Toys R Us to Close all US Stores

Toys R Us to Close all US Stores
Toys R Us will close or sell all its 885 stores in the US after failing to find a buyer, putting about 30,000 jobs under threat. Chief executive Dave Brandon said it was a “profoundly sad day” for the retailer. The giant toy-store chain was already in the process of closing one fifth of its shops after filing for bankruptcy protection last year.

Toys R Us will also close all its UK stores by the end of April.

The UK collapse will put more than 3,000 people out of work as a dismal period for the retail sector continues.

However, the company said it could resurrect 200 of the best-performing US stores if talks to combine these with its Canadian operations prove successful.

Mr Brandon said in a statement released late on Wednesday: “This is a profoundly sad day for us as well as the millions of kids and families who we have served for the past 70 years. I have always believed that this brand and this business should exist in the US.”

Toys R Us said it would provide more details about the plans in the near term. The company is trying to sell its Canadian and international operations in Asia and Europe, including Germany, Austria and Switzerland.

Australia, France, Poland, Portugal and Spain are considering their options, including potential sale processes in their respective markets, but the retailer is likely to go into liquidation in France, Spain, Poland and Australia, Mr Brandon said.

The US parent company filed for bankruptcy in September.

The business was bought in 2005 by a group of investors, including private equity firms Bain Capital and KKR, which loaded it with about $5bn (£3.6bn) in debt. The company was landed with interest payments that were as much as $400m a year.

In the UK Toys R Us joins a long list of high-street retailers, including Maplin and Claire’s, that have run into difficulties this year. Many have been hit by changes in consumer spending habits, a squeeze on disposable income, higher inflation and the extra cost of the national living wage, and the prospect of increases in business rates in April.

 

MP’s Call for Unpaid Shifts to be Illegal

MP’s Call for Unpaid Shifts to be Illegal
Some MPs and lawyers have called for a blanket ban on unpaid shift work. Companies can currently invite prospective employees to do trial shifts with the carrot of a job at the end.

But there has been a six-fold increase over three years in complaints over unpaid shifts, trade union Unite said.

The Federation of Small Businesses said unpaid shifts are a valuable part of the recruitment process, but shouldn’t cross the line into exploitation.

On Friday a private members bill which seeks to make unpaid trials illegal will get its second parliamentary reading.

Thousands Face Fine for Late Tax Returns

Thousands Face Fine for Late Tax Returns
A total of 746,000 people missed the deadline to file their self-assessment tax return, risking a fine of £100. Some 11.4 million people, primarily those with more than one source of income and the self-employed, were required to complete returns.

The deadline for those filling in paper forms was the end of October. Online returns should have been completed by the end of Wednesday.

The UK tax authority said a record number filed on time. HM Revenue and Customs (HMRC) said 10.7 million submitted details on time, but 6.5% missed the deadline, compared with 7% last year.

Angela MacDonald, director general for customer services at HMRC, said: “We want the number missing the deadline to be zero, and we will continue to adapt the process to make it easier and simpler for all our customers until every return is in on time and without avoidable errors. If you’re one of the small number that missed the deadline, please submit your return now to avoid further penalties. We really don’t want penalties, we just want tax returns.”

The current system means HMRC could demand a penalty of £100 for late filing during the first three months after the deadline. After three months, additional penalties of £10 per day can be demanded, up to a maximum of £900, followed by further charges six and 12 months after the deadline.

However, the government is working on plans to introduce a points-based system, similar to driving offences, for those who fail to submit their tax returns on time, rather than an automatic fine. Under the planned changes, they would instead receive points and have to pay fines after a certain threshold was reached. Points would also be wiped off the record after a certain period of time.

This could begin with VAT in the 2019 tax year, before income tax is added to the system later, but some accountants are concerned that people may mistakenly believe such a change had already come into force.

Amazon 2017 Sales Increase by a Third

Amazon 2017 Sales Increase by a Third
Online retailer Amazon saw sales jump by nearly a third last year, helped by growth in its Prime delivery service. Full-year revenue came in at $177.9bn (£124.6bn), a rise of 31%, while profit hit $3bn, against $2.4bn in 2016. The company reported record sales in the final three months of the year, driven by a surge in online shopping over the holiday season and demand for its cloud services.

Shares in Amazon rose by 6% in after-hours trading. The company said more than five billion items were sent using its Prime shipping service worldwide in 2017. It added that more “new paid” members joined the scheme than in any previous year, both worldwide and in the US. More than four million people signed up in one week alone last quarter Amazon said. Prime members have access to fast shipping, exclusive TV shows on Amazon Prime Video and extra benefits when using the company’s voice-controlled Alexa digital assistant.

Amazon has focused on boosting Prime subscribers, which its chief financial officer has previously called its “most important customer base”. Prime subscribers tend to do more shopping with the company, although Amazon has not said how many people it has signed up so far.

The company’s boss Jeff Bezos said projections for its Alexa assistant had been very optimistic and the company had “far exceeded them. We don’t see positive surprises of this magnitude very often – expect us to double down.”

The company said fourth-quarter sales rose by 38% to hit a quarterly record of $60.5bn (£42.4bn). Fourth-quarter profits more than doubled to $1.9bn against $749m in the last three months of 2016.

The figures were boosted by a tax benefit of about $789m related to the new US tax law.

The results also include the contribution from the Whole Foods grocery store chain, which Amazon bought last year. “This was another blow-out quarter for Amazon,” said analyst Daniel Ives of GBH Insights. “The retail strength was eye-popping as the company had a banner holiday season and looked to capture roughly 50% of all e-commerce holiday season sales.”

 

Disability Plan to Help a Million into Work

Disability Plan to Help a Million into Work
The BBC are reporting that the government plans to get one million more disabled people in work over the next 10 years have been set out by the government. Ministers say the new strategy will help those with disabilities keep their jobs and progress in their careers.

The new measures include widening the number of people who can issue fitness-to-work notices and additional training for mental health professionals. Labour’s Debbie Abrahams said benefit cuts had already pushed more disabled people towards poverty.

The pledge comes after ONS figures from June 2017 suggested that disabled people were twice as likely to be unemployed as non-disabled people. About 80% of non-disabled people are in work compared with just under 50% of disabled people.

Prime Minister Theresa May said a person’s life and career “should not be dictated by their disability or health condition”.

“Everyone deserves the chance to find a job that’s right for them,” she added. “I am committed to tackling the injustices facing disabled people who want to work, so that everyone can go as far as their talents will take them.”

The government says in the past four years 600,000 disabled people have found work. However, the disability charity Scope says progress is too slow. The new strategy includes:

  • Measures to provide access to personalised support for those with mental health issue
  • Extending “fit note” certification – which details how a condition affects someone’s ability to work – beyond GPs to a wider group of healthcare professionals, including physiotherapists, psychiatrists and senior nurses
  • Reform statutory sick pay

The 10-year plan builds on a green paper published last year which pledged to halve the so-called disability employment gap. The government hopes the changes to the fit note system will improve the identification of health conditions and treatments to help workers get back to work quickly.

But some disability activists say the problem lies in employers’ attitudes. Mik Scarlet, an inclusion specialist, says he chose to be self-employed after some “disastrous attempts” at getting work.

“Employers have little idea of how beneficial disabled employees can be to a workforce,” he said. “They also don’t understand that creating flexible inclusive work systems improves the working environment for all.”

BBC disability correspondent Nikki Fox said it was not the first time the government had pledged to get more disabled people into work. However, she said “the employment gap between disabled and non-disabled people has not significantly changed for some years”.

Labour’s shadow work and pensions secretary, Ms Abrahams, warned the government’s plans “hinted at” further cuts. “The Tories’ cuts to social security support are pushing more and more disabled people into poverty,” she said.

“The Tories have already hit disabled people who are not fit for work but who may be in the future in the work related activity group. “I hope they are not going to now target the most disabled people in the support group, as their green paper hinted at.”

Google Faces Mass Legal Action in UK

Google Faces Mass Legal Action in UK
Google is being taken to court, accused of collecting the personal data of millions of users, in the first mass legal action of its kind in the UK. It focuses on allegations that Google unlawfully harvested information from 5.4 million UK users by bypassing privacy settings on their iPhones.

The group taking action – Google You Owe Us – is led by ex-Which director Richard Lloyd. He estimates the users could get as much as “several hundred pounds each”.

The case centres on how Google used cookies – small pieces of computer text that are used to collect information from devices in order to deliver targeted ads. The complaint is that for several months in 2011 and 2012 Google placed ad-tracking cookies on the devices of Safari users which is set by default to block such cookies.

The Safari workaround, as it became known, affected a variety of devices but the UK case will focus on iPhone users.

Mr Lloyd said: “In all my years speaking up for consumers, I’ve rarely seen such a massive abuse of trust where so many people have no way to seek redress on their own.” He added: “Through this action, we will send a strong message to Google and other tech giants in Silicon Valley that we’re not afraid to fight back.”

Mr Lloyd said Google had told him that he must “come to California” if he wanted to pursue legal action against the firm. “It is disappointing that they are trying to hide behind procedural and jurisdictional issues rather than being held to account for their actions,” he said.

Google told the BBC: “This is not new – we have defended similar cases before. We don’t believe it has any merit and we will contest it.”

Those affected do not have to pay any legal fees or contact any lawyers as they will automatically be part of the claim, unless they wish to opt out.

The case is being supported by law firm Mishcon de Reya, which specialises in large-scale litigation.

Although there is no precedent for such a mass legal action in the UK, there is in the US. Google agreed to pay a record $22.5m (£16.8m) in a case brought by the US Federal Trade Commission (FTC) on the same issue in 2012. The firm also settled out of court with a small number of British consumers.

The case will be heard in the High Court, likely in spring 2018.

Google & Website Security

Google & Website Security
Because of website hacking and personal data theft in recent years, most Internet users are aware that their sensitive information is at risk every time they surf the web. And yet, although the personal data of their visitors and customers is at risk, many businesses still aren’t making website security a priority. Enter Google.

The folks over at Google are known for paving the way for Internet behaviour. Last month, they took a monumental step forward in helping protect people from getting their personal data hacked. The update they released to their popular Chrome browser now warns users if a website is not secure – right inside that user’s browser. While this change is meant to help protect users’ personal data, it’s also a big kick in the pants for businesses to get moving on making their websites more secure.

Google’s Chrome update
On October 17, 2017, Google’s latest Chrome update (version 62) began flagging websites and webpages that contain a form but don’t have a basic security feature called SSL. SSL, which stands for “Secure Sockets Layer,” is the standard technology that ensures all the data that passes between a web server and a browser – passwords, credit card information, and other personal data – stays private and ensures protection against hackers. In Chrome, sites lacking SSL are now marked with the warning “Not Secure” in eye-catching red, right inside the URL bar!

What’s the impact on businesses?
Because Chrome has 47% of market share, this change is likely noticed by millions of people using Chrome. And get this: 82% of respondents to a recent consumer survey said they would leave a site that is not secure, according to HubSpot Research.

In other words, if your business’ website isn’t secured with SSL, then more than 8 out of 10 Chrome users said they would leave your website.

What’s more, Google has publically stated that SSL is now a ranking signal in Google’s search algorithm. This means that a website with SSL enabled may outrank another site without SSL.

Cash Converters Reveals Customer Data Breach

Cash Converters Reveals Customer Data Breach
High Street pawnbroker Cash Converters has warned customers about a data breach on its website. The company said customer usernames, passwords and addresses had potentially been accessed by a third party. The data breach exposed accounts on the company’s old UK website, which was replaced in September 2017.

The company told the BBC it was taking the breach “extremely seriously” and had reported it to the information commissioner.

Cash Converters lets people trade in items such as jewellery and electronics for cash, and then sells the items on to others. It operates an online store that lets people buy items traded in at Cash Converters shops around the UK.

The online store was relaunched in September 2017, and the data breach affected only people with an account on the old website.

Cash Converters said no credit card information had been breached, and people who visited its stores but did not use the website had not been affected. “Our customers truly are at the heart of everything we do, and we are disappointed that they may have been affected,” the company said in a statement. “We apologise for this situation and are taking immediate action to address it.”

CPG Sector Needs to Embrace Digital Transformation

CPG Sector Needs to Embrace Digital Transformation

Leading CPG players have responded to digital disruption with huge investment in eCommerce. But if they are to truly realise the massive potential growth through the channel they need to embrace an end-to-end digital transformation programme encompassing their entire business process.

New entrants using plug and play e-commerce technology and other distribution solutions to sell directly to consumers have been increasingly disrupting the traditional CPG model with the retailer acting as middleman.

With no legacy systems designed for bulk distribution to retail partners, the new CPG players serving today’s ‘little and often’ consumer have been able to steal a march on the established sector leaders for D2C online sales.

A good example would be Dollar Shave Club. Founded in 2011, it was able to solve an industry problem: razor blades are too expensive. Established products have to do a lot of heavy lifting (marketing, R&D, supply chain costs, sustainable procurement, industry competition) that doesn’t have a positive impact on the consumer’s wallet. Dollar Shave Club spotted an opportunity to differentiate but also wasn’t restricted by wider costs. It was a true disruptor…until it was sold to Unilever in 2016 for $1bn. Warby Parker is another example.

Saddled with the disadvantages of huge cost and complexity in changing traditional business practices, global CPG giants were initially slow to react to the digital transformation agenda. But the sector has latterly been investing huge resources into eCommerce.

So far this has largely been restricted to front end activity including digital marketing, although there have been some notable examples of true digital interaction with consumers. They include UK multinational alcoholic beverages firm Diageo, which launched a smart bottle in 2015 for its iconic Johnnie Walker Blue Label whisky enabling personalised communication to consumers reading the tags with their smartphones and tracking of stock.

But for CPG leaders to capitalise on the huge potential growth in direct online sales to consumers, they need to go a lot further and invest in digital transformation throughout the whole ecosystem of their business.

This means fully digitising back office business processes like finance, hr, supply chain and logistics.

In 2013 eCommerce accounted for under 1 per cent of sales in packaged food and 3 per cent in non-food but by 2020 it is predicted this could rise to 5 per cent of food sales and 10 per cent of non-food sales – accounting for up to 30 per cent of total CPG industry sales growth between 2015 and 2020.*

However, a KPMG survey of 175 global retail and consumer goods CEOs published in September revealed a third were concerned they were “not leveraging digital means to connect with their customers as effectively as possible”. **

Customer-centric strategies being pursued to tackle this include digitisation through technology transformation, greater speed to market, and stronger marketing, branding and communications, the survey found.

D2C sales enable CPG firms to collect significant volumes of customer data, providing invaluable intelligence on consumer purchasing preferences which can help shape product development and targeted sales.

Recognising the benefits, the sector is now starting to examine the digital technologies which can help throughout all areas of the business.

In its report How digital reinventors are pulling away from the pack published last month, global management consultants McKinsey&Company conclude: “The reinventors are investing at scale in technology, analytics, and digital talent – not just playing on the margins – and investing much more aggressively in business-model innovations or entirely new business models.”

The report, based on a global survey of more than 1,600 executives, continued: “To find success and sustain growth, incumbents must do two things at once: digitize their core businesses while also innovating with new digital ones. Making small changes to the edges of your business model is insufficient in an increasingly digital world.” ***

HW Global Talent Partner has been helping clients transform their global digital capabilities for the past five years.

We recently completed an executive search assignment for a Sales Director for a tier one courier and logistics firm. One of his key targets is nailing last mile delivery, which has been a significant customer service issue. The company will achieve this by investing in digital technology, making it a more attractive proposition for partners and clients alike.

Other recent assignments include a global CIO search for a tier one food business. With an $18bn P&L they will ensure the organisation has the systems and MI that make it fit for purpose for the next ten years across the entire value chain. In addition, a recently placed VP for Data & Analytics for the same client will translate consumer behaviour and trends into actionable business strategy across marketing, sales, supply chain and logistics.

As an international executive search and professional interim business, HW Global Talent Partner advises many of the world’s most recognised and respected brands, among them the leaders in consumer products and services, and retail operations of all shapes and sizes.

For a confidential discussion about how we can assist you with digital transformation contact Stuart Richards, Consultant in the Global Consumer Practice, at stuartr@hwglobalpartner.com or on +44 (0) 7787 254 600.

* The digital future of CPG companies: McKinsey&Company article – Oct 2015
** U.S. Consumer Goods & Retail CEOs More Optimistic Than Global Peers About Growth: KPMG Survey – Sept 2017
*** How digital reinventors are pulling away from the pack: McKinsey&Company survey report – Oct 2017

The CPG Sector Needs to Embrace Digital Transformation

The CPG Sector Needs to Embrace Digital Transformation

 Leading CPG players have responded to digital disruption with huge investment in eCommerce. But if they are to truly realise the massive potential growth through the channel they need to embrace an end-to-end digital transformation programme encompassing their entire business process.

New entrants using plug and play e-commerce technology and other distribution solutions to sell directly to consumers have been increasingly disrupting the traditional CPG model with the retailer acting as middleman.

With no legacy systems designed for bulk distribution to retail partners, the new CPG players serving today’s ‘little and often’ consumer have been able to steal a march on the established sector leaders for D2C online sales.

A good example would be Dollar Shave Club. Founded in 2011, it was able to solve an industry problem: razor blades are too expensive. Established products have to do a lot of heavy lifting (marketing, R&D, supply chain costs, sustainable procurement, industry competition) that doesn’t have a positive impact on the consumer’s wallet. Dollar Shave Club spotted an opportunity to differentiate but also wasn’t restricted by wider costs. It was a true disruptor…until it was sold to Unilever in 2016 for $1bn. Warby Parker is another example.

Saddled with the disadvantages of huge cost and complexity in changing traditional business practices, global CPG giants were initially slow to react to the digital transformation agenda. But the sector has latterly been investing huge resources into eCommerce.

So far this has largely been restricted to front end activity including digital marketing, although there have been some notable examples of true digital interaction with consumers. They include UK multinational alcoholic beverages firm Diageo, which launched a smart bottle in 2015 for its iconic Johnnie Walker Blue Label whisky enabling personalised communication to consumers reading the tags with their smartphones and tracking of stock.

But for CPG leaders to capitalise on the huge potential growth in direct online sales to consumers, they need to go a lot further and invest in digital transformation throughout the whole ecosystem of their business.

This means fully digitising back office business processes like finance, hr, supply chain and logistics.

In 2013 eCommerce accounted for under 1% of sales in packaged food and 3% in non-food but by 2020 it is predicted this could rise to 5% of food sales and 10% of non-food sales – accounting for up to 30% of total CPG industry sales growth between 2015 and 2020.*

However,But a KPMG survey of 175 global retail and consumer goods CEOs published in September revealed a third were concerned they were “not leveraging digital means to connect with their customers as effectively as possible”. **

Customer-centric strategies being pursued to tackle this include digitisation through technology transformation, greater speed to market, and stronger marketing, branding and communications, the survey found.

D2C sales enable CPG firms to collect significant volumes of customer data, providing invaluable intelligence on consumer purchasing preferences which can help shape product development and targeted sales.

Recognising the benefits, the sector is now starting to examine the digital technologies which can help throughout all areas of the business.

In its report How digital reinventors are pulling away from the pack published last month, global management consultants McKinsey&Company conclude: “The reinventors are investing at scale in technology, analytics, and digital talent – not just playing on the margins – and investing much more aggressively in business-model innovations or entirely new business models.”

The report, based on a global survey of more than 1,600 executives, continued: “To find success and sustain growth, incumbents must do two things at once: digitize their core businesses while also innovating with new digital ones. Making small changes to the edges of your business model is insufficient in an increasingly digital world.” ***

HW Global Talent Partner has been helping clients transform their global digital capabilities for the past five years.

We recently completed an executive search assignment for a Sales Director for a tier one courier and logistics firm. One of his key targets is nailing last mile delivery, which has been a significant customer service issue. The company will achieve this by investing in digital technology, making it a more attractive proposition for partners and clients alike.

Other recent assignments include a global CIO search for a tier one food business. With an $18bn P&L they will ensure the organisation has the systems and MI that make it fit for purpose for the next ten years across the entire value chain. In addition, a recently placed VP for Data & Analytics for the same client will translate consumer behaviour and trends into actionable business strategy across marketing, sales, supply chain and logistics.

As an international executive search and professional interim business, HW Global Talent Partner advises many of the world’s most recognised and respected brands, among them the leaders in consumer products and services, and retail operations of all shapes and sizes.

For a confidential discussion about how we can assist you with digital transformation contact Stuart Richards, Consultant in the Global Consumer Practice, at stuartr@hwglobalpartner.com or on +44 (0) 7787 254 600.

* The digital future of CPG companies: McKinsey&Company article – Oct 2015
** U.S. Consumer Goods & Retail CEOs More Optimistic Than Global Peers About Growth: KPMG Survey – Sept 2017
*** How digital reinventors are pulling away from the pack: McKinsey&Company survey report – Oct 2017