The Hart Monitor - December Edition

THE

MONITOR

Keeping Our Finger On The Pulse Of The Retail Industry

Volume VIII, Issue 12

December 2010

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Retailers Post Strong November Sales

Retailers almost across the board reported a strong start to the holiday season as their November sales were enhanced by aggressive discounting that started early in the month. Same-stores sales rose 6% in November, above the estimated growth of 3.6%, according to 27 retailers tracked by Thomson Reuters.

Confidence among shoppers also rose in November to the highest level in five months, according to the New York-based Conference Board. The month was particularly strong for apparel. Year-over-year total apparel sales in November saw a 9.6% increase, according to a MasterCard Advisors SpendingPulse report, which estimates total retail sales across all payment forms. The results were fueled by a 3.9% in sales of women’s clothing and a 7.2% gain for men’s apparel.

Some Highlights for November:

Abercrombie & Fitch reported a 22% gain in same-store sales
Costco reported a 9% increase
West Seal reported a 7% increase
Limited Brands reported at 10% increase
Tandy Leather Factory reported a 19% increase
Hot Topic reported a -2.1% drop in same-store sales
Aeropostale reported a -1% drop in same-store sales

Robust Sales for the Thanksgiving Holiday Weekend

As reported in an article in the New York Times, more Americans went shopping over the Thanksgiving weekend than in recent memory, and online shopping accounted for the highest percentage of the weekend’s sales yet.

According to the NRF survey, the average amount spent per person from Thursday to Sunday was about $365, more than a 6% increase over last year. And, an estimated 212 million people shopped, up from 195 million last year. That is the highest number of Thanksgiving weekend shoppers since the first survey in 2004.

Spending on discretionary items rather than bargain-basement discounts seemed to help push the weekend total to a high of $45 billion, up from about $41.2 billion recorded in the last two years.

Many retailers opened their doors earlier, and shoppers responded. According to the survey, the number of people who began their Black Friday shopping at midnight tripled this year from 3.3% last year to 9.5% in 2010. By 4:00 a.m., 24% of Black Friday shoppers were already at the stores. The number of people who shop on Thanksgiving - both online and in stores - has doubled over the past five years, from 10.3 million in 2005 to 22.3 million in 2010.

According to the survey, both department stores (52% this year vs. 49.4% last year) and clothing stores (24.4% vs. 22.9%) saw increases in traffic, while the percentage of people who shopped at discounters declined 7.2%, from 43.2% last year to 40.3% this year.

The survey also suggested that 106.9 million Americans planned to shop on Cyber Monday this year, up from the estimated 96.5 million who shopped on Cyber Monday last year.

Cyber Monday - Retailers Say Online Sales Remain Strong

Cyber Monday was created five years ago to encourage people to shop online from work, where they could use a high-speed Internet connection that they lacked at home. It never was the busiest online shopping day. But now that broadband Internet connections have replaced dial-up access in most American homes, fewer consumers are waiting until they get to their work computers to shop online. The day has evolved into a way for online retailers to keep up the spending momentum that began in earnest on the day after Thanksgiving.

Shop.org, the online arm of the National Retail Federation, said that the percentage of people shopping online from work on Monday was expected to drop more than one percentage point from last year, to 12.1 percent. Online shoppers started buying on Thanksgiving and did not let up on Cyber Monday, the day retailers designated for more discounts and promotions. By 6 p.m. on Monday, Eastern Time, sales were 20 percent higher than during the same time period on the Monday after Thanksgiving a year ago, according to Coremetrics, a research firm owned by I.B.M. that tracks online sales.

“We saw a lot of companies jumping the gun by doing a Thursday-only sale,” said Charlie Graham, the founder and chief executive of ShopItToMe.com, a personal shopping site that works with more than 200 retailers. “There are still some retailers who did a different deal on Friday than on Monday,” Mr. Graham said, “and you’ll see retailers who put a deal up Thursday through Monday.” And yet, he said, there were enough shoppers who waited until they got back to work on Monday to visit retail Web sites that the day is still a marketing tool.

Industry wide, online retail sales for the month through Nov. 26 were up 13 percent, to $11.6 billion, according to comScore. Consumer spending — both online and in stores — increased 6 percent over the four-day weekend to an average of $365, according to a survey of 4,300 Americans by the National Retail Federation.

Online retailers were careful to note that while the strength of sales on Friday and Monday might be indicators of the season, they were only the beginning. The peak shopping day for many online retailers comes in mid-December as shipping deadlines approach. Many companies offer deals like free shipping throughout the holidays.

Shoppers are increasingly using cell phones to shop online, whether to buy products or simply to research. Shop.org said that it expected around 7 percent of people to use their cell phones to shop on Monday, nearly double from last year. Another relatively new phenomenon is the use by online retailers of social media sites like Facebook to get the word out. Land’s End, for instance, created “12 hours of Twitter” on Monday, during which it promoted its discounts, some of which were played up only on Twitter.

More Consumers Buying Online This Holiday Season

According to The Internet Retailer Holiday Shopping Survey, conducted online in mid-November by market research firm Lightspeed Research, found that 72% of U.S. online consumers say they will shop online for holiday gifts this season.

When they’ll buy
35% of shoppers made at least one holiday purchase online by Nov. 15
33% say they expect to start buying the week after Thanksgiving
14% will wait until early December
2% will wait until mid-December
23% say they are waiting for holiday promotions from e-retailers

Where they’ll buy
67% will buy holiday gifts from two to four e-retailers
23% will shop at five to seven

Consumers claim low prices (69%) as the most important factor when choosing a store. Free or discounted shipping is second (65%), followed by selection (42%), site recognition or previous experience with a site (32%), customer service quality (29%), return policy (26%), customer store reviews (20%) and free gift with purchase (14%).

What they’ll buy
54% Gifts from books/video/music category
50% Electronics
41% Toys
38% Apparel/shoes
35% Video games
34% Gift cards (34%).

Why they’ll buy online
72% Will shop online for the time saving and convenience (avoiding crowds and long lines)
63% Find it is easier to compare prices online
61% Actually found lower prices on the web.
51% Larger selection of items
49% Saving on gas

Operation Gratitude

Again the Hart Systems family is spreading the Holiday Cheer and Best Wishes to our brave men and women in the service who are spending their holidays away from home and their loved ones. Please join us in this effort through the holiday season and beyond.

You can send Holiday cards to:

Operation Gratitude
16444 Refugio Road
Encino, CA 91436

For more information on this and other ways of spreading cheer now and throughout the year, logon to Operation Gratitude website www.operationgratitude.com

Top Ten Holiday Trends for 2010

According to the NRF Retail BIG Blog their Holiday Forecast, the economy is still impacting shoppers, but there is reason for optimism ,
According to the holiday survey by BIGresearch, Americans plan to spend an average of $688.87 on holiday-related shopping, this is a rise from last year’s 681.83. Here are some of the most interesting trends and nuggets found through the full report of data:

#1. Americans STILL aren’t ready to declare an end to the recession. This trend was resurrected from the 2009 vault. There hasn’t been a magical turnaround in consumer sentiment, meaning the trend is still sticking around.

#2. But there’s a glimmer of hope. There are all sorts of reasons to be optimistic about the holiday season. There will be a huge return on impulse buying, and spending behaviors of the mid-2000s and retailers have room this year to focus on factors other than price and promote items beyond the basic needs.

#3. Fundamentals are out. Fun is in. After Santa spent much of the last holiday season doling out blue jeans and small appliances, Americans seem to imply that this year’s gifts will be a bit more…well, exciting. While gift cards and clothing will remain the most requested holiday items this year, the number of people putting jewelry on their wish lists this year is up 13 percent from a year ago. Consumers are also asking for personal care and beauty items. Could this be the first signal of a return to discretionary spending?

#4. There’s still room for service with a smile. For the past nine years we have been asking Americans which factor is the most important when determining where to shop around the holiday season. During a recession, sales or discounts and everyday low prices win hands down as the majority’s response.

#5. Forget price. It’s all about value. Of course retailers know they need to focus on sales and promotions to bring in shoppers. Of course price is a factor for just about everyone, but not the only one. Instead of solely focusing on price, shoppers are looking at the big picture. Is the sweater made from cashmere versus polyester so much softer that it’s “worth it?” Will the pre-lit artificial Christmas tree save so much hassle and headache compared with the unlit version that the two hours saved each holiday season will more than make up for the $40 difference in price?

#6. Kids today are a walking contradiction. Generation Y contingent is a tough group to figure out. They’re not shopping early (27.7% will start before Halloween compared with 37.2% of all adults), but they’ve got an ambitious list of the stores where they want to make purchases: they’re more likely than average adults to buy at department stores, clothing stores, electronics stores…basically, when this group decides to actually start shopping, they’re really planning to hit the pavement. They’re spending pennies on the holiday season compared to other adults ($469.32 for young adults 18-24 vs. $688.87 average) but they’re among the first to head out and make “non-gift” purchases for themselves (69.4% of young adults vs. 57.1% average.

#7. It’s all about me. Again purchases. The number of people who will take advantage of holiday sales to make non-gift purchases for themselves is up eight percent this year (52.9% in ’09 vs. 57.1% this year), and the average person will spend about $108 on these “just for me” purchases. Americans might be able to find wiggle room in the budget to splurge on something for themselves or make an impulse buy on a great deal. In fact, some retailers may want to consider a return to the “one for you, two for me.”

#8. Men are from Mars, Women are from Venus. It’s always interesting to see the difference between men’s and women’s shopping habits. I’m sure it comes as no surprise to those of us in retail that far fewer men will start their holiday shopping before Halloween (32% of men, 42% of women) and that men are more likely to request consumer electronics (39.7%) or sporting goods (25.8%) while women prefer gift cards (63.8%), jewelry (33.3%) and home décor (25.9%). But here’s something that might surprise you: men will also spend about $20 more than women on holiday purchases ($698.76 for men, $679.48 for women) and are more likely to shop at department stores than their female counterparts (56.5% of men, 52.5% of women).

#9. The biggest spenders are just one click away. Gone are the days when online shoppers were simply bargain hunters who only wanted the lowest prices and free shipping. While those factors are still important, online shoppers have much deeper pockets this year: According to the survey, people who will shop online will spend 24.6 percent more than average adults ($858.49 for online shoppers vs. $688.87 for all adults). Online shoppers are no more likely to say that sales and discounts are the main factor when deciding where to buy than average shoppers – 41.8 percent of respondents in both groups said sales were the overriding factor.

#10. Can you hear me now? Good. Knowing that retailers were ramping up their mobile apps and websites – and understanding that iPhones and Droids are all the rage – we wanted to get a sense of how mobile devices would impact holiday shopping this year. So we asked people with smartphones if they planned to use their devices to research or make holiday purchases from a retailer.
The results? More than one-fourth of Americans who have a smartphone will use their mobile device to shop for gifts, compare prices and research products (or read reviews, buy merchandise, find nearby stores…the opportunities are truly endless). It’s no surprise that number is quite a bit higher among 18-24 year-olds (45.0%), but should serve as a clear signal to retailers that this mobile trend is not going away anytime soon.

Secret Service: More Fake Money Hitting Streets

Authorities say counterfeit currency is popping up in record amounts

As reported by Tresa Baldas of the Detroit Free Press, when federal agents busted a counterfeiting operation in Detroit recently, they didn't find any sophisticated engraving tools, expensive presses or fancy paper that mimicked the real green stuff. Instead they found a Lexmark printer and some plain paper, nothing else.

According to the U.S. Secret Service, counterfeiting, a onetime trade of skilled criminals has gone mainstream. Federal authorities say fake money is being created in record amounts using simple equipment like all-in-one printers. In this day and age it is easy for even the tech-illiterate to make “homemade” money.

Across the nation, the U.S. Secret Service pulled $182 million in fake bills from circulation in 2009, which is more than double the $79 million in fake cash that was discovered the year before. About 62% of the counterfeit bills passed around in 2009 were made on digital printers, which was less than 1% back in 1995.

"There really is no craftsmanship or workmanship in this anymore," said Special Agent Scott Vogel, who has been with the Secret Service for nearly twenty years. "If you're able to put a piece of paper in a copy machine and push a button, that's pretty much all it takes.”
It is a new world of counterfeiting. The onetime sophisticated art of making phony money has been made simpler by technology. Easy-to-use printers let just about anyone, experienced or not, make their own fake loot. Counterfeit cash is turning up in record numbers, with the $20 bill being the biggest victim.

In metro Detroit, the counterfeiting trend that has surfaced in recent months is a new scam: criminals bleaching $1 and $5 bills and copying $100 bill images onto them. This can get the bill past the marker test that catches most phony paper.

The feds have a new, harder-to-copy $100 bill coming out soon, although its February debut has been put off because of a printing snafu.
With the holiday season just kicking off, the Secret Service office in Detroit is sending agents to area malls to teach retailers how to catch phony money. "It's now a crime of opportunity," he said. "It took a skill set a long time ago ... an institutional knowledge of printing. Not anymore. All it takes is a printer, the push of a button, and line it up and cut it,” says Special Agent Vogel.

Movers & Shakers

People you know, who are on the go…

This monthly installment to The Hart Monitor includes executive moves within the retail industry as reported in publications such as WWD, Hoover's, and various other sources.

Office Depot:
At office supply retailer Office Depot, director Neil Austrian is now interim chairman and CEO after chairman and CEO Steve Odland resigned.

Burlington Coat Factory:
Lori Tobin was named Regional LP Manager at apparel retailer Burlington Coat Factory.

Best Buy:
At leading retailer of consumer electronics Best Buy, Chris Gould is now vice president of Finance and treasurer.

Kohl's:
Discount department store Kohl’s has promoted former senior executive vice president, Don Brennan to chief merchandising officer.

Dollar General:
At discount retailer Dollar General, Sergio Martinez, CFI has been appointed Regional LP Manager.

Kroger:
Paul Scutt, senior vice president of retail operations, at grocery store chain Kroger’s, will retire in late February after a 45-year career with the company.

Publix Super Markets:
John Frazier, vice president of real estate for supermarket chain Publix Super Markets will be retiring at the end of December.

Big Lots:
Jamie Russell, CFI was named District LP Manager at close out retailer Big Lots.

Wal-Mart:
Mega retailer Wal-Mart has named Jeff Davis senior vice president and treasurer. He succeeds Charles Holley, who has been named executive vice president and chief financial officer.

Radio Shack:
Janette Murray is now Investigations Manager with electronics retailer RadioShack while Sam Reichman, CFI was promoted to North East Investigations Manager.

CVS Caremark:
Pharmacy chain CVS Caremark had a few changes happen; Randy Hall, CFI was named Regional LP Manager, Freddie Torres was promoted to Director LP Financial Analysis, and Juan Madrid was appointed Regional LP Manager.

Every issue of The Hart Monitor will contain a 'TIPS' section of helpful information regarding Inventory or Loss Prevention for retailers, including some of the industry's "Best Practices." If you have any Inventory or LP tips that you'd like to share, please CLICK HERE

The Largest Annual Retail Industry Conference is Coming to New York City Next Month…

Did you know…Retail's BIG Show in New York City will be celebrating 100 years of retail leadership this January 2011 and the celebration will include one-of-a-kind education, amazing networking opportunities, as well as pioneering solutions and services with the biggest and brightest names in retail.

The Convention is open January 9 - 12 and the EXPO Hall Floor is open January 10-11.

To learn more about the convention, go to http://events.nrf.com/annual2011/public/enter.aspx

Join your peers, learn about best practices and new retailing trends and concepts, network, etc. Thousands of retail executives will descend on New York City to network with one another, learn about best practices and new retailing trends, discuss and debate the future of retail, meet face-to-face with vendors, demo new products and services, etc.

Some of the highlights this year will most likely be the speaking sessions by these notable retail executives:

Terry J. Lundgren, President and CEO, Macy’s, Inc.
Ben Fischman, CEO, Rue La La
Mindy Grossman, CEO, HSN, Inc.
Cathy Green, President, Food Lion Family
Matthew Rubel, Chairman, CEO and President, Collective Brands Inc.
Stephane Bout, CIO, Groupe Casino

and Hart Systems will be there!!!

Learn how to reduce your Physical Inventory Expenses by nearly 50%...Hart can show you the way!

The leading provider of technology driven physical inventory management solutions to the retail industry - resulting in higher accuracy at a lower cost than outside counting services.

BOOTH # 547

We’ll be raffling off great prizes at the show – including an Apple IPAD!!!!
Stop by our booth for your chance to win!

Want to know more?
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Hart Quote !!!

“Our Wishes for a Joyous Holiday Season
to You and Your Families
And a Prosperous New Year!”

Hart Systems Family (1964 – present) The Self Inventory Experts

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