Author: Chad Symens

In a new report titled “How We Shop Now: What’s Next?,” Westfield London has unveiled five key trends that they believe will shape the retail industry of tomorrow. Combined, the trends paint a picture of what the store of the future is likely to look like, and the report reveals that customers will be looking for richer shopping experiences and will expect physical retailers to go beyond the transaction. The five key trends identified are:

People are increasingly interested in retailers adopting the “sharing economy” made popular by companies like Uber and Airbnb. The trend is strongest among Millennials, and exercise equipment, cars, consumer electronics, bikes and clothing top the list of items people want to rent.

Classroom Retail: Stores are not just for shopping anymore. Increasingly, shoppers view retail stores as classrooms where they can learn new skills and build their social networks. Examples include health and fitness sessions at the local sporting goods store and cooking classes at a home goods store.

Lifestyle Loyalty: There is a new consumer demand for loyalty programs that reward good lifestyle choices rather than just monetary transactions. As many as one fifth of UK consumers find lifestyle rewards appealing and would like to be rewarded for recycling, exercising, spending time with family, getting enough sleep and volunteering.

Enhanced Assistance: Consumers are interested in using new technologies, such as virtual reality, to bring in-store products closer to their everyday lives. 41% of people in the UK would like to use technology to experience how products would look in their homes and 33% would like to use technology to see how clothes would look on them.

Inside-out Retail: A sensory retail experience is becoming increasingly important to consumers. All five senses were deemed to enhance the shopper experience with vision and touch coming out on top.

Download the full report here.

On Wednesday, home improvement retailer Lowe’s made a $2.3 billion bid for Quebec-based home-improvement chain Rona. The deal comes 4 years after an attempted hostile acquisition that faced opposition from major political parties. Initial indications point to a friendly deal this time around with approval from the Rona board of directors.
“One of the big differences between this and last time is obviously this time we have the unanimous approval and support of the board of directors of Rona as well as the management team” said Robert A. Niblock, Lowe’s chairman, president and chief executive. “We’re in a much better place than we were in 2012.”

Under the terms of the deal Lowes is expected to acquire all of the issued and outstanding common shares of Rona for C$24 per share in cash, and all of the issued and outstanding preferred shares of RONA for C$20 per share in cash. The total transaction value is C$3.2 billion (2.3 billion in US dollars).

“We believe the time is right to take the next step in the evolution of the RONA family. The team at Lowe’s has presented us with an excellent plan that enables our company to maintain its brand power while at the same time leveraging Lowe’s global presence to build upon and expand our reach. With commitments made by Lowe’s to our employees, potential new markets for Canadian manufacturers and product offerings for our independent dealers, this transaction presents the ideal opportunity for the continued growth of our company while delivering an attractive premium for our shareholders,” said RONA’s Chairman, Robert Chevrier.

Lowe’s has identified over C$1 billion of opportunities to further increase revenue and operating profitability in Canada. These include: expanding customer reach and serving a new portion of the market by applying Lowe’s expertise in certain product categories, such as appliances; enhancing customer relevance, utilizing Lowe’s strengths as a leading omni-channel home improvement company and drawing on its customer experience design capabilities; and driving increased profitability in Canada by leveraging shared supplier relationships and enhanced scale, as well as Lowe’s private label capabilities, in addition to eliminating RONA’s public company costs. Given these opportunities, Lowe’s believes there is potential to double operating profitability in Canada over five years.

“The transaction is expected to accelerate Lowe’s growth strategy by significantly expanding our presence in the Canadian market through the addition of RONA’s attractive business and excellent store locations across the country,” added Niblock.  “Importantly, the transaction also provides Lowe’s with entry into Quebec, where RONA is the market leader and we have no presence.

Retail veterans Ronny Shmoel and Albert Liniado are bringing back Circuit City, once the number one big-box tech chain in the marketplace before filing for bankruptcy in 2008. Their ambitious plan includes retail outlets, web sales, branded and private-label products, licensed kiosks, mobile shops and franchise opportunities, all under the iconic red and white banner. The first store is expected to open in June, most likely in the Dallas market, and the relaunch of circuitycity.com is expected to happen at approximately the same time.
We want to bring profitability back into retail,” said Liniado, Vice President of Business Development. The stores will range from 2,000 to 4,000 square feet and the product mix will be targeted directly at millennials. According to Shmoel, CEO of the enterprise, they expect to have 50 to 100 corporate-owned stores up and running by the end of the year and eventually an additional 100 to 200 franchised locations.

Source: Twice.com

>After the market’s close on Thursday, Amazon.com Inc. reported fourth quarter earnings that missed expectations and the company’s stock plunged 13%. Wall Street analysts were forecasting record revenue of $35.9 billion for the company. Amazon did hit a new revenue record, but it missed expectations with sales of $35.7 billion.

That’s despite successes that were in stark contrast to their competitors. Amazon posted record profit last quarter and double-digit sales growth over the previous year. Prime memberships grew by 51% last year and according to a Consumer Intelligence Research Partners study, just under half of all U.S. households subscribe to prime.

Amazon Web Services, which boasts big name customers like Netflix, Airbnb, Major League Baseball, Expedia and Yelp, grew from 1.4 billion in 2014 to 2.4 billion in 2015, a 71% increase.

The biggest part of Amazon remains its retail business, and it’s smart home assistant, Echo, is poised to become the company’s third billion-dollar business soon. Echo has only been widely available for about 7 months but it consistently ranks high in Amazon’s best sellers list. It is a virtual assistant and audio speaker that lets you control and connect with other services through your voice. Echo was one of the surprise stars at this year’s Consumer Electronics Show and will be prominently featured in the online store’s first-ever Super Bowl ad.

In its report series “Taking Stock of CPG Past and Future: Gear Up Now for a Year of Growth“, IRI reflects on the lessons learned in 2015 and provides insight into several key trends that will drive growth in 2016.

Growth is still a significant challenge for the CPG Industry. Faced with conservative shopper behaviors and a challenging economy, the industry is struggling to generate solid volume growth. And the trend is similar across retail channels.

According to the IRI report, several new and existing trends will shape the CPG industry in 2016, but three trends “hold particular promise for growth.”

• Circle the Wagons: The internet will account for approximately 50% of industry growth in the next several years and the CPG industry can’t afford to wait if they want to capture their fair share of this opportunity. While online CPG sales are still small – only about 2% of the total – the average annual growth of online CPG spending has topped 15 percent since 2010. Additionally, according to IRI, e-commerce plays a significant role in defining how consumers approach shopping. Over three-quarters of all shopping trips now begin online as consumers conduct research and plan their shopping trips. To solidify their understanding of the online path to purchase, CPG marketers must invest in digital marketing programs and “elevate their digital expertise”. CPG marketers who don’t will suffer.
• Melting Pot Gets Hotter: With more than 54 million Hispanic consumers in the US and population growth at three times the national average, the Hispanic population has been a key target for marketers for the past several years. According to the IRI report, the key to successful growth in this market will be an investment to understand Hispanic shoppers “across a deep and wide spectrum of attitudes and behaviors.” As the Hispanic population grows, marketing to the segment as a homogeneous group is ineffective. Marketers need to see the diversity within the Hispanic market and demonstrate a detailed level of understanding within it.
• Do More With Less (Media): Forty years ago consumers viewed an average of 500 ads in a given day. Today, consumers view an average of 5000 ads a day! The result is information overload for consumers and a lot of wasted effort and dollars for marketers. CPG marketers have an opportunity to move away from the “more is better” approach to media and focus on impact over exposure, or in other words, maximum media efficiency. Though difficult, getting there isn’t impossible with the right data, analytics and insights. Marketers need to effectively communicate with high-value shoppers and employ impactful micro-targeting methods.

Click here for the full IRI report. To receive Accelerated Analytics’ own monthly Retail Industry Briefing Book (RIBB) full of key retail industry data compiled by our team, click here to request a copy.

The first winter storm of 2016 slammed the Northeast and Mid Atlantic last Friday and Saturday leaving much of the area paralyzed. Despite warmer temperatures early this week, many areas are still recovering and some schools and businesses remain closed as local governments and residents dig out from up to 2 ½ feet of snow and ice.

While the economic cost of the storm due to structural damage and business interruption will likely reach into the billions, the net impact on the retail industry will essentially be neutral according to Weather Channel meteorologist and business analyst Paul Walsh. The demand generated by storm predictions creates a surge for for grocery stores, home improvement retailers and discount department stores like Walmart. This pre-storm boon essentially balances the losses experienced during the winter storm.

Whether winter weather impacts an Individual retailer positively or negatively, they can prepare for the next winter storm by analyzing historical data. Retailers can use “forecasts and analytics to understand how past storms have impacted sales so they know what kind of products to feature and the inventory needed,” explained Walsh. Accelerated Analytics can provide that data so that vendors in the retail sales and supply chain markets can tackle large weather events head-on.

The NRF’s Big Show wrapped up on Wednesday after record attendance, and, as we unwind from an exciting week in New York, we find ourselves reflecting on the event as a whole and on the key takeaways that will impact Accelerated Analytics in 2016.

Matt Shay, President and CEO of the National Retail Federation, opened the trade group’s annual Convention and EXPO with a state-of-retail message, highlighting the event’s transformation under the strategic guidance of Shay and the NRF board.

“We’ve invested in attendee experiences, added a third day of exhibits and gained exclusive control of the entire convention center.” Shay said.

The event saw record numbers, with 35,000 people in attendance and roughly 580 exhibitors. While the convention was dominated by technology companies, both those facilitating consumer-driven change in the retail industry and those designed to help retailers replace, upgrade and modernize their systems, very few occupy the niche market of POS data and analytics. “There were about 50 companies in the Data and Analytics section of the expo, but very few that do what we do,” said Jennifer Freyer, Director of Sales and Marketing for Accelerated Analytics.

As customer expectations continue to rise, it’s imperative that vendors and retailers have access to their data –  down to the item level –  quickly. Accelerated Analytics is well positioned to meet that need via our one-click access to SKU/store level sales to identify trends, optimize assortments and track promotions. Plus, our forecast reports and low inventory and out of stock alerts help our clients ensure the right inventory is at the right stores.

Our visit to the Big Show also provided the opportunity to participate in several meetings with GS1, as we work with them toward standardizing POS data sharing in the retail industry. This is crucial in expanding the retailer and vendor partnership for better joint planning, store execution and sales performance.

The event returns to New York again next year, January 15-18, 2017.

Twelve major retailers released holiday results last week confirming what was arguably one of the most unusual holiday shopping seasons in recent history. A combination of economic factors, evolving consumer behaviors and an increasingly competitive marketplace provided a challenging and unpredictable backdrop for holiday sales this year. The following are some of the most notable results.

Ascena Retail Group: A total company decline of 4% during the six-week period ending January 3 was largely due to a 15% same store sales decline of 15% at the company’s Justice brand stores during the holiday season. However, performance at other brands such as Ann Taylor, Dressbarn, Lane Bryant and Maurices was much better and allowed the company to affirm its full year profit forecast.

Build-A-Bear Workshop: CEO Sharon Price John expects “fiscal 2015 to deliver our third consecutive year of positive consolidated comparable sales and our third consecutive year of improved profit performance,” despite fourth quarter expectations that same-store sales would decline 5.5%.

Genesco: Same store sales increased 5% for the quarter ending January 2^nd for the parent company of Journeys, Lids and Johnston & Murphy. “We are especially pleased with the strong performance at Journeys, which delivered another exceptional holiday season,” said chairman, president and CEO Robert Dennis.

Lululemon Athletica: CEO Laurent Potdevin said “Sales for the fourth quarter are exceeding expectations.” The retailer announced a successful holiday season with fourth quarter same store sales increasing in the mid single digits.

Ollie’s Bargain Outlet: A 5.6% same-store sales increase during the 9 weeks that ended on January 2 led chairman, president and CEO Mark Butler to comment that he is “Thrilled,” with the discount retailer’s holiday sales. The retailer had only predicted 4% growth and now expects total annual sales of $760 million in 2016.

Source: Chain Store Age

There were 12 major retail acquisitions in 2015 in the apparel specialty, department and shoe store industries. See below for the details including the effective date and the number of units.

With many Americans suffering from a holiday-spending hangover, it’s not surprising when we see a lull in spending in January. Coupled with abnormal weather conditions across the country and an uncertain economy, consumer spending is likely off to a slow start this month.

The Chain Store Guide (CSG) Retail Spending Index saw its largest decrease since July of 2015 when it dropped 1.4 points to 101.3 in December. This decline led CHG to forecast low spending in January and an overall slow start to 2016.

The long-term outlook for 2016 is more positive, according Kiplinger’s. They predict that retail sales will expand by a healthy 4.4% in 2016, up from 2015’s 3.2% growth.