Industry News - July 16th 2010
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RETAIL AND TECHNOLOGY NEWS
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Starbucks Brews Up Free One-Click Wi-Fi
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Starbucks customers will no longer have to gulp down their venti mocha cappuccino to avoid timing out of their Web surfing session, at least in company-operated stores in the U.S. and Canada. The retailer now offers unlimited Internet access for Wi-Fi enabled devices including laptops, tables and mobile phones, accessible via one click with no user name or password requirement. Most recently, the free Wi-Fi was limited to two hours per day and only available to members of the My Starbucks Rewards program.
“Our customers were asking for a simplified Wi-Fi offering, and free Wi-Fi has been a top request on MyStarbucksIdea.com," said Howard Schultz, chairman, president and CEO of Starbucks. “We're excited to turn this feedback into action and believe our customers will be delighted with the enhanced experience they'll find in Starbucks stores."
Later this fall, Starbucks plans to introduce the Starbucks Digital Network in partnership with Yahoo! This online service will offer customers in U.S. company-operated stores free, unrestricted access to a group of paid sites and services, as well as exclusive content and previews, free downloads and local community news.
Starbucks will continue to work with AT&T in the U.S. as its Wi-Fi provider, a relationship that has been in place since 2008. Nearly 6,800 Starbucks locations are part of AT&T's U.S. Wi-Fi network, the nation's largest. In Canada, more than 750 company-operated stores offer free Wi-Fi through Bell, which has worked with Starbucks since 2005..
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JCPenney Taps into Power of Teens’ User-Generated Videos
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"Haul" videos that feature teens showing off their most recent purchases, their haul from the mall, have become a YouTube phenomenon, with more than 159,000 such videos posted on the social media site. Now JCPenney will turn a handful of these videos into a core component of its back-to-school marketing.
Penney joins other teen-oriented retailers, including Forever 21 and American Eagle, in exploring the use of haul videos to stake their claim to the estimated $50 billion back-to-school market, according to a report in USA Today.
Under Federal Trade Commission guidelines, the subjects of the haul videos must disclose in the video if they got free products or other types of compensation from retailers.
JCPenney has a deal with six teen girls to create back-to-school haul videos. Each girl was provided with gift cards worth $250 to $1,000; some were given free transportation and lodging to shop near JCPenney's headquarters in Plano, TX. The videos are scheduled to start this week at jcp.com/teen.
American Eagle posts messages on its Facebook page that encourage customers to check out haul videos about the retailer or to post their own. Forever 21 is in discussions with two popular "haulers," although nothing has been solidified, according to the published report.
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Contextual Advertising Replaces Print for Home Depot, CVS, Sears
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In a move that will save retailers millions of dollars and help avoid producing millions of pounds of paper waste, promotion-driven retailers are switching from local print circulars to contextual advertising and marketing solutions.
One of the leaders in this important new promotional area is ShopLocal, which recently signed a joint partnership with Vibrant to deliver contextual advertising solutions and next-generation hyperlinks.
ShopLocal distributes local marketing promotions in interactive digital formats for such retailers as Target, Best buy, Home Depot, CVS, Albertson's and Sears. Its Web site delivers more than 420 million visits and 6.5 billion page views annually.
These numbers will be added to Vibrant's network of 4,500 premium Web sites and 170 million consumers.
"By combining the effectiveness of contextual keyword targeting with the power of display, Vibrant is the perfect vehicle for ShopLocal to extend local offers and deals to consumers," says Doug Stevenson, co-founder and CEO of Vibrant.
"We are thrilled to partner with Vibrant to deliver highly targeted, local shopper deals to online consumers based on their interest and location," says Vikram Sharma, CEO of ShopLocal.
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Urban Areas are Newest Markets for Big Box Retailers
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The nation's cities are the new growth area for big-box retailers, including two of the largest, Walmart and Target. The latter company is exploring opening its first store in San Francisco, and on the East Coast will be opening its first store in Manhattan later this month. Target already has stores in the outer boroughs of New York City, but its East Harlem store will be its first on Manhattan island.
In San Francisco, Target has scheduled a community meeting for July 21 to discuss the proposed location for its first store in the city, according to a report published in the San Francisco Chronicle. The meeting is the first step required to obtain permission to open a retail outlet under the city's strict rules regulating chain stores.
Less than one year ago, the San Francisco Planning Commission approved a proposal for retailers Marshalls and Home Goods to occupy vacant space in a struggling shopping center in the Richmond District near Laurel Heights, but the companies never followed through. While that approval might seem to be a positive sign for Target, San Francisco has a reputation as being less than welcoming to chain stores.
Target has considered locations in San Francisco for several years, according to the article. The company already operates numerous stores in the Bay Area, and it has acquired sites in Oakland and San Jose for stores that may open as soon as 2011.
In Chicago, the City Council's recent unanimous vote approving a zoning change clears the way for the construction of the city's second Walmart store, to be located on the Far South Side. The vote came after a multi-year battle with Walmart, Chicago Mayor Richard Daley and the Chicagoland Chamber of Commerce facing off against unions, labor-backed aldermen and social activists. To win approval from opposing groups, Walmart agreed that the Chicago stores will be union-built, and that entry-level wages would be $8.75 per hour, 50 cents above Illinois' minimum wage, according to a report in Chain Store Age.
Several days prior to the July 1 city council vote, Walmart said it was planning several dozen stores in Chicago that would add 12,000 jobs over five years and more than $500 million in sales and property taxes, according to the company's own estimates..
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Two Chains Shutter Stores, Add to 2010 List of Store Closings
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Less than a year after launching its PH8 retailing concept, which offered playful, fashion-forward women's apparel, Bebe Stores will close or convert its 48 PH8 stores at an estimated cost of $17 million. Bebe wants to focus its efforts on improving Bebe sales and profitability as well as continuing to develop its 2b bebe concept, which features outlet-style stores offering affordable contemporary fashions. Some of the PH8 stores may be converted to 2b bebe stores.
The Eres division of Chanel is also closing its U.S. retail locations, which offer high-end swimwear and lingerie. The brand will vacate its 900-square-foot store on Manhattan's Madison Avenue in mid-September, following the closing of its SoHo location earlier this year, according to published reports. Two additional boutiques located in Palm Beach and Beverly Hills will be closed between August and October 2010.
Luxury retailing has been having a difficult time in brick-and-mortar locations. Last month, watch company Movado announced it was closing its 27 U.S. retail stores, citing retail division losses that averaged $10 million per year.
Bebe Stores made its decision based on an approximate after-tax loss of $10 million during fiscal 2010. Bebe will begin to close or convert the PH8 stores during the first fiscal quarter of 2011, which began on July 5, 2010, and the company believes all 48 stores will be closed or converted during fiscal 2011.
The PH8 division is not the company's only trouble spot. Bebe recently released its fiscal 2010 results, reporting sales of $481.7 million, compared to $580.3 million for its 2009 fiscal year, a 17% decrease. Comparable store sales decreased 17.1% during the 2010 fiscal year compared to the previous year. The company operates a total of 297 stores in the U.S., U.S. Virgin Islands, Puerto Rico and Canada.
ParTech Expands via Global ISV Program
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ParTech, Inc. (PAR) announced its new global independent software vendor (ISV) program designed to offer customers an expanded portfolio of solutions that increase sales, reduce costs and simplify support. The PAR ISV Program's founding members include Agilysys, Bally Technologies, Inc., CAP Software, Gateway Ticketing Systems, Jesta I.S., Titan Technology Group, Torex, and Vista Entertainment Solutions. ParTech, Inc. is a wholly owned subsidiary of PAR Technology Corporation. The goal of the PAR ISV Program is to develop long-term relationships with select ISVs to drive incremental business, while providing the best possible solutions to meet customer needs across multiple industries including: hospitality, retail, education and healthcare. The ISV program, and its ISV members, is an important element of the PAR EverServ Ecosystem because it provides customers a broader choice of solutions for their dynamic business challenges. "Our new global ISV program will benefit our joint customers, ISV partners and PAR," said Mark Bunney, Director Strategic Alliances, ParTech. "Partnering with ISVs to expand our offering enables PAR to provide customers integrated and supported solutions to address their evolving business needs. ISVs will benefit with incremental business from PAR's strong customer relationships, channel partners and investment in the ISV relationship. The ISV program will enable PAR to expand its presence in many market segments. An excellent example is PAR's new EverServ 6000 LP (low profile) terminal which is a perfect fit for retailers who want the ultimate in customer-friendly service environments."
"As a member of the PAR ISV program, our strengthened relationship with PAR will support mutual customers with enhanced solutions in the quick service restaurant (QSR) and retail markets in the US," said Paul Daly, Vice President Americas Channel, Torex. "The PAR ISV program is a great way to identify new mutual customer opportunities and drive increased business for both companies."
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