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Wednesday suffers a data security breach

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 and 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

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.

Oroton equity valued at nil

Inside Retail reports that struggling accessories retailer Oroton's equity has been valued at nil by an independent expert’s report to creditors and shareholders. The report will now be presented to the NSW courts. Oroton entered into a Deed of Company Arrangement (DOCA) with Manderrah Pty Ltd (Manderrah) in April, under the condition that the business obtains leave from the Supreme Court of New South Wales to transfer 100% of shares in Oroton to Manderrah for nil consideration. As an alternative to a 'break up' sale, the DOCA will secure the future of the business, and its employees, which initially fell into administration last November due to declining sales and high rental costs. Privatisation is the best way forward for the wounded retailer, as a long recovery trajectory doesn't sit well with the sharemarket.  

Labour market defies AI predictions

The AFR reported that a boom in white-collar jobs in Australia is defying fears that the rise of Artificial Intelligence (AI) use cases in many industries will stall job growth. According to the first quarterly Australian Bureau of Statistics release of a "labour account", professional jobs are now just shy of becoming the nation's third-biggest category of employment behind healthcare and retail trade. Professional services grew 13.1% over the same period last year. The article supports our position is that AI is a poorly understood and often misrepresented technology. Over the coming decade, its full potential will not be realised as a replacement for a human workforce, but rather as a complement to it. AI's true benefit is in helping enhance the way we do our jobs.

Lidl flops in the US

Forbes reported on Lidl's poor performance after entering the US market in 2017. At the time, Lidl's promise was to convince US consumers to "Rethink Grocery" and to open 100 stores by the summer of 2018. The grocer was viewed as a threat to the incumbents - Kroger, Albertsons, Walmart and regional grocery retailers. However, 12 months down the road and Lidl has only opened 53 stores and has failed to achieve anything close to a viable, long-term business strategy capable of gaining enough market share to destabilise its competition. The article asks the obvious question - how is it possible that a retailer operating 10,500 stores in 28 countries, with a reputation for being one of the best grocery retailers in the world, could fall so short in the US market? Lidl's business model just doesn't work in the States and the business is yet to adjust. Lidl's results confirm that entering the retail space in the US remains a big challenge, even for excellent operators.

The alternate universe of offices

The Hustle reports that a recent study out of Harvard Business School has found that open plan offices are actually bad for business, decreasing face-to-face colleague interaction by 72%. According to the article, the HBS study is one of many that delivered similar findings. For example, open office plans result in an average 15% decline in productivity, a 50% increase in the likelihood of getting sick and an increase in the number of distractions per hour. Open plan workspaces may be trendy and inexpensive to set up, but it looks like these "benefits" don't come cheap for businesses in the long run.

2018 iPhone models to come in five colours

27 reported that Apple analyst Ming-Chi Kuo's latest intel says the new 2018 iPhones will come in a plethora of colors. The 6.5-inch phone will be offered in black, white and gold. The entry-level 6.1-inch LCD iPhone will apparently debut in “grey, white, blue, red and orange”. According to the report, the 6.5-inch OLED iPhone model will be priced around US$1000, like the current iPhoneX, and will feature dual-SIM capabilities. The 6.1-inch LCD iPhone X style device will retail for around US$700. Like always, it will be interesting to see what Apple unveils later this year.

Aldi now Australia's most trusted brand

Inside Retail reports that a survey by research firm Roy Morgan has revealed that German supermarket giant Aldi has claimed the mantle of Australia’s most trusted brand. Aldi outperformed local rivals Coles and Woolworths, neither of which placed in the top 10 due to low trust ratings. Aldi also outperformed the likes of Qantas, Bendigo Bank, Bunnings Australia and Kmart. Roy Morgan's CEO echoed the sentiments we have long held about the grocery sector stating, “Aldi’s ability to excel at its core competencies has built a level of trust in the Australian market without at the same time attracting the degree of distrust seen by its rivals.”

Reports of retail death have been premature

The Washington Post published comments about a Bloomberg report, reflecting on specialty apparel and department store stocks being battered in recent years, as a steady stream of store closings and online competition put their future in doubt.  Recently, this trend has been shifting and analyst now started to rank some of the retail stocks as 'buy'.  According to Bloomberg, many big names in the clothing business have better days ahead because they’ve made some "underappreciated progress in solving some important problems", such as ... getting better at inventory control and shortening merchandise buying cycles.  Such measures make sense, but what we don't understand is why did this qualify as news?  Effective buying and accurate inventory control are retail 101.  Anyway, it is good to hear that not everything within the retail industry is doom and gloom.

Japanese retailers around the world

Nikkei Asian Review commented on the international expansion of Japanese retailers - around 14% have operations outside  Japan.  They target mainly Chinese and the US markets; only about 20% of the expanding companies look at SE Asia.  Around 70% of the Japanese retailers who operate internationally are pleased, or at least comfortable with their results.  The biggest challenges encountered relate to finding regional partners and adopting local management styles.  We can imagine how hard the latter must be for Japanese corporations.

99-year-old Godfreys owner taking the fight to social media

The AFR reports that 99-year-old Godfreys owner John Johnston has instructed CEO John Hardy to take the fight for the business's resurgence to social media and beyond. The retailer will stop trading on the ASX at the close of today, as it ends an awkward chapter after nearly four years as a listed company. The newly restructured company will take a more aggressive and progressive position in the market, already launching an advertising blitz, which generated some positive momentum. It will be intriguing to see if the limping business can be turned around.

US shopping malls are emptying out

The Wall Street Journal reports that shopping malls in the US are the emptiest they have been in six years, with a vacancy rate of 8.6% in the second quarter. According to research from Reis Inc, the high vacancy rate is due to more consumers shifting to online shopping. Retailers such as Bon Ton, Sears, J.C. Penney and Toys “R” Us have all announced store closures this year. But, the main reason is not that Americans have abandoned brick-and-mortar for online merchants. The US simply has far too much retail space per capita - one of the highest globally. Stores still play a major role, with many pureplay retailers now recognising that having a brick-and-mortar presence reinforces their online efforts, including