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What Experts Predict for the Luxury Market in 2019

· Retail, Retail Business

Experts are making predictions for the luxury market for 2019, with an expectation of slowing sales and some turmoil. For years, Paris has been the example of what was to come in the luxury market within the United States and the rest of the world, but Paris is far from setting trends at the moment with its protests and other problems going on. Some experts predict a similar battleground in the luxury market.

Slowing Sales and Turbulence

One of the predictions for luxury goods in 2019 involves slowing sales amidst the market turbulence. Experts do not anticipate an end to this market turbulence and predict an impact for the luxury market. They point to the Savigny Luxury Index’s decline in November as an example of what to expect.

Increase in Wealth

Luxury brands should be excited about the growth of the wealthy class. This means that those who have previously been in a position to afford luxuries are better equipped to spend on them than they previously were. The wealth of high-net-worth individuals grew in 2018, which solidifies this idea. On the other hand, only the rich seem to be getting richer, so the overall number of customers in the luxury segment may not increase in 2019.

Adopting Digital Technology

The procrastination is over, and luxury brands will no longer be able to wait to adopt digital technology. More luxury brands will be selling their items online or incorporating technology and applications into the overall shopping experience. This trend is still young enough in the luxury industry that those companies who take advantage of it early will get a significant advantage.

This adoption of digital technology will play a particularly important role for luxury brands in 2019 in their efforts to bring in new lifelong customers. Older millennials are beginning to accumulate the type of wealth needed to lead to an interest in luxury goods, meaning luxury brands will start trying to get the interest of wealthy young shoppers.

Source:

https://www.forbes.com/sites/pamdanziger/2018/12/18/whats-ahead-for-the-luxury-market-in-2019-expect-turmoil-and-slowing-sales/#606aa98b6578

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A Look Back at the Top Beauty Retail Trends in 2018

· Retail, Retail Business

Now that 2018 has come to a close, we can look back on some of the retail trends. Some of the beauty trends from 2018 will likely be left in the previous year, while others will find their way into 2019, perhaps with some updates. Explore some of the top beauty retail trends that brought in consumers last year.

Changes to Loyalty Programs

Beauty retailers have long worked hard to build up a sense of loyalty with consumers, and this was no exception in 2018. Both Ulta and Sephora worked hard to reinforce the idea of brand loyalty. In May, Ulta had nearly 28 million members in its loyalty program, and the company had added a Diamond Tier for those spending over $1,200 annually. Sephora’s update to its loyalty program added benefits to certain member tiers. Overall, there was a trend toward investing in these types of programs for beauty brands.

Updating the Appearance of Stores

Another trend for beauty retailers in 2018 was the transformation of the actual brick and mortar stores. Most stores made a transition to more of a high-touch atmosphere with a focus on experiences and the use of technology. Within the beauty industry, the use of virtual and augmented reality was a big move, as well as the increase in tech throughout stores. An example of the experiential focus for stores’ layouts is Saks, which now has space for services like facials and brow shaping.

Piloting New Spaces

Many retailers that do not associate with the beauty industry have also put their feet in the door by piloting new spaces and partnerships. Banana Republic, for example, partnered with Cos Bar in San Francisco to drive traffic. Meanwhile, CVS began testing for a store-within-a-store concept called Beauty IRL, with success. Walgreens announced a Birchbox partnership, joining the trend.

Time will tell which of these beauty retail trends continue into 2019 and which are left behind in 2018.

Source:

https://www.retaildive.com/news/3-trends-that-pushed-beauty-retailers-to-new-heights-in-2018/543600/

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Retail Had the Best Holiday Season in Six Years

· Retail Business

Now that the holiday season is over, it is time for retailers to look back at sales. Expert analysis is in, and this year’s holiday season was the best for retail in an impressive six years.

The Figures

According to Mastercard SpendingPulse, the sales within the United States during the holiday season rose 5.1 percent to over $850 billion. For the purposes of this evaluation, the holiday season is considered the time between November 1 and Christmas Eve. Additionally, Mastercard compared online sales during that period to those within the same time range the previous year, finding an increase of 19.1 percent from last year. SpendingPulse monitors spending online and in stores with any payment method, so the results are all-inclusive.

The Timing of the News

This evaluation from Mastercard SpendingPulse is timely since there are currently other factors at play impacting the market and spending habits. Specifically, the fluctuations in the stock market and the assortment of concerns on Wall Street about spending and the economy had some retailers concerned. Even so, these figures show that consumer confidence is strong, which is likely why the holiday season went so well for retailers.

The Best Sectors and Businesses

While all of retail did well over the holiday season this year, some sectors did better than others. The strongest sectors included home improvement and apparel, which went up 9 and almost 8 percent, respectively, since their top growth since the year 2010. The leading position of the apparel sector is unsurprising, as many of those major brands kicked off the holiday season with high sales during Black Friday. Abercrombie & Fitch, Old Navy, and Lululemon were all among the high-performing retailers during that time of the year. Other apparel retailers doing well this holiday season include Nike and T.J. Maxx as well as other activewear and off-price companies, respectively.

Source:

https://www.cnbc.com/2018/12/26/retail-is-having-its-best-holiday-season-in-6-years.html

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Cramer Says that Retailers Cannot Ignore Digital Media in Their Marketing Strategies

· Retail, Retail Business, Retail Store Marketing

Jim Cramer from CNBC has once again given out advice for retailers around the world. According to Cramer, digital media is something that retailers cannot afford to overlook, as it helps drive traffic to websites and physical stores.

What Cramer Says

Cramer pointed to the retailers with recent reports and how they have all indicated that spending on digital media is essential. More money than ever before is going into digital advertising, and retailers need to follow suit to stay relevant and competitive. Cramer noted that every single conference call he has been on related to retail has included boosting online advertising, often multiple times within the call.

Even Facebook Is Still Relevant

Even with the scandals surrounding Facebook, advertising on that social media platform remains a very smart move for retailers. Cramer is unsure what will happen with the Facebook stock, saying that it may have already bottomed or it may be ready to – or it may still go higher. While the stock for Facebook is all over the place, including gaining 2.5 percent intraday then settling up 1.7 percent, the benefits of advertising on the social media platform are certainly still there.

How to Harness Digital Media

There are many ways that retailers can use digital media to help with their marketing, but the bottom line is that you should be doing so. You can pay for ads on various social media platforms, or you can make accounts on those pages and then work to gain followers/friends and post relevant content, including advertising for your brand. You can partner with influencers on social media. Or you can pay for digital advertising on various websites online. Digital media marketing could even include your search engine optimization strategy as well. The most important thing to remember is that in today’s world, retailers will struggle without using some element of digital media to promote their company.

Source:

https://www.cnbc.com/2018/12/12/cramer-remix-to-ignore-this-trend-is-to-miss-a-huge-opportunity.html

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Online Shopping with In-Store Pickup Is Growing in Popularity and Accessibility

· Retail, Retail Business

With the growing demand for convenience when it comes to shopping, it is no secret that shopping online has grown in popularity. What many people and retailers do not consider, however, is the popularity and convenience of buying online and picking up in-store. This is one way to get items within a few hours without having to wait in line or wander around a store.

Increased Online Spending

Adobe Analytics recently analyzed data and found that between November 1 and December 6, a record $80.3 billion was spent online, representing an increase of 18 percent from last year, from $67.7 billion. This increase was the result of monitoring transactions at 80 of the top internet retailers in the United States.

Click-and-Collect Accounted for Growth

According to Adobe Analytics, one of the many reasons that digital sales keep skyrocketing so much is that more shoppers than before are using click-and-collect, where they order items online and pick them up in stores. This involves going to a designated spot of the store and picking items up, in many cases, on the same day. Adobe actually found that during that same period from November 1 to December 6, click-and-collect orders grew by 46 percent from last year.

Retailers Have Taken Notice

Some of the increase in the use of click-and-collect services is due to the fact that retailers have realized customers want these services and have made adjustments. Companies understand the value of speed for most shoppers, which is why they are working to refine this type of service. A few years ago, the idea of buying online and picking up in-store was still new. Then, retailers realized that they could deliver a competitive advantage over online retailers with their growing distribution centers. Essentially, retailers found click-and-collect to be a win-win situation where customers can get items on the same day in a convenient way and the company saves on costs like shipping.

Adding Click-and-Collect Is an Investment

The only issue for retailers looking to add click-and-collect functionality is that it can be a serious investment. You need to dedicate an area of the store to the process, create a system, and train staff. That adds up to a large investment. There are also other challenges, with each retailer facing some struggles along the way. For example, it can be hard to give customers the right timeframe for pickup or prevent errors while they are collecting the items. Overall, stores have been improving their performance for buying online and picking up in stores, and more large retailers have been adding the feature. Those who want to remain competitive and have the ability to follow suit should do so.

Source:

https://www.cnbc.com/2018/12/11/its-getting-easier-to-skip-the-line-and-buy-online-pick-up-in-store.html

 

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Empty Sears Stores Will Likely Be Torn Down Instead of Rented or Sold

· Retail Business

It is no secret that retail giant Sears filed for bankruptcy and has closed nearly all of its stores within the United States. The question has been what will happen to those stores. Will another retailer snatch them up, or will they sit empty for years to come? Now, it seems that tearing many of them down may be the best option.

Store Closings by Numbers

Sears already indicated that following its bankruptcy, it will shut 142 stores by the end of 2018. The future of Sears is a bit uncertain, and it is currently in bankruptcy court. One potential outcome is a complete liquidation, and if that happened, then more than 500 more Sears (and Kmart) physical stores could close.

Filling the Space Is a Challenge

Given today’s retail space, owners of malls where Sears previously had stores are having some serious problems filling the space left behind by the retail giant. Most Sears stores cover over 100,000 square feet and have several levels. The number of retailers who need a space this size is relatively low. The number of retailers who use that amount of space and are actively growing, making them likely tenants, is miniscule. Some big companies have already shown some interest, including Burlington, At Home, and U-Haul.

Even so, most real estate owners would find it much easier to divide up a Sears store and rent it in pieces than to just rent or sell it as is. Unfortunately, that process would involve a great deal of costly construction. Some mall owners have successfully done just this, but it can prove a challenge.

Tearing Down the Store Is the Best Alternative

Combine the high cost of construction with the fact that even between the various interested companies like U-Haul, At Home, Burlington, and others, there would not be enough interest to use all the emptied Sears stores. With that in mind, it becomes the most cost-effective option to just demolish a Sears store. By tearing down the store, there is no need to worry about how to divide up the space or concerns about supporting structures.

One retail expert pointed to the actual cost of each option. Greg Maloney, who is the CEO and President of JLL’s Americas retail, indicated that retrofitting a Sears store or dividing it into several smaller spaces can cost about $100 per square foot. By contrast, demolition would be around $30 per square foot, with a similar cost to build new stores. Mathematically, it is cheaper to tear down an empty Sears and start from scratch, assuming it cannot be filled as-is.

Source:

https://www.cnbc.com/2018/12/12/your-shuttered-sears-store-could-soon-be-demolished-heres-why.html

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More Shoppers Will Be Spending Via Mobile this Holiday Season

· Retail Business

Retail experts expect more shoppers to buy items using their mobile devices this holiday season than in previous years. This is significant given that the forecast for online holiday sales is $125 billion for 2018. Adobe Analytics found that smartphones will drive almost half of shopper traffic, bringing in more sales than desktop computers.

What the Analytics Found

Adobe Analytics measures transactions from 80 of the 100 top internet retailers, making them well-positioned to create accurate predictions for shopping during the holiday season. The team predicts that smartphones will account for 48.3 percent of the visits to apps and websites for retailers. By comparison, they predict that desktop computers will account for 42.9 percent and tablets for 8.8 percent.

Even with more visits to applications and websites via smartphones, Adobe Analytics expects smartphones to only account for 27.2 percent of the revenue. By comparison, this figure was 11.6 percent last year. Desktop computers are predicted to account for a whopping 63.1 percent of online sales and tablets should account for 9.6 percent.

What the Figures Mean

Looking at the sets of figures from Adobe Analytics, it becomes clear that more people than ever before will be using the mobile applications and mobile versions of retailers’ websites to browse items, but most will not actually buy there. Many shoppers still indicate they prefer to just browse deals on mobile devices and buy on their desktop.

Retailers Are Taking Note

The major retailers are already well aware of the increased interest in buying during the holiday season via mobile devices. As such, Target, Walmart, Kohl’s, Macy’s, and others have been working hard to improve their mobile applications, including making heavy investments into these projects.

What Retailers Should Do

If retailers can figure out how to take advantage of the increase in use of mobile applications for shopping, there is a great deal of potential profit. According to Adobe, simply lowering the number of shopping carts that have been “abandoned” on smartphones to a similar amount as those on desktop computers would lead to $9 billion in sales. Orders are currently completed on smartphones 20 percent less often than with other devices.

In the meantime, consumers tend to look at 30 percent more content on apps than retailers’ websites. They also spend 2.4 times the amount of time browsing on apps versus websites. If retailers can harness this browsing, they can do well. One strong suggestion from experts is to combine the in-store experience with the application use. Walmart shows a perfect example via its in-app maps for stores so you can plan your journey.

Source:

https://www.cnbc.com/2018/11/25/shoppers-this-holiday-season-using-smartphones-apps-to-buy-gifts.html

 

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Kohl’s and Old Navy Are Leading Efforts to Attract Last-Minute Holiday Shoppers

· Retail, Retail Business, Retail Store Marketing

The last-minute holiday shopping is now in full gear, making this the height of the busy season for retailers. With so many retailers looking to make sales from last-minute holiday shoppers, some stores seem to rise above and stand out from the crowd while others blend in. Both Kohl’s and Old Navy have announced strategies that will help them bring in those shoppers.

The Strategy from Kohl’s

The approach for Kohl’s is a continuation of its previous holiday tradition where many of the store’s locations stay open for 80-plus hours in a row. This tradition began a few years ago, and the trend continues following success in previous years. This year, Kohl’s will be open for 83 hours straight, between 7 a.m. on December 21 until 6 p.m. on December 24. This is nothing compared to 2014, when Kohl’s kept some stores open for 100 hours in a row or in 2015 when some were open for 170 hours straight.

While the number of open hours in a row is a bit less extreme for 2018, the strategy should hopefully still remain effective. It is ideal for those who procrastinated on making purchases and anyone who wants to take advantage of a shopping marathon. By the time the Kohl’s shopping marathon begins, the cutoff for online shopping with delivery in time for Christmas will have passed for most retailers. Kohl’s plans to step in and fill this void.

Of course, the strategy from Kohl’s comes with plenty of complications. Not only does the company need plenty of employees who will expect holiday and overtime pay, but the stores also need to have plenty of inventory in place so they do not run out of items.

To sweeten the deal, Kohl’s will also offer free in-store pickup of certain items ordered online during this time.

The Strategy from Old Navy

Old Navy is taking a different approach, offering free rides from Lyft to pick up orders made online. This partnership already took place on December 15 and will repeat on December 22. This is not only a convenience for shoppers, but it also serves to highlight the newly offered ability to buy items online and pick them up in stores from Old Navy. This promotion will help both Old Navy and Lyft. It is unclear whether or not Lyft is subsidizing the promotion or if Old Navy is footing the full bill. Even if Old Navy does pay for all the rides, the retailer will get valuable data and boost customers, likely with some supplemental purchases in store.

Source:

https://www.retaildive.com/news/kohls-old-navy-sprint-to-win-the-final-lap-of-the-holiday-race/544128/

 

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Retailers Should Expect a 75% Increase in Social Media from Holiday Shopping

· Retail, Retail Business

For retailers, the holiday season is the biggest time of the year and when they make a huge percentage of their annual sales. In addition to the boost in sales, retailers should be prepared for a boost to their social media interactions this time of the year.

The Expectation

Reports from Sprout Social are estimating that retailers will see an increase of 75 percent in the daily social media messages received during November and December of this year. This is a larger increase than between January and October. It is also around 32 percent more than the daily messages in November and December of 2017. It is expected that larger retailers (those that have over 1,000 employees) will generate 7,599 social messages daily in the last two months of the year. By raw numbers, this is over 1,500 more than the same time last year.

On Instagram, in specific, Sprout’s data indicates that retailers will receive 65 percent more messages daily on average in the final two months of the year compared to the end of 2017. Keep in mind that November and December of 2017 already saw a 120-percent increase in daily messages on Instagram for retailers compared to the same time in the previous year.

The Study

The report from Sprout Social should be considered reputable. After all, Sprout Social looked at over 2.9 billion messages on Instagram, Twitter, and Facebook.

Social Media Responses Matter

Hopefully for retailers, there has been significant improvement since three years ago when a different Sprout Social study discovered that retailers did not respond to up to 83 percent of messages on social networks. This is no longer an option thanks to the increasing use of social media. A recent study from Sumo Heavy indicated that less than 20 percent of users of social media buy things via social channels. Even so, these channels play a key role in branding and reputation. This figure may also increase as retailers put in additional effort to reach consumers via social media.

Source:

https://www.retaildive.com/news/retailers-to-see-75-increase-in-social-media-during-the-holidays/542777/

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Snapchat Revealed an In-App Shopping Channel in Collaboration with Shopify

· Retail Business, Retail Store Marketing

Popular social media platform Snapchat has collaborated with Shopify to release its Shop and Cop channel. This is a dedicated shopping channel within the application that features limited-time deals as well as exclusive offers available on Shopify.

Finding and Filling the Channel

The channel is in the Discover section of Snapchat, and it will be curated by Snapchat itself. On the channel, you will find content and posts from social influencers. It also utilizes Shopify’s abilities to let shoppers actually stay within the application to claim those deals and make a purchase. In other words, there is no need to redirect to a retailer website.

Instagram May Be Doing the Same

There are reports that Instagram is also looking into creating a shopping application and is already in the development stage. Some experts feel that these reports may have spurred Snapchat on to create their in-app channel more quickly than planned. The rumors concerning Instagram indicate that the company is creating a separate app from its current one, while Snapchat chose to incorporate the shopping element into its existing application.

Follows the Use of Mobile for Shopping

This new release from Snapchat and Shopify comes when mobile shopping apps have continued to evolve, making it fit right in with the changing market. More mobile shopping applications now incorporate social media networks or elements of those platforms in addition to the deals they offer. There is also more and more personalization arising in shopping applications. As such, Shop and Cop from Snapchat seems to come at a time when the market will appreciate its addition.

Other Advances for Snapchat

This is not the only recent innovation from Snapchat or its only partnership, for that matter. Snapchat has partnered with retail giant Amazon for visual searches. Last month, the social media application created additionally shoppable ad options for advertisers. There is also recent news that a Snapchat-augmented reality lens is being tested by Disney and Levi Strauss to allow for virtually trying on clothes.

Sources:

https://www.retaildive.com/news/snapchat-unveils-in-app-shopping-channel-with-shopify/542784/

https://www.businessinsider.com/snapchat-shop-and-cop-shopping-channel-2018-11

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