• Thursday , 19 October 2017

Retail news roundup: Teavana, NRF, Apple, Amazon, Retale, Costar, Echo

Cashback Industry News has a US retail news roundup to help you get all the retail news and trends in one place. A new Credit Suisse report  predicts 20 to 25% of US shopping malls will close in the next five years while e-commerce will grow from 17% to 35% in the same time frame. US retail sales rose 4% in the past year and the National Retail Federation predicts continued steady growth although another 8,500 stores are expected to close this year.

Reorg First Day reported that retail bankruptcies rose 110% in the first six months of 2017 including jeans maker True Religion and kids retailer Gymboree. Full-time retail employment in the US dropped 3% in Q2 2017, according to a report from BRC Retail Employment Monitor which also said 69% of retailers had reduced employee hours. Which retailers make the most sales per square foot? Think Murphy USA ($3,721), Generation Next Franchise Brands ($3,970) and Apple ($5,546) according to a Costar analysis.

Wells Fargo analyst Ike Boruchow send investors are showing new interesting in retailers, especially strong brands like Michael Kors, Ralph Lauren and Hanes. The National Retail Federation says 43% of consumers plan to use their smartphones during back-to-school shopping. In less than four years, Chicago headquartered Retale has gained more than 26 million active digital coupon app users.

Watch for artificial intelligence to impact retail as consumers get used to shopping with devices as Amazon’s Echo, Google’s Home and Apple’s Siri. Starbucks will close all 379 Teavana stores which are under performing and dragging down profits. Analysts remain positive on Amazon which reported $37.96 billion in revenue although earnings per share were below estimate. Retailers and small business have different opinions on Amazon, dubbing them the “frenemy.”

Are shopping malls on their way out in Polk?

http://www.theledger.com/news/20170729/are-shopping-malls-on-their-way-outCallie Foggie shopped at Lakeland Square Mall on Tuesday, but owners of that mall and others worried about the future of their properties shouldn’t take heart from it.

Foggie is just one of millions of examples underlying a May report on retailing from the Wall Street bank Credit Suisse, which predicted 20 percent to 25 percent of U.S. malls will close in the next five years.

Although Credit Suisse cited several factors in the U.S. retail industry contributing to the expected wave of closings, it put the loss of business to e-commerce, or online shopping, as the big gorilla. Online sales will grow from 17 percent to more than 35 percent during that same period, according to the bank study, which found that the trend away from malls and other “brick-and-mortar” stores to online shopping is structural and not transient. Via theledger.com

Changes in Retail Landscape Create Opportunities for Real Estate Industry

Search “Death of Retail” on Google.com and, as of July 26, you will get approximately 855,000 hits, many of which stress the negative impact that online sales and Amazon, in particular, have had on traditional retailers.

However, predicting the future of the retail industry cannot be reduced to an easy slogan. Amazon itself is a retailer, and it is facilitating sales on its site by other retailers, including many that previously had difficulty bringing goods and services to market. Moreover, retail sales overall rose almost 4% in the past year, and the National Retail Federation expects growth to continue due to low unemployment and a strong stock market. Clearly, the retail industry is not in a meltdown, but it is experiencing great change, and the industry must adapt.

Brick-and-mortar retailers, which still handle approximately 90% of all sales, are expected to announce more than 8,500 store closures this year—significantly higher than the previous record of more than 6,000 closures in 2008. Closures are due to both the rise of e-commerce and shifts in how consumers elect to spend their money. Shoppers are spending more on entertainment, restaurants, exercise and technology and less on clothing and accessories. Department stores and apparel chains, such as Macy’s, Sears, Kohl’s, Dillard’s, Chico’s, A&F and JC Penney, appear to be the most affected, even in a relatively healthy economy. Some retailers, including Payless ShoeSource, RadioShack, Wet Seal and the Limited, are in bankruptcy. There appears to be less need in the United States for sprawling malls and megastores. And yet, some retailers, such as Walmart, Home Depot, Costco and T.J. Maxx, are doing well and seem to be evolving with consumers and creating successful e-commerce platforms.

For the real estate industry, the changing retail economy will create new opportunities. Two particular trends already are affecting acquisition and development activity: “experiential retailing” at brick-and-mortar locations, and increased demand for optimal warehouses and data centers. Via jdsupra.com

Retail Bankruptcies Soared by 110% This Year

http://www.investopedia.com/news/retail-bankruptcies-soared-110-year/The fact that physical retail is hurting is old news. But the extent of its suffering became clear last week when news and research organization Reorg First Day reported that retail bankruptcies rose 110% in the first six months of this year compared with the same period a year ago. The consumer discretionary sector accounted for 24% of all bankruptcies this year, according to the ratings agency Fitch.

In its report, Reorg First Day released a chart listing major retailers that collapsed this year. True Religion, maker of jeans and shorts, started the slide at the beginning of this year by declaring liabilities of between $100 million and $600 million. Among the high-profile companies that declared bankruptcy this year was kids’ retailer Gymboree, which declared liabilities of well over $1 billion.

So what does this mean for the overall retail industry and for investors in particular? For starters, it means that online e-commerce is a trend that cannot be reversed and that Amazon.com, Inc. (AMZN) is poised to benefit from the trend. ZeroHedge, an online publication, has jokingly predicted that “every incremental retail bankruptcy should add approximately $5 billion to $10 billion to Amazon’s market capitalization.”  Via investopedia.com

Technology revolution sees retail jobs plummet

The number of full-time retail jobs fell due to mounting cost pressures and technology transforming the way consumers shop. In the second quarter of 2017, full-time employment (FTE) fell by 3.3%, with all three months reporting a decline in FTE employment.

More than half (69%) of respondents to the BRC Retail Employment Monitor reported a reduction in hours in the quarter compared to last year, while 15% said they intend to decrease employment levels in the coming three months.

BRC chief executive Helen Dickinson said: “The second quarter of 2017 saw employment in retail fall as the tide of change continues to sweep through the industry. Technology, which is both transforming the way we shop and providing increasing opportunities for automation in retail, combined with a difficult market environment and policies that have increased the cost of employing people, such as the National Living Wage and the Apprenticeship Levy, are driving the industry towards fewer but more productive jobs. Via professionaljeweller.com

Here are the retailers that make the most money per square foot on their real estate

https://www.cnbc.com/2017/07/29/here-are-the-retailers-that-make-the-most-money-per-square-foot-on-their-real-estate.htmlSales per square foot — a popular metric used when comparing the profitability of retail real estate — have tumbled in recent years as the retail industry struggles to draw in shoppers.

Those sales, as measured by CoStar, at most public retailers have declined to an average of around $325 per square foot, down from roughly $375 in the early 2000’s, the commercial real-estate research firm said in a report.

Here are the retailers that are bringing in the most dollars per square foot of real estate, according to CoStar: Lululemon ($1,560 psf), Tiffany & Co ($2,951), Murphy USA ($3,721), Generation Next Franchise Brands ($3,970) and Apple ($5,546). Via cnbc.com

Retail: Getting Better All The Time?

http://www.barrons.com/articles/retail-getting-better-all-the-time-1501607030Wells Fargo’s Ike Boruchow and his team have a new note out, arguing that the outlook for the retail industry has improved lately: Investors are finally getting back into the sector after stock valuations revisited Great Recession lows, at the same time that a number of companies have reported upbeat earnings and macro data—unemployment, consumer confidence—has been in retailers’ favor.

That said, he writes that investors aren’t embracing all retailers equally, preferring to own brands, rather than third-party sellers, like off-price and department stores. According to Burochow, that’s a clear sign that Amazon.com is still a powerful force in the sector.

As such, he sees potential upside for brands, like Michael Kors, Ralph Lauren, and and— although not Under Armour, which he sees plagued by tough end market fundamentals and growing competition. Via barrons.com

How mobile is changing back-to-school

http://www.retaildive.com/news/how-mobile-is-changing-back-to-school/448267/Gen Z students and millennial parents comprise much of the back-to-school market and having, or not having, a mobile strategy could make or break the season.

Back-to-school shopping isn’t just a trip to the local mall anymore. The methods by which parents and their kids find back-to-school deals are changing, making mobile a key component to any successful shopping event.

Aside from mobile’s obvious use as a marketing and purchase platform, shoppers’ relationship to mobile during back-to-school is shifting, down to the device’s inclusion as a must-have item. “Though consumers will continue to make purchases on their mobile device, there becomes a point where every child needs (wants) a phone. Thus, purchasing a mobile phone will also become a part of the back to school shopping experience,” Rich Kahn, CEO and co-founder of eZanga, told Retail Dive in an email.

According to the NRF’s annual back-to-school survey, 43% of consumers plan to use their smartphones during back-to-school shopping — a 10% increase from five years ago. Via retaildive.com

This Chicago-based coupon app gained 26 million users in less than four years

Retale  mobile coupon appAbout three-and-a-half years ago, a company called Retale identified an opportunity: digitizing shopping coupons in weekly newspapers. Choosing to pursue this as a mobile app, it established a U.S. headquarters in Chicago and has quietly amassed staggering 26 million monthly active users since

Retale, which is part of Berlin-based advertising group Bonial, is a location-based mobile advertising platform that allows retailers and brands to showcase local and relevant deals to consumers directly within their physical proximity.

And despite operating amidst a turbulent e-commerce landscape — as Amazon’s shadow looms over grocery stores and local merchants — it firmly believes that most people still prefer the personal experience of buying items in-store — with data and insight to corroborate. Via bizjournals.com

AI and the retail store of the future

https://venturebeat.com/2017/07/27/ai-and-the-retail-store-of-the-future/When it comes to artificial intelligence (AI), both reporters and consumers tend to focus on big, bold, and very sexy stories, like autonomous self-driving cars or machines beating human world champions at games like chess, Go, and even Jeopardy. And I’ll admit, those stories are very cool, and they certainly deserve the attention they get.

Aside from those stories, though, some of the largest, most practical advancements in AI are happening in the industrial sector, and it might come to the surprise of more than a few that the retail industry — traditionally risk-averse and more fast follower than early adopter — is leading the way.

Deep learning-powered shopping
Currently, retail sees AI solutions like Amazon’s Echo, Google’s Home, and Apple’s Siri making real differences in the online shopping experience, and the Amazon Go concept store appears destined to be a disruptive force in the brick-and-mortar realm. Seemingly every week, new applications come online, like Original Stitch’s Bodygram, which custom-tailors button-down shirts from a single photo. But there are a lot more applications on the short-term horizon, especially those that will appear “behind the scenes,” and they will have a tremendous impact in all areas of the retail enterprise. Via venturebeat.com

Starbucks to close all Teavana stores by spring 2018

All Teavana stores will closeStarbucks will shutter all 379 Teavana locations by spring 2018, the company said Thursday.

“Following a strategic review of the Teavana store business, the company concluded that despite efforts to reverse the trend through creative merchandising and new store designs, the underperformance was likely to continue,” the company said in a statement.

The coffee giant said last quarter that many of its Teavana mall stores were a drag on its results, with as many as 350 of these stores hurt by reduced foot traffic. CFO Scott Maw said back in April that the company had begun a review process to “take clear action” to improve its Teavana portfolio. Via cnbc.com

Despite earnings miss, Amazon is on ‘firm course to win’

http://www.retaildive.com/news/despite-earnings-miss-amazon-is-on-firm-course-to-win/448097/Amazon on Thursday reported second quarter earnings that, at 40 cents per share and $197 million, air-balled below analyst expectations of $1.42 per share, though its $37.96 billion in revenue beat estimates of $37.18 billion, according to CNBC, making up for that, somewhat.

Wall Street mostly shrugged off the miss, mostly because the results showed that Amazon continues to grow, even, as noted by GlobalData Retail Managing Director Neil Saunders, in a market as mature as North America, where sales grew 26.6%.

Prime Day had a big impact for Amazon, starting with boosting membership, the company said in a press release. “It was the biggest global shopping event ever for Amazon with more new Prime members joining Prime than any single day in Amazon history,” the company said. “Hundreds of thousands of small businesses and entrepreneurs participated in the global event and sold more than 40 million units.” Via retaildive.com

Amazon as frenemy: What’s on the minds of top retailers today

https://digiday.com/marketing/amazon-frenemy-whats-minds-top-retailers-today/Last week, nearly 200 executives from retail startups and long-standing brands joined us in Napa, California, for the Digiday Retail Summit to talk through their biggest challenges.

In town hall-style discussions and small-group meetings, they discussed the issues weighing on their minds: Amazon, internal roadblocks, conversion, customer acquisition and conquering “cross-channel.”

“We call Amazon a ‘frenemy’; we sell through our own site and through Amazon, and our customer prefers shopping our products through Amazon. That’s their choice, and that’s OK. For us, the challenge with Amazon is there’s no opportunity to tell our brand story.” Via digiday.com

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