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Target US shares surge on in-store boom

CNBC posted that shares in Target US surged after the retailer reported unprecedented growth in foot traffic at its stores, along with second-quarter profit, revenue and comparable store sales that surpassed analysts' expectations. The big-box retailer also said that online sales grew 41% from the same period last year, compared with an increase of 32% a year ago. That said, with the strongest same-store sales growth in 13 years, the boom for Target has been in the brick and mortar stores. It looks like the chain reinvented their stores and product mix, but has also succeeded in telling their consumers about it.

Lovisa reports double-digit growth

In a report lodged with the ASX, jewellery retailer Lovisa posted a 21.4% increase in revenue over of the previous year. The double-digit growth comes off the back of 28 new store openings globally, driving $217 million in revenue for the retailer in FY18, compared to $178.7 million in FY19.

The Reject Shop turns things around

A report lodged with the ASX shows that The Reject Shop has posted a 34.3% year on year increase in net profit after tax in FY18. Net profit has gone up to $16.6 million compared to $12.3 million in FY17, but this is on turnover of $800 million, with EBIT at 3%, which is pretty weak. Overall, a relatively flat but competent performance as the business seeks to recover from a challenging 2017, which resulted in a 28% drop in profit.

Super Retail takes on Amazon

In a results announcement lodged with the ASX this week, Super Retail Group (SRG) reported a 26% rise in net profit to A$128.3 million, up from $101.8 million last financial year. SRG attributes the results to a $60 million investment in 2018 to build the group's omni-channel retail capabilities – launching click and collect, improving customer delivery times and implementing online price monitoring tools. In FY19, SRG aims to "further defend its turf against Amazon" by increasing investment in e-commerce and spending less on bricks-and-mortar stores. Looking at the amount of money invested versus the return, one has to wonder how commercially savvy is the strategic focus? And, with stores being Aussie retail's best defense against Amazon, is divesting from them the best way to keep Amazon at bay?

Temple & Webster "hopes" to make a profit

The AFR reported that pure-play online homeware retailer, Temple & Webster will now target the $50 billion home improvement market as a new source of expansion in an attempt to find its maiden profit this year. Calling a spade a spade, Temple & Webster is an example of a non-profitable business that sucks $70 million dollars (its annual revenue) from the market and gives it away at cost, causing considerable damage in its wake. Not dissimilar to Amazon.

Alibaba warns "laggard" Aussie retailers

According to an article in, Australia is now Alibaba’s third biggest market outside China, behind the US and Japan. But despite its size, the firm seems happy to remain under the radar and isn’t looking to pick a fight with Amazon. Interestingly, Alibaba is one of the fastest growing retailers in the country — working with well-known names from Chemist Warehouse to Woolworths and Kathmandu. The article notes that "In its home market, Alibaba is rolling out vending machines that spit out cars, cash-free supermarkets where your shopping can beat you home and “magic mirrors” where you can virtually try on makeup. In Adelaide, shops still can’t open on a weekend later than 5pm." A top local executive at Alibaba said that "the company's rapid growth Down Under should be a wakeup call to laggard Australian retailers failing to keep pace with their customers."

Nordstrom tests new retail strategies

Glossy reported that US department store, Nordstrom is testing new retail strategies to drive sales and promote customer loyalty - starting in Los Angeles, its largest market. The retailer has found that customers who shop both online and in stores spend five times more than customers who shop in a single channel and that customer profitability doubles. As such, the company is investing in new store strategies that can complement its growing online business, including a highly targeted marketing approach, and an improved localised supply chain. The key to Nordstrom's continued success is its holistic view of retail sales, the retailer does not report on in-store and online sales separately. The approach makes good sense. If your customers demand a consistent and seamless “one” brand experience, unifying the client engagement structure of the business becomes the only way to effectively meet and exceed such expectations.

Woolworths reports sluggish sales

The AFR reported that same-store supermarket sales slowed sharply in the first seven weeks of 2019 to 1.3% partially due to disruption from the ban on single-use plastic bags. We warned about mixing commerce with politics - some customers always get upset to the detriment of the business.

Annual spending hits four-year high

A Business Sales Indicator report released by Commonwealth Bank shows that spending was up across all industry sectors by 1% in July, pushing annual spending growth to a four-year high of 10.4%. The report indicates that retail deflation (i.e. lower prices) across a range of good and services has resulted in very stable spending so far in 2018, rising approximately 1% every month.    

Tiffany & Co partners with Alibaba

Tiffany & Co has joined Burberry, Maserati, Hugo Boss, and La Mer on Alibaba's invite-only Luxury Pavilion. According to a post by The Hustle, after initially resisting the allure of Alibaba and Amazon due to their failure to crack down on counterfeiting, the ultra-luxury jeweler succumbed to the allure of gaining access to the growing Chinese luxury market. Alibaba's strategy to be the "gateway to China" seems to be paying off, enabling the marketplace to succeed in a challenging luxury market that has proved elusive even to Amazon.

Nordstrom continues to shine

The Seattle Times reported that Nordstrom surpassed its own forecasts, posting a profit of U$162 million, up about 46%, on U$4.07 billion in sales, up 7.3%. Comparable sales were 4% up.  Executives attributed the performance to strength across the board for the last quarter.  Most retailers would see this as an excellent result, but for a department store in 2018 we see it as truly remarkable.

Artificial Watson

Under the heading of 'Spin Doctor', The Wall Street Journal commented that in 2012 IBM pitched its artificial-intelligence system Watson as a breakthrough weapon in the fight against cancer. Billions of dollars later, it has had a limited impact on patient outcomes, and more than a dozen IBM clients or partners have stopped or scaled back their projects with the platform.  We have researched the AI area in depth and our findings can be found in the article covering Retail Directions' keynote address to the Online Retailer conference in Sydney in July 2018 (  AI demystified.