Note to Readers: IPDA Daily will take a holiday break on Thursday and Friday, back Monday, Dec. 1.
Q3 Sales +1.3% at Books-A-Million
Books-A-Million posted a solid quarter for the period ended Nov. 1. Total revenue rose 1.3%, to $101.2M vs. Q3 2013, while the net loss stayed at $6.9 million. Comp store sales rose 1.8%. Excluding sales of e-readers, comp sales were up 2.2%. CEO Terry Finley said the sales gain was led by good comp store increases in its kids and teen category, where sales benefited from movie tie-ins for "Frozen" and "The Fault in Our Stars." Sales of Minecraft titles were also strong. In adult, the graphic novels, history and humor categories had a good quarter. Sales were up in the general merchandise and café areas, as well. BAM also added more stores to its 2nd and Charles division in the quarter; it now has 22. For the first nine months, sales were up 0.3%, to $313.3M and the net loss was cut to $15.5M from $19.8M in the year-ago period. Finley called the holiday book lineup modest, but said he was excited about books from Stephen King and James Patterson, plus books tied the film releases of "The Hobbit" and "American Sniper."
Marie Claire Names Site Director
Jessica Pels has been named site director of MarieClaire.com. Pels comes to Marie Claire from Teen Vogue, where she most recently served as online deputy editor and features editor. Pels starts December 8, and will report to Kate Lewis, Hearst Magazines Digital Media’s VP, content operations and editorial director.
Google Takes Another Shot at Helping Readers Pay for News
Google wants to be the wallet you use to pay for news. Again. Last week, it debuted Contributor, an experimental platform that lets people pay publishers for visiting a site. Instead of buying a subscription, readers put $1 to $3 a month into an account that's used to pay publishers on a per-visit basis. Currently, 10 sites are participating in the experiment, including Mashable, The Onion, Science Daily, and wikiHow (others have not been announced by Google). Each publisher gets the equivalent of the market rate for an ad shaved off their contribution each time they visit a site, according to Google spokeswoman Andrea Faville. Users can support their favorite website and enjoy an ad-free (or at least Google-ad-free) reading experience. People using Contributor get a NSFW-looking pixelated box in the familiar ad slots on a page, along with a message thanking them for contributing. Contributor is currently invite-only, but the project has the potential to be expanded out to more publishers and a broader collection of users, Faville said. “A healthy web depends on healthy publishers,” she said. Contributor is one of a number of reader-revenue options a publisher can use alongside advertising, events and other sources. A number of publishers like The Next Web have already experimented with offering ad-free reading as a premium, subscription-level service. Contributor is the latest in a line of efforts from Google to reach out to an industry that has seen it as an adversary at best and a thief at worst. Google Consumer Surveys is another kind of paywall alternative for publishers, asking readers to answer questions in exchange for access, with Google paying publishers per response. So far, the survey system has remained small, favored by medium-to-small news organizations. One of Google’s original experiments in paying for content was One Pass, a transaction tool that let readers pay for their news subscriptions through Google Checkout. Debuting in 2011, One Pass was seen as an alternative to Apple’s Newsstand that offered ease of use and fluid transactions without Apple’s 30% cut. One Pass failed to catch on, with only a handful of publishers using the system before it was shuttered a year later. Then, as now, Google faced a problem convincing publishers to work with them. Even as the company has courted favor with the media by branding its products as tools for journalism, they remain a target from publishers who say Google search welds too much power over the distribution of content.
HarperCollins to Provide Content for JetBlue
HarperCollins Publishers has signed on as the exclusive book content partner for JetBlue's new inflight wi-fi program, Fly-Fi, which provides content to airline passengers. Beginning today, the publisher will provide excerpts from a selection of bestselling titles, and each e-sample will include buy buttons to a variety of retailers. Titles will change monthly, and the offer will continue throughout the next year. The Fly-Fi Hub is currently accessible on 35% of JetBlue's fleet.
Wired U.K. Event Explores Future of Retail
Speakers at the U.K. title’s inaugural Wired Retail conference, in London, discussed the future of retail. “People are looking for inspiration in the way that they would look through a magazine, but now it’s on a small screen for 24 hours a day,” said Tracy Yaverbaun, head of brand development, EMEA at Instagram. “People are walking into stores with their Instagram feeds,” she added. But Instagram isn't planning to add an ecommerce element yet. “We feel like focusing on inspiration first is the most important thing to do, then we can figure out the rest later,” she said. Amber Venz, cofounder of RewardStyleRewardStyle, which links online content creators to brands so the creators can monetize their online promotion of labels, said that the style bloggers her firm represents are directly influencing online sales. Venz said that the firm’s “top influencers” will drive $270M in online sales in 2014, up 174% vs. 2013. She also cited one of the firm’s stats (widely reported earlier this year) that some of its bloggers are making around $100K a month in commission from products they link to online. In addition, Venz said that Liketoknow.it, her firm’s tool that enables bloggers to earn affiliate commission on products they promote on Instagram, has driven 3% of the retail sales generated by the firm’s bloggers in the last eight months. Runar Reistrup, ceo of social marketplace Depop, noted that his peer-to-peer buying-and-selling app has been described by an executive at Asos as hybrid of shopping and a social network, or more specifically as “eBay and Instagram having a baby.” The app displays an Instagram-style feed of images of goods that its users are selling — from art books to designer clothes to rare sneakers — and Reistrup said the interaction between buyers and sellers is an integral part of the app’s experience. “[Online retail] doesn’t have to be a faceless, Amazonlike store,” said Reistrup, noting that the app’s users are influenced by whether one of the site’s respected sellers has commented on an item. “People are asking opinions, and using [the app] as a social network,” he said.
Why Publishers Are Struggling with Private Advertising Marketplaces
For many publishers, optimism about private marketplaces has been replaced by the disappointment or, in some cases, outright disillusionment about the concept’s unfilled promises. Private marketplaces arose in response to the concerns publishers have had about offering their inventory on open exchanges. Instead of getting squeezed on CPMs in the open market, publishers like Hearst, Tribune Publishing and Future Publishing have turned to their own private marketplaces, which they use to offer their inventory to a select group of buyers in a more transparent, controlled environment. And they’re not alone: eMarketer expects private marketplace selling to reach $3.3B by 2016. But publishers say that the tech isn’t there yet, or if it is, it’s unevenly distributed. Publishers often face compatibility problems between their own supply-side platforms and the demand-side platforms that their buyers use, which gum up the works on their deals. Other publishers cite lack of demand as the problem. Evolve Media president Brian Fitzgerald says the biggest problem with PMPs is that many buyers are approaching them the same way they do open exchanges, which they use to find big audiences at low prices. “They cannot apply the same numbers-driven approach to buying quality inventory and audiences as they do when they cookie-match in exchanges,” he said. “The two will never marry up, and quality publishing will always get marginalized for the bottom line.” Also, advertisers that buy into PMPs often come to publishers with a specific-but-limited cookie pool that they want to retarget against. The problem is that publishers often overestimate how much those two audiences overlap — in part because they often don’t ask buyers how big their cookie pool is in the first place. The result: Publishers expect buyers to spend $500 a day, but they end up spending fractions of that because they don’t see enough impression opportunities they’re interested in. Others say publishers contribute to the problems. “Programmatic has got everyone chasing tails for dollars when they should be evaluating opportunities more diligently,” said Rich Routman, president and CRO of Sporting News Media. “If they’re using a DSP you haven’t heard of and are targeting a very specific audience, you probably should think twice.” Routman said that one of the ways publishers can avoid compatibility problems and yield misconceptions in their PMP deals is to ask buyers the right questions upfront, including: How many people are you targeting? How much do you plan on spending? and Which DSP are you using?
Mistakes Publishers Make with Mobile Apps
Common mistakes include abusing push notifications, scheduling articles for a desktop audience, obsession with infinity (trying to keep people in the app forever), and adding to app overload. Article expounds and also offers some preferable strategies and fixes.
OTHER NEWS OF NOTE:
Walmart Leads Social Engagement for Black Friday
Walmart has the biggest social media presence as measured by consumer engagement heading into Black Friday, according to the latest figures from the Digital Engagement Index, a new MediaPost feature powered by ListenFirst, which tracks daily increases and decreases in engagement across major social platforms for top brands (as compiled by Redbooks 500). ListenFirst’s Michael Robinson noted: “While Walmart typically leads the big box retailers based on Digital Engagement Ratings, it’s clear that they've turned on the media machine over the past week, as their digital engagement is almost 800% higher than average.” From a content perspective, Walmart is engaging its customers with recipes, health tips, and how-to’s, distinguishing itself from the torrent of deals and promotions that fill consumers’ inboxes and social feeds. Their social program includes countdowns to special savings offers on Facebook, and a video on YouTube promoting their “1-hour guarantee,” promising consumers they will get the discounted item they want if they stand in line from 6-7 pm on Thanksgiving. Over the last week, W-M scored an average digital engagement rating of almost 2.6M interactions per day, over 10 times more than Target, second on the list in the retail category.
Whole Foods Keeps Lid on T-Day Meal Costs
Thanksgiving is providing Whole Foods Market with another chance to shed its Whole Paycheck reputation. A basket of 23 goods, including organic turkey, chicken stock and fresh green beans, was $104.91 at Whole Foods, 0.3% cheaper than last year, according to a Bloomberg Intelligence study. The items were less expensive than the $111.94 they cost at Fresh Market and a bit more than the $103.95 at Trader Joe’s, which is known for low prices. “Whole Foods has been really focusing on trying to present a better value message,” said Jennifer Bartashus, a Bloomberg Intelligence analyst. “It's a bit of a surprise that Trader Joe’s costs as much as Whole Foods.” WF has recently focused on cutting prices for its fresh produce to draw bargain seekers away from mass retailers and warehouse stores. Earlier this month, WF reported quarterly profit that topped analysts’ estimates as revenue gained 9.4%. “Our value focus is on perishables, where we see opportunities to broaden our selection of products at entry-level price points, increase promotions and narrow price gaps,” co-CEO John Mackey said at the time.
WSJ Analysis: The End of the Impulse Shopper
WSJ researchers spent time this past fall with four Milwaukee-area families typical of today's middle-class families (according to demographics and other criteria), to see how they shop. Some of their observations: "A new intentionality has taken hold of shopping. Many Americans have the money and the will to spend. But they are time-pressed and deal savvy, visiting stores only when they run out of items like cereal or toilet paper and after doing extensive research on purchases online and with friends. They buy what they came for—and then leave. Those habits threaten more than just gum sales at checkout. Impulse is why stores offer deep discounts on loss leaders, why they put the milk in the back corner and why marketers spend heavily to pile up products in displays at the ends of the aisles. If shoppers just target the deals and don’t let their eyes wander, long cherished models for boosting sales fall apart. The shift of attention toward the Web and lingering frugality after the trauma of the financial crisis are the underpinnings of the problem. And the symptoms of the industry’s malaise are clear enough: extended declines in shopper traffic, weak sales growth, and a discount-driven race to the bottom that is sapping pricing power...Intentionality has now spread beyond the Web to in-store shopping. 'Consumers are now conditioned to shop for specific items and it’s not just affecting online consumer psyche but offline consumer psyche as well,' said Joel Bines, a managing director at retail consultancy AlixPartners...Wal-Mart Stores moved aggressively into the low-margin grocery business in the 1980s hoping it would prove a weekly draw for shoppers who in theory would also pick up more profitable items like clothing and toys. But the formula has come under strain. Groceries now account for 56% of Wal-Mart’s $279 billion in U.S. sales, and categories like electronics and toys are waning or migrating online. Only once since 2012 has the company reported increased U.S. sales, excluding newly opened or closed stores. Meanwhile, traditional grocers like Kroger are eroding Wal-Mart’s price advantage...Wal-Mart and other retailers are reacting to shoppers’ extreme planning in a variety of ways. Wal-Mart is trying to pair items that sell well together, like Corona beer and limes. They call it, “Better Together.” It is also investing in e-commerce and smaller stores that cater to more targeted shoppers. At Dollar Tree, each week the chain designates a product like a pen or candy bar as 'drive items' that cashiers push at checkout." The article offers numerous, specific examples of how real families' shopping behaviors have changed. In a related piece, WSJ describes how it chose the families to observe, and lists the current top 50 test markets in the U.S., per Acxiom.
(end of impulse shopper)
(middle class, top test markets)
More on Wal-Mart U.S. Management Shakeup
WSJ reported that U.S. chief merchandiser Duncan Mac Naughton resigned from Wal-Mart because he was disappointed about being passed over for the W-M U.S. CEO job, which went to Greg Foran in July. The departure allowed Foran "to restructure the U.S. operation as Wal-Mart tries to fix a problem that has dogged it for years: stocking products that will attract more shoppers into its stores," writes WSJ. "As a result, Wal-Mart won’t name a new chief merchant at this time and executives in charge of food, general merchandise, apparel and several other business lines will report to him directly." Foran said he "would like to use this opportunity to get closer to the merchandising organization.” Marketing Daily's Thom Forbes rounds up more of the media coverage, including observations from Allan Ellstrand, an expert in corporate leadership and professor at the University of Arkansas, to The City Wire: “If you look at some of the recent talent selections in the C-suite, it’s apparent that Wal-Mart is looking for something different, casting a broader net to gather people with varying experiences,” Ellstrand said, adding that if companies always do things the same way with the same people, it’s hard to get different results. The piece notes that W-M CEO Doug McMillon and Foran have each said that they're after higher sales and better performing supercenters. “Research shows that bringing in outside talent can be more contentious but, overall, companies that do it often get richer, better and more compelling results,” Ellstrand noted.
Oregon's GMO Labeling Mandate Fails by Tiny Margin; Recount to Begin
MNB cites an ABC News report that the Oregon referendum that would have called for mandated labeling of foods containing genetically modified organisms (GMOs) has failed by just 809 votes, or by 0.06 percentage points, and will now go to an automatic recount. More than 1.5M votes were cast on this ballot measure.The story notes that "at nearly $30M, the battle over Measure 92 was by far the costliest campaign in Oregon history." Almost two-thirds of that money was spent by GMO labeling opponents.
Gift Cards Top Wish Lists for 8th Consecutive Year
Total spending on gift cards is expected to reach $31.74B, according to the National Retail Federation. Gift cards have been the most requested holiday item eight years in a row. NRF said total spending on gift cards has increased 83% since 2003, when it began tracking people’s intentions to give the cards as holiday presents. And now, you don’t even have to give folks a physical plastic card. You can purchase electronic cards that can be delivered to a person’s smartphone.
C-Store Association Also Takes Issue with New FDA Menu Labeling Regs
The National Association of Convenience Stores (NACS) yesterday issued a statement that "expressed disapproval of the sweeping new menu labeling regulations imposed on convenience stores and other food establishments including grocery stores, movie theaters, and vending machines" by the Food and Drug Administration. “The FDA has clearly gone beyond congressional intent by expanding the types of businesses that fall under this law to include convenience stores,” said Lyle Beckwith, SVP government relations for NACS. “The one-size-fits-all approach that FDA announced today would treat convenience stores as though they are restaurants, when in fact they operate very differently. It is now up to the bipartisan, bicameral opponents of this regulatory overreach to enact legislation introduced in both houses of Congress that reasonably defines a restaurant as a business that derives at least 50% of revenue from prepared food.”
Ohio Bill Would Mandate Triple Retail Wages on Holidays
An Ohio legislator wants stores in the state to pay triple wages for employees who work on Thanksgiving — an effort that comes as Macy’s, the holiday’s quintessential retailer, is allowing its workers to choose whether to work that day. Both are attempts to counter frustration among workers and their families over holiday store hours that have expanded into the holiday. Rep. Mike Foley, D-Cleveland, said his bill would allow employees to bow out of the holiday shift without job sanctions while protecting family time from excessive consumerism. Foley said the idea for his bill came from a call last year from a Cincinnati woman who said both she and her 82-year-old mother had been scheduled to work their retail jobs on Thanksgiving.
Latest Tesco Developments
MNB summarizes two news items: AFP reports that a group of Tesco shareholders have declared their intention to sue the company, charging that management "knew or were reckless" about its financial condition, allowing for the overstatement of profits that currently is the subject of a federal fraud investigation. Also, The Guardian reports that Tim Smith, "the former head of the Food Standards Agency (FSA), who went straight from his job as regulator to a lucrative role as technical director of Tesco, lobbied the government this summer about its plans to publish the official food poisoning contamination rates for supermarket chicken." The problem, according to the story, is that Smith was only allowed to go to work at Tesco in 2012 by Prime Minister David Cameron on condition that he not do any lobbying on behalf of Tesco for two years. "Smith is understood to have warned the Department of Health in June that FSA proposals for publishing results, which included naming and shaming individual supermarkets, could provoke a food scare and damage the industry," The Guardian reports.
Economy: Jobless Claims Rose Last Week
Initial jobless claims rose 21,000 to a seasonally adjusted 313,000 in the week ended Nov. 22, per the Labor Dept. Updated figures put the prior week’s level at 292,000, up from an initially reported 291,000. Last week’s rise marked the first time since early September that new claims exceeded 300,000. And despite last week’s climb, claims remained near post-recession lows, a sign the U.S. labor market continues to heal amid the longest stretch of job growth since at least World War II. Initial jobless claims rose to 665,000 toward the end of the recession in 2009 but have steadily come down since. Employers have added an average 229,000 jobs a month this year, a pace strong enough to bring unemployment down quickly. The jobless rate fell to 5.8% in October from 7.2% year earlier. Stronger job growth is boosting the broader economy, which grew at a robust 3.9% annualized rate in Q3, the government said earlier this week. Still, nearly 9M workers are searching for a job, an additional 7M are stuck in part-time jobs because they can’t find full-time work, and wages are still growing tepidly, according to most measures.
OTHER NEWS OF NOTE: