With traffic jams, elbow jabs, and bleary eyes, Americans kicked off the holiday shopping season with gusto. In fact, many didn't even bother to wait for Black Friday, but instead started shopping before the Thanksgiving leftovers were put away, as many stores and malls around the country opened as early as midnight. The National Retail Federation predicted Friday that Thanksgiving weekend would bring in almost $28 billion in retail sales--a significant chunk of the estimated $457 billion shoppers are expected to spend this season. Based on polls released yesterday afternoon, the NRF said more than 140 million shoppers hit the stores during the weekend, spending an average of $360.15--up 18.9 percent from last year's $302.8. While women shoppers outnumbered men (47.9 percent versus 37.4 percent), men spent more--an average $420, compared with women, who spent $304. According to the survey, some 36.2 percent of Black Friday shoppers arrived at their first shopping destination before sunrise (6 a.m.). By 9 a.m., more than half of shoppers (58.8 percent) said they had already visited one store. Men were more likely to wait in line than women, as 17.3 percent of men said they got to their first store by 4 a.m., compared to just 8 percent of women who arrived by that time. The most popular items purchased were clothing or clothing accessories (41.4 percent) as well as books, CDs, DVDs, videos, or video games (41.4 percent), according to the NRF poll. Consumer electronics or computer-related accessories (33.3 percent) came next, followed by toys (28.3 percent), gift cards/gift certificates (17.6 percent), and home décor or home-related furnishings (17.4 percent). While the Friday following Thanksgiving is not the biggest day in terms of sales, it is the biggest in terms of traffic, and gives customers a preview of what they'll buy in the weeks ahead. So far, they seem to like what they see: "The holiday season is off to a good start at J.C. Penney," the company said in a release Saturday, with brisk traffic in all regions. "Specifically, merchandise categories such as home entertainment, team sports, jewelry, children's apparel, housewares, Christmas trim and women's shoes were most popular with customers on Friday." The news was not so cheery for mass-merchandiser Wal-Mart, which Saturday reported another drop in same-store sales, with November sales declining 0.1 percent in the four-week period ending on Friday, Nov. 24. What makes that news especially troubling for Wal-Mart is that after reporting disappointing October sales, it slashed prices on everything from baby food and turkeys to toys and electronics--but apparently not enough to goose sales. Even its successes hurt Wal-Mart this weekend, when an unexpectedly large number of shoppers tried to use its Web site, which was not working for as much as 10 hours on Friday, the Associated Press reported. Then on Saturday afternoon, two teenagers set off two homemade bombs inside a Wal-Mart in Skowhegan, Maine, causing hundreds of customers to be evacuated from the store when the acid bombs detonated. At least eight people were treated for irritation to their eyes and throat or ringing in their ears, CNN reported. Separately, endurance artist David Blaine succeeded in escaping his shackles on New York's West 46th Street in time to escort children to a Target-sponsored shopping spree. Blaine was the centerpiece of a promotion for the retailer's two-day sale, and was suspended in a gyroscope-like contraption on Nov. 21. He broke free on Thanksgiving afternoon.
Cyber Monday came early as consumers flocked online over the weekend to pay as much as $100 for TMX Elmo on eBay as the season's hottest toys and electronics sold out early on Black Friday. Mattel, parent company of Fisher-Price, said it has ordered more of the red fabric that makes up the $40 Elmo, added production lines, and is flying the toys into the country from its foreign plants. Mattel, which sought to capitalize on the 10th anniversary of the original Tickle Me Elmo, generated buzz by word of mouth--and an industry observer estimates that the company put out only enough inventory so far to satisfy a third of consumer demand, ensuring a sense of urgency among parents to get one. Consumer demand is high not only for Elmo, but also for Nintendo's Wii and Sony's PlayStation 3. Worldwide, there's a shortage of Sony's much-anticipated PlayStation 3 gaming system, with only 400,000 released to the public in the U.S. A spokesman for Toys 'R Us said all the PlayStation 3 systems sold out before hitting shelves, at a pre-sale on Oct. 29. Bargain hunters flocked to the Web well ahead of so-called Cyber Monday--what pundits are dubbing the "official" start of the online holiday shopping season. According to a Shop.org survey conducted over the weekend by BIGresearch, 60.7 million consumers plan to shop online from home or at work today. "Online retailers are using Cyber Monday to debut holiday merchandise and offer virtual doorbusters," said Scott Silverman, executive director of Shop.org. "On Cyber Monday, consumers will find specials ranging from percentages off entire Web sites to specific savings on big-ticket items." Some 83 percent of online retailers plan to offer some kind of free shipping promotion during the holiday season, according to the Shop.org/Shopzilla eHoliday Mood Study. On Friday, Wal-Mart's Web site was disrupted for most of the morning; Disney also had problems handling the online rush, and Amazon.com had brief disruptions a day earlier due to a Thanksgiving Day sale on Microsoft's Xbox 360 video game machines. The most popular e-commerce site, with 7.5 million unique visitors on Friday, was eBay--which sold 2,537 Elmos at an average price of $70. Traffic increases do not always translate into immediate sales, as Internet shoppers often browse the Web for deals, but wait until later in December to make a purchase. Still, overall traffic to more than 120 online retailers tracked by the Nielsen//NetRatings Holiday eShopping Index rose 12 percent on Friday compared to the same day last year. That is a more modest pace than the 29 percent growth in overall traffic to the index from 2004 to 2005, and more in line with the 11 percent growth seen from 2003 to 2004. Comparison shopping site Shopping.com anticipated a repeat of last year, when Cyber Monday was its busiest day for merchant referrals. Through Black Friday, the company reported that referrals were up 40 percent across the board, with categories such as kids and family up 70 percent. Still ahead is the second Monday of December, which was the best sales day recorded by online retailers last year. Forecasts for online holiday sales increases from Jupiter Research and Forrester Research range from 18 to 23 percent. For perspective, total forecast sales of $27 billion to $32 billion represents just 6 to 7 percent of total holiday retail sales--which the NRF projects will be up 5 percent to $457.4 billion.
With the holiday shopping season in high gear, many consumers would use social networking sites as a source for ideas if marketers offered them in an appropriate way, according to a new survey from the American Marketing Association. "We're starting to see a merging of ecommerce and social networking, on sites such as Yahoo! Shopping. This 'social commerce' is creating a new way to interact with customers," said Nancy Costopulos, chief marketing officer of the AMA, in a statement. "But we have to be careful," she added. "Social networking sites have been successful because they allow for real connections to take place. The research shows an opportunity for marketers to participate, but they must have something real and relevant to say--if they try to go in with stealth tactics or over-hyping the brand, they will face a serious backlash." Some 49 percent of all respondents said they would search for holiday gift ideas, find out about upcoming holiday sales, or download coupons if those activities were available through social networking sites, the AMA reported. Some 29 percent said they would buy products on a social networking site if that service were available. Still, across multiple product categories, respondents' top online resource for finding out about hot new holiday products will be search engines, the research concluded--with 43 percent selecting that as their top option. Online consumer reviews were the first choice for hot product information in categories whose products involve a fair amount of consideration--automotive (17 percent), electronics (17 percent), and computers and software (15 percent). The AMA released the research as a lead-in to its Mplanet event, which kicks off on Wednesday in Orlando. Conducted by the Opinion Research Corp., the survey consisted of online interviews with 1,098 Internet-representative U.S. consumers age 18 or older--527 of them men, 571 women.
The certified pre-owned vehicle category, pioneered by Lexus in the '90s as a way to create an option between new and used, is no longer restricted to luxury brands. "Everyone's doing it," said Alex Rosten, manager of pricing and market analysis at Edmunds.com. Most recently, Hyundai launched a CPO program, as has Toyota's Scion division. While the number of CPO vehicles sold is up very slightly, the rate of increase is not what it was in the heyday of leasing. Analysts say the flood of returning off-lease vehicles that once filled dealer parking lots has turned to a trickle. That impetus had led luxury brands to so-called CPO programs in the first place. Today, the programs are viewed as a way to grow dealer service business, build automotive brands through trial, and ultimately, create new-car buyers. Rosten predicts that CPO sales will increase over the next few years, because of increased inventory, and because manufacturers like GM and Lexus are beginning to put incentive dollars and subsidized lease rates behind CPO. "In 2008, we will see a more substantial increase in CPO sales because of inventory," he said. The leasing trend has been on a downswing since a raft of low-interest purchase incentive programs propelled more people to buy, not lease, their vehicles. It goes back to General Motors' post-9/11 "Keep America Rolling" campaign five years ago. Leasing peaked in 1999, and vehicles coming off three-year leases flooded dealer lots in 2002 and 2003. But inventories of late-model vehicles began slowing in 2004, said Rosten. As a result, automakers such as Toyota have loosened the criteria for what constitutes too old and too much mileage to be a CPO vehicle from five years and 65,000 miles to seven years and 85,000 miles. Roughly 45 million used cars are now sold in the U.S. every year, of which 1.6 million were CPO vehicles in 2005, according to Edmunds.com. The auto commerce Web site and consultancy is predicting 2006 to hit 1.65 million in CPO sales. Rosten said there has been a 1.5 percent increase in CPO sales through September. Still, CPO is only about 3.5 percent of the overall used vehicle market. What CPO "does for the volume brands--as with luxury--is to improve brand retention and dealer profit margins, if done right," Rosten said. "It's a win-win-win. The manufacturer benefits from higher brand loyalty and incremental revenue selling warranties; dealers from higher profits and higher service business and customer retention; and consumers by getting a new-car experience with a second-hand car." Some 85 percent of respondents to an Edmunds.com survey said they would consider a CPO vehicle. Consumers pay an average premium of $1,680 for CPO--ranging from $500 for sub-compacts to as much as $3,000 for premium cars. Thirty-one percent of respondents to the Edmunds.com survey said they would pay up to $500 extra for a certified pre-owned vehicle, and 12 percent said they would pay over $1,000 extra for a CPO. Almost one-fourth said they would not pay any additional amount for a CPO vehicle. Tom Gauer, senior director of auto retail practice at J.D. Power and Associates, said such programs wield enormous power in building new business and loyal customers. "We have found that if [consumers] are satisfied with the vehicle and have a good experience, the likelihood is they will return to dealers for service, will purchase a new vehicle of the same make, and refer the brand to others," he said. The consultancy's annual Used Vehicle Sales and Certification study, based on 13,000 questionnaire responses from consumers who bought 2001-to-2006 model-year vehicles in September and October of 2005, suggests that consumers who are happy with both the second-hand vehicle and the sales experience will return to the dealership for service, and are far more likely to return later on to buy a new car.
Abbott Nutrition has teamed with the National Basketball Players Association to promote its EAS meal replacement and supplement brands, which include Myoplex, Precision Protein and Armor. Through the one-year agreement, Abbott Nutrition--a division of the pharmaceutical company Abbott Laboratories--will supply $5,000 worth of products to each of the 30 NBA teams. In exchange, the brands will get some exposure at events, although a spokesperson declined to give specifics. This marks the second sports partnership for Abbott Nutrition, which has since 2004 had an agreement with the National Football League's players union. EAS products and supplements are marketed for specific athletic needs, with different products for endurance, speed or strength. They include protein and amino acid powders, meal replacement bars and drinks, and supplements. Abbott has also signed the Chicago Bulls' Ben Gordon as its newest endorser for EAS, which uses professional athlete endorsers on various brands dubbed "Team EAS." Seattle Seahawks Quarterback Matt Hasselbeck, for instance, is one of the EAS faces appearing on the EAS Web site and in advertising. Part of the appeal for the NBPA is control over players' use of supplements, as the partnership comes after a period of increased scrutiny and controversy around athletes using steroids and other banned performance-enhancing chemicals and drugs. Although Abbott guarantees that its products do not contain substances banned under the NBA drug policy, the association will have a third-party organization test all products that players can receive through the program, according to a spokesperson. NBA players will get a 50 percent discount on permitted EAS products. EAS supplements are sold at supermarkets and nutrition and vitamin stores and are primarily used by professional and "everyday" athletes, according to a rep. Abbott Nutrition purchased the brand in 2004. Abbott Nutrition's other brands include Ensure, ZonePerfect, AdvantEdge and several pediatric brands, such as Similac, PediaSure and Pedialyte.
Thanksgiving weekend may be over, but Ocean Spray Cranberries has turned cranberry season into a year-long affair. Sales of its dried, sweetened cranberry Craisins are up 100 percent over two years, and they represent the fastest-growing segment for the cranberry growers' cooperative. Sales volume for the dried snack is expected to double again to $300 million, says Ocean Spray CEO Randy C. Papadellis. Sales of Craisins are relatively small compared to Ocean Spray's total annual sales of $1.5 billion. But their promise is one factor behind the company's plan to quadruple cranberry output, according to Papadellis. Ocean Spray seems to have cornered the dried cranberry market in sales and taste. American Culinary ChefsBest, an independent, chef-based organization that recognizes and honors the best products in America, last week named Ocean Spray Craisins the best-tasting sweetened dried cranberries over those produced by Mariani and Sunmaid. Craisins are hardly an overnight success. Ocean Spray began producing them a decade ago, and sales started taking off only in the last four years. Papadellis says sales are evenly split between those at the retail level and those going to baked goods makers, cereal makers and others who use the Craisins as an ingredient. Ocean Spray has a more than 7 percent share of all dried fruits sold in grocery stores. Another reason for Craisins' popularity may be attributed to marketing. The product is one featured in "Straight From The Bog" advertising that took the "good for you" positioning in a new direction using a pair of cranberry growers to tell the Ocean Spray story. Women have long been aware of the urinary tract health benefits of cranberries. Just one-third cup of Craisins yields the same benefit as a serving of cranberry juice cocktail.
David Bowie. Annie Lennox. Jim Morrison. Prince. Gwen Stefani. Stevie Wonder. Peter Gabriel. You can hear them in your mind's ear, Bowie belting out "Suffragette City"; or Annie Lennox's "Walking on Broken Glass," a masterpiece of heartache wrapped in a pop bow. When thinking about these disparate artists as brands whose styles and identities created millions of loyal fans (consumers), there's a core commonality. They realized for their work to be heard, their music and performing personas had to be different. Not just good or polished, but distinctive. And that, dear marketer, is the essence of innovation and creativity -- distinction with a purpose; being relevant yet different. Devotion to that cause can energize the marketing and new product process, and take us somewhere truly inspired. Lest you think those crazy musicians have it easy and don't have to answer to consumers the way we marketers do, think again. To be a successful recording artist you have to deliver the basics, the building blocks of a strong song. You'll need a hooky zeitgeist phrase like "I ain't no Holla Back, Girl!" And you'll want a killer rhythm track like Prince's "This is the Life of the Party". But in addition, the great performers know that everything they create must also be fresh and then filtered through their unique point of view (brand equity). Sometimes the result becomes Led Zeppelin IV or the Beatles White Album. How would you like to have a new product like that in your pipeline? Remarkably however, not one of these musical masterpieces was tested before it was aired. After Stevie Wonder wrote "I Just Called to Say I Love You", his manager didn't ramble off BASES scores to tell him about purchase intent, or to identify which verses didn't connect with listeners. No, these pioneers write, refine, record and launch. Now, there's a scary thought. As business people eager for innovation, we acknowledge the need to "think outside the box," to develop "blue oceans" where we can define our own product categories. We hold ideation sessions, attend focus groups, watch ethnography until we're bleary eyed. Yet our good intentions face the real pressures of next quarter's earnings, shrinking shelf space, or hitting a price point. We experience corporate cultures that talk organic growth yet act incrementally. It's real, normal and understandable. But our customers don't care about your board of directors, strategic plans or corporate politics. They simply demand that we offer them something uncommon, something they haven't seen, heard, or tasted before. Otherwise, what's their motivation to seek out our products? And happily, true creativity pointed in the right direction pays off Bigtime, "I'm on my way, I'm making it", whether with a hit song or an iPod revolution. To witness how creativity steals market share, ask Eric Burdon, the brilliant songwriter and lead singer of The Animals. Burdon was an influential force in The British Invasion, the 60's tsunami that gave America the Beatles and the Rolling Stones, among others. During an A&E interview, Burdon told a story about Pete Townsend and Eric Clapton. They were competitors and not on speaking terms when Townsend suddenly called Clapton to suggest they go to the movies. Clapton agreed and found himself sitting for hours next to a silent Townsend. Finally, Clapton looked up and said, "Peter, is there a reason why you invited me here?" Pale and shaken, Townsend looked at Clapton and replied, "Eric, there's this black dude named Jimi Hendrix, and he's going to put us both out of business." If we want to take some of our competition's business, we might start by taking a page from the Jimi Hendrix songbook. Don't fear creativity. Embrace it, nourish it, and guide it along. Then watch what it does for your bottom line. Alan Sharavsky (alan@wbbe.biz) is partner and creative director, at Yardley, Pa.-based Whole-Brain Brand Expansion, which builds product pipelines through equity expansion and new product development. Visit the Web site at www.wbbe.biz