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China Turns Challenging But Coach Scores Big
01/05/13, 02:10
The number of national retailers in the U.S. who continue reporting monthly sales has dwindled to 14.
Nordstrom, Macy's and Target among the latest to end the practice. Chains reporting March numbers
(excluding drugstores) posted a meager 0.6% average gain compared to sales in March 2012.
Like privately held Neiman Marcus and publicly traded Saks, Nordstrom will report same-store sales numbers
when it releases quarterly results on May 16. Saks is due to report on May 21. Wall Street forecasts 6.7% revenue
growth for Nordstrom in the three months ended April 30, and 3.5% sales growth for Saks.
Coach bagged a solid first quarter in 2013, with sales higher by 10% year-over-year, excluding swings in
currencies, After a disappointing decline in North American sales during the holiday season, Coach delivered 7%
revenue growth in the region for the first three months of the year. CEO Lew Frankfort attributed robust U.S. sales to a
new emphasis on men's items, the launch into footwear, and strong e-commerce sales. Internationally, sales rose 6%,
dragged down by Europe. The big boost came from China, where sales shot higher by 40%, even as economic growth
there slowed to a 7.7% annual pace in the first quarter from 7.9% in the last three months of 2012. Coach rival Michael
Kors, blamed for biting into Coach's holiday handbag sales, is scheduled to report quarterly results in June. Unlike Coach,
whose shares vaulted 10% higher following results, Kors' stock is down 17% from its recent highs.
Despite its slowdown in GDP growth, China is still a sales dynamo relative to the rest of the world for most global
luxury brands. At the very high end, Hermès grew quarterly revenue 13% globally, largely on the strength of sales of its
Birkin bags and other items in China. Overall sales rose even as watch sales fell 5%, a result of the yearlong corruption
crackdown that bans gifts for public officials. Hermès, LVMH Moet Hennessy Louis Vuitton and Burberry all noted lighter
store traffic in China for the first three months of 2013, a situation exacerbated by fewer Japanese tourists as the
exchange of diplomatic barbs between Beijing and Tokyo dimmed the desire to visit China. LVMH posted its smallest
quarterly sales gain since 2010. Hermès is hardly retrenching after this year's setbacks in the watch market, taking
advantage of weakness by increasing its position in Swiss watch maker Joseph Erard into a majority one.
In its most recent quarter, Burberry rode double-digit same-store sales growth in China and Hong Kong to 11%
year-over-year revenue growth, and 13% for the retail division. Comparable sales grew at a single-digit pace in the
Americas. Burberry has made a big push into mobile shopping and social media in the past year to create more customer
engagement and drive sales across channels as it shifts more of its business to retail from wholesale. As you'll read next,
a new survey of wealthy shoppers this month by the Luxury Institute shows how a brand's presence on the Web and
mobile devices works not only in boosting sales through those channels, but also in driving customers back into stores.
WealthSurvey - Multi-Channel Purchase and Behaviors
The Luxury Institute surveyed wealthy consumers with annual household income of at least $150,000
about their usage of the Internet and mobile devices, and how these technologies affect the ways in
which they interact with brands across platforms. Findings show that online engagement actually
feeds store traffic, rather than pulling customers and sales away from the stores. Successful retailers
are making the face of their brand an integrated ecosystem of channels. They turn shopping and
browsing into a seamless experience on apps for smartphones and tablets, via traditional websites
and within the classic brick-and-mortar store.

Nearly two decades after many Americans first surfed the Web, e-commerce now accounts for 10% of total retail
sales, up 15% last year to $186.2 billion, according to comScore. Tablets and smartphones that enable easy
browsing and purchasing have accelerated the growth of online retail sales in the past five years, and turned
electronic platforms into a primary point of contact for brands and consumers, with purchases in categories like
travel, financial services, real estate and personal transportation taking place mostly on the Web.
Going into a physical store to purchase something and ordering it on the Web from home are about equally as
popular among high-earners, with 78% saying that they bought in-store in the past year, and 77% reporting
buying online. Stores and the Web are the two biggest generators of business by far. Women lean slightly toward
purchasing at home on the Web instead of going to the store (80% vs. 78%). Accessing the Web via tablet is surging in
popularity as a shopping tool, from nothing five years ago to the way that 20% of wealthy consumers purchased goods in
the past year. As a sales avenue, Web-enabled tablet usage is more popular than catalog purchases (17%), telephone
orders (15%), or buying via smartphone Web access (14%). Downloaded apps for phones (12%) and tablets (11%) are
also gaining in popularity as distinct retail channels where wealthy consumers shop and finalize transactions.
Websites are the most efficient channel for turning browsers and information gatherers into buyers, with 69% of
wealthy shoppers making a purchase on the Web doing so based on information they gathered online. In stores,
57% of consumers ultimately made purchase decisions based on information they gathered while shopping. Store traffic
is bolstered by Web activity too, with 58% of shoppers who buy in-store getting their information online using a computer.
Only 25% of wealthy shoppers engage in "show-rooming," or buying online after checking out the merchandise and
getting insights and comparisons from staff at a local store. Retailers still send out catalogs because they're effective
drivers of sales in other channels: 16% of respondents say they bought something online in the past 12 months after
seeing it in a catalog; 20% were motivated by a catalog to go to a store and make a purchase. Catalogs are more popular
among women (22%) than men (13%), and used more frequently by those older than 50 (20%) than by younger highincome shoppers (13%).

The Luxury Institute
Categoria: Biblioteca Angel News | Adicionado por : netoangel | Tags: mundo, Sales, Chains, National, The Luxury Institute, China Business, luxo, poder, mercado
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