February 13, 2017

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Retail Trends 
Three Trends Shaping Retail Cybersecurity In 2017      

From the National Retail Federation, February 1, 2017

"Nearly one in three retailers have already suffered revenue losses as a result of a cyberattack - and the worst is still to come. But understanding digital threats can help neutralize them.

Retailers are on high alert. U.S. companies and government agencies experienced a record 1,093 data breaches in 2016, up 40% year over year, and all evidence suggests still more (and still more dangerous) digital attacks are coming in 2017.

Nearly one in three retailers have already suffered revenue losses as a result of a cyberattack, and retail organizations perceive targeted attacks as the greatest risk facing their business, according to the Cisco 2017 Annual Cybersecurity Report. Even so, just 52% of retail organizations consider their security infrastructure up-to-date and upgraded with the best technology tools (below other industries at 59%), and only 61% strongly agree that they are able to maintain full compliance with payment card industry (PCI) security standards.
But knowledge is power. Not only can retailers mitigate the threat of cybercrime by understanding and recognizing the most likely vectors of attack - they can also team with cybersecurity experts and other trusted partners to fortify their defenses.

Here's what retailers need to know.
  1. The Internet of Things is a growing target
  2. Ransomware is on the rise
  3. There's strength in numbers"

Imports To Grow In First Half Of 2017 As Economy Improves 

From the National Retail Federation, J. Craig Shearman, February 9, 2017

"Imports at the nation's major retail container ports are expected to increase 4.6 percent during the first half of 2017 over the same period last year as the nation's economy improves and retail sales continue to grow, according to the monthly Global Port Tracker report released today by the National Retail Federation and Hackett Associates.

"This is very much in line with what we are forecasting for retail sales and consumer spending this year," NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. "Retailers try to balance inventories very carefully with demand. So, when retailers import more merchandise, that's a pretty good indicator of what they are expecting to happen with sales."

Ports covered by Global Port Tracker handled 1.58 million Twenty-Foot Equivalent Units in December, the latest month for which after-the-fact numbers are available. That was down 3.8 percent from November as the holiday season came to an end but up 10.2 percent from December 2015. That brought 2016 cargo volume to a total of 18.8 million TEU, up 3.2 percent from 2015, which had grown 5.4 percent from 2014. One TEU is one 20-foot-long cargo container or its equivalent.

January was estimated at 1.59 million TEU, up 6.6 percent from January 2016. February is forecast at 1.53 million TEU, down 0.6 percent from last year; March at 1.43 million TEU, up 7.8 percent from last year; April at 1.56 million TEU, up 8.2 percent; May at 1.66 million TEU, up 2.3 percent, and June at 1.65 million TEU, up 4.3 percent.

Those numbers would bring the first half of 2017 to 9.4 million TEU, up 4.6 percent from the first half of 2016. That would be almost three times the 1.6 percent growth seen in the first half of 2016 over the same period in 2015.

The cargo numbers come a day after NRF forecast that 2017 retail sales - excluding automobiles, gasoline and restaurants - will increase between 3.7 and 4.2 percent over 2016, citing job and income growth and low debt that show "the fundamentals are in place." 

How Self-Service Retail Is Becoming Mainstream Retail

From PYMNTS, February 6, 2017

"Vending machines aren't about soda and salty snacks anymore - even if, at the consumer level, that's what most people think of when they think about the technology. And vending machine operators are behind that mental reset as they contemplate their own futures since vending machines no longer have to be about junk food bought with cash.

"The wave of vending operators that are embracing cashless and mobile continues to roll through the sector because there is a lot of evidence that consumers like it and spend more," USA Technologies Senior Vice President of Sales and Marketing Maeve McKenna Duska told Karen Webster in a recent conversation. "We've been seeing [this build] over the last year and half or so, and the market is really accelerating now."

The latest evidence of that acceleration was in the headlines last week when USA Technologies announced its latest partnership with Colorado-based Premier Services, Inc.. Under the terms of the agreement, USAT is now the company's single cashless payments provider for all credit, debit, mobile and loyalty services for its vending, coffee and micro-market kiosks throughout the Denver region.

"The pervasiveness of the smartphone has given us a new way to engage with our customers at the point of sale, which, in turn, is giving us the data we need to foster long-term relationships. USA Technologies was the best and only choice for this journey," remarked George Yost, president of Premier Services, Inc., in the announcement.

The Increasingly Cashless Landscape

When it comes to vending, the sea change to cashless is being driven by merchants who have had the realization that only offering cash as a way to pay is a good way to lose sales, according to Duska.

The Bigger Opportunity

Beyond the marketing ability and the fact that the more payment methods they can take, the more customers they have a chance of capturing, the opportunity for self-service vendors is also growing and evolving."

Business Confidence 
McDonald Hopkins Survey: New President Gives A Big Bump To Business Confidence

From Crain's Cleveland Business, February 9, 2017

"Business owners and executives are in an overwhelmingly positive mood about the state of the economy and their own enterprises, according to the seventh annual McDonald Hopkins Business Outlook Survey.

The reason, the Cleveland law firm says, is simple: President Donald Trump, who was cited by one survey respondent as "a positive game changer for the business community."

McDonald Hopkins says in a summary of the report that nearly 80% of the respondents believe U.S. business conditions will improve this year, compared with just 44% who said that in the year-ago survey predicting conditions for 2016.

In 2016, only 2% of respondents expected "significant improvement" in business conditions; this year, that figure is up to 19%. (You can read the full 2017 report here. The survey was conducted from Jan. 4 to Jan. 31.)

McDonald Hopkins reports that business owners and executives "are just as upbeat about their own organizations" as they are about the general state of the economy. For instance, 77% of respondents said they expect business conditions to improve at their companies, and 55% said they are likely to increase their number of employees this year. However, the firm said, 50% define attracting top talent as a significant business issue." 

Retail Pharmacy 
Report: Drug Price Increases Were Tame In 2016

From Modern Healthcare, Adam Rubenfire, February 6, 2017

"Per-person prescription drug spending increased 3.8% for health plans covering employees and their families, a tame increase when compared to the prior year, according to a new report from Express Scripts.

The St. Louis-based pharmacy benefits manager said the increase was 26.9% less than the 5.2% increase observed in 2015. That may in part be due to consumer backlash over drug prices, including widespread outrage over Mylan Pharmaceuticals' pricing of the EpiPen.

Though high-deductible plans are an emerging trend for American employers, members of commercially insured plans managed by Express Scripts saw their total share of pharmacy costs decrease for the second consecutive year, the PBM maintained. However, that decrease was minimal - members paid 14.6% of the total cost of prescription medication in 2016, compared to 14.8% the year before.

Utilization of traditional drugs increased modestly in 2016, while specialty drug use increased 7.1%. Specialty drugs used for inflammatory drugs and oncology saw some of the biggest increases in utilization, and continue to account for some of the highest spending amounts across therapy classes, along with diabetes medication.

One of every five dollars spent on prescription drugs was for a diabetes or specialty inflammatory conditions drug."

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