All posts by ANNE D'INNOCENZIO, AP Retail Writer

Target joins other retailers in offering voice shopping

NEW YORK (AP) — Target is jumping into voice-activated shopping as it deepens its relationship with Google, offering thousands of items found in the store except for perishables like fruit and milk. The move is happening as Google says shopping will be available later this year through Google Assistant on iPhone and Android phones, joining its Google Home device and Android TV. So shoppers can shout out orders to their phone while they’re running around doing errands or just walking. Target Corp. joins Walmart and Home Depot among others in partnering with Google on voice shopping as they seek to compete against Amazon’s dominance with its Echo devices. Amazon started offering Echo voiceassistants in late 2014, while Google made its debut with Google Home earlier this year. Target is also expanding nationwide its Google Express program that offers faster delivery from a test program in New York City and California. Shoppers will be able to get deliveries within two days since the items will be shipped to a nearby Target store for free provided the purchase meets the $35 order minimum. Next year, Targetshoppers will be able to pick up their online purchases at a Target store where orders are ready in two hours as part of the Google Express program. They’ll also be able to use Target’s loyalty card as an option for Google Express shoppers, giving them such benefits as a 5 percent discount off most purchases. Like many retailers, Target has been offering more shopping options. This past summer, for example, the Minneapolis discounter began expanding its next-day essentials delivery service that it was testing to the Atlanta, Chicago, Los Angeles, New York, Philadelphia, San Francisco, St. Louis, and Washington, D.C./Baltimore areas. “We have lots of different choices of how they buy from us,” said Mike McNamara, Target’s chief information and digital officer. He believes that voice shopping will be more prevalent in the next few years. More devices are in the hands of shoppers. Even Apple has one coming out this year. But the key is personalizing the order so if a consumer shouts out “detergent,” the voice assistant will know the exact brand that the shopper wants. Target says that it will give customers the option to link their accounts with Google Express for more personalized shopping. In fact, Walmart, which went live with voice shopping last week, is integrating its easy reorder feature — which has data on both store and online purchases — into Google Express. Shoppers who want to reorder their favorites have to link their Walmart account to Google Express. Amazon doesn’t give sales figures for Echo, but Consumer Intelligence Research Partners estimated that the Seattle company has sold more than 10 million Alexa-powered Echo devices in the U.S. since late 2014. That includes the core Echo, as well as the less expensive and smaller Echo Dot and the portable Amazon Tap. According to Forrester Research, 12 percent of shoppers own some voice device like Echo or Google Home. And 29 percent of them use the device for some shopping, Forrester says. To be more competitive with Amazon, Google Express scrapped the $95-a-year membership in August, allowing shoppers to get free delivery on orders within one to three days, as long as the purchase is above each store’s minimum. ___ Follow Anne D’Innocenzio: http://twitter.com/ADInnocenzio
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Retail group expects holiday sales to rise 3.6 to 4 percent

NEW YORK (AP) — A retail trade group says it expects holiday sales to at least match the 3.6 percent growth of a year ago, as job creation and improving wages should put shoppers in a mood to spend. The National Retail Federation said Tuesday it expects sales in November and December to rise 3.6 percent to 4 percent, to a range of $678.75 billion to $682 billion. It’s the first time the trade group forecast in a range rather than by a fixed percentage, because the impact of several big hurricanes is still uncertain. So far this year dozens of retail chains have filed for bankruptcy, and hundreds of stores have closed — particularly among those dependent on clothing sales. Toys R Us is reorganizing in bankruptcy as well at a critical time of year. Holiday sales account for nearly 20 percent of the annual industry sales total. But online spending is still growing strongly, which accounts for some of the optimism, and some analysts say retailers like dollar chains are still adding locations. Holiday forecasts from Deloitte, the International Council of Shopping Centers and AlixPartners have come in around the same level, ranging from growth of 3.5 percent to 4.5 percent. PwC predicts that holiday spending will rise 6 percent, but that estimate includes travel and entertainment. Other holiday forecasts exclude restaurants and travel. The NRF forecast — which considers economic indicators such as consumer credit, disposable personal income and monthly retail sales — excludes sales from autos, gas and restaurants but includes online spending and other non-store sales like those from catalogs. It estimates that online spending and other non-store sales will rise 11 percent to 15 percent. More and more sales are moving online, and internet leader Amazon is increasingly exerting its influence over a huge part of the retailing world. Credit Suisse believes that there could be 8,640 store closings this year, which would surpass the 2008 peak of 6,200. But retail research group IHL says retailers are opening about 1,300 more stores in 2017 than they are closing. That’s according to its report that reviewed 1,800 retail chains with more than 50 U.S. stores in 10 areas.
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Target is raising minimum hourly wage to $15 by end of 2020

NEW YORK (AP) — Target Corp. is raising its minimum hourly wage for workers to $11 starting next month and then to $15 by the end of 2020, a move it says will help it hire and keep the best employees and make shopping a better experience for customers. The initiative announced Monday is part of the discounter’s overall strategy to improve its business, which includes remodeling stores, expanding its online services and opening up smaller urban locations. Target quietly raised entry-level hourly wages to $10 last year from $9 from the previous year, following initiatives by Walmart and others to hike pay in a very competitive marketplace. But Target’s increase to $15 per hour far exceeds not only the federal minimum of $7.25 but the hourly base pay at Walmart, the nation’s largest private employer, and plenty of its retail peers whose minimum hourly pay hovers around $10. Now Target’sraise could force some rivals to match the pay. “We see this not only as an investment in our team but an investment in an elevated experience for our guests and the communities we serve,” Brian Cornell, CEO of Target, told reporters on a call Friday. The changes come as there’s more attention on hourly wages. Thousands of workers have protested to call attention to their financial struggles and to fight for $15 an hour. The election of a Republican-controlled Congress dampened hopes of an increase in the federal minimum wage, but advocates have continued to press at the state and local level. At the same time, competition for lower-skilled workers has heated up. As shoppers get more mobile-savvy, retailers want staffers who are more skilled at customer service and in technology such as using iPads to check out inventory. But with the unemployment rate near a 16-year low, the most desirable retail workers feel more confident in hopping from job to job. Some 75 percent of hourly retail workers now change jobs within a year, compared with 50 percent during the Great Recession, according to Korn Ferry Hay Group, a global consultancy group. Thirty-two percent of all first jobs in the U.S. are in retail, according to the trade group the National Retail Federation, and stores overall have more job openings now than they did a few years ago. Hourly pay at restaurants and hotels is up 3.5 percent from a year earlier, a much better raise than the 2.5 percent gain for all employees. For workers at transportation and warehousing companies, where e-commerce growth is fueling hiring, pay is up 2.7 percent in the past year. Retailers, however, have lifted pay just 1.8 percent in the past year. That may be spurring more workers to leave for better opportunities: Separate government data shows the number of retail workers quitting their jobs this year and last is at the highest in a decade. The average hourly pay for cashiers is now $10.14, according to the Korn Ferry Hay Group’s survey of 140 retailers with annual sales of at least $500 million. The survey was conducted in May. A year ago, it was $9.79. Target says its minimum hourly wage of $11 is higher than the minimum wage in 48 states and matches the minimum wage in Massachusetts and Washington. It says the pay hike will affect thousands of its more than 300,000 workers, but it declined to quantify the percentage of its workforce. It said the increase to $11 per hour will apply to the more than 100,000 hourly workers that Target will be hiring for the holiday season. Target declined to say what the average pay will be for its hourly workers with the increased wages. Ken Perkins, president of research firm Retail Metrics LLC, called Target’s decision “astute.” “Target is really trying to gain market share in an environment where there is tremendous upheaval,” Perkins said. But he believes only a few dozen healthy retailers, such as Best Buy, Home Depot and Walmart, could mirror what Target is doing. Craig Rowley, head of the retail practice at Korn Ferry Hay Group, estimates that retailers devote 5 to 8 percent of their annual sales to store hourly labor costs. Target is seeing signs that its turnaround efforts are starting to win back shoppers. In August, it reported that a key sales figure rose in the second quarter, reversing four straight quarters of declines, and its online sales jumped 32 percent. The company also boosted its earnings expectations for the year. Target is spending $7 billion over three years to remodel old stores, open small ones in cities and college towns and offer faster delivery for online orders. It is also adding more clothing and furniture brands. Walmart has also been benefiting from its investment in its workers. The Bentonville, Arkansas-based retailer has seen lower turnover and improved customer service scores. Its namesake U.S. division reported a 1.8 percent increase in revenue at stores open at least a year during its fiscal second quarter, marking the 12th straight period of gains. Walmart’s wage investments, however, did take a big bite out of profits. Target reiterated its third-quarter and full-year profit guidance, and said it would update investors early next year about how higher wages will affect long-term profits. Its shares initially fell Monday, but regained that ground and were little changed.
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Toys R Us revs up for holiday hiring

NEW YORK (AP) — Toys R Us may have filed for Chapter 11 reorganization, but the toy chain is revving up its holiday hiring. The Wayne, New Jersey-based chain said Thursday it will be accepting job applications for part-time holiday positions at stores and distribution centers in the U.S. That includes a new position called a toy demonstrator, who will help kids test out toys. Toys R Us plans to hire more than 12,500 for the top six markets, including Groveport, Ohio, where it will be looking to staff more than 2,400 for its distribution facility that handles online orders. It hired more than 10,900 workers for the top five markets a year ago. It declined to offer actual overall hiring figures for the holiday season, but in the past, overall holiday hiring was about 40,000. The company, which operates around 1,600 stores, filed for Chapter 11 bankruptcy protection late Monday heading into the all-important holiday season, which makes up around 70 percent of annual toy sales. Toys R Us said Monday it has received $3.1 billion in new financing that will allow it to pay its employees and suppliers through the period. So far, retailers have detailed mixed hiring plans for the holidays. Walmart won’t be doing large-scale holiday hiring at its stores this year. Instead, like last year, it will offer extra hours to its current workers. The nation’s largest private employer says, however, that it will be taking on more temporary workers at its distribution centers. But it’s not giving a number yet for its planned holiday hires at the centers. Macy’s is increasing the number of temporary workers it’s planning to hire for distribution and warehouses. But overall holiday hiring will fall nearly 4 percent from last year. Target announced an increase of 40 percent in holiday hiring at its stores. The retailer also plans to hire 4,500 workers at its warehouses, down from 7,500 a year ago. United Parcel Service Co. said that it plans to hire about 95,000 workers to handle the surge in packages from late November through January. That’s about the same number as the last two years. Rival FedEx Corp. said that it would hire about 50,000 people for the holiday season, also the same as last year. A store’s hiring plans can indicate its expectations for the holiday season, which accounts for 20 percent of the retail industry’s annual sales, according to the National Retail Federation, the nation’s largest retail trade group. Many companies are employing more automation at new facilities, which could limit the need for seasonal hiring even as online shopping continues to expand.
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Walmart dives into voice-activated shopping with Google

NEW YORK (AP) — Walmart is diving into voice-activated shopping. But unlike online leader Amazon, it’s not doing it alone.

The world’s largest retailer said Wednesday it’s working with Google to offer hundreds of thousands of items from laundry detergent to Legos for voice shopping through Google Assistant. The capability will be available in late September.

It’s Google’s biggest retail partnership — and the most personalized shopping experience it offers — as it tries to broaden the reach of its voice-powered assistant Home speaker. And it underscores Walmart’s drive to compete in an area dominated by Amazon’s Alexa-powered Echo device.

“Voice shopping is becoming a more important part of everyday shopping behavior,” said Marc Lore, CEO of Walmart’s U.S. e-commerce business.

The voice-activated devices are becoming more mainstream as they become more accessible. Even Apple has one coming out this year. Walmart has said Google’s investment in natural language processing and artificial intelligence will help make voice-activated shopping even more popular.

And Lore said the personalization of the partnership means people can shout out generic items like milk, bread and cheese, and Google Assistant will know exactly the brands and the size that the user wants.

Google introduced shopping to Home in February, letting people use voice to order essentials from more than 40 retailers like Target and Costco under its Google Express program. But that was far behind the Echo, available since late 2014.

Walmart, which has more stores than any other retailer and the largest share of the U.S. grocery market, is also working hard to close the gulf online between itself and Amazon.

It has overhauled its shipping strategy and is expanding store-curb pickup for groceries ordered online. But it’s also had to look beyond itself and form partnerships. Walmart announced Monday that it’s expanding its grocery delivery service with ride-hailing service Uber, and it’s been testing same-day delivery service with Deliv at Sam’s Club in Miami.

Amazon generally has been building its network of services on its own, using its $99-a-year Prime membership with same-day and even one-hour shipping options to develop loyalty.

It’s also been drawing in customers with its Alexa-powered devices. Amazon doesn’t give sales figures for Echo, but Consumer Intelligence Research Partners estimated that it’s sold more than 10 million Alexa-powered Echo devices in the U.S. since late 2014. That includes the core $179 Echo as well as the less expensive and smaller Echo Dot and the portable Amazon Tap.

To be more competitive with Amazon, Google Express is scrapping the $95-a-year membership starting Wednesday, allowing shoppers to get free delivery within one to three days on orders as long as the purchase is above each store’s minimum.

Walmart is integrating its Easy Reorder feature — which has data on both store and online purchases — into Google Express. Shoppers who want to reorder their favorites have to link their Walmart account to Google Express.

With other Google Express retailers, personalization takes time as the assistant learns shoppers’ preferences, says Brian Elliott, general manager of Google Express. So the quick personalization with Walmart should make voice-activated shopping more attractive, he says.

While one of Walmart’s biggest advantages over Amazon is its massive number of stores, Amazon’s nearly $14 billion offer for Whole Foods could shake up the landscape.

Walmart says it will be tapping its 4,700 U.S. stores and its fulfillment network next year to offer more kinds of customer experiences using voice shopping. For example, shoppers can tell Google Assistant they want to pick up an order in a store. Lore said the company wants to make voice shopping as easy as possible.

“That’s why it makes sense for us to team up with Google. We know this means being compared side-by-side with other retailers, and we think that’s the way it should be,” Lore wrote in a corporate blog post.

Independent internet analyst Sucharita Mulpuru-Kodal, who was unaware of the Google deal at the time of the interview, says Walmart is going in the right direction, though it has a long way to go. She noted that partnerships with companies like Uber enable the discounter to get the business “up and running” and it will be able to learn a lot.


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Some shoppers fret when companies take over favorite brands

NEW YORK (AP) — Some shoppers are fretting about big companies they don’t like taking over their favorite brands. The latest: Amazon’s move to purchase Whole Foods has spurred worries about a decline in quality and ethical standards, or that the store will become like other supermarkets. Walmart’s purchase of clothing labels ModCloth and Bonobos has some shoppers anxious that the world’s largest retailer will cheapen the quality of the clothes, or they’re vowing not to buy the brand again because they don’t want to support Walmart. For big companies, the challenge is always expanding the reach of a beloved niche brand without alienating its core customers. Of the recent deals, that’s a bigger job for Walmart, since its reputation is more about low prices than trendy fashion — and shoppers might not view the world’s largest retailer very positively. “Bye bye Bonobos,” T.D. Arkenberg wrote on Twitter. “I’ll miss you. You were a great brand. But as Sears destroyed Lands’ End, Walmart will destroy Bonobos!” Arkenberg, of Arlington Heights, Illinois, has five pairs of Bonobos pants and loves the way they fit. He planned to buy more, but now says he’ll shop more at Nordstrom and other small boutiques. Arkenberg believes Walmart puts cost-cutting ahead of workers. “In my mind, Walmart’s participation of the brand will cheapen it,” he said in an interview. Retail history is full of big companies taking over smaller labels, with mixed results. Cosmetic giant Estee Lauder kept the irreverent spirit of MAC Cosmetics when it bought the remaining stake of the upstart makeup brand in 1998. And when Marriott International purchased the swank Ritz-Carlton chain that same year, it found success because it took a hands-off approach, says Allen Adamson, founder of the firm BrandSimpleConsulting. But plenty of cases didn’t turn out so well, as Arkenberg noted. Sears Holdings Corp. purchased sporty outdoor chain Lands’ End in 2002, but sales deteriorated before Sears spun it back off in 2014. Cereal giant Kellogg Co. bought Kashi in 2000 as it sought to get into the organic food market. But sales of Kashi tumbled after Kellogg stopped letting Kashi run its business independently. Arkenberg is also worried about his local Mariano’s grocery store changing for the worse now that its parent company is owned by Kroger Co., the nation’s second-largest food retailer. He hasn’t seen any negative impact so far — but is watchful. “There is a level of distrust among big institutions,” said Wendy Liebmann, CEO of consulting firm WSL Strategic Retail. “So there’s a very delicate balance for big companies to continue to support (the label) and let it grow, and taking costs out of it to make it more efficient.” Joan Walsh, a Whole Foods customer from Seattle, is concerned that Amazon could ruin the shopping experience at her favorite store. “I really like Whole Foods for its quality, customer service, and also its proximity to my home and the fact they have all natural ingredients, non-GMO products,” said Walsh. “I just worry that Amazon will really degrade the kind of customer service and quality I’m accustomed to.” Neither Amazon nor Whole Foods has said much about what they plan. They have said, though, that they don’t intend to change Whole Foods’ standards, which include a ban on artificial ingredients. And Walmart says it’s keeping the stable of online brands it’s bought up, including ModCloth and Bonobos, independent. It says they won’t be sold in Walmart stores — only through Jet.com, which Walmart acquired last year. Andy Dunn, co-founder and CEO of Bonobos, said that when news of the possible deal leaked two months ago, it gave him a chance to test the reaction. And he found that customer growth actually accelerated. But Dunn concedes there’s work to be done in appeasing what he calls a dissatisfied minority who are loud on social media. He says some shoppers don’t understand that Walmart is a different company than it was in the past, and he plans to be a “mouthpiece” to trumpet the company’s moves to increase pay for workers and its environmental efforts. “We need to help them rethink the Walmart they thought they knew,” he said. Being owned by Walmart will improve logistics like faster shipping, he said, and promised that the quality and service will be at least the same. While Walmart and Bonobos likely had little overlap in customers, Amazon and Whole Foods do. More than 60 percent of Whole Foods shoppers are members of Amazon Prime, and more than 25 percent of Whole Foods customers already buy some groceries on Amazon, says consumer research firm Magid. Whole Foods’ most loyal shoppers were fairly negative about the deal, with almost 43 percent saying they thought it was a bad idea, according to a survey of more than 2,000 shoppers conducted by research firm GlobalData Retail after the purchase was announced. Most of the concerns centered around a possible change in food quality or the company’s ethical standards, the report said, and just over half fear the deal might mean Whole Foods becomes like “any other grocer.” “The finding underlines the fact Amazon will have to tread carefully as it makes changes at Whole Foods,” wrote Neil Saunders, managing director of retail at GlobalData. Smaller companies see opportunities in those concerns. Take Gunnar Lovelace, the co-founder of online retailer Thrive Market, which aims to make non-perishable organic food and non-GMO products more widely affordable. Lovelace believes he’ll benefit from shoppers worried about Amazon taking over even more of their shopping experience. “Consumers are so sophisticated they can smell the phoniness,” he said, “and that plays to our vantage point.”
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Sears says that some Kmart stores targets of security breach

NEW YORK (AP) — Some Kmart stores were targeted by hackers, leading to unauthorized activity on some of its customers’ credit cards, the retailer’s parent company said. Sears Holdings Corp. said in a blog post late Wednesday that Kmart’s store payment systems were recently infected with virus-like computer code undetectable by current anti-virus systems. It said some credit card numbers were stolen. A Sears Holdings spokesman said the investigation into the hack is still ongoing, so details on the dates of the breach, how many customers were affected and which stores were targeted, were not available. Not all Kmart stores were affected, he said. Kmart had 624 stores at the end of April. No personal information, such as names, addresses, social security numbers and email addresses, was pilfered, the company said. Sears Holdings, which is based in Hoffman Estates, Illinois, said it has removed the hackers’ code and is confident Kmart customers can safely use their credit and debit cards in its stores. There is no evidence kmart.com or Sears customers were affected, it added. Sears Holdings also said that given its rollout of more secure cash register systems, it believes that the exposure of cardholder data that can be used to create counterfeit cards was limited. “Data security is of critical importance to our company, and we continuously review and improve the safeguards that protect our data in response to changing technology and new threats,” said the company in the blog post.
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Target, states reach $18.5 million settlement on data breach

NEW YORK (AP) — Target Corp. has reached an $18.5 million settlement over a massive data breach that occurred before Christmas in 2013, New York’s attorney general announced Tuesday. The agreement involving 47 states and the District of Columbia is the largest multistate data breach settlement to date, Attorney General Eric T. Schneiderman’s office said. The settlement, which stipulates some security measures the retailer must adhere to, resolves the states’ probe into the breach. Target spokeswoman Jenna Reck said in a statement that the company has been working with state authorities for several years to address claims related to the breach. “We’re pleased to bring this issue to a resolution for everyone involved,” she said. Target had announced the breach on Dec. 19, 2013, saying it occurred between Nov. 27 and Dec. 15 of that year. It affected more than 41 million customer payment card accounts and exposed contact information for more than 60 million customers. The breach forced Target to overhaul its security system and the company offered free credit reports for potentially affected shoppers. Target’s sales, profit and stock price all suffered months after the disclosure as shoppers were nervous about their security of their credit cards. The breach also contributed to the departure of Target’s then-CEO, chairman and president Gregg Steinhafel, who resigned in May 2014. CEO Brian Cornell took the helm in August 2014. Target’s data breach was the first in a series of scams that hit other retailers including SuperValu and Home Depot. It forced the retail industry, banks and card companies to increase security and sped the adoption of microchips into U.S. credit and debit cards. An investigation by the states found that in November 2013, scammers got access to Target’s server through credentials stolen from a third-party vendor. They used those credentials to take advantage of holes in Target’s systems, accessing a customer service database and installing malware that was used to capture data, including full customer names, telephone numbers, email and mailing addresses, credit card numbers, expiration dates and encrypted debit PINs. The settlement requires Target to maintain appropriate encryption policies and take other security steps, though the company has already implemented those measures. Reck said the costs of the settlement are reflected in the reserves that Target has previously disclosed.
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