Industry News & Expert Views

It's the Moment of Truth for Drugstore Chains

By Sheridan Fifer

Walgreens, CVS, and Rite Aid are about to have a chance to show consumers that they are still relevant, and that goal stretches beyond the vaccine.

The coronavirus pandemic dealt a blow to drugstore chains as shoppers cut down on their number of store visits and had more prescriptions delivered to their homes. But the COVID vaccine promises to send many of those shoppers straight to their nearest drugstore to receive their shots, and that presents an opportunity for the chains to prove the value of their investments in their businesses.

As rivals such as Walmart and Amazon encroach on drugstores' traditional territory, all three of these drugstore retailers have made big changes, including modernizing stores, opening primary care clinics, and emphasizing wellness. 

The companies have had their share of internal changes, too. CVS and Walgreens are both getting new CEOs. Rite Aid is in the midst of a turnaround effort complete with a new logo and store design.

Read the full story at CNBC.

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Macy's Begins "Rightsizing" Its Store Count

By Sheridan Fifer

Starting with 45 stores, Macy's is implementing a three-year plan to close 125 locations by the year 2023. The department store retailer is trying to reduce its dependence on struggling malls, without abandoning its anchor store status altogether. Macy's itself is struggling: In November, same-store sales fell more than 20%, and the surge in the retailer's e-commerce sales was not enough to make up for the dismal in-store numbers. Macy's stated goal is to operate stores in high-performing malls. It hopes that a mix of standalone and mall locations will strike the right balance with consumers. 

Macy’s Chief Executive Jeff Gennette had previously said the company was still betting on the best malls in the country, but that it would look to grow off-mall in the future.

Read the full story at CNBC.

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The Post-Holiday Shipping Crush Is Here: UPS Predicts a Record Week of Returns

By Sheridan Fifer

Faced with data that pointed to a post-holiday shipping crush, shipping companies have been preparing for this season of returns for months. UPS says that this week will break the company's record for the highest weekly total of returns. An estimated 8.75 returns will be entrusted to UPS this week. That's a 23% increase over last holiday season's biggest returns week.

As e-commerce adoption grew by leaps and bounds, so too did demand for delivery, and for convenient returns options. The growth of e-commerce increased behaviors seen only in online shopping – behaviors that contribute to the much higher rate of returns for online orders versus in-store purchases. For example, bracketing occurs when shoppers order multiple sizes of an item with the intention of returning all but the one that fits best. 

The good news, according to John Morris, executive managing director of CBRE's Americas industrial and logistics operation, is the returns are coming after months of capacity building on the part of logistics players, he said in early December.

Read the full story at Supply Chain Dive. 

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Amazon Buys Aircraft for the First Time

By Sheridan Fifer

While Amazon has leased aircraft for years, a recent deal with Delta and WestJet marks a first for the online retailer: it now owns its own jets. With many airlines reducing the number of planes in their fleets in the wake of the coronavirus pandemic, now is an opportune time to buy.

Amazon has made no secret of its delivery ambitions, which it hopes to further with the eleven used jets it acquired from Delta and WestJet. With a mix of leased and company-owned aircraft, the online retailer will exert more control over its operations. 

According to a year-old analysis, Amazon delivers more than half of all of its packages in the US as it accelerates its push to own the entire logistics chain and end its relationship with companies like FedEx and UPS.

Read the full story at The Verge. 

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COVID-19 Produces a Holiday Season "Unlike Any Other"

By Sheridan Fifer

From a Black Friday that retailers took pains to keep crowd-free to booming e-commerce sales (one retail CEO said that adoption of omnichannel services had jumped forward by years), this holiday season was one for the books. Longstanding and much-loved holiday traditions fell by the wayside as everything from Christmas parties to Santa himself went virtual. Retailers saw sales in some categories soar, while other categories tanked. Apparel, for example, suffered as a category when demand for workwear plummeted. Some retailers who relied on the category adapted; others went under.  

There are countless small things that changed as a result of the global health crisis, but here are some of the largest factors that impacted the holidays for retailers in 2020.

Read the full story at Retail Dive. 

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Amazon's Joint Healthcare Venture with JPMorgan and Berkshire Is Ending

By Sheridan Fifer

When online retailer Amazon launched a joint venture with Berkshire Hathaway and JPMorgan Chase to improve healthcare while lowering its cost, healthcare companies almost panicked. Given Amazon's history of industry disruption, it didn't seem like much of a stretch that the combined power of the online behemoth and JPMorgan and Berkshire could turn healthcare upside down – and not necessarily to the benefit of all major industry players. But three years later, that joint venture – named Haven – is disbanding, having never gained much traction. All three of the companies will continue to pursue healthcare improvements on their own, and they will collaborate in the future, but on a more informal basis.  

The move to shutter Haven may be a sign of how difficult it is to radically improve American health care, a complicated and entrenched system of doctors, insurers, drugmakers and middlemen that costs the country $3.5 trillion every year. 

Read the full story at CNBC.

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How Much Do Retailers Really Stand to Gain from Second Stimulus?

By Sheridan Fifer

Last month, Matthew Shay, president and CEO of the National Retail Federation, applauded the passage of the second stimulus bill, citing the benefit to consumers and to the retail industry that employs millions of them. Now, as Americans begin to receive their stimulus checks, the question arises: how much will retailers really gain from the payments?

Coresight Research released a report on how Americans used their first stimulus checks, and the results weren't terribly cheering for retailers who sell more discretionary items. For the most part, consumers used the money on bills and necessities. But Matt Priest, president and CEO of Footwear Distributors & Retailers of America, is confident that at least some consumers will turn to discretionary spending after their financial obligations and basic necessities are met. 

The industry leader told FN last week, “Any time you inject more cash into the American economy — these kinds of direct payments have been shown to improve economic activity, [particularly] in the short term,” Priest said, drawing a comparison to impact of annual tax refunds.

Read the full story at Footwear News.

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The Year 2021 Could Make or Break These Retailers

By Sheridan Fifer

The coronavirus widened the gap between retail's winners and losers, and for some in the latter group, the long-awaited end to the pandemic may come too late. Analysts aren't holding out much hope for a few of the companies on USA TODAY's list of the most vulnerable retailers heading into the new year. They were barely holding on when the retail landscape was comparatively untroubled – how will they survive in the midst of pandemic? A widespread rollout of the vaccine will take time, and time is exactly what some of these retailers no longer have. And no matter how much data the experts study, the coronavirus remains the wild card. 

"It really comes down to how long COVID persists," said Chris Hudgins, who analyzes retail data for research firm S&P Global Market Intelligence.

Read the full story at USA TODAY.

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