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Posts about Retail

A bad week for Total Wine

Posted by: John Ewoldt Updated: December 20, 2013 - 3:31 PM

Score one for the Minnesota Licensed Beverage Association. Instead of Total Wine superstore opening of Dec. 5 in Bloomington, it will now be delayed until at least April.

After the MLBA brought a stack of Total Wine-related court cases to the Bloomington City Council, the council has decided to delay voting on approval of Total Wine's liquor license while its attorney Sandra Johnson evaluates them.

That's quite a lengthy delay for a store that already has its neon signage lighted and a nearly completed interior. Still, no alcoholic beverages can be delivered to the site until the license is approved.

The long delay will give Total Wine's attorneys time to gather evidence and mount a rebuttal, said Johnson.

A second location in Roseville is under construction in the former J.C. Penney home store, but the build-out isn't expected to be completed until spring. "It typically takes four to six months to construct, fixture and open a store," said Total Wine spokesman Ed Cooper. The Roseville city council  approved TW's liquor license earlier this month.

Total Wine sees the delay in Bloomington as an attempt by competitors to slow it down, said Ed Cooper, vice president of public affairs and community relations for Maryland-based Total Wine. “They hate our low prices and fanatic adherence to providing incredible service to our customers,” he said.

Total Wine has 100 stores in 14 states but this is the company's first foray into the Upper Midwest.

Free shipping day just got better

Posted by: John Ewoldt Updated: December 18, 2013 - 11:01 AM

Free shipping day is new and improved this year. While it's true that the number of retailers participating (938) is down from nearly 1,200 in previous years, that's a good thing. Why? Because the site is asking retailers to sign up only if there is no minimum purchase. Don't you hate it when a retailer offers free shipping with a $250 minimum?

This year, the site hopes to avoid listing those retailers.Wednesday, Dec. 18 is also a good day to be shopping deals on clothing sites such as Abercrombie & Fitch and J. Crew, which both are offering 40 or 50 percent storewide and online along with no-minimum-free shipping.

For more information about great deals on clothing this season, when many stores are offering 30 to 50 percent off storewide, check out my article. Bargains "analysts" suggest that if you really want to give clothing and have the recipient get the most bang for the buck, give a gift card that they can use after Christmas when the deals are even better.

These credit cards offer you price protection for the holidays (& more)

Posted by: John Ewoldt Updated: December 11, 2013 - 9:32 AM

In today's article about retailers expanding their price matching policies during the holidays, I mentioned that consumers can get a price adjustment from the retailer at the point of sale or if they find a lower price on the identical item within a week or two (or 7 weeks during the holiday period).

But my partner reminded me of another way to get a price match--your credit card. I had forgotten about that, even though I tried unsuccessfully to use it on an American Express card a few weeks ago.

Besides the purchase protection, car rental insurance and extended warranty benefits offered free on most credit cards, some also offer complimentary price protection. According to the blog Credit Card Forum, a few credit cards still offer this service. American Express does not, even though they used to several years ago. Apparently, Amex dropped it because too many savvy shoppers were milking the credit card company when airfares would decline, according to the blog. "It's been gone since 2006. I think it's unlikely they will bring it back," wrote blogger Michael Dolan. Frequent fliers should keep this tip in mind on the cards that still offer price protection.

Credit card companies still offering the service include Discover, Chase and some Citicards. Discover will refund up to $500 for purchases made within 90 days. The Chase Freedom card with Visa and MasterCard versions offers coverage for up to $500 per claim and up to $3,500 per year maximum for purchases within 90 days. Citi's Thank You Preferred and Platinum Select/ AAdvantage Visa Signature cards also offer the benefit, according to Dolan. Citicards also have a free service called Price Rewind that will search online prices.

Check with your credit card now to see if it offers price protection and what you need to do to get a refund. That may motivate you to use the service.

Target's complicated relationship with PFresh

Posted by: Updated: December 10, 2013 - 12:41 PM

It’s no secret that Target Corp. has high hopes for its PFresh grocery format.  Food and grocery products are driving most of Target’s slow comp sales growth—0.5 percent over nine months. PFresh also attracts a lot of repeat business since people will eventually run out milk and bread.

Grocery items are not the easiest things to carry, even for people just wanting to make a quick run for a few items. So why does Target located PFresh so far away from store entrances?

Precisely because Target does not want consumers to make a quick run for a few food items.

“Target wants PFresh customers but they don’t want just PFresh customers ,” said Amy Koo, an analyst with Kantar Retail consulting firm in Boston.

Target’s strategy has always been to get people to buy as much as they can in a store. You may have intended go to a Target only to buy milk and bread but you wind up leaving with a cart full of higher margin clothes, accessories, and home goods. Think about the REDcard ‘s 5 percent discount of total purchases. The more you buy, the bigger the discount.

That strategy is embedded in the store design: to get to PFresh, you must generally pass through a gauntlet of clothes, shoes, jewelry, and sporting goods, a pathway that will inevitably tempt you to buy more.

“It’s like Target is saying ‘we are going to call you on your bluff,’” Koo said. “You may have intended to buy food but you really want to buy clothes.”

Excluding SuperTargets, regular Target stores usually have only one entrance, lest you sneak in through a side door closer to PFresh.

Target’s strategy is clever but does not come without sacrifices. The first is convenience.

Consider CityTarget.  The retailer touted CityTarget as the ideal smaller format for the hurried urban shopper who are not likely to drive cars and buy large quantities of goods, possibly because they are single and rent apartments. A perfect place where you can rush in during your lunch break or just after work, grab some stuff, and then hurry off to the subway or commuter trains.

But visit the CityTarget in Chicago and you’ll discover PFresh is located on the second floor near the back of the store, arguably the least convenient place to buy groceries.

“Convenience can mean different things,” said spokesman Eric Hausman. “CityTargets are convenient because of their locations” in the city core.

The second issue with Target’s approach is the type of customer it normally attracts. Target has always excelled at making its most loyal shoppers even more loyal. These are the type of customers that will gladly buy a lot of stuff at Target.

And let’s face it: if you’re going to navigate the maze of Target departments just to buy some bread and milk, you must really love Target or you must really love bread and milk.

But here’s the rub: Target actually needs to attract a broader group of shoppers beyond its diehard “Best Guests,” Kantar says.

Given Target’s sales challenges since the Great Recession, Kantar argues the retailer needs to focus on the casual, less affluent customer who are more likely to buy fewer items than load up on the Missoni and Nate Berkus collections.

Indeed, about a third of Target’s sales come from customers who make less than $50,000 a year.

One way Target can reach those customers is to make their shopping experience more convenient. To that effect, Target has established Dollar Store like selections near the checkout areas at the front of the store as well as “grab and go solutions “ throughout its departments.

CEO Gregg Steinhafel has also told analysts that Target is looking for further ways to shrink the size of CityTargets. Perhaps that path to PFresh will get a little shorter.

Target finishes Buy Online, Pick Up in Store roll out early

Posted by: Updated: December 4, 2013 - 3:28 PM

Target Corp. has certainly come a long way with its e-commerce efforts.  Two years ago, the company’s website couldn’t even properly process orders following the roll out of its Missoni collection.

Fast forward to 2013. As of the first week of November, all 1,800 of Target’s stores in the United State offer consumers the ability pick up merchandise in the store that they had ordered online.

Buy Online, Pick Up in Store is not exactly new: Best Buy and Macy’s have long offered the service. But given its ambitious timetable—CEO Gregg Steinhafel told analysts during the summer the retailer planned to complete the roll out by Black Friday—Target not only finished the job but finished it a good three weeks early.

Amy Koo, a retail analyst at Kantar Retail, expressed skepticism that Target could complete the project in such tight timeframe. But the company seems to have adopted a more cautious approach to the rollout, she said.

Unlike the launch of the redesigned in 2011, the retailer has not heavily publicized the debut of Buy Online, Pick Up in Store. Back then, critics argued that Target did not adequately test its website to see if it could handle all of the heavy traffic the Missoni collection was bound to attract.

This time though, Target opted for a “soft launch” to first the test the service on employees and some customers.

“Target did not make a big splash, which makes it easier for them to first get the hang of it ,” Koo said. “It’s a real good thing to ease into it rather than make a big blowout statement.”

Even now, the service remains rather low key. Koo said a store she recently visited was only filling 10 to 15 orders a day.

Target is apparently still working out the bugs. A good friend in San Francisco recently complained to this blogger that the item she ordered on the website was not set aside for her when she visited the store.

“Target made up for it though by helping me find the items and helping me wheel them to my car,” she said.

Despite spin, Black Friday numbers don't bode well for retailers

Posted by: Updated: December 4, 2013 - 3:25 PM

The National Retail Federation had some interesting numbers from Thanksgiving/Black Friday weekend.

Low prices helped keep Americans’ budgets in check this weekend: on average, shoppers spent $407.02 from Thursday through Sunday, down from $423.55 last year.

That’s one way to look at it. Here’s another interpretation: consumers on average spent less than they did than the same period a year ago.

More than 141 million unique shoppers have already or will have shopped by the end of the big Thanksgiving weekend, up from 139 million.

More shoppers are always a good thing. But when you factor in how much money they spent, you get this: the number of shoppers over the weekend grew just 1.4 percent while average spending fell 4 percent.

Yikes. A 1.4 percent gain in shoppers hardly equals out a 4 percent decline in spending. Retailers are essentially brawling over a barely growing pool of Black Friday shoppers who are actually spending less on average than did a year ago.

In addition, there is one less shopping week this year because Thanksgiving fell on the last week of November. Suddenly, a season with an already low margin of (profit) error just got a little more perilous.



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