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Advertising activity remains intense at Walmart

BY CSA STAFF

No wonder Walmart comps are increasing. Check out the latest monthly report from the ad tracking provider Market Track.

The month saw drop in the number of circulars released to the market by the majority of retailers. However, interestingly we saw flyers increasing pages compared with last year for most of the retailers in the year over year comparison.

Walmart had a significant increase in both the number of circulars as well as number of pages when compared with same time last year.

Staples, Kmart and Best Buy were the other retailers witnessing an increase in both flyer circulation as well as page counts per flyer. However, the Best Buy increase was marginal when compared with others.

Target was also among the retailers who increased the number of circulars, though they did not increase page counts.

JC Penney continues to decrease promotional activity overall, releasing fewer flyers, however, they increased page counts. Kroger, Sears, Walgreens and CVS followed the same trend, with fewer circulars that had more pages.

It’s important to note a number of factors should be considered when examining the number of inserts and pages retailers send into the marketplace. Market Track’s granular level of data reflects regional versioning and market specific differences. This is accomplished through an extensive collections process, including physically obtaining the ads from the various markets in which they are distributed. In the instance that retailers send additional circulars to a limited number of markets, Market Track’s information reflects these nuances through numbers with decimals (for average number of inserts per market) and odd numbers (for average number of pages).

About Market Track:
Market Track is a market intelligence firm dedicated to increasing customers’ returns on their promotional investments. Through innovative technology and marketplace expertise, they monitor and analyze over 200 U.S. and Canadian markets for every channel of trade in order provide retailers and manufacturers with superior tools to monitor promotional activity, support dynamic decision making and turn information into market intelligence. For more information, contact Market Track at 1.800.235.3781 or e-mail [email protected].

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Check out KC location for Sam’s Club efficiency initiative

BY CSA STAFF

Sam’s Club cashiers could become an endangered species if an expanded test of a payment platform at a new club in Kansas City is embraced by members.

Sam’s Club opened a new club in the Kansas City market this week and one of the most intriguing features is a new check out system that involves what Sam’s calls, "convertible registers." The name stems from the fact that the register can either be staffed by a cashier or used as a self checkout. The new Sam’s, the eighth club in the Kansas City market, is the first to feature the convertible registers at every checkout. The net effect is every checkout lane is open all the time because members will have the option to check themselves out if staffed lanes are too long or they simply prefer the self service method.

Sam’s has rapidly added conventional self checkout systems to clubs this year and they are now present in about half of Sam’s 600 locations and are said to be enjoying strong member acceptance. It was only recently that Sam’s began experimenting with the convertible checkout configuration that was touted as a productivity enhancement to financial analysts last week at Walmart’s investor conference.

The move is in response to member feedback on increasing the speed of the checkout process, according to Sam’s Club. As club managers listen to member feedback at the Kansas City location, Sam’s said it will be able to more accurately determine when and where to expand access to the convertible register innovation in 2013. Broader application of the convertible option would lessen Sam’s need for cashiers and presumably result in labor savings over time.

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Flash sales feeding full price demand

BY CSA STAFF

A funny thing happened on the way to the department store: luxury goods became accessible to consumers online and at increasingly deeply discounted prices. Thanks to a spate of discount websites offering “flash sales” or exclusive, limited-time offerings, the flash sale phenomenon has revolutionized the way consumers shop, offering an entry into the luxury market at a fraction of the price.

One particularly desirable side effect of this trend is that luxury retailers are benefiting by way of consumer demand for more access to luxury products online – so much so that they are willing to pay full-price to attain the brands they love.

As expected during uncertain economic times, consumers are trying to save money at every corner and are understandably more price-conscious. Retailers, on the other hand, are doing everything they can to lure customers in by dropping prices, running promotions and rewarding loyalty. Particularly in the apparel sector, flash sale sites have provided a solution for consumers and retailers alike. Shoppers could now enjoy exclusive offerings on high-end labels – something they might have never been able to afford before – while for retailers, their inventory reached an entirely new audience and was moved quickly.

The initial popularity of apparel and accessory flash sale sites spurred the entry of countless others. These sites provided a chance for fashion enthusiasts to buy their favorite brands at more affordable price points, and with the added convenience of online – and even mobile – accessibility. According to actual, aggregated spending data from American Express Business Insights, spending on online discount luxury fashion increased significantly across all consumer groups in 2010, compared to 2009. Average consumers increased spending on online discount luxury fashion by 92% and “Top Spenders” – accounting for the top 10% of spend in the luxury fashion category – followed the same trend, posting an impressive 96% spend growth over the year prior.

Flash sales also opened up the world of luxury fashion to a much larger consumer base. Consumers, who may never have previously owned a designer bag or heels, now had the opportunity to do more than window shop at their local mall. Flash sale sites lowered the entry point to designer brands and provided shoppers across a range of demographics and affluence levels with a taste of designer fashion. In fact, one of the most unexpected groups to subscribe to the flash sale craze included Seniors, who increased spending on these sites in 2010 by a whopping 122%. Compared to other generations, Gen Y followed by a still impressive 100% spending increase for the same period, Boomers fell just shy of that with an increase in spend on discount online luxury fashion by 99% and Gen X consumers increased spending by a very strong 86%.

The initial explosive growth of flash sale sites has evened out a bit, though data shows spend is still growing, and more importantly, the massive initial popularity stimulated consumers’ appetites for luxury fashion to such a degree that consumers are willing to pay a much higher price tag to get their luxury fix.

In 2011, spending on flash sale sites did continue to grow, but by not nearly as much as the year prior. Average consumers increased spending on online discount luxury fashion by a more moderate 21%, when compared to 2010. Top Spenders also slowed spend growth, increasing by just 5% over the same period. Seniors outperformed the younger generations, increasing spend on online discount luxury fashion by 28%. Gen Y and Gen X consumers boosted spending by 19% and 12%, respectively, while the Boomer generation posted a slimmer 9% increase in spending on online discount luxury fashion.

Although there has been some slowdown in online discount luxury fashion spend growth, interest in designer brands hasn’t been lost. As economic conditions improve, flash sale sites are proving to be the catalyst for growth in spending as the daily deal enthusiast transitions into a full-price luxury consumer. The former discount shoppers are now showing a willingness to pay full-price for the luxury brands, which they have grown accustomed to, and are shifting their spending from discount to full-price.

In fact, American Express Business Insights data shows that average consumers increased spending on full-price online luxury fashion by 20% in 2010, and in 2011, this same group posted a 25% increase in spend. When looking closer at generational spend on full-price online fashion, younger consumers were more willing to make the jump from flash sale sites during this period. Leading the boost was Gen Y consumers with increased spending by 31%, followed by Gen X who bumped spending by 23% over the previous year. Boomers, though also more reserved than the younger generations, increased spending by 19% for this period. Seniors trailed their younger counterparts in full-price online luxury fashion, increasing spending by 6%.

Moving into 2012, we are continuing to see a growth in the full-price online fashion space while discount online luxury spending remains flat in comparison to the booming popularity witnessed in 2010. Gen Y consumers led category spend increases in Q1 2012 with 27% growth over the same period last year, while increasing spend by just 15% in discount online luxury. Seniors followed the same trend, increasing spending on full-price online luxury by 21% and on discount online luxury by 2%. Boomers increased spend on both full-price online fashion and discount online luxury by 19% and 7%, respectively and Gen X increased spending on both full-price and discount online fashion by 15% and 5%, respectively.

The benefits continue to show for luxury brands that marketed in flash sales, whether the goal was simply being to move product amidst economic uncertainty or to spark long-term brand awareness for a new customer base. Amidst an ever increasing number of channels for luxury fashion, there will always be debate as to which will best satisfy consumers’ changing demands. One thing is most certainly clear: the rapid growth of discount luxury sales online has created a new and thriving accessibility to full-price luxury fashion online – a win-win for retailers overall.

Peter Niessen is vice president at American Express Business Insights and has been with the organization for more than 10 years. American Express Business Insights leverages the power and reach of the company’s information capabilities to help clients develop better-informed strategies to grow their business.

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