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Department Stores’ Pains Eased In Q2, But Challenges Are Digging In

This past week’s earnings results for Macy’s and Kohl’s were brighter than expected, but that doesn’t mean troubles afflicting major retailers are fading.

As eMarketer pointed out on Thursday, Macy’s same-store sales slipped 2.8 percent — the 10th consecutive quarterly drop.

Meanwhile, Kohl’s same-store sales were essentially flat, falling 0.4 percent year-over-year, continuing a dynamic that was seen for the past five quarters.

Even Nordstrom’s reversal was fairly meager, as it delivered a same-store sales gain of 1.7 percent.

On Friday, JCPenney posted a 1.3 percent declines in same-store sales, a bit worse than the expected fall of 1.2 percent.

The retailer, like its rivals, have been aggressively pursuing in-store omnichannel strategies designed to combat online showrooming, even as it and other major store brands shrink the number of locations they have.

For JCPenney, it did point to some bright spots in its home, fine jewelry, footwear and handbag, and Sephora beauty units.

“The company has gained customers across these segments — including younger shoppers who might previously have shunned JCP,” GlobalData Retail’s Saunders told CNBC about JCPenney’s focus on the home, footwear, and fashion categories.

Looking at how broader shifts away from malls and other big boxes have seen a retreat in foot traffic, eMarketer, citing RetailNext data, says that through July, sales and traffic at US brick-and-mortar stores have declined each month since at least January 2014. Both Macy’s sand Kohl’s, for instance, said on Thursday Q2 traffic declined.

“Department stores themselves also have failed to keep up with fast fashion rivals like Zara,” eMarketer says. “They also have shot themselves in the foot with frequent promotions and one-day sales.”

Some observers find that omnichannel moves, such as advancement of mobile-based loyalty programs, are unlikely to reverse the trajectory of department stores’ dwindling fortunes.

“It’s all band-aid stuff, said Mark Cohen of Columbia Business School in an interview with eMarketer. “The slope of the curve of their performance continues to point downward. The slope may be abating a bit, but not turning up. Macy’s is the poster child of the whole sector. The department store genre is in decline.”

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What State Gives You the Most ‘Bang for Your Buck’? [INFOGRAPHIC]

What State Gives You the Most ‘Bang for Your Buck’? [INFOGRAPHIC] | Simplifying The Market

What State Gives You the Most ‘Bang for Your Buck’? [INFOGRAPHIC] | Simplifying The Market

Some Highlights:

  • Thinking of moving across the country? How far will your money take you?
  • The majority of states in the Midwest and South offer a lower cost of living compared to Northeast and Western states.
  • The ‘Biggest Bang for your Buck’ comes in Mississippi where, compared to the national average, you can actually purchase $116.01 worth of goods for $100.
  • For more information regarding the methodology used to create the map, visit the Tax Foundation.

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The Quick and Easy Guide to Determining How Big of a Mortgage Your Family Can Afford

The Quick and Easy Guide to Determining How Big of a Mortgage Your Family Can AffordAre you shopping around for a new house or apartment? One of the key considerations you will need to make is figuring out how much you want to invest in your new home. Below you’ll find our quick and easy guide to determining just how much “house” you can afford. Let’s get started!

Start By Making A Proper Budget

The first thing you’ll want to do is sit down and get a full budget put together. The easiest way to get the process started is to begin with two lists: income and expenses. For the income list, write down the amount of money your family brings in each month after taxes. If you have side income sources or extra income that tends to fluctuate over time, use the average amount for the past six months.

For the expenses list, write down all the spending that you do each month. Start with the major, stable items like rent, utilities and the like. Then work your way through to discretionary spending like dining out and other sources of entertainment. If it helps, go through your bank and credit card statements to ensure that you are not missing anything.

Once you have an accurate budget, you’ll know exactly how much you can afford to pay toward your mortgage payments each month.

Figure Out How Much You Can Put Down

Next, you’ll need to think about how much cash you want to pay as a down payment on your home. The larger the down payment you can afford, the smaller amount of mortgage financing you’ll need. While it might seem like a good idea to put as much as you can down, there are some things to consider. Any money you put against your down payment is going to be unavailable to you, which reduces your financial options. You’ll also lose the opportunity to invest it, which means missing out on potential returns over time.

Determine How Much House You Actually Need

Finally, give some thought as to how large or luxurious a home you want to buy. For example, if you have a small family and don’t need a large four- or five-bedroom house, you can instead opt for a smaller but more luxurious home. Conversely, if space is a priority, you may want to forego the high-end options to ensure you have enough room.

When you’re ready to explore your mortgage options, we’re ready to help. Contact your trusted mortgage professional at your convenience. We’re committed to helping you purchase the home of your dreams.

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Age of Amazon: Stores’ Lack Of Responsiveness Is A Prime Problem

Pretty much all brand marketers agree that “responsiveness: the ability to source, understand and then quickly react to feedback, preferences and needs” is crucial to the delivery of an exceptional customer experience as expectations driven by Amazon and the on-demand economy have shaped consumers’ views.

But all too few can say that their businesses can meet those expectations.

In a CMO Council survey of 153 senior marketing executives (54 percent of whom are CMOs), 90 percent concede responsiveness is important, if not critical, to attracting and retaining customers and maintaining competitive viability.

However, only 16 percent of marketers feel their organizations are extremely responsive to the consumer, failing to make changes to products, packaging, services and experiences based on real-time consumer requests and feedback.

Is Anyone There?

The CMO Council study, The Responsiveness Requirement: Meeting the Consumer When and Where It Matters to Drive Growth, was conducted with Danaher Corporation’s Product Identification Platform companies, examined the level of success (or lack thereof) when it comes to responding “in the moment,” whether it is a physical or digital touchpoint.

“Customers fully expect for brands to engage at the speed of light—after all, it is exceptional customer experiences from brands like Amazon and Starbucks that have proven that rapid response, personalization and real-time (or near real-time) omnichannel engagements are possible at the push of a button or click of an app,” said Liz Miller, SVP of Marketing for the CMO Council. “This is engagement at the speed of digital, and the customer expects a similar level of responsiveness across all experiences, regardless of whether the channel is physical or digital.”

In general marketers feel they are able to respond or react to consumer feedback, requests, suggestions or complaints specific to marketing campaigns in less than two weeks — which to app-centric consumers may feel like a lifetime.

For the most part, 78 percent of marketers surveyed are able to meet that expectation, with 43 percent actually saying that they are able to respond to the consumer within 24 hours, effectively setting the expectation with consumers that responsiveness is possible.

In those cases, the averages are skewed by online interactions, which are naturally immediate. When it comes to brick-and-mortars, though, that’s when the problems of immediacy show themselves.

About 77 percent of respondents admit it can take up to 90 days to respond and react to customer feedback, suggestions or issues, with 36 percent needing up to three months to respond. In other words, the equivalent of several lifetimes as far as consumers are concerned.

Source: CMO Council

Among the solutions the CMO Council is proposing to spur marketers to ramp up their level of responsiveness:

  • Starting strategic conversations internally to bring product packaging and physical touches like POP displays and promotions into the customer experience dialogue. This isn’t just about printing and getting packaging made; it must be discussed as a critical touch in a multi-touch, connected experience.
  • Setting the expectation that procurement must act as a strategic partner and not just a cost-cutter. Together, marketing and procurement must identify vendors that can meet responsiveness goals, not just budgetary ones.
  • Demanding transparency. Marketers need to develop supply chain relationships that provide continuous data streams with the intentional goal of total transparency across the supply chain to track everything from creative iteration and collaboration to works- in-progress.
  • Broadening the meaning of omnichannel to including everything from social posts to product packaging. It is time to bring physical and digital together, if for no other reason than this: The consumer thinks of us as one brand—not a physical brand and a digital one.

“With recent great advances in digital media delivery, unfortunately, the capability to make changes to physical media has been a laggard,” says Joakim Weidemanis, Group Executive and Vice President, Product Identification at Danaher Corporation. “Many people simply don’t know what’s possible until they decide it will be so. Advances in technology today allow business leaders to demand more speed, higher quality and greater transparency from their partners and vendors than ever before. Even more powerful for global brands is that such technology is available all over the world.”

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Hey, Millennial Homeowners!! It May Be Time to Sell

Hey, Millennial Homeowners!! It May Be Time to Sell | Simplifying The Market

Contrary to what many believe, Millennials are not the ‘renter’ generation. Millennials purchased a larger percentage (34%) of homes in the U.S. than any other age group in 2017 and the most recent Census Bureau report shows that the homeownership rate among Millennials is finally on the rise.

Many Millennials took advantage of post housing crash prices and the First-Time Homebuyers’ Tax Credit and jumped into homeownership in 2010. If you are one of these buyers, now may be the time to sell for many reasons. Here are a few:

1. Equity Build-Up

Home prices have been on the rise since the beginning of 2012 and your house may have appreciated by more than you think. ATTOM Data Solutions, in their Q2 2017 U.S. Home Sales Report revealed that:

“…homeowners who sold in the second quarter realized an average price gain of $51,000 since purchase — the highest average price gain for home sellers since Q2 2007, when it was $57,000.

The average home seller price gain of $51,000 in Q2 2017 represented an average return of 26 percent on the previous purchase price of the home, the highest average home seller return since Q3 2007, when it was 27 percent.”

2. Projected Home Price Increases

If you just got married or just found out you are about to become a parent, you may have plans to move up a bigger home or perhaps move to a different area. Waiting to buy a more expensive home in this market probably doesn’t make sense. The experts contacted for the Home Price Expectation Survey are projecting home prices to increase by nearly 5% over the next year. Yes, your house’s price will increase but not as much as a home currently valued higher than yours.

3. Projected Interest Rate Increases

The Mortgage Bankers’ Association, Freddie Mac, Fannie Mae and the National Association of Realtors are each projecting mortgage rates to increase over the next year.

Higher PRICES + Higher INTEREST RATES = LARGER MORTGAGE PAYMENTS.

Bottom Line

If you are lucky enough to be one of those Millennials who purchased a house in 2010 (or even later), now might be the perfect time to move up to the home of your dreams!

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Getting Tired of Renting? Here Are the Top 5 Reasons Why Young People Prefer Owning a Home

Getting Tired of Renting? Here Are the Top 5 Reasons Why Young People Prefer Owning a HomeAt some point in their lives, every renter thinks about home ownership and whether or not it’s worth it. Let’s explore the top 5 reasons why young individuals prefer the idea of owning a home over renting.

It’s All About Control

It’s unlikely to come as a surprise that having control over their living space is the number one reason that younger buyers prefer owning over renting. Living in a home owned by someone else limits your ability to customize your home. Want to expand a room or rip out the kitchen cabinets? Good luck with getting your landlord to pay for that!

Privacy And Security Are Key

More than 90 percent of millennials reported that having a sense of privacy is an important factor when choosing between buying and renting. And this makes a lot of sense, especially in areas where a landlord has the right to enter the premises on short notice. It’s tough to imagine feeling secure when a landlord can demand access to their home for whatever reason they so choose.

Your Own Space Is Just Nicer

Take a look around your home. Is it as luxurious as you’d like it to be? While you can furnish a rented apartment or house however you want, in many cases, renters just don’t put the same amount of effort into it. 81% of young renters shared that one reason they want to buy is so that they can live in a nicer place.

You’ll Be More Engaged In The Community

If you want to feel more engaged in your local community, buying a home is an excellent idea. More than 75 percent of young and first-time buyers reported that community engagement is a key reason that they want to be a home owner. Not only are you more likely to care about the area around your home if you’re responsible for its upkeep. But as the value of your home is influenced by the surrounding area, you also have a financial incentive to staying engaged in the health of your community.

Owning Gives You Flexibility

Finally, consider that owning your own home will offer flexibility that you can’t get from renting. Not only will you be able to customize your home the way you want, but you’ll also have a productive financial asset. And that can be a huge help in securing additional credit if you want to make significant investments or other financial moves.

When you’re ready to expand your freedom by purchasing your own home, contact your trusted mortgage professional. We’re happy to help.

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5 Principles for Delivering Exceptional Customer Service

Spark - Business Ideas to Fuel Your Bottom Line

We all understand the importance of customer service, but what does it really mean to put this into action? It all comes down to some simple yet fundamental principles that you need to live by. Whether you’ve been in business for five years or 50, let’s go back to basics and take a look at what it means to deliver customer service that will wow your customers and keep them coming back year after year.

Understand your customers’ needs. People seek out your business because they have a problem you can help solve. It’s as simple as that. When you understand the specific needs of each customer and tailor your services to accommodate those needs, you’ll end up with more satisfied clients. Assure them that you’ve got their best interests in mind by taking the time to listen, empathize, and understand what they’re looking for before diving into your sales pitch. If you want to improve your listening skills, here’s a great resource to help you get started.
 

Know your stuff. Your clients are counting on you to be the expert they need. That means knowing your product or service inside and out and educating them about the best options for their situation. This positions you as a valuable resource they can trust. Spend time each day educating yourself on your specific market, and keep up on the latest trends and industry best practices. In addition, stay connected with other cross-industry professionals so you can make quick recommendations to your clients and create a more holistic, positive customer experience.

 

Be accessible and responsive. Communication is key to any healthy relationship; why should it be different with your customers? Keep the lines of communication open, respond to questions promptly, and follow through with your promises. Set expectations, so they know when they will hear from you. An excellent way to do this is by crafting a welcome email or letter for each client that outlines your sales process and the value you bring to the relationship. This will help set the tone for their customer experience.Click here to download a sample letter.

 

Be professional – always. When dealing with people, there’s bound to come a time when you and a client don’t see eye to eye. Whether they’re right or wrong, always address these situations professionally. Keep emotions out of it, and don’t argue. Focus on the resolution, not being right. Most importantly, admit when you mess up. Clients will appreciate your authenticity.

 

Think long-term. The best customer service looks beyond the here and now and seeks to gain customers for life. Go the extra mile to exceed expectations. Think about what sets you apart from your competitors, and play up those unique strengths to deliver an unforgettable customer experience. Show your appreciation for their business by sending a thank you card or following up with a thank-you call. Also, be sure to thank anyone who provided you with a referral or vice versa, as it provides a perfect opportunity to reconnect and find a way to partner together in the future. Last but not least, keep in touch after the sale with value-added communications to continually nurture your client relationships.

 

By incorporating the above principles into your day-to-day activities, you can guarantee a memorable, high-value experience for each and every customer. Be sure to capture positive feedback from your clients with online reviews. Click here to learn how.

 
Looking for unique ways to wow your customers?
Let’s discuss how we can accomplish this by working together.

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Jason R. Richardson Photo Jason R. Richardson
NMLS# 256859
Mid America Mortgage, Inc.
27413 Tourney Road Suite #150
Valencia, CA 91355
(866) 575-9993
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Economic Observer
This letter is for information purposes only and is not an advertisement to extend customer credit as defined by Section 12 CFR 1026.2 Regulation Z. Program rates, terms and conditions are subject to change at any time.

Amid Declining Ad Revenues, Twitter Aims To Prove Offline Sales Effectiveness

Twitter’s second quarter earnings last month revealed an interesting disconnect: on the plus side, advertising engagement grew 95 percent compared to the same period the year before; but ad revenue slipped 8 percent.

The competition for the ad dollars not claimed by the digital ad hegemons Facebook and Google is a problem all online publishers have to contend with. But Twitter’s ubiquity as a mainstream social media tool has put a spotlight on its challenges more than most companies, though Snap is starting to feel some heat as well.

eMarketer has forecast Twitter’s ad revenue will grow 1.6 percent this year, to $2.28 billion — driven by almost entirely — 90 percent — from mobile. By being so heavily mobile, the microblog hopes to capitalize on the kinds of micro-moments that have propelled spending on its online rivals.

To help make its case to marketers, Twitter has enlisted analytics partners Foursquare and Nielsen to make its case to brands, particularly when it comes to driving offline foot traffic and sales.

Among the stats Twitter is highlighting involves the sale of mobile devices at telcos’ brick-and-mortar locations.

“For carriers and manufacturers focused on generating in-store foot traffic, Twitter proves to be an effective partner,” Twitter says. “Research shows that Twitter not only drives in-store foot traffic, but it also compels buyers to spend more overall. In fact, people on Twitter are more likely to research a smartphone while in-store compared to those who don’t use Twitter.”

Specifically, Foursquare and Nielsen say that buyers spend 6.8 percent more with mobile wireless carriers after seeing ads on Twitter.

Nielsen and Foursquare’s research also offered analysis of the kinds of people who are more likely to make purchase in brick-and-mortar stores.

Twitter users tend to frequent big-box stores and budget-friendly travel locations, and their tastes include fast-casual food. While that sounds a lot like the general population, it does indicate the connections of when those brands should advertise. For example, in-store shoppers love sports — again, like pretty much everyone else — so brands can activate during major sporting events when people are the most engaged on Twitter.

“On Twitter, people are in a unique discovery mindset,” the report says. “They are curious, leaned in, and looking to learn, be inspired, and act. This means that because users are in the right mindset, people on Twitter are more likely to see and remember ads.

“Competition in the telco industry is fiercer than ever, and marketers need to make their ad dollars work harder,” Foursquare and Nielsen note. “Whether you are looking to drive offline sales, online sales, or both, people on Twitter are especially receptive to ads and motivated to buy. Brands that leverage customer insights to reach different audience segments based on their interests, passions, and behaviors on Twitter will be able to more thoughtfully and creatively reach and win customers.”

Of course, given that Twitter’s rivals recognize the micro-moments and user attention, Twitter will have to make a concerted effort to specifically target the brands who are considering how much to spread finite ad dollars around.

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Housing Inventory Hits 30-Year Low

Housing Inventory Hits 30-Year Low

Spring is traditionally the busiest season for real estate. Buyers, experiencing cabin fever all winter, emerge like flowers through the snow in search of their dream home. Homeowners, in preparation for the increased demand, are enticed to list their house for sale and move on to the home that will better fit their needs.

New data from CoreLogic shows that even though buyers came out in force, as predicted, homeowners did not make the jump to list their home in the second quarter of this year. Frank Nothaft, Chief Economist for CoreLogic had this to say,

“The growth in sales is slowing down, and this is not due to lack of affordability, but rather a lack of inventory. As of Q2 2017, the unsold inventory as a share of all households is 1.9 percent, which is the lowest Q2 reading in over 30 years.”

CoreLogic’s President & CEO, Frank Martell added,

“Home prices are marching ever higher, up almost 50 percent since the trough in March 2011.

While low mortgage rates are keeping the market affordable from a monthly payment perspective, affordability will likely become a much bigger challenge in the years ahead until the industry resolves the housing supply challenge.”

Overall inventory across the United States is down for the 25th consecutive month according to the latest report from the National Association of Realtors and now stands at a 4.3-month supply.

Real estate is local.

Market conditions in the starter and trade-up home markets are in line with the median US figures, but conditions in the luxury and premium markets are following an opposite path. Premium homes are staying on the market longer with ample inventory to suggest a buyer’s market.

Bottom Line

Buyers are out in force, and there has never been a better time to move-up to a premium or luxury home. If you are considering selling your starter or trade-up home and moving up this year, let’s get together to discuss the exact conditions in our area.

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3 Reasons to Hit the Accelerator on Your Mortgage Payments – If You Can Afford It

3 Reasons to Hit the Accelerator on Your Mortgage Payments If You Can Afford ItDoes the thought of repaying your mortgage for the next twenty-plus years leave you feeling a little down? Whether you’ve had your mortgage for weeks or years, accelerating your payments is an excellent option that can help get your mortgage fully paid off in a shorter time frame. Let’s explore three great reasons to accelerate your payments so that your mortgage debt is paid down faster.

You’ll Be Debt-Free That Much Faster

It may seem obvious, but it’s worth stating that you’ll be debt-free that much quicker if you accelerate your repayment schedule. Every extra payment you make against your mortgage debt builds the amount of equity you own in your home. So not only are you becoming more debt-free with each payment, but you’re also building your net worth. And while it’s true that you might only shave a year or two off of your 25-year mortgage period, being debt-free faster is still worth the effort.

You’ll Pay Less Interest

With most mortgages, any extra payments that you make will go straight towards your ‘principal’ balance. Getting the principal paid down faster means that you’ll end up paying less in interest than if you hadn’t. If you consider that every year you shave off of a 20-year amortization period is a full year of interest that you won’t have to pay, it adds up. Note that if you have an existing mortgage agreement, you’ll need to check the terms to determine the rules around extra principal payments.

You’ll Have More Financial Freedom

Finally, the faster you get your mortgage paid off, the more financial freedom you’ll have. The equity and credit you’ve built over time will also provide you with some options. You can invest in buying an investment property, or in taking out a line of credit to renovate and upgrade your current home. If the numbers make sense, you can also borrow against your home equity to invest in the financial markets. This will diversify your investment portfolio and expand your net worth.

As you can see, it’s well worth the financial investment to accelerate your mortgage repayment. If you can afford it and it won’t significantly lower your quality of life. If you have questions about a mortgage new or existing, contact our team of mortgage professionals. We’re happy to help.

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