“Online sales jump on Cyber Monday, eBay shines” by Alistair Barr at Reuters.  “Online sales were up 25.6 percent as of 3:00 pm EST on Monday, compared with the same period a year ago, according to International Business Machines Corp which tracks transaction data from 500 U.S. retail websites. In 2011, Cyber Monday year-over-year growth was 15 percent by 3:00 pm, IBM said.  Strong online sales growth on Thanksgiving Day and “Black Friday” sparked concern that shoppers were just buying earlier, threatening revenue later in the season.”  https://www.reuters.com/article/2012/11/26/net-us-usa-retail-cybermonday-idUSBRE8AM0TL20121126

“Starboard Adds Nardelli and Ex-Staples Exec for Office Depot Fight” in the Wall Street Journal.  “Bob Nardelli, the former chief of companies such as Home Depot and Chrysler, and Joseph Vassalluzzo, a former vice chairman of Staples Inc., are teaming up with Starboard to provide counsel and insight into how Office Depot can improve its operations and strategy, according to the amended 13D filing.”  https://blogs.wsj.com/deals/2012/11/27/starboard-adds-nardelli-and-ex-staples-exec-for-office-depot-fight/

“Walmart’s Evolution From Big Box Giant To E-Commerce Innovator” by Farhad Manjoo in Fast Company.  “Jeremy King was ignoring the largest retailer in the world. For a month, he’d been getting calls from a Walmart recruiter. King was used to being wooed, since he was well known in Silicon Valley as an engineer who built key parts of eBay’s infrastructure. The calls kept coming. Finally, he picked up the phone and let Walmart know exactly what it would take to get him to interview. “I was like, ‘Why don’t you get the CEO on the phone–let him talk to me and then maybe I’ll come in?'” recalls King, who didn’t even know who the CEO of Walmart was. “I was being cocky. The CEO of the world’s largest retailer wasn’t going to meet with me just so I’d do an interview.  The next thing King knew, Walmart arranged for him to join a videoconference with CEO Mike Duke. “It was the strangest thing,” King says. “Mike’s office in Bentonville is the original one that Sam Walton had, complete with 1970s wood paneling. I was looking at this video, thinking, Where is this place?”  https://www.fastcompany.com/3002948/walmarts-evolution-big-box-giant-e-commerce-innovator 

“The bricks-and-mortar albatross” by James Saft in Reuters.  “But underlying the term Black Friday is a business model reality, which, once examined, poses real problems, especially given the impact of the Internet. Physical stores are not simply a combination of assets, labor and merchandise, they are systems, ones with a lot of sunk costs.  Why after all do stores even stay open during slack periods if in fact they only are truly profitable during the holiday rush and other peak periods?   They do so because there are huge upfront costs to setting up a physical retail outlet and once you’ve made those investments in people, facilities and everything else, the economics dictate that you sweat those assets, work them as hard as possible in order to gain as much revenue as you can to recoup fixed costs.”  https://www.reuters.com/article/2012/11/27/us-column-markets-saft-idUSBRE8AQ06F20121127

“So where will people shop today that isn’t Amazon?” by Shara Tibken at CNET (includes chart ranking top online retailers).  “What it has found is that Amazon, of course, dominates Internet retail. About 14 percent of all Internet users interact with Amazon’s site every day, nearly double eBay in the No. 2 position at 8.8 percent. Deepfield included Amazon’s flagship site and its other smaller Web properties, like MyHabit, in the count.  Zappos and Quidsi, also owned by Amazon, are large enough to be broken out separately. Both fall in the top five in Deepfield’s ranking.  The ranking gets more interesting further down the list with names like Shopify and Shopzilla popping up. Shopify, which ranks third with 5.4 percent share, is an e-commerce hosting site that provides a complete Web storefront offering for more.”  https://news.cnet.com/8301-1023_3-57554048-93/so-where-will-people-shop-today-that-isnt-amazon/  

“Amazon and Pinterest Add Business Pages” by Paul Chaney at Practical Ecommerce.  “Amazon has quietly launched what it refers to as Amazon Marketing Services, which is a suite of self-service tools that merchants can use to promote their products.  The suite contains three components: Amazon Pages, Amazon Posts, and Amazon Analytics.”  https://www.practicalecommerce.com/articles/3819-Amazon-and-Pinterest-Add-Business-Pages

Small Business Saturday Spending Exceeded Expectations According to Research from NFIB and American Express.   “According to the second installment of the Small Business Saturday Consumer Insights Survey, released today by the National Federation of Independent Business (NFIB) and American Express, consumer awareness of Small Business Saturday jumped to 67 percent from 34 percent just two weeks ago. Of those aware, nearly half (47%) shopped on Small Business Saturday.  The increased awareness translated into higher spending. Those U.S. consumers who were aware of Small Business Saturday spent a total of $5.5 billion with independent merchants. Pre-holiday surveys estimated that U.S. consumers would spend $5.3 billion.”  https://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsLang=en&newsId=20121126006330&div=-1245645151     

Dollar General Launches Mobile Applications with Cyber Monday Deals.  “Many of our shoppers use mobile phones for shopping and to make purchasing decisions,” said Todd Vasos, Dollar General’s executive vice president, division president and chief merchandising officer. “We’re making shopping at Dollar General simpler for our customers by making ads and information available at the touch of a button on their mobile phone.”

The new app allows customers to:

• Find stores with a store locator.
• View ads, create shopping lists and share via email or text message.
• Save money with mobile coupons.
• Use free Quick Response (QR) scanner to access upcoming sales and unlock additional savings.
• Connect with Dollar General through Facebook, YouTube and Twitter

“In Two Months, Walgreens Gets 28 Million Loyalty Members” by Patricia Odell from Penton Business Media.  “Eight of the top 10 U.S. retailers have loyalty programs, some for more than a decade like Kroger, and others with just a year under their belt like Lowe’s.  The number of U.S. loyalty program memberships has skyrocketed over the last decade from 97 million in 2000 to 2.09 billion in 2010.  Walgreens debuts Balance Rewards long after many competitors have established loyalty programs, but Holyk sees that as a benefit.  “We thought there was a great opportunity for our late mover advantage and that would really come through in how we designed the program, how we’re able to leverage technology, the data and insights, and really put together a best in class program,” he said.   https://www.equities.com/news/headline-story?dt=2012-11-26&val=755184&cat=hcare 

“Canada’s organic food certification system ‘little more than an extortion racket,’ report says” by Adrian Humphrey’s at The National Post.  “The organic certification industry’s “dirty little secret,” they write, is that “organic crops and livestock are not tested in Canada before they are certified, thus making organic certification essentially meaningless.  The organics industry rejects that notion and defends the integrity of its members and the system.”  https://news.nationalpost.com/2012/11/24/canadas-organic-food-certification-system-little-more-than-an-extortion-racket-report-says/

Happy Black Friday!!

“To Lure Shoppers, Wal-Mart Tries Same-Day Delivery” by Jeff Brady at NPR News (audio and text).  Walmart testing same day delivery in Northern Virginia, Philly, Minneapolis, San Jose and San Francisco during holidays.  https://www.wbur.org/npr/165592058/to-lure-shoppers-wal-mart-tries-same-day-delivery

“Canadian retailers cast ‘Black Friday’ net to keep shoppers at home — and spending” by Vito Pilieci in the Edmonton Journal.  “According to the Retail Council of Canada, 2012 is marking a bit of a watershed moment for Canadian retailers, who have for years watched as busloads of Canadians headed south to the United States to take advantage of post-Thanksgiving sale prices.  This year, the Canadian retailers have simply had enough.”  https://www.edmontonjournal.com/business/Canadian+retailers+cast+Black+Friday+keep+shoppers+home/7590854/story.html 

“Here’s A Holiday-Shopping Chart That Should Terrify Google Investors” by Owen Thomas at Business Insider.  “So far this month, Amazon and eBay’s sales are way up over last year—41.5% and 24.5% respectively. Sales through search and comparison shopping engines are flat or down.  At the same time, sales are strongly shifting off of PCs—an environment where shopping typically starts by typing what you’re looking for into a search engine—and onto tablets and smartphones, where it’s much more common to shop with an app.”  https://www.businessinsider.com/amazon-ebay-google-mobile-shopping-2012-11

60 Percent of U.S. Adults Plan to Shop and Buy Gifts Thanksgiving Weekend, According to CEA Survey.  “CEA’s Pre-Black Friday Survey found that 60 percent of U.S. adults plan to shop Thursday, Thanksgiving Day, through Cyber Monday, with Black Friday expected to be the busiest shopping day of the weekend. Overall, 37 percent of U.S. adults plan to shop this Friday, with one-third (33 percent) going to a retail store and 20 percent shopping online. Saturday and Cyber Monday will be the next most popular shopping days of the weekend, with more than a third (34 percent) of adults planning to shop on Saturday and a quarter (25 percent) will go in-store or online on Monday.”  https://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsLang=en&newsId=20121120006482&div=-1245645151

“The Secret Place Where Apple Hides Your Shopping Bags” by Buster Heine at Cult of Mac (includes picture).  “When you walk into an Apple Store the only thing Apple wants you to think about are Macs, iPhones, iPads and iPods…Next time you’re in a store, take a gander under the tables to see what kind of stuff Apple is hiding.”https://www.cultofmac.com/202132/the-secret-place-where-apple-hides-your-shopping-bags-image/#B0tGlkl41iXdGDTm.99

“Tablets, discounters top U.S. holiday shopping lists” by Jessica Wohl at Reuters.  “Amazon is the top online retailer shoppers plan to visit more than they did last year, with 42 percent picking it, 38 percent choosing Walmart, 23 percent selecting Target and 14 percent picking EBay.  Physical stores remain the top destination, with 26 percent planning to shop primarily at stores and only 14 percent planning to shop primarily online.”  https://www.reuters.com/article/2012/11/20/us-usa-retail-holiday-poll-idUSBRE8AJ1BF20121120 

Wal-Mart exec: ‘Great shopping experience’ despite strike’ at NBC News (with video).  “Wal-Mart’s chief marketing officer Duncan Mac Naughton tells TODAY’s Savannah Guthrie that the retail company is “confident” that customers will not be affected by employees strikes.”  https://video.today.msnbc.msn.com/today/49914793/#49914793

“Target Corp. goes on 50 years of Black Friday’s” by Annie Baxter on Minnesota Public Radio (audio and text).  “They didn’t call it Black Friday at the time, but 50 years ago Target held its first-ever day-after-Thanksgiving sale.  The discount retailer had just begun to operate in May 1962.  By coincidence, Wal-Mart and Kmart also opened their doors that year.”  https://minnesota.publicradio.org/display/web/2012/11/21/business/target-corp-50-years/

“Get Instragram prints from…Walgreens” by Suzanne Choney at NBC News.  “Now, a new app, Printicular, lets you order up Instagram 4×4 prints from Walgreens, and pick them up in an hour. It makes sense for Walgreens: Instagram now has more than 100 million users.”  https://www.nbcnews.com/technology/gadgetbox/get-instagram-prints-walgreens-1C7181506

Kodak Extends Retail Printing Relationship with CVS/pharmacy.  “Eastman Kodak Company today announced that it will extend its relationship with CVS/pharmacy through 2016. CVS/pharmacy operates 7,400 stores across the U.S. and is the largest customer of Kodak’s Retail Systems Solutions (RSS) business.”  https://www.businesswire.com/news/home/20121116006088/en/Kodak-Extends-Retail-Printing-Relationship-CVSpharmacy

Yesterday’s Lowe’s Q3 Earnings Call Highlights 

Heard on the Call…

Strategy

In the US, Lowe’s is focused on two large bodies of work this year — value improvement and product differentiation.

Through these efforts, Lowe’s expects to deliver comp transaction growth and better gross margin by localizing assortment (i.e. store clustering), driving excitement in stores through better display techniques, and managing an appropriate balance of product costs and retail pricing.  Lowe’s expects to have this work done by mid-2013.

Accelerated line reviews and resets

Expect to finish line reviews in 90% of categories by end of this fiscal year.

Expect to reset 40-50% of  business by the end of this fiscal year.

Resets are “peaking now” in early fourth quarter

Categories that have gone through reset have stabilized.

About 3-4 dozen categories have reached “normalization” stage now

Less than 20% of categories have “normalized” at this point

Seeking to improve product line designs…to make them more relevant to the markets they serve…reducing duplication among price points.

Tile category held up as an example of the accelerated line review process working well.  Lowe’s started with consumer insights..used analysis to group stores into four clusters…sent firm expectations to vendor partners to bring innovation to line review..result was dropping duplicated skus while adding new wood looks…still reducing inventory by 20%…while investing in more inventory of popular and new styles and sizes.

Paint cited as a category that benefited from reset.  They developed four new color collections one for each season…introduced premixed paint samples…and simplified offering of paint applicators.

Redirecting inventory dollar savings and vendor promotional dollars to higher velocity skus, job lot quantities, etc.

Endcaps

Product differentiation – Lowe’s is in the process of updating endcaps and is working to have better adjacencies with inline inventory.  A cross-functional team is spearheading the process.

Endcaps — What’s working:  Innovation endcaps, videos.

Endcaps — What isn’t working:  “Theme” endcaps with multiple products…Takeaway “keep it simple”.  Adjacencies to inline inventory is a weak spot but they’re working to remedy.

Q3 Comps

Categories that comped above company average:  lumber, tools, lawn and garden, cabinets, paint, storage, cleaning, appliances and hardware.

12 of 14 product categories positive comped in Q3.

Nearly 2/3 of product categories comped above co. average in Q3.

Strength in commercial business..which is 25% of sales.

Lawn and garden cited as a Q3 success story where they were prepared with ample inventory and drove improved attachment rates in live goods, fertilizers, solid rocks and mulch.

Consumer sentiment

Housing market is “on the mend”…but overall consumers remain cautiously optimistic.

Consumer sentiment study conducted by Lowe’s found that  spending is staying the same or declining and the majority of those who delay a project site a lack of income growth as the primary reason.

Consumer sentiment study also found that the overwhelming number of projects planned for the next three months are for tickets under $500.

Sandy

Lowe’s details storm stages as 1) Prep, 2) Impact, 3) Cleanup and 4) Recovery.  Regarding Sandy, they say they’ve already been through the Prep and Impact stages and some of Cleanup.  Cleanup will continue into Q4 and Recovery will extend into 2013.

Canada — Rona

“We like Canada from a market standpoint…pleased with performance of our 32 stores..continue to make improvement…but we need more scale..will come from opening additional stores…ecommerce site in Canada now open..ships to home or store…will also continue to look at acquisitions.”

Click here for webcast:  https://phx.corporate-ir.net/phoenix.zhtml?c=95223&p=irol-EventDetails&EventId=4869856

 

“Lowe’s efforts to cut costs, spur sales paying off” by Phil Wohba at Reuters.  “Credit Suisse analyst Gary Balter, in a research note, called the results “a promising inflection” that signed Lowe’s efforts are “beginning to take hold.  On a call with analysts, Chief Executive Robert Niblock said the company’s current transformation phase would end in mid-2013.”  https://www.reuters.com/article/2012/11/19/us-lowes-results-idUSBRE8AI0QK20121119

“Jeff Bezos: We would love to open Amazon retail stores” by Dan Farber at CNET (Video with text).  Bezos — “We would love to but only if we can have a truly differentiated idea. We don’t do a me-too product offering very well. When I look at physical retail stores, it’s very well served. The people who operate physical retail stores are very good at it. The question we would always have before we would embark on such an thing is what’s the idea, what would we do that would be different, how would it be better… we don’t want to be redundant.”  https://news.cnet.com/8301-1023_3-57551081-93/jeff-bezos-we-would-love-to-open-amazon-retail-stores/

“Amazon goes Hollywood” by JP Mangalinden in CNN Money/Fortune.  “Can Amazon do to Hollywood what it has done to the publishing and retailing industries? Two years ago Jeff Bezos & Co. launched Amazon Studios, which aims to compete with traditional production companies by developing feature-length films and television series — with a distinctly Amazonian twist: Scripts and pitches are uploaded online, and may be evaluated and commented on by the public.”    https://management.fortune.cnn.com/2012/11/16/bezos-amazon-studios/

CareerBliss Announces the Top 10 Happiest Stores for Your Shopping Pleasure. “CareerBliss analyzed more than ten thousand independent company reviews, evaluating which retail employees were happiest. Nordstrom—known for its customer service oriented culture—tops the list in providing a happy work environment for its employees. Following Nordstrom is Macy’s, OfficeMax, Best Buy and GameStop to round out the happiest retailers in America.”  https://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsLang=en&newsId=20121119006880&div=-1245645151

“Wal-Mart fights back as Black Friday strike nears” by Jessica Wohl in The Christian Science Monitor.  “Wal-Mart Stores Inc. is taking legal measures to sop months of protests at stores nationwide, filing charges against the union it says is behind such actions. The move comes as a group of Wal-Mart workers prepare to strike on Black Friday, the busiest shopping day of the year.”  https://www.csmonitor.com/Business/Latest-News-Wires/2012/1119/Wal-Mart-fights-back-as-Black-Friday-strike-nears  

“Pinterest Releases Business Accounts” by Armando Roggio in Practical Ecommerce.  “Thousands of businesses have become part of our community, giving great ideas, content and inspiration to people on Pinterest. Whether it’s Anthropologie sharing awesome clothes, Whole Foods sharing tasty recipes, the Smithsonian sharing fascinating collections, or Amazon making products easy to pin, many of us have been inspired on Pinterest by businesses. We want to help more businesses provide great content on Pinterest and make it easy to pin from their websites. Today, we’re taking a first step toward that goal with some free tools and resources,” wrote Pinterest Product Manager, Cat Lee on the company’s blog.”  https://www.practicalecommerce.com/articles/3812-Pinterest-Releases-Business-Accounts

“Staples CEO Sargent quits Home Depot board” by  Jacques Couret in the Atlanta Business Chronicle.  “The Atlanta-based home improvement giant reported in a U.S. Securities and Exchange filing..Staples Inc. Chairman and CEO Ronald L. Sargent resigned immediately from the Home Depot (NYSE: HD) board of directors.” https://www.bizjournals.com/atlanta/news/2012/11/16/staples-ceo-sargent-quits-home-depot.html

“Sears Canada launches new ad campaign for holiday season” (Video with text) by Hollie Shaw at Financial Post.  “The company is trying to focus promoting its core merchandise categories including major appliances and furniture before Target Canada opens in Spring 2013. This week Sears Canada reported a net loss in the third quarter and a 7% drop in revenue.”  https://business.financialpost.com/2012/11/15/sears-canada-launches-new-ad-campaign-for-holiday-season/

 

Highlights from Target Q3 Earnings Call on 11/15/12

Q3 US sales increased 3.4% to 16.6 billion in third quarter 2012 from 16.1 billion last year

Q3 US comp +2.9%

Heard on the call…

Online:

Free wi-fi now rolled out across the chain.

Target sees a halo effect from stores to their online site.

Not currently offering “buy online ship to store” but it’s something they’re looking at.

In store, Target has created QR codes for each of their top 20 toys, allowing guests to purchase by scanning the QR code in store and then having the toy shipped anywhere in US for free.

City Target stores:

There are now five City Target stores operating in four different metro areas:  Chicago, LA, San Francisco and Seattle with plans to open three more in 2013.

Typical guest is younger and more affluent than seen across the chain as a whole.

See pics of Seattle City Target here (from Seattle PI):  https://blog.seattlepi.com/thebigblog/2012/07/23/photos-tour-seattles-new-city-target/#6468-28)

Canada:  

Moving forward to open first stores by next April.

5% Reward “Red Card”:  (Note — Target is in love with their Red Card and talked about it at length on the call)

14% penetration on purchases in Q3, up 400 basis points from a year ago.

In Kansas City, where the Red Card was launched a year earlier, penetration reached 20% this month.

Big driver is the debit card which continues to grow at a 3:1 clip vs the credit card. As expected, Red Card use is higher online and in certain categories (assumption being higher dollar ticket items).

Comps:

Comps strongest in food, health and beauty.

Comps in apparel were up slightly, strongest in mens and active wear.

Hardline comps down overall; softest in electronics which reflects mature product cycles.

Pricing:

Target didn’t seem to think that competitors layaway programs were having much of an impact on sales.

Regarding price match policy over holidays, Target doesn’t see much price matching in stores now and doesn’t anticipate much over holidays either.  Will assess program after holidays to see if they should consider in 2013.

https://investors.target.com/phoenix.zhtml?c=65828&p=irol-newsArticle&ID=1759107&highlight= 

Highlights from Dollar Tree Q3 Earnings Release on 11/15/12

Q3 net sales +7.8% (1.72 billion)

Q3 comp sales +1.6

Q3 opened 111 stores, expanded or relocated 16, closed 4.

Q3 retail selling square footage +7.1% compared to a year ago to 40.1 million square feet.

See full release here:  https://www.dollartreeinfo.com/investors/global/releasedetail.cfm?ReleaseID=721513

“How Apple, Target and Starbucks are skirting Seattle’s billboard laws” (Video) by Amy Rolph at Seattle PI / KOMO News in Seattle.  “This is a fascinating report from seattlepi.com’s news partner KOMO News. City law dictates that billboards on buildings can only advertise merchandise actually sold inside — but many companies have found a creative way of getting around that rule.”  https://blog.seattlepi.com/thebigblog/2012/11/14/how-apple-target-and-starbucks-are-skirting-seattles-billboard-laws/  

“Costco (Home Depot & Others) Offers Shoppers Mortgage Refinancing Loans” (Video) on Fox Business News.  “George Mason University professor Anthony Sanders says increasing regulation on banks has opened the door for non-traditional lenders…Home Depot offering home repair loans.”  https://video.foxbusiness.com/v/1971748544001/

“Denver is First to Experience the New Office Depot – a New Store Concept Designed by Customers, for Customers.”  “Office Depot has built an entirely new store experience for its customers, and is debuting it in four new stores in Denver. The new concept store was created to encourage customers to interact more with products, with Office Depot associates, and with each other – all in a brand new store designed around the way customers want to shop. the new Office Depot Denver stores feature a PC Bar where people can sit down, plug in their laptop or tablet and get to work. There is also a computer rental station, free Wi-Fi throughout the store, a recharge station and free, self-serve coffee.”  https://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsLang=en&newsId=20121115005067&div=-1245645151

“Wal-Mart sales under global pressure, shares down” by Brad Dorfman at Reuters. “”When you see a slowdown in sales and then pressure in traffic, that causes investors to be cautious,” Brian Yarbrough, analyst at Edward Jones.  https://www.reuters.com/article/2012/11/15/us-walmart-results-idUSBRE8AE0V420121115

“Wal-Mart Expands Foreign Bribery Investigation” Stephanie Clifford in The New York Times / CNBC:  “Walmart disclosed on Thursday that it has expanded an internal investigation into bribery accusations in Mexico to Brazil, China and India.”  https://www.cnbc.com/id/49842387

“Ahold Expects Markets Conditions to Remain Difficult” by Robert van den Oever in Capital.gr.  “Dutch retailer Royal Ahold NV said Thursday it sees no relief from an intensely competitive U.S. market, as it continues to sacrifice margin in an attempt to attract cost-conscious consumers.”  https://english.capital.gr/News.asp?id=1666691

People Section:  Congrats to Marvin Ellison, Exec. VP at Home Depot, on being named an Outstanding Alumnus at The Fogelman College of Business & Economics.  https://www.hispanicbusiness.com/2012/11/14/u_of_m_business_college_honors.htm