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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Thursday
December 4, 2008
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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Cyber Monday is here and.. almost gone. This is a holiday created by marketers looking to capitalize online sales that may or may not one day match the phenomenon that is Black Friday. In the meantime, it still represents a day in which there area significant chunk of e-commerce sales and deep discounts.
Regardless of the hype, Cyber Monday seemingly caused an uptick in visitors to e-commerce websites throughout the industry. Web servers across the country saw their processors stretched to the limit and on-call IT technicians had their hands full. By and large, it appears that most websites were winners – with only a few retailers seeing minor downtime or sluggishness – applause and props go to the often overlooked network engineers and sysadmins who kept their servers runner.
The Cyber Monday cross hairs were aimed directly at the web servers of two retailers: J.Crew and Bloomingdale’s. Both retailers have seen significant outages today – with each website serving “System Unavailable” messages since early this afternoon.
Earlier in the year, J.Crew redeveloped their website. The site has seen problems and glitches ever since the launch. J.Crew went as far as to blame their decline in Q3 revenue on the problems they were seeing with their relaunched website. A lot of money was spent, I’m sure, on this new implementation of the website and it’s incredible to see the downtime they are still happening. Being down for a few hours on a weekday in June is bad – being down on one of the busiest days of the holiday season is unimaginable.
I don’t know what the issue is with Bloomingdale’s, but they haven’t fared much better. As with J.Crew, they’ve been serving a system error message for the better part of the afternoon. Another missed opportunity.
Additional coverage of the site outages from Computerworld and Crain’s, New York Business. I also have an on-going collection of System Maintenance screenshots over at ecommr.
Slowness and downtime issues aside, I’m hoping the rest of the industry is seeing a positive sales day. Looking forward to seeing the sales estimates over the next few days.
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Focusing today’s Express Lane on Black Friday and Cyber Monday. Here’s some articles that I’m reading that I’d like to share:
ComScore estimates e-commerce sales only up 1% on Black Friday. Retail stores only saw a 3% gain, the smallest gain in several years, according to ShopperTrak. The modest sales growth, combined with the deep discounts cutting into profit margins, has already helped send Wall Street into another daily tail spin.
For a further look into the Black Friday numbers, the National Retail Federation released a comprehensive survey into this year’s shopping habits. Seeking Alpha does a great job of digesting and breaking these numbers down.
CNBC has a good look at how Black Friday transpired at one local mall. Good snapshot into the events of this day at one New Jersey mall.
Of course, today is Cyber Monday. Retailers are offering deep discounts and free shipping. Twitter is on fire with people discussing deals and sharing links. Looking forward to seeing the sales figures for today and I wonder what impact social media will have today.
And finally, the industry did have some very tragic events occur on Black Friday when a worker was trampled to death at a Long Island Wal-Mart and two men were killed in a shooting at a California Toys R Us. Very sad and tragic events, indeed.
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Wednesday
November 26, 2008
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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Tuesday
November 18, 2008
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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Thursday
November 13, 2008
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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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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Another mixed month for retail sales. While some retailers rebounded and look to go into Back to School on a positive note, it was another dark month for some mall and teen retailers.
Wal-Mart beat expectations with a 5.8% increase in June (showing 6.1% increase at their US name-brand stores and a 4.6% increase at their Sam’s Club locations). Target ended up in positive territory with a 0.4% uptick in same store sales. Costco showed a 9% increase, Kohl’s beat estimates with a 2.3% increase, and even mall retailer Aeropostale showed gains with a 12% increase in June.
The month was not as kind to mall and teel retailers such as Gap (company down 7%), Abercrombie (down 3%), and American Eagle (down 11%).
June’s numbers have been posted to Retail Numbers, which allows you to chart and track the retail industry monthly same-store sales.
More coverage from Fox Business and the Associated Press.
Photo above from Flickr user James@mannequindisplay. com, used under Creative Commons.
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In an effort to learn some new technology and add something new to this website, I have developed a simple application to track and graph retail monthly comp store sales data. Also known as same store sales, this is a measurement of change in sales in stores that have been open for over a year.
Located at http://www.noturnonred.org/charts, the Retail Monthly Comp Sales Charts is a dynamic application using PHP, Ajax, and MySQL. Still in it’s early stages, it will be updated monthly when the new retail numbers are announced. The database currently contains data for approximately 20 retailers that I cover often in this blog, from January 2005 to present. In addition to viewing the data by retailer, you can also compare two retailers over the same time period. With time, I will get additional retailers into the database and extend the range of information available.
I love looking at these numbers and I created this application for me to better spot trends in retailers’ sales.
For example, does American Eagle’s healthy sales this year make it appear that they could be in for a very solid back to school season? It seems that they have had a more positive trend this year, compared to some other similar retailers in the marketplace.
Could this slight uptick that AE is showing be the foundation for a great BTS season?
These are the kinds of things that I like to look at. While I may not always know the reasons for why things are trending one way or another, I still like to look at these numbers. I hope the application I have developed is useful to others, as well.
Again, the URL for the Retail Monthly Comp Sales Charts is http://www.noturnonred.org/charts/. Let me know what you think.
Note: Motley Fool has a very good roundup of what exactly these numbers are and what they mean to retailers and analysts. They explain all of this much better than I can.
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