Get the latest retail news straight to your inbox

    Don’t go searching for insights in the retail space, we deliver them direct.
    The week's most important retail news, delivered to your inbox every Friday.

Ford fits workers with mechanical exoskeletons

The Hustle reported that Ford has ordered 75 strength-enhancing mechanical exoskeletons from Ekso Bionics after a successful pilot. Ford tested the suits not to increase the lifting capacity of its employees, but rather to help prevent injuries. The results: after a yearlong trial, the Ekso suits helped reduce workplace injuries by 83%. Ekso has at least 35 competitors in the exo-suit industry, but for now, the company has the edge with both Ford's patronage and a 28% spike in its share price.    

Shallow analysis, dubious conclusions

The AFR commented on a report released by Nielsen, which stated that “shoppers are spending $51 billion a year on promoted sales.”  Then, Nielson asserted that this caused retailers to lose $11 billion “on pointless discounting” as the customers would have made the purchases regardless.  We were amazed by the level of oversimplification in this ‘analysis’.  We expect more from an organisation such as Nielsen.

Millennial's domain keeps flourishing

The AFR reported on ZipPay's results. The ‘buy now, pay later’ business processed A$500 million of sales last year (about a quarter of its direct competitor, Afterpay).  We were able to distil some interesting numbers from the published figures. Zip’s revenue of around A$40 million tells us that fees charged to retailers (on average) are around 10%, once bad debts are factored in at about 2.6% of receivables.  The business has been growing substantially and currently has over 700,000 customers and over 10,000 participating retailers. Millennials clearly love it and it puts the traditional credit card business under pressure.

Clothing and footwear spend down 50% since 1984

The AFR reported that the share of household expenditure on clothing and footwear has more than halved since 1984, from 6.5% to 3.1%. This data dispels the myth that specialty retailers' woes have been caused by the emergence of e-commerce. Online retail handles just 8% of sales, translating to just 0.2% of the decline. The remaining 3.2% drop has been caused by changing spending patterns.

Another major bankruptcy in the US?

Reuters reported that Mattress Firm Inc, the largest mattress retailer in the US, is considering a potential bankruptcy as it seeks ways to get out of store leases and shut poor performers from its 3,000 locations. Mattress Firm’s deliberations offer the latest example of a US brick-and-mortar retailer struggling financially. Reuters think that the situation is due to competition from e-commerce firms such as Amazon, but we have a suspicion that it's more likely the consequence of the continuing escalation of lease costs. Interestingly, Mattress Firm is owned by Steinhoff International, which paid US$3.8 billion to acquire the business in 2016. When it rains, it pours.

Omni-channel games in the UK

The Retail Gazette in the UK reported that as struggling retailers leave High Street to focus on the less-costly online format, some successful online retailers are starting to take their place. A sign that the omni-channel game seems to be shifting, these once pureplay retailers now typically open only a few brick and mortar outlets, “to showcase their brands.” The article mentioned retailers such as Misguided, Boden, Joe Browns, Blaiz and Zalando as examples. In the meantime, the online sales in the UK keep growing and now account for 17.4% of the UK’s total retail turnover.

Australian retail statistics

Reuters reported that Australian retail sales have grown strongly in the last quarter. A figure of 1.2% growth was quoted, quite useless as it was in comparison to the previous quarter.  We had to do our own research and we discovered that the growth was about 2.8% in comparison to the corresponding period last year (the only number that really matters). Reuters also commented that retail prices fell 0.1%, but their assertion that this meant “no inflation” ignored the ongoing, behind the scenes, increases in government charges, health insurance premiums, and energy.

Point-of-sale lending on the increase in the US

The Economist reported on the rising popularity of point-of-sale lending in the US, noting that many retailers are now offering their customers the option to pay for goods over six to 12 months interest-free. Consumers who might have financed big-ticket purchases with a credit card are increasingly utilising these "point-of-sale" loans instead. The article noted that over-the-counter lending is being led by innovative tech startups. Interestingly, Australia seems to be well ahead of the US in this space, with AfterPay and ZipPay now processing a material percentage of all retail spend Down Under. Retail Directions' point-of-sale enables our clients to offer both payment options to their customers.

Amazon's AU scouting mission

The Sydney Morning Herald reported on Amazon's flat entry into the Australian market. Documents lodged with the Australian Securities and Investments Commission show Amazon Australia ran at an $8.9 million loss with just $16 million in sales for the 2017 calendar year. Not quite the retail apocalypse prophesised by much of the media in anticipation of tech giant's arrival Down Under, speculation which put local retailers on edge and played havoc with their share prices. We've always said that stores are Aussie retails' best defense against the online raider, while directly competing with Amazon online is a sure way to put your business under pressure.

Apple becomes the first trillion dollar company in the US

25 reported that Apple has become the first US company to reach a US$1 trillion sharemarket valuation. Buoyed by stronger than expected earnings for the second quarter, Apple shares rose 3% on Thursday to close at $207.39, and are up about 31% over the past year. Other tech giants in the hunt for a $1 trillion market cap are Amazon at $877 million, Alphabet at $851 million and Microsoft at $822 million. Facebook was in the hunt until last week's historic stock collapse cut the company's value to $504 million.

Google heading back to China?

The Intercept reported that Google is planning to build a censored search engine for the Chinese market, based on a leaked document. According to the article, the project, code-named Dragonfly, has been active since 2017 and recently accelerated after a meeting between Google CEO Sundar Pichai and a “top Chinese official.” Google shut down its search engine in China in 2010 due to the country's censorship policy, but now it appears that it wants back in. It is important to note that numerous companies have wasted time and cash trying to break into China’s massive market. Most recently, Facebook seemed to have finally made it behind the steel curtain until China slammed the door shut at the last minute, again.