Get the latest retail news straight to your inbox

    Don’t go searching for insights in the retail space, we deliver them direct.
    The week's most important retail news, delivered to your inbox every Friday.
16
Oct-18
Tuesday

Tech stocks take a hit in ASX slump

197
The AFR reported that the share market has been undergoing a correction in relation to technology stocks. It mentioned Afterpay, which saw its share value decline around 30%. The adjustments in ASX follow a near-correction by the Nasdaq Composite Index last week, the home of the FAANG stocks Facebook, Amazon, Apple, Netflix and Google. From its record high two months ago to last week's lows, the tech-heavy index fell more than 9%.

Adyen teams up with Gap Inc.

205
WWD reported that Gap Inc. has teamed with unified payments provider Adyen, to install the company’s technology in more than 150 stores in Europe. Adyen commented that its payments platform will enable Gap and Banana Republic to provide a consistent experience across its markets. Retail Directions powers both the Gap and Banana Republic stores in Thailand; we work with Adyen on making its payments technology available to our clients worldwide.

Two stories about US retail sales figures

192
Mainstream media continues to demonstrate its lack of understanding about the retail industry. Reuters reported that “US retail sales increased modestly” because “retail sales edged up 0.1% last month”.  In reality, US retail sales are absolutely booming, at 4.7% up  compared to September last year.  This is against the background of low inflation and full employment, and despite interest rate hikes. We wonder whether the US economy is showing signs of overheating?
15
Oct-18
Monday

One third of households to adopt 5G for their internet

206
The AFR reported that new research found that one in three Australian households are interested in subscribing to 5G wireless services for their home internet connection. The finding further threatens the already troubled NBN - the fixed-line network has been plagued with endless rollout and performance issues. 5G is capable of speeds up to 20Gbps, which is much faster than the 100 Mbps most NBN customers are limited to. We called out this situation back in 2015 in an article about how misguided the NBN is as a national technology initiative.

Aldi calls out supermarket loyalty schemes

235
News.com.au reported that Aldi has hit out at Woolworths and Coles in a new campaign, calling their loyalty programs ‘schemes’ that benefit shareholders, not shoppers. Aldi's view is that supermarket loyalty programs “manipulate” shoppers potentially costing Australians up to $1500 each a year as they desperately try to accrue enough points for a toaster while forgoing actual savings at the checkout. But Woolworths and Coles have said Aldi’s calculations aren’t a true reflection of how customers accrue points and rewards can be earned far quicker. However, a lecturer in Psychology at the University of Tasmania said loyalty programs can make people “less rational” with their shopping. You don't have to be a professor to know that both Woolworths' loyalty scheme and Coles' wingless Flybuys are pretty much gimmicks. BTW: Aldi doesn’t have any loyalty programs and each location it opens takes customers away from Coles.
12
Oct-18
Friday

Advertisers ditch Google for Amazon

226
CNBC reported that advertisers are increasingly ditching Google and putting their search budgets into Amazon ads instead. It’s not just a handful of companies, according to execs at multiple agencies, the moves, so far, have amounted to hundreds of millions of dollars. Amazon is making huge headway in the advertising game, becoming the 3rd largest US digital advertising platform behind Google and Facebook. It also doesn’t hurt that around 49% of product searches begin on Amazon, meaning that Google is becoming an unnecessary middleman.

Walmart patents biometric shopping handles

394
CB Insights reported that Walmart aims to use biometric shopping handles to track customers' heart rates, temperatures, and stress levels. The company’s recently published a patent application titled “System And Method For A Biometric Feedback Cart Handle”, which aims to equip shopping cart handles with the ability to gather biometric data to determine when customers might need help. The system would continuously monitor these metrics throughout the customer’s time in the store, measuring them against the baseline. The retail giant says the data would be used to help identify shoppers in distress and to improve their overall shopping experience, without collecting personal data.

Amazon shelves sexist AI recruitment tool

223
The UK Daily Telegraph reported that Amazon has ditched a "sexist" internal tool that used artificial intelligence to sort through job applications. Created in 2014, the program was used to sort through submitted resumes and pick out the most promising candidates. However, it taught itself to prefer male candidates over female ones, repeatedly penalising resumes that included the word "women's". The problem stemmed from the fact that the system was trained by people over a 10-year period, most of which came from men. In fact, the danger of inherent bias in the use of algorithms is a common problem in the technology industry. This stems from the fact that artificial intelligence doesn't exist, what we deal with is actually artificial instinct - machines equipped with pattern-based learning, which gives the Appearance of Intelligence. You can read more about Artificial Instinct here.
11
Oct-18
Thursday

Will Baby Bunting get the last laugh?

229
Multiple media outlets reported that Baby Bunting looks poised to shine in the children's retail space now that the clearance sales of its market-exiting competitors are over. In a Morgan’s Conference presentation to shareholders earlier today, Baby Bunting said that  FY19 EBITDA is expected to be in the range of $24 million to $27 million, representing growth of between 30% and 45% – the guidance assumes the opening of six new stores during FY19, as planned. Baby Bunting plans to build a network of more than 80 stores, with just 49 at present there is a long way to go, but its online strategy seems to be in line with its bricks and mortar growth to drive customer interaction.

PM confident that company tax cut laws will get across the line

235
Australia Associated Press reported that Prime Minister Scott Morrison has expressed confidence that his government can pass laws next week to bring forward tax cuts for small and medium-sized businesses by five years at a cost of about $3 billion. Under the plan, companies with annual turnovers of less than $50 million will have their tax rate cut to 26 per cent in 2020/21, then 25 per cent the following year. The cuts build on last year’s reduction to 27.5 per cent for the same business groups, from 30 per cent.

Secret Amazon brands put the squeeze on 3rd-party products

250
The Hustle reported on Amazon’s private label business, which after quiet growth is on track to hit US$25 billion by 2022. Amazon sells 70+ in-house brands with names like “Lark & Ro” and “Arabella” that are nearly indistinguishable from 3rd-party products, often advertising private label products below competitors’ products. Its private label strategy aims at slowly reducing its reliance on 3rd-party sellers and increasing its profit margins. The company has also launched an “Amazon Accelerator Program” to develop even more private label brands. This is what invariably happens when a large retailer starts dominating its market segment – ‘home brands’ begin to sneak into the mix, to the detriment of the normal suppliers who helped the retailer grow in the first place.
10
Oct-18
Wednesday

The end of Sears?

440
Fox Business News reported that iconic American department store chain, Sears is spiraling downward and fast. Sears stock lost 90% of its value over the past 12-months, now trading below US$1.00. This week reports surfaced that the retailer may close 11 more stores across the US, including one of chain’s most profitable US stores, which according to retail experts could drive Sears out of business. The company has already closed hundreds of stores and sold off assets in recent years. The article goes on to say that while some of the issues at Sears are unique to the company, the broader retail landscape is suffering as competition from the likes of Amazon gets even tougher. We don't buy this point of view, retailers who have adapted to provide a holistic Digital Path to Purchase focused on all sales, not just online, are thriving - e.g. Nordstrom.