Category: retail
The 2009 holiday season was the worst in 40 years according to the December sales figures for many major chains. Abercrombie and Fitch saw a 24% year-over-year percentage change in December sales at stores open at least a year, Saks 19.8%, and American Eagle 17%. Target (TGT) same store sales were down 4.1%. Wal-Mart (WMT) U.S. store sales (excluding fuel sales) were up 1.7 but international sales were down 10.4 percent for the five weeks ended Jan. 2, and Sam’s Club sales were down 2.1 percent. On the bright side, December same store sales for Hot Topic were up 4.3% and American Apparel sales were up 3%. Atlanta Business Chronicle 1/8/09, LATimes, 1/9/09
Saying “the economy’s awful,” discount clothing retailer Goody's Family Clothing is liquidating its stores after filing chapter eleven bankruptcy in June 2008. Atlanta Business Chronicle 1/8/09
Meanwhile, Circuit City Stores, Inc. CCTYQ) filed a motion in bankruptcy court that seeks approval of procedures that would formally put the company up for sale, as a going concern, as separate business units or as individual assets. The company closed 155 domestic stores in 4Q08. Circuit City Stores, Inc. 1/9/09
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Iconix Brand Group, Inc. (ICON), today announced that Target Corporation (TGT) has renewed its direct-to-retail license agreement for Iconix's Mossimo brand through January 31, 2012. Mossimo has been licensed exclusively to Target in the U.S. since 2000. Iconix Brand Group owns, licenses and markets a portfolio of consumer brands including CANDIE'S®, BONGO®, BADGLEY MISCHKA®, JOE BOXER®, RAMPAGE®, MUDD®, LONDON FOG®, MOSSIMO®, OCEAN PACIFIC®, DANSKIN®, ROCA WEAR®, CANNON®, ROYAL VELVET®, FIELDCREST®, CHARISMA®, STARTER®, and one of my favorite brands, WAVERLY®. Iconix Brand Group, Inc. 1/7/09 via PRNewswire
Constellation Brands, Inc. (STZ), “the world's largest wine company and a leading international producer and marketer of beverage alcohol,” today reported its fiscal 2009 third quarter results, reporting net income of $84 million, or $0.38 diluted earnings per share ("EPS") for the quarter ended Nov. 30, 2008 ("third quarter 2009"), compared with net income of $120 million or $0.55 diluted EPS for the prior year. The company is a producer and marketer of beverage alcohol in the wine, spirits and imported beer categories, with more than 250 brands in its portfolio and sales in approximately 150 country. Major brands in the company's portfolio include Corona Extra, Black Velvet Canadian Whisky, SVEDKA Vodka, Robert Mondavi wines, Clos du Bois, Ravenswood, Blackstone, Hardys, Banrock Station, Nobilo, Kim Crawford, Inniskillin, Jackson-Triggs and Arbor Mist. Constellation Brands, Inc. 1/7/09 via PRNewswire
Brands that bit the dust in 2008 included retailers Bombay Co., Linens ‘n Things, Steve & Barry’s, Sharper Image (closing retail stores but will live on as an online, catalog and direct-to-retail brand), and Mervyn’s; airline brands Aloha Airlines, Skybus, ATA, Champion Air; and financial services brand Bear Stearns. LATimes 1/2/09
Kraft (KFT) may have cracked the code with its release of a Facebook application that enables users to donate six meals to hungry families for each friend they convince to add the application. In contrast to earlier programs which signed up few users, reportedly 25,000 Facebook users have added the cause-related Kraft application, which results in 1.4 million donated meals. Adweek 12/30/08
Dominos (DPZ) is running a 30-second spot contending that 2/3 of the participants in a national taste test prefer Dominos oven-baked sandwiches to Subway. Adage says attack ads and taste tests are on the rise. Advertising Age 12/30/08. May require registration or subscription.
The Gatorade Company, a division of PepsiCo (PEP), is renaming, reformulating and repackaging their Gatorade brand sports beverages to better appeal to a “broader range of athletes and active people.” Gatorade Fierce® is now Bring It, Gatorade X-Factor® changes to Be Tough™, Gatorade AM™ is now called Shine On™ and Gatorade Rain™ becomes No Excuses™ Brandweek 12/29/08, Image from Gatorade image library
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Author, speaker and CEO of Chicago retail group, the Goltz Group,
Jay Goltz is steering his retail group (including Artists Frame Service, the country's largest picture framing business, and high-end home decor retailer, Jayson Home & Garden) through its fourth recession. He shares his three point plan for re-framing the recession to help small businesses stand a better chance of success in the coming year:
1. Discretionary Means Different Things to Different People
"You may think picture framing is a discretionary expense," says Jay Goltz, "but it's really important to our customers." No matter what industry you are in there are consumers for whom your products are necessary. Jay continues, "Customers who put a high value on quality and service are not going to automatically trade down or stop buying when things get tight. I've learned if I do right by them, I do alright." Re-frame your thinking: Don't assume you are discretionary. Figure out to whom you are a necessity and stay in sync with them.
2. Sales Down? Up Your Options
According to Jay, "If sales are down, you might be tempted to cut back on the number of alternatives you offer but now is the time to increase your options. Be creative about the product you offer. You're the expert; lead the way." Artists Frame Service is initiating a once-a-month Sunday Frame Outlet to accommodate customers clamoring for the re-opening of a beloved Frame Outlet. They also now offer low cost poster framing packages and a range of discontinued picture frame mouldings. Re-frame your thinking: The solution isn't necessarily to get leaner; sometimes it's just to get smarter.
3. Avoid the Service Cut Trap
The idea of cutting staff might seem prudent but consider the consequences. Customers still want service, and good people are hard to find and even harder to train. Jay points out, "Retail customer service is a vanishing commodity. If you actually still offer it, it's hugely valuable. If you can afford it, sometimes it's worth toughing it out with the staff you have. Artists Frame Service's framing consultants have been with the company an average of nine years. You can't replace that when the good times return." Re-frame your thinking: Your payroll may be more of asset than a liability. Be careful when "trimming the fat"; it could be bone.
While no recession is easy to navigate, the question is what shape your ship will be in after the storm. Jay Goltz' three point plan for re-framing the recession will not only help you survive the storm, it will ensure you maintain the integrity of your ship well into 2009 and beyond.
Chicago businessman Jay Goltz (jaygoltz.com ) writes a column for Fortune Small Business and blogs for Inc. Magazine. He is a much sought after speaker since writing "The Street Smart Entrepreneur: 133 Tough Lessons I Learned the Hard Way
." He regularly gives speeches to small business groups and Fortune 500 companies.
Jay Goltz has been featured in national publications such as Inc. Magazine, Forbes, The Wall Street Journal, Fortune Small Business, Crain's Chicago Business and the Chicago Tribune. His company, the Goltz Group, is one of only 14 companies featured in "Small Giants: Companies That Choose to Be Great Instead of Big
," a best selling book about companies that choose to be great instead of big.
Source: Goltz Group
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Coca-Cola (KO) is planning to introduce Sprite Green, the first in a line of naturally sweetened reduced-calorie beverages made with a sweetener from stevia leaves called “truvia.” Sprite Green is aimed at active young adults. Atlanta Business Chronicle 12/17/08
Jamba Juice (JMBA) has launched slow-cooked Steel Cut Oatmeal with real fruit and organic oats, to target “on-the-go people who are looking for a slow food experience in terms of taste and quality, but in a quick service format.” The company believes their product offers improved texture and flavor versus instant rolled oats offered at competitors, including Starbucks (SBUX). Brandweek 12/18/08
City and state attorneys general have succeeded in getting MillerCoors to remove stimulants, such as caffeine and guarana, from Sparks, their best-selling alcoholic energy drink, and to change a brand-marketing program that the attorneys general said appealed to underage drinkers. AdAge 12/18/08
Barnes & Noble (BKS), USAA, and Hampton Inn were among the top scorers in the Forrester Research, Inc. Customer Experience Index of large US firms. Just 11% of companies received an excellent rating; 38% of firms were rated as poor or very poor. Marketing Charts 12/18/08
Burger King (BKC) announces The Flame by BK, a new body spray that captures the essence of America’s love of the Whopper, or as they put it, “Behold the scent of seduction, with a hint of flame-broiled meat.” The King himself is freaky enough with his clothes on---how creepy is the photo of the King, dans le buff leering and stroking a fur throw? Eeuww. However, if it works for you, you can get the body spray at http://www.firemeetsdesire.com/. Another tactic that BK’s target will love. AdFreak 12/16/08
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A Rasmussen poll finds that 51% of U.S. consumers say they won't buy a car from an auto maker that is in Chapter 11 bankruptcy reorganization. Thirty-one percent said they’d be okay with it, while18% said they weren’t sure. Phoenix Business Journal 12/13/08
What are the most effective means of reaching consumers in social media spaces? A report from Netpop Research, “Social Networkers U.S., Who They Are And What They Mean for Next-Generation Online Advertising” provides trending data showing the growth of social networking users since 2006, including a comparison of social networkers to non-social media users, and categorization of broadband users segments. While now is not the best time for marketers who haven’t used social network advertising to experiment with (during challenging economic times it’s best to stick with proven ROI), the report provides useful insights on social media users. Download the report, free until 1/31/09. Clickz 12/12/08
Nearly 30% of online adults will immediately leave a website if they perceive it to be cluttered with ads, and more than 75% of those who remain on cluttered sites pay less attention to the ads there says a study from Burst Media. Marketing Charts, 12/11/08
The financial crisis has spawned a new generation of mattress stuffers, aka New Mattress Stuffers, boomers “who have lost their faith in the housing market, the stock market, their bank, their big corporate employer, their auto company, and their last president,” and they’re waiting for the next shoe to drop. The new mattress stuffers are trying to create “safe havens” by investing in U.S. Mint gold coins, purchasing safes, vaults and guns, and eschewing plastic for cash. Wall Street Journal 12/10/08
Retailers can help consumers make a decision, and prevent the loss of a sale by introducing “decoys, loss leaders, or other products similar to the ones they really want to market.” When consumers are trying to choose between two highly desirable options, its easier for them to make a decision when a third, less desirable option is introduced, according to research conducted by Akshay Rao, marketing professor at the
University of Minnesota's Carlson School of Management. Using the example of a consumer trying to choose between two attractive sweaters, adding a third, less attractive sweater serves as a “’decoy’” that makes the other sweater appear more pleasing than before.” Science Daily 12/14/08
University of Minnesota (2008, December 14). Inside The Consumer Mind: Brain Scans Reveal Choice Mechanism. ScienceDaily. Retrieved December 13, 2008, from http://www.sciencedaily.com /releases/2008/12/081211141846.htm
53% of American Adults age 18 and older play video games while four out of five (21%) young adults play. Not surprisingly, the biggest players are teens; a staggering 97% of teens play video games. Obtain a PDF of the report. Pew Internet and American Life Project 12/07/08.
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Despite a drop of 28% in November sales at stores open at least a year versus 2007, Abercrombie & Fitch says they’re protecting the brand’s appeal as a casual-but-elite lifestyle brand for young adults by refusing to offer steep discounts during the holiday season. Los Angeles Times 12/13/08
Massachusetts-based toy retailer KB Toys Inc. has filed for Chapter 11 bankruptcy protection and plans to close its 460 stores. Atlanta Business Chronicle 12/12/08
Dell (DELL) plans to charge new computer purchasers an annual or monthly fee for tech support agents based in North America. Some argue the practice accedes to customer prejudice against non-Americans, others that the support should be offered for free but Dell sees it as a way to fight globalization and still make a profit. Los Angeles Times 12/11/08
Apple (AAPL) is number one on BusinessWeek’s first annual list of “The World’s Most Influential Companies. “Apple has gained a cultlike following because it somehow manages to breathe new life into every category it touches,” says BusinessWeek. Apple, as well as other companies on the list, “have devised winning strategies in their industries and are the ones with game-changing ideas, the greatest impact on consumers, and the bold tactics rivals emulate.” Also making the list: Google (GOOG), Monsanto (MON), News Corp. (NWS), Toyota (TM), Unilever (UL) and Wal-Mart (WMT). BusinessWeek 12/11/08
Michelin Footwear has launched a website (www.michelinfootwear.com) for commercial industry professionals, featuring over 20 styles of boots and shoes, many with soles inspired by Michelin's high-performance tire tread designs. Michelin boots offer waterproof, protective toe and metatarsal support; electrical hazard protection; resistance to punctures, chemicals, heat and abrasion. Michelin Footwear was created in 2005 to leverage the company's technical expertise in managing contact with the ground in comfort and safety. Michelin Footwear 12/11/08 Photo: www.michelinfootwear.com
Nickelodeon will launch "The Big Green Help Global Challenge" on December 14th, a multiplayer kids' online game with a goal of igniting real-world action for environmental change. Kids are asked to virtually pledge volunteer hours in the "Global Challenge" that they can translate into actionable steps in their homes, communities and schools. The game is part of Nickelodeon's on-going global pro-social initiative, The Big Green Help, which aims to make energy-saving and earth-friendly activities a part of kids' everyday lives.
Nickelodeon 12/11/2008 (www.nick.com/biggreenhelp)
“Four Bucks is Dumb,” and “Large is the New Grande” proclaims a 140 billboard campaign promoting McDonald’s (MCD) coffee in high traffic locations throughout western Washington state---including within site of Starbucks (SBUX) headquarters. The campaign supports the launch of McDonald’s espresso in the Seattle area and is not expected to be expanded nationwide. SeattlePI.com 12/10/08
Office Depot (ODP) plans to close 112 underperforming stores and 33 distribution facilities in North America. Atlanta Business Chronicle 12/10/08
Kid-focused Chuck E. Cheese pizza parlors across the country are the scenes of an unusually high number of calls to the police for disorderly conduct and battery by adults. Some local law enforcement officials even say the number of disruptions at their local Chuck E. Cheese restaurant are higher than many nearby restaurants and bars. Alcohol and the “mama-bear instinct” – parents rushing to protect their young---is blamed for many of the incidents. Wall Street Journal 12/9/08. May require subscription.
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According to the National Retail Federation's 2008 Black Friday Weekend survey, conducted by BIGresearch, more than 172 million shoppers visited stores and websites over Black Friday weekend, up from 147 million shoppers last year.*
Shoppers spent an average of $372.57 this weekend*, up 7.2 percent over last year’s $347.55. Total spending reached an estimated $41.0 billion.
"Pent-up demand on electronics and clothing, plus unparalleled bargains on this season’s hottest items helped drive shopping all weekend," said NRF President and CEO Tracy Mullin. "
Holiday sales are not expected to continue at this brisk pace, but it is encouraging that Americans seem excited to go shopping again."
Friday was the busiest day of the weekend with 73.6 million people hitting stores and websites for doorbuster sales. Though traffic subsided after Friday, retailers were buoyed by two-day sales as 56.9 million people shopped on Saturday, up from 48.3 million last year, while another 26.2 million people planned to shop on Sunday. Thanksgiving Day also continues to increase in importance as the number of people who shopped on Thursday was up 48 percent over last year (16.2 million people vs. 10.9 million people).
"Though retailers should be encouraged by strong traffic and sales over the weekend, consumers are still being cautious," said Phil Rist, Executive Vice President, Strategic Initiatives, BIGresearch. "Weekend shoppers indicated that they are still sticking to a budget and thinking carefully before making any holiday purchases."
NRF projects that holiday sales will rise 2.2 percent this year to $470.4 billion.
Source: National Retail Federation
*Spending data includes Thursday, Friday, Saturday and projected spending for Sunday.
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Upcoming ‘Cyber Monday’ Represents Strong Historical Bellwether for Total Holiday Season E-Commerce Spending
comScore (NASDAQ : SCOR) today reported its tracking of holiday season retail e-commerce spending for the first 28 days of the November – December 2008 holiday season. For the holiday season-to-date, $10.41 billion has been spent online, marking a 4-percent decline versus the corresponding days last year, while Black Friday saw $534 million in online spending, up 1 percent. For the combination of Thanksgiving Day and Black Friday, online sales were up 2 percent relative to last year.
2008 Holiday Season To Date vs. Corresponding Days* in 2007
Non-Travel (Retail) Spending
Excludes Auctions and Large Corporate Purchases
Total U.S. – Home/Work/University Locations
Source: comScore, Inc.
|
Holiday Season to Date
|
Millions ($)
|
2007
|
2008
|
Pct Change
|
November 1 – 28
|
$10,839
|
$10,410
|
-4%
|
November 27 (Thanksgiving Day)
|
$272
|
$288
|
6%
|
November 28 (“Black Friday”)
|
$531
|
$534
|
1%
|
*Corresponding days based on equivalent shopping days relative to Thanksgiving (October 27 thru November 23, 2007)
“Early reports suggest that Black Friday sales in retail stores were slightly better than anticipated in this depressed retail climate, and that performance apparently extended to the online channel, which saw sales on Thanksgiving Day and Black Friday combined increase 2 percent versus year ago,” said comScore chairman, Gian Fulgoni. “It’s probable that on Black Friday consumers responded positively to the very aggressive promotions and discounts being offered in retail stores, so it will be important to see how they respond to similarly attractive deals being offered online on Cyber Monday, the traditional kick-off to the online holiday shopping season.”
Cyber Monday Historical Bellwether for Overall Holiday Season Performance
The Monday after Thanksgiving, popularly known as “Cyber Monday,” represents the first significant spike in online spending activity for the holiday season. The phenomenon results from Cyber Monday being the first working day following the Thanksgiving holiday and the fact that purchases from work still account for approximately half of all e-commerce spending.
Interestingly, Cyber Monday has historically proved to be an accurate bellwether for the overall performance of the online holiday shopping season. While the year-over-year growth rates for individual online spending days vary quite significantly throughout the season, during the past few years Cyber Monday has been within a few percentage points of the final holiday season growth rate.
Cyber Monday Growth Rates
Non-Travel (Retail) Spending
Excludes Auctions and Large Corporate Purchases
2005-2007
Total U.S. – Home/Work/University Locations
Source: comScore, Inc.
|
|
Growth Rate vs. Prior Year
|
Cyber Monday
|
Full
Holiday Season
|
2005
|
26%
|
25%
|
2006
|
26%
|
26%
|
2007
|
21%
|
19%
|
“With so much volatility right now in the variables that influence consumer spending, predicting where this online holiday season will end up has been far more challenging than in previous years,” added Fulgoni. “That said, Cyber Monday may well prove to be an important indicator of whether the decline in spending that we’ve seen during the first few weeks of the online holiday season will continue for the balance of the year.”
comScore 2008 Holiday Online Retail Spending Forecast
Online Non-Travel (Retail) Holiday Consumer Spending
Excludes Auctions and Large Corporate Purchases
Total U.S. – Home/Work/University Locations
Source: comScore, Inc.
|
|
Billions ($)
|
2007
|
2008
|
Pct Change
|
January – October Actual
|
$93.6
|
$102.1
|
9%
|
Holiday Season Forecast (Nov-Dec)
|
$29.2*
|
$29.2**
|
0%**
|
* Actual **Forecast
Source: comScore
comScore, Inc. (NASDAQ: SCOR) is a global leader in measuring the digital world and preferred source of digital marketing intelligence.
Xerox (XRX), known for selling printers, copiers, inks, toners and paper, is reinventing itself as a company that helps customers to use less of these products. The company hopes the approach will position them competitively and appeal to customers who are attracted to green solutions to reduce costs and their carbon footprints. Newsweek 11/21/08.
Olympic gold medalist Michael Phelps recently signed an exclusive deal to promote Subway’s healthy fresh brand positioning. Brandweek 11/21/08.
Pentax is launching a new brand positioning “intended to appeal to “independent spirits who see the world through a different lens,” and to challenge and encourage the independent spirit of photographers who are considering Pentax cameras.” The new tagline: “Be interesting.” MediaPost 11/17/08, Businesswire 11/17/08
Brands "that represent good quality, no-nonsense and excellent value for money” such as
Campbell ’s (CPB) will prosper in 2009. Green brands, those based on corporate social responsibility, as well as status and luxury brands, will struggle says The Economist 11/19/08.
Say buh-bye to PC Magazine; after 27 years the monthly will be printed for the last time in January 2009, but will continue online. Adage 11/24/08.
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Holiday messaging from many retailers this year is downright pragmatic: Best Buy (BBY) touts reliability and trust, Kohl’s (KSS) talks pricing, Sears (SHLD) and Kmart promote layaway and JCPenney (JCP) advertises price points instead of percentage off. Via AdAge.
Tic Tac hopes their new sugar-free Tic Tac CHILLs will “personalize” and “modernize” the brand, make it stand out in the adult mint category, and appeal to harried Gen Xers looking for a “fresh way to CHILL”. Photo: tictacplaychill.com
Mercedes-Benz USA says the private, online Generation Y-centric community they launched six months ago – Generationbenz.com - has been so successful at generating feedback from members that they plan to launch a site for boomers. Via Brandweek.
Welch’s antioxidant repositioning as the “original SuperFruit” helped the brand to reverse four years of sales declines according to the company. “Super Fruits” are characterized as having high antioxidant levels, such as pomegranates, goji berry, noni, and acai. Via Brandweek.
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