Author: Chad Symens

The 100-year-old Florida based Bealls, Inc. announced plans to launch a specialty store concept in 2015, named “Bunulu”.

“Bunulu is an Aboriginie name that means a place of water,” said Lorna Nagler, president, Bealls Department Stores, in a report by the Bradenton Herald. “Our tagline for our store is Land, Water and Style.”

Bunulu will open 3 to 5 stores in the fall, and the stores will average 4,000 sq. ft. The stores will target a younger demographic, featuring coastal-inspired lifestyle apparel and accessories. They will feature national brands. It already has its own website, Bunulu.com.

The brand’s website describes Bunulu as the “next generation of outdoor active lifestyle brands. Personalized for the coastal lifestyle.” Based on the site’s renderings, the stores will have a casual atmosphere, with wood floors and shelving and beach décor accents.

Source: Retailing Today

Retailers are striving to minimize return rates and maximize customer satisfaction. In a recent survey from Voxware, it was revealed that 57% of consumers are returning items they purchased online. 42% noted the products they received were in the wrong size or color and 15% said they received the wrong product altogether. Nearly 20% of consumers say they received an incorrect item a second time.

By analyzing return data, retailers can gain a better understanding of consumer preferences and behavior, as well as survey their internal supply chain and warehousing abilities.

Retailers are focusing heavily on omnichannel. Customers expect to buy what they want, how they want, when they want and have it delivered quickly to wherever they want them. Consumers can order online and pick up in a store, order from a brick and mortar store and have it shipped to them or the store, and order directly online. This requires store operations to effectively manage picking and shipping, turning each store into a warehouse.

Retailers need to analyze their business processes though POS and return data to drive sell-through velocity, margin improvements and customer loyalty.

While customers may be willing to forgive retailers after one return experience, 45% of respondents stated that they have limited their shopping with the retailer – both online and in-store after a second return.

Resources: Retail Touchpoints, Multichannel Merchant

Hudson’s Bay Company, which has 90 locations, two outlet stores, thebay.com and is the parent company of Saks 5^th Avenue and Lord & Taylor, is forming two joint ventures valued at $4 billion to bring more value to its property portfolio.

The company has entered into agreements with Simon Property Group Inc. and RioCan Real Estate Investment Trust. These joint ventures will enable them to build on the strength of its existing real estate assets and identify new real estate growth opportunities.

The transactions position HBC’s retail business for continued growth, the company said, while providing increased financial flexibility. The approximately $1.1 billion in expected cash proceeds from the joint venture transactions, net of expenses, will be used to reduce debt on HBC’s balance sheet, the company said.

“I am truly excited by these partnerships and what they mean for the future of HBC,” said Jerry Storch, CEO, Hudson’s Bay Company. “A stronger balance sheet and enhanced financial position will enable us to invest in growth initiatives across our retail business, including strengthening the connection between our store and digital businesses, expanding our off-price channel and investing in our world-class store base.”

Source: Retailing Today

Retailers have much more sophisticated tools for in-store analytics of customer behavior, but a study conducted by Forrester Research, Inc. revealed pitfalls and recommended key actions for retailers to take to achieve success with in-store analytics.

Legacy store analytics only has allowed for slow reaction and limited breadth of activity measurement in traffic counting, merchandise productivity, labor management, loss prevention and shopper studies. Increasing use of analysis of smart mobile devices, wi-fi and surveillance technology creates an opportunity to address layout optimization, merchandise productivity and labor management coupled with customer behavior, proactive loss prevention, marketing attribution and store marketing performance.

For retailers to successfully utilize this technology, they should take some specific measures. First, address privacy concerns of the customers and be transparent. Nordstrom attempted to deploy in-store analysis in 2013 and it resulted in enough customer complaints to cause the company to cease implementation. Next, rather than simply measuring store traffic, measure the conversion rates of customers who enter the store – for example, improve practices of window display effectiveness and how it relates to store traffic.

Most important is to involve many teams, from store operations, merchandising, asset protection, and marketing, to use the analytics in cooperation. Retailers must merge store analytics with traditional retail data — including staffing, inventory, customer lifetime value, online customer behavior, weather, environmental conditions and existing historical behavioral data — into an enterprise data warehouse (EDW) to transform physical store operations. Retailers need to empower and train associates, local store managers, and regional managers to act locally with insights and provide staff with real-time guidance.

Source: Retailwire.com

The American Consumer Satisfaction Index (ACSI) reports that consumer satisfaction with retail is on the decline for the first time in four years.

The ACSI report states brick-and-mortar customer satisfaction fell flat or weakened, while Internet retail is up from last year. By category, overall satisfaction with department and discount stores stayed flat at 77, while the gap between best- and worst-ranked companies grew. Nordstrom was the top rated, gaining 4% to 86. They are followed by Dillard’s (81), Kohl’s (-1% to 80) and Macy’s (79). Walmart dropped 4% to 68 and is at the bottom of the category behind Target (+4% to 80), Meijer (78) and Sears (-5% to 73).

Among home improvement chains, Lowe’s rated best at 81, while Home Depot falls to the category’s bottom dropping 4% to 76.

Amazon remains at the top of the Internet sector, at 86. Netflix improved for the third straight year gaining 3% to 81. Overstock and eBay both dropped to 77 and 79, respectively.

The ACSI is a national economic indicator of customer evaluations of the quality of products and services available to household consumers in the US. The ACSI uses data from 70,000 customers annually for measuring satisfaction with more than 230 companies in 47 industries.

Resource: Retailing Today

Despite disappointing end of 2014 sales, Fossil is focused on the future, announcing Tuesday that it has reached a ten year licensing agreement with Kate Spade, assuming its existing watch business.

Fossil CEO Kosta Kartsotis called the agreement, “yet another great example of our ability to capitalize on lifestyle brands that are poised for global expansion.” The company already has partnerships with brands like Giorgio Armani, Michael Kors, Tory Burch and Emporio Armani Swiss.

Sales in 2014 were flat at $1.07 billion, missing their estimate of $1.12 billion.  Best known for its watches, this segment pulled in more than three quarters of the company’s total revenue. Jewelry sales increased but only accounted for $93 million of the total revenue.

The company is forecasting a sales decline of 5.5%-7.5% in the first quarter of 2015. “We are not entirely satisfied with our fourth quarter performance and begin 2015 intensely focused on taking advantage of the many opportunities available to us to drive future growth,” said Kartsotis.

Resource: Forbes

A recent benchmarking survey of key consumer product metrics by Gartner and IDC Manufacturing Insights found SKU-level forecast error rates one month out had an average of 21.9%. For new products, the error rate grew to 48.3%. In that report, Gartner says consumer goods companies will continue to get better at using POS data and near-term demand signals to improve short term forecast accuracy and replenishment plans. Top performing companies showed forecasting error rates much lower than the averages, dropping to 11.7%, and 34.7% for new products.

Forecasts with high levels of error result in many supply chain issues, such as the wrong product mix – excess inventory of some products and not enough of others, higher overall inventory – excess cash tied up in inventory and poor cash flow, increased waste in production resources and customer service problems.

Gartner says performance leaders are not only working on their forecasting but also leveraging downstream data to better predict how much to replenish based on what is being consumed downstream.

Those leaders “are already working closely with their key retail accounts to manage vendor-managed inventory (VMI) replenishment based on retail warehouse inventory and movements, and some point of sale (POS) data reflecting consumer pull through the pipeline. They set inventory buffers based on product level, average daily demand, range of demand variation and supply reliability. These buffers are reviewed regularly to reflect recent patterns, rather than averaging two years of history to take out the highs and lows.”

In addition, increased analysis of actual SKU-level demand to determine average daily usage, near-term demand patterns and range of variation will improve alignment of buffer inventory to cover demand volatility with less reactive disruption in the upstream supply chain than we see today.

As a result, overall inventory will be reduced because the mix is better aligned with what is selling. There will be less slow-moving and obsolete inventory for those products replenished based on downstream consumption. This will improve cash flow and cash conversion cycle time, and it will reduce write-offs.

Resource: Supply Chain Digest

January US consumer spending barely rose .1 percent, despite cheaper gasoline and a buoyant labor market. Economists are speculating that consumers were using their extra income to pay down debt and boost savings. This was below Wall Street’s expectations for a .4 percent increase.

“Should we be worried about the weakness of underlying sales over the past two months? Possibly,” said Paul Ashworth, chief U.S. economist at Capital Economics in Toronto.

“But all the conditions are in place for a period of very strong consumption growth. We still expect to see that strength come through in the retail sales data soon.”

The economy has added more than a million jobs in the past three months and the number of those seeking jobs hit its lowest level since 2007 in December.

Resource: Reuters

Retailers need to figure out how to keep shoppers engaged with their mobile apps so they come back and shop for more, instead of downloading an app, using it once, and then forgetting it or deleting it.

In a recent panel of 250,000 US and 2 million global app users, an engagement measurement of monthly active users (users who shop an app at least once a month) who shop an app at least once a week indicated which retailers rank the highest.

Apps with the highest engagement levels include Neiman Marcus (64.3%), Kohl’s (63.6%), Victoria’s Secret (61.7%), and Groupon (47.8%).  Kohl’s success is attributed to doing a great job highlighting discounts, coupons and deals of the day.

Belk Inc. also has a high level of app engagement with 32.4%. Mobile apps are becoming much more important as digital commerce evolves,” says Ivy Chin, senior vice president of e-commerce and omnichannel digital at Belk. “Our shopper often uses her mobile device to complement her in-store experience, so we developed the Belk app to support that, with easy bar code scanning, coupon integration with Apple’s Passbook wallet, a Belk store finder, integration of e-mail, and social sharing.”

Resource: Internet Retailer.com

“It’s true that retailers have yet to fully make use of location in mobile commerce, but you have to do location right,” Chin says. “Location awareness has to be meaningful for customers and give them the right information and the right messages. This involves understanding how your customers engage with your brand whether they are in-store, online or on a mobile device—a 360-degree view of your customers.”

Francis Blake, 65, joins the Proctor & Gamble Co. board of directors, effective immediately. This announcement comes just a few days after his retirement as chairman of Home Depot. He stepped down from the CEO position in November.

Blake’s extensive retail experience joins Macy’s Inc. CEO Terry Lundgren on the board.

Prior to Home Depot, Blake was general counsel for the US Environmental Protection Agency and deputy counsel to Vice President George H.W. Bush.

“Frank is one of the most respected business leaders in America today. His vision, strategy and focus on execution led Home Depot to strong and sustained business growth,” said P&G CEO A.G. Lafley said. “We will deeply benefit from his management expertise and retail experience.”

Blake also serves on the board of directors of Delta Airlines and the Georgia Aquarium.

Resource: Retailing Today