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3
May-19
Friday

Mobile devices have become a primary shopping companion

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WWD reported that according to a RetailMeNot survey, 69% of in-store shoppers would rather consult a product review on their phone than ask a store associate. Some 53% would rather use a mobile device to find deals and offers on products they are considering purchasing than discuss promotions with an in-store associate. In addition to using their phones as assistants in stores, consumers are leveraging their devices to seek out deals. For example, nearly 49% of Americans have an app that collects and provides deals and discounts across retailers on their smartphones. 65% said receiving mobile coupons they can redeem in-store is important when shopping in physical stores. More importantly, 69% said receiving a personalised offer on their phone that they can use in-store would make them more likely to visit physical store locations. While retail marketers continue to focus on driving e-commerce and mobile sales, there is still a major opportunity to drive revenue through offline channels at the physical store level.    
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May-19
Thursday

AU lags behind in online consumer satisfaction

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The AFR reported that the upper end of the Baby Boomers segment and the "Silver generation" - aged between 67 and 75 - are an untapped goldmine for Australian e-commerce companies ploughing millions into enticing Millennials. A report by Boston Consulting Group on digital consumers found that Australia was trailing behind global counterparts like Britain and China in the number of digital users satisfied with online transactions. BCG's Consumer Practice head in the Asia-Pacific said the research across retail, energy, financial services, insurance,  telecommunications and media found that up to 30% of customers were purchasing offline after vigorous research online. There were was a "drop-off" at the purchase step in many cases, largely because of under-investment in a completely seamless end-to-end digital offer.

Aldi's outlook for 2019

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The AFR reported that Aldi's CEO says the retailer is unlikely to surpass in 2019 the 10% sales growth achieved in 2018, although house price declines and cost-of-living pressures are bringing more customers to its 540 stores. Aldi will open about 20 stores this year, but the sheer size of the business meant it will be harder to repeat such growth levels and it will probably fall short of topping the double-digit growth in 2018 when gross sales revenue hit $9.2 billion. Aldi also won't change its strategies with the looming entry into Australia of German discount retailer Kaufland, which it competes against in Europe. The two toughest issues for entrants into Australia, like Kaufland and US warehouse retailer Costco before it, are finding the right sites and building a supply chain from scratch. In terms of its local competition, Aldi's CEO says that, "it was easier running a privately held supermarket chain than a publicly listed entity because he wasn't hostage to quarterly sales figures and the need to meet short-term targets."
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May-19
Wednesday

The ugly truth facing mall owners

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The AFR reported that after 20 years of asset valuation increases a reckoning is coming for shopping centres as willing buyers and sellers inevitably make deals at much lower prices. The grim outlook for a sector of the property market that has been good to investors for 25 years is no surprise to wisened players. Many have been predicting a reckoning for shopping centre valuations for some time. Unwinding valuations could be painful as the process could cause billions of dollars of write-downs as lower valuations flow through the balance sheets of all shopping centre owners. Vicinity Centres' CEO exposed the scale of the problem when he said there was a total of $11 billion in shopping centres in various stages of the selling process in Australia at the moment. The typical stock of shopping centres for sale at any one year was $3 billion to $4 billion. With three to four years of supply hitting the market at once, the full impact is yet to be felt.

Consumers pick and choose

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The AFR reported that solid sales at discretionary retailers JB Hi-Fi and Super Retail Group suggest consumers are still willing to spend on technology, hobbies and sports despite weak wage growth, a weakening economy and political uncertainty. However, the downturn in house prices is taking its toll on retailers more heavily exposed to the housing cycle. For example, Beacon Lighting was forced to downgrade earnings guidance by about 12.5% to between $28.5 million and $30.5 million on Tuesday following a 1.8% fall in same-store sales over the last few months. Faced with solid but unspectacular sales growth and rising costs, retailers are resorting to self-help measures such as cutting costs, simplifying supply chains and using data analytics to better understand customers and encourage them to stay loyal and keep spending amid competition from new players such as Amazon, Decathlon and JD Sports.
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Apr-19
Tuesday

Coles gambles on convenience

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The AFR reported that Coles plans to stock more ready-to-eat meals and change store layouts so customers can shop for their evening meal faster in an attempt to boost sales to shoppers demanding more convenience. Coles chief executive Steve Cain says the biggest challenge facing Australia's second-largest food and liquor retailer is meeting the need for convenience while holding down prices and the cost of services such as home delivery as online sales soar. Here's the thing, ready-to-eat meals were first pushed as a great differentiation strategy for grocers back in the 1980s, Coles seems to have forgotten that it's old hat. Additionally, a convenience strategy means that the retailer will actually rely on location as a key differentiator, so the minute strong competition opens next door the strategy will fail.

Afterpay rivals Zip Co, Splitit soar on positive updates

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The AFR reported that shares in the buy-now, pay-later sector surged following positive quarterly updates from Afterpay rivals Zip Co and Splitit. Zip said on Monday it had made an unaudited $23 million in revenue for the three months to March 31, a 20% rise on the second quarter, and nearly double the same period last year. Zip shares rose 6.1% to $2.63, but that leap was outdone by rival Splitit pay, which surged 22.7% to $1.135. Splitit's surge came after the newly listed company said its active merchants increased by 15% to 437 for the quarter. Splitit said its unique shoppers lifted by 36% to 160,000 for the quarter across 27 countries, and its merchant fees rose 31% for the quarter to sit at $556,000 for the year so far. Meanwhile, Afterpay shares were more than 4%t higher at $24.81. The company's share price has more than doubled this year alone and has risen 207% since its 2017 float.

Oaktree and Alceon snap up housewares

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Iconic Australian housewares brands Decor and Willow are set to expand overseas and online after being snapped up by private equity investors Alceon Group and Oaktree Capital Management. Alceon, which owns womenswear retailer Noni B and online retailers SurfStitch and EziBuy, and Oaktree, which owns surf wear brands Billabong and Quicksilver, have acquired Marlin Management Services. Marlin Management is a wholesaler whose consumer brands include Decor and Willow, Albi homewares, Independence Studios toys and giftware, and Pacific Optics, which distributes general merchandise such as sunglasses and phone accessories to petrol and convenience stores. Marlin Management was put up for sale by its South African owner Coast2Coast Capital last September after abandoning plans for an initial public offering. Alceon and Oaktree did not reveal the acquisition price but an information memorandum circulated by Moelis Australia last year suggested Marlin was worth between $300 million and $400 million, based on a multiple of about eight times earnings.

Facebook, Google are not publishers?

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The AFR reported that renowned US competition lawyer Howard Shelanski has pushed back against moves by regulators to treat Facebook and Google as publishers, saying any laws dictating how the tech giants display content or refer users to news sites would be overreaching. Mr Shelanski said some regulatory reform was necessary, particularly around data privacy and mergers and acquisitions, but he urged the competition regulator and the federal government to take a slowly-but-surely approach to any changes. His comments come in response to the ACCC's preliminary report from its digital platforms inquiry, which stated that Facebook and Google curate content served to consumers and in doing so make their own decisions regarding the trustworthiness of content. It was in the aftermath of the Christchurch massacre, which was live-streamed on Facebook, that the tech giants started to be called out as publishers, not just platforms.
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Apr-19
Monday

Labor's penalty rates a triple hit for retailers

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The AFR reported that business is bracing for an unprecedented rise in the cost of weekend work if Bill Shorten is elected, as wages are expected to rise by up to 21% after July 1, if Labor proceeds with its promise to increase penalty rates. New analysis from the Australian Retailers Association shows Labor’s pledge to reverse cuts to Sunday penalty rates within the first 100 days would mean employers would suffer a triple wage hit when combined with minimum wage increases and further rises in award rates for evenings and Saturdays in the retail industry. Russell Zimmerman, executive director of the Australian Retailers Association, said the size of the increases over such a short space of time risked employers cutting jobs and would “certainly mean retailers will look at the number of hours they employ people - it’ll send us into meltdown, industry won’t know where we are. We’ll be changing rates left, right and centre. The cost to business will be astronomical.”

Amazon strengthens ties with French food retailer Casino

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Reuters reported that e-commerce giant Amazon and French retailer Casino are expanding their partnership, with Amazon installing pick-up lockers in Casino stores and making more of the French company’s products available on Amazon. The deal, unveiled last week, will see Amazon lockers installed in 1,000 locations across France in nine of Casino’s brands, including Monoprix, Monop, Geant, Hyper Casino, Casino Supermarche, Leaderprice, Viva and Spar by the end of the year. The lockers store Amazon products to be picked up by customers. Some 3,500 Casino-branded products will also be available on Amazon, while Amazon and Monoprix will extend their partnership on Amazon’s Prime Now grocery delivery service outside Paris and into new cities in the next twelve months. Locker-based click and collect model will piggy back on this type of arrangement.

H&M pioneers supplier transparency

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Adweek reported that fast fashion brand H&M will now list suppliers and factories for all of its garments, positioning the retailer as a pioneer in transparency. The origin of where a garment was made will be listed on H&M’s website and will also be available in store by scanning an item’s price tag with the H&M app, which will then display the supplier information.