Thursday, September 13, 2012 | Edited by Daniel Moores
||Reading Holiday Tea Leaves
Forecasters Predict Higher Sales This Christmas; Retailers Say Flexibility is Key
Predicting how strong or weak holiday sales will be is a time-honored tradition, but it is far from an exact science.
Prominent forecasters over the past eight years have regularly overshot or underestimated actual results by a percentage point or more. Predictions for this year's holiday shopping are beginning to come in, and, for now, modest gains are expected, but economic certainty evaporated in the last recession.
The discrepancies between forecasts and reality underscore the tricky balancing act retailers have to perform to avoid being stuck with unsold gear if consumers prove cautious or, alternatively, missing out on crucial sales in a two-month period when many retailers book 25% to 40% of their annual sales.
Market-research firm ShopperTrak Corp. expects that sales in November and December will rise at a slower rate than a year ago -- a 3% increase versus last year's 3.7% gain. (ShopperTrak counts foot traffic using 50,000 cameras mounted on retailers' ceilings, blends it with data provided by stores and takes account of macroeconomic trends to make its forecast.)
Meanwhile, a survey of 14 retailers conducted in August by management consultancy Hay Group found three out of four expect a better holiday than last year, and that many will hire more seasonal help as a result.
Last year, actual holiday sales were stronger than some of the predictions. ShopperTrak and the International Council of Shopping Centers expected a 3% gain, while the National Retail Federation predicted a 2.8% increase. But according to the government figures tallied after the selling period ended, sales had risen 3.7% from the previous year's holiday results.
In general this year, retailers remain cautious amid a wobbly economic recovery that is easily susceptible to shocks, whether from gasoline prices or stock-market swings.
Chain stores are keeping inventories relatively lean and some say they are planning earlier sales to test which products catch on, so that there is time to reorder for the peak season around Christmas.
Jones Group Inc., the parent company of brands such as Nine West, Rachel Roy and Anne Klein, has been monitoring August and September sales closely to spot early hot sellers, President Richard Dickson said. For instance, the company has noticed consumers buying up flat boots.
"How consumers react to these early shipments is a great indicator of how they'll spend in the fourth quarter," said Mr. Dickson. Jones expects sales to be up modestly over last year. "We're gaining more and more confidence it will be a good holiday season," Mr. Dickson said.
Retail experts say retailers have gotten better at planning inventory in general, chasing hot items when necessary and cutting off shipments of products that don't sell. Hay Group's study found nearly a third of retailers expect to run promotions in October compared with about a fifth a year ago. Craig Rowley, vice president of Hay Group's retail practice, said the earlier discounts are a way for the companies to see what is selling and what isn't, so they can fine-tune the inventory going forward.
Ascena Retail Group Inc., the parent company for Dressbarn, Justice, Maurices and Lane Bryant stores, expects its holiday sales to be up at least modestly but it is looking for early reads on bestsellers. The company also has planned out promotions for the season, but remains flexible in order to add more if they are needed, said David Jaffe, chief executive of Ascena.
"I'm looking forward to getting past the election so there's certainty and less of a distraction to the consumer," he added.
In the U.S., retail patterns have been uncertain since the recession, with consumers turning out for the holidays and even into the New Year but fading in the spring. Back-to-school sales were unexpectedly strong, but retailers are unsure that trend will carry into Christmas.
The culprit is the slow recovery. While the heavy job losses of the downturn have ceased, employment gains have been slow. The U.S. added just 96,000 jobs in August. That leaves 12.5 million people still out of work and the rest keeping a close eye on their own jobs.
Volatile gasoline prices and the coming presidential election are adding to the uncertainty this year, said Bill Martin, executive vice president at ShopperTrak.
Hay Group's survey found that 30% of responding retailers plan to hire more seasonal workers this year. Only 10% of stores said they were increasing holiday staffers a year ago.
"What jumped out at me the most is how upbeat retailers are for Christmas," the Hay Group's Mr. Rowley said. "Most are expecting to see sales and hiring up. Had you asked me in July what I thought, I would have expected them to be more conservative."
Zale Corp., the jewelry store chain that does 35% of its business during the holidays, expects sales to be better than last year, but only modestly so.
"With the election and 8.1% unemployment, people will still be cautious," said Matt Appel, Zale's chief administrative officer.
(Source: The Wall Street Journal, 09/12/12)
||Nation's Unbanked Continue to Grow, FDIC Says
The proportion of U.S. households with limited access to a bank inched up between 2009 and 2011, with most unbanked and underbanked still turning to alternative products to manage their finances, the Federal Deposit Insurance Corp. said Wednesday.
The FDIC's second biennial report about the unbanked -- conducted with the U.S. Census Bureau -- said 28.3% of households were unbanked or underbanked in 2011, a jump of nearly three percentage points from two years earlier. Overall, the number of unbanked or underbanked households rose 13% to nearly 34 million.
Similar to the previous survey, a common reason households may lack real banking relationships is the perception that their funds are not sufficient for opening an account.
The report also showed that transactional use by unbanked customers of nonbank financial companies such as check-cashers continues to be prevalent. Overall, more people appear to be using such providers than what was reported in the 2009 survey.
"Unbanked and underbanked households value the convenience of transaction...(alternative financial services) and perceive AFS credit to be easier to obtain than bank credit," the report said. "The most common reason households use transaction AFS is convenience, while the main reason households use AFS credit products is because they are easier or faster to obtain than bank credit."
The nation's amount of unbanked households increased only slightly in the two-year period -- by 821,000 or 0.6% -- to nearly 10 million households, totaling about 17 million adults. That amounted to about one in 12 households being unbanked. Over 29% of U.S. households lack a savings account, while about 10% lack a checking account.
The rise in the "underbanked" -- meaning those that have a bank account but also utilize alternative products -- was more pronounced, although the increase was due in part to changes in the category's definition between the two periods. Underbanked households increased by 14% -- or about 3 million -- to 24 million households, totaling about 51 million adults. Over 20% of U.S. households are considered underbanked.
The results of the survey "indicate that insured financial institutions have an important chance to grow their customer base by expanding opportunities that bring unbanked and underbanked individuals into mainstream banking," Martin Gruenberg, the FDIC's acting chairman, said in a press release.
Meanwhile, lower-income families and minorities were more likely than the rest of the nation to have little or no contact with a traditional bank. Nearly half of the households in several demographic groups -- including non-Asian minorities, lower-income, younger households and the unemployed -- were either unbanked or underbanked, compared to just over a quarter of all households. (The FDIC noted that unbanked rates among specific demographic groups were "essentially unchanged" from the previous survey.)
The FDIC said about a quarter of all households had used some kind of alternative financial product in the year leading up to when the survey was conducted. "The use of both transaction and credit AFS became more widespread between 2009 and 2011, with higher proportions of households reporting having used either product," the report said.
Over 23% of households had used an alternative transaction product -- which include money orders and remittances -- compared to 6% using a credit product from an alternative provider, such as payday lenders and pawn shops.
The survey also provided data on the growing use of prepaid cards by the unbanked. Although not formally considered an "alternative" product for the purposes of the report, the FDIC said "prepaid debit cards continue to be more widely used among the unbanked and underbanked than among fully banked households."
Nearly 18% of unbanked households used a prepaid card in 2011, compared to just over 12% two years earlier.
(Source: American Banker, 09/12/12)
||Another Successful Rising Through the Ranks Seminar Concludes
The Radio Advertising Bureau, in conjunction with BMI and the Mentoring and Inspiring Women in Radio Group, recently completed its fifth annual Rising through the Ranks, Women in Radio Management & Leadership Training Program.
A total of 30 graduates made up the 2012 class of Rising Through the Ranks, after receiving scholarships to the highly-successful program that was held at the BMI offices in Nashville, August 29-30.
Scholarship recipients were selected and awarded by the three organizations. The two-day course emphasized the specific needs of women in management roles, including enhancing their overall management knowledge and skills.
Courses were led by Lynn Anderson, Integrated Media Solution Group; Lindsay Cerajewski, CBS Radio; Penny Everhard, BMI; Erica Farber, Radio Advertising Bureau; Katie Gambill, 5 Star Radio; Brandeis Hall, Radio Advertising Bureau; Scott Herman, CBS Radio; Julie Lane, Katz Marketing Solutions; Kay Olin, Local Focus and Alliance for Women in Radio; Danielle Outlaw, Neuhoff Media; Allison Smith, BMI; and Dan Spears, BMI.
The customized curriculum included practical and real world applications that managers immediately put to use in the workplace, including lessons on managing team personalities, integrated solutions, budgeting, forecasting, and P&Ls.
"It was so inspiring to be in a room with such wonderful people, all from the same industry, sharing so many different ideas," noted Cheryl Mulligan, senior account manager, Clear Channel Media and Entertainment. "This was real world training that I will take back and implement in my office."
"This year's class represents our future leaders within the radio industry," said Erica Farber, President and CEO, Radio Advertising Bureau. "With the help of BMI and MIW, these women are heading back to their offices invigorated, empowered and ready to implement the lessons learned at this seminar."
"With in-depth information, interaction with industry leaders, and best-practice teachings, graduates of the 2012 Women in Radio Management & Leadership Training Program will have a powerful impact on the industry in the years to follow," noted Michael Steinberg, BMI Senior VP of Licensing. "BMI is very proud to partner with the RAB and the MIW to offer the Rising Through the Ranks program."
In the last 10 years, over 200 BMI-funded scholarships for both Rising Through the Ranks and the FastStart Minority programs have been awarded. RAB's Professional Development team also offers a variety of sales and management courses via online webinars and in-person training.
This year's Rising Through the Ranks graduates include:
Rene Adams - First Natchez Radio Group
Amberly Beckman - Inland Northwest Broadcasting
Aimee Bittourna - Emmis Communications
Luci Breuer - Entercom Communications Corp
Sheena Calton - Radio Advertising Bureau
Cathy Cangiano - Bonneville
Melissa Companik - Journal Broadcast Group Inc.
Cindie Crabtree - Forever Communications
Jackie D'Eon - CBS Radio
Kim DiGiovanni - Maverick Media LLC
Megan Downey - Cox Media Group
Sarah Gillespie - Clear Channel Media & Entertainment
Kristen Graves - CBS Radio
Stephanie Heide - Saga Communications Inc.
Alison Johnson - CBS Radio
Jenna Kirk - Inland Northwest Broadcasting
Angela Kluke - My Broadcasting Corporation
Cathy Lloyd-Bauerle - CBS Radio
Kristine Lynch-Lesh - Townsquare Media LLC
Michelle Maro - CBS Radio
Kimberly Martinez - Entercom
Cheryl Mulligan - Clear Channel Media & Entertainment
Kathi Pag - Clear Channel Media & Entertainment
Christie Pederson - Bonneville Seattle Media Group
Heather Pennella - Buck Owens Production Company Inc.
Katie Philippi - Three Eagles Communications
Patty Reilly-Murphy - CBS Radio
Leslie Roberts - BMI
Cressy Walton - Alpha Broadcasting LLC
Maegan Wilburn - Cox Media Group
Daily Sales Tip: The Ultimate Screening Tool
Writing is a lost art. Yet, we are more dependent on written communication than ever before. Email! Is there anything worse than a poorly written email that is sent to a prospect? It doesn't matter how good your product or service is, your company now looks sloppy and unprofessional.
An effective technique for screening sales talent is the use of the mini-business plan. When the candidate has satisfactorily completed all of the other steps of the pre-offer process, the request is made for a one-page business plan that shows how they would approach the job. I mention three times that I'm only looking for a one-page plan and ask when they can send it to me. It is important that the submission date be asked of the candidate, not the other way around as you will see in a moment.
Of all of the techniques that I have used over the years, this is the one where I have the most candidate fallout and I was always happy to learn that this sales marriage wouldn't work, before it was formulated.
This technique allows you to evaluate a number of important areas:
-- Can they communicate in written form coherently? If you were a client receiving this document, what message do you get about its author?
-- Do they understand what the role entails? Since this component is performed late in the process, they should have a clear picture of the job and expectations.
-- Is their approach consistent with the expectations of management? It is best to know now if you don't feel comfortable with their game plan.
-- Can they meet a self-imposed deadline? If the plan is late, the candidate is no longer considered for the role.
-- Can they follow directions? I asked for a one-pager, not an epic.
Having a sales talent screening program has many benefits. The most obvious impact is a longer sales tenure of your sales team, which means an increase in sales performance and a reduction in personnel turnover. This can do nothing short of helping the bottom line of any company.
Source: Lee Salz, president of Sales Architects