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The Average Credit Score in the US Is at a High: What It Means for Retailers

· Retail Business

Credit scores tend to be a good indication of spending as well as financial responsibility. Recently, FICO announced that the national average credit score hit its high at 704. FICO is the developer behind one of the credit scoring systems that lenders use and has scores between 300 and 850.

Comparing Figures

Around a decade ago, the average credit score bottomed out at 686 during the housing crisis. This was a result of the increase in foreclosures. Since then, credit scores have steadily climbed back up, now reaching the all-time high. To put the average score of 704 in perspective, this is a “solidly good” score. Those who have this score will qualify for most lines of credit they want. Most lenders consider scores above 700 to be good and those above 760 to be excellent.

Why the Scores Rose?

There are many factors related to the change in average credit scores, but experts can pinpoint at least a handful. The increase can be because people have more understanding of their credit scores today as well as their credit behaviors. If you understand your score, you will more likely be able to manage it. There are also new standards for public records that allow credit reports to no longer include tax liens and civil judgements, which directly boost the credit score.

However, creditors have loosened underwriting criteria to drive new card volume, which leads to a rise in delinquencies and balances. Additionally, most newly opened credit card accounts are from subprime borrowers with scores of 660 or less. Even so, this cannot make up for the fact that last year the percentage of Americans who have at least a collection account on their file dropped from 25.8 percent to 23 percent. As payment history accounts for 35 percent of FICO scores, this has a significant impact.

How Credit Scores Can Impact Retail

The link between credit scores and retail experience is fairly clear. If the average credit score is higher, this means that shoppers are more likely to be approved for a credit card or a raise in spending limit. Either of those things can translate into more sales for retailers as there is more money available for people to spend via credit. Additionally, the higher scores indicate that fewer people have outstanding debt on their credit cards, something which also increases their ability to spend.

Sources:

https://www.cnbc.com/2018/09/24/average-fico-score-hits-an-all-time-high.html

https://www.bloomberg.com/news/articles/2018-09-24/american-credit-scores-hit-a-new-high

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The MySizeID App Measures Clothing Sizes, Revolutionizing the Fashion Industry

· Retail

MySize recently launched its MySizeID app for iOS. This application lets smartphone users measure themselves to ensure a perfect fit for clothing. The idea behind the app is to help customers shop with confidence, knowing that they are much more likely to buy the correct size and not have to worry about returns.

How It Works

The MySizeID application only requires users to complete several simple movements using their smartphones. Based on those movements, the application uses sensors within the smartphone to create measurements. Those measurements become a user’s MySizeID fit profile. Via the application, users can then choose a clothing brand and see their exact size to wear for that given brand. Users utilize that information to shop online or in stores with confidence, knowing that they will buy or try on the right size on their first try.

How Shoppers Benefit

For shoppers, MySizeID is a time saver, whether you shop in physical stores or online. If you order online, there is no need to scour the website for measurement guidelines and reviews of whether the clothes run small. Instead, you can just order the clothing and are less likely to waste time returning the item and ordering a new one. If you shop in the store, you will know which size to try on first, so you do not have to bring three different sizes into the fitting room, saving time both in terms of trying on clothes and finding them.

Helping Retailers

MySizeID also has significant benefits for retailers with its ability to reduce the number of returns. MySize estimates that the use of this application will be able to reduce return rates by about 30 percent each year. This is significant considering retailers spend about $62 billion annually on returns. Additionally, the company behind the app estimates that it will increase order values by about 20 percent due to the additional confidence in terms of sizing.

Other Approaches From Additional Companies

My Size is not the only company trying to reduce the number of returns. Naked Labs is working to ensure the perfect fit with 3D body scanners. Meanwhile, Amazon recently purchased Body Labs to use its 3D scanning technology. Many retailers are also starting to offer applications with augmented reality, so users can visualize what things like furniture would look like in their homes. You can already find this feature on apps from many big names like Wayfair, Lowes, Amazon, Target, Anthropologie, Williams-Sonoma, Macy’s, and Ikea.

Sources:

https://www.retaildive.com/news/fashion-measuring-app-debuts-for-ios/533253/

https://www.prnewswire.com/news-releases/my-size-launches-mysizeid-smart-measurement-fashion-app-for-ios-300719259.html

 

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Retail Storefronts in Manhattan Are Struggling, Leading to a ‘Ghost Town’

· Retail, Retail Business

Retailers around the world are struggling as online shopping rises in popularity, and Manhattan is no exception to this trend. A recent survey from Douglas Elliman found that 20 percent of the storefronts in Manhattan are vacant. This compares to a similar 2016 report from the brokerage when it was just 7 percent vacant. This information lines up with other studies as last year, Gale Brewer, the borough president, completed a study discovering that just on Broadway Avenue, there were 188 empty stores.

No Single Explanation

Owners of brick-and-mortar stores around the world can take heart in the fact that they are not alone if they are struggling or facing declining sales, particularly if an area like Manhattan is experiencing a similar problem. The issue, however, is determining the specific cause of the increase in store vacancy. Different people, both experts and store owners, have varying explanations.

Smaller family-owned shops point to landlords as the problem, saying that they keep on raising the rent. They feel that the landlords are hoping that zoning changes will arrive to entice developers, or they are holding out for corporate chains that can pay the higher rates. Landlords, however, argue that they are flexible with rent, even willing to go below market rates at times. They say the problem is that tenants do not want to sign a long-term lease due to market uncertainties. Yet others point to the opening of new retail spaces that makes existing properties less desirable.

Manhattan Is Not Alone

This trend of store closures is not just in Manhattan. Other areas in New York City are experiencing a similar phenomenon, including in places that always had full occupancy in previous years. Even so, many stores are holding out and continuing to do well. Those who want to stay in business can look at successful retailers for strategies on how to stay in the retail game.

Source:

https://therealdeal.com/2018/09/09/why-one-fifth-of-manhattan-storefronts-are-vacant/#

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Tips for Competing with Internet Sales

· Retail Business, Retail Store Marketing

Brick-and-mortar retailers face many challenges, including competition both online and in stores. Internet sales are particularly problematic as more people choose to buy items online instead of in stores due to the convenience factor. To successfully compete with internet sales, you need to have a few strategies up your sleeve.

Optimize Localized Search Engine Results

Any company with an online presence will likely take steps to optimize their search engine rankings. However, those with a brick-and-mortar store should make an extra effort to optimize for localized searches. This way, when people look to buy an item that you sell in your area, you will pop up near the top of the results page and the customer can get the item right away, without any need to wait for shipping. Just ensure that all information on your website, social media presence, and online business profiles is correct.

Communicate with the Landlord in Your Shopping Center

In the case of stores located within shopping centers, try communicating and working with your landlord to boost traffic to your store. This will have the side effect of boosting traffic to the entire shopping center, which is exactly what the landlord wants. Something as simple as asking your mall to promote an upcoming sale on its social media accounts and website can have a significant impact.

Offer Services Customers Cannot Get Online

The reason many people still choose to do at least some shopping in store instead of online is that you simply cannot get all the services online that you would in stores. Take advantage of this and promote unique services your store offers. If you are a clothing store, offer fashion advice from trained stylists on your team. If you sell makeup, promote the makeup application services you offer. If you sell craft supplies, plan regular events and workshops for customers to use your products or learn a new craft. These are all things online stores could not offer, giving your company a huge advantage. It only takes a quick brainstorming session to come up with something your store could offer.

Sources:

https://www.entrepreneur.com/article/290766

https://blog.vendhq.com/post/64901828979/how-brick-and-mortar-can-compete-with-amazon

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Consumers Will Pick Physical Stores Over Online Shopping – If the Staff Is Highly Knowledgeable

· Retail, Retail Business

While many retailers worry about the rise of online shopping, there is still plenty of evidence that some consumers prefer to actually visit a physical store. Stores provide some obvious benefits, like the ability to see a product in person, try it on in the case of clothes, and buy that item immediately. Recent research shows that one of the most important reasons consumers continue to choose physical stores is the knowledgeable staff on hand.

The Survey

A recent study from I-Am found that up to 74 percent of people prefer shopping in a physical store with just 26 percent selecting to shop online. There was a very big caveat in the results, however. Nearly half of those who responded to the survey indicated that employees in the stores do not necessarily improve the customer experience with 71 percent wanting staff to have more knowledge.

What the Results Indicate

The results of that study give some important information to retailers. While customers want to shop at your store, they would strongly prefer to do so if your employees can enhance their buying experience. Shoppers want to be able to ask the sales staff questions and get helpful answers to guide their purchasing decisions. Combined with the fact that more major chains are trying staff-less stores, like Amazon Go, it seems that if the employees do not add value, consumers do not care if they are there. If they are present, however, they want the staff to enhance their shopping experience.

Incorporating This Information

To make the most of this information, figure out what you can do to ensure that your staff is knowledgeable about the products you sell and can improve the customer experience. If you sell clothing, consider a service like having a personal stylist on hand to assist shoppers. Some British retailers are taking these trends to heart and have already made changes. The Waitrose supermarket chain, for example, has upgraded employees to “food ambassadors” and plans on training them so that they can give customers advice on foods and drinks and even lead food tastings. Regardless of your industry, there is a way to use your staff’s knowledge to enhance the customer experience and draw in clients; you just have to find it.

Source:

http://www.retailinsider.com/2018/07/knowledgeable-employees-vital-for-success-of-physical-stores.html

 

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Diane von Furstenberg Says 11% of Revenue Is from Individualized E-Commerce: What Other Retailers Can Learn

· Retail Business, Retail Store Marketing

Diane von Furstenberg recently announced that 11 percent of the company’s revenue comes from the individualized e-commerce experiences of its clients. This information came via a press release from Qubit.

The Individualization

According to the report, Diane von Furstenberg relied on Qubit, a marketing personalization company, to add customization features. These included shopping basket reminders and targeted emails and offers of clothing collections. All of this is part of Diane von Furstenberg’s recent efforts to create a direct-to-consumer business.

Diane von Furstenberg used Qubit Aura, which is a product discovery solution powered by artificial intelligence that targets visitors of the mobile website. Thanks to Qubit Aura, mobile customers can view more items in the product catalog, including more products that are relevant to them following several interactions and swipes.

This move was crucial for the clothing retailer since mobile accounts for more than half of Diane von Furstenberg’s web traffic, but the company was struggling to increase that mobile revenue. The report indicates that the personalization thanks to Qubit Aura led to a four-fold increase in conversions on mobile. Thanks to the use of Qubit Aura, user-specific offers led to a 20 percent conversion rate in the target customers, and basket reminders also boosted sales.

Other Examples

Diane von Furstenberg is not the only retailer to be successful with this type of individualization. Juice Beauty also used Qubit Aura’s personalization to boost mobile conversions 2.7 times with a revenue per visitor increase of 41 percent. Wolf & Badger saw an increase of 3.6 percent in its conversion rate with Qubit Aura’s individualization. Of course, you should also keep in mind that mobile commerce sales have also been growing, which could contribute to the figures.

What Other Retailers Can Take Away

These new figures from Diane von Furstenberg do more than show that Qubit Aura is a useful platform. More importantly, they give other retailers an idea of what customers want when shopping via a mobile website or application. Retailers now know that targeted offers are likely to lead to conversions, as is the ability of customers to view a wide selection of products while browsing.

Source:

https://www.retaildive.com/news/diane-von-furstenberg-credits-11-of-revenue-to-personalized-e-commerce/531120/

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Tips for Creating a Window Display That Will Draw in New Customers

· Retail, Retail Business, Retail Store Marketing

As a retailer, your window display is one of the many ways that you can draw in new customers. Think of your window display as another type of marketing, but one that you can instantly change as a way to meet changing demands and trends. To maximize the effectiveness of your window display, keep the following advice in mind.

Create a Story

Instead of just finding everything in your store that is relevant to something, such as an upcoming holiday, use those items to craft a story. Around Valentine’s Day, passersby are more likely to be drawn to a display that has a theme, like mending a broken heart instead of one that just includes a random assortment of pink and red items. If you cannot figure out what story to tell, start with a theme and see where that takes you.

Be Aware of Eye Level

While a window display is large, the entire space is not equally important. You want to put the chosen elements, either the most critical or the most likely to draw attention, at eye level. To achieve this, have an employee stand outside your window and look in while another person marks the appropriate eye level of passersby. Now, set up your design so that at least most of the crucial elements are at eye level. Just remember to account for the varying heights in people and think of your clientele. If you sell kids’ clothing or toys, for example, you need items at the eye level of the children and items at the parents’ eye level.

Don’t Clutter the Space

As with displays inside your store, you should take care not to clutter the window displays. Overcrowded displays tend to be associated with lower quality or a lack of care, neither of which you want potential clients to think about your product. Instead, keep the space clean, well-planned out, and organized.

Keep It Updated

The most successful retailers do not let their window displays stagnate. Instead, they make changes on a regular basis. In between major changes, update a few smaller items. For example, you can swap out one shirt on display for another or change the pictures you have on display. Keep in mind that changing your displays more frequently encourages people to look inside your store since they know there will be something new. If your display is always the same, it will start to blend into the background for passersby.

Sources:

https://www.entrepreneur.com/article/223677

https://www.shopify.com/retail/120058947-a-fool-proof-guide-to-creating-window-displays-that-turn-heads-and-drive-foot-traffic

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How to Create Retail Displays That Attract Millennials

· Retail Business, Retail Store Merchandising, Visual Merchandising

Anyone with a retail store knows that displays have a crucial impact on sales and even whether potential customers make it into your store. With millennials getting older and becoming a larger segment of the retail market, it is crucial that you ensure your retail displays attract millennials. With some simple advice, you can do just that.

Stay Organized

Millennials prefer stores that are organized and tidy in their arrangements. In a study from the University of Florida, the team found that millennials are driven to clearly organized merchandise, such as items that take advantage of color blocking. They also prefer stores that are tidy, staying away from those that look dirty or messy. Unfortunately, the study also found that millennials do not like employees stocking shelves as they shop, which may pose a problem for some retailers.

On a related note, millennials also want the actual layout of the store to be well-organized. In other words, make sure that your layout makes it easy to navigate your space, so millennials can easily find what they want.

Personalize It

When they are out shopping, millennials like to feel as if they are in a residence or at their home. In terms of setting up your display, this translates into personalization with some nice, homey touches thrown in. To enhance the feeling of being at home, make your store seem relaxing, so millennials are more likely to spend extra time there.

Use Technology

It should come as no surprise that millennials are attracted to retail displays that include technology, but this can still be challenging for some companies to incorporate. Luckily, technology has gotten cheaper, so you should be able to integrate tech with your display without an increase in your budget. Just be sure to make your technology high quality, such as a catchy video wall with carefully created videos.

Sources:

https://www.retailwire.com/discussion/what-do-millennials-want-in-store-design/

https://www.instoredesigndisplay.com/blog/3-ways-to-merchandise-to-millennials/

http://yaffe.com/2016/06/how-to-attract-millennial-shoppers-by-creating-a-relaxing-store-environment/

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Britain Experiences Shop Price Inflation for 1st Time in More Than 5 Years

· Retail Business

Shop prices in the United Kingdom have risen for the first time in more than five years, thanks to the heatwave increasing the prices associated with fruit and vegetables. This report came in late August when BRC-Nielsen released its latest figures.

Those figures showed an overall increase in shop prices of 0.1 percent during August. This inflation figure is in sharp contrast to the 0.3 percent deflation from July. This marks the very first time that the prices entered inflationary territory since April 2013, more than five years ago.

Specific Figures

In August, food inflation actually jumped to 1.9 percent, marking a seven-month high. Deflation for non-food prices decreased to 1 percent in August, compared to the 1.4 percent it had been in July. This 1 percent deflation also marked the lowest level on record since April 2013. Experts link this rate to the fact that there was a stronger demand than normal for summer items earlier in the season, which decreased the requirement for discounting. Additionally, experts feel that this lowest deflation rate associated with non-food items in more than five years contributed to the shop price inflation.

In August, fresh food inflation reached 1.5 percent, compared to 1.2 percent in July. This was the highest figure for seven months. The figure for canned and packaged food was even greater, 2.5 percent in August compared to 2.2 percent in July.

What It Means

These latest figures on shop price inflation in Britain arrived at the same time that many experts are expressing concerns that consumers will have to deal with food price shock in the upcoming months. In fact, the CEBR (Centre for Economics and Business Research) reported a few weeks ago that the unusually cold winter combined with 2018’s summer heat wave could lead to an increase in food prices of 5 percent at a minimum. To put this in perspective, CEBR estimates that the average household increase on food bills would be around £7.15 each month.

CEBR also pointed out that some staples experienced an increase in wholesale farm-gate prices of as much as 80 percent from March to July. The staples affected include carrots, lettuce, strawberries, and wheat. The BRC (British Retail Consortium) additionally pointed out that farmers have had to deal with the global market increase in the cost of agricultural products and oil.

Despite all these figures, the BRC did indicate that the shop price inflation sits well below consumer price inflation, the latter of which is at 2.5 percent. however, it did caution that if Britain leaves the EU without first making a deal, retailers will face dramatically higher costs.

Source:

https://www.theguardian.com/business/2018/aug/29/uk-shop-prices-rise-for-the-first-time-in-more-than-five-years

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7-Eleven Has Launched the First Fully Automated Stores in South Korea

· Retail, Retail Business

The retail landscape is changing, and the latest move from 7-Eleven shows just how much. 7-Eleven is launching its very first fully automated stores in South Korea, called 7-Eleven Express. These stores will be a test. Depending on how they do, the convenience store chain will decide how to move forward.

The Stores

Two of these machine-style convenience stores are by the 7-Eleven headquarters in downtown Seoul. There is another one at the Lotte Rent-a-Car headquarters in Anyang, Gyeonggi Province, and one more at Lotte E&M in Incheon. Each of these fully automated stores is 10 meters long and has five different vending machines for a total of 200 products. All the products are divided into five different categories: non-food products, processed foods, prepared meals, snacks, and drinks. 7-Eleven carefully chose these categories based on consumer demand.

To use the stores, consumers input the number of the product they want right on the machine or via a central kiosk. They then pay using a credit card or prepaid transit card; the store does not accept cash. The central part of each store also features hot water dispensers and microwave ovens.

7-Eleven Plans

The idea is that these convenience stores in the style of vending machines will become commercialized. Assuming the four test stores go well, 7-Eleven will accept applications for franchises from those who currently own a franchise location, so these business owners can open a second store. 7-Eleven told reporters that the idea is to maximize profit for the existing franchise owners.

7-Eleven in South Korea has additionally worked on testing a “c-store” of the future that uses hand-payment at Lotte World Tower. In Taiwan, the convenience store chain opened a second X-Store, which is unstaffed, following the reasonable success of the first.

What It Means

As the fully automated stores are still in the testing stage and only available in small numbers, retailers likely still have some time before they need to think about dramatic changes to the landscape. Even so, the trend toward automation and convenience for customers is clear, something that all store owners need to keep in mind.

Source:

https://www.retailnews.asia/7-eleven-launches-first-fully-automated-stores-in-south-korea/

 

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