School Spending Pumps Up Retail Sales

Septembers' back to school shopping was inspired by all of the promotion through coupons and sales. It was much more successful than retailers had planned for so they are hopping that they can expect more sales during the year-end holidays. Sarah Henry, retail analyst at MFC Global Investment Management said that there is usually a strong statistical correlation between back to schools ales and holiday sales. So it is safe too assume that there should be a rise in sales after the October break where not too much shopping is done.

Playing it safe I think Retailers are being smart in not assuming their sales will be so large, they are being realistic, but as much of the news has been saying, we are slowly coming out of this recession, but if there really is such a strong statistical correlation between back to school sales and holiday sales, hopefully they don't begin to assume higher expectations in the future. Better to be safe.

-Jacky Meltzer

http://online.wsj.com/article/SB10001424052748704696304575537732859742138.html

Burberry as a Role Model in the Retail Industry

The designer clothing company, Burberry, has managed to increase its sales and implement effective budgeting strategies in the current global economic environment.

Most of the company's sales have been generated by growth in China; the company now operates 50 stores in China. The company also cut costs by eliminating "unprofitable" items, limiting overstock, and minimizing discounts and expanded its consumer base with the introduction of a ready to wear and a casual line. The company expects positive results in the form of continuous increasing sales in the future.

Other luxury retailers can look to Burberry as a model of how to survive in the current economic environment. Concentrating on what really makes a profit, like global expansion and universal availability, luxury retailers can report positive sales in a time of limited consumer spending.

Burberry has also exemplified that China is a market that retailers should look to. Growth in China has made it a profitable place to do business and it would be advantageous for retailers to look into tapping into the Asian market.

http://online.wsj.com/article/SB10001424052748703673604575549360918756070.html?mod=WSJ_Retailing_leftHeadlines

Holiday Retail Jobs Maybe on Vacation This Winter

According to the NY Times, retailers are warning this holiday season to hold back on hiring for seasonal positions. Having worked in retail, I know that management looks for permanent positions during this time of year, while also using this temporary labor force to fill the greater need for trained associates around the gift-giving season. Much of the risk surrounding the hiring for seasonal jobs is associated with the flimsy prospects retailers are expecting this Christmas, forecasted by a weak back-to-school August and September. 

I think this is distressing for jobs on several levels. Knocking out seasonal retail jobs during the holidays leaves a huge mass of the public expecting to fill the cyclical unemployment for the year. Teens and college students depend on these low-paying hourly wages to supplement the season's trend of spending. Many families also depend on the jobs in retail to supplement other careers in order to pay for the holidays and the worker's families. Without the temporary positions provided by holiday hiring, people are not able to spend more money, thus also effecting the retailers themselves. 

-Colin

http://www.nytimes.com/2010/10/06/business/06hiring.html?_r=1&scp=1&sq=retail%20labor&st=Search

Target Corp. is on the Move

Target is planning to open "six to 10" stores in Canada in "late 2014 0r 2015." This will be the company's first move out of the United States.

Target, however won't be alone in Canadian territory; Wall Mart Stores Inc. has already been established there for 10 years and other stores such as Khol's Corp. and Victoria's Secret also have plans to open stores in Canada.

This is another example of the ever increasing presence of globalization. Corporations are not limited to any one area and are becoming recognizable on almost all of the world's continents.

Could this stretch across the northern border hurt Target Corp? The Wall Street Journal expresses that some problems are "great distances between large Canadian cities and, in some cases, the need for labeling in both English and French." Moving up north to Canada, however "costs less and carries fewer logistical risks than overseas expansion."

This may be a good way for Target Corp to see how it can operate in another country and to measure if it would be successful over seas.

http://online.wsj.com/article/SB10001424052748704689804575536273265184134.html?mod=WSJ_Retailing_leftHeadlines

Retailers to Challenge Amazon

Many retailers are now coming together to retaliate against Amazon.com Inc. by working with ShopRunner to get rid of shoppers' biggest concerns that waste more of their money: shipping costs. Working with ShopRunner, they are offering FREE 2-day shipping. This company is mostly working towards the costumers that wills pend the most. "-U.S. e-comerce market, one of the fastest-growing parts of the U.S. retail. Mike Golden, President of Shop Runner Inc. said his market research would appeal mostly to those who buy at least eight times in a year from retailers. Unfortunately I cannot find how ShopRunner is doing this business between all of these huge retailer companies because they are not revealing much information as of now.

Its evident that consumers have now come to expect free shipping on most online purchases, at least when they spend up to a certain point. I can personally say how outraged i get when I have to pay for shipping. I have grown accustomed to buying many different things online from usually and almost every time from Amazon.com. the reason i chose to talk about this article is because when we had out last guest speaker, the Leadership one, he referred to Amazon and how Barns and Noble hasn't yet had a comeback for Amazon because Amazon has been such a hit with the consumers that until now there is real competition. It will be interesting to keep track of how sales for for ShopRunner in the future and how Amazon's cliental shifts in the next few months/years. I personally think that Amazon will continue taking the lead in retailer shopping online because aside from free 3-5 day shipping it is also beginning a new program that if you do a free trial of it you receive your shipment for FREE 2 day shipping. Also I think that by placing other cheaper products on the side that recommend you to other sites, it ultimately helps the consumer get the same product for a cheaper cost. 

-Jacky Meltzer

Market Place section in the New York Times

Article: Retailers to Challenge Amazon

Dozens Including Babies 'R' Us, PetSmart to Combine Forces to One-Up 'Prime' Shipping Service

Vans to Roll in Brooklyn

   Later this month, Vans Inc. is planning to open a private skateboard park inside a Brooklyn warehouse. They opened it in hopes to “beef up Vans’s presence in New York and the East Coast.”  It will only be open to skateboarders endorsed by Vans, but there will be some opportunites in which outsiders can get inside the park and use it as well. It opens on October 16^th, where people will get to see a brand new skateboarding course, and a set of stairs and handrailings for skaters to slide down. They are creating this with a desire to expand to the eastern part of the U.S.

   I do think what they are doing is a great idea, for it will be a good strategy to attract customers to their brand. Although it does require a lot of money to build this warehouse, it will hopefully all be worth it in the end. This is a fantastic way for Vans to spread out in different parts of the country and will make it easier for them to make their brand known.  Some may argue that this investment might be a little too pricey to make known their company, but people cannot judge too quickly. All companies do start slow in the beginning, but can quickly speed up their income by attracting more and more people. They also stated that this warehouse will also be hosting events for artists and magazines. Thus, it will be easier for Vans to persuade people to buy their brand. Because of the bandwagon theory that says that people follow popularity, it will apply in this case as well. Once artists use Vans, people will get the idea that they need them as well, and will start buying for themselves. It is also a creative way of advertising. Instead of just doing commercials or using billboards to spread their company throughout the US, they decide to create something entertaining and fun that relates to their brand. Skateboarding is a big trademark of theirs, and so the idea here is that those people endorsed by Vans can skateboard with their shoes. I find it extremely brilliant because not only are they attracting people with their brand, but doing it in a way in which they can be a part of a "skateboard community." I do find success in their business, and believe it will benefit them in a very short period of time. What do you guys think? Do you agree with me that this creation of a skateboard park will work to their advantage? Or do you think that it is a waste of time and money? 

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Posted by Tania Dabdoub

Target Explores Canadian Locations

Target is a huge nationally known company, and it shocked me at first to realize it hasn't moved beyond our country's borders yet. That might change within the next couple years as Target execs have met with Canadian real estate developers to discuss possible development locations. Target will be facing some familiar competition in Canada because Wal-Mart stores have been present in the Canadian market for over a dozen years already, however, it will also have to compete against Hudson's Bay Co. with its The Bay and Zellers chains.  The article explains a couple problem that present itself in the Canadian market which explains why it's taken so long for many companies to expand into our northern neighbor such as the large distance between most large Canadian cities and the need for bilingual labels because of the many French speaking areas.
However, crossing the border to the north is much easier and beneficial than going overseas because it will cost less and carry fewer logistical risks. Many other companies are taking part in this expansion idea as well. Marshalls, Kohl's, J. Crew, and Victoria's Secret might soon move into Canadian retail markets as well.
The convenience of Target- food, clothes, appliances, electronics, pharmaceuticals, and more all in one store- makes it a very typical American store. It will be interesting to watch as Target in introduced to other countries and how these other countries react to the lifestyle of the American convenience.




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--Posted by Leah Stoltz