No Turn On Red

Good news for the sometimes troubled retailer:

The Boscov’s department store chain will receive a $43.7 million federal loan through a Department of Housing and Urban Development program for economic development, U.S. Sens. Arlen Specter and Bob Casey announced today.

The 20-year loan is intended to assure the Exeter, Berks County-based department store chain continues to operate. The chain employs about 5,000 workers in Pennsylvania.

More on this from the Morning Call.

This is great news for the regional retailer who, I’m sure, can use the infusion of cash. It is also very good news for mall owners throughout the Mid-Atlantic who cannot afford any more vacant square footage in their anchor units.

I do have to say that I’m somewhat surprised at the fact that Boscov’s was able to secure a loan. With other industries receiving assistance from the government, I guess it was only a matter of time before retailers saw the same type of consideration. Is anyone aware of other retailers who have secure loans from the government to assist them through the turbulent retail economy?

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ComScore reports that Cyber Monday spending increased 15% over last year. While the November to December period is down 2% from last year, this weekend saw tremendous gains in online sales. Breaking down the data a bit more, ComScore today reports that there was a 22% increase in online shoppers, though a decrease in the average value per transaction. Online shopping sites saw a 33% jump in traffic, with Best Buy seeing a 131% increase in traffic. I hope they were able to reap the benefits of that. More detailed breakdowns available in today’s release from ComScore.

Best Buy recently turned to their retail stores to look for talent to build their new intranet. There seems to be a good focus on breaking down divisions between rank and accelerating communication from the bottom up. Employee feedback is being used by merchants to help make better, and most likely, more timelier decisions. I also really like the fact that they went to the store level to find the skill to build the intranet, essentially allowing the target audience to have a major say in how the site will be built.

Walmart and Coke have released a new commercial called “Joy! Enough to go around“. The commercial pushes the low prices that Walmart has on Coke products; prices so low that it allows the star of the video to throw a holiday party for everyone he knows. It’s a really well crafted video. I love the continuous, one-camera shot of this video. Now, I can’t get the jingle out of my head. Well done, I think.

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Chris Churchill, of the Times Union newspaper in Albany, NY, has a good look into the expansion plans of drug stores like Walgreens, CVS, and Rite-Aid in the New York region: Sick economy, healthy business. Despite the downturn in the economy, drug stores have not completely cut out their expansion plans and are still opening new locations at a solid rate.

And despite the recession, the proliferation continues. Other retailers, shaken by falling sales, are limiting expansions — but nearly every planning board agenda, it seems, contains a drugstore proposal.

The retail economy is ill. But drugstores seem healthy.

“We’re not immune from what’s going on in the economy, but we’re better insulated,” said Michael DeAngelis, spokesman for Rhode Island-based CVS Caremark Corp. “People are still getting their prescriptions filled. They’re still getting sick.”

I think there are a lot of people in the industry, myself included, who spend a lot of time looking at the big picture – national plans and trends of retailers – that we overlook the unique impact that every retailer has on the different locales that they serve. I like articles like this that examine the localized plans of retailers.

Also to note and put out there as a disclaimer, that Chris reached out to me for my thoughts on these retailers expansion plans. I am quoted about midway down the first page of the article. Thanks to him for allowing me to share some of my thoughts with him.

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Couple of stories that I’m reading this morning:

CNBC’s got a great run down on Amazon’s holiday strategy. The online retailer saw a 42% sales growth in Q4 2007 and forecasts 12 – 15% growth this year. Remarkable feat considering consumer spending is forecast to be down this season. The retailer looks to siphon sales from other retailers by offering low prices and “ridiculous deals”.

Shop.org has released more data on expected consumer habits through this Holiday season and especially for this weekend. Bottom line, consumers are using the web to enhance their real world shopping experience. Be prepared.

Just on the heals of reporting very soft e-commerce sales growth in October, Comscore forecasts flat growth in e-commerce sales for this holiday season. They estimate a 4% decline in sales through the first 23 days of the Nov-Dev shopping season.

Earlier today I talked about JCPenney’s use of social media, Twitter, and viral marketing. I missed this press release from the retailer detailing some of the improvements they’ve launched on jcp.com for a better online shopping experience. More product photos, customer reviews, and more online-only promotions. Kohl’s holiday strategy also emphasized a better online experience.

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comScore has released their October 2008 US retail e-commerce sales estimates. The verdict? Sales were weak – only up 1% over October 2007, which is the softest increase since comScore started tracking US retail e-commerce sales in 2001.

For households making less than $50,000, sales were down 3% for the past three months, compared to the same time period last year. Households with incomes over $100,000 saw a 14% growth in the same time period.

The economy is hitting everyone hard right now and it appears that no retailer, online or live, is immune at this point.

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Some stories that are on my radar this morning:

McDonald’s is testing no-brand marketing in Japan by opening a store without any of the colors, logos, or branding of their traditional stores. Supported through non-traditional marketing such as hand outs, viral campaigns, and a unique website, the store offers two menu choices and that is it. Intriguing concept and I wonder how long it is until we see that more often in the United States. Jon Sykes also shares his thoughts on this campaign.

Linda at Get Elastic has a very informative post about the benefits of pushing educational content, rather than sales promotions, in e-mail. In Should Retail Email Sell or Inform? An A/B Split Test Case Study, she provides a look into an study into different types of e-mails that were sent out from a retailer and provides concrete information on ROI, conversion rates, and sales results. Summary is, content is king and the e-mails that were focused on educational content and information performed better than the sales oriented e-mails. Good information for all retailers.

Over at CNBC, Cindy Perman writes about the impact the economy is having on second hand and consignment shops. Some intriguing sales numbers from Goodwill and quotes from consignment store owners that reflect the uptick in sales and traffic they are seeing this holiday season. At least someone is seeing positive gains this season.

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I’ve received an e-mail this morning from reader Eric who shares an unfortunate shopping experience with Buy.com. He ordered a hard drive which Buy.com says was delivered on October 30th. Unfortunately for him, no signature was required and the package disappeared from his front porch. This is not surprising, considering it was delivered on Mischief Night. He’s contacted Buy.com and it seems they aren’t offering much recourse to him now.

I just thought I would write since I am chock full of anger, which unfortunately is not how I should be feeling the thursday after election night.

I placed an order (#XXXXXXXXX) for an external TB firewire LaCie drive from buy.com and waited for it’s arrival. Nothing came. Several days after the date that was indicated in my shipping email I tried contacting them and after several false starts- they have a terrible support system- my order was reviewed and I was told I already had the item. That it was delivered, and that since Buy.Com does not request a signature the item was “left outside”. Now my wife works from home, so she’s always home, so I’m not sure how she didn’t hear the delivery person ring the bell. Worse yet the “delivery” date was Mischief night, October 30th, so it’s hard to believe they would leave a 300 dollar item outside without getting a signature.

Buy.com “reviewed” my claim and denied me via an automated email with no option for appeal. After writing them back I was told this,

Per company policy: “Title to goods passes to you upon delivery to the common carrier.” (http://www.buy.com/corp/legal.asp). Basically this says that once a product is in transit via the shipping carrier, the ownership and responsibility of the product has passed from Buy.com to the customer. It is the customer’s responsibility from this point forward to make sure someone is at the delivery address provided to accept the package. If no one is available at this address at the time of delivery, the carrier is authorized to leave the package at the door and the order is considered completed at that time. Basically, the security of the delivery location provided by the customer falls under the responsibility of the customer.

So apparently when you make a purchase from Buy.com you are actually not buying it yourself, but rather purchasing the item for a delivery service that may or may not send you the item. So what is to prevent the delivery agent from keeping the item, giving it to a friend, covering it with glitter and making a puppet friend?

I have tried to file a claim with paypal (what I used to pay), but I was hoping you might have some more information on what my rights are as a purchaser? Also if nothing else, please let others know this policy.

Buy.com customer service has offered no assistance or alternatives in resolving this matter. Here they basically tell the consumer that he is shit out of luck from their end. At the very least, I would think that they should offer to contact FedEx on the consumer’s behalf to assist in the investigation.

Is it the responsibility of e-commerce stores to work with the carrier to ensure packages get to the customer? At which point should a signature be required for delivery? If the retailer is going to offer no assistance in making sure packages get delivered, what other rights do consumers have in this type of situation?

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Really recommend this blog post written by Jim Barraud: Email Newsletter Makeover. He takes a real email newsletter he’s received and shows the technical issues with it that prevent most people from getting all of the content and then shows how easy it is to make it more accessible. Very good use of a real world example and some very simple tips that all retailers should be aware of, especially as the use of email newsletter blasts ramps up as we progress through the holiday season.

For full disclosure, Jim is an associate of mine at Media-Hive.

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Members of the family that founded and, for many years, ran the Boscov department store chain have revealed that they have bid to buy back the stores current under bankruptcy protection:

Albert R. Boscov and his brother-in-law Edwin A. Lakin are among the group who put in an offer for Boscov’s Inc., in a bankruptcy auction that culminates next week with the selection of a winning bidder, Boscov said in a report published today.

The pair, who helped run the company for decades, received multimillion-dollar buyout packages when they retired in January 2006 and handed the controls to Lakin’s son, chief executive officer Ken Lakin.

Boscov’s, you may remember, filed for bankruptcy protection in August and immediately closed 10 of their 49 stores. The remaining 39 stores are still operating under bankruptcy protection while bids are accepted that will determine the future of the company.

The deadline for bids was October 15 and more information may be revealed next week as to who the new owner will be. The other top bidder is Versa Capital Management.

I’d like to see someone buy Boscov’s who will continue to operate it. It’s a respectable mid-size department store chain. While my local Boscov’s has already closed, I hope the other 39 can remain open as long as financially feasible.

With the economy as it stands today, I can’t really imagine someone buying the chain with the intention to shut it down and sell off the real estate. There’s not a huge market for mall anchor real estate right now. Other department store chains, like Kohl’s and JC Penney, have already announced reductions in their short-term growth plans. Who else would be moving in to these locations?

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Handbag Planet is a new store that is launching tomorrow and they are using social media to promote their site launch. They’re giving away 24 handbags over the course of the launch day and entries to the contest are gained through posting about the site to blogs, Twitter, Facebook, and other social networks.

The contest and social media campaign must be working as word of mouth seems to be strong on various networks. A search on Twitter returns 6 pages of results while a Google blog search returns close to 3,000 mentions. I’d assume that the positive word of mouth could lead into positive first day sales. If they also offer good customer service and a strong product, they can hopefully convert some of the first day customers into repeat customers.

I’m very interested to see how this plays out, how the website looks, and how their long term prospects look. I’ll sure be looking at the site tomorrow to check it out and, of course, with this blog post I wil hpefully win my fiancee a new handbag. It’s a win-win for all of us.

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