August 13, 2018
Register now for MnRA's new Retail+Policy Legislator Meet & Greet Dinner August 30 at the Mall of America.
National Retail Federation Upgrades 2018 Economic Forecast But Says Tariffs Remain A Threat
From the National Retail Federation, August 13, 2018

The National Retail Federation today increased its retail sales forecast for 2018, saying sales are expected to grow more than previously predicted thanks to tax reform and other positive economic inputs but warning that tariffs threaten to dampen consumer confidence.

NRF now expects 2018 retail sales to increase at a minimum of 4.5 percent over 2017 rather than the 3.8 to 4.4 percent range forecast earlier this year. The numbers exclude automobiles, gasoline stations and restaurants.

“Higher wages, gains in disposable income, a strong job market and record-high household net worth have all set the stage for very robust growth in the nation’s consumer-driven economy,” NRF President and CEO Matthew Shay said. “Tax reform and economic stimulus have created jobs and put more money in consumers’ pockets, and retailers are seeing it in their bottom line. We knew this would be a good year, but the first half turned out to be even better than expected. However, a tremendous amount of uncertainty about the second half remains. It could be a banner year for the industry, or we could keep chugging along at the current rate.”

Retail sales in the first half of 2018 grew 4.8 percent year-over-year and have been up 4.4 percent year-over-year in the most recent three-month moving average. NRF now expects gross domestic product for the year to grow at the higher end of the 2.5 to 3 percent range it forecast earlier.

“We don’t want to see these economic gains derailed by protectionist trade policy,” Shay said.
Back To School Shopping In Full Swing
From WNAX Radio 570

Families with children in elementary through high school plan to spend 685 dollars. Those with young people heading to college plan to spend around 950 dollars.

"Back to school back to college, is probably second only to the holiday season, and retailers continue to be competitive, so we will see some good sales, if we haven't already, across the State," said Minnesota Retailers Association president Bruce Nustad.
Most Shoppers Abandon Their Purchase If Checkout Is Too Hard
From the Retail Dive, Jacqulien Renfrow, August 13, 2018

As e-commerce continues to rise, the market is expected to reach $4.88 trillion by 2021. But sales to individual merchants are by no means guaranteed, and the onus is on retailers to make checkout as easy and fast as possible given that an abandoned cart could mean the permanent loss of a consumer.

According to a recent study by Usabilla, the No. 1 reason for shopping cart abandonment — cited by 58% of consumers — is high shipping costs. Another 8% cited longer-than-desired delivery times as reasons to abort. In an era of Amazon Prime's free two-day delivery, other retailers are under pressure to match with free delivery or include other incentives at checkout to continue to compete with the marketplace giant.

Among those incentives, exclusive deals, special shopping days and reward points are a key way that retailers draw and ultimately retain long-term consumers. Big names such as Kohl's, Macy's, Target and DSW beefed-up rewards for their loyalty members in 2018 and some even now offer options that don't require membership or store credit cards.

However, a relationship that can take many transactions to build can be easily erased by just one bad experience. A study by Optimizely, reported in Biz Rate, states that 35% of all shoppers can be turned off of a brand from just a single bad user experience. And 39% of consumers in the same study said that a bad online experience would affect their likelihood of purchasing from the brand in a physical store moving forward. .
Rising U.S. Consumer Prices Are Eroding Wage Gains
From the Wall Street Journal, Josh Mitchell, August 10, 2018

A humming U.S. economy is pushing inflation up to levels that the central bank considers healthy. But there's a downside: Americans' paychecks are barely keeping up. Consumer prices rose 2.9% over the past year, a rate last exceeded in late 2011, the Labor Department said Friday.

Core prices-those outside of volatile food and energy-related expenses-climbed 2.4%, the biggest annual gain since September 2008. The rising cost of things like rent, gasoline and health care is another sign the economy is kicking into a higher gear after years of slower growth. Businesses raise prices when they feel Americans are able and willing to spend more.
Department of Revenue: Minnesota To Begin Remote Seller & Marketplace Sales Tax Collection October 1
From the Minnesota Department of Revenue, July 25, 2018

The Minnesota Department of Revenue will require remote sellers and Marketplace Providers facilitating sales into Minnesota to begin collecting sales tax no later than October 1, 2018.

Minnesota law requires all sellers to collect sales or use tax to the extent allowed under the United States Constitution.

The June 21 U.S. Supreme Court decision in South Dakota v. Wayfair allows states like Minnesota to require remote sellers with no physical presence, such as online and mail-order companies, to collect and remit the applicable sales or use tax on sales delivered to locations within their state. The Court’s decision in Wayfair caused Minnesota’s existing law, which was enacted in 1989, to become effective.

Remote sellers that sell goods or services into Minnesota from other states must register and begin collecting and remitting Minnesota sales tax no later than October 1, 2018.

Minnesota has a Small Seller Exception, which does not require remote sellers to collect sales tax until their sales during a period of 12 consecutive months total either:

    • 100 or more retail sales shipped to Minnesota
    • 10 or more retail sales shipped to Minnesota that total more than $100,000

Minnesota law also requires certain Marketplace Providers to collect and remit Minnesota sales tax on all taxable retail sales made into Minnesota facilitated by the marketplace. Remote sellers do not need to collect sales tax when a Marketplace Provider is collecting and remitting.

The Court’s decision in Wayfair also caused Minnesota’s 2017 Marketplace Provider law to become effective.

Marketplace Providers must register and begin collecting Minnesota sales tax on behalf of remote sellers using their marketplace no later than October 1, 2018.