SEM and SEO spending expected to continue increasing, while online sales continue to bolster retailers

March 25, 2009 Leave a comment

 

According to eMarketer, in spite of growing recessionary concerns U.S. marketers are likely to boost spending by as much as 16 percent in 2009 across the four basic forms of search engine marketing (paid search advertising, contextual advertising, paid inclusion, and search engine optimization.)  Investment is expected to grow to from $12.2 billion last year to $14.1 billion this year.  In addition, they suggest that by 2013 such spending could exceed $23 billion annually.  Another strong upward trend is in the area of search engine optimization, where eMarketer predicts that the size of the SEO industry could almost double in the next five years.

Anecdotal evidence from retailers selling online would appear to support the validity of making these investments.   In its annual report filing, Kohl’s just announced a 48% jump in Internet sales in 2008, joining Macy’s and Saks among retailers who have seen online success despite the recession.  This followed a strong ‘07 for Kohl’s, where online sales grew over 30%.  In the case of Macy’s and Saks, even as poor performing stores were being closed down their online sales were increasing.  What this means is that their brand was still resonating with Internet shoppers.

Online marketing for retailers is more than just SEM and SEO however.  In the case of Kohl’s, they struck timely deals with AOL, MSN and Yahoo during the holidays with eight home page takeovers, plus they offered regular “deal of the day” internet-only discounts on their web site.

The argument for investing in online brand development and selling via SEM, SEO and web site activities remains compelling, especially in these hard economic times.

Filed under eCommerce, Retailing, Sales, Search Engines Tagged with , , , , , , , , ,

A Bounce in Consumer Sentiment? Some Encouraging Numbers, Especially for Amazon & WalMart.

January 28, 2009 Leave a comment

 

A survey just released by ChangeWave shows that sentiment on consumer spending may have finally bottomed after a prolonged slowdown.  But they also cautioned that this tiny uptick in their data may be shortlived, much like their May ’08 data following the tax rebate checks.

hand-moneyThat being said, their Jan ’09 survey of almost 2,800 U.S. consumers  said that although fifty-seven percent of U.S. respondents said they’ll spend less during the next 90 days than they did a year ago – that is still three points better than last month’s December survey.  Better still, another 13% said they’ll actually spend more, which is two points better than last month.  Finally, 12% said they think the economy will improve in the next 90 days (up 3 points), and the 56% who said they think the economy will worsen during the next 90 days is still 10 points better than the December low.

What does this mean for online & retail?

For the third consecutive survey, ChangeWave indicates that in the home entertainment and network shopping category Amazon.com (+1 to 24%) is the clear momentum leader.   On the flip side, brick & click retailers like Best Buy (-6  to 37%) and bankruptcy-headed Circuit City (-2 to 7%) show significant weakness going forward.

Finally, for retail stores ChangeWave’s consumer surveys have consistently pointed to two retail winners since Feb ‘07: Wal-Mart and Costco (both +6).   The greatest weakness going forward is among traditional retailers, led by Bed, Bath & Beyond (BBBY) (-14), Sears (SHLD) (-12), Macy’s (M) (-12) and JC Penney (JCP) (-10).

For the majority of Americans who are still spending less, the primary reasons remain reduced household  income, saving money, and debt reduction.

Filed under eCommerce, Economy, Market Research, Retailing Tagged with , , , , , , , , ,

Top 50 Retail Brands for 2009 Includes Two Online-Only Outlets

January 21, 2009 Leave a comment

InterBrandDesignForum has just released their 2009 list of the 50 Most Valuable Retail Brands for 2009.  Heading the list of course is Walmart whose brand is valued at $129 billion.  To get a sense of the range, at #50 is Anthropologies at $420 million. 

Of particular note to Jedwar.com readers, two of the top 15 brands are actually online-only sellers eBay (at #11 and valued at $7.9 billion) and Amazon (at #14 and valued at $6.4 billion.)   As online-only brands both have the advantage of all consumer touchpoints – brand and otherwise – being under one experience.   However, being just on the Internet means their primary competitive differentiator is eBay and Amazon rankingconvenience, which is easier for competitors to narrow.  Brick & mortar stores who also sell online can express their value propositions in a myriad of ways including price, design, store-layout, store-location, attitude, etc.

In addition, eBay’s brand has some challenges ahead.  What was once an auction business is now a blurred collection of acquisitions that include Skype (which hasn’t faired as well as they had hoped) and online payments systems including PayPal.  Further adding to the challenge is their move towards fixed-pricing.  Keeping all those consumer experiences tied together logically will be difficut for eBay, just as it was for previous online aggregators like AOL.

Amazon is in better shape.  Their narrower scope allows them to vigilantly focus on making online buying really, really simple.  With fewer levers to pull they continue to drill down on the critical moving parts of their business which is site useability, product availablity, shipping and price.  It would not be surprising to see Amazon’s brand move ahead of eBay in the 2010 list.

Filed under Retailing Tagged with , , , , , ,

Circuit City to call it quits. e-Lesson: Take the offer when you can

January 20, 2009 Leave a comment

Big box electronics retailer Circuit City is seeking Bankruptcy Court approval to start liquidating its assets after failing to reach an agreement with its creditors.  The rub is that Blockbuster had tried to acquire Circuit City last year but the overtures were rejected. Although Circuit City eventually warmed to a deal the talks between the two went nowhere.

circuit-cityThe lesson here is that 30,000 employess will soon lose their jobs because Circuit City failed to address a critical erosion in their core business model.  Blockbuster was  a logical suitor because of its broad retail store base and complementary products (videos to be viewed on popular, high-end electronic devices).  Blockbuster was facing similar erosion due to on-demand movie and television e-tailing from cable companies and would likely have struck a favorable deal.   But (as George Bush might say) Circuit City “miss-underestimated” the growing dominance of online and offline retailers such as Best Buy, Walmart, and Amazon. 

Jedwar’s advice: “When in doubt, branch out.”  When faced with similar conditions (merge or fail), consider carefully your options.  Many times 2 birds in the hand are worth far more than one in the bush.

Filed under Retailing Tagged with , , ,

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