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Friday - May 19, 2000

Amway Blames Web for Job Cuts

According to the Free Press:

"Amway Corp., Michigan's largest direct-sales company, said Wednesday that it's eliminating 1,300 jobs -- or about 11 percent of its workforce worldwide -- as part of an plan to focus more on e-commerce opportunities.

About 900 jobs will come from Amway's headquarters in Ada, which employs 4,500 people. Most of the cuts there will occur among the 2,700 managers and salaried staff members, Amway officials said. The remaining cuts will take place in California and overseas.

The 3 million people who sell Amway detergents, vitamins and lipsticks worldwide will not be affected by the cuts.

Amway officials, who first hinted at the cuts in February, refused to call Wednesday's announcement a cost-cutting effort, even though sales are slipping and the officials noted the cuts will save the company $300 million a year.

Instead, they blamed the cuts on a need to better develop Internet sales opportunities to aid its traditional sales force..."

Click here for the full story.

Consumer Spending Springs Ahead in New Season
The National Retail Federation and Forrester Research, Inc., in conjunction with Greenfield Online, announced yesterday the results of the fourth NRF/Forrester Online Retail Index. According to the fourth survey in a monthly series, sporting goods and tools and gardening products blossomed in April. The Index also noted an increase in apparel and footwear sales, as online consumers geared up for spring.

"The same cold weather in April that contributed to the soft retail sales as reported by the US Department of Commerce may have helped fuel the increase in online sales, as consumers opted to avoid the weather outside and shop from the comfort of their own homes," said David M. Cooperstein, research director at Forrester. "Consumers are also cleaning out their closets and replacing last year's spring and summer fashions by shopping online. Our data shows that spending on apparel and footwear grew from $175 million in March to $223 million in April."

The fourth NRF/Forrester Index also indicates that although spending on big-ticket items increased by $112 million -- reaching $1.9 billion -- from March to April, sales in the majority of these big-ticket categories experienced a decline in revenue. With the exception of travel-related categories, which include airline tickets and car rentals and were responsible for an overall $114 million boost from March to April, the remaining categories decreased while computer hardware remained the same.

Total spending in April reached more than $3.2 billion, which is an increase of $281 million over March, with the average spent per customer growing from $252 in March to $256 in April.

"The NRF/Forrester Index clearly indicates that online shopping continues to grow in popularity," said Scott Silverman, NRF's vice president, Internet retailing. "More people are shopping online, and they're spending more money -- despite a slowdown in mass media advertising by online retailers."

About The Index
The NRF/Forrester Online Retail Index measures, on a monthly basis, the growth and seasonality of online shopping based on data collected from online shoppers. The Index is based on 5,000 responses to an online panel fielded by Greenfield Online during the first 10 business days of each month. The survey results for April 2000 were fielded from May 1, 2000, through May 15, 2000.

The monthly panel is weighted to Forrester Research's Benchmark Panel, which surveyed nearly 90,000 US and Canadian members of a consumer mail panel developed by NPD Group, a market research firm. Data was weighted to represent the North American population demographically. The survey was fielded from late November 1999 to February 2000.


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