All the retail analysts predicted that September Sales would be bad, and it appears that they were right on the money. But just how bad was it at a macro level? And, is there a silver lining for specialty retailers to this dark cloud?

There are certainly no clear, easy answers to these questions at this point, but there is some interesting information floating around out there. So let’s take at look at these questions one at a time:

How Bad Were September Retail Sales?

With a few exceptions—most of which are discounters that sell food—it was a pretty tough month for everyone [See charts below]. Wal-Mart, B.J.’s Wholesale Club, and Costco were also able to post positive comps, but just about every other retailer out there was down. Some were down big; Old Navy comps were down 24%!

Charts Courtesy Of Teradata

“It was even worse than my worst fears,” Charles Grom, an analyst from J.P. Morgan told the Wall Street Journal. Denver based business writer Lisa Everitt’s coverage on the issue is titled September Sales: Ugly As Sin. But perhaps the most pessimistic prediction of all came from Strategic Resource Group’s Analyst Burt Flicklinger, who said he expects 1,000 to 1,500 stores will close in January and February as a result.

So, yeah … I’d say it was pretty bad on a macro level.

Is There A Silver Lining For Specialty Retailers?

Some reports suggest there is. According to the Labor Department, while department stores cut 10,800 jobs in September, specialty apparel stores added 2,600. Which, according to Footwear News, is the first time in twenty years that the number of people in the specialty store workforce (1.5009 mil) outweighs the number of employees in department stores (1.5006 mil).

“Call it the death of the department store,” said Richard Yamarone, director of economic research for Argus Research Corp in the report.

I guess you could call that an opportunity for specialty stores.

Another interesting take comes from Internet Retailer, which reports that consumers plan on going online this Holiday season for discounts.“As economic pressures mount, consumers are becoming more strategic in the way they look for deals and they are using online tools more than ever,” says Guy King, co-founder of RetailMeNot in the article.

A survey of 2,022 online adults conducted by research firm Harris Interactive commissioned by King’s company offered these results:

Roughly 85 percent of online shoppers use Web tools to find sales and deals. Meanwhile, 37 percent of consumers plan to do their holiday shopping online, and 32 percent of Web shoppers turn to the Internet specifically looking for bargains, the survey suggests.

So what does this mean, and why is this good?

Sounds like there is some opportunity out there for retailers that have there online stores dialed in. The door is wide open according to Forrester Research’s Vice President Bruce Temkin.

“Our research on retailers shows they say the customer experience is very important and they want it to differentiate themselves from competitors and other companies,”Temkin told Internet Retailer. “But our consumer research shows shoppers don’t think retailers are doing a very good job.”

To gauge the quality of online customer experiences, Forrester Research analysts recently reviewed 1,200 web sites, including e-commerce sites—only 3% passed the firm’s usability test.

“The No. 1 failure, believe it or not, is text legibility,” Temkin says in the article. “In this day and age companies are investing hundreds of thousands of dollars, even millions, in their sites, yet display content in a way in which people can’t read it. Another failure near the top of the list is inefficient task flows. Some e-retailers, for example, have checkout processes that put you through too many steps. The processes simply are not efficient.”

So there you have it. Department stores are hurtin’ worse than specialty stores, and there appears to be some room for improvement for online stores. Is it a silver lining? You tell me.

Weigh in on the topic below!

Tags: retail results, september retail results

This entry was posted on Friday, October 10th, 2008 at 12:03 pm and is filed under FEATURES. You can leave a response, or trackback from your own site.