Justin Bieber Doll to Save Retail?

Well its that time of the year to look at what presents will be the hottest to buy. With the crazy advertising going on this year because of the push to save the industry through holiday sales, the turnout for Black Friday is going to be crazier than ever. This yea, there are so many great deals that it would be crazy not to be able to find the cheapest price.

What is absolutely crazy about this year is that a Justin Bieber doll is suppose to raise the retail industry by a quarter this season. Now, I am not to judge what people like to listen to music wise, but a Justin Bieber doll is really that popular? Apparently books and other dolls just do not match up. I must say it is brilliant marketing done by the 16 year old's publicist. He already has completely taken over Itunes so why not the economy. At a young age he learning this market very well.

By: Ariel Levin

http://voices.washingtonpost.com/blog-post/2010/11/black_friday_shopping_tips_for.html

Time to "Twist and Shout": Beatles Now on iTunes

Steve Jobs and Apple announced on Tuesday that the Beatles would finally appear on iTunes. Terms of the deal between Apple and the record lable EMI Group, Ltd. have still not been released, but the talks have happened. Apple now has the right to digitalize the Fab Four and sell their music online.

The Beatles' entrance into the realm of iTunes could be "Hello" for some and "Goodbye" for others in the industry of music retail. For one, it completely solidifies the prominence of online music. The fact that the Beatles had been missing from iTunes before meant that there was a great gap in the digital music system. Now that iTunes has said "goodbye" to that gap, it can really start to take a hold of the music business.

Over the past few years, online music selling has very quickly become the primary form of music retail, and the fact that that retail now includes the Beatles only makes the online market stronger. It may even represent a step in the direction toward the death of the CD, and, therefore, physical music retail stores. As more and more artists finally go digital, there are fewer and fewer reasons to go out and buy CDs. Any retailers that sell CDs, from Best Buy to small record stores, will suffer from this digitalization.

This transition could also mean big things for Apple in general. The Beatles are an older group and draw from an older population of fans. The fact that they are now available online may encourage those of an older generation to jump on the iPod bandwagon. Incorporating such a groundbreaking band will open awareness and spread Apple products across more generations.

Apple is likely to see a large boom in sales when the Beatles finally go on the market. Everyone has been waiting for this for a long time and they will be eager to begin buying every song imaginable. There will suddenly be so many popular songs available at once, and sales will rise accordingly. Some may even buy their first iPods because of the fact that the Beatles are now available.

As for music retail, the online trend is becoming more and more common, and it is becoming more and more difficult for anyone to compete with Apple in that category.


Sources: http://online.wsj.com/article/SB10001424052748703326204575617004052395816.html

http://www.appolicious.com/finance/articles/3991-with-the-beatles-now-on-itunes-the-album-format-is-no-longer-yesterday

Catherine Reeves

Game over… Continue?

U.S retail sales of video game hardware (consoles like Xbox), software (actual titles) and accessories summed $1.07 billion in October compared to $1.11 last year. Year to date sales stood at $11.07 billion, an 8% decrease from last year.

Moreover, hardware sales went down 26% to $280 million from $381 million last year. Both Nintendo and Sony were unable to sell as many consoles in the past two years, while Microsoft has actually increased unit sales of its console, Xbox, by 30% to 325,000 units.

Meanwhile, game software sales increased by 6% to $605 million. This figure does not include the latest record shattering release of Call of Duty: Black Ops, which holds the record of the highest release day sales with a shocking figure of $360 million.

Video games have always seemed a small niche market to many people, yet such figures clearly make this industry a lot more significant than the image of teenagers passing time in the basement. At a time where many people have little to spend on leisure, video games actually seem to hold strong sales. Perhaps with the advancement of technology multiplayer gaming is replacing other social activities.
Although quite expensive at first, video games offer a higher bang for the buck than many other pastime activities such as going to the movies when a ticket costs $12.

Obviously the slump in overall sales can be attributed to the lack of new products along with the ongoing affects of the recession, which continue to prevent people from spending money on unnecessary goods.

Video games will continue to revenue enormous sums of money in these troubled times in the retail industry as even the worried consumer can’t say a to a determined kid with the latest & greatest video game on his Christmas list…

Article source: http://www.google.com/hostednews/ap/article/ALeqM5gHaDv9mvelX2WsRRERcGrlQcsgBQ?docId=9c5894761e3442c79954705ad7ea46e1

Written by Michael Milner

Free Shipping...YES!

Electronic retailer, Best Buy Co., plans to offer costumers free online shipping for certain items until December. 21. Wal-Mart made a similar decision earlier in the month. Best Buy will offer free shipping for hundreds of thousands of items “including all CDs, Blu-Ray and DVD movies and gaming software and accessories”. However, products with heavy demand and values like iPads, laptop computers and major appliances will not be included in this deal. In fact, many retailers are starting to present consumers with free shipping as the holidays approach. Wal-Mart plans to have 60,000 online items with free shipping while Target this season will have the same deal for over 800,000 products on orders of at least $50.

In recent months, Best Buy has faced a steady stream of competition from Wal-Mart and other discounters. However, the company has still managed to posts growth for the year. In September, “the company reported a fiscal third-quarter profit that topped analysts' estimates and raised its forecast for the year”. As the approach, Best Buy will look to continue this growth.

_{http://online.wsj.com/article/SB10001424052748704648604575620482439021728.html?mod=WSJ_Retailing_leftHeadlines}

A lady can NEVER have too many bags

The hand bag and leather goods luxury store, Coach, reported a 34% increase in their net profits for it's first fiscal quarter. The company reported that it's adoption of lower price points, increased profit margins, along with expansion into developing markets have all contributed to the success. Currently Coach is hoping to expand into chinese market, recognizing the great opportunities in the booming chinese economy.

I believe that Coach is doing well not only because of it's adoption of lower price points, but due to the luxury trend in the market. Households with an income of over $100K have been spending at almost pre recession levels where as households with a lower income are still cautious when it comes to luxury spending.

Or perhaps the reason is as simple as: Some consumers are still willing to sacrifice other necessary expenses such as rent, for the latest, "cutest" bag.

Written by Michael Milner

Article source:
http://online.wsj.com/article/SB10001424052702303390704575575881503013638.html

Cheers to That

Trailing 52% to 48%, a Washington state ballot initiative wants to privatize liquor sales and change the beer and wine distribution rules. Large food retailers like Costco, Safeway, and Wal-Mart contributed financial support to the ballot. In fact, out of the campaign’s six million dollars in funding, Costco is attributed to nearly 4.8 million dollars of that fund. Brewers like MillerCoors and Anheuser-Bush gave funds to the opposition, “Protect Our Communities” as well. Together, the opponents of the ballot collected 9 million dollars. 

The ballot, if passed, would cause a revamp and overhaul of Washington’s trade regulation concerning alcohol. Brewers, distributors, and small businesses fear that if passed, the ballot would give large retailers an unfair advantage. These companies would gain leverage to lower prices and therefore, weaken the role of independent distributors in the supply chain. Unable to lower their own prices, small time businesses would not be able to compete with large retailers. However, supporters claim that consumers would benefit from paying lower prices.

While supporters are right that lower prices would benefit the consumer, at what cost to other retailers. Is fair to contribute funds to a campaign where other businesses have the potential to suffer severe losses? Costco and Wal-Mart at this time have already seen gains in profit over the last quarter while many small businesses have experienced losses. If anything, at most, large discount retailers should wait for full economic recovery before supporting a ballot like this.

http://online.wsj.com/article/SB10001424052748703506904575592430139576138.html

RadioShack Back on Track?

RadioShack has posted promising 3rd quarter returns, with net income rising 23%. Part of this comes from RadioShack's effort to liven itself up and move away from the recent reputation it has gained for being a "has been" in the era of technology. RadioShack is focusing more on smartphones and e-readers and it has begun calling itself "The Shack" so that it can connect more with a younger generation. Despite revenue changes, RadioShack's current stock price is still around where it had been. Some analysts expect it to rise as much as 40 percent, however. Hopefully RadioShack, or "The Shack" for short, can continue to hold on in this competitive technology era.

In a world that is continually advancing technologically, one would think that a company that deals with technology would not have any problems surviving. However, as technology grows, old products become obsolete very quickly. This can also happen to a company name as well. RadioShack fell a bit behind the times and then became associated with only the geeky crowd. "Radio" is also outdated, because people rarely listen to the radio as their main source of auditory or technological recreation. RadioShack is now moving in the right direction, though, by informally dropping the "Radio" from its name and moving its focus to more demanded products. That is what companies must do to stay in the game, especially in such a quickly moving field.

Catherine Reeves

Source: http://online.wsj.com/article/SB128907583106554497.html?mod=WSJ_Retailing_leftHeadlines

Halloween Saved The Month!

The October numbers are and they turned out good, but that was only after a very weak start to the month. With the warm weather starting at the beginning of the month, many consumers did not find their ways over to the stores to pick up the fall merchandise. It looked like sales were going to be much lower than anticipated, and that the sales of October of 2009 would be higher than the sales of October of 2010.

But halloween saved the month. Traffic found its way back to the stores as people began to purchase costumes, candy, and other halloween festive decorations. If we compare October 2010's numbers to October 2009's numbers, it is easy to easy that the economic depression is lifting. Macy's Department stores sales rose 2.5% compared to the sales of October 2009. And they are not the only store. Limited Brand, which owns Victoria Secret, were 9% higher than they were this time last year.

While we are a long ways away from completely recovering from the economic crisis of 2008, these numbers show a positive outlook on future. It shows that there is hope for a strong fourth quarter and holiday season. While it is too soon to see if this will happen yet, there are signs that having a holiday increases sales for stores, and can sometimes even save a month.

By: Ariel Levin

Article used: http://voices.washingtonpost.com/political-economy/2010/11/october_retail_sales_start_wea.html

Ahh what to do when even the basics become expensive

Rising inflation threatens to end nearly two decades of food price stability.  Prices for staples like milk, beef, cocoa and sugar have retailers like McDonalds, Kellogg, and Kroger signaling that consumers may bear the brunt of these rising costs. Demand for meat in China and grain in India and emerging economies are key factors in rising costs and therefore prices. Grain prices have risen in particular because of drought in Russia, speculative trade, and overall planting difficulty. Furthermore, food prices are rising faster than the rate of inflation.

Now, it is up to food executives to determine the speed at which they pass costs off to consumers; many Americans still fear unemployment and are looking for any ways to save. In 2008, when producers had to push costs over to consumers, shoppers “switched to private label products”. Therefore, some companies like Weis Market have implemented a price freeze on over 1500 staple items. “There’s a ceiling people are willing to pay for a meal” Greg Horon Gibson, director of operation for Gibsons Bar and Steakhouse states plainly. Companies will indeed have to choose whether to raise prices at the costs of consumer loyalty or place price freezes to attract frugal consumers.

Wall Street Journal  

Growing Monster

In an article published by the Wall Street Journal, it has been reported that Simon Property Group Inc. has done exceptionally well in 2010. The company, which owns 343 malls in the US, is the largest mall owner in the country. Despite accusations of antitrust actions by the Federal Trade Commission following Simon’s attempt to purchase Prime outlet company and adding 21 outlet locations to the company’s long list of assets. In addition to Prime outlets, Simon was trying to purchase the bankrupt General Growth Company, the second larges mall owner in the US. The company has showed signs of recovery, as it’s third quarter earnings more than doubled to $230.6 million, or 79 cents per share. Revenue increased by 5.9% to $979.3 million in the quarter. Moreover, occupancy rose to 93.6% along with the company’s higher renewed leasing contracts, which rose by an average of 2.8%.

Simon’s success concerns many retailers as the company’s growth increases the growing fear that it might poses to much power. If the company is able to acquire its competitors many retailers will lose their bargaining powers and take an unnecessary hit due to lack of competition. Although I find it wonderful that a company is able to show signs of recovery, it is questionable if such growth is not on the behalf of the many retailing companies that lease spaces in its malls.
Perhaps healthier competition could lead to reduced costs for the struggling retailing businesses, resulting in their own ability to recover from the recession.

Written by Michael Milner

Article source: http://online.wsj.com/article/SB10001424052748704141104575588010926207920.html?mod=WSJ_Retailing_leftHeadlines

Cotton Prices Could Get out of Hand

Apparel sales could be taking a major hit soon due to the rising cost of raw materials. Cotton, for example, is up 80% since the beginning of the year. Apparel companies have tried to withstand the price increases for as long as possible because they don't want to deter the already delicate state of consumer spending. However, as the prices continue to increase, there is almost no other choice. Though they are reluctant to raise the prices, it must be done, and as a result, certain clothing prices could increase by up to 10% in the next year. In order to survive, these companies need to raise the prices. But, that same price increase could push some companies out of business. It really all depends on which companies are large enough and strong enough to handle that type of hit to the system.

This is a difficult situation for retailers, and all businesses alike. The prices of raw materials are often out of anyone's control. They simply rise and fall according to the common supply and demand model. Natural disasters have eliminated cotton supplies. What can retailers do to prevent floods and heavy rains? They have no control over that type of disaster. What can they do but raise the price when the supplies are low? These increases come at an inconvenient time, too. The recessionary time period has seriously wounded the retail/high end apparel business. Consumers were reluctant to spend in tough economic times. In the past few months, however, numbers were showing healthy increases in consumer interest in those areas. Higher prices are only going to send that consumer interest reeling again. This is a critical point that could determine which business stay in the positive and which businesses struggle.

Catherine Reeves

Source: http://online.wsj.com/article/SB10001424052702304879604575582673135103404.html?mod=WSJ_Retailing_leftHeadlines

Saks' Italian Mogul

The article, “Italian Mogul Della Valle Boosts His Interest in Saks” came as a shock to me: 1) since I did not know that Saks Inc. was a U.S. retailer and not a foreign-retailer with a U.S. base and 2) that in this recession, there are investors trying to buy up shares of high end (and high risk!) companies. Della Valle comes as an angel investor to the company, since his now 19.05% share of Saks beats the now second largest shareholder Carlos Slim, who came as somewhat as a threat to the growth of Saks Inc.

Buying those shares come as a financial boost to the company as well as a great way to ensure product placement of the two brands Tod’s and Roger Viver, owned by Della Valle. To those with the capital, it may be wise to buy shares in these companies hit by the recession but with the potential to work through it all. Saks has not had a dramatic increase in profits, but has been seeing positive sales monthly for the past few months—a hopeful sign to profit-seeking investors in high end retail and really, any other industry.

By Leya Abebe

Article found at:

http://online.wsj.com/article/SB10001424052702304023804575566160904696050.html

Investing in India

“In a speech in New Delhi Tuesday, Mr. Duke [chief executive of Wal-Mart Stores Inc.] argued that permitting foreign ownership of retail stores like Wal-Mart in India would reduce prices, create jobs and modernize the country’s agricultural market and supply chain.” Many companies have expressed interest in opening international operations in India, but haven’t received that with the full support of the government of India, the CEO of Wal-Mart being the most recent representative. So far, the government only allows foreign companies to enter the market “through franchise agreements or as wholesalers or distributors, and usually only as part of joint ventures.” This does not allow for the ideal marketing and control brands want to portray at times.

India is a large market with an estimated potential value of $400 billion. However, I don’t believe it’s the market companies want to spend most of their energy breaking through. The culture is very strong there and mom-and-pop shops reign supreme. For companies to really want to expand in India, they would need to tailor their operations, stores, and selling practices to mimic closely the practices already in place by other native businesses. In the U.S., trends are much easier to introduce and find a following. In India, that is not the case. Trends popular elsewhere will need to be treated like grassroots political campaigns, expecting little but giving a lot until change is made.

By Leya Abebe

Article found at:

http://online.wsj.com/article/SB10001424052702303891804575576252700008116.html

Ebay on the rise?

The online retailer Ebay is going through major changes in order to increase sales during this upcoming holiday season. With much of the same properties as its competitor and online retail giant, Amazon.com, Ebay has changed its focus to developing its technological foundations. Some of the projects they’re working on is to provide a whole new home page that is more attractive to the online customer and building a product catalog. The homepage will provide recommendations based on previous searches and for a few technological devices, pages consisting of certain models of those products have begun to arise, “consolidating the sometimes thousands of different listings by sellers and highlighting the best deals at the top.”

Here is another online retailer trying to revamp their image and increase their sales. Looking at the homepage, I feel as if Ebay re-designed the page to look more like other online retailers: logo on the top left, horizontal menu bar, drop-down menu on the left, picture in the middle, a few links on the left, and other pertinent information below. The page looks much cleaner and easier to navigate, but I’m not impressed. I’m impressed with what this company is trying to do to make the site more user-friendly because already, there is a great customer following, and I feel like this will increase brand loyalty as well as attract more customers. I have often heard people selling their ideas on how to get rich quick with eBay. These new changes may add to the next volume of e-commerce trading secrets. 

By Leya Abebe

Article found at:

http://online.wsj.com/article/SB10001424052748703817604575585320835209814.html?mod=WSJ_Retailing_leftHeadlines#ixzz144pORk00

Black October

Everybody knows the day after Thanksgiving is called Black Friday because it is the biggest shopping day of the year. Stores open their doors as early as 4 in the morning and have amazing deals all day long. Well shoppers make your way over to the stores because the prices you would see for black friday arrived in late October this year. Sears, Wal-Mart, Amazon, and Target have already started their sales for the holiday season.

Sears had a "Black Friday Two-Day Doorbuster sale" this past weekend with amazing deals for the whole family. And don't think they are the only store! Amazon's entire electronics department is on sale. Kindles are selling for as little as $139 and yes, there is free shipping. Also, TVS, blue-ray dvd players, and much more are selling at very low prices. Toys R Us is making their entire 80 page holiday toy book on sale NOW. All 80 pages are on sale next weekend.

The retailers are making these big moves now because they know that consumer's money is tight. They want to have the best deals now to get the business and take the consumer's money before another store does. I have to admit this is very smart; however, its kind of like the idea of playing christmas songs before thanksgiving. It drags on the holiday season, and makes it seem like getting to Christmas is taking forever!

But for the discount shopper, these sales are making you sprint to your car and speed to the stores. But let me warn you, these deals will last and I would not be surprised if the prices went EVEN lower on Black Friday. Why? Because the stores want to attract as much attention as possible and because other stores will have low prices. I guess we will find out as the month goes on.

By: Ariel Levin

http://www.nytimes.com/2010/10/28/business/28friday.html?ref=retail_stores_and_trade