Retailers Invest in E-Commerce in Response to Changes in Consumer Behavior
July 07 2016 - 8:30AM
Business Wire
CIT Executive Shares Insights on State of the
Retail Sector
- Retailers Are Closing Unprofitable
Stores and Embracing E-Commerce
- Millennials and Teens Shopping
Differently
- Furniture Sector Remains Strong;
Overseas Furniture Suppliers Considering Direct-to-Retailer
Model
- Consumer Product Companies That Sell to
Retail Still Pursuing M&A
The retail industry is going through a form of evolution, maybe
even a revolution. E-commerce has changed the way retailers sell,
so that the major brick-and-mortar companies are looking at their
individual stores, potentially closing what they consider
unprofitable stores, and investing in e-commerce to continue to
grow their business. These are some of the observations from Marc
Heller, President, CIT Commercial Services, a division of CIT Group
Inc. (NYSE:CIT), a leading provider of commercial lending and
leasing services, in “E-commerce Drives Retail Revolution”
(cit.com/heller), the latest piece of market intelligence in a
series of in-depth CIT executive Q&As.
“In apparel, millennials and teen consumers have different
buying habits than their parents, which is reflected in
millennials’ preference for ‘buying’ one specific item, even when
at a mall or a store, rather than ‘shopping’ for multiple items,”
said Heller. “This difference can be attributed to the fact that
millennials are often accustomed to buying a specific item online
rather than browsing for items in multiple stores. Consumers whose
shopping behavior was established before the rise of e-commerce
could be more likely to browse through a store or a mall, leading
to the discovery of new items and greater sales.”
Some of the other trends Heller expands upon
include:
- Consumers Favoring Experiences over
Products: The apparel side of the business, as well as
accessories, has slowed down. In the recent past, handbags, watches
and leisurewear were booming. Those areas seem to have taken a
significant step back, while consumers are spending more on
restaurants, vacations and health spas. Consumers are favoring
experiences over products, and retailers are reengineering their
businesses as a result.
- Furniture Sector Remains Strong:
The furniture segment continues to do well. Feedback at the
furniture show in High Point, North Carolina, indicated that the
show was extremely busy. A looming question in the furniture sector
is whether the Asian suppliers will go direct to retail versus
using furniture companies in the U.S. to distribute.
- Consumer Product Companies That Sell
to Retail Still Pursuing M&A: Consumer product companies
that sell to retail are looking to acquire the front ends of
businesses, because that gives them an increase in revenue. If the
acquirer already has the back office, warehousing and sourcing in
place, an acquisition can add significantly to the bottom line,
especially if the company is acquiring a brand that sells to
customers it doesn’t presently have. Acquisition at the right price
can sometimes be the key to growth.
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About CIT
Founded in 1908, CIT (NYSE: CIT) is a financial holding company
with more than $65 billion in assets. Its principal bank
subsidiary, CIT Bank, N.A., (Member FDIC, Equal Housing Lender) has
more than $30 billion of deposits and more than $40 billion of
assets. It provides financing, leasing and advisory services
principally to middle market companies across a wide variety of
industries primarily in North America, and equipment financing and
leasing solutions to the transportation sector. It also offers
products and services to consumers through its Internet bank
franchise and a network of retail branches in Southern California,
operating as OneWest Bank, a division of CIT Bank, N.A.
cit.com.
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version on businesswire.com: http://www.businesswire.com/news/home/20160707005671/en/
CIT MEDIA RELATIONS:Matt Klein, 973-597-2020Director,
Media RelationsMatt.Klein@cit.comorCIT INVESTOR
RELATIONS:Barbara Callahan, 973-740-5058Senior Vice
PresidentBarbara.Callahan@cit.com
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