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)
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