ETD: 883 Neiman Marcus; Online Consumers Window Shop More than
Impulse Buy; DMS Retail
E-Tailer's Digest
etd_post at gapent.com
Tue May 3 12:07:50 GMT 2005
E-Tailer's Digest --- Everything for the Retailer
Issue #0883 May 3, 2005
George Matyjewicz, Moderator mailto:georgem at gapent.com
Published by: GAP Enterprises, Ltd. http://www.etailersdigest.com
----------------------------------------------------------------
CONTENTS
[1] Greetings
[2] Neiman Marcus
[3] Online Consumers Window Shop More than Impulse Buy
[4] DMS Retail
----------------------------------------------------------------
[1] Greetings.
----------------------------------------------------------------
Hi All:
There was some interesting news yesterday - Neiman Marcus was sold for nine
(9) times cash flow! That's a big boost for the luxury market, one of the
best retail markets according to many gurus, including list member Pam
Danziger.
This week, another client of ours who manufacturers and sells high-end
lingerie, introduced a line of sleepwear that resembles what was worn in
the 1800's and the product retails for $1,800. And at the recent auto
show, high-end autos were featured. It looks like the luxury market is
going to be with us for a while. Are you in it?
We found an interesting article on online shopping, which has to get us
thinking about how we present goods. This article says the shoppers window
shop more than impulse buy. Which means we need to offer items to get them
to buy. What do you do?
List member Dianne Miethner has provided a profile of her business - DMS
Retail, which will remain for posterity at our "Members: Who Are You?"
site. This is a courtesy to our members who contribute to our forum, and
not merely a way to advertise for free. Anything to do with the retail
world, i.e., supplier, retailer, consulting,
etc. http://etailersdigest.com/resources/members/index.htm And we have a
form there for you to tell us about you. As I said when I first proposed
this idea, we have "known" each other for a long time, yet we often don't
know anything about each other. So, tell us who you are and what you do.
Now, let's get to everything for the retailer.
Sincerely
George Matyjewicz, PhD
Chief Global Strategist, GAP Enterprises, Ltd.
mailto:georgem at gapent.com
http://www.etailersdigest.com
----------------------------------------------------------------
[2] Neiman Marcus
----------------------------------------------------------------
Private equity firms Warburg Pincus and Texas Pacific Group announced a
deal to acquire luxury icon Neiman Marcus Group Inc. for about $5.1
billion, or $100 a share. The sale, which includes 35 Neiman Marcus
stores and two Bergdorf Goodman stores in New York, values Neiman at nine
times its cash flow.
Neiman's new owners are getting one of the most valuable names in American
retailing, known for its opulent catalogs, immaculate sales floors, and
exclusive designer collections. In addition to its famous luxury stores,
the Dallas-based company also owns catalog and Internet operations
including Horchow luxury home furnishings, and majority stakes in
accessories-maker Kate Spade and Gurwitch Products, which manufactures
Laura Mercier cosmetics. Flush with customers unaffected by economic
jitters, Neiman's stock price had already climbed some 50% before the
company announced a potential sale in March.
"The play for us is a long-term play on the continued spending in the
luxury segment. This is more a play on luxury than retail," said Kewsong
Lee, a Warburg Pincus partner.
The question for Warburg and Texas Pacific is just what additional value
the two can extract from what is already regarded as one of the world's
best-run retailers. The deal comes when most buyout firms are flush with
cash. Warburg Pincus, for example, is near closing on a $7.8 billion fund.
People familiar with the private-equity groups' plans say the goal is to
build between five and 15 new stores while expanding the company's Internet
and catalog operations. Texas Pacific already has experience in retailing
after acquiring 85% of family-owned clothing retailer J.Crew in 1997. After
a major turnaround, J. Crew is expected to seek an initial public offering
later this year.
The sale is the latest in a rash of recent mergers and acquisitions in the
retail sector including Kmart Holding Corp.'s takeover of Sears Roebuck &
Co. and Federated Department Stores Inc. acquisition of May Department
Stores Co. Saks Inc., Birmingham, Ala., confirmed Friday the sale of its 47
stores in the Proffitt's and McRae's department-store chains to closely
held Belk Inc. for $622 million, adding that it won't sell its luxury Saks
Fifth Avenue chain or its 38 Parisian department stores.
But unlike most of those deals, the acquisition of Neiman Marcus doesn't
represent a weak company in need of a turnaround. It also isn't an indirect
real estate play as was the case with the recent purchase of Toys "R" Us.
Neiman's dominates upscale retailing with a singular focus on catering to
wealthy shoppers. The company has posted consistently strong gains in sales
and profit quarter after quarter. For its fiscal year ended July 31, 2004,
Neiman's posted revenue of $3.55 billion, up 14.4% from a year ago. Profit
totaled $204.8 million, up 87% from the year before.
Warburg Pincus and Texas Pacific's purchase represents confidence that the
luxury market will continue to thrive. Bear Stearns estimates that it
reached $92 billion in sales last year, up from $80 billion in 2000. Just
as other discounters and middle-market retailers feel the crunch of high
gasoline prices and continued pressure from Wal-Mart Stores Inc., high-end
retailers have continued to post strong sales amid demand for designer
products such as high-end handbags, shoes and apparel.
Details at...
http://online.wsj.com/article/0,,SB111499467928321767,00.html
----------------------------------------------------------------
[3] Online Consumers Window Shop More than Impulse Buy
----------------------------------------------------------------
The Internet might be turning into the ultimate window shopping experience
for online shoppers. Greater sophistication with browsing is making
consumers more prone to comparison shop online before actually buying.
Internet shoppers are more prone to visiting 10 or more Web sites before
returning to a favored location hours or days later to make a purchase.
This new trend of leaving a Web site before completing a sale suggests that
Internet merchants need to rethink their marketing strategy and Web site
design, says the author of an exhaustive study.
According to the report on Internet shopping habits, online merchants need
to shift their focus from why shoppers abort shopping carts to why they
leave Web sites without buying.
Buying Habits Changing
Online consumers are no longer rushing to click the shopping cart button on
Web sites. Instead, they spend days digitally window-shopping before
buying, abandoning shopping carts with an ease that frustrates and often
confuses online retailers.
"The shopping cart abandonment issue is the most important thing that we
uncovered," said Ken Leonard, CEO of ScanAlert. "Most merchants think that
shopping cart abandonment is just part of the online shopping process."
His study showed the average time delay between a consumer's first visit to
a Web site and the first purchase was just over 19 hours. About 35 percent
of all tracked shoppers took more than 12 hours to make a buy decision,
while 21 percent took more than three days, with 14 percent taking more
than one week to decide where to buy.
According to Leonard, the abandonment issue and the delay in completing the
shopping cart purchase shows behavior that is radically different from two
years ago.
Shopping Cart Redesign
"The implication to merchants is that the shopping cart is not just a
convenience factor. It must be a comfort zone to shoppers," Leonard said.
"These results were not expected."
The length of time from initial visit to actual purchase varies from site
to site depending on customer demographics, brand recognition, the number
of competitors online and average product price. The data suggests that
shopping cart abandonment is actually an habitual part of many consumers'
shopping behavior prior to purchasing.
The report offers two recommendations for converting shoppers into buyers.
One is for merchants to create a comfort zone for comparison shoppers. The
other is for merchants to move the focus of the Web site from shopping cart
abandonment to Web site abandonment.
Thus, site designers must make the shopping experience more informative and
the sense of safety more memorable. Otherwise, those who abandon their
shopping carts will also abandon the Web site later when it comes to
deciding where to buy.
Comparison a New Factor
According to the report, much of the observed increase in shopping cart
abandonment over the past two years results from an increase in comparison
shopping. As consumers learned to use the shopping cart as a comparison
shopping tool, they also learned to leave the Web site as a natural
characteristic of electronic window shopping.
"It is very easier to comparison shop online today. Consumers have many new
tools," Leonard said. "There is also a connection with the change in
shopping patterns and the more widespread use of broadband."
The consumer's ability to make product comparisons online is a factor in
site abandonment as well. The study shows that the shortest buying delays
involve shopping for the most unique products, while the longest delays
occur for more common items.
Details at...
http://www.ecommercetimes.com/story/42761.html
----------------------------------------------------------------
[4] DMS Retail
----------------------------------------------------------------
DMS Retail 0ffers Retail advice; Mystery Shopping services; E-books for
success in retail; Retail consulting; Dear Bobbie Q&A
Our 15+ years experience in store, district and Head Office level retail
management and strong management and people development experience,
combined with excellence in customer service delivery results in
exceptional benefits to our clients.
We started the business 10 years ago to help retail people become better at
serving customers and managing people; to help them decrease turnover.
We market out services via our Website; Newsletter to subscribers and Word
of Mouth.
Prices vary for services; e-books from 9.95 to 29.95; Performance
evaluation tool- $349.95
Visit www.dmsretail.com or e-mail info at dmsretail.com for information,
quotes, etc.
Dianne Miethner
President
DMS Retail
46 Bilbrough Street
Aurora, Ontario L4G 7W4
Tel: 416-917-2655
----------------------------------------------------------------
Links to follow
----------------------------------------------------------------
GAP Enterprises, Ltd. http://www.gapent.com/
E-Tailer's Digest http://www.etailersdigest.com
Interim Help http://interimhelp.com
Marketing Your Web http://www.gapent.com/myweb/
Automated Press Releases http://www.automatedpr.com
More information about the ETD
mailing list