“Conversion optimization is the same as it’s been for a while,” says Justuno CEO Erik Christiansen. “People still don’t want to focus on the last mile. We’ve kept to the same message that retailers should be investing in their current website visitors. There’s always low-hanging fruit to improve your business. How do you take one marketing dollar and stretch it as far as you possibly can? It’s all about creativity. That’s what marketing is and that’s what retail is.”
Conversion optimization is the same as it’s been for a while. People still don’t want to focus on the last mile. Finally, in 2020, we saw that shift when advertising got so expensive. Everyone is like, okay, we have minimal budgets, how do we stretch them? Finally, with all the competition from COVID where everyone’s shifting online everyone, they are saying that we can’t keep just throwing money at this. We’ve got to come up with the real problem.
When we first launched we had to pivot immediately because when we mentioned the word coupon or the word pop-up people just ran the other way. It’s been ten years of education and we’ve kept to the same message of investing in your current website visitors. Our main job still is to educate the online retailer about the basics. We ask most businesses, as you know with email, are you doing a 30, 60, 90 day, the basics? Are you doing a cart abandonment email? You cover the basics and you get so much further ahead.
There’s always low-hanging fruit
Everyone thinks businesses are run perfectly but most businesses are just a mess. What I’ve been trying to do is challenge my team to look at the basics. There’s always low-hanging fruit to improve your business. When it comes to retail, where’s the low-hanging fruit? Let’s break out your business to the basics like new visitors versus repeat. With the new ones, how many are there? What percentage of emails are we capturing? Are we sending those emails to your ESP? Are we putting in the basic workflows? There’s so much low-hanging fruit.
Then, you’re sending these emails, are you reinforcing those campaigns on-site? You spend so much time designing the email, sending it. Then it comes to that shopping cart abandonment. Do you even know how many people come to your cart each day? Do you know how many carts get abandoned and the dollar value? What can we do? The basics are still very much there in terms of opportunity to help people increase their sales lead capture and sales. How do you take one marketing dollar and stretch it as far as you possibly can? How do you also get creative? It’s all about creativity. That’s what marketing is and that’s what retail is. Retail is retailing and getting your hands dirty.
Retailers Should Focus On The Last Mile, Says Justuno CEO Erik Christiansen
This is a great time for innovation,” says National Retail Federation CEO Matthew Shay. “There’s been a great increase in efficiency in the supply chain. Those gains are not going to be given back. Customers are going to continue to expect certain kinds of delivery and fulfillment opportunities that have been rolled out by retailers this year. They won’t give that up. They are going to want the convenience and they are going to expect to be able to maintain that in the future.”
Just look back a decade ago and the companies that were created in the midst of the great recession in 2008, 2009, and 2010. We saw a lot of new IPOs. This is a great time for innovation. Some of the predictions this year, for example, about the number of stores that would close or bankruptcies that we would see just haven’t materialized. Part of that is because consumers have been relatively healthy and part of that is because on a net basis we’ve seen new businesses opening to offset the closing. There’s an enormous amount of innovation taking place.
On the issue of returns, there’s a big company located right here in Washington, D.C., Optoro, a big partner for many retailers helping them process returns efficiently. I’ve talked to senior executives at UPS today about shipping issues and there is a lot of innovation taking place. They are working very diligently and have a great delivery record so far. We are looking forward to getting all those gifts to American families. The biggest gift of all, of course, will be some additional pandemic relief.
A Lot Of This Is Going To Be A Permanent Change
The issue is how much of this consumer behavior has changed permanently and fundamentally? How much of us as Americans go back to our old behaviors? That’s going to play itself out. Certainly, a lot of this is going to be a permanent change. People will do more as we saw across all demographic groups, regardless of age, this entire year doing much more online. Some of that will remain sticky.
There’s been a great increase in efficiency in the supply chain. Those gains are not going to be given back. Customers are going to continue to expect certain kinds of delivery and fulfillment opportunities that have been rolled out by retailers this year. They won’t give that up. They are going to want the convenience and they are going to expect to be able to maintain that in the future.
With those kinds of innovations and that kind of resilience in the system against the backdrop of a year next year that could be extremely bullish if we get the vaccine rolled out, as we all believe it will be. I talked to a senior executive of one of the major pharmaceutical companies last week and they said early April or the end of May everyone that wants it will get it. We could be set up for a really big comeback for consumers next year.
National Retail Federation CEO Matthew Shay: This Is A Great Time For Innovation
“With Walmart’s e-commerce business humming the way it is and the way the company’s been able to integrate it with the store base, with curbside and everything else, this is a tough one,” says Moody’s retail analyst Charlie O’Shea. “This is really setting a high bar for brick and mortar retail and it’s giving Amazon something to really think about.”
Charlie O’Shea, retail analyst at Moody’s, and Bill Simon, former president and CEO of Walmart, discussed Walmart’s blowout quarterly results:
Walmart Is Going To Be Tough To Stop
This is just a phenomenal quarter for Walmart. It’s good on all fronts. It really is an indicator that the consumer is still there. Once we sort through all this COVID stuff the consumer is willing to spend. I’m particularly impressed by Walmart’s operating income. I’ve been watching that for several years and it’s been challenged as they move their business to digital and to e-commerce. Big growth and operating income have been under pressure.
Walmart grew its operating income by almost nine percent. Even adjusted for currency it is in the mid-teens. That’s phenomenal. Brett Biggs is one of the best CFOs in the country in my view and they manage the company very well. It looks like they’ve been able to get the e-commerce growth under control in a way that can deliver some pathway to profitability. If they can do that they’re just going to be tough to stop.
Walmart Ecommerce Business Is Humming
Every quarter it looks like they’re running on all cylinders and now the engine just keeps getting bigger. We’ve gone from an eight-cylinder engine to a 12-cylinder engine. With the e-commerce business humming the way it is and the way the company’s been able to integrate it with the store base, with curbside and everything else, this is a tough one. This is really setting a high bar for brick and mortar retail and it’s giving Amazon something to really think about.
It’s how does Amazon compete with Walmart not how does Walmart compete with Amazon? With an almost doubling of online revenue for this quarter we’re starting to see this battle really escalate. If you were open you obviously had advantages. That’s not exactly a lightning bolt coming out of the sky. But I think what we’re seeing with the consumer is they have money they’re willing to spend and they weren’t able to spend it for a while because a lot of places weren’t open. Now that things are starting to reopen there’s a lot of pent-up demand here.
Consumers Are Shifting Spending And Walmart’s Benefitting
During the early days of the pandemic during lockdowns no one’s buying pants, no one’s buying blouses, and no one’s buying tops because you can’t eat those and you also can’t use them to clean your house. So people had kind of shifted their demand towards the essentials and the consumables. Now they’re moving in another direction and Walmart’s benefiting. They benefited from the early blast of spending and now they’re benefiting as it expands. The margins going up indicates they’re selling a lot of other non-consumable stuff because those margins are lower.
I also cover the auto retailers and the auto retailers showed an awful lot of resilience so far this year. Q2 numbers for my rated universe were much better than we expected and we didn’t expect them to be that bad. The consumer clearly has money and the stimulus obviously helps the folks that are still employed are out there and still spending. That portends well for Target tomorrow and Best Buy next week. Home Depot also popped a big number today. The essential type retailers are still going to be benefiting.
“Our digital performance was up 50 percent,” says Target CEO Brian Cornell. “As we gain greater clarity around the consumer, the economy, the state of the vaccine, we feel that the consumer continues to respond to our in-store experience and the ease and convenience of shopping with some of our same-day services like pickup, drive-up, and ship. Same-day fulfillment services now represent over half of our digital channel.”
Brian Cornell, CEO of Target, discusses their massive Q1 results in an interview on CNBC:
Digital Performance Up 50 Percent
We’ve had a string of really solid results going back to 2017 but this quarter may be one of the highlights. Our team executed throughout the quarter. We had a great performance from our store teams with a store comp of 18%. Our digital performance was up 50%. It was really a team effort. We had great supply chain support with our merchants and marketers all coming together to support the results which speak for themselves.
We are benefitting from investments we’ve been making for years now. Our investment in our store experience, our curated Home Brand and national brand mix, and then the fulfillment services that we offer. That combined with the investment in our team, I think we are seeing continued strength. We feel really good sitting here right now about our outlook, not just for the second quarter but for the full year.
We’ve Connected With The Consumer
As we gain greater clarity around the consumer, the economy, the state of the vaccine, we feel that the consumer continues to respond to our in-store experience and the ease and convenience of shopping with some of our same-day services like pickup, drive-up, and ship. They really connect with our curation of Great Home Brand, national brands, and the service our team provides each and every day.
We are feeling very confident about our position today. I look at the proof point from Q1, we picked up another billion dollars in market share on top of the $9 billion of share last year. That’s just a sign that we’ve connected with the consumer, we’re building relevance, and we’re providing what they need and what they want throughout the year.
Newness Is A Huge Trend In Our Business
When you see the combination of stores comping up at 18%, which to me is just a highlight number, and categories like apparel growing again by over 60%, that combination of store traffic and category mix really benefited us throughout the quarter. We are seeing a resilient consumer. They’re clearly shopping our stores and when they’re there they are attracted to anything that’s new.
Newness has certainly been a trend throughout our business in the first quarter and I think that’s going to continue. That great combination of store traffic and store comps and the continued movement of same-day fulfillment services which now represent over half of our digital channel. We really like that transaction. It looks and feels more like a store transaction which from a profitability standpoint certainly is beneficial for us.
Target CEO Brian Cornell Says Digital Performance Up 50%
“Customers that engage with us from a digital standpoint also continue to enjoy coming into the store,” says Kroger CEO Rodney McMullen. “They also spend about twice as much with us. When you look at those things together I really feel optimistic about the future. We’re continuing to make progress on the things that matter on a seamless experience… digital, fresh, and friendly.”
Rodney McMullen, CEO of Kroger, says that customers who engage digitally come in more often and spend twice as much on average as non-digital customers:
Seamless Experience of Digital, Fresh, and Friendly
Every day our associates are taking care of our customers. We’re continuing to make progress on the things that matter on a seamless experience… digital, fresh, and friendly. When you look at the things behind the numbers continuing strong trends. If you look at the things that we’re doing it sets us up well for the fourth quarter and sets us to continue to gain share in 2021 as well.
One of the things that our customers are telling us is they’ve learned how to cook, they enjoy cooking, and they enjoy the time together as a family. Also, I think the economy continually will continue to be a little bit soft which will cause people to eat at home more as well. Both of those things will continue to provide support (for increased sales).
Customers That Engage Digitally Spend Twice As Much
Obviously, we’re anxious for the vaccine to get here and to get widespread use of it just like everyone else is. We were making great progress in gaining share even before COVID 19 started and we expect once things get back to normal we’ll be able to continue to gain share as well. We can’t wait until a vaccine gets out there and it gets widespread usage.
I really believe our teams will continue to take care of our customers and the seamless experience will tie it all together. What we find are customers that engage with us from a digital standpoint also continue to enjoy coming into the store. They also spend about twice as much with us. When you look at those things together I really feel optimistic about the future.
Kroger CEO Rodney McMullen: Customers That Engage Digitally Spend Twice As Much
Alibaba today announced it will invest $3.6 billion in Sun Art Retail Group, a huge hypermarket and supermarket operator in China. Sun Art is the largest retailer in China and competes head to head with Walmart. The transaction will give Alibaba a 72% controlling interest in the China-based brick and mortar retailer. Alibaba says that this purchase furthers its ‘New Retail’ strategy of integrating online and offline retail in China.
“Alibaba’s strategic investment in Sun Art in 2017 was an important step in our New Retail strategy,” says Alibaba CEO Daniel Zhang. “The alliance we formed with Auchan Retail and Ruentex was instrumental in building a robust infrastructure to create opportunities and value in China’s retail sector. Led by Chief Executive Officer Peter Huang, Sun Art has achieved impressive results in its digitalization and pursued promising synergies with businesses across the Alibaba digital economy. As the COVID-19 pandemic is accelerating the digitalization of consumer lifestyles and enterprise operations, this commitment to Sun Art serves to strengthen our New Retail vision and serve more consumers with a fully integrated experience.”
In 2017 Alibaba entered into a strategic alliance to digitalize and introduce New Retail solutions at Sun Art stores. The company says that since then “Sun Art has made significant progress in the digital transformation under a fast-changing market environment by leveraging resources and technology from the Alibaba ecosystem, to capitalize on the growth opportunities in China’s hypermarket and supermarket space.”
This acquisition reflects a growing retail trend in China. Euromonitor International said in a report earlier this year that merger and acquisition activities are expected to continue in the forecast period. As China’s retailing industry modernizes it is undergoing a drastic digital transformation. The forecasting firm also said that sun Art held a 14.1% share of the country’s hypermarket sales last year. That compares to Walmart’s 10.3% market share in that category.
As of June 30, 2020, Sun Art operates 481 hypermarkets and 3 mid-size supermarkets in China, with a focus on strengthening its position through small and offline community stores.
Here is the official joint announcement of the acquisition.
Amazon wants to emulate the success of Prime Day every day with ‘Holiday Dash,’ a new section on Amazon with daily deals that “equal Black Friday.”
Amazon says that “with new deals dropping every day starting October 16, customers can shop early and with confidence that they are getting Black Friday-worthy deals and incredible savings on a huge selection of products.”
Here are the announced details on Amazon’s Holiday Dash deals:
Amazon Brands
Save up to 30% on select kid’s clothing and more from our brands including Amazon Essentials, Spotted Zebra, and Simple Joys by Carter’s
Save up to 30% on select men’s and women’s clothing and more from our brands including Amazon Essentials, Daily Ritual and Goodthreads
Save up to 20% on AmazonBasics
Save 40% on Wag dog food, and treats
Save 20% on household and personal care products from Solimo
Save 20% on Presto! Refillable Cleaners
Save 20% on baby care products from Mama Bear and Solimo
Save 20% on Belei skincare
Save 20% on nutrition and wellness products from Amazon Elements and Revly
Save 20% on coffee, snacks, and other grocery essentials from Solimo, Happy Belly, and Amazon Fresh
Toys & Games
Save up to 40% on Star Wars toys
Save up to 40% on Collectible toys from L.O.L. Surprise!, Calico Critters, Fingerlings, and more
Save up to 30% on Hot Wheels toys
Save up to 30% on Building Sets from LEGO, Magna-Tiles, and PlayMonster
Save up to 30% on Marvel toys
Save up to 30% on Fortnite, Pokemon, Roblox and more
Save up to 40% on Tegu Building Blocks
Save up to 30% on Funko POPs!
Save up to 30% on Arts & Crafts sets
Save 30% on Evenflo Pivot Explore Wagon
Save up to 30% on preschool toys from Jazwares, Spin Master, Hape, and more
Save on AmScope 52-piece kids beginner microscope STEM kit
Fashion
Save up to 40% on select apparel from Calvin Klein
Save up to 40% on select Levi’s apparel for the whole family
Save up to 40% on Star Wars apparel
Save up to 30% on select New Balance footwear and apparel
Save up to 40% on select Tommy Hilfiger apparel
Save up to 40% on select kids’ clothing from Gerber, Hudson Baby, and more
Save up to 50% on select watches from Citizen, Bulova, Anne Klein, and more
Save up to 30% on select Lacoste apparel, shoes, and accessories
Save up to 30% on Marvel apparel
Save up to 30% on select seasonal fashion trends
Save up to 25% on select Nautica men’s and women’s apparel
Save up to 48% on select Hanna Anderson pajama sets and underwear styles
Save up to 30% on select styles from The Drop
Save up to 40% on select women’s shoes from Shopbop
Save up to 15% on select women’s accessories from Shopbop
Household, Kitchen, Home Improvement & Smart Home
Save on Le Creuset Cast Iron and Stoneware, including up to 48% on select Le Creuset 3.5Qt Oval Dutch Ovens
Save up to 50% on select Bissell Vacuums
Save up to 40% on SharkNinja Shark Navigator Lift-Away
Save up to 35% on Eufy by Anker RoboVac
Save up to 30% on Eureka Stick Vacuum
Save on iRobot Robotic vacuums and mops
Save up to 30% on iLife Robotic vacuum cleaner
Save up to 25% or more on Samsung vacuums
Save up to 36% on select Blueair air purifiers
Save up to 20% on select Molekule air purifiers
Save up to 40% on KitchenAid tools
Save up to 20% on the Instant Pot Duo Mini Plus
Save up to 30% on Hallmark gift wrap, ornaments, and cards
Save up to 20% on select Breville Smart Ovens
Save up to 20% on OXO BREW coffee makers
Save up to 30% on Tineco floorcare products
Save on Ninja AF161 Air Fryer and Ninja FG551 Foodi Indoor Smart Grill
Save on select SodaStream Fizzi Sparkling Water Maker Bundles
Save on the Keurig K-Mini Coffee Maker
Save up to 20% on OXO Good Grips Smart Seal and bakeware
Save up to 35% on Ayesha Curry Cookware
Save 30% on Linenspa 10″ hybrid mattresses
Save up to 30% on Zinus furniture and mattresses
Save 30% on Sweetnight mattresses
Save up to 30% on Moen bathroom fixtures and up to 20% off on Moen kitchen products
Save up to 25% on select Hansgrohe products
Save 15% on GE Profile Ice Maker
Save 20% on select Broan appliances
Save up to 15% on select Delta Faucet products
Save up to 15% on Whirlpool softeners
Save 15% or more on gaming, home education and home office furniture
Save on select August Smart Locks
Save on select Kwikset Smart and Mechanical Locks
Save on Smart Home products from Emerson, Kasa TP-Link, and more
Beauty, Health & Personal Care
Save up to 50% on your favorite Premium Beauty brands from Elemis, Mario Badescu, Redken, and more
Save up to 40% on Premium Beauty appliances from T3, Foreo and more
Save up to 40% on Waterpik and Colgate oral care appliances
Save up to 45% on skin care from NIVEA, Aquaphor, and Eucerin
Save up to 30% on hair dryers and products from Revlon, Bed Head, and more
Save up to 35% on razors from Braun, Gillette, and more
Save 33% on Panasonic and Norelco shavers
Save up to 20% on Fitbit Activity and Fitness Trackers
Electronics
Save up to 33% on select Nintendo Switch games
Save up to 35% on Nixplay Digital Frames
Save up to 30% on Kodak Instant Cameras and Printers
Save 25% on Adobe Creative Cloud Entire Collection
Save up to 20% on Samsung TVs
Save up to 20% on Sony TVs
Save up to 50% on JBL Speakers
Save up to 33% on Sony Headphones
Save up to 33% on Bose Headphones
Save up to 40% on select Mynt 3D printing pens and accessories
Save 30% on Mynt 3D PRO Pen with OLED Display
Save up to 30% on VAVA 4K Projectors
Save up to 30% on TaoTronics Headphones
Small Businesses on Amazon Launchpad
Save up to 50% on Kids Against Maturity: Card Game for Kids and Families
Save up to 30% on the SOLIOM S600 Outdoor Security Camera
Save up to 25% on the Zen Laboratory DIY Jumbo Slime Kit for Kids
From October 26 to November 19, Prime members can save 10% or more on select unique products from small brands on Amazon Launchpad like: Mobile Pixels Duex Portable Monitor for Laptops and Scentered Travel Essentials Aromatherapy Balm gift set
Entertainment: Amazon Music, Audible, Books & Prime Video
Amazon Music: Beginning October 23, new Amazon Music Unlimited customers can get three months of the premium streaming tier free, to enjoy unlimited access to more than 60 million songs, ad-free and a wide selection of popular podcasts.
Amazon Music: Beginning October 29, current Amazon Music Unlimited subscribers can upgrade to the Family Plan free for three months, with access for up to six accounts.
Audible: Between November 1 and December 31, new members save nearly 40% on the first six months of an Audible Plus membership at just $4.95 per month. Membership includes unlimited access to more than 10 thousand Audible Originals, audiobooks and podcasts.
Books: Deals on select multi-genre books and ebooks throughout the season
Prime Video: This holiday season, Prime Video will offer up to 50% off select popular Halloween, family and holiday movies to rent or buy. Deals will roll out over the next few months, so be sure to check www.amazon.com/pmd for updates.
Amazon Gift Cards
Starting today, customers using Amazon Reload to replenish their Amazon Gift Card balance for the first time will receive a $10 bonus with their reload of $100 or more. Offer available through December 31.
Starting October 26, first-time Amazon Gift Card shoppers will receive a $15 promotional credit with the purchase of $50 or more in Amazon Gift Cards. Offer available through December 20. The promotional credit expires on February 6, 2021. Other restrictions apply.
Amazon Credit Cards:
Now through December 22, with an eligible Prime membership, customers who apply and are approved for the Amazon Prime Rewards Visa Card will instantly receive a $100 Gift Card. Prime Cardmembers earn 5% back at Whole Foods Market and Amazon.com. Additionally, starting November 1 through December 22, customers without a Prime membership can apply for the Amazon Rewards Visa Card and receive a $60 Gift Card upon approval, in addition to earning 3% back at Whole Foods Market and Amazon.com as a cardmember. Restrictions apply. Visit amazon.com/visa for details.
Automotive, Tools and Lawn & Garden
Save 50% on tire installation
Save up to 25% on Miracle-Gro Expand ‘n Gro concentrated planting mix
Save 25% on Castrol GTX Conventional motor oil
Save 20% on Select Tonno Pro Tonneau covers
Save up to 20% on select Streamlight flashlights
Save on select DEWALT cordless drills and tools
Save up to 30% on select SKIL tools
Save up to 15% off on select ZGrills Pellet Grills & Smokers
Save up to 15% on Shintenchi 4 piece wicker rattan outdoor patio furniture set
Save on select Renogy monocrystalline solar panels
Sports & Outdoors
Save up to 20% on Select Coleman Tents & Gear
Save up to 20% on select CamelBak kids water bottles
Save up to 25% on select Sawyer Products water filters
Save up to 30% on select Stanley drinkware
Save up to 28% on select Segway scooters and kids bikes
Save up to 30% on select Stiga table tennis rackets and Zume badminton set
Save up to 30% on select Legendary Whitetails apparel
Save up to 30% on select Osprey Outdoor Packs
Pets
Save 20% on Catit Creamy cat treats
Save on Petsafe electronic dog toys
Save on The Honest Kitchen human grade pet treats
Save on Friends Forever donut pet beds
Whole Foods Market:
Both in-store and online, Prime members can receive discounts on customer favorites including 35% off Bare Bones broths and 35% off all packaged teas, available now through October 27.
Available now through October 20, customers can get 20% off pumpkins and gourds – excluding squash.
“We really doubled down on digital,” says Bed Bath & Beyond CEO Mark Tritton. “We weren’t easy and we weren’t convenient. Life’s tough at the moment and you really want to make it simple, easy, and frictionless for customers. The introduction of BOPIS (buy online, pick up in-store), curbside, and now same-day to really facilitate ease and frictionless shopping starting with digital or in-store, wherever the customer wants to go.”
Mark Tritton, CEO of Bed Bath & Beyond, after releasing their earnings report discusses how the company is driving success by leveraging digital with frictionless brick and mortar stores:
Doubling Down On Digital
Our (6 million) new customers coming on board are about six years younger which is great news for us as we expand our customer profile. The key to that is our omni-always strategy. We talk about understanding our customer, how they shop today, and this was pre-COVID. Even more important, we know that 80% of our customers pre-shop online and either purchase there or go to store.
We had a really broken paradigm. We had a fantastic digital business that was very large. We did about $1.8 billion last year. We already beat that by this time this year. We’re large, but we are growing. We really doubled down on that digital aspect. But we weren’t easy and we weren’t convenient. Life’s tough at the moment and you really want to make it simple, easy, and frictionless for our customers.
Stores Are Key To Profitability
So we looked at our website and our integration with our stores which is an ability to leverage our store asset and connect those strongly to an omni environment. It’s really worked out. The introduction of BOPIS (buy online, pick up in-store), curbside, and now same-day to really facilitate ease and frictionless shopping starting with digital or in-store, wherever the customer wants to go.
We know that if we have a digital side that is BOPIS, curbside, or same-day, our margin is actually equivalent to a store. We are driving behaviour, driving engagement, and driving those three assets. That’s helping to leverage out our gross margin. As we rapidly expand our digital business the stores are a key to this profitability.
“The Macy’s Thanksgiving Day Parade is not going to be a live event but it’s all going to be filmed live,” says Macy’s CEO Jeff Gennette. “It’s going to be filmed over a two-day window. It’s got the floats, it’s got the balloons, but the talent is different. We are really excited about having a great Thanksgiving Day Parade for America this year. It’s just going to be different but it will be going without a hitch.”
Jeff Gennette, Chairman and CEO of Macy’s, says that the iconic 2020 Macy’s Thanksgiving Day Parade will be happening over two days but without a live audience:
Macy’s Thanksgiving Day Parade Is Happening
When you think about Macy’s you think about we’re pillars of the communities that we are a part of. We take great pride in that. That’s in our DNA. When you look at what we do to give back and what we’re doing with all of our donations, what we’re doing for meals on wheels with food instability right now, those are things that we’re really proud of. We’re in that with our customers raising millions of dollars for communities in need. If there ever was a time where we need to give thanks it is right now.
For Thanksgiving, we had kind of a dress rehearsal where we did the fireworks. We did the fireworks and we did it in a way that was safe for people who are living in New York City. Expect the same thing with the Macy’s Thanksgiving Day Parade. It’s not going to be a live event but it’s all going to be filmed live. It’s going to be filmed over a two-day window. It’s got the floats, it’s got the balloons, but the talent is different. All the people that were ready to come, the marching bands, the cheer squads that were coming in for 2020, we’ve given them a pass and they’re coming back for 2021. We’re backfilling with other entertainment.
We are really excited about having a great Thanksgiving Day Parade for America this year. It’s just going to be different but it will be going without a hitch.
Being An Omnichannel Retailer Gives Us An Advantage
Is back to school shopping a prequel to how holiday shopping will be? We’re all looking at how’s the traffic going to be between Thanksgiving and Christmas or Hanukkah? How should we expect that? We’re all looking for whatever comes our way. We’ve all got A-B-C. alternatives. We call it the 2020 options because whatever comes our way we have to have flexibility. What I’m expecting is that holiday traffic is going to start much earlier. More than ever, customers want to have a great gift that they either put under the tree or they give in a treasured box.
To make sure that we have that ready for customers no matter when they want to shop we’re pulling the calendar to start addressing those great values at the beginning of November. We’re going to be ready for the customer, for those that want to shop after Thanksgiving. Being an omnichannel retailer, we’re going to have a great advantage to be able to deliver it the day before Christmas by same-day delivery or them coming to a store and through the safety of curbside being able to pick up that great value.
Macy’s Thanksgiving Day Parade For TV Only, Says CEO Jeff Gennette
“In the most challenging operating environment I’ve ever seen for this team to deliver the strongest comps in our 50 year history is pretty incredible,” says Target CEO Brian Cornell. “This is in an environment where so many Americans are avoiding shopping in physical stores, our store comps were still up almost 11 percent. The investments we made in our team and in creating a safe shopping environment has built trust with the consumer. Certainly, our digital growth is industry leading at almost 200 percent.”
“Our second quarter comparable sales growth of 24.3 percent is the strongest we have ever reported, which is a true testament to the resilience of our team and the durability of our business model,” said Cornell. “Our stores were the key to this unprecedented growth, with in-store comp sales growing 10.9 percent and stores enabling more than three-quarters of Target’s digital sales, which rose nearly 200 percent.”
“We also generated outstanding profitability in the quarter, even as we made significant investments in pay and benefits for our team,” noted Target’s CEO. “We remain steadfast in our focus on investing in a safe and convenient shopping experience for our guests, and their trust has resulted in market share gains of $5 billion in the first six months of the year.”
The Company had comparable stores sales growth of 10.9 percent and digital sales growth of 195 percent. Total revenue of $23.0 billion grew 24.7 percent compared with last year, reflecting sales growth of 24.8 percent and a 16.6 percent increase in other revenue. Operating income was $2.3 billion in second quarter 2020, up 73.8 percent from $1.3 billion in 2019.
Target Delivers Strongest Comps In 50 Year History
I’ve been with Target now going on seven years. Obviously, this is a special moment for the team. It is a beautiful morning here in Minnesota. I’ve got to start by really recognizing our team. In the most challenging operating environment I’ve ever seen for this team to deliver the strongest comps in our 50 year history is pretty incredible. Our EPS was also a record high up over 80 percent. So to the 350,000 team members in the U.S. and in offices around the world these results were all about you.
We continue to see strength across our entire portfolio. The strength that we saw in the second quarter, which we will break down in our earnings call later today, the fact that we saw really consistent strength from May into June and July. May was the strongest month with comps over 30 percent. But in both June and July we saw comps over 20 percent. That strength has continued in August and we are seeing low to mid-teen growth.
Being Agile and Flexible Is Key To Our Success
The biggest adjustment is probably the consumer who is still waiting for a signal around back to school. As you might imagine uniforms, backpacks, and school supplies are a little slower than last year. But the overall momentum and growth in market share continues as we go into the third quarter. The key to our success when I think about the second quarter is one, we’ve been true to our strategy, but our team has really focused on being agile and flexible and adjusting to the current operating environment. We’ve been changing the playbook every week.
As we think about back to school as I’m sitting here today there are 56 million K-12 students that are waiting for direction. As of this week 66 percent of students will start remotely. They don’t know if they are going back into a classroom in September, October or if it’s going to happen in January. So we are going to have to extend the back to school season and make sure that we’ve got the items they need throughout the fall. We can adjust by market. We’ve got to be flexible and adaptable. That’s really been the key to our success so far this year in both the first and the second quarter.
Digital Growth Is Industry Leading – Up 200%
If you look at our results in the second quarter overall comps were up 24.3 percent. These are some of the strongest in retail. Our store performance is really for me a standout and probably one of the biggest surprises. This is in an environment where so many Americans are avoiding shopping in physical stores, our store comps were still up almost 11 percent. The investments we made in our team and in creating a safe shopping environment has built trust with the consumer. Certainly, our digital growth is industry leading at almost 200 percent.
We’ve been taking share on a broad based basis from both specialty and department stores but also some of our traditional competitors including club. Category by category we’re gaining share. In categories like food and beverage and household essentials we were up 20 percent during the quarter. As Americans have been working and learning from home we’ve seen categories like electronics grow by 70 percent in the quarter. We’ve picked up significant market share from our electronic competitors. Our business and home categories were up over 30 percent.
We Are Seeing Significant Market Share Gains
Categories like decor, categories like domestics, what we are seeing with kitchen ware, we are continuing to build momentum and market share. We also saw a big rebound in apparel which was down almost 20 percent in the first quarter. It grew in the low teens in the second quarter. We are seeing significant market share gains. Across our business we are picking up share from our competitors whether they are specialty players, department stores, or our traditional retail competitors.
The market share number of $5 billion is the most important number on the print. It just shows the relevance of our brand, the momentum, and the trust we are building with American consumers.
Target CEO Brian Cornell: Digital Growth Is Industry Leading – Up 200%
“The important thing to think about is that the biggest threat to brick-and-mortar retail is really the current version of themselves,” says Caruso CEO Rick Caruso. Caruso is one of the most successful retail developers in the United States. “Many of them have to evolve and many of them have to change because the consumer is going to change. This crisis, I believe, is going to change consumer culture, their expectations, and what they want from retailers in a really significant way.”
Rick Caruso, founder, and CEO of the Caruso real-estate empire discusses how retail will be forever changed even after the current crisis is over:
This Crisis Is Going To Change Retail
I hope (retail jobs) come back I think some are going to be lost. The retail environment is tough out there right now. The important thing to think about is that the biggest threat to brick-and-mortar retail is really the current version of themselves. Many of them have to evolve and many of them have to change because the consumer is going to change. This crisis, I believe, is going to change consumer culture, their expectations, and what they want from retailers in a really significant way.
They’re going to be winners and they’re going to be losers. I think the winners are going to be very connected. They’re going to be curated and feel more local. They’re going to feel more personalized and they’re going to have a better value proposition. There are many out there that we’re doing that before this crisis began and they’ll continue to do it. I think they will be rewarded with great success and hopefully, they will drive a lot of hiring. There will be more retail jobs coming back into the current economy.
People Are Going To Want More Physical Space
I do think that people are going to want to have more physical space (after this crisis is over). I think they’re going to operate differently. Listen, 9/11 fundamentally changed our habits as human beings. But the one thing that is always crystal clear is we’re human souls that want to have a sense of connection and community and our properties provide that. The challenge for retailers inside their four walls is going to be to meet the customer where the customer wants them to be.
The very innovative and very smart retailers are going to do very well. When you get to crowded restaurants and things like that I think they’re going to have to change how they operate. Movie theatres may have to change how they operate for a while. There’s certainly going to be a shift. What we have seen is the isolation gets very tiring very quickly. So I think people are going to want to come out and they’re going to want to celebrate life and they want to connect with their community.
Economy Is Built On The Back Of The Entrepreneur
Some (of our retail tenants) are and some aren’t (paying rent right now). The ones that I worry about the most and I care about a lot are the smaller ones. These are the entrepreneurs and the people that have started a small business or a small restaurant. We’re leaning in with all of those to support them. I’m a big believer that the economy is built off the back of the individual entrepreneur.
We’re going to support them to get them reopened so they can rehire and move forward. The tenants that are more creditworthy, which is a big chunk of our portfolio, they have been paying. My expectation is that they should, given these times, so that we can put more resources into the smaller businesses which clearly will need our help.
We’re Giving Smaller Tenants Concessions On Rent
We’re meeting with each of (our small business tenants) individually. It depends on certain circumstances but we’re going to give them concessions on rent. We certainly may give them concessions and investment in terms of TI’s and maybe upgrading their stores. Whatever they need to do. Our properties are very popular for a number of reasons but one of them is the small retailers, the entrepreneurs, the restaurant tourism. They’re the soul of the properties and they’re the fabric of the properties. We need those to survive.
What we don’t want to do is have successful properties that are just full of national retailers. National retailers could be great but they don’t have the same connection to the community and the same soul that a local entrepreneur has. Those are the ones we’re very focused on supporting and working with.
This Crisis Is Going To Change Retail, Says Caruso CEO Rick Caruso
There’s no denying that when it comes to holiday shopping, Amazon is the company to beat. The past few years saw the retail giant’s sales figures going up, especially during the holidays, as thousands of consumers opt to shop online because of convenience. As a matter of fact, the internet retailer accounted for 33.8% of online visits during the last two months of 2016.
While retailers and small businesses can’t hope to match Amazon’s numbers this year, they can still do something to beat it at its own game. Here are ways that retailers can get a leg up on Amazon:
Capture Consumers Attention During Vital Shopping Days
Amazon will always be in the minds of countless shoppers during the holiday season, mainly because of convenience and fast delivery. So how can retailers compete with this? By finding a way to capture the consumer’s attention and imagination. One of the best ways to do this is to come up with a marketing campaign that highlights the company’s values in order to target loyal and high-converting clients.
Companies like REI did this by closing its doors on Thanksgiving and Black Friday and encouraging customers to spend the day outside instead with its #optoutside campaign. The movement inspired state parks to waive their entry fees and saw companies like Subaru and Outdoor Research teaming up REI to promote outdoor recreation. And even though REI closed its doors on Black Friday, the campaign generated a 26% boost in online traffic on that day.
Treat Each Shopper as a Unique Individual
One of Amazon’s weaknesses is its one-size-fits-all approach to its consumers. This means everyone gets the same deals and prices. But retailers can go in the opposite direction and show consumers that their unique and individual needs are taken seriously. They can come up with customized offers for different types of shoppers, like loyal consumers, senior shoppers or first-time buyers. Retailers can also ensure that the content and offers in their email ads are designed for each particular group of shoppers.
Streamline Your Shopping Cart
There’s no question that the ease that someone can order from Amazon is a contributing factor to its popularity. In order tocompete in the same league as Amazon, retailers should take a critical look at their shopping cart and see what their customers’ experience. They should pay particular attention to details like the number of steps it takes to fill their cart, the number of decisions that the customer must make during the checkout stage (ex. gift wrapping, shipping) and whether every step is necessary. Retailers should consider whether some steps can be streamlined by combining decisions and actions. After all, there’s nothing more frustrating than spending more than 10 minutes just trying to pay for something you want.
Offer Worry-Free Shipping and Returns
Free shipping is now the norm.While this might be a huge obstacle for some companies, there’s no denying that it’s what customers are now expecting from online retailers. There’s no better way to drive your customers to Amazon than by having high shipping costs during the holiday season. But aside from implementing this strategy, retailers should also ensure that they push this message to their consumers, like through the company’s homepage, pop-ups and social media ads.Promoting free shipping to your website’s visitors will also give them an additional incentive to browse through and hopefully purchase something.
Retailers should also take advantage of Amazon’s less than stellar reputation when it comes to returns. Designing a system where shipping and returns won’t become a thorn on the shopper’s mind will definitely give a retailer an edge over Amazon.
Provide Special Touches
Customers will definitely love the special touches that companies offer, particularly during the busy holiday season. A simple gift-wrapping service or a program for storing items purchased ahead of time and to be delivered close to the holidays will be appreciated. Knowing that the company has taken the time to make life easier during this busy season will be more than enough to keep them coming back.
Amazon might be an eCommerce behemoth, but small retailers can still hold their own against it. Remember that the best way to compete with such a big company is to look at the details it neglects and to give customers a truly personalized experience.
When retailers start offering before Christmas sales before the actual holiday, you have to question – what is up?
Retailers have Black Friday– the most insane shopping day of the entire year – and all of those weeks in between Thanksgiving and Christmas to make their yearly quotas – could it be they are not making them – or are they just getting greedy.
Amazon.com is already offering “after Christmas” deals of up to 70 percent.
Old Navy advertises its “after-holiday sale starts early” with discounts of up to 75 percent. And CVS Pharmacy, which opened early Christmas Eve, is in on the trend with heavy discounts.
So what's this about post-Christmas sales starting before Christmas is over?
Some revealing yet advanced estimates for November 2013’s sales for retailers were up 4.7 percent compared to November 2012. Then perhaps it is greed.
This year, stores gave Black Friday shoppers an earlier window – opening in the evening of the Thanksgiving Day Holiday for those who wanted a head start.
This rush to discount inventory in early sales raises a lot of red flags.
Why are stores moving up their timelines earlier and earlier? Why are stores dropping their prices even before the end of the traditional holiday sales season? What message are we inadvertently getting about the economy?
With sales up from last year, could it be that stores are just exercising their power of the free market and becoming more and more competitive? You would certainly think so with all the competitive television ads going on during the holiday season.
After-Christmas sales start before Christmas – It's beginning to look a lot like … the day after Christmas? On t… http://t.co/bhkRNJknGl
Could it be the stores are afraid of hitting January with merchandise that won’t be worth squat because they’re seasonal, or could it mean that the pre-order sales expectations have not been met? The merchandise can be written off as a loss by the retailers, and some returned to the manufacturers, so this is really puzzling.
Perhaps these stores are concerned about unforeseen losses and are grabbing at every straw to prevent this from happening.
For the retailers and manufacturers, this aggressive, early sales strategy just could be an indicator of a weak and unsteady 2014 first quarter, with retailers and manufacturers wondering how to dump the unsold inventory.
After all, we have not yet come out of the worst recession since the “Great Depression” – is this just erring on the side of caution?
“Our store checks coupled with numerous other reports from over the weekend suggest the final Super Saturday weekend, while busy, did not generate the final crush of shoppers necessary to save this holiday season from being ‘ho-hum,’” said Ken Perkins, the president of Retail Metrics.
Either way, it is bizarre – and hopefully whatever these retailers are up to, it will help them fulfill their quotas and stay afloat. It really is helping customers get some great deals on products from cars to electronics.
Tablets are now the hottest growth commodity in the tech industry. A recent Gartner report even showed that tablet growth is largely helping to offset the decline of the PC industry and pushing continued IT growth in 2013. Now it appears that electronics retailers, which have been struggling to keep up with the changing marketplace, might have a place in tablet sales channels.
Market research firm Strategy Analytics today revealed its prediction that specialist electronics retailers will make up 35% of global tablet shipments this year. That’s more than any other sales channel, including direct manufacturer sales. The firm attributes this statistic to consumer buying habits, specifically customers comparison shopping between the growing variety of tablets on the market.
“While the channel composition is complex, providing consumers with many ways to buy, consumers are clearly happy to buy Tablets from outlets where they can hold, touch and play with the devices”, said Matt Wilkins, Director of Tablets and Wearable Devices for Strategy Analytics. Wilkins went on to say that “…it is particularly important for first-time buyers to see the devices in the flesh, with competing models and price-points side-by-side.”
Although electronics retailers will have a place in tablet sales channels they are also subject to “showrooming,” where customers shop at a physical retailer and then order from another retailer online. In addition, Strategy Analytics points out that online sales are more convenient in emerging markets such as China and Brazil, where retailers may not have a large physical infrastructure. The largest growth in the tablet market in the coming years is predicted to be from low-cost devices in those emerging markets.
October has just begun, and for many retail outlets that means dragging out the holiday decorations. With the economy slowly rebounding over the past five years, experts are now expecting to see a marginal increase in sales this holiday shopping season.
The Consumer Electronics Association (CEA) this week predicted a 4% year-over-year increase in holiday spending during November and December of this year. That increase will allow total holiday spending in the U.S. to reach an estimated $738 billion.
“Overall retail holiday sales growth looks healthy for 2013,” said Shawn DuBravac chief economist at CEA. “However, significant economic risks remain unresolved, and these could still negatively impact how much consumers decide to spend this holiday season.”
Tech sales have been forecasted to be a major part of holiday spending with new tablets and video games systems coming in November. Spending on apparel, furniture, and “general merchandise” is predicted by CEA to rise by just 2.7% this holiday season.
Online sales will be particularly important this year, as will sales on mobile devices . Online sales are expected to hit a record $57 billion this holiday season, making up over 18% of all holiday retail sales. Mobile purchases are expected to grow by 35% year-over-year to a record $8 billion in sales.
“The online retail channel will dictate holiday sales this season,” said DuBravac. “Retailers and manufacturers should take note of shifting shopping habits as consumers increasingly turn online and to their mobile devices to make purchases.”
J.C. Penney today announced that it has borrowed $850 million from a revolving credit fund of $1.85 billion. The company stated that the money will be used to ensure the company’s liquidity and replenish inventory levels.
“Earlier this year, we increased our revolving credit facility in anticipation of operating, working capital and capital expenditure needs, especially during the first half of the year,” said Ken Hannah, CFO for J.C. Penney. “As we near completion of the home department transformation in over 500 stores, we have been undertaking and will continue to experience a significant inventory build and increase in capital expenditures.”
J.C. Penney CEO Ron Johnson stepped down last week after just over one year with the company. Johnson had attempted to move the retail company away from the modern department store strategies of constant sales and coupons. The strategy did not succeed, and J.C. Penney stock and revenue fell while debt rose. The company is now estimated to be more than $3.5 billion in debt.
“While jcpenney has faced a difficult period, its legacy as a leader in American retailing is an asset that can be built upon and leveraged,” said Mike Ullman, who replaced Johnson as acting CEO. “To that end, my plan is to immediately engage with the Company’s customers, team members, vendors and shareholders, to understand their needs, views and insights. With that knowledge, I will work with the leadership team and the Board to develop and clearly articulate a game plan to establish a foundation for future success.”
J.C. Penney’s pricing strategy has already begun to shift. The retailer is issuing coupons, and clothing prices are expected to rise in preparation for sales.
Over the holiday season, Best Buy began offering its customers price-matching on products that can be found for lower prices at online retailers. The move was meant to curb incidences of “showrooming” – the term that refers to customers who use physical retailers as a space to look at and research products before purchasing them online.
That holiday-time policy must have paid off for the big box retailer, because Best Buy today announced that it is making online price-matching an official policy.
The company announced this weekend that it will implement the policy at its physical stores and its online store starting March 3. Best Buy will match local retailer prices, as well as the prices of 19 “major online competitors,” including Amazon.com, Apple.com, Bhphotovideo.com, Buy.com, CircuitCity.com, CompUSA.com, Crutchfield.com, Dell.com, hhgregg.com, HP.com, HomeDepot.com, Lowes.com, Newegg.com, OfficeDepot.com, OfficeMax.com, Sears.com, Staples.com, Target.com, TigerDirect.com, and Walmart.com.
The price-matching isn’t automatic, however. Customers will have to request the lower prices, and not every product in Best Buy stores is covered. Music, movies, phones, digital downloads, pre-orders, and refurbished products that can only be found in Best Buy’s online store will not be price-matched.
Best Buy is touting its customer service as an advantage over online retailers. Whether or not this is true, the retailer will have to continue implementing tough policies such as price-matching to prevent the company from going the way of the now-defunct Circuit City.
Last month, U.K. electronics retailer HMV entered administration. Employees and customers were left wondering whether the business would be shutting down.
Today, Deloitte, the firm hired to oversee HMV’s administration, announced that 66 HMV stores will be closing throughout the U.K. These stores collectively have 930 employees, and no plans to relocate them were revealed. HMV currently has 220 stores in the U.K.
This step has been taken in order to enhance the prospects of securing the business’ future as a going concern,” said Nick Edwards, joint administrator of HMV. “We continue to receive strong support from staff and are extremely grateful to them for their commitment during an understandably difficult period. All other key stakeholders remain very supportive and I continue to be hopeful of securing a future for the restructured business.”
No date has been set for the closure of the stores, but they are expected to shut down sometime in the next two months. Below is the list of stores that will be closing. Consumers near these stores would be well-served to keep an eye on them to watch for closeout sales.
As media consumption shifts to streaming and downloaded products, retailers of physical entertainment media are being forced to change rapidly or die ignoble deaths.
At the same time that Blockbuster U.K. has entered administration (bankruptcy) and announced 160 of its stores across the U.K. will be closing, Blockbuster in the U.S. is having similar difficulties. Dish Network, the parent company for Blockbuster, announced this week that 300 Blockbuster video rental stores across the U.S. will close up shop in the coming weeks. The company told the Denver Post that around 3,000 employees will lose their jobs.
These new closings are on top of the 500 stores that Dish shut down last year. The company stated that only around 500 Blockbuster stores remain. This is down from the 4,000 U.S. stores the company had at the beginning of 2010, the same year it entered bankruptcy. The specific stores that will be closing have not been unveiled, but consumers who still live around a Blockbuster (and who still want DVDs or Blu-Rays) might want to watch for closeout sales.
A Dish company spokesperson told the Post that the company is currently evaluating Blockbuster stores on a case-by-case basis, and that underperforming stores will be closed. The company is also evaluating whether or not to sell smartphones and wireless service at Blockbuster stores, a sign of the times if there ever was one.
Last week Blockbuster U.K. announced that it would be entering administration and begin looking for a buyer for its 528 stores across the U.K. Today, the real process of closing up shop has started and store closings have been announced.
Deloitte, the firm administering Blockbuster, has announced that 160 Blockbuster stores in the U.K. will be closing. The possibility of more store closing announcements in the near future was not ruled out.
“Having reviewed the portfolio with management, the store closure plan is an inevitable consequence of having to restructure the Company to a profitable core which is capable of being sold,” said Lee Manning joint administrator of Blockbuster U.K at Deloitte. “We would like to thank the company’s employees for their support and professionalism during this difficult time. We are also grateful to the customers for their continued support.”
The closings mean around 1,000 Blockbuster employees will soon be out of work or shuffled to other stores. The stores won’t close immediately, however, and a hotline has been put in place to help employees find other work.
In the meantime, the closing stores will remain open for business. Customers will get to enjoy “closing down promotions” as the stores close.
Competition from online retailers and the rise of streaming digital media are causing increasing difficulties for physical retailers. British retailers HMV and Game Group have also entered administration within the past year.
Coming just one day after U.K. electronics retailer HMV announced it would seek administration, auditing firm Deloitte has announced that it has been commissioned to administrate Blockbuster U.K. Deloitte was also mentioned as a possible administrator for HMV.
Deloitte claims that Blockbuster U.K.’s “core” business is still solid. A buyer for the company’s 528 stores across the U.K. will be sought. Blockbuster U.K. currently employs 4190 people.
Unlike HMV, which suspended trading of its stock on the London Stock Exchange, Blockbuster stock will continue to trade normally. Deloitte also made a point to assure customers that all gift cards will be honored.
“In recent years Blockbuster has faced increased competition from internet-based providers along with the shift to digital streaming of movies and games,” said Lee Manning, a Deloitte partner and one of the people assigned to jointly administer Blockbuster U.K. “We are working closely with suppliers and employees to ensure the business has the best possible platform to secure a sale, preserve jobs and generate as much value as possible for all creditors.”
Blockbuster U.K. is just another in a line of British retailers of physical media to run into financial trouble. In addition to HMV, GameStop closed its stores in the U.K. last year and Game Group entered administration in March of last year. These failures are almost certainly a sign of things to come in the U.S. and the rest of the world, as media consumption shifts from physical discs to downloadable and streaming options.
In order to
