Tag: retail

Retail and Artificial Intelligence: What’s Next?

Retailers are constantly talking about the future, but what technologies are going to take them there?
Retail Artificial Intelligence

When we think about innovations like chatbots, personalized product recommendations, dynamic pricing and programmatic display, there’s one common denominator. All of these are great examples of how artificial intelligence can be a game-changer for a multichannel retailer.

Over the next three to five years, AI will play a significant role in the multichannel retail market. It will help differentiate the winning organizations, as well as determine which ones close their physical and digital doors.

It’s easy to think of AI as a buzzword, but based on a study of more than 13,000 consumers, brands with the most sophisticated, personalized customer experiences have higher satisfaction and Net Promoter Scores, as well as higher retention. Using AI, machine learning and technology to highlight what makes the brand and their buyers unique is what sets apart retailers like Sephora and Nordstrom.

Global retail sector technology spending is expected to grow 3.6% year-over-year to reach almost $203.6 billion this year. Similar spending is projected for the next two years as well, with the fastest-growing category being software. As consumer expectations for highly-connected experiences continue to increase, it’s critical for retailers to become versed in how to buy and apply AI — and quickly.


This post is based on an article written by Jason Grunberg for SailThru.

Lowe’s CEO Announces Retirement

Lowe's CEO Retires Lowe’s announced today that CEO, Robert Niblock, will be retiring after 25 years with the home improvement retailer. Mr. Niblock will retain his position as chairman, president and CEO until the board selects his replacement. He became CEO in 2005 and was in charge of the $2.4 billion acquisition of Canadian retailer Rona, Inc.

“As we transition to the next chapter, I have great confidence in the strength of our team and the opportunity ahead for Lowe’s,” Niblock said in a statement. “I look forward to assisting the board with its search, and I am committed to supporting a seamless transition for all of our stakeholders.”

David Batchelder, who is a new Lowe’s board member and former director at rival Home Depot, will be chairing the committee to find Niblock’s replacement. Lowe’s executives are looking for ways to increase revenue and improve customer results, and did recently close in on Home Depot with same store sales growth.

Forever 21 Set to Open Beauty Specialty Stores

Several fashion retailers who cater to younger consumers also have beauty sections in their stores –  H&M, Urban Outfitters and Sephora in JCPenny – but Forever 21 is making a big move in the beauty game with plans to open over a dozen stand-alone beauty boutiques under the name Riley Rose. The new stores are being carefully designed to meet the expectations of millennial and Fashion Retailer Forever 21 Gen Z consumers. The new concept store will focus on beauty and lifestyle items that consumers wouldn’t usually get to try and will include interactive, digitally-focused features as well as in-store entertainment that not only suggest, but encourage social media engagement. Picture a selfie-designated station and touch-screens throughout the store so you can find fall’s coolest trends and then try them for yourself.

Esther and Linda Chang are the daughter’s of Forever 21 founders Don and Jin Sook Chang, and are the masterminds behind Riley Rose.

“We know our customer can open her phone and research anything she sees in our store within seconds, and we embrace this reality by empowering her to explore our offerings through digital and social moments throughout the store,” Linda says.

The first Riley Rose store opens September 30 at the Glendale Galleria in California, with more shops opening by the end of the year.

Sources: Refinery29.com, Cosmeticsdesign.com

Consumer Spending Gains Biggest Since December

After four slow winter months, consumers rebounded in April, increasing spending .4% from the previous month. Economists are crediting income growth, low inflation, low interest rates and rising household wealth for the rise. The Federal Reserve Bank of Atlanta predicted on Tuesday that gross domestic product would expand at 3.8%. Inflation is still weakened versus last year, and overall prices rose 1.7% in April, down from 1.7% in March.

The rise in spending was led by a .9% rise in spending on durable goods, such as autos. Spending on non-durable goods included clothing up .6%. American’ average daily spending in April was $107, up $7 from March. This is the highest spending average since May 2008. Though retail sales dropped in Q1, April could be a turning point. A Gallup poll found that Americans still prefer saving to spending, but the actual amounts they are spending has been rising.

Sources: WSJ, USA Today, Gallup

Specialty Beauty Retailer Bluemercury is Thriving Despite Downturn in Physical Retail

Beauty retailer Bluemercury is going strong and has plans for significant expansion during a time when many brick and mortar stores are shutting their doors.

According to Barry Beck, Founder and COO of Bluemercury, location is everything.

“I bet I could open 60 stores in Manhattan, 40 stores in Chicago, 50 in the greater Chicago area, and that’s my intention. We don’t see cannibalization, we see overall lift,” said Beck in a report by the Chicago Tribune.

BlueMercury was launched in 1999 as an upscale, neighborhood alternative to department store beauty departments. It was purchased by Macy’s in 2015 for $210 million and has nearly 140 locations nationwide with plans to open 40 stores in 2017.

When asked why he believes consumers will continue to purchase cosmetics from physical stores Beck responded, “For me it’s about customer behavior. People are ultimately social beings. They love interacting and they love being connected to each other, and shopping is a social experience, so I don’t think it’s going to go away. It’s just going to change. The store has to transition to become a place for information, education, edu-tainment, where we’ll do your facials and you can come in for a quick tip or trick or when you’ve got an emergency blemish and you’re on your way to a black-tie event.”

Accelerated Analytics reports and analyzes POS data from Bleumercury for beauty customer L’Oreal. For more information on our beauty industry expertise, POS data reporting and analysis solution and a list of our beauty clients, visit our website.

Source: Chicago Tribune

Gen Z in the Store

Much has been said about millennials—with good reason. Their attitudes, habits, knowledge and expectations are spurring cultural and technological changes to businesses worldwide.

But the next generation is advancing, right on the heels of the millennials—Gen Z, and its presence will bring even bigger changes and challenges to retailers. While millennials made the most impact as they entered the workplace, Gen Zers, some of them currently in elementary school, are disrupting retail businesses right now.

Who is Gen Z?

Gen Zers (also known as Generation Z, Post-Millennials or iGeneration) were born between 1996-2010, and are the first digital natives. These 7 to 21-year-olds don’t remember life before mobile phones, social media or the Internet. Unlike previous eras of young people who were seen but not heard, 70% of Gen Zers say they actively influence family purchasing decisions. With their mobile devices at the ready, this global population of 2-2.5 billion (and 70 million in the U.S.) has $44 billion in buying power.

In contrast to millennials, Gen Zers are a cautious bunch. Although they may not remember 9/11 firsthand, the aftermath left them wary and more socially aware than their predecessors, which affects their shopping decisions.

Because of Gen Zers’ significant influence as shoppers—even at a young age– retailers will realize the disruptive impact of Gen Zers before other business sectors. Understanding Gen Z shoppers is the first step in attracting this young generation.

Retailers and Generation Z

4 Things Retailers Should Know About Generation Z

  1. 98% of Gen Zers still shop in brick and mortar stores. Creating the right in-store experience is crucial. From offering personalized customer service to ensuring items are in stock, retailers can make a positive impression on this desired demographic—because they may not get a second chance.
  2. Gen Z shoppers expect technologically savvy retailers. This generation goes from mobile phones to iPads to laptops—and expects fast-loading websites and an omnichannel experience. If they research an item online, then go to the store to see the item, they want that transition to be seamless.
  3. Gen Zers have money, and aren’t afraid to save it. Despite their unprecedented influence on purchasing decisions, Gen Zers are financially conservative. Moreover, this young generation has an entrepreneurial spirit and an affinity for hard work. With funds to spend, they are selective in how they spend it. Retailers who reach, attract and retain loyal Gen Z shoppers will have an advantage.
  4. Gen Zers care about social issues and are drawn to brands that do too. Although Gen Zers can still be fickle towards brands, they connect with those that promote causes and stories. Retailers must have the agility to support these brands—even as today’s cause changes tomorrow—and manage inventory to stay on top of these changes. Retailers that do will draw shoppers in search of an emotional reason to purchase.

Gen Zers will be disrupting retail for a long time. Already comprising almost 25% of the U.S. population, Gen Zers will represent 40% of global consumers by 2020. Retailers who understand the distinct expectations and challenges of Gen Z will have the advantage in connecting with this unique generation.

 

Chart above from the infographic “What Retail Needs to Know About Generation Z”. Complete the form below to request the full infographic.

2017’s Year-to-Date Store Closings Top Historical High Set in 2008

According to a Credit Suisse report released Thursday, 2017 year-to-date store closings have already topped the historical high set in 2008 when the last U.S. recession was raging. About 2,880 stores have closed year to date compared to 1,153 at the same time last year. And since 60 percent of store closures are typically announced in the first five months of the year, Credit Suisse estimates that there could be as many as 8,640 store closings this year.

This week saw stores at both ends of the price spectrum preparing to close their doors. Payless Inc. shoe chain filed for Retail Stores Closing bankruptcy on Tuesday and announced plans to close hundreds of locations. Meanwhile, Ralph Lauren Corp announced it will close its flagship Fifth Avenue Polo store.

While the unemployment rate fell from 4.7 percent to 4.5 percent in March (the lowest since May of 2007), the retail industry took a hit with the worst two months for job creation since December 2009, according to the Bespoke Investment Group. Almost 30,000 retail workers lost their jobs in March, and more than 60,000 jobs have been eliminated since January.

“Retail is a mess, to say the least” proclaimed Jason Mudrick, hedge fund manager and the founder and current President and CIO of Mudrick Capital Management, on Bloomberg Daybreak: Americas earlier this week. He continued, “this is not a cyclical issue . . . this is a forever trend.”

As stores are closing faster than ever, US shopping malls are left with a glut of space to fill. Last month CEO of Urban Outfitters Richard Hayne sized up the situation by saying, “This created a bubble, and like housing, that bubble has now burst,” he said. “We are seeing the results: doors shuttering and rents retreating. This trend will continue for the foreseeable future and may even accelerate.”

Industry analysts like Oliver Chen at Cowen & Co recommend that retailers “refocus on customers. Management needs to be fixated on speed of delivery, speed of supply chain, and be able to test read and react to new and emerging trends.”

Detailed, expert reporting and analysis of retail POS data enables vendors to do just that. In a blog post on our site earlier this week, technology journalist Scott Koegler wrote about the benefits of using a retail data analysis tool like Accelerated Analytics to improve supply chain responsiveness.

“You can look at trends and predict item performance down to the shelf level in order to plan your recommendations to store buyers,” wrote Koegler. He continued, “Forward thinking suppliers are already taking advantage of the data their customers give them to sell more of their products.”

Sources: CNBC.com, Bloomberg.com, WashingtonPost.com

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Calculating the cost of out of stock’s

Vendors know an out of stock or empty peg is a very bad thing, so it’s hard to understand why most vendors are not managing their retail sales at a store and item level. Here is what we calculated for a vendor this week to estimate their lost sales due to out of stocks. The results were pretty eye opening.

This vendor has 4 retail customers. Retailer 1 has 3,600 stores, retailer 2 has 2,500 stores, retailer 3 has 1,800 stores and retailer 4 has 950 stores. Total retail stores = 8,850. Average in-stock % across all four retailers = 98% so approximately 177 stores are out of stock each week. Weekly unit sales for their top selling items average 6 per week so approximately 1,062 unit sales are being lost each week, which is roughly $15,000 in lost sales per week.

In other words this vendor is loosing over $750,000 per year in sales.