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Target is spending roughly the same amount on this year's marketing as last year, though executives declined to provide a figure. The 1,805-unit chain spent $170.6 million on measured media in November and December last year, according to Kantar Media. Same-store sales during the critical holiday period from November through January were up 3.8%.
Target is dedicating a whopping 61% of its media spending to digital, up from 51% last year.
Fantastic article from FiveThirtyEight that indicates Uber isn't responsible for increased congestion in NYC.
Some commentary around a few stats that surprised me in listening/reviewing the various earnings reports this past week:
Amazon: 46% of product sales were 3rd party sellers. Amazon truly is becoming Ebay and Alibaba as 3rd party sellers drive the revenue flywheel. Most of the sales are through Prime members which drives 3rd party sellers to use Fulfillment By Amazon (FBA) when listing their product. Amazon charges a higher fee per unit sold and/or stored yet doesn't have to take on any inventory risk. With that said, Amazon is still struggling to bring any meaningful growth in revenue internationally.
Google: 40% of all mobile searches return indexed app results. Desktop searches are flat to down, mobile searches are up considerably in aggregate but average less than desktop per user. 40% of searches driving app results is staggering but less searching equals less ads and clickthroughs.
Pandora: 3% growth in listener hours year over year. The impact of Apple Music was seen this quarter and the loss was greater than expected. With that said, 5 billion listening hours still drove 31% growth in advertising.
eBay: 12% fixed price listing growth and 21% drop in auction listings. As Amazon becomes more like eBay with 3rd party listings, eBay becomes less auction and fixed price like Amazon. Nothing too extraordinary about eBay earnings, stock benefited from low expectations.
NRF Holiday Survey shows modest spend increases year over year and a more connected consumer.
Average spending per person reaches $805.65, comparable with spending in 2014 holiday season ($802.45).
Spending on gifts for family members will total $462.95, up from $458.75 last year, and a survey high.
Almost half of holiday shopping, consisting of browsing and buying, will be done online: average consumers say 46 percent of their shopping (both browsing and buying) this holiday season will be conducted online, up from 44 percent last year.
21.4 percent of smartphone owners will use their device to purchase holiday merchandise this year, the highest seen since NRF first asked in 2011.
Nearly half (46.7%) said free shipping/shipping promotions are important factors in their decision on where to shop.
55.8 percent of holiday shoppers will splurge on themselves and/or others for non-gift items, and will spend an average of $131.59, up from $126.37 last year.
On Monday, Mayor Steven M. Fulop will introduce legislation to legalize the use of all short-term sleepover web services, like Airbnb and HomeAway. The law is expected to be approved by November.
In exchange for agreeing to let some of Jersey City’s 262,000 residents rent out a couch, a bedroom or even their entire apartment or house on Airbnb, the company would charge users the same 6 percent hospitality tax currently levied on guests at the city’s dozen hotels.
Mr. Fulop anticipates the tax would generate between $600,000 and $1 million annually on the more than 300 Airbnb listings in the city. That would be added to the roughly $6 million the city makes on its hotel rooms each year.
Kudos Mr. Fulop for recognizing the benefit to homeowners, visitors and city coffers. Hopefully this is just the start for other major cities to evaluate similar legislation.
Bloomberg recently wrote about the relationship breakup between American Express and Costco. A few interesting tidbits made the article:
Chenault went all out to hold on to the discounter in the U.S. Costco’s costs to accept credit cards as part of its deal with Amex was about 0.6 percent of every purchase, people familiar with the arrangements say, which was pretty cheap for any retailer, but Chenault offered to cut them further. Still, Jelinek insisted on putting the U.S. business up for grabs, too.
10 percent of the 112 million Amex cards were Costco-branded.
“Yet they decided not to tell us that 23 percent of their business was actually co-branded, which means it’s using someone else’s brand. I find those two things somewhat inconsistent.”
Whether the above is 100% accurate or not, Costco had quite the deal with Amex and it seems as though Amex was willing to provide even a better deal given that 10% of their current card base is Costco-branded. The Amex strategy of high tier, high spend consumers with award winning customer service is tough to maintain as they push further into prepaid and loyalty through offerings like Serve and Plenti. Will be interesting to see if Amex can replace cobrands like Costco.
Surprised that analytics was the top benefit cited. With that said, each of the top benefits impacts a different silo of a current retail organization. From Store Planning to Marketing to Store Operations to Digital, beacons and other forms of brick tech benefit all in some way when used correctly.
Google and the Android platform seem to be pulling away from iOS globally. We will see how the launch of 6S has impacted October 2015.
No surprise that GameStop is now focused on pushing physical game bundles in place of digital game bundles:
Bartel went on to say that "if in fact... the platform holders do continue to put in free games as promotional items, we anticipate that at GameStop you will see more physical bundles from third parties as opposed to digital bundles." That suggests that even included first-party download codes, like Sony's The Last of Us bundle or Microsoft's Halo: Master Chief Collection pack-in, could be replaced with physical third-party games at GameStop stores in the future.
Also unsurprisingly, the CEO credited the move as a customer preference:
GameStop CEO Paul Raines spun this in the earnings call as a move that "consumers have a pretty strong preference in... Consumers prefer those physical bundles, because they know that that disc has value in the trade-in program at GameStop."
As discussed here previously, GameStop is delaying the inevitable and should further focus on their transition to become a retailer beyond just used and new physical form games. Publishers are providing early releases of top games and content in a push to go direct to consumer. Without a transition, GameStop's only strategy will be to continue buying outstanding shares to drive their earnings per share. Flat to declining top line sales coupled with share buybacks makes GameStop the IBM of Retail.
Related: Can GameStop Survive? and Games: Brick vs. Tap
Online retail sales hit 1.6 trillion yuan (250 billion U.S. dollars), 11.4 percent of total retail sales in China. The number of online shoppers rose 19.1 percent to 417 million, said the Hangzhou-based e-commerce tracker.
Cross-border e-commerce has become a new driver of retail sales as online retailers connect domestic consumers with an increasing number of overseas brands, according to CECRC analyst Mo Daiqing
Alibaba's online marketplace Tmall continues to dominate China's online business-to-consumer market, with 57.7 percent of the market. Its rival JD.com comes in second, at 25.1 percent, followed by a distant third by Sunning.com, at 3.4 percent.
Not sure which is most impressive. Scale and growth? % of total retail sales? Or the fact that Alibaba and JD.com essentially own the entire market.
For sake of comparison, the US is about 7-8% of total retail sales and $300 billion annually in 2014.
Earlier this week, Disney announced the ability to view their "Movies Anywhere." Upon purchasing Disney content, you are able to watch however, whenever, wherever you want. If you use Apple, Microsoft or Amazon for your video viewing, you are set. Brands should take this example of openness across platforms as a lesson for making brands available across not only all brick, click and touch channels, but also all marketplaces, apps and social networks. Viewing marketplaces like Amazon as enemies or not opting for Facebook "buy buttons" is selling your brand short.
Messaging apps like WeChat provide every service you can imagine:
Tencent Holdings Ltd. plans to add a personal loan feature to its popular WeChat smartphone messaging application later this month, in the latest step in the Chinese Internet giant’s expansion in online financial services, according to people familiar with the matter.
The new WeChat feature called Weilidai, which literally means “a tiny bit of loan,” allows users to borrow up to 200,000 yuan ($31,350) without guarantee or collateral. The Weilidai service is operated by WeBank, an Internet bank launched in January by Tencent and Chinese financial firms.
Albeit biased, some of the stats on Twitter show why the users are some of the most engaged users there are. Not to mention, 300 million plus users is nothing to scoff at. That number of users only seems small when compared to Facebook.
Nearly 9 in 10 Twitter users in the study (86%) say they use Twitter for news, and the vast majority of those (74%) do so daily.
Three quarters of Twitter news users follow individual journalists, writers and commentators (73%) and nearly two thirds follow institutional accounts (62%). Twitter users also are very likely to discover new journalists and writers and consequently follow their work, often on other platforms beyond Twitter.
Fully 94% of Twitter news users get their news either through scrolling their timelines or browsing tweets of those they follow. Other features are used far less often: For instance just 34% of Twitter news users say they get news from trending topics and 30% use search.
A majority of non-Twitter users (51%) have seen tweets. 45% on TV, 33% from friends, 27% in news articles they read, 22% from going to twitter.com without signing up, 12% from search and 8% in a newspaper.
Bank of America has closed a number of locations as the customer shifts to mobile. I believe banking is several years ahead of where retail shopping is headed. Each door will fall into one of the following buckets: 1) transition to fulfillment/product trial store; 2) shrink overall square footage footprint; 3) closure.
John Bason, CFO of Associated British Foods who owns Primark on why they will forgo the launch of an ecommerce site:
"This is not a profitable avenue for us.”
For a retailer known for selling $10 jeans and $3.50 t-shirts, this is understandable. Primark has over 270 stores in the UK and still no ecommerce presence. The high cost of fulfillment direct to the customer and 2-5x higher return rates of online do make the channel much less profitable.
However, the retailers and etailers that excel in ecommerce realize the convenience online shopping provides for consumers. That convenience often leads to a willingness for higher prices. And given that Primark ONLY sells exclusive private label merchandise, consumers are likely willing to pay higher prices, purchase in bundles and forgo the option to return. Primark is forgoing ecommerce today, but I'm sure they are constantly reevaluating this stance as customers see ecommerce as a foregone conclusion.
In March, WSJ had an article outlining a drop in circular spend in 2014 of just over 6%. Fast forward to August and it seems we may have hit an inflection point for several key retailers:
Wal-Mart published half as many circulars in June, compared with the same month last year, according to Molly Blakeman, a company spokeswoman. For the three months to July 31, Wal-Mart reduced its circular count to four pieces from 20 a year ago, Greg Foran, Wal-Mart’s U.S. chief, said on Tuesday in remarks discussing the company’s earnings.
Kohl’s distributed 19 circulars from June 1 through Aug. 14, compared with 27 circulars in the same period a year ago, according to Market Track. The total number of pages Kohl’s circulated declined nearly 27%. At Sears, total pages were down 44% for this period. A Sears’s spokesman declined to comment.
Wal-Mart, Kohl’s and Sears were among 14 large retailers whose circular distribution was tracked by Market Track. All told, the number of circulars fell 24%, while the number of pages mailed decreased 27%.
We are far from the point of the death of circulars but we likely are at an inflection point. The culprit? Digital..but even more so, direct mail.
Further to the post in July in which I asked if Gamestop will survive, I was surprised to see a few pieces of news this week that are providing a glimpse into how full size content games will sold and accessed digitally in the future:
Based on the success of initiatives like the ones above, I expect publishers to run similar campaigns and provide access to their catalog of games. The sooner the games are made available and the easier to access, the more likely a consumer will shift purchases from physical media to digital media. And as the purchases shift from brick to tap, the Gamestops and Best Buys of the world will see their share of the market negatively impacted. We saw this play out in music, movies and books. Video games are no different.
The core problem was that deep links only really worked if a user already had the app. Because the average phone has fewer than 100 apps installed, and the same apps dominate most phones in the market, deep links were useless for almost every app in the app stores.
Recently, a new type of deep linking has appeared. Contextual deep-linking technology offersdeep links that can pass data to an app through install, in addition to supporting the legacydeep-linking method.
This data is used by the app to show the user relevant information when they open the app for the first time (below). This makes deep links useful for users who didn’t have the app, as well as those who already did. Now, deep links work for newly acquired users, not just existing users, driving growth and re-engagement.
Providing context prior to and after install of an app is crucial to new user signup and retention. Haven't found many, if any retailers using contextual deep links.
Anyone who works for a major news website or publisher knows that social referrals—that is, links that are shared on social networks such as Facebook and Twitter—have become a crucial source of incoming traffic, and have been vying with search as a source of new readers for some time. Now, according to new numbers from the traffic-analytics service Parse.ly, Facebook is no longer just vying with Google but has overtaken it by a significant amount.
1 in every 5 minutes online is spent on Facebook in the US.
