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27
Dec-18
Thursday

Gift card woes

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The Age reported that customers at Myer and Coles had their gift cards declined on Boxing Day.  The problem was fixed around 5:30 pm and apparently it was caused by Coles' "third-party gift card provider's technical difficulties".  Woolworths, who uses the same provider, also had its gift vouchers declined on Boxing Day. Furthermore, ANZ and Westpac payment systems faced difficulties on the day. Volumes processed on Boxing Day are massive and we feel for all who were impacted, as this is not a situation a retailer, bank, services provider or a customer wants to be faced with.
26
Dec-18
Wednesday

Boxing Day sales to top $2.5b

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The AFR reported the Australian Retailers Association and Roy Morgan are forecasting a 3.1% increase in post-Christmas sales, and predict Aussie shoppers will spend in excess of $2.5 billion this Boxing Day both in-store and online. NSW shoppers are projected to take the lead, spending around $790 million on Boxing Day, followed by Victoria on $786 million.
25
Dec-18
Tuesday
24
Dec-18
Monday

One of the strongest holiday seasons in the US

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The Wall Street Journal reported that Americans crowded stores for last-minute Christmas gifts and delivery companies have so far been keeping up with the surge in online orders. Total US retail sales rose 5.2% from Nov. 1 through Dec. 19 compared with the last year. Online sales continued to grow faster than sales overall, rising 18.4% during that time and accounting for 13% of total sales.

Aussie shoppers set to splurge on Boxing Day

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The AFR reported that Australian shoppers are set to splurge a record $2.49 billion at the Boxing Day sales. It will be the biggest single spending day of a Christmas season that already has retailers raking in a record-breaking $50 billion in sales since mid- November, the National Retail Association (NRA) says. According to the NRA CEO, "this is the largest Christmas we've seen in some time, which is great news for retailers, especially with those figures being quite flat across the year."
22
Dec-18
Saturday

Costly returns

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Reuters reported that fashion retailers are finding that almost a third of the shoes and clothes are bigger or smaller than the size on the label indicates, explaining why many clothes bought online are sent back.  Sometimes, the same sizes differ even between colors within a single style. Any change in fabric or design can also have a big impact as far as fit is concerned. Achieving good fit is further complicated, as some people prefer more loose or over-sized garments.  Calculating sizes more accurately is essential for online retailers to cut costly returns and improve customer satisfaction. According to a recent survey, around half of Americans expect to return clothes ordered online this holiday season due to poor fit.  The tip for Australian retailers: examine your processes that relate to defining and verifying sizes.  Improvements in this 'soft' area can generate hard savings.
21
Dec-18
Friday

Retailers facing Afterpay hangover?

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The AFR reported that retailers are facing a "buy now, pay later" hangover in 2019 as they cycle a sales boost underpinned by new forms of consumer credit. UBS analysts estimate Afterpay and Zip accounted for at least 15% of sales growth for listed discretionary retailers such as Super Retail Group, Premier Investments, Adairs, Kogan.com, Myer, Kathmandu and Wesfarmers in 2018. This sales boost will be difficult to cycle in 2019, unless thousands of new customers start using short-term credit to fund purchases they would not have otherwise have made. Afterpay and Zip have achieved high customer penetration in a relatively short period of time, with more than 10% of Australians estimated to be using their services. With regulatory scrutiny mounting, they dodged a bullet this month when a report from the ASIC said the National Credit Code would not be extended to the sector. Is it just a matter of time?

Ulta Beauty’s channel-agnostic growth strategy

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Glossy reported that when Ulta Beauty credited a 16% increase in year-over-year net sales in the third quarter to an integrated omni-channel approach as the key driver. Ulta’s increasingly channel-agnostic slant is how customers are shopping today, particularly high-spend customers. According to said Ulta's SVP of Digital and E-commerce, Ulta’s omnichannel shoppers spend up to four times more than its single-channel guest, and they frequent stores two-to-four times more. “You would think their extra spend was digital spend, but, ironically, that extra spend is happening in stores,” she said. “Our best customers are omnichannel customers, so we want more of those kind of shoppers and to make our experience better for her,” she said.

Edcon's interesting approach to reducing rent costs

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Reuters reported that South African retailer Edcon is in talks with shopping mall owners about a two-year 41% rent reduction in exchange for 5% stake in the company. Edcon has been grappling with an over-leveraged capital structure for several years after troubles in its credit business in 2014 coincided with an economic slowdown and weak consumer spending at home. Edcon, which vies for market share with TFG, Truworths and international chains such as Zara and H&M, is one the biggest names in South African retail, employing more than 14,000 permanent full-time staff in over 1,100 stores.
20
Dec-18
Thursday

Retailers hoping for big bang finish to 2018

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The AFR reported that retailers that have held off discounting to protect margins are counting on a "big bang" finish to the Christmas shopping season to help meet sales and earnings targets. Shares in most discretionary retailers have fallen sharply in the December quarter in the belief that Christmas 2018 will fall short of expectations. However, analysts and the Australian Retailers Association (ARA) still expect a "decent" festive season, with the ARA sticking to its forecast for a 2.9% increase in Christmas spending. With foot traffic in shopping centres up over last year, the ARA expects consumers to splurge almost $15 billion over the next five days.

US interest rates

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Reuters reported that the US Federal Reserve raised interest rates yet again, by 0.25%.  Two more increases are expected next year, so the pace of further rate increases will be slower (there were four increases in 2018).  The stock market reacted by shedding off 1.6% of its value and the US dollar gained ground against most major currencies. The AUD dipped below 71 cents. The Fed Chairman commented that the US economy continues to perform well, so it no longer needs the Fed’s support.  The US economy is expected to grow by 2.3% next year and the unemployment rate will drop to a record low of 3.5%.  Inflation is expected to be 1.9%.  We noted that some commentators tend to view rate increases as something negative, but in reality, it reflects business confidence in the future – if investors expect good returns, they will invest and the rates respond accordingly.
19
Dec-18
Wednesday

NBN to be made obsolete by 5G

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An article in the AFR poses questions regarding the future of 5G, noting that Telstra executives have admitted they don't yet know how 5G mobile technology, which the telco is betting its future growth on, will be used. On the surface, the article throws a bit of shade on the rollout of 5G technology and consumer adoption, but if you read between the lines it's obvious that Telstra's 5G network will sooner rather than later make the NBN obsolete - something we predicted back in 2015.