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Holiday Crunch Time: Survey Shows Consumers Trust Online over Physical Stores

Posted By Administration, Thursday, January 15, 2015
Updated: Wednesday, January 14, 2015

by Suhas Sreedhar, GT Nexus

This past holiday season, shoppers made it clear that their faith in brick-and-mortar stores is waning. In a survey conducted by YouGov (and sponsored by GT Nexus), 61% of respondents said they trusted online stores more than physical ones to have their last minute gift items in stock.1


The result is particularly shocking because historically, it was just the opposite. Customers would rush to physical stores to do their last minute shopping. Despite how disruptive e-commerce has been to traditional retail, brick-and-mortar merchants always saw last minute holiday shopping as one of their last few bastions of success. But this survey statistic, along with the 2014 holiday season as a whole, is just the latest confirmation of the dramatic shift in shopping habits taking place. 

Everyone Everywhere is Shopping Online Now
According to IBM Corp.'s Digital Analytics Benchmark Hub report, online holiday sales from November 1st to December 31st went up 13.9% over the previous year. And mobile traffic accounted for 45% of all online traffic, up 25.5% over the previous year.2

You can expect this trend to accelerate in 2015. Customers expect seamless shopping convenience at lower and lower prices – not just during the holidays, but throughout the year.


E-commerce has done a lot of things well and retailers like Amazon have set a precedent for superior service (known as the "Amazon Effect"). Online merchants often have a wider assortment of products, readily accessible customer reviews, convenient customer service, and easy delivery – all at a cheaper price than most physical stores. Plus they put customers squarely in the driver's seat. No longer are shoppers at the mercy of store employees to figure out where to look and what to buy. True, they miss out on value-added expertise, but they also skip potentially frustrating and disappointing encounters.

Omni-channel to the Rescue or in Need of Rescue?
What are traditional retailers supposed to do? For many the solution has been "omni-channel," the idea that you can create a seamless customer experience between your physical store, your online store, and your mobile platforms. Purchase, pick-up, delivery, and returns could all happen in whichever ways customers want, without error or frustration.

But omni-channel's implementation has left something to be desired. There are often many out-of-stock situations and the movement of goods across channels can be convoluted and confusing. True omni-channel is a wonderful dream, but it's a dream in need of help. The retailers who will pull off omni-channel successfully will be the ones who recognize the need to rethink data sharing and delivery, putting technology to use to gain better control over their processes and deliver better customer experiences.

Supply chains have grown long and complex. The hundreds and thousands of steps in between suppliers, buyers, and customers makes implementing omni-channel very difficult. Retailers who use technology to gain better control over their supply chains have a great opportunity to differentiate themselves by living up to the true omni-channel promise. Those who don't will find that their last 39% of emergency holiday shoppers won't stick around much longer.


Suhas Sreedhar is a Strategic Writer at GT Nexus, a cloud supply chain provider that connects retailers, brands and their trading partners on a global network. Sudas writes frequently on technology, supply chain, Internet of Things and retail. His work has been featured in Forbes, IEEE Spectrum and various industrial blogs and trade publications.

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Tags:  Brick-and-Mortar  e-commerce  Holiday 2014  Omni-Channel 

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Retail Industry Encouraged by Holiday Sales Gains

Posted By Administration, Thursday, January 15, 2015
Updated: Wednesday, January 14, 2015


In some ways, the deck seemed to be stacked against the retail industry as a late Thanksgiving holiday created a shorter shopping window between the long holiday weekend and Christmas, and Black Friday sales led many prognosticators to negatively adjust forecasts. Clearly, these predictions of doom and gloom were premature.

Overall, retailers enjoyed a strong holiday season as spending exceeded the forecasts of most experts. Several key factors contributed to the lift in sales, including increased consumer confidence, a drop in gas prices, and a higher number of sales over the course of a longer shopping season.

According to FirstData, retail sales increased 3.2 percent between November 1 and January 4, compared to a modest 0.5 percent gain during the same period in 2013. A growth in sales was experienced in all 50 states. ShopperTrak found that holiday sales in November and December 2014 rose 4.6 percent from 2013, the biggest year-over-year gain since 2005.

Interestingly, FirstData reports that Black Friday did not rank among the 10 best days for sales or total number of purchases. Although consumers showed a willingness to shop earlier, last minute shoppers led the way, as the top three days for retail sales were December 22, 23, and 24. The top three days for retail transactions were December 21, 22, and 24.

Rather than focusing on specific shopping days on Thanksgiving weekend, many retailers responded to the demands of the end consumer by offering sales earlier and for a longer period of time. This led to steadier shopping over a two-month stretch rather than overreliance on a handful of days. It also helped to avoid shipping issues that occurred last year.

However, the trend of spreading out sales didn't necessarily apply to Cyber Monday. According to comScore, Cyber Monday was the busiest day of the online shopping day of the season with $2 billion in total sales. The day after Cyber Monday brought another $1.79 billion.

Although in-store sales and foot traffic were down, comScore reports a total of $53.3 billion in e-commerce sales on desktop computers during November and December, an increase of more than 14 percent from 2013. The impact of mobile purchases may push that figure as high as 17 percent, according to Internet Retailer.

Separate research from Tangent Data Services shows an 18 percent increase in online sales, with a seven percent increase in unique online shoppers and an 11 percent increase in the average online receipt.

Sales even continued on Christmas Day as consumers purchased music, applications and other products for their new smartphones and tablets. Christmas Day online sales rose 8.3 percent compared to the previous year, according to IBM.

Retailers also saw positive results from more widespread usage of mobile messaging. MarketingLand research revealed that retailers sent 34 percent more push notifications during the "Cyber Week" shopping period in November compared to 2013. Consumer engagement rates doubled and more than one-third of all mobile retail app "opens" were tied to a push notification. Previous research found that retail leads all industry verticals in engagement and retention improvements resulting from mobile push messaging.

The National Retail Federation predicts a 4.1 percent increase in total sales, which includes both store and online sales.

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Tags:  Holiday 2014 

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E-Commerce is Killing Retailers – Here's How Your Supply Chain Can Save You

Posted By Administration, Thursday, December 18, 2014
Updated: Wednesday, December 17, 2014

by Suhas Sreedhar, GT Nexus

This year's holiday shopping season is shaping up to be a brutal bellwether for the runaway erosion of the traditional retail market. Shoppers spent 6.4% less on average1 this Thanksgiving weekend than in 2013. That's despite the economy and unemployment doing much better overall.2 The reason for the downturn in spending is a complex cocktail3 of demographics, changed buying habits, and cultural shifts.

An added complexity on top all those ingredients is the rise in online shopping, or e-commerce. Online sales rose 26% to $1.2 billion this Black Friday,4 while in-store spending tanked5 and overall Black Friday sales declined by 11%.

The obvious question for retailers then is, why not just pivot heavily toward e-commerce?

Going E-Commerce Isn't Easy or Necessarily Profitable
For customers, online shopping isn't just about greater convenience or assortment. It's about cost. Customers expect online goods to be cheaper, while still being delivered quickly and conveniently with free shipping and returns. Retailers entering into the online game face costs that can run as high as 25% of sales.6 Companies like Kohl's, Wal-Mart, Target, and Best Buy are reporting their online operations to be far less profitable than their stores. Online infrastructure costs tend to swell while sales margins tend to emaciate. There's also the fact that PayPal processed 47% more payments from mobile devices than last year,7 which signals that retailers can't just have a great website, they need to invest in mobile technologies like apps, platforms, and partner ecosystems to succeed. Competing successfully for customers requires differentiating not only on price and convenience, but also on overall customer experience – a task demanding innovation and creative thinking, which are two goals tough to achieve on slim margins.

It's on the Back End, Not the Front, Where Retailers Can Profit
The days of padded margins are certainly gone. To eke out a profit, retailers will need to cut costs while still exceeding high customer expectations. How is that possible? It starts with an agile supply chain.

The concept of an agile supply chain means more than just finding the quickest, most efficient way to get goods from supplier to customer. An agile supply chain can restructure on a dime – flexing, twisting, adjusting, and adapting to harsh, capricious market conditions. It has two main components:

360 Visibility: This goes beyond "end-to-end" visibility. Value chains are becoming ecosystems8 – vast interconnected webs of suppliers, manufacturers, logistics providers, carriers, distributors, and retailers. The number of transaction points, hand-offs, and processes involved is enormous and the links between them are no longer straightforward – they overlap, circle back, and interface in multiple ways. Without granular knowledge about what exactly is going on where at any given instant, maintaining agility becomes almost impossible. Visibility in all directions is crucial for knowing which parts of the supply chain can contract and expand to meet changing demand and for taking action.

Network DNA: In the era of low margins and volatile demand, the businesses that will operate best are the ones that operate as networks. Just as omni-channel has demonstrated how critical it is to not silo inventory into specific channels,9 e-commerce's onslaught on brick-and-mortar should warn retailers that differentiating by innovative customer experience is vital for their survival. Doing this requires thinking big – operating beyond themselves as individual companies and, instead, as parts of vast, collaborative and competitive networks that spans across the globe and as well as physical and digital boundaries. Networking should be placed at the core of supply chain architecture so that all partners can work tightly together in lockstep whenever they need to shift tactics to meet demand.

Retailers wielding an agile supply chain have insight into all inventory residing in-store, in DC, on-truck, on-ship, or in factory. The supply chain's network acts as a central nervous system connecting supply and demand signals making data available to all parties and, in some instances, automating changes and adjustments in real time. The network also gives rise to higher brain functions – the big data and analytics tools that empower it to operate as a system of engagement10 to direct the flow of goods. This opens the door to a smarter way to allocate goods, ship directly from factories, and make smarter decisions about the positioning and movement of inventory, increasing overall adaptability.

Underpinning this network and modernizing supply chains is the digital transformation brought on by the cloud, which also happens to be changing industries all across the board.11 The cloud centralizes and abstracts away supply chain function from form, allowing for unprecedented flexibility, speed, and communication. But perhaps the most exciting thing about an agile cloud supply chain isn't even its ability to cut costs or increase efficiency – it's the opportunity created to invent new business models that drive growth and tackle larger issues. Levi Strauss & Co., for instance, recently partnered with the International Finance Corporation (IFC) to offer low cost financing12 for suppliers in developing countries that have conformed to Levi's sustainability policies. At a time when customers are increasingly concerned about how their products are made,13 such actions differentiate businesses from their competition while also solidifying their own infrastructure.

What's in the cards for future holiday seasons? Will e-commerce continue to thrash brick-and-mortar sales? Will omni-channel save retail? Will new models of fulfillment arise? One thing is clear – in this new, uncertain age, your biggest assets for survival will be who you are (your purpose14) and what you're made of (your supply chain) – two things very much under your control.


Suhas Sreedhar is a Strategic Writer at GT Nexus, a cloud supply chain provider that connects retailers, brands and their trading partners on a global network. Sudas writes frequently on technology, supply chain, Internet of Things and retail. His work has been featured in Forbes, IEEE Spectrum and various industrial blogs and trade publications.

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Tags:  e-commerce  Holiday 2014  Omni-Channel 

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What's Happening to Black Friday?

Posted By Administration, Thursday, December 18, 2014
Updated: Wednesday, December 17, 2014

by Dwight D. Hill, McMillan Doolittle LLP

The air is crisp, the holiday sales prediction from the National Retail Federation is out, and retailer's shelves are stocked high with merchandise and gifts, ready for the masses – and another Black Friday is behind us.

This year's results were anything but stellar. Depending on your news source, sales over the Thanksgiving holiday weekend sank 11% according to the NRF and The Wall Street Journal.1 We shopped at Best Buy on Thanksgiving evening – bravely believing we would be putting our lives at risk with the thought of hordes rushing the store. As it turns out, we arrived to the store 30 minutes after opening to a relatively calm crowd – and even calmly picked up a door buster TV without any altercation or threat of being "tazed" by frantic shoppers. Not too many years ago we would have been trampled!

So what happened? We believe we are witnessing a transformation in the business of holiday. Below are a few "reads" on the season thus far:

1. The early bird gets the worm. Retailers are offering deals earlier. Retailers were offering deals well in advance of Thanksgiving, with promotions, free shipping and price matching of Amazon being several leading indicators. No longer are customers forced to wait until a specific date for the deals to occur or shop a specific channel. Online offers provided a level of convenience for shoppers that didn't necessarily want to camp out in front of their favorite stores.

2. The pie is about the same size. Before we panic and think we are in store for a rough holiday season, we need to look at the numbers. According to Shoppertrak,2 Thanksgiving Day and Black Friday sales have amounted to the following since 2011:

  1. 2014: $12.29b
  2. 2013: $12.35b
  3. 2012: $12.04b
  4. 2011: $11.92b

It is obvious we are merely seeing a shift in the pie, not a dramatic reduction or increase over the Thursday/Friday of selling. Sales are simply moving into the holiday of Thanksgiving, if not even earlier into the month. If you can get great deals the week before Thanksgiving and actually not have to rush out in the wee hours after enjoying a turkey dinner – why not? It did seem a little calmer this year. And for all those lamenting about stores opening on Thanksgiving Day – we agree it does take away from the sanctity of the holiday, but as long as the customer is willing to show up, we will see more of this in years to come.

3. The customer knows what she wants. The other obvious trend this year that will impact sales is the rise of the "purposeful shopper." She has shopped online first and "web-roomed" by reading product reviews, learning about the product and finding the best price – and she stays focused on that shopping mission. Not that impulse or pick-up shopping will disappear, but the rise of the online channel has encouraged shoppers to do their research first, prior to coming in store.

If Black Friday is being diluted, now what? Is it going away? Not at all, but be on the lookout for shopping and promotional intensity to be at its peak the weekend of December 20th. As we've said before, this is another short shopping season and retailers will be pulling out all the stops during that weekend to ensure they clear inventories before January. Thus, save a little of your budget for that big weekend – you're bound to find some bargains!

[1] "Black Friday" Fades as Weekend Retail Sales Sink, The Wall Street Journal, November 30, 2014
[2] "Black Friday Weekend 2014 Store Visits and Sales Update," Shoppertrak,  

Dwight D. Hill, whose background includes leadership roles with Neiman Marcus and Deloitte LLP, is Partner, McMillan Doolittle LLP. Dwight can be reached at

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Tags:  e-commerce  Holiday 2014  Omni-Channel 

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Digital Innovations Being Unwrapped for Holiday 2014

Posted By Administration, Thursday, November 13, 2014
Updated: Tuesday, November 11, 2014

by Dwight D. Hill, McMillan Doolittle LLP

Another holiday season is upon us and seemingly for weeks now we have been seeing early hints of the season ahead with some retailers installing Christmas decorations, inventories are piling up, and some advertisements are shouting early "Black Friday" pricing.

The cottage industry of holiday sales predictions is also alive and well with sales estimates ranging from +4-5% depending on the source. Whether sales will grow at that healthy estimate is anyone's guess, but one thing is certain – retailers will be pulling out all the stops to grab their fair share of the consumer's wallet. In fact, some are launching innovative cross channel technologies to make it even easier for you to select the "checkout" button.

  1. Neiman Marcus: See Something You Like? Snap a Pic and You'll Find Something Similar at NM! NM has just launched an innovative tool within their iPhone app called Snap.Find.Shop. Wherever you are, if you see an item that you like (imagine a pair of shoes walking by) – simply snap a picture within the app and the photo recognition technology will search for similar items within Neiman's inventory, presenting them to you as options for purchase. How's that for a way to generate more loyalty!
  2. Kate Spade Saturday: Opening Pop Up "Vending Machines." Kate Spade Saturday has partnered with eBay to open up "vending machines" that offer a limited selection of apparel and accessories. In the Manhattan pilot market, customers can walk up to the "shop," make a selection, and their purchases will be delivered to any location of their choosing within one hour. An innovative way to grab a pick-up item while you're on the go!
  3. "Webrooming:" No Longer a Bad Thing? Webrooming, or the process of researching online and then picking up in store, has become a reality that retailers are now facing head-on. In store pick-up is quickly becoming a foundational principle within retail, allowing the customer to shop on her terms, when and how she desires. Inventory visibility is an obvious tie-in that must be in place to enable this process. Just a few of the retailers adopting this strategy include Macy's, Banana Republic, and The Gap. Once in store, customers, of course, are enticed by promotions and other fresh products that may just be too hard to resist, thus building a larger basket!

While cross channel innovations and digital technologies are advancing at a dizzying pace, one thing is certain – savvy retailers are focusing less on the technology simply for technology's sake, and more on how these tools can simplify and enable a better customer experience. Happy shopping this holiday season!

Dwight D. Hill, whose background includes leadership roles with Neiman Marcus and Deloitte LLP, is Partner, McMillan Doolittle LLP. Dwight can be reached at

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Tags:  Holiday 2014  Omni-Channel 

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Holiday 2014: Another Wild Ride Up Ahead!

Posted By Administration, Thursday, October 9, 2014
Updated: Wednesday, October 8, 2014

by Dwight D. Hill, McMillan Doolittle LLP

The holidays are rapidly approaching, the Christmas trim boutiques have been up for weeks, and the cottage industry of holiday sales predictions is well in gear. Numbers this year are coming in at +4-5% depending on your source – certainly optimistic compared to last year. Will this holiday season be frightful or delightful for retailers? It's anyone's guess, but I offer a list of facts retailers need to be aware of going into Holiday 2014.

1. Get the turkey on the table early. Better start planning Thanksgiving "lunch" versus "dinner" going forward – if you aren't already planning to open your stores on Thanksgiving Day, you soon will be. While many naysayers will trumpet the sanctity of the holiday has been lost, the shopper has proven over the past two years they have no problem spending Thanksgiving evening on a mad dash for deals. We all know the retail institutions of "Black Friday" and "Cyber Monday" are rapidly vanishing into an endless caldron of promotions that blur the entire holiday season. Yet shoppers enjoy the thrill of this kick-start to the holiday season. Thus, the Thanksgiving afternoon/evening openings are here to stay and the number of retailers participating will continue to grow.

2. We're in for another short holiday season. Holiday 2013 was one of the shortest on record, at least since 2002 with 26 shopping days between Thanksgiving and Christmas. To make matters worse, Mother Nature provided her own gift in the form of two major winter storms that socked in much of the Midwest and Northeast during two key shopping weekends. As a result, retailers panicked and it turned out to be one of the most promotional on record – shoppers were treated to 30%, 40%, or even 50% off their entire purchases during the last 12 or so shopping days before Christmas – not to mention clearance events that were moved up into the holiday period. It was the shopper's paradise!

Now, another holiday season is upon us and, in case you've not checked your calendar, we're in for a repeat – this year there are 27 days between Thanksgiving and Christmas, giving retailers only one more day! Thus, we are likely in for another wild ride as retailers attempt to grab as much of the shopper's wallet as possible through an almost never-ending sea of promotions.

3. The evolution of the store will continue – and likely be more pronounced over the holidays. Store traffic declined as the e-commerce growth continued over Holiday 2013, yet shoppers tell us they still like to visit malls and stores – especially the millennial. In addition, the mobile device continues to be the shopping tool of choice as shoppers seek out product and pricing information, store locations, and comparison shop. The takeaway? Make sure your mobile customer experience is one of simplicity and ease. Your customer will convert more frequently if the shopping experience is convenient for them versus complicated and confusing.

Will we see the positive sales increases the retail sages are predicting? It's anyone's guess, but as long as the consumer feels increasingly confident, this season certainly promises to be an interesting ride!

Dwight D. Hill, whose background includes leadership roles with Neiman Marcus and Deloitte LLP, is Partner, McMillan Doolittle LLP. Dwight can be reached at

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Tags:  e-commerce  Holiday 2014  Omni-Channel 

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