23% in Q4 2018.

Walmart’s total Q4 revenue was $136.3 billion, an increase of $5.3 billion or 4.1% over Q4 2017, while U.S. comparable-store sales increased 2.6%, marking the 14th straight quarter same-store sales remained positive. Shopper visits rose 1.6%, indicating that Walmart’s efforts to integrate physical stores and e-Commerce are paying off. Gross margins fell 60 basis points to 24.1%.

Walmart stock dipped 9% in the wake of the news, but Moody’s Lead Retail Analyst Charlie O’Shea still saw the online sales growth as “impressive,” in commentary provided to Retail TouchPoints. O’Shea attributed the lower gross margin to holiday promotional activity, as well as the impact of an “ongoing price-driven market share battle with Amazon.”

Doug McMillon, CEO of Walmart, indicated in an earnings call that the “majority of this slowdown was expected.” But McMillon noted that e-Commerce sales were depressed due to some operational issues.

“During the seasonal spikes, seasonal inventory — think electronics, toys, gifts — came into our fulfillment centers and there was enough cube that it harmed our basic in-stock on more everyday items, and our basic in-stock for e-Commerce suffered as a result,” McMillon said during the call. So we're learning how to deal with higher volumes and learning how to deal with a higher peak than what we had previously.”

For the full fiscal year, Walmart brought in revenues of $500.3 billion, a 3% year-over-year increase, and e-Commerce sales grew 44% to $11.5 billion. McMillon said in a statement that Walmart is still maintaining an expectation of 40% e-Commerce growth in calendar 2018.

Separately, Walmart is revamping its store-brand labels in low-price apparel, according to Bloomberg News. The new clothing lines will include Time and Tru for women, Terra & Sky for plus sizes and Wonder Nation for kids, and Faded Glory, White Stag and Just My Size will be phased out.

The apparel changes come as Walmart plans to unveil a new web site in early 2018. Lord & Taylor will launch a flagship store on the updated Walmart.com in spring 2018, as part of the retail giant’s push to serve as a more upscale online destination for fashion and apparel.

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feed@retailtouchpoints.com (Glenn Taylor) News Briefs Tue, 20 Feb 2018 16:39:34 -0500
Gap Brand CEO Steps Down Amid Profit Challenges https://www.retailtouchpoints.com/features/retail-movers-and-shakers/gap-brand-ceo-steps-down-amid-profit-challenges https://www.retailtouchpoints.com/features/retail-movers-and-shakers/gap-brand-ceo-steps-down-amid-profit-challenges Jeff KirwanJeff Kirwan, President and CEO of Gap brand since 2014, is leaving the company amid challenges around profit growth. While Gap Inc. searches for a successor, Brent Hyder, current Gap Inc. EVP, Global Talent and Sustainability, will oversee the brand.

The Gap brand has struggled with both external and internal competitors, particularly the Gap Inc. Old Navy brand. Old Navy generates approximately half of all Gap Inc. sales but represents approximately 70% of the company’s profits, according to Fortune.

“While I am pleased with our progress in brand health and product quality, we have not achieved the operational excellence and accelerated profit growth that we know is possible at Gap brand,” said Gap Inc. CEO Art Peck in a statement. “As we move into the brand’s next phase of development, Jeff and I agreed it was an appropriate time for a change in leadership.”

Peck credited Kirwan with “significant progress” on the operating model of Gap brand. “We are faster and more responsive than ever before, we radically improved quality and fit, and we centered the brand on the aesthetic that our customers love: casual, optimistic and American,” he noted. “We have also seen the results of exceptional marketing and customer engagement reflected in increased traffic, improved sales and the strength of the digital business.”

Despite these advances, the flagship brand has only achieved comparable store sales increases for one quarter during the past three years, in Q3 2017. Q4 financial results for Gap Inc. will be announced on March 1.

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feed@retailtouchpoints.com (Adam Blair) Retail Movers & Shakers Tue, 20 Feb 2018 16:31:25 -0500
J.Crew Hires Starbucks Digital Exec As Chief Experience Officer https://www.retailtouchpoints.com/features/retail-movers-and-shakers/j-crew-hires-starbucks-digital-exec-as-chief-experience-officer https://www.retailtouchpoints.com/features/retail-movers-and-shakers/j-crew-hires-starbucks-digital-exec-as-chief-experience-officer Adam BrotmanStruggling apparel retailer J.Crew has made a significant hire, bringing Starbucks’ former Chief Digital Officer Adam Brotman on board to fill the newly created post of Chief Experience Officer. Brotman will report to CEO Jim Brett.

In nine years at Starbucks, most recently as EVP for Global Retail Operations and Partner Digital Engagement, Brotman was credited with overseeing the retailer’s popular mobile ordering, payment service and loyalty card initiatives. He also was responsible for the retailer’s in-store digital experiences, including the Starbucks Digital Network.

“Adam’s experience with global field operations and cutting edge consumer-facing digital platforms makes him an invaluable partner in shaping and driving J.Crew Group’s strategic initiatives to the next level,” said Brett in a statement, according to GeekWire. “Adam will help us establish customer relationships that leverage all our channels, helping us to serve them in ways that are more meaningful and relevant to how they shop and live.”

J.Crew has been facing many of the same headwinds as other mall-based apparel retailers. For Q3 2017, total revenues decreased 5% to $566.7 million, while comparable company sales dropped 9%, compared to an 8% dip in Q3 of the previous year. The company had a net loss of $17.6 million, more than double the $7.9 million loss for Q3 2016.

Brett was brought in to attempt to turn J.Crew’s fortunes around following the departure of long-time CEO Millard “Mickey” Drexler in June 2017.

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feed@retailtouchpoints.com (Adam Blair) Retail Movers & Shakers Tue, 20 Feb 2018 14:49:43 -0500
NACS Survey: Consumer Optimism Dips In February https://www.retailtouchpoints.com/features/news-briefs/nacs-survey-consumer-optimism-dips-in-february https://www.retailtouchpoints.com/features/news-briefs/nacs-survey-consumer-optimism-dips-in-february NACS Survey: Consumer Optimism Dips In February

Even though the percentage of gasoline consumers expressing optimism about the economy fell in February 2018 compared to January, the numbers remain ahead of those for February 2017. According to new survey data from the convenience and fuel retailing association NACS, 60% of gas consumers reported being somewhat or very optimistic about the overall economy in February 2018, down from 65% in January.

Back in February 2017, only 57% expressed this level of economic optimism, but the percentage had risen to 61% by Q4 2017.

NACS attributed February’s confidence decline to a turbulent stock market compounded by a 9-cent increase in the median price of gas, which rose from $2.50 to $2.59. The association conducts monthly surveys related to economic issues and consumer sentiment to learn how consumers shop for fuel, what affects their buying decisions and what it means in a broader economic context.

Almost one-quarter of consumers (24%) reported that they are likely to drive more in the coming 30 days, up five percentage points compared to February 2017, and 70% will drive about the same amount.

“Consumers are still very optimistic in general, but there are some early warning signs for retailers,” said Jeff Lenard, NACS VP of Strategic Industry Initiatives in a statement. “The question on the minds of most c-store operators today is whether increased traffic will lead to increased sales inside the store.”

In a new question designed to estimate how gas prices would affect future consumer spending, NACS found that the majority of gas consumers (59%) expected to spend about the same amount on typical non-gas household purchases such as groceries and clothing, while 22% anticipated spending more and 19% predicting they would spend less.

In another new question, more than half of gas consumers (56%) expected to eat out “about the same” as last month, but almost one-third (32%) anticipated they would dine out less often.

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feed@retailtouchpoints.com (Marie Griffin) News Briefs Tue, 20 Feb 2018 13:22:32 -0500
1-800-FLOWERS.com Boosts AOV After Generating 35% Click Share Of Valentine’s Day Search Ads https://www.retailtouchpoints.com/features/news-briefs/1-800-flowers-com-boosts-aov-after-generating-35-click-share-of-valentine-s-day-search-ads https://www.retailtouchpoints.com/features/news-briefs/1-800-flowers-com-boosts-aov-after-generating-35-click-share-of-valentine-s-day-search-ads 1-800-FLOWERS.com Boosts AOV After Generating 35% Click Share Of Valentine’s Day Search Ads

Valentine’s Day spend hit a record $19.6 billion this year, according to the National Retail Federation (NRF). 1-800-FLOWERS.com leveraged both popular and niche search terms to outperform its floral retail rivals, beating competitors in both search ad volume and click share in the month leading up to the holiday.

Improving these metrics likely led to an increase in average order value (AOV) at 1-800-FLOWERS.com. The retailer increased AOV from $78 in 2017 to $82 in 2018, according to Edison Trends. By comparison, AOV actually decreased for competitors FTD and ProFlowers.com in that time frame (FTD dropped from $79 to $76; ProFlowers.com decreased from $73 to $69).

1-800-FLOWERS.com enjoyed a 331% order increase between Feb. 11 and Feb. 13, 2018, well ahead of competitors. ProFlowers.com saw a significant 154% increase in order volume between Feb. 11 and its peak on the Feb. 12, while FTD experienced a 181% increase on those dates. But unlike 1-800-FLOWERS.com, ProFlowers.com and FTD saw order volumes decline from Feb. 12 to Feb. 13.

1-800-FLOWERS.com was the top advertiser by text ad volume from Jan. 15 and Feb. 14, 2018. The top five advertisers by volume were:

  1. 1800flowers.com: 890 ads;
  2. proflowers.com: 830 ads;
  3. fromyouflowers.com: 710 ads;
  4. bouqs.com: 690 ads; and
  5. ftd.com: 650 ads.

But while 1-800-FLOWERS.com was first among roughly equal competition in ad volume, the online retailer completely dominated when it came to generating clicks, garnering more than one third of the total. In terms of click share, the top five advertisers were:

  1. 1800flowers.com: 35.32%;
  2. ftd.com: 14.81%;
  3. proflowers.com: 13.50%;
  4. fromyouflowers.com: 13.46%; and
  5. teleflora.com: 9.39%.

“Our analysis reveals that 1-800-FLOWERS had an all-encompassing search strategy,” said Ashley Fletcher, VP of Marketing at Adthena. “They bid consistently on all high-volume generic keywords like ‘flowers,’ which are expensive, to more niche, Valentine's Day-specific terms. It was a full court press.”’

However, 1-800-FLOWERS didn’t sweep all the advertising awards: ProFlowers drove the most search impressions leading up to the holiday. The top-five Valentine’s advertisers by search impressions were:

  1. proflowers.com: 18.19%;
  2. fromyouflowers.com: 17.09%;
  3. 1800flowers.com: 16.52%;
  4. ftd.com: 14.62; and
  5. teleflora.com: 11.92%.

For the study, Adthena analyzed more than 2,700 text search ads, totaling more than 590 search terms and 17.4 million impressions, from 276 U.S.-based floral and gourmet foods gift retailers. The study was conducted between January 15 and February 14, 2018.

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feed@retailtouchpoints.com (Glenn Taylor) News Briefs Tue, 20 Feb 2018 12:10:00 -0500
Email Marketing Success Is All In The Timing https://www.retailtouchpoints.com/resources/type/infographics/email-marketing-success-is-all-in-the-timing https://www.retailtouchpoints.com/resources/type/infographics/email-marketing-success-is-all-in-the-timing Email Marketing Success Is All In The Timing

Marketers seeking to maximize email open and click-through rates need to factor in not just what the email says but also when it's sent. For e-Commerce companies, Wednesdays at 10 a.m. are optimal, while prime time for offline retail and hospitality is Thursday from 8 a.m. to 10 a.m.

For all types of companies, sending emails in the middle of the week is best for generating both opens and clicks. Learn more about scheduling emails for the best ROI in this infographic from SendinBlue.

[click to expand]

IG SendinBlue 02.18.18

Source: SendinBlue

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feed@retailtouchpoints.com (Roman Aguila) Infographics Tue, 20 Feb 2018 00:00:00 -0500
Albertsons-Rite Aid Merger Shakes Up Both Grocery And Pharmacy Sectors https://www.retailtouchpoints.com/features/mergers-and-acquisitions/albertsons-rite-aid-merger-shakes-up-both-grocery-and-pharmacy-sectors https://www.retailtouchpoints.com/features/mergers-and-acquisitions/albertsons-rite-aid-merger-shakes-up-both-grocery-and-pharmacy-sectors Albertsons-Rite Aid Merger Shakes Up Both Grocery And Pharmacy Sectors

Albertsons Cos., parent company of supermarkets Albertsons, Safeway, Jewel-Osco and Acme, has reached a definitive merger agreement with Rite Aid to create a combined company that could generate as much as $83 billion in 2018 revenue.

The merger would bring privately-backed Albertsons onto the New York Stock Exchange, finally taking the company public after years of speculation. Albertsons reportedly put its IPO filing plans on hold in July 2017 after the Amazon-Whole Foods merger, two years after initially postponing such a listing.

But with the help of Rite Aid and recent investments in online grocery, including a partnership with Instacart and the acquisition of meal kit provider Plated, the grocery giant appears to have itself well situated for a public push. Albertsons even has launched a digital platform designed to give CPG brands access to shopper data to help them deliver targeted ad campaigns, showing that it is very serious about engaging consumers at all points of the shopper journey.

“Albertsons has been contemplating going public for over two years and this cash-and-stock deal will finally allow Albertsons to do so after more than a decade of ownership by private equity firm Cerberus Capital,” said Mickey Chadha, VP of Moody’s in commentary for Retail TouchPoints. “However, drug retailing has had its own challenges, with reimbursement pressure and weak front-end sales as evidenced in Rite Aid’s weak profits over the last couple of years. Competing with much larger and more diversified drug retailers like CVS and Walgreens will be a formidable challenge."

Deal Highlights New Modes Of Retail Expansion

The Albertsons-Rite Aid deal underlines that retail expansion is no longer defined just by adding more stores, but also by incorporating new functionalities. Retailers are looking to pharmacies to take advantage of the frequency with which people buy OTC and prescription drugs. These combinations also create opportunities to use physical stores as a base for prescription drug delivery and pickup.

Retail pharmacy also has seen its fair share of changes over the past few months, with CVS Health acquiring health care insurer Aetna for $69 billion and Rite Aid already selling off 1,900+ pharmacies to Walgreens for $4.4 billion. In the case of CVS, the pharmacy seeks to deliver more transparency to the relationship between pharmacy benefit managers (PBMs) and drug manufacturers, providing cheaper prices and improved shopper experiences. Even Amazon has made a move to shake up the health care industry, partnering with Berkshire Hathaway and JPMorgan Chase to create an independent health care company for employees.

Upon the deal’s closing, Albertsons-Rite Aid will have approximately 4,900 locations (with 4,300 of them including pharmacy counters). The combined company is expected to generate 2018 revenues of $83 billion and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $3.7 billion. Additionally, the company expects to deliver annual run-rate cost synergies of $375 million in approximately three years.

Rite Aid Chairman and CEO John Standley would become CEO of the combined company, and Albertsons Chairman and CEO Bob Miller will be Chairman. The Board of Directors will be comprised of nine directors, four of whom will be named by Albertsons (including Miller and Lenard Tessler, Vice Chairman and Senior Managing Director at Cerberus), four of whom will be named by Rite Aid (including Standley) and one of whom will be a jointly selected director.

The combined company is expected to include leadership from both companies and maintain dual headquarters, in Boise, Idaho, and Camp Hill, Pa. The name of the combined company will be determined by transaction’s close, according to a company statement.

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feed@retailtouchpoints.com (Glenn Taylor) Mergers & Acquisitions Tue, 20 Feb 2018 11:36:42 -0500
Teacher Peach Sales Soar 114% With Amazon-Only Strategy https://www.retailtouchpoints.com/features/retail-success-stories/teacher-peach-sales-soar-114-with-amazon-only-strategy https://www.retailtouchpoints.com/features/retail-success-stories/teacher-peach-sales-soar-114-with-amazon-only-strategy Teacher Peach Sales Soar 114% With Amazon-Only Strategy

Rather than splitting her team’s efforts between its own e-Commerce site and the Amazon Marketplace, Teacher Peach Founder and Chief Creative Officer Randi Brill decided to focus exclusively on the marketplace in 2017 — and she saw sales increase 114%. Founded in 2012, Teacher Peach is an online-only retailer of teacher gifts and classroom products.

“While I understand that focusing exclusively on the Amazon Marketplace is not for every business, it certainly was a very smart strategy for our business,” Brill explained in an interview with Retail TouchPoints.

We realized that the amount time and investment we were putting into our own store was equal to or slightly higher than our investment in the Amazon site, but the rate of return on Amazon was significantly higher,” said Brill. “Our focus is on teachers, our customers, and we made the commitment to move to Amazon because our teachers were shopping there. The ability to become discovered so much more quickly in the Amazon Marketplace is an outstanding advantage for us.

“As consumers, we have certain habits and patterns,” Brill added. “Amazon has done an amazing job of anticipating and responding to those behaviors in a way that companies that are smaller than Amazon, like us, can't possibly compete with as effectively.”

Teacher Peach did not shift its entire e-Commerce business to Amazon without carefully weighing the decision. “You have to do your homework and validate your hunches,” she said. “Then you have to work your way towards it, making sure that the infrastructure of your company and your team is prepared.”

Making The Most Of Amazon Seller Services

For many of its products, Teacher Peach leverages Fulfillment by Amazon (FBA), which allows marketplace sellers to hand over the picking, packing and shipping of products, as well as customer service, to Amazon for a fee.

The retailer doesn’t use FBA for every product, though. “We have a system we utilize internally to determine when we feel a product is ready for FBA,” she explained. “Our job is to balance the fees, the amount of inventory, the price and the customer demand to decide whether or not a product goes to FBA. It’s a business decision.”

Teacher Peach leverages Amazon’s logistics and shipping, along with the two-day shipping promise of Amazon Prime, because it has won the trust of consumers. “Initially I thought that it was extremely important for customers to see a Teacher Peach box arrive on their doorstep,” Brill said. “When our customers receive materials from Amazon, they could be receiving our fabulous Teacher Peach products along with a book or laundry detergent. It took me a while to recognize that my customer's experience with our products could begin outside the carton.”

Teacher Peach uses many of Amazon’s advertising and marketing tools, “depending on the season and the products we’re focusing on at any given time,” Brill said. “Teaching is a cyclical process, and we know what our users need at particular times of the year. We have a lot of data, history and strategy around understanding what is important to our customers.”

Teacher Peach Maintains Control Of Brand Identity

With Amazon handling the logistics of e-Commerce, Brill is able to focus on using the Teacher Peach web site to advance the brand. “We want people to understand that our commitment is to teachers and raising confident kids,” she asserted. To that end, Teacher Peach has set up a nonprofit fund, teacherpeachseeds.org, that receives 10% of the profits from all product sales to support “initiatives designed to help raise confident and creative kids.”

Teacher Peach also has a home page on Amazon where it can control its branding message. “We pay a lot of attention to our own web site and our Teacher Peach page on Amazon so that people can find out whatever they want to know about us — and they do,” Brill said.

Teacher Peach will continue to evolve and evaluate whether the Amazon-only strategy will always be the best option. “Amazon is working beautifully for us, but we are exploring quite a few other marketplaces because that model works very well for us,” she said. “As we grow, we would be remiss if we did not continue to research and do our homework to make the best decisions for the business.”

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feed@retailtouchpoints.com (Marie Griffin) Retail Success Stories Fri, 16 Feb 2018 15:43:11 -0500
HuHot Mongolian Grill Delivers Promotional Offers For ‘Least Likely’ Visitors https://www.retailtouchpoints.com/features/news-briefs/huhot-mongolian-grill-delivers-promotional-offers-for-least-likely-visitors https://www.retailtouchpoints.com/features/news-briefs/huhot-mongolian-grill-delivers-promotional-offers-for-least-likely-visitors

1huhotHuHot Mongolian Grill has deployed Paytronix Predictive Scoring to deliver relevant offers to customers based on their likelihood to visit the restaurant. The new capability is designed to help increase incremental revenue, by sending loyalty and promotional offers to customers who would not otherwise visit without the campaign offer.

The Paytronix scoring solution is designed to analyze visit and purchase behavior to predict customers’ future actions. The solution helps ensure that HuHot does not waste marketing dollars sending offers to people who would visit the restaurant anyway without a promotion to lure them in.

Headquartered in Montana, HuHot Mongolian Grill is a restaurant chain that specializes in create-your-own stir fry cuisine. The company operates more than 70 Grills in 18 states, mostly in the Midwest and Mountain West states.

“With Paytronix scoring I have more confidence in my campaigns,” said Monica Minford, Digital Marketing Director for HuHot Mongolian Grill in a statement. “Paytronix has the knowledge and resources for accurate predictive analytics, so I trust the scoring and its ability to help us create impactful campaigns. We’ve also gained a clear understanding of how our emailed promotions are performing, so we can repeat or refine the ones that drive incremental visits and spending.”

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feed@retailtouchpoints.com (Klaudia Tirico) News Briefs Fri, 16 Feb 2018 12:16:56 -0500
H-E-B Expands Delivery Offerings With Favor Acquisition https://www.retailtouchpoints.com/features/mergers-and-acquisitions/h-e-b-expands-delivery-offerings-with-favor-acquisition https://www.retailtouchpoints.com/features/mergers-and-acquisitions/h-e-b-expands-delivery-offerings-with-favor-acquisition H-E-B Expands Delivery Offerings With Favor Acquisition

By 2024, 70% of U.S. consumers will be shopping for groceries online, according to a recent study from Nielsen and the Food Marketing Institute. Supermarkets are scrambling to set up customer-facing ordering and delivery solutions to handle this growing wave. H-E-B has made a rare acquisition, purchasing Favor Delivery for an undisclosed sum.

Favor, founded in 2013, now serves 50 cities in Texas after doubling its footprint in 2017. The Austin, Texas-based company deploys 50,000 contract delivery people, called Runners, to bring groceries and restaurant orders to consumers.

The Favor acquisition gives H-E-B more strength in the highly competitive grocery delivery arena. Amazon-Whole Foods announced earlier this month that it would begin deliveries via its Prime Now service in four markets (including Favor’s home town of Austin). Instacart recently received $200 million in new funding, bringing its valuation to approximately $4.2 billion. Even Costco, which had long resisted moving into e-Commerce, debuted an online grocery shopping and delivery service in October 2017.

H-E-B already offers home delivery via its HEBtoYou program, along with curbside pickup at more than 100 stores and online deliveries of grocery, drugstore and general merchandise products to 48 states and military bases worldwide. The retailer has been working with Favor for two years and also partners with Shipt, which Target acquired in December 2017.

The Favor acquisition gives H-E-B access to “best-in-class consumer-facing technology and the on-demand company’s advanced delivery system,” according to a company statement. “H-E-B will also leverage Favor’s data-driven approach to capture valuable insights to deliver the best customer experience possible.”

Favor CEO and President Jag Bath will remain in his role and the company will maintain its headquarters and 140 employees. “We’re not looking for Favor to become an H-E-B delivery service,” said H-E-B COO Martin Otto in a report on MySanAntonio.com.

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feed@retailtouchpoints.com (Adam Blair) Mergers & Acquisitions Fri, 16 Feb 2018 12:17:04 -0500