Transcription
Retail’s Radical Transformation/Real OpportunitiesBeyond the “Retail Apocalypse” to a Bright FutureAuthorsLee HolmanGreg BuzekAugust, 2018
Thank You to our Title Sponsor
CONTENTS4681014151727
IntroductionCopyright 2018 IHL Group – All Rights Reserved4
Some DefinitionsCopyright 2018 IHL Group – All Rights Reserved5
RetailRealitiesBUSINESSMARKETINGPRESENTATION SLIDES
First Things First - Why the Negative Press? o oooo o ooooCopyright 2018 IHL Group – All Rights Reserved7
The Real Story - 2017 Year EndoooooooSources: IHL, Retail CensusCopyright 2018 IHL Group – All Rights Reserved8
2018 Year So Far – Through JulySources: IHL, Retail Census, Company ReportsCopyright 2018 IHL Group – All Rights Reserved9
Cheap Money and Overstored Figure 2 – Retail Square Footage – Global ComparisonsooSource – Cowan ResearchFigure 1 – Historical Fed Rates ooooSource – Federal Reserve – Board of Governors'Copyright 2018 IHL Group – All Rights Reserved10
Fast Fashion and Beauty oooo ooooCopyright 2018 IHL Group – All Rights Reserved11
Haves and Have NotsFigure 3 – Household Income by Quintile ooooooooSources: BLS, Census Bureau Historical Income Tables H1/H3ooooo oooooCopyright 2018 IHL Group – All Rights Reserved12
Shrinking Middle ClassFigure 4 – The Middle Class is ShrinkingFigure 5 – Share of US Income held by the Middle Class has PlungedSource: Pew Research Center oooooCopyright 2018 IHL Group – All Rights Reserved13
Stores Will Still Matter In Online Sales ooooCopyright 2018 IHL Group – All Rights Reserved14
ESENTATION SLIDES
The Real Story ooooooooooooooooCopyright 2018 IHL Group – All Rights Reserved16
2018 Enterprise Retail MarketSegmentSupermarketsDrug StoresMass Merchants/Superstores/ WH ClubsDepartment StoresSpecialty HardgoodsSpecialty SoftgoodsConvenience StoresRestaurants oNet StoreGrowth 3,835NetStores Opening438-8001,490-348575-9091,5661,823Source: IHL Group, Company Reports ooCopyright 2018 IHL Group – All Rights Reserved17
Why Retail Food Service?How US Census on Retail Trade reports numbersHow vendors organize to sell to retail/hospitalityCore RetailFDCMGMSRestaurantsTotal2017Net Opens 558 3,115-2,557 1,787 2,3542018Net Opens 2,012NetIncrease of6,189stores inlast twoyears 2,694- 682 1,823 3,835.Source: IHL Group, Company ReportsCopyright 2018 IHL Group – All Rights Reserved18
FDCM Opening vs Closing StoresFor each companyclosing stores,3.7are opening storesSource: IHL Group, Company Reports ooCopyright 2018 IHL Group – All Rights Reserved19
GMS Opening vs Closing StoresFor each companyclosing stores1.5are opening storesSource: IHL Group, Company Reports oooooCopyright 2018 IHL Group – All Rights Reserved20
Restaurants Opening vs Closing StoresFor each companyclosing stores3.3are opening storesSource: IHL Group, Company Reports oooooCopyright 2018 IHL Group – All Rights Reserved21
Banners Opening vs Closing StoresAll segments butDepartment Stores havea ratio 1.0 of companiesopening vs closingSource: IHL Group, Company Reports1.0 is breakeven number of opening vs closing o ooCopyright 2018 IHL Group – All Rights Reserved22
Retail Store Count GrowthSource: IHL Group, Company Reports ooooCopyright 2018 IHL Group – All Rights Reserved23
Retail Store Count Decline16 RetailersRepresent66%of Retail ClosingsSource: IHL Group, Company Reports oooCopyright 2018 IHL Group – All Rights Reserved24
Restaurant Store Count GrowthSource: IHL Group, Company Reports o oooCopyright 2018 IHL Group – All Rights Reserved25
Restaurant Store Count Decline16 RestaurantsRepresent74%of ClosingsSource: IHL Group, Company Reports oooCopyright 2018 IHL Group – All Rights Reserved26
FDCM SegmentsNet Stores Opening or ClosingSources: US Census on Retail Trade, IHL Group, Company ReportsCopyright 2018 IHL Group – All Rights Reserved27
GMS SegmentsNet Stores Opening or ClosingSources: US Census on Retail Trade, IHL Group, Company ReportsCopyright 2018 IHL Group – All Rights Reserved28
Restaurant SegmentsNet Stores Opening or ClosingSources: US Census on Retail Trade, IHL Group, Company ReportsCopyright 2018 IHL Group – All Rights Reserved29
BUSINESSMARKETINGPRESENTATION SLIDES
Two Things Stores Must Fix ooFigure 7 – % of US households that are Amazon Prime Memberso ooIHL Study – Out of Stock, Out of Luck – June 2018ooCopyright 2018 IHL Group – All Rights Reserved31
Online Shopping Growth oIHL Study – Out of Stock, Out of Luck – June 2018Copyright 2018 IHL Group – All Rights Reserved32
Why Do Customers Shop at Stores1. Customers Want It Now Fast Checkout In-stock on what they want to buy2. Want To Touch And Feel Experience the product Questions about the product/expertiseIf you miss on first two items you missPERIODIHL Study – Out of Stock, Out of Luck – June 20183. Don’t Want To Pay Delivery Charge4. Want To Support Local5. ConvenienceCopyright 2018 IHL Group – All Rights Reserved33
What They Do When Encounter OOSNon-PrimeHave them check other stores or OnlineGo to another store same retailerAmazon Prime15.0%14.0%19.0%17.0%29.0%Buy at competitor storeAmazon or OnlineDo not buy at all23.0%17.0%29.0%20.0%16.0%IHL Study – Out of Stock, Out of Luck – June 2018 ooCopyright 2018 IHL Group – All Rights Reserved34
Driving Customers to AmazonIHL Study – Out of Stock, Out of Luck – June 2018Copyright 2018 IHL Group – All Rights Reserved35
Bottom LineRetailers are losing3.4% of Same Store Salesdue toOUT-OF-STOCKSIHL Study – Out of Stock, Out of Luck – June 2018Copyright 2018 IHL Group – All Rights Reserved36
MethodologyBUSINESSMARKETINGPRESENTATION SLIDES
How We Got HereCopyright 2018 IHL Group – All Rights Reserved38
IHL Group Enterprise Licenseand Fair Use AgreementCopyright 2018 IHL Group – All Rights Reserved39
Thank You
Retail’s Radical Transformation/Real Opportunities Beyond the “Retail Apocalypse” to a
