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16
Jul-18
Monday

Sussan still on the market

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The AFR reported that Naomi Milgrom, who controls Sussan, Sportsgirl and Suzanne Grae fashion chains, has invited investment bankers to pitch for a role in helping to sell the business. Previously, Citigroup was tasked with finding buyers and did not succeed, indicating that the task won’t be easy. The AFR quoted figures from FY2016 and 2015 for the ARJ Group Holdings, which owns the retailer: the EBITDA shrunk between these two years from $61 million to $12 million. Industry sources estimate the value of the business somewhere between $300 and $400 million.
14
Jul-18
Saturday

The end of Blockbuster

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This week the video rental company will have only one location left in the US.  In 2004, at its peak, Blockbuster was employing 60,000 people and operating 9,000 stores worldwide. At the time, its market value was $5 billion and revenues were close to $6 billion, but in 2010 it failed for bankruptcy.  In the continuing discussion about the percentage of retail that will shift online, the disappearance of Blockbuster reinforces the point we made a fee weeks ago: all such statistics are irrelevant unless analysed by category.  In the video rental space, the online will surely take 100% of trade.  Anything that can be delivered electronically will ultimately end up in the pure play space.  But, other categories will continue to be dominated by brick and mortar.
13
Jul-18
Friday

Twitter to shut millions of accounts

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The AFR reported that embattled social media platform, Twitter will cull tens of millions of suspicious accounts from users' followers, in an effort to restore trust and address a pervasive form of social media fraud. Many Twitter users have inflated their follower counts with automated or fake accounts, effectively buying increased relevancy to bolster their political, business or entertainment careers. The Washington Post reported last week that Twitter suspended more than 70 million accounts in May and June. Following Facebook's recent UK penalty for a data breach, this is another example of the squeeze felt by big technology companies from all angles - social, regulatory and the media.

Old Navy merging digital and physical

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The NRF reports that, after months of experimenting and testing, Old Navy has rolled out a strategy integrating physical and digital retail to all stores, allowing its customers to "order online and collect in store" and "make immediate purchases from employees in-store using mobile checkout capabilities". Of course, the initiative is needed to ensure the retailer's relevancy in the market, but we're just not sure how the story made the headlines. Our clients have been offering click & collect and trading off the shop floor with mobile POS for years.

Noni B sales growth

20
Noni B Ltd issued a trading update for FY 2018, with solid like-for-like sales growth (4.5%).  The company also announced an increase in EBITDA to $37 million ($23 million the year before).  Sounds like a solid number, but we do agree with Warren Buffet that EBITDA is virtually meaningless.  It is EBIT that really measures company performance and many organisations tend to conveniently avoid talking about it.
12
Jul-18
Thursday

Retail staff with digital and marketing skills in demand

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Inside Retail reported that two-thirds of retail employers are likely to give their staff a pay rise of less than 3% in their next review and 10% will not increase salaries at all. The figures come out the 2018-19 Hays Salary Guide, which also notes that retailers will continue to rely heavily on temporary and contract staff. In terms of hiring, at head office the skills in demand trend toward retail professionals with digital and marketing expertise. This aligns with our message that the future of retailing demands an elegant Digital Path to Purchase across all channels, not just e-commerce.

Facebook hit with maximum UK penalty for data leak

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Facebook has been hit with an A$895,000 financial penalty over a data leak to political consulting firm Cambridge Analytica, according to a report in the AFR. The fine was issued by Britain's Information Commissioner Office (ICO), which accused Facebook of "not protecting user data and failing to be transparent about how it shard information with third parties".  The ICO will be expanding its investigation into data and politics, looking closely at possible Brexit-related offenses as well. Like we said in yesterday's Pulse covering the same topic, it's just a matter of time before the data infractions by big tech and social media companies are exposed due to mounting regulatory pressure.

Catch Group eyes an IPO

16
The AFR reports that the founders of online shopping and deal business the Catch Group have engaged with investment banks UBS and Canaccord Genuity to prepare the company for a share-market float. The company and its banks are looking at a potential $200m - $300m IPO. The Catch Group's Catch.com.au e-commerce offering is a direct Amazon.com competitor in the Australian market. The business looks to be trying to capitalise on Amazon.com's recent decision to halting shipping to Australia from its US site in protest of the new GST rules for international online purchases.
11
Jul-18
Wednesday

Environmental baby steps

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EnvironmentaLeader.com reported that ALDI in the US will use the How2Recycle label across its products in the next two years.  The How2Recycle labels contain instructions whether the package can be recycled, how to recycle the product,  and if any special steps are needed to prepare the package for recycling.  In our assessment the relatively superficial instructions (e.g. "Empty and Replace Cap") won't help much, but given the massive volume of products sold by Aldi, even a minor improvement counts.  

This trash really is treasure

27
The Hustle reports that e-waste is the world's fastest-growing kind of trash. Globally the total amount of tech-trash is forecast to reach 57m tons by 2021, with only 20% of it being recycled. Perhaps even more interesting is the total value of the e-waste produced each year, totalling at least US$61 billion. For perspective, the amount of gold thrown away equals about 10% of all the gold mined annually. In the US alone, 6.9 tons of e-waste is generated annually - the equivalent of 400 iPhones for every American family. We find it concerning that the environmental impact of this tech-catastrophe unfolds in media silence, while proven ineffective eco-initiatives such as banning plastic bags at supermarket checkouts make the headlines.

Macys.com suffers a data security breach

25
Digitialcommerce360 reports that Macy’s Inc.’s e-commerce site suffered a data security breach between April and June this year, giving criminals access to credit and debit card information, names and birthdays of “a small number” of Macys.com and Bloomingdales.com customers. This is the second time this month that a large retailer has suffered an e-commerce data breach, with Adidas AG reporting compromised user data including contact information, usernames, and encrypted passwords. It is becoming ever more critical for cybersecurity to sit at the core of Loss Prevention in a retail enterprise. Cybersecurity cannot be left to IT, it requires a specialised focus as retail becomes ever more entwined with digital.

Facebook faces class action threat

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A report in the AFR states that Australian Facebook users are being invited to sue the social media company over the release of personal data to Trump campaign advisor Cambridge Analytica. Litigation funder IMF Bentham has lodged a representative complaint with the Office of the Australian Information Commissioner seeking compensation over breaches connected to the personality quiz "This is my Digital Life". According to the article, users of the app were unaware that it also harvested data from their Facebook "friends" such as their political and religious views. The data, from an estimated 50 million users, was then made available to British firm Cambridge Analytica, which used it for targeted advertising during the 2016 US presidential election. In Australia, 300,000 Facebook users were affected. We expect more and more stories of a similar nature to creep out of the woodwork as social media and technology giants come under increasing political and privacy scrutiny.