The “Dukes of Hazzard”-themed ad campaign AutoTrader launched this year addresses some basic car shopping behavior trends: mobile, device agnostic, and real-time digital auto shopping are where it’s at. The 74 million or so Millennials out there don't know what kind of car they want when they start shopping, they are not set on any particular feature, and what they learn, they'll glean from the Internet -- and that means mobile devices. And they need more time to do it. According to a new study from AutoTrader, "2014 Automotive Buyer Influence Study," detailing the car shopping habits of Millennials versus everyone, shoppers spent 17.5 hours on average mulling car and truck choices three years ago. That has dropped to 15.5 hours, but Millennials are spending 16.4 hours researching and choosing. Digital channels, sandwiched between traditional media/offline catalysts on one side and a trip to the dealership on the other, is where they are spending their time. When they finally go into the showroom, they are testing and hopefully buying the vehicle they have pretty much settled on. AutoTrader finds that, today, 70% of Millennials (and 66% of all auto shoppers) who walk into a dealership for the first time, end up buying the vehicle they had in mind. Isabelle Helms, AutoTrader’s VP of research and market intelligence, tells Marketing Daily that since most Millennials enter dealerships pretty much knowing what they want, "[Dealers] don't want to create high pressure. Buyers are coming in to test drive the car but also the technology. They are visiting the dealer to get final answers that weren't answered online." In 2011, auto shoppers across all age cohorts reported they spent 62% of their time shopping online; in 2014 shoppers said they spend 78% of their time in digital channels. For Millennials that number jumps to 82%. And, per the study, Millennials are spending over half of their online time on third-party sites (like AutoTrader.) Only 5% of Millennials use social sites as a car-shopping resources, and they are brackish about auto brands that use social media to reach them: 78% of Millennials surveyed by AutoTrader said such efforts had not the slightest impact on their perception of the brand. That's versus 83% for auto shoppers of all ages. Ninety-five percent of Millennials now use the Web to shop for vehicles versus 79% in 2011, per the study. Among buyers of all ages, use of references has gone from 34% to 29% between the two periods; newspaper has dropped from 27% to 16%; TV has fallen almost by half, from 22% to 14%; magazines have fallen off the coffee table, from 17% to 11%; direct mail is down by over half; out of home has dropped by even more, from 12% to 5%; and radio has dropped by half, from 8% to 4%. Half of Millennials are using smartphones this year to shop -- nearly double the percentage of the total auto shopper population. Last year, only 19% of all shoppers were using smartphones to car shop. Sixty-six percent of Gen Y survey respondents said they use mobile to find a dealer or get dealer info; 65% use them to find actual vehicles listed for sale; and 64% use them to research car pricing. Seventy-one percent use their smartphones on the go; 66% at home; and 60% in dealerships. "Because more people are shopping on mobile devices, it is time manufacturers and dealership make sure they have good experiences," says Helms. "Just hoping that a desktop optimized Web site translates well to smartphone won't cut it. You have to design for the device. I think manufacturers are doing a better job at this than dealerships." Over a third of Millennial respondents to AutoTrader's survey said they think less of an auto brand that has no mobile site. But 59% of Millennials (52% of all shoppers) think less of an auto brand that has a mobile site, but one that functions poorly. "Car Dealership" photo from Shutterstock.
Recent days' developments have underscored both the potential power and limitations of menu innovations within the hyper-competitive fast-food industry. Burger King announced that most of its North American franchisees are dropping its heavily marketed healthier fries option, Satisfries, less than a year after the launch of the item billed as a "game changer." Meanwhile, Wendy's announced that its Pretzel Bacon Cheeseburger has now officially earned a permanent place on the chain's menu. Satisfries — with 270 calories, 11 grams of fat (1.5 from saturated fat, zero trans fat) and 300 milligrams of sodium in a small portion — offer 20% fewer calories and 25% less fat than BK's regular fries, and 30% fewer calories and 40% less fat than McDonald's' fries. They are being phased out by two-thirds of the chain's approximately 7,400 franchises in the U.S. and Canada due to disappointing sales, although about 2,500 of the franchisees opted to retain Satisfries as permanent menu items, reported The Wall Street Journal. In what seems a strategically timed move, the Satisfries news was released a day after Burger King's announcement that it is bringing back Chicken Fries as a limited-time item, in response to "an overwhelming number of enthusiastic tweets, Change.org petitions, dedicated Tumblr and Facebook pages and phone calls." Chicken Fries, which were on Burger King's menu between 2005 and 2012, have 290 calories, 17 grams of fat (including 3 grams of saturated fat and 1.5 grams of trans fat) and 780 milligrams of sodium per a nine-piece (102 grams) serving. Wendy's, which had a major success with its Pretzel Bacon Cheeseburger in a limited run last year, brought it back this summer, also offering new creative variations on its original Pretzel Love Songs video/social campaign. After whipping up buzz and sales, Wendy's this week used the final video in the #PretzelLoveSongs "encore" campaign to announce that the cheeseburger is being added to the permanent sandwich menu as "Combo 11." The Pretzel Bacon Cheeseburger has 680 calories, 37 grams of fat (including 16 grams saturated fat and 1.5 grams trans fat), 115 mgs cholesterol, and 1,090 mgs sodium. Surveys continue to show significant and growing numbers of consumers saying that they're actively trying to eat healthier diets, and the leading burger chains in particular have come under heavy pressure as a result of efforts to curb America's obesity crisis. But while chains like Chipotle Mexican Grill and Subway are thriving by attracting more nutrition-conscious consumers with better-for-you fast-food positioning, most patrons of the major, long-established QSR brands continue to go there for the core menu items and new items that emphasize taste innovation more than healthy nutritional profiles. Satisfries are the latest instance of less-than-spectacular responses to a number of the healthier options introduced by these QSRs in recent years — McDonald's salads (which according to the chain still account for just 2% to 3% of its U.S. sales) being the most often-cited example. On the other hand, there has been some evidence of change in recent years. In addition to introducing at least some healthier options, most big QSRs now list calories and other nutrition information on their Web sites. McDonald's began listing calories on its store menu boards and drive-throughs in 2012, prior to implementation of the federal rules requiring that. And studies have found that seeing calories on menu boards does appear to be associated with consumers ordering somewhat lower-calorie options. Also, consumers have proved adaptable to new fast-food recipes since pressure from the medical community, government and consumer watchdogs like the Center for Science in the Public Interest caused many major QSR chains to stop using the partially hydrogenated oils that result in high levels of trans fats in food.
In a further sign that consumers are disenchanted with Walmart, the retailer says its second-quarter same-store sales fell 0.3% in the U.S., and that traffic at its stores declined 1.1%. And it lowered its financial forecast for the full year, citing pressures from lower sales in the U.S., as well as rising healthcare costs. Walmart estimates that next quarter’s sales results are likely to be flat as well. Total net sales for the Bentonville, Ark.-based chain rose 2.8% to $119.3 billion. Sales in the international division climbed 3.1% to $33.9 billion. Total U.S. sales rose 2.7% to $70 billion. And consolidated net income attributable to Walmart inched up 0.6% to $4.1 billion. Results at its small-store formats, Neighborhood Market, were considerably perkier, with comparable sales rising 5.6% for the period. Earlier this year, the retailer announced plans to goose the expansion of that format, opening an additional 22 stores this quarter, and expects to have added up to 200 new units by the end of the year. Conceding disappointment with the results, President and CEO Doug McMillon said in its earnings announcement that the company is pleased with gains in its e-commerce business. “We see opportunities to improve in merchandising, pricing and store level service in our supercenters, and we are working to close those gaps,” he says. “Our investments in e-commerce and mobile are very important, as the lines between digital and physical retail continue to blur. Our customers expect a seamless experience, and we’re working to deliver that for them around the world.” As Walmart’s no-growth quarters continue to pile up — this is its seventh consecutive quarter of declining traffic — OUR Walmart, a group representing the labor rights of Walmart workers, blamed the weak results on its employment practices. “Walmart’s weak sales once again confirm what experts and thousands of shoppers and workers have been saying for years,” the group says in an email reaction to the earnings. “The Walmart model of poverty jobs and under-staffed stores doesn’t just hurt workers, it hurts the company’s bottom line.” Separately, a new release from Kantar Retail shows that Walmart is maintaining its low-cost advantage for consumers, albeit by a slimmer margin. Walmart’s basket is now just 1% less expensive than Target’s, which reflects the smallest price gap since the June 2012 study. “Walmart’s slightly weakened stronghold on price leadership shows the difficulty in creating basket separation based on price,” writes Laura Kennedy, a principal analyst at Kantar, in the analysis. "These results emphasize the need for both retailers to pursue alternative methods to drive impression and value perception by their shoppers. The smaller price gap seems to reflect Walmart’s general shift toward a more nuanced and customized approach to Every Day Low Prices positioning.”
Horses and their owners continue to be an essential component of the U.S. pet market, according to a report from Packaged Facts. Despite the costs of ownership and the proliferation of unwanted horses, sales in the U.S. equine market reached $23 billion in 2013. Although equine market sales have been declining in recent years, the market appears to have reached a plateau, and sales should begin to level out, according to Shannon Brown, Packaged Facts analyst and author of the report. “The struggling economy has been the biggest factor affecting this market, which has manifested in both the number of horses in the U.S. in general (breeders don’t breed horses that they can’t sell or feed), and the number of horse owners (horses require a huge financial investment in terms of feed and care),” Brown tells Marketing Daily. “Because economic conditions have been improving, and because those horse owners that remain are passionate about their horses, conditions look favorable for slow recovery.” Marketers should note that horse owners are receptive to Internet marketing, blogger opinions, and online peer reviews, Brown says. For many horse product marketers, the best promoters of their products are their customers. Opening up Web sites for consumer comments, via a blog or other audience-participation mechanism, allows other customers to obtain unbiased feedback about the products. In addition, marketers can encourage brand communities through actively recruiting customers to participate in different challenges or contests, or even by asking for them to submit testimonials of how they use the products and how their horses have benefited. The horse industry has its own marketable celebrities. These are successful riders and trainers who have built names for themselves throughout the years as reliable sources of information about horse care. Using a film star to endorse horse feed will not have quite the same impact as having a rodeo star who eats, sleeps and breathes horses and says a particular feed is the only one he uses. Consequently, the names used to endorse horse products may not be familiar to the average consumer, but in the horse market these names are worth their weight in gold. One of the areas of opportunity in this market includes the trend toward natural horsemanship, Brown says. “Although I don’t anticipate that marketers who don’t currently offer equine products will suddenly decide to expand into this market as a result, there is definite opportunity for marketers currently in the space to shift gears and bit and consider either revamping existing products or introducing new products that fit the requirements of this type of horse ownership/training,” Brown says. “Across the board in CPG markets, consumers are increasingly gravitating towards products that they perceive to be better for them (or in this case, their pets), and the equine market is no exception.”
JCPenney’s turnaround is gaining ground. It reported a hefty 6% increase in same-store sales, marking the third quarter in a row that the retailer has reported growth. But Kohl’s says its quarterly sales slipped for the period. “Our turnaround initiatives continue to produce improved financial results,” says Myron E. (Mike) Ullman, III, CEO of the Plano, Tex.-based J. C. Penney, in its earnings announcement. “In the second quarter, we gained additional market share while significantly increasing gross margin in a highly competitive promotional environment.” He says the company expects those sales to continue through the back-to-school season. Its net sales for the second quarter hit $2.8 billion, up from $2.66 billion in the second quarter a year ago. Online sales came in at $249 million, for a 17% gain. It also says that while all regions gained, the southern and western regions performed best, and predicts that next quarter, it will also achieve same-store sales increases in the mid single digits. The news was not nearly as upbeat at Kohl’s, Penney’s main competition in the moderate department store category. The Menomonee Falls, Wisc.-based chain says its same-store sales dropped 1.3%, while its total sales declined 1.1% to $4.24 billion. Net income came in flat for the period, at $233 million. The company says it was encouraged that sales built momentum as the quarter progressed, and turned positive in July. There are some indications, however, that both JCPenney and Kohl’s will have their struggles as the back-to-school season continues. According to YouGov BrandIndex, the brand consumer perception research service, parents considering buying back-to-school clothes at Penney's fell from 26% to 23%. Kohl’s also had a drop in purchase consideration, as did Sears, Charlotte Russe, Nordstrom, and Bloomingdale's. Among the biggest gainers? Gap, American Eagle, Hot Topic, Old Navy, and Forever 21. But in terms of a combined measure of purchase consideration and value perception, a spokesperson for the index tells Marketing Daily that Walmart, Target and Old Navy rank far above all other brands, and they also have had the biggest gains in ad awareness.
Advertising isn’t one medium or another anymore -- and a new campaign from Hewlett-Packard and ad agency 180 LA blends emerging media with traditional to create an entirely new hybrid. "The agency had to push ourselves to innovate and think about how we best showcase a new medium within an established one," says William Gelner, chief creative officer of 180LA. The "Bend The Rules" campaign was initially designed to live through social media. 180LA worked with the management company Niche that represents popular “videographers” to select and book five influential personalities who post on the Vine platform. Each Viner then created a six-second clip to highlight Hewlett-Packard's convertible PC, the x360 Pavilion, a tablet computer that can bend and fold upon itself. The premise was to showcase the flexibility of the computer and its applications with fellow “rule benders.” The campaign was tagged with #BendTheRules and ran across social media channels. However, one Vine video from Robby Ayala became a viral hit, with more than 10 million views. This video shows him watching a girl use her HP tablet and then allowing him to think his regular computer can fold as well. He ends up breaking it. Then, 180LA quickly pivoted to capitalize on this viral success by developing a traditional TV spot. There was no original intention to make a TV ad out of Vines, but seeing the success of the online campaign sparked the idea of expanding the campaign’s reach through TV, say 180LA executives. Transforming the videos to a traditional TV spot was conducted in a compressed time frame. After the video was originally posted July 16, 180LA developed a concept, produced a 30-second spot, and posted online August 8th that began airing August 11th. The Connected ad is the first TV ad made entirely in the setting of Vine. The ad links each Vine personality as the x360 tablet computer bends and travels through each individual's video in a choreographed continuum, all set within the Vine user experience. "For a campaign called ‘Bend The Rules’ we thought ‘let’s really do it,’” says Gelner. “We took a digital execution and brought it to TV. You usually see it the other way around." 180LA has worked with HP since 2013. The commercial can be viewed here. More of the #BendTheRules greater campaign is available here.
Professor Harold Hill was a sham, but he at least could show his "contributors" some real musical instruments. Fundraising for a cause is pitching an invisible trombone. There will be no River City Boys Band here. And if the charity funds research and patient care for a condition like amyotrophic lateral sclerosis, or ALS, a.k.a. Lou Gehrig's disease, the sell is a tad harder. There is no cure, and when such is the case it is much easier for would-be donors to recoil, almost reflexively, from the solicitation -- either from atavistic fear or from the go-to rationalization: "What's the point. My money can do no good here. I'll spend it on the marching band." Every one of the 5,600 new ALS diagnoses per year is a bucket of ice water down the back of the patient getting the news, but the American Cancer Society expects 1,665,540 new cancer diagnoses for 2014. And there is an array of heart diseases, other neurological syndromes like MS, there's COPD, incontinence and on and on -- and every single one of them has a foundation asking you for money right now. Check your inbox. On the other hand, individual donations to ALS will go further than the same donation to the American Cancer Society. A Boston ALS patient, former Boston College baseball player Pete Frates, has gone very far, and done a huge service to the ALS Association, with his social media campaign called the "Ice Bucket Challenge" (#IceBucketChallenge) that you, reader, already know about. And the fact that you know about it, and may have joined it already, and certainly know that Mr./Ms. (name a celebrity, athlete, politician, movie star, comedian, talk show host, fashion icon, religious leader, noted author) has dunked him/herself in full view of Twitterdom, also shows the power of social media to propagate an idea extremely fast. ALS Association spokesperson Carrie Munk (who has probably been interviewed more times this past couple of weeks than the Dalai Lama) told me that the organization can only marvel at what Frates was able to achieve with a simple social media gesture. “Only marvel” because it can't be repeated by the organization itself. Jacob Davidson, however, makes an interesting point in a column in Time. He rightly points out that there’s some self-serving afoot with this campaign. Indeed, some of these videos border on pure narcissism, and even self aggrandizement, or maybe both, as you can see here. It’s really, for many of these people, not about the disease at all -- it’s about me, which is kind of what social media is about, right? He also notes that most people who accept the challenge to post videos of themselves getting an ice water shower never really mention ALS. The other thing is that it really is kind of an "out." You are challenged to take the dunk. If you don't, you donate to the association. Therefore, everyone pictured getting iced is presumably not donating. Yes, but the numbers don't lie. Frates has beaten the association's own donation numbers: over 70,000 new donors; $2.3 million compared with $25,000 in donations July 29 to Aug. 12 versus the period last year. Four million dollars versus $1.1 million if you include local chapters. Munk says the association does the tried-and-true approaches, such as matching donations, and most donations are individual. She adds that the Ice Bucket Challenge offers substantially the same kind of hook the association employs with individual donors throughout the year, "which is about connection to the cause. Although the Ice Bucket Challenge is a little different because it has a friend-to-friend challenge." And, she concedes, it's a tactic that the association can't easily adopt. "I can tell you that one reason it is so successful is because it started so organically by a person with ALS. Could it be created by our charity or another? It's one of those amazing things that happened that shows the power of social media, and I find it hard to believe that we could do it."