Target announced flexible payment options before the holiday season that let eligible shoppers pay on different delayed schedules. The retailer partnered with buy-now, pay-later financial firms Sezzle and Affirm that offer a range of payment options, timelines and services for approved customers who apply for the programs, it said Wednesday. For online purchases over $100, Affirm has a monthly payment program that customers can choose at checkout, at a set amount, on a schedule that works for them, with no hidden or late fees, Target said. Sezzle, a 2019 graduate of Target’s Accelerator program, splits payments into four, interest-free payments over six weeks, with no fees if payments are made on time. Customers use a virtual Sezzle card at checkout; it also works with Target’s drive-up, order pickup and same-day delivery fulfillment options.
Best Buy took its $199 annual Totaltech membership program nationwide Tuesday, after piloting the service as Best Buy Beta in select markets since April (see 2104070040). The program replaces Total Tech Support, also $199. Members get Geek Squad tech support 24/7 365 days a year on all technology in the home, no matter where it was purchased, and 10% off subscription services billed through Best Buy, said the retailer Tuesday. Member benefits include delivery and standard installation, a 60-day return and exchange window, haul-away on most replacement products and access to dedicated phone and chat teams. Members also get up to 24 months of product protection on most Best Buy purchases during active membership, including AppleCare+, it said.
Electronics and appliance store sales fell 3.1% in August from July, but overall retail surprised analysts with a 0.7% increase amid supply chain disruptions and COVID-19 concerns. Year on year, electronics and appliance sales were up 18% vs. 15.1% for general retail, reported the National Retail Federation Thursday. “Retail sales in August overcame unusual twists and turns that have affected shopping behavior both in terms of the timing and composition of sales,” said NRF Chief Economist Jack Kleinhenz. Consumer shopping behavior remained “rock solid” despite macroeconomic headwinds including the tapering of government stimulus, elevated COVID-19 infections and shortages in labor and goods, Kleinhenz said. August sales were higher “even with a disjointed back-to-school season” as students returned to in-person classes but with some delays until after Labor Day. August results “pave the way for sturdy consumer spending” and a strong Q4, Kleinhenz said. For the first eight months of the year, retail sales grew 15% year on year, which NRF said is consistent with its forecast for 2021, revised in June (see 2106090064), for 10.5%-13.5% growth to $4.44 trillion-$4.56 trillion.
As effects from COVID-19-related government stimulus programs recede, the economy will rely on the labor market to support spending, said the National Retail Federation Wednesday. Supplemental unemployment benefits are coming to an end and most federal stimulus checks have either been spent or set aside in bank accounts, said NRF Chief Economist Jack Kleinhenz. “Consumer spending is currently far above pre-pandemic levels thanks to unprecedented monetary and fiscal policies that have backstopped demand by putting money into wallets,” Kleinhenz said: While consumers remain in the mood to spend, “the labor market and job creation will play an increasing role in their ability to do so.” The number of Americans out of work remains “well above pre-pandemic levels, while the number of initial jobless claims is returning to normal, he said. Most of the uptick in U.S. inflation has been driven by supply chain bottlenecks and low inventory levels, but high labor costs are often “passed on to consumers and are considered a precursor of broader inflation,” Kleinhenz said, saying NRF will monitor market developments to determine if expanded payrolls expected in coming months influence inflationary pressure as wages increase. The spreading delta variant could cause “relatively modest” disruption to retail sales but “not likely enough” for the association to revise its 2021 forecast calling for growth of 10.5%-13.5% vs. 2020. The variant could have a negative impact on restaurants, travel and accommodations, possibly causing a shift back to spending on retail goods after those service sectors saw gains this summer as consumers returned to pre-pandemic activities, he said.
Target’s late August top toys list for the holiday selling season is a “reflection of back-to-school inventory shortages" and "the expectation that people are going to be concerned about holiday inventory availability, especially for toys,” emailed Nikki Baird, Aptos vice president-retail innovation, Monday. Target announced its “most exclusives ever” for the holidays that day and expansion of its Disney store-within-a-store section to 160 stores. Twenty-two of the retailer’s 50-item Bullseye’s Top Toys list are exclusive to Target, it said. Electronics on the list include Nintendo Switch models, plus PlayStation 5 console and Xbox Series S, which were in short supply last holiday season and well into 2021. The news release put the bug into consumers’ ears to shop early; it didn’t mention promotional pricing. Despite this year’s expected product shortages due to supply chain disruptions, Baird believes retailers will still battle hard for wallet share during Q4, but “maybe not as deep as typical because inventory levels will not be as deep. It will be more a question of whether consumers can find what they want.” Walmart, meanwhile, was still in back-to-school season Monday, promoting “free, outdoor or virtual concerts” for teachers and students: Imagine Dragons, Friday, in Las Vegas; Chance the Rapper, Aug. 30, in Chicago; and Kane Brown, Sept. 7 in Fort Oglethorpe, Georgia. Walmart will livestream the Sept. 7 event honoring teachers, offering virtual attendees back-to-school prices and shoppable content.
Supply chain disruptions, delta variant impacts and increased consumer spending for dining, services and travel led to a drop in retail spending in July, reported the National Retail Federation Tuesday. NRF’s sales tally of core retail -- excluding car dealers, gas stations and restaurants -- showed a 1.1% decline from June after a 1.1% increase from May. Year-over-year sales grew 9.5% vs. July 2020, when store sales were affected by COVID-19 closures. Electronics and appliance store sales were up 0.3% month-over-month and 23.4% year on year, it said. NRF Chief Economist Jack Kleinhenz said the American consumer continues to be “resilient” despite recent price increases. “If retailers could find more inventory, they could sell it,” he said. Though consumers are “a bit fearful" about increases in COVID-19 cases due to the delta variant, “they’ve learned to live with the virus and shopping continues.” The variant could have an impact on local markets, “especially where vaccination rates are low, but doesn’t appear likely to show up in the national data,” Kleinhenz said. NRF encouraged vaccination. The shift to spending on services was expected as more of the economy reopened, he said, and Amazon’s move of Prime Day to June may have “siphoned off some sales that normally come in July.” But consumer finances are “in good shape with a cushion from paying off debt and building up savings,” and employment and wages have seen recent increases, he noted. Back-to-school spending has been “solid,” and is expected to spill over into August, he said. The trade group maintained its outlook for the year of 10.5%-13.5% growth over 2020 to $4.44 trillion-$4.56 trillion.
As retailers are struggling to find workers (see 2107230053), Walmart committed nearly $1 billion over the next five years to pay 100% of college tuition and book fees for associates through its Live Better U education program, it said Tuesday. It removed the $1-a-day fee associates previously had to contribute to the tuition program, which launched in 2018. About 1.5 million part- and full-time employees in the U.S. can earn college degrees or learn trade skills “without the burden of education debt,” said the retailer. The LBU program was initially based on research on what drives completion rates among adult working students, Walmart said, which led to the $1 per day approach. “But the economy and job market have changed,” it said. Walmart will add four partners: Johnson & Wales University, the University of Arizona, University of Denver and Pathstream, joining existing institutions Brandman University, Penn Foster, Purdue University Global, Southern New Hampshire University, Wilmington University and Voxy EnGen.
Walmart’s cloud-powered checkout system lets the retailer “stay nimble” and deliver a positive customer experience, blogged Wes Sweet, vice president-global tech. The Cloud Powered Checkout (CPC) system was born from an effort to expedite the checkout experience in Walmart’s garden departments and ended up changing the point of sale (POS) landscape, Sweet said Thursday. It's scalable, processing billions of transactions globally. Walmart’s previous POS system primarily used stationary terminals and was written in a coding language that wasn’t broadly used, making it a “hindrance” for developers, said Sweet. It was also tightly coupled to a proprietary operating system and limited the retailer’s options for different experiences such as mobile, he said. CPC was built as an e-commerce system first, leveraging common architecture, he said. It can run on different clouds or at the edge in a store and integrates with business services using standard application programming interface patterns, making it easier for tech teams to deploy additional features, said Sweet. CPC is in all U.S. stores and clubs and in most global markets. The system enabled stores in Canada to create a self-service checkout experience with a different layout and hardware supplier than other Walmart markets, he said.
June retail sales rode Amazon Prime Day coattails, rising 0.8% from May, said the National Retail Federation Friday. There was a sequential decline of 1.9% in May. Electronics and appliance stores rose 3.3% from May, 36.5% year on year. Retail sales excluding gasoline, automobiles and restaurants gained 12.1% vs. June 2020, “unusually high” due to the pandemic, NRF said. Most stores were closed a year ago, and some had started to open by June. NRF expects a record back-to-school season including on electronics purchases, but CEO Matthew Shay warned of the impact of product shortages and supply chain constraints: “We urge Congress and the administration to enact meaningful, bipartisan infrastructure legislation that is critical for retailers who depend on a safe, reliable and efficient transportation system.” Chief Economist Jack Kleinhenz noted a continued “impressive recovery,” saying the economy and consumer spending are “particularly sensitive to government policy.” The boost from government stimulus earlier this year shows benefits, he said. Reopening stores and the economy progressed despite rising prices, Kleinhenz said. “As more people get vaccinated and get out, some of the growth will shift to services rather than retail but there’s enough momentum to support both.” For the first six months, sales increased 16.4%, a rate expected to slow in the second half. That’s consistent with NRF’s revised forecast for retail sales to grow 10.5-13.5% to $4.44 trillion-$4.56 trillion, it said.
Walmart is automating 25 of 42 regional distribution centers after testing a Symbotic system in its Brooksville, Florida, center, blogged Joe Metzger, executive vice president-supply chain operations. It’s using automation to sort, store, retrieve and pack freight onto pallets, replacing a process that uses manual labor to pack a 53-foot trailer “in a human game of Tetris for transit,” said Metzger. An algorithm helps to “store cases like puzzle pieces” in stores, using high-speed mobile bots that speed up the intake process and increase accuracy, he said Wednesday. Modular storage expands building capacity, and high-speed “palletizing” robots create custom store- and aisle-ready pallets. That takes guesswork out of unloading trucks, Metzger said of the “game changer.”