Post Holiday Store Closings

WHILE the 2016 holiday sales season was profitable for many independent retail stores, it was not as promising for some of the major chain stores who have announced below average earnings. The post holiday numbers are in and the retail industry as a whole had the largest increase in sales in the last five years. Consumers opened their wallets and made a record amount of purchases, but much of the retail money was spent online. The droves of shoppers did eventually turn up at the retail chains but they were driven by heavy discounts.

 

PROMOTIONS are great for shoppers but not so much for the store owners. While many small retailers held their own, the large chains felt the brunt of the challenges.

 

MACY’S has announced that it will be closing about 100 stores in 2017, which is roughly 15% of their locations. Along with those closings comes job losses which are expected to be as many as 10,000 workers nationwide. Sears has also announced the closure of many of their stores as well which will also result in many layoffs.

 

AMERICANS were in the mood to spend – just not at traditional stores. Independent retailers were quick to realize this and have been building, tweaking and improving their online presence to make sure they prosper for the new year. The challenge that all retailers have in this changing environment is to better define their place in the market and create experiences both on and away from the shoppers computer keyboards. Stores will need to become more of a destination or entertain customers in order to prosper. The retail store is not dead, but the retail store of the past is. It’s a far cry from the days of unlocking the front door and letting the line of shoppers inside!

This Holiday’s Shopper….One For You – Two For Me!

wholesale merchandiseSHOPPERS are planning to put themselves at the top of their holiday shopping lists according to some new information just released. Many shoppers plan on having a more conservative budget this year with the average consumer planning to spend around $935.00 for the holiday season. Total spending includes gifts for others, self spending, food, flowers, decorations and greeting cards for the holidays. Last year spending was just slightly higher.

 

RETAILERS should be ready for a rush of shoppers in the weeks following the presidential election as they get more economic certainty and will start taking advantage of the promotions and deals. It is believed that once the election has passed shoppers will pull themselves out of the election doldrums and get into the holiday spirit.

 

FIFTY-eight percent of consumers plan to buy for themselves, with spending up 4% over last ear and marking the second highest level of personal spending in the last 13-years. Many shoppers are taking the “one for you, two for me” approach this year and retailers are preparing a vast array of merchandise and promotions of items that shoppers want to give as great gifts as well as buy for themselves. Make sure your store follows suit on this trend.

 

OVER 93% of those surveyed also stated that they would be taking advantage of free shipping and conveniences to buy online and pick up in store, as well as expedited shipping.

 

CLOSE to half of those surveyed will be tackling their holiday shopping early again this year, many having already started in October. The same percentage said they would start in November and 18% are waiting until December. Millennials seem to be waiting the longest to wait out for the best deals by retailers, with over half of the group waiting closer to the holidays to start shopping.

 

THE hottest items this year: Gift cards at 61% followed by clothing and accessories at 54% and then books, CDs, DVDs or Videos at 40%.

 

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Shoplifting Becomes FREE For All

wholesale merchandise - shopliftingIs it just the “Bernie” supporters who want everything for free, or has the state of California jumped on the bandwagon of giving away the farm?

Retailers in California are feeling the sting of increased shoplifting throughout the state as the government powers that be changed the laws when it comes to penalties for the CRIME of shoplifting. Turns out that the new rules say that anything stolen that is less than $950 keeps the crime a misdemeanor.- and likely means that the thieves face no pursuit and no punishment.

It is already being reported by many larger retailers in the state that shoplifting is up around 15 percent already since voters in the state approved Proposition 47 and ended the possibility of charging shoplifters with a felony and potential prison sentence.

The recent ballot also lowered penalties for forgery, fraud, petty theft and drug possession. WHO was doing the voting? Criminals!! What civic minded person would agree to the ridiculous changes in the law?

Retailers are saying that while they are installing more security cameras and watching shoppers more carefully it’s just not worth pursuing the shoplifters since the laws no longer protect the store owners and are favoring the criminals.

THIS is why Trump and Sanders have picked up steam this election year!

Online Retailers Now Opening Stores

wholesale merchandise mallsHas the retailing world gone insane? Over the last several years online sellers have made significant dents in brick and mortar stores in every market and in every city. Many retailers had to jump into online selling whether they wanted to or not to keep a presence to the consumers. This addition has been costly and for many retailers has not been all that popular, as many online shoppers are scouring for the cheapest price.
Fast forward to today when new retailing reports are showing that many online stores that had been exclusively on line are venturing into brick and mortar situations. Has everyone lost their minds? Is this backwards day?

 

An article that was published in USA today talked about an online fashion retailer in San Francisco that has sold online only for a decade and then decided that it would be a great idea to open a physical store so he could interact with the customers. Lo and behold he discovered that he makes larger sales and were able to interact better with the customers. OMG – something us physical retailers have known about forever!

 

So now the hipster millennial trend is the NEW thing…opening physical locations! They even have a name for it – it is called omni-channel marketing. We used to just call it RETAILING!

 

The newfound genius’ have discovered that there are great benefits by having a physical location and those selling fashion feel they can no longer ignore the client who wants to touch and feel the merchandise. Wow. something we have all been doing for eons until many were put out of business because of these same genius’ saying the internet is the ONLY way to sell. So, they rise through the carnage THEY made of the brick and mortar stores only to bring it back again. But this time they think they have invented a NEW way to sell!

 

My favorite addition to this story is that after years of the decimation of book stores and the burying of Walden Books, Borders and the dwindling down of Barnes and Noble, an announcement was just made that Amazon will be opening physical book stores next year!  I give up!! Is it just me?  Share your thoughts…

 

 

 

Congress Overtime Rule Would Crush Small Businesses

wholesale merchandise - overtimeThe Labor Department’s proposal to expand overtime would suffocate employee development and company growth, a small gift shop owner from Alabama testified recently at the hearing. Many wholesale merchandise suppliers and independent retail stores are up in arms over this new proposal.

 

Having a blanket overtime rule ignores the fact that the cost of living from city-to-city varies greatly. He pointed out the major differences from his small Alabama city to New York City. Such a dramatic one-size-fits-all increase will have big consequences for workers as well as small businesses. Every dollar spent on compliance of this regulation would have been one that could be used to grow businesses and invest further in employees.

 

The National Retail Federation has found that the more than doubling of the overtime salary threshold will force many employers to convert their salaried managers to hourly,. non-exempt status, and their managers would oppose the rule because overtime expansion would limit their opportunities for career advancement. It would also have a disproportionate impact in rural, low-wage areas.

 

Converting salaried positions to an hourly wage adds pressure to get the job done in a standard 4-hour work week. Most employers will not keep the workers past the 40-hours because of the exorbitant costs and this will hurt everyone.

 

This new overtime rule is bad for employees as well as business owners, it was argued to the Labor Department and small business owners around the country need to speak up against it.

 

The trend that we here at Forum have seen is that many employers are cutting their workers hours. With the mandatory health care inclusion now set at 30 hours, we have heard from many workers complaining their hours now are averaging under 30 hours weekly so employers do not have to put them on their health care coverage. How is anyone supposed to make a fair living and support themselves or their families on part time work. Our country has become one of part-timers and “gig” workers. When all the politicians talk of job creation it would be nice to know if they are meaning full time, full employed workers like our parents enjoyed during their careers.

 

What do you think?  Share your comments with us.

 

 

 

Push For Taxing Internet Sales Continues

internet sales tax 1For the past several years Congress has been kicking the can down the road on what to do about taxing sales made on the internet. It was all the way back in 1992 that the Supreme Court issued a ruling that required online businesses to file sales taxes only if they had a physical presence in the state where the sale was made.

 

It has been quite a while since 1992 and internet sales have pervaded the mainstream, making it difficult for brick-and-mortar retailers to keep up with their online counterparts. Often it is just the sales tax that makes the difference between a store making a sale or losing it to some company online.

 

Those against the internet tax complain that it is just another tax to the public, but the National Retail Federation points out that the law is already on the books that people must report purchases on their tax returns as “use tax” – but less than 1% of anyone actually does.

 

Making online sellers collect sales tax would even out the playing field for regular line retailers. What do you think?

 

 

Employees Who Bad Mouth Your Business

wholesale merchandise employeesWell, here is something I think will be of interest to many business owners. If you are a boss and your staffers vent on social media about their jobs – you have no recourse.

 

The law says that employees are allowed to vent and the government protects these workers’ rights to say almost anything they want about where they work even if it is mean-spirited or insulting. It is illegal for an employee to be fired for a post about working conditions, whether it is regarding to pay, hours, tasks, difficult supervisors or any other issue.

 

Social media proves that it can be a boom or bust to a business. Employers have very little rights under the law when it comes to protecting their businesses against the wrath of angry workers.

 

One of the few times an Employer is protected is if the poster is giving out trade secrets, financial information or posting about clients or customers. Employees can be fired for postings that are racist, homophobic, sexist or discriminatory. But, calling their supervisor out is not grounds for firing.

 

Has freedom of speech gone too far when the employee is protected as they bash you or your business? What do you think? Share with us.

 

Also, one thing I will remind business owners of: If your store is not unionized your workers are considered “at will” employees. They can be dismissed with no reason whatsoever in most cases. Hint, hint!

 

 

Wholesale Merchandise Industry Suppliers Still Viable

wholesale merchandiseWholesalers of merchandise have had quite a run on things over the last few years with many retailers thinking they could bypass them by going online and trying to find the direct manufacturers of merchandise. What retailers found is that the internet is a maze of confusion and there are many unscrupulous dealers who have no connections to merchandise.

 

That said, retailers around the country have realized that wholesalers play a valuable part in the success of their businesses. A good wholesaler knows what products are trending and has the resources to buy in large quantities to keep merchandise costs competitive. Established wholesalers have the connections to the major brands and are allowed to purchase them for resale. Many novices find out quickly that the major brands are not interested in selling to small independent retailers.

 

I think one of the most challenging things for retailers this year was that many tried to buy directly from overseas suppliers to save money. Buying overseas requires a skill level that most of us do not have. There is a lot of quality control issues as well as payment terms and shipping that are best left to the professionals. How many of you have tried buying overseas only to be frustrated when the merchandise arrives broken or misrepresented? Unlike a local supplier, it is often difficult and expensive to try to remedy overseas purchases gone bad.

 

This is where the established wholesaler comes in. They negotiate regularly with overseas suppliers and take on all the risk. Before it gets sold to you, defective items and problem wholesale merchandise is removed so you get only the top quality in the lot. This is why importers are entitled to their small percentage of markup when they resell goods. It is a small price for retailers to pay to have someone ensuring the quality of their purchases.

 

What has been your experience with wholesalers? Share with us…

 

 

 

Robots Will Take Over Construction Industry

How many times have we heard politicians promising to bring back manufacturing jobs to the United States? Maybe I am over thinking it, but unless you are manufacturing some very expensive items it will be a challenge to offer American workers minimum wage to stand on an assembly line and put together key-chains and such. Come to think of it, there are some very expensive items like all of Apple’s products that have low material cost and sell for hundreds or thousands of dollars. Those components would be great to manufacture in America and pay workers a decent wage. But, wait, why manufacture here when they can pay a couple of hundred dollars a month to do it overseas? And so the problem continues.

 

As sales director for Union store fixture and mill work installations I understand now more than ever how important labor unions are to our work force. With many Americans working harder than ever we see many corporations cutting shifts to less than 30-hours so they are not eligible for health benefits. We are becoming a country of part time workers, which is not going to sustain us to raise families and live the American dream.

 

Thanks to Labor Unions like the International Brotherhood of Carpenters, which we are members of, there are some safeguards for us. An honest wage for a day’s work by skilled workers who are well- trained and focused on quality and safety.

 

We often sit around and discuss the future of our children and the new generation when it comes to what types of jobs will be available to them. Tech comes up a lot. It’s a growth industry, not only in the USA but overseas as well. With the world becoming smaller (thanks to the internet) it also becomes more competitive and price conscious.

 

Many manufacturing jobs have been replaced by computers and robots. A bottling plant for a beverage company can replace 100 human workers with a series of robotic stations and only 2 human workers to turn them on and off. More people unemployed by technology. Many young college graduates have studied robotics in the hopes to build a career in that field. Now, here is the kicker (and It is real)… There are companies that are actually designing robots capable of building robots!

 

Now let’s get onto construction! We as union carpenters, while more states embrace “right to work” are still feeling secure that a man with tools will always have a job. Well, I felt the same way until I researched the robotics industry and found a startling new concept: Robotic construction workers!

 

Yes, it’s true, according to Science Journal, a prototype of a new robot referred to as “termes” has been developed that may one day revolutionize the construction industry. Engineers provided the robots with construction blueprints, and then left them alone. The TERMES built the structures by observing and reacting to the other robots around them—with no further instruction from humans.

 

Because they work independently, the same construction plan can be executed by a dozen TERMES or a hundred of them. Because their directives are so simple—put down a brick that fits in the building plan, where no one else has laid one down–they require little processing power. The prototype TERMES use specially built bricks to construct towers, castles, and pyramids. The researchers say they could also handle simple tasks like laying sandbags down before floods. While the prototype robots are about the size of a desk phone, researchers say they could eventually scale them up or down

 

Imagine construction sites where human workers are union store fixture installersreplaced by robotics. Carpenters and construction workers can be displaced by the robots and the sites requiring only minimum supervision.

 

While this technology is still in prototype, the reality is that they have successfully created the beginning stages of its development. While those of us middle-aged carpenters may not have to contend with R2D2 taking over our jobs, future generations may very well have to deal with this new technology that will threaten their livelihood.

 

My advice to those up-and-comers in the industry….become a shop steward so you can watch over the robot workers!

 

There is an interesting video put out by Harvard that shows these Termes in action: http://youtu.be/LFwk303p0zY

 

About the author:

Martin Chase is National Sales Director at Store Force, Inc., leading Union store fixture installers providing clients with fixture and mill work installations around the country. Martin can be reached at 631-672-3150 or by email at: unioninstallers@gmail.com

 

 

 

Manufacturing In America?

wholesale merchandise, manufacturingThis month just some fodder to think about. Since the election of our president (twice!) there was a good deal of talk about bringing manufacturing back to the United States. The idea is great and it stirs up a lot of cheers from the crowd. But the reality of doing this really is quite different that the concept.

 

If you are talking about very high end goods like cars, then yes, manufacturing can be done in the USA. The product has enough margin to sustain localized manufacturing. How many people do you know who build cars? The talk was about all types of manufacturing to get our factories buzzing again. That is a much harder scenario.

 

When it comes to wholesale merchandise, do we really think that we will be able to manufacture here as opposed to overseas? The conundrum is that dollar store merchandise made here in the USA would be considered $5 store. Because citizens of the USA are trained on bargains and deals, it’s very unlikely that they will pay double or triple for a product because it is USA-made. The concept of USA-made gets a lot of cheers until consumers need to open their wallets to pay for it.

 

The other end of that is the manufacturing itself. How many people do you know will want to work on a factory assembly line making minimum wage to assemble widgets? Even if a factory could employ American workers for minimum wage, that is still double, triple or beyond what they pay their counterparts in other countries.

 

So, we have a double edge problem. We really should manufacture here but we really can’t afford to either make it, or buy it after it’s made. And unless the product is a high margin one, companies will not consider cutting into their own margins.

 

By the way, and I never understand why the millennials never take offense to Apple when they are “Occupying Wall Street.” Here is a company that employees poorly paid workers in China – exploits them and charges $600 for a cell phone here in the USA. This is a great example where we CAN manufacture here in the USA and maybe instead of costing $5 to make an iPhone it would take $10 – still leaving a big margin and allowing American workers the opportunity of employment.

 

I often think of the Apple scenario and wonder why our President hasn’t reached out to the mega tech gurus over there … then I realized that he’s a Blackberry guy! And we all know what’s happened to Blackberry!

 

Your thoughts?  Please share.