Raphael Stevens

In this articleWMTMA man shops for clothes in Macy’s department store in Herald Square, New York.Trevor Collens | AFP | Getty ImagesCrumpled piles of clothes. Unpacked boxes of inventory. Half-empty shelves. And employees rushing through aisles to grab items for online orders.That’s what some consumers are finding as they shop in stores again. Retailers adapted stores and workforces as more sales moved online during the pandemic. Portions of sales floors became staging areas for curbside pickup. Employees got trained to pack online orders, as well as help with customers in stores.For some retailers, that has turned a store’s appearance into an afterthought. Bare spots on shelves and unkempt displays at Walmart prompted a research firm to downgrade its stock earlier this year. Macy’s, the storied department store that now must fend off internet savvy rivals, has also faced ridicule for its poor presentation.The coming months may be especially crucial for retailers as they try to woo shoppers back to stores, where sales tend to be more profitable. Consumers have money they’ve stashed away after saving on commuting costs, eating out and traveling. Some have stimulus checks waiting to be spent. These shoppers may hit the mall to buy merchandise that has been off their radar for months: dresses, blazers, heels, swimsuits and make-up.Neil Saunders, managing director of GlobalData Retail, said it’s time for retailers to clean up their act — or risk losing customers. He snaps photos on shopping trips to better understand companies’ strategies and execution, which he then sends to his clients and posts across social media. He is quick to point out where retailers fall short: shabby signage, sloppy apparel or puzzling choices, such as setting up a large umbrella display at a store in Arizona, a state known for few rainy days.”Having a store that’s very messy and illogically laid out is quite very difficult for the consumer, because the consumer has to sift through a lot of things and they have to do a lot of searching to find the things that they want,” he said. “And because people have gone online more during the pandemic, when they’re coming back to shopping, their tolerance for that will have reduced even further.”Foot traffic is already picking up, as a growing number of Americans get Covid-19 vaccinations and feel comfortable venturing out again. Store visits across the country nearly doubled year over year during the week of March 22, according to Placer.ai. That followed a 60% jump in store visits the prior week, according to the research firm, which uses cellphone data to track consumer behavior.Yet consumers may hang on to pandemic-related expectations, such as a heightened desire for safety and cleanliness.Kelly Haws, a consumer psychologist and professor of marketing at Vanderbilt University, said store presentation will shape whether consumers feel eager or anxious to shop. She said cleanliness is most important for many consumers because of the global health crisis.”Being organized and clean is going to be more important than ever for people,” Haws said. “That’s going to give them signals of safety.”Source: R5’A tossed salad’Retail analyst Scott Mushkin started visiting different Walmart locations in the fall. What he saw inspired him to visit even more stores on a cross-country road trip and ultimately, to downgrade the company’s stock to sell in January. He said the low-cost retailer’s disorganized stores and numerous out-of-stock items raised bigger concerns.Mushkin, CEO of R5 Capital, said he saw huge variability, even in the same region during the same period of time — such as a store that didn’t have any vacuums and another where they were piled high. He took photos of abandoned carts of inventory, empty shelves, clearance racks blocking walkways and clothing in a heap on the floor.”You see a store that’s just completely tossed,” he said. “It’s like a tossed salad.”Mushkin said he has visited roughly 60 SuperCenters in about a dozen states since late last year. He said the low-cost retailer’s disorganized stores and numerous out-of-stock items raised bigger concerns.Walmart is trading lower this year, after hitting a 52-week high of $153.66 at the beginning of December. Shares closed at $139.80 on Monday, narrowing the gap between its value and R5 Capital’s price target of $131. The retailer also missed Wall Street’s expectations when it reported fourth-quarter earnings in mid-February.Walmart has had out-of- stocks and empty shelves at some stores in recent months. CEO Doug McMillon attributed it to high demand and supply chain challenges during the pandemic.Source: R5 CapitalIn interviews during the pandemic, Walmart CEO Doug McMillon has expressed his own frustrations with out-of-stock inventory. He attributed the trend to unusual demand and supply-chain crunches created by Covid-19 and said the situation is improving.This fiscal year, Walmart plans to invest $14 billion in its business, up from about $10 billion to $11 billion in prior years. The stepped up investment includes the cost of turning a portion of dozens of its stores into high-tech fulfillment centers that use automation, rather than employees, to put together most of its online orders. Ultimately, this could reduce the number of employees picking orders in the aisles of Walmart’s stores — and free them up for other tasks.The company said it is also redesigning stores to make them sleeker and easier to navigate. It plans to have the new design in 1,200 stores by the end of the fiscal year.Competing prioritiesWith the rise of e-commerce companies like Amazon, retailers have had to split their focus between digital initiatives and brick and mortar and make tough decisions about where to direct investment dollars. How much should be spent on a website versus refreshing and remodeling stores? Should employees tidy shelves and cater to customers, or pick and pack online orders?Those debates have only intensified during the pandemic, as the shift online accelerated rapidly.Stores that were making a gradual shift to offer services like the ability to buy an item online and pick it up at the store had to find a way to offer the service immediately. The “bolted-on” e-commerce features can make a shop seem cluttered and stressful for customers who come for a laid-back and enjoyable shopping experience, retail strategy analyst Steve Dennis said.”There are lots of retailers that their stores were born for a different age,” he said. “It was basically a place to go select what you want and now we are putting all these other demands on top of it.”Macy’s has become a target of criticism for its store presentation, in part because of investments being spread wider and thinner. The department store chain’s problems have been brewing long before the pandemic. Sales fell for three consecutive years, from 2015 to 2017, as shoppers increasingly looked elsewhere for shoes and handbags. Revenue dropped again in 2019 and then last year, during the health crisis, fell about 28%.On recent trips to Macy’s stores, visitors have shared photos of naked mannequins, bare shelves and merchandise askew. This includes Saunders, of GlobalData Retail, whose boots-on-the-ground research is sometimes shared widely on Twitter.Saunders told CNBC he has noticed a large and growing gap between the look of Macy’s website and social media channels, and what customers see when they walk into the stores.”Macy’s has done some good investments in digital, but it really has neglected a lot of its stores,” he said. “The problem with that is, the store is often what shapes one’s perception of the brand.”While Macy’s may be trying to reel in a younger audience with e-commerce investments, he said, it has to “get the balance right and do both,” or risks sinking sales.Macy’s stock hit an all-time intraday low of $4.38 in early April 2020. Shares have since clawed their way back, closing Monday at $17.06. The company has said it expects 2021 to be a time for recovery and rebuilding, with momentum growing in the back half of the year.Mushkin, who downgraded Walmart, said he saw that tug-and-pull dynamic between brick-and-mortar and e-commerce at Walmart, too. Inside of stores, he said numerous employees walked through aisles plucking items for online orders for customers who would later collect them in the parking lot or get them delivered. Shoppers, however, struggled to find items they needed and waited in long lines at the store.”There are growing pains,” he said. “It was a 100-year pandemic that created havoc across not only their supply chain, but everyone’s supply chains. …The question is: Why is it worse at Walmart?”If Walmart and other retailers don’t improve their store experience, he said, they will push even more customers toward online options that require more store labor and generate lower profits. Or, he said, they will lose customers entirely.Plus, other experts say retailers can’t think about investments in stores and websites in silos.”It’s not an either or,” said Steve Sadove, former chairman and CEO of Saks and now a senior advisor for Mastercard. “You have to make choices so that you can make the investments in both. And you’re going to have to then make trade-offs because you don’t have unlimited resources.”That’s the model that has been embraced by the likes of Nordstrom and Target — retailers with different prices but a similar reputation for well-organized stores, with boutique-like destinations inside, even as online sales grow.An increased number of mannequins feature clothing and shoes throughout the remodeled Target store in Orange, California.Jeff Gritchen | MediaNews Group | Getty ImagesTarget CEO Brian Cornell has said customers who shop online through curbside pickup or its home delivery service, Shipt, have a deeper relationship with the brand and tend to shop more at its stores. The company has put money toward store remodeling and made them a destination by striking deals with retailers, including Levi Strauss & Co., Ulta Beauty and Apple.Macy’s has also acknowledged that stores help drive digital revenue. CFO Adrian Mitchell recently told analysts that its digital sales per capita are two-to-three times higher in markets with Macy’s stores. And conversely, the retailer’s ongoing store closures over the past few years have resulted in digital sales dropping in some markets, especially when there was only one Macy’s in a single market to begin with, Mitchell said.”Stores are providing the critical nodes to our digital customers,” he said.One category of retailers, though, seems to get away with sloppiness in stores: off-price retailers. These companies also have a much smaller presence online, if at all. Customers planning to visit TJ Maxx, HomeGoods, Ross or Burlington likely anticipate they will be digging through mounds of merchandise, picking through piles of mismatched shoes, and rummaging through tags on clothes to find the perfect bargain in all of the chaos.This experience, often referred to as treasure hunting, is what makes these discount apparel and home furnishings businesses so unique. It’s what keeps customers coming back for the thrill. And experts say customers who were used to this sort of browsing pre-pandemic will be eager to return soon.’One of your best salesmen’Most others in retail, including department stores and big-box chains, could benefit from drawing a little inspiration from the past.Because before retailers had websites, they had stores. Just stores. That was the single place a sale could happen. Retailers poured money into eye-catching window displays and trendy mannequins. Employees were trained to keep merchandise organized. If a customer picked up a shirt in a department store and set it back down on a shelf, it was immediately refolded.Mannequins in retail stores, like in Nordstrom pictured here, are meant to draw shoppers in and inspire customers to put together similar outfits.Ben Nelms | Bloomberg | Getty Images”Everything always had to look neat,” said Jan Whitaker, who has written books about the history of department stores. “You couldn’t have merchandise spilled all over the place. … Even the basement stores, which were the lower price stores, didn’t look messy or horrible either.”Victor Gruen, an Austrian-born architect best known for pioneering the design of shopping malls in the United States, knew cleanliness was the way to win customers over.Gruen was confident — and it showed in his blueprints — that the right lighting, strategic floor plans, snazzy window displays and brightly colored signs would draw people and turn a shop into a “machine for selling,” according to his biography “Mall Maker,” by M. Jeffrey Hardwick.His advice may be prove to be timeless.”A good storefront is one of your best salesmen,” Gruen once told merchants, according to Hardwick’s book. “On its dignity and good taste people will base their opinions of your entire business.” More

In this articleBLRN-ILBlade EVA aircraftSource: Beta TechnologiesBeta Technologies announced a deal Tuesday to supply up to 20 electric vertical aircraft to Blade Urban Air Mobility.”We’re really excited to partner with [Blade] because they have the most operational real experience and can talk credibly about the opportunities and the benefits of flying aircraft in and out of cities,” Beta founder Kyle Clark told CNBC.Blade gets the “opportunity to do flight paths that they presently are not doing with the capabilities of this aircraft,” Clark added. “The EVA is really going to shine in complement to their existing helicopter fleet.”EVAs, also known as eVTOLs, are electric vertical take off and landing aircraft that look like they’re part helicopter, part plane. Last week, Clark’s Vermont-based electric vertical aircraft maker struck a deal to sell at least 10 EVAs to United Parcel Service for testing on package delivery.New York-based Blade, which agreed to purchase five EVAs from Beta with an option to buy 15 more, provides helicopter and executive jet flights focused on New York City, Los Angeles, South Florida as well as other urban and tourist destinations.”What streaming was to Netflix, EVAs are to Blade,” Blade CEO Rob Wiesenthal told CNBC, comparing his company’s transition from helicopters and planes to EVAs to the streaming giant’s transition from DVDs to streaming.Blade was founded in 2014 with the goal of acquiring EVAs to provide transportation services that are cost effective and carbon neutral. The air mobility provider said it has 200,000 users and transported 40,000 passengers in 2019 before the Covid pandemic. Blade is set to go public through a merger with Experience Investment Corp., a special purpose acquisition company, in a deal that closes on May 5.”It increases our addressable market because most of the places we land, the airports are over 100 years old and the heliports over 35 years old. What’s holding us back from building new infrastructure or buying infrastructure is noise,” said Wiesenthal. “Communities don’t want noisy airports and heliports around. This solves that issue. You will be able to show stakeholders such as community boards,  local legislators and the general public this technology is safe, quiet and zero emissions. That’s how you start the conversation about building new infrastructure.”Tuesday’s deal makes Blade the fourth customer for Beta. In addition to UPS, the company’s first customer, United Therapeutics, plans to use EVAs to transport human organs. The Air Force is also testing Beta’s EVAs as part of its Agility Prime program.Beta’s EVA is called the Alia-250 and will be delivered to customers by 2024, pending certification from the Federal Aviation Administration. The aircraft, which is powered by an electric battery, has five propellers, allowing it to take off vertically like a helicopter and then fly like a plane. It can carry 1,400 pounds or six people and can travel up to 250 miles at 170 miles per hour once fully charged. The charging process takes about 50 minutes.”Electric powered aviation is the future of on-demand organ transportation and, with the ALIA aircraft and charging network, that future is closer than we think,” United Therapeutics CEO Dr. Martine Rothblatt said in a press release. Rothblatt is on the Beta board and is the founder of Sirius Satellite Radio, which later merged with competitor XM to form Sirius XM.Wall Street research firm Wedbush estimates $300 billion will be spent on EVAs by 2028. The EVA industry is becoming increasingly competitive with Joby, Archer, Wisk and others competing to develop the emerging technology. More

In this articleFDA-ITJNJJohnson & Johnson COVID-19 vial and box seen at a vaccination site. Doses of the Johnson & Johnson vaccine are being administered throughout the state of Florida despite a small number of patients who have experienced adverse reactions, including blood clots.Paul Hennessy | LightRocket | Getty ImagesThe Food and Drug Administration asked states on Tuesday to temporarily halt using Johnson & Johnson’s Covid-19 vaccine “out of an abundance of caution” after six women in the U.S. developed a rare blood-clotting disorder.”Right now, these adverse events appear to be extremely rare,” the FDA said in a joint statement with the Centers for Disease Control and Prevention. “COVID-19 vaccine safety is a top priority for the federal government, and we take all reports of health problems following COVID-19 vaccination very seriously.”A White House spokesman referred CNBC to HHS when asked for comment.All six cases occurred in women ages 18 to 48, with symptoms developing six to 13 days after they received the shot. Doctors typically treat that type of blood clot with heparin, but health regulators noted that could be dangerous in this case and recommended a different treatment.J&J said in a statement that “no clear causal relationship” has been identified between the blood clots and the vaccine, adding it is working closely with regulators to assess the data.People who receive the vaccine and “develop severe headache, abdominal pain, leg pain, or shortness of breath within three weeks after vaccination should contact their health care provider,” the FDA and CDC said.After the news, first reported by The New York Times, shares of J&J were down 2.4% in premarket trading Tuesday.The CDC will convene a meeting of the Advisory Committee on Immunization Practices on Wednesday to further review the cases, federal health regulators said Tuesday. The FDA is also investigating the cases.J&J’s vaccine, like Pfizer’s and Moderna’s, received emergency use authorization from the FDA to start distributing the doses across the U.S. An EUA grants conditional clearance based on two months of safety data, pending another submission for full approval, which usually requires at least six months of data.J&J submitted its Covid vaccine data to the FDA in February, and no specific concerns were identified at the time when analyzed by age, race and comorbidities, according to the agency. The FDA said at the time the most common side effects reported were headache and fatigue, followed by muscle aches, nausea and fever.It’s unclear how the pause will impact J&J’s goal to deliver 100 million doses to the U.S. by the end of May. The company has already been plagued by manufacturing issues after a plant run by Emergent BioSolutions ruined 15 million doses of the vaccine.Dr. Kavita Patel told CNBC on Tuesday she believes the FDA’s recommendation will likely have lasting impacts on the nation’s efforts to combat the pandemic.”This is a devastating blow to this J&J vaccine effort in the United States,” Patel, a primary care physician in Washington, D.C., said in an interview on CNBC’s “Squawk Box.” Patel said the supply of the two-shot vaccines from Pfizer and Moderna won’t be able to quickly make up the demand created by the J&J pause. This will delay U.S. vaccination efforts, she added.Last week, Europe’s medicines regulator said it found a possible link between the coronavirus vaccine developed by AstraZeneca and the University of Oxford and rare blood-clotting issues. AstraZeneca has not received authorization for use in the U.S.Emer Cooke, executive director of the European Medicines Agency, said in a televised news conference last week that unusual blood clotting with low blood platelets would be added as a “very rare” side effect to the AstraZeneca vaccine’s product information, along with a slew of other possible adverse reactions.Isaac Bogoch, an infectious disease specialist who has sat on several drug data and safety monitoring boards, noted J&J and AstraZeneca use the same platform for their vaccines. The J&J and AstraZeneca vaccines both use an adenovirus, a common type of virus that typically causes mild cold symptoms.”Clearly we don’t have all the information and need to learn more about the mechanism and risk factors,” he told CNBC. “But of course we can’t sweep any potential adverse events under the rug and it needs to be investigated thoroughly.” More

In this articleYUMTaco Bell’s new Times Square locationSource: Taco BellTaco Bell will open its first digital-only U.S. restaurant on Wednesday in New York’s Times Square.To buy a Crunchwrap Supreme or soft taco, customers will have to place a digital order ahead of their visit or use one of the 10 self-order kiosks inside the restaurant. The kiosks can also be used to buy Taco Bell souvenirs. The location, inside the iconic Paramount Building, also features a separate entrance for mobile and delivery order pick-up from cubbies.The simplified design is expected to keep employees of the Yum Brands chain from becoming overwhelmed. Times Square is usually one of the city’s busiest tourist hotspots, with an estimated 50 million visitors every year. Darden Restaurants’ Olive Garden restaurant in Times Square is the chain’s busiest, although it has taken a hit during the coronavirus pandemic, like most eateries that rely on tourist traffic.Other restaurant chains, like Starbucks and Chipotle Mexican Grill, have also been opening digital-only restaurants as their online sales surge. The new design is meant to cut down on square footage and do away with long, winding lines during busy times. Taco Bell opened its first digital-only location last year, in the Wembley section of London.Taco Bell’s decision to open a digital-only restaurant in the United States follows the success of its Cantina format, which was meant to help it deepen its urban footprint. It is testing the design in suburban markets.Cantina restaurants are smaller and are more modern and upscale, featuring open kitchens and alcohol on the menu. Taco Bell has already opened more than 20 Cantinas across New York’s five boroughs. The Times Square location includes all of the typical features of a Cantina, except for menu boards. More

In this articleTGTAAPLGESA shopper browsing through secondhand clothes at a pop-up swap event in Singapore.CATHERINE LAI | AFP | Getty ImagesLONDON — The future of physical stores has been called into question by the coronavirus pandemic, but experts believe the key to survival will be reinvention.For some time now, retailers have tried to attract customers by creating experiences in store, but they now need to get creative as shopping habits change and customers become more demanding.Online shopping has boomed since the start of the pandemic. In the U.K. alone, internet sales jumped from under 20% to more than 32% in just three months at the start of the first Covid-induced lockdown. And experts expect the convenience of buying online to mean consumers will continue this habit even after the pandemic.Meanwhile, almost 50 stores closed every day in the U.K. in 2020, according to accountancy firm PwC.Both trends show how important it is for retailers to get their physical presence right.Kristina Rogers, consumer global leader at EY, told CNBC in March that there is a “real redefinition” in how retailers use their physical spaces.”It’s not just an exchange of goods anymore,” she said, adding that retailers have to understand who their customers are and what these want.Customers browse clothing in the pop-up shop Pangaia inside Selfridges department store in London on April 12, 2021 as coronavirus restrictions are eased.GLYN KIRK | AFP | Getty ImagesShe highlighted how Target, one of the largest retailers in the U.S., has opted to have a bigger space in its stores for Apple products. This effectively allows customers who are interested in Apple devices to check them out while shopping for other things in Target. It is also convenient for current Apple users who can merge two trips into one.”They’re recreating a ‘mini mall’ within their store,” she said.But not every retailer has such a large area to work with. In fact, some experts believe that successful stores of the future might be ones that, irrespective of size, keep offering new things.”Undoubtedly there will be less physical stores as we move forward,” Matt Clark, managing director at consulting firm AlixPartners told CNBC’s Street Signs Europe in March. “But the stores that remain will need to offer an even greater experience and an additional set of services, as well as just the ability to buy products.”One way for retailers to stand out is by focusing more on pop-up stores. These are spaces that are open temporarily to show off a particular line or product, and have been gaining in popularity in recent years.Stella McCartney store in Bond Street in November 2020.SOPA Images | LightRocket | Getty Images”One of the prime opportunities for pop-up shops are to create new opportunities for exploration. It’s not about a consumer going to a Ralph Lauren store that is the same today as it was 10 years ago or 20 years ago,” Alex Cohen, a commercial property expert at Compass told CNBC.Some big-name brands have already looked to pop-ups as a way to attract more customers. Stella McCartney, the British fashion designer, is featuring different local businesses in her flagship store on Old Bond Street, London, to celebrate the lifting of restrictions for retailers in the U.K. Guess, meanwhile, is about to open its first pop up store in Germany for Activewear.Pop-up spaces allow retailers to create something “really fresh” while saving on costs, Cohen said.”The brands, they have the opportunity to spend much less, to not having to commit themselves to a long-term contract, to spend less with modular installations and to do it very quickly,” he added.ExclusivityIn addition, this sort of store boosts the idea of exclusivity — a feeling increasingly popular for many customers.”The whole idea of exclusivity is really important. The fact that a pop-up will expire … creates in the consumers kind of an excitement. ‘Wow, if I don’t check out this pop-up retail offering … in the next 3 months, it is going to go away, I will never be able to see it,'” he said. This adds the sort of excitement missing from many traditional stores.So it is not just about the feeling of having an exclusive product, but also an exclusive experience. And this means there are other ways for retailers to capitalize on this exclusivity trend.”In terms of exclusivity, a lot of the high street retailers are now requiring, either by appointment or actually when you arrive at a store, that you must be linked up to a sales person. You can’t browse and that — for better or worse — creates a feeling of exclusivity,” Cohen added.SustainabilityBrands are also recognizing the increasing importance of sustainability, both from a business perspective and because of growing customer awareness.And it’s not just coming through in more “ethical” product lines, but also in what services are available at physical stores.At its flagship space in Stockholm, for instance, H&M is offering services to fix old clothes and is hiring out some of its outfits for special occasions.”The sustainability movement really highlights one of the core dichotomies that the fashion industry particularly is facing but broader retail is also facing,” Clark from AlixPartners said.”The value versus values debate: the need to be really, really clear on your sustainability credentials, ethical sourcing, etc but at the same time offering great value for money that doesn’t just mean cheapness but value for money to the consumers.” More