Showing posts with label Sales. Show all posts
Retailers need to leverage every successful opportunity in the coming year, but do they have the visibility to identify them in a timely way?
Distributing timely and accurate information across the retail enterprise to support distinctive business successes is the envy of every retailer. Without the right systems to distribute the data and tools to bring focus to the information, opportunities quickly fade from view. Does your business get the word out and empower field managers, analysts and executives to initiate change?
IBM (NYSE: IBM) today announced that NYC-based apparel manufacturer Bernard Chaus is using SKYPAD delivered analytics through cloud computing to improve sales, analyze in-season buying trends, and track the hottest selling products by store -- down to style, size and color. SKYPAD is enabling Managers at all levels of the organization to make informed decisions based on the timely and accurate receipt of sales data, providing the flexibility to react globally and locally to instant trends.
Bernard Chaus, Inc., a midsize manufacturer and distributor of women's career and casual sportswear, was looking to streamline its sales and merchandising efforts and create a detailed, accurate view of weekly sales trends for their decision makers. With previous manual data collection processes and Excel spreadsheets, there was no guarantee that sales information was correct or all inclusive, compromising the company's ability to react to fluctuations in sales.
Working with IBM and IBM Business Partner SKY I.T. Group, the company developed an analytics-based solution called SkyPAD that provides a weekly report of key business metrics via a web-based dashboard. The dashboard enables improved decision making across product pricing, assortment design, production and distribution. Using the system, Chaus can quickly spot fast selling items, shift products between stores, adjust pricing and make in-season adjustments based on proven consumer demand. Chaus also has the capability to instantly compare profit margins across different retail outlets to identify future brand positioning strategies.
SKYPAD Enables Retailers to:
- Get comprehensive retailer reports faster
- Automate reporting into ONE easy to use platform
- Easily analyze data based on YOUR specific initiatives
- Seamlessly integrate spreadsheets, EDI and portal data into ONE view
- Increase accuracy, productivity and team focus
- Utilize images, scalability and consistency not possible with Excel
Target, Toys R Us, Sears and Kmart are just a few of the big retailers that have launched mega-sales in recent weeks to tempt increasingly cost-conscious shoppers to their stores. This phenomenon -- known as the seasonal sales shift, or "Christmas creep" -- is not new. But in today's uncertain economic climate, it has bigger implications than ever, both for the retail sector's growth strategies and for consumer spending habits, say Wharton and other business experts.
1. Why we should get retail right
Productivity in the retail sector is critical for understanding the relative success rates of national economies.
For example, India’s antiquated retail sector has yielded bizarre market distortions. “In India, the price of ready-made shirts from domestic manufacturers is about 35% higher than the price of a tailor-made shirt,” Lewis says. “The manufacturing cost of the shirt is about the same as the tailor-made price. However, the manufactured shirt has to get to the consumer. In India, that’s a huge problem because of the undeveloped retail sector.”
Lewis points out that productivity gains in retailing have dynamic effects throughout a nation’s economy. For example, when most Americans and others think of the drivers of the US economic performance, they immediately think of successful tech firms such as Microsoft and Intel, or innovative financial services players such as Goldman Sachs. However, it is efficiency gains in the retailing sector that powered much of America’s economic performance in recent years.
“Evolving to a more productive retail format mix,” Lewis says, “has large spillover effects in improving the productivity of consumer goods manufacturing and wholesaling.” The effect is enormous. Improvement in US retailing “was the single largest contribution to productivity acceleration in the US economy in the late 1990s,” he says. It trumped that of even the much-heralded Silicon Valley.
How is this possible? Lewis points out that “large-scale retailers improve their efficiency in part by buying in bulk from efficient, large-scale manufacturers. Thus, world-class British supermarkets, Carrefour and Wal-Mart have worked with suppliers in many countries to increase their scale of operations…” These efforts have “improved productivity significantly in the manufacturing sector itself”. What’s more, Lewis continues, “world-class retailers have reached a scale that allows them to bypass the wholesale sector and buy directly from manufacturers. This...has put enormous pressure on wholesaling to improve its performance.” Thus, greater efficiency in retail yields greater efficiency and productivity in sectors such as manufacturing and wholesaling. These beneficial spillover effects can be further found in transportation, agriculture, textiles and more.
2. Holiday Online Receipts Are Strong, but Reflect a Decline in Rate of Growth
The latest mixed-bag of news for retailers hails from cyberspace: holiday e-commerce sales were robust, but showed their slowest-ever growth, industry analysts projected.
The sales growth of 19 percent, while enviable for traditional retailers, was down sharply from the 25 percent to 30 percent growth rates of recent years. Retail industry analysts said the deceleration underscored a tight economy, but also reflected changing consumer and retailing habits.
And it is consistent with a broader slowdown in the growth rates for Internet retailing — making the holidays of 2007 a vivid example of the changing growth curve for online sales.
When the receipts are tallied from this holiday, American consumers will have spent around $29.5 billion at Internet shops, according to projections published by comScore, a market research firm. “The growth rates for previous years were clearly much higher,” said Andrew Lipsman, spokesman for comScore. The research firm did not have growth rates before 2003, but Mr. Lipsman suspected that they were 25 percent or more.
3. RFID poised for the big time in 2008
Next year will witness the spread of RFID applications into familiar, everyday settings, while consumer electronics, wireless technologies and security requirements will continue to benefit from the integration of RFID.
4. How Wal-Mart stole Christmas
After years of being trumped by Target on holiday sales, giant retailer is poised to come out on top. Analysts point to more effective marketing and pricing.
Weak economy spurred by Subprime crisis has a different meaning for Target and Wal-Mart. While Target is struggling with slipping sales, Wal-Mart has readjusted itself with it's even more discounted merchandise and has seen sales increase. In what is being dubbed as the "trading down within the store", customers are buying lower priced items with more discount.
Rosa Setkiewicz, 50, stopped at the Target in Jersey City, New Jersey, recently to stock up on Arm & Hammer baking soda, Clorox bleach and Downy laundry detergent — "things that are cheap," she said as she loaded the trunk of her Toyota Corolla. "I have cut back a lot on clothing and things that are not necessary."
Bill Dreher, an analyst at Deutsche Bank Securities, dubbed this phenomenon "trading down within the store."
Target executives acknowledge there is some truth to the theory. But the bigger issue, in their view, is that the number of customers walking into Target's stores has dropped. They see that as a sign not of any tactical failure on Target's part, but of rising doubts among consumers about the economy.
"I think people are being more conservative in an environment where they are uncertain," said Susan Kahn, vice president of communications at Target.
Wal-Mart also had not made things easier for Target.
Target also faces a tough adversary this year in Wal-Mart, which has staked its holiday season on heavily promoted discounts. The chain held early-morning, door-buster sales every weekend in November in an effort to steal the thunder from its rivals, which generally waited until the day after Thanksgiving to stage such sales.
Target countered with a display of merchandise priced at $1 in the lobbies of its stores, sending a strong low-price message as consumers walked in.
Nevertheless, Todd Slater, a retail analyst at Lazard, said that "Wal-Mart may be better positioned for an economic downturn than Target, because it is the price leader." He added that "Target is more the fashion leader; it's more upscale."
More:
Reports have started trickling in reporting better Black Friday sales numbers this year as compared to the same period last year. Accroding to comScore Black Friday Online sales grew by 22% to $531 Million.
comScore, Inc. , a leader in measuring the digital world, today released an update of holiday season e-commerce spending covering the first 23 days (November 1 - 23) of the November - December 2007 holiday season. More than $9.3 billion has been spent online during the season-to-date, marking a 17- percent gain versus the corresponding days last year. Online retail spending was strong on both Thanksgiving Day (up 29 percent to $272 million) and "Black Friday" (up 22 percent to $531 million), outpacing the season-to-date growth rate.
2007 Holiday Season To Date vs. Corresponding Days* in 2006
Non-Travel (Retail) Spending
Excludes Auctions and Large Corporate Purchases
Total U.S. - Home/Work/University Locations
Source: comScore, Inc.
Billions ($)
Holiday Season to Date 2006 2007 Pct Change
November 1 - 23 $7.98 $9.36 17%
Thanksgiving Day $0.21 $0.27 29%
"Black Friday" (November 23) $0.43 $0.53 22%
* Corresponding Shopping Days, Not Calendar Days
According to another report based on a survey conducted by NRF,
Retailers attracted 147 million shoppers over the three-day holiday weekend, up 4.8% from last year, according to a survey conducted by the National Retail Federation. Black Friday's results were especially impressive. About 14.3% of all Americans were out shopping before 4 a.m. on Black Friday, up from 12.4% in 2006, the federation estimates. And ShopperTrak RCT, which tracks the activity at more than 50 million retail outlets, estimates that Black Friday sales rose 8.3% from last year's level. "The Black Friday outpouring should have [retailers] breathing a sigh of relief," says Bill Martin, co-founder of ShopperTrak.
Now all eyes are on Cyber Monday.
With the advent of Multi-Channel Retailing and online sales becoming a big component of retailers revenues, Analysts are finding it difficult to gauge Retail Success or failure during Holiday period.
Current retail measurements are outdated, experts say, and investors now need to take a varied approach to making informed decisions about which retailers will see the fattest profits.
What was once a more cut-and-dried formula has in recent years become far more complicated, as consumers gravitate online and buy gift cards, and traditional shopping days lose their importance.
Same-store, or "comp," sales, which have been a heavily relied upon statistic, measure sales at stores open at least a year. But neither online sales nor the bulk of holiday gift cards shows up in same-store sales data for November and December.
While I never gave it a thought, looks like in view of multiple channels that Retailers have started using, the "Comps" as the article confirms has really become a not so useful metric. There is a scope for some study to factor in the effect of Online Sales to the entire sales of the retailers.
As Sucharita Mulpuru, multichannel retail analyst at Forrester, sees it, today's retail measuring sticks don't always consider the whole picture, "and the whole picture is a pretty complex picture.
"In general, retail metrics are pretty outdated and comp sales are one of the most outdated," Mulpuru said. "Stores are absolutely being cannibalized by the Web. It's really a naive and outdated metric that has outlived its use."
The stakes are high in accurately predicting U.S. retail health during the holidays, which can contribute as much as 40 percent of yearly profits for retailers. That is especially true this year, when fears over consumer spending are rife amid high gasoline prices, a housing slowdown and a credit crunch.
Desperate times for retailers. USA Today reports:
Whether to draw the masses or woo the upscale shopper, retailers are pulling out all the stops — and stunts — to snag customers for the post-Thanksgiving start of holiday shopping.
More competition and less distinctiveness are driving gimmicks.
"These are desperation moves," says Erik Gordon, marketing professor at Johns Hopkins University. "Everyone is your competitor these days, and no retailer can afford to lose market share."
With online sellers open 24/7, many stores will open at 5 a.m. or earlier Friday. Some even will open on Thanksgiving.
Big retailers like Wal-Mart, Best Buy and Kmart are included in this list. Wal-Mart going back to it's old self has declared that it will match rivals' advertised discounts on Black Friday.
USA Today - Stores cook up holiday gimmicks
New York Times - Back to Basics at Wal-Mart: Spare No Rivals
