Retail News and Trends
Rough road ahead

From NRF Stores
By Susan Reda, Executive Editor

Retailers are bracing themselves for a rocky stretch. Already, many have announced plans to slow or suspend new store openings; remodels also are likely to be put on hold. Some executives say they'll cut back on inventories, and nearly all are scrutinizing their operations in an effort to trim unnecessary costs.

While no one could have predicted the severity of the current crisis, retailers have been operating with tighter inventories for the better part of 2008. Most trace the early signs of a slowdown in consumer spending back to last fall, but it was when gasoline prices started to soar in the spring that shoppers began parking their disposable income. While the cost of filling their gas tanks has come down recently, consumers--feeling the pressure of declining home values, shrinking investment portfolios, and rising unemployment rates--have dramatically reined in spending.

"Consumers are finding it more difficult to borrow and tap home equity lines of credit as banks tighten their credit standards," says Frank Badillo, senior economist and global program manager for TNS Retail Forward. "This will continue to be a drag on retail spending well into 2009. Some of this will also happen voluntarily as economic conditions cause households to decide that they don't want to carry the kind of debt burdens they had in the past."

Michael O'Hara, president of Consensus Advisory Services, an investment banking and financial advisory services firm, expects third-party consumer credit companies like Visa and MasterCard to increase their risk profiles, making it tougher to open new accounts or increase lines of credit. "As shoppers struggle to pay loans, credit scores are likely to migrate down," he says.

O'Hara is keeping a wary eye on the retail companies that provide consumer credit cards, too. "There was a time when store credit was common for jewelry or furniture retailers," he says. "Now, unless a store has a pristine balance sheet, they're not going to be able to take on consumer credit. The low financing, multi-year payment deals shoppers became accustomed to could really dry up."

How Retailers Can Make the Best of a Slowdown
Moving quickly to improve performance can help retailers to recover faster.

By Ashish A. Kotecha, Josh Leibowitz, and Ian MacKenzie

Downturns are tough on retailers. Recent McKinsey research indicates that during the last two recessions (1990-91 and 2000-01), growth slowed for nearly every retail subsector in the United States. Ninety-three percent of the retailers surveyed that existed during both downturns experienced slowing revenue growth in one of them, and 59 percent endured it in both.

Unfortunately for retailers, their position on the front lines of consumer spending doesn't translate into a rapid turnaround when the general economy experiences a subsequent uptick. The average retail subsector growth rate during the first year of recovery following the 1990-91 and 2000-01 downturns was 0.3 percent. And 12 of 15 retail sectors lagged behind even that rate of growth during one or both upturns.

These downturn dynamics-declining sales followed by a sluggish recovery period-mean retailers should move quickly to minimize performance deterioration. The challenge, of course, is that retailers have a large number of options to sort through, ranging from cutting costs by shutting stores or restructuring support functions, to increasing revenue by refreshing stores or overhauling promotions. Many make the mistake of focusing on what is easy or known to them and fail to tackle more challenging goals that might improve their competitive positioning during the inevitable upturn.

In our experience, some basic rules of thumb are invaluable for helping retailers rapidly sort through their options and set priorities for action-in particular, determining whether to take an offensive or defensive approach. Combining a tough self-assessment with a hard-nosed scan of the environment can help retailers decide on the relative importance of reducing costs, increasing investments, creating financial flexibility, and seeking near-term revenue growth (exhibit).

Retailers should start by taking a rigorous look at the health of their balance sheets, management teams, and overall operating performance. Companies with reasonable cash reserves and ready access to credit lines, for instance, have options-such as investing in stores, people, or acquisitions-that weaker competitors simply lack.
At the same time, retailers need to be realistic about the potential of their businesses. Do they operate store formats or play in a subsector with strong growth prospects? To what extent is the market already saturated, and where does the retailer stand versus competitors? Recent growth rates, market penetration figures, and a serious review of the strengths and weaknesses of competitors are all important factors to consider.

Companies with good financial strength in markets with significant growth potential should lift investment to gain strategic advantage over competitors. Big bets, such as doubling down on new stores or remodeling old ones, are one possibility. Equally important are smaller bets, such as recruiting talent from weaker players or investing in more precise local market execution. For example, when one specialty retailer began suffering from declining foot traffic in its stores, the company built an analytic tool to help merchants and members of the central marketing organization more effectively use data from customer-relationship-management (CRM) and transaction databases. This allowed the retailer to better predict local demand and decide which items should receive how much space in its advertising circular. Comparable store sales have risen between two and four percent in test markets employing the new promotion-effectiveness tool.

Retailers with good financial health in mature industries can also go on the offensive, taking actions to quickly grow revenue by driving traffic into stores through more compelling offers and ensuring that staff is ready on the floor for the assisted sale. For example, a North American soft goods retailer has reversed declining sales, improved customer satisfaction, and increased the frequency and average size of transactions by focusing on eliminating out-of-stocks, raising the effectiveness of front-line salespeople, and making small store-layout changes that help customers find the goods they want.

Companies with weaker financial health will need to focus more aggressively on reducing costs. Our recent experience suggests that weak performers have major opportunities to rationalize inventory stock keeping units (SKUs)-freeing up working capital-and to renegotiate terms on direct sourcing. These companies can also increase shop-floor efficiency, an area where they frequently lag. By applying lean operations techniques to redeploy labor, they can shorten the time staff spend on noncustomer-facing tasks and increase the time spent helping customers. The focus should be on getting more from existing sales resources, not just on cutting labor hours. Indeed, the key driver of economics is sales-not just cost as a percentage of sales.

More broadly, retailers should bear in mind that the least effective thing to do during a downturn is to simply "hunker down" and "weather the storm." Though there's no escaping some pain, moving quickly to improve performance can reduce the odds of a deep dip in sales and position retailers to participate fully in the inevitable upturn.

The Future of Point-of-Sale is Here and Now!

Software Solutions
Process a sale or manage inventory any time or any place with one of our Mobile POS solutions. They extend Microsoft Dynamics' Point-of-Sale products and place all the tools you need to process orders and manage inventory on a hand-held device. Use our Mobile POS solution to:

• Enable real-time tendering and create more personable and friendly customer interactions
• Improve staff efficiency whether in a physical store, at a field event, customer location, or trade show
• Maintain better control over inventories
• Reduce the time customers wait in line using mobile POS lanes
• Save on equipment costs and use your floor space more efficiently

Now Available at BlueStar...

Bundles
Hewlett Packard Rp3000 bundle
Features: 

• Microsoft RMS or POS
• HP,SMART BUY,RP 3000 POS, 1.6 GHZ ATOM/160G/2G/DVD/VISTA DOWNGRADE TO XP PRO,NO KBRD,NO MOUSE
• HP,L1710 17" NON TOUCH LCD MNTOR,VGA CABLE AND POWER CABLE INCLUDED, SILVER
• HP,USB MINI MSR WITH BRACKETS
• HP, SINGLE STATION THERMAL RECEIPT PRINTER
• HP, USB PROMO BARCODE SCANNER WITH STAND AND CABLE
• HP,USB POS POLE DISPLAY
• HP, USB OPTICAL MOUSE
• HP, USB STANDARD KEYBOARD
• HP Cash Drawer

On October 1, HP released the rp3000 designed for the small and medium retail, hospitality and niche verticals.
The rp3000 has a smaller footprint, which makes it easier for retailers to save counter space and has been designed with color-coded ports in the back to simplify setup.
A range of peripherals include the touch-screen display, a cash drawer, keyboard with an integrated magnetic stripe reader, a free-standing credit card reader, a USB thermal receipt printer, USB bar code scanner and a customer display pole.  New products will be an integrated tray and high end printer with MICR coming in December.
The actual computer system is built around Intel's Atom processor, with a speed of 1.6 GHz and according to HP, uses less energy to run, letting you extend your business hours while staying green.

 

Toshiba STA-10 Bundle

 

Features:
Microsoft Dynamics RMS
Toshiba Tec ST-A10 All-in-One
Toshiba Tec TRST-A10 Two-Color Thermal Receipt Printer
Optional:
Toshiba Tec LIUST Rear Display
Toshiba Tec DRWST Cash Drawer
Toshiba Tec ST-USBPWR Cables
Toshiba Tec MCRST Mag Stripe Reader
Metrologic MK9520-32A38 Scanner
Bringing maximum connectivity, simplified cable management, and an ultra-small footprint together in the ST-A10, it has been specially engineered and designed to handle airflow and provide the optimal cooling with one main cpu fan.  Along with Microsoft Dynamics RMS it is designed for use by small to mid-market Retailers and offers a complete Point-of Sale solution that can be modified to meet unique retail requirements.

Motorola Mobile Bundle
 
Features:

• MOTOROLA,MC50, WLAN 802.11 B, COLOR TOUCH SCREEN, 1D LINEAR CMOS SCANNER, PPC2003, 64/64MB, QWERTY KEY, STANDARD 1X 1560 MAH BATTERY
• MC50 Magnetic Stripe Reader Adapter
• MC50 RoHS Compliant Single Slot USB Desktop Cradle Kit
• EPSON MOBILELINK TM-P60 PRINTER, 802.11
• EPSON MOBILELINK TM-P60 CHARGER
• MICROSOFT RMS (if RMS is not already installed)
• MICROSOFT RMS MAINTENANCE (if RMS is not already installed)
• MOBILE SUITE PR0

• MOBLIE SUITE PRO MAINTENANCE

 

Process a sale or manage inventory any time or any place with one of our Mobile POS solutions. They extend Microsoft Dynamics point of sale products and place all the tools you need to process orders and manage inventory on a hand held device.

• Perform sales transactions from anywhere
• Reduce long checkout lines
• Perform real rime wireless credit card authorizations
• Conduct physical inventory with ease
• Receive against open PO's on demand
• Easily create inter-store transfer orders

• Automatically synchronize offline transactions

 

NEW RETAIL PRODUCTS

The HP RP3000 Retail POS System
On October 1, HP released the rp3000 designed for the small and medium retail, hospitality and niche verticals.
The rp3000 has a smaller footprint, which makes it easier for retailers to save counter space and has been designed with color-coded ports in the back to simplify setup.
A range of peripherals include the touch-screen display, a cash drawer, keyboard with an integrated magnetic stripe reader, a free-standing credit card reader, a USB thermal receipt printer, USB bar code scanner and a customer display pole.  New products will be an integrated tray and high end printer with MICR coming in December.
The actual computer system is built around Intel's Atom processor, with a speed of 1.6 GHz and according to HP, uses less energy to run, letting you extend your business hours while staying green.
The rp3000 lists at $699 (for the 1 GIG system) and $750.00 for the 2 GIG.
 

HSP7000 Multifunction (Hybrid) Printer
 

With the new HSP7000 Multifunction (Hybrid) Printer and a large offering of POS printers, Star Micronics gives you the freedom to choose - so you can do business simply, swiftly, successfully.
The multifunction (hybrid) HSP7000, is designed to assist and empower users who want to extend the capabilities of their current system.
Star Micronics has developed the best value printer for people who are looking for the 3 primary functions of a multifunction printer:
- Read the check's MICR reliably
- Endorse checks without jams
- Print a receipt as fast as possible