Tuesday, July 23, 2013 | Edited by Daniel Moores
||2013 Back-to-School Spending Expectations Decrease
A combination of pent-up demand and a growing population of school children put 2012 back-to-school spending in the history books, leaving parents in 2013 with an array of school supplies that still work, and a significantly shorter shopping list.
According to the National Retail Federation's 2013 Back-to-School Survey conducted by Prosper Insights & Analytics, families with school-age children will spend an average of $634.78 on apparel, shoes, supplies and electronics, down from $688.62 last year. Total spending on back-to-school is expected to reach $26.7 billion.
Total back-to-school and back-to-college spending combined will reach $72.5 billion.
"he good news is that consumers are spending, but they are doing so with cost and practicality in mind. Having splurged on their growing children's needs last year, parents will ask their kids to reuse what they can for the upcoming school season," said NRF President and CEO Matthew Shay.
"As they continue to grapple with the impact of increased payroll taxes, Americans will look to cut corners where they can, but will buy what their kids need. It's important to note, however, that spending levels are still well above where they were a few years ago."
The biggest portion of back-to-school shoppers' budgets will go toward new apparel and accessories: 95.3 percent of those with school-age children will spend an average of $230.85 on fall sweaters, denim and other chic pieces of attire. Additionally, families will spend on shoes ($114.39) and school supplies ($90.49).
Fewer families with children in grades K-12 will purchase electronics (55.7%), and those that are going to invest in a new tablet or smartphone are going to spend slightly less than last year ($199.05 vs. $217.88 in 2012).
Economy is still a concern
It's clear the economy is still weighing heavy on the average family's mind; the survey this year found eight in 10 school shoppers (80.5%) say economic conditions will change their spending in some way. Turning to the Internet to save money, 36.6 percent say they will do more comparative shopping online and 18.5 percent will shop online more often.
Shopping has begun
According to the survey, families are already out and about shopping for school items: 23.9 percent of families with children in grades K-12 say they will begin shopping at least two months before school (i.e., right now), up from 22.3 percent last year and the highest percentage seen in the survey's 11-year history. Half (49%) will shop three weeks to one month before school, 21.8 percent will shop one to two weeks before school, 2.8 percent will shop the week school starts, and 2.6 percent will shop after the start of the season.
"We continue to see a shift in shopping patterns during big spending 'events,' where consumers typically head out early to take advantage of fresh inventory options and initial markdowns, then see a lull only to rev back up again when final sales appear," said Prosper Consumer Insights Director Pam Goodfellow.
"Hoping to spread out their budgets but still reap the benefits of getting the products their children want, parents this back-to-school season will comparison shop online and around town at their child's favorite stores, potentially even more than once, as they seek to find bargains and products that offer the best value."
Department stores still popular; teens heavily influence decisions
Though most school shoppers (67.1%) will visit their favorite discount store for school items as they did last year, department stores will be popular with teens and their parents this season as well: 61.7 percent will shop at department stores, up from 59.9 percent last year and the highest in the survey's history. Additionally, 51.5 percent will shop at a clothing store, 40.6 percent will shop at an office supply store, 37.3 percent will shop online and 25.9 percent will shop at an electronics store. One in five will hit their local drug store (19.6%) and 13.7 percent will look for goods at thrift/resale stores.
Stylish teens and tweens know what they need to impress their friends when it comes to new school gear, and this year parents need to be up for the challenge. According to the survey, 59.6 percent of parents say their children influence at least half of their back-to-school purchases.
And for those extra small purchases, children plan to chip in some of their own money as well. Teens will dole out $30.13 of their own money, and pre-teens will spend an average $18.45 -- both slightly down from last year.
Back-to-College Spending Plans Drop, but Interest in Home Furnishings Points to Style-Savvy Millennials
Much like families with children in grades K-12, college students and their parents will trim their budgets this year as well, looking for ways to reuse what they have and spend only on what they need.
According to NRF's 2013 Back-to-College survey conducted by Prosper Insights & Analytics, college students and their families will spend an average $836.83 on apparel, electronics, dorm furnishings and more, down from $907.22 last year. Total spending for back-to-college is expected to reach $45.8 billion.
"While spending on college is down from last year, it is still higher than what we saw in 2011, indicating that parents this year are simply purchasing only what their college-age children need," said Shay. "The back-to-college market continues to grow, with specialty, discount, department, office supply and even drug stores luring students and their parents with attractive deals on everything from microwavable food products to personal care items and of course, home furnishings. In such a competitive space, we expect the deals over the next few weeks to really turn some heads."
Sprucing up their living spaces
When it comes to where college students plan to live this year, on average, fewer will be in dorms or college housing, and more will live at home. According to the survey, 22.5 percent will live in dorms, down from 25.9 percent last year, 24 percent will reside in off-campus housing, down from 24.8 percent last year, and 47.7 percent will commute to campus from home, up from 42.9 percent last year.
Though almost every category will see a decrease in spending, there's one area that will increase for retailers: dorm and apartment furnishings. Two in five (42.0%) families will spend an average $104.76 on new bedding, small refrigerators and microwaves, up from $100.27 last year. Spending on food items is expected to increase as well ($104.44 vs. $100.18 last year).
The largest portion of college shoppers' budgets will go toward electronics ($203.28). Other traditional college expenditures will include clothing and accessories ($122.70), shoes ($65.60), gift cards ($65.12), personal care items ($65.08), school supplies ($62.92) and collegiate gear ($42.94).
"Multiple factors go into a family's decision on where their child will live during college, and it is likely the economy has something to do with parents wanting to keep their costs down and forgo the traditionally expensive room-and-board route," said Goodfellow. "That said, we do expect those living on campus this year to do so in style. Millennials are extremely different from previous generations when it comes to personal style and décor, and retailers are answering their call with trendy college-related products that will put a personal touch on their temporary living spaces."
College shoppers look to home furnishings stores, online
The survey found college shoppers are already getting ready for the school year. Nearly three in 10 (29.8%) students and their parents say they will begin shopping at least two months before school, or right now, up from 29.0 percent last year and the highest in the survey's history. More than one-third (34.5%) will begin three weeks to one month before school and 19.9 percent will begin one to two weeks before school.
Overall, parents and their college-age children will shop around for their needs, but most will look to discount stores (48.3%) and department stores (42.7%). Three in 10 (30.8%) will shop at clothing stores, one-third (33.3%) will head to office supply stores and 37.1 percent will shop online. The most in the survey’s history -- 17.2 percent -- will shop at home furnishings or home décor stores, up from 16.4 percent last year. Additionally, 20.4 percent will shop at electronics stores and 18.5 percent will shop at drug stores.
Economy still a factor
Though many economic indicators point to a growing economy, it is clear consumers are still wary about their finances. The survey found more than three-quarters (76.5%) of college shoppers say the economy will impact their spending in some way, which is down from 83.5 percent last year, but still shows caution with spending plans. Specifically, 32 percent will buy generic or store brand products, and 37.5 percent will shop for sales more often; 10.1 percent say the economy is impacting where their student lives for the school year.
The survey found college seniors and their families will spend slightly more than last year ($702.81 vs. $680.70) but will look for ways to cut corners because of the state of the economy. Specifically, 44.8 percent plan to make do with last year's items, up from 38.9 percent last year, and more than half (51%) will spend less overall on the items they do buy, up from 42.6 percent last year.
(Source: National Retail Federation, 07/18/13)
To download the complete NRF Survey results, click here.
||Craft Beer Brewers Feel Growing Pains of Industry Boom
It seems even people who get to brew delicious beer for a living can have a bad day at work.
Craft brewers across America were frustrated last week after hundreds were shut out from an upcoming prestigious beer festival, which many consider the premier event for networking and showcasing new products. The festival's 600 exhibitor spots were sold out in under two hours, an unprecedented scenario that took many, including event organizers, by surprise.
The speed at which the festival filled up, several craft beer brewers told The Huffington Post, is a reflection of an industry currently undergoing a massive boom -- and experiencing growing pains as a result. With its focus on seasonal offerings, small-batch manufacturing and one-of-a-kind tastes, craft brewing is seeing frothy growth at the moment, those brewers said.
"There's a seismic shift happening in the way beer is made and sold in this country," Jacob McKean, founder of San Diego-based Modern Times Beer, said. "Consumers are so excited about craft beer and there are so many breweries adding to the supply that we're exceeding the pace of the infrastructure. I think what's catching everyone off-guard is the pace.
"There's growth, and then there's exponential growth," he said.
Over 300 breweries were unable to snag a booth at the Great American Beer Festival, an annual three-day suds showcase to be held in Denver, Colo., this October, due to high demand for space at the exhibit. A spokeswoman for the Colorado-based Brewers Association, which organizes the trade show, said so many breweries were attempting to sign up for a spot at the festival that it overloaded website servers, leaving many frustrated brewers frantically reloading a sign-up webpage that had slowed to a crawl.
"We are making the event bigger, but we just haven't been able to catch up with the explosive growth in the industry," Barbara Fusco, the spokeswoman, said.
Giants like Anheuser Busch and Molson Coors still dominate the industry -- making 90 percent of all beer sales, according to the most recent Brewers Association survey -- but craft beer is growing. While small-batch brews accounted for just 6.5 percent of all the beer consumed in the United States in 2012, they took up 10.2 percent of the $99 billion spent on beer that year, according to industry numbers -- up from 9 percent of the dollar share in 2011.
Mark Irvin, the brewmaster and co-owner of No-Li Brewhouse in Spokane, Wash., said he was able to sign his brewery up for the Colorado beer festival after several attempts. But, he noted, a lack of space at the festival is only one of the ways in which the influx of new players into the craft brewing industry is affecting business.
While demand from consumers keeps growing, there are other inputs breweries need to be successful that are currently in short supply, Irvin said. For example, even though many people with experience brewing a few barrels of beer at home are entering the industry as "nanobreweries," brewmasters with the knowledge needed to handle an industrial operation are currently difficult to find, he said.
"You're also seeing a struggle for tap handle space at bars and restaurants," Irvin said. "And even though the amount of shelf space in stores has grown dramatically recently, there's still a lot more competition than space."
As of May, when it conducted its most recent survey, the Brewers Association counted 2,514 breweries in the United States -- a 20 percent jump from the 2,092 total breweries counted in 2012. All but 56 of the over 2,500 U.S. breweries in the 2013 count are small, craft breweries, the association found.
Duane Lujan, the owner of Rocky Mountain Brewery in Colorado Springs, Colo., said he was one of the brewers unlucky enough to be on the wrong side of the sign-up process last week.
After putting the finishing touches on a batch of his "Brunette" nut brown ale, Lujan said he went online to sign up for a booth at the Denver festival. He was especially excited, he said, about having his company's key lime cheesecake-flavored brew judged in the competition that is an integral part of the festival. Being awarded a prize there can bring not only bragging rights, Lujan said, but also attention from wholesalers bearing lucrative distribution deals.
But after spending 90 minutes reloading the webpage, he said, he was unsuccessful in his attempt to sign up.
"I've been going to this thing for 27 years, most of it on the drinking side in the early years," Lujan said. "We have hotel rooms, and beer to bring, so we might just end up having our own little side festival."
One thing the breweries don't need to worry about: the love of beer aficionados.
Fusco, the Brewers Association spokeswoman, said she expects about 49,000 people to attend this year's festival. That amount is about as much as festival security will be able to handle, she said.
When $75 tickets for the event go on sale July 31, Fusco said, "those will be gone in minutes."
(Source: The Huffington Post, 07/17/13)
||Temporary Jobs Becoming Permanent Fixture
Hiring is exploding in the one corner of the U.S. economy where few want to be hired: temporary work.
From Wal-Mart to General Motors to PepsiCo, companies are increasingly turning to temps and to a much larger universe of freelancers, contract workers and consultants. Combined, these workers number nearly 17 million people who have only tenuous ties to the companies that pay them -- about 12% of everyone with a job.
Hiring is always healthy for an economy. Yet the rise in temp and contract work shows that many employers aren't willing to hire for the long run.
The number of temps has jumped more than 50% since the recession ended four years ago to nearly 2.7 million -- the most on government records dating to 1990. In no other sector has hiring come close.
Driving the trend are lingering uncertainty about the economy and employers' desire for more flexibility in matching their payrolls to their revenue. Some employers have also sought to sidestep the new health care law's rule that they provide medical coverage for permanent workers. Recently, though, the Obama administration delayed that provision of the law for a year.
The use of temps has extended into sectors that seldom used them in the past -- professional services, for example, which include lawyers, doctors and information technology specialists.
Temps typically receive low pay, few benefits and scant job security. That makes them less likely to spend freely, so temp jobs don't tend to boost the economy the way permanent jobs do. More temps and contract workers also help explain why pay has barely outpaced inflation since the recession ended.
Beyond economic uncertainty, Ethan Harris, global economist at Bank of America Merrill Lynch, thinks more lasting changes are taking root.
"There's been a generational shift toward a less committed relationship between the firm and the worker," Harris says.
An Associated Press survey of 37 economists in May found that three-quarters thought the increased use of temps and contract workers represented a longstanding trend.
Typical of that trend is Latrese Carr, who was hired by a Wal-Mart in Glenwood, Ill., two months ago on a 90-day contract. She works 10 p.m. to 7 a.m., helping unload trucks and restocking shelves. Her pay is $9.45 an hour. There's no health insurance or other benefits.
Carr, 20, didn't particularly want the overnight shift.
"I needed a job," she says.
The store managers have said some temps will be kept on permanently, Carr says, depending on their performance.
Carr isn't counting on it.
The trend toward contract workers was intensified by the depth of the recession and the tepid pace of the recovery. A heavy investment in long-term employment isn't a cost all companies want to bear anymore.
"There's much more appreciation of the importance of having flexibility in the workforce," says Barry Asin of Staffing Industry Analysts, a consulting firm.
Susan Houseman, an economist at the Upjohn Institute of Employment Research, says companies want to avoid having too many employees during a downturn, just as manufacturers want to avoid having too much inventory if demand slows.
"You have your just-in-time workforce," Houseman says. "You only pay them when you need them."
This marks a shift from what economists used to call "labor hoarding": Companies typically retained most of their staff throughout recessions, hoping to ride out the downturn.
"We clearly don't have that anymore," says Sylvia Allegretto, an economist at the University of California, Berkeley.
The result is that temps and contract workers have become fixtures at large companies. Business executives say they help their companies stay competitive. They also argue that temp work can provide valuable experience.
"It opens more doors for people to enter the labor market," says Jeff Joerres, CEO of ManpowerGroup, a workplace staffing firm.
But Houseman's research has found that even when jobs are classified as "temp to permanent," only 27% of such assignments lead to permanent positions.
About one-third of temporary workers work in manufacturing. Temps can be found on production lines, repairing machinery and stocking goods in warehouses. About a fifth are administrative.
Shortages of doctors and nurses have led some hospitals to turn to temp agencies. Staffing Industry Analysts forecasts that spending on temporary doctors will grow 10% this year and next.
Some school districts now turn to temp firms for substitute teachers. This lets them avoid providing retirement benefits, which union contracts might otherwise require.
Manufacturing unions have pushed back against the trend, with limited success.
"We run into this across all the various industries where we represent people," says Tony Montana, a spokesman for the USW, which represents workers in the steel, paper, and energy industries.
Todd Miller, CEO of software company Gwabbit in Carmel Valley, Calif., says about a third of his 20 employees are temporary. An additional one-third are contractors.
He says he's had no trouble filling such positions. People are "willing to entertain employment possibilities that they would not have six or seven years ago," Miller says.
If the economy were to accelerate, Miller says he might hire more permanent staff. But "I don't have tremendous confidence in this economy."
Only the health care and leisure and hospitality sectors have added more jobs during the recovery. But each is roughly five times as large as the temp industry. The proportion of all jobs in the temp industry is about 2%, just below a record set in 2000.
Temp hiring has accelerated even though the economy has 2.4 million fewer jobs than it did five years ago. Temp jobs made up about 10% of jobs lost to the recession. Yet they've made up nearly 20% of the jobs gained since the recession ended.
A survey of companies with more than 1,000 employees by Staffing Industry Analysts found they expect 18% of their workforces to be made up of temps, freelancers or contract workers this year, up from 16% in 2012.
Shane Watson, who in November lost a job providing tech support for Blackberry maker Research In Motion, says contract work has helped him recover. He's on his third such position. Still, Watson, 36, misses the security of a permanent job.
Wal-Mart says it's been hiring disproportionately more temporary workers. "Flexible associates," it calls them. Spokesman Dave Tovar says temps allow store managers to provide permanent workers with more reliable schedules.
Online competitors are seeking to upend the temp industry just as Amazon and eBay disrupted retail. Employers spent $1 billion last year hiring workers for short-term projects through online labor exchanges, such as oDesk and Elance, according to Staffing Industry Analysts. That's 67% more than in the previous year.
Freelancers in the online exchanges can be evaluated by employers, post portfolios and take online tests to demonstrate their abilities.
Gary Swart, CEO of oDesk, says his clients are mainly small or startup companies. But giants like AOL and Unilever are using the service, too.
When Hans Hess of Arlington, Va., was seeking a lawyer to do a trademark search for his Elevation Burger chain, he turned to Elance. He found a lawyer to do it for under $500.
"When I was using a big law firm, it could cost me $5,000 to get to the point of just filing a trademark," Hess says.
Gigwalk recruits temps for brief projects in retail, merchandising and marketing. Anyone who downloads Gigwalk's app can see pinpoints on a map signifying available jobs nearby.
Frito-Lay, a division of PepsiCo, used Gigwalk this year to hire workers to check in-store displays of its products to ensure that a seasonal promotion was being handled properly.
"You can hire 10,000 people for 10 to 15 minutes," says Gigwalk CEO Bob Bahramipour. "When they're done, those 10,000 people just melt away."
(Source: USA Today, 07/08/13)
Daily Sales Tip: Persistence Pays Off
Stop assuming customers won't take your call, agree to an appointment or do business with you. Too many reps simply give up because they don't hear back from prospects right away. They throw proposal after proposal out the door and then lose interest in following up because they get distracted chasing the next opportunity.
Please understand that I'm not giving you license to become a pest, but I am encouraging you to become more persistent. Quit making decisions for your prospects and move forward with a relentless "go for no" attitude.
Sure, you'll face a little more rejection, but that helps clean out your funnel and forces you to focus on the right opportunities. I know it hurts to lose, but you can't lose what you don't have. And you just might be surprised how many times you'll hear a "yes" if you're willing to stay engaged.
Source: Sales consultant/speaker Tim Wackel