Why Wal-Mart Is Worried About Amazon?

Five years ago, the world’s largest retail chain didn’t have to worry much about the world’s largest online mall. Only about a quarter of Wal-Mart Stores (WMT) customers shopped at Amazon.com (AMZN), according to data from researcher Kantar Retail. Today, however, half of Wal-Mart customers say they’ve shopped at both merchants. That’s leaving the mega-retailer—which long ago bested local brick-and-mortar merchandise stores and supermarkets across America—with a massive online competitor that is too tough to ignore.

Threatening Wal-Mart’s dominance are two trends: The discounter’s traditional customers—bargain hunters making less than $50,000 a year—are getting more tech-savvy, and more-affluent shoppers who began frequenting Wal-Mart during the recession are returning to Amazon as their finances improve. Amazon has moved into merchandise categories that Wal-Mart traditionally has sold, from diapers to vacuum cleaner bags. In its last fiscal year, Amazon posted 41 percent revenue growth, to $48.1 billion, vs. 8 percent at Wal-Mart. The chain’s 2011 online sales amounted to less than 2 percent of its $264 billion in U.S. revenue, says Kantar. “Amazon is always in our sights,” says Jeremy King, chief technology officer at the retailer’s @ WalmartLabs skunkworks in Silicon Valley. “My biggest issue is playing a catch-up game.”

In the last year Wal-Mart has increased its investment in its online business. The company has spent more than $300 million acquiring five tech firms since May and hired more than 300 engineers and code writers in the U.S. and India. Wal-Mart is also launching a program to allow the 20 percent of its customers without credit cards or bank accounts to make online purchases.

Wal-Mart’s acquisitions include Kosmix, a social-media firm, and iPhone app creator Small Society. The company hopes the newcomers can find a way to stop shoppers from engaging in scan and scram. That’s when would-be customers use their smartphones in stores to scan an item’s bar code and then buy it online from a rival merchant. The chain’s tech team also is working on a concept called Endless Aisle, which would let shoppers immediately order from Walmart.com via smartphone if an item is out of stock. “You can’t ask people to leave their phones at the door. So you have to give them value and an experience,” says Venky Harinarayan, @WalmartLabs’ senior vice president of global e- commerce. The former Amazon executive joined from Kosmix.

Wal-Mart is trying to improve links between its store inventory, website, and mobile phone apps so that more customers can order online and pick up their purchases at stores, which half of Web customers do already. Wal-Mart is trying Web-based shopping tactics, like its Pay With Cash program for Wal-Mart customers who don’t have credit cards. The new program allows them to reserve products online and pay cash at their nearest store. To cater to its affluent customers, Wal-Mart is selling more expensive items—for example, high-end televisions from Sony (SNE) and Samsung—only online.

Harinarayan’s team is also trying to tackle a new problem for Wal-Mart. Last year the chain was the No. 1 destination for holiday shoppers, with 53 percent of U.S. customers visiting its stores. That was down from 59 percent the year before. To lure gift shoppers, the techies have developed a Shopycat feature that scans the social media preferences of a consumer’s Facebook friends and suggests gift ideas sold on Walmart.com. About 150,000 users have installed the app.

To roll out more such innovations, Wal-Mart must improve its in-house e-commerce technology, so King will hire 87 engineers and coders to bolster the links between the stores and the website. “We’re starting from scratch to build a foundation,” says the EBay (EBAY) veteran. “Ideally, we’d have this platform built a couple of years ago.”

 

The bottom line: Wal-Mart, which gets less than 2 percent of its U.S. sales online, aims to bolster its technical capabilities to compete with Amazon.

 

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Black Friday Sales Hits Record, Retail traffic and Foot-falls up.

Preliminary reports for Black Friday indicate that retailers may have seen their strongest sales ever during the all-important kick-off to the holiday shopping season.

black friday sales

Retail sales on Black Friday climbed 6.6% this year to an estimated $11.4 billion, according to ShopperTrak, which tracks foot traffic at malls and stores. Last year, sales climbed just 0.3% to $10.7 billion, which was a record one-day sales amount at the time, according to the company.

“This is the largest year-over-year gain in ShopperTrak’s National Retail Sales Estimate for Black Friday since the 8.3 percent increase we saw between 2007 and 2006,” said ShopperTrak founder Bill Martin. “Still, it’s just one day. It remains to be seen whether consumers will sustain this behavior through the holiday shopping season.”

However, sales have been strong throughout the entire month of November with retailers rolling out holiday deals earlier than ever. In the two weeks leading up to the week of Black Friday, retail sales were up 3.6% and 3.8%, respectively, ShopperTrak reported.

“Retailers continue to stretch out Black Friday weekend by enticing shoppers with doorbuster deals weeks in advance,” said Martin.

Online sales have also proven to be strong, with many big-box retailers and department stores offering deals online earlier this year.

Black Friday online sales surge 24%

Online sales were up 39.3% on Thanksgiving Day and 24.3% on Black Friday compared to the same days last year, according to IBM’s (IBM,Fortune 500) Coremetrics, which tracks real-time data from 500 retailers in the apparel, department store, health and beauty and home goods categories.

“This year marked Thanksgiving’s emergence as the first big spending day of the 2011 holiday season with a record number of consumers shifting their focus from turkey to tablets and the search for the best deals,” said John Squire, chief strategy officer at IBM’s Smarter Commerce division.

Consumers also spent slightly more than they did last year, although they spent most of that money on themselves. According to NPD Group consumers spent about 3% more on purchases during Black Friday. However, about 44% were self purchases up from 33% last year, the research group said.

Retail traffic on Black Friday up 2%

Total US visits to the top 500 Retail websites increased 2% on Black Friday as compared to 2010 and received more than 173 million US visits. Traffic has increased each day leading up to the Thanksgiving holiday and the total visits dipped slightly (-1%) on Black Friday compared Thanksgiving Day 2011. Early Black Friday sales resulted in a shift of online traffic, which climbed prior to the Thanksgiving holiday, however, continued heavy promotional activity helped to drive significant online traffic on both Thanksgiving and Black Friday. While Black Friday has been the top day for online retail traffic over the past two years, warm weather and early store openings encouraged shoppers to go online sooner this season.
DMS Retail 500 11-25-2011.png

Among the categories driving the growth in traffic on Black Friday were Department Stores (e.g. Amazon and Wal-Mart) Apparel & Accessories, Appliances & Electronics (e.g. Best Buy) and Video & Games (e.g. Game Stop).
DMS Retail Categories 11-25-2011.png

Below is a list of the top visited retail sites on Black Friday:
DMS Retail 500 Sites 11-25-2011.png

Many of the major retail websites experienced growth on Black Friday, including Amazon, Best Buy, JC Penney, Sears and Kohl’s. Amazon.com was the most visited website on Black Friday for the 7th year in a row.

Sears to Re-Open Toy Business

Department store chain Sears, Roebuck and Co., a subsidiary of Hoffman Estates, Ill.-based Sears Holdings Corp., has plans to re-open its toy business at 20 Sears locations, according to the Los Angeles Times. Scheduled to launch on Aug. 15, the toy shop openings will mark the retailer’s return to the toy market after officially leaving the niche decades ago. The company experimented with the toy market several years ago, introducing temporary KB Toys shops inside hundreds of Sears locations, but eventually abandoned the program. Six toy shops will be planted in Southern California, with four in San Francisco, seven in Chicago and three in New York.

Sears Aims to Boost Sales With Christmas Shopping in July

Is it too early to start thinking about Christmas shopping?
Apparently, Sears doesn’t think so.

The retailer and its corporate partners, including KMart, have launched special holiday sections called “Christmas Lane” on their Web sites — sure to become a big hit with those early bird holiday shoppers who start to panic when Labor Day rolls around.

The company also has opened Christmas boutiques at hundreds of its stores, MyFOXNY.com reports , a business move that aims to court holiday customers earlier than ever and get them to take advantage of the company’s layaway offers.

The year-end holidays typically represent a giant chunk — as much as half — of retailers’ annual revenues, and every year, the start of the holiday shopping season seems to creep earlier and earlier.

Retailers suffered through a particularly weak season last year as the United States suffered through the recession. The National Retail Federation reported a dismal 2.8 percent drop in the 2008 holiday season compared to the same period a year earlier.

It remains to be seen whether the concept of Christmas shopping in July will persuade skittish consumers to open their wallets.

But even if they do decide to commit $199 to buying the GE “Energy Smart” spruce tree from KMart.com, they may be disappointed to find that particular product won’t be available until September.

Source: http://www.myfoxatlanta.com

Sears Brings Personalized and Convenient Shopping to Life With ShopYourWay

Sears Holdings Corporation today announced the unification of its industry-leading, multi-channel services under, ShopYourWay, which transforms the shopping experience and gives customers just that – the ability to “shop their way.”

Both Sears and Kmart customers can now conveniently experience these innovative and best-in-class, multi-channel purchase opportunities in stores and online. As more and more new multi-channel capabilities are made available, the ShopYourWay banner will help identify the many choices for Sears and Kmart customers.

ShopYourWay provides the best of what Sears and Kmart offer – great prices everyday and one of the largest assortment of brands, products and services of any store online or offline through Sears.com and Kmart.com, Sears2go, Web to Store, Store to Web, 1-800-4-MY-HOME and in-store visits. Its expanded selection of jewelry, apparel, electronics, tool, shoes and power lawn & garden equipment are now always available on Sears.com or Kmart.com.

“ShopYourWay revolves around the lives of our customers,” said Richard Gerstein, Sears Holdings Corporation’s senior vice president, marketing. “By letting their schedules determine the way they shop, our customers can take advantage of making purchases in-store, online, over the phone and with mobile capabilities.

ShopYourWay empowers our customers to manage their lives by providing them with unique services, expanded selections and the best prices.”

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Sears: Layaway making a retail comeback

NEW YORK, Nov. 28 (UPI) — U.S. retailer Sears is bringing back the purchasing system called layaway this year, marking a small comeback for a plan popular during the Great Depression.

The strategy allows shoppers to put some money down on an item which is held by the store until the bill is paid in full. Layaway is now available at Sears after a 20-year layoff, the San Francisco Chronicle reported Friday.

“People are looking for frugality and personal finance discipline. It’s really great how layaway can help them, empower them,” Tom Aiello, vice president of Sears Holdings. Continue reading

Hassle-free merchandise returns

Consumers are less likely to recommend a store if they’ve tried to return merchandise and walked away dissatisfied from that experience, according to a nationwide telephone survey of 1,024 people conducted by Opinion Research Corporation. “Easy returns are important in demonstrating flexibility and good will” on the behalf of the retailer, says Linda Shea, senior vice president and global managing director of customer strategy at Opinion Research.
To keep you out of the ranks of the dissatisfied, we’ve compiled a cheat sheet that details the return policies of some of the largest U.S. retailers of home products. The information could help you avoid a bad experience if you need to return an air conditioner that’s the wrong size or a gallon of paint you don’t need.

A number of retailers have made their return policies stricter. “Retailers examine and reevaluate their policies all the time,” says Scott Krugman, a spokesman for the National Retail Federation, a trade group. “They balance the needs of the customers and also consider whether the policy is being abused [by consumers].” Wal-Mart, for example, toughened its policy several years ago and implemented a return-tracking system that signals cashiers when customers have returned more than three items without receipts within 45 days. Managers at the retailing behemoth’s stores must approve returns signaled by the system.

After analyzing the policies of its competitors, Sears changed its return policy in late 2005 by tacking on a 15 percent restocking fee for some appliances, tools, and lawn and garden products that don’t contain all the original packaging and can’t be resold as new.

Costco, the warehouse-club giant, takes a more liberal approach to returns. The retailer claims that, with few exceptions, shoppers can return items at any time. The company even refunds shipping fees for items purchased online. Still other retailers, including Home Depot, Lowe’s, and Target, either do not require receipts or they use systems that trace purchases made with checks or credit and debit cards.

HOW TO AVOID RETURN HASSLES

Check the return policy. You’ll typically find the return policy for each retailer on signs near the checkout registers, on receipts, and on its Web site. Note the number of days you have to return items, policy exceptions, and whether restocking fees apply. If you buy and return items online, be aware that many merchants do not refund the cost of shipping, and you’ll probably have to pay the return postage. To avoid the inconvenience and cost of returning by mail, see if you can return your online purchases to a walk-in store. The chart below details this type of information.

Save the receipt. Not all retailers allow you to make returns without receipts. In some cases you’ll receive store credit, which could be based on a selling price lower than what you paid. To facilitate returns, hang onto receipts until warranties expire or for seven years if you need receipts to support tax returns.

Open with care. You might not be able to return some items, such as electronics, if you’ve opened the box and the products are not defective or if they’re not in their original packaging with all of the paperwork.

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