No Turn On Red

Retail sales in July continued to be a mixture of disappointment and mediocrity.

Retailers catering to teens saw a mixed bag of results as teens decided to spend more money at Aeropostale (same store sales up 6%) and Buckle (same store sales up 2.8%), but both retailers missed analysts projections. American Eagle saw an 11% drop in same store sales, on top of the 7% drop they saw this time last year. Abercrombie & Fitch continued their terminal velocity fall with a 28% drop in same store sales. No good.

Macy’s saw a 10.7% drop in same store sales, JCPenney reported a 12.3% drop in same store sales, while Kohl’s managed to eek out a nearly flat month (0.4% increase in same store sales). I guess shoppers are really going nuts over that new line by Avirl Lavigne.

Besides the general state of the economy and unemployment through the course of the year, some analysts suggest that the, recently enacted and more recently refueled, Cash for Clunkers program is diverting money from the retail industry:

“One of the unintended negative side effects of the cash for clunkers program was that it’s going to remove money that probably would have been spent in retail stores and restaurants and is now going to go toward a car payment,” said Purdue Consumer Sciences Professor Dr. Richard Feinberg.

And not just “spare change.”

Feinberg estimates the nation’s retailers could lose up to $300 million a month as consumers spend their disposable income on loans instead of lunch. By the end of what’s expected to be another tough holiday shopping season, losses could add up to between $1.5 billion and $2.5 billion, Feinberg says.

More information on retail sales from the New York Times and Los Angeles Times.

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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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Over at ecommr, we’ve been adding e-commerce elements related to Black Friday. Head to ecommr to see a roundup of the different banners, homepage landing, and e-mails that retailers are using to promote their Black Friday specials. More will be added as we come across them.

As a related note, it appears (to me) that retailers are being more aggressive in their marketing for Black Friday, with earlier campaigns and with more detail. Normally, promoting specific price points for comes right before Thanksgiving. But this week has been filled with “online previews”, television commercials, and e-mail marketing that seems to be more aggressive and detailed than years past. Retailers are trying to step up their game in order to capture a larger piece of the shrinking sales pie.

Walmart and Target both have their Black Friday ads online and featured prominently on their homepages. Kohl’s even has an entire section on their site that allows customers to browse the Black Friday ad and make a printable shopping list.

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Last week, Kohl’s discussed some of their holiday marketing strategies with the press. They plan on increasing their spending to capture a larger share of the dwindling holiday sales figures, with increased emphasis on direct mail, e-mail campaigns, and online-only sale prices.

Going into the holiday season, the retailer, which has seen Web sales increase by more than 50% so far this year, is making a big push online as well. It plans to send email blasts out to 15 million shoppers — more than double the number that it had on its electronic mailing list last year — and it’s offering one or two specially discounted items on Kohls.com every day through Christmas.

Their website has started advertising these online-only specials on their homepage, with a callout that went live this week (apparently):

This is a very interesting shift in marketing for the retailer that has, until now, always offered consistent pricing in-store and online. Their marketing campaigns even advertised this fact and, for years, coupons that were sent out to customers, in direct mail, were also good online.

Kohl’s needs to be aggressive in order to increase their market share this holiday season. This is a perfect opportunity for the retailer to utilize a service, like Twitter, to advertise these special, limited-time promotions. It is obvious that they want to aggressively promote these deals as they they are utilizing prime screen real estate to push the deal. It even appears that they already have a Twitter account, although with zero posts. They should be using this to promote the daily deals and reach more people, one-on-one.

The usage of the service would be simply – they’d just need to follow the example that other retailers have set to announce daily deals. I look at the Amazon MP3 Deal of the Day and Woot.com as two examples of retailers using the service to effectively promote daily deals.

Maybe the first step, for a retailer like Kohl’s, is the use the service to promote daily deals and then they can evolve into using the service to engage customers in conversation. I think there is always more room for retailers to use Twitter to reach their customers.

What do you think?

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The stimulus checks have been (presumably) spent, back to school shopping is underway, and the retail sales numbers for July are in and they are, well, pretty ugly. A lot of retailers posting negative same-store-sales numbers for the month, many of them posting numbers that fell below Wall Street’s expectations. Wall Street is responding – as of 12:30, the S&P Retail Index is down around $7.

The negative results are hitting all segments of retailers – from department stores to the mall, teen retailers to mass market merchandisers. Wal-Mart posted a positive sales increase of 3.0%, but that is less than the 3.5% increase that Wall Street was looking for. Target saw same store sales drop 1.2% in the month of July and warn that August isn’t going to be much better. JCPeneny’s sales dropped 6.5% but raised their Q2 guidance “due to better than expected sell-through of promotionally priced merchandise and continued expense management measures.” Kohl’s saw a steep 10.4 drop in same store sales in the month.

Gap saw negative numbers across all brands – Old Navy down 16%, Banana Republic down 8%, and Gap North America down 6%. When are they going to spin off the Old Navy brand, sell it, and let someone else deal with the turnaround?

Teen retailers aren’t seeing the Back to School numbers they hoped for with American Eagle down 7%, PacSun was down 4%, Abercrombie & Fitch (as a company) was down 7% (with only A&F proper posting flat numbers, up 1% for the month. Hollister was down 11% – blowing away the 4.1% decrease expected by analysts), but Aeropostale saw sales jump 13%.

More coverage from CNN/Money, Forbes, and Marketwatch.

Reminder, all of July’s numbers are available to analyze over at our partner site, Retail Numbers.

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A few of the stories I’m reading and wanted to share today:

John Zogby’s got a very insightful look into the political trends of retail consumers and dives behind the numbers to make sense of it all. He looks at presidential election polling numbers, the retailers the customers shop at, and how this relates to the retailers’ branding.

J.Crew’s website has had their share of mistakes and downtime lately. Church of the Customer is talking about the apology e-mail that the retailer sent out to their customers and what this means for the company.

Matt at A New Marketing presents a clean, easily digestable definition of what social media is.

.. and finally – Starbucks is offering a $2 discount on iced beverages in the afternoon when you buy a drink in the morning. I think this is a smart move that should drive repeat business throughout the day. Besides that, I’m selfish and now look forward to saving a little bit of money on my second trip to Starbucks every day.

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Today, JCPenney has announced the launch of a new activewear line called Xersion. The line, developed, sourced, and designed by the retailer, fits in the “better” pricepoint of Womens activewear. This is one of the six brands JCPenney is launching with this back to school season.

More details are available in their own press release.

Timing of this launch is interesting as Kohl’s readies to launch their exclusive licensing agreement for activewear with Fila. Makes sense that JCPenney would want to ramp up their private label activewear offerings.

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It’s official:

Boscov’s Inc., the 9,500-employee department-store chain founded in 1911 in Reading, Pennsylvania, filed for Chapter 11 bankruptcy protection in Wilmington, Delaware, today, citing decreased consumer spending.

Boscov’s, which said in court papers that it’s the biggest family-owned full-service department store chain in the U.S., will immediately close 10 of its 49 stores. The company said it will borrow as much as $250 million from a group of lenders led by Bank of America Corp. to help it restructure.

The Associated Press has the full list of stores that are closing:

MARYLAND
Marley Station Mall, Glen Burnie
Owings Mills Mall, Owings Mills
White Marsh Mall, Baltimore

NEW JERSEY
Monmouth Mall, Eatontown

PENNSYLVANIA
Harrisburg East Mall, Harrisburg
Monroeville Mall, Monroeville
Montgomery Mall, North Wales
Oxford Valley Mall, Langhorne
South Hills Village Mall, Bethel Park

VIRGINIA
Piedmont Mall, Danville

More coverage from the Associated Press, Wall Street Journal, and Reuters.

This is a blow to the retailer that touts itself as American’s largest family owned department store. In an age of consolidation and rapid, national, retail expansion, Boscov’s was one of the last regional department store chains that we had here in the Mid-Atlantic.

I wonder how many of these locations are being scouted by JC Penney and Kohl’s.

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As always, I’m looking at a ton of e-commerce sites lately. Decided to run through some of the landing pages that I am seeing around the web right now to show off the variety of promotions and marketing going on. Though it’s not as denim-centric as it was two years ago, it’s obvious denim is still the #1 push in the back to school season.

Continue reading this entry

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The Channel Checkers are reporting that Kohl’s has started selling Vera Wang merchandise earlier than the advertised street date of September 9:

We have been surprised so far in our survey. 12 of the 25 (48%) stores we have called this week have told us that they already have the Vera Wang line and are selling it. We were told there is a Vera Wang perfume on sale at Kohl’s now too. Many of the stores that have the line appear to be in the Pacific Northwest and the Southeast. Stores in Washington and Oregon and South Carolina and Georgia provided the bulk of our positive responses. We called one store in New York City and they claim to be stocking the line already as well.

Read more at their site under: Vera Wang Line Sneaking Into Kohl’s Early.

In the past, Kohl’s generally rolls out their national branch launches in highly coordinated affairs, unveiling the new line in all of the markets on the same day. We saw this in 2005 with the launch of Candies, as an exclusive Kohl’s brand, and we’ve seen it through the past few years of growth in the Chaps brand. These launches, from new fixturing to promotions to actual merchandise are all tied in to hit the stores on the same day, with major national ad campaigns behind them.

There are exceptions to this: Casa Cristina rolled out in the Southwest in Q4 2006 prior to a national launch in early 2007. More contemporary lines, such as Elle and Stamp 10, have seen staggered growth after successful launches. The retailer has also tested new products and concepts on smaller levels before rolling out nationally – case in point is the recent addition of a private-label tuxedo line to the menswear departments of their stores in a slow rollout.

It does surprise me to hear that Kohl’s may have let this merchandise out early. It seems to be against their past behavior. Is Kohl’s really selling Vera Wang merchandise early in an attempt to reach out to some test markets? This is the largest brand launch in the retailer’s history – so perhaps it is time to do things differently than they have in the past.

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