Every year small package carriers FedEx and UPS evaluate their shipping rates and make adjustments that can have a substantial effect on you and your business. The UPS rate increases take effect on December 26, 2016, while the new FedEx rates take effect on January 2, 2017. As always, how much more expensive your particular small package shipments will be in the new year largely depends on many factors, including shipment volumes, sizes, weights, and modes.
Here are some quick facts:
The important takeaway when thinking about your shipping expenses in 2017 is that the announced average increases paint an inaccurate picture of the true impact these new rates could have on your business. The shipping experts at PartnerShip® have dug into the details and analyzed the new rate tables to assess the true impact to shippers and help you make sense of these changes. Learn more about how the 2017 rate increases will affect your shipping costs by downloading the free white paper at PartnerShip.com/RateIncrease.
NRF’s annual survey finds all respondents were victimized in the past year
For the first time in the 12-year history of the National Retail Federation’s organized retail crime survey, every responding retail company — 59 in total — said it had been a victim of ORC in the past 12 months.
In addition, 83 percent of respondents, all top-level loss prevention executives, reported that ORC activity had increased in the past 12 months: 44 percent reported a “significant increase” while 39 percent reported a “slight increase.”
The survey also uncovered a trend of ORC criminals and shoplifters becoming “more aggressive and brazen;” 97 percent reported an increase in the levels of aggression, and one in six felt the level of aggression was much higher than the previous year.
“Shoplifters are more confrontational with our LP officers,” one respondent said. “Even if we do catch them, it’s just a slap on the wrist. Short of pulling a gun on our LP team, they will always be cited and released by the police. Even if they attack our team, they are not charged with a battery or robbery anymore. It’s all just considered part of theft crime.”
Survey respondents elaborated on increases in online fraud. One retailer said its online fraud rate had tripled, even as it has stopped more than $350,000 in merchandise from being shipped through the use of software that flags “risky transactions for loss prevention review prior to shipping.”
Another respondent noted that their company has seen “more and more” gift cards sold online that are later traced to “no-receipt” returns in stores.
The average loss attributable to ORC was $700,259 per $1 billion in retail sales.
The average loss attributable to ORC was $700,259 per $1 billion in retail sales, up significantly from 2015’s average of $453,940.
Even though the survey found that the average dollar amount of retail personnel dedicated to combating ORC reached an all-time high of $545,694, more than half of responding companies had “not allocated additional resources in personnel or technology” in the past 12 months.
Noting that ORC activity has increased over the past three years, Robert Moraca, vice president of loss prevention for NRF, says that loss prevention in retail is “a cost center, and retailers across the board have been struggling from a financial perspective, so the fact that LP budgets are remaining flat is not uncommon.
“I think they all would like to do more, but you just have limited financial resources competing for a return on investment.”
Moraca says there are steps that retailers can take that don’t cost anything. “They won’t increase the budget but they will still be proactive steps.”
For example, he says, “Most employers have computer-based training modules on topics like loss prevention. They can enhance that and develop incentives for their associates to review those training modules frequently.”
Some companies are adding another level to digital closed circuit TV camera surveillance systems. Overlaid on CCTV systems, video analytics “can help identify problems,” Moraca says. “Some of these video analytic systems can even send messages via email to loss prevention professionals. These systems self-learn — they are a minimal form of artificial intelligence.”
In another negative trend, 56 percent of respondents haven’t seen any additional support from law enforcement for combating ORC in the past 12 months. That could be due in large part to shoplifting being downgraded to misdemeanor offense in many jurisdictions.
One respondent said that the change in status has led to a “higher theft per ORC incident. The felony limit used to be $500, so they would steal $490 per store. Now, with many states having increased the felony limit to $1,500, they steal $1,490 per store.”
Nearly 80 percent of respondents said a federal law is needed to combat ORC, with stronger penalties acting as a deterrent. A federal law would remove jurisdictional issues in what increasingly is becoming an interstate crime.
Moraca says that in states with strong anti-ORC crime legislation, “it is easier to get prosecution.
“However, decriminalization is now a trend all over the country. Legislators are raising the standard for what constitutes a felony.”
To try to reverse this trend, Moraca urges retailers to be proactive in building relationships with local law enforcement.
“The rubber meets the road in the communities you live in,” he says. “Corporate LP policies are not enough. LP personnel on the local level have to meet with their local police departments as a part of community policing/crime prevention programs.
“Engage with the local police … so they can come to really understand your problems and come to see you as part of the community and not just a big retailer with all these assets,” he says.
“You should never be meeting your law enforcement, your first responders, for the first time during an emergency.”
“At the end of the day, you should never be meeting your law enforcement, your first responders, for the first time during an emergency. If that’s the case, you’re already behind the eight ball.”
Some success stories did emerge from retailers that have developed new tactics to fight ORC.
One retailer reported “having some issues with online fraud involving third-party gift cards. However, where we make the deliveries ourselves, losses are limited.”
Another noted that “aggressive refund management and POS policies have limited the impact in these areas.”
And one said their company was successful in reducing ORC by “lessening the allowable timeframe for returns [to 60 days] and eliminating cash returns for no receipts and e-commerce.” The company also “increased its aggressiveness with return management to include receipted returns.”
December 14, 2016
National Retail Federation |
This article was published in the December 2016 issue of STORES Magazine.
The holiday shopping season is often a peak for retailers' sales. But the flipside to that boom is it leads to peak returns season — costing retailers billions to handle unwanted, used or damaged goods each year.
The surge in digital shopping is only compounding the pain, as record online sales means record online returns. It's not uncommon to see return rates of 30 percent or more for merchandise that's bought online. Clothing returns can be closer to 40 percent.
In total, Americans returned $260 billion in merchandise to retailers last year, or 8 percent of all purchases, according to the National Retail Federation. That swells to 10 percent around the holiday season. Because less than half of returned goods are re-sold at full price, retailers may end up forfeiting 10 percent of their sales at the busiest time of year, according to Gartner Research.
Unwanted and damaged goods either get tossed out or sent through a lengthy chain of liquidators and wholesalers, paying pennies on the dollar to the retailer before eventually selling them to bargain-hunting consumers.
"Retailers are not very good at managing returns right now, and so unless they invest in their ability to manage returns, the volume of returns coming back will cause problems in their overall supply chain," said Tom Enright, supply chain research director at Gartner.
He warns retailers that dealing with returns the old way is a "ticking time bomb turning into a major cash hole."
Best Buy is one retailer that's working on ways to recoup losses associated with returns. When it started this focus three years ago, returns represented 10 percent of its annual sales, or $400 million.
The retailer's ship-from-store capabilities have increased the number of "open-box" products on its website, which means a TV returned to a store in Omaha, Nebraska, can now be re-sold to a shopper in another state on Bestbuy.com. Best Buy has also been working on reducing the amount of product that gets damaged between the distribution center and the consumer by adding protective packaging and better handling.
Meanwhile, third parties have identified an opportunity to cash in on retailers' return problems, and are trying to disrupt the traditional model for dealing with them. The Washington, D.C.-based startup Optoro claims its technology platform optimizes the efficiency for returned merchandise by finding the best re-sale pricethe moment the product is returned and scanned.
"We help these goods find their next best home, whether it's an individual, business, charity or recycler anywhere around the world," said Tobin Moore, CEO of Optoro. "We're the technology and the systems that retailers are using at their warehouses, in storefronts and headquarters to manage and monitor these returns and to best route them."
"Many retailers are getting 15 cents to 30 cents on the dollar for these returns because they're having such trouble economically processing them and getting them to the next best markets," Moore explained. "We're able to get them to double and triple the recovery."
Sixteen of the top 20 U.S. retailers and manufacturers use Optoro's technology. Its client list includes Home Depot, Target, BJ's Wholesale and Jet.com (owned by Wal-Mart).
After being returned to a store, merchandise ends up at Optoro's warehouse in Mount Juliet, Tennessee. Once the merchandise arrives at the warehouse, it gets tested and inspected first. When it's determined to be in working order, or refurbished and given a clean bill of health, it's simultaneously listed for re-sale on Amazon, eBay, and Optoro's retail site, called Blinq.com.
If an item isn't able to be refurbished easily, it goes onto a pallet of goods sold on Optoro's Bulq.com website. Bulq.com buyers often don't mind doing the repairs themselves because they get a deeper discount.
Electronics make up the bulk of returned products to Optoro, at just under one-third. Home and garden merchandise makes up 20 percent, while baby items, clothing and other consumer electronics are another fifth of the returned products in Optoro's warehouse.
Optoro offers a win-win...win. Retailers get a higher recovery rate for returned goods, waste is reduced, and consumers have another channel to shop for discounted merchandise.
Courtney Reagan | @CourtReagan
NEW YORK — Three years into being a business owner, Becky Davis knew she needed to break the hold technology had on her.
Davis, a marketing and management consultant to other small business owners, was so immersed in emails, texts and social media that she was getting only four or five hours of sleep a night and her husband said he felt invisible. It also hurt her productivity — she'd get distracted reading people's posts and realize she'd lost two hours of work time.
"If you don't set some rules, guidelines and put some technology boundaries in place on using your phone, tablet or computer, they will run your life and can very well ruin your life," says Davis, who's based in Douglasville, Georgia.
Many small business owners in tech overload are putting limits on how much time they spend on ever-growing modes of communication. For some, the antidote is more technology, such as apps or programs that filter emails. Others go low-tech, simply turning their devices off. Some tell clients they're just not available to answer emails and texts at night and on weekends.
Davis now schedules time for social media posting and leaves her computer in another room at night. When she's out to dinner with her husband, she doesn't check email.
For small business owners passionate about their companies, their dedication makes it hard to say no to the email or text that arrives at 10 p.m. The tipping point for many has been the explosion of social media sites that have some owners reading hundreds of posts each day, says Patricia Greene, an entrepreneurship professor at Babson College.
"There are so many streams to manage," she says.
Overload during work hours can also be a problem, Greene says. Owners who get bogged down answering emails and social media posts rather than spending time on strategy can see their work days lengthen.
Justine Pattantyus has turned off most notifications, including email and Facebook alerts. The constant interruptions prevented her from focusing on doing work for the clients of her management consulting business.
"How much time I was losing to responding constantly to those outside influences!" says Pattantyus, owner of Spark Life International.
Pattantyus sets other limits. She lives in Lisbon, Portugal, but her clients are five to eight hours behind her in the U.S. If she has clients on Pacific time, they're in the early part of their work day as Pattantyus nears the end of hers. She shuts her computer down at 7 p.m. her time. Clients know that's the rule when they sign on with her.
Kelley Weaver's company, Melrose Public Relations, is in Santa Monica, California, but she's in Chapel Hill, North Carolina, where her husband is in graduate school. Her employees start their days three hours after hers begins, raising the possibility of an extended string of texts and emails encroaching on her evening.
Weaver uses the Slack messaging system with her staff for group and individual conversations that eliminate the stop-and-start rhythm of emails and texts. She also strives to go off-duty technologically at the day's end; she silences her phone and tries not to look at it.
"When we go to dinner, I'll leave it home," Weaver says. But it's not always easy: "Part of it is second nature and breaking habits," she says.
Aaron Norris says he's slowly gotten rid of his laptop at home for work after finding he was reading emails at 5:30 a.m. and spending time in the evening sorting through emails that he estimates were 80 percent spam. Norris, a vice president at his family's Riverside, California-based real estate business, The Norris Group, has also cut back on time spent on email at work and no longer tries to read every social media channel.
"There has to be some peace or I just feel frayed by the end of the day," he says.
Josh Nolan began putting a boundary between work and personal life — his own and his staffers' — about three years after his website design company, Bold Array, was founded. He was working over 100 hours a week as he and his staff of five tried to keep up with clients' questions, requests, emails and texts.
"Things were getting a little difficult to manage," says Nolan, whose company is based in Costa Mesa, California.
His solution: Clients are told Nolan will answer emails, phone calls and have meetings between 8 a.m. and 5 p.m. He'll answer texts and emails after 10 p.m. or the next day, keeping evenings clear. Weekend work is billed at a higher rate.
"Once we started setting those limits and communicating expectations, it helped with company morale and not just going insane with the amount of work," he says.
Follow Joyce Rosenberg atwww.twitter.com/JoyceMRosenberg. Her work can be found here: http://bigstory.ap.org/content/joyce-m-rosenberg http://www.usatoday.com/story/money/personalfinance/2016/12/08/time-set-limits-business-owners-suffer-tech-overload/95089174/
In the classic film Miracle on 34th Street, the most accurate resource for product updates was R.H. Macy’s Santa Claus. Today, Santa’s got an app, and so do many of the stores he visits.
The result: Consumers are increasingly purchasing directly from mobile devices, skipping the aisle, the desktop and any possible referrals to Macy’s or Gimbels.
Sales on mobile devices increased 56% in 2015, to $49.2 billion — double the growth rate of 2014, according to The Wall Street Journal, citing comScore. Nearly 40% of desktop purchases in the fourth quarter of 2015 occurred after a customer visited the retailer’s app or mobile site.
Retailers are taking note. Many merchants from Target to Macy’s and more are offering holiday-specific apps or tailoring existing apps to include holiday trimmings.
“The retailers that are succeeding are training customers to think of their smartphones like an all-day impulse aisle,” The Wall Street Journal stated. “Apps are able to capture data available on handsets and push consumers to buy when they have a spare moment.”
Deck The Devices
For retailers, getting their apps on a shopper’s screen is the equivalent of getting their products under the tree. Consumers averaged more than 3 hours a day in app use in 2015. Further, 75% of shoppers used mobile devices in some fashion for holiday shopping, according to the software company SandBox Commerce.
These trends have not been lost on retailers. Not only are more of them offering holiday-specific apps; some are checking the app box twice. read more
By Bryan Pearson
With the holiday shopping season upon us, retailers are feeling the pressure to make big numbers during their busiest time of the year. Retailers generate 25 percent of their annual sales during this lucrative period according to the National Retail Federation (NRF).
There are more challenges for retailers than ever before. Brick and mortar stores are struggling with fierce online competition. Department stores such as Target, Walmart and BestBuy posted year-over-year declines of 7.3 percent. Further, mobile commerce is on the rise. Mobile shoppers now make up 61 percent of total ecommerce traffic, according to Unbxd.
All of that means retailers must have a complete omni-channel strategy to remain competitive.
So, what new technology can you expect to see retailers using this holiday season to boost their sales, online and offline?
Although online shopping is supposed to be easy for consumers, it often is a long and tedious process filled with doubts and guesswork.
For retailers, this guesswork is a major problem. According to the NRF, American consumers returned more than $360 billion in merchandise last year. And for 22 percent of those consumers, they do so because the products look different from the photos online.
Augmented reality (AR) is helping retailers combat this challenge. With AR, consumers can view 3D product models at home in real size before buying using their smartphone or tablet. The real-time rendering removes the guesswork for the consumer, facilitating the path to purchase.
Top retailers have already started offering AR solutions to their customers this holiday season. In early November, Wayfair launched its AR application, WayfairView, which is available on Lenovo’s Phab 2 Pro. The Phab 2 is Tango-enabled, meaning the device has depth sensing and rooming mapping built in. This technology is powering new AR experience for consumers.
“WayfairView allows shoppers to check the scale of products before they purchase to facilitate home-improvement planning, from furniture pieces and décor to ceiling lamps and chandeliers," said Mike Festa, head of Wayfair’s R&D lab Wayfair Next.
Lowes and Ikea are also among the retail giants that have launched augmented reality shopping apps.
Chatbots garnered a lot of attention in 2016, and retailers are making use of this smart technology to engage shoppers and to boost online sales.
Consumers now spend more time on messaging platforms than social media apps. Chatbots allow retailers to reach and engage consumers within those messaging platforms. Chatbots deliver automated content such as customer support and ecommerce solutions in real time. Even more, chatbots are now functioning with machine learning, allowing them to understand information and respond intelligently.
Major brands are leveraging chatbots, including Sephora, Tesco, Mattel, H&M and Toys R Us. In early 2016, Sephora launched a chatbot on Kik, a mobile messaging app. The chatbot offers personalized beauty tips and product recommendations based on the user’s tastes and preferences.
One of the biggest messaging platforms is Facebook Messenger, which boasts 1 billion global monthly active users. Facebook introduced chatbots earlier in 2016, and retailers are taking advantage. In October, just ahead of the holiday shopping season, eBay announced it was testing a chatbot shopping assistant on Facebook Messenger.
Chatbots add another layer of engagement and personalization to the shopping experience, helping brands drive conversions.
Brick and mortar is on the decline, while mobile shopping is on the rise. The challenge for retailers is connecting their offline and online channels. Beacons are helping brick and mortar stores do just that.
ABI Research predicts 400 million beacons will be deployed by 2020. Beacons allow retailers to push notifications to users while they are in stores when they are within a certain proximity to the device. These notifications are highly targeted and relevant for the user. With the right message, proximity marketing facilitates the in-store shopping experience.
From Macy’s to Target to McDonald’s, widespread beacon deployment is more than underway. One of the largest beacon rollouts this year was by Rite Aid. Rite Aid installed over 4,500 beacons in their stores across the United States. The beacons push notifications and promotions to customers, but they also allow the retailer to collect valuable data about in-store shopping patterns. That data can be leveraged to better optimize the in-store shopping experience.
With so many retailers deploying this technology, it’s more likely than not you’ll enter a store that uses beacons this holiday season. read more
By Lindsay Boyajian
Network World, Inc.
During the FRF/FPMA Fall Meeting and Retail Summit, Linda Edwards, Esq., a member of the Employment & Labor team from FRF Chairman’s Circle member, Rumberger, Kirk & Caldwell, hosted a session focused on the recent federal Department of Labor overtime regulations to clarify the issue for members and what it could mean for your business. For those who couldn’t attend the Summit, we felt her presentation, and the implications on Florida businesses, were important enough for us to share with our entire membership. So below is a link to her comments, powerpoint and questions from membership. We hope you’ll find this helpful as you prepare your business accordingly:
Getting Ready for Changes: What You Need to Know for Fair Labor Standards Act Compliance
What is covered?
Retailers such as Dick's Sporting Goods will have specific Olympics displays in stores. Macy's, which has an exclusive partnership with Ralph Lauren to sell the opening and closing ceremony outfits, expects a surge in traffic this weekend after the athletes make their entrance in Maracana Stadium in Rio de Janeiro.
"Historically, as soon as the Olympics start we see a huge lift," says Tim Baxter, Macy's chief merchandising officer. That goes for athletic apparel too, particularly in the kids department as impressionable youngsters are inspired by Olympic competitors, Baxter says. Red, white and blue options will be especially popular, he says. read more