Cooler weather in March has left cool results for most retailers. Total comp retail sales were up 1.6% against last year’s healthy 3.9% increases. The weather played a tremendous role in the performance as March was one of the coldest in over a decade. Areas most effected by weather were the Northeast and Midwest. The cold weather coupled with the shift of Easter into March resulted in a lower than expected performance. However, a few outliers did manage to buck this lackluster trend. American Apparel posted a celebratory 8% increase in sales, continuing a positive trend that has lasted almost two years. Limited Brands was up 3%. An interesting global retailer, Marks & Spencer, who is one of the top 100 global retailers operating in about 40 countries with headquarters in the UK, ended its fourth quarter (3/31) up 3.1%.
The stores are filled with bright “neon” trend Spring merchandise which hopefully will make a better sales showing in April. The real test is to take a combined March/April total vs. last year of the same period, especially since Easter alone accounts for a 1% or 2% drop in March sales for most retailers.
According to RetailNext, traffic was up 7.2% in March vs. February with average transaction value slightly up at 1.4%. RetailNext clients on average increased sales 3.3% over February (normalized with the variance week counts between the two months). The only disappointing metric was conversion, down by 4.8% for March as compared to February. This indicator shows that the consumer was still comfortable wearing the winter wardrobe and not quite ready to commit to Spring purchases. The demand for seasonal Spring fashions may come as the weather warms.
As we move into April, the key trend for brick and mortar retailers will be to improve the in-store experience. As many customers are turning to on-line and mobile commerce, it is essential that physical stores look at ways of (1) driving traffic into the stores with marketing or multi-faceted strategies like “buy on line, pick up in store” and (2) making the in-store experience memorable. “The Shopping Experience” is vital to win over the foot traffic and brand loyalty for physical stores. The four walls are becoming one of the most valuable marketing assets out there today. Customers that are in the stores want to “feel” an experience and they want to be entertained. They want to explore, learn, and have fun. Above all else, they want that instant gratification from products that are in stock and easy to find (after all, this is the one benefit that brick-and-mortars have left over other channels). The 3 P’s of shopping apply here which are… personalized service, productive visits, and POSITIVELY convenient.
Since April has already showed signs of warming up, retailers should make sure they're armed with that fabulous in-store experience that will help convert shoppers into sales!