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industry lowdown
Alexandra Biesada

Industry Lowdown: Retail Sector

by Alexandra Biesada | Dun & Bradstreet Editor

April 1, 2016 | No Comments »

Take a look at some of the opportunities, trends, and challenges from industry profiles updated by D&B First Research editors in recent weeks, with a focus on the Retail Sector.

Trend: Adults Drawn to Coloring Books
More grown-ups are turning to coloring books to de-stress and take a break from their digital devices, spurring a surge in sales. Around 12 million coloring books for adults were sold last year, a dramatic increase from the 1 million sold in 2014, according to Nielsen BookScan. Since the first commercially successful adult coloring books were published in 2012-13, the novelty hobby has grown into a full-blown trend, reports CNN. Capitalizing on the craze, crayon maker Crayola launched the Color Escapes series of coloring books aimed at adults last year in time for the holiday gift-giving season. Retailers, including Barnes & Noble, Wal-Mart and Target, craft seller Michaels, and Amazon.com, are all rushing to get in on the craze.

To learn more about this and other industry trends, see our Gift, Novelty & Souvenir Stores report.

Trend: Indie Bookstores Propel Modest Industry Growth
Increased sales from independent bookstores helped propel modest bookstore industry growth in 2015. Bookstore sales rose 2.5% for the year compared to 2014, the first annual increase since 2007, according to US Census data cited by Publishers Weekly. The 2015 turnaround was due in part to the growing number of independent bookstores in the US since Borders went bankrupt and closed more than 600 stores in 2011. Since Borders’ demise, independents have made up a significantly larger share of the US’s total bookstores. In 2015 indie stores accounted for 71% of all bookstores, up from 51% in 2010, the year before Borders closed. Some 60 new indie bookstores opened in 2015, and another 60 opened the year before, according to ABA figures reported in Publishers Weekly. Sales from more than 500 independent bookstores jumped 10% in 2015 versus 2014.

To learn more about this and other industry trends, see our Bookstores report.

Opportunity: Outdoor Furniture Sales Rise
With nearly $3.8 billion in 2015 sales, outdoor furniture is a growing category (up 5.5% versus 2014) as more homeowners invest in outdoor living spaces. However, traditional furniture stores lag far behind home improvement chains and specialty shops as destinations for consumers looking to furnish their decks and patios. A survey conducted by Home Furnishings Business of people who recently purchased outdoor furniture found that nearly a third shopped at Home Depot or Lowe’s, followed by 22% at specialty stores, and just 13% at traditional furniture stores. The good news is that furniture stores are gaining share at the expense of mass merchants like Target and Wal-Mart, which saw their share of the market decline in 2015.

To learn more about this and other industry trends, see our Furniture Stores report.

Opportunity: Pollinator-Friendly Plants Good for Bees and Sales
With consumer awareness driving demand for pollinator garden plants, garden centers and nurseries need to put pressure on growers to ensure adequate supplies, according to greenhousegrower.com. The success of the Million Pollinator Garden Challenge (MPGC), established by the National Pollinator Garden Network, has increased awareness and demand for pollinator-friendly plants, including annuals, perennials, shrubs, trees, and vines. The MPGC seeks to preserve and create gardens and landscapes to help revive the health of bees, butterflies, birds, bats, and other pollinators, and in doing so benefits pollinators as well as retailers that engage with customers to grow sales. Tips for garden centers for increasing sales include affixing colorful tags to identify pollinator plants, cross-merchandising pollinators with edible plants, giving away free samples, and teaming with local wildlife or native plant societies to spread the message beyond their established customer base.

To learn more about this and other industry trends, see our Garden Centers & Farm Supply Stores report.

Challenge: Amazon Pulls Away from Competition
A new analysis of visits to top retail websites during the 2015 holiday season shows that Amazon.com is gaining market share at the expense of its competitors. In November and December 2015, Amazon.com accounted for 34.5% of visits to the top 500 retail websites, up from about 26% during the same period in 2014, according to data from Hitwise reported by Internet Retailer. Amazon’s growth in traffic was nearly double that of runner-up Wal-Mart. Overall, visits to the top 500 retail websites grew 25% in the 2015 holiday season from the year before. While most of the top websites posted year-over-year gains in visits as consumers did more of their holiday shopping online, many sites nevertheless lost share due to Amazon’s outsized growth. For example, Walmart.com gained 13.8 million visits this past holiday season versus the prior year while falling from a 7% share overall to 6%. Amazon’s share of visits is bigger than that of the next 19 most frequently visited retail websites combined.

To learn more about this and other industry trends, see our Internet & Mail-Order Retail report.

Challenge: Dearth of New Products Hampers Growth
A shortage of innovative products, especially in the mobile phone category, is behind the sluggish growth forecast for consumer electronics in 2016. The nation’s largest consumer electronics retailer, Best Buy, is anticipating flat sales for the year in the absence of exciting new products that could entice consumers. Cellphone makers such as Apple haven’t released a new model for a while, and GoPro has delayed the release of its Hero 5 camera model until October 2016. In a February 2016 statement, Best Buy said it hopes to offset weakness in the mobile phone market with growth in sales of appliances, connected home and theater products, and emerging categories, such as drones. However, the consumer electronics giant doesn’t expect to see sales growth in the first half of 2016, but is more optimistic about the second half.

To learn more about this and other industry trends, see our Consumer Electronics & Appliances Stores report.

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Alexandra Biesada shops every day, whether she wants to or not, and pines for the days when it was strictly a recreational activity. She has covered the retail beat for Hoover’s since 2001. Follow her on Twitter.

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