marketing news publishing news · economic update gdp: 3rd quarter 2012: 3.1 percent. unemployment...
TRANSCRIPT
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MARKETING NEWS Consumers respond most to QR codes found in magazines ....................................................... 2
Global mobile ad revenue projected to grow to $24.5 billion by 2016 ...................................... 3
Hot print markets for 2013-2014 ................................................................................................ 4
Tablets see record in searches, surpassing mobile ad spend ....................................................... 6
PUBLISHING NEWS AMI and USA Today enter SIP partnership ............................................................................... 7
Hearst’s Clinton: Brand integration is driving more business .................................................... 8
Vogue again leads women's fashion for March-issue ad pages .................................................. 9
Advance Publications buys digital marketing agency, POP ..................................................... 10
POSTAL NEWS US Congress must help USPS grow revenues, says GAO ....................................................... 11
Why USPS is a viable alternative to FedEx and UPS .............................................................. 13
RETAIL NEWS 3 Major tech trends transforming the retail landscape .............................................................. 14
Amazon will build a third warehouse in California .................................................................. 15
Gigante and Petco in deal to open stores in Mexico and Latin America .................................. 16
JC Penney taps R/GA for digital work ..................................................................................... 16
ECONOMIC UPDATE
GDP: 3rd
quarter 2012: 3.1 percent.
Unemployment Rate: the unemployment rate was unchanged at 7.8 percent in December.
Consumer Confidence: which had declined slightly in November, posted another decrease in
December. The Index now stands at 65.1, down from 71.5 in November.
January 28th
, 2013
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MARKETING NEWS
Survey: Consumers Respond Most to QR Codes Found In Magazines
Staff Writer , Print In The Mix . 1/21/2013
Survey: According to a new Pitney Bowes report, 2012 QR Codes Use in the U.S. and
Europe: Getting ahead of the emerging QR code marketing trend, Quick Response (QR)
codes are “gaining increased acceptance among consumers in North America and Europe.”
Pitney Bowes surveyed 5,000 smartphone users – 2,000 in the U.S. and 1,000 in France,
Germany, and the UK respectively. The survey asked consumers whether they had used QR
codes and if so, where the QR codes had been located. Findings:
One in 5 Americans have scanned a QR code
• On average, 15% of all respondents say they have used a QR code. The study shows
Americans use of QR codes is slightly ahead of European equivalents, due to “almost a third
of the (U.S.) population” owning smartphones (U.S–19%, UK–15%, Germany–14%,
France–12%).
• Unsurprisingly, QR code use is an average 27% for consumers in the 18- to 34-year-old
group.
Location of QR codes most often scanned
• Consumers have responded most to QR codes found in magazines (15%), and on
consumer packages (13%) and mail pieces (13%), such as direct mail and bills and
statements.
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Global Mobile Ad Revenue Projected to Grow to $24.5 Billion by 2016
Tony Silber , Folio . 1/23/2013
While the mobile media landscape is still in a trial-and-error period for many publishers,
advertisers are jumping in headfirst. According to information technology research and
advisory company Gartner, Inc., mobile advertising revenue will reach $11.4 billion in 2013.
For the North American market that number is expected to climb to $3.8 billion this year—
an increase of about $700 million from 2012. By 2016, mobile advertising revenue
worldwide is expected to more than double to $24.5 billion and $8.8 billion in North
America.
“The mobile advertising market took off even faster than we expected due to an increased
uptake in smartphones and tablets, as well as the merger of consumer behaviors on
computers and mobile devices,” says Stephanie Baghdassarian, research director at
Gartner, according to a statement. “Growth in mobile advertising comes in part at the
expense of print formats, especially local newspapers, which currently face much lower ad
yields as a result of mobile publishing initiatives.”
Mobile search, which Gartner says includes paid positioning on maps and different forms of
augmented reality that will all be driven by a consumer’s location, will contribute to drive
mobile ad spending across the forecasted period. The company asserts that mobile display
ad spending will grow and take over mobile search, with Web display spending to take over
in-app displays by 2015.
These circumstances, says Gartner, creates a surplus condition because ad inventory is
generated at a pace considerably faster than most advertisers can shift their budgets, which
has been driving down unit ad prices—creating circumstances reminiscent of the early days
of Web advertising, in which cyclical advertising arrangements among websites produced an
inflated picture of revenue.
“Some correction in the growth rate must occur before demand for brand local advertisers
catches up with supply, and more sustainable economics support a faster growth rate
commensurate with consumer adoption,” says Baghdassarian.
By 2015, the Asia Pacific region will have the largest share of the $24.5 billion in global
mobile advertising revenue with $9.4 billion—North America will follow, with Western
Europe claiming $4.4 billion.
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Hot Print Markets For 2013-2014
Staff Writer , Print In The Mix . 1/22/2013
Printing Impressions has compiled their annual projection for the hottest print markets by
sector.
Packaged foods ranked top hot market
Packaged Foods ($1.15T, +4 percent; with $17.8B to print, +11 percent) ranked number
one, with a revenue forecast of $1,151 billion, thanks to a potential 4% growth rate for
2013-2014.
Printing Impressions cites varied drivers, such as, "smart printing in-pack, on-pack, near-
pack, in-aisle, on-cart, end-aisle, on-shelf, dangling down and topped with near-field QR
codes, Augmented Reality and nano-propertied inks and substrates that wink, blink, bubble,
scratch and talk...Also in the cart, containers, lids, sleeves, bags, wrappers and labels that
are two-thirds of this sector's print demand."
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Medical/Pharma and Publishing ranked number 2 and 3, respectively
Medical/Pharmaceuticals ($471B, +5 percent; with $14.6B to print, +8 percent) ranks 2nd,
while Publishing ($78B, +0 percent; with $11.6B to print, +6 percent) will grow to number
3, thanks to many more book titles are introduced via very-short-run digital printing and
finishing," and "tablets and other non-print delivery of literature are creating demand for
hard copies from new readers, on-demand of course." With this said, "newspapers, unable
nor willing to cross media, will continue in diminishment of circulation and page count, thus
folding FSI demand."
Now in its 34th year, Printing Impressions' "Hot Markets" is the longest continuous forecast
of the printing industry, by sector, region and product.
Tablets See Record in Searches, Surpassing Mobile Ad Spend
Press Release , Multichannel Merchant . 1/22/2013
The Search Agency, a global online marketing firm and the largest independent U.S. search
marketing agency, today released its quarterly State of Paid Search Report, which, among
other findings, reports that smartphones and tablets drove 23 percent of total clicks in the
fourth quarter of 2012, an 89 percent increase year over year. The quarterly report
analyzes aggregated client data from various industries on paid search marketing trends
across search engines and devices on a year-over-year (YoY—Q4 2011 to Q4 2012) and
quarter-over-quarter (QoQ—Q3 2012 to Q4 2012) basis.
"With ongoing advancements and multiple lower priced tablet options being introduced into
the market, it's no surprise traffic on these devices continues to increase," said Keith Wilson
, vice president of agency products at The Search Agency. "But, while our advertisers' spend
on mobile and tablets is increasing, it's not at the expense of desktop. In fact, data shows
that desktop searches remained level over the last two quarters, underscoring the trend
that search is steadily growing overall."
Additional findings from The Search Agency's State of Paid Search Report include:
Tablets see record searches; surpass mobile ad spend
The introduction of a number of new tablet models and record sales growth spurred on huge
growth in both tablet use and advertiser spend. Tablet click share in Q4 more than doubled
YoY and jumped 16 percent from Q3, and smartphones and tablets combined drove 23
percent of total clicks in Q4 2012, an 89 percent increase YoY. The last quarter of 2012
marked the first time in which share of spend on tablets exceeded spend on smartphones
(8.5 versus 7.1 percent of total spend).
Google and Yahoo!-Bing Network continue to see growth; Google leads in mobile
Search engine advertising continues to show healthy growth as impressions in Q4 2012
grew 11 percent YoY and total clicks grew 4 percent. Total clicks on Google increased 4
percent YoY and cost per click (CPC) rose 7 percent from $0.55 to $0.59. Bing also showed
a 4 percent growth in click traffic, with a 15 percent increase in average CPC YoY. Bing's
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mobile impression share and click share increased, but is still substantially less than
Google's impression and click share overall. Google continued to see more paid clicks
coming from mobile devices with 25.9 percent of its total clicks coming from tablets and
smartphones in Q4, compared to 12.6 percent for Bing.
Product Listings accounted for more than 14 percent of spend on Google
Product Listing Ads (PLAs) continued their strong growth in Q4 2012, accounting for 14
percent of retailers' total spend on Google in Q4, a 236 percent increase from the previous
quarter. Specifically, retailers spent more than 9 percent of their PLA budget on tablets and
smartphones, an 80 percent increase from Q3.
Retail surged on mobile during the holidays, but click volume declined YoY
In the retail sector, mobile click share increased from 14.3 percent in Q4 2011 to 26.1
percent in Q4 2012. Retail volume was the driving factor for Q4 growth in comparison to Q3
2012, with a 20 percent increase in click traffic. However, YoY click volume declined 6
percent.
"The holidays brought on big numbers in mobile retail searches but we saw click volume
decrease overall – possibly because of uncertainty from the presidential election and the
natural disasters that affected the Northeast," added Wilson.
To uncover key trends for the Q4 2012 State of Paid Search Report, The Search Agency
extracted client data from search engine advertising tools. The research sample included
advertisers who had 15 consecutive months of data with The Search Agency, and had an
established and stable business model from Q4 2011 to Q4 2012. All results are based on
U.S. campaigns only.
PUBLISHING NEWS
AMI and USA Today Enter SIP Partnership
TJ Raphael , Folio . 1/25/2013
Nowadays, publishers are looking for more and more opportunities to capitalize on existing
and new audiences. Brand extensions through special interest publications (SIPs) are just
one of the valued ways publishers are generating additional revenue from consumers and
advertisers, particularly on the newsstand.
American Media Inc. and USA Today have entered into an alliance to roll out 12 SIPs
together over the next 12 months. Under the partnership, the companies will publish these
12 special magazines that will carry a “Best Of” theme, distributing more than 400,000
copies to newsstands, airports and hotels.
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The editorial strategy and content for these special issues will be cultivated by teams at
both companies and will draw from the expertise of each organization, in addition to outside
subject-matter experts.
The overarching concept of the SIPs is to provide reader guides on what to buy or do across
multiple categories, including health, personal finance, travel, education and more,
according to a statement.
The Best of Diet and Fitness will be the first special issue to roll out, which is scheduled to
hit at the end of February 2013. The content will draw heavily from AMI’s health and fitness
titles, Shape and Men’s Fitness magazines.
All of the advertising sales and production for the issues will be handled by AMI. Companion
websites and digital applications for tablets and smartphones are also being considered.
“When you think of iconic brands across our national media landscape, USA Today has to be
at the top of the list,” chairman and CEO of AMI, David Pecker, says in a release. “Coupled
with AMI’s editorial, production and distribution strengths, we have a unique skill set to
create a series of magazines that will take the ‘Best Of’ concept to a new level in terms of
actionable information for today’s consumer.”
Financial terms of the deal were not disclosed. As of posting time, AMI could not be reached
for comment.
Hearst’s Clinton: Brand Integration is Driving More Business
TJ Raphael , Folio . 1/21/2013
Print may still be the breadwinner for most publishers, but multiplatform integration is now
what’s behind any meaningful growth in ad revenue. Bringing a brand’s content and
messaging across the entire media spectrum is where the fight for marketing dollars will be
won. At Hearst Magazines, that concept has helped propel revenue in the first quarter above
same-period 2011 levels.
“The whole idea of integration is driving business,” says Michael Clinton, president of
marketing and publishing director of Hearst Magazines. “Ten years ago, Cosmo’s audience
was about 17 million and change—that was it. Ten years later, the magazine audience is
around 18 million but there is another 10 million that live in the Cosmo universe. These are
women who go to Cosmo.com, that follow Cosmo on social media or they follow Cosmo on
Sirius Radio. The expansion of the audience, because of the other platforms, allows us to
work with advertisers in an integrated way through print, digital, tablets and social media—
it lifts all boats.”
While the company’s revenue continues to be derived predominantly from print,and,
Clinton adds, “Will be that way for as far as the eye can see,” the company has been
acquiring revenue sources from its other platforms by introducing cross platform, integrated
programs to advertisers.
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When doing year-over-year comparisons, Hearst is running up about 7 percent in ad pages.
Seventeen magazine will be up 50 percent in the first quarter; Food Network magazine will
be up 35 percent for the same period and Harper’s Bazaar will be up 20 percent as well. The
company now has 800,000 monthly digital subscriptions in the United States, of which 80
percent are new customers, as initially reported by FOLIO:.
Besides the company’s brands and content, Clinton says that Hearst’s success in advertising
and sales is driven by the new focus on audiences.
“Magazines are living, breathing organisms,” he says. “Good Housekeeping is a long
standing magazine and we went out into the marketplace to talk the consumer, the reader
and the target potential consumer over 18 months. We spent a lot of time getting insights
into what she wanted, what she liked and what she didn’t like. That led to the editorial
relaunch of Good Housekeeping. What has been the pivotal point or the pearl in all of this is
it’s our job to channel what the consumer is looking for. When we do that in the right way
through one-on-ones, focus groups and research, we provide enormous credibility.”
Treating magazine brands and content as audience driven, specific marketplaces that
capture the desire of readers is how Hearst will compete not only with rival brands, but for
coveted advertising dollars. Clinton points to HGTV magazine—it’s only published six issues
and has 725,000 print subscribers, 28,000 digital subscriptions and sells about 300,000
copies a month on newsstands, bringing its paid circulation to 1 million.
“It’s because HGTV magazine captures the consumer sensibility right now—it’s answering a
consumer’s interest and need,” he says. “If the consumer looks at magazines as a different
kind of experience than she does when she’s online or tweeting, that’s a good story. The
advertising world acknowledges that and is seeing that in an amplified way and that leads
us to being optimistic about 2013."
Vogue Again Leads Women's Fashion for March-Issue Ad Pages
Nat Ives , Advertising Age . 1/24/2013
Ad pages increased again in women's fashion magazines' important March issues, which see
designers introduce new collections every spring and only trail September in importance to
publishers.
March ad pages grew by double-digits percentages at a few titles and by smaller margins at
most others, but the gains are welcome amid a slow start to the year for monthly
magazines as a whole. Monthlies saw ad pages in their January and February issues slip
1.2% from the same period a year prior, according to the Media Industry Newsletter.
But Vogue's March issue will include 457 ad pages, more than any competitor and 3.5%
more than in March 2012, according to the magazine, which is part of Conde Nast.
Time Inc.'s InStyle came in second with 361 ad pages, a gain of 4% from last year. That
makes this the largest March issue in InStyle's 19 years, according to a spokeswoman. And
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Hearst Magazines' Elle ranks third with an estimated 338 ad pages and a 7% increase over
2012.
Larger percentge gains came for some of the titles a little further down the list. Harper's
Bazaar is running 330 ad pages in its March issue, up 21% and enough to set a March
record for Harper's Bazaar as well. Half the title's gains came from fashion, a spokeswoman
said, while half came from beauty. Harper's Bazaar is part of Hearst.
Conde Nast's W has 210 ad pages slated for March, an uptick of 3% and the biggest March
issue for W since 2008. Hearst's Marie Claire follows with 207.5 ad pages, yet another
biggest March yet and a 15.3% gain over 2012, the magazine said.
Time Inc.'s People StyleWatch is posting the second-largest year-over-year gain, 27%,
enough to get it to 172 ad pages, with new buys from brands including Bloomingdales,
Seven for Mankind and Sheiseido.
Conde Nast's Glamour will run 161 ad pages, an 11.5% decline from the year earlier,
although it has a tough comparison against last March, when it introduced a redesign and
saw ad pages leap 21.3%.
Cosmopolitan, part of Hearst, is running 130 ad pages in March, up12.6%. Teen Vogue, a
Conde title, will run 123.9 ad pages, up 31%. And Seventeen, one more Hearst title, will
have an estimated 92.4 pages, up some 66%, a spokeswoman said.
Advance Publications Buys Digital Marketing Agency, POP
Michael Rondon , Folio . 1/24/2013
Advance Publications, parent company of Condé Nast, has stepped up its efforts on two
fronts with the acquisition of digital marketing agency, POP. The company had been making
investments in marketing and M&A since last summer.
Terms were not disclosed.
Counting Nike, Microsoft, Target and Home Depot among its clientele, POP, founded in
1996, generated $35 million in revenues last year-a 30 percent gain on its 2011 earnings
and its tenth consecutive year of double-digit revenue growth.
The company, which will continue to operate independently, employs more than 200 people
between its Seattle headquarters and offices in Costa Rica. No layoffs or personnel changes
are expected. POP added 48 new positions in 2012 and expects to expand similarly in the
coming year.
"As the transition to a digitally-centered world continues, the demand for the services of
pure-play digital agencies will only grow stronger," says Steve Newhouse, chairman of
Advance.net, a division of Advance Publications, in a statement. "POP is incredibly well-
positioned to offer consumer brands something special."
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Adds POP CEO Bill Predmore: "With Advance we now have access to resources that will
support our expansion in North American and beyond."
The POP acquisition comes about six months after Advance made a $10 million investment
in social marketing firm, Unified. It also follows hints from mid-2012 that the company
would seek to increase its M&A activity moving forward.
Peter King Hunsinger, president and publisher of Condé Nast's Golf Digest brands, will serve
as liaison to POP.
Madison Alley Global Ventures advised POP in the deal.
POSTAL NEWS
US Congress must help USPS grow revenues, says GAO
Staff Writer , Post & Parcel . 1/21/2013
That is the central message of a new report from the US Government Accountability Office
(GAO) sent to Congress this week.
The report comes with a new session of Congress needing to restart the process of drawing
up and passing postal reform legislation this year in order to solve the huge financial
problems at the US Postal Service, with mail volumes currently falling “precipitously”.
The GAO sheds light on dozens of revenue-raising initiatives that the Postal Service has
been pursuing in recent years, but also warns that many have been abandoned for various
reasons including the fact that Congress decided back in 2006 to restrict USPS to providing
only products and services that could be firmly defined as postal.
The GAO report looks at suggested revenue-generating ideas that arose from conversations
between USPS and stakeholders since 2010.
The process identified more than 1,500 ideas, which were narrowed down into specific
projects with most potential, fitting with USPS priorities including making it easier to use the
mail, improving the value of the mail and growing the package business.
The Postal Service is pursuing 55 projects to increase revenue, 48 of which are extensions
of existing postal product lines and services like its Every Door Direct Mail saturation mail
programme and extended PO Box services. It has also been investigating experimental
postal products like prepaid greeting cards.
However, 25 other projects suggested by stakeholders have not been followed up.
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One reason behind some of the potential projects being shelved is that the Postal Service
was banned by Congress in 2006 from running non-postal services, although services up
and running before that year were allowed to continue, bringing in about $141m a year in
2012.
USPS wants the ban on non postal products lifted by Congress as part of this year’s hoped-
for postal reform legislation.
Similarly, USPS would like the legal power to start shipping alcoholic beverages and provide
more services to state and local government.
Abandoned initiatives
The Postal Service abandoned 12 projects because they were not expected to be sufficiently
profitable, or if it was believed there was a lack of customer demand.
Among the projects that USPS did not believe would offer a return on its investment were
an online Identity Management Service educating consumers about identify theft when
shopping online. Other projects were considered as requiring too high an initial investment,
including a domestic money transfer service and a retail bill-payment service.
Initiatives that were abandoned because of a perceived lack of customer demand included
plans to expand self-service passport kiosks in post offices, which was vetoed by the US
State Department on cost grounds. And, a plan to have post offices provide identity
verification services for the government’s Internal Revenue Service was similarly torpedoed
by the IRS opting for an alternative solution.
An initiative offering volume-based discount pricing for First Class Mail was ditched because
USPS believed mailers would not have the resources to increase their use of First Class Mail
sufficiently to achieve the discounts.
The Postal Service declined to pursue a hybrid mail service that would have involved
opening and scanning customers’ physical letters – with customers’ permission – and
sending messages to them in digital form. The GAO report stated that it was believed such a
service would “potentially damage the trust that customers have in the USPS brand”.
Similar services are provided to businesses by other postal services including Deutsche Post
and Swiss Post.
Another abandoned initiative similarly thought to risk trust in the USPS brand was a project
to provide companies with tools to better target their mailings to customers.
Congressional reforms
The thrust of the GAO report in its recommendations for Congress is that the Postal Service
should be freed up to provide a wider range of products and services as part of its efforts to
resolve its horrific financial situation.
USPS officials actively want to pursue more non-postal services, as well as the shipment of
wine, beer and spirits, the report said. They also want to provide more services for state
and local governments.
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“According to USPS, opportunities in these three areas could provide significant value to
customers, improve USPS’s financial position, and take full advantage of its resources and
competencies,” said the GAO, adding the proviso that fresh revenue-generating projects will
never be enough to fix all the USPS financial problems.
The GAO told Congress: “We continue to believe action to address the long-standing
challenges that hinder USPS’s financial viability, including a consideration of options to
expand its revenue generating potential, remains necessary.”
Why USPS is a Viable Alternative to FedEx and UPS
Tim Parry , Multichannel Merchant . 1/23/2013
Citing the fact that the United States Postal Service "cannot wait indefinitely for legislation,"
the USPS Board of Governors said last week that it has directed management to accelerate
the restructure its operations to further reduce costs in order to strengthen its finances.
That's good news for merchants who ship direct-to-customer, according to MCM Outlook
2012-13. According to the annual report, 56% of respondents said they felt the USPS is a
viable alternative to UPS and FedEx.
The USPS also gained ground as respondents' choice of primary domestic shipper: While
21.8% said the USPS was its primary domestic shipper of choice, that's up almost 1% when
compared to the MCM Outlook 2011 results.
The USPS continued to grow its package services business in FY 2012, which ended Sept.
30. Revenue from its package business increased by $926 million, or 8.7%, on a volume
increase of 244 million pieces compared to the same period last year, according to a press
release. Higher consumer spending, higher ecommerce retail sales plus increased marketing
efforts drove much of the growth in this segment of the USPS business during the last year.
Ken Wood, president and founder of freight auditing and consulting firm LJM Consultants,
says the USPS has its pros and cons for package shippers.
For example, Wood says USPS is very competitive when it comes to lightweight-residential
shipments with low value. Also, the USPS does not have the accessorial charges and
surcharges that UPS and FedEx have, such as address correction fee, residential fee and
fuel surcharges.
"The USPS has flat rate boxes that select shippers can benefit from," Wood said. "(But) the
drawbacks are a lack of guaranteed time delivery, inferior tracking system, lack of trust
when it comes to more expensive, time sensitive items."
Rob Martinez, president and CEO of transportation spend management firm Shipware, says
USPS cannot compete with discounted pricing of FedEx and UPS for the majority of
packages.
"If (you are shipping) 3 to 13 ounces, First Class parcel is a terrific choice. Even 1- to 2-lb
Priority Mail, or Flat Rate Box Priority Mail, can be an economic alternative to UPS and
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FedEx," Martinez says. "However, over 3 lbs., most volume shippers have significantly
better discounted pricing through FedEx and UPS."
Amine Khechfe, general manager and co-founder at Endicia, says it is interesting to see how
some shippers Endicia serves are migrating to deferred shipping using consolidators. This is
a joint service whereby private carriers such as FedEx SmartPost, UPS Mail Innovations and
DHL Global Mail use the USPS for the last mile.
"Both the USPS and private carriers win together," Khechfe says. "However, when looking at
the B2B arena, private carriers are still strong."
RETAIL NEWS
3 Major tech trends transforming the retail landscape
Staff Writer , Forbes . 1/23/2013
Another holiday shopping season has come and gone, and in its wake most major retailers
are scratching their heads, wondering how earlier-than-ever Black Friday openings
translated into retail’s smallest growth rate since 2008 (a measly 0.7 percent).
While a myriad of explanations have been offered for America’s softened interest in
shopping — bad weather and personal economic issues being the most cited — another view
is that traditional retailers are beating back against the technological revolution in retail.
Between our collective move towards e-commerce, the new technologies being introduced
into stores and an increasing reliance on smartphones and apps, retail is undergoing a
massive tech transformation.
Retailers of the future would be wise to come on board.
A changing tide: the online retail market’s steady growth
Just as predicted, the ease and comfort that online shopping affords us is in many ways
besting the traditional in-person shopping experience. Case in point: though many
traditional retailers struggled this winter, Amazon sold 306 items per second on Cyber
Monday (27 million purchases in total), setting a new record.
In general, the online retail market has grown steadily: It is now valued at $226 billion, and
is estimated to rise to $327 billion by 2016 — a 45 percent increase. Though retail giants
like Amazon and eBay may dominate the market, venture capitalists are pouring money into
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the sector, with flash-sales sites like Fab.com – which raised $105 million in July 2012 —
reaping the benefits.
1. E-commerce is replacing physical stores. In fact, e-commerce is set to replace
physical retail spaces altogether in some parts of the world. American companies like
Toys“R”Us, looking to gain a foothold in foreign markets, plan to open mobile-friendly retail
websites in places like China, Australia and France.
The way of the future is clearly to commit fewer resources towards opening brick-and-
mortar stores and instead, cultivating virtual ones. More and more companies are
acknowledging that this is where the real opportunity lies.
2. Smartphones are forcing retailers to keep prices competitive and websites
active. This e-commerce explosion is thanks in no small part to the increasing use of
phones and tablets for Web surfing and shopping. But our use of mobile devices isn’t limited
to shopping on-the-go or from the couch.
A study by Pew Internet shows that more than half of all adult cell phone owners used their
device to help with purchasing decisions while already in store. People either called friends
for advice, used their phones to look up product reviews or investigated the prices of items
they wanted. Smartphones give us direct access to the world’s information on nearly every
retail product, which forces retailers to keep their prices competitive and their Web presence
active — lest they lose out to more aggressive online retailers and flash sale sites.
Amazon will build a third warehouse in California
Thad Rueter , Internet Retailer . 1/22/2013
Amazon.com Inc.. will build a 1-million-square-foot warehouse in Tracy, CA, the e-retailer’s
third announced fulfillment center in that state.
Today’s announcement of the facility, to be located east of the San Francisco area, follows a
deal in September 2011 with state officials that requires larger retailers to collect sales
taxes from residents. Part of the deal called for Amazon to build more warehouses in the
state.
In October, Amazon opened a warehouse in San Bernardino. The e-retailer plans to open
another warehouse in Patterson this year. Amazon did not immediately say when the Tracy
facility would open; it is being built by Prologis, a development company. Amazon says the
Tracy warehouse will “create hundreds of full-time jobs.”
“We are grateful to be members of the California business community and to employ so
many hardworking and skilled Californians,” says Mike Roth, vice president of Amazon’s
North American operations. “We are excited to be growing in the state.”
Amazon is No. 1 in the Internet Retailer Top 500 Guide.
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Gigante and Petco in deal to open stores in Mexico and Latin America
Staff Writer , Chain Store Age . 1/25/2013
Mexican supermarket and restaurant operator Gigante has entered into a joint venture with
Petco Animal Supplies to open at least 50 stores in Mexico and other Latin American
countries over seven years, Reuters reported.
The first two Petco stores will open this year in Mexico City and Guadalajara, Gigante said in
a release to the stock exchange.
The financial terms of the agreement were not disclosed.
JC Penney Taps R/GA for Digital Work
Natalie ZmudaBio , Ad Age . 1/24/2013
JC Penney has tapped R/GA to handle digital marketing and e-commerce.
The shop was brought on board at the end of last year and is expected to work with the
retailer on a variety of digital projects. A JC Penney spokeswoman confirmed the
relationship, but declined to offer details on the scope of work.
According to an agency spokeswoman, "R/GA was brought on based on their history of
digital product, service and marketing innovation for a variety of retail clients."
R/GA counts Nike, American Eagle, Verizon and Barnes & Noble among its retail clients. It
also did a significant amount of work for Walmart, before splitting with the retail giant in
late 2011.
JC Penney previously worked with Razorfish on digital efforts.
Since parting ways with Saatchi & Saatchi a year ago JC Penney has relied on several
smaller shops, including Mother and Minneapolis-based Peterson Milla Hooks.
Nearly a year ago CEO Ron Johnson introduced his plans to reinvent the department store
to great fanfare. But he has been forced to adjust both the retailers' marketing and its sales
strategy amid slumping sales.
The upbeat, colorful marketing rolled out in the first half of 2012 made people rethink JC
Penney and was entertaining, Mr. Johnson has said, but it didn't reach the core customer
and didn't build the business. To that end, the brand shifted to more direct, product- and
price-focused messages in the second half. Mr. Johnson has also shifted money from TV ads
to print ads.