Friday, December 28, 2012

New Year, New Super Bowl Ads

The calendar hasn't even turned 2013, the NFL playoffs haven't begun, but already Super Bowl advertising is in the air.

Just for the record, Super Bowl XLVII will be played in New Orleans on February 3rd, at the Mercedes-Benz Superdome. Of course, Mercedes-Benz will air ads during the game.
As of yesterday, Ad Age reports that only a handful of ad spots remain to be sold. Many of the 2012 advertisers are returning for 2013. Remember, at nearly $4 million per spot--not to mention the cost of production and talent--big money is at stake. That's why I'm wondering about these advertisers:
  • Gildan is seeking the spotlight for its inhouse Gildan brand of athletic apparel. Gildan thinks big: It sponsored the New Mexico Bowl this month (see left) and also holds a Guinness Book record for the world's largest T-shirt. Can it make a distinctive brand name in an industry dominated by deep-pocketed rivals?
  • SodaStream will promote its make-your-own-soda product, with a 30-sec ad likely to be a retooled version of its controversial UK campaign. Considering that Coca-Cola is going to air multiple commercials, SodaStream may have difficulty breaking through. It also has to convert attention into interest, positive attitudes, and sales.
  • Best Buy will air a 30-sec ad. Last year it featured innovators of the mobile industry, instead of well-known celebrities. Considering the retailer's challenging situation, I hope it will promote a USP (remember that concept? unique selling proposition) that differentiates it from competitors, particularly Amazon. Otherwise, as the Wall Street Journal observes, it may not be able to survive the showrooming effect.

Friday, December 21, 2012

Kindle's Star Turn, Year After Year

The Internet Wayback Machine serves as a window on the World Wide Web of past days, weeks, months. And if you use it to browse Amazon's pages since late 2007, you'll see one product very consistently featured.

Every day since Amazon introduced the Kindle, the product has been on the retailer's home page. Imagine if Macy's had one product or brand in its main display window every day, day after day, updating the display when new models are introduced. This exposure has helped the Kindle shine as the star of Amazon, year after year after year.

For example, look back at Amazon's home page for December 20, 2009, and here's what you'll see at top of the home page:

Yes, the Kindle, 2 years old in 2009 and going strong, was featured prominently just days before Christmas.

Fast-forward to 2010, and on December 21, Amazon is showcasing its Kindle reading apps for multiple devices and platforms. The message: You can read your Kindle books (purchased at Amazon) anywhere, at any time, picking up on the page where you left off.

Today's Amazon home page shows the Kindle product line, from the most basic model to the latest Fire HD, and free two-day shipping.

Wednesday, December 19, 2012

The Wheel of Retailing Turns Again

More than 50 years ago, Professor Malcolm McNair proposed the "wheel of retailing" theory. He sought to explain the way a retail business evolves, starting at the no-frills, low-price end with minimal services--as a way of breaking into the store business--and then progressing ever higher on the wheel to offer expanded goods and services in better store surroundings and with higher price points (and margins).

At the time, discounting was a new retail phenomenon and a threat to established department and specialty stores. What would McNair have made of the incredible rise of online retailing? Would he have included Jeff Bezos, for example, on his list of the greatest merchants in history?

Here are the names that McNair gave Fortune in 1962 as the six greatest merchants:
  • John Wanamaker (whose Philadelphia department store featured fixed pricing--no more haggling!)
  • Frank Woolworth (whose five-and-dime variety stores were once a fixture in so many cities and towns)
  • General Robert Wood (who took Sears from a mainly mail-order business to the heights of bricks-and-mortar retailing)
  • Michael Cullen (who founded King Kullen supermarkets because he saw a real need for affordably-priced foods in a business model of high-volume, low-margin retailing)
  • J.C. Penney (his middle name was Cash and he had a policy of cash-only sales)
  • Eugene Ferkauf (founder of E.J. Korvette, a New York-based discount chain that predated the self-service model of Walmart and other mass merchants)

Whether or not the wheel of retailing applies to today's business environment, it correctly suggests that the retail industry is always changing. In a "back to the future" move, some online-only retailers like Bonobos are opening brick-and-mortar stores. A store chain in Brazil hangs fashions on hangers that display the real-time number of "likes" each item has attracted on the retailer's Facebook pages, bringing social media onto the selling floor in a new way. Piperlime, owned by the Gap, was once online-only but now has a store in New York City's SoHo district (see photo).

What's next for the wheel of retailing?

Thursday, December 13, 2012

Online Privacy: Survey Says . . .

Consumers in Canada may use Facebook, but as this infographic of survey results shows, 69% worry that it poses a threat to privacy. They're not logging off, however.

U.S. parents tell Pew researchers that they're concerned about who's tracking their teenagers' online behavior and why.

In Europe, consumers in the Netherlands say they're very aware of cookies and tracking, but not very concerned about online privacy issues.

Watch for more on this issue in 2013 and beyond.

Wednesday, December 12, 2012

Brands with Purpose and Authenticity

Purpose. Authenticity. Brands either have 'em or they don't. And that makes all the difference in today's global marketplace, where consumers have more power and more choices than at any time in the past.

According to a recent Edelman study, purpose will tip the balance in favor of a particular brand when the quality and price of that category's brands are perceived as being equal. In fact, a majority of consumers expect businesses to do something for society, not merely ring up sales and profits. Employees who work for companies that market brands with a purpose--brands with authenticity--are more likely to go the extra mile.

Case in point: Unilever, which has won praise and publicity for its international initiatives promoting sustainability, social responsibility, and transparency. Its Lifebuoy brand posts this vision on its website:

As the world’s No. 1 germ protection soap, our vision is to bring health and hygiene to a billion people.

In line with this vision, Lifebuoy provides handwashing education to fight disease in India, Kenya, and other areas.

Unilever also owns Ben & Jerry's, an ice-cream brand built on the purpose and authenticity of its cofounders. When ice-cream lovers choose Ben & Jerry's, their purchases enable the brand to continue buying from local dairy producers and to support ongoing social responsibility activities.

Despite being under the Unilever umbrella since 2001, Ben & Jerry's has now become a certified B Corporation, showing its dedication to purpose while advancing Unilever's sustainability agenda.

Sunday, December 9, 2012

When Fans "Like" a Brand on Facebook

From local businesses to multinational corporations, just about every marketer on the planet wants to boost the number of "likes" on its Facebook page. A like is rewarded by exclusive coupons (Domino's Pizza) or early announcements of new products (Graeter's ice cream) or a sneak peek at brand news (H&M). In other words, brand fans perceive they get something of value in exchange for clicking like.

But what, exactly, is a Facebook like worth to a brand? Booz & Co.'s new video, above, features Nick Hodson explaining how and why brands can use the "likes per million" metric for a social media perspective on brand value.

The LPM formula is:
Number of Facebook likes
Millions in $ Revenue

Instead of looking only at the actual number of likes--which can run into double-digit millions for brands like Coca-Cola--the LPM metric uses the context of revenue to evaluate the value of a like. This metric also allows competitive comparisons over time.

Another way to view likes is in the context of stock price. Arthur J. O'Connor conducted research while at Pace University to understand the relationship between likes and company share price. By tracking the number of likes and changes in share price, O'Connor found that "99.95 percent of the change could be explained by the change in fan counts," as he told NPR. Of course, likes don't cause the change in stock value...but they do indicate sentiment toward the company and its brands.

Wednesday, December 5, 2012

Tesco's Tough Time with Fresh & Easy

Fresh & Easy has turned out to be costly and difficult for its parent Tesco, the UK's largest supermarket retailer.

Tesco's researchers observed US shoppers at close quarters and studied market dynamics for two years before the first Fresh & Easy stores opened in Arizona, California, and Nevada in 2007.

Based on what they learned, Tesco's original strategy was to exploit a gap in the market between small-format convenience stores and large-scale supermarkets and superstores.

Fresh & Easy was to be a neighborhood market featuring easy-in, easy-out shopping for fresh fruits, vegetables, and prepared foods, with everyday low pricing (EDLP). In other words, the merchandise would be fresh and the shopping would be easy (and easy on the wallet).

The long-term plan was to have 1,000 stores stretching the coast from California to Washington state. Never mind that those states already have plenty of supermarkets and superstores selling produce and related foods, including powerhouses like Trader Joe's, Costco, Walmart, and Whole Foods. Tesco believed its fresh concept and core competency in food retailing would bring something new and different to the US market. Tesco even invested in a gigantic distribution center to serve the huge network of stores in the works.

However, Tesco soon found that competition was much fiercer than expected. Even worse, the global financial crisis pushed the economy into a tailspin and the Western states where its first Fresh & Easy stores were located suffered particularly severe and prolonged downturns. Shoppers became accustomed to bargain-hunting for promotional pricing, not Fresh & Easy's EDLP pricing strategy.

Meanwhile, Fresh & Easy lacked the high profile and positive brand associations it needed to attract and retain shoppers. Even though a belated advertising campaign, new color scheme, new merchandise categories for US shoppers' preferences, and promotional pricing helped slow the losses, these moves couldn't boost sales and customer counts to break-even levels quickly enough.

After years of multimillion dollar losses and no break-even date in sight for Fresh & Easy, Tesco today announced it was conducting a strategic review of the US grocery chain. Whether Fresh & Easy is sold or shuttered, the experience has been painful and profit-sapping for Tesco.

Thursday, November 29, 2012

Target: Targeting Canada

Target will officially open its Canadian stores in just a few months. 

Instead of a traditional ad blitz, Target is unleashing an avalanche of initiatives to build goodwill and positive brand buzz, all across Canada.

For example, the company's holiday caravan bus recently left Toronto for a high profile coast-to-coast tour. 

Its first stop in Halifax will feature free special events and product sampling . . . and then the bus rolls westward for more than a dozen stops. "Our goal is to create a fun, family-friendly experience to celebrate the holiday season and the caravan enables us to make stops along the way," explains a Target spokesperson.

Showcasing corporate citizenship, Target is asking its Canadian Facebook friends (430,000 strong) to vote for the causes and nonprofits to receive up to $1 million in donations, with timeline posts in French and English.

Finally, Target is seeking LEED environmental certification to demonstrate that its 124 stores are eco-friendly. The bulls' eye may be red and white, but Target knows many shoppers have an eye for green marketing as well.

Needless to say, Canadian retailers are watching Target carefully to see how this new competition will affect their customers.

Meanwhile, Target is saying "Joyeux Noël" and "Bonjour Canada" with personality as it readies for the grand openings in 2013.

Wednesday, November 28, 2012

Marketing Movie Rentals: Risk and Reward

With 35,000 bright red kiosks (not to mention 5 million Facebook likes), Redbox virtually rules America's on-the-spot DVD rental business now that Blockbuster has closed its US stores.

Redbox also has a deal with Verizon to offer monthly subscription access to streaming movies. Redbox CEO Paul Davis hints to Fast Company that curated content will be its point of differentiation: "I think there's a point where as consumers, I mean, do you really need 100,000 titles? I mean, really?"

Of course, market dynamics change day to day. When the NPD Group compiled the chart at right, just a few months ago, physical DVD rentals still dominated the market overall. The implication: Redbox should keep plugging in those free-standing kiosks wherever they can. Costly, but convenient for customers.

However, in a survey by conducted a few weeks later, streaming was named the rental method of choice by most respondents, followed by DVD rental and then video-on-demand (VOD). Redbox's Verizon alliance would be critical in this situation.

Disney has tried and failed to gain traction in the streaming segment, one example of the risk in this hotbed of activity.

Netflix has been steadily building a massive library of DVDs and streaming movie content, following the CEO's long-term strategy of "grow membership, increase content, repeat." In other words, Netflix's direction conflicts with the Redbox idea about reaching a point where buyers simply have too many choices. Plus, Netflix lets buyers subscribe to streaming-only content or DVDs-by-mail, as they prefer--at least for now.

Amazon's latest test of monthly pricing for streaming movie content brings the price in line with Netflix's streaming-only subscription price and with Hulu's price. YouTube is testing on-demand rentals (streamed of course). The market is also seeing some experiments like the UK Domino's Pizza/Lionsgate movie rental streaming option being offered to buyers who order pizza.

Where is the market going? Which strategies will pay off? Tune in tomorrow.

Sunday, November 25, 2012

Strategy or Execution? Both!

Booz & Co. asks the question Strategy or Execution: Which Is More Important? Its conclusion: You can't have good execution without good strategy. Strategy is a broad road map for driving decisions about which customers to serve and how. Apple's strategy is distinctly different than Samsung's strategy and from Microsoft's strategy. Amazon's strategy isn't the same as Macy's strategy, or Walgreen's strategy.

Still, as a practical matter, the best strategy in the world is useless if it can't be implemented or if it can't be implemented effectively (two different things). A Harvard Business Review article points out that companies need to look at how their managers and employees make decisions and are held accountable, not just at symptoms of poor execution such as out of control costs. Fix the underlying problems, and you'll be better able to transform strategy into reality.

In a recent interview with Fortune, Bank of America CEO John Stumpf tells Geoff Colvin: "We always say we could leave our strategic plan on an airplane, somebody could pick it up, and it wouldn't matter. It's all about execution." Well, in an industry like banking, his statement may have a lot of validity, but Bank of America also works hard at crafting its strategy and updating it as circumstances change. It's not just execution, clearly, that helps B of A compete.

In general, highly-trained managers may be excellent at strategy but unable to execute because the company resists changes needed to make the strategy work . . . or because they focus on the wrong things . . . or because the corporate culture is in conflict with the strategy. In the past, another reason for ineffective execution was that execs didn't properly track implementation of their plans. Those days are gone, thanks to key performance indicators and metrics.

When Adobe introduced tools for digital marketing, it started a campaign to dispel the mistaken idea that marketing lacks hard facts and figures for performance analysis. Now marketers can back up their projections and plans with solid data to connect the dots between good strategy and good execution. One without the other? Like a car without wheels--not going anywhere.

Wednesday, November 21, 2012

Marketing to Millennials: Value, Shared Experiences, Sustainability

One-third of the world's population can be classified as the Millennial generation (roughly, those born after 1980), according to recent research by Viacom. Not surprisingly, the economy stands out as an important factor affecting their use of credit cards and buying decisions in general. This segment has a unique attitude and perspective on the world, shaped by the economic turmoil of recent years plus their upbringing, their cultural backgrounds, and their life experiences.

As a result, marketers are targeting the Millennial generation with distinctive, value-rich products for their preferences, using quirky, nonconformist communications that avoid the hard sell (unless tinged with irony, of course). Even the shopping experience itself is different for this generation, often mobile or digital, often shared, and heavy on the search for local and/or unique "personality" products to express personal values.

Take the Chevy Spark, for instance, a sub-compact car that comes in eye-catching colors/designs (see above) and is also available with an electric motor. The car is affordable, the design grabs the eye, the size is just right for city driving and parking, and the gas efficiency makes sense for a Millennial buyer making a first or second new car purchase. This is not your grandpa's car--it's clearly a "now" model designed for tastes and preferences of the target market.

Then there's the market for travel services, such as airline tickets, lodgings, and tourism. Research presented at a travel industry meeting  shows that Millennials like to travel with friends and expect value for the money (not necessary budget, but value for the money). Unlike traditional "group tours," the goal is to have a shared experience, and sustainability is a major factor in many travel decisions made by this cohort.

Although some experts suggest that Millennials are anything but brand-loyal, remember that they're very open to trying new brands and products (no-brands included!) and like to share the results with friends. Any brand or product that makes the grade has a good chance of being in the consideration set next time around.

Tuesday, November 20, 2012

Marketing the Company via Its Museum

Company museums are a wonderful way to engage customers and their families, deepen knowledge of the company's heritage, and encourage loyalty. Plus, as The Economist points out, these museums can also teach employees about corporate culture, not to mention products of the past.

Here are a number to check out when you're out and about:

Monday, November 19, 2012

Happy 50th to Target, Walmart, and Kmart

Way back in 1962, three discount chains opened their first stores. Today, Walmart, Target, and Kmart are well known for their suburban discount stores filled with aisles and aisles of low-priced merchandise. Over time, this high-volume, low-price approach to retailing would reshape the entire industry and do a lot to reset consumers' expectations and buying patterns.

Target, a discount chain founded by the owners of Dayton's department store, opened its first store in the company's home state of Minnesota in 1962.

Why "Target" with a bulls' eye? "As a marksman's goal is to hit the center bulls-eye, the new store would do much the same in terms of retail goods, services, commitment to the community, price, value and overall experience," management explained. By 2000, the discount side had become so successful that the company was renamed Target.

Kmart was the brainchild of management at S.S. Kresge, a five-and-dime retailer. Eyeing the rise of discounting (and the changes that would ultimately doom five-and-dime stores), the company opened its first Kmart in Michigan in 1962.

Within four years, Kresge was operating 162 discount stores...and by 1977, the majority of the firm's revenues were coming from discounting, which is why the name was officially changed to Kmart in that year.

Sam Walton brought discount retailing to Arkansas in 1962 when he opened his first Wal-Mart store.

Five years later, the company had 24 stores and was growing rapidly.

Today, Walmart (no hyphen in the name any more) is the world's largest retailer and as controversial as it is innovative.

Will discount stores survive the Internet age? Or will they morph into showrooms where shoppers can examine merchandise and then click to buy online?

Sunday, November 18, 2012

Small Business Saturday 2012: Shop Small

Saturday, November 24, is Small Business Saturday, a concept originated and promoted by American Express. The idea is to support small and local businesses during this very busy holiday shopping weekend. American Express provides free downloadable and customizable marketing materials plus campaign ideas to help small businesses reach out to shoppers. It also offers $25 credit to its cardholders for shopping local.

This is the 3d annual Small Business Saturday, and the Small Business Administration is only one of many organizations getting involved. Across the country, chambers of commerce are sponsoring special events, downtown merchants' groups and community organizations are hosting receptions parades, and newspapers are providing coverage to get the word out.

Already, the Small Business Saturday Facebook page has more than 3 million likes, the Twitter account has nearly 11,000 followers, and a YouTube page (autogenerated by YouTube) has a few dozen videos related to this event.

So between Black Friday and Cyber Monday, sandwich in a bit of shopping at an independently-owned retailer or business near you.

Wednesday, November 14, 2012

Competitive Pricing, Hour by Hour

With the holiday buying season almost in full swing, retailers recognize that consumers are doing more comparison shopping than ever before.

Shopping search engines like Nextag are still popular, of course, and offer marketing opportunities for retailers to reach consumers who are trying to make a buying decision.

Retailers are using sophisticated technology from Mercent and other firms to monitor competitors' prices and, if necessary, adjust their own prices--daily, hourly, or whatever it takes to remain in contention.*

To quote Mercent's CEO: “If your competitor re-prices daily and you do it hourly, for 23 hours a day you are in position to own the [purchase] decision.”

Stores are also price-conscious, keeping an eye on their competitors' tags. Nebraska Furniture Mart (above), owned by super-investor Warren Buffett's Berkshire Hathaway, keeps abreast of competitive pricing and changes as many as 800 prices every day. Remember those printed shelf price tags? Gone, replaced with electronic e-ink tags for clear and up-to-date prices in all of the branch locations.

* According to today's New York Times, online prices over the Thanksgiving weekend were changing hourly at Amazon, Walmart, and Target, sometimes by a matter of pennies, so that one retailer or another could trumpet the absolute lowest price on some popular item.

Saturday, November 10, 2012

The World's Most Innovative Company Is...

The company behind the iPad Mini heads the 2012 list of the most innovative companies on the planet, as compiled by Booz & Co.

For the third year in a row, Apple remains at the top of Booz's list (see below), although its R&D spending is far from the top.

Fast Company's list of the world's 50 most innovative companies also puts Apple at the top, followed by Facebook, Google, Amazon, and Square. The Forbes list of most innovative companies shows Apple as #5 ( is #1 in this list).

Thursday, November 8, 2012

Holiday Retailing 2012: The Challenge of Showrooming

What does the trend toward showrooming mean for stores and online retailers this holiday season? Showrooming occurs when shoppers examine products in a nearby store but then buy from an online merchant (using a mobile phone or their tablet or personal computer). So many shoppers have smartphones in hand when they visit stores that retailers should expect showrooming to be a way of life from now on.

Remember last December, when Amazon's promotion of its price check app angered store competitors? The company not only encouraged consumers to compare prices when they were at the mall, it also offered a discount for ordering the item from Amazon instead of buying in the store.

Here's how retailers are gearing up for the showrooming challenge in 2012.
  • Target and Best Buy have already announced they will match the prices of online rivals during certain periods. 
  • Some stores are equipping employees with tablets or other devices to help shoppers compare products, understand features, check inventory, and even place orders for same-day pickup (in the store, of course). 
  • To combat showrooming, a number of retailers are offering exclusive merchandise assortments and improving in-store service.
One final consumer behavior point in favor of store shopping is that once a buyer stands in front of a merchandise display and makes a buying decision, he or she may put a higher value on being able to take the product home right away instead of paying less but having to wait a day or two for an online order to be delivered.

Tuesday, November 6, 2012

What's Happening to Flash Sale Sites?

When the Gilt Group took its first online orders for upscale apparel in 2007, the cofounders envisioned a kind of virtual sample sale rather than a retail website. Soon they realized that "the big and exciting change in our model was the feeling that you had to move and act really quickly on making a purchase because it was fleeting," cofounder Alexis Maybank told Adweek.

That's the appeal of the flash sale site: Quantities are limited, time is limited, so click to buy what you like when you see it, or you'll miss out on the item/size/color/price you want. Flash sale sites like Rue La La (apparel) and One Kings Lane (home furnishings and decor) specialize in marketing luxury products to members, consumers who've signed up to receive offers.

Now, with the economy poised for improvement and fewer status brands selling off excess  inventory, flash sale sites are taking a second and third look at how to attract and retain members as this type of marketing evolves. In addition to branching out beyond clothing, some sites are reevaluating local operations and pursuing global expansion.

Finer segmentation (such as on purchase occasion) is helping some flash sale sites grow., for example, creates limited-time pop-up shops on its site to focus on seasonal or holiday gifts and merchandise.

Will flash sale sites flourish or fizzle as competition intensifies?

Saturday, November 3, 2012

Black Friday, 3 Weeks Early

Amazon has decided to push Black Friday marketing up to the first Friday in November, a full 3 weeks earlier than usual for this "traditional" first and biggest Christmas-Hanukkah shopping day of the season.

Above, Amazon's home page, as it looked on November 3, with a link to "Countdown to Black Friday Deals Week." Each countdown day comes with its own deals, of course.

Walmart is promoting its own preholiday, online specials here, calling them "our lowest prices of the year." And the store is also reminding those who love to shop online not to forget Cyber Monday!

Dell has its Black Friday specials ready for shoppers right now. And if you want the inside info on Target's Cyber Monday specials, sign up for its e-mail news.

'Tis the season to comparison shop.

Wednesday, October 31, 2012

Sandy, Soggy Halloween

It's Halloween, and a bit spooky for people in the Eastern US. We're having a subdued and soggy holiday this year, with no electricity, widespread damage, injuries, and cleanup efforts still in the early stages. Many towns are postponing children's events for safety reasons.

Well before Hurricane Sandy made her appearance, candy marketers were on the air and in print advertising family size packages, individual packages suitable for trick-or-treaters, and recipes for party fare.

Halloween goodies come in salty flavors as well as sweet. Some supermarkets are featuring point-of-purchase displays of Wonderful Pistachio treats for Halloween, with packaging tied to the Disney Frankenweenie movie.

And while pumpkin lattes wouldn't seem to be at the top of the list for young trick-or-treaters, their parents are unhappy about Starbucks running out of this seasonal favorite. (Starbucks has been testing pumpkin spice latte ice cream too.) On the other hand, Dunkin' Donuts has pumpkin lattes, pumpkin donuts, and more. And 'tis the season for pumpkin beers.

Happy Halloween, no matter what treat you prefer, and please be safe.

Thursday, October 25, 2012

Free Returns Lead to "Escalation Effect"

A new study published in the September 2012 issue of the Journal of Marketing indicates that consumers will spend MORE with online retailers that pay for shipping on returned goods.

Of course e-tailers will pay for returns on goods that are defective, broken in transit, or when the order is filled incorrectly. Many, however, require customers to pay for shipping when they return something that doesn't fit or is the wrong color or just isn't what customers expected.

According to this study, when companies like Zappos pay shipping both ways, their customers tend to buy more. Why? Because of the escalation effect--the idea that the customer is willing to try purchasing more items or more expensive items because there's no risk in the purchase, no shipping fees to pay to return unwanted purchases.

In the study, customers who'd previously returned one or more items (without paying return shipping) bought significantly more later from the e-tailer offering free returns. In contrast, customers who had to pay for return shipping reduced their future purchases with that e-tailer.

The study's authors conclude:
The findings suggest that online retailers should either institute a policy of free product returns or, at a minimum, examine their customer data to determine their customers' responses to fee returns.
The founder of, a company specializing in virtual dressing rooms that enable customers to "try on" clothing before purchasing online, also notes the other side of the equation: "Returns cost retailers enormous sums of money; not just the transportation of it, but the re-warehousing of the garment and, often, its subsequent discounting for resale."
The bottom line for retail marketers: Know your customers' behavior patterns and test to see whether you'll get a better financial return from offering free returns.

Tuesday, October 23, 2012

Retailers in Halloween Mood

Retailers are getting ready for a busy Halloween this year: According to the National Retail Federation, 71.5% of Americans "will get into the haunting Halloween mood, up from 68.6 percent last year and the most in NRF’s 10-year survey history." The survey suggests that purchases of candy, costumes, and decorations will be about 10% higher than last year--nearly $80 per household, on average.

Pet owners will be costuming their dogs or cats, too, to the tune of an estimated $370 million in Halloween spending.

And trick-or-treaters will be enjoying a LOT of candy this year. The National Confectioners Association projects more than $2 billion in US candy sales for Halloween.

The top 10 costumes? The NRF's infographic sums it up: superheroes, zombies/vampires, and the usual pirates, princesses, pumpkins, and ghosts.

Top Halloween costumes for adults, kids and pets in 2012 – Infographic

Saturday, October 20, 2012

Cause-Related Marketing: October and Pink Products

When First Lady Betty Ford talked publicly about her battle with breast cancer in 1974, she broke down barriers and encouraged dialogues that have continued to this day. Would she have been amazed at the blossoming of pink products offered through cause-related marketing to raise money for breast cancer research and education?

A quick search for "pink cancer products" brings up more than 47 million results. They range from Master Lock's pink locks (above) to NFL football jerseys and everything in between. Walk down almost any aisle in the supermarket and you'll see pink products. Many retailers (such as Staples) have pink products for sale, as well.

Yet some research shows that consumers are skeptical about how much this river of pink actually benefits the cause. On the one hand, 86% of those who responded to a Cone Communication survey said they have a more positive perception of firms that support breast cancer awareness/research. On the other hand, 77% of respondents believed that firms get involved with cause-related marketing “solely for corporate gain.” The study also indicates that people are overwhelmed by the huge number of pink offers.

To improve transparency, both Susan G. Komen For The Cure and the Breast Cancer Research Foundation have established specific guidelines for firms to use in disclosing the level and purpose of their pink product fundraising. For example, if purchasing a pink product triggers a financial donation, the tag should say that (and how much the firm is donating). If purchasing a pink product raises money for cause awareness, the label should say that.

Buy a pink cause-related product next time you're shopping, and help raise money to fight breast cancer.

Friday, October 19, 2012

Starbucks + Coinstar = Premium Coffee Kiosks

Rubi coffee kiosk
Coinstar, which owns the highly successful Redbox chain of DVD rental kiosks, has now teamed up with the Starbucks-owned chain Seattle's Best Coffee to create Rubi vending machines (oops, I mean kiosks) that dispense premium coffee by the cup.

The out-of-home coffee market is estimated to be as large as $28.5 billion yearly. No one competitor dominates, so the Rubi kiosk won't be trying to dislodge a well established brand. It's also selling premium coffees, lattes, and other specialty java drinks at prices below the menu price at Starbucks, a plus for price-conscious folks.

Seattle's Best used to feature its coffees in Borders bookstore cafes. Now that Borders has gone bust, Rubi kiosks are an opportunity to spread the Seattle's Best brand across the country once again.

Coinstar's CEO says that Rubi will offer "the kind of quality, convenience and value that we know coffee drinkers on the go will appreciate."

Will Rubi machines deliver enough revenues and profits per square foot to become fixtures at thousands of supermarkets, stores, and offices within a few years?

Tuesday, October 16, 2012

State Fairs Reach Out to Exhibitors and Sponsors

State fairs are big business these days, with events scheduled over two or three weeks, multiple exhibit halls, musical presentations, agricultural contests, and much, much more. A million people or more attend each fair--creating a marketing opportunity for many companies.

Here's what the State Fair of Texas tells prospective exhibitors: The State Fair of Texas Auto Show functions on two levels. As an exposure venue, the Auto Show has no peer in its ability to put the product in front of the customer. As a sales venue, a big percentage of car purchases were preceded by a State Fair visit.

Demographics posted on the Texas site profile the Fair's audience. For example: Of the new car buyers who attend the Fair's auto show exhibits, household income is over $95,000, 76% are married, 51% are men/49% are women, and the average age is 44.

The Florida State Fair, held every February, describes its attendees using a variety of demographics, including: 88% are Florida residents, average household income is over $64,000, 60% of attendees work full time, and 14% of attendees bring children under 5 years old.

Here's what the Arizona State Fair knows about the 1.1 million people who attend during the fair's three weeks: Average household income is more than $55,000, 42% bring a child under the age of 12, 58% are female, and 34% have college degrees. 

The Ohio State Fair (photo above), which opens for two weeks each year, promotes itself to sponsors this way: The Ohio State Fair Corporate Event Marketing Program has developed into one of the most comprehensive grass-roots marketing initiatives in the Fair industry today. Whether you sell products or services, or have a message or initiative to promote, we can develop a turn-key tailored sponsorship and promotion program that provides integrated advertising, sales promotion and hospitality benefits to meet your goals and objectives.

Thinking about a state fair exhibit or sponsorship? Know your goals and objectives; determine whether the fair's audience matches your target market. Talk with sponsors and exhibitors who have experience with the fair you're considering. Be sure to attend before you sign. And enjoy!

Monday, October 15, 2012

Reverse Channels for Old or Unwanted Cell Phones

So many consumers are upgrading their smartphones so often that entrepreneurs are figuring out ways to profit by providing a "reverse channel" for old or unneeded phones. The goal is to keep these devices out of landfills where they don't belong and create a way to collect and refurbish them for resale. Consumers win, entrepreneurs win, and the planet wins.

EcoATM is much in the news lately because its automated self-serve kiosks make it quick and easy for consumers to recycle their old phones with the bonus of making a few bucks--right away. "There's no 30-day wait for a check in the mail," founder Mark Bowles tells Businessweek. In essence, customers let the kiosks test their old phones, receive an instant appraisal, and get immediate cash or store credit for the value set by EcoATM, if they decide to accept the offer. (NOTE: The Economist notes that the EcoATM requires fingerprints and driver's license of sellers to discourage the sale of stolen merchandise.)

The EcoATM looks user-friendly, and its green-and-white theme has a recycling feel. (The animated "how to" on the company's home page features a robot who might be a cousin of Eve, WALL-E's companion, as shown at left--both have a white body and big blue eyes!)

There are numerous ways to recycle your old phone, not just through EcoATM but at online buyback sites, the store where you buy your new phone, and other drop-off points. Check it out next time you upgrade.

Sunday, October 14, 2012

Ford Accelerates Social Media Marketing

Ford is putting the pedal to the metal by testing lots of marketing ideas--and then taking immediate action when it finds a winner. "We test it, and if it works, we scale it right away," Ford's Jim Farley told the Masters of Marketing conference.

Social media marketing makes sense in this situation, because it can be updated quickly, with metrics to determine audience response day by day (or more frequently). How many people clicked to view a site or page? How long did each person stay on that site or page? Did the visitor click for more information or to configure a car?

True, it's very hard to determine whether a sticky site or popular page leads to a purchase. But Ford is taking the long view, thinking about its brand first. "We want to be the brand that the average person feels most engaged with. We don't want to be the fanciest company, we just want to engage people," Farley explains.

The "Random Acts of Fusion" campaign, for example, stars Ryan Seacrest and Joel McHale putting lucky consumers in the driver's seat of a newly redesigned Ford Fusion. Farley says that consumers seek out Ford because of technology, and this Fusion campaign reminds consumers that Ford is a very social brand.

Rather than segment by age and other demographics, Ford is providing social media content that appeals to a target market segmented by psychographic and behavioral elements.  

Farley said in an Advertising Age interview: "The days are over that digital media is dominated and consumed by younger males. Far over. The fastest growing group on Facebook is women in their 50s." Consider Ford a driven brand.

Tuesday, October 9, 2012

Cigarette Labels, Down Under

After a series of legal challenges that failed to change the rules, cigarette marketers in Australia are getting ready to comply with the country's new laws on plain packaging. Starting on December 1st, 75% of the package front must be devoted to graphic images and written warnings about the dangers of smoking.

Australia has set a goal of reducing smoking rates from nearly 17% in 2007 to 10% by 2018. This plain-pack law is one of several approaches to demarketing tobacco products.

Now, instead of the familiar red-and-white box, Marlboro cigarettes will look like the packs in the photo. In fact, every brand's cigarettes will be packaged in similar wrappings, with strict rules on the way the brand name is presented on the label. A recent study confirms that plain packaging is much less appealing to would-be smokers than the usual colorful, differentiated cigarette packages.

One legal challenge the Australian courts brushed aside was the argument that brands' intellectual rights were not being respected. Manufacturers charged that the country was infringing on their legal right to use trademarked packaging and branding. The high court responded: Although the Act regulated the plaintiffs' intellectual property rights and imposed controls on the packaging and presentation of tobacco products, it did not confer a proprietary benefit or interest on the Commonwealth or any other person.

Sunday, October 7, 2012

McDonald's Canada Makes the Most of Content Marketing

Content marketing--marketing to demonstrate thought leadership through informative, engaging, and often original content --is increasingly vital in this age of social media and viral videos.

A company that can weave a theme of transparency and engage customers through content marketing is really savvy. That's why McDonald's Canada is doing so well with its content marketing initiatives, emerging as a model of how to address issues of real interest to customers, critics, and the company itself.

On a dedicated web page, on Facebook, and on Twitter, McD's Canada is inviting questions from the public and creating written answers, photos, and/or videos that respond with facts and details. Think the eggs on a McMuffin look too perfect to be fresh and real? McD's Canada can explain (here). An earlier video about how McD's burgers are prepped for commercials went viral worldwide.

As simple as this content marketing approach seems to be, it's actually breaking new ground and is a refreshing change from the usual over-produced, glitzy fast-food commercials and ads we're used to seeing. McD's Canada is promoting this "Our Food, Your Questions" program in multiple media to attract more attention and involve more customers in asking questions that offer opportunities for sharing info and educating the public about policies and practices.

Will other McDonald's companies follow this recipe for smart marketing?

Saturday, October 6, 2012

Goodwill Markets Vintage Everything

"Vintage" clothing and furniture and housewares are trendy...and that's great news for Goodwill Industries. The nonprofit group's mission is: to enhance the dignity and quality of life of individuals and families by strengthening communities, eliminating barriers to opportunity, and helping people in need reach their full potential through learning and the power of work.

Its no-frills thrift stores offer employment for local people and sell a wide selection of clothing and seasonal basics at extremely reasonable prices. Money raised helps Goodwill provide job retraining and other needed services in hundreds of U.S. communities.

Now new Goodwill stores are filling vacant storefronts with spruced up-merchandising, attracting crowds of bargain hunters. Shopping for gently worn Halloween costumes? Check your local Goodwill store this month. Costume jewelry, books, even LPs are on the shelves at many Goodwill stores. In my area, when you donate your unneeded clothing or goods to Goodwill, you receive a 20% off coupon good on your next purchase in nearby Goodwill stores.

Although Goodwill has been part of the e-commerce movement for some time, local Goodwill groups are beginning to sell local merchandise online. Pre-owned stuff marketed in 21st century fashion!

Tuesday, October 2, 2012

Previewing Top Toys for Christmas, 2012

Although Halloween is still 29 days in the future, Christmas is right around the corner for marketers in the toy industry. Already we're seeing lists of the top toys for Christmas 2012. Here's a preview:

Time to Play magazine says that a new Thomas the Tank Engine toy will be the must-have for kids 2 and up. Never fear, there's a digital device for age 3 and up, the LeapPad2, a tablet computer for toddlers--complete with apps. A few others among the magazine's picks are Teenage Mutant Ninja Turtles action figures and new MEGA Blocks kits.

Toys 'R' Us is offering its own list of 15 hot toys, ready for reservation so gift-givers don't find themselves without this year's trendy toy. With a 20% deposit, you can reserve your Furby or LeapPad2 or Lego Ninjago Epic Dragon Battle kit. Or a 1D collectors' set of figures from the hot new boy band, among other toys.

Target has its own list of 24 top toys, including Disney's Bounce Bounce Tigger and Lego Friends kits (for girls), plus a few toys that overlap with other lists.

Finally, CNN Money picks 7 toys made by small businesses that it believes will be in high demand for Christmas 2012, including
Illumivor Mecha-Shark (left) and
Perplexus Twist, a solve-it 3D toy.

Tuesday, September 25, 2012

Marketing Oreo's 100th Birthday

Millions of people are helping Oreo celebrate its 100th birthday through videos, Facebook (28 million "likes"), Pinterest, and YouTube (5 million views).

Every day for 100 days, Oreo has been posting a new image or ad as part of its "Daily Twist" campaign in print and social media.

The finale is next Tuesday (October 1), when that day's ad will be revealed in New York City's Times Square, based on customers' ideas and submissions.

Some of the Oreo promotions in this centenary year are taking the iconic cookie in distinctly different directions from its chocolate roots.

As an example, the new seasonal Halloween-themed version exclusive to Target stores, with "candy corn" flavor and icing, has received mixed reviews.

Still, this unusual twist on the traditional cookie is keeping the Oreo name in the spotlight and headlines! Happy birthday, Oreo.

Sunday, September 23, 2012

Building Buzz, Building Loyalty: has one foot in the past (the deep past--generation upon generation of genealogical data) and one foot firmly in today, via its savvy marketing. The site operates on a subscription model, selling access by the month, or for 6 or 12 months at a time.

I'm one of Ancestry's 2 million worldwide subscribers. (Above, my grandpa, as a young man, in his grocery store.) The company reported revenues of $166 million in 2007 and by 2011, revenues had grown to $400 million--strong growth regardless of the challenging economic situation. Estimated revenues this year will be $480 million. Some reports point to Ancestry's profitability and refer to a possible buyout.

This week's Businessweek analyzes Ancestry's smart marketing moves. Every few months, Ancestry announces some startling discovery about the family history of a well-known politician or celebrity. That gets people buzzing about genealogy in general and Ancestry in particular, leading some to visit the Web site and register for the company's 14-day free trial. After two weeks, many people find Ancestry so convenient and user-friendly that they become subscribers.

The site also sends subscribers e-mails about "hints"--new documents or research connections that pertain to specific people on their family trees. Hints keep subscribers coming back to the site over and over in search of the latest documents that have been digitized or for connections to distant relatives who are researching the same ancestors.

For holidays such as Memorial Day and July 4th, Ancestry opens certain databases to the public for free searches. This is a different version of the tried-and-true "free trial" promotion that has helped Ancestry attract and maintain a strong and loyal subscriber base.

PS: This is my 701st marketing post! Many more to come in the months and years ahead.

Thursday, September 20, 2012

What About Your Stakeholders?

All marketers have stakeholders--but who are they and what do they want? Use this list as a starting point for identifying the people and organizations that (1) can affect your marketing performance or (2) are affected by your marketing performance:
  • customers
  • employees/managers
  • owners/shareholders
  • government (regulators, legislators, etc) 
  • members of the media 
  • securities analysts 
  • suppliers, partners, and service firms (ad agencies, banks, etc)
  • special interest groups
  • competitors
Depending on your market, mission, goals, and plans, you may have other stakeholders. For example, if your company is involved with cause-related marketing, the nonprofit group that benefits from this connection is definitely a stakeholder. Why? Because the amount of money it receives depends on your marketing performance in the cause-related campaign.

In other words, UNICEF is a stakeholder of Giorgio Armani Fragrances and other corporate partners that sponsor the UNICEF Tap Project to get clean drinking water to children worldwide.

As you create your next marketing plan, take time to list your stakeholders and identify how they affect you and how you affect them. If their influence is particularly important to the success of your marketing, think about what they want or expect from your organization and what you can do to communicate with them, if appropriate.

Remember, it's illegal to communicate with competitors to coordinate pricing decisions, for example. Yet for industrywide challenges such as conserving natural resources or reducing fraud, representatives of competing firms might serve together on panels or committees. A number of competitors are members of the Sustainability Consortium, a group that's developing methods for measuring and communicating the environmental impact of goods and services. All are stakeholders in the system that will emerge from this consortium...and as customers, we're stakeholders, as well.

Monday, September 17, 2012

Walmart and Sustainability

Remember back in 2007, when Walmart began to go green in a big way?

The world's largest retailer surprised a lot of people with its full-speed-ahead sustainability initiatives. It began adding solar panels to distribution centers and stores, introduced many green products, and jumped on the recycling and CFL bandwagons. Given the huge influence Walmart has on its supplier base, this was a very promising beginning.

Since then, Walmart has logged many accomplishments in its sustainability efforts, including adding alternative energy sources to reduce dependence on traditional energy generation and reducing excess packaging to keep stuff out of landfills. The retailer recycles more than 80% of its waste, not quite reaching its 100% goal--but given the company's global operations, this milestone is positive from any perspective.

Some programs are moving ahead more slowly. Walmart's Sustainability Index, announced in 2009, is making some progress through an industry consortium. However, some observers say the pace is too slow.

On the other hand, even small changes can make a difference in sustainability. Walmart is asking PC manufacturers to put their computers into sleep mode sooner, as an energy saving measure. Its SVP of sustainability explains: "We've really been trying to focus on things that we can do that can provide a benefit but that won't cost our customer[s] more because that's not something we believe that they'll pay for."

Read all about Walmart's green goals and achievements in the company's latest sustainability report.

Saturday, September 15, 2012

Tracking In-Store Shoppers

Time recently polled its online readers about the practice of stores tracking shoppers by following their smartphone signals or by facial recognition technology. Out of 294 respondents (as of the day I participated), more than half were against the practice. Here's the tally as of September 15:
  • 52% agreed that it violates their privacy and they'd avoid stores using such tracking.
  • 25% agreed that it "creeps me out a little" and they'd prefer to opt out.
  • 5% were neutral.
  • 12% weren't bothered, seeing this tracking as just another data point like the info in a credit report.
  • 5% thought it would be a positive if such tracking helped stores personalize product suggestions and promotional deals for individual customers.
Last November, a mall in California and one in Virginia started tracking shoppers via their mobile devices on Black Friday (the Friday after Thanksgiving, one of the season's biggest shopping days).

Although the malls posted notices about the tracking, the only way to opt out was to turn cell phones off. After a NY senator contacted the malls to question this practice, the tracking was suspended.

As the yearend holiday shopping season draws near, such tracking may again become an issue. New tests are about to begin in which shoppers are tracked via Wi-Fi accessed as they visit stores. Will the info be useful to retailers? Will consumers object?

Friday, September 14, 2012

21st Century Trade Shows

Virtual trade show
Trade shows are still alive and well, bringing B2B marketers together with customers in person or online. 

Marketing Profs recently ran an insightful article summarizing why businesspeople attend trade shows. The top reason, of course, is to see what's new. Here are the main reasons, from most cited to least cited:
  1. See new goods and services.
  2. Collect information for planning purposes.
  3. Gather ideas on near-term trends and changes for decision-makers to consider.
  4. Meet with experts.
  5. Meet with people who can "make things happen."
  6. Meet people with common interests.
  7. See friends and travel to interesting places.
Not everyone visits a trade show in person. One growing trend is toward virtual trade shows that take place online. For example:

Monday, September 10, 2012

Legos for Girls are Selling Well

My first blog entry of 2012 was about Legos Friends, a line of Legos blocks and figurines designed specifically for girls.

Despite some worries about this product line reinforcing gender stereotypes, Legos Friends are selling well--at a rate that's double what Legos projected, which the CEO says is "astonishing."

In a period of economic uncertainty, with purchases of many non-essential items languishing, Lego's profits are actually up by 35%. Its market share has risen by a full percentage point, which in the multi-billion-dollar toy market represents a lot of money.

Now Lego is ramping up to stock store shelves with Lego Friends for the big holiday-buying season ahead. The market has spoken.

Sunday, September 9, 2012

Pop-up Stores for Pop Groups

One Direction is a UK "boy band" with an international fan base and a big MTV video win to its credit. It made its name on the X Factor show (one of the shows that inspired American Idol) and has been touring the world.

Instead of simply selling T-shirts and other band-branded items at each venue on the concert tour, the band's merchandising company decided to open limited-time pop-up stores in Melbourne, Sydney, Toronto and Chicago when One Direction came to town.

Thanks to the Facebook page and other social media, 1D World was the talk of tweens well before One Direction's concert dates. “Before we were coming, before we announced, they all knew about 1D World,” the merchandising firm's managing director tells Maclean's.

Pop-ups featuring music are popping up all over. Two pop-ups opened in Chicago for this year's Record Store Day, one devoted to the now defunct local group Hot Jams and one by Numero Group--both loaded with vintage or new vinyl releases.

The next big occasion for pop-ups is Halloween, when temporary shops open all over America to offer holiday-themed costumes, makeup, and merchandise. Even before the Halloween stores close, the Christmas pop-ups will be open (with enough fake snow to cover the globe several times over!).