Five Kelley Blue Book favorite holiday deals. The Honda and Acura offers end 1/4/11; others expire on 1/3/11.
* 2011 Ford Fusion: 0%, 60-month financing
* 2011 Acura TSX: 0% financing for 24 to 60 months
* 2011 Mercedes-Benz C300: $339 per month, $3,379 due at signing
* 2011 Mazda3 s Sport: Lease for $229/month, $0 due at signing
* 2011 Honda Odyssey: Lease for $360/month, $0 due at signing
Monday, December 27, 2010
Car dealerships usually full of buyers in last week of year
By Jayne O'Donnell, USA TODAY
Car dealers are bracing for one of their biggest sales periods of the year this week as many consumers shift their attention from what's under the tree to what's in their garage.
Many dealers do up to 70% of their December business in the week after Christmas, says James O'Sullivan, CEO of Mazda North America. Some don't even bother to advertise much until right before Christmas, recognizing that it would be hard to get most consumers' attention, O'Sullivan says.
CARS.COM: Find the latest car deals
"December is not the biggest selling month of the year," says O'Sullivan, but Dec. 26 to Jan. 1 is the "most intense selling week of the year."
Several factors make the post-Christmas/pre-New Year's period a bountiful one for the car business. Some, including big stock market gains, make it likely this year will be busier than usual. Most important, many people are off work and kids are home from college, so there's time for families to shop.
"In the car business, weekends are our big volume days," says Shaun Del Grande, whose San Jose-based dealership chain sells brands including Honda, Toyota, Subaru and Mazda. This week, "Every day is like a weekend."
There's also pent-up demand among consumers who held back on big-ticket purchases during the recession, says James Bell, executive market analyst at Kelley Blue Book. And many people know that "at the end of the month, dealers are a little more willing to wheel and deal." Those hoping to get a tax deduction for a new model bought or leased for business also may be rushing to buy before the end of the year, Bell says.
People are clearly still in the mood to shop after Christmas. Kathy Grannis, spokeswoman for the National Retail Federation, says Dec. 26 is one of the busiest shopping days of the year, and the week after Christmas can account for up to 15% of holiday sales for non-auto retailers.
Luxury-car sales will likely get the biggest bump for the car business this week, thanks to stock market indicators that hit two-year highs last week, says Paul Taylor, chief economist for the National Automobile Dealers Association. Luxury-car buyers typically own the most stock outside of their retirement programs, Taylor says, and are most likely to feel more confident when the markets are up. Luxury-vehicle sales were already up 21% last month over November 2009.
Don't expect the incredible deals of 2008 and '09. Car dealers don't have to resort to the deep discounting as they did during the recession. Still, there are plenty of zero-percent financing or no-money-down lease deals, even on vehicles such as the Honda Odyssey minivan that are new for 2011.
"It truly is the 'perfect storm,' " Del Grande says. "It's like our version of Black Friday, but we get it for a whole week."
Car dealers are bracing for one of their biggest sales periods of the year this week as many consumers shift their attention from what's under the tree to what's in their garage.
Many dealers do up to 70% of their December business in the week after Christmas, says James O'Sullivan, CEO of Mazda North America. Some don't even bother to advertise much until right before Christmas, recognizing that it would be hard to get most consumers' attention, O'Sullivan says.
CARS.COM: Find the latest car deals
"December is not the biggest selling month of the year," says O'Sullivan, but Dec. 26 to Jan. 1 is the "most intense selling week of the year."
Several factors make the post-Christmas/pre-New Year's period a bountiful one for the car business. Some, including big stock market gains, make it likely this year will be busier than usual. Most important, many people are off work and kids are home from college, so there's time for families to shop.
"In the car business, weekends are our big volume days," says Shaun Del Grande, whose San Jose-based dealership chain sells brands including Honda, Toyota, Subaru and Mazda. This week, "Every day is like a weekend."
There's also pent-up demand among consumers who held back on big-ticket purchases during the recession, says James Bell, executive market analyst at Kelley Blue Book. And many people know that "at the end of the month, dealers are a little more willing to wheel and deal." Those hoping to get a tax deduction for a new model bought or leased for business also may be rushing to buy before the end of the year, Bell says.
People are clearly still in the mood to shop after Christmas. Kathy Grannis, spokeswoman for the National Retail Federation, says Dec. 26 is one of the busiest shopping days of the year, and the week after Christmas can account for up to 15% of holiday sales for non-auto retailers.
Luxury-car sales will likely get the biggest bump for the car business this week, thanks to stock market indicators that hit two-year highs last week, says Paul Taylor, chief economist for the National Automobile Dealers Association. Luxury-car buyers typically own the most stock outside of their retirement programs, Taylor says, and are most likely to feel more confident when the markets are up. Luxury-vehicle sales were already up 21% last month over November 2009.
Don't expect the incredible deals of 2008 and '09. Car dealers don't have to resort to the deep discounting as they did during the recession. Still, there are plenty of zero-percent financing or no-money-down lease deals, even on vehicles such as the Honda Odyssey minivan that are new for 2011.
"It truly is the 'perfect storm,' " Del Grande says. "It's like our version of Black Friday, but we get it for a whole week."
Friday, December 24, 2010
Happy Holidays
I just wanted to take a moment and wish my clients, friends and family and very Merry Christmas and a Safe and Prosperous New Year!I am looking forward to having a great 2011!
-Edwin-
-Edwin-
Thursday, December 23, 2010
Owning a Home Still the American Dream, Despite Housing Bust
The American Dream is still alive and kicking, including within immigrant and minority communities, according to a survey from mortgage giant Fannie Mae.
The housing crisis hasn't quenched the homeownership thirst, the company found. More than 51% of people said the bust did not change their willingness to buy a home and an additional 27% said it actually made them more likely to do so.
"The crisis has not put a dent in the desire to own," said Doug Duncan, Fannie's chief economist, "although it may have changed the reasons that people want to own."
The report, the first close analysis Fannie has taken of consumer attitudes about the rent-or-own decision, found that qualitative reasons -- like having the ability to remodel or to send the kids to a better school -- have overtaken financial considerations as the primary motivators for homeownership.
Some misperceptions about financial benefits may help to keep it high.
"People's attitudes don't always line up with empirical facts," said Duncan.
For example, although trillions of dollars of equity were wiped out by the housing bust and millions of people will lose homes to foreclosure, nearly two-thirds of people surveyed still believe purchasing a house is a safe investment. That could be viewed as a major disconnect.
Also, more than half the public thought buying a home was a good idea financially even if they plan to move out in less than three years. That's actually rarely true because transactional costs like real estate commissions, title insurance costs and mortgage fees take a big cut off the top of selling and purchase prices.
Furthermore, a huge majority, 86% of those surveyed, cite income-tax benefits -- mostly the mortgage interest deduction -- as a big reason to buy. That benefit, however, is very small for most homeowners or even nonexistent.
"Lower-income homeowners, for example, don't itemize," said Duncan, "so there is no tax benefit for them at all."
Broad homeownership hopes
Fannie found that no matter what their ethnicity or immigration status, Americans generally share similar positive attitudes toward homeownership, even though there are substantial differences among these groups in homeownership rates.
It seems that economic opportunities, not attitudes, account for much of the variation.
Only 44% of African Americans own homes, for instance, compared with 71% of whites, but that disparity starts to vanish among families in stronger financial circumstances. African Americans' homeownership rises to 60% for those earning between $50,000 and $99,000, for example.
The survey findings have implications for Fannie's business model. Non-Hispanic whites are projected to account for just 46% of the population by 2050. Immigration will account for most of the population growth between now and then.
And since, as the report stated, "strong homeownership aspirations exist across races, ethnicities and immigrant groups," Fannie can count on future demand for owner-occupied homes remaining strong, as long as the economy cooperates.
(Source: CNNMoney.com, 12/16/10)
The housing crisis hasn't quenched the homeownership thirst, the company found. More than 51% of people said the bust did not change their willingness to buy a home and an additional 27% said it actually made them more likely to do so.
"The crisis has not put a dent in the desire to own," said Doug Duncan, Fannie's chief economist, "although it may have changed the reasons that people want to own."
The report, the first close analysis Fannie has taken of consumer attitudes about the rent-or-own decision, found that qualitative reasons -- like having the ability to remodel or to send the kids to a better school -- have overtaken financial considerations as the primary motivators for homeownership.
Some misperceptions about financial benefits may help to keep it high.
"People's attitudes don't always line up with empirical facts," said Duncan.
For example, although trillions of dollars of equity were wiped out by the housing bust and millions of people will lose homes to foreclosure, nearly two-thirds of people surveyed still believe purchasing a house is a safe investment. That could be viewed as a major disconnect.
Also, more than half the public thought buying a home was a good idea financially even if they plan to move out in less than three years. That's actually rarely true because transactional costs like real estate commissions, title insurance costs and mortgage fees take a big cut off the top of selling and purchase prices.
Furthermore, a huge majority, 86% of those surveyed, cite income-tax benefits -- mostly the mortgage interest deduction -- as a big reason to buy. That benefit, however, is very small for most homeowners or even nonexistent.
"Lower-income homeowners, for example, don't itemize," said Duncan, "so there is no tax benefit for them at all."
Broad homeownership hopes
Fannie found that no matter what their ethnicity or immigration status, Americans generally share similar positive attitudes toward homeownership, even though there are substantial differences among these groups in homeownership rates.
It seems that economic opportunities, not attitudes, account for much of the variation.
Only 44% of African Americans own homes, for instance, compared with 71% of whites, but that disparity starts to vanish among families in stronger financial circumstances. African Americans' homeownership rises to 60% for those earning between $50,000 and $99,000, for example.
The survey findings have implications for Fannie's business model. Non-Hispanic whites are projected to account for just 46% of the population by 2050. Immigration will account for most of the population growth between now and then.
And since, as the report stated, "strong homeownership aspirations exist across races, ethnicities and immigrant groups," Fannie can count on future demand for owner-occupied homes remaining strong, as long as the economy cooperates.
(Source: CNNMoney.com, 12/16/10)
Wednesday, December 22, 2010
Used-Vehicle Prices Rise, But So Do Profits
Franchised dealers have complained about paying more for used vehicles. But they're grousing all the way to the bank, data from the nation's largest dealer group show.
Dealership financial profile data from the National Automobile Dealers Association show that the typical retail gross profit at franchised dealerships jumped 35 percent to $2,245 per used vehicle sold in the first 10 months of the year vs. the year-earlier period.
The average used-vehicle retail price rose 10 percent to $16,371 in the same period, the data show. The figure encompasses all model years.
NADA's dealership profile is based on data from NADA dealership 20 groups and represents a broad range of dealerships by size.
In light of the current used-vehicle shortage, NADA chief economist Paul Taylor expects used-vehicle prices to remain firm if the economy continues to grow even at a relatively slow pace. Used-vehicle gross profits depend on variables such as new-car incentives, he says.
For typical NADA members, used-vehicle sales revenue, including finance and insurance revenue, rose 21 percent in the first 10 months to $8.6 million.
NADA Used Car Guides, a subsidiary of NADA that analyzes and publishes used-vehicle price data, shows that the average wholesale price of used late-model vehicles, defined as those 2 to 5 years old, increased 11 percent to $15,911 through October from a year earlier.
Data from ADESA Analytical Services show that industrywide whole-sale used-vehicle prices continued to rise in November, up 2 percent from November 2009 to an average of $9,788.
(Source: Automotive News, 12/20/10)
Dealership financial profile data from the National Automobile Dealers Association show that the typical retail gross profit at franchised dealerships jumped 35 percent to $2,245 per used vehicle sold in the first 10 months of the year vs. the year-earlier period.
The average used-vehicle retail price rose 10 percent to $16,371 in the same period, the data show. The figure encompasses all model years.
NADA's dealership profile is based on data from NADA dealership 20 groups and represents a broad range of dealerships by size.
In light of the current used-vehicle shortage, NADA chief economist Paul Taylor expects used-vehicle prices to remain firm if the economy continues to grow even at a relatively slow pace. Used-vehicle gross profits depend on variables such as new-car incentives, he says.
For typical NADA members, used-vehicle sales revenue, including finance and insurance revenue, rose 21 percent in the first 10 months to $8.6 million.
NADA Used Car Guides, a subsidiary of NADA that analyzes and publishes used-vehicle price data, shows that the average wholesale price of used late-model vehicles, defined as those 2 to 5 years old, increased 11 percent to $15,911 through October from a year earlier.
Data from ADESA Analytical Services show that industrywide whole-sale used-vehicle prices continued to rise in November, up 2 percent from November 2009 to an average of $9,788.
(Source: Automotive News, 12/20/10)
Tuesday, December 21, 2010
Shoppers Spending More in Christmas Countdown
The malls were packed last weekend, and in many places it's beginning to look a little like a pre-recession Christmas.
Americans spent more than last year on clothing, luxury goods and even furniture, delivering healthy gains across the board Oct. 31 through Saturday, according to MasterCard Advisors' SpendingPulse, which tracks spending across all transactions including cash.
The online category continued to be a bright spot. The big exception was consumer electronics, dragged down by deep discounting of TVs. That area was virtually unchanged from a year ago.
"This is the first normal Christmas in three years," said Michael McNamara, vice president of research and analysis for SpendingPulse. He said there is "genuine demand" for a variety of products, even higher-ticket items.
Sales of clothing rose 9.8%, with particular strength in men's clothing. Jewelry revenue rose 2.6% and furniture rose 3.4%, according to SpendingPulse.
Malls reported higher traffic over the weekend, including Saturday -- the Saturday before Christmas, known as "Super Saturday." It's one of the busiest shopping days of the year. Research firm ShopperTrak expects it will be the third-busiest this year. The lack of any major storms nationwide was a boon for shoppers and retailers.
The strong numbers are encouraging to retailers, who this fall remained worried that the inventory they ordered earlier in the year, when the economic recovery looked stronger, might end up being too much.
But after a slowdown this summer, spending picked up amid more positive economic signs. McNamara said there's no evidence of emergency discounting and stores have appropriate levels of inventory.
Robin Lewis, CEO of The Robin Report, a retail insiders' newsletter, said the spending stems from three factors: consumers have been paying down their debt slightly, the savings rate has decreased slightly and working hours have increased, partly due to seasonal demand.
"Those three things put a few more bucks in their pocket," which becomes signficant combined with pent-up demand.
Still, spending is still below pre-recession levels in many categories. McNamara estimated that furniture is about 20% below the level before the Great Recession, while luxury and jewelry sales are about 10% below the peak before the big downturn. Clothing sales are recovering faster.
At the Mall of America in Bloomington, Minn., the nation's largest mall, Public Relations Director Dan Jasper said a big snowstorm the weekend before that closed the mall had shoppers packing the mall this weekend to catch up. Preliminary reports showed 200,000 came to the mall Saturday, one of its busiest days ever and the busiest so far this year.
"People are a little panicked. I'm hearing them say 'We've gotta get this done,' and that doesn't usually show up until the 22nd or the 23rd."
It wasn't the only mall that saw packed stores and parking lots. Greg Maloney, CEO of the retail practice of Jones Lang LaSalle, which operates about 90 malls across the country, said traffic was up 10% to 12% across the country over the same weekend last year.
Karen MacDonald, a spokeswoman for Taubman Centers, which owns or manages 26 shopping centers, said many stores were reporting higher traffic.
Most shoppers still had about half their Christmas shopping left heading into the weekend, according to the National Retail Federation trade group. It raised its holiday sales forecast last week to a 3.3% rise, approaching 2007 levels, from an earlier forecast of a 2.3% increase.
In an interview with The Associated Press last week, Myron Ullman III, chairman and CEO of retailer J.C. Penney, said he feels good about the holiday season so far, and inventory is in line with demand. Like many other retailers, Penney had slim offerings last Christmas because it worried about having too many leftovers. Consequently, many merchants, including Penney, sold out of some items earlier in the 2009 Christmas season.
"People seem to be feeling better," he said.
Shoppers stuck to lessons learned during the recession: using cash, not credit, and sticking to a budget. Although they are spending slightly freer, with unemployment still stuck at 10% and a strained housing market consumers are still under pressure to spend wisely.
"The consumer has returned, not blindly, but thoughtfully," said Stifel Nicolas analyst Richard Jaffe.
"I have a budget and when it's gone, it's gone," said Nicala King of Vancouver, Wash., who was at Barnes & Noble picking up a few final items. She was set on preserving the savings she built up after paying off her credit cards last year.
Retailers are offering promotions that are more planned than last year, Wall Street Strategies analyst Brian Sozzi said.
Ann Taylor Loft, for example, has had a 40% off promotion in its stores since Thanksgiving, although on Saturday it increased that to 50% off for sweaters.
"It's not slash-and-burn on prices, but promotions are out there, and that is one of the main ingredients driving sales," Jaffe said. Online shopping was going strong as well. On Saturday, online retail spending rose 18%, and the average order size rose 4% to $169.04 compared with the same day a year ago, according to IBM Coremetrics. As of Friday, shoppers have spent $27.46 billion online since Nov. 1, up 12% from last year, according to research firm comScore Inc.
Paul and Connie Surface drove about 60 miles Saturday from their Waveland, Ind., farm to downtown Indianapolis to buy a bottle of Coach's Poppy perfume for their daughter-in-law and take in the mall scene. They've shopped every weekend since Thanksgiving and are pretty much finished.
"This is not a bad economy if you've got a job," said Paul, 62. "The stores are discounting nice, and the interest rates are low."
(Source: USA Today, 12/20/10)
Americans spent more than last year on clothing, luxury goods and even furniture, delivering healthy gains across the board Oct. 31 through Saturday, according to MasterCard Advisors' SpendingPulse, which tracks spending across all transactions including cash.
The online category continued to be a bright spot. The big exception was consumer electronics, dragged down by deep discounting of TVs. That area was virtually unchanged from a year ago.
"This is the first normal Christmas in three years," said Michael McNamara, vice president of research and analysis for SpendingPulse. He said there is "genuine demand" for a variety of products, even higher-ticket items.
Sales of clothing rose 9.8%, with particular strength in men's clothing. Jewelry revenue rose 2.6% and furniture rose 3.4%, according to SpendingPulse.
Malls reported higher traffic over the weekend, including Saturday -- the Saturday before Christmas, known as "Super Saturday." It's one of the busiest shopping days of the year. Research firm ShopperTrak expects it will be the third-busiest this year. The lack of any major storms nationwide was a boon for shoppers and retailers.
The strong numbers are encouraging to retailers, who this fall remained worried that the inventory they ordered earlier in the year, when the economic recovery looked stronger, might end up being too much.
But after a slowdown this summer, spending picked up amid more positive economic signs. McNamara said there's no evidence of emergency discounting and stores have appropriate levels of inventory.
Robin Lewis, CEO of The Robin Report, a retail insiders' newsletter, said the spending stems from three factors: consumers have been paying down their debt slightly, the savings rate has decreased slightly and working hours have increased, partly due to seasonal demand.
"Those three things put a few more bucks in their pocket," which becomes signficant combined with pent-up demand.
Still, spending is still below pre-recession levels in many categories. McNamara estimated that furniture is about 20% below the level before the Great Recession, while luxury and jewelry sales are about 10% below the peak before the big downturn. Clothing sales are recovering faster.
At the Mall of America in Bloomington, Minn., the nation's largest mall, Public Relations Director Dan Jasper said a big snowstorm the weekend before that closed the mall had shoppers packing the mall this weekend to catch up. Preliminary reports showed 200,000 came to the mall Saturday, one of its busiest days ever and the busiest so far this year.
"People are a little panicked. I'm hearing them say 'We've gotta get this done,' and that doesn't usually show up until the 22nd or the 23rd."
It wasn't the only mall that saw packed stores and parking lots. Greg Maloney, CEO of the retail practice of Jones Lang LaSalle, which operates about 90 malls across the country, said traffic was up 10% to 12% across the country over the same weekend last year.
Karen MacDonald, a spokeswoman for Taubman Centers, which owns or manages 26 shopping centers, said many stores were reporting higher traffic.
Most shoppers still had about half their Christmas shopping left heading into the weekend, according to the National Retail Federation trade group. It raised its holiday sales forecast last week to a 3.3% rise, approaching 2007 levels, from an earlier forecast of a 2.3% increase.
In an interview with The Associated Press last week, Myron Ullman III, chairman and CEO of retailer J.C. Penney, said he feels good about the holiday season so far, and inventory is in line with demand. Like many other retailers, Penney had slim offerings last Christmas because it worried about having too many leftovers. Consequently, many merchants, including Penney, sold out of some items earlier in the 2009 Christmas season.
"People seem to be feeling better," he said.
Shoppers stuck to lessons learned during the recession: using cash, not credit, and sticking to a budget. Although they are spending slightly freer, with unemployment still stuck at 10% and a strained housing market consumers are still under pressure to spend wisely.
"The consumer has returned, not blindly, but thoughtfully," said Stifel Nicolas analyst Richard Jaffe.
"I have a budget and when it's gone, it's gone," said Nicala King of Vancouver, Wash., who was at Barnes & Noble picking up a few final items. She was set on preserving the savings she built up after paying off her credit cards last year.
Retailers are offering promotions that are more planned than last year, Wall Street Strategies analyst Brian Sozzi said.
Ann Taylor Loft, for example, has had a 40% off promotion in its stores since Thanksgiving, although on Saturday it increased that to 50% off for sweaters.
"It's not slash-and-burn on prices, but promotions are out there, and that is one of the main ingredients driving sales," Jaffe said. Online shopping was going strong as well. On Saturday, online retail spending rose 18%, and the average order size rose 4% to $169.04 compared with the same day a year ago, according to IBM Coremetrics. As of Friday, shoppers have spent $27.46 billion online since Nov. 1, up 12% from last year, according to research firm comScore Inc.
Paul and Connie Surface drove about 60 miles Saturday from their Waveland, Ind., farm to downtown Indianapolis to buy a bottle of Coach's Poppy perfume for their daughter-in-law and take in the mall scene. They've shopped every weekend since Thanksgiving and are pretty much finished.
"This is not a bad economy if you've got a job," said Paul, 62. "The stores are discounting nice, and the interest rates are low."
(Source: USA Today, 12/20/10)
Thursday, December 16, 2010
Majority of Holiday Shoppers Still Have Gifts to Buy
Hard to pass up holiday sales helped motivate holiday shoppers a little earlier this year, though most agree they still have quite a dent to make in their list. According to the National Retail Federation's 2010 Holiday Consumer Intentions and Actions Survey, conducted by BIGresearch, the average person had completed 49.5 percent of their holiday shopping by the second week of December, up from 46.7 percent at same time last holiday season.
"It's well-known that at least half of the shopping that occurs during the holiday season happens during the last few weeks, making the final stretch of utmost importance to retailers," said NRF President and CEO Matthew Shay. "With the big day falling on a Saturday this year and a lot of shopping left to be done, retailers will continue to push aggressive promotions in the weekdays leading up to it, hoping to remind shoppers they only have one more weekend to shop."
According to the survey, 37 million people (16.9%) had not even started their shopping as of late last week, lower than the estimated 42 million people who said so during same point last year. Additionally, 22 million go-getters (10.1%) say they have already finished, up from 8.6 percent who had finished by this time last year. Though they started the season with a bang, men admit to having completed slightly less than women at this point (48.5% vs. 50.4% respectively).
It seems many shoppers are well aware they only have one big weekend left to shop. According to the survey, most holiday shoppers (32.4%) plan to complete their list prior to Saturday, December 18. Though, Friday, December 24 (11.9%) is expected to be the second busiest day between the 18th and Christmas Day.
Of the people who say they have used their smartphone to shop this holiday season, more than one-quarter (26.0%) have used the phone to make an actual purchase. Nearly one-third (32.5%) are specifically using their phone to receive text messages with special offers and 34.6 percent are reading what their peers are saying in customer reviews. It seems locating store hours or locations (50.7%) and perusing their options by browsing for gifts (60.2%) are the most popular ways shoppers have used their phones thus far.
"Just as we saw with the emergence of Internet shopping, mobile shopping, too, is already starting to catch on in terms of being a generator of sales for retailers," said Phil Rist, Executive Vice President, Strategic Initiatives, BIGresearch. "Tracking down mobile coupons and reading customer reviews remain extremely popular options for shoppers as they look for the best price, product and even store location."
Department stores can expect the larger share of traffic over the next few weeks (38.4%), though online retailers (37.6%) and discount stores (36.5%) will also be popular shopping destinations for last-minute shoppers. Electronics stores (19.4%), clothing or accessories stores (18.8%) and outlet stores (10.8%) will also see their share of procrastinators in the coming days.
When it comes to gifts that have been bought so far, most say they have purchased clothes or clothing accessories (43.9%). Though books, CDs, DVDs, videos or video games (38.1%) have also been popular purchases. Consumers also bought toys (35.3%), gift cards (29.9%), consumer electronics (21.3%), food or candy (20.0%), and home décor (15.2%).
When asked which payment method they have used the most, four out of ten (40.9%) have used their debit or check cards most often. Nearly one-third (31.1%) have used their credit cards and nearly one-quarter (24.4%) have used cash. A mere 3.6 percent have relied on checks.
Christmas Day itself will largely serve as a day for consumers to cook (45.6%), visit friends and family (66.0%) and watch TV (52.8%), but nearly one-quarter (24.1%) will browse the Internet as well. NRF has revised its holiday sales forecast to 3.3 percent, or $451.5 billion, up from the original 2.3 percent expected increase.
(Source: National Retail Federation, 12/15/10)
"It's well-known that at least half of the shopping that occurs during the holiday season happens during the last few weeks, making the final stretch of utmost importance to retailers," said NRF President and CEO Matthew Shay. "With the big day falling on a Saturday this year and a lot of shopping left to be done, retailers will continue to push aggressive promotions in the weekdays leading up to it, hoping to remind shoppers they only have one more weekend to shop."
According to the survey, 37 million people (16.9%) had not even started their shopping as of late last week, lower than the estimated 42 million people who said so during same point last year. Additionally, 22 million go-getters (10.1%) say they have already finished, up from 8.6 percent who had finished by this time last year. Though they started the season with a bang, men admit to having completed slightly less than women at this point (48.5% vs. 50.4% respectively).
It seems many shoppers are well aware they only have one big weekend left to shop. According to the survey, most holiday shoppers (32.4%) plan to complete their list prior to Saturday, December 18. Though, Friday, December 24 (11.9%) is expected to be the second busiest day between the 18th and Christmas Day.
Of the people who say they have used their smartphone to shop this holiday season, more than one-quarter (26.0%) have used the phone to make an actual purchase. Nearly one-third (32.5%) are specifically using their phone to receive text messages with special offers and 34.6 percent are reading what their peers are saying in customer reviews. It seems locating store hours or locations (50.7%) and perusing their options by browsing for gifts (60.2%) are the most popular ways shoppers have used their phones thus far.
"Just as we saw with the emergence of Internet shopping, mobile shopping, too, is already starting to catch on in terms of being a generator of sales for retailers," said Phil Rist, Executive Vice President, Strategic Initiatives, BIGresearch. "Tracking down mobile coupons and reading customer reviews remain extremely popular options for shoppers as they look for the best price, product and even store location."
Department stores can expect the larger share of traffic over the next few weeks (38.4%), though online retailers (37.6%) and discount stores (36.5%) will also be popular shopping destinations for last-minute shoppers. Electronics stores (19.4%), clothing or accessories stores (18.8%) and outlet stores (10.8%) will also see their share of procrastinators in the coming days.
When it comes to gifts that have been bought so far, most say they have purchased clothes or clothing accessories (43.9%). Though books, CDs, DVDs, videos or video games (38.1%) have also been popular purchases. Consumers also bought toys (35.3%), gift cards (29.9%), consumer electronics (21.3%), food or candy (20.0%), and home décor (15.2%).
When asked which payment method they have used the most, four out of ten (40.9%) have used their debit or check cards most often. Nearly one-third (31.1%) have used their credit cards and nearly one-quarter (24.4%) have used cash. A mere 3.6 percent have relied on checks.
Christmas Day itself will largely serve as a day for consumers to cook (45.6%), visit friends and family (66.0%) and watch TV (52.8%), but nearly one-quarter (24.1%) will browse the Internet as well. NRF has revised its holiday sales forecast to 3.3 percent, or $451.5 billion, up from the original 2.3 percent expected increase.
(Source: National Retail Federation, 12/15/10)
Wednesday, December 15, 2010
American Family Insurance Creates Hispanic Marketing Campaign
American Family Insurance, in partnership with The San Jose Group, recently debuted its first-ever music-licensing advertising campaign for the Hispanic market.
The lyrics of "No Hay Nadie Como Tu" (English: There's no one like you) complement American Family Insurance's advertising program aimed to identify with the family that is like no other, whether they are of a different culture or have different needs. The reggaeton song by Calle 13 and Café Tacuba won the best alternative song at the 2009 Latin Grammy's and is a collective mix of Latin music styles.
"This popular song was an ideal match for American Family's 'Unique Family' general market campaign and enhances the communication that our product offerings are tailored for each family's specific needs," said Telisa Yancy, the company's advertising director. "The Hispanic audience quickly identifies with Nadie Como Tu's lyrics. The song allowed us to properly transculturate our campaign and reach an important customer base."
Along with a television and radio spot, the campaign also includes print and online banner ads to complement the unique family branding message. The current campaign is scheduled to run through December.
(Source: Insurance Journal, 11/16/10)
The lyrics of "No Hay Nadie Como Tu" (English: There's no one like you) complement American Family Insurance's advertising program aimed to identify with the family that is like no other, whether they are of a different culture or have different needs. The reggaeton song by Calle 13 and Café Tacuba won the best alternative song at the 2009 Latin Grammy's and is a collective mix of Latin music styles.
"This popular song was an ideal match for American Family's 'Unique Family' general market campaign and enhances the communication that our product offerings are tailored for each family's specific needs," said Telisa Yancy, the company's advertising director. "The Hispanic audience quickly identifies with Nadie Como Tu's lyrics. The song allowed us to properly transculturate our campaign and reach an important customer base."
Along with a television and radio spot, the campaign also includes print and online banner ads to complement the unique family branding message. The current campaign is scheduled to run through December.
(Source: Insurance Journal, 11/16/10)
Tuesday, December 14, 2010
Shoppers Look to Rewards for Holiday Spending
Consumers are looking to stretch their holiday dollars with benefits from the various rewards programs they belong to, according to research from LoyaltyOne and Epsilon Targeting.
According to the companies' research, which involved a nine-question survey sent to more than 700 U.S. households, 11% of consumers said they planned to use reward points or miles to augment their holiday spending this year. Of that group, 70% said they would use those points on purchases for other people, rather than for themselves.
According to the survey, more than 70% of consumers said they were occasional or frequent users of rewards programs. Of those users, 8.1% of them said they planned on spending more on holiday purchases this year, compared with 6.6% of the total respondents.
"Retailers who use data from their reward programs to respond to customers' most pressing concerns at critical times like the holiday gift giving season can enhance the shopper experience and leverage relationships in a way that deepens loyalty to their store or their brand," said Epsilon Loyalty Solutions Vice President John Bartold, in a statement.
Meanwhile, a separate survey found that Canadians are much more likely to use rewards programs than Americans. According to the Air Miles and American Express Holiday Rewards survey, 91% of Canadians use rewards programs, compared with 72% of Americans. Eighteen percent of Canadians said they plan to use those programs for holiday purchases, compared with 8% of Americans.
Americans, on the other hand, are more likely to shop online than Canadians, at a rate of 73% vs. 44% for general sites. However, when the online shopping involves a loyalty or rewards site, Canadians are three times more likely to shop online.
(Source: Marketing Daily, 12/04/10)
According to the companies' research, which involved a nine-question survey sent to more than 700 U.S. households, 11% of consumers said they planned to use reward points or miles to augment their holiday spending this year. Of that group, 70% said they would use those points on purchases for other people, rather than for themselves.
According to the survey, more than 70% of consumers said they were occasional or frequent users of rewards programs. Of those users, 8.1% of them said they planned on spending more on holiday purchases this year, compared with 6.6% of the total respondents.
"Retailers who use data from their reward programs to respond to customers' most pressing concerns at critical times like the holiday gift giving season can enhance the shopper experience and leverage relationships in a way that deepens loyalty to their store or their brand," said Epsilon Loyalty Solutions Vice President John Bartold, in a statement.
Meanwhile, a separate survey found that Canadians are much more likely to use rewards programs than Americans. According to the Air Miles and American Express Holiday Rewards survey, 91% of Canadians use rewards programs, compared with 72% of Americans. Eighteen percent of Canadians said they plan to use those programs for holiday purchases, compared with 8% of Americans.
Americans, on the other hand, are more likely to shop online than Canadians, at a rate of 73% vs. 44% for general sites. However, when the online shopping involves a loyalty or rewards site, Canadians are three times more likely to shop online.
(Source: Marketing Daily, 12/04/10)
Radio Gains More Than 3 Million Listeners
Arbitron Inc.'s RADAR 107 National Radio Listening Report, which was released yesterday, shows an increase of 3.3 million radio listeners age twelve and older per week, versus the December 2009 report. The number of persons twelve and older listening to radio each week now reaches an estimated 239.8 million -- 93.2 percent of all Americans twelve and older.
In addition to persons twelve and older, radio listening increased year-over-year across major demographic groups, with adults aged 18 to 34 showing the biggest gains. The number of adults aged 18 to 34 who are weekly radio listeners increased nearly 960,000 in the past year, and adults aged 25 to 54 gained more than 750,000 in the same period. Meanwhile, teens aged 12 to 17 continue to embrace radio broadcasts with an average weekly increase of 365,000 versus last year's report.
Despite the proliferation of competing media platforms, radio continues to reach just about everyone on a regular basis. RADAR 107 indicates that, over the course of a week, radio is listened to by over 92 percent of all teens aged 12 to 17, 94 percent of adults aged 18 to 34, and 95 percent of adults in the 18 to 49 and 25 to 54 age brackets.
Radio's diverse appeal
The data from RADAR 107 showcases radio's penetration among various ethnic groups, particularly Black (non-Hispanic) and Hispanic, a direct result of airing an array of formats.
* Overall, radio continues to reach more than 93 percent of Black (non-Hispanic) persons aged 12 and older and more than 95 percent of Hispanics aged 12 and older on a weekly basis. Hispanic listeners 12 years and older grew more than 1.4 million year-over-year.
* More Hispanic teens aged 12 to 17 are tuning in to radio, versus the same period a year ago. This demographic group increased 177,000 average weekly listeners, year-over-year.
* Black (non-Hispanic) and Hispanic adults aged 18 to 49 demonstrated the biggest gains in overall weekly radio listenership versus last year, showing an increase of 165,000 and 834,000, respectively.
On an average week, radio reaches 95 percent of adults 18 and older with a household income of $75K or more. More than 96 percent of adults aged 25 to 54 that are college graduates and have a household income of over $50K tune in to radio weekly. Radio also delivers 96 percent of adults aged 18 to 49 with a college degree.
Network radio commercial listening
Arbitron also reported in its December 2010 RADAR 107 radio network audience ratings that over 189 million Persons 12 and older heard one or more network radio commercials in an average week of the survey period. That's an increase of over 800,000 versus the December 2009 report.
The RADAR 107 survey period demonstrates network radio's continued broad reach across all key demographics on a year-over-year basis. Among the prime audience demographics sought by advertisers, the commercials aired on the 54 radio networks reached:
* 73.7 percent of persons aged 12+ (189,685,000 persons)
* 74.1 percent of persons aged 18+ (172,292,000 persons)
* 73.3 percent of persons aged 35+ (118,732,000 persons)
* 76.6 percent of persons aged 18-49 (103,455,000 persons)
* 76.9 percent of persons aged 25-54 (97,537,000 persons)
(Source: Arbitron, 12/13/10)
In addition to persons twelve and older, radio listening increased year-over-year across major demographic groups, with adults aged 18 to 34 showing the biggest gains. The number of adults aged 18 to 34 who are weekly radio listeners increased nearly 960,000 in the past year, and adults aged 25 to 54 gained more than 750,000 in the same period. Meanwhile, teens aged 12 to 17 continue to embrace radio broadcasts with an average weekly increase of 365,000 versus last year's report.
Despite the proliferation of competing media platforms, radio continues to reach just about everyone on a regular basis. RADAR 107 indicates that, over the course of a week, radio is listened to by over 92 percent of all teens aged 12 to 17, 94 percent of adults aged 18 to 34, and 95 percent of adults in the 18 to 49 and 25 to 54 age brackets.
Radio's diverse appeal
The data from RADAR 107 showcases radio's penetration among various ethnic groups, particularly Black (non-Hispanic) and Hispanic, a direct result of airing an array of formats.
* Overall, radio continues to reach more than 93 percent of Black (non-Hispanic) persons aged 12 and older and more than 95 percent of Hispanics aged 12 and older on a weekly basis. Hispanic listeners 12 years and older grew more than 1.4 million year-over-year.
* More Hispanic teens aged 12 to 17 are tuning in to radio, versus the same period a year ago. This demographic group increased 177,000 average weekly listeners, year-over-year.
* Black (non-Hispanic) and Hispanic adults aged 18 to 49 demonstrated the biggest gains in overall weekly radio listenership versus last year, showing an increase of 165,000 and 834,000, respectively.
On an average week, radio reaches 95 percent of adults 18 and older with a household income of $75K or more. More than 96 percent of adults aged 25 to 54 that are college graduates and have a household income of over $50K tune in to radio weekly. Radio also delivers 96 percent of adults aged 18 to 49 with a college degree.
Network radio commercial listening
Arbitron also reported in its December 2010 RADAR 107 radio network audience ratings that over 189 million Persons 12 and older heard one or more network radio commercials in an average week of the survey period. That's an increase of over 800,000 versus the December 2009 report.
The RADAR 107 survey period demonstrates network radio's continued broad reach across all key demographics on a year-over-year basis. Among the prime audience demographics sought by advertisers, the commercials aired on the 54 radio networks reached:
* 73.7 percent of persons aged 12+ (189,685,000 persons)
* 74.1 percent of persons aged 18+ (172,292,000 persons)
* 73.3 percent of persons aged 35+ (118,732,000 persons)
* 76.6 percent of persons aged 18-49 (103,455,000 persons)
* 76.9 percent of persons aged 25-54 (97,537,000 persons)
(Source: Arbitron, 12/13/10)
Monday, December 13, 2010
Tips for keeping holiday spending in check
By Jayne O'Donnell, USA TODAY
Setting a budget, making a list and checking both regularly are keys to savvy holiday spending, personal finance experts say.
"Everyone, regardless of income, always tends to spend a little bit more than they anticipated," says Barbara Stark, director of education and community development at American Debt Counseling in Sunrise, Fla. "People think, 'I'll deal with it later,' but then there's shock and panic when the January bills arrive and the cycle begins again."
Five members of the USA TODAY Shopper Panel are keeping us in the loop as they plan their purchases and buy gifts this holiday season, when many consumers say they're loosening the grip on their purse strings a bit. We're also checking with experts to see how they — and we — could shop smarter. There's still plenty of time to chart a new course (or at least stop shopping) this holiday season.
Four lessons based on the experiences of our shoppers
1Save money all year. LeLynda Briggs, 24, of New Orleans had $25 taken out of each paycheck all year for holiday gifts so she wouldn't wind up in debt for three months after the holidays like she did last season.
CAUTIOUS OPTIMISM: Holiday shopping series tracks 5 shoppers
VIDEO: Ways to save with online shopping
VIDEO: Haggling tips for getting holiday bargains
VIDEO: Tips for spotting counterfeit products
Stark put $10 in an envelope every week and used that as her holiday fund. "If it's out of my wallet, I forget I ever had it," she says.
Dawn Masters, 43, of Denver contributes to a "fun money" fund that will help pay for a Disney trip in the spring but also gets tapped for holiday purchases. She has $125 taken out of her account twice a month.
2Set a budget. Eason Adams, like Briggs, got hit with big bills from his holiday shopping early this year. So he set a budget of about $100 per person this year, even though he has a young son who still believes in Santa Claus.
"I don't really have much of a choice but to go by my budget, as I will not be putting any purchases on credit cards," says Adams, 31, a long-distance truck driver from Inez, Ky.
Marietta Landon, 31, of Douglasville, Ga., doesn't set a strict budget but sticks to about $100 a person for her small family. She says she has "never stressed out about it" or carried a credit card balance over to the next month.
Setting a budget "sounds so 'bah, humbug,' " says Manisha Thakor, co-author of a personal finance book for couples, Get Financially Naked. But it's something everyone should do, she says.
To stay in even closer touch with your budget — or to see if it needs adjusting — she recommends signing up for notifications if your bank balance hits a certain level and checking that balance at least weekly.
People "do not want to look at their financials," says Thakor. "But you need to understand exactly what you have left to work with."
3Keep track of purchases. While it's important to make a list of what you're buying, it's also critical to have a list of everything you've already bought. Tricia Richards, 46, of South Abington Township, Pa., says she's forgotten purchases in the past and fears she's guilty of it again this year.
"Of course, I've lost track of some things I've bought already," says Richards, a self-employed public relations person. "My biggest overbuying surprise has been the stocking stuffers and Advent calendar items. When something costs just a few bucks, it's so easy to rationalize another purchase."
To avoid that problem, Stark — who has two twentysomething sons — puts her holiday gift list on an Excel spreadsheet and carries it around in her wallet. She updates it as she buys things and makes a note of what she's spent.
"I could be done with my shopping, but I feel like I need to buy more," says Stark. "It takes a lot of self-control to stick to your list and stick to your budget."
Thakor says losing track of purchases is one of the most common problems she hears from people she counsels on personal finance through her work with the Women's Financial Literacy Initiative.
4Avoid credit cards if money is tight. Adams cut up his credit cards so he didn't get himself in debt again. Thakor says that's a smart move. She recommends anyone who knows he can't pay off his bill by the due date should use debit cards. She prefers debit cards over cash because it's easier to monitor what you spend.
Richards also steers toward debit cards, especially at the holidays: "I rarely slide a credit card out of my wallet."
According to the American Bankers Association, the average consumer takes six months to a year to pay off holiday debt. And it can take far longer: Stark notes someone who charges $1,220 on a credit card with an 18% interest rate and pays only the minimum payment each month would spend 11 years paying it off. The gifts would wind up costing more than $2,700.
Stark, who is done with her shopping, stayed on budget and didn't put anything on a credit card. "I'm so excited I feel like I have to buy myself a present," she says.
But she won't.
How some businesses are doing
L.L. Bean: Good times could be here again
Christmas may be more than two weeks away, but L.L. Bean CEO Chris McCormick can already say with confidence that the season will be the outdoors clothing and gear retailer's best since 2007.
People are spending more money and buying more items on each store or website visit. Order totals are running 6% higher than last year. "The trend is so clear: People are feeling more confident," McCormick says.
Last Monday turned out to be an even bigger day for sales than Cyber Monday, which set records for the Bean website. "Strong double-digit growth" over the same period last year is putting L.L. Bean well head of its forecast for a 2.3% increase over the 2009 holiday season.
Sporting equipment became an even bigger seller during the recession, McCormick says, and now higher-end products such as kayaks and bicycles are seeing sales boosts. Skis and snowshoes are "really taking off," he says.
Unlike many retailers, L.L. Bean adjusted its inventory for the disastrous 2008 holiday season so it didn't have to resort to deep discounting to move unsold items. Bean remains fairly non-promotional but did launch free shipping in August. The deal runs through the holidays with no minimum purchase requirement. That's seldom done in retailing.
McCormick says customers told the company they were "annoyed with shipping charges," so Bean decided it had little choice. The deal has boosted sales considerably but at so much cost, it's "at best a break-even," he says.
Discounters that have seen big sales increases during recessions have historically done well after recessions because they have an expanded customer base. The reverse can be true, too, McCormick says, and it helps higher-end companies such as L.L. Bean.
"People who have tried trading down in the past have realized you get what you pay for," McCormick says.
UncommonGoods.com: Pricier gifts are selling well
UncommonGoods.com didn't offer any Cyber Monday specials, but did such a brisk business on the Monday after Thanksgiving that it has raised its forecast for a holiday sales increase from "almost 15%" to "up to 20%."
The online and catalog retailer of environmentally friendly, quirky and otherwise creative gifts may have had a bumpy few first years in business after launching in 1999, but things are going smoothly now. The workforce more than doubled to keep up with calls, and packages are actually getting to consumers ahead of schedule.
Customer Brian Stewart e-mailed Uncommon Goods to say that he had "ordered many things from many — ahem — big retail websites on Cyber Monday, and my order from you was on my doorstep" while the other sites were "finally finished processing my orders and sending e-mails."
Along with many other bricks-and-mortar and online retailers, Uncommon Goods is finding pricier items are selling well — such as jewelry and $185 framed dog breed "blueprints."
And while electronics remain a hot seller at other retailers, an anti-electronics product is proving one of Uncommon Goods' top products. In the first two weeks they offered it last month, the company sold hundreds of the $15 "Phone Kerchief," a cloth embedded with silver fibers that will block calls to a mobile phone.
It's a way to show people "that they are more important to you than your device," says Uncommon Goods CEO David Bolotsky.
In October, the company overhauled its website only to see sales plummet. Now that the kinks — compatibility problems with browsers on some customers' computers — have been worked out, it's now running twice as fast as it did a year ago.
There were a few times when the site slowed down on Cyber Monday, but nothing like the problems some far bigger retailers have had in recent years during the post-Thanksgiving rush.
Setting a budget, making a list and checking both regularly are keys to savvy holiday spending, personal finance experts say.
"Everyone, regardless of income, always tends to spend a little bit more than they anticipated," says Barbara Stark, director of education and community development at American Debt Counseling in Sunrise, Fla. "People think, 'I'll deal with it later,' but then there's shock and panic when the January bills arrive and the cycle begins again."
Five members of the USA TODAY Shopper Panel are keeping us in the loop as they plan their purchases and buy gifts this holiday season, when many consumers say they're loosening the grip on their purse strings a bit. We're also checking with experts to see how they — and we — could shop smarter. There's still plenty of time to chart a new course (or at least stop shopping) this holiday season.
Four lessons based on the experiences of our shoppers
1Save money all year. LeLynda Briggs, 24, of New Orleans had $25 taken out of each paycheck all year for holiday gifts so she wouldn't wind up in debt for three months after the holidays like she did last season.
CAUTIOUS OPTIMISM: Holiday shopping series tracks 5 shoppers
VIDEO: Ways to save with online shopping
VIDEO: Haggling tips for getting holiday bargains
VIDEO: Tips for spotting counterfeit products
Stark put $10 in an envelope every week and used that as her holiday fund. "If it's out of my wallet, I forget I ever had it," she says.
Dawn Masters, 43, of Denver contributes to a "fun money" fund that will help pay for a Disney trip in the spring but also gets tapped for holiday purchases. She has $125 taken out of her account twice a month.
2Set a budget. Eason Adams, like Briggs, got hit with big bills from his holiday shopping early this year. So he set a budget of about $100 per person this year, even though he has a young son who still believes in Santa Claus.
"I don't really have much of a choice but to go by my budget, as I will not be putting any purchases on credit cards," says Adams, 31, a long-distance truck driver from Inez, Ky.
Marietta Landon, 31, of Douglasville, Ga., doesn't set a strict budget but sticks to about $100 a person for her small family. She says she has "never stressed out about it" or carried a credit card balance over to the next month.
Setting a budget "sounds so 'bah, humbug,' " says Manisha Thakor, co-author of a personal finance book for couples, Get Financially Naked. But it's something everyone should do, she says.
To stay in even closer touch with your budget — or to see if it needs adjusting — she recommends signing up for notifications if your bank balance hits a certain level and checking that balance at least weekly.
People "do not want to look at their financials," says Thakor. "But you need to understand exactly what you have left to work with."
3Keep track of purchases. While it's important to make a list of what you're buying, it's also critical to have a list of everything you've already bought. Tricia Richards, 46, of South Abington Township, Pa., says she's forgotten purchases in the past and fears she's guilty of it again this year.
"Of course, I've lost track of some things I've bought already," says Richards, a self-employed public relations person. "My biggest overbuying surprise has been the stocking stuffers and Advent calendar items. When something costs just a few bucks, it's so easy to rationalize another purchase."
To avoid that problem, Stark — who has two twentysomething sons — puts her holiday gift list on an Excel spreadsheet and carries it around in her wallet. She updates it as she buys things and makes a note of what she's spent.
"I could be done with my shopping, but I feel like I need to buy more," says Stark. "It takes a lot of self-control to stick to your list and stick to your budget."
Thakor says losing track of purchases is one of the most common problems she hears from people she counsels on personal finance through her work with the Women's Financial Literacy Initiative.
4Avoid credit cards if money is tight. Adams cut up his credit cards so he didn't get himself in debt again. Thakor says that's a smart move. She recommends anyone who knows he can't pay off his bill by the due date should use debit cards. She prefers debit cards over cash because it's easier to monitor what you spend.
Richards also steers toward debit cards, especially at the holidays: "I rarely slide a credit card out of my wallet."
According to the American Bankers Association, the average consumer takes six months to a year to pay off holiday debt. And it can take far longer: Stark notes someone who charges $1,220 on a credit card with an 18% interest rate and pays only the minimum payment each month would spend 11 years paying it off. The gifts would wind up costing more than $2,700.
Stark, who is done with her shopping, stayed on budget and didn't put anything on a credit card. "I'm so excited I feel like I have to buy myself a present," she says.
But she won't.
How some businesses are doing
L.L. Bean: Good times could be here again
Christmas may be more than two weeks away, but L.L. Bean CEO Chris McCormick can already say with confidence that the season will be the outdoors clothing and gear retailer's best since 2007.
People are spending more money and buying more items on each store or website visit. Order totals are running 6% higher than last year. "The trend is so clear: People are feeling more confident," McCormick says.
Last Monday turned out to be an even bigger day for sales than Cyber Monday, which set records for the Bean website. "Strong double-digit growth" over the same period last year is putting L.L. Bean well head of its forecast for a 2.3% increase over the 2009 holiday season.
Sporting equipment became an even bigger seller during the recession, McCormick says, and now higher-end products such as kayaks and bicycles are seeing sales boosts. Skis and snowshoes are "really taking off," he says.
Unlike many retailers, L.L. Bean adjusted its inventory for the disastrous 2008 holiday season so it didn't have to resort to deep discounting to move unsold items. Bean remains fairly non-promotional but did launch free shipping in August. The deal runs through the holidays with no minimum purchase requirement. That's seldom done in retailing.
McCormick says customers told the company they were "annoyed with shipping charges," so Bean decided it had little choice. The deal has boosted sales considerably but at so much cost, it's "at best a break-even," he says.
Discounters that have seen big sales increases during recessions have historically done well after recessions because they have an expanded customer base. The reverse can be true, too, McCormick says, and it helps higher-end companies such as L.L. Bean.
"People who have tried trading down in the past have realized you get what you pay for," McCormick says.
UncommonGoods.com: Pricier gifts are selling well
UncommonGoods.com didn't offer any Cyber Monday specials, but did such a brisk business on the Monday after Thanksgiving that it has raised its forecast for a holiday sales increase from "almost 15%" to "up to 20%."
The online and catalog retailer of environmentally friendly, quirky and otherwise creative gifts may have had a bumpy few first years in business after launching in 1999, but things are going smoothly now. The workforce more than doubled to keep up with calls, and packages are actually getting to consumers ahead of schedule.
Customer Brian Stewart e-mailed Uncommon Goods to say that he had "ordered many things from many — ahem — big retail websites on Cyber Monday, and my order from you was on my doorstep" while the other sites were "finally finished processing my orders and sending e-mails."
Along with many other bricks-and-mortar and online retailers, Uncommon Goods is finding pricier items are selling well — such as jewelry and $185 framed dog breed "blueprints."
And while electronics remain a hot seller at other retailers, an anti-electronics product is proving one of Uncommon Goods' top products. In the first two weeks they offered it last month, the company sold hundreds of the $15 "Phone Kerchief," a cloth embedded with silver fibers that will block calls to a mobile phone.
It's a way to show people "that they are more important to you than your device," says Uncommon Goods CEO David Bolotsky.
In October, the company overhauled its website only to see sales plummet. Now that the kinks — compatibility problems with browsers on some customers' computers — have been worked out, it's now running twice as fast as it did a year ago.
There were a few times when the site slowed down on Cyber Monday, but nothing like the problems some far bigger retailers have had in recent years during the post-Thanksgiving rush.
Friday, December 10, 2010
2011 Trends: Content Marketing Is Critical
Next year, marketers will need to rethink their approach to advertising and marketing and intensify their focus on creating magnetic content that will naturally attract consumers, rather than relying solely on the interruption model of advertising, which consumers are responding to less and less. Think pull vs. push.
Magnetic content can include anything created on behalf of a brand -- be it an ad, YouTube video, online game, Facebook page, Twitter promo or mobile app -- that consumers genuinely want to engage with and pass along to others. This content entertains, amuses, informs, serves a function or satisfies a consumer need. It's welcome instead of annoying or interruptive.
Marketers, especially those working in social media, have seen the proven value of branded content, sometimes also referred to as "earned media." Nearly three-quarters of US companies with a social media strategy used such content in their campaigns, making it the most common type of content used, according to a June 2010 study by King Fish Media, HubSpot and Junta42.
Creating effective, breakthrough advertising has always been a challenge for marketers, as well as for the agencies charged with the task. But the classic interruption-disruption model of advertising is moribund. Marketers should ask themselves five questions about the magnetic content they are seeking to create to determine whether it will be truly attractive to their audience:
(Source: Geoff Ramsey, CEO, eMarketer, 12/01/10)
Magnetic content can include anything created on behalf of a brand -- be it an ad, YouTube video, online game, Facebook page, Twitter promo or mobile app -- that consumers genuinely want to engage with and pass along to others. This content entertains, amuses, informs, serves a function or satisfies a consumer need. It's welcome instead of annoying or interruptive.
Marketers, especially those working in social media, have seen the proven value of branded content, sometimes also referred to as "earned media." Nearly three-quarters of US companies with a social media strategy used such content in their campaigns, making it the most common type of content used, according to a June 2010 study by King Fish Media, HubSpot and Junta42.
Creating effective, breakthrough advertising has always been a challenge for marketers, as well as for the agencies charged with the task. But the classic interruption-disruption model of advertising is moribund. Marketers should ask themselves five questions about the magnetic content they are seeking to create to determine whether it will be truly attractive to their audience:
- Is the content unique?
- Is the content useful?
- Is the content well executed?
- Is the content fun?
- Does the content make good use of the channel in which it appears (e.g., social, mobile, video)?
(Source: Geoff Ramsey, CEO, eMarketer, 12/01/10)
Thursday, December 9, 2010
If Your Target Audience is Teen Christmas Shoppers...
A recent AMP Insights Holiday Shopping Behavior survey looked at teens between the ages of 13 and 19, and came up with some interesting results regarding what they are buying, where they are buying, and what they would like to receive for Christmas.
Teens have deep pockets:
-- 49% are planning on spending over $150 on gifts for others this holiday season.
-- 20% are planning on spending over $300 on gifts for others this holiday season.
They're planning to give gifts to those closest to them:
-- 86% plan to give gifts to parents.
-- 75% plan to give gifts to siblings.
-- 74% plan to give gifts to friends.
-- 60% pan to give gifts to boyfriends and girlfriends.
Teens treat themselves when shopping for holiday gifts for others. Sixty-five percent say when shopping for gifts for others, they will sometimes shop for themselves if they happen to find something they need or want.
Finding the best deal is the number one priority for teens. Forty-five percent research a gift item to find the best deal before purchasing.
Though Apparel is ranked high on teens' wish lists, the Electronics and Entertainment categories are top choices:
-- 79% hope to receive gifts in the Electronics category.
-- 69% hope to receive gifts in the Entertainment category.
-- 61% hope to receive gifts in the Accessories category.
-- 47% hope to receive gifts in the Apparel category.
-- 46% hope to receive gifts in the Footwear category.
-- 32% hope to receive gifts in the Health and Beauty category.
Within the Electronics and Entertainment categories, teens want items for a fun experience:
-- 85% hope to receive video games.
-- 74% hope to receive movies.
-- 74% hope to receive music.
-- 64% hope to receive an iPod.
-- 59% hope to receive a laptop.
Big retail stores rise to the top for shopping:
-- GameStop, 62%
-- Wal-Mart, 60%
-- Best Buy, 57%
-- Target, 53%
-- Hot Topic, 46%
-- JC Penney, 45%
-- Macy's, 40%
-- Aeropostale, 37%
-- Apple, 37%
-- Hollister, 36%
(Source: The Center for Media Research, 11/30/10)
Teens have deep pockets:
-- 49% are planning on spending over $150 on gifts for others this holiday season.
-- 20% are planning on spending over $300 on gifts for others this holiday season.
They're planning to give gifts to those closest to them:
-- 86% plan to give gifts to parents.
-- 75% plan to give gifts to siblings.
-- 74% plan to give gifts to friends.
-- 60% pan to give gifts to boyfriends and girlfriends.
Teens treat themselves when shopping for holiday gifts for others. Sixty-five percent say when shopping for gifts for others, they will sometimes shop for themselves if they happen to find something they need or want.
Finding the best deal is the number one priority for teens. Forty-five percent research a gift item to find the best deal before purchasing.
Though Apparel is ranked high on teens' wish lists, the Electronics and Entertainment categories are top choices:
-- 79% hope to receive gifts in the Electronics category.
-- 69% hope to receive gifts in the Entertainment category.
-- 61% hope to receive gifts in the Accessories category.
-- 47% hope to receive gifts in the Apparel category.
-- 46% hope to receive gifts in the Footwear category.
-- 32% hope to receive gifts in the Health and Beauty category.
Within the Electronics and Entertainment categories, teens want items for a fun experience:
-- 85% hope to receive video games.
-- 74% hope to receive movies.
-- 74% hope to receive music.
-- 64% hope to receive an iPod.
-- 59% hope to receive a laptop.
Big retail stores rise to the top for shopping:
-- GameStop, 62%
-- Wal-Mart, 60%
-- Best Buy, 57%
-- Target, 53%
-- Hot Topic, 46%
-- JC Penney, 45%
-- Macy's, 40%
-- Aeropostale, 37%
-- Apple, 37%
-- Hollister, 36%
(Source: The Center for Media Research, 11/30/10)
Consumers Are Buying For Themselves This Christmas
Consumers are adding a very important name back to their holiday shopping lists this year: their own.
The percentage of shoppers who say they plan to indulge in a little something extra for themselves has risen four points since last year to more than 57 percent -- the biggest jump in at least six years, according to an industry survey. Sales of jewelry, apparel and consumer electronics are up so far this holiday season from last year, and experts attribute part of the boost to what has become known as "self-gifting."
You didn't think Dad was going to give that 50-inch flat-panel TV to someone else, did you?
"The consumer really is sitting there saying, 'I'm going to take advantage of these deals,' " said Marshal Cohen, senior analyst for NPD Group, a consumer research firm. "This consumer is saying that there really is some pent-up demand."
During the nation's economic downturn, consumers saved money by whittling down their Christmas lists. Spending on gifts for babysitters, co-workers and teachers were slashed, and, in the ultimate act of self-sacrifice, shoppers cut back on themselves.
According to the National Retail Federation, the number of self-gifting shoppers began to fall in 2007 -- the year the recession began -- after steadily increasing for several holiday seasons. Though the number ticked up in 2008, it plunged last year to under 53 percent of shoppers. The amount they intended to spend last year also fell nearly 5 percent to $101.37.
This year, both measures have rebounded along with consumer confidence. And shoppers reported plans to spend an average of $107.50 this Christmas on themselves, the NRF said.
"The economy is picking up a little bit," said Lisa Bennett, as she sipped a Bellini on a recent evening at a cocktail party at Bliss Spa in downtown Washington, D.C. for its top customers.
Bennett said the sense that the recovery is on track made her feel a little less guilty about spending $200 online at Ann Taylor for herself while she was scouring the Internet for gifts for her teen cousins. They got Best Buy gift certificates and J. Crew sweaters; she got two new tops and a dress and then booked an oxygen facial for herself at the spa.
General manager Michelle Caron said customers are not only booking "maintenance" appointments -- the manicures and waxing counted as necessities among some women -- but also reserving more indulgent services such as facials and massages. This holiday, the spa launched a new service dubbed Shopper's Delight, a lower leg massage and exfoliating treatment for $70.
"We've only been getting busier and busier," Caron said.
Industry experts say the return of self-gifting is a telling indicator of consumer health. Over the past two years, as consumers have grappled with high unemployment, falling home prices and a volatile stock market, spending was primarily driven by necessity. Retailers that sold staples such as groceries held up better during the recession than those that stocked discretionary items.
But if shoppers are now willing to buy for themselves, that could mean the big freeze on consumer spending is starting to thaw.
Cohen said self-gifting helped drive the strong sales and shopper traffic over the post-Thanksgiving weekend. His research showed 35 percent of shoppers bought something for themselves, more than he expected.
Self-gifting could also prove lucrative for retailers because it rarely occurs by itself, Cohen said. Shoppers may reward themselves after spending on others or, on the flip side, justify their own purchases by buying a few gifts.
"It's like it becomes a fever," he said. "For every self-gifted item, there's generally another item that gets added to the assortment as well."
At Fair Oaks Mall in the Washington, D.C. area, general manager Robbie Stark said self-shopping dominated the Black Friday weekend, including one four-hour line of teen boys waiting to buy $10 T-shirts at Elite Board Shop, which sells skateboard gear. He said retailers welcome the business to pad holiday sales.
"The more self-buying that goes on, that's good because they're still going to get the gift-buying," he said.
Still, New England Consulting Group founder and chief executive Gary Stibel said any increase in self-gifting is incremental at best. Shoppers put their kids first and their pets second, he said. Parents and spouses take the back seats, leaving only a tiny portion of discretionary income left over for personal indulgences.
"She's trying to take care of everybody, but she more often than not puts herself last," Stibel said of the typical female shopper. "She's too damn conscientious for her own good."
So which actually makes us happier: self-sacrifice or self-indulgence? A study by Harvard Business School associate professor Michael Norton and two colleagues from the University of British Columbia in 2008 examined whether shoppers derived greater pleasure from spending on themselves or on others.
The researchers gave up to $20 away to shoppers with instructions to spend it on themselves or on other people -- perhaps through a gift for a friend or a donation to a homeless shelter. Though most people expected to enjoy keeping the money, Norton said that at the end of the day, those who bought for someone else reported feeling significantly happier.
Of course, devoting a day of shopping for someone else is one thing. But the holiday shopping season is two full months of making a list, checking it twice, then trying to balance your checkbook. Norton said his research did not examine whether the drawn-out process of gift-giving can overwhelm the joy of giving, but he is clearly no Grinch.
"In the moment of giving," he said, "it's still nice to have given a gift to someone."
(Source: The Washington Post, 12/06/10)
The percentage of shoppers who say they plan to indulge in a little something extra for themselves has risen four points since last year to more than 57 percent -- the biggest jump in at least six years, according to an industry survey. Sales of jewelry, apparel and consumer electronics are up so far this holiday season from last year, and experts attribute part of the boost to what has become known as "self-gifting."
You didn't think Dad was going to give that 50-inch flat-panel TV to someone else, did you?
"The consumer really is sitting there saying, 'I'm going to take advantage of these deals,' " said Marshal Cohen, senior analyst for NPD Group, a consumer research firm. "This consumer is saying that there really is some pent-up demand."
During the nation's economic downturn, consumers saved money by whittling down their Christmas lists. Spending on gifts for babysitters, co-workers and teachers were slashed, and, in the ultimate act of self-sacrifice, shoppers cut back on themselves.
According to the National Retail Federation, the number of self-gifting shoppers began to fall in 2007 -- the year the recession began -- after steadily increasing for several holiday seasons. Though the number ticked up in 2008, it plunged last year to under 53 percent of shoppers. The amount they intended to spend last year also fell nearly 5 percent to $101.37.
This year, both measures have rebounded along with consumer confidence. And shoppers reported plans to spend an average of $107.50 this Christmas on themselves, the NRF said.
"The economy is picking up a little bit," said Lisa Bennett, as she sipped a Bellini on a recent evening at a cocktail party at Bliss Spa in downtown Washington, D.C. for its top customers.
Bennett said the sense that the recovery is on track made her feel a little less guilty about spending $200 online at Ann Taylor for herself while she was scouring the Internet for gifts for her teen cousins. They got Best Buy gift certificates and J. Crew sweaters; she got two new tops and a dress and then booked an oxygen facial for herself at the spa.
General manager Michelle Caron said customers are not only booking "maintenance" appointments -- the manicures and waxing counted as necessities among some women -- but also reserving more indulgent services such as facials and massages. This holiday, the spa launched a new service dubbed Shopper's Delight, a lower leg massage and exfoliating treatment for $70.
"We've only been getting busier and busier," Caron said.
Industry experts say the return of self-gifting is a telling indicator of consumer health. Over the past two years, as consumers have grappled with high unemployment, falling home prices and a volatile stock market, spending was primarily driven by necessity. Retailers that sold staples such as groceries held up better during the recession than those that stocked discretionary items.
But if shoppers are now willing to buy for themselves, that could mean the big freeze on consumer spending is starting to thaw.
Cohen said self-gifting helped drive the strong sales and shopper traffic over the post-Thanksgiving weekend. His research showed 35 percent of shoppers bought something for themselves, more than he expected.
Self-gifting could also prove lucrative for retailers because it rarely occurs by itself, Cohen said. Shoppers may reward themselves after spending on others or, on the flip side, justify their own purchases by buying a few gifts.
"It's like it becomes a fever," he said. "For every self-gifted item, there's generally another item that gets added to the assortment as well."
At Fair Oaks Mall in the Washington, D.C. area, general manager Robbie Stark said self-shopping dominated the Black Friday weekend, including one four-hour line of teen boys waiting to buy $10 T-shirts at Elite Board Shop, which sells skateboard gear. He said retailers welcome the business to pad holiday sales.
"The more self-buying that goes on, that's good because they're still going to get the gift-buying," he said.
Still, New England Consulting Group founder and chief executive Gary Stibel said any increase in self-gifting is incremental at best. Shoppers put their kids first and their pets second, he said. Parents and spouses take the back seats, leaving only a tiny portion of discretionary income left over for personal indulgences.
"She's trying to take care of everybody, but she more often than not puts herself last," Stibel said of the typical female shopper. "She's too damn conscientious for her own good."
So which actually makes us happier: self-sacrifice or self-indulgence? A study by Harvard Business School associate professor Michael Norton and two colleagues from the University of British Columbia in 2008 examined whether shoppers derived greater pleasure from spending on themselves or on others.
The researchers gave up to $20 away to shoppers with instructions to spend it on themselves or on other people -- perhaps through a gift for a friend or a donation to a homeless shelter. Though most people expected to enjoy keeping the money, Norton said that at the end of the day, those who bought for someone else reported feeling significantly happier.
Of course, devoting a day of shopping for someone else is one thing. But the holiday shopping season is two full months of making a list, checking it twice, then trying to balance your checkbook. Norton said his research did not examine whether the drawn-out process of gift-giving can overwhelm the joy of giving, but he is clearly no Grinch.
"In the moment of giving," he said, "it's still nice to have given a gift to someone."
(Source: The Washington Post, 12/06/10)
Tuesday, November 30, 2010
Robust Sales for Holiday Weekend
More Americans went shopping over the Thanksgiving weekend than in recent memory, and online shopping accounted for the highest percentage of the weekend's sales yet.
The average amount spent per person from Thursday to Sunday was about $365, more than a 6 percent increase over last year, according to a survey of about 4,300 Americans by the National Retail Federation, a trade group that reported results on Sunday afternoon.
And an estimated 212 million people shopped, up from 195 million last year. That is the highest number of Thanksgiving weekend shoppers since the first survey in 2004.
Spending on discretionary items rather than bargain-basement discounts seemed to help push the weekend total to a high of $45 billion, up from about $41.2 billion recorded in the last two years.
Spending over the holiday weekend usually accounts for about 8 to 9 percent of the season's sales, but Ellen Davis, a National Retail Federation spokeswoman, cautioned it was not always a predictor of how busy the holiday season would be. In 2008, one of the worst holiday seasons in recent years, survey respondents said they had spent about $373 on average, a record high.
"It's important to keep the economy in mind here. Sometimes Black Friday is not an indicator of the holiday season, because people are so focused on deals that they'll get themselves up early," she said, while in better economic times, they will shop even on days without huge promotions.
A broader picture of early holiday performance will be available on Thursday, when several companies report November sales at stores open at least a year.
Online, results were strong.
Though companies traditionally began their online holiday sales push the Monday after Thanksgiving, this year, they emphasized promotions on Thanksgiving Day and the day after, often called Black Friday, and the efforts seemed to work. About 33.6 percent of weekend shoppers bought online, which, according to the federation's study, is the highest percentage ever.
Other data suggested similar increases in online spending. On Thanksgiving, online sales increased 33 percent over a year earlier, while on Friday, sales increased 15.9 percent, according to Coremetrics, an I.B.M. company, which gathers actual online sales results of more than 500 retailers, including Macy's, Williams-Sonoma and Petco.
MasterCard Worldwide said its Friday transaction data indicated that spending in the category that includes online shopping was accelerated even faster this year than it did the year before.
"People are doing more of their shopping online," said Michael Manchisi, chief technology officer for MasterCard. Growth in that category, which MasterCard calls "consumer not present," so it also could include catalog or telephone sales, also outpaced growth in in-store purchases this year.
ComScore, an online research firm, said online retail spending increased 13 percent, to $11.64 billion, in the first 26 days of November versus the same period a year ago. Online spending on Thursday rose 28 percent, and online spending on Friday rose 9 percent, to $648 million, the biggest sales day yet in 2010.
Cheryl Schiller, a part-time auditor and high school track coach who lives in the Boston suburb of Arlington, is a tiny contributor to the increase in online sales. Though she was browsing at a crowded Best Buy in Boston, she had already bought a third of her holiday gifts from various sites.
"Online is the way to go," she said. "We're getting better at planning the shopping."
The strength in online shopping may explain why another report, issued Saturday, showed slow growth for Friday sales.
In-store sales increased only 0.3 percent on Friday, to $10.69 billion, ShopperTrak said, while traffic increased 2.2 percent.
ShopperTrak uses cameras to observe traffic at malls and retail outlets, then uses known conversion rates -- the percentage of shoppers that actually buy something at a specific store, economic indicators and other factors -- to estimate total sales.
The National Retail Federation said that the difference between its data and ShopperTrak's could be attributed to ShopperTrak's not measuring online sales, to looking only at Friday sales rather than the extended weekend and to measuring largely shopping at big malls, rather than big-box stores or boutiques.
The National Retail Federation data also indicated people were buying for themselves, rather than spending only on gifts, which was echoed by shoppers interviewed on Friday.
There was a shift in spending "away from basics and necessities and more toward discretionary items," Ms. Davis of the federation said. "We certainly saw that this weekend. Some of these items may have been gifts and some may have been self-gifting purchases."
Weekend shoppers who said they bought jewelry, for instance, rose to 14.3 percent this year, from 11.7 percent last year.
I.B.M. data showed an increase in jewelry spending as well, with online jewelry retailers reporting a 17.6 percent increase in sales compared with the Friday a year ago.
A higher percentage of men than women said they were buying consumer electronics, according to the federation's survey, and a higher percentage of women said they were buying items like jewelry, home furnishings and beauty items.
That suggested people were snapping up items for their own use, Ms. Davis said.
"It certainly implies that some of these items were self-gift purchases," she said. While a man could be buying his wife a Blu-ray DVD player and a woman could be buying her boyfriend a watch, the overall impression, Ms. Davis said, was that "people were out buying for themselves."
That was the case in Santa Monica Place, an upscale Los Angeles area mall, on Friday. Rachel Farzam, 25, was shopping with her mother and her sister. Ms. Farzam's mother had already bought a handbag and a gold bracelet from Nordstrom. The women had also bought laptops, a GPS unit and a hard drive at Staples. By late morning, they were surveying jewelry at Tiffany.
"We're out looking for deals, but if we see something nice, we'll still get it," Ms. Farzam said. "It's just fun."
And in Atlanta, before the Apple Store opened on Friday morning, the first people in line were Jose Aguiar, 50; his son Tiago, 20; and two of Tiago's friends. They had driven 45 minutes from Kennesaw and were in line at 2 a.m.
The store opened at 5 a.m., and by 5:05, the group had bought their items -- an iPad and four iPods -- and were ready to leave. There were no special prices that day, which disappointed Jose Aguiar.
"I thought it would be much cheaper," he said, but it didn't stop him from buying.
Despite all the industry frenzy around the day, Laura Gurski, a partner and global head of the retail practice at the consulting firm A. T. Kearney, said she thought it was becoming less important over all.
"The earlier retail promotions begin to diminish the importance of Black Friday in terms of a year over year comparison of the specific day," she said in an e-mail. "As the retailer's strategy has changed, so has the consumer's behavior, right along with it."
(Source: The New York Times 11/29/10)
Monday, November 29, 2010
Cause Marketing
Consumers Set High Bar for Cause Marketing
It wasn't long ago that "cause-related marketing" was a novelty. Then it turned into a necessity -- something companies had to do if they wished to be welcome in polite society. Now, as the new edition of Edelman's annual Goodpurpose study makes clear, consumer expectations have evolved in such a way that companies must make sure their involvement with causes amounts to much more than a marketing ploy.
These days, found Edelman, consumers set the bar high for companies when it comes to their involvement in social issues. Among respondents to polling in the U.S. (fielded in August), 87 percent agreed that "business needs to place at least equal weight on society's interests" as it does on its own interests. And this can't be just a matter of handing one of those oversized checks to some charity: 62 percent said it's "no longer enough for corporations to give money; they must integrate good causes into their everyday business." Of course, this doesn't mean money is a trivial aspect of corporate commitment to good purposes, as 63 percent of respondents also said they "expect brands to donate a portion of their profits to support a good cause."
According to Mitch Markson, chief creative officer at Edelman and founder of its Goodpurpose study, "It's a matter of brands ingraining the cause into their DNA." And that, in turn, means the cause should have some plausible connection to the brand's own business. "I think it speaks to the need for a company to ask what its business purpose is and to find its cause through that purpose. If you go back to what is the purpose of the brand or company, I think there's a natural pathway to finding a cause," he says.
Mitch Baranowski, principal and chief creative officer at BBMG (a firm whose specialties include analyzing consumer interest in corporate behavior vis-à-vis environmental and other issues), concurs on the importance of choosing a cause that truly fits the company's core identity. Speaking of "conscious consumers" who are alert to matters like corporate social responsibility, he says, "They see companies and causes in a holistic sense. While they often see the benefit of more traditional cause-related marketing, they are candidly more interested in seeing companies be the cause -- for example, Tom's Shoes and Newman's Own -- rather than engage in 'stick-on' cause-related marketing that risks being inauthentic if done poorly." Drawing the implication of this for companies, he says, "If you are to engage in cause marketing, do so in a way that is authentic to your brand. The cause should be relevant to your consumer set and align with who you are and what you do. It shouldn't be an order dictated by the C-suite for no apparent reason."
'A UNIQUELY POWERFUL POSITION'
If consumers expect a lot from business in committing to good causes, it's because they think it's capable of a lot -- and perhaps all the more so in an era of skepticism about what government can and should do. Eighty percent of Edelman's respondents agreed that "corporations are in a uniquely powerful position to make a positive impact on good causes."
Happily for marketers, it's not purely a matter of imposing obligations on companies. Consumers will also reward a company that makes engagement with good causes an integral part of the way it does business: 72 percent in the Edelman polling said they're "more likely to purchase a product from a company that supports good causes and has fair prices than a company that simply offers deep discounts." And while a willingness to pay a premium for cause-supporting products is less than universal, 34 percent said that, in the past six months, they've "purchased a brand that supports a good cause even if it was not the cheapest." That dovetails with the findings of recent polling by BBMG in which 81 percent of respondents said they bought more "socially and environmentally friendly products and services" in the past year than they'd done in the preceding year.
Consumers will also enlist as unpaid spokespeople for brands they believe have a purpose beyond just making profits. Sixty-six percent of Edelman's respondents subscribed to the statement, "I would help a brand promote their products or services if there is a good cause behind them." Surprisingly, given the foibles of human nature, the impulse to reward good corporate deeds seems more common than the inclination to punish bad ones. If a company failed to engage with worthy causes, 34 percent "would criticize it to others" and 36 percent would "refuse to buy its products/services."
CONSUMERS AS PARTICIPANTS
If a company does integrate cause-supporting behavior into its normal operations, rather than making it a conspicuous add-on, does this raise a danger that consumers won't notice its good deeds and give credit for them? Not if the company makes a point of involving consumers in the cause-supporting action -- as, for instance, Pepsi (an Edelman client) has done with its Pepsi Refresh project, which invites consumer input in choosing causes to be funded. In the social networking era, people expect and seek such participation, especially since they feel it will yield the most benefit for good causes. Edelman found 74 percent of respondents agreeing that "brands and consumers could do more to support good causes by working together."
Says Markson: "To me, it's about whether the consumer is partnering with and participating with companies to do something good. If you're involving consumers in your community of cause, we'll all get the credit."
This also empowers consumers to affect the corporate world in a way they normally cannot. Says Markson of such corporate-consumer cooperation on behalf of causes: "It allows consumers to put their mark on it. They can't be involved in setting price or developing product, but they can be involved in defining a company's engagement with a cause."
The long economic downturn has lent a greater urgency to this. Markson notes that the overseas portion of the Good purpose polling found people in emerging markets "have higher expectations of companies on social issues than we do in the West, because they're closer to social need." The bad economy here may be creating a kind of global convergence in that regard as economic hardship bites harder for many in the developed countries. This also blurs the divide between self-interest and social interest. Says Markson: "Thinking about 'me' may also be thinking about a social issue, because it might affect 'me.'"
When Edelman asked respondents in the U.S. to identify the causes they'd like to see companies engage in, "alleviating hunger and homelessness" topped the list, cited by 89 percent. "Maybe we're getting closer to the need here, too," Markson says.
(Source: Brandweek, 11/16/10)
It wasn't long ago that "cause-related marketing" was a novelty. Then it turned into a necessity -- something companies had to do if they wished to be welcome in polite society. Now, as the new edition of Edelman's annual Goodpurpose study makes clear, consumer expectations have evolved in such a way that companies must make sure their involvement with causes amounts to much more than a marketing ploy.
These days, found Edelman, consumers set the bar high for companies when it comes to their involvement in social issues. Among respondents to polling in the U.S. (fielded in August), 87 percent agreed that "business needs to place at least equal weight on society's interests" as it does on its own interests. And this can't be just a matter of handing one of those oversized checks to some charity: 62 percent said it's "no longer enough for corporations to give money; they must integrate good causes into their everyday business." Of course, this doesn't mean money is a trivial aspect of corporate commitment to good purposes, as 63 percent of respondents also said they "expect brands to donate a portion of their profits to support a good cause."
According to Mitch Markson, chief creative officer at Edelman and founder of its Goodpurpose study, "It's a matter of brands ingraining the cause into their DNA." And that, in turn, means the cause should have some plausible connection to the brand's own business. "I think it speaks to the need for a company to ask what its business purpose is and to find its cause through that purpose. If you go back to what is the purpose of the brand or company, I think there's a natural pathway to finding a cause," he says.
Mitch Baranowski, principal and chief creative officer at BBMG (a firm whose specialties include analyzing consumer interest in corporate behavior vis-à-vis environmental and other issues), concurs on the importance of choosing a cause that truly fits the company's core identity. Speaking of "conscious consumers" who are alert to matters like corporate social responsibility, he says, "They see companies and causes in a holistic sense. While they often see the benefit of more traditional cause-related marketing, they are candidly more interested in seeing companies be the cause -- for example, Tom's Shoes and Newman's Own -- rather than engage in 'stick-on' cause-related marketing that risks being inauthentic if done poorly." Drawing the implication of this for companies, he says, "If you are to engage in cause marketing, do so in a way that is authentic to your brand. The cause should be relevant to your consumer set and align with who you are and what you do. It shouldn't be an order dictated by the C-suite for no apparent reason."
'A UNIQUELY POWERFUL POSITION'
If consumers expect a lot from business in committing to good causes, it's because they think it's capable of a lot -- and perhaps all the more so in an era of skepticism about what government can and should do. Eighty percent of Edelman's respondents agreed that "corporations are in a uniquely powerful position to make a positive impact on good causes."
Happily for marketers, it's not purely a matter of imposing obligations on companies. Consumers will also reward a company that makes engagement with good causes an integral part of the way it does business: 72 percent in the Edelman polling said they're "more likely to purchase a product from a company that supports good causes and has fair prices than a company that simply offers deep discounts." And while a willingness to pay a premium for cause-supporting products is less than universal, 34 percent said that, in the past six months, they've "purchased a brand that supports a good cause even if it was not the cheapest." That dovetails with the findings of recent polling by BBMG in which 81 percent of respondents said they bought more "socially and environmentally friendly products and services" in the past year than they'd done in the preceding year.
Consumers will also enlist as unpaid spokespeople for brands they believe have a purpose beyond just making profits. Sixty-six percent of Edelman's respondents subscribed to the statement, "I would help a brand promote their products or services if there is a good cause behind them." Surprisingly, given the foibles of human nature, the impulse to reward good corporate deeds seems more common than the inclination to punish bad ones. If a company failed to engage with worthy causes, 34 percent "would criticize it to others" and 36 percent would "refuse to buy its products/services."
CONSUMERS AS PARTICIPANTS
If a company does integrate cause-supporting behavior into its normal operations, rather than making it a conspicuous add-on, does this raise a danger that consumers won't notice its good deeds and give credit for them? Not if the company makes a point of involving consumers in the cause-supporting action -- as, for instance, Pepsi (an Edelman client) has done with its Pepsi Refresh project, which invites consumer input in choosing causes to be funded. In the social networking era, people expect and seek such participation, especially since they feel it will yield the most benefit for good causes. Edelman found 74 percent of respondents agreeing that "brands and consumers could do more to support good causes by working together."
Says Markson: "To me, it's about whether the consumer is partnering with and participating with companies to do something good. If you're involving consumers in your community of cause, we'll all get the credit."
This also empowers consumers to affect the corporate world in a way they normally cannot. Says Markson of such corporate-consumer cooperation on behalf of causes: "It allows consumers to put their mark on it. They can't be involved in setting price or developing product, but they can be involved in defining a company's engagement with a cause."
The long economic downturn has lent a greater urgency to this. Markson notes that the overseas portion of the Good purpose polling found people in emerging markets "have higher expectations of companies on social issues than we do in the West, because they're closer to social need." The bad economy here may be creating a kind of global convergence in that regard as economic hardship bites harder for many in the developed countries. This also blurs the divide between self-interest and social interest. Says Markson: "Thinking about 'me' may also be thinking about a social issue, because it might affect 'me.'"
When Edelman asked respondents in the U.S. to identify the causes they'd like to see companies engage in, "alleviating hunger and homelessness" topped the list, cited by 89 percent. "Maybe we're getting closer to the need here, too," Markson says.
(Source: Brandweek, 11/16/10)
Tuesday, October 26, 2010
Foodservice Driving Convenience Store Visits
Foodservice has become a key area of opportunity for convenience stores across the country. As revenues from gasoline and tobacco products fall, foodservice sales increasingly are becoming c-stores' most profitable category, according to Technomic Inc.'s Convenience Store Foodservice Consumer Trend Report. As more c-stores increase their focus on providing a wider variety of fresh, high-quality food offerings, competition is heating up within the market -- and the foodservice industry as a whole. C-stores are striving to gain a greater share of stomach and to compete with restaurants.
In many cases, foodservice drives c-store visits, said Chicago-based Technomic. Of those consumers who visit c-stores at least once every six months, nearly half (47%) indicate that they visit these locations for foodservice purchases at least once a week. Within this group, about a quarter (24%) visit two to three times each week and 8% visit daily for foodservice items.
C-stores are not top of mind, however, for many consumers as a place to source meals or snack, Technomic added. Technomic developed the Convenience Store Foodservice Consumer Trend Report with findings from an online survey of more than 1,500 consumers conducted in July 2010. About a fifth of consumers polled (18%) report that they rarely or never visit c-stores specifically to purchase items from the foodservice area. Because Technomic wanted to gauge the usage and preferences of consumers who purchase foodservice items from c-stores, these consumers were disqualified from the survey after this point.
Technomic asked consumers to estimate what percentage of all foodservice items typically purchased at c-stores are for breakfast, lunch, dinner and for snacks. The results reiterate the extent to which c-stores are primarily visited for snacks rather than for meals.
Consumers say that about 48% of the items they purchase at c-stores are intended as snacks. About a quarter (23%) of the prepared food and beverages consumers purchase at c-stores are for breakfast and a fifth (20%) are for lunch. Showing foodservice purchases by daypart also reinforces how low patronage is at dinner in comparison to other occasions. Only about 10% of consumers' total c-store foodservice purchases are for dinner.
A large proportion of the food that consumers order at c-stores is eaten in the car or en route to someplace. Options purchased for breakfast are most likely to be consumed in the car (72%), while walking or biking (26%) or on public transportation (21%). Although lunch from a c-store is primarily eaten in the car (55%) or at work (49%), two-fifths of consumers polled (40%) take items to eat at home or someone else's house.
Dinner, when sourced from a c-store, is most frequently eaten at home or someone else's home (65%), followed by in the car (45%). More often than breakfast or lunch, dinner is also eaten at the c-store (33%). Perhaps this is because stores are less busy at dinnertime hours and there is more seating available.
For snacking occasions, consumption in the car (57%), at home or someone else's home (55%) or at work (33%) is most common.
C-store customers say that they purchase some type of food or beverage on about half of their c-store visits, indicating that while foodservice is an important category for these stores, opportunities for growth still exist; however, while location is key to getting consumers in the door, restaurants still have the upper hand when it comes to perceptions of high-quality food and dine-in ambiance.
Although c-stores are already recognized as locations that excel when it comes to offering fast service, look for them to increasingly add features, like drive-thru service and call-ahead ordering, to further expedite transactions and compete with quick-service restaurants, said Technomic. In order to encourage more lunch and dinner purchases and in-store dining, it is likely that c-stores will expand their seating areas in years to come and offer free Wi-Fi access, TV screens and updated decor to compete with restaurants. This suggests that restaurant operators will need to further define what makes their establishments unique (better food, better prices, etc.) and carve out their own niche. And more so than at restaurants, where food made from scratch is expected, c-stores may be able to boost foodservice sales by offering highly recognizable, name-brand prepared foods that consumers are already familiar with and perceive to be high in quality.
Another Technomic report, the 2010 Restaurants & Retail Report: Segmenting the Food & Beverage Consumer, said that consumers are sourcing their food across an increasingly broad range of retail and foodservice outlets. The report provides a snapshot of Americans' restaurant and food shopping patterns.
Retailers continue to move into the restaurant sphere even as restaurant companies extend their brands with retail product offerings. Many retailers are using the restaurant sector as a blueprint for innovation as they seek to keep value-conscious consumers coming through the doors.
"Restaurants consistently provide consumers with foods that respond to their changing preferences and ideas of value. Locally sourced ingredients, organic and additive-free foods and humanely sourced menu offerings have been growth areas," said Darren Tristano, executive vice president at Technomic. "In a down economy, retailers gained a larger share of the foodservice market, but in order to keep that as the economic picture improves, they need to respond to consumers as effectively as restaurants have."
Findings include:
- 18- to 34-year-olds are most likely, by a wide margin, to be heavy users of premium fast food. This could have significant implications for future competition between retailers and limited-service restaurants, particularly in the fast-casual segment.
- Heavy users of warehouse clubs, specialty/natural food stores and upscale supermarkets tend to source food from many types of retailers and restaurants.
- Men are more likely than women to be heavy food shoppers at convenience stores and warehouse clubs.
(Source: Convenience Store/Petroleum News, 10/14/10)
Thursday, October 21, 2010
Economy Still Impacting Shoppers, but Glimmers of Holiday Hope Appear
Shoppers to Spend on More Discretionary Items, Non-Gift Purchases
Though Americans are still operating with the recession in the back of their minds and many have fundamentally changed their shopping habits, some findings from NRF's first holiday survey imply consumers won't only be focusing on low prices and basic necessities this year. According to NRF's 2010 Holiday Consumer Intentions and Actions Survey, conducted by BIGresearch, U.S. consumers plan to spend an average of $688.87 on holiday-related shopping, a slight rise from last year's $681.83.
As in years past, most holiday gift-givers will spend the largest portion of their budget buying gifts for family ($393.55) and friends ($71.45), though they'll still carve out room in their budget for small tokens of appreciation for both co-workers ($18.26) and others ($34.82). Total spending on gifts ($518.08) is expected to rise 2.1 percent from last year, which is in line with NRF's 2010 holiday forecast. Americans will also spend an average of $41.51 on decorations, $26.10 on greeting cards and postage, $86.32 on candy and food, and $16.86 on flowers.
"Consumers will still shop with the economy in the back of their minds, but we're starting to see shoppers take baby steps toward a new normal," said NRF President and CEO Matthew Shay. "As Americans open up their wallets for more discretionary gifts like jewelry or take advantage of sales to buy for themselves, retailers will begin to truly believe that the worst may be behind them."
According to the survey, 61.7 percent of shoppers say the economy will impact their spending, down from last year's 65.3 percent. Many shoppers say they will compensate by spending less (81.5%), comparison shopping online (30.9%) or with newspapers and circulars (28.1%), shopping for sales (54.1%) or using more coupons (40.6%). Although the economy continues to impact shoppers, a number of survey results indicate that shoppers may be ready to emerge from their shells this holiday season.
When asked which one factor will be most important when shopping this holiday season, the majority of shoppers said that sales or price discounts (41.8%) or everyday low prices (12.7%) were most important. While those factors either declined or remained flat this year, two other categories rose in importance. The number of people who counted customer service as the most important factor rose from 4.4 percent last year to 5.3 percent this year, while shoppers who touted quality as the overriding factor rose from 11.8 percent to 12.7 percent.
"Price is paramount during any recession, but when the economy begins to recover other factors take on greater importance," said Phil Rist, Executive Vice President, Strategic Initiatives, BIGresearch. "When shoppers consider other factors like customer service and quality in buying decisions, retailers have the ability to highlight a variety of other features to help their company stand out from the competition."
While many traditional categories like clothing (48.2%) and books (47.3%) will appear on a majority of wish lists this year, one item will appear more often than a year ago: jewelry. As a potential sign that discretionary gifts may become more popular, 23.0 percent of people will ask for jewelry this year, a significant 10 percent jump from last year’s 20.8 percent. Gift cards will remain the most requested holiday gift this year with 57.0 percent of people asking for plastic.
As another sign that shoppers feel a bit of breathing room in their budget, the number of people who say they will make a holiday purchase from a discounter dropped from 70.1 percent last year to 65.1 percent this year. Popular holiday shopping destinations will include department stores (54.5%), grocery stores (46.7%), the Internet (43.9%) and clothing stores (33.6%).
Americans aren't only shifting where they're shopping – how they're shopping is changing, too. Mobile devices like iPhones and Androids are becoming more popular among consumers, and many shoppers plan to use these devices this holiday season to look for gift ideas, compare prices and find items in nearby stores. According to the survey, over one-fourth of American adults with a smartphone (26.8%) will use these devices to research or make holiday purchases, and that number jumps to 45.0 percent among young adults 18-24. Retailers are expected to take advantage of this trend by offering more robust mobile apps and websites, along with enhanced features like mobile reviews, to cater to Americans looking to shop from their phones.
Yet another hopeful indicator: the number of people who plan to take advantage of holiday sales to make non-gift purchases for themselves will rise 8 percent this year (52.9% in '09 to 57.1% this year), with the average holiday shopper spending $107.50 on themselves, up from $101.37 last year.
Though the holiday season won't kick off for many retailers until at least November 1, a sizeable number of shoppers are already planning ahead. According to the survey, 37.2 percent of Americans will begin holiday shopping by Halloween. Women are the most likely to begin shopping by the end of October (42.1%) while young adults 18-24 are among the least likely (27.7%).
NRF continues to expect holiday sales to rise 2.3 percent to $447.1 billion.
(Source: National Retail Federation, 10/19/10)
Tuesday, October 12, 2010
Insurance Marketers Missing Opportunities
Study: Insurance Marketers Missing Opportunities
A study from the Chief Marketing Officer Council shows that insurance marketers are too focused on new acquisitions and are missing ways to grow business with existing customers.
For the most part, consumers are happy with their insurance experience, but 12% those surveyed say they resent not hearing from companies until it is time to pay the bill. The biggest communications oversight seems to be silence on the part of the insurance companies.
According to the findings of "What's Critical in the Insurance Vertical," more than 55% of consumers polled have held their existing insurance policies for more than five years and are open to receiving information from their trusted providers on new or complimentary services. And 21% of consumers purchased or increased the value of their existing policies after receiving communications, according to the study from the Palo Alto, Calif., group. However, only 7% of marketers in the insurance vertical value up-sell and cross-sell tactics as critical to route to revenue.
The report, sponsored by InfoPrint Solutions Co., reveals that insurance marketers could increase their business by executing data-driven, targeted retention marketing strategies. Yet many feel they must focus on acquisition strategies or servicing the needs of top-performing or strategic accounts.
Insurance marketers need to break the cycle of "data paralysis," according to Sandra Zoratti, vice president of global solutions marketing at InfoPrint Solutions Company and the author of the report.
"To me, there are two key findings which point to the fact that insurers are clearly not leveraging or maximizing value in their current customer base through data-driven cross-sell and up-sell opportunities which help drive incremental revenue, improved loyalty and increased customer lifetime value," Zoratti tells Marketing Daily. "Simultaneously, insurers continue to focus most of their marketing spend on new customer acquisition which is a more costly avenue to pursue, especially when their current customers are making it clear that they would buy more from their current insurer if asked."
For the report, more than 100 insurance marketers provided insights on how they market and sell insurance, while over 1,100 consumers provided feedback on their experiences shopping for insurance and selecting providers. The insurance industry's net premiums total more than $1 trillion annually. There are more than 2,700 property/ casualty insurers and more than 1,100 life/health insurers in the U.S., according to the Insurance Information Institute.
(Source: Marketing Daily, 09/27/10)
A study from the Chief Marketing Officer Council shows that insurance marketers are too focused on new acquisitions and are missing ways to grow business with existing customers.
For the most part, consumers are happy with their insurance experience, but 12% those surveyed say they resent not hearing from companies until it is time to pay the bill. The biggest communications oversight seems to be silence on the part of the insurance companies.
According to the findings of "What's Critical in the Insurance Vertical," more than 55% of consumers polled have held their existing insurance policies for more than five years and are open to receiving information from their trusted providers on new or complimentary services. And 21% of consumers purchased or increased the value of their existing policies after receiving communications, according to the study from the Palo Alto, Calif., group. However, only 7% of marketers in the insurance vertical value up-sell and cross-sell tactics as critical to route to revenue.
The report, sponsored by InfoPrint Solutions Co., reveals that insurance marketers could increase their business by executing data-driven, targeted retention marketing strategies. Yet many feel they must focus on acquisition strategies or servicing the needs of top-performing or strategic accounts.
Insurance marketers need to break the cycle of "data paralysis," according to Sandra Zoratti, vice president of global solutions marketing at InfoPrint Solutions Company and the author of the report.
"To me, there are two key findings which point to the fact that insurers are clearly not leveraging or maximizing value in their current customer base through data-driven cross-sell and up-sell opportunities which help drive incremental revenue, improved loyalty and increased customer lifetime value," Zoratti tells Marketing Daily. "Simultaneously, insurers continue to focus most of their marketing spend on new customer acquisition which is a more costly avenue to pursue, especially when their current customers are making it clear that they would buy more from their current insurer if asked."
For the report, more than 100 insurance marketers provided insights on how they market and sell insurance, while over 1,100 consumers provided feedback on their experiences shopping for insurance and selecting providers. The insurance industry's net premiums total more than $1 trillion annually. There are more than 2,700 property/ casualty insurers and more than 1,100 life/health insurers in the U.S., according to the Insurance Information Institute.
(Source: Marketing Daily, 09/27/10)
Time For The Holidays
Consumers Celebrating Practicality This Holiday Season
Consumers Maintaining Family Traditions and Entering Holiday Shopping Season Equipped with Lists and Frugal Strategies
This year, 49 percent of consumers are heading into the holiday shopping season concerned about the economy. This and related sentiments are affecting how, where and when shoppers make their gift, and holiday-celebration related food and beverage purchases.
New research, titled "SymphonyIRI Group Special Report: Holiday Shopping 2010," finds that 59 percent of consumers plan to spend less than $500 on holiday gifts this year, and 28 percent plan to purchase fewer gifts. The report goes on to explain that 25 percent of consumers will trim back spending on holiday celebration-related food and beverages. These findings point to a new holiday season that will continue to see practical and frugal shopper habits.
Despite this year's tight budgets, consumers still plan to maintain traditions by continuing their holiday celebrations and purchasing gifts for their friends and loved ones. For example, 60 percent of consumers indicate that they will purchase "very nice" gifts for their loved ones but do what they can to keep costs down, and two-thirds of consumers will work to pull off a fancy holiday celebration, but again, do what they can to keep costs down. Among all of these shoppers, however, spending will be conservative. In related findings:
Tight Budgets Equal Strategic Shopping
Consumers are shopping in a deliberate, preplanned fashion in an effort to reduce expenditures on gifts and holiday celebration-related food and beverages. As with 2009, this year, consumers plan to enter stores with shopping lists in hand. Strong majorities of consumers will plan ahead and create gift and grocery lists with the same or increased frequency than they did last year.
In order to get the best deals on gifts and groceries, a large majority of consumers will also seek out deals prior to entering stores while also keeping an eye out for in-store promotions:
Mass merchandisers and supercenters, such as Walmart and Super Kmart, and online stores will be frequented most by shoppers making holiday gift purchases:
Holiday Shopping Season Kicks Off Earlier
In an effort to alleviate budgetary strain, this year's holiday shoppers are equipped with coping strategies adopted over the past couple of years. Nearly half of all shoppers surveyed plan to begin their holiday shopping before November, citing the desire to take better advantage of sales (46 percent), to ensure products are available (39 percent) and to spread spending out over time rather than making fewer larger purchases (39 percent).
Cash, Gift Cards and Functional Items Top Gift and Wish Lists
Not only are consumers planning to be mindful about how much, where and when to spend their holiday shopping dollars, they are also indicating that they will strive to be practical when it comes to selecting gifts -- perhaps a sign of the times where necessity trumps luxury.
This year, "what gift seekers want" and "what gift givers plan to give" are in sync, as gift givers and recipients have practicality top of mind. Cash and gift cards top both lists this year with functional items coming in a close second:
Twenty-five percent of consumers intend to use their credit cards less this holiday season, instead opting to increase use of cash (20 percent of respondents) and debit cards (18 percent), as more consumers look to minimize debt. Across all income groups, cash is the preferred method of payment. Across all households earning less than $100,000, one-quarter of respondents indicate that they will use credit cards less when paying for their holiday goods.
"The economy continues to transform, and with that, consumers are evolving," said John McIndoe, senior vice president, Marketing, SymphonyIRI. "As a result, today's retail environment is even more complex than we have seen historically. Through comprehensive and ongoing surveys, such as this newly released Holiday Shopping 2010 survey, SymphonyIRI is providing insightful information that reveals opportunities for CPG manufacturers and retailers to serve and satisfy consumers and secure ongoing shopper loyalty."
(Source: SymphonyIRI Group, 10/04/10)
Consumers Maintaining Family Traditions and Entering Holiday Shopping Season Equipped with Lists and Frugal Strategies
This year, 49 percent of consumers are heading into the holiday shopping season concerned about the economy. This and related sentiments are affecting how, where and when shoppers make their gift, and holiday-celebration related food and beverage purchases.
New research, titled "SymphonyIRI Group Special Report: Holiday Shopping 2010," finds that 59 percent of consumers plan to spend less than $500 on holiday gifts this year, and 28 percent plan to purchase fewer gifts. The report goes on to explain that 25 percent of consumers will trim back spending on holiday celebration-related food and beverages. These findings point to a new holiday season that will continue to see practical and frugal shopper habits.
Despite this year's tight budgets, consumers still plan to maintain traditions by continuing their holiday celebrations and purchasing gifts for their friends and loved ones. For example, 60 percent of consumers indicate that they will purchase "very nice" gifts for their loved ones but do what they can to keep costs down, and two-thirds of consumers will work to pull off a fancy holiday celebration, but again, do what they can to keep costs down. Among all of these shoppers, however, spending will be conservative. In related findings:
- 2010 will see an increase in the number of consumers who plan to budget no more than $199 this year on gift shopping -- 23 percent, up 8 points from 2009 (15 percent) and 12 points from 2008 (11 percent).
- Twenty percent of consumers are going out less frequently and entertaining at home more often this holiday season versus "typical" years
Tight Budgets Equal Strategic Shopping
Consumers are shopping in a deliberate, preplanned fashion in an effort to reduce expenditures on gifts and holiday celebration-related food and beverages. As with 2009, this year, consumers plan to enter stores with shopping lists in hand. Strong majorities of consumers will plan ahead and create gift and grocery lists with the same or increased frequency than they did last year.
In order to get the best deals on gifts and groceries, a large majority of consumers will also seek out deals prior to entering stores while also keeping an eye out for in-store promotions:
- When it comes to purchasing gifts, nearly three-quarters of consumers plan to compare products on the Internet as much or more than they did last year, while nearly half plan to take better advantage of in-store promotions and newspaper/circular coupons.
- Similarly, for holiday celebration-related food and beverages, three-quarters of shoppers will leverage Internet and e-mail coupons with the same or increased frequency, and just under half of shoppers plan to take better advantage of in-store promotions and newspaper/circular coupons.
- About one-third of survey respondents plan to stick to their shopping lists and avoid purchasing unplanned items during their gift and grocery shopping trips.
Mass merchandisers and supercenters, such as Walmart and Super Kmart, and online stores will be frequented most by shoppers making holiday gift purchases:
- Mass merchandisers and supercenters continue to attract shoppers from across income groups; mass merchandisers will be a bit more heavily shopped by lower-income households, while upper-income households will skew slightly toward supercenters.
- Online shopping will also be heavily leveraged across income segments this year, but skew slightly to wealthier shoppers ($55,000-$99,000 income range and $100,000 or more). Key drivers of Internet shopping are convenience, product information, selection and price.
- Eighty-eight percent of shoppers will shop in mass merchandise and/or supercenter outlets this year, with each of these channels cited heavily by shoppers across income segments.
- Seventy percent of consumers will shop at grocery stores.
- One-third of shoppers, who fall mostly in higher-income brackets, plan to shop at club stores, including 38 percent of those in households earning $55,000-$99,000 and 47 percent of those from households earning $100,000 or more.
- Eighteen percent of consumers plan to shop dollar stores, with those in the lower-income brackets citing a slightly higher propensity to visit this channel (27 percent of those in households earning under $35,000).
Holiday Shopping Season Kicks Off Earlier
In an effort to alleviate budgetary strain, this year's holiday shoppers are equipped with coping strategies adopted over the past couple of years. Nearly half of all shoppers surveyed plan to begin their holiday shopping before November, citing the desire to take better advantage of sales (46 percent), to ensure products are available (39 percent) and to spread spending out over time rather than making fewer larger purchases (39 percent).
Cash, Gift Cards and Functional Items Top Gift and Wish Lists
Not only are consumers planning to be mindful about how much, where and when to spend their holiday shopping dollars, they are also indicating that they will strive to be practical when it comes to selecting gifts -- perhaps a sign of the times where necessity trumps luxury.
This year, "what gift seekers want" and "what gift givers plan to give" are in sync, as gift givers and recipients have practicality top of mind. Cash and gift cards top both lists this year with functional items coming in a close second:
- Fifty percent of those surveyed would like to receive a gift card as a present and 66 percent plan to give gift cards this holiday season. Twenty-three percent of respondents plan to increase the amount of cash or gift cards they plan to give this holiday compared to 2009.
- Sixteen percent of respondents would like to receive clothing, and 8 percent would like to receive books as a present. Luckily for these gift seekers, 49 percent of shoppers plan to purchase functional items, such as clothes, books and items for the home. In fact, 24 percent of respondents intend to purchase more functional items this year versus what they purchased in 2009, according to those surveyed.
Twenty-five percent of consumers intend to use their credit cards less this holiday season, instead opting to increase use of cash (20 percent of respondents) and debit cards (18 percent), as more consumers look to minimize debt. Across all income groups, cash is the preferred method of payment. Across all households earning less than $100,000, one-quarter of respondents indicate that they will use credit cards less when paying for their holiday goods.
"The economy continues to transform, and with that, consumers are evolving," said John McIndoe, senior vice president, Marketing, SymphonyIRI. "As a result, today's retail environment is even more complex than we have seen historically. Through comprehensive and ongoing surveys, such as this newly released Holiday Shopping 2010 survey, SymphonyIRI is providing insightful information that reveals opportunities for CPG manufacturers and retailers to serve and satisfy consumers and secure ongoing shopper loyalty."
(Source: SymphonyIRI Group, 10/04/10)
Thursday, September 16, 2010
Live Broadcast at The Grant Road 76!
Check out my live broadcast of The Coca-Cola Mello Yellow Tour on The Quake 102.1
http://justin.tv/edwinccr/b/270160407
http://justin.tv/edwinccr/b/270160407
Tuesday, September 7, 2010
Report: Radio Still A Good Way To Sell Cars
Great write up from the Radio Advertising Bureau: www.rab.com
It's hard to believe that with the proliferation of digital media platforms, and the visual nature of the product, radio is still a good place for auto marketers to stack their media chips.
But a 2009 report by Nielsen, "How U.S. Adults Use Radio and Other Forms of Audio," had some surprising results: despite the proliferation of satellite radio, MP3s, and online radio channels like Pandora, terrestrial radio on FM and AM bands still dominate listening time -- particularly among younger listeners.
Nielsen says broadcast radio is second to TV in daily reach in minutes of use. The study, in which the Council for Research Excellence also participated, said that more adults 18 to 34 listen to radio every day than does the general population. Seventy-nine percent of them listen to AM/FM, and only 13% listen to satellite bands. Also, adults over 18 listen to more broadcast radio every day than all other audio options -- including CDs, satellite radio, and digital file players -- combined.
Marketers at car companies might counter that radio is the side salad, not the steak: a car is inherently such a visual tactile experience that marketing should not be wasted in a place where the experience of the vehicle can't be translated visually. Not so, says Chris Hamer, SVP of Katz Marketing Solutions.
Hamer, who at one time was on the Cadillac marketing team, says it is likely that as part of tier-one or national marketing programs for automakers, broadcast radio constitutes probably only "a couple of percentage points. It's quite small." He says, however, that there is more to marketing than seeing the vehicle. "It's also lifestyle -- it's the feel of owning a car; what does a car mean?"
However, he says it isn't functional for automakers to use radio solely to mirror TV ads with an audio experience. Rather, he says, radio is best understood as a community experience, with local-market flavor, driven by the personalities that listeners make part of their day. For regular listeners, radio is not a monologue. "What radio does is encourage dialogue with listeners, and there is a tight relationship between radio personalities, the station, and the public," he tells Marketing Daily. "For marketers, it can supercharge great TV campaigns."
Hamer says that while auto marketers can get inexpensive advertising by doing audio versions of TV ads, getting endorsements from personalities is powerful because listeners trust the radio jocks they like. "Dialogue between radio personalities, stations and listeners is an entirely different category," he says. There's a real personality involved. It's not just the radio station talking."
From the VP marketing's perspective, it's a national campaign; from the listener's perspective it's market-by-market, station community by station community. So the local New York stations might be at Jones Beach one weekend, or an arts fair on Columbus Avenue or in the Hudson Valley doing things to enhance the listener community. And they love to have ad sponsors to tie into that."
As for endorsement by radio personalities, the automaker must invest in getting the jocks to know the product and drive it. "You have to make sure people endorsing it are using it. You would find the target audience and then the stations that best connect with them, then arrange ride and drives with personalities."
Hamer says the right media mix is when across all media, a marketer is not spending past saturation level. "And it is easy to do in national TV, and be nowhere near saturation in other areas."
(Source: Marketing Daily, 08/31/10)
http://www.rab.com/public/rst/article.cfm?article=3&id=2053&view=email
Wednesday, September 1, 2010
Is Radio Advertising RIGHT FOR ME?
Marketing plays a vital role in any business and can ultimately determine the success or failure of a company. Although some perceive radio advertising to be too expensive for small businesses, and perhaps even an obsolete medium to reach audiences, they could not be more wrong. In fact, radio advertising is affordable and has proven to be the most effective medium for delivery of advertisements to targeted audiences.
Audience- Potential Customers
In the United States, about 95% of people listen to the radio on a weekly basis. People wake up to the radio in the morning, listen to the radio on the way to and from work, hear it while at the workplace, and may stay up to hear the late-night talk shows.
Radio talk programs, morning shows, shock-jocks, and listener call-in shows all provide an enormous audience base for you to advertise your product or service.
Targeting your Audience
In addition to the sheer size of your potential customer base, radio advertising provides an effective way to specifically target your prime audience. Every radio station appeals to its own unique demographic. Some radio stations are liberal, some conservative. There are religious stations, children's stations, and sports stations. This natural division of interests into specific listener groups makes radio the prime medium to selectively target your specific consumer base.
Not only do different consumer groups divide by station, but by listening times, as well. It has been shown that the majority of adults listen to the radio to and from work, while younger listeners are more often tuned in during the afternoon, after school. This means that if your business offers sports equipment for kids, then you can choose to advertise at 4:30 in the afternoon, on the children's stations and sports stations.
Budget
Radio is actually an extremely cost-effective medium for you to advertise your business on. Radio spots can require a smaller budget than advertising in newspapers and magazines. In addition, your radio ads can be more comparable to larger competitor's ads, since there is no cost of competing visually with them, such as with television ads.
Effectiveness
Perhaps the biggest benefit of using radio advertising is the effectiveness of ads on listeners. Radio is perceived as the most intimate of advertising mediums, because people are so often alone when listening to the radio, such as when driving to and from work.
Also, people usually tend to develop a personal relationship with their favorite radio stations and programs, more so than television. As a result, people have been found to be more accepting of radio ads than of any other type of advertising media. This intimacy provides an opportunity to contact more personally with consumers, and to arouse emotions in the listener which, if all goes well, will increase the chance of a sale.
Audience- Potential Customers
In the United States, about 95% of people listen to the radio on a weekly basis. People wake up to the radio in the morning, listen to the radio on the way to and from work, hear it while at the workplace, and may stay up to hear the late-night talk shows.
Radio talk programs, morning shows, shock-jocks, and listener call-in shows all provide an enormous audience base for you to advertise your product or service.
Targeting your Audience
In addition to the sheer size of your potential customer base, radio advertising provides an effective way to specifically target your prime audience. Every radio station appeals to its own unique demographic. Some radio stations are liberal, some conservative. There are religious stations, children's stations, and sports stations. This natural division of interests into specific listener groups makes radio the prime medium to selectively target your specific consumer base.
Not only do different consumer groups divide by station, but by listening times, as well. It has been shown that the majority of adults listen to the radio to and from work, while younger listeners are more often tuned in during the afternoon, after school. This means that if your business offers sports equipment for kids, then you can choose to advertise at 4:30 in the afternoon, on the children's stations and sports stations.
Budget
Radio is actually an extremely cost-effective medium for you to advertise your business on. Radio spots can require a smaller budget than advertising in newspapers and magazines. In addition, your radio ads can be more comparable to larger competitor's ads, since there is no cost of competing visually with them, such as with television ads.
Effectiveness
Perhaps the biggest benefit of using radio advertising is the effectiveness of ads on listeners. Radio is perceived as the most intimate of advertising mediums, because people are so often alone when listening to the radio, such as when driving to and from work.
Also, people usually tend to develop a personal relationship with their favorite radio stations and programs, more so than television. As a result, people have been found to be more accepting of radio ads than of any other type of advertising media. This intimacy provides an opportunity to contact more personally with consumers, and to arouse emotions in the listener which, if all goes well, will increase the chance of a sale.
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