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Levi’s CFO Plans to Increase Capital Spending on Digital Initiatives

By Industry News

Levis is making big changes to their back end infrastructure.

Following the trend of enterprises transitioning their logistics and distribution models to digitally native ecosystems, Levis has recently announced that they plan to invest heavily into digital initiatives over the coming years. Levis, and SDI customer, is one of the many organizations that are re-evaluating their strategies and infrastructure in a post-pandemic world and see the value in updating and upgrading their distribution systems to ensure they can continue to meet demand while customers transition from in-store to e-commerce shopping. Full article from the Wall Street Journal below:

Levi Strauss & Co.’s finance chief is ramping up the jeans maker’s capital spending, aiming to spend two-thirds of it on digital initiatives to aid the company’s recovery from the effects of the coronavirus pandemic.

San Francisco-based Levi’s this year plans to allocate about $210 million toward capital expenditures, up from last year’s budget, which was trimmed to around $130 million, according to Chief Financial Officer Harmit Singh. “We are reallocating our costs in a way that we drive synergies and savings, and invest in areas of growth,” Mr. Singh said.

Levi’s on Thursday reported net revenue of $1.31 billion for the quarter ended Feb. 28, down 13% compared with the prior-year quarter, before the pandemic hit Europe and the U.S. Digital revenue made up 26%, or about $340 million of net revenue in the quarter, up from about 16% during the prior-year period.

The company expects sales to grow as increasing supplies of Covid-19 vaccines and fresh stimulus funds boost the economic recovery. Levi’s forecasts net revenue will increase by 24% to 25% during the first half of the year, compared with the first half of fiscal 2020 when it booked $2 billion in net revenue. The guidance is “largely driven by a faster recovery and a more optimistic view that we have,” Mr. Singh said.

Levi’s, which temporarily closed many of its stores because of local lockdown restrictions in 2020, has been shifting toward e-commerce sales and expanded its online presence, by offering virtual styling and shopping services, for example. Some of the about 1,540 locations the company owns and operates—consisting of stores as well as shop-in-shops—are currently shut amid the resurgence of coronavirus infections, particularly in Europe. Still, it plans to open 81 new stores in 2021.

The company is looking to expand its digital offerings and increase its use of data analytics and artificial intelligence to forecast consumer demand and set the right prices, Mr. Singh said. “As we decide about pricing and promotions, it tells us how deep you can go,” Mr. Singh said about the company’s AI tool.

The digital initiatives include spending for Levi’s smartphone app, customer loyalty programs and expanding its “buy online, pick up in store” offering in Europe and Asia, he said.

Levi’s also wants to build out its distribution for e-commerce orders, which is largely run by third-party providers. “What this gives you is insight into inventory,” Mr. Singh said, adding that better insight into Levi’s stock helps drive efficiencies.

Levi’s last year reduced its costs, in part by cutting about 700 jobs in the U.S. It reported selling, general and administrative expenses of $583 million for the quarter ended Feb. 28, down 12% compared with the same period last year.

CFO Pay Rises as Their Companies Navigate Coronavirus Pandemic April 15, 2021
The company continues to “play offense” from an investment standpoint while reducing SG&A expense in other areas, analysts at investment firm Guggenheim Securities LLC said in a note to clients.

Levi’s will use some funds for the launch of its new enterprise-resource-management system, which ties together information on finance, inventory management, supply chains and human-resource management. “We started in Mexico and are now rolling it out to Canada and the U.S.,” Mr. Singh said.

The recent trend toward more casual clothing—which Levi’s promoted during the pandemic months—won’t reverse with more people returning to their offices, Mr. Singh said.

“We think underlying brand strength, new distribution opportunities and an accelerated shift to more comfortable apparel will allow [Levi’s] to exit the pandemic better positioned than peers,” Lorraine Hutchinson, a research analyst at Bank of America Corp., said in a note to clients.

Write to Nina Trentmann at

In 2024 e-commerce will overtake physical retail

By Industry News

Companies are adapting from wholesale to e-commerce faster than ever.

Generix recently published an article explaining how by the year 2024, e-commerce sales will exceed that of physical retail. For Zeros customers, this means that they need to be prepared and adapt to the times by having their products and facilities ready to sell directly to consumer rather than through traditional wholesale channels. This means smaller but more orders to satisfy demand, which requires increased output. Robotics and automation are solutions that can help bridge the gap and make the transition smoother. Full article below:

This announcement left a huge impression at the NRF Retail’s Big Show 2018: In the US, e-commerce sales are expected to overtake in-store sales by 2024. This shift in paradigm is one retailers will have to adapt to. Given this context, how can we rethink the relationship between physical points of sale and online platforms? Your questions answered.

NRF Retail’s Big Show 2018: what are the latest trends in the sector?

From 14 to 16 January, the 2018 edition of Retail’s Big Show, organized by the National Retail Federation (NRF), was held in New York. A major event for retail professionals who are on the lookout for the latest trends in the sector.

During the conference “Leading with positivity” led by WD Partners, an expert in customer experience, one announcement particularly caught our attention: in the US by 2024, e-commerce will have overtaken physical sales. With the omnichannel retailing model gaining ground, companies must rethink the role of their physical points of sale in order to stay competitive.

In the face of store closures recorded in the US in 2017, this is an even more startling observation for retailers. According to WD Partners, more than 8,000 stores have closed their doors this year alone: a first since 2000, which is not expected to improve. The firm estimates that 25% of American malls will shut down over the next 5 years.

Is this the end of physical points of sale?

By 2024, the turnover generated by e-commerce is expected to grow exponentially, to the detriment of retail. In fact, according to WD Partners’ forecast, the curve for physical sales and e-commerce will cross paths at 600 million dollars. This distribution is very different from the one in 2017: 900 million for retail and 100 million for e-commerce.

However, can we affirm that the bell has tolled for physical points of sale? Not necessarily. Studies show that a retailer who opens a store in a given location will see online traffic from residents in the area to its e-commerce platform increase by 52%. And this only 6 weeks after store opening.

A lot of the store owners often require the services of reliable online loan providing companies who help them to afford all the high-cost necessary expenses when opening a new store in a certain location. The main goal of the loan providing companies is to connect people with trustful and legit lenders offering cash advances passing the fastest and easiest process. This way, the store owners get the fastest loan for their emergency needs. The companies provide the most secured loan application protecting the information with secure encryption technology.

Within this context, eradicating physical points of sale seems doubtful. What remains to be determined however is how to rethink the relationship between e-commerce and retail in order to make the most of each sales channel.

Redefining roles between retail and e-commerce becomes a must

Despite the rise of online shopping, stores still have a non-negligible competitive edge: they are a direct point of contact with the brand and allow customers to see the products in person. However, stores can no longer be thought of as places for storage and sale but rather as a genuine marketing tool.

Welcome to the era of showrooming, the practice of using the physical point of sale as a place to present a brand’s product range. Goal: allow customers to see and find products they like in store while giving them the possibility to purchase them later online.

This practice is still not very widespread but is expected to gain ground by 2020 to limit losses. Within this context, stores will no longer seek profitability but will rather aim to give their consumers a rich and unique customer experience. This drastic shift in paradigm is one that companies must be prepared for so they can become the perfect standard-bearer for their brand.

Showrooming: what are the consequences in terms of organization?

In specific terms, showrooming entails designing a new store model. For example, flagship stores are a new type of store that act as real display cases for the brand’s products and values. This drastic transformation means less inventory in store and thus greater customer demand to purchase products.
This is precisely the strategy used by Adidas in New York. In its store, it has only a single pair of shoes available in order to redirect customers to its online platform. The brand has thus gone from a transactional approach to a model that values customer in-store experience and the feeling of exclusivity.

The consequences of such a transformation are multiple in terms of human resources and organization of space:

-The company needs to put most of its employees in charge of customer relations and reduce its labor force in maintenance areas.
-Former shop assistants will become real advisers capable of offering customers a personalized experience in line with the brand’s universe.
-Fixed cash registers will be gradually eradicated. Instead, purchases will be made on mobile phones within a context of store-to-web.

These trends observed in the American market are proof of the coming shifts in the retail sector. The challenge for companies will be to undergo this transformation in its entirety in order to benefit from the future predominance of online sales. Going from web-to-store to store-to-web is also essential for the survival of stores in the United States as well as the world around.

Disney is closing 60 stores in the US and Canada

By Industry News

Traditional wholesale distribution to e-commerce distribution, there is no better example

As the companies in our industry continue to evolve their business to adapt with the times by making the transition from a focus on wholesale distribution to e-commerce distribution, there is no better example than Disney shutting down 60 of their flagship stores throughout the country to focus on their growing e-commerce business. This is a growing trend amongst Zeros customers who specialize in the wholesale and retail distribution space.

Traditionally, these brands have followed a distribution model in which product is delivered to their various warehouse facilities where they are sorted and stored, then sent out for shipments in large quantities to their own retail stores, wholesale retailers, and other distributors. As they shift to a direct-to-consumer, packaging and shipping orders to one customer at a time, they must have the infrastructure in place to fulfill orders timely and accurately. Read below for the full article of how Disney is adapting to the times by shutting down retail stores to focus on e-commerce:

"New York (CNN Business)The Disney Store, once a mall mainstay, is drastically reducing the number of locations it has in the United States and Canada.

Disney said it's closing at least 60 stores in North America, amounting to about 35% of its locations in the region. Moving forward, Disney is placing a larger emphasis on its e-commerce business rather than its brick-and-mortar footprint.

"While consumer behavior has shifted toward online shopping, the global pandemic has changed what consumers expect from a retailer," said Stephanie Young, president of Disney's consumer products, games and publishing unit, in a press release.

Disney (DIS) said that it's focusing on making its shopDisney platform a more "seamless" and "personalized" experience. That online revamp will be "complemented by greater integration with Disney Parks apps and social media platforms."

Covid-19 has spurred more people to move their shopping habits online. Research firm eMarketer recently said e-commerce sales across the world grew nearly 28% in 2020, surpassing $4 trillion.

Fans can still buy Mickey merchandise at theme park stores, third-party retailers and Disney shop-in-shops. In 2019, Target opened mini-Disney stores in 25 of its locations.

Disney, which didn't release a list of stores that will close, has about 300 locations worldwide. It had nearly 800 locations globally at its peak in 1999."

More store closings in 2021? These are the most vulnerable major retailers of 2021 as pandemic continues.

By Industry News

More retail stores are closing amidst the COVID-19 pandemic

There is no denying that both the pandemic and the evolution of e-commerce is putting a strain on traditional retailers and department stores. 2020 brought a slew of challenges for even the most recognizable and longest standing brands in this space. Many of them listed in the below article, published by USA today have struggled to adapt to the new reality of the digital supply chain and are their businesses are facing serious consequences as a result. Meanwhile, companies like many of Zeros' customers are thriving through these times by adapting their business models to suit the purchasing habits of today's consumers to meet demand for e-commerce fulfillment.

Through the utilization of the right technology in the form of robotics and automation coupled with the right reporting and optimization software like Zeros, companies are able to adapt and succeed in these interesting times. Full article below:

For retailers that survived the catastrophe that was 2020, there’s hope on the horizon in 2021. But there’s no guarantee they’ll keep their engines running long enough to reach the light at the end of the tunnel. While 2020 was a mess for many retailers, leading to the liquidation of chains like Stein Mart and Pier 1 Imports, it was a boon to others, like Walmart, Target and Dick’s Sporting Goods.

“If you’re in a sector like department stores or specialty or off-price or apparel, you suffered the most in 2020,” said Mickey Chadha, vice president and senior credit officer of Moody’s Investor Service, who studies the retail sector.”

More J.C. Penney store closings: After exiting bankruptcy, 15 additional stores will shutter in spring 2021. Despite the crushing shutdowns that temporarily brought physical sales to a standstill in the early months of the coronavirus pandemic across the nation, the industry’s struggling retailers are now hoping that a nationwide vaccination campaign will bring them back from the brink. Restrictions still continue in California and other states also continue to limit the number of shoppers that can enter stores. Apple temporarily closed all 53 of its California stores again and about a dozen other stores across the country because of COVID-19 surges.

“It really comes down to how long COVID persists,” said Chris Hudgins, who analyzes retail data for research firm S&P Global Market Intelligence. “If we see this vaccine roll out and a lot of the cases come down and people go out and start shopping more, that will alleviate some strain on the retail sector.”

Here’s a list of major retailers for whom 2021 could be a make-or-break year based on USA TODAY research, public data and analyst reports:

J.C. Penney

The department store chain filed for Chapter 11 bankruptcy protection in May after its sales collapsed amid temporary store closures. The company was at risk of total liquidation for months as it negotiated with its creditors. After reaching a deal to sell to a consortium of property owners, including mall company Simon Property Group, J.C. Penney emerged from bankruptcy in December having closed more than 150 stores.

While that’s good news for fans of the chain founded by James Cash Penney that remains an icon of the era when shopping malls dominated American retail, it’s not out of the woods yet. 2021 will be crucial to whether J.C. Penney can prove its relevance to consumers who grew more comfortable than ever with online shopping in 2020.

“For a long time, we’ve seen foot traffic at department stores declining,” Hudgins said.

Sears and Kmart

You might think they’re already out of business since thousands of their stores have closed in recent years, but they’re not gone. Both chains were owned by a company that filed for Chapter 11 bankruptcy protection in 2018 and narrowly escaped liquidation in early 2019. They were sold to their longtime investor and CEO, Eddie Lampert, who has kept them alive on a shoestring budget. In February 2020, another 51 Sears and 45 Kmart locations closed, leaving some 182 surviving stores. There have been additional closings but no large closing announcements have been made since then. While Sears and Kmart are a shadow of their former selves, they remain in operation. But given that they have been struggling for ages in healthy times, experts say it’s hard to see how they can mount a turnaround during or in the wake of a pandemic.

Rite Aid

Rite Aid’s outlook has been gloomy for several years and Moody’s considers the company to be a “very high credit risk.” The company is stuck in an uncomfortable netherworld: not big enough to present a big threat to drugstore rivals Walgreens and CVS but not agile or rich enough to reinvent itself. A few bad breaks haven’t helped: A merger deal with grocery chain Albertsons collapsed in 2018, leaving the company’s path to reinvention unclear. Plans for a mega-merger between Walgreens and Fred’s also collapsed in June 2017 amid federal antitrust concerns. Like Moody’s, S&P Global Ratings views Rite Aid as facing a risk of failing to meet its financial obligations if something goes wrong.

Party City

Quite simply, it’s a tough time to be selling party goods when parties are, in some states, illegal. Given restrictions on large gatherings intended to reduce the transmission of the coronavirus, the market for balloons, streamers, party decorations, and costumes is naturally limited. Party City was already facing challenges before this crisis began. The company has closed 76 stores since 2019, most of them before the pandemic, leaving it with 739 locations as of Sept. 30. Its financial troubles mounted in 2020. The company posted a loss of $432 million in the first nine months of 2020, compared with a loss of $264 million in the same period of 2019.

Jo-Ann Stores

This fabrics retailer remains on the edge of trouble. Owned by private equity firm Leonard Green & Partners, Jo-Ann faces the challenge of digging out of debt while dealing with the retail industry’s other challenges. Private-equity ownership has been a problem for many other retailers in recent years, such as Toys R Us, which liquidated after accumulating too much debt and facing intense competition.

“A lot of the weaker players that we have now in the distressed space are still owned by private equity firms and still have weak balance sheets,” Moody’s executive Chadha said. “And those companies are going to find it difficult, even when things normalize, to compete with stronger players that got stronger in 2020 because it’s just going to be that much more competitive.”

Neiman Marcus

One of the first major retailers to file for bankruptcy protection during the pandemic, Neiman Marcus entered Chapter 11 in early May. It successfully navigated the debt-cutting process and emerged from bankruptcy in September, giving it another shot at achieving sustainability. But time could be running out for the department store model. Neiman Marcus is already on Moody’s list of vulnerable retailers based on their financial circumstances.

Tuesday Morning

Tuesday Morning was already struggling when the coronavirus pandemic began and went into a free fall when it was forced to temporarily close its locations due to the crisis. The off-price retailer – which sells a wide variety of merchandise including home decor, bath and body goods, crafts, food, and toys – filed for bankruptcy protection in May. The company said it expected to stay in business while using the bankruptcy process to restructure operations. As of Sept. 30, it had 490 states in 40 states after closing 197 stores as part of its reorganization plans.

Christopher & Banks

Apparel retailer Christopher & Banks, which caters to women over 40, announced on Dec. 10 that it hired strategic advisers including B. Riley Securities Inc., and is working to refinance debt and explore alternatives. The Minneapolis-based company obtained a $10 million loan under the Paycheck Protection Program in June.

“We believe that COVID has had an outsized impact on our customer demographic as her shopping behavior is more pragmatic with limited demand for new outfits in the absence of social engagements,” Keri Jones, president, and CEO, said in a statement on Dec. 10. “In addition, based on our own retail traffic trends we believe she remains hesitant to shop in stores.”

As of Oct. 31, the company operated 452 stores in 44 states, including 316 Missy, Petite, Women stores, 77 outlet stores, 31 Christopher & Banks stores, and 28 C.J. Banks stores. Jones said COVID-19 was expected to continue to depress sales over the next several months.

J. Jill

The women’s retailer announced in September that it had worked with lenders to restructure its debt out of court. The company, which has more than 280 stores nationwide, had signaled it would consider filing for bankruptcy. Interim CEO James S. Scully said in December that the company’s third-quarter results showed improvement because stores were open for the entire quarter versus the temporary closures from the second quarter. A permanent CEO, Claire Spofford, will join the company in early 2021.


Macy’s announced in February 2020 that it planned to cut 2,000 jobs and close one-fifth of its stores or roughly 125 locations over the next couple of years while also opening smaller stores that are not located in malls. Macy’s along with other department store chains temporarily shuttered all of its stores amid the pandemic in mid-March. The company, which includes Bloomingdale’s and Bluemercury, started reopening stores in May and added curbside pickup. Macy’s appears to be in better shape than some of its competitors. In June, officials said the company received a credit line of $3.15 billion backed by its inventory, bringing its total new financing to $4.5 billion. In September, Macy’s Inc. Chairman and CEO Jeff Gennette said the timeline for permanent store closings could be adjusted as the company monitors the competition and the recovery from the pandemic.

“Retail today has been disrupted. And while that disruption creates challenges, it also holds opportunity,” Gennette told analysts during the September quarterly earnings call. “With many competitors closing or struggling, we see the potential to bring new customers into our brands and gain market share.”

In November, Gennette said the company entered the quarter “in a stronger than expected position.”

Ascena Retail Group

Also listed on USA TODAY’s 2020 list of struggling retailers, Ascena Retail Group, the parent company of Lane Bryant and Ann Taylor, which filed for bankruptcy in July. The New Jersey-based company said at the time of the Chapter 11 filing that it plans to “reduce their store fleet from approximately 2,800 stores to approximately 1,200 stores,” which represents a 56% reduction in the company’s total number of stores.

The company shuttered all of its Catherines plus-size stores and in November announced it sold the rights, title, licenses, and e-commerce business of its Justice tween brand to management company Bluestar Alliance LLC. Most Justice stores have already closed and the remaining locations are expected to close in early 2021. On Dec. 23, the company announced it sold Ann Taylor, Loft, Lou & Grey, and Lane Bryant brands to Sycamore Brands, a New York private equity firm. Ascena also sold two of its brands, Maurices, and Dressbarn, in 2019 before bankruptcy.

Bed Bath & Beyond

Even before the pandemic, Bed Bath & Beyond planned to close stores but in July the number increased to 200 planned closures, accounting for some 21% of the company’s namesake stores. In September, the New Jersey-based home goods retailer – which also operates buybuy Baby and Harmon Face Values – revealed the first 63 namesake stores that would shutter as part of the plan by the end of 2020. In late October, company officials said the 200 stores are expected to close by the end of the 2021 fiscal year. Under the leadership of CEO Mark Tritton, who joined Bed Bath & Beyond in November 2019 from Target, the company has been selling some of its brands.

On Dec. 14, the company announced it was selling Cost Plus World Market, which has 243 stores, to Los Angeles-based private equity firm Kingswood Capital Management. Bed Bath & Beyond sold its Christmas Tree Shops brand with 80 stores in November.

Victoria’s Secret

In May, L Brands, the parent company of Victoria’s Secret and Bath & Body Works, said it would permanently close approximately 250 stores in the U.S. and Canada in 2020. As of the end of October, the company reported it had closed 223 Victoria’s Secret stores and three Pink locations and opened 18 new Victoria’s Secret and two Pink stores. It also closed 13 of its 38 stores in Canada. With the openings and closings, it has 704 Victoria’s Secret and 143 Pink stores.

In February, L Brands announced a deal to sell 55% of Victoria’s Secret to Sycamore Partners. After the pandemic struck, Sycamore went to court to back out of the deal, and in early May, both parties called it off.

“We would expect to have a meaningful number of additional store closures beyond the 250 that we’re pursuing this year, meaning there will be more in 2021 and probably a bit more in 2022,” interim Victoria’s Secret CEO Stuart Burgdoerfer told analysts in May.

Company officials said they still plan to separate Victoria’s Secret and Bath & Body Works into two companies, which has pleased investors. Despite sales improving in the third quarter, L Brands CEO Andrew Meslow said in November the company was cautious “given anticipated constraints on store traffic, online fulfillment, and shipping capacity, as well as other uncertainties related to the COVID pandemic.”


Fashion retailer Express launched a turnaround plan in January 2020 and announced it would close 100 of its 600 stores. Express CEO Timothy Baxter told the Wall Street Journal in December that the company had hired investment bank Lazard Frères & Co. to help raise enough financing to carry the company through the pandemic. Earlier in December, the company said it had completed a 10% workforce reduction at its Columbus, Ohio, corporate office.

The reductions are expected to save $13 million in 2021 in addition to the $95 million cash tax benefit the company expects to receive in the second quarter of 2021 as part of the CARES Act.

Follow USA TODAY reporters Nathan Bomey and Kelly Tyko on Twitter @NathanBomey and @KellyTyko.

COVID-19 pandemic accelerated shift to e-commerce by 5 years, new report says

By Industry News

As the race to an e-commerce driven world intensifies, it’s more important than ever for companies to adopt a digital supply chain.

The pandemic has changed and continues to change our society in more ways than imaginable. One of the most impacted areas of this stay-at-home time is the need for consumers to receive items without ever stepping foot out of the house. Naturally, e-commerce is the solution to at-home shopping and has been growing in popularity for the past few decades, but the rate at which it is overtaking traditional retail is staggering.

While many organizations struggle to make ends meet and adapt to the times, many Zeros customers who have planned ahead and started taking early steps to transitioning their business models from wholesale distribution to e-commerce distribution, are capitalizing on the fact that more consumers are ordering from home than ever, a trend that will likely continue even after the pandemic passes.

TechCrunch investigates how the pandemic is shaping this evolution, and what shopping will look like in a post-covid world. Full article below:

As the COVID-19 pandemic reshapes our world, more consumers have begun shopping online in greater numbers and frequency. According to new data from IBM’s U.S. Retail Index, the pandemic has accelerated the shift away from physical stores to digital shopping by roughly five years. Department stores, as a result, are seeing significant declines. In the first quarter of 2020, department store sales and those from other “non-essential” retailers declined by 25%. This grew to a 75% decline in the second quarter.

The report indicates that department stores are expected to decline by over 60% for the full year. Meanwhile, e-commerce is projected to grow by nearly 20% in 2020.

The pandemic has also helped refine which categories of goods consumers feel are essential, the study found. Clothing, for example, declined in importance as more consumers began working and schooling from home, as well as social distancing under government lockdowns. However, other categories, including groceries, alcohol and home improvement materials, accelerated, by 12%, 16% and 14%, respectively.

The report suggests that department store retailers will need to more quickly pivot to omnichannel fulfillment capabilities in order to remain competitive in the new environment. Specifically, they will need to drive traffic to their stores through services like buy online and pickup in store (BOPIS), and will need to offer an expanded set of ship-from-store services.

Large retailers like Walmart and Target have embraced omnichannel fulfillment to their advantage. Both reported stellar earnings this month thanks to their earlier investments in e-commerce. In Walmart’s case, the pandemic helped drive e-commerce sales up 97% in its last quarter. Target set a sales record as its same-day fulfillment services grew 273% in the quarter. Both retailers have also invested in online grocery, with Walmart today offering grocery pickup and delivery services, the latter through partners. Target has also just now rolled out grocery pickup and runs delivery through Shipt.

Amazon, naturally, has also benefited from the shift to digital with its recent record quarterly profit and 40% sales growth.

The growth in e-commerce due to the pandemic has set a high bar for what’s now considered baseline growth. According to the Q2 2020 report from the U.S. Census Bureau, U.S. retail e-commerce reached $211.5 billion, up 31.8% from the first quarter, and 44.5% year-over-year. E-commerce also accounted for 16.1% of total retail sales in Q2, up from 11.8% in the first quarter of 2020.

The questions that IBM’s report aims to answer is how much of this pandemic-fueled online spending is a temporary shift and to what extent is it impacting longer-term forecasts? The answer, at least in this estimate, is that this pandemic pushed the industry ahead by around five years. The shift away from physical stores was already underway, but we’ve now jumped ahead in time as to where we would be if a health crisis had not occurred.

This is a similar trend to what other industries have seen as well, including things like streaming/cord cutting, gaming and social video apps, and more.

Correction: The US Census Bureau figures indicate growth of 31.8% on a quarterly, not annual, basis. This figure was corrected after publication. TC apologizes for the error.

Krish Nathan, CEO of SDI Systems – CNBC Interview

By Industry News

CEO of Zeros strategic partner, SDI Systems, sits down with CNBC to discuss the future of logistics, post COVID-19

Watch the Interview here

SDI Systems is a leading manufacturer, engineer, and installer of advanced robotics and automation hardware, and strategic integration partner of Zeros. Servering Fortune 1000 customers in the retail, wholesale, e-commerce and 3PL industries, there are few companies who better understand the current and future state of the supply chain.

New Deloitte report confirms industry trends.

By Industry News

A new Industry Report confirms the adoption of robotics and automation technologies.

Every year we look forward to the Industry Report, a joint venture between MHI and Deloitte that surveys 1,000 executives at the top supply chain and logistics companies in the world. Traditionally, this survey has done a great job in uncovering trends in the industry as well as forecasting the future. We were excited to learn how quickly organizations are utilizing advanced robotics and automation in their facilities. Some of the key highlights we took away from this year’s report were:

  1. 20% of supply chain leaders believe the digital supply chain is already the predominant model and 80% expect it to become dominant within five years.
  2. 71% of logistics operations rate finding qualified talent as extremely challenging, justifying the need for further investment in automation technology and systems to help them do more with less.
  3. 48% want partnerships with their vendors to better understand the benefits and application of advanced technology.
  4. Warehouse logistics operators presently have a 39% adoption rate of new automation equipment and are expected to increase to 73% within the next 5 years.
  5. Survey respondents plan to invest a weighted average of $13MM each in supply chain technologies over the next 2 years.
  6. Robotics and automation are expected to be the most disruptive forces to impact the supply chain in the coming 10 years.

The report is 45 pages long and jam-packed with information about the evolving supply chain space. If you’d like to download the full report, you can find it at the link below.

Who Will Be The Next CEO At JCPenney? (And Why?)

By Industry News

JC Penney is a cautionary tale in the evolution of the digital supply chain

Few names in the retail space are more recognizable than JC Penney, one of the oldest and longest standing names in the space. But as the world has begun a transition to a new form of retail landscape, JC Penney has struggled to keep up. This is due to many reasons, but the main reason that stands out to the team at Zeros is that JC Penney has resisted the transition to the digital economy, and has continuously doubled down on the traditional retail model, carrying a large retail footprint and the price tag that goes along with leasing all that space. With a focus on the digital supply chain, there is still hope for JC Penney. There are many brands that started in similar positions yet have adapted by utilizing technology and focusing on distributing direct to consumer.

Forbes explains how JC Penney got to where it is today and where it’s going in it’s future. JC Penney serves as a case study for brands in the retail space. Full article below:

JCPenney made sure it ended 2020 with a thud, capping off an ugly year for one of the most iconic names in retailing.

With the announcement on Wednesday that current CEO Jill Soltau’s last day would be the next day, Dec. 31, the search begins for her replacement. Under new ownership — split among two giant real estate operators — as well as its branding partner and assorted private equity investors, Penney is just emerging from its bankruptcy with a clean balance sheet, about a hundred fewer stores and soon, a new leader. What it still doesn’t have yet in the eyes of many is a reason to exist.

Soltau took over the corner office at Penney a little over two years ago and assembled a new team at the retailer in an attempt to halt its precipitous retail slide and find a new identity that would provide for a place in the increasingly squeezed mid-market sector. Some criticized her lack of a sense of urgency and the visible changes at the company under her reign were marginal. Stores and signage were cleaned up, some new brands brought in and both home and e-commerce — once mainstays at the retailer — were both given more emphasis. A so-called “lab” store outside Dallas was opened about a year ago and it pointed to a possible new direction that might succeed. But any sort of a dramatic reinvent was nowhere to be seen.

Then the pandemic hit and Penney’s tenuous finances and over-reliance on physical stores doomed it to chapter 11, where it landed up in May. New ownership — it resembles Ghidorah, the three-headed monster of Japanese science fiction movies with its many faces — divvied up the proceeds and then on Wednesday dropped the CEO shoe. And while Soltau’s departure is not entirely shocking it is at least a little surprising given that she seemed to be part of the new ownership’s plans going forward. Now whoever gets her job has to start from scratch.

So who’s in line for this job in 2021…not to mention who wants to take it? Certainly with the number of retail closings in the past 12 to 18 months there is no shortage of competent and qualified retail leaders who could step into the Penney position. Who is asked will say a lot about how the retailer’s ownership group views its investment: something to blow up and totally reinvent, a legacy property to be maintained at the status quo to keep its doors open, or something in between with just enough upgrades to prolong its existence.

But a short list would have to include at least some of the following: Roger Farah, now chairman of Tiffany, but perhaps about to be out of a job with that company’s sale to LVMH; Jane Elfers, now running Children’s Place with a very nice turnaround under her belt; John Foran, former head of Walmart’s U.S. division and now running a New Zealand airline but perhaps itching to get back into retailing: Helena Foulkes, who most recently ran Saks Fifth Avenue but was caught in one of Richard Baker’s endless purges; Mindy Grossman, now running WW, formerly Weight Watchers, who has a good mid-price retail pedigree; and any number of retail retirees from Macy’s Terry Lundgren to Qurate’s Mike George to Jeff Wilke, essentially the number two at Amazon.

Of course, the ownership group could go rogue and bring in a younger hot-shot from elsewhere in retailing, particularly e-commerce, if it wants to do something dramatic. Then again, the last time Penney did this with Apple’s Ron Johnson it didn’t work out so well.

Whoever gets the job will face a staggering task: making Penney relevant in a shrinking mid-market segment, squeezed from below by Walmart, Target and the off-pricers and with an ever-desperate Macy’s at the other end of the mall facing a similar challenge and perhaps somewhat better positioned to deal with it.

It will need to get its e-commerce side up to speed, fix 600 or so physical stores that have been severely under-invested in even as the malls they are often located in are dying slow deaths, find a compelling promotional strategy that doesn’t involve endless one-day sales and coupons up the wazoo and generally remake a 119-year-old company that has been stubbornly resistant to change from both within and without.

If it sounds like your kind of job, Stanley Shashoua, now the chief investment officer of Simon Property — one of Penney’s new owners — is the interim CEO. I’m sure he’d love to hear from you…or at least some of you.

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