RETAIL NEWSTOP STORIESFive trends impacting retail sales ― p9

American malls are dying faster than you think p16

SEPTEMBER 2016

BEST PRACTICE3 Ways to Improve Supply Chain Collaboration― p6

2

SEPTEMBER 2016 RETAIL NEWSCO

NTEN

TS 6 BEST PRACTICES / MARKET TREND REPORT3 Ways to Improve Supply Chain Collaboration

A Basic Guide to Exporting -- 11th Edition

State of the Global Supply Chain

Building the Smarter Warehouse: Warehousing 2020

The Future of Manufacturing: 2020 and Beyond

7-9 TOP STORIESConsumer confidence remains high despite contentious presidential race

Amazon Reveals ‘Prime Air’ Cargo Jet

Retail sales grow at a solid pace, up 0.8% in June

Fraud attacks spike over past four quarters

Worldwide Retail Ecommerce Sales Will Reach $1.915 Trillion This Year

Why you see Christmas items in stores during the summer

Retailers should respond to needs of ‘silver’ shoppers

Study: Five trends impacting retail sales

9-10 INNOVATION & OPERATIONSThe Smartphone Platform War Is Over

3 Tech Trends Shaping the Future of Global Logistics

Orders for Robots Hit Record in First Half of 2016

The Third-Party Logistics Arena is Booming

Uber Acquires Autonomous Truck Startup Otto

China’s Biggest Air-Con Maker Bets $2 Billion on Electric Cars

World’s First Self-Driving Taxis Hit the Road in Singapore

China’s manufacturers set their sights closer to home

Lower Retail Prices Threaten Profits of Middleman Li & Fung

China tipped to overtake US as world’s largest retail market this year

11 RETAILING IN ASIA-PACIFIC

CONT

ENTS

3

SEPTEMBER 2016 RETAIL NEWS

12-13 RETAILING IN EUROPE, INDIA, MIDDLE EAST, AFRICAAmazon Expands Drone Testing in Britain

Passenger trains increasingly used to transport urgent shipments

British retailers report higher Aug. sales

Passenger trains increasingly used to transport urgent shipments

Economists grow more optimistic about Britain’s economy

Mstore parent sees room for rapid growth in Africa

South African-based retail giant enters U.S. with $3.8 billion acquisition

Zalando Confirms Earnings Boost From Efficiency, New Brands

14-15 RETAILING IN LATIN AMERICAJetBlue Completes First Commercial Flight to Cuba

Mexican Supplier to Ford, BMW Looks to Europe as Upgrade Beckons

Spanish retailer Mango to open megastore in Cuba

Wal-Mart Sells Mexico Clothing Chain to Liverpool for $1 Billion

15 RETAILING IN NORTH AMERICABack-to-school spending starting to heat up

One in Three US Parents Shop for School via Smartphone

The Zika Virus Has Arrived In The Continental U.S.

Has the time come to cut back on bricks-and-mortar? U.S. retailers have a “ridiculous” problem

American malls are dying faster than you think — and it’s about to get even worse

17 CWW RETAIL LOGISTICS SUCCESS STORYCrane Worldwide Logistics partners with Project SEARCH

18-19 RETAILING JARGON

4

SEPTEMBER 2016 RETAIL NEWS

This month marks the official start to the retail

holiday shopping season with Back To School

(BTS) numbers showing positive gains. According

to American Express, BTS spending is up 33% from

last year with consumers spending an average of

$1,642 versus $1,239 in 2015. This can be attributed

in part to expanding housing market, falling

unemployment rate, and lower fuel costs leading

households feeling their finances are solid.

Additionally, the Consumer Confidence Index,

currently at 113 (see Figure 1 below), has risen to

a level not seen since the pre-recession years.

This index provides retailers with an estimate of

consumers’ willingness to spend based on her/his

outlook on the state of the economy.

Retail sales for the first half of 2016 grew 4%

prompting the National Retail Federation to

revise its retail sales forecast to a year-over-year

increase of 3.4% from the previous forecast of

3.1% growth. eCommerce sales are now expected

to increase between 7% and 10%, up from the

previous forecast increase between 6% and 9%.

Higher than anticipated Q1 and Q2 2016 retail sales

and positive economic trends such as improving

housing market, job growth, and high consumer

confidence prompted this revision.

Hello everyone,“

Figure 1: Advisor Perspectives (2016) Source: AdvisorPerspectives.com

5

SEPTEMBER 2016 RETAIL NEWS

If BTS 2016 results and improving Consumer

Confidence Index is any indicator of retail sales

activity for 2016, retailers should be looking forward

to a healthy selling season.

With many of our retail client are analyzing these

results, we need to be prepared to help provide the

agility they will need to exploit market opportunities.

We can accomplish this with the modification our

logistic solutions to fit the needs of their brick

and mortar and eCommerce product distribution

channels. We can also help our clients to identify

and assess risks in their logistics networks as well

as providing mitigation plans which leverage our

capabilities and strengths.

In this month’s newsletter, I have selected

articles and reports which will help identify what

opportunities our clients will encounter in the retail

marketplace. I have also selected articles detailing

industry best practices, solutions, technology,

and trends which can be incorporated in the

development of our solutions for our retail clients.

Finally, I have added a unique success story that

many of our retail clients may find interesting along

with more useful retailing and supply chain terms

and definitions.

Sincerely,

Dr. David Widdiefield, DM.Director, Retail Solutions, Crane Worldwide Logistics

Contact: david.widdifield@craneww.com

”

6

SEPTEMBER 2016 RETAIL NEWS

3 Ways to Improve Supply Chain Collaboration Kinaxis- Today’s supply chains are more complex and face greater volatility, uncertainty and risk than ever before. Lack of both supply chain visibility and collaboration is dramatically and negatively impacting the time it takes to make critical decisions. From our experience working with global supply chain organizations, we’ve identified what’s inhibiting effective collaboration and how to address it.

> Download the eBook to learn more_____________________________________________

A Basic Guide to Exporting -- 11th Edition Industry Week - For more than 70 years, A Basic Guide to Exporting has given companies the information they need to establish and grow their business in international markets. Whether you’re new to exporting or just want to learn the latest ideas and techniques, this new 11th Edition -- completely rewritten, revised, and updated will give you the nuts-and-bolts information you need.

> Download the report to learn more. _____________________________________________

State of the Global Supply Chain The Economist - Manufacturers expect major supply chain challenges and risks in 2016 stemming from external factors, often beyond their control. While meeting rapid-fire customer demand is deemed a priority, this study suggests execution roadmaps are misguided, focused more on cost cutting than strategy. This starts at the top level, where 76% of companies operate without a Chief Supply Chain Officer. With almost half of companies reporting a disruption that impacted business in the past 12 months, this gap in strategic direction to address broader supply chain agility is a major concern.

> Download the report to learn more_____________________________________________

Building the Smarter Warehouse: Warehousing 2020SupplyChain247 - The exponential growth of omnichannel shopping and ever-burgeoning demand for faster merchandise deliveries is redefining the supply chain’s distribution of consumer products goods. A seminal shift in how shoppers increasingly buy via multiple touch points - online from desktop computers, mobile devices and in-store - has created the need for the “smarter” warehouse to serve today’s connected consumer.

> Download the report to learn more.

_____________________________________________

The Future of Manufacturing: 2020 and Beyond Industry Week - U.S. manufacturers as a whole are bullish about future growth prospects. Nine out of 10 company leaders expect revenues to increase every year over the next five years, and well over half anticipate strong annual growth of 5% or more. This is only one of the predictions and insights revealed in this special research report on the leadership expectations and priorities of U.S. manufacturers. The top five market challenges limiting that potential sales and profit growth are:

1. Market volatility,

2. Material costs,

3. Price reduction pressures,

4. Labor costs,

5. Transportation/logistics costs.

To address such challenges, manufacturers are making significant investments in equipment and systems. age. Download this IDC Infographic for the facts and figures about the digital world of manufacturing.

> Download the report to learn more._____________________________________________

Best Practices/Market Trend Report

7

SEPTEMBER 2016 RETAIL NEWS

Amazon Reveals ‘Prime Air’ Cargo Jet Wall Street Journal- Amazon.com Inc. unveiled the first in a planned fleet of new cargo jets, part of an effort by the e-commerce giant to expand its logistics operation. It is one of 40 that Amazon has agreed to lease as it broadens its system for shipping and delivering goods quickly to supplement partners such as United Parcel Service Inc. and FedEx Corp. The effort stems from a broad desire at Amazon to take greater control of its shipping and package delivery operations. Amazon’s shipping costs have been rising more quickly than sales, and having its own cargo fleet could help stem the rise. The company said last month its second-quarter shipping expenses rose 44% to $3.36 billion, while sales rose 31%.

> Read more_____________________________________________

Consumer confidence remains high despite contentious presidential race Retailing Today- The latest Nielsen Consumer

Confidence Index showed that consumer confidence in the U.S. is on the rise, despite the uncertainty and starkly contrasting rhetoric around key economic issues. Per the Index, Americans remained optimistic in the second quarter with a three-point confidence increase to 113.

> Read more_____________________________________________

Fraud attacks spike over past four quarters Chain Store Age- Cyber-criminals have been wreaking so much havoc among retailers that there has been a 137% jump in fraud attacks over the past four quarters, an issue affecting $7 out of every $100 of retail sales, according to the latest PYMNTS.com Global Fraud Attack Index. The report, compiled with fraud detection and protection technology vendor Forter, measures the rate of fraud attempts made on online merchants, and monitors trending changes. It also examines the types, sources and geography of fraud attacks, as well as the potential cost to merchants, if these attempts remain undetected. > Read more

Top Stories

IMAGE: Amazon.com

8

SEPTEMBER 2016 RETAIL NEWSStudy: Five trends impacting retail sales Retailing Today- These are among the five trends identified by consumer financial services company Synchrony Financial as impacting both the retail and mobile payments space. Here’s a review of what Synchrony says consumers are especially interested in:

• Content Marketing: Over 40% of consumers said in a recent survey they like to shop at stores that reflect their values. With shoppers’ moral and emotional viewpoints in mind, retailers are tailoring their marketing efforts to convey a lifestyle or experience, rather than just sell a product. People who believe in the brand message can help share excitement for the brand. Social media can also offer marketers the opportunity for free content advertising, which gains traction through sharing by people who believe in the brand message.

• Instant Delivery: With apps providing amenities ranging from personal chauffeurs to doorstep delivery, retailers are going beyond free shipping and launching same-day delivery services. Some car services are even partnering with retailers to provide same day delivery of groceries, clothing and other goods. Many customers value convenience and instant gratification, and will pay to get it.

> Read more_____________________________________________

Why you see Christmas items in stores during the summer Chicago Tribune- Have you started Christmas shopping yet? There are fewer than five months until Santa Claus comes to town and companies including Hobby Lobby, Hallmark and even the U.S. Postal Service have spent years, even decades, fine-tuning the process of getting holiday merchandise ready for sale. Labor Day seems to be the unofficial start date many retailers mark on their calendars to sell items for Halloween, Thanksgiving and Christmas. Some shoppers may not like the idea of “holiday creep,” where holiday items seem to be available earlier each year in stores. But about 40 percent of consumers surveyed by the National Retail

Federation say they begin their winter holiday shopping before Halloween.

> Read more_____________________________________________

Retailers should respond to needs of ‘silver’ shoppers Chain Store Age- Convenience stores stand to benefit the most from a greying population. That’s according to new report from Fung Global Retail & Technology which looks at the impact of the growing 65-and-over population on global economies, industries and retail. “The Silver Series IV: Retail Reconfiguration for Seniors,” noted that with smaller households and appetites, seniors shop more frequently, but make smaller purchases, favoring the convenience store sector. It predicts more but smaller, neighborhood stores, an increase in local delivery trucks and changing store layouts as retailers accommodate aging populations. > Read more

IMAGE: IStock

9

SEPTEMBER 2016 RETAIL NEWS

The Smartphone Platform War Is Over Statista- While the global smartphone market is as competitive as ever in terms of manufacturers fighting for the consumers’ love (and money), the long-raging platform war appears to be over. According to a recent report by Gartner, Android and iOS now account for 99 percent of global smartphone sales, rendering every other platform irrelevant. > Read more_____________________________________________

3 Tech Trends Shaping the Future of Global Logistics SupplyChain247 - While the global logistics business has never taken many cues from Silicon Valley, an array of new technologies is set to significantly alter - and likely disrupt - the $4 trillion sector over the next several years. Smartphone apps and GPS technology have already removed the boundaries between factories and roads. Sophisticated tracking software is making it easier and faster to deliver shipments, manage schedules, monitor cargo, plan routes and avoid delays, all in real time. The result: faster, cheaper and more sustainable circulation of goods. But there are even more advanced logistics technologies looming just around the corner. Here’s a look at three that could have significant impact > Read more

Orders for Robots Hit Record in First Half of 2016 MHL News- When The North American automation industry has set new records to begin 2016, according to the Association for Advancing Automation. A total of 14,583 robots valued at approximately $817 million were ordered from North American companies during the first half of 2016.

“The robotics industry is thriving today as more companies of all sizes are realizing the benefits of automation,” said Jeff Burnstein, President of A3. “The increasing functionality, flexibility, affordability and safety of robots today contributes to how this dynamic market is reshaping the global manufacturing landscape.”

The number of robots ordered by automotive OEMs and component suppliers increased 16% and four percent respectively to begin the year, and was the largest driver of the market’s record performance. Similarly, the food and consumer goods industry soared in the first half of the year, ordering 41% more robots than the same period in 2015.

> Read more _____________________________________________

Innovation & Operations

Worldwide Retail Ecommerce Sales Will Reach $1.915 Trillion This Year EMarketer- Retail ecommerce sales—which include products and services (barring travel, restaurant and event ticket sales) ordered via the internet over any device—will reach $1.915 trillion in 2016, accounting for 8.7% of total retail spending worldwide. While the pace of growth for overall retail sales is subdued, the digital portion of sales continues to expand rapidly, with a 23.7% growth rate forecast for 2016.eMarketer expects retail ecommerce sales will increase to $4.058 trillion in 2020, making up 14.6% of total retail spending that year. > Read more

IMAGE: IStock

10

SEPTEMBER 2016 RETAIL NEWS

The Third-Party Logistics Arena is Booming SupplyChain247- As potential customers are becoming better and better at understanding their own supply chain core competencies, this will continue to be reflected in increased business opportunities for 3PLs and 4PLs. One area of growing opportunity is in the IT services sector. Shippers continue to rely heavily on the IT services 3PLs provide. In fact, the availability of capable IT-based services already has become a key differentiating factor for commercial providers of 3PL and 4PL services.

Among the types of IT-based services that are growing in popularity are supply chain visibility; execution-based capabilities; meaningful use of descriptive, predictive, and prescriptive analytics; and integration technologies. > Read more_____________________________________________

Uber Acquires Autonomous Truck Startup Otto SupplyChain247- Uber is acquiring Otto, a startup that’s been working on developing self-driving trucks, for an undisclosed sum. The company’s co-founder, Anthony Levandowski, is a former Googler who has been working on autonomous driving for years. He’ll head up Uber’s entire self-driving division - both Otto’s self-driving truck efforts and Uber’s own fast-growing autonomous division - reporting directly to Uber CEO Travis Kalanick.

The news comes as Uber announces a public pilot program that will see its autonomous vehicles (with minders sitting in the front seat in case something goes wrong) picking up real passengers in Pittsburgh.

> Read more

IMAGE:Otto

11

SEPTEMBER 2016 RETAIL NEWS

China’s Biggest Air-Con Maker Bets $2 Billion on Electric CarsIndustry Week- Gree Electric Appliances Inc., China’s largest air-conditioner maker, is going ahead with a plan to diversify its business outside of home appliances by paying 13 billion yuan ($2 billion) to buy an electric-vehicle manufacturer. The appliance maker, which announced its intention to buy Zhuhai Yinlong New Energy Co. in March, will fund the purchase by selling 834.9 million new shares at 15.57 yuan ($2.33) apiece, about 19 percent lower than the stock’s last traded price, according to a filing to the Shenzhen stock exchange.

> Read more_____________________________________________

World’s First Self-Driving Taxis Hit the Road in Singapore Wall Street Journal- Singapore became the first country in the world to launch a self-driving taxi service, beating ride-hailing giant Uber Technologies Inc. The trial, although small, illustrates how intense the global race to develop autonomous driving vehicles has become. NuTonomy’s test vehicles, a Renault Zoe and Mitsubishi i-MiEV electric car, will have a computer engineer and backup human driver during the trial phase in case anything goes wrong, and can be hailed by select members of the public using a smartphone app, the company said. NuTonomy said it would test its vehicles on a 6 kilometer (3.7 mile) route. > Read more_____________________________________________

China’s manufacturers set their sights closer to home Wall Street Journal- China’s Midea Group is among a growing group of manufacturers working to make higher-quality goods for the domestic market as the country’s economy shifts from a focus on exporting. The company aims to make rice cookers that can compete with the machines Chinese consumers have historically bought from Japan. For decades, China’s economy blossomed through low-cost exports built on inexpensive labor. That era is coming to an end, because

of rising wages, overproduction and competition from Vietnam and Bangladesh. In a bid for new growth, China hopes to produce more high-end goods to sell domestically, and that is where Midea Group and their rice cooker come in. > Read more_____________________________________________

Lower Retail Prices Threaten Profits of Middleman Li & Fung Wall Street Journal- The migration of shoppers online has been squeezing profits throughout the retail industry—including at Li & Fung Ltd., one of the world’s largest factory middlemen. The more than 100-year-old company, based in Hong Kong, contracts with 15,000 factories globally to make apparel, toys and other goods. Its core business has been connecting Western retailers such as Abercrombie & Fitch Co. and Target Corp. with factories around the world. But as consumers increasingly shop online for the best deals, retailers have been forced to offer lower prices, putting pressure on factories and intermediaries alike. Middlemen need to “either figure out ways to create value, or they will be going out of business,” said Edwin Keh, chief executive of the Hong Kong Research Institute of Textiles and Apparel. “The bigger question is whether middlemen can still exist in a globalized economy.” > Read more_____________________________________________

China tipped to overtake US as world’s largest retail market this year South China Morning Post- The Chinese mainland, home to the world’s biggest e-commerce market, is predicted to overtake the United States in annual retail sales by the end of this year, according to data released on Thursday by New York-based research firm eMarketer. Total retail spending on the mainland is forecast to grow 13.3 per cent to reach US$4.886 trillion this year, up from US$4.313 trillion last year, to edge past the estimated US$4.823 trillion expenditure in the US in the same period, eMarketer said. The milestone for China, which counts a potential 1.4 billion consumers, would come two years earlier than expected. > Read more

Retailing in Asia-Pacific

12

SEPTEMBER 2016 RETAIL NEWS

Amazon Expands Drone Testing in Britain NY Times - Amazon has partnered with the British government to significantly expand drone testing, a move that could allow the devices to deliver packages to British homes far earlier than in the United States. Under the partnership, Britain’s aviation regulator will let Amazon test several aspects of drone technology — such as piloting the machines beyond the line of sight of its operators. The tests, which are an important sign of confidence in Britain after its historic vote last month to leave the European Union, are to begin immediately. “The U.K. is a leader in enabling drone innovation,” Paul Misener, Amazon’s vice president of global innovation policy and communications, said in a statement. “This announcement strengthens our partnership with the U.K. and brings Amazon closer to our goal of using drones to safely deliver parcels in 30 minutes to customers in the U.K. and elsewhere around the world.”

> Read more_____________________________________________

Passenger trains increasingly used to transport urgent shipments Lloyd’s Loading List- The number of time-critical biological samples carried on passenger trains in the UK has increased by 100% over the last 12 months, with other urgent products including documents, auto parts, and perishables also using the new specialist freight transport system. Companies around the UK running clinical trials where samples need to be tested daily in London laboratories have found the speed and reliability of these ‘Bio FastTrack’ services especially useful, according to shippers and their delivery partners. Passenger rail services are so regular and so fast that doctors and patients around the country awaiting biopsy and other test results can get the answer on the same day when the samples need to be sent to laboratories in London. Using passenger trains transport is much lower in cost, up to 25% cheaper, than using traditional same-day couriers

> Read more

Retailing in Europe, India, Middle East, Africa

IMAGE:IStock

13

SEPTEMBER 2016 RETAIL NEWSBritish retailers report higher Aug. sales Wall Street Journal- Nice weather and a lower pound boosted UK retail sales in the first half of August, according to the Confederation of British Industry. The currency devaluation that’s spurring spending by tourists this summer may hurt sales later this year, as Britain’s consumers pay more for imported goods, the group said.

> Read more _____________________________________________

Passenger trains increasingly used to transport urgent shipments Lloyd’s Loading List- The number of time-critical biological samples carried on passenger trains in the UK has increased by 100% over the last 12 months, with other urgent products including documents, auto parts, and perishables also using the new specialist freight transport system. Companies around the UK running clinical trials where samples need to be tested daily in London laboratories have found the speed and reliability of these ‘Bio FastTrack’ services especially useful, according to shippers and their delivery partners. Passenger rail services are so regular and so fast that doctors and patients around the country awaiting biopsy and other test results can get the answer on the same day when the samples need to be sent to laboratories in London. Using passenger trains transport is much lower in cost, up to 25% cheaper, than using traditional same-day couriers

> Read more _____________________________________________

Economists grow more optimistic about Britain’s economy The Telegraph- The UK economy is on track to expand quicker than forecasts stated in the wake of the Brexit vote, economists said after reviewing employment and spending reports. Britain’s retail sales grew 5.8% in July from the same month last year, and unemployment is at its lowest in more than a decade. Britain’s economy will

grow faster than expected in 2016 and 2017, as newly optimistic economists reverse some of the downgrades made immediately after the Brexit vote. City economists now believe the UK will grow by an average of 1.6pc this year and 0.7pc in 2017, according to the Treasury’s latest study of forecasts. > Read more_____________________________________________

Mstore parent sees room for rapid growth in Africa North Jersey- Midcom Group will increase its Mstore presence in Africa from 300 stores to over 2,000 by 2020 and expand into new markets on the continent, the Dubai-based conglomerate said. Mstore is a seller of consumer electronics and mobile devices. The diversified conglomerate will expand across Kenya, Tanzania, Uganda, Rwanda, Nigeria, Ghana and Togo. The expansion will also target Chad, Ivory Coast and Senegal for their first stores. The investment could make Mstore the largest mobile and electronics retailer in Africa.

> Read more _____________________________________________

South African-based retail giant enters U.S. with $3.8 billion acquisition Chain Store Age- A company relatively unknown outside its home base has entered the U.S. retail market in a deal to acquire Mattress Firm Holding Corp., the largest mattress retailer in the United States. Steinhoff International Holdings will acquire Mattress Firm, whose assets include Sleepy’s, for $64.00 per share in cash, which represents a premium of 115% over the company’s stock price of $29.74.. The price represents a total equity value of approximately $2.4 billion and an enterprise value of approximately $3.8 billion, including net debt. The acquisition is expected to create the largest multi-brand mattress retail distribution network in the world. Steinhoff, which is often referred to as the Ikea of Africa, is an integrated retailer that manufactures, sources and sells furniture, household goods and clothing in Europe, Africa and Australasia. It operates more than 40 brands in 30 countries. > Read more

14

SEPTEMBER 2016 RETAIL NEWS

JetBlue Completes First Commercial Flight to Cuba Fortune - JetBlue Airways became the first U.S. passenger airline to complete a commercial flight to Cuba in 50 years, just months after a historic agreement between the two countries to resume scheduled air service. The agreement is part of the Obama Administration’s effort to normalize relations with Cuba. The newly approved flights will provide service to Havana from Atlanta, Charlotte, Fort Lauderdale, Houston, Los Angeles, Miami, Newark, New York City, Orlando, and Tampa.

> Read more _____________________________________________

Mexican Supplier to Ford, BMW Looks to Europe as Upgrade Beckons Industry Week - Nemak SAB, Mexico’s largest publicly traded auto-parts maker, has been supplying U.S. automakers for years. Now it’s looking for more growth in Europe. The company’s aluminum engine components are gaining business on the continent as automakers increase their reliance on the lightweight metal in an effort to cut vehicle weight and increase fuel efficiency. That helped the Alfa SAB unit boost revenue in Europe 15% in the second quarter, partially offsetting declines in North America and the rest of the world. Nemak is bolstering the Europe business by investing in production from Russia to Germany, and shifting some work away from its North American roots. > Read more _____________________________________________

Spanish retailer Mango to open megastore in Cuba Reuters - Spanish fashion group Mango is set to open its first megastore in Cuba before the end of the year after a recent thaw in the country’s diplomatic relations with the United States, a source close to the company said. Mango’s sales grew by 15.3 percent in 2015, the Barcelona-based unlisted company reported in May, driven by a focus on opening megastores internationally. Its megastores range in size from 800 to 3,000 square metres. The brand, a rival of Spanish Inditex-owned

Retailing in Latin America

Zalando Confirms Earnings Boost From Efficiency, New Brands Bloomberg - Zalando SE boosted second-quarter earnings as the online apparel retailer added new brands like Kate Spade and got more bang for its marketing buck. Adjusted earnings before interest and taxes rose to 80.9 million euros ($90.3 million) from 30.2 million euros ($33.7 million) a year earlier, said Berlin-based Zalando. The company said July 19 that earnings would probably be in the range of 68 million

euros ($76 million) to 88 million euros ($98 million). The shares gained as much as 3.5 percent. Zalando, which sells products like Nike sneakers and Armani coats, has broadened its assortment with brands like Fenty by Rihanna, Club Monaco and Kate Spade. Those, in addition to an earlier Easter holiday and more targeted advertising campaigns, boosted sales during the quarter, said Claire Huff, an analyst at RBC Capital Markets in London.

> Read more

IMAGE:IStock

15

SEPTEMBER 2016 RETAIL NEWS

Back-to-school spending starting to heat up Chain Store Age - Back to school sales appear to be rebounding this year after experiencing sluggish growth over the past three years (2013-2015). That’s according to First Data’s Back-to-school SpendTrend report, which is based on aggregate same store sales activity in the First Data point-of-sale network. Some of the most significant findings include:

• July 2016 spending is up 2% compared to 1% last year. August spending was down 1.9% in 2015; however based on data from the first week of August (when the majority of tax free holiday sales were taking place) spending appears to be trending up.

• Between 2013-2015, average spend per ticket has been between $59-$67. In July 2016, the average spend was $63.81, a decrease of about two dollars from the prior year. That said, transaction growth is up meaning lower prices due to discounting are driving more foot traffic and higher transaction growth rates.

> Read more___________________________________________

One in Three US Parents Shop for School via Smartphone EMarketer - Back-to-school shopping is here. And with consumers’ increasingly higher expectations of mobile

commerce, what should marketers be prepared for? According to July 2016 research, 32% of US parents who are also internet users plan to use their smartphone this year to make school purchases for their child. When looking at US smartphone mCommerce overall, there are many indications that on-device purchasing will grow. In a separate survey from comScore, nearly a quarter of US smartphone owners said they had between six and 10 retail apps on their smartphone in April 2016, up 3 percentage points from October 2015. Meanwhile, eMarketer estimates show that smartphone retail mCommerce in the US is expected to nearly double in 2016 to $130.92 billion.

> Read more _____________________________________________

The Zika Virus Has Arrived In The Continental U.S. Statista - Four cases of the Zika virus were diagnosed north of downtown Miami, more than likely spread by local mosquitos. They were swiftly followed by a further ten cases, prompting U.S. federal health officials to warn pregnant women to avoid the neighborhood where the outbreak occurred. It marks the first time in history that people have been advised to avoid a U.S. community. > Read more___________________________________________

Retailing in North America

label Zara, opened 63 megastores in 2015 and plans to have opened 45 more before the end of 2016. The new Cuban store will be in Manzana de Gomez, a shopping centre situated in Havana’s historical centre. Mango already operated a smaller franchise in the city, which opened 20 years ago. > Read more_____________________________________________

Wal-Mart Sells Mexico Clothing Chain to Liverpool for $1 Billion Bloomberg- Wal-Mart Stores Inc.’s Mexican unit agreed to sell its Suburbia clothing chain to El Puerto

de Liverpool SAB, Mexico’s biggest department store chain operator, in a deal valued at 19 billion pesos ($1.03 billion). The transaction, which involved 119 stores, is subject to regulatory approval, Wal-Mart de Mexico SAB and Liverpool said in statements Wednesday after markets closed. Liverpool will pay 15.7 billion pesos, assume 1.4 billion pesos of debt and distribute an additional 3.3 billion pesos to shareholders after the deal is completed. As part of the deal, Liverpool will also pay rent to Walmex for all 34 store locations where Suburbia stores stand alongside Wal-Mart stores.

> Read more

16

SEPTEMBER 2016 RETAIL NEWS

Has the time come to cut back on bricks-and-mortar? U.S. retailers have a “ridiculous” problem CBS News - Indeed, retail industry observers have argued for years that the U.S. is “overstored,” and as more shopping shifts online, the costs of maintaining brick-and-mortar stores will prove too much for many chains. The problem, years in the making, is getting only worse, according to retail analysts. “The U.S. is the most overstored it’s ever been,” said Jan Rogers Kniffen, an independent retail industry analyst. “How overstored is a question we won’t be able to answer until we understand how much business is being transferred online.” According to Kniffen, 50% of all retail not tied to bars and restaurants will go online by 2030. As of now, about 11 percent to 14 percent of all

retail spending is transacted over the web. Forrester Research expects Internet retail spending to hit $500 billion in 2020, up from $373 billion this year. _____________________________________________

American malls are dying faster than you think — and it’s about to get even worse Business Insider- America’s most iconic retailers are closing stores, and it’s left many speculating about the future of shopping malls. Macy’s recently announced it is closing 100 stores, following similar announcements from Sears, Gap, and Abercrombie & Fitch. The decline in traffic has been stunning: In 2010, there were 35 million visits to malls, according to the real-estate research firm Cushman and Wakefield. By 2013, there were 17 million visits – a 50% decline. > Read more_____________________________________________

IMAGE:Flickr

17

SEPTEMBER 2016 RETAIL NEWS

Crane Worldwide Logistics partners with Project SEARCHCrane Staff - Crane Worldwide Logistics (CWW) has partnered with Project SEARCH and local retailers headquartered in Columbus, Ohio to help high functioning developmentally disabled adult secure fulltime employment in the logistics management field. Working with Project SEARCH’s internship program, CWW assists in helping to develop program accreditation, training curriculum, and employment opportunities within the local logistics communities for interns who successfully complete a rigorous 8 week training program.

According to the Autism Society (2016) developmental disabilities in U.S children has risen dramatically over the last decade and continues to cost communities over $200 billion annually in care costs. The Autism Society has found that;

• 1 percent of the world population has a developmental disability,

• 1 child out of 68 born in the U.S. has a form of developmental disability,

• 35% of young adults (ages 19-23) with a developmental disability have not had a job or received postgraduate education since leaving high school,

• Autism is one of the fastest growing disabilities in children with an increase of 119% percent from 2000 (1 in 150) to 2010 (1 in 68) and growing at a rate of 6% to 15% each year based on Center for Disease Control regional estimates, and

• Only 16.8 percent of the population with disabilities was employed.

To improve the quality of life of adults with a developmental disability as well as reduce cost of care burdens on communities, Project SEARCH biannually selects and provides 6-8 candidates (called interns) with “real world” logistics operations training at its local training distribution center (DC) which is owned and operated by a large Columbus based retailer. Interns learn and use relevant work skills in DC operational activities which include; cycle counting/inventory control, bundling/kitting, packing, receiving, shipping, sorting, and tagging/ticketing.

Following the intern’s graduation from the program, they find employment opportunities within the many Fortune 500 and 1000 companies located in Columbus. CWW is a proud partner of this program which has been helping disabled adults secure employment in industry since 1996.

> Read more about Project SEARCH

CWW Retail Logistics Success Story

CHALLENGING THE NORMWe would love to hear from you. Find contact details for your nearest Crane location

1-888-870-2726 | generalinquiries@craneww.com

www.craneww.com

18

SEPTEMBER 2016 RETAIL NEWS

Agile Manufacturing: Tools, techniques, and initiatives that enable a plant or company to thrive under conditions of unpredictable change. Agile manufacturing not only enables a plant to achieve rapid response to customer needs, but also includes the ability to quickly reconfigure operations-and strategic alliances-to respond rapidly to unforeseen shifts in the marketplace. In some instances, it also incorporates “mass customization” concepts to satisfy unique customer requirements. In broad terms, it includes the ability to react quickly to technical or environmental surprises._____________________________________________American Customer Satisfaction Index (ACSI): Released for the first time in October 1994, an economic indicator and cross industry measure of the satisfaction of U.S. household customers with the quality of the goods and services available to them-both those goods and services produced within the United States and those provided as imports from foreign firms that have substantial market shares or dollar sales. The ACSI is co-sponsored by the University of Michigan Business School, ASQ and the CFI Group._____________________________________________Anticipation Order: An order placed in advance of the availability of a product for delivery at a future date. Anticipation orders are frequently used in the retail environment where suppliers are previewing new products at trade shows and want to get a commitment from their retail customers prior to production of seasonal items._____________________________________________Assemble-to-order: A strategy employed in production and light manufacturing environments where complete subassemblies and components are assembled into a finished product just prior to customer shipment. _____________________________________________Basis Point (BPS): A basis point is a unit that is equal to 1/100th of 1%, and is often used instead of percentages when discussing interest rates, rates of return, and other percentage-based performance metrics that can occur as fractions of a percent. 1% change = 100 basis points, and 0.01% = 1 basis point.

_____________________________________________Bonded Warehouse: Warehouse approved by the Customs or Treasury Department and under bond/guarantee for observance of revenue laws. Used for storing goods until duty is paid or goods are released in some other proper manner. In many cases the bonded warehouse is a building adjacent to the main warehouse, or a separate secure area within the main warehouse. Incoming goods should be received to this location as usual, but flagged as in quarantine or quality hold._____________________________________________Cash-to-Cash Cycle Time: The time it takes for cash to flow back into a company after it has been spent for raw materials._____________________________________________Cellular manufacturing: A manufacturing approach in which equipment and workstations are arranged to facilitate small-lot, continuous-flow production. In a manufacturing “cell,” all operations necessary to produce a component or subassembly are performed in close proximity, thus allowing for quick feedback between operators when quality problems and other issues arise. Workers in a manufacturing cell typically are cross-trained and, therefore, able to perform multiple tasks as needed._____________________________________________Class I carrier: A classification of regulated carriers based upon annual operating revenues-motor carriers of property: > or = $5 million; railroads: > or =$50 million; motor carriers of passengers: > or =$3 million._____________________________________________Class II carrier: A classification of regulated carriers based upon annual operating revenues-motor carriers of property: $1-$5 million; railroads: $10-$50 million; motor carriers of passengers: < or = $3 million._____________________________________________Class III carrier: A classification of regulated carriers based upon annual operating revenues-motor carriers of property: < or = $1 million; railroads: < or = $10 million.

Retailing Jargon

19

SEPTEMBER 2016 RETAIL NEWS

_____________________________________________Configure/Package-to-Order: A process where the trigger to begin manufacture, final assembly or packaging of a product is an actual customer order or release, rather than a market forecast. In order to be considered a Configure-to-Order environment, less than 20% of the value-added takes place after the receipt of the order or release, and virtually all necessary design and process documentation is available at time of order receipt._____________________________________________Customer Facing: Those personnel or activities whose jobs entail actual contact with the customer._____________________________________________Demand Shaping: Using programs, including price, new product launch, trade and sales incentives, promotions, and marketing programs, to increase what customers want to buy._____________________________________________Dock-to-Stock Cycle Time: The elapsed time beginning with the delivery of goods from the supplier and ends when those goods are put away in the warehouse and recorded into the inventory management system.

_____________________________________________European Article Number (EAN): A defined numbering mechanism used in Europe to uniquely identify every retail product and packaging option. The EAN is similar in concept and design to the UPC code and is usually what the barcode represents on goods.

_____________________________________________Fast Moving Consumer Goods (FMCG): Fast Moving Consumer Goods are packaged commercial products that are consumed through use. They include pre-packaged food and drinks, alcohol, health and beauty items, tobacco products, paper products, household cleansers and chemicals, animal care items, anything that we need, can buy right off the shelf, and use up through daily living._____________________________________________Field Finished Goods: Inventory which is kept at locations outside the four walls of the manufacturing plant (i.e., distribution center or warehouse).Fourth-Party Logistics (4PL): Differs from third party logistics in the following ways; 1)4PL organization is often a separate entity established as a joint venture or long-term contract between a primary client and one or more partners; 2)4PL organization acts as a single interface between the client and multiple logistics service providers; 3) All aspects (ideally) of the client’s supply chain are managed by the 4PL organization; and, 4) It is possible for a major third-party logistics provider to form a 4PL organization within its existing structure.________________________________________________________________

Global Trade Item Number (GTIN): A unique number that comprises up to 14 digits and is used to identify an item (product or service) upon which there is a need to retrieve pre-defined information that may be priced, ordered or invoiced at any point in the supply chain. The definition covers raw materials through end user products and includes services, all of which have pre-defined characteristics. GTIN is the globally-unique EAN.UCC System identification number, or key, used for trade items (products and services). It’s used for uniquely identifying trade items (products and services) sold, delivered, warehoused, and billed throughout the retail and commercial distribution channels. Unlike a UPC number, which only provides information specific to a group of products, the GTIN gives each product its own specific identifying number, giving greater tracking accuracy.________________________________________________________________

Fast Moving Consumer Goods (FMCG):

..packaged commercial products that are consumed through use.“

”