About Retail Industry
Retail Industry
7 Mar 2010 at 12:55pm
When the stars strutted down the red carpet of the 82nd annual Academy Awards event, the fashion police were eager to identify all the worsts that make the best dish, but the U.S. retail industry was rooting for the good taste of this year's stylists and designers. The longer the red carpet best-dressed list, the greater the impact on the post-Oscar multimillion-dollar red carpet knockoff business.
But not everything of value to the retail industry happens on the red carpet. Retailers who watch the Academy Awards and award shows like it through the eyes of a leader get clues about rewards and recognition that can benefit their retail business long after the hottest Oscar fashion knockoffs are forgotten.
The reason why 40 million people willingly watch while the film industry rewards and promotes itself is because most of us rarely experience a definitive point of recognition where dreams and accomplishments become one in the same. We don't win the recognition as the best in our job, best in our field, or best in our industry because we are rarely afforded the opportunity.
Every day there are employees in every industry who are giving the best performance of their life, without anybody even noticing, much less staging a black tie event or engraving a statue for them. Millions watch the Academy Awards because as they watch the winners get chosen and applauded, and they watch the few winners who are brave enough to deliver an acceptance speech that's not written on an index card, they get to see what ultimate recognition looks and sounds like. Consciously or unconsciously, millions of people want to feel what it feels like to be recognized as the best.
Every Oscar fan remembers the moment in 1985 when Sally Field won her second Academy Award and gushed words that would be parodied for decades to come - "You like me! You really like me!" But we've all forgotten the part of the speech that came after that. When Field said, "I haven't had an orthodox career, and I've wanted more than anything to have your respect," she was speaking for every working person everywhere. We remember that acceptance speech from the grown-up Gidget not just because it was absurdly humorous, but also because it was real. We all want to have that moment when we know with certainty that our work is respected.
One of my consulting projects was creating a 5-day customer service training program for front-line hourly employees who worked for a large national retail chain. Built into the design of the program was 30 minutes for a "graduation." I got some pushback from the company's managers for that part of the program design because some of them thought that the 30 minutes should be used for teaching, and if there was nothing left to teach, then the employees should be sent home, off the time clock.
I felt very strongly that a 40-hour training event deserved an exclamation point at the end of it, so I pushed back against the pushback and we kept the graduation ceremony.
The graduation wasn't elaborate by any standards - music out of a boom box played while individuals were called up to receive a certificate printed on a desktop printer, and a dollar store trinket. During one of these ceremonies there was a young woman - we'll call her Latoya - who came up to the front of the room, took her certificate and burst into tears. Her co-worker classmates clapped louder and she cried harder.
Then the clapping died down, but the crying didn't stop. After a very uncomfortable pause in the festivities that seemed to last about an hour, the facilitator of the program asked Latoya what the tears were about. After another protracted uncomfortable pause, Latoya gathered herself together enough to say, "I've never finished anything before in my life."
There was a lot more clapping, and a lot more crying from everyone in the room for Latoya. What we all observed that day was a moment of significance.
In that moment Latoya saw herself as more than one of the nameless undereducated employees who shuffle through life earning the minimum wages allowed by law. In that moment Latoya got the opportunity to see herself differently and from that moment she could springboard to attempting - and finishing - other things too. This was LaToya's Oscar-winning moment, hopefully the first of many.
There are obvious differences between a priceless gold-plated statuette awarded on the stage of an iconic theater in front of a global audience and a 50-cent paper certificate awarded in the front of a windowless training classroom decorated with flip chart pages. When an actor, writer, director, producer, or technical contributor is awarded an Oscar, it almost always instantly means better projects, better pay, better handlers and better treatment in the film industry. I'm pretty positive that Latoya's customer service training certificate did not yield the same instant results for her.
Despite the obvious differences, though, both LaToya and Sandra Bullock have one big thing in common. After the Academy of Motion Picture Arts and Sciences recognized Sandra as the"best," forever more she will have the phrase "Academy Award-winning" in front of her name. She instantly and forever more took on a new identity. Similarly, with her graduation certificate as evidence, Latoya instantly became "the girl who can finish things." She was able to expand her own sense of identity and that is what Latoya was telling us that her tears were about.
It's not obvious in all industries where the Oscar-worthy accomplishments are found, if they exist at all. Retail leaders who aren't clear about where the award-winning performances can be found at all levels of their organization hopefully flipped channels during the Oscar telecast to get some inspiration from a CBS reality-type reality-check show called "Undercover Boss."
If you haven't seen the show yet, "Undercover Boss" follows different corporate leaders each week as they pose as a new employee in their own organization, and join the rank and file on their own front line. Even though the show is more forumlaic than raw reality, it is still obvious that the employees are clueless to the setup and the executives are authentically surprised by what they find.
In the first week President Larry O'Donnell discovers a Waste Management employee who cleans porta potties for a living with an enthusiasm that transcends the nasty duties that wait for him every day. In another episode, CEO Joe DePinto finds out that the record-breaking coffee sales at one of his 7-11 stores has nothing to do with the coffee and everything to do with a veteran hourly employee named Delores. White Castle owner Dave Rife trains under a graveyard drive-thru employee who treats customers with much more care and respect than the drunk and disorderly deserve.
There's no glitter and glamour in waste management, fast food restaurants, or convenience stores. But there are award-winning performances that are happening there every day. The employees who were impressing the plastic name tags off the undercover bosses didn't just do an exemplary job on that particular undercover day. They had been doing an exemplary job for years. So why did it take a TV show and a camera crew for their leaders to notice?
The answer to that question can be found in the entertainment industry as well. In the newest film about Sherlock Holmes, (which received two Oscar nominations), Holmes stops his sidekick Watson from impaling himself on a nearly invisible razor sharp glass sheath. When Watson realizes what Holmes saved him from, he asks Holmes incredulously, "How ever did you notice it?" Holmes replies (in classic Robert Downy Jr. deadpan style) "I saw it because I was looking for it."
The undercover bosses found award-winning employees when they put themselves in the position to look for them. Just because a leader doesn't have a systematic way to identify stellar performances doesn't mean they aren't happening. Retail managers who don't make it a priority to proactively identify the superstars at all levels of their organization and provide their employees with the opportunity to experience meaningful Oscar-winning moments are being derelict in their leadership duties.
What the gold-plated Oscar statuettes handed out each year symbolize is significance. The "best" have done significant work in a significant way that made a significant impact. It would serve American business well for managers in all industries to watch the Oscar broadcast and think about how they could bestow that kind of moment of significance on someone under their supervision.
Is there anything that anybody in any industry really wants any more than the definitive recognition that tells them they are significant?
Oscar Winners' Impact On the U.S. Retail Industry Is More Than Red Carpet Best Dressed Fashion Knockoffs - Clues About Employee Rewards and Recognition From the Academy Awards originally appeared on About.com Retail Industry on Sunday, March 7th, 2010 at 18:55:39.
Permalink | Comment | Email this
26 Feb 2010 at 10:51am
Beyond the focus on numbers and forecasts in the earnings reporting season, the U.S. retail industry has also been focused on the business of retailing, which, by necessity, includes strategies that are both green and healthy. Consumers are expecting a greater commitment to green and healthy practices from major retail chains, and legal actions are demanding it. Here are the top six healthy and green retailing news stories that were recently under reported and overlooked by busy retail industry number-crunchers.
Dollar Tree (DLTR) is Banned from Bling in Vermont
Dollar Tree has been banned from selling any products "commonly understood to be jewelry" in the state of Vermont. This bling ban is not a result of the Vermont fashion police run amok, but rather is part of the settlement of a lawsuitsuit that was filed against the ultra discount chain because it was selling products containing high amounts of lead. Some of the cheap-chic jewelry sold at Dollar Tree had 1,600 times the legal limit of lead in them. Since presumably it is children who wear - and suck on - jewelry that can be purchased for a dollar, this high lead level was considered to be a health hazard and in violation of Vermont's Consumer Fraud Act.
I find it a little bit humorous that consumers don't seem to question why low-priced merchandise is so low-priced. Huge discounts are often health hazards and you often pay a big price for big bargains.
Saks (SKS) Sued For Carcinogenic Jewels and Faux Labels
Apparently buyers also need to beware when shopping in luxury stores as well. Saks is reportedly being sued by the Center for Environmental Health after the organization tested jewelry purchased at the luxury retailer and found dangerously high amounts of cadmium in those items. While the lead in the Dollar Tree jewelry can cause brain damage, the cadmium in the Saks jewelry has been identified as a carcinogen.
In other legal trouble, Saks settled a lawsuit filed against it by... more >>
U.S. Retail Industry News Roundup: Retailers Focus on Green and Healthy Practices By Choice or By Forced Legal Actions (DLTR, SKS, TGT, KSS, LOW, SWY) originally appeared on About.com Retail Industry on Friday, February 26th, 2010 at 16:51:36.
Permalink | Comment | Email this
22 Feb 2010 at 6:53pm
This is a busy reporting week for the U.S. retail industry. Sears (SHLD), Macy's (M), RadioShack (RSH), Nordstrom (JWN), TJ Maxx (TJX), Limited Brands (LTD), Target (TGT), Dollar Tree (DLTR), Gap (GPS), Kohl's (KSS), Lowe's (LOW), Safeway (SWY), Office Depot (ODP), Saks (SKS), America's Car Mart (CRMT), and Caribou Coffee (CBOU, all have earnings to report to their shareholders and the media this week.
Because quarterly results, same store sales, and earnings forecast reports will be in the spotlight, some of the recent news about this week's reporting retailers will be under reported by the media. Here are the top eight news items that are most likely to get buried under retail numbers headlines.
Sears Pimping Out Its Value Brands? (SHLD)
Ace Hardware will be selling Craftsman tools, franchisees will be operating Sears Auto Centers in empty auto dealerships, the Diehard brand has been licensed to a battery accessories manufacturer, and reportedly Sears is actively seeking retailers to sell Kenmore appliances.
The company takes the position that this new brand strategy will help grow the business. But after the announcement last week about eight Sears store closings, it's hard to not wonder if the company is finding a home for its most profitable brands because its long-term plan is to greatly reduce the number of Sears store doors that it can't seem to get customers to walk through any more. Is Sears extending its retail reach or creating its own competition? Building its brand exposure or pimping its products?
Medical Benefits Out, Madonna and Martha In at Macy's (M)
There is an unconfirmed rumor that Macy's will be cutting jobs and eliminating the health benefits... more >>
Not Just Earnings and Forecasts - Top Eight Under Reported News Stories From the U.S. Retail Industry (SHLD, M, RSH, JWN, TJX, LTD) originally appeared on About.com Retail Industry on Tuesday, February 23rd, 2010 at 00:53:31.
Permalink | Comment | Email this
15 Feb 2010 at 10:30pm
The U.S. retail industry has the unique ability to transform just about any minor occasion into a major consuming opportunity. As creative as they can be, retailers are always happy to see holiday celebrations, major sporting events, and long weekends roll around on the retail calendar because these are the occasions that can easily motivate spending. That is, unless they all fall on the same weekend.
Having the opening of the Winter Olympics, the Daytona 500, Valentine's Day and President's Day all fall on the same weekend was not really in the best interest of the U.S. retail industry this year. Like having too many open house invitations between Christmas and New Year's, trying to participate in back-to-back events starts off fun, but usually ends in celebration overload.
There were just too many occasions jammed into one February pay period this year. Rather than boosting retail spending, as each individual event normally would do, the holidaypalooza this weekend forced consumers to choose and industries to share. Choosing and sharing are good things, but they are not necessarily helpful to a recovering economy.
Perhaps that's one of the reasons why, according to an NRF survey, 80% of U.S. adult consumers were not planning to spend money at a florist, 64% were not planning to go out to dinner, and 40% were planning to skip playing the cupid game completely this past Valentine's weekend. And perhaps the big-occasion weekend overload is also to blame for the expected drop in spending for traditional Valentine's gifts of candy, jewelry, and flowers, as reported by market research company IBIS World.
With the spending of the average American man predicted to be $135, it's easy to understand why jewelry sales were also expected to be down for Valentine's Day 2010. Even at the Zales bankruptcy-avoidance desperation sales, $135 doesn't buy many diamonds.
So, now we know about what consumers weren't planning on doing with their money and time on Olympic-NASCAR-Valentine-President's weekend 2010. What did they do instead?
We know that a huge number of couples spent at least part of their Valentine's weekend watching "Valentine's Day," the movie. Even though the reviews were not particularly favorable, and it is a quintessential Garry Marshall chick flick, apparently there were plenty of men who won bonus points by sitting through "Valentine's Day" and other big screen productions on Valentine's weekend. All in all, box offices collected 183 million valentines for Hollywood this weekend.
The rare back-to-back holidays on Sunday and Monday gave more U.S. consumers the opportunity for a romantic getaway this past weekend. It was expected that the amount spent on Valentine's trips in 2010 would increase, compared to last year. Both the travel and hospitality industry had about two billion reasons to celebrate this year's calendar anomaly and what U.S. consumers decided to do with it.
Another 150,000 consumers traded the smell of roses and scented candles for the smell of burning rubber at the Daytona 500. While men were earning bonus points at the movie theaters, there were tens of thousands of women winning an equal number of bonus points at the NASCAR race that just wouldn't end on Sunday. The pothole-filling only adding to the romance of the day for those who are in love with chugging beer out of plastic cups and watching cars go around in circles. Sunshine state retailers were happy to get their share of the 670 million valentines that race fans distributed at the NASCAR classic in Daytona over Valentine's weekend.
That annual "Super Bowl of auto racing" in Daytona had to share the sports spotlight this year with the 2010 Winter Olympics, which opened in Vancouver this past weekend as well. Some Americans took their Valentine's budget across the border and spent $1,100 (each) for seats at the Opening Ceremonies, which undoubtedly will substitute for candy and chocolates for the next ten years for some couples. It wasn't the Olympic show itself that blew the Valentine weekend budget, it was the additional $1,100 spent on dinner and hotel afterwards that made it a pricey date. To our neighbors up north, green was the color of love this Valentine's weekend.
By the way, U.S. retailers have definitely cut back on their sports sponsorship budgets in this post-recessionary year, but the U.S. retail industry certainly has not abandoned its affiliation with sports altogether. When looking at the lists of retail Super Bowl advertisers, retail NASCAR sponsors, and retail Olympics partners, we can see that there is still a wide variety of retail sports sponsorships, but there are not many retail companies that show up on more than one of these sports sponsorship lists in 2010.
The last retail opportunity of the weekend was Monday's President's Day, traditionally a day of closed banks, discounted furniture, and car dealership wheelin' deals. Positioned at the end of a weekend overstuffed with occasions, though, it was difficult for the annual President's Day retail hype to stand out, and even more difficult for consumers to justify additional purchases immediately following their obligatory Valentine's spending.
In a better economy, the new discount mattress purchased at the Sears (SHLD) President's sale would have been covered in rose petals borrowed from the Valentine's Day bouquet, and a few pieces of imported chocolates would have found their way onto the pillows. The new frugality, however, dictates that practicality trumps frivolity, and "both" is not really an acceptable choice.
Consumers definitely consumed this past Olympic-NASCAR-Valentine-President's weekend, they just didn't consume in the traditional way. The entertainment, airline, sports, hospitality, and retail industry each got their share of the love, but each was wishing they had more of an exclusive relationship with U.S. consumers.
Olympic-NASCAR-Valentine-President's Day Weekend Sends U.S. Retail Industry Sales Dollars to Entertainment, Sports, Airline and Hospitality Industries (SHLD) originally appeared on About.com Retail Industry on Tuesday, February 16th, 2010 at 04:30:11.
Permalink | Comment | Email this
7 Feb 2010 at 12:04am
If Super Bowl XLIII was dubbed the Recession Bowl, then Super Bowl XLIV can rightfully claim to be the Recovery Bowl, as some consumer stats rose and advertisers placed big multi-million dollar bets. The world's most popular advertising commercial showcase was dominated by the incompatible combination of beer and autos, but predictions say that Facebook and Twitter are the odds-on favorites to benefit most from long-term Super Bowl advertising spillover.
In 2009 the extravagance of the Super Bowl recessed to mirror the mood of the country. In 2010, despite the fact that a substantial number of Americans still disapprove of the $93,000 per second paid for advertising, Super Bowl XLIV recovered at least some of its buzz.
The public expressed a lot of emotional investment in the Super Bowl XLIV before the pre-game show even began. (The Recovery Bowl moniker will definitely stick for a long time with a New Orleans upset.) But even though a good number of the 100 million viewers actually cared about the final numbers on the game scoreboard this year, the majority of viewers still cared more about what happened in between the action on the field. According to a Nielsen poll, 51% of Super Bowl television viewers expected the commercials to provide the best entertainment of the event.
Advertisers are always optimistic about the return on their Super Bowl advertising investment, but this year that optimism seemed to be far ahead of consumer reality. Spending for merchandise, food, and televisions was even lower in 2010 than it was for last year's Recession Bowl, according to the annual Retail Advertising and Marketing Association (RAMA) "Super Bowl Consumer Intentions and Actions Survey." Overall, about $8.9 billion Super Bowl dollars were predicted to change hands in 2010, which drops Super Bowl spending back to 2007 levels. Unfortunately this stat indicates recession, not recovery.
The marketing scoreboard for every Super Bowl is cluttered with numbers that measure the non-sports aspects of the event from every conceivable angle, even some angles that probably never really needed to be conceived. Some of the numbers on the 2010 marketing scoreboard provide the answers to the Recovery Bowl FAQs for the retail industry.
Who Purchased Advertising Spots in Super Bowl XLIV From the Retail Industry?
Twelve retail industry companies advertised in this year's Recovery Bowl, compared to 6 retail advertisers in last year's Recession Bowl.
More than half of the retail industry advertisers in the 2010 Super Bowl were automobile companies or auto-related. Only 3 car companies were Super Bowl advertisers in 2009.
Looking at the history of Super Bowl retail commercials, automobile companies lead the retail advertising spending, having spent $108.6 million on Super Bowl commercials. This puts automobile retailers Super Bowl budgets third, just behind Hollywood movies and beer.
What Retail Industry Products and Services Were Advertised In the 2010 Recovery Bowl?
Audi - A3 TDI with a diesel engine
Bridgestone - Tires
Cars.com - Website
Chrysler - Dodge Charger
Denny's - Free Grand Slam breakfast, birthday club free breakfast
Honda - Crosstour wagon-sedan crossover
Hyundai - 10-year warranties, Sonata paint job better than Mercedes
Kia - 2011 Sorento crossover
Papa John's - Pro Bowl special deliveries
Taco Bell - NBA Five Buck Box
Teleflora - Sarcastic talking flowers
Volkswagen - Slug Bug
Take the Super Bowl Super Commercial Super Trivia Quiz
Why Were Retailers Willing to Pay $93,000 Per Second to Advertise in the 2010 Super Bowl?
A study by one ad agency revealed that 66% of 2009 Super Bowl viewers remember their favorite advertiser, but only 39% remember which team won. The same survey concluded that 40 million people will watch the Super Bowl commercials online, and 26% will share their favorite commercials with their friends in cyberspace.
According to a ComScore poll, 77 million people will be logged onto the internet before the Super Bowl begins this year, and 3.8 million of them will be buying Super Bowl related merchandise.
If post-game results are the same in 2010 as they were in 2009, web traffic to the websites of Super Bowl advertisers will increase an average of 63%, the day after the event, according to Nielsen.
Month-over-month web traffic increased an average of 6% on the websites of 2009 Super Bowl advertisers from January to February.
When Retailers Advertised in the 2009 Recession Bowl, What Results Did They Get?
Denny's bought one ad spot in Super Bowl XLIII, and served two million free Grand Slam meals that were offered during that commercial, at a cost of $5 million in free food. Same store sales in the Denny's chain fell 4.5% in the first three quarters of 2009. But because of the free press and image boost that Denny's received from its Recession Bowl promotion, the company more than doubled its Recovery Bowl spending. Three Denny's spots were purchased in 2010.
After just one 30-second spot, Overstock.com had 728,000 visitor on its website the day after the Super Bowl in 2009. This represented a 33% increase in traffic for the deep discount internet retailer.
Does It Matter How Retail Companies Advertise in the Super Bowl?
The commercials that run in the first quarter will be remembered much more than those that appeared later in the game, according to Nielsen.
When Is It Not a Good Time for Retailers to Advertise During a Superbowl?
According to the ComScore survey, 37% of people disapproved of the advertising dollars spent on the 2010 Super Bowl, 21% approved, and 41% didn't much care one way or the other.
Which Advertisers Will Win The Competition for the Consumer in Super Bowl XLIV?
The odds-on favorites to win in the long-term are Facebook and Twitter. Neither of these companies purchased advertising spots because why would they? Driving traffic to and through Facebook and Twitter accounts is a big part of the overall marketing strategy for just about every Recovery Bowl advertiser.
The only thing Facebook and Twitter needed to do to capitalize on the largest U.S. sporting event of the year was to figure out how to remain functional during heavy traffic spikes. Tweeters of the world know that remaining functional for several hours in a row is a challenge for Twitter on regular days. So hopefully the head Twits prepared well for #SB44, which was predicted by many to be a social media phenomenon.
U.S. retail industry companies stand to profit in 2010 from Super Bowl XLIV whether they purchased advertising time for the event or not. An exciting game, a spectacular half-time show, some buzz-worthy commercial entertainment, and a sentimental favorite underdog team had all the makings for a mood-altering event. If the 200 million eyeballs that were focused on the event get a sustainable buzz from it, then the Recovery Bowl might be viewed historically as a significant contributor to the attitudinal recovery of the American consumer.
As they say, in economic recovery, as in sports, (as in life), attitude isn't everything, but it is pretty much all that.
More About the Retail Industry in the Super Bowl:
Recession Bowl 2009
Super Bowl Consumer Survey 2005 - 2010
Vintage Retail Super Bowl Commercials
Super Recovery Bowl XLIV Scores – Retail Advertising Bets Big, Consumer Stats Rise, Auto Ads Dominate, Facebook and Twitter Are Odds-On #SB44 Winners originally appeared on About.com Retail Industry on Sunday, February 7th, 2010 at 06:04:09.
Permalink | Comment | Email this
25 Jan 2010 at 10:36pm
Fifteen members of the U.S. retail industry were designated to be 2010 "Best Companies to Work For" on Fortune Magazine's most recently released ranking list. A look at a five-year comparison of Fortune's best retail employers reveals that these same fifteen companies are denizens of this particular ranking list. EBay (EBAY) fell off the list completely this year, and Starbucks (SBUX) dropped to #93, compared to its previous ranking of #24. Considering the news that's been coming out of both of those companies, neither of these changes is particularly surprising.
While there were no big surprises for the retail industry in this year's best employers list, when compared to another recently released workplace study, the Fortune "Best Companies to Work For" list gains much greater significance for U.S. retailers in 2010.
While Fortune was compiling its best employers list, the Conference Board, a non-profit management organization, was doing a study of its own. The Conference Board study revealed that job dissatisfaction in the U.S. is at its highest level in 23 years. According to the 2009 Conference Board job satisfaction study, here's how average American workers feel about their jobs:
Only 12% are "very satisfied" with their jobs
Only 34% are satisfied with their paychecks
Only 28% are satisfied with the non-financial recognition they receive at work
22% are hoping to get a new job in the next year
The 13 million people who have no jobs at all probably read those statistics and find it hard to muster much sympathy for the people who still have regular paychecks, no matter how unsatisfying the workplaces behind those paychecks may be. The unemployed would probably also be willing to switch places with the 22% who are eager to leave their unsatisfying jobs so that they can take their turn on the unemployment line. That seems fair.
The most significant thing about this job dissatisfaction survey is... read more>
Retail Industry Companies on Best Employer List Outperformed Retail Stock Index by 75% (EBAY, SBUX, WMT) originally appeared on About.com Retail Industry on Tuesday, January 26th, 2010 at 04:36:02.
Permalink | Comment | Email this
18 Jan 2010 at 9:17pm
There may not have been a lot of sales in the U.S. retail industry in the first two weeks of 2010, but there were plenty of numbers. Unlike this time last year, 2010 store closings are in the hundreds, instead of the thousands, job cuts are in the thousands instead of the tens of thousands, store opening plans far outnumber store closing activities, and global stores openings are planned in every developed country.
But even though we're all desperately seeking recovery, Chapter 11 filings and unemployment continue, while numbing numbers and hasty headlines are giving false positive signals that create inflated hope and lead to disappointment. Disappointment is not really good for the consumer psyche right now.
Watching retail numbers spin out of the U.S. retail industry in the past couple of weeks was like watching an episode of "The Bachelor" reality show. It's equally as humorous to watch seemingly intelligent women conclude that they have met their happily-ever-after soulmate at the end of one date as it is to watch seemingly intelligent retail experts conclude that the retail industry is in recovery after any less-than-horrible number is reported.
Christmas week sales were up 2.3%. "Recovery!" Holiday sales estimates predicted a positive 3.6%. "Recovery!" Same store sales were up 2.9%. "Recovery!" Online sales jumped 5%. "Recovery!"
But just like it always happens with The Bachelor's harem too, reality crept into the retail industry, and premature conclusions proved themselves to be sadly uninformed. Month-over-month, December sales were actually down, unemployment is stuck at record high levels, and adjusted for inflation, the full year of 2009 sales is at 1999 levels. That doesn't add up to happily-ever-after to me.
Two days before these reality numbers hit the retail industry last week, economist Mark Zandi stood in front of the 99th annual National Retail Federation (NRF) Conference and reportedly told a room full of retail industry professionals, "The economy today is measurably better than a year ago." Really, Mr. Zandi? Better?
In December 2008 the unemployment rate was 7.2%. In December 2009 that rate was 10%. According to my calculator, Mr. Zandi, that's 3.9 million more people who don't have a regular income this year than a year ago, which is not exactly "better" by any measure.
In 2009, businesses filed bankruptcy papers 89,402 times, which was nearly a 40% increase from 2008. Explain to us, Mr. Zandi, if the economy is better than it was a year ago, why did the number of personal bankruptcy filings increase by 32% in 2009 and why does the American Bankruptcy Institute expect that to increase even more in 2010? If the ABI is correct, more than 1.4 million additional Americans will be bankrupt and living with a trashed credit rating by the end of 2010. That doesn't seem to be better, Mr. Zandi, but I'm sure you have some kind of an extrapolation that tells you why it is.
If things are measurably better now, then why are 871,086 more people without their homes, their equity, and their housing investment at the end of 2009? This is on top of the 861,664 people who had their homes repossessed in 2008. If renting is better, homelessness is better, and moving down on the socioeconomic ladder is better, then I guess you're right that life for these people is measurably better, Mr. Zandi.
There is one thing that is notably better than last year, and that is the stock market. That could be considered a positive point to support Mr. Zandi's position except for one thing. The stock market, as has been dramatically illustrated more than once in the past two decades, is not really a reliable economic indicator as much as it is a legal form of institutionalized gambling.
I'm sure Mr. Zandi would want to remind me at this point that unemployment and retail sales are lagging economic indicators and then pull out lots of graphs and numbers that prove that his economic conclusions are correct. To that I would have to remind Mr. Zandi that he delivered his "measurably better" message to a retailing audience, and that retailing can never be reduced to numbers and charts because there are people involved. People are not numbers, human beings can't be quantified, and the "laggards" aren't really in a big spending-consuming mood. It's the people whose lives are "measurably worse" that are causing the reality of recovery to be out of line with economic calculations, estimations, and predictions.
So what are retailers supposed to do with all of this conflicting data and all of these mixed messages? Hopefully, they're ignoring the numbers and paying attention to their customers. To average consumers, "the economy" doesn't extend beyond their own personal financial statements. And despite what any economist says in any keynote speech, if average American consumers were asked to describe their personal finances, I find it hard to believe that a great number of them would actually check the box that says "measurably better."
Leaders of publicly traded retail organizations know better than to get all twirled up in industry numbers and those who analyze them. But retail onlookers might think that all of the numbers and conclusions that have been flying around in the past few weeks seem conflicted, crazy and chaotic. For these people, a book like "The Retail Industry Numbers for Dummies" would be helpful.
It might seem like this would be one dull book, but really a "Retail Industry Numbers for Dummies" manual would be a very quick read because it would only need to contain about five points and five paragraphs:
#1 - The NRF and ICSC are industry trade organizations and will always spin numbers and facts in a way that will shine the most positive light on their retail industry members. Assume the numbers from these organizations are always skewed to the positive.
#2 - Same store sales are the most largely ineffective measurements in existence and shouldn't be considered a meaningful indicator of much of anything. Follow the lead of stock analysts and investors and largely ignore monthly same store sales numbers.
#3 - Analysts are "disappointed" much more often than not. Consider analysts' predictions to always be overly optimistic.
#4 - Most of the media is more interested in good headlines than good understanding. Consider their conclusions to be inappropriately broad, and hastily drawn.
#5 - Economists live in a world of numbers and theory, but human beings do not. Since the warm-blooded part of retailing can't be quantified, economists' conclusions are almost always incomplete when it comes to retailing.
With these five guidelines in mind, the numbers that came out of the U.S. retail industry in the past few weeks make a lot more sense.
Out of 80 economists asked to project December's retail sales numbers, 80 of them were wrong, according to Reuters. I would say that even that number is wrong because by my calculations, the total should be 81, after hearing what Mark Zandi had to say at the NRF convention.
We're glad that the recession is over on paper, Mr. Zandi (and Mr. Bernanke), but paper isn't people, and telling people in diminished circumstances over and over again how much better the economy is, isn't very endearing. And making business decisions based on paper reality rather than people reality is not very wise for the U.S. retail industry. The U.S. economy can't afford for the U.S. retail industry to make major missteps because it is the one industry saddled with the contradiction of being both a leader and a lagger in recovery.
Until the lives of consumers are actually "measurably better," retailers can't believe in that reality because if they do, they will lose touch with the needs and expectations of their customers, and then they will lose those customers. That is the non-extrapolated reality of this year's retail reality show.
U.S. Retail Industry Numbers: 663 Store Closings, 967 Store Openings, 4 Chapter 11 Filings, Sales Surprises, Conflicting Conclusions, and Recovery Remarks originally appeared on About.com Retail Industry on Tuesday, January 19th, 2010 at 03:17:04.
Permalink | Comment | Email this
4 Jan 2010 at 11:16pm
The easiest way to summarize the value of an entire year is to cherry-pick the most dramatic happenings and highlight them on one neat and tidy best and worst list. It's a traditional New Year exercise and the compulsion to do it this year seems to be particularly strong. That's probably partly because we're moving into a new decade, and mostly because we're especially anxious to leave the old decade behind.
As it pertains to the U.S. retail industry, it's pretty easy to rattle off the many worsts of 2009 - the worst store closings, worst stock prices, worst job cuts, worst sales comps, worst bankruptcies, and worst recessionary missteps. It's not quite as easy to rattle off a list of the bests for U.S. retailers in 2009. Unless less-worse is considered to be the new best, then the "bests" gets a little bit easier to identify.
The specific details behind the picks for the Best and Worst of the U.S. Retail Industry in 2009 list can be found by clicking on each individual link. In general the criteria used to pick the "Best and Worst of the Retail Industry in 2009" was an equitable blend of industry recognition, hard numbers, expert analysis, and because-I-said-so opinion. Holistic measurements are always best.
Since it's been a year of mostly bad news for the U.S. retail industry, let's end the year by focusing first on the best.
The Best of the U.S. Retail Industry in 2009... read more...
The Best and the Worst of the U.S. Retail Industry in 2009 - Highs, Lows, and a New Due North (DG, ARO, AAPL, VSI, SBUX, AMZN, BBI, SHLD, DDS, ANF) originally appeared on About.com Retail Industry on Tuesday, January 5th, 2010 at 05:16:20.
Permalink | Comment | Email this
23 Dec 2009 at 6:27pm
American shoppers are working the last nerve of the U.S. retail industry this holiday shopping season with last-minute shopping activity that has forced many retail chains to increase their own last-minute activities. Many major retail chains have unexpectedly extended their store hours this week in order to increase the number of last minutes that shoppers will have to spend money on Christmas Eve, and even on Christmas Day. Despite the gift of extra shopping hours, though, the best last-minute shopping options may still be found online with the websites that offer e-gift cards and e-gift certificates.
After Super Saturday snowstorms sucker-punched both retailers and shoppers, many major retail chains scrambled to extend store hours to make up for the sales-stifling weather disaster. In the hours and minutes before Christmas Day 2009, the most desperate of the last-minute consumers will be found roaming the aisles of these stores looking for anything that is marginally appropriate and gift-worthy. The stores that will be happily opening their doors for last-minute shopping include:
7-Eleven - Open 24 hours through Christmas
CVS - Many stores open 24 hours through Christmas Day
K-Mart - Open 24 hours through 10:00 p.m. Christmas Eve
KTA Super Stores - Some stores open Christmas Day
Macy's - Some stores open 24 hours through 6:00 p.m. Christmas Eve
Safeway - Some stores open Christmas Day
Starbucks - Some stores open Christmas Day
Target - Open until 7:00 p.m. Christmas Eve
Toys 'R Us - Many stores open from 6:00 a.m. to 9:00 p.m. Christmas Eve
Walgreens - Many stores open 24 hours through Christmas Day
Wal-Mart - Open until 8:00 p.m. Christmas Eve
The best of the last last-minute gift shopping options, though, may be e-gift cards and e-gift certificates, which can be purchased on the websites of more than 40 retailers through Christmas Day.
See a complete list of retail websites that offer e-gift cards and e-gift certificates
The electronic versions of gift cards and gift certificates work just like their physical counterparts, without the plastic. When you purchase e-gift cards or e-gift certificates, they will either be delivered directly to the recipient via e-mail, or you may be given the option to print them out from your own computer. This printed version can be wrapped in a gift box or tucked into a greeting card. If packaged well enough, this tech-savvy nifty gift can look like it was actually a planned and thoughtful purchase.
One caution about e-gift cards and e-gift certificates is to make sure you read the terms. Some of them can only be redeemed online, and not in brick-and-mortar stores. That might not be the best option for great Aunt Sophie who thinks computers are demonic devices of moral destruction. Another caution is to check for cutoff times. Some websites do have deadlines for making purchases on Christmas Day. You'll want to know what their scheduled "last minute" is so that you can schedule your own.
Speaking of gift cards, many companies are offering bonus incentives to gift card purchasers this holiday season. So if you are generous enough to give the gift of food and beverage from the Melting Pot, California Pizza Kitchen, the Cheesecake Factory, Denny's or T.G.I. Friday's, for example, you'll get to eat, drink and be merry at those same restaurants yourself with the bonus gift cards the chains will give you for free. Since many of these restaurants will be open on Christmas Day, the ultimate procrastinators can purchase their gift cards and gift them on the same day. Just make sure to leave enough time for the glue to dry on the envelope before the giving occurs. Otherwise, you're busted.
Retailers know that there are going to be a record-breaking number of last-minute purchases made this year, and they are eager and willing to do whatever it takes to be the recipient of as many of those last-minute dollars as possible. At least that's the prevailing attitude this year. The underlying hope, however, is that by this time next year, Americans will be back to their old habits of shopping early and shopping often.
Best of the Last Christmas Eve and Christmas Day Last-Minute Gift Shopping Options From 50 U.S. Retailers originally appeared on About.com Retail Industry on Thursday, December 24th, 2009 at 00:27:02.
Permalink | Comment | Email this
19 Dec 2009 at 8:29am
Somewhere around 50 million people who might be boosting U.S. retail industry holiday sales today are spending Super Saturday at home instead, cursing the timing of a shopping-unfriendly winter storm. While online shopping seems like the only option for desperate consumers running out of time, the cost of expedited shipping that will ensure holiday delivery is not a good option for cost-conscious shoppers.
The best and most economical shopping option for homebound holiday shoppers this weekend are online e-tailers with in-store pickup options.
A growing number of large U.S. retailers have integrated their online shopping with their traditional brick-and-mortar stores to give virtual shoppers the option to pick up their purchases instead of having them shipped. The retailers with this ship-to-store option in place are the ones best positioned to capitalize on Super Saturday's unfortunate weather conditions.
See a complete list of online retail websites with ship-to-store, click-to-brick and in-store pickup options
Holiday shopping sales figures on Super Saturday were predicted to... read more...
Best Bad Weather Online Retail Shopping Options: Ship-to-Store, In-Store Pickup, and Click-to-Brick E-tailers Best Positioned to Capture Super Saturday Winter Storm Sales originally appeared on About.com Retail Industry on Saturday, December 19th, 2009 at 14:29:46.
Permalink | Comment | Email this
Newsfeed display by CaRP
