RETAIL NEWS

Target’s same-store sales rise during holiday season

BY Marianne Wilson

Target posted stronger-than-expected holiday sales amid a surge in traffic to its stores and website.

Target’s same-store sales in the combined November/December period rose 5.7%, ahead of 3.4% growth in the year-ago period. The results reflected strong traffic, positive store comps and comparable digital sales growth of 29%, the retailer said. All of Target’s core merchandise categories posted growth, led by toys, baby and seasonal gifts.

Target said store pickup and drive-up for online orders surged more than 60% from a year ago, and accounted for a quarter of the company’s digital sales in the holiday period. The company expects that 2018 will be the fifth consecutive year in which its online sales grow more than 25%.

“We are very pleased with Target’s holiday season performance, which came on top of really strong results in the same period last year,” said Brian Cornell, chairman and CEO, Target. “This performance demonstrates the benefit of placing our stores at the center of every way we serve our guests, including both in-store shopping and digital fulfillment.”

Target reaffirmed its full-year earnings and sales forecast, putting it on track for the strongest full-year comparable sales growth since 2005.

The company also forecast market-share gains across all of its core merchandising categories and double-digit growth in adjusted EPS.

“In 2019, we expect to build on this momentum as we gain further scale in our fulfillment capabilities and deliver profitable growth throughout the year,” the retailer stated.

Analyst Neil Saunders, managing director of GlobalData Retail, commented that Target gave everything it had to this holiday season, “pulling out all the stops on merchandise, omnichannel services, and marketing” and that its efforts paid off.

“Over the past couple of years, Target’s store execution on festive products has been patchy,” said. “However, this year Target won Christmas with a very compelling and well-executed assortment of decorations, decor, gifting, and food. Conversion rates for holiday products were up sharply on last year and we believe that Target was a key destination for many households buying Christmas essentials.”

Target continues to expect fourth quarter 2018 comparable sales growth of approximately 5%. For the full year, the company continues to expect adjusted EPS of $5.30 to $5.50 and GAAP EPS of $5.41 to $5.61. The 11-cent difference between expected full-year adjusted EPS and GAAP EPS is driven by discrete items already reported through third quarter 2018.

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Survey: Consumers use mobile discounts on in-store purchases

BY Dan Berthiaume

More than half of consumers use mobile apps in-store, but not necessarily to buy things.

According to “Surviving the Retail Apocalypse,” a new survey of more than 1,000 consumers of all ages from Yes Marketing, 57% of consumers have used a retailer’s mobile app while shopping in the store. The top three reasons respondents offered in-store mobile app usage all revolved around obtaining discounts: redeeming coupons (65%), finding coupons (57%) and locating items that are on sale (46%).

Meanwhile, only 33% of surveyed consumers prefer to make purchases on smartphones. Instead, they would rather use tablet and desktop (49%) for a more frictionless purchasing experience.

“To survive the retail apocalypse, retailers need to prioritize the mobile experience,” said Jim Sturm, president of Yes Marketing. “Consumers will not hesitate to turn to another brand if it offers a more user-friendly experience. Retailers can bridge the mobile-to-store experience by introducing apps that support the in-store shopping with features like maps of store layouts and access to product ratings.”

Other survey findings include:
• Half of respondents (49%) say visually appealing stores would motivate them to shop at a brick-and-mortar location.

• Centennials (consumers born after 2000) are more likely than all other generations to shop in stores for visually appealing displays (58%), while Millennials are most interested in local events (36%) and additional services (42%).

• Nearly all consumers (90%) purchase in stores at least monthly, and 60% say they shop in stores because they want to see items in person.

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Walmart continues expanding autonomous vehicle delivery efforts

BY Dan Berthiaume

Walmart is staying in the fast lane when it comes to piloting autonomous vehicle deliveries.

The discount giant’s latest venture in this space is a pilot with autonomous vehicle company Udelv in Surprise, Arizona. The program will test the effectiveness of custom-made driverless cargo vans from Udelv in delivering groceries handpicked by Walmart personal shoppers to customers.

Walmart has been active in piloting different autonomous vehicle technologies as a means of delivering online grocery orders. In November 2018, Walmart partnered with Ford and Postmates to test self-driving vehicles to deliver fresh groceries. The pilot, which is taking place in Florida’s Miami-Dade County, uses Ford driverless cars to deliver fresh groceries hand-picked by Walmart’s personal shoppers. Postmates, which is already connected to Ford’s digital platform, serves as Walmart’s delivery partner.

In addition, through a partnership with Waymo, Google’s self-driving car project, Walmart uses Waymo vehicles to transport customers to and from a local store to pick up their groceries. The pilot, which is conducted out of one Walmart store in Chandler, Arizona, is being tested among a group of Waymo’s 400 daily users.

In a corporate blog post, Tom Ward, senior VP, digital operations, Walmart US, said Walmart will continue to stay abreast of the latest developments in omnichannel grocery shopping.

“There’s no telling what innovation the future will bring,” said Ward. “But, Walmart is committed to staying on the forefront of change to make getting groceries simple, quick, and easy.”

Other recent notable driverless food and grocery delivery pilots include an upcoming March 2019 joint pilot from DoorDash and General Motors’ Cruise Automation self-driving vehicle division to use autonomous vehicles to deliver meal and grocery orders in San Francisco, as well as an ongoing test of driverless delivery in Scottsdale, Arizona by Kroger.

A post announcing the partnership on the Udelv site also promoted the pilot as a harbinger of things to come.

“This partnership with Walmart is an affirmation of our goals and vision: That ADVs (autonomous delivery vans) can improve lives and drive the future of e-commerce,” said the blog.

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