By Bertha Coombs, CNBC
Retailers drew more shoppers to open their wallets this Black Friday weekend, but the steep discounts they used to get them in the door meant that on average, shoppers spent less.
The National Federation of Retailers says 195 million people shopped at stores and online over the weekend, up 13.3 percent from last year. Total spending was flat at $41.2 billion, but on average consumers spent 8.5 percent less, roughly $343 per person compared to $372 a year ago.
Department stores emerged the shopping destination of choice for nearly half of all shoppers polled in the NRF’s Black Friday survey, conducted by BIGresearch.
Discount stores came in second garnering a 43.2 percent share, and outlets picking up 7.8 percent of shoppers. Just over one in four surveys shopped at electronics stores (29 percent) or online (28.5 percent).
Two years into the deepest recession in a generation, consumers may be showing signs of what some have termed frugal fatigue, says the NRF’s Ellen Davis. “Retailers have to come away from this weekend encouraged,” she says, “that shoppers were willing to spend on some discretionary items.”
Capital Growth Partners president Craig Johnson says the consumer was back in force over Black Friday weekend. In a note to clients, he wrote, ‘These are not simply browsers, but buyers, with checkout lines of 30 or longer in some mall teen specialty stores, and checkout lines exceeding 350 in several Big Box stores.”
Just over half shoppers bought clothing, according to the survey, helping to boost department store sales. About forty percent bought books, DVDs and video games. Those numbers were about the same as last year.
Price wars on popular toys at Wal-Mart, Target and Toys R Us saw more shoppers buying toys as gifts. About a third of shoppers said they spent money on toys, a 12.9 percent increase from last year.
According to the survey, more shoppers bought sporting and leisure items this year — 12.6 percent, up a point from last year. Personal care and beauty items saw a bigger increase — 22.4 percent up from 19.0 percent — along with gift cards — 21.2 percent vs. 18.7 percent a year ago.
Did those early door busters in the wee hours of the morning pay off? Nearly one-third of shoppers (31.2 percent) were at the stores by 5 a.m. according to the NRF survey, that’s up from 23.3 percent last year. The majority of those early shoppers were men or younger shoppers.
By Meg James
There’s finally some new life in old media.
After pummeling traditional media companies for nearly two years, the advertising recession is showing signs of a recovery. TV networks — including Fox, CBS and ABC and such leading cable channels as TNT, TBS, USA, Bravo and Fox News Channel — have benefited the most as advertisers have been snapping up available commercial spots and agreeing to pay significantly higher prices than they did just five months ago.
“In challenging times, people go back to what they know, and what they know best is television,” said David Levy, president of sales for Turner Entertainment, which includes TNT and TBS. “It is a little too early to declare victory, but the market is definitely improving.”
The welcome news is the result of stronger-than-expected demand for TV advertising in the “scatter” market, in which advertisers frequently have to pay premiums for scarce available commercial time. It also represents something of a win for the networks, which gambled this summer that demand would pick up later in the year and held back a larger percentage of their inventory than in previous years, hoping to capitalize on the improved economy.
Fourth-quarter commercial sales have been propelled by retail chains hoping to ignite their holiday sales; technology giants Microsoft Corp. and Apple Inc., which have new products to promote; cellphone carriers such as Verizon, AT&T and Sprint, which are battling for customers; and even such financial firms as American Express, according to television executives and advertising buyers surveyed this week.
Such strong demand has made up for the weaker orders from other mainstay advertisers, including automakers, still reeling from weak sales, and Hollywood movie studios, which have fewer new movies to hype.
A fourth quarter described by one top network sales executive as “gangbusters” amazed even veterans who have lived through several economic cycles. Only five months ago, the industry was bracing for another dismal year as TV network sales teams were engaged in protracted negotiations with advertisers that were demanding that the networks roll back prices as much as 20%. Networks eventually agreed to trim rates about 5% to 8% to mollify advertisers and begin unloading their time.
But now, in some cases, advertisers have agreed to pay rates 10% to 35% higher than the prices established in June and July, when the networks sold the bulk of their time for the new TV season. In addition, advertisers that placed their orders in the summer are honoring their commitments. Network executives said that few advertisers have canceled their orders for commercial spots, in contrast with a year ago.
“We have all been surprised that the ad market has come back this soon,” said Gary Carr, executive director of national broadcast for the advertising firm TargetCast. The networks, he said, also face easier comparisons because last fall, with banks failing and the economy on the skids, companies were afraid to spend on advertising.
“A year ago, people thought the world was coming to an end, and the U.S. economy was falling apart,” Carr said. “But the world did not come to an end. Cars still have to be sold, and studios still need people to go see their movies. Advertisers have begun releasing the money that they have been holding onto all year.”
Even local TV stations — among the hardest hit by the slump in advertising spending — have received a lift, primarily fueled by stores that unleashed their holiday sales campaigns earlier in the season, according to television executives.
Not all media outlets have rebounded, however. Many small cable TV channels and Spanish-language television networks are still hurting, according to television executives. Newspapers, magazines and radio stations also continue to struggle.
“In many sectors, the news is still grim,” said Jon Swallen, senior vice president for research at TNS Media Intelligence, which tracks advertising spending. “And there is still a fairly large hole for these companies to dig out of before they get back to the levels they were a few years ago.”
Unexpectedly, online advertising also has taken it on the chin.
Many advertisers are no longer as eager to buy Internet display ads as they were two or three few years ago, when firms were steering millions of ad dollars to online sites.
“There is still a big push toward digital and online video, but the Internet display advertising market is challenged,” said Greg Kahn, senior vice president of strategic insights at advertising firm Optimedia. “There is so much clutter in the space, and advertisers have begun to question the effectiveness of those display ads.”
This is turning into quite the battle of the airwaves. The mere fact that the court declined to order Verizon to pull the ads means more to come, and quickly.
By Peter Svensson
NEW YORK (AP) – What would the holidays be without bickering between siblings? AT&T and Verizon are swamping TV with ads attacking facets of each other’s wireless networks. While the ads stick fairly close to the truth, there’s a lot they don’t say.
AT&T Inc. has been running ads with actor Luke Wilson checking off points in AT&T’s favor over Verizon Wireless. It’s the continuation of a spat that started a month ago, when Verizon started airing cheeky commercials that highlighted how its fast, third-generation (“3G”) network has wider coverage than AT&T’s 3G system.
Verizon’s ad used the slogan “There’s a map for that,” a play off Apple Inc.’s ads for the iPhone, which tout the diversity of third-party applications for the phone with the line “There’s an app for that.“
AT&T sued Verizon Wireless over the “map” ads, not because the maps were incorrect, but because AT&T felt there was a danger that viewers could get the impression that AT&T had no coverage at all where it doesn’t have 3G. Last week, a judge declined to force Verizon to pull the ads.
AT&T and Verizon, two offspring of Ma Bell, are getting more aggressive in their marketing, though it’s not clear how much they are spending. Verizon and AT&T are both pulling away from their smaller rivals, so instead of competing with Sprint Nextel Corp. and T-Mobile USA, they’re increasingly focused on each other. Verizon Wireless has more subscribers than AT&T – 89 million versus 81.6 million. But AT&T added more wireless subscribers in the latest quarter – 2 million versus 1.2 million at Verizon, which is a joint venture of Verizon Communications Inc. and Vodafone Group PLC of Britain.
From Consumer Reports:
Bell ringers, perfume sprayers and the steady drumbeat of holiday music may be annoying to some shoppers. But what really brings out their grinchier instincts are stores that fail to open all the checkout lanes and then use pushy retail tactics when shoppers finally make it to the cash register.
Customers don’t like being pressured to open store credit cards or being asked for personal information. And they really object to being hounded to buy extended warranties, according to a nationally representative survey by the Consumer Reports National Research Center.
The survey was conducted as part of Consumer Reports’ annual “Dear Shopper” campaign that highlights holiday gotchas and shopping traps. This year Consumer Reports had an assist from its sister Web site, Consumerist, which collected a list of annoyances from its readers.
When the list was taken to the public at large, those surveyed were in agreement. Here are the top gripes about retail practices:
* 72% Stores that don’t open all the checkout lanes;
* 68% Fake “sales”. If something is always 20% off, it’s not on sale;
* 67% Coupons that exclude almost everything in the store;
* 62% Being hounded with the extended warranty sales pitch;
* 58% Cashiers that ask for your phone number or other personal information;
* 56% In-store prices that do not match the same company’s on-line prices;
“Consumers have told us that they just want a hassle-free and convenient shopping experience,” said Jim Guest, president and CEO of Consumers Union. “We really hope this list of holiday annoyances is a wake-up call for the retail industry.”
When we asked shoppers about the number one non-retail practice that made them grumpy almost a third said the crowds (29%) followed by difficulty parking (28%), sales people spraying perfume (16%) and bell ringers outside stores (13%). Surprisingly, few folks are annoyed by that holiday music—only three percent said that was their top pet peeve. Fa-la-la-la-la indeed.
We’re proud to announce the addition of a new client, Fortress Technologies. They design, develop and manufacture secure wireless networking products for a wide variety of government markets, civilian organizations and corporations.
Right now, on the media side, we’re working on the planning and placement for the first half of 2010, in conjunction with Timberlake Media Services in Chicago.
Creatively, we’re working on a new direction that will offer them the ability to communicate their message effectively, while standing out in a very crowded field.
We’re really looking forward to the opportunity and hope to be posting some great work in the coming weeks.
By Keith Hampton, Lauren Sessions, Eun Ja Her, Lee Rainie
This report adds new insights to an ongoing debate about the extent of social isolation in America. A widely-reported 2006 study argued that since 1985 Americans have become more socially isolated, the size of their discussion networks has declined, and the diversity of those people with whom they discuss important matters has decreased.
In particular, the study found that Americans have fewer close ties to those from their neighborhoods and from voluntary associations. Sociologists Miller McPherson, Lynn Smith-Lovin and Matthew Brashears suggest that new technologies, such as the Internet and mobile phone, may play a role in advancing this trend.
Specifically, they argue that the type of social ties supported by these technologies are relatively weak and geographically dispersed, not the strong, often locally-based ties that tend to be a part of peoples’ core discussion network.
They depicted the rise of Internet and mobile phones as one of the major trends that pulls people away from traditional social settings, neighborhoods, voluntary associations, and public spaces that have been associated with large and diverse core networks.
The survey results reported here were undertaken to explore issues that have not been probed directly in that study and other related research on social isolation: the role of the Internet and mobile phone in people’s core social networks.
This Pew Internet Personal Networks and Community survey finds that Americans are not as isolated as has been previously reported. People’s use of the mobile phone and the Internet is associated with larger and more diverse discussion networks. And, when we examine people’s full personal network – their strong and weak ties – Internet use in general and use of social networking services such as Facebook in particular are associated with more diverse social networks.
Some 19% of Internet users now say they use Twitter or another service to share updates about themselves, or to see updates about others. This represents a significant increase over previous surveys in December 2008 and April 2009, when 11% of Internet users said they use a status-update service.
Three groups of Internet users are mainly responsible for driving the growth of this activity: social network website users, those who connect to the Internet via mobile devices, and younger Internet users – those under age 44.
In addition, the more devices someone owns, the more likely they are to use Twitter or another service to update their status. Fully 39% of Internet users with four or more Internet-connected devices (such as a laptop, cell phone, game console, or Kindle) use Twitter, compared to 28% of Internet users with three devices, 19% of Internet users with two devices, and 10% of Internet users with one device.
The median age of a Twitter user is 31, which has remained stable over the past year. The median age for MySpace is now 26, down from 27 in May 2008, and the median age for LinkedIn is now 39, down from 40. Facebook, however, is graying a bit: the median age for this social network site is now 33, up from 26 in May 2008.
It will probably become more difficult to track status updating as an independent activity as social network updates feed into Twitter and vice versa. For now, it is clear that a “social segment” of Internet users is flocking to both social network sites and status update services. This segment is likely to grow as ever more Internet users adopt mobile devices as a primary means of going online.
Ouch. And Architectural Digest is one of my favs.
By Stephanie Clifford
Condé Nast’s ad-page numbers are in, and they explain why the company has had such a rough 2009.
Ad pages fell by 49.9 percent at Architectural Digest, part of an estimated total loss of 8,359 ad pages at Condé Nast monthlies in 2009.
The company lost 8,359 ad pages at its monthly magazines, according to estimates it released Wednesday. That is a 31.6 percent drop from last year.
The worst hit were Architectural Digest, where ad pages fell 49.9 percent; W, where ad pages fell 46 percent; and Condé Nast Traveler, where pages fell 41.1 percent. Details and Wired both fell about 39 percent.
Some magazines showed improving numbers toward the end of the year. Traveler dropped only 5.4 percent from last year’s December issue, and Lucky 8.8 percent. Glamour actually rose 6.6 percent.
By Stephen Shankland
Google said Tuesday it will subsidize free wireless network access in 47 airports from now until January 15–and indefinitely in the airports of Burbank, Calif., and Seattle.
The promotion, in cooperation with Boingo Wireless, Advanced Wireless Group, and Airport Marketing Income, is the latest effort to use free Wi-Fi to boost a brand. Among others: Yahoo is sponsoring Wi-Fi in Times Square in New York, and Google is sponsoring Internet access on Virgin America flights during the holidays.
Among the larger participating airports are those in Houston, Boston, Miami, Las Vegas, Nashville, San Diego, Baltimore, and St. Louis. A full list of the airports is at Google’s free holiday Wi-Fi site.
The move, though not cheap, is probably smart. Plenty of business travelers have a laptop and time to kill, and today’s consumers are increasingly likely to be equipped with laptops, iPod Touches, or other devices that can use wireless Internet access. Google is spending some money for an opportunity to give a lot of people the warm fuzzies when they encounter the Google brand.
And in the big picture, Google gets to show people what the world might be like if there were more high-speed wireless Internet access–something the company has been aggressively lobbying for in Washington, D.C. Many people are used to wireless networking in their homes, but it’s a different matter on the road.
There are downsides, though, too. Having been to dozens of conferences where the wireless Net access collapses as soon as the keynote speech begins, I’m acutely aware that providing large-scale wireless Internet access is technically demanding–and people get unhappy when a promised benefit evaporates. And public, anonymous places such as airports and urban population centers are great spots for hackers to launch main-in-the-middle attacks by offering “Free Wi-Fi,” so exercise caution when logging on to these networks.
The battle between AT&T and Verizon is going to make for some great advertising in the near future…
Marketing Casts Verizon Device as Antithesis of the Ubiquitous iPhone
By Rita Chang
SAN FRANCISCO (AdAge.com) — Verizon’s droid is pitching itself as the anti-iPhone, and nowhere is that more evident than in the look and feel of its campaign — a blanket push you won’t be able to escape.
The integrated campaign, the largest in Verizon history, will receive an estimated $100 million in support, most of it spent before the end of the year. Within it, the new phone is touted as the robotic do-it-all antidote to the Apple handset’s shortcomings.
The TV spots set to hit airwaves Monday night are about as far from the iPhone’s cheery spots as possible. Visually somber and testosterone-packed, they could be mistaken for ads for “The Terminator.” But, like the iPhone spots, they also demonstrate what the device can deliver, such as voice-activated turn-by-turn directions, fast web-browsing and video viewing. The tagline: “In a world of doesn’t, Droid does.”
Production insurance is a must. Trust me. Programs now cover travel delays, dangerous weather conditions for TV shoots.
By Rupal Parekh
NEW YORK (AdAge.com) — A few years ago Dianne Richter, an ad agency veteran who’s clocked time in the broadcast departments of shops such as JWT, Y&R and Saatchi & Saatchi, found herself on a nightmare of a commercial shoot. While driving to location, police had blocked the production team’s route for several hours after a suicide jumper perched himself on a bridge.
With daylight fading and under a tight production schedule, the team scrambled to rent boats to ferry their rigs and crew across the river to the set. Quick thinking saved the commercial, but those last-minute changes came at a steep cost to the client.
The good news for advertisers is that broader protections are being offered under recent changes in the U.S. insurance market. New, broader insurance programs are becoming available to fill gaps and cover things such as travel delays, dangerous weather conditions and other unforeseen issues that can crop up unexpectedly and quickly skyrocket production costs.
Traditionally, U.S. insurance policies for TV commercial shoots have covered claims only for physical damage. If a house being used in a commercial shoot burns down, for example, or if camera equipment is stolen. Arranging insurance is a small — not to mention pretty unsexy — step in the lifespan of a TV spot, but in a tough economy that has squeezed marketers’ budgets, it can help prevent extra costs from being tacked on when least expected.
The new protections are the most significant change in TV production insurance in the American ad market in years, said A. LeConte Moore, managing director at Dewitt Stern, a century-old risk insurance brokerage that specializes in insurance for media, entertainment and ad industries.
According to ad industry executives, the average cost of a TV spot these days runs about $250,000. But depending upon the complexity of the job — the location of the shoot, music rights, celebrity actors — the costs can reach a high-end of between $1 million and $2 million.
Insurance premiums tend to cost about 2% of a shoot, and the broader coverages being made available by the likes of Entertainment Brokers International, part of OneBeacon Insurance, today aren’t all that higher. So if a production budget is $200,000, and carries a $3,400 insurance premium, for another $200 a production can manage a variety of surprise contingencies.
“It feels like insurance on steroids,” said Ms. Richter, who now works at New York-based independent Droga 5, handling production estimates and contracts for the agency.
Franchisee’s obscure idea turns sandwich maker into national phenomenon
By Matthew Boyle
Stuart Frankel isn’t what you’d call a power player in the world of franchising. Five years ago he owned two small Subway sandwich shops at either end of Miami’s Jackson Memorial Hospital.
After noticing that sales sagged on weekends, he came up with an idea: He would offer every footlong sandwich (the chain also sells 6-inch versions) on Saturday and Sunday for $5, about a buck less than the usual price. “I like round numbers,” says Frankel, a brusque New Yorker who moved to Miami in 1972 and owned a drugstore before opening his first Subway outlet in 1988.
Customers liked his round number, too. Instead of dealing with idle employees and weak sales, Frankel suddenly had lines out the door. Sales rose by double digits. Nobody, least of all Frankel, knew it at the time, but he had stumbled on a concept that has unexpectedly morphed from a short-term gimmick into a national phenomenon that has turbocharged Subway’s performance. “There are only a few times when a chain has been able to scramble up the whole industry, and this is one of them,” says Jeffrey T. Davis, president of restaurant consultancy Sandelman & Associates. “It’s huge.”
In fact, the $3.8 billion in sales generated nationwide by the $5 footlong alone placed it among the top 10 fast-food brands in the U.S. for the year ended in August, according to NPD Group. That puts the $5 menu’s success just a notch behind KFC and ahead of Arby’s and Domino’s Pizza. It helped privately held Subway, of Milford, Conn., lift U.S. sales 17 percent last year at a time when most restaurant chains, save for industry leader McDonald’s, struggled.
By John Horrigan.
Some 69% of online Americans use webmail services, store data online, or use software programs such as word processing applications whose functionality is located on the web. Online users who take advantage of cloud applications say they like the convenience of having access to data and applications from any Web-connected device.
However, their message to providers of such services is: Let’s keep the data between us.
Download the report here.
Only 37% left to go. Give or take a few percentage points.
An April 2009 survey by the Pew Research Center’s Internet & American Life Project shows 63% of adult Americans now have broadband internet connections at home, a 15% increases from a year earlier.
April’s level of high-speed adoption represents a significant jump from figures gathered by the Project since the end of 2007 (54%). The growth in home broadband adoption occurred even though survey respondents reported paying more for broadband compared to May 2008. Last year, the average monthly bill for broadband internet service at home was $34.50, a figure that stands at $39.00 in April 2009.
Download the report here.
Broadcast radio still has reach. Now, that’s great to hear.
By Katy Bachman.
Contrary to popular belief, consumers are not trading broadcast radio for new media. Far from it. Of all audio segments, broadcast radio reaches more than 77 percent of users daily compared to 11.6 percent for MP3 players and iPods.
In total, more than 90 percent of adults were exposed to some form of audio media.
The findings, published Tuesday (Nov. 3) are based on a Nielsen analysis of data from the Council for Research Excellence Video Consumer Mapping Study. The $3.5 million landmark study conducted in 2008 used direct real-time observation methods to record the media behavior of participants in five major markets. Earlier this year, the CRE released results for video media.
Portable audio has its highest daily reach among the 18-34 demographic, but it takes up only 7.5 percent of all daily audio usage, compared to more than a 47 percent share for broadcast audio. In fact, broadcast radio has the highest daily reach among 18-34 year olds at 82.2 percent, compared to 81.6 percent for the 35-54 demo and 71.9 percent for 55 and older.
“There is a much more complex picture going on with audio than we ever really imagined,” said Dr. Michael Link, chief methodologist for Nielsen (parent company of Mediaweek). “What this report shows is that 18-34s aren’t abandoning radio. Rather, they’re adding new audio technologies in addition to broadcast radio consumption.”
Broadcast radio was also widely used among users of other forms of audio media. More than 81 percent of those who used portable audio devices, also listened to broadcast radio.
The medium also stacked up well against other media in terms of average hourly reach. Live TV reached the most people, followed by radio, the Web/Internet and newspapers and magazines.
By Robert Seidman
Yankees/Phillies Game 4 Up +45 in Rating & +47% in Audience with the Fall Classic Overall Rating Up +42% & +45% in Audience.
Game 4 of the 2009 World Series soared to a 13.5/22 average household rating/share with an average audience of 22.8 million viewers last night on FOX according to fast national ratings issued by Nielsen Media Research. Game 4 is the highest-rated and most-watched World Series game since Game 4 of the 2004 Series (18.2/28, 28.8 million) when the Red Sox snapped their 86-year championship drought.
It’s also the most-watched, non-decisive Game 4 in eight years, dating back to the 2001 Series (23.7 million., Diamondbacks-Yankees) and the highest-rated non-decisive Game 4 in six years (13.6/23, Yankees-Marlins-12-inning game). Compared to last year’s World Series, Game 4 of Yankees-Phillies is up +45% in rating and +47% in audience compared to Game 4 of Rays-Phillies (9.3/15, 15.5 million), and ranks as the highest-rated and most-watched prime-time show of the Monday-Sunday broadcast week (10/26-11/1).
Game 4 and its pregame program (10.7/17) combined with an NFL overrun and THE OT (fast nationals for both will be released later today) to make last night FOX’s most-watched night since the AMERICAN IDOL finale in May.
PHILADELPHIA topped all markets for Game 4 with a 42.0/58, +8% over its Game 4 rating a year ago (39.0/54). NEW YORK fired a 31.2/45, a Series-high and a better rating than any of the six games of the Yankees last World Series appearance in 2003.
2009 WORLD SERIES TO DATE
This year’s World Series has been a dominant force in prime time. The first four games of the 2009 Fall Classic have averaged an 11.5/19, 19.1 million viewers and a 6.1 among A18-49. The Series is up +42% in household rating and +45% in audience over last year (8.1/14, 13.2 million) and is the highest-rated, most watched World Series since 2004. If we compare the first four games of the World Series to top-rated season-to-date prime-time shows, the World Series would rank No. 2 in households, and No. 4 among Adults 18-49.
Post-season baseball has powered FOX to its best fourth quarter performance in history. Season-to-date, FOX is averaging a 3.7/10 in prime time among Adults 18-49 (preliminary pending final NFL numbers), +16% better than second-place CBS (3.2/9), FOX’s biggest season-to-date lead ever in fourth quarter and the biggest for any network in six years. The week of October 26th, which included four World Series games, averaged a 4.9/13 among Adults 18-49, an +81% win over second-place ABC (2.7/7) and the highest-rated fourth quarter week on any network in five years, dating back to the week of the 2004 World Series on FOX.
By Cat Moriarty
Sure, your brand message is consistent across all channels. But you haven’t truly integrated your marketing efforts unless you’re putting those channels to work together.
Mixing media — especially print and digital — is not only a smart idea, but with a little creativity, it can be a highly profitable one.
If your company depends on offline purchases, for example, improve direct mail conversions by e-mailing your audience before a drop, like True North did during a campaign for a New York–based credit union. The print-digital combination quickly produced 5,543 new members — 122 percent above expectations.
And with personalized URLs (PURLs), you can use direct mail to help drive online purchases, too. It’s what office machinery and consumer electronics company Ricoh did (with some pretty impressive results) when promoting its new high-end production print equipment
Retailer W.L. Gore had similar success when it included PURLs in its “Take Me to Everest” campaign. Not only did PURLs strengthen the company’s direct mail–Web connection, they also helped build brand awareness and generate shoe sales during the coveted holiday season.
And as this holiday shopping season soon gets under way, don’t underestimate the power direct catalogs — and their hybrid cousins (magalogs and catazines) — can have over online sales. With so much online competition, sending catalogs and other direct pieces is helping brands like mark and Zappos.com motivate customers to visit their sites more often, stay longer and get to know them better.
In wake of recession, consumers look for value, focus on essentials.
By Allison Linn
The recession has dramatically changed many Americans’ shopaholic habits, at least temporarily and perhaps forever.
Now the question is whether the nation’s retailers have kept up.
“The answer is no,” said Marshal Cohen, chief industry analyst with NPD Group.
He’s not alone in that assessment.
Although it’s still early days of the holiday shopping season, some analysts are already worried that too many merchants are taking a business-as-usual approach to an era that is anything but usual. Any miscalculation could be disastrous for retailers, who typically expect up to 20 percent of annual sales and a bigger share of annual profits during the critical holiday season.
“Retailers still don’t have a full grasp of reality,” said Burt P. Flickinger III, managing director of Strategic Resource Group, a consulting firm.
Flickinger thinks many of the nation’s retail executives don’t completely understand how severely the Great Recession has affected the millions of Americans who have lost jobs, had their wages cut or are living in fear of a job loss.
That, he noted, is on top of other financial concerns many Americans are facing, including a steep drop in home and investment values.
Retailers have good reason to fear such financial jitters, having only last year endured a disastrous season in which holiday retail sales fell 3.4 percent as Americans, rattled by the financial crisis, held onto their pocketbooks.
This year, Flickinger said, consumers are facing the reality of a sky-high unemployment rate and growing concerns about credit card debt.
“Shoppers are more scared going into this holiday season than any time in the last 50 years,” he said.
In the new era of tight budgets, consumers are looking for good value on the items they want and need. But instead, many analysts say retailers seem to be taking a different approach: offering ever-more extreme discounts on items they want to get rid of.
The super-low price method of offloading excess inventory has become so commonplace, even among higher-end retailers, that shoppers are coming to the conclusion that many products are just worth less, said brand analyst Robert Passikoff.
“It isn’t just that you learned that there will be sales — there will always be sales — but what it’s done is it ultimately affects the value perception of the product,” said Passikoff, president of the customer loyalty research firm Brand Keys.
By Michael J. de la Merced and Andrew Ross Sorkin
General Electric and the cable giant Comcast have moved closer to a deal giving control of NBC Universal to Comcast, and a formal announcement could be made sometime next week, people briefed on the talks said Sunday.
After a series of meetings last week, the two companies reached a tentative agreement on Friday over the main points of a deal, these people said. Comcast would own about 51 percent of NBC Universal, contributing several billions of dollars in cash and its own stable of cable networks to the new venture. G.E., which currently owns 80 percent of the entertainment company, would retain the other 49 percent and would contribute about $12 billion in debt to the new entity, though it is expected eventually to sell its ownership interest over several years.