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How Did the UK’s Retail Stores Fare in the Holiday Shopping Season?

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It was forecasted to be a grim Christmas for retailers across the UK in the 2017 holiday season with inflation and wage growth placing downward pressure on consumers’ holiday spending. But while investors were bracing themselves for lackluster sales over the holiday shopping season, it turns out the reality wasn’t as gloomy as was feared.                                       

Most notably, the British clothing chain Next – the first major British retailer to provide any update on holiday sales – reported that Christmas sales that were better than expected. The retailer reported full price sales growth of 1.5 percent in the 54 days before Christmas. While the retailer reported that in-store sales did fall from 2016 sales, growth in online sales more than compensated for the dip in revenue.

And Next isn’t the only British retailer to perform better than expected over the holidays. John Lewis, for example, reported an incredibly strong sales week in the final run-up to Christmas, with total sales increasing almost 9 percent. Sales at Macy’s stores also rose by 1 percent across the UK in November and December. JC Penny also reported sales growth with revenue rising 3.4 percent in the nine-week period prior to Christmas. Much of this sales growth reportedly came in the categories of home, jewelry, and beauty.

“We have long believed that conditions were not as bad as many believed for the consumer and we expect the next few weeks’ statements to show that companies with the right offer can do very well,” analysts at Peel Hunt told the Daily Mail.

The bottom line? There is no doubt that retail stores in the UK will continue to face challenges, particularly given the rough economic conditions and the ever-increasing growth of online sales. However, the situation might not be as bad as it initially seemed. Encouraging holiday sales suggests that customers are still willing to venture out to get their shopping done.

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Bitcoin’s Effect on Retail

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Bitcoin is the hot topic in the world of tech. With dramatic fluctuations in value, the cryptocurrency is increasingly garnering attention from both governments looking to regulate it and consumers looking to use it. But as bitcoin continues to grow in popularity and gain more mainstream attention, what, if any, effect will have on retail?

First, if the cryptocurrency continues to grow in popularity, retailers will need to accept it as a method of payment – or risk losing business. A number of retail outlets already allow customers to pay for their purchases in bitcoin. For example, Overstock was among the earliest retailers to accept bitcoin payment. Now, e-commerce platforms like as Magento and Shopify also accept bitcoin payments using integrations like BitPay. But analysts expect the number of stores accepting bitcoin payments to skyrocket in 2018.

“There’s undoubtedly a meteoric rise of cryptocurrency awareness. It’s at the forefront of mainstream discussion and intrigue. In 2018, many retailers (SMB and enterprise) will hop onboard the cryptocurrency trend to diversify payment options — adoption will inevitably increase,” Ecommerce and technology columnist Tom Popomaronis recently told Forbes.

Second, some analysts speculate that we may even start to see the rise of cryptocurrency-only online stores.

“The real prediction is the emergence of cryptocurrency-only e-commerce stores. The fierce cryptocurrency and blockchain tribe of loyalists provides an incredible opportunity for rising DTC e-commerce startups to cater to that — it’s relatable and relevant,” Popomaronis explained. “It’ll be fascinating to see that a customer might first consider an e-commerce site simply because of its exclusive payment option, instead of the product(s) it sells.”

The bottom line? It doesn’t look like bitcoin is going anywhere anytime soon. As it grows in popularity, retailers should begin to adapt. Failure to accept bitcoin payments could potentially render some retailers less competitive in the not-too-distant future.

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3 Retailers Amazon Can’t Crush

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When it comes to the increasingly competitive retail landscape, it is no secret that the rise of online shopping has put a dent in the sales of many traditional brick-and-mortar stores. E-commerce giant Amazon is often blamed for traditional retailers’ financial woes, with the convenience and economics of shopping at Amazon making it difficult for traditional retailers to compete. But believe it or not, a good number of retailers have managed to survive Amazon’s rise to power. Take a look at these three retailers that Amazon can’t crush.

  1. Nordstrom is one of the few department stores out there growing its store count. Much of its success can be attributed to Nordstrom Rack, a discount line that has helped it attract discount shoppers. Additionally, Nordstrom has also made significant investments in online shopping and around 20 percent of all of its sales are now online, which has helped the company’s finances tremendously.
  1. Like Nordstrom, Target has also invested in online shopping. Over the course of the past two years, its online sales have risen 30 percent annually. It’s also changed its approach. Instead of building megastores, it’s working to build smaller stores that are easier to navigate in densely populated urban centers, making it easy and convenient for consumers to shop.
  1. Best Buy. Electronics retailer Best Buy is also thriving, having significantly beefed up its omnichannel presence and cut its expenses. Believe it or not, its stock has actually increased an impressive 75 percent over the past three years. In addition, it reportedly has plans to increase revenues by nearly 10 percent over the course of the next four years.

Ultimately, while online shopping is rapidly growing in popularity, a good chunk of customers do still opt to shop in stores. According to Forrester Research, 8 out of every 10 retail sales took place in stores in 2017. With the right strategy, traditional retailers can survive the e-commerce boom.

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Florida’s Mysterious Mannequin-filled Ghost Ship

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Residents in Florida were perplexed after a hurricane in September dragged some unusual debris onshore: an empty, mannequin-filled ship.

A jogger reportedly found the boat while out on a morning run. The double-masted sailboat – which apparently appeared to have taken quite a beating in the now infamous hurricane Irma – reportedly washed up on Florida’s Melbourne beach in the days after the hurricane. A number of mannequins were found below the deck of the 45-foot vessel, including one holding an ominous sign that read, “The beatings will continue until morale improves.”

Following the ship’s discovery, the local sheriff’s department learned that the boat was registered to an owner in the Key West, meaning it had traveled over 200 miles during the storm. Records show that it is a fiberglass hull sailboat constructed in 1974, named “Cuki.” The owner of the ship is reportedly currently incarcerated.

“What I find amazing is this sailboat stayed intact, two masts, and it rode that hurricane all the way up here from Key West,” Tom Tobin, a local Melbourne beach resident and a charter pilot, told USA Today. “Earlier today when I was out here, there were two mannequins on board. They survived it, too. So to me, that’s incredible that they survived that journey in a Category 5 hurricane.”

In spite of its treacherous journey, both the ship itself and the mannequins in it appear to be in fairly good condition, though scavengers have reportedly stolen a few pieces of electronic equipment from it since it washed up onshore. It remains unclear when the boat will be cleared away.

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Millennials’ Love of Makeup Driving Beauty Sales This Holiday Season

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It’s a tough market out there for retailers. But there is one segment of the retail industry that is thriving: cosmetics. Young shoppers today are spending almost 25 percent more on cosmetics than they did just two years ago. They all outspend baby boomers in the makeup department considerably. According to research conducted by the firm NPD, millennials that self-identify as “makeup enthusiasts” use upward of six different cosmetic products per day.

In the US, beauty retailers are reaping the benefits of this. Revenues at beauty retailer Ulta Beauty are expected to hit $5.9 billion this year – up from just $3.9 billion two years ago. Similarly, revenues at beauty retailer Sephora have doubled since 2011. Sales are up for newcomers to the cosmetic industry and long-time established brands alike. 20-year-old Kylie Jenner’s makeup line, Kylie Cosmetics, had racked up a staggering $420 million in sales a mere 18 months after it launched. Meanwhile, Estée Lauder’s Double Wear foundation – a product that has been on the market for over three decades now – has seen double-digit growth rates in sales.

The trend holds true in the UK as well. As of this spring, cosmetics have become the top-performing category within the health and beauty sector, with sales up over £55 million over the course of the past year. Sales of bronzer in the UK doubled within a year, while sales of concealers shot up from £52 million to £42 million. Face contouring products and eyebrow products have also sold at much higher rates – largely driven by the trends for dark, thick eyebrows and heavily contoured faces seen in the selfies of stars like Kim Kardashian, Kylie Jenner, and Cara Delevigne.

“The result is that there is a lot more new product development among brands in this space, for both female, and increasingly male, cosmetics, leading to a wider and often more interesting choice of items within stores and online,” Chloe Humphreys-Page, a director at market analytics firm IRI told the Independent earlier this year. “The impact of the so-called ‘selfie generation’ – where people are spending disproportionately long periods of time studying their faces and making sure they are camera-ready – is not just driving sales for certain cosmetics, but also boosting demand for ancillary products, like eyebrow kits, sponges, pencils, and brushes.”

This increased demand for cosmetic products will be good news for retailers this holiday season, as cosmetic sales are expected to buoy the performance of the beauty market overall. And the even better news? Analysts say the cosmetics market is expected to enjoy even further growth in 2018.

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Is Retail Going Through a Midlife Crisis?

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It’s no secret that the world of retail is changing – and it’s changing fast. Over one-half of all consumers say that they begin their purchasing journey using some kind of digital platform, while over two-thirds of consumers report that they prefer a combination of digital and in-store options while shopping. In this world of fast-paced change, retailers are going to new lengths to keep up with the shifts and stay relevant.

“The retail industry is currently going through a very visible existential crisis. On one end, there are long-time brands closing stores and refitting showrooms to become distribution centers,” Eric Feinberg explained in Forbes. “And on the other? Well, to casual observers it probably looks like the equivalent of a retail version of a mid-life crisis.”

In other words, in order to keep up with shifting consumer demands and shopping habits, retailers are increasingly looking to reinvent themselves. Often, this involves stretching themselves beyond their core businesses competencies. Iconic department store Nordstrom, for example, is expanding well beyond traditional department store territory of apparel, homeware, and beauty products. Now, Nordstrom department stores will have full-service fashion centers, which boast everything from scheduled spa amenities from full=service juice bars. Ikea is moving beyond just furniture and is now offering handyman services, while Whole Foods is increasingly trying to get customers to ditch store visits in favor of home delivery services.

Essentially, retailers are increasingly looking to get customers through their doors not just relying on the allure of the products that they’re selling, but also the experiences and services they can offer their customers. In order to succeed, retailers will need to keep reinventing themselves to keep up with evolving consumer behaviors. To survive this midlife crisis, brands must measure satisfaction and customer journeys to make tweaks to their selling models and strategies accordingly.

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Pranksters Disguise Themselves as Mannequins to Scare Passerby

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A pair of pranksters in Beirut have garnered international media attention after releasing a funny video in which they disguise themselves as mannequins to surprise pedestrians.

The video, which was shot on Oct. 31 by the collective HowAboutBeirut, shows the men standing absolutely still, completely posed as mannequins outside of a store. Every time pedestrians passed by, however, the disguised men made a surprising movement, typically scaring the passerby while eliciting the laughter of those around them. In fact, one woman passing by the men on the busy street was so startled that she almost toppled over.

The video was the brainchild of Alex Stifler and Jad Khawandi, two members of the collective. It was widely shared across social media, including on Instagram, Facebook, and YouTube. A good chunk of viewers found the pranks quite amusing – although some expressed disapproval with group’s choice to scare innocent strangers. Either way, it is certainly an apropos Halloween prank!

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Retail Chain Store Closures Fall to Lowest Level Since 2010

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The number of retail chain store closures in the United Kingdom has fallen to just 14 a day according to analysis by PwC – the lowest rate since 2010. All in all, the analysis found that 2,342 retail stores opened on the UK’s high streets and shopping malls in the first six months of the year. And just 2,564 shops closed during the same period, bringing the net closure rate to 222. That is down significantly from 503 net closures during the same period in 2016 – a significant improvement in a year.

“The relatively low level of net closures in the first half of this year reflects a more stable environment, with consumer confidence proving more resilient than expected as the year unfolded. Historically, the number of retail insolvencies has been a major factor in the volume of store closures,” Mike Jervis, an insolvency partner and retail specialty at PwC, explained in a blog post on the company’s website. “2017 is on course to post the lowest level of administrations for more than a decade, with a favorable impact on overall store numbers.”

Still, however, it should be noted that the closure rate hasn’t had the same effect on all sectors of retail. For example, women’s shoes and clothing stores had the highest closure rates, with charity shops and gift shops also suffering. Coffee shops, bookstores, and grocery stores, however, actually fared quite well – all saw fairly significant increases in store numbers.

All in all, analysts seem to agree that this is good news for Britain’s retail sector, offering an increasing amount of stability to many towns that have suffered significantly because of store closures. However, there could be obstacles ahead: analysts have pointed out that with high inflation and a looming Brexit, this bright spot for the sector may not last.

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Retail in 2018

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It is no secret that technology is changing retail as we know it. But what advancements stand to have the biggest impact as we move into 2018? Take a look at the following trends.

Augmented Reality

With the rise of online shopping, the retail experience is becoming less and less about picking up and trying out a physical product in a brick-and-mortar store. Instead, retailers are becoming more adept at leveraging the power of augmented reality to entice customers into buying products. For example, some furniture retailers – such as Ikea – now allow you to upload a picture of your living space to see how a specific item of furniture looks in it. Some retailers are testing out technology that allows customers to try on clothing via a virtual representation. Increasingly, retail success will depend on retailers’ ability to provide immersive shopping experiences online. Expect retailers to continue to make use of augmented reality throughout 2018.

Assortment Planning Driven by Artificial Intelligence 

There are no longer physical limitations on the number of products that retailers can carry in their stores thanks to the rise of drop shipping. That means that while retailers can carry all sorts of different product types, they need to figure out which ones are most consistent with their overall brand identity. To figure this out, retailers are increasingly making use of artificial intelligence-driven assortment planning, which helps them select the products that are most likely to resonate with their customers based on the products’ characteristics and the demographic information of their target customers.

The Distinction Between Brands and Retailers Will Blur

The distinction between a brand and a retailer is becoming less and less important. Brands are increasingly partnering with other brands to sell their products and labels, and retailers – notably Amazon – are building up billion-dollar private label businesses. That means the distinction between the two is becoming less relevant.

The bottom line? The world of retail is evolving quickly – and 2018 is anticipated to bring major changes. If retailers want to stay relevant, they have to keep up.

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Inflation Squeezes Holiday Shoppers in the UK

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Retailers in the UK are struggling this holiday season as inflation combined with slow wage growth squeeze shoppers. Analysts say that rising food prices are forcing consumers to focus on the essentials – leaving them without extra money for holiday purchases. The amount of money consumers spent on food in the last 12 months, for example, rose by an average of 3.4 percent. That’s the biggest increase since March 2013.

“November brought relief as growth in retail sales perked up after last month’s dip. But Black Friday, the big retail event of the month, failed to fundamentally shift underlying trends in spending,” Helen Dickinson, chief executive of the British Retail Consortium, told the Telegraph earlier this month. “Food sales were responsible for pretty much all the growth this month as higher prices continue to absorb more of the weekly shopping budget. Non-food sales – the focus of Black Friday – fell, as the squeeze on household incomes continues to impact discretionary spend.”

All in all, spending only increased by 2.8 percent in November, a rate which is less than the rate of inflation, suggesting that consumers are cutting back. And estimates suggest that holiday spending is likely to decrease for the first time in five years. All in all, it looks like it will be a less-than-ideal holiday shopping season for retailers in the UK this year.

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