Author: Chad Symens

American Express announced a new coalition loyalty program, called Plenti. Macy’s, Rite Aid, ExxonMobil and other major companies are joining American Express for this new  offering not previously available to U.S. shoppers.

Shoppers can earn points when they make purchases with participating retailers, and then those points are good for savings at all of those stores. A customer could purchase a cream and lipstick at Rite Aid and then redeem those points to get savings when buying a dress at Macy’s. They can get points paying a cell phone bill with AT&T and then get a discount at their ExxonMobil gas station.

Participating companies believe this will be more attractive to consumers because it is flexible. Although the Plenti program will be operated by American Express, shoppers can use any form of payment as they earn or redeem their points.

American Express is selecting only one participant in every industry; there will not be multiple department stores or gas stations. Retailers will not get access to one another’s consumer data. If a consumer purchases an item at Rite Aid, Macy’s will not know about that purchase. Each participating brand will have control over how consumers accumulate points in their stores.

“Consumers today are busy and smart. They know good value, and they want to be rewarded for the dollars they spend day-in and day-out at their favorite stores,” said Martine Reardon, chief marketing officer at Macy’s. “Plenti will offer customers everyday opportunity to earn and to redeem those points with much more choice.”

Resource: Washington Post

Industrial production, measuring the output of manufacturers, utilities and mines, rose .1% in February from January. Cold weather caused an increase in utility output, but factory and mining production declined, lowering capacity utilization two-tenths to 78.9%, instead of economist expectation of gains to 79.5%. Lower capacity utilization could prompt businesses to wait on investments.

Manufacturing, the bulk of all industrial output, declined for the third straight month, a development the Fed attributed largely to weak demand for long-lasting goods. “Manufacturing has started 2015 on a softer note than we had expected and if we do not see a pickup in the next few months we will have to consider notching down our 3% real GDP growth forecast for 2015,” John Ryding of RDQ Economics said in a note to clients. Economists said cold weather, while boosting utilities, may have crimped factories.

Resource: Wall St. Journal

Home Depot and Macy’s both posted solid earnings for the fourth quarter 2014. However, both retailers report that the situation with the West Coast ports will begin to really affect them now. This is after a report that a tentative deal was reached in the dispute that has affected retailers, manufacturers, farmers and merchants.

“The West Coast situation has been tough, with 12- to 16-day delays in getting our imports in,” Mark Holifield, Home Depot’s executive vice president for supply chain and product development, said on a call with analysts. “There’s still a fair amount of uncertainty what the new normal will be, once the ports get back to normal.”

Karen M. Hoguet, Macy’s chief financial officer, said that shipment delays were only just starting to hit inventory levels, and that its apparel and accessories departments were the most affected. About 12 percent of the department store chain’s first-quarter merchandise was delayed, Ms. Hoguet said, which may affect sales, gross margins and expenses in the first few months of the year.

Department stores, like Macy’s, were somewhat protected by allowances that enabled them to return some late products to their vendors. Discount retailers could benefit from getting merchandise the traditional retailers cancelled due to late delivery.

Source: The New York Times

Ulta Beauty announced fourth quarter growth in same store sales at a very high 11.1% and e-commerce growth of 55.2%. The 11.1% same store increase was after a prior year gain of 9.2%.

The company opened 100 new stores last year and are planning another 100 new stores for 2015. It is forecasting same store sales growth of 6% to 8% and e-commerce growth of 40%.

“Ulta Beauty wrapped up a very strong year of sales and profit growth with an excellent fourth quarter, which we are proud to celebrate as our first billion dollar sales quarter,” said Ulta CEO Mary Dillon. “Our best comparable sales increase of the year was driven by accelerating traffic growth, continued strength in prestige and mass color cosmetics, a successful holiday selling season, execution of more effective marketing and CRM strategies, a double-digit comp in our salon business, and a 55% comparable sales increase in our e-commerce business.”

Source: Retailing Today

Sales at Bon Ton grew 3% in the fourth quarter, attributing its success to top-producing sales in cold weather and active apparel and home.

The company continued its growth trend with double-digit sales growth in e-commerce, prompting them to announce expanded omnichannel strategies and opening an e-commerce fulfillment center.

“As we look ahead, we are excited for continued progress on our initiatives. We are looking forward to the opening of our new e-commerce fulfillment center, which we expect will facilitate significant expansion of our shipping capacity with improved operational efficiency and support the fastest growing area of our business,” stated Kathryn Bufano, President and CEO of Bon-Ton. “Investments such as this will continue paving the way for sustainable long-term profitable growth.”

Source: Retailing Today

Inclement weather and low wage gains slowed consumer retail spending in February, which is the third straight month of decline. February showed a .6% decline, after a .8% drop in January. Sales declined in nine of thirteen major categories, led by auto dealers and building supply merchants. The 2.3% drop in purchases at building-material stores was the biggest since May 2012.

“Consumers aren’t really spending as much of their savings from lower gasoline prices as expected,” Tom Simons, an economist at Jefferies LLC in New York, said before the report. “It’s the bad weather, consumers not spending the fuel savings as much as expected, and subdued wage growth.”

One standout in February was non-store retailers, which includes online retailers. Purchases showed at 2.2% increase in demand, the largest since March 2014.

Household consumption, which accounts for almost 70 percent of the economy, is projected by economists to expand this quarter. It grew at a 4.2 percent annualized rate in the final quarter of 2014, the most since the last three months of 2010, according to revised figures from the Commerce Department.

Source: Bloomberg Business

In a report released by Price Waterhouse Coopers, it provided an overview of what will challenge retailers in 2015. The reports focuses on what retailers and suppliers must do to satisfy the needs of their customers in order to be successful and profitable in an ever-changing, customer-centric environment.

Targeted Collaboration between retailers and suppliers is listed as a key component for success. To achieve better alignment of goals and drive greater efficiency, retailers and suppliers need to become trading partners, sharing details and processes on product launches, trade promotions, inventory management and supply chain operations.

Technology greatly contributes to improved operational efficiency, and there will be a need to effectively manage the business through business intelligence. Customer demand-based management can only succeed with real-time POS sales, inventory and consumer data information. Retailing will become more personal and customer data and relationships will become a key asset for retailers.

Source: Price Waterhouse Coopers

TJX Companies revealed in their annual report net sales for the past fiscal year were $29.1 Billion. This is greater than Macy’s report of $28.1 Billion. This marks a 6.2% sales increase for the year, and 4^th quarter earnings jumped 15%.

TJX Companies operates retail stores in the US as T.J.Maxx, Marshalls and HomeGoods, and recently added Sierra Trading Post. In Canada, they operate Winners, HomeSense and Marshalls. In Europe they have T.K.Maxx and HomeSense. The company sources from more than 16,000 vendors in 75 countries.

The retailer features brand-name merchandise at value prices. Because the company has aggressive inventory management, assortments change quickly and customers have learned to buy what they like when they see it. Their offerings are unique, timely, attractive and at a perceived value. Other major retailers are taking note and they want a piece of the off-price action.

Shares of some top department store retail companies were mixed at the close of trading yesterday, March 9:

Kohl’s Corp. rose $.80 or 1.1 percent, to $73.71.

Macy’s Inc. fell $.42 or .7 percent, to $62.56.

Nordstrom fell $.52 or .6 percent, to $80.34.

J.C. Penney Co. fell $.32 or 4.2 percent, to $7.33.

Sears Holdings Corp. fell $1.80 or 4.6 percent, to $37.21.

TJX Companies rose $.20 or .3 percent, to $68.23.

Source: Forbes.com and Yahoo Finance

Sephora announced several strategies and technologies focused on omnichannel retailing, for both in-store and mobile shopping.

The first is “Sephora Flash”, an Amazon Prime style subscription service, offering customers free 2-day shipping on all products for $10 per year. The Flash will be free for their Rouge Beauty Insider members, who spend more than $1,000 in a calendar year.

Second is “Augmented Reality”, allowing customers to engage with custom content by placing their phone over the images of the nine female founders found in the retailer’s windows and display cases. Launching in April, scanning the images will show content options, such as interviews and product videos. The stores will also deploy beacons that a customer can opt-in on, receiving birthday alerts, loyalty program updates and events happening in the store.

Sephora is also launching “Pocket Contour”, a new mobile app, where a customer can upload a photo of herself and get personalized face contouring advice and product recommendations.

In their San Francisco corporate hub, Sephora has created an “Innovation Lab”, where the Sephora team can brainstorm and test ideas in a think-tank environment and the company can groom future management.

We’re completely focused on making shopping more efficient, intelligent and fun for our clients,” said Julie Bornstein, chief marketing and digital officer for Sephora.

Source: Retailing Today

The National Hardware Show, the largest industry event for home improvement retailers around the world, will be introducing an auction concept this year: The Outdoor Supply Auction.

The show, taking place at the Las Vegas Convention Center May 5-7, will host the auction in a 50,000 square foot arena. The North American Retail Hardware Association (NRHA) is co-sponsoring the show.

Show attendees can attend the auction for free. It will give attendees opportunities to bid via a mobile app on hundreds of different product lots of new, overstock, discontinued and seasonal and package changed products from all categories. Categories include plumbing and electrical, homewares, paint and accessories, hardware and tools, outdoor and recreational, and lawn and garden. Attendees can use the mobile app to preview, bid and get instant updates real-time.

The National Hardware Show exhibitors are provided this sales opportunity. In addition to immediate sales and new customers, those that participate in the auction have the option to receive real-time leads from attendees who preview their product detail and from buyers bidding on their product during the 3-day auction event.

Source: HardwareRetailing.com and NationalHardwareShow.com