Shop Talk

Check Out Line: Signs of brighter days ahead?

Check out hopeful signs that the recession may be abating.

While recent reports showed slumping sales at many big-box retailers, there are other signs that the economy may be bottoming.

U.S. retail sales rose in May and the number of workers who filed new applications for jobless benefits last week fell for the fourth straight week.

The Commerce Department today reported that U.S. retail sales rose 0.5 percent in May, thanks partly to gasoline sales that jumped 3.6 percent. Meanwhile, the Labor Department said initial jobless claims fell to their lowest levels since Jan. 24.

Discount retailer Target has increased its quarterly dividend, Clorox did the same while also affirming its 2010 profit outlook and financial targets for 2013, and Del Monte posted far stronger-than-expected quarterly earnings and provided a better-than-expected 2010 forecast.

Not all the news has been hopeful, however.

While last month’s U.S. foreclosure activity ebbed from April’s record high, homeowners were still struggling to keep up with house payments and May foreclosure filings were the third-highest on record.

Netflix tops customer satisfaction survey

Online retail may be outperforming brick-and-mortar rivals amid the U.S. recession, but that’s no reason to get complacent.

In a wake-up call to the industry, a new survey shows that customer satisfaction with online retailers declined 3 percent from last year.

The slipping satisfaction level uncovered in ForeSee Results’ Top 100 Online Retail Satisfaction Index is a “remarkable trend,” according to its author.

The report — which surveyed 22,000 respondents to measure customer satisfaction at the top 100 online retailers by sales volume — found that the top performers were outweighed by more bottom performers, with 55 online retailers seeing their scores drop from last year.   “Customer satisfaction, when measured scientifically, is not just a number or a beauty contest. It is a direct precursor of customer behaviors that have a measurable and quantifiable ability to impact sales and profitability,” warned author Larry Freed.      A 1 point increase in customer satisfaction is equivalent to nearly 9 percent growth in online sales, the report found, while a satisfied shopper is 71 percent more likely to buy than a dissatisfied one.       First, the good news: Netflix.com is still No 1, followed by Amazon.com, with the top two companies maintaining their spots for five years in a row.  Avon.com came in third.

While a score of 80 or above represents a superior job, those logging lower than a 70 need some help.

That group includes 1800Flowers.com, BlueNile.com, JCrew.com, UrbanOutfitters.com and RestorationHardware.com.

The biggest year-over-year declines in customer satisfaction came from discounter Etronics.com and book retailer efollett.com, both also among the worst performers.      “It is surprising that any of the top 100 retailers could get away with scores in the 60s and maintain any kind of market dominance for very long,” wrote Freed.      While not in the bottom group, sites including CVS.com, NeimanMarcus.com, Apple.com and Blockbuster.com all saw their ratings fall over 6 percent from the prior year.

Slump means market share gains in E-commerce

We know the U.S. recession is gloomy for retailers, online stores included, but at least a third of these e-commerce sellers say they’re taking greater market share amid the slump. 

That’s according to Shop.org and Forrester Research in a marketing study based on their annual State of Retailing Online report. Shop.org is a division of the National Retail Federation.

The survey of 117 online retailers showed that, despite the economic downturn, some 46 percent of respondents said they would spend as planned on their web businesses, with no scale-back of original budgets. Moreover, a quarter said they’d spend even more than originally planned, while fewer than a third said they’d spend less.

“As weak retailers disappear from the eCommerce landscape, companies that remain do have an opportunity to capture orphaned shoppers,” the report said.   Online retail has continued to outperform the brick-and-mortar retail environment, which has been hurt by lower mall traffic as shoppers try to avoid all but the most necessary shopping trips.      Analysts have pointed to Amazon.com as the online retailer finding the most success getting consumers to shop. With a strategy of lowered prices, increased selection and a discount shipping program, the Seattle-based e-commerce giant has managed to beat sales forecasts in its last two reported quarters.       In January, Forrester forecast a 11 percent jump in total U.S. online sales to $156 billion, representing 6 percent of the overall retail pie.      With a renewed push for customer acquisition — and retention — some 88 percent of retailers listed email communications as a high priority for 2009, higher than paid search, which is more expensive.      And, demonstrating the rise in popularity in sites like Facebook and Twitter, some 11 percent of retailers said that social media was an effective acquisition tactic.

(Reuters photo)