Archives for January 2018

Retail 2017: The good, the bad and the ugly.

January 24, 2018 by randersen0919 Leave a Comment

The Good:

U.S. retails sales growing at fastest pace in three years.
C-Stores continue to grow fueled by Millennials
Grocery produce growth outpaces other categories – again fueled by Millennials
Just over half of Millennials prefer shopping at a brick & mortar store vs online.
81% of young Gen Z (age 13-21) said they preferred to shop in stores, while 40% said they will only shop in stores.

The Bad:

A record number of retail store closings, close to 7,000 in 2017.
Hispanic spending was down. Retail experts, economists and business leaders believe the administration’s stance on undocumented immigrants is causing anxiety in the Latino community. Hispanic business leaders added, “Many Hispanic consumers are saving money in case something happens to them or their loved ones in any crackdown on immigrants.”

The Ugly:

Shiny, gray concrete floors have become all the rage at many retailers. Shiny is good, but many consider gray to be a soul-crushing color that promotes a feeling of being in a warehouse. Hopefully, we’ll see some Earth tones or brighter floor colors in 2018.
Package theft by porch pirates continues to grow. Nearly 20% of American homeowners have been a victim of package theft in the last year.
Consumers perception of ugly produce (picked by someone else) continues to slow the adoption of online grocery buying.

What Online Retailers Can Do to Stop Porch Pirates

January 16, 2018 by randersen0919 Leave a Comment

As online purchasing continues to rapidly grow, so does the theft of packages sitting on doorsteps and porches. It happens year-round, but thefts really spike during the holidays.

Not a big deal? Nearly 20% of American homeowners have been a victim of package theft in the last year and the median value of a stolen package was $250, according to a recent survey by Ring, a home security firm.

Another survey by Shorr Packaging found that 61% of consumers feel online retailers are not doing enough to prevent package theft. Online retailers may feel it’s out of their control, but there are some things they can do:

Offer theft insurance – 53% of respondents in the Shorr survey said they would pay more for a product if offered theft insurance.

Ship in discreet packaging – 37% said they would pay more if the package were more discreet. That is, the packaging hides the more enticing brands or products from thieves.

Ship to a secure location – 71% of the respondents said they would be open to having their packages sent to a secure address such as a U.S. Post Office, UPS store, or Amazon locker or their workplace.

The above options will take some time to implement. What can online retailers do now? You can alert customers to the growing package theft problem on your website (at checkout and/or in a blog?) and offer some suggestions such as:

Provide delivery instructions to leave the package at the back door or hide behind a plant on the porch. However, thieves may follow delivery trucks and see the where the package is hidden.
Provide security code – If your customer has a key-pad front door lock or garage door opener, they can provide the door opening code to the delivery service. But some customers may not want delivery people entering their home and like having to change their entry code after every delivery.
Advertise a security system real or imagined by placing security stickers, yard signs and security cameras where thieves will see them. Thieves can be easily deterred and will move on to another house if they fear triggering an alarm. Just remember, some thieves disguise themselves and may not fear video surveillance.
Ask a neighbor to hold it for you. A neighbor can pick up a package at your door or have it delivered directly to them. This may not be a practical option for many.
Secure containers/alarms. There are plenty of secure storage container options available that can be placed on the front porch. Choices range from large metal boxes to the Amazon Porch Pirate bag that locks and tethers to a doorknob or post. The Package Guard is a disc that sits on a porch and once a package is placed on it, a 100-decibel alarm goes off if it’s removed before a wireless code is entered.

If your customers happen to live in San Francisco, Chicago or New York, they can use Doorman(for an extra fee) to have the packages delivered when they are at home.

Online retailers need to understand the growing problem of porch piracy. The ones that succeed will take a proactive approach and come up with innovative solutions to help their customers.

Consumers are Hooked on Seafood. But Will Higher Prices Make Waves?

January 16, 2018 by randersen0919 Leave a Comment

For years, Americans have been encouraged to eat seafood more often as it’s a good source of protein, vitamins and nutrients – plus it’s low in calories and saturated fat. The health benefits are helping to drive the demand for fish at a faster pace than beef, pork and poultry.

The 6.2 percent increase in U.S. per capita seafood consumption in 2015 was the biggest jump in over 20 years. Plus, according to the National Oceanic and Atmospheric Administration (NOAA), Americans increased their seafood consumption by nearly 1 pound per personin 2015, to an average of 15.5 pounds for the year.

In the recent Progressive Grocer’s 2017 Retail Seafood Review, over half of respondents expected seafood sales to increase this year. Even so, Americans still fall short of dietary recommendations of 8 ounces of seafood per week (24 pounds/year), which means there’s room to grow.

However, many grocers saw declines last year in some higher priced seafood categories and consumption increases in 2017 could be impacted by price changes. They noted that shrimp helped boost fresh seafood volume last year due, in part, to an average retail price decline of 9 percent.

If the tide continues to rise for seafood (U.S. wild-caught seafood, in particular), prices could as well and Category Managers will need to navigate accordingly.

Millennials’ hunger for healthy, local brands causing indigestion for big food manufacturers

January 16, 2018 by randersen0919 Leave a Comment

So why should we care what they eat? Well they’re now a larger group than the Baby Boom generation with numbers exceeding 75 million. In fact, Millennials (ages 18-36), now represent the largest segment of the U.S. workforce and have significant spending power.

The group has a strong appetite for high quality, natural foods and are willing to pay more for them. This hasn’t been good news for large food companies as they are showing a preference for healthier, organic and non-GMO foods from smaller, local food sources.

In addition, Millennials are more likely to:

be influenced by friends than be affected by advertising
advocate for products by posting about them on social media
“love cooking” and consider themselves “experts in the kitchen”
be open to shopping in non-traditional retail environments
prefer labeling that also reveals what the food doesn’t contain (e.g. clean labeling)

As more Millennials enter the workforce and older ones move up the ladder, their spending power and influence will only grow. Understanding the buying behaviors and satisfying the unique needs of this large group will become a major component of a successful growth strategy for category managers in food companies going forward.

Thinking Outside the Big Box

January 16, 2018 by randersen0919 Leave a Comment

As Macy’s, Sears and J.C. Penney plan to close hundreds of stores over the next few years, malls are finding creative ways to fill the large empty spaces left behind of these big box anchors. Even so, some malls will not survive and over 300 malls are expected to close over the next 10 years.

But there’s hope for malls that can find the right solutions. Here’s why:

Brick and mortar is alive and well: Online sales still account for less than 10% of all retail sales.
Amazon reported a $38 billion increase in sales from 2000 to 2013 while Costco’s sales rose by $50 billion over the same period.
Malls catering to upscale shoppers can replace a Macy’s with a high-end department store such as Von Maur.
Mall developers are adding new venues like gyms and other entertainment options;
- g. Orland Square Mall is getting a 29,000-square-foot Sky Zone trampoline park and 33,000-square-foot Gizmos Fun Factory for kids with an indoor ropes course.
Large supermarkets are moving into malls* because;
- Space and parking are adequate
- Good visibility and traffic
- Appeals to millennials who like the efficiency of a one-stop visit

*Two examples:

Grocery giant Kroger Co., has purchased a former Macy’s Inc. location at Kingsdale Shopping Center in Upper Arlington, Ohio, and plans to build a new store in its place.

Natick Mall in Natick, Mass., is leasing 194,000 square feet of space vacated by J.C. Penney Co. to upscale grocer Wegmans, which is planning to open a store in 2018.

Time will tell whether malls will survive or thrive, but category managers need to understand how malls are changing and how to take advantage.