Customers Search Internet For Back To School Deals

by Sharon Edelson
From WWD Issue 07/19/2011

Facing sticker shock at the pumps, consumers are traveling no further than their computers to log onto price comparison search engines for back-to-school deals for their kids.

While b-t-s shopping budgets will be flat or shrink slightly as cautious consumers maintain a recession mind-set, e-commerce is poised to significantly gain market share, as it did last Christmas season when it more than doubled its growth rate. “The Internet is already highly promotional,” said Walter Loeb, founder of Loeb Associates. “That’s where retailers are gaining share. Many retailers at the mall were empty last Sunday. Success this b-t-s season will be selective and it won’t be for all retailers. There’s no sense of free spending exuberance. Department stores will get their share if they don’t have a sale every Friday and Saturday,” as has been their custom during the b-t-s selling period.

A b-t-s forecast survey by PriceGrabber, a part of Experian, found that 69 percent of consumers plan to shop online and use comparison shopping sites as a money-saving technique, compared with 23 percent in 2010. Forty-one percent of shoppers said they’ll visit retailer Web sites this b-t-s period to print out coupons, versus 33 percent last year.

“Clothing retailers will always benefit from the b-t-s shopping season, and we suspect that the increase in purchases in this category can be attributed to the recent wide availability of affordable, designer-inspired clothes,” said Graham Jones, general manager of PriceGrabber. “Parents looking to keep their kids on-trend may find it easier to stay within their budget by comparing prices online for a discounted pair of designer jeans and extending the life of the expensive electronics they already own.”

PriceGrabber’s survey found that 48 percent of consumers plan to spend $250 or more on b-t-s purchases, and 25 percent will spend $500 or more, a modest decrease from b-t-s budgets in 2010, when 56 percent of consumers said they’d spend $250 or more and 31 percent planned to spend $500 or more. The survey of 2,612 U.S. online consumers was conducted May 12 to 19.

The NPD Group’s study of consumers’ purchasing intentions for the b-t-s season saw little change in the amount shoppers plan to spend. The same number — 38 percent — said they planned to spend more this year than last, and 22 percent said they would spend less in both periods. Once again, value is their modus operandi.

“We have a clear sign that ‘trendy and fashionable’ or ‘influenced by friends’ is shrinking and ‘value’ is gaining momentum,” said Marshal Cohen, NPD’s chief industry analyst. “The study’s results clearly point out that consumers will be shopping later, looking for value, and searching out lower priced options.”

That should benefit mass chains like Target, Kmart and Wal-Mart. “Target.com continues to be a destination, especially at monumental moments like b-t-s,” said a spokeswoman for the retailer. “There’s an expanded assortment on Target.com, an option for students to make lists and a back-to-college checklist where we’ve curated a list of products students need as they head back to college. Even if they’re not shopping online, our guests are doing some homework and preview shopping.”

A key launch for b-t-s is Denizen jeans from Levi’s, with styles for the whole family. The brand, which is exclusive to Target, features jeans in a variety of washes, dyes and fits. Skinny jeans for boys and girls are $17.99. Shake it Up, the new collection from the Disney Channel’s D-Signed brand, consists of fashion tops, leggings, screen prints and jackets inspired by Ashley Tisdale’s Sharpay character from the “High School Musical” series. Customization and personalization of items for b-t-s includes Paul Frank stationary and notebooks, where kids can color the iconic monkey to their liking.

“B-t-s is the second biggest season” next to Christmas, in terms of sales, said Mark Snyder, chief marketing officer at Kmart. “Our customer is compressing the frequency of her trips and saying she’s being more thoughtful and deliberate in what she’s choosing.”

Kmart is trying to leverage social networking in the b-t-s arena. “Selena Gomez has 4 million followers on Facebook,” Snyder said, referring to the actress, whose Dream Out Loud collection is sold exclusively at Kmart. “With the celebrity deals you put together today, you negotiate with them to tweet and do Twitter parties. In the old days it was, ‘How many appearances can you make?’”

Kmart’s silver bullet, according to Snyder, is layaway. “In this post credit-crazy world, it’s one of the things that will get the customer into the store, along with great prices. We grew layaway in 2009 by 3 million families.Layaway is growing in influence every year,” he said.

However, Amy Noblin, a retail analyst at Weeden & Co., said retailers are adopting a more conservative tone with regard to b-t-s. “The economic data have been mixed. There’s a lot of uncertainty around pricing,” she said, referring to how higher cotton prices will impact consumer prices. “That’s the big wild card. Retailers are waiting to see what [their competitors] are going to do with pricing. Certain retailers have been able to deflect some increases to the spring. The price increases will be bigger in the second half of the year. The more cotton-exposed categories are up more.”

For example, Noblin said graphic T-shirts are up $2 to $5, hoodies up by $10 and there are more high-priced denim stockkeeping units offered in the category. “You’re going to see more promotions that help mask the price increases,” she said.

Denim will be important, as always, with styles ranging from “the skinniest leg through boot cut to straight leg to a slightly wider flare,” said Tana Ward, senior vice president and chief merchandising officer for American Eagle Outfitters Inc. “It’s not really about one fit.”

American Eagle’s b-t-s offerings have more of a rocker influence with the marketing message “We the People,” edgier graphics on T-shirts and crop tops. Pre-planned promotions start as early as this week and will continue throughout the season. Ward said American Eagle continues to see more visitors online.

“To truly win b-t-s, J.C. Penney is reaching a new and younger customer through unique digital experiences,” said a J.C. Penney Co. Inc. spokeswoman. “We want to be part of their online social circle through virtual tools that enable them to express their personal style while getting involved in a worthy cause.”

That includes using mobile devices, QR codes, MS Tags and location based check-in this b-t-s season. Penney’s is leveraging the popularity of haul videos, which blend video blogging and a fashion show-and-tell, with a Haul Nation contest on its Facebook page. Teens can upload their haul videos for a chance to win a trip to New York City.

Stardoll, a new brand for b-t-s based on Stardoll.com, is bowing at Penney’s. With more than 100 million users worldwide, Stardoll.com claims to be “the world’s largest fashion and dress up games community for girls.” Penney’s is capitalizing on the popularity of girls designing and dressing personalized “MeDoll” avatars by using those style trends to create Stardoll clothing and accessories, such as five-pocket jeans, $23.99, and floral flounce tops, $17.99. The retailer is also launching its largest-ever online cause marketing campaign to benefit kids’ after-school programs, a spokeswoman said.

Sears is introducing a new juniors brand called American Star. Mix and match related separates feature trendy looks with an “uptown bohemian” feel, a spokeswoman said, adding, “It’s an inspirational collection for us.” Superstretchy jeans and jeggings come in a range of washes and fits this season and jeans have details such as “bling” on the back pockets.

“We do see a trend in increased shopping in September as many kids check out what their friends are wearing, take note of those trends and return to the stores or go online to purchase additional, key items,” she said.

Brooklyn Lease Negotiations Continue For Walmart, Penney's

Wall Street Journal
By Eliot Brown and Joseph De Avila

The Related Cos. is in advanced lease negotiations with Wal-Mart Stores Inc. and J.C. Penney Co. about anchoring a mall in southeast Brooklyn, according to people familiar with the matter.

Wal-Mart has long been considering the site overlooking the Belt Parkway just west of Howard Beach. But talks have intensified in recent months as the company has expanded a publicity campaign and taken steps to mollify potential critics, the people said.

The outlook for the 630,000-square-foot development—which would accomplish Wal-Mart's longtime goal of opening a location in the city—was boosted by J.C. Penney's strong interest. The combination of the two large stores would likely give the project sufficient financial viability to move forward despite the uncertainties that continue to cloud the slowly recovering economy.

J.C. Penney, which was based in Manhattan for about seven decades before moving to Texas, already has stores in all four other boroughs. But Wal-Mart doesn't, and its possible entry into the city has sparked strong opposition from labor unions, community groups and some elected officials.

Hurdles to Wal-Mart's beachhead remain. For starters, Related has yet to finalize a purchase of a portion of the site from the state, the price for which has come under criticism from Wal-Mart opponents.

But the project doesn't require further approval by the City Council, typically a major obstacle for developers. Given a 2009 rezoning, Related is free to build any big-box store on the site once it takes control.

Representatives for Wal-Mart, J.C. Penney and Related declined to comment on lease negotiations. "We still have not signed any leases anywhere in the city," Steven Restivo, a spokesman for Wal-Mart, said last week. "We continue to evaluate opportunities across the five boroughs."

Wal-Mart and J.C. Penney would take around 150,000 square feet each in the planned Gateway Center II mall, according a person familiar with discussions. The project would sit just north of Related's Gateway Center mall, which was completed in 2002 and houses a Target and a Best Buy.

Wal-Mart, which has unsuccessfully sought to break into the New York market in the past, has been investing considerable resources in an attempt to pave the way for an entrance over the objections of a powerful set of unions and elected officials.

Two labor groups, the United Food and Commercial Workers and the Retail, Wholesale and Department Store Union, have been particularly aggressive in combating Wal-Mart, which has long been opposed to a unionized work force. They are joined by elected officials including Council Speaker Christine Quinn and community groups worried about the giant discounter's impact on local merchants.

To counter the critics, Wal-Mart has launched a public-relations campaign to tout the retailer's virtues through fliers and newspaper and radio ads.

In the first four months of the year alone, Wal-Mart spent more than $1.7 million on consultants, most of which was directed at firms that do advertising and polling, according to lobbying records.

Earlier this month, the company announced a $4 million donation to a New York City job program at a news conference with Mayor Michael Bloomberg. Wal-Mart also recently signed up as a $150,000 sponsor for a summer concert series hosted by Brooklyn Borough President Marty Markowitz that includes performances by such artists as Queen Latifah.

The sponsorship drew praise from Mr. Markowitz, who has been critical of Wal-Mart in the past. In a statement on Sunday, he said he isn't "philosophically" opposed to Wal-Mart, but declined to comment on Related's plans. He said he believes the retailer should pay "a fair wage" and allow workers to unionize.

The push seems to have created a sense of inevitability among many elected officials, particularly given that the company has said it only intends to take space in stores where City Council approval isn't necessary, making it difficult to block. Earlier this year, Wal-Mart also won some labor support by signing a five-year contract with the Building and Construction Trades Council of Greater New York that guarantees that any of the company's store construction would be done with union labor.

Even Ms. Quinn, a vocal Wal-Mart critic, earlier this year offered to broker a deal between the company and the Hunts Point Terminal produce market. Under the deal, Wal-Mart would have committed to buying at least 5% of its produce from the market, although talks fizzled.

Aides to Ms. Quinn last week downplayed the potential deal and said Ms. Quinn hasn't changed her position on Wal-Mart and that she continues to oppose the company coming to New York.

Critics of the possible Wal-Mart Brooklyn development have recently stepped up efforts to block Related's purchase from the state of a 21-acre piece of the mall site. Related already controls the rest.

Last week, critics released a state memorandum from the Office of General Services that detailed how Related had renegotiated the purchase price for the state-owned land. The price was reduced in 2010 to $14.5 million from the $32.5 million it agreed to pay in 2009.

According to the memo, the price was changed partly because of an appraisal that showed a lower value for the site. Also, Related had been counting on at least $7.5 million in expected government incentives that proved unavailable. The mall is part of a larger 227-acre development that includes low-income housing, retail and parkland.

"The Gateway 2 development will expand on the enormously successful project that has already brought great economic benefits to this area," creating thousands of jobs, said Joanna Rose, a spokeswoman for Related, last week.

The land sale must be approved by state agencies and the state comptroller. A spokesman for the comptroller's office said last week that it hadn't yet received the proposal.

Couple Sees Jesus In Walmart Receipt

Anderson County Couple Says Image On Receipt Is Jesus

WYFF4 in Greenville, SC

An engaged couple in Anderson County said a shadowy image that turned up on a reciept from Walmart looks like the face of Jesus.

Jacob Simmons and his fiancee, Gentry Lee Sutherland, said they bought some pictures from Walmart on Sunday, June 12.

Simmons said when he spotted the receipt on the floor of Sutherland's apartment the following Wednesday, it had changed.

"I was leaving the kitchen and I just looked on the floor, and it was like it was looking at me," Simmons said.

A dark gray mark on the receipt seems to show two eyes, a nose and a mouth in a thickly bearded face.

"Then the more you look at it, the more it looked like Jesus, and it was just shocking, breathtaking," Simmons said.

The couple said they had just come from a church service when they saw the image.

"We had a message on knowing God, abiding in him," Sutherland said. "(The preacher asked) 'If you know God, would you recognize him if you saw him?'"

Simmons said he called the store to ask what could have made the mark.

"They said the only way you could really get it black was to put heat on it," Simmons said.

"We just feel like it's a blessing that God showed it to us and opened our eyes and we just feel like we should share the blessing God gave to us to everybody else," Sutherland said.

The couple denied tampering with the paper to make the face appear.

Shed No Tears For Wal-Mart In The Final Battle of Goliath vs Goliath

Wall Stree Journal
By Russ Britt

The movement to force Internet retailers to collect sales tax is designed to level the playing field between so-called Main Street shops and online rivals like Amazon.com Inc.

The movement, however, could have the unintended effect of paving the way for retail behemoth Wal-Mart Stores Inc. to further consolidate its market power into the online world, if price comparisons are any indication.

MarketWatch conducted an informal shopping expedition at the websites of Wal-Mart (WMT) , its chief brick-and-mortar rival Target Corp. (TGT) and Amazon (AMZN) . The findings show that despite having to charge taxes, Wal-Mart still holds a slight edge over Amazon in price, and a much greater advantage over Target.

MarketWatch priced five identical items at the three outlets -- a videogame, a best-selling novel, a case of golf balls, an iPod Touch and a 32-inch flat-panel television. With taxes and shipping included, the final total for the Wal-Mart shopping trip was $672.15 compared with $672.77 for Amazon, a difference of 62 cents. Target's total was $732.86.

Yet Wal-Mart -- accused over the years of decimating mom-and-pop stores in numerous small towns -- has joined with other retailers to lobby for mandatory sales taxes on online transactions. Company officials say that they've joined with other brick-and-mortar companies to help them level the playing field.

"Main Street businesses and retailers are losing out as online-only retailers are gaming the system and creating an unfair playing field," Wal-Mart spokesman Daniel Morales said in an e-mail. "This is bad public policy. Tax policies should not be any different for online-only retailers than those for retailers that operate brick and mortar operations."

But the ultimate effect of an online sales tax is that Wal-Mart may be able to relegate Amazon to a pricing category that is closer to Target and other retailers, while putting some distance between itself and everyone else.

Amazon has fought against online taxes in the states where they're currently levied, including California, New York, North Carolina, Colorado, Illinois, Rhode Island and Connecticut. This week, Amazon said it would seek a referendum in California to have voters determine whether it should charge the 7.25% sales tax in that state, the highest of any in the nation.

"This is a referendum on jobs and investment in California," Paul Misener, Amazon's vice president of public policy, said in an e-mailed statement. "We support this referendum against the recent sales tax legislation because, with unemployment at well over 11%, Californians deserve a voice and a choice about jobs, investment and the state's economic future."

California's law, which went into effect July 1, allows the charging of taxes through an online retailer's affiliates that refer customers to Amazon and are based in the state. As a result, Amazon has cut ties with 10,000 California affiliates while it seeks to resolve the sales tax issue.

The MarketWatch survey doesn't prove that Wal-Mart will beat Amazon on all pricing; but it does indicate that it can compete with the online retailer. The study chose items that were available at all three online outlets of Amazon, Wal-Mart and Target in the same exact model and/or quantity.

A more detailed study from William Blair retail analyst Mark Miller published earlier this week found that Amazon averaged an 11% price discount compared to its brick-and-mortar rivals. The study looked at a total of 2,400 items, or 100 items for each of the 24 retailers included in the survey.

While items such as shaving cream, toothpaste and laundry detergent are sold at all three, the exact same variations on a brand usually are not available in the same quantities at all three. Target may offer, for example, a particular variation on Colgate toothpaste only in packages of two tubes, while it might be six tubes at Wal-Mart and only one at Amazon.

But Wal-Mart seems to consistently beat competitors in online sales by keeping its shipping costs low. And those low shipping costs come in handy in several cases. One interesting find is that Amazon may fall well short of Wal-Mart in the low pricing department on one of its cornerstone businesses -- book sales.

Breaking out the hardcover best-seller, "Smokin' Seventeen" -- one of the items on the MarketWatch shopping list -- shows that Amazon charges more than $2 more to get that item to consumers than does Wal-Mart.

So the final cost to consumers is $18.50 from Wal-Mart and $19.20 from Amazon. For the record, Wal-Mart charges one penny less than Amazon for the base price of the book, $15.20 vs. $15.21. And the total cost to buy the book at Target, including shipping and taxes, is $22.17.

Danny Diaz is spokesman for the Alliance for Main Street Fairness, a group that seeks to force online retailers to charge sales taxes. He says regardless of what Wal-Mart is charging, a raft of retailers are at a disadvantage when trying to compete with Amazon.

"Any business should be required to compete on the price of the product. They shouldn't have to compete on whether they collect the sales tax," Diaz said. "Ultimately, this is an issue about fairness."