Merchants

Learning From Toys R Us Failure

April 2, 2018 By Twila Van Leer

Toys R Us Closing — Toys R Us announced that it will close or sell more than 700 stores across the country.

Well, Toys Rn’t Us any more. The company’s announcement that it will close or sell more than 700 stores across the country is a commentary on today’s American shopping habits and how retailers are coping – or not.

The toy giant, one of Santa’s favorite outlets, just hasn’t been able to compete with online buying. Its more than 30,000 employees are joining the ranks of the unemployed.

Because Toys R Us filled such a special niche in the market, many families are watching its demise with heavy hearts. Buying toys, they say, is different. They and their kiddies want to touch and test out the products before buying. The end of the toy store will mean the end of a special experience for the children who were treated to regular trips to see the goodies. But the likelihood is that most of these families will join the march to online shopping.

But in the retail market, where survival of the fittest rules, the Toys R Us closing will have its effect on other major outlets.

The companies that make toys and games are likely to feel the difference. Toys R Us has served as a test ground or “incubator” for new toys. Hasbro and Mattel, who have stood at the apex of toy-making for years, will feel the pinch and then likely increase their use of major retailers such as Walmart, Target and Amazon. Toys R Us has accounted for 11 percent of Mattel sales in recent years, and about 9 percent for Hasbro’s sales.

Experts in the toy market predict that smaller toy companies will have a hard time because Toys R Us accounted for up to 40 percent of their sales, in some instances. The Walmart and Target stores have less space to display toys and may offer fewer of the toys produced by the smaller companies. Hasbro and Mattel may look at creating smaller toys to survive in the new marketing schemes.

The large malls where the toy company has tended to settle its stores will find themselves with big blanks to fill. Some of them have watched the Toys R Us struggle and have been looking for new tenants already.

Not everyone is assuming that Toys R Us is down for the count. Some retailers that appeared dead have created new incarnations for themselves. Consider American Apparel, which declared bankruptcy and closed its stores last year. It was revived by another company and is enjoying a second life as an online-only clothing store.

Jeffery, Toys R Us’ long-necked giraffe spokes-animal, could find new ways to sell his wares. There will always be a market for toys.

Holiday Sales Grow From 2016

December 30, 2017 By Twila Van Leer

The 2017 holiday shopping season appears to be a very good one for America’s retailers, many of whom have not had much reason in recent years to be merry. The successful end-of-the-year selling shows that traditional retailers are adapting to the shift to online buying.

The tax overhaul recently passed by Congress could signal more shifts in shopping as ordinary Americans figure out how the changes might affect them and their ability to spend. If they are in the brackets that might benefit from the tax re-do, they might spend more. Or they might put the “savings” into savings.

As the year wound down, it appeared that the 2017 holiday season would stack up very well against previous years. One factor is that unemployment is at a 17-year low, contributing to the highest level of consumer optimism in years. The current spending spree is the most intense since the recession that is now about 10 years in the past.

Consumers are not only spending more this year, but they are putting more of their money into electronics, clothing and toys to a greater extent, according to the National Retail Federation. The federation noted with elation that the week before Christmas, the most critical time for retailers, saw a lot of traffic in stores. Many retailers see 20 percent of their foot traffic during that week. The fact that there was a full weekend immediately before Christmas also boded well for the industry, as late shoppers continued to flood the stores in search of last-minute gifts and stocking stuffers.

Most online shoppers have completed their buying before the last week to allow time for deliveries. They then are more likely to show up in the stores, bypassing the convenience of online shopping for the assurance that their gifts will be on time. Even so, the numbers of shoppers buying online continues to grow. Now, the growth in online sales is about double that level at stores, according to First Data, a payment technology firm. Online giant Amazon accounts for a considerable amount of the growth. Amazon has expanded into new areas, putting more categories of retailers on alert. The firm reported that its Cyber Monday sales tallied the highest in its history. Estimates are that Amazon accounted for more than 60 percent of the total sales for that day.

Some families have begun exchanging “wish lists” before the holidays, consisting of many web links. The shopping then becomes easier and the satisfaction with gifts more consistent.

Stores are responding to the online onslaught by offering more weekend deals and upping their loyalty programs.

Beauty Products Great Christmas Gifts

November 18, 2017 By Twila Van Leer

Beauty Products Christmas Gifts — Beauty products have been at the top of the gift lists for many women each Christmas

Traditionally, beauty products have been at the top of the gift lists for many women each Christmas and the merchants who deal in such items are doing what they can to make the gift-buying easier. Some stores, including Walmart and Target, are rearranging their displays and adding less expensive niche brands to their selections.

Korean-produced beauty products are being featured in some discount and drug chains. Glow Studio, created by the online Korean retailer Glow Recipe, is one of them. Ulta, whose whole product line is beauty goods, has gone to pains to offer products in a wide range of prices and features brow bars at some locations. Online merchants such as Colourpop and Glambot, feature high-end brands at lower prices.

With all that availability, there are some suggestions you might want to take shopping for beauty products. Here are five, compiled by BeautyStat.com.

First, know what you have to spend and decide how far you can make it go. If you choose to make a $100 expenditure for a high-end face cream, consider how it will be replaced in the future. Some stores, including Walgreen’s, share weekly circulars that include coupons that can cut the outlay. Aim for Black Friday for even better deals. J.C. Penney, which features Sephora displays in its 600 stores, doesn’t wait for the holidays. It has its products half off every Thursday.

Shop online. Use your phone to compare prices while you shop and read reviews on beauty products ahead of time. Check out eBay and Overstock.com. Glambot will trade your new but unloved products for cash.

Follow the bloggers, who keep current on product trends. They often can provide information on drug store deals on beauty products.

Take advantage of merchants’ offers to test the products before buying. Some have concierge services that allow customers to get first-hand information about such things as color-matching. Target has such services in 75 of its outlets. There also are subscription sites such as Birchbox that allows you to test five samples tailored to y our skin, hair and style. Subscriptions range from $10 a month to $100 for a year.

Sign up for loyalty programs. Sephora and Ulta have reward programs that offer points on purchases. If you spend $400 in a year, you qualify for Ulta Platinum, which gives you 1.25 points for each dollar you spend. The points can be used in conjunction with couples and other discount offers. Be aware that at Sephora, your loyalty points expire if you haven’t purchased for 18 months or more.

With such smart shopping, you can look forward to putting your best face on the holidays and sharing the same with those on your gift list.

Fraud And Liability Charges For Merchants

July 21, 2015 By Twila Van Leer

EMV credit cards are being accepted at over 78,000 merchants.

More and more credit and debit cards containing fraud-busting chips are showing up at the point of purchase. Creditcard.com reports 78,800 merchants have installed EMV technology. That’s good news for most individuals, but have become a source of concern for small businesses that can ill afford the equipment needed to handle the new cards.

Banks and credit card companies hail the advanced technology as a way to sharply reduce fraud opportunities. They are distributing the cards and phasing out magnetic strip cards that are easier targets for thieves. But the cost of refitting to accommodate the new chip cards is hurting small businesses. The cost can range from the low hundreds to tens of thousands of dollars, depending on the required equipment. Merchants who don’t have the EMV processing equipment and then have a fraud issue could face a charge-back so big, it could put them out of business.

The retailers are under notice that they must make the transition by Oct. 1, 2015 when the magnetic strip cards will be phased out. If they don’t comply, the credit card giants, such as MasterCard, Visa and American Express will make them liable for transactions made with phony chip cards.

The small companies have a double whammy. They don’t have the volume of business to underwrite the costs of new equipment and they don’t qualify for the discounts that those who sell the equipment offer to larger businesses.

A consumer sees only a small part of the payment processing system. Software in the merchant’s computer only receives the transaction information. It then goes to a processor, which posts a charge or debit to the cardholder’s account and a credit to the merchant’s account.

Even the simplest card readers used in stores and other small businesses cost at least $100. At the outset, the readers also will be able to read magnetic strips and/or handle so-called contactless payments made with services such as Apple Pay or Google Wallet and other electronic wallet applications. More complex reading systems will run into the thousands. They manage inventory and customer/vendor information. Restaurants and businesses with multiple locations are likely to have the most complex systems and so the highest expenses.

Besides the costs of reading equipment, many small businesses will have to hire the expertise needed to accommodate the upgraded technology. Such experts charge $100 an hour or more to install systems and ensure that they work.

But with the growing concerns for the amount of fraud that has beleaguered retailers and their customers, the handwriting is on the wall. The expectation that the chip-embedded cards will make inroads into the problem will likely trump any other concerns. Small businesses will have to make the leap, regardless of the cost.