retailer

How Restoration Hardware Made ‘Showrooming’ An Asset Instead Of An Enemy

Source: http://www.businessinsider.com/restoration-hardware-uses-showrooms-2012-12

restoration hardware furniture

Many retailers are terrified of turning into a showroom. They fear consumers will come only to test out the products they’ll later buy online. 

Furniture store Restoration Hardware decided to approach “showrooming” differently by accepting and encouraging it, reports Joan Solsman at The Wall Street Journal

Many stores, including Restoration Hardware’s rival Pottery Barn, fought showrooming by “rushing to lower prices,” Solsman writes. 

But Restoration Hardware decreased its number of physical stores and used the remaining ones as showrooms. Sofas, tables, rugs and other decor were meticulously arranged with an emphasis on the aesthetic. Customers could find even more merchandise online or in catalogues while shopping in the stores.

The tactic is working. Direct-to-consumer now makes up half of Restoration Hardware’s business, and the retailer has reported double-digit sales growth for 10 quarters, according to Solsman.

Restoration Hardware’s model probably wouldn’t work for Best Buy, the most prolific victim of “showrooming,” Solsman cautions. 

Furniture and decor, unlike consumer electronics and other items, aren’t easily searchable by specifications,” Solsman writes. “A highly fragmented market, home furnishings sellers benefit from many players having proprietary merchandise, which stunts online competitive threats.”

DON’T MISS: The Fabulous Life Of The Mysterious Billionaire Behind Zara >

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Wednesday, December 12th, 2012 news No Comments

The Massive Scale Of Amazon’s Distribution Operations, Revealed Through Startling Images (AMZN)

Source: http://www.businessinsider.com/massive-scale-of-amazons-distribution-operations-2012-11

amazon fulfillment center

As the world’s largest online retailer, it’s no surprise that its biggest fulfillment center in Phoenix, Arizona is the size of 28 football fields.

That’s because it’s their goal to have everything anyone wants at anytime. 

Amazon has 80 fulfillment centers in the world to handle all of its orders.

Even though Amazon already has massive operations, it’s still planning to open at least two new fulfillment centers in California over the next year or so.

And with the holiday shopping season in full force, Amazon hired an additional 50,000 employees to help with the expected demand.

Thanks to Imgur user SippingTea’s incredible photos, we have a sense of that this incredible scale actually looks like.

Stacks of shelves line the warehouse

Employees need carts to navigate through the massive amounts of inventory

Hundreds of boxes full of products cover the floor

See the rest of the story at Business Insider

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Friday, November 30th, 2012 news No Comments

Zara Has Fundamentally Changed Fashion And There’s No Going Back

Source: http://www.businessinsider.com/how-zara-is-changing-fashion-forever-2012-11

zara clothing

Fast-fashion retailer Zara is on a mission to take over the world, and in the process it has changed the whole fabric of the industry. 

Zara’s strategy involves stocking very little and updating collections often. Instead of other brands that only update once a season, Zara restocks with new designs twice a week, reported Suzy Hansen at the New York Times

That strategy works two ways, according to Hansen. First, it encourages customers to come back to the store often. It also means that if the shopper wants to buy something, he or she feels that they have to in order to guarantee it won’t sell out. 

As a result of its massive success, Zara is making luxury retailers pretty nervous. Zara tries to build their stores as close as possible to the luxury boutiques like Stella McCartney and Chanel. Meanwhile, those retailers are trying to stay far away from the fast-fashion company. 

“They broke up a century-old biannual cycle of fashion,” an analyst told Hansen. “Now, pretty much half of the high-end fashion companies” — Prada and Louis Vuitton, for example — “make four to six collections instead of two each year. That’s absolutely because of Zara.”

Another important way that Zara has impacted the fashion is by negating the idea that expensive clothes are more desirable. Kate Middleton has often been photographed in the brand, and getting something chic for a steal is something to brag about. 

Zara also fits in with another trend: today’s demanding consumer. 

Now that shoppers can get what they want from virtually any channel for a variety of prices, they’re becoming much more discerning about what they want.

That means that a company that sells high fashion for low prices and offers constant new merchandise is set to do well in today’s marketplace, and other retailers should be rushing to emulate Zara’s model.

DON’T MISS: 19 Years In The Evolution Of The Victoria’s Secret Fashion Show >

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Saturday, November 10th, 2012 news No Comments

JC Penney Shares Are Collapsing After A Dismal Earnings Report

Source: http://www.businessinsider.com/jcp-shares-fall-after-earnings-2012-11

JC Penney

Shares of JC Penney are tanking over 11.5% this morning after the retailer reported earnings.

Revenue of $2.9 billion is way below estimates of $3.2 billion.

EPS of $-0.93 per share is well worse than the loss of seven cents that were expected.

And same-store sales are down 26.1%

CEO Ron Johnson offers up:

Ron Johnson, chief executive officer of jcpenney said, “While the quarter overall was challenging, the performance of jcp’s new brands and shops reinforces our conviction to transform jcpenney into a specialty department store.  Today, jcp is really a tale of two companies.  By far the largest part of our store is the old jcpenney, which continues to struggle and experience significant challenges as evidenced by our third quarter results.  However, the new jcp, centered around the shop concept, is gaining traction with customers every day and is surpassing our own expectations in terms of sales productivity which continues to give us confidence in our long term business model.”

Full report is here >

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Friday, November 9th, 2012 news No Comments

It Seems That Target Is Still Being Haunted By A Donation It Made More Than Two Years Ago

Source: http://feedproxy.google.com/~r/businessinsider/~3/bWwNmtwA7GE/target-brand-perception-2012-10

bullseye target

Back in 2010, the retailer made a controversial — and much publicized — $150,000 donation to MN Forward, which then supported a gubernatorial candidate who was anti-gay marriage. It resulted in calls for a national boycott.

Consumer recommendation levels have been steadily dropping ever since, according to brand perception firm YouGov.

[Target’s] customer loyalty seems to be still haunted,” writes YouGov BrandIndex SVP and managing director Ted Marzilli.

Marzilli explains:

“Once the political donation news broke in July 2010 and became a political flashpoint, the two brands took different paths: while Amazon went on to climb modestly from 53 to its current 56 score, Target’s score fell for more than three months, from 53 down to 44 at the end of October. Since that bottom point, Target’s highest recommend score was 50 in February 2011, but it is currently at 46.”

Here’s a chart of Target and Amazon on the YouGov BrandIndex:

target

NOW SEE: The Mega-Trends That Are Changing Retail Forever >

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Wednesday, October 10th, 2012 news No Comments

Urban Outfitters Says It Will Never Buy Another Cash Register Again

Source: http://www.businessinsider.com/urban-outfitters-replaces-all-cash-registers-with-ipads-2012-9

urban outfitters ipad

Retailer Urban Outfitters had its first ever annual analyst day today.

You can listen to the whole presentation here, but about halfway through CIO Calvin Hollinger makes some interesting comments about the future of point-of-sales systems in retail.

Specifically, the company is going all Apple devices for its stores. Sales people will have iPod touches, and cash registers are being phased out in favor of iPads on a swivel.

In fact, he says: “Two or three weeks ago, we placed our very last register order… once we make sure this ipad works.. all stores will be equipped with iPod touches and iPads.”

iPads, he explained, cost about 1/5th as much as a cash register, and can be used for so much. As shown in the picture, they can be turned towards the customer, who can view content, put in personal information, use it as a gift registry and so forth.

What’s more, it makes a lot more sense from a space usage standpoint. An iPad on a swivel that’s not in use can quickly be taken off, with that space being used for packing or more merchandising or anything else.

SEE ALSO: The 29 best stocks in the market right now >

(Via @montoyan)

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Thursday, September 27th, 2012 news No Comments

Why Michael Kors Is Having A Blockbuster Year

Source: http://www.businessinsider.com/why-michael-kors-is-successful-2012-9

michael kors model

The Michael Kors brand has achieved unstoppable momentum even in the age of discount retailers.

The company recently raised its guidance again after blockbuster sales in the second quarter.

Meanwhile, other aspirational brands like Tiffany & Co. and Restoration Hardware are struggling.

Michael Kors succeeded because it was the first retailer to hit the market’s sweet spot: people with money to spend but who aren’t rich.

Luxury marketing expert Pam Danziger calls these people HENRYs, for “High Earners Not Rich Yet.” They are the people who make between $100,000 and $250,000, she says.

HENRYs are a growing segment, while the wealthiest people are making less than they used to.

Danziger explained the concept to us in a recent note:

Ultra-affluents (i.e. those at the top 2 percent of U.S. households with incomes starting at $250,000) cut their spending by nearly 30 percent from 2010, while the HENRYs (High Earners Not RichYet with incomes $100,000-$249,999) increased their spending on luxury by some 11 percent from 2009 levels. Even though HENRYs individually have a far lower spending threshold than ultra-affluents, there are nearly ten HENRY households for every ultra-affluent. That is why with a total of 21.3 million households, the HENRY segment is a critically important part of the consumer market.

With Michael Kors’ $450 handbags and $250 watches, HENRYs can show off their success without feeling like they’re going overboard.

Kors wisely chose the exact right audience, and now it’s pay! ing off.

DON’T MISS: The Real Reason People Line Up At The Apple Store >

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Friday, September 21st, 2012 news No Comments

JCPenney’s New Concept Shops Are Killing It, And Here’s Proof (JCP)

Source: http://www.businessinsider.com/jcpenneys-new-shops-succeeding-2012-9

JC Penney

JCPenney CEO and former Apple retail chief Ron Johnson has been constantly criticized for his performance thus far in the turnaround attempt of the ailing retailer, but now, he’s got some very good news.

JCPenney’s new shops inside the department stores are rocking 20 percent higher comps than the rest of the store.

“Shops are working,” said Johnson.

What’s he most impressed with?

The Levi’s shop is his pride and joy — the one with the denim bar. It’s getting double digit comps in mens. 

“Both are doing well above what we planned,” said Johnson.

Johnson also focused on Sephora, a shop that JCPenney has actually had for a while now. He says that Sephora continues to comp in year six. In the future, he’s planning on slightly larger Sephora stores. Izod and Liz Claiborne are also doing great, said Johnson.

The in-house jcp brand is a bit more complicated. The women’s shop is doing well, said Johnson, but the mens is behind. He said that the “colors might be a bit advanced,” since JCPenney’s offering a lot of vibrant colors like purple and orange.

NOW SEE: Huge Photos Of JCPenney’s New Concept Shops >

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Wednesday, September 19th, 2012 news No Comments

The Biggest Difference Between Apple And Amazon (AAPL, AMZN)

Source: http://www.businessinsider.com/chart-of-the-day-apple-vs-amazon-2012-9

Now that Amazon is going all-in on tablets, and likely to release its own smartphone, the comparisons between it and Apple are going to pick up.

Below is a chart from Dan Frommer at ReadWriteWeb that shows the biggest difference between the two companies. Apple, as you can see, makes an insane amount of money each quarter, whereas Amazon does not.

This is because Apple sells very expensive hardware while Amazon is a retailer who operates on very thin margins. Jeff Bezos is okay with this arrangement. He says Amazon charges low prices because it wants to be in alignment with its customers, who want low prices.

chart of the day, amazon vs apple, september 2012

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Wednesday, September 12th, 2012 news No Comments

Source: http://lifehacker.com/5937580/the-best-times-to-shop-online-if-you-want-the-most-savings

The Best Times to Shop Online If You Want The Most SavingsGrabbing the best prices is all about where and when you shop. Retailer reporting service SumAll has identified the best (and worst) days and months to find online deals and packed it all in this handy calendar infographic.

The data is compiled from over 3,000 merchants and almost half a billion transactions over four years.

It probably won’t surprise you that November offers the biggest discounts (an average of 5.99%), followed by post-holiday January (4.95%), but the calendar also warns you that March is a dismal time to shop if you’re looking for sales (2.76%).

The best days to buy are Tuesday and Thursday. Forget big savings on Sunday.

And new companies (just opened or under two years old) offer the biggest deals versus established ones. So don’t wait to shop at a new site.

Here’s the whole graphic, which includes which states offer the best deals (click to expand, right click to save):
The Best Times to Shop Online If You Want The Most Savings

Keep in mind that there are specific days and months that are best for particular shopping categories (see our best time to buy anything guide or this handy infographic). If you’re just planning your shopping in general, though, consider waiting until the days and months with the highest discounts.

Discounts…Get the Inside Scoop | SumAll via DailyFinance

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Saturday, August 25th, 2012 news No Comments

Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.

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