| Written by Debbie Hauss |
| “I think this year is a singularity,” says Paula Rosenblum from RSR Research. “We are living in a shell-shocked society at the moment, and I can’t imagine this will continue.” Consumers did flock to the stores on Black Friday 2008, but mostly to deep discounters and at those stores they were looking for unusually large markdowns. Retailers know that consumers, particularly this year, won’t blink an eye at a 20%, 25% or even 50% discounts in many cases. Those out shopping are looking for 70% off and higher – and in many cases the retailers responded…but at what cost? The Deep Discount Debate Many retailers have felt the pressure to offer consumers the deepest discounts this year, even if it is historically out of character for their companies. “It is the year of the deal,” says Brad Wolansky, vice president of global e-commerce for The Orvis Company. “Even merchants who traditionally aren’t promotional (such as Orvis) must pay to play this year. Serving up the ‘same old stuff’ doesn’t work, particularly on the web where customers can see the difference.” But industry experts have mixed opinions on the subject: “Deep discounts don’t boost your brand, they just destroy your margin,” says Nikki Baird from RSR Research. Greg Buzek, president of IHL Services, has a different take: “Retailers that are not willing to heavily discount during this season are going to see dramatic drops in same store sales. Abercrombie discounted less than others and saw their overall sales for November drop 28%. Those that discounted might not have increased sales, but they were able to weather the storm a bit better.” “To further exacerbate the problem, it has also been challenging for retailers to compete against the prices of competitors who have filed for bankruptcy and have already publicly announced their store closures,” adds Janet Sherlock, research director at AMR Research. “While top-level revenue figures were adequate during the 2008 Thanksgiving weekend, profit contribution was likely poor for many retailers. Unfortunately, we then train the consumer to expect excessively low prices. Next year, there will likely be fewer retailers.” Is Cyber Monday Effective? RSR’s Rosenblum says a resounding “No!” She contends that if the industry jumped off the Cyber Monday bandwagon retailers would gain more total gross margin dollars. “Cyber Monday is a creation of the industry (or let’s say, industry trade groups), not the customer. The core assumption is that people shop while they are at work because they have bigger and better computers, and that’s just wrong, or at least dated. If retailers stopped running those silly promotions on that day…they would be primed to provide a better customer experience.” Nevertheless, Cyber Monday exists and will likely continue to exist. To make it a successful event, retailers must first ensure that their web sites will work effectively throughout the entire Thanksgiving weekend, then they should focus on effective cross-channel retailing as an everyday practice. “Retailers have totally underestimated the amount of online traffic on Black Friday,” says Buzek. “Sears’ site went down and Walmart attempted a major change the week of Black Friday. That’s just asking for trouble.” That said, Buzek suggests that retailers bring Black Friday and Cyber Monday together for consumers to offer a better customer experience through effective cross-channel retailing. “The best thing would be to allow consumers to gain Black Friday pricing or Cyber Monday pricing in both channels. Particularly for Cyber Monday, the offers that are online should also be available in the stores.” But Baird sees challenges with trying to coordinate across channels during this hyper busy weekend. “There is little cross-channel opportunity because the challenge of managing high-demand items prevents you from making online or in-store promises.” Make Loyalty Members Feel Special Whether or not deep discounting is helping retailers this year or any year for that matter, retailers still must focus on garnering sales from their best customers not only during the holidays but all year long and from one year to the next. “Retailers really do very little to make their loyalty shoppers feel special,” notes Baird. “How about a special gold member lounge complete with foot massage and hot chocolate? Or loyalty members only from 4-6am and 9-10pm?” Buzek agrees. “I think most retailers are missing the boat on focusing on low margin sales only to drive traffic for (Black Friday) rather than building a longer term relationship that allows for outreach and ‘special days’ throughout the year. Retailers like Borders and Best Buy get it with their programs. I’m not sure of too many others that are taking advantage.” Other Innovative Alternatives to Deep Discounting Discounting on Black Friday, Cyber Monday or any other day of the year is just not an option for some retailers. Abercrombie chose to forgo discounts to maintain its brand image. Cloudveil, an outdoor apparel wholesaler and retailer, has responded similarly. “We can’t discount on our site or at our store because our products are sold through many other wholesalers and they would not appreciate being undersold by us,” says Jeff Wogoman, director of marketing at Cloudveil. Instead, Wogoman is looking at more innovative ways to sell Cloudveil products. “We are looking at developing more video content for our website and we are trying to crack the social media nut a bit more.” Wogoman cites Nike as one retailer that has “hit the ball out of the park” with social media. “Giving a forum to runners to download information and share with others – it was genius that they pulled it off.” Is There a Utopian Thanksgiving Weekend for Retailers? It’s called Black Friday because it’s the weekend when most retailers traditionally move into the “Black” and it is likely to continue beyond 2008 and 2009. But the Internet, social media and mobile retailing are forcing retailers to be more reactive on the spot. “You need to evolve daily and serve the promotions and products and prices that customers are looking for,” says Orvis’ Wolansky. AMR’s Sherlock offers up a few tips for retailers going into 2009. “Next year there will likely be fewer retailers and the retailers that remain should have learned to: 1. Buy as lean as possibleThose tips plus a healthy economic recovery could bode well for retailers in 2009 and beyond. |
Thursday, December 18, 2008
Mid-Season Report Card For The Holiday Season Shows Missed Opportunities
Thursday, December 11, 2008
iPhone Apps Represent New Window Of Opportunity For Retail Marketers
By John Gaffney
After all the same store sales plunges, consumer spending pullbacks, profit nosedives and pricing collapses, one of the few the most positive image of 2008 can be found in a swirling picture of snow set against an iPhone screen and a big red bullseye. With Target, Amazon, and The Gap leading the way, the past two weeks has definitely put mobile applications on the retail agenda to stay.
“It’s a very similar market to ten years ago when retailers started flocking to online advertising,” says Chris Negron, sales executive for online music service Pandora. “Now everyone wants to be mobile. I would say 50 percent of our online clients are looking to develop a mobile application and a good number of those are retailers.”
The importance of this initial flurry is twofold. First, it has taken mobile phone applications and advertising from the planning stage to reality in a short period of time. Second, it has established the platform as a legitimate touch point for retail consumers. Pandora has been officially listed by Apple as one of the top ten applications (out of 10,000) in the iTunes app store. It was one of the first applications developed for the device, and its service carries mobile on-screen ads.
Negron is not at liberty to discuss the retailers initially involved in his service, but he says there are major companies other than Target, Gap and Amazon. He has seen the retail interest level developing into the more substantial breakouts from the three retailers who bowed proprietary applications over the past two weeks. Here’s what the three are aiming at with their applications:
• Target: Developed by San Francisco-based AKQA, the Target app makes use of the “accelerometer.” Shake the iPhone and the gravity and vibration cause the screen to change. While other accelerometer applications are used to simulate beer chugging,in Target’s case it is a snow globe that settles around a product and then the logo. “Good mobile phone applications are good branding applications,” says Kevin Barenblat, CEO of Context Optional, which has developed iPhone applications for several brands. “That’s what Target does.”
• Amazon: Barenblat says Amazon’s entry defines the utility that must be associated with the brand magic for mobile apps. Amazon’s application offers access to other retailers, such as Target and Macy's, but its features, which include "one-click" shopping, are focused on Amazon. It also includes Amazon Remembers, an experimental feature that uses the iPhone's camera to help create visual lists of products you want. Take a photo, and the iPhone app uploads the image to Amazon.com; the service then tries to match products in the same category.
• Gap: Barenblat also urges retailers to make sure their mobile apps are viral. The Gap fills this requirement. Its first mobile app features music videos with Christmas carols being sung by popular artists. The videos can be sent to friends via email. Another allows users to mix and match clothing on male or female models, and then tap to buy the items.
The most important “to do” for retailers planning mobile app development is long-term planning. Negron counsels retailers that are either planning ad campaigns on apps like Pandora or developing proprietary solutions to think beyond the initial buzz. The iPhone for example, started with just 300 apps in June. By the fourth quarter of next year it could easily have 20,000 different applications ranging from the novelties like beer chugging to serious retail e-commerce channels.
“Think through the series of apps as you would a media plan,” he says. “They are changeable and they will all need to have their own promotion plan to achieve scale. Different applications will fit different times of the year.”
Most analysts believe e-commerce applications will be the rule rather than the exception for cross-channel retailing by spring. “Think beyond the first iteration,” Barenblat says. “And don’t settle for cool factor alone. Think in terms of ROI.”
Thursday, December 4, 2008
Warning Signs Within Black Friday, Cyber Monday Spikes, As Retailers Go “All-In” Early With Holiday Deals
At first glance the results from the recent Black Friday and Cyber Monday sales gave the retail community some hope that consumers might be willing to open up their wallets again. Shoppers upped spending on Black Friday by 7.2% over last year, with the NRF’s 2008 Black Friday Weekend survey conducted by Big Research, estimating total Black Friday spending at $41 billion. Online sales for Cyber Monday also jumped 15% from a year ago, according to data from comScore, Inc.
However, a closer look at how those increases were achieved raises some caution flags. Sales spikes from the key Black Friday and Cyber Monday deals may have been more of a mirage that distorted the real slump still going on in retail. The November sales results reported this week continued to show a sharp downturn for almost every company not based in Bentonville. Target’s November sales dropped 10% and off-price leader TJX declined 12%. The November MasterCard Spending Pulse predicted a decline of more than 20% across several categories.
What is even more troubling than the continued sales slump is the potential long-term impact that the desperate deep discounting and “promote-at-all costs” approach retailers have taken to try and paddle some new life into the holiday season. The huge traffic spikes merchants have come to count on Black Friday and Cyber Monday could easily be watered down in coming years as retailers offered head starts and extensions on the holidays this year. Some examples:
Given the meltdown of the economy and the related impact it has had on consumer spending it is understandable that retailers need to be extremely aggressive during the remaining weeks of the holiday season. However, it is also important that promotions be based on real value of special buys and/or hot merchandise, rather than desperation. As the auto industry is demonstrating in its testimony in Washington this week, once you have played all your cards with the consumer, there is no rebate offer or discount promotion you can offer to trump up demand. Ultimately, what happens is consumer trust is lost and shoppers become trained that a better deal is always coming next week.
However, a closer look at how those increases were achieved raises some caution flags. Sales spikes from the key Black Friday and Cyber Monday deals may have been more of a mirage that distorted the real slump still going on in retail. The November sales results reported this week continued to show a sharp downturn for almost every company not based in Bentonville. Target’s November sales dropped 10% and off-price leader TJX declined 12%. The November MasterCard Spending Pulse predicted a decline of more than 20% across several categories.
What is even more troubling than the continued sales slump is the potential long-term impact that the desperate deep discounting and “promote-at-all costs” approach retailers have taken to try and paddle some new life into the holiday season. The huge traffic spikes merchants have come to count on Black Friday and Cyber Monday could easily be watered down in coming years as retailers offered head starts and extensions on the holidays this year. Some examples:
- Borders got a head start on Black Friday with an email campaign on Tuesday, Nov. 25, extending its Rewards members a Pre-Black Friday Savings Pass for the Wednesday prior to Black Friday, extending 50% off certain books and Buy 1 Get 1 offers as part of a special in-store promotion.
- On the Sunday prior to Cyber Monday, Circuit City sent out an email with the headline, “Our Cyber Monday Sale starts now--we couldn't wait until tomorrow!” On the flipside of starting early, Circuit City also dragged Black Friday for out for an “encore event,” with an email campaign hitting on the Thursday after Black Friday titled, “Back by popular demand: Black Friday deals, better than ever!”
Given the meltdown of the economy and the related impact it has had on consumer spending it is understandable that retailers need to be extremely aggressive during the remaining weeks of the holiday season. However, it is also important that promotions be based on real value of special buys and/or hot merchandise, rather than desperation. As the auto industry is demonstrating in its testimony in Washington this week, once you have played all your cards with the consumer, there is no rebate offer or discount promotion you can offer to trump up demand. Ultimately, what happens is consumer trust is lost and shoppers become trained that a better deal is always coming next week.
Thursday, November 20, 2008
Leading Retailers Relying On Analytics Tools To Respond To Shifts In Holiday Demand
By John Gaffney
The dynamics of the current retail landscape are fast and furious, with the next few weeks sure to turn up the heat even more as retailers look to make up for lost sales after a slow start to the holiday shopping season. Many experts are predicting customer data analytics, and the optimization processes that result from it, will play an essential role as retailers try to maintain their agility.
Leading online jewelry site Ice.com, which has been in business since 1999, is banking on data to help it get through a “tough” year,” according to Pinny Gniwisch, Vice President of Marketing. Next week the site will add a proprietary customer review application. “The data we collect helps us get to know our customers and helps us interact with them,” he says. “We used to manually search through shopping carts and wish lists to get customer data, and while that can work, it’s not automated. Now it’s automated. All the successful retailers that I track are using data to cut acquisitions costs and drive sales.”
Industry insiders predict data analytics will give leading edge retailers a competitive advantage on many fronts this holiday season. “Very simply data makes retailing more customer-centric,” says Alexi Sarnevitz, senior director of retail strategy for SAS. “That’s important in any environment, but it is essential in a tough economy.”
From a pricing perspective, Sarnevitz believes the stronger retailers will be able to quickly evaluate Thanksgiving weekend sales, and then make adjustments within days. From a marketing perspective, he expects that campaigns will be optimized or pulled based on the data generated by them. Many retailers have begun this process already and are looking at agility as a key to surviving this holiday season.
While SAS has been working closely with leading retailers on predictive modeling and predictive analytics solutions, Sarnevitz points out that past behavior counts too. Retailers who rely closely mine their data will be in better shape from an inventory perspective because their stock levels have been driven by data, not supplier relationships or past year comparisons. An example of how inventory optimization can be seen in recently published case study on Waitrose, a leading UK supermarket chain. Using SAS solutions to achieve accurate demand forecasting, Waitrose was able to realize more efficient stock ordering, delivery and replenishments. Waitrose also reduced its stock holding by 8%, its waste by 4% and was able to improve customer satisfaction significantly by ensuring product availability.
“Data needs to be managed end to end,” says Thomas Redman, author of Data Driven. “Retailers have to put good data in the system, and they will be rewarded with the ability to understand their customers. Those customers will still be here next quarter. All the good things that data brings to a business will be here next quarter too.”
The dynamics of the current retail landscape are fast and furious, with the next few weeks sure to turn up the heat even more as retailers look to make up for lost sales after a slow start to the holiday shopping season. Many experts are predicting customer data analytics, and the optimization processes that result from it, will play an essential role as retailers try to maintain their agility.
Leading online jewelry site Ice.com, which has been in business since 1999, is banking on data to help it get through a “tough” year,” according to Pinny Gniwisch, Vice President of Marketing. Next week the site will add a proprietary customer review application. “The data we collect helps us get to know our customers and helps us interact with them,” he says. “We used to manually search through shopping carts and wish lists to get customer data, and while that can work, it’s not automated. Now it’s automated. All the successful retailers that I track are using data to cut acquisitions costs and drive sales.”Industry insiders predict data analytics will give leading edge retailers a competitive advantage on many fronts this holiday season. “Very simply data makes retailing more customer-centric,” says Alexi Sarnevitz, senior director of retail strategy for SAS. “That’s important in any environment, but it is essential in a tough economy.”
From a pricing perspective, Sarnevitz believes the stronger retailers will be able to quickly evaluate Thanksgiving weekend sales, and then make adjustments within days. From a marketing perspective, he expects that campaigns will be optimized or pulled based on the data generated by them. Many retailers have begun this process already and are looking at agility as a key to surviving this holiday season.
While SAS has been working closely with leading retailers on predictive modeling and predictive analytics solutions, Sarnevitz points out that past behavior counts too. Retailers who rely closely mine their data will be in better shape from an inventory perspective because their stock levels have been driven by data, not supplier relationships or past year comparisons. An example of how inventory optimization can be seen in recently published case study on Waitrose, a leading UK supermarket chain. Using SAS solutions to achieve accurate demand forecasting, Waitrose was able to realize more efficient stock ordering, delivery and replenishments. Waitrose also reduced its stock holding by 8%, its waste by 4% and was able to improve customer satisfaction significantly by ensuring product availability.
“Data needs to be managed end to end,” says Thomas Redman, author of Data Driven. “Retailers have to put good data in the system, and they will be rewarded with the ability to understand their customers. Those customers will still be here next quarter. All the good things that data brings to a business will be here next quarter too.”
Thursday, November 13, 2008
Mobile Couponing Moves Into New Markets, GameStop Plays With New Phone Offers
After making its mark initially with supermarkets and consumer product brands, mobile couponing is extending its reach into other retail verticals. Matching its target demographic of young, tech savvy consumers, GameStop recently signed with Cellfire to use its service to distribute mobile coupons which are redeemable at its more than 4,200 stores in U.S. and Puerto Rico.
GameStop, the world’s largest video game and entertainment software retailer, is partnering with Cellfire to deliver a unique mobile experience that will add a dimension of fun and convenience to the retail experience for its customers. The program allows customers to simply show the coupon displayed on their cell phone at the register to receive a discount.
“As the mobile Web emerges as a viable marketing channel, reaching our customers through their cell phones is a natural progression,” said John Brittell, VP of E-commerce and Direct Marketing of GameStop.
Gamers can take advantage of these exclusive deals at GameStop by subscribing to the Cellfire mobile coupon service at http://www.cellfire.com or they can text keywords to have the respective offer clipped to their Cellfire account where it can be accessed on-demand. The promotional offers are targeting customers who are trading in or exchanging games, as well as a discount toward the purchase of a used game.
Mobile couponing is also catching on with quick serve restaurants as Arby’s announced plans back in August to partner with San Jose, CA-based Cellfire to use its service to distribute mobile coupons redeemable at 250 locations throughout the country.
The Arby’s offers included coupons for a Buy One, Get One free sandwich, discounts on premium drinks and free sandwich offers with the purchase of fry and drink. “Cellfire’s mobile coupons help us deliver value right into our customers’ hands when they are on-the-go, hungry for fresh, great tasting quality food and looking for a deal,” said Cyndi Richardson, Vice President, Company Marketing, Arby’s Restaurant Group, Inc.
Consumers access the free Cellfire mobile coupon service through a mobile application that resides on their cell phone or through a mobile Web browser. While consumers can use text messages to initiate Cellfire registration and save offers for future use, Cellfire is not a text message coupon service.
GameStop, the world’s largest video game and entertainment software retailer, is partnering with Cellfire to deliver a unique mobile experience that will add a dimension of fun and convenience to the retail experience for its customers. The program allows customers to simply show the coupon displayed on their cell phone at the register to receive a discount.“As the mobile Web emerges as a viable marketing channel, reaching our customers through their cell phones is a natural progression,” said John Brittell, VP of E-commerce and Direct Marketing of GameStop.
Gamers can take advantage of these exclusive deals at GameStop by subscribing to the Cellfire mobile coupon service at http://www.cellfire.com or they can text keywords to have the respective offer clipped to their Cellfire account where it can be accessed on-demand. The promotional offers are targeting customers who are trading in or exchanging games, as well as a discount toward the purchase of a used game.
Mobile couponing is also catching on with quick serve restaurants as Arby’s announced plans back in August to partner with San Jose, CA-based Cellfire to use its service to distribute mobile coupons redeemable at 250 locations throughout the country.
The Arby’s offers included coupons for a Buy One, Get One free sandwich, discounts on premium drinks and free sandwich offers with the purchase of fry and drink. “Cellfire’s mobile coupons help us deliver value right into our customers’ hands when they are on-the-go, hungry for fresh, great tasting quality food and looking for a deal,” said Cyndi Richardson, Vice President, Company Marketing, Arby’s Restaurant Group, Inc.
Consumers access the free Cellfire mobile coupon service through a mobile application that resides on their cell phone or through a mobile Web browser. While consumers can use text messages to initiate Cellfire registration and save offers for future use, Cellfire is not a text message coupon service.
Thursday, October 30, 2008
RetailWire: P&G Tests Online Sales to Consumers
Editor’s Note: This article is an excerpt from one of RetailWire’s recent online discussions. Each business morning on RetailWire.com, retail industry executives get plugged in to the latest news and issues with key insights from a “BrainTrust” of retail industry experts.
By: George Anderson
After focusing on cross-channel promotions and online info-sites for years, Procter & Gamble is working with a third-party operated website, theEssentials.com, to sell its brands directly to consumers, thereby bypassing traditional retail outlets.
TheEssentials.com, which only sells P&G products, is part of a larger movement by consumer packaged goods (CPG) brands to test direct sales to consumers. P&G rivals L'Oreal and Estee Lauder, for example, have operated websites that sell beauty brands to consumers.
While it supports the operation of theEssentials.com, P&G spokesperson Paul Fox told The Financial Times, "We treat them like any other retailer as they buy product directly from us."
P&G's direct sales test is still somewhat uncommon among CPG manufacturers but is something that companies in apparel, electronics and other categories have used with varying degrees of success. Some retail experts were underwhelmed by P&G’s move and skeptical of its success.
While an interesting experiment, one has to ask why consumers would feel the need to buy these products directly from Procter & Gamble, when most of the products are available at either Drugstore.com, Amazon.com, or other online retailers. While it is a great way for P&G to gain insight from their consumers, they will have a difficult time providing a compelling reason as to why people should shop on this site. Unless on the other hand, they start to offer products or variations of products that are not available from other online retailers,” said Joel Warady, principal of the Joel Warady Group. “Let's not forget that P&G has sold directly to consumers before through their Reflect.com site. And that ended up in a failure, although it was a completely different model. Let's see where P&G takes this, and how they can make this work.”
“It's highly unlikely that CPG vendors will make significant sales directly to consumers over an Internet channel. For the bulk of P&G's products, it is far more convenient for consumers to buy them from a retailer that offers a broad assortment of products that can be purchased on one shopping trip. theEssential.com appears to be focusing on P&G's more expensive and complex products, such as OralB toothbrushes, Braun coffee makers, and Crest Whitestrips, not toothpaste and detergents,” said University of Florida professor Barton Weitz. “For these more expensive products, consumers might purchase them from an Internet channel with theEssentials.com being one of many Internet retailers offering the products. theEssentials.com does provide parts for P&G consumers that might be hard to buy through traditional supermarket channels. By offering these parts, theEssentials.com can provide a service to P&G customers--a service not offered by its retailers.”
By: George Anderson
After focusing on cross-channel promotions and online info-sites for years, Procter & Gamble is working with a third-party operated website, theEssentials.com, to sell its brands directly to consumers, thereby bypassing traditional retail outlets.
TheEssentials.com, which only sells P&G products, is part of a larger movement by consumer packaged goods (CPG) brands to test direct sales to consumers. P&G rivals L'Oreal and Estee Lauder, for example, have operated websites that sell beauty brands to consumers.
While it supports the operation of theEssentials.com, P&G spokesperson Paul Fox told The Financial Times, "We treat them like any other retailer as they buy product directly from us."
P&G's direct sales test is still somewhat uncommon among CPG manufacturers but is something that companies in apparel, electronics and other categories have used with varying degrees of success. Some retail experts were underwhelmed by P&G’s move and skeptical of its success.
While an interesting experiment, one has to ask why consumers would feel the need to buy these products directly from Procter & Gamble, when most of the products are available at either Drugstore.com, Amazon.com, or other online retailers. While it is a great way for P&G to gain insight from their consumers, they will have a difficult time providing a compelling reason as to why people should shop on this site. Unless on the other hand, they start to offer products or variations of products that are not available from other online retailers,” said Joel Warady, principal of the Joel Warady Group. “Let's not forget that P&G has sold directly to consumers before through their Reflect.com site. And that ended up in a failure, although it was a completely different model. Let's see where P&G takes this, and how they can make this work.”
“It's highly unlikely that CPG vendors will make significant sales directly to consumers over an Internet channel. For the bulk of P&G's products, it is far more convenient for consumers to buy them from a retailer that offers a broad assortment of products that can be purchased on one shopping trip. theEssential.com appears to be focusing on P&G's more expensive and complex products, such as OralB toothbrushes, Braun coffee makers, and Crest Whitestrips, not toothpaste and detergents,” said University of Florida professor Barton Weitz. “For these more expensive products, consumers might purchase them from an Internet channel with theEssentials.com being one of many Internet retailers offering the products. theEssentials.com does provide parts for P&G consumers that might be hard to buy through traditional supermarket channels. By offering these parts, theEssentials.com can provide a service to P&G customers--a service not offered by its retailers.”
Tuesday, October 28, 2008
Q&A With OfficeMax VP Bob Thacker On Cause Marketing, Holiday Promos
OfficeMax has proven itself to be one of the most innovative marketers in the retail space. It recently announced it will reprise its highly trafficked Elf Yourself campaign this holiday season, after driving 193 million website visitors last year to upload a photo so they could see what they looked like as an OfficeMax elf. Following up on the Elf Yourself campaign, now OfficeMax is adding a layer of cause marketing.
The “A Day Made Better” cause marketing initiative, in which OfficeMax and education advocate Adopt-a-Classroom surprised over 1,000 teachers with school supplies across the US and Mexico, is one of the activities that “gives a company a soul,” according to OfficeMax VP of Marketing Bob Thacker. Retail TouchPoints had the opportunity to talk with Thacker and learn the fundamentals of the recent “A Day Made Better” cause marketing initiative. The former VP of marketing for Target Corp. and head of creative for Sears, Thacker is one of the more experienced and respected voices in retail marketing. In addition to detailing the Day Made Better campaign, Thacker also touched on the company’s holiday plans, and how the elves are taking over.
Retail TouchPoints: Can you speak to how and why cause marketing is becoming a more important element of a retailers’ marketing mix?
Bob Thacker: I’ve been involved in cause marketing for over 20 years. I actually helped create cause marketing when I was at Target and I felt then, and I feel even stronger now, that it is what gives a company a soul. People today are looking for a deeper relationship with companies they do business with. Many people today feel that they don’t want to do business with what I call a “carpet bagger,” a company that just comes into the market and just takes money out and doesn’t put anything back, or make the experience richer or more rewarding. People really expect companies to have a soul, and cause marketing is one of the ways that companies can do that.
RTP: How, if at all, does the economy factor into cause marketing?
Thacker: For [OfficeMax], it really wasn’t a factor at all. Other people have asked, ‘well, gee, with what the economy’s doing your sales are probably not as great as you’d want them to be. Have you thought about canceling that?’ My response is: would I cancel Christmas? They are two different things. Cause marketing can and does lead to increased sales, but that really isn’t why it should be on your marketing initiative. It has to do with who you are as a company. Do you put your soul away because sales are down? I don’t think so.
RTP: You had mentioned how consumers are looking for a deeper relationship with the companies they shop. How does the customer psychology and perception of cause marketing factor into it, and how is “A Day Made Better” really nurturing those thoughts?
BT: The Cone Cause Evolution study 2008, released this month, revealed that education was the leading issue among Americans. 79% of consumers said if the price and quality were similar they would switch to a brand associated with a good cause.
RTP: The “A Day Made Better” initiative was launched in 2007. Was there a difference in last year’s initiative to that of 2008?
BT: Yes.To go back and recap why we did it in the first place, the whole idea of teacher’s funding their own classrooms is a crime. And teachers spend $4 billion a year of their own money to pay their way, and on average, a teacher makes about $30,000 a year. Our whole attempt is to make this a national cause. We can’t fix it ourselves but we can certainly bring attention to it, do what we can and make the public aware of what a crime is being committed. In 2007, we did 1,000 classrooms all over the country. In 2008, we increased it by 1/3 to 1,300 classrooms and we involved Mexico. We also brought celebrity and key opinion leader attention to it. We had some very prominent people supporting this initiative, and in some cases, going out and surprising teachers. It grew in a really great way to become something bigger, more dynamic, than we had expected it to be.
RTP: Was there a criteria for the teachers selected who received supplies on “A Day Made Better?”
BT: Yes. They were all selected by our non-profit partner, Adopt-a-Classroom. We were not involved in the individual school selection. The teachers all needed to be in school that had a high level of need. A majority of the children in the schools are on free lunch programs, come from lower income families and in schools that have generally a greater need than, say, a well-endowed private school or a school that has some legacy or a huge foundation behind it. These are poor schools, underpaid teachers with kids who need it the most.
RTP: Does OfficeMax plan to continue the “A Day Made Better” effort in the future?
BT: Oh yeah, it’s deeply engrained in our culture and it’s’ really fun to walk around and hear people talk about ‘okay, next year on a day…’ It’s come down to a day and it’s referred to like it’s our day. I’ve been involved in 50 or so events like this in my career, and this has been the most emotionally effective and has done the most to raise the whole self esteem of the company… Our primary focus is on helping teachers and schools.
RTP: Does the company plan to bring back the “Elf Yourself” promotion for the holidays?
BT: He’s back! He’s going to be bigger than ever before. We’re just getting ready to launch him after Halloween. He’s going to be available in four different varieties of music and different dances. It has taken on a life of its own. It’s set a bar that nobody I know has been able to match, including us. The thing that’s different this year is that people will actually be able to make things out of the elf. You can make Christmas cards and different novelty items ad ornaments, so the elf can be preserved permanently, whereas before he used to be limited to the viral space. He will actually be available in product form so that’s going to be fun! It has become the viral equivalent of Frosty or Rudolph, the classic icons of the past. The elf is today’s version of that. Over 30% of the people who created elves said it made them feel better about OfficeMax.
The “A Day Made Better” cause marketing initiative, in which OfficeMax and education advocate Adopt-a-Classroom surprised over 1,000 teachers with school supplies across the US and Mexico, is one of the activities that “gives a company a soul,” according to OfficeMax VP of Marketing Bob Thacker. Retail TouchPoints had the opportunity to talk with Thacker and learn the fundamentals of the recent “A Day Made Better” cause marketing initiative. The former VP of marketing for Target Corp. and head of creative for Sears, Thacker is one of the more experienced and respected voices in retail marketing. In addition to detailing the Day Made Better campaign, Thacker also touched on the company’s holiday plans, and how the elves are taking over.Retail TouchPoints: Can you speak to how and why cause marketing is becoming a more important element of a retailers’ marketing mix?
Bob Thacker: I’ve been involved in cause marketing for over 20 years. I actually helped create cause marketing when I was at Target and I felt then, and I feel even stronger now, that it is what gives a company a soul. People today are looking for a deeper relationship with companies they do business with. Many people today feel that they don’t want to do business with what I call a “carpet bagger,” a company that just comes into the market and just takes money out and doesn’t put anything back, or make the experience richer or more rewarding. People really expect companies to have a soul, and cause marketing is one of the ways that companies can do that.
RTP: How, if at all, does the economy factor into cause marketing?
Thacker: For [OfficeMax], it really wasn’t a factor at all. Other people have asked, ‘well, gee, with what the economy’s doing your sales are probably not as great as you’d want them to be. Have you thought about canceling that?’ My response is: would I cancel Christmas? They are two different things. Cause marketing can and does lead to increased sales, but that really isn’t why it should be on your marketing initiative. It has to do with who you are as a company. Do you put your soul away because sales are down? I don’t think so.
RTP: You had mentioned how consumers are looking for a deeper relationship with the companies they shop. How does the customer psychology and perception of cause marketing factor into it, and how is “A Day Made Better” really nurturing those thoughts?
BT: The Cone Cause Evolution study 2008, released this month, revealed that education was the leading issue among Americans. 79% of consumers said if the price and quality were similar they would switch to a brand associated with a good cause.
RTP: The “A Day Made Better” initiative was launched in 2007. Was there a difference in last year’s initiative to that of 2008?
BT: Yes.To go back and recap why we did it in the first place, the whole idea of teacher’s funding their own classrooms is a crime. And teachers spend $4 billion a year of their own money to pay their way, and on average, a teacher makes about $30,000 a year. Our whole attempt is to make this a national cause. We can’t fix it ourselves but we can certainly bring attention to it, do what we can and make the public aware of what a crime is being committed. In 2007, we did 1,000 classrooms all over the country. In 2008, we increased it by 1/3 to 1,300 classrooms and we involved Mexico. We also brought celebrity and key opinion leader attention to it. We had some very prominent people supporting this initiative, and in some cases, going out and surprising teachers. It grew in a really great way to become something bigger, more dynamic, than we had expected it to be.
RTP: Was there a criteria for the teachers selected who received supplies on “A Day Made Better?”BT: Yes. They were all selected by our non-profit partner, Adopt-a-Classroom. We were not involved in the individual school selection. The teachers all needed to be in school that had a high level of need. A majority of the children in the schools are on free lunch programs, come from lower income families and in schools that have generally a greater need than, say, a well-endowed private school or a school that has some legacy or a huge foundation behind it. These are poor schools, underpaid teachers with kids who need it the most.
RTP: Does OfficeMax plan to continue the “A Day Made Better” effort in the future?
BT: Oh yeah, it’s deeply engrained in our culture and it’s’ really fun to walk around and hear people talk about ‘okay, next year on a day…’ It’s come down to a day and it’s referred to like it’s our day. I’ve been involved in 50 or so events like this in my career, and this has been the most emotionally effective and has done the most to raise the whole self esteem of the company… Our primary focus is on helping teachers and schools.
RTP: Does the company plan to bring back the “Elf Yourself” promotion for the holidays?
BT: He’s back! He’s going to be bigger than ever before. We’re just getting ready to launch him after Halloween. He’s going to be available in four different varieties of music and different dances. It has taken on a life of its own. It’s set a bar that nobody I know has been able to match, including us. The thing that’s different this year is that people will actually be able to make things out of the elf. You can make Christmas cards and different novelty items ad ornaments, so the elf can be preserved permanently, whereas before he used to be limited to the viral space. He will actually be available in product form so that’s going to be fun! It has become the viral equivalent of Frosty or Rudolph, the classic icons of the past. The elf is today’s version of that. Over 30% of the people who created elves said it made them feel better about OfficeMax.
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