Thursday, August 8, 2013 | Edited by Daniel Moores
||Survey: Retailers Cautiously Optimistic for 2013 Holiday Season
Retailers are cautiously optimistic about the 2013 holiday season, with 60% forecasting revenue growth in excess of 10%, in line with industry forecasts, according to a survey by Baynote, a provider of personalized customer experience solutions.
Conducted in partnership with the e-tailing group, Baynote's inaugural "2013 Holiday Predictions Survey" found that retailers expect mobile to play an increased role in driving sales with minimal contributions from social media. The study surveyed 77 U.S. retailers with annual revenue ranging from less than $20 million to more than $5 billion.
Among its key findings:
• Thirty-eight percent of respondents project an 11 to 20% year-over-year increase in sales, with 22% predicting an increase of 21% or more.
• The majority expect a slow start to the season with increased momentum throughout late November and December.
• Respondents predict that online will continue to steal market share from retail stores as the season progresses, but mobile's influence will drive renewed store interest for omni-channel retailers.
• Fifty-three percent of respondents expect mobile transactions to account for a significant part of holiday revenue.
• Thirty-eight percent believe mobile will drive renewed in-store interest that will lead to increased revenue.
• Mobile's momentum heading into the holiday season is in stark contrast to social media, which 84% of respondents see as having little or no impact on sales.
• Retailers plan to offer promotions, such as flash sales, buy-one-get-one free offers and free shipping, at selective times throughout the holiday season.
• Thirty percent of retailers will begin promotions prior to Oct. 1; over 40% of retailers will wait until early November.
• Forty-six percent of retailers continue to make significant investments in SEO and SEM technology.
• Nearly all retailers are investing in enhanced home, category and landing pages while 77% invest in enhanced site search capabilities.
• Eighty-one percent of retailers have dedicated resources to upgrade e-commerce platforms in anticipation of the season.
"By using mobile as a tool to drive discovery, in-store purchases and overall customer experience, retailers will increase customer connectivity and be able to provide information and incentives that will encourage customers to complete transactions and engage with the brand post-sale." said Dan Darnell, VP of marketing and product, Baynote.
(Source: Chain Store Age, 08/01/13)
||Bad Buzz for Brewers as Light Beer Sales Slip
These are heavy days for light beer makers. Bad spring weather and a sluggish economy have been cited by brewers such as Anheuser-Busch and MillerCoors as reasons for the recent poor sales of some of their flagship light beer brands.
But a couple of new surveys might give greater cause for concern: consumers may just be growing tired of the taste of light beer and moving on to wine or spirits.
According to a survey by Consumer Edge Insight, beer consumers appear to be shifting away from the premium light segment. That's more bad news for the beer industry, given the dominance of light beer in the marketplace. The top two best-selling beer brands, Bud Light and Coors Light, together have about a 27 percent share of the market.
The main reason for the shift? Twenty-seven percent of the respondents said they are "getting tired of the taste."
The second most popular reason won't make macrobrewers feel much better, with 21 percent saying they are "consuming more of other types of beer." An additional 20 percent said they were drinking less premium light beer to "save money."
And then there is the 17 percent who said they were consuming other types of alcohol -- that's bad news for the entire beer category.
Any way you look at the Consumer Edge Survey, it's bad news for light beer:
Age: Among younger drinkers, aged 21-27 years old, 40 percent say they are getting tired of the taste of premium lights.
Demographics: In the fast growing Hispanic demographic, 39 percent say they are tired of the taste.
Brand: 28 percent named a premium light brand as their favorite, down from 32 percent in June 2012.
Perception: 37 percent are more likely to describe the premium light segment as "watery" in 2013 vs. 34 percent last year.
The man behind the survey said the research reveals some serious warning signs for the premium light segment.
"After a long period when these domestic premium light brands dominated the U.S. beer industry, many beer drinkers, particularly younger ones, are finding that they prefer the stronger and more varied tastes of imports and craft beers instead," David Decker, president of Consumer Edge Insight, said in a press release. "This suggests that the recent weakness in share trends for the big premium light flagship brands is likely to continue."
Trouble brewing elsewhere, too
While the Consumer Edge Survey paints a not-so-pretty picture for the premium light beer segment, the annual Consumption Habits poll by Gallup also paints a grim picture for the beer industry.
Beer still takes the top spot as the preferred beverage among Americans who drink alcohol, at 36 percent compared to 35 percent for wine and 23 percent for liquor. But beer's current one-percentage point lead is a long way from the 20-point advantage the beverage enjoyed at its height in 1992.
The Gallup poll also mirrors the concern that younger consumers are turning to other beverages besides beer. Forty-one percent of adults under the age of 30 surveyed said they drink beer most often, down from 71 percent in the early 1990's.
The polls may help tell a story, but the numbers that matter most are the sales figures and recently those haven't been kind to the big brewers either.
In its second-quarter earnings report, Anheuser-Busch reported a decline in U.S. sales volume of 2.8 percent. Still, the brewer managed to offset that decline with higher prices (volume measures sales without the impact of currency and price changes). While Bud Light and Budweiser sales lagged, higher-priced brands such as Bud Light Platinum, Budweiser Black Crown and Bud Light Lime Lime-A-Rita did well.
It was a similar story for MillerCoors, the joint venture between SABMiller and Molson Coors Brewing, which reported U.S. domestic sales to retailers were down 4.4 percent in the second quarter.
MillerCoors premium light sales to retailers declined high-single digits in the quarter with Coors Light declining mid-single digits and Miller Lite declining high-single digits.
Just like Anheuser-Busch, MillerCoors is also looking to grow its higher-priced brand portfolio. MillerCoors' above premium portfolio grew double digits in the last quarter driven by the success of new product offerings, including Redd's Apple Ale and Third Shift Amber Lager. Those more recent products are building on the success of established brands like Blue Moon and Leinenkugel's, whose Summer Shandy seasonal grew at a double-digit percentage rate.
Beer's continued bright spot: Craft
Craft beer continues to be a bright spot in the beer category, with the Brewers Association mid-year 2013 numbers showing a 15-percent dollar sales increase and 13-percent volume increase for craft brewers. Those numbers put the craft segment on pace for its fourth consecutive year of double-digit sales and volume growth.
But while craft continues to shine, it still has a long ways to go, making up only 6 percent of the overall beer market.
Light beer may be declining but it still rules the day, with four of the top five selling domestic beer brands in 2012 in the light beer category: Bud Light, Coors Light, Budweiser, Miller Lite and Natural Light.
(Source: CNBC, 08/03/13)
||High-End Malls and Retailers Beat Pack as Shoppers Thrive
High-end malls are sitting prettier as upper-income shoppers spend more confidently and retailers angle to locate near them.
Affluent consumers have seen their incomes grow rather sharply since the recession and are benefiting from rebounds in the stock market and home prices, analysts say -- while the rest of the population is still battling back.
It's led to a wide gap in performance between Class A malls, the ones that sell the most per square foot and tend toward luxury, vs. the others.
"The wealth effect is starting to kick in," said Ryan Sweet, a senior economist at Moody's Analytics. Sweet says rising home prices are making better-off homeowners feel freer to spend.
"They're seeing their houses appreciate and stock prices rising and they're recovering the wealth they lost during the recession," he said.
Some of that money has gone shopping, boosting retailer fortunes. But what drives earnings and cash flow for mall landlords is demand by retailers for a particular location, notes RBC Capital Markets analyst Rich Moore.
"The retailers doing the best are the high-end and value guys and the guys in the middle are having a harder time," he said.
The average vacancy rate for Class A malls -- which command top rents -- has fallen below where it was in early 2008 at the recession's start, says Ryan Severino, senior economist at real estate research firm Reis. The rate for Class B and C malls, which serve the middle- to lower-income crowd, remains 40% above its own early-recession level, he says.
Middle muddles along
Lower- and moderate-income consumers aren't seeing wage gains like the higher-income set, nor are they benefiting as much from the rising stock and housing markets, says Ken Perkins, president of Retail Metrics. So they don't have the extra disposable income to make a lot of discretionary purchases.
The result: Malls catering to the midmarket consumer are having a tough time along with their mid-tier retail tenants, watchers say.
"There is a pretty sizeable rift between the high-quality dominant centers that cater to more affluent consumers and other retail centers that cater to everyone else," said Severino. "That's largely a function of the fact that the affluent consumers are among the higher income earners, who are more insulated from the vagaries of the economy. These consumers continue to spend money at these centers, and at high-end stores.
Less-flush consumers have been more gun-shy about getting back into the stock market after the recession, Perkins says. And many still owe more on their mortgages than their homes are worth, or have just a little equity in them.
Against this backdrop, luxury retailers have outperformed all other retail segments in sales, earnings and same-store sales since the first quarter of 2010, in an index compiled by Perkins.
The "barbell" effect is at work at retail and the mall level, says Suzanne Mulvee, director of retail research for the CoStar Group. It's either the discounters on one end or luxury on the other end that are doing well, with everyone in the middle getting squeezed, she says.
Mulvee says a key measure of a mall is its productivity. If a mall is tied to luxury retailers that are generating stronger same-store sales gains than a mall tied to middle-market retailers, its productivity will be higher and the landlord can demand better rents.
Mall operators such as Taubman Centers, which tend to have more luxury properties, are seeing higher tenant sales per square foot than those like CBL & Associates Properties that have properties that are a little more middle market, she says. In 2012, Taubman's average tenant sales per square foot were $688, while CBL's were $354.
The top 25 Class A shopping centers in the U.S. have average sales that are more than $1,000 per square foot, while Class C malls have average sales of approximately $375 per square foot, according to data compiled by commercial real estate firm Jones Lang Lasalle.
The average vacancy rate for Class A malls is about 4% and asking rents have risen 15% in the past year -- showing better negotiating power, says Garrick Brown, director of research for Cassidy Turley. Class B malls are seeing vacancy rates of 5% to 6% and no growth in asking rents, he says, while Class C asking rents are down about 15%.
Severino calculates the national vacancy rate at regional and super-regional malls at 8.3% in the second quarter, unchanged from the first. Rents grew 0.4% vs. the first quarter and 1.3% from a year earlier.
The performance of a mall depends on the spending profile of the customer base, which is tied to the economic conditions of the trade areas where the mall is operating, says Michael Niemira, chief economist at the International Council of Shopping Centers.
He says the A malls have a stronger economic demographic in their trade areas than other properties.
But it's not just the luxury retailers that are spurring performance of the top malls, he adds. It's the mix of retailers and the whole experience they offer that are the drivers.
What makes a top mall?
Severino paints a picture of a high-end mall this way: It would have a more upscale anchor like a Nordstrom or a Saks vs. a midtier department store anchor such as a J.C. Penney. The restaurants would also be more upscale and it would have multiple coffeehouses. It would have fewer kiosks than you would see in low-end malls and a comfortable space to socialize.
On the flip side, centers that are doing poorly have high vacancy rates of 40% of more, Niemira says, and the "life" of these centers is very much gone: Shoppers probably only go to these malls for a specific purchase rather than to browse around.
The strong performance of the Class A malls is reflected in how investors value them. The two components are how much income the property generates and the return someone will accept for the income stream, says George Good, an executive vice president and shopping center investment broker with commercial real estate giant CBRE.
He says the income from the high-end properties is going up faster than the middle-market or lower-level properties. That is causing values to increase more quickly for these better-valued properties, and the yield requirements are going down for investors, which means they're willing to take a lower yield or pay more for a property.
REITs are doing well up and down the chain, Moore says. Cash flow from rents is strong for community centers, malls, and outlet centers, including REITs like Simon Property Group and Tanger Factory Outlet Centers.
Overall a mall recovery continues this year, Severino says. But tenant demand is almost entirely for Class A and trophy malls, Brown says.
(Source: Investor's Business Daily, 07/25/13)
Daily Sales Tip: Taking Personal Accountability
It's a given customers feel more secure agreeing to do business with a salesperson who has their best interests at heart.
One of the most effective ways to convey that sentiment is by taking personal accountability for ensuring all issues are resolved quickly, and -- more importantly -- the customer is satisfied with the outcome.
It might even be helpful to let prospects know during the initial selling process that you're always available to answer any questions they have.
This way, the two of you are in sync every step of the way, which ensures you'll be the first to know when or if any issue does arise.
More importantly, it allows salespeople to transform the occasional service issue into an opportunity to build trust, increase loyalty, and, ultimately, create the type of customer relationships great businesses are built upon.
Source: Adapted from From a Good Sales Call to a Great Sales Call, by Richard M. Schroder