Retailers at NRF’s Global Supply Chain Summit are learning about how to make their supply chains more effective and serve their businesses better. And, as they learned at one session, that sometimes includes giving stuff away.
Charles Johnston, director of the repair and liquidation center at The Home Depot, joined Good360 Vice President of donor Relations Doyle Delph to make the case for donating unused goods to nonprofits in local communities. And when you see the numbers, it’s not a tough case to make. Many retailers have merchandise they can’t sell. Props from store displays, merchandise used in photo shoots, or returned merchandise that has been damaged and can’t be resold are just a few examples. The nonprofit group Good360 does a job that most of these supply chain executives can appreciate – logistics, or getting the right goods to the right nonprofit at the right time – while retailers gain a solution for unused items that reduces their carbon footprint, saves the cost of shipping waste to landfills, and helps them give back to their communities.
Home Depot has taken this win-win concept to impressive heights. Five years ago, when some associates at company noticed how many building materials were being thrown out, they asked if they could instead put it to use in their own communities. That request led to the creation of the Framing Hope project at the Home Depot Foundation (their philanthropic arm), an initiative that uses unsold merchandise to build houses for veterans and others in need. Since 2008, the foundation has donated more than $150 million in merchandise and impacted over 1 million homes and families through this partnership with Good360.
Johnston said the program isn’t just the right thing to do. It also increases employee morale, builds up the community, reduces carbon emissions, and makes good financial sense. Watch the video to see how the program works below:
The key to Good360 is their network of nonprofits that distribute goods within their local communities. In Dallas, one of those partners is Refugee Connections, run by Bright Osigwe, who was also among the speakers. Osigwe’s organization supports refugees by setting them up in homes and helping them get on their feet in a new country. And while their organization used to drive from garage sale to garage sale to gather supplies, working with Good360 has connected the group with retailers from the area that have donated home items, linens and even food to help those in the most need. A true “one man’s trash is another man’s treasure” story.
Is the lack of “bad” economic news affecting consumers’ spending habits and sentiment in a good way? Bloomberg recently reported that confidence in the economy climbed to the highest level in almost six years in May as rising real estate values and record stock prices boosted household wealth. And NRF’s latest consumer survey conducted by Prosper Insights & Analytics finds that the number of people who say the economy is affecting their household spending plans decreased to 83 percent in May, down from 85 percent in both March and April in March.
As we look into the psyche of the American consumer, it’s easy to base perceptions on some of the latest news. Surprising growth in April retail sales, decreasing unemployment numbers and a rise in U.S. payrolls appear to be contributing to a more confident shopper. But when we dig a little deeper it’s actually quite a different story – filled with dwindling hopes for improvement in the labor force, plans to spend less overall and a shift in the way consumers prioritize their budgets.
According to NRF’s May consumer survey conducted by Prosper Insights and Analytics, which gauges the level of impact the economy has on consumers’ spending plans, 54 percent of those surveyed said they are spending less to compensate for the state of the economy. Nearly another four in 10 say they are dining out less frequently for that same reason. Though these figures are both either flat or slightly down from the previous month, neither presents a terribly rosy outlook for consumer spending plans.
More highlights from the survey include:
- 26 percent say they are shopping at discount stores more often, hoping to stretch their budgets as far as they can.
- Nearly one-quarter will cut back on “small luxuries” and discretionary expenditures like gourmet coffee and high-end cosmetics.
- Three in 10 will spend less on apparel.
- Nearly one-third say they are travelling less or not at all – a trend to watch as important “travel” holidays such as Memorial Day and Independence Day approach.
- 43 percent say they are shopping for more-frequent sales.
When it comes to consumers’ belief in a strong economy, the impact the calendar has on their spending demands, and their plans for investing in their savings this year, it seems consumer sentiment as a whole is still a bit unpredictable.
Although Reuters and the University of Michigan found earlier this month that consumers were much more confident about the economy, Prosper Insights and Analytics analyst Pam Goodfellow says “people want to believe in future growth for the economy, but they are having a hard time keeping the faith and are trying to be as conservative as their budgets will allow.”
For a bigger “Consumer Snapshot,” watch Prosper’s latest video below, and for more in-depth analysis and information on consumer sentiment and the economic landscape, visit the NRF’ Foundation’s Retail Insight Center.
Day before Yesterday
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In this morning’s opening keynote at NRF’s Global Supply Chain Summit, Jim Tompkins, CEO of Tompkins International, told retail supply chain executives what a wild ride they’re in for: Retail is at a crossroads, with a transformation occurring as supply chain leaders gain the ear of the CEO. The supply chain is becoming even more critical in either raising an organization to the top or sinking it to the bottom.
Jim Tompkins, CEO, Tompkins International
There’s no question that the current retail environment is intensely competitive and complex. Winning on price is tough, and many argue that price wars are simply a race to the bottom. Competing on selection can be difficult as well. So how will retailers distinguish themselves? Customer experience and convenience, Tompkins says. And the supply chain plays a huge role in both.
Have the wrong retail strategy or the wrong supply chain strategy, and retailers could end up going down the wrong path. But turmoil within the supply chain field will make for tough navigation. Over the last four years, retailers haven’t been addressing key challenges due to economic uncertainties, but Tompkins expects a flurry of changes and advancements in the next 18 months.
So what are the tipping points to the turmoil?
- Amazon. They can’t be ignored, so you need to understand why they’re winning.
- Online success. Your website is your front door, regardless of whether you make any money there.
- Technology. To do a buy/fulfill/return-anywhere model, you need the right tools.
- Social commerce. People don’t need to be together to shop together.
- Youth culture. Digital natives see shopping quite differently.
- Bad in-store experience. Service in the store needs to wow customers.
- Store relevance. Why should someone come to your store?
Tompkins points to the need to understand all of these in order to successfully navigate your organization. But he says the big one is undoubtedly Amazon, explaining that Amazon is winning for lots of reasons. They still run intensely like a startup, they’re persistent, they experiment and learn from their mistakes, they measure everything, and they focus on customers, not competitors. According to Tompkins, it’s very important to study Amazon.
Tompkins posed this question: What are you doing to align your supply chain with your business strategy to create supply chain value? It’s the answer that will guide you through the crossroads and on to success.
“You are going to make our future,” NRF President and CEO Matthew Shay told the Wittenberg University graduating class last week – and he couldn’t have been more right. Of the 1.7 million college students graduating this year with a bachelor’s degree, the retail industry might find the next Mark Zuckerberg, or Terry Lundgren, or Sara Blakely.
In our work with universities – whether we’re trying to use the NRF Student Association to share insights on what a career in retail looks like, meeting with our Retail Recruiter Network about how to collectively promote our industry in a more compelling way to jobseekers, planning a student program for one of our conferences to give young people the opportunity to network with CEOs, or working to distribute more than scholarship monies to very deserving candidates – we hear and see every day how today’s college students are motivated and intelligent “change agents”, ready to leap headfirst into their career. And, of course, we hope that career is retail.
During Shay’s commencement at his alma mater, he shared five life and career lessons, some of which he’s learned the hard way (haven’t we all?). And while these were created with students in mind, they certainly apply to professionals at all levels:
- When you make a decision, be committed.
- Clean up your own messes.
- Happiness is more important than money.
- Find a mentor.
- No one ever accomplished anything great alone.
And with that, he proposes a challenge: “Never let anybody outwork you.”
Watch a recap of his commencement speech below.
To see Shay’s entire speech, watch the video courtesy of Wittenberg University.
There’s a well known proverb that “it takes a village to raise a child.” A small village in Honduras serves as an amazing example of just that.
As part of the Retail Orphan Initiative, retail executives from across the country traveled to La Entrada, Honduras in April to the Plan Escalon campus, a haven for more than 550 Honduran youth ranging from grades 6-12. Many of these kids come to the school from difficult circumstances, feeling lost and hopeless. But the Plan Escalon program gives children a chance to reclaim their future through education, faith and training. Plan Escalon means “A Plan to Escalate”, and the program’s success is undeniable. With nearly 50 percent of their graduates going on to attend a college or university, compared to the national average of just one percent, the importance of the school’s partnerships with groups like RetailROI and Lifesong for Orphans results in their continued success. In a nation with 70 percent overall unemployment, over 70 percent of these graduates have full time employment – a testament to the positive impact Plan Escalon has on the future of Honduras.
During my trip last month, I saw first-hand how one graduate’s journey is just beginning at the Plan Escalon campus. After she completed her education, the graduate returned to her home to start the village’s first elementary school, a truly remarkable accomplishment.
As part of Escalon’s weekly “Life in Action” village trips, we traveled up the side of a mountain with pickup trucks piled high with desks, chairs and Escalon students. It was apparent that our visit was the beginning of fulfilling another child’s opportunity to overcome obstacles and reach for their dreams.
With the emergence of new technology, a personal call-to-action can stretch from the United States to a village thousands of miles away. For almost five years, RetailROI has not only been able to make an impact on children’s lives domestically and internationally, this group of retail industry professionals has also touched hearts and encouraged others to become believers, leaders and champions for the cause.
Since 2008, the Retail Orphan Initiative has partnered with organizations on global missions to lend resources that change nations in 13 countries with over sixty projects. In Honduras, it started with building a computer lab and using the technology to connect students to a world of expanded learning, skills and opportunities. Similar projects have taken place in Liberia, Haiti, Zambia, Ethiopia and the United States through the construction of schools and the improvement of existing facilities. The purpose of RetailROI is to raise awareness and provide real solutions for the more than 400 million vulnerable children worldwide, and so far the organization has successfully donated more than 92 percent of their funds directly to the projects and missions at hand. In addition to the work in their professional lives, this group has adopted the motto “Find the need, Meet the need, Change a Nation.”
Ultimately, what we saw in Honduras was a perfect representation of the funds raised through RetailROI’s supporters. Our group did not just bring much needed resources to a village, but in many ways, those trucks served as vehicles to deposit seeds of inspiration and encouragement.
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The Retail Bulletin