Category Marketing
3 in 4 Retailers Use SocNet Sites; Only 40% Text
When it comes to non-traditional marketing, North American retailers have mostly cottoned on to hosted social networking sites (75%), but are far less likely to have implemented other strategies such as SMS (40%), 2D barcode scanning by customer smartphones (30%), and location-based social networking (29%), details Boston Retail Partners [download page] in a January study. The results also show that many retailers aren’t interested in blogs: 42% have no plans to implement their own hosted blogs, and 39% won’t monitor external blogs.
The researchers point out that the percentage of retailers hosting their own social networking sites has risen slightly from last year, while the proportion monitoring external sites has fallen. By “controlling their own destiny” on social media, retailers are more able to “react quickly to any issues that may occur and more readily reward loyal customers.”
Customer Service Most Important to Retailers
Perhaps retailers will cotton onto the trend of using social media not just for marketing but also for customer service. Given a list and asked to identify the items by importance, a leading 86% of respondents rated customer service as being very important to their organization, ahead of efficient processing at the register/speed of service (64%), employee product knowledge (50%), and in-stock position (50%).
About the Data: The Boston Retail Partners data is based on a survey of more than 500 top North American retailers conducted in October through December of 2012. Close to two-thirds of the respondents to the 14th Annual POS Benchmarking Survey are in the specialty category.
‘Fair and square’ pricing? That’ll never work, JC Penney. We like being shafted!
You might have seen recently that iconic retailer JC Penney is slumping badly. You almost certainly have seen the reason why: A massive, creative and aggressive new advertising and pricing campaign that promises simplified prices.
No more coupons or confusing multiple markdowns. No more 600 sales a year. No more deceptive circulars full of sneaky fine print. Heck, the store even did away with the 99 cents on the end of most price tags. Just honest, clear prices.
Sounds like a sales pitch aimed at consumer advocates and collectors of fine print frustration, like me. As it turned out, it was a sales pitch that only a consumer advocate could love.
The campaign, which launched on Feb. 1, appears to be a disaster. Revenue dropped 20 percent for the first quarter compared to last year. Customer traffic fell 10 percent. Last year, the company made $64 million in the first quarter; this year, it lost $163 million.
Could we have a moment of silence please for what might be the last heartbeat of honest price tags?
Not only did Penney’s plain pricing structure fail to attract fair-minded shoppers – business reporters wrote with seeming glee during the past few days that it “repelled” them.
Don’t blame Ellen DeGeneres, the spokeswoman for the Penney’s plain pricing campaign. If only executives at the firm were familiar with the work of behavioral economist Xavier Gabaix and the concept of “shrouding,” all of this could have been avoided.
Seven years ago, Gabaix and co-author David Laibson wrote a brilliant (if depressing) paper on shrouding and “information suppression” that should be required reading for all consumers and executives considering a harebrained new pricing strategy. The principle is simple, and shows why cheating is rampant in our markets and why honesty is rarely the best policy.
First, a definition of shrouding:
In days gone by, price tags were simple. An apple cost 10 cents. A cup of coffee cost $1. But today, the consumer marketplace is far more complicated, giving sellers the opportunity to create confusion. Many items have follow-up costs that make the original price tag meaningless.
Computer printers are the classic example. You might get a great deal on a printer, but if the ink is expensive, you lose in the end. In fact, Gabaix argues that it’s impossible for consumers to intelligently shop for printers. No consumer knows how much ink costs — the cartridges don’t come in standard sizes, the amount of ink used to print varies and ink costs are unpredictable. That makes the true price of a printer “shrouded,” in Gabaix’s terminology. Not quite hidden, but not quite clear, either. Advantage seller. It’s easy for printer companies to lowball printer price tags and overcharge for ink, enabling them to print money.
If you think about it, shrouded price tags are everywhere. The hotel website might say “$99 a night” but you know the bill will be more like $120 or $130. Pay TV companies promise $30-a-month service, which ends up costing more like $50. And what happens when you buy a TV with a store credit card that offers an upfront discount but a complex interest charge? And so it goes.
Posted by eBrand Media Research Department in Customer Centric, Marketing on May 25th, 2012
Weekly Sweeps… Snippets For Your VFOGI (Vast fund of general information)
1. Cash-Strapped Consumers Shift Brands
According to a blog from Gian Fulgoni in Ad Age Digital, about 54% of consumers said they bought the brand they wanted most in 2008. By 2010, this had dropped to 45%, and 43% this year. Declines were observed in every category, with the most severe drop (17 points) in over-the-counter medicines and the lowest in the household category (6 points).
If consumers aren’t buying the brand they want most, they are switching brands, says Fulgoni. When a “peer” brand is on sale, 38% in 2011 say they bought it compared to 33% in 2008. But they also turn to a cheaper product. About 19% of consumers switched to private-label products in 2011, up from 14% in 2008.
When downsizing caused consumers to switch to another brand, 14% said it usually did and 54% said it occasionally did. But when asked which cost-controlling action they would prefer, 62% more consumers chose a smaller size over a price increase. Brand marketers appear to be backed into a “damned if you do, damned if you don’t” corner.
For more from Ad Age, please visit here. Read the rest of this entry »
Posted by eBrand Media Research Department in Advertising, Marketing on November 14th, 2011
Free necklaces and shipping for holiday shoppers?
Retailers are so desperate this holiday season that they’re willing to lose money to get you to spend yours.Take online jeweler Stauer. It’s offering a $249 amethyst necklace for free — provided customers pay the $24.95 it costs to ship it. Stauer will lose money on the deal, but it hopes to reel in new customers who will buy other jewelry.
“In this economy, you have to be outrageous in your offers,” said Michael Bisceglia, the president of Stauer who found that more than a third of customers who took advantage of a similar deal on a $179 pearl necklace in 2009 bought additional items. “You have to shake up the world a bit.”
Not every retailer will go as far as giving away merchandise during the holidays, but many will offer profit-busting incentives. It’s a critical time of year for merchants, which can make up to 40 percent of their annual revenue in November and December. And they’re so worried that Americans are spooked by the weak economy that they’re willing to sacrifice profit for sales.
Nordstrom, for instance, is one of the first retailers to offer free shipping on most orders, no matter how small, even though it could wind up paying $3 to ship a $7 pair of socks. Furniture chain Raymour & Flanigan is allowing customers to go four years without paying interest on their purchases — the longest period it has ever offered — even though it will have to help cover a chunk of those charges itself. And Sears is not only offering to match the cheapest prices customers find online, but the department store chain is giving them an additional 10 percent off the difference.
“You may be making a $1 profit instead of a $3 profit,” Fiona Dias, chief strategy officer of members-only shopping service ShopRunner.com, said about retailers. “But you’re not losing a sale.”
Retailers are nervous about holiday sales because many Americans are cutting back on spending as they grow increasingly concerned about the stubbornly high unemployment rate, stock market turmoil and an overall fragile U.S. economy. In fact, a recent Gallup poll found that eight of 10 Americans think the country is in a second recession.
“Retailers are now scared because some believe they’re in a second recession,” said C. Britt Beemer, chairman of America’s Research Group. “And the second recession is hitting them in the biggest shopping season of the year.” Read the rest of this entry »
Posted by eBrand Media Research Department in Advertising, Marketing, Trend Tracker on October 19th, 2011