This Week In Retail - Jan. 18th 2021

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December Retail Sales Were Actually Up 8.2%, GameStop Surges On Holiday Spending Where Nordstrom Fell Short, And Retailers Grapple With Workforce Vaccination

Analysts poured over the December retail sales data and depending on who you read, retail sales were either way up or slightly down. Which is it? Overall, December retail sales including restaurants declined 0.7% from November as was widely reported by the WSJ, NYTimes and others, but if you looked at the census data more carefully were up 2.9% YoY (December 2020 vs. December 2019) - and that includes hard hit categories like restaurants (-22.2% YoY) and gasoline stations (-8.8%) which if removed showed a whopping 8.2% increase!! Be careful what you read out there and make sure to dig in to the category data. Of course, apparel was a retail category that continues to be hit hard (-16.6% Dec over Dec), although that was much better than the 26.4% it was down overall for the year.

Source: CNBC via Placer.ai

Even mall traffic recovered a bit from its November slump, although that was driven by late season gift buying procrastination and it is still down substantially. It is yet to be seen whether we will see continued momentum in 2021 with Covid cases spiking likely into March.

Source: NRF

NRF released that it saw 8.6% increase in holiday sales for November and December, well above its top end guidance of 3.6-5.2% and that top end was only to be hit if stimulus was passed before the holidays. We are also seeing China’s manufacturing output outpacing estimates, posting 7.3% growth instead of the 6.9% analysts expected. With stimulus coming with the incoming Biden administration and new goods flooding the market this sets up a strong 2021 with Americans having additional $1.3 trillion in savings propelling the luxury segment, and stimulus checks creating demand among the working class.

Target and GameStop Win The Holidays While Nordstrom Struggled And Apparel Was Mixed

Source: Yahoo Finance Target Stock

Not surprisingly Target won the holidays with online sales doubling and in-store sales rising 4%. For those who want to dismiss the Target results as being grocery driven - not so fast. Food and beverage were on par with the overall growth average. The strength came from beauty and essentials that rose in the low teens and the biggest surprise was the hard hit apparel segment which showed a high single-digit sales lift. Home merchandise, including electronics grew 20%.

Source: Yahoo Finance GameStop

GameStop too benefitted from an electronics surge and the release of new gaming system platforms. Holiday digital sales boomed 309% with comp sales up 4.8%, they added Chewy co-founder Ryan Cohen and their stock popped up

Source: Yahoo Finance Nordstrom

The department store category and its dependence on apparel predictably lagged, with Nordstrom holiday sales tumbling 22%. Digital sales during the holidays grew 23% from 2019 and were 54% of total sales, compared with 34% last year. Nevertheless, Nordstrom expects to report a profit and Nordstrom’s stock held steady, down just 4.1% in the last 12 months and more than doubling since Q3.

The market was less kind to Urban Outfitters, whose company sales fell 8.4% from 2019, while same-store sales fell 9% due to declines in store traffic and store closures. Crocs on the other hand is experiencing a resurgence as it forecasted 2020 sales to grow more than 12% to a record $1.38 billion, which is nearly double its previous range from 5% to 7% growth. And of course Lululemon reiterated strong holiday sales at the top end of its outlook. We are learning that strength begets strength in periods of increased hardship and competition.

Incentivizing Covid-Friendly Retail Environments

With the vaccine rolling out and some Americans wary of it, retailers are looking at different strategies to safeguard their workforce and market safe shopping environments to their shoppers. Instacart is offering a $25 stipend for its in-store pickers and delivery workers to get vaccinated. Dollar General is offering its frontline workers the equivalent of 4 hours of pay for getting vaccinated. Trader Joes is offering 2 hours, while many retail industry pundits think that retailers should make a policy that it is a condition of employment. In the future, we expect retailers to market such policies or percentage adherence as part of their safety marketing, and to help jockey for Covid restrictions (which vary state by state) to be eased.

Join Us Thursday, Jan 21st At 2pm For Our Free Webinar With Survey.com On Data Driven Merchandising

Data-focused shopper marketers, category specialists, and founders are invited to join this free virtual session with Trevor Sumner, CEO of Perch, and Tina Adolfson, Marketing & Data Innovation Lead of Survey.com, as they discuss how brands can gain or maintain captaincy during times of uncertainty by implementing data-driven merchandising practices.

Join this webinar to learn more about:

• Eliminating the friction of the in-store shopping experience, by providing shoppers with contextually relevant pricing and educational content
• Driving shopper loyalty, even as social distancing protocols impact tentpole brand-building processes
• Increasing data-visibility to respond rapidly to shifting shopper behavior, as “COVID” and vaccine timelines impact usually buying habits
• Using technology and shopper marketing to establish category captaincy

Survey.com and Perch, are the leaders in providing brands and retailers with the data they need to make informed merchandising decisions and optimizing for sales and engagement. During this presentation, we will share insights gained working with respective networks of clients in the grocery, beauty, and fragrance categories, and how they have responded to this time of disruption.

REGISTER NOW

This Week In Retail Tech Implementations

Every week we cover the top retail technology updates and implementations. There’s plenty of technology updates in eCommerce and online advertising, but that’s not our focus. We focus on where 75% of retail transactions occur - in-store. This Week’s Top Retail Technology Investments include:

• New Forrester research shows that Facebook’s retail ads are falling flat
• Walmart tests smart coolers for home delivery dropoff
• Albertson’s spends $1 billion on retail technology and it pays off
• Ahold tests UV cleaning robots
• Everyone is testing AI for assortment planning

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Activating The Physical Store: The Role Of Digital In Creating Omnichannel Profitability

"Good artists borrow. Great artists steal." - Picasso. Download this presentation to learn: 

• The democratization of experiential retail
• About shifting investments from in-store to omnichannel
• How brick-and-mortar is taking share from eCommerce
• The process of converting in-store customers to omnichannel shoppers

Stories To Share At The Retail Water Cooler

Walmart’s Marc Lore is set to resign at the end of January ending a 4 year stint after Walmart acquired his Jet.com for $3 billion. Although Walmart’s eCommerce share increased substantially, especially during Covid, losses have been sizable leading to budget tensions with brick-and-mortar colleagues. Perhaps, a harmonized retail strategy is leading to an overall organizational shift, or Lore has his eyes on the next big thing. Or perhaps after a year of Covid and rapid digital innovation, he will take some time to relax. Whatever he chooses, his legacy at Walmart and impact to the retail industry are undeniable.

My wife Emily was early on the Poshmark platform and was offered access to IPO shares. I advised her to max out her allocation and I am sure glad I did. The stock popped 141% on its first day, showing that the mix of tech and retail is strong and that bankers underprice IPO shares to aid their clients.

According to RIS, the hot retail startups include Prose, Primary, Italic, Imperfect Foods, Vuori, The Inside, and Naked Retail Group. If they covered the hot startup in Retail Technology, I am sure they would include Perch (ahem).

Carrie Underwood is the latest celebrity to sign a deal with performance beverage company BodyArmor, which now boasts over $1 billion in sales, up 70% YoY. Why singer Carrie Underwoord? She has launched her own mobile app Fit52 with her trainer so its more than just sweating on stage.