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Retail Law Advisor

Black Friday? Not This Year.

Posted in Holiday, Retail, Retail Sales

Black Friday is the infamous day that kicks off the official holiday shopping season in the United States. With many folks and students enjoying the day after Thanksgiving off, Black Friday is the perfect time to start working through lengthy holiday gift lists. Traditionally, retailers offer incredible sales, vying for consumer attention and wallets. In 2014, $50.9 billion was spent during the 4-day weekend alone.

In recent years, retailers have pushed back store opening times, drawing in buyers with promises of amazing deals. In 2011, several retailers, including Target, Macy’s and Best Buy, opened at midnight on Thanksgiving day for the first time.  Since then, retailers have slowly moved store opening times earlier and earlier. In 2014, stores like JC Penney and Best Buy opened their doors at 5pm on Thanksgiving day.

Not this year…

Some retailers are giving back Thanksgiving to their employees.  In 2015, stores like REI and Staples are leading the way by choosing to stay closed on Thanksgiving day. REI has pushed the envelope even further, keeping their 143 brick and mortar stores closed for Black Friday as well.  REI is encouraging employees and consumers to “discover nature’s restorative power” as an alternative to shopping that day. Of course, the store continues to offer online shopping options around the clock. But why? While many retailers have their employees’ best interests at heart, it has become increasingly clear that opening on Thanksgiving day isn’t as lucrative as some retailers thought. Additionally, a recent report by PwC shows that more shopping occurs before and after Black Friday, and that most holiday shopping takes place in December. The retail industry may be on the brink of responding to the way people are shopping- at least on Thanksgiving weekend.

The War for Talent: It’s On

Posted in Employment, Holiday, Retail

credit_card_transaction_paul_burnsIt’s not exactly news that we have a war for talent in the U.S. Since the recession of 2008, business commentators have followed the U.S. population’s return to work. When unemployment was high and workers had no alternatives, they often stayed at jobs regardless of their level of satisfaction or room for advancement. However, now that unemployment is low, and workers have options open to them, experts believe Millennials in particular will make more frequent job transitions.

The retail industry feels the constant pressure to retain quality employees and has taken swift action to remedy it. Recently, Wal-Mart announced that in order to attract, retain and raise morale of its workers, the company would raise the minimum wage to $10/hour beginning February 2016, up from $9/hour last April. The news has been met with both positive and negative reaction from Wal-Mart’s various stakeholder groups. Recently the SEC came out in support of a component of the Dodd-Frank Act that mandates companies to compare publicly the gap between CEO and worker pay which, some analysts believe, will pressure many companies to address wage inequalities.

Against this backdrop we are heading into the holiday season, the retail industry’s busiest season of the year. Will Wal-Mart’s wage hike affect any of its seasonal workers? On the surface, it’s not likely to do so, as the increase does not go into effect until February, long after the last ribbons have been tied on the packages. However, there’s no telling whether the potential for higher wages and possibly long-term employment will encourage some seasonal workers to perform just a little harder this holiday season as they look for a little extra boost in their paycheck come February.

Trend-watchers predicted that shoppers would begin their buying before Halloween and that online sales will rise by almost 14% this season. It remains to be seen whether brick-and-mortar stores will be increasing their staffs, and with it, the big line item in their HR budget. It is also unclear as of yet whether any of these workers will stay through the first part of 2016. However, one thing is certain: jobs are plentiful in the retail industry and the turnover is high. A study found that the average cost for identifying, hiring and training a retail worker with a $10/hour pay rate is more than $3,000. We can all do the math- that’s a big investment, and as wages increase and employees are tempted to job-hop, this could become one of the most vexing issues for retailers.

Until then, we’ll wait to see what this season brings.

Looking Ahead to MAPIC 2015

Posted in Retail

globe with shadowed man_1547163It’s hard to believe, but it’s that time again: MAPIC (le marché international professionnel de l’implantation commerciale et de la distribution) hosts its annual meeting and our retail practice will be there in full force. Goulston & Storrs has been working with MAPIC for a number of years.  Last year in this blog we discussed explosive growth in the retail sector leading up to the show — 520 new brands were represented at the expo as exhibitors, speakers or attendees and Goulston & Storrs led a standing room only panel discussion on what foreign retailers should know about operating in the U.S. In addition to a positive market outlook, MAPIC 2014 also marked the event’s 20th anniversary, adding to the overall excitement of the event.

This year, 226 exhibitors from 37 countries will convene at MAPIC. As it does each year, MAPIC designates a “featured nation” and builds content around issues relevant to that specific market. This year, the U.S. is MAPIC’s featured nation, so we will have great momentum leading into this year’s conversation.

In fact, conversations are already starting. We recently spoke with Bisnow regarding our presence at MAPIC 2015 and what we believe retailers entering the U.S. will want to know this year about opportunities, challenges, and trends. A few of the topics we will cover include the litigation climate and outlook in the U.S. and its impact on retail expansion; intellectual property concerns; and locational considerations such as where brokers and other advisors are in relation to the desired U.S. customer base. We will be ready to tackle those questions and more! We encourage participants to stop by our booth, P-1.H68.

As we look toward MAPIC 2015, we are eagerly scouting trends, drawing out questions, and starting important conversations. We look forward to returning later in November with our finger on the pulse of the international retail community. Stay tuned for our updates from the show, and please join the conversation while we are there, following us @goulstonstorrs and sharing your ideas #MAPIC #retail.

Strong Showing in Arizona: ICSC’s 2015 U.S. Shopping Center Law Conference

Posted in Retail

ICSCArizona played host to ICSC‘s 2015 U.S. Shopping Center Law Conference, and with great success. The conference took place at the JW Marriott Phoenix Desert Ridge Resort & Spa, which comfortably housed over 1,400 attendees. The conference offered a robust itinerary of educational sessions, focus groups and roundtables. As always, the gathering was rich with opportunities to network and mingle with colleagues, peers and old friends.

By day, attendees had the opportunity to take advantage of an impressive slate of educational programs for all skill sets.  Organizers divvied up the schedule to provide workshops for both emerging practitioners (e.g., “Leasing Boot Camp I: Negotiate a Lease Like a Jedi Wields a Light Saber”) and more advanced professionals alike (e.g., “We Are Not in Kansas Anymore: Unique Issues in City Leasing”), allowing everyone a chance to further develop their practice.  Sessions with a broader focus, like “Developer/Tenant Flashpoints in the Redevelopment of Malls and Shopping Center”, drew listeners of all levels and specializations.

At dusk on Wednesday, the crowd gathered outdoors for the welcome reception to enjoy multiple networking opportunities whilst sharing food and libations.  Thursday morning, keynote speaker Commander Rorke T. Denver inspired his audience with a powerful message about leadership, balance and the importance of mentorship.  That evening, ICSC’s Next Generation gave newcomers an opportunity to connect while indulging in some of the area’s local cuisine with a casual, “Dine Around” event.  Outside of the scheduled programs and events, attendees reconnected with old friends, made new connections and took advantage of the retail-rich environment to share ideas and expand networks.

All in all, the 2015 Law Conference was a great success.  Record numbers for attendance proved that the retail industry continues to thrive.  Next year, conference organizers are shooting for similar success, this time in Hollywood, Florida, on October 26th, 2016.

“In fashioning myself, I fashion man” – E-Tailers Champion A Sartorial Renaissance in Masculinity

Posted in Retail, Retail Sales, Technology

menswearWhen it comes to shopping, men generally fall into one of two camps: (a) those who simply don’t know how to shop and would rather book their next root canal before embarking on such an experience and (b) those who don’t have time to shop and shudder at the prospect of waiting in long lines. To the rescue of men everywhere, a new generation of tech concierge clothing services has taken a page from the Mad Men era and benched the mundane salesperson for a personal style expert. These companies seamlessly marry technology and that indispensable women’s touch, arming their personal shoppers with useful algorithms and data that improve the likelihood of yet another happy customer. In much the same manner as Netflix disrupted the movie industry, subscription retail websites, such as Trunk Club (@TrunkClub) and Bombfell (@Bombfell), have taken the fashion industry by storm by effortlessly integrating the online and offline customer experience; in turn, creating a hassle-free personal styling experience, all done with a personal touch.

For a man willing to hand over the reins to an e-tailer’s personal stylist, there is little reason to visit a clothing store again (aside from the rare drop-in to offer consolation to those unaware of e-tailers). Thus far, e-tailers have been successful at tapping the potential of the men’s fashion market. By shielding male consumers from the frustrations of shopping, introducing them to new brands, giving free fashion tips and delivering clothing directly to their doors, e-tailers have created a personalized service that harkens back to the mid-century with a modern twist manifest in each perfectly curated item hand-picked for the customer. This personal styling component is a major selling point and an integral part of these companies’ success. The fact that Trunk Club’s clothes are hand-picked with the personal tastes of each customer in mind allows customers to have a shopping experience that feels as if they were actually in a store. This unique dynamic provides a private forum for the customer to voice his fashion penchants, and, over time, gives the stylist a better understanding of the client’s specific tastes and fit in order to deliver trunks that fulfill the client’s every fashion need.

Women’s wear has forever been considered the belle of the ball to the fashion industry, while men’s wear has been considered the sartorially dysfunctional step-child. Traditionally, trends in men’s wear have moved at a glacial pace and been out of step with the cycle of items appearing in runway shows, fashion-forward blogs and magazines. However, the men’s fashion market is taking huge steps at altering the convictions of the fashion industry due in large part to a male consumer base that is more seasoned and willing to spend more than ever before. The meteoric rise of retail tech companies –Trunk Club, Bombfell, Five Four Club, Curator and Mule, and The Mr. Collection, just to name a few – proves that the once green men’s fashion market is now ripe for the taking. By merging technology and fashion, these online shopping assistance websites are stimulating the growth of a potential $100 billion men’s retail market. The lack of competition in this arena makes it fertile ground to reap profits and redefine the game of men’s fashion – a proposition that Nordstrom categorically accepted evident by its acquisition of Trunk Club in August, 2014.

Over the past decade, we have seen explosive growth in terms of the interest in men’s wear. And, e-tailers have blazed a trail by seemingly creating the ultimate personalized shopping experience for men. In sharp contrast to the shopping experience that many of us are familiar with, e-tailers are channeling an earlier time in retail, and styling men in clothing that promises a look of time-honored refinement and sartorial masculinity.

Why is Omnichannel Retail so Hard?

Posted in Retail, Retail Sales, Technology

omnichannelThe retail industry has been evolving rapidly to keep up with new technology and consumer patterns. While the chief concern previously was about how traditional retailers could prevent the loss of market share to online retailers, now all retailers compete on all fronts in an omnichannel setting. In brief, omnichannel retail is about creating one cohesive retail environment across many different physical and online platforms; recognizing it may require multiple touch points from initial consumer exposure to eventual purchase; and offering an individually-tailored and consistent user experience.

While we have previously blogged about the benefits of omnichannel, creating a successful omnichannel environment is a complex process that requires targeted investments to ensure all platforms function smoothly with each other. For a successful online presence, retailers must understand how to use social media, mobile, computer and other technologies, all of which must be fully integrated with legacy environments. In stores, employees must be trained to operate in a sophisticated environment where consumers expect seamless integration between browsing in stores and shopping on their phones and other devices.

Retailers face many challenges in playing in this complex environment. Without a coherent strategy, dealing simultaneously with warehouses and shipping, increased IT and security infrastructure, research and analytics, and brick and mortar stores can lead to disorganization and decreased margins. Underperformance in one area affects all other areas. For higher end retailers, any inconsistency in consumer experience, such as price discrepancies caused by currency fluctuations or tariffs and disjointed back-end operations may tarnish the exclusivity of the brand reputation. In an omnichannel environment, it is important to have integrated brand control that keeps the brand messaging, pricing and shopping experience the same across all platforms and locations.

In such an interconnected space where consumers make purchases after several rounds of engagement, it is difficult to pinpoint cause and effect and, therefore, which investments are worthwhile. That is why the effective use of data analytics and detailed customer tracking mechanisms are crucial for a successful omnichannel strategy. Moreover, consumers also want consistent personalization across all platforms. Tracking consumers across channels helps in both these areas and also creates significant new market opportunities by giving consumers product suggestions based on their past purchases or browsing history, reminding consumers about shopping cart items, and turning loyal consumers into brand representatives via social media engagement. There is no doubt that omnichannel retail is ripe for experimentation and will only become more sophisticated. While challenging, successful omnichannel retail offers many more possibilities for engaging with and selling to consumers.

Pop-Up Halloween Stores Don’t Scare Landlords

Posted in Landlords, Pop-up Retail, Retail, Retail Sales

Halloween Pop UpHalloween specialty stores have been popping up annually since the 1980’s and quickly became a national phenomena.  According to the National Retail Federation, the celebration of Halloween is projected to generate approximately $7.4 billion dollars this year. Pop-up Halloween stores can be big business for both retailers and their landlords.  Even though pop-up tenants only typically occupy their spaces for a maximum of ninety days, landlords are able to charge higher rents for those periods than one would typically find on a longer lease.  Many pop-up Halloween stores begin scouting for next year’s lease as early as November 1 because the retailer can capitalize on return business if they “pop-up” in the same location again.  Although many short-term leases signed in the first six months of the year include clauses allowing the landlord to break the lease if it finds a suitable long-term tenant, by June many landlords are happy to fill the storefronts on a temporary basis and attract additional traffic to the center.

Temporary Halloween stores often have specific basic criteria for potential locations: roadside visibility, foot traffic and proximity to other in-demand stores.  But while pop-up retailers may be unwilling to compromise on these criteria, they are often flexible on other criteria.  They have been known to rent old warehouses, bookstores, restaurants, and even space in parking lots if they are in the right location.  Some of these unique spaces actually help pop-ups create the “Halloween experience” their customers are looking for.  In order to create the right ambiance, specialty stores are hiring more than just cashiers and stockers.  Many are bringing in lighting technicians, makeup artists and even prosthetic engineers.

Although Halloween specialty stores initiated the pop-up trend and dominated the market in the 1980’s and 1990’s, more general retailers have begun to open their own temporary stores. Clothing lines, restaurants, electronic stores, and even major online brands are getting on board with pop-up stores.  Some use it as a way to test a market for permanent locations.  If a location sells enough of a product to a certain demographic, that is a strong indicator to the retailer that a permanent store location would succeed there. Others use the pop-up model to launch a new brand.  Retailers can also increase brand recognition by orchestrating temporary stores in many locations to reach a broader audience than with a single permanent location. Then, when it comes time to open permanent locations, for those locations where the retailer had a pop-up, it already has a following.  Still other retailers use pop-up stores as a way to offload excess inventory, using the temporary nature of the shop to play on customers’ sense of urgency.[8]  Finally, some online retailers have used pop-up stores as a way to get their products to consumers immediately through in store pick-up, and to allow customers to test and touch their merchandise.

Given the many benefits to creating a “pop-up” retail experience, expect to see more temporary stores popping up in major markets as retailers look for more creative and cost-effective ways to increase their sales and reach new customers.

Apple Pay, Android Pay, Samsung Pay: Where’s Your Wallet?

Posted in Retail, Retail Sales, Technology

apple payLast week Samsung launched its mobile payments app to compete with ApplePay and Android Pay, with much anticipation among technology bloggers. A few Technorati rushed to try the application so they could compare and contrast with the others. While it’s not likely that the general population will comparison shop for their payment system anytime soon, the technology is definitely gaining traction due to the ease of use in a world of ubiquitous mobile phones. In addition, for some people the added security features of tap-to-pay offers peace of mind in a world addled by data breaches from malfunctioning credit card swiping technologies and chip readers. These emerging mobile payment providers take advantage of near field communication (NFC) technology (contactless communication between devices) to enable the payments.

For the Apples, Samsungs and Googles of the world, this move is not so much a rush to unseat banks and take over the financial world, as it is an opportunity to gain more insight and thus control over the customer experience. Mobile payments offer retailers the opportunity to blend features of the online and offline shopping experience, gaining greater insights about consumer spending habits along the way.

For example: imagine a customer circa 1998 who frequents a coffee shop and eventually takes a loyalty punch card by the register. In a few weeks, he has amassed the required number of purchases and receives a free coffee and repeats the experience. Imagine that same customer today, enabled by a mobile payment app: he uses the app once for a coffee, and is immediately offered the opportunity to purchase twelve-for-the-price of ten coffee drinks to use at any time. This loyalty program is like the loyalty card but in reverse: it happens early in the relationship, faster, and when the customer least expects it. And, the ability to add loyalty perks with mobile payments is almost limitless, unlike the punch card which must be repeated again and again, with no variation and little opportunity to differentiate the shopper who visits twenty times from the one who visits 200 times. Gaining customer trust and buy-in early in a relationship could be a good way to offset decreasing customer loyalty.

Widespread adoption of mobile pay technology may be slow, but is likely. Deloitte predicts that by the end of 2015, five percent (5%) of NFC-equipped phones will be utilized for mobile payments. Will they be right? Time will tell.

Omni-Channel Marketing: Maximizing the [In-Store] Shopping Experience

Posted in Retail, Technology

omnichannelWhile retailers recognize that most purchases can be accomplished by conveniently using an electronic medium, they also know that “one click” shopping does not satisfy everyone. In order to capture this population and to entice the online shoppers to visit stores, brick-and-mortar retailers must use the technology available to co-exist with the virtual world and enhance the in-store experience. Studies show that 80% of store shoppers check prices online, with one-third accessing the information on their mobile device while inside the actual store. This percentage proves that consumers are approaching their experience from multiple angles. Consequently, retailers must consider ways to make the in-store experience multi-dimensional.

Enter omni-channel marketing. Omni-channel is a form of marketing that gives retailers the ability to cross brand using multiple formats and devices. This approach allows customers to create their own experiences, provides opportunities for retailers to be more competitive, and increases revenue. Retailers are streamlining their marketing efforts and the clear lines that once existed between online and brick-and-mortar operations have now become blurred.

Mobile applications have multiple functions. They are used to remind customers of prior purchases, to introduce new products, to deliver product discounts, and to complete purchases. These applications also allow customers to send text messages that reward them with in-store coupons, receive loyalty rewards to use toward future purchases and even pay for their purchase. All of this data is collected by retailers and used when establishing future marketing and merchandising efforts.

In addition to the numerous conveniences of personal devices, some retailers provide tablets within their stores for customers’ use when shopping. Still others have taken the next steps to entice consumers into their store and to send the shopping experience to new heights. Ugg has established the innovation lab which includes a large touch screen that enables shoppers to customize their footwear while in the store and have items delivered if they are not available at the time of purchase. Neiman Marcus has launched Memory Mirror at select stores. Memory Mirror is a giant video screen that remembers customers and what they have tried on. Memory Mirror enables shoppers to see outfits from 360 degrees, compare clothing options side-by-side, and email videos and photos of the clothing to others. The use of this technology allows customers to shape shopping experiences in ways that were never before possible.

The interactive experience that customers now have while shopping in stores is one that cannot be created by shopping online alone, and the converse is also true. The omni-channel marketing strategy allows customers to begin their experience before entering the store, maximize its potential while in the store and continue it long after leaving the store. As retailers continue to use technology to integrate the online and in-store experiences, the possibilities seem endless.

#Instagram, #Instafashion, #Instagood: A Fashion Foray into Instagram

Posted in Retail

Facebook Instagram AdsDespite its reputation for over-filtered pictures, fashion blogging on #Instagram has moved the needle and compelled the fashion industry to welcome a group of #fashionistas that traditionally have been considered the plebeians of the fashion world. The rise of the fashion blogger phenomenon, coupled with consumers’ insatiable desire for more personalized shopping experiences, has resulted in the genesis of curated retail that has revitalized the relationship between retailers and consumers. On their fashion pilgrimage from amateur blogger to aficionado of style au courant, #Instagram #stylebloggers have attracted from hundreds of thousands of followers (@menstylepro, @onedapperstreet and @articlesofstyle) to millions of followers (@chiaraferragni and @negin_mirsalehi) on their #Instagram accounts. In doing so, #fashion-bloggers have created a groundswell of customer engagement.

For established and up and coming brands alike, collaborating with a #styleblogger is a smart bet to increase “word of mouth” endorsements and is a penny-wise method of interacting with their target demographic. Most importantly, it is perceived by many as being more genuine than traditional marketing efforts, mainly because #stylebloggers have established personal and fun rapports with their followers based on candor and inspiration for daily fashion. When such collaborations are transmitted through social media such as #Instagram, a brand can broadcast its story from a different viewpoint while also tapping into the #stylebloggers’ loyal following. Bloggers give brands a new social medium to interact with their consumers in a very authentic way. Essentially, #fashion-bloggers express a brand’s vision in the blogger’s own voice that may ring more true with consumers than traditional advertising. Because readers often develop impassioned and trusting connections with #fashion-bloggers, they are more likely to wear clothes that are specifically recommended by bloggers and validated or “liked” by their peers, proving that peer validation reigns supreme for consumers.

With their celebrity-like qualities, such as strong personal branding and a devout following, #fashion-bloggers are very appealing to brands due to their direct ties to consumers. The fashion industry has long had a reputation for ignoring entire groups of people and body shapes, with the common response from consumers being that they can’t see themselves on the pages of these glamour lookbooks wearing these clothes. Followers of #fashion-bloggers, however, often feel closer to them because consumers perceive bloggers as real people with whom they can identify. By creating a real world experience for consumers by exposure of clothing through bloggers, a brand can realize strong customer growth. Brands like Burberry (@burberry), Urbanstox (@urbanstox) and AlexanderWang (@alexanderwangny) have used first-rate trendsetters to showcase their clothing and, as a result, realized increased consumer engagement and growth.

Today, many people first discover brands through social media. Given that fashion is a world based upon aesthetic artistry, it’s hardly surprising that #Instagram, which allows users to alter photos to best advantage, has garnered much respect from the fashion industry. Numerous retail brands have recognized the buying power of Instagram users, and, as a result, adopted trend-arousing #selfies and branded hashtags. With the popularity of @Instagram ever-increasing, it’s clear that amateur fashion blogging is the next form of social media to be exploited by retailers seeking to boost their market share.