ETD: 886 Need software solution; Internet Companies Look to
China; Luxury Consumption Index up 5.3 Points
E-Tailer's Digest
etd_post at gapent.com
Thu May 12 11:56:36 GMT 2005
E-Tailer's Digest --- Everything for the Retailer
Issue #0886 May 12, 2005
George Matyjewicz, Moderator mailto:georgem at gapent.com
Published by: GAP Enterprises, Ltd. http://www.etailersdigest.com
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CONTENTS
[1] Greetings
[2] Need software solution
[3] Internet Companies Look to China
[4] Luxury Consumption Index up 5.3 Points
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[1] Greetings.
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Hi All:
We are looking for a new IT solution for a client, and I thought it would
be a good exercise for all of us to learn what is new on the market. I
have asked our software vendor members to tell us about their
offerings. What do your use?
China seems to be the place to go for business growth. But is it? There
are issues doing business in China.
Luxury guru Pam Danziger offers an update on luxury consumption. Folks, if
you aren't in the luxury market, you should be. It's hot.
Tell us about your business, 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
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[2] Need software solution
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We have begun a major project with a client, part of which includes new
IT. We will be reorganizing their processes and procedures in all areas
of the business (they are an apparel company) - order processing,
inventory, sales, administration, accounting, operations, warehouse
distribution, EDI and manufacturing. Then we will be issuing an RFP for a
new IT solution, which we will also implement at the client, since it will
be with new processes and procedures. We expect this to take 12-18 months.
Why am I saying this? I need some ideas of what our list members may be
using or would recommend. We don't need Point-of-Sale. What are you
using? What do you wish you were using? What do your colleagues say is a
good solution?
For the software vendors on the list, what do you have to offer? This will
be a good exercise for our list members.
George
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[3] Internet Companies Look to China
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There is a good article in E-Commerce Times about the annual Hua Yan
Science & Technology conference Saturday in Santa Clara, Calif.
http://www.ecommercetimes.com/story/42968.html In it they discuss how
Internet companies are focusing on China and that the potential for
e-commerce in China is tremendous. At the same time, competition is intense.
I learned a lot about China during my tenure as Chief E-Commerce Officer at
the world's largest polyresin giftware company (China-based), when we were
involved with the digital currency company and when I wrote my doctoral
dissertation.
China holds an array of risks for U.S. companies. Its legal system is in
constant flux, Enronesque accounting scandals are frequent, and some
industries may be due for a shakeout because of an excess of competitors.
Over the past 8 years I have done a lot of business in China. The
challenges are quite stiff, and will take quite some time to overcome. For
example, most of the people in China earn less than $1,000 a year. And the
government has strict restrictions on who can open a business there,
including partnering with a native. They also have major restrictions on
what the population can hear and read, and have restrictions on Internet
information.
When Pepsi entered the market, McDonald's suffered, even though they are in
two different arenas. The reason is because of the limited discretionary
spending funds available.
It's going to be interesting to see how e-commerce works in China.
George
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[4] Luxury Consumption Index up 5.3 Points
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Reversing a downward trend in luxury consumer confidence tracked since the
second quarter 2004, the Luxury Consumption Index rose 5.3 points to reach
100.9 at the close of the first quarter 2005. In a survey of 732 luxury
consumers (average income $132.8k) conducted in association with Unity
Marketing's quarterly luxury consumer tracking study, 36 percent of
respondents said their financial condition was better off now than at the
end of 2004.
Despite rising gas prices and a feeling of uncertainty about the economy as
a whole, luxury consumers in the first quarter of 2005 are beginning to see
light at the end of the tunnel in terms of their personal financial
status. Consequently they spent more buying luxuries in the first quarter
2005 compared to last year, $11,726 up 11 percent over $10,596 reported in
1Q2004.
Prospects look strong for the rest of 2005 in terms of luxury
spending. Some 28 percent of luxury consumers expect to spend more buying
luxury over the next twelve months. Further a majority (55 percent) expect
their financial status will continue to improve in the next twelve months.
In the first quarter 2005, luxury consumers spent considerably less buying
luxuries for their homes compared to last year, with home luxury spending
down 43 percent from $6,779 in 1Q2004 to $3,872 on average. Following a
spending pattern identified throughout the 2004 tracking year, when luxury
consumers spend less on home luxuries, they spend more on experiential
luxuries, like travel, dining and entertainment. Spending on experiential
luxuries rose 70 percent in the first quarter 2005, up from $2,501 to
$4,249 in 1Q2005.
While spending on personal luxuries, like fashion and fashion accessories,
jewelry and luxury cosmetics, remained about even with last year, luxury
consumers spent more buying luxury automobiles in the first quarter 2005,
up 48 percent from $30,793 to $45,594 on average.
Intuitively it makes sense that when luxury consumers spend more time out
and about, traveling, dining and attending the theatre, they don't focus
their attention on their home surroundings. And that is the pattern that
Unity's quarterly luxury tracking study has verified. How much luxury
consumers spend on luxuries for home is in an inverse relationship with how
much they spend on experiences. When home spending goes up, experiential
spending go down and vice versa.
For luxury home marketers, they have to look to the younger luxury
consumers, members of the GenXer (born 1965-1976) and Millennial (1977 and
after) cohorts, as their primary target markets as the luxury baby boomers
continue to emphasize spending their luxury dollars on things to do and
places to go, rather than acquiring more material goods.
Unity Marketing's benchmark index of luxury buyers is calculated from a
sample of over 700 upper-income households throughout the United
States. This panel, with household incomes over $85,000 represents one of
the largest longitudinal studies of high-end luxury consumption of goods
and services. Panelists reported purchasing behavior of luxury goods and
services over the past three months, as well as attitudinal and expectation
data about luxury brands and categories, their households and the health of
the economy in general.
Unity Marketing publishes its Luxury Tracking Study quarterly with the next
due in June 2005. For more information, visit
http://www.unitymarketingonline.com/reports2/luxury/luxury3.html or call
Pam Danziger, President
Unity Marketing
717-336-1600
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