Cashback News – Aug 8: What’s ahead for US retail? News, insight & trends.

Us retail trendsBack-to-school shopping is madly underway. Recent US government stats on retail sales in the first half of 2016 were encouraging if you’re a retailer with an omnichannel presence – that is, online and bricks-and-mortar. The news for the bricks-and-mortar retail sector is looking negative as sales dip and store closures are just one of the strategies to respond to the rapidly changing marketplace. Today, we look at what’s ahead for US retail through the busy back-to-school season and leading into the run-up to the end of year holiday sales.

The National Retail Federation sees room for optimism, projecting 2016 retail sales to end the year up 3.4%. It expects online sales to be up between 7% and 10% by year-end. Good news for omnichannel retailers. Analysts say investors should be cautious on the retail industry rebound according to a report by CNBC.

The potential Walmart purchase of has experts speculating on the pluses and minuses but most agree there is synergy and the online business would benefit from Walmart’s physical locations. Some analysts are even suggesting the combination could challenge Amazon.

Nike is exiting the golf business citing flat growth potential, Adidas is looking to sell TaylorMade and Callaway could be the beneficiary of this playoff in the golf industry. Though it reported quarterly profits of $127 million, up 13%, QVC expects “headwinds” to negatively impact Q3 results. Office Depot reported Q2 profits of $210 million compared with a $58 million loss in Q2 2015 although revenue decreased 6%. Meanwhile it plans to close 300 US stores in an effort to manage profitability.

Burger King saw sales drop 0.6% despite new product introductions – a further sign of challenges ahead for the restaurant sector. Retailers are exploring a wide range of new technologies such as beacons to rebuild in-store sales. Watch for cyborg sales and big data to also play a role in improving customer service. For retailers, these are interesting times indeed.

Retail sales forecast looking brighter such, the National Retail Federation on Tuesday raised its full-year sales forecast to 3.4 percent growth, up slightly from its previous expectation for a 3.1 percent lift. It cited improvements in the housing market, job growth and higher wages as three factors that should boost consumer sentiment through the end of the year.

A larger-than-expected lift in online sales is likewise expected to drive additional growth, with the NRF now calling for a 7 to 10 percent increase in digital revenue. That compares with its prior forecast for a 6 to 9 percent lift.

“Economic indicators are showing positive trends for retail,” NRF President and CEO Matthew Shay said in a news release. “Challenges remain, with some greater than others depending on the retail category, but consumer confidence remains high.”

Indeed, as sales at online retailers continue to thrive — revenue at non-store retailers rose 14.2 in June — the department store channel has remained challenged. Department store sales contracted 3.7 percent last month compared with the prior year. Via

Retail ETFs May Rebound, But Play the Segment Carefully

Retail-ETFs-May-ReboundRetail stocks are struggling this year and those struggles are reflected by the SPDR S&P Retail ETF (NYSEArca: XRT). XRT, the largest dedicated retail exchange traded fund, has had its share of struggles. However, some analysts think the broader retail space is poised to rebound, but investors should be wary of department store names.

Amazon (NasdaqGS: AMZN) and Dow component Wal-Mart (NYSE: WMT) have recently helped XRT’s rival, the VanEck Vectors Retail ETF (NYSEArca: RTH), perform less poorly than XRT. XRT, an equal-weight ETF, has been plagued by slumping apparel retailers, among other corners of the flailing retail industry.

There are fundamental factors that should buoy consumer discretionary and retail ETFs. For example, the U.S. has been adding about 200,000 new jobs each month for the past two years, a rapid pace not seen since the boom days of late 1990s. That thesis will be tested today with the delivery of the July jobs report.

“Retail brands could suffer if their offerings are largely contingent on department stores, the analysts said. Department stores want to have “clean” inventories, or have an appropriate amount for sales, so vendors should look to other distribution channels for stability, they said,” reports CNBC. Via’s sale to Walmart shows importance of physical retail stores e-commerce store is reported in talks to be sold to Walmart for $3 billion.

The deal shows may have struggled to reach its lofty goal of becoming a $40 billion company within 5 years. It’s also a sign that Walmart is serious about expanding its online presence. But the merger would also highlight a new trend that’s increasingly sweeping through the online commerce business: expansion to physical retail space.

“The future of retail is the integration of physical bricks and online clicks. This is true because the customer experience needs to address anywhere a customer wants to shop,” market research firm Cowen & Co.’s analyst Oliver Chen told Business Insider. Via

Walmart could overtake Amazon’s e-commerce business has long been overshadowed by Amazon’s.

On a dollar-for-dollar basis, it’s easy to understand why: Walmart’s online sales were $13.7 billion in 2015, compared to Amazon’s $107 billion.

But if Walmart buys, which it’s reportedly considering, it could become Amazon’s worst nightmare. Via

Nike’s breakup with golf equipment could mean business for this brand’s getting out of golf equipment. Adidas is trying to offload TaylorMade. That could mean big business for Callaway.

Nike’s golf business rang up $706 million last year. While that figure includes apparel and footwear sales, it presents a big opportunity for Callaway, a brand that’s rooted in the sport. Golf balls and clubs are the brand’s bread and butter, and accounted for some three-fourths of its $844 million in revenue last year.

TaylorMade is also due for a shakeup. Though there aren’t plans to shutter the brand, Adidas will not aggressively compete for market share as it tries to find a buyer, Jefferies analyst Randal Konik said. The company has already cut back on sponsorships, which is likely a way to boost its profitability ahead of a sale, Konik noted. Adidas on Thursday reported a 4 percent lift in TaylorMade sales during the first half. Via

QVC owner plummets 21% on sudden sales slowdown of Liberty Interactive Corp. QVC Group closed down more than 21 percent Friday afternoon to a fresh 52-week low after reporting earnings and a “more cautious” outlook. The earnings release noted that U.S. sales for QVC began to experience “significant headwinds” in early June and the sales declines “have averaged in the mid to high single digit percentages” as compared to prior periods.

The company also said “there is no guarantee” its efforts to reverse the negative trends will have a positive effect and that “U.S. net revenue and adjusted (operating income before depreciation and amortization) will likely experience negative growth rates for the third quarter.”

QVC includes Liberty Interactive subsidiaries QVC and Zulily, and its interest in HSN. The company said profit rose 13 percent in the second quarter to $127 million from the same period last year. Revenue increased 21 percent to $2.4 billion. Via

Office Depot closing 300 more stores as revenue slumps

Office DepotOffice Depot announced Wednesday second quarter profit of $210 million, up from a loss of $58 million in the same period a year ago.

Office Depot completed the first phase of a U.S. retail store optimization initiative launched in 2014 during the quarter, resulting in the closure of 400 stores, and is now expanding the plan, targeting approximately 300 additional stores over the next three years.

The office supply retailer reported adjusted second quarter earnings of 3 cents per share, below the FactSet consensus of 6 cents, which excluded non-recurring items like a $250 million fee collected from termination of its ill-fated merger with rival Staples. Revenue was $3.22 billion, down 6% from $3.4 billion in the same quarter last year, but ahead of the FactSet consensus of $3.20 billion.: Via

Burger King sales slowed down while Americans pack their lunch sales at the burger chain increased just 0.6% in the quarter, driven largely by weakness in the US Canada, where comparable sales fell 0.8%.

The results are particularly troubling at a time when Burger King has been introducing new menu items, including hot dogs and Mac ‘n Cheetos, said Neil Saunders, CEO of retail consulting firm Conlumino.

“The softness in the US market is disappointing given the initially positive reaction to menu changes and the introduction of hot dogs,” Saunders wrote in a note to clients. “In our view, it underlines the fact that menu change and innovation is not now something that can be done periodically: fast food players need to see this as a constant process that has to be supported by ongoing promotions and marketing activity.”

Burger King’s performance is further evidence that Americans are choosing to pack their lunches and eat dinner at home versus visiting restaurants. Via

Brick-and-mortar retail tech: Through the shopper’s lens

small-business-generic2-ss-1920In the world of brick-and-mortar retail technology, there is an ever-increasing array of innovations offering the latest bells and whistles and promising to help retailers attract and engage shoppers. Apps, beacons, smart fitting rooms, digital mall directories, in-store consumer path tracking… the list goes on.

What’s most important for mall owners and retailers isn’t the technology itself, but rather the real value the technology is delivering to consumers. Specifically, how are they using the solution to fulfill an immediate need?

Consider what the technology brings to the particular application, as well as experiential shopping differences. For instance, beacons will likely prove very helpful in driving consumer value by informing shoppers about relevant information in grocery and drug stores; however, beacons are less likely to prove effective for apparel retailers.

Why? Because the shopping experience is considerably different when buying toothpaste or juice boxes versus shopping for a dress. Shoppers who visit the market for the same types of staple products on a weekly basis are far more incentivized to download the app required for beacon engagement — as well as turn on Bluetooth to receive offers — than someone shopping for different items at different retailers each time they visit the mall. Via

The Rise of Cyborg Sellers: How Technology Enables and Empowers Salespeople matter how fast technology advances, the core strategy to successful sales never changes. Know your customers and their pain points. Be able to coherently explain your value proposition. Nurture strong relationships. These are the moves that will allow you to build a robust sales culture in your organization.

Still, technology is making a difference — a big difference: The recent proliferation of mobile broadband technology, combined with increasingly sophisticated software, is allowing salespeople to take their productivity and service skills to new heights.

Cloud adoption, for one thing, is accelerating among businesses of all sizes, as more and more CEOs recognize the potential conveniences and cost savings that come with hosting data on the cloud. And advanced technology is making it possible to track and evaluate more sophisticated sales data in real time, giving salespeople new tools to complete tasks more efficiently.

It is now clear that although good salespeople cannot rely solely on technological solutions to do their jobs, innovative tech products are changing B2B sales processes in profound ways. Here are four. Via

Retail is living in interesting times

Following the retail industry is a complex study in challenges, fast-changing marketplaces and impact of technology. For every retailer struggling, there are others succeeding in this new hyper-consumer environment. We’ll continue to track industry news and trends and keep you up-to-date. To get news highlights in your inbox M-W-F weekday mornings, just subscribe at the top of the page.