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Cue moves to provide same day deliveries

The AFR also mentioned Cue’s decision to provide free, same day deliveries.  Given that statistics show that such an offering generates an extra 10% of traffic to the e-commerce business, the question arises whether the extra sales will be profitable.  Same day, free shipments cut deeply into profits and one needs fat margins to accommodate such costs.

QLD government demands a share of income tax for the states

The AFR reported that the Queensland government demanded a share of the income tax for the states.  Ms Palaszczuk needs to be reminded that states already collect tax in relation to income, hidden under the moniker of ‘payroll tax’ and it’s already quite substantial.  Interestingly enough, this tax applies even to low salary earners, as long as they work for a larger enterprise.  Has anyone within the QLD government ranks considered the obvious alternative: if you don’t have enough money, reduce your expenses?

Cotton On thrives in the online space

The Herald Sun published an article about Cotton On and its success within the e-commerce space.  The author quite rightly pointed out that being a global operator, Cotton On had prior experience in markets where Amazon was active, so their arrival in Australian was ‘business as usual’ for the Group. One important area where we were able to underpin their excellent results was a new loyalty system, deployed using Retail Directions’ software, which already runs a large portion of Cotton On’s business.

Speculation that Amazon will buy Target

The Chicago Tribune speculates that Amazon will buy Target this year.  The Tribune thinks that this fits with Amazon's business model, which has been growing beyond e-commerce.  We beg to differ, but if Amazon does buy Target, it will be good news for traditional retailers.  The more Amazon moves into the traditional retail space, the more its absurd stock market valuation will be exposed to rational analysis.  Once its stock starts to be valued in the same way as normal businesses, they will lose the ability to operate at a loss, using the share market to cover this up.  

Tax changes in the US to substantially boost the economy

The US National Retail Federation (the world’s largest retail trade association ) commented that the recently legislated tax changes will boost the US economy more than any other initiative in decades.  Retailers will benefit as employment grows and wages increase.  The NRF expects up to 1.5 million new jobs to be created as a result of the new tax regime.  Congressional estimates show a family on the average income of $73,000 pa will see a tax cut of over $2,000 in 2018.

Will Bitcoin boom or burn?

The main stream media continues to comment about Bitcoin and other emergent ‘crypto-currencies’, referring to it as ‘boom’, ‘investment’ and ‘currencies’.  Pity they didn’t take the time to read Extraordinary Popular Delusions and the Madness of Crowds.  Published in 1841, the book describes precisely what’s happening and what WILL happen.  Bitcoin is not a legal tender, it’s not represented via coins or banknotes, it is not supported by even a single nation, so the question arises whether it actually could be called a ‘currency’.  Anyone who put money into this pyramid scheme will get burnt, sooner rather than later.

Solid Christmas trading period for retailers

The Australian Financial Review commented on the Christmas trading period, which was quite solid for Australian retailers.  The AFR expressed surprise that Amazon’s Australian operations didn’t make any noticeable impact, which actually didn’t surprise us.  Every country has its specific environment, which leads to its own mix of over the counter vs. delivered retail sales.  The entry of another online player may alter the mix within the segment that sells via deliveries, but it was unlikely to move more sales away from brick and mortar stores.  We think that most of the shift from over the counter sales to delivered sales has already occurred.  Regrettably (for retailers) there is much less profit in a sale if delivery is required…