Eye-on-Retail Tipsheet for 12/12/12: Walmart trends report, Amazon mounts your TV, Dollar store growth

 

Walmart Economic and Customer Trends Report – Q3 2012.  Highlights:

Tradeoff between diaper and baby cream sales signals we’re still in difficult economic times according to Walmart’s unconventional “Diaper Rash Indicator…

“Diaper Rash Indicator:  In at attempt to save money in down economic times, parents with children in diapers try to save costs by cutting back on diaper changings.  At the same time sales of baby cream, related to Junior’s increase in diaper rashes, builds.  Parents, in effect, are trading more expensive diapers for less expensive baby cream”

“Walmart’s internal analyses confirms that household discretionary spending has yet to return to pre-downturn levels.  A prolonged improvement in confidence is unlikely until income for disposable purchases improves considerably.”

“Walmart expects the full effect of the 2012 drought and its impact on consumer packaged and processed foods will not be felt until 2013.  Consequently, the USDA has forecast 2013 food inflation to be 3%-4%, which is significantly higher than the historical average.  More food pricing pain is on the horizon.”

https://news.walmart.com/walmart-facts/walmart-economic-customer-insights-report-q3-2012 

 

“Dollar Store, Inc.: The Booming Business of Being Cheap” by Ryan Owens and Jake Whitman at ABC News (Video featuring Family Dollar and Text).  “The three top players, Family Dollar, Dollar Tree and Dollar General, have quietly become a $56 billion industry and they are opening new locations faster than Starbucks. By one estimate, there are more dollar stores in the United States than drug stores.  “Believe it or not, we can still open a lot of stores,” said Family Dollar CEO Howard Levine. “Particularly in California where we just opened a store a year ago… this is probably a 1,000-store state.”  https://abcnews.go.com/Business/dollar-store-booming-business-cheap/story?id=17934578#.UMf5AoPAfzk

 

“Target: Going Deep on Engagement” in McKinsey &  Company.  Jeff Jones (@jjones), Target’s Executive Vice President & Chief Marketing Officer, explains what it takes to build deep relationships with their guests, how to build a multichannel organization, and how to balance analytics with creativity…”The most important marketing change we’ve made is to collaborate in a more strategic way at the beginning of the process, not tactically after the work is done. It used to be that we’d develop the business objective, then define the marketing strategy, work on the creative, buy media, then inform PR, etc. Now we bring together those paid, owned, earned and shared teams as a strategic input into what we’re trying to accomplish at the beginning of the process. This is an important philosophical shift.”  https://cmsoforum.mckinsey.com/article/target-going-deep-on-engagement

 

” Amazon’s latest experiment: Installing your TV and other household items” by Taylor Soper at Geek Wire.  “In another example of Amazon expanding its footprint in new ways, the online retail giant is now contracting with a Seattle area company to install TV mounts right in your home.  Currently in beta mode and available only in the Seattle area, Amazon’s new TV mount service is priced at $275. It includes the mount itself and the labor costs for installation. All a customer needs is a flatscreen TV, and Amazon’s partner does the rest.”  https://www.geekwire.com/2012/amazon-inhome-tv-mounting-installation/

 

“Sears Canada Mines 60-Year-Old Database for Turnaround” by Ari Altstedter at Bloomberg News.  “Sears Canada Inc. is betting on using its 60-year-old credit card database, the largest in the country, to create advertising for targeted customers and help return the retailer to profitability by 2014.  “We recognize it as a huge opportunity, it’s been under- leveraged,” Chief Executive Officer Calvin McDonald, 41, said in an interview at the company’s Toronto headquarters last week. “We’re on it.”  Sears Canada, which has reported 12 straight quarters of sales declines, delved into its database for the relaunch of its Jessica women’s brand in September, analyzing customers’ past purchases to determine who it should choose for exclusive discounts by direct mail and e-mail.”  https://www.businessweek.com/news/2012-12-11/sears-canada-mines-60-year-old-database-for-turnaround 

 

“Wal-Mart CEO says ‘fiscal cliff’ affects U.S. shoppers” by Martinne Geller in The Chicago Tribune.  “In the week before last month’s U.S. presidential election, only 25 percent of its core U.S. shoppers knew what the term “fiscal cliff” meant, CEO Mike Duke told a gathering on Tuesday in New York.  “One week after the election it was up to 75 percent,” said Duke, adding that 15 percent of those customers said the debate in Washington would affect what they spend for Christmas.  Wal-Mart, the largest retailer in the United States and the world, polls its shoppers regularly.  The latest poll could bode poorly for retailers like Wal-Mart, which rely on the year-end holiday shopping season for an outsized portion of their annual revenue.”  https://www.chicagotribune.com/news/sns-rt-us-walmart-dukebre8bb075-20121211,0,5602674.story

 

“Dollar General feels heat from competition, economy” by Jessica Wohl at Reuters.  “The discount chain posted a bigger-than-expected increase in quarterly profit and total sales in line with Wall Street expectations. But sales at stores open at least a year rose less than some analysts expected, and its profit forecast suggested this quarter’s profit will miss estimates.  But competitors including Walmart have stepped up their focus on items priced at $1 or less and have been advertising heavily, putting pressure on stores such as Dollar General that operate on much smaller ad budgets. Dollar General said it would start to lower some prices and use more advertising.”  https://www.chicagotribune.com/business/sns-rt-us-dollargeneral-resultsbre8ba0fo-20121211,0,2230535.story 

 

“With Home Depot Deal, Samsung Ties Up Quartet of North American Retailers” at Chosun Media.  “With this deal, Samsung now has partnerships with all four major distributors of home appliances in North America, following similar agreements with BestBuy in 2003, Lowe’s in 2005 and Sears in 2007.”  https://english.chosun.com/site/data/html_dir/2012/12/12/2012121200974.html

 

“Amazon wins its insane gadget-airbag patent” by Josh Lowensohn at CNET (Pictures from Patent and Text).  “Amazon has been granted a patent for protecting gadgets from accidents by using tiny airbags and even jets of air…At its core, the patent details a system that uses your gadget’s built-in gyroscope, accelerometers, camera, and other onboard sensors to figure out if the device has gone airborne. If so, a system can keep the device from getting too badly damaged by changing its fall, and even deploying airbags to lessen the damage.”  https://news.cnet.com/8301-13578_3-57558622-38/amazon-wins-its-insane-gadget-airbag-patent/

 

“Forbes recognizes Wegmans as ‘customer service champion” by S.J. Velasquez at Buffalo.com.  “Rochester-based Wegmans is one of three companies recognized as “customer service champions” by Forbes.  The Western New York grocery chain is in good company, too. It’s honored in an article alongside recognizable brands such as Apple and the Ritz-Carlton for embracing a simple, underrated customer service practice: “empowerment.”“We empower our people to make decisions that improve their work and benefit our customers and our company,” Wegmans media relations director Jo Natale told Forbes contributor Carmine Gallo.”  https://www.buffalo.com/grub-pub/blog/forbes-recognizes-wegmans-as-customer-service-champion/