Looks like affluent people are feeling safe about spending again: Coach says its fiscal third-quarter sales jumped 12%, and Burberry says that its retail sales gained 15% in the second half. Patricia Pao -- head of the Pao Principle, a New York-based consulting company -- says she isn't surprised, and that the strong pickup some luxury retailers saw over the holidays is building steam. "The Chanel boutique in Houston basically was out of merchandise four days before Christmas," she tells Marketing Daily. "During the recession, it was not considered 'cool' to shop. So right now, people with money are spending because of that pent-up demand. And interestingly, so are people with less money, not just because of pent-up demand, but also due to the new merchandising direction of prints and bright colors." At Coach, sales rose 12% to $831 million for its third fiscal quarter while net income jumped 37% to $158 million, from $115 million reported for the prior year. (Excluding a one-time charge from the previous year, net income rose 28%.) On a same-store basis in North America, sales gained 5.1%. "Our excellent third quarter results showed further strengthening of our full-priced businesses across all geographies and channels," CEO Lew Frankfort says in its release. Sales in China are still growing rapidly, and the company says it also plans to expand in Western Europe, opening 14 locations in Printemps stores throughout France over the next three years. (The first opens in Paris in June.) And through a separate agreement with British retailer Hackett Limited, it will open Coach stores in the U.K., Spain, Portugal and Ireland. At Burberry Group plc, total sales gained 6% for the half -- stronger than its forecast--with retail sales climbing 15%. Same-store sales grew by 10% -- gains it says were driven by steady demand for full-price goods in its spring and summer lines. The company says it expects a retail sales increase of about 10% for the full fiscal year. "While the pace and level of the global economic recovery remain unclear, we remain confident that our strategies will continue to build momentum," CEO Angela Ahrendts says in its earnings release. "To drive growth, we will increase investment in new regions, initiatives and digital commerce, while taking further action to enhance the brand."
While the producers are trying to keep at least a few surprises in store for fans planning to take in the latest adventures of Carrie Bradshaw and cohorts in the upcoming "Sex and the City 2," "Sex" addicts can count on at least one thing: When the foursome sips a bit of the bubbly, their brand of choice will be Moët & Chandon. Placement opportunities (both in the movie and its trailer) are of course a key part of having signed on as the official champagne for the sequel. But the iconic, nearly 270-year-old champagne is also making the most of the tie-in with ads in magazines (including Vanity Fair, Elle, Essence and InStyle), billboards in Carrie's NYC stomping grounds, glam movie preview events, on-premise promotions, a nationwide retail program, and a PR/media campaign handled by The Rose Group. Moët is not alone in looking to leverage association with the popular franchise: For instance, as previously reported in Marketing Daily, Gruppo Campari's Skyy, the movie's official vodka, is busy running its own round of premieres and other promotions. But for the champagne -- one of the flagship brands in the LVMH Moët Hennessy-Louis Vuitton luxury goods portfolio -- the "Sex" sequel represents an opportunity to further build on its longtime "champagne of cinema" platform, points out Laurent Boidevezi, SVP at Moët Hennessy USA. That platform emerged out of Moët & Chandon's having been, by dint of its cache, featured in films going back to the 30's -- a prime example being Billy Wilder's 1957 "Love in the Afternoon," featuring a middle-aged lothario played by Gary Cooper unexpectedly falling for a dewy Audrey Hepburn, aided by ample champagne (and a band of gypsy musicians) in a Paris Ritz Hotel suite. The brand has hosted events at the Cannes Film Festival since the 1950s, has been the official champagne of the Golden Globe awards for going on two decades and a sponsor of the Deauville Film Festival for nearly a decade, and as of last year, became the exclusive champagne of the Oscars. Another recent effort was last year's signing of Scarlett Johansson as the brand's celebrity ambassador and star of a multimedia international advertising campaign, kicked off with a red-carpet "Tribute to Cinema" gala at London's Big Sky studio. While not tied into the original "Sex and the City" movie, Moët & Chandon enjoyed some exposure during the TV series' six seasons -- "organic" placements, according to a brand spokesperson. The Moët & Chandon-sponsored "Champagne and Cinema" previews of the movie, being released by Warner Bros. on May 27, will be held in more than 10 key U.S. cities. Boidevezi promises "surprises" -- not ruling out appearances, at least in some locations, by some of the film's principals/stars, as well as other celebs. (Lead Sarah Jessica Parker is also again co-producing, with director/screenwriter Michael Patrick King.) On-premises promotions at trendy venues are featuring Moët cocktails created in honor of the movie's characters ("The Bombshell," etc.) and a "Lucky Bubble" sweeps in which each glass of the wine ordered comes with a 'bubble' atop bearing a chance to win a ticket to the movie and other prizes. Meanwhile, U.S. retail outlets will feature bottles of the champagne bearing $5-off coupons for tickets to the movie, according to Boidevezi. The magazine ads prominently showcase a bottle of the brand caught in mid-uncorking, as well as the movie's name, and suggest that "Sex" fans "Carrie On" with Moët & Chandon.
Harley-Davidson says first-quarter sales were down, but not as sharply as they had been in the prior three quarters. The Milwaukee-based maker of the top-selling bike brand in the U.S. said worldwide retail sales of new motorcycles dropped 18.2% for the company, versus the quarter last year. Not surprisingly, given the U.S. economy's demolition job on sales of discretionary goods over the past year, Harley-Davidson's largest declines last quarter were in the U.S., where retail sales of its motorcycles dropped 24.3% versus the same quarter last year. Beyond U.S. borders, retail sales of Harley-Davidson motorcycles declined 2.8% versus the year-ago quarter, largely because of a 9.8% drop in Asia-Pacific and 7.8% drop in Latin American sales. The company, however, says that result is better than in each of the four prior quarters, in which H-D posted international decline percentages in the double digits. All told, Harley sold 18.2% fewer motorcycles in the first quarter than in the quarter last year, shipping 53,674 motorcycles to dealers and distributors worldwide, versus 74,670 motorcycles in the first quarter of 2009. Meanwhile, revenue from parts and accessories dropped 12.1% to $149.1 million, and revenue from the brand's all-important merchandise division, which includes things like Harley's MotorClothes apparel, was down 11.9% to $66.3 million. Still, the company is relatively bullish, partly because the second quarter -- when the weather warms up -- is when sales ignite, or so the company hopes. "We are encouraged by our progress in the first quarter...we are seeing directional improvement in our dealers' retail motorcycle sales as we enter the key selling season," said President and CEO Keith Wandell in a statement. Wandell, who became president about a year ago, said the company's business-growth strategy is focused on global growth through market and demographic outreach, commitment to core customers, "and developing motorcycles that inspire and fulfill dreams." The company earlier this year launched a new retro derivative of the Sportster bike, called Forty-Eight -- a Brando-esque job with a peanut tank, tractor seat and fat wheels -- designed to appeal to younger, urban consumers for around town.
It's a question men and marketers have been asking since time immemorial: What do women want? Well, for marketers the answer is more targeted ads that show an understanding of their lives and give them something of value. In a survey of more than 1,800 women, 65% of them think: "Cool! How did they know I wanted this?" when they receive an online ad that was targeted directly at them. By the same token, 88% of them said the wished brands they trusted sent tailored offers. To develop these relationships, 58% of the survey respondents encouraged brands to give them something first, while 19% wanted brands to get to know them better and 17% wanted the brands to tell them something valuable. The brands women said they have the best online relationships with are: Pillsbury, Procter & Gamble, Betty Crocker and General Mills. "This report debunks a lot of prior thinking that consumers may fear or question targeted advertising," said Emily Girolamo, vice president of marketing and corporate communications at Q Interactive, in a statement. "Women, who are so entrenched online, are creating new expectations of brands, agencies and marketers. They are past any fear or suspicion when they get a targeted ad online -- and now just expect, want and seek out brands online with meaning for their busy lives." What's more, women view their online interactions with sites and brands as "relationships." More than half (53%) used that word to describe the sites and brands they use online. More than 37% described the brands they encountered as "good partners" who reach them with relevant, targeted ads.
iShares, a leader in Exchange Traded Funds (ETFs), has launched an integrated, multiplatform marketing campaign, its first since the company was acquired by BlackRock in December 2009. The campaign, which introduces the tagline 'Keep Evolving,' includes digital, mobile, print and TV as well as trade marketing support, a key audience for iShares, BlackRock's ETF business. TV spots launch April 20 while print and online launched on March 29 in business publications including The Wall Street Journal, Barron's, The New York Times and WSJ.com, Morningstar.com, Yahoo Finance, and relevant trade sites such as seekingalpha.com. The brand is also a lead sponsor of The Wall Street Journal's iPad app. Media spending for the campaign was not disclosed. The campaign includes three TV spots, airing on CNBC, Fox News and Bloomberg. One spot features the story of the silent, electric garbage trucks in England that are powered by the garbage they collect. The voiceover asks: "Transportation keeps evolving. Shouldn't the way you invest in it evolve as well?" The tagline relates to the nature of ETFs, which are innovative, next-generation financial tools, most of which are index funds, that allow investors to access a wide range of asset classes, sectors and emerging markets. The TV spots will be available in a longer-form documentary style at ishares.com/evolve beginning April 22. iShares is the lead sponsor of the ETF center on WSJ.com, and is launching a new mobile site, created by IPG mobile agency Ansible, later this month. Digital ads have also been placed on Bloomberg terminals, a core resource for institutional investors. The campaign will be integrated across a comprehensive relationship marketing program and financial professional communications, developed by MRM Worldwide for iShares ETFs. This includes digital and direct media, with plans for expansion to emerging and mobile platforms. The campaign was developed by McCann Erickson and MRM Worldwide in San Francisco, and targets financial advisors and institutional investors. It is the first work from McCann and MRM since the agencies were appointed by iShares late last year. Media planning and buying, mobile site hosting, emerging media platforms, SEM/SEO, and integrated media sponsorships are handled by MEC.
Automakers are throwing cash on the hood and consumers are biting. Last month, according to Edmunds.com, sales of new vehicles purchased with zero-percent financing hit record levels -- at least since 2004, when Edmunds came on the scene. Arguably, the only time incentives would have been higher was right after Sept. 11, 2001 -- when after the attacks in New York and Washington, General Motors launched "Keep America Rolling" and others followed suit. The firm says the higher rate of incentive sales mean credit is loosening, as a quarter of all transactions financed in March were approved for zero-percent financing. Per the firm, more than 22% of financed new cars had zero finance deals, versus just 13% in the month a year ago. Edmunds says that most recent high-water mark for the proportion of sales financed with zero percent offerings in a given month was 21% of new-vehicle sales in July 2006. It is also likely that the big gains in zero-percent deals came by way of Toyota, 71% of whose sales last month had zero-percent APR, which -- per Edmunds -- doubles the previous Toyota record of 39% in August last year. The firm says that the two brands with the next-highest percentages of such deals were Mazda, 58% of whose financed transactions last month were zero percent offers; and Mercury with 32% of its finance deals offered at 0%. "Credit must be starting to loosen if almost a quarter of all transactions financed in March were approved for zero-percent financing," said Jessica Caldwell, senior analyst for Edmunds.com. The firm says the average automobile-finance interest rate dropped to 4.4% last month, the lowest average rate since 2002 when Edmunds.com began to track finance records. Toyota had the lowest average finance rate at 1.9%, followed by Mazda at 2.5% and Ford's Mercury brand was third at 3.3%. Edmunds said Kia had the highest average interest rate in March, at 7.1%. Among luxury brands, BMW had the highest average down payment at $13,614, and the shortest average loan term, 52.4 months. In non-luxury, Subaru had the highest average down payment at $3,911, and shortest average loan term, 60.9 months. "We are also seeing a big push in the zero-percent arena from GM, Chrysler, Mazda and Nissan who have had those offers off and on for years," says Caldwell. "GM and Ford have been doing it for some time, but I think Toyota brought attention back to this concept, and really breathed new life into it: the attention drawn to them got other brands talking about it." Caldwell sees the trend continuing into April and beyond. Honda began offering similar deals at the end of the month. "I don't see this concept going away. Low financing means a higher-quality customer than cash rebates, and it doesn't hurt resale values as much," she says.
Top 10 DMAs in which reside adults who own or lease a hybrid vehicle: 1 San Francisco/ Oakland/ San Jose 2 Washington, D.C. 3 West Palm Beach/ Ft. Pierce, Fla. 4 Seattle/ Tacoma 5 Buffalo, N.Y. 6 Austin, Texas 7 Fort Myers/ Naples, Fla. 8 Boston 9 Wilkes Barre-Scranton, Pa. 10 Jacksonville, Fla. Source: Scarborough Research, www.weknowthelocals.com
The next new, hot media channel is ... the automobile? That's right! Visit your local car dealership and test-drive almost any new vehicle. You may become enamored with:
a. the drive (maybe) b. the fuel economy (probably) c. the media center (most definitely)Many new car models today are true media epicenters with portals for laptops, smartphone-enabled screens, radio on steroids (Pandora, Hi-Def, and Satellite) and even televisions (Chrysler/Flow TV). What does this mean for marketers? The automobile will change the way we think about a brand's media strategy on multiple levels:
The New Hub: The only place where computers/radios/televisions/smart screens all collectively reside is in the home ... until, now. The automobile is truly becoming a multi-media phenomenon. Any medium that was reserved for in-home consumption can now be experienced in cars. We now have mobile media epicenters, where multiple message formats can all converge in a single location, on the go. Improved Proximity: All of a sudden message salience is as close as a store's parking lot. Granted, outdoor and radio were already capable of delivering such proximity. And, smartphone technology/geo-tagging takes proximity to a heightened level. But, imagine picking up the living room (and every media device in it) and shifting it to a parking lot. All of a sudden, proximity takes on a whole new meaning. We can place messages along the purchase funnel much more effectively when the automobile takes us directly to the point of purchase. We are much closer to filling the gap between in-store and out-of-store marketing. Everything is Mobile: Historically, mobile media were reserved for such devices that could be unplugged and personally ported to various locations (think mobile phone). Now, the plugs are mobile. Any medium is now a mobile medium when it resides in a car.How do we integrate this new media phenomenon into our media plans? Should the automobile become a holistic media channel? According to Advertising Age, "Ford could be the next media company." Unfortunately, the "business" of our business isn't structured to capitalize on these emerging phenomena easily. I can make a case that the auto is an emerging channel that requires dedicated expertise. I can also make the case that mobile media experts are well equipped to deal with the opportunity. Or, maybe it doesn't matter where the device resides: home or car. Let's start with the planners: account planners, context planners, channel planners ... whatever you like to call them. Planners are used to asking where/when/how questions. The automobile as media hub will offer a whole new perspective on what is truly contextually relevant. The most fundamental next step in understanding the potential of the automobile as a media channel is to understand how this hyper-mobile experience will affect the context and influence of our messages as we move closer to the point of purchase.