Tag: Retailing

Localized customer specific strategies provide competitive edge for retailers

Posted by | Jul 2, 2007 | |

For retailers, there’s nothing more important today than precisely understanding local markets. Trying to serve the average consumer is a quick ticket to commoditization and earnings pressure for retailers.

Sure, companies can still be profitable using the old retail model. But in today’s marketplace, the road to increased market share, higher profit margins and stronger customer loyalty begins with a localized, consumer-centric strategy.

For some retailers this means a fundamental transformation in the way they approach their business. To succeed, companies must make informed, data-driven decisions by positioning the customer in the center of their universe.

Take this example: two stores are virtually identical. Both are 30,000 square feet, do about USD 6 million in volume a year and have about 3,800 customers a week. The surrounding population for both has a median household income of USD 80,000 and median age of 40.

The customers for both stores probably view the same ads and experience the same merchandise and store presentations. Yet, both stores may be sub-optimizing their performance.

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Wal-Mart, Home Depot, Kroger triumph in Top 100 retailers list

Posted by | Jul 2, 2007 | |

Retail giant Wal-Mart, home-improvement chain Home Depot and grocery chain Kroger have topped the list of Stores Magazine Top 100 Retailers ranking.

The annual report, conducted by Stores, the monthly magazine of the National Retail Federation, ranks companies in all segments by revenue.

Bentonville, AR-based Wal-Mart again ranked No. 1 with 2006 revenues of USD 348.65 billion, an 11.7 percent increase over the previous year. Wal-Mart’s revenues were greater than those of the next five largest US retailers combined.

Home Depot and Kroger retained their second and third spots, respectively. Despite a troubled year, which saw the departure of CEO Robert Nardelli, Home Depot gained 11.4 percent in total revenues in 2006. Kroger’s 2006 sales rose 9.2 percent over 2005 to USD 66.11 billion.

Costco came in at No. 4, up from last year’s fifth place, thanks to increasing its private-label offerings with a new line of food conceptualized by Martha Stewart. Costco’s revenues increased 13.6 percent in 2006 to USD 60.15 billion.

Mass merchants Target and Sears came in fifth and sixth. Target advanced a spot in the ranking with a revenue increase of 13.1 percent to USD 59.49 billion. Sears dropped two spots despite a 7.9 percent revenue increase to USD 53.01 billion.

Drug stores are also represented in the top 10. Walgreens rose one spot to No. 7 after aggressively adding freestanding store locations and focusing on front-end merchandise. CVS, which took ninth place and is a new entry to the top-10 list, acquired Caremark Rx in an attempt to upgrade pharmacy services.

Other companies in the top 10 include Lowe’s, which dropped one spot to No. 8, and Safeway, which retained its spot at No. 10.

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Market forces raise the bar for delivery

Posted by | Jul 1, 2007 | |

While retail web sites work to differentiate themselves from stores with web-only features, personalized services, detailed imaging and other tactics, there always will be one thing that separates sites from their braicks-and-mortar counterparts: a reliance on delivery services to fulfill online customers’ orders.

And as shoppers have become more accustomed to online retail, their expectations of timely and reliable delivery services—across a variety of delivery options—have only increased. A comprehensive shipping policy has become a crucial part of e-retailing, experts say.

“A critical component of the online checkout process is the determination and selection of a shipping option,” says Rob Garf, vice president of retail strategies at research and advisory firm AMR Research Inc. “Retailers must offer multiple delivery methods, including overnight, ship-to-store and split shipments, and be crystal clear regarding cost and timeframe.”

For Internet retailing, the average postal rate increase comes to about 6 pct, says David Marinkovich, senior vice president of sales and marketing at DHL Global Mail. “The cost of fuel is having a big effect on retail shippers, but the Postal Service rate change that went into effect May 14 is the most dramatic postal rate change ever,” he says. “Some retail organizations that sell products like CDs, video games, books and apparel are looking at rate increases of about 54 pct.”

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Wal-Mart to expand financial services

Posted by | Jun 20, 2007 | |

Wal-Mart Stores Inc. said on Wednesday that it intends to open 1,000 Wal-Mart MoneyCenters and launch a reloadable prepaid Wal-Mart MoneyCard, in a major expansion of financial services the retailer provides to its base of low-income customers.

The company earlier this year withdrew an application with U.S. bank regulators to operate a specialty bank in the face of immense opposition from politicians, consumer groups and community banks.

While Wal-Mart had insisted it wanted to use the bank to save money by processing credit-card and check transactions internally, consumer groups and banks feared the retailer would eventually provide other retail banking services, leading to the demise of community banks.

After withdrawing the application, the retailer said it would focus on introducing new financial services, and Jane Thompson, president of Wal-Mart financial services, said the company would have “a lot of things that will be coming out this year.”

Wal-Mart currently has 225 MoneyCenters and intends to expand that number to 1,000 by the end of 2008. The retailer said the centers, which are geared toward customers who are “outside mainstream banking,” offer money services like check cashing, money orders, bill payment and money transfers.

It will also launch the Wal-Mart MoneyCard, a reloadable prepaid Visa, that it is rolling out nationally with GE Money and Green Dot. It said the card can be used at all locations where Visa is accepted and at automated teller machines.

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New loyalty scheme brings revenue stream to retailers

Posted by | Jun 20, 2007 | |

Webloyalty has launched its shopper discounts and rewards programme in UK. The scheme has been running successfully in the US with 140 retailers and has now moved to the UK market with Interflora being the first retailer to sign up for the new concept.

Membership to the Webloyalty scheme is offered on participating retailers’ sites once a customers has completed a purchase. When a shopper would normally see a thank you for your order or click here to continue shopping message, an offer is highlighted – such as money off future purchases. They can then click through to the Webloyalty site and find out more or sign up for the scheme.

Interflora customers, for example, have the option to join Webloyalty’s Shopper Discounts and Rewards programme and received up to 40% off online purchases with retailers such as M&S, John Lewis, Asda, Tesco, PC World and Lastminute.com. New members also receive a GBP 10 cash back voucher towards their next purchase at Interflora.co.uk. This GBP 10 is funded by Webloyalty.

The retailer benefits from an extra revenue stream since Webloyalty pays retailers for each new member that signs up. It’s also adding value to the customer’s purchase and deepening the relationship between the retailer and shopper. Michael Barringer, Marketing Director of Interflora said that this, along with the transparency, is amongst the factors that made the scheme appealing to the company.

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