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Retail Vendor Performance Management News Round Up for September 2018


Moody’s Says there May be too Much Investment in Rapid Delivery; Turkey, Myanmar Added to List of Countries Producing Goods with Child and Forced Labor; Retailers Blend Physical and Digital to Succeed; Bon-Ton begins its Planned Comeback On-line

September 27, 2018

by SCDigest Editorial Staff


Moody’s Says there May be too Much Investment in Rapid Delivery


While retailer investments in speedy delivery are escalating, the benefits remain unclear, according to a new report from financial firm Moody’s.

The report notes that traditional retail has the advantage as the only way for consumers to satisfy their itch for “instant gratification” and get merchandise the same-day in most areas of the US is to visit the store and pick it up.

“With the same-day delivery arms race’ in full swing, and large retailers such as Walmart, Amazon, and Target taking meaningful and costly steps to develop increased capability, the issue of how much is too much remains,” Moody’s lead analyst Charlie O’Shea said in the report. “What is unclear to us is to what degree consumers will ultimately desire and use the service, and then how much they will be willing to pay.”

Supply Chain Digest Says...

There is a growing divide between retail's winners and losers - and the answer may be in the store experience.

With all these efforts, Moody’s said that “There are some significant unknowns, in our view. For instance, how ‘loudly’ are consumers actually clamoring for same-day delivery and how much are retailers investing in what we view as a costly initiative?”

Retailers are really at risk of overspending in this area, Moody’s says. The Moody’s report contends that “the jury is still out regarding how important same-day delivery will be in the eyes of many consumers.” Interesting.

For many such programs, “it is less clear at which purchase level the consumer will recognize that there is in fact a compelling value proposition for the service,” Moody’s said. “Until this happens, it looks like the U.S. consumer will benefit from this ongoing battle for same-day delivery leadership, which could very well result in a Pyrrhic victory for the ultimate winner.”

Turkey, Myanmar Added to List of Countries Producing Goods with Child and Forced Labor


Turkey and Myanmar, formerly Burma, have been named by the United States Department of Labor’s Bureau of International Labor Affairs (ILAB) in its annual “List of Goods Produced by Child Labor or Forced Labor.”

According to the Sourcing Journal, garment industries in both countries have employed child labor, according to the report, as have footwear manufacturers in Turkey.

The report, which includes 148 commodities from 76 countries, was mandated by the Trafficking Victims Protection Reauthorization Act of 2005 and is updated regularly. ILAB continuously collects data from worldwide exporters in order to educate industry leaders on risky goods and regions that might otherwise escape notice. The process requires independent verification of labor information and does not rely solely on official data.

Turkey is one of the larger exporters of textile and clothing in the world. It exported nearly $26 billion in textile and clothing products in 2016, the latest year available in World Bank’s data, and was responsible for roughly 18% of the world’s textile and clothing exports.


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Retailers Blend Physical and Digital to Succeed

According to the Business Insider web site, the retailers who have found the most success lately have beefed up their stores to make them more amenable to shoppers who mostly purchase things on-line.

It cited Walmart, Target, Nordstrom, and Kohl's as all reporting strong earnings results in the most recent quarter after launching new initiatives to blend e-commerce and in-store shopping.

The move to beef up the in-store experience seems to be paying off for these retailers, Business Insider says.

In fact, it observes, there is a growing divide between retail's winners and losers — and the answer may be in the store experience.

In April, for example, Nordstrom opened a new men's store in New York that combines in-store services such as tailoring, shoe shining, and food with high-tech digital ordering and returns systems.

Customers can choose to buy items online and pick them up in-store, or reserve up to 10 items in advance on the Nordstrom app and have them ready and waiting to try on in the store's fitting room.

There is also a handy returns system by the entrance of the store that allows shoppers to nip into the store, scan their receipt, and insert the items into a box.

Meanwhile, Target has been investing in its stores, opening smaller locations in urban centers, rolling out new partnerships and private-label brands, and doubling down on e-commerce, an area where it has lagged behind its competitors in the past.

It is also focusing on ways to make it easier for shoppers to load up their carts without worrying about how to get their purchases home.

One new service, which is reserved for Target's urban locations, allows customers to have their purchases shipped home that same day for a flat fee of $7.

Another service allows customers to buy products on the app and have them brought out to their car by a team member.

All this take investment and out of the box thinking or sure – but it’s innovate or perish in this new normal for retailers.

Bon-Ton begins its Planned Comeback On-line

 

Invest firm CSC, of Merrillville, Indiana, had been thinking about Bon-Ton Stores Inc. for about a year, wondering whether the brand could be saved and reinvented as an online-based retailer with some physical stores in its old markets. CSC concluded it could and agreed in federal bankruptcy court to pay $900,000 for Bon-Ton’s trademarks, websites, customer lists and other intellectual property.

Websites for Boston Store, Younkers and other department store names were recently re-launched to put Bon-Ton back in business, selling merchandise such as kitchen appliances, major home electronics and other new items along with the apparel, cosmetics and home goods Bon-Ton stores had been known for over the years.

The company also is planning to open some limited-hour physical stores, and might open regular outlets in coming years.



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