There is hope, though, at least for retailers that taking new steps to draw shoppers.
The discounter said it would post a “modest increase” in second-quarter comparable sales “as a result of improved traffic and sales trends through the first two months of the quarter.” The earnings per share outlook was boosted to “above the high end” of its earlier guidance, calling for profits of 95 cents to $1.15.
“Following better-than-expected results in the first quarter, we’ve seen additional, broad-based improvement in traffic and category sales trends in the second quarter, despite continued challenges in the competitive environment,” said Brian Cornell, chairman and chief executive officer Target.
While a “modest” comp sales increase would in normal times not set off the retail Richter scale, these are not normal times and retailers — and their investors — are taking what they can get. Shares of Target rose 4.8 percent to $53.31.
Cornell has been working to bring people back into Target stores for some time.
“Traffic drivers are fundamentally different, and guests behave differently, too,” he told Wall Street in February. “They’re looking for inspiration, they enjoy discovery, they enjoy shopping.”
To that end, Target has been remodeling stores and is rolling out new brands and phasing out older names. It’s an effort that’s still very much a work in progress.
But while any good news on footfall is good news for retailers — if only as proof that it is still possible to draw shoppers — more declines are in the offing.
“If you take the retail industry, brick-and-mortar as a whole, traffic is down, it’s not going to go up, it’s going to continue to go down and that’s that,” said Ray Hartjen, director of marketing at RetailNext.
The store analytics company tracks traffic by month and logged an average decline of 9 percent for the first half, with footfall dropping as much as 13.8 percent, in February.
“It’s more than just a little trend,” Hartjen said.
He suggested that retailers put more money into keeping the customers happy — both digitally and in store— and focus less on pulling shoppers in with price cuts.
“Retailers are just beginning to get it now,” Hartjen said. “Omnichannel was just kind of this word and this dream a few years ago. Now it’s a reality. Mobile this holiday is going to continue to be the new front door to the store. The store is the new homepage; it’s a way to more cost effectively introduce a brand to new shoppers.”
Antony Karabus, ceo of HRC Advisory, said he advises retailers to control what they can control.
And that means converting shoppers into buyers.
“Don’t obsess 100 percent on traffic,” Karabus said. “You’ve got to separate traffic from your ability to do the most possible with the traffic you’ve got. At the end of the day, if you’re conversion rate is 25 percent and you can increase that to 26 percent, that completely eliminates the negative effects of a 5 percent traffic decline.”
Overall, he said retailers that tie their web sites to their stores and offer unique products are doing better on the traffic front than their less connected and less differentiated peers.
Branding expert Catherine Sadler, ceo of Sadler + Brand, said: “Seismic cultural and behavioral shifts, caused by the advent of the internet, have swept over traditional retail like a massive tidal wave. And the survivors will be those who have the vision and ability to deliver amazing, differentiated product, truly memorable customer service and meaningful delighting experiences across every touch point. Experiential retail is here to stay. That is where you’ll find the traffic — and the profitability — in new retail’s future.”
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