The age of web-based shopping has fueled brick-and-mortar openings.
November 14, 2016
NEW YORK CITY – Online shopping has changed the buying habits of Americans, but many online-only retailers are opening physical locations to further enhance the shopping experience, the New York Times reports. For example, last month, Amazon.com hinted that it might open convenience stores.
Both big and small companies online are finding that an actual store has allowed them to reach more customers and build their brands. In the United States, online sales will hit $394 billion in 2016, according to Forrester Research. That number is less than 12% of total retail sales, which Forrester Research predicts will reach $3.4 trillion this year.
However, online-influenced sales at brick-and-mortar stores (when a consumer looks online for a product but goes to a store for purchase) will generate an additional $1.3 trillion—around 38% of all retail sales. “Stores are still vitally important,” said Fiona Swerdlow, a vice president and research director at Forrester Research. “But the influence of digital touchpoints is huge.”
The Internet provided companies with an easier way to connect directly with consumers. “In a lot of categories, you’re seeing a significant shift from wholesale, as a percentage of their total revenue, to direct channels,” said Al Sambar, a managing partner at Kurt Salmon. Brands find that it’s easier to have a personal relationship with a customer online as well.
But what those companies are finding out now is that customers also want to visit a physical store. Traditional retailers like Saks are helping shoppers integrate their online experience with an in-person one, while online-only companies are branching out into actual stores. “We’re seeing this convergence where it’s the best of both worlds,” said Steven Barr, U.S. retail and consumer leader at PricewaterhouseCoopers. “It’s centered around extraordinary technology and extraordinary customer service.”
With a lower unemployment rate, moderate wage gains and cheap fuel and food prices, the pieces are falling into place for a more robust holiday shopping season.
Yet while the outlook is slightly more upbeat for retailers, a round of sales forecasts is calling for growth that’s roughly in line with last year.
Despite 2015’s results being held back by unseasonably warm temperatures — which forced retailers into taking aggressive price cuts — Deloitte predicts holiday spending will increase between 3.6 percent and 4 percent from November through January, to top $1 trillion. That’s roughly in line with last year’s results, when sales excluding motor vehicles, gasoline and restaurants rose 3.6 percent.
A separate prediction from Kantar Retail is calling for 3.8 percent growth in the fourth quarter, compared with a 3.4 percent gain in 2015. Its forecast excludes the same categories as Deloitte’s prediction.
Retail Next is calling for a more dramatic uptick from last November and December, when it says sales grew 1.3 percent by its measures. Still, it expects 2016 holiday growth to be roughly in line with the other two forecasts, at 3.2 percent.
“Folks are opening up their wallets a little bit,” said Rod Sides, who heads up Deloitte’s Retail & Distribution practice.
Indeed, consumers are loosening their purse strings. The personal saving rate was slightly lower in July than at the start of the year, falling to 5.7 percent from 6.2 percent, according to government data. Meanwhile, preliminary consumer confidence figures rose to 89.8 percent in September, up 2.6 percentage points from the prior year.
Yet an expected rise in health-care costs will likely weigh on consumers’ psyche, Sides said. That’s because Americans will be selecting their coverage plans for the upcoming year at the same time they’re doing their holiday budgeting.
Uncertainties surrounding the election are also seen keeping the lid on spending early in the season, though retailers are expected to make up for any lost spending once all the votes have been tallied. They could even see a lift from pent-up demand, Deloitte said. That would be just in time for the most critical shopping days, including Black Friday.
Thanks to a series of minimum wage hikes across the U.S., Sides predicts the low-income consumer will be in better shape to spend this holiday. But while the upper echelon of shoppers still has purchasing power, he said they will likely dedicate a larger share of their income to experiences over traditional goods. That trend has held back retail sales growth for more than a year.
Consumers’ addiction to discounts has likewise challenged retailers’ ability to grow the top line, as lower prices mean they have to sell more units to increase sales. Even though retailers’ inventory levels are more rational heading into this holiday season, Sides expects those with run-of-the-mill merchandise will be forced to continue down the path of excessive promotions.
“They can have a reasonable holiday season, but the price will be at [the expense of] margin,” he said. On the flip side, those retailers who can carve out a niche — or create a sense of scarcity for their merchandise — will win.
Companies who check off those boxes are off-price chains, where the merchandise is always changing, or small business players who are slowly stealing share from their larger competitors.
Online sales are once again expected to edge some 17 percent to 19 percent higher, reaching $96 billion to $98 billion, according to Deloitte. That growth rate is in line with last year’s figures, Sides said. Kantar Retail is calling for a similar 15.9 percent lift in fourth-quarter online sales, which would be a slight acceleration over last year’s 14.8 percent increase, by their methodology.
Retail Next predicts digital sales will rise 14.9 percent, compared with 12.6 percent in the final two months of last year. If realized, they would account for 16 percent of total retail sales in November and December, up from 14.4 percent in 2015, the firm said.
The “experience” generation has spoken & it’s not what you would think. Online retail has long been forecasted as the ultimate decline of the traditional brick & mortar, but not so so fast. Even though millennials spend ample time on every internet device possible, when it comes to shopping, they want to see-feel-touch the products they’re buying. Very interesting read below from retailtoday.com:
Gen Z and Millennials are big on physical stores—even more so than their older counterparts.
That’s one of the findings of a new research study by insights firm iModerate in which 74% of all respondents said it is important for brands to have a physical location rather than solely selling online. Interestingly, 80% of Gen Zers and 82% of Millennials respondents said it is important, compared to 69% of Gen Xers and 65% of Boomers.
One of the biggest lures for in-store shopping is the assurance that comes from seeing, feeling and trying on merchandise, particularly items such as clothing, shoes and cosmetics, according to the study. This is especially true for first-time buying experiences.
“One of brick-and-mortar’s greatest advantages over other channels is that there’s an opportunity for shoppers to interact with products, and that gives them the confidence they need to make a purchase,” said iModerate CMO Adam Rossow. “Retailers can take even small steps to capitalize on these exploratory shopping habits, such as creating close-up experiences with new styles, providing samples and demos, and ensuring there are ample mirrors and fitting rooms.”
Big Box Stores: The study noted that while big-box chains are likely affected by e-commerce more than other types of stores because they sell commodity products, they still appeal to busy shoppers who want quick, one-stop-shopping.
iModerate identified three factors that can tip the scales in either direction for big-box shoppers, and lead to different perceptions of the same brand:
- Personnel – Big-box stores are often well staffed, but consumers complain that sales associates lack product knowledge.
- Convenience – Although they carry a wide array of products, consumers find inconsistency with selection, layout, maintenance and management within each store, causing them to spend more time shopping than they’d like.
- Layout – Larger stores with wider aisles allow for easier navigation, but these cavernous spaces can feel cluttered and dirty when not well maintained.
“When it comes to big-box stores, providing a consistent brand experience across every store is essential,” said Rossow. “Retailers should identify the locations that best uphold their brand promise, figure out what consumers love about them, and implement those best practices across all of their locations to the best of their ability.”
The study also revealed that each generation is looking to get something different from their store visits:
- Gen Z – Seeks the reassurance found through the sensorial. Stores like Forever 21 enable them to try on various sizes and styles that are difficult to perfect online, and brands such as Sephora offer samples and demos.
- Millennials – Seek efficiency and quality. Many are launching careers and have young families so they need to shop frequently, and favor big-box stores for their ability to quickly find everything they need in one place.
- Gen X – Seeks an escape and discoveries.
- Boomers – Seek comfort and space. They also value low music, light scents and seating.
iModerate conducted the survey with 844 consumers who ranged in age from 15 to over 65, and who shop in a store or online at least monthly.
Lighting systems have long been a target for maintenance and engineering managers seeking to reduce the energy use in their institutional and commercial facilities. Lighting systems tend to be low-hanging fruit when it comes to energy-saving opportunities. New lighting technologies and fixture designs, as well as improved control systems, have combined to provide relatively quick paybacks while allowing managers to improve the quality of lighting.
But managers also have opportunities to improve the quality of lighting and reduce energy use and maintenance costs outside of facilities. Lighting systems for parking lots, walkways, signage, and façades all offer potential savings for managers who are willing to invest time and effort. Most exterior lighting systems in use today are more than 20 years old. Technology changes and improvements in light-source efficiencies offer managers the potential for reducing energy use and maintenance costs by 40 percent or more.
With such potential savings, the first impulse is to rush into a lighting retrofit program that simply replaces existing lamps and ballasts or the entire fixture with new, higher-efficiency products. While a one-for-one replacement program is quick and easy, it might not offer the best return, and it might not solve existing lighting issues. One-for-one replacement assumes an existing system is the ideal system for its application and that managers only need to upgrade fixture efficiencies.
If managers are to maximize an upgrade to an exterior lighting system, they must consider such issues as light distribution, glare control, color rendering, and time of operation. Lighting system upgrades need plans, and a plan starts with an audit of existing systems and issues.
Part 2: Auditing Process Helps Managers Discover Lighting System Savings
Part 3: Place Focus of Exterior Lighting Projects on Fixtures
Part 4: LED, HID, Fluorescent Fixtures Among Exterior Lighting Options
*repost from www.facilities.net
Energy costs consume a major portion of every facilities budget. Recently a new law went into effect that could provide a tax break when energy management systems are installed in certain buildings.
The Protecting Americans from Tax Hikes (PATH) Act, has been extended along with more than 50 expiring provisions of the tax code. The bill included a two-year extension of the Energy-Efficient Commercial Building Deduction, or section 179D of the tax code.
The owner of an eligible building can claim 179D and qualify for what can be a $1.80 per square foot tax deduction. Owners of these buildings can allocate the accrued tax savings to the businesses responsible for the energy-saving enhancements. In order for a building to qualify for the deduction, the energy based improvements must be made to either the HVAC, hot water or interior lighting systems or to the building’s envelope.
HOUSTON, Feb. 11, 2016 /PRNewswire/ — Near the end of last year, Congress passed and President Obama signed into law the Protecting Americans from Tax Hikes (PATH) Act, a broader, bipartisan tax bill that extended (and in certain instances, made permanent) over 50 expiring provisions of the tax code. Among a host of other pro-business tax provisions, the bill included a two-year extension of the Energy-Efficient Commercial Building Deduction, or section 179D of the tax code. alliantgroup applauds both the PATH Act’s extension and modification of section 179D, citing the tax deduction as not only a vital incentive for U.S. job creation and economic growth, but also as sound environmental policy.
“By extending 179D, Congress has done architects, engineers and contractors a major favor as we have seen firsthand how this incentive has helped companies expand both their workforce and the scope of their services,” said Dean Zerbe, alliantgroup National Managing Director and former Senior Counsel to the U.S. Senate Finance Committee. “Not only is 179D critical to the success of U.S. designers and builders everywhere, it is simply just good tax policy, taking a completely technology neutral approach to incentivizing energy-efficiency.”
Section 179D was originally passed by Congress as part of the Energy Policy Act of 2005 in response to data from the U.S. Department of Energy showing that 73 percent of all electricity consumption was by buildings, with about half of that coming from commercial buildings. The owner of an eligible building can claim 179D, but in an effort to allow architects, engineers, construction companies and energy service providers to qualify for what can be a $1.80 per square foot tax deduction, section 179D allows eligible designers and builders to qualify through energy-efficient enhancements made to government-owned buildings at the federal, state or local levels. As government entities do not traditionally pay tax, the owners of these buildings can allocate the accrued tax savings to the business responsible for the energy-saving enhancements.
In order for a building to qualify for the deduction, the energy based improvements must be made to either the HVAC, hot water or interior lighting systems or to the building’s envelope. The PATH Act retroactively extends section 179D for 2015 and into 2016, but stipulates that buildings placed into service this year must meet ASHRAE 2007 standards as opposed to the old ASHRAE 2001 baseline. The bump up in the standard is a policy nod to modernizing energy-usage techniques and the need to raise the thresholds accordingly.
“The extension of 179D is tremendous news for our clients,” said alliantgroup Senior Managing Director Rizwan Virani. “Even with the higher baseline beginning in 2016, 179D will remain broadly applicable to architects, engineers and contractors across the country. The deduction will continue to provide these companies the funds necessary for broader reinvestment and will allow them to be more competitive not only in their bids, but serve to make them more competitive in the marketplace as a whole.”
Powerhouse is always seeking team members who embrace our core values of great service, honesty, integrity and making a positive impact on others’ lives. Our company is dynamic and growing, and we regularly post job openings nationwide. Below are our current positions open for application:
Overview: The Project Manager is responsible for overall management of the client relationship and the project from development and review of the estimate to project completion and closeout. Full job description HERE.
ASSISTANT PROJECT MANAGER
Overview: The Assistant Project Manager assists in the implementation of the guidelines and requirements to complete a project within budget and time frame. Full job description HERE.
This position, under the supervision of the Project Manager(s), and in collaboration with the Assistant Project Manager(s) assists in the implementation of the guidelines and requirements to complete a project within budget and time frame.
Overview: The Project Coordinator is responsible for working closely with the APM and PM assigned to specific projects to complete paperwork, processes and tracking duties. Full job description HERE.
Powerhouse Retail Services is a progressive company looking for high energy, positive people! Attention to detail, ability to work as a team and a positive attitude are a must! May require work in the evening or overnight. Must be able to travel extensively. Experience in Retail/Restaurant Construction environment preferred. This is a hands-on position! Full job description HERE.
In addition to applying on our JOBS SITE, you may submit your resume to email@example.com.