How Retailers Can Cope With Fierce Online Competition

The retail industry as we know it is facing an upheaval of its traditional business practices. As online shopping and consumer tech grow in popularity and usability, traditional retail is rapidly losing business to e-commerce giants and “deep value” retailers that keep costs down.

The result? Big-name retailers closing stores and getting stuck with more square footage than they know what to do with. It’s adversely affected the economy too, forcing some chains to file for bankruptcy and lay off thousands of employees. Payless ShoeSource, hhgregg and American Apparel, to name a few, are no more, while Macy’s, JCPenney, and Kmart are shuttering stores.

So, what’s a retailer to do? Continue reading “How Retailers Can Cope With Fierce Online Competition”

’Tis the season for holiday discounts

Sale signs will be as prolific as tinsel and mistletoe this holiday shopping season. Marketers have already begun peppering storefronts and e-mails with markdowns — 50% off, 40% off, 25% off, buy-one-get-one-half-price — joyful music to price-conscious consumers’ ears.

Holiday shopping

Many merchants have trapped themselves in a cycle of promotions, fueling consumers’ reluctance to pay full price. Inventory levels are evening out, but years of near-constant discounting and a lack of exciting new product lines have pushed shoppers to hold off on purchases longer, until sellers slash prices.

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Booming Autos Sales to Downshift

2016 is on track to be another banner year for the auto industry. But dealers won’t ring up quite as many sales this year as they did in 2015, which set an all-time record. And 2017 figures to see another small sales pull-back as demand for new cars and trucks levels off.

The Rebound Winds Down

The U.S. auto industry has come a long way from the dark days of the Great Recession. In 2009, drivers bought only 10.4 million new vehicles, down by roughly a third from what had been considered normal prior to the recession. But that sharp decline set the stage for an epic comeback. Beginning in 2010, the industry consistently notched annual sales gains of 10% or so. Many consumers who had wanted or needed a new car during the economic downturn put off buying one, which resulted in a marked aging of the country’s car fleet. The recovery from the recession released a surge in new car buying by folks rushing to replace their old rides.

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Billions’ Worth of Merchandise Stranded at Sea

The collapse of one of the world’s largest ocean carriers has marooned more than half a million cargo containers in international waters. As much as $14 billion worth of cargo is stuck in limbo awaiting the fate of bankrupt Hanjin Shipping, with dozens of vessels anchored offshore filled with toys, shoes, computers, couches, dishwashers, etc. Port operators and cargo handlers refuse to unload the ships until they are paid.

Hanjin’s global creditors have impounded at least eight vessels, and about 80 are still at sea until captains are assured ships and cargo won’t be seized. It isn’t clear whether Hanjin’s parent company will be able to secure the $90 million it pledged to ease the carrier’s financial woes, or whether that will be enough to dent Hanjin’s $5.5-billion debt. The company has resorted to selling off ships from its 149-vessel fleet, after signs that the South Korean government won’t bail out its largest ocean carrier.

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Consumers Rev Up Spending

4% growth in ’16, compared with 4.8% in ’15 (excluding gas)

Feeling more confident about the economy, the job market and their own financial stability, shoppers dialed up spending in June. The third consecutive month of gains marks a strong end to the second quarter of 2016, though challenges remain as retailers grapple with changing industry trends—more online shopping, free shipping demands, etc. Continue reading “Consumers Rev Up Spending”