Welcome to this week's round of retail news.
Tablets Gaining on PCs in Online Shopping
In another sign of the post-PC era, people are quickly making tablet computers their preferred devices for mobile shopping.
According to a study in the US by Monetate, shoppers using a tablet tend to view the same number of Web pages as those on PCs, while shoppers using smartphones tend to view far fewer.
When looking at conversion rates, those for tablets and PCs are very close (3.2% vs 3.5%), while people using smartphones make fewer purchases (1.4%).
The propensity for tablet users to spend longer on their devices than people do on their smartphones means tablet traffic to retail sites will grow its share. According to the same study, 88% of web site visits to retailers come from PCs – a four point drop on first quarter 2012, whilst tablet traffic share has grown to 7%. This is the first time tablet share has exceed smartphone share.
Retailers bracing themselves for a second austerity Christmas
High street stores held their seasonal shows last week – known in the industry as Christmas in July – where they showcased their Christmas products. However, retailers are also preparing themselves for many Britons to balance the desire to celebrate with the limitations of squeezed incomes. The shows demonstrate how retailers expect this to mean more practical rather than luxurious presents – presents such as slippers, kettles and food processors.
Christmas can account for up to half of annual profits for non-food retailers. For supermarkets, Christmas shopping makes up around an extra month of trading – vital for Tesco and Marks and Spencer.
Stores depend upon clearances to boost sales
A second week of clearance sales gave John Lewis a 17% rise in total sales for the week ending 30th June. Home performed best, with nearly 12% growth, due to discounted items. With the Olympics only a few weeks away, there was a strong interest in Olympic merchandise, which made sales of 12.8 per cent.
Moving into July, nine out of ten clothing retailers had sales on last weekend, offering an average discount of 55%. In a sign of how sales are becoming normalised, this was the highest ever level of discounting recorded in any July month according to accountancy firm PwC. If shoppers are slowly becoming accustomed to sales prices, they won’t want to pay full prices in the run up to Christmas, which is bad news for retailers.
ASDA in financial service move
ASDA announced on Monday its expansion into financial services, with the launch of Asda Money.
Through the scheme, ASDA will become the first British supermarket to offer an unlimited cashback facility. It wants to appeal to its 18 million customers visiting its 542 stores each week, as well as target shoppers who ASDA believes are frustrated with the reward points offered by other supermarkets.
Undoubtedly, some shoppers may be frustrated by the rewards system. However, one of the benefits of Tesco Clubcard is that the value of its rewards are mostly greater than any cash value – for example tickets to Chessington Zoo, Legoland and so on.
Rain dampens Marks and Spencer sales
Marks & Spencer posted its worst underlying quarterly sales performance for three and a half years this week. Sales at UK stores open more for than a year fell 2.8% in the 13 weeks to 30 June 30, which is its first fiscal quarter of the year.
Some of this may be explained by downturn in women’s wear trade during the wettest April and June months since records began. This said, thisannouncement was quickly followed by news on Tuesday that its head of non-food business, Kate Bostock, is due to leave the company.
ASOS retail sales rise
At the same time M&S non-food sales are down, online fashion retailer ASOS has reported a 31% per cent year-on-year rise in retail sales to £137m for the three months to 30 June. UK sales account for 35% of all sales, which rose 8%, a strong result considering how some high street retailers are performing.
Poundland poaches Tesco Director; plans on new payment system
Poundland has revealed its appointment of Andrew Higginson as Non – Executive Chairman for the company. Higginson has 20 years experience in retail, having formerly been Senior Executive and Board Director at Tesco.
Last week, the company reported a sales rise of 21% for the year to April 1st 2012, with a turnover of £780m. With 4m customers each week, the retailer aims on opening 60 new stores next year.
In a separate story, Poundland is considering offering contactless payments to a maximum value of £20, and is also considering self-service checkouts. It says it is testing these with a view to improving in-store experience, but with tight margins, much of this will be down to cost savings.
Sources:
FT,
Retail Gazette,
Retail Times,
Reuters
