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Retail Sales Fall 0.3% Retail sales fell 0.3% in September after rising an upwardly revised 0.6% in August, according to the latest figures from the Commerce Department. It was the first decline in retail sales in seven months. Core retail sales, which exclude food services, car dealers, gasoline stations and building materials stores, were down 0.1%; analysts had expected a 0.3% increase. Excluding auto sales, retail sales were down 0.1%. Core retail sales correspond most closely with the consumer spending component of GDP. Holiday Retail Sales Forecast The National Retail Federation (NRF) forecasts that holiday sales will grow between 3.8% and 4.2% this year to a total of $727.9 billion to $730.7 billion. The NRF excludes automobile dealers, gasoline stations and restaurants from their numbers. The NRF expects online and other non-store purchases, which are included in the total, to increase between 11% and 14% to between $162.6 and $166.9 billion, up from $146.5 billion last year. Holiday sales have increased an average of 3.7% over the previous five years. However, holiday sales during 2018 rose just 2.1%. The unusually small increase was attributed to the government shutdown, stock market volatility, tariffs and other issues. NRF also expects retailers to hire between 530,000 and 590,000 temporary workers, compared to 554,000 in 2018. In September, Deloitte forecast that holiday sales will increase between 4.5% and 5% and online and non-store sales will grow between 14% and 18%. Retailers Plan for Shorter Season Thanksgiving is very late this year, leaving the time between Thanksgiving and Christmas six days shorter than it is in most years. Target and Walmart are focusing on making in-store holiday shopping easier this year. Target is investing $50 million in holiday payroll in order to have more employees on the floor during critical shopping times. Target also recently revamped their loyalty program, Target Circle, which already has 25 million customers enrolled. Walmart is leaning on technology as the way to make shopping easier. They debuted a digital gift finder that allows customers to search for presents by gift receiver, a scannable toy catalog and kiosks to place online orders within retail stores. Both Walmart and Target are highlighting, fast, free shipping with no membership fee. Holiday Spending Plans Deloitte’s annual global survey found that US consumers plan to spend about $1,496 per household this holiday season, down slightly from $1,536 in 2018. Since 2012, projected holiday spending has grown an average of 5.4% annually and overall retail sales have grown just over 4%. For the third consecutive year, about 20% of consumers plan to spend less than they did the year before. Their research shows that two-thirds of respondents plan to begin their holiday shopping at online retailers with no physical stores and 58% intend to use online search engines as their main source of research. Half also plan on doing in-store research and then buying online, a process that’s been dubbed “showrooming.” Product (76%) and price (75%) are virtually tied for important in consumers’ minds. A whopping 85% prefer free shipping to fast shipping, with 80% of those responding willing to wait three days for their order to arrive. “Experience” spending has grown to account for 40% of holiday spending plans, as people intend to spend more time and money traveling, dining out, socializing and attending events this holiday season. The Home Depot THD announced their 2019 Innovation Awards. Ryobi was named Marketing Innovation Partner of the Year for their line of lithium battery products. Apex Tool Group was the Supplier of the Year in the tool category. The DeWalt Atomic 20V compact series and the Milwaukee Packout Tool Storage system were finalists in the category of product innovation. Lowe’s Lowe’s named John Deere, Pergo floors and Pella windows as their 2019 Vendor Partners of the Year. Best-in-class for hardlines was Spyder’s power tool accessories system for Pros and their new Stinger wood boring program. Google was recognized with an Innovation award for Google Nest Hub Max and their interactive demonstrations and in-store merchandising experiences. Walmart Walmart officially launched their InHome Delivery service, which will initially be available to about one million customers in Pittsburgh, Kansas City, Missouri and Kansas City, Kansas, and Vero Beach, Florida. Customers who want to use the service that will deliver groceries directly to their refrigerators will need to pay $49.95 upfront and have Walmart install either the Level Home smart lock or the Norteck Smart Garage Door kit. Once the lock is installed, with a minimum order of $30, customers can get an unlimited number of deliveries for a $19.95 monthly fee. Walmart associates will use a proprietary, wearable camera to gain one-time access to the customer’s home. Customers will control access and will be able to watch their delivery from their smart device. Deliveries will be made by trained and vetted employees who have been with Walmart at least one year. John Furner, head of Sam’s Club US, was promoted to President and CEO of Walmart US in mid-October after WM’s current US head, John Foran, resigned to become CEO of Air New Zealand. Foran, who has been with WM since 1993 when he took a part-time job in the garden center, said the move is bittersweet for him and he is very proud of what he’s been able to accomplish at Walmart. Walmart heaped praise on both Foran and Furner, and said that a replacement for Furner at Sam’s Club will be named at a later date. Walmart is reportedly subsidizing some vendors in what the media describes as a “price war” with Amazon. Walmart introduced a program to temporarily lower the price consumers pay for some items on their marketplace site, where third-party vendors pay Walmart a fee to list their goods. The merchants selling on the site will still be paid the same amount they would have received prior to the price reduction. The price reduction will not affect shipping fees. The move appears to be in response to a program Amazon rolled out over the summer that gave Amazon the ability to set prices of third-party products sold on its marketplace in return for guaranteeing a minimum payout. Amazon has also come under scrutiny for reportedly leaning on vendors to ensure their products are not offered for a lower price on any rival’s website, including Walmart’s. Walmart’s new strategy has been dubbed Walmart’s Competitive Price Adjustment Program. Walmart says that the program will only be applied to selected sellers and selected items. Walmart reports selling about 75 million unique items on their website, most of which are third-party marketplace items. Ace Hardware Ace hired Kirk Armstrong as their new Vice President of Distribution and Supply Chain Innovation. He’ll report to EVP Lori Bossmann. He joins Ace from Owens & Minor, a leading Healthcare distributor and solutions provider, and previously spent 13 years at W.W. Grainger. Ace was recently ranked in the top five in the 2019 Franchise Times Top 200. The move up the rankings comes after four successive years ranked at No. 6. Ace is the only non-food brand in the top five. The rankings are based on global system-wide sales, based on the previous year’s performance. Amazon Amazon Q3 sales grew 24% to $70 billion, but their forecast of $80 billion to $86.5 billion in Q4 sales fell short of the $87.4 billion analysts were expecting. Analysts noted that Amazon is now dealing with the true costs of accelerating free shipping for Prime customers from two days to just one day, a benefit they pledged to deliver for the holidays back in April. They are reconfiguring warehouses to store more inventory closer to population centers and adding new shifts and schedules to ship goods more frequently. They are also spending more on their own already massive transportation network as well as third-party contractors. CFO Brian Olsasky said that they are still learning about the true costs and economies of one-day shipping. Amazon stock took a beating as investors were disappointed in results. Amazon Web Services revenue grew 35% year over year, disappointing analysts who had expected AWS to beat Microsoft’s Azure cloud business growth of 36%. Amazon has partnered with Nationwide Insurance and Financial Services to give away one million Echo Auto devices to qualifying Nationwide new and existing auto insurance policy holders in select states. Nationwide is introducing new features for its Alexa skill, including a New Driver Safety Checklist and Roadside Assistance and Road Conditions. Amazon is releasing a pair of smart glasses, Echo Frames. The $180 glasses have Amazon’s Alexa voice assistant built in, which allows wearers to talk to Alexa anywhere and anytime. Some privacy advocates are concerned that encouraging people to wear listening devices all day is a disturbing invasion of privacy. Amazon says that wearers can instruct Alexa to make a call, set reminders on their phone or play a podcast, among many other things. Users will hear Alexa’s responses through four micro speakers built into the frames and pointed directly at their ears to avoid others eavesdropping on their conversations. In addition, the microphone can be turned off at any time. Amazon also introduced earbuds, a ring and a tiny device for spaces like bathrooms and garages. There’s even a new dog collar that tracks a pet’s location so the owner can easily find it with a smartphone. © Robert Bosch Tool Corporation. All rights reserved, no copying or reproducing is permitted without prior written approval.
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