While many retailers are suffering due to cash-squeezed customers, Costco is flourishing as customer flock to the discount warehouse in search of bargains.
Sales increased 13 percent to $16.26 billion from $14.34 billion in the year-ago period. Including membership fees, revenue rose to $16.61 billion from $14.66 billion.
Consumers plan to spend an average of $94.54 this year compared to last year’s $98.34 for Father’s Day. It comes as no surprise that consumers are cutting their budget due to higher gas prices and the increasing cost of living.
Of those surveyed, 32.5% plan to shop at retail department stores, 31% at discounters, 28.1% at specialty stores, 18% with online retailers, and 7.9% also plan on shopping at specialty clothing stores.
Consumers with passive and predictable habits are thinning and are being replaced with noisy, internet-savvy activists, who challenge everything from business approaches to product designs. Who are these new consumers? Two rising classes of customers are the “information omnivores” and the “socially minded customers”. The “information omnivores” are those customers who demand a say in everything from product design to aftermarket support while “socially minded customers” are those customers who will buy environmentally and ethically responsible products, and will most likely pay more for them.
Customer Potential
The rise of the “information omnivores and “socially minded customers” present both a threat and an opportunity for executives. These customers are noisy and unpredictable; however, they are willing to spend more money. Also, if they truly enjoy a product, they will most likely spread positive feedback on the internet. Targeting these new market segments might be one way to improve sales and growth for many companies.
Where is the Customer Loyalty?
Chief executives are accustomed to customer loyalty, but many customers today are complaining about customer service on blogs, sending suggestions for easier-to-use products by e-mail, and demanding the use of recyclable materials. What should a company do? Set up a customer blog.
Customer Blogs
Many companies have set up customer blogs to bring internet discussion of their products and services in-house. Customer blogs allow consumers to provide feedback and criticism, which has become a common practice over the internet. Customer blogs bring back control to the company. For instance, if a customer were to provide negative feedback or criticism, the company can spot the comment and respond accordingly right away.
Cutting back on marketing expenses is one tactic retail giant Gap used to help lift earnings up to 40%. Ad spending dropped almost 18% from the year-earlier with a $21 million reduction due to absence of TV spots. While earnings improved, sales showed signs of trouble amid an economic slowdown affecting the whole retail industry. Gap North America sales dropped 7% for the quarter to $976 million while Old Navy’s sales decreased 18% to $1.2 billion. At Banana Republic, sales decreased 4% to $538 million. How can a retailer such as Gap increase sales?
Consumer Desirable Goods
Cost controls can only go so far. In the end, retailers need to offer consumer’s attractive products to achieve sales growth. Does Gap have the clothes consumers want?
Customer Service
During an economic slowdown, retailers such as Gap need to focus on customer service. Store managers should train their employees to sell, sell, & sell. Customers should not leave the store with only one item in their bag.
Papa John’s will be the first national pizza chain restaurant to offer a 100% whole-wheat crust pizza. Customers at all 2,700+ Papa John’s restaurants will be able to enjoy the healthier choice starting this May. Whole grains are an increasing trend in the food industry because of its many health benefits. Whole grains can help reduce the risk of heart disease, diabetes, and stroke.
Will other national pizza chain restaurants introduce whole-wheat crust pizzas?
The Promotion Marketing Association released findings showing benefits of shopper marketing collaboration between retailers and manufacturers. Two-thirds of retailers who collaborated with manufacturers have seen increases in sales and improvements in profitability. Two-thirds of manufacturers who collaborated with retailers also saw an increase in profitability. Manufacturers also reported increases in sales, enhanced brand equity, stronger retailer relationships/greater cooperation and stronger consumer relationships.
Click here for more information on shopper marketing collaboration.
Facial recognition company OmniPerception and software company Charton have been testing a biometric device in a convenience store located in London to help stop children buying alcohol and cigarettes. The facial recognition technology will be used at the point of sale to capture facial measurements that will be checked against a database of profiles of known offenders.
Retail grocer Tesco’s Fresh & Easy chain find as many as 90% of their customers
were either ‘satisfied” or very satisfied’ with their check out experience according to this Retail Bulletin article. Self-checkouts provide positive benefits for both the retail grocer and the customer. For retail grocers, all-self checkouts mean reduced in-store staff as well as less space for check out areas. For customers, the benefits include time savings, ease & convenience.
In the past, all-self checkouts accounted for about 15%-20% percent of tills. Today, this number is up to 50%-60%.
Pollo Campero teams up with retail giant Wal-Mart to expand its reach to the nation’s growing Hispanic population. Wal-Mart already customizes some aisles to sell culturally attuned products to its large Hispanic customer base. The retail giant hopes that the addition of Pollo Campero will please their customers even more.
Pollo Campero hopes to have more than 20 Wal-Mart locations across the country by the end of 2009.
While many retailers are cutting back on store openings and closing down underperforming stores, Steve & Barry’s is on an expansion roll. How do they do it?
No Advertising
Steve & Barry’s does not advertise. They also don’t sell anything through the internet or catalog.
Keep costs and price tags low while maintaining quality
Steve & Barry’s started an $8.98 price tag promotion during the holidays and has continued on with the promotion because of the slow economy.
Keep corporate expenses at a bare minimum
Steve & Barry’s says office chairs cost about $20 each at their corporate headquarters
For more information, read Cheap and chic fuels Steve & Barry.
