Who Is Top In Customer Service?

The fifth annual NRF Foundation/American Express Customers’s Choice survey is out and L.L. Bean has been ranked number one for customer service for the third year in a row. Read more

New Markets in 2010

Consumer spending is stabilizing. This means it is time for retailers and priviate-equity firms to look for ways to grow their companies. Instead of opening new locations in exisiting markets the trend that’s appearing is adding brands and expanding into new markets.

“Everyone is looking for some type of brand,” said Philip Green, owner of Arcadia Group. “Running a one- brand business is not the place to be.”

Although many companies are looking to expand they are doing so more cautiously and looking ar potiential targets more carefully. Read more

A Sign of Some Recovery?

With the unemployment rate at around 10% it is hard to believe that work is out there. However the

Labor Department is reporting that the retail sector by 321,700 jobs in November despite the weakest sales in 35 years according to some reports. That is a 37% increase over last year.

“Holiday hiring is definitely stronger than a year ago, but it remains clear that retailers are still reluctant to hire,” said John A. Challenger, CEO of Challenger, Gray & Christmas. “Even if we see total holiday retail gains of 400,000 to 450,000 this year, it would be well short of the 714,000 seasonal jobs added on average between 1999 and 2007. Even in 2001, in the wake of the September 11th terrorist attacks, the retail sector added more than 585,000 extra workers in the final three months of the year.”

Still any improvement in hiring is better that nothing.

Stronger Spending in 2010

The news is looking good going into 2010. Retail Forward is reporting the same-store sales for December (excluding Wal-Mart) increased 3.0%. This number comes from a sales-weighted composite of 32 retailers. Department stores stores sales did lag, but they did have higher sales over last year while apparel and accessory stores did better than average.

Who is the big winner in all of this? Well, Amazon.com. They did cut into some of the sales from stores. Numbers show that more than half of all households shopped at Amazon.com during the holidays.

“The trend through the holidays is now pretty clear that shoppers are moving toward stronger spending into 2010. But it’s also clear that some cautiousness will persist and that s pending will remain uneven across categories and retailers,” said senior economist at Retail Forward, Frank Badillo

Maybe it’s time for more retailers to pull out their business models and take a cue from Amazon.com’s playbook.

Holiday Commercials And Flickering Lights

Do TV ads work? Sure they do, but how much? According to the Retail Advertising and Marketing Association Broadband TV makes up 23% of the media influencers and Cable TV accounts for 12% (Coupons being the number one influencer at 45%). It has been a long time since a commercial made me want to shop and since I have become an expert at tuning them out; very few actually get through.

Recently I saw a ranking from the Retail Advertising and Marketing Association that rated the top ten holiday commercials  and I though about my favorites. I loved the Gap commercials with the overly cheery group draped in flannel. It reminds me more of an ad for America’s Best Dance Crew than Gap, but their moves get me each time. However my favorite commercial is the flickering lights at Wal-Mart one. Where the cashiers are switching on and off the lights at the registers to Christmas carols. Would I shop Wal-Mart, sure, but I would be more inclined to go into their store and brave the holiday crowd if they actually did the light thing.

On the other hand Old Navy commercials are a huge miss for me. They are corny and those mannequins freak me out. I am drawn to their feature item of the week, but am scared away from the stores when I see those weird mannequins. Can we get them already?

Target was another huge disappointment and many consumers seem to agree with me. Complaints surfaced on Facebook by scorned people complaining about the casting doubt Santa’s existence and talking about finances. Where is the Christmas spirit, Target? Give me some flickering lights!

So, how does my preferences fair against the survey?

Top Ten Holiday Commercials According to Retail Advertising and Marketing Association:

RETAILER:
Walmart
Target
Best Buy
Gap
Macy’s
Old Navy
Kmart
Sears
Hallmark
Kohl’s

Even with great ads consumers aren’t influenced by their favorite commercials as many retailers might hope. 17% of consumers surveyed said that their favorite ad influenced them to shop at that particular retailer.

What influences you to shop?

Social Media Influencing The Numbers.

According to comScore there is a 3% increase over last year form the first 36 days of the November-December Holiday shopping season. The numbers are up across the board shopping a 10% in Thanksgiving Day sales, Black Friday sales were up 11%, and Cyber Monday up 5%.

What attributed to these numbers? Prior to Black Friday we saw a rise in retailers pushing their ads on Social Networking sites such as Facebook and Twitter. Through a survey conducted by comScore 28% of the shoppers purchases were influenced by these sites. From this expert and consumer customer reviews of a product seemed to influence the most people. Others were drawn to become a fan on Facebook and follow store discounts, watching a video, or following on Twitter.

“Social media really appears to be emerging as an important marketing channel this holiday season,” says Gian Fulgoni,  comScore chairman. “On the one hand, its emergence is being driven by increased consumer adoption of these technologies and the exponential growth in digital word-of-mouth that is occurring over this medium. On the other hand, having a social media marketing strategy makes sense for retailers in this environment because it’s cost-effective and shows an effort to get closer to one’s customers. I think we are getting our first real glimpse at the impact social media will play on commerce as we enter the next decade.”

December Outlook

The Consumer Reports Index says that the outlook for December will be strong. Overall the planned spending is looked to increase 36% from last month with the major seller being personal electronics, major electronics, and small appliances.

“Despite the fact that the average consumer has not experienced much improvement in their financial lives in the past six months, they appear to be buying more for the holidays,” said Ed Farrell, a director of the Consumer Reports National Research Center. The Consumer Reports Employment Index is at 48.9 (49.0 in November). A indicator that the job market really hasn’t changed.

So, what kind of ramifications will this have on the market in the coming months? Farrell went on to explain that the growth in sales for retail will be seen this month, but to recover consumers will cut back in their spending post-holiday.

December Sales Week 2

Breaking down some of the numbers coming out of the weekend ICSC-Goldman Sachs found that the chain store index is up 0.4% for the week ending on December 12 from the prior week. It is also up 2.4% from last year. However consumers seem to still haven’t finished their shopping with only about 56.9% done. This remains lower than last year.

Over the last week some chain retailers offered big sales offering anywhere from 50%-75%, while others seemed to hold back a bit on the big price cuts. This week will see a huge boost in sales being the last weekend to shop before Christmas. How low will retailers actually go to get the crowds into their stores?

November Sales

Retail sales for November have been tallied and it’s not looking good. Twenty-three major retailers have seen declines from the same time last year.

Here are the highlights:

Those that should be happy:

2009              2008

Aeropostale           -17.0%           -28.0%

JC Penney              -5.9%             -11.9%

Macy’s                     -6.1%            -13.3%

Neiman Marcus    -5.5%           -12.0%

Target                      -1.5%            -10.4%

Those that wondering why everyone is complaining about sales:

2009              2008

Buckle             +1.4%           +14.5%

Kohl’s             +3.3%            -17.5%

Nordstorm     +2.2%            -15.7%

Ross                +9.0%            -2.0%

Those that need to break out a bottle of whiskey and rethink their 2010 strategy:

2009              2008

Children’s Place               -13.0%            -7.0%

Costco                                   -5.0%           +0.0%

Destination Maternity    -11.6%           +0.6%

Gap                                        -4.0              -10.0%

Saks                                       -26.2%           -5.2%

Stage Stores                         -12.5%           -4.8%

Cyber Monday

October saw a 1.4% increase in sales from the previous year (healthy sales are an indicator of a healthy/recovering economy) leaving hope for a promising November. After all it is when retailers start bringing in the money. But when the numbers were said and done November sales were only up 0.7% from last year and according to analysts even giant discount stores didn’t provide the expected numbers. Even with the bad news of less than impressive Black Friday sales there is a bright spot on the horizon.comScore who track online trends, there was a 5% increase in spending on Cyber Monday.

Here’s the break down:

The average spent per person online per person rose from $130.24 in 2008 to $180.03 in 2009.

There was an increase of new online consumers for department stores 33% on Cyber Monday and 150% on Black Friday.

13.7% rise over sales the same time last year.

What could attribute to this? Well, retailers have become smarter at marketing; utilizing social networking sites like Twitter, Facebook, and blogs.

Another reason could be inventory levels. Stores were left with to much inventory last year resulting in drastic price cuts. This some stores have cut inventory levels by 20% or more. This translates to less items in the store with fewer colors, sizes, and styles driving people online to not only get what they need and often finding a greater array of product than can be found in the stores.

However I would also look at another factor: connivence. Consumers are still unsure about the condition of the economy and are holding on to their money. Websites offer something that is much harder to do in stores, especially on Black Friday, comparison shop. Within seconds  anyone can compare the a shirt at Macy’s with the same one at JCPenn, Teyarget, and Kohl’s. Throw on top of that the online price wars and it isn’t surprising why people are turning to the internet for shopping.

Weigh in on this. Do you think that online sales vs store sales will be an indicator of the economy’s health in years to come?