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Jack Goes Outside the Box

BY Marianne Wilson

Jack in the Box Inc. is rolling out a digital-signage network starring its fictional founder and CEO (and ad spokesman), Jack. The network, referred to as Jack TV, is part of the San Diego-based fast-food chain’s overall re-imaging program, which also includes exterior and in-store design elements, menu-board improvements and improved seating. The re-imaging is intended to bring the store experience at Jack in the Box more up to par with the chain’s advertising and menu.

“It [the video content shown on the network] overtly integrates Jack into the restaurant space,” said Joanne O’Brien, group account director, Secret Weapon Marketing, Santa Monica, Calif., during a presentation at the Retail Advertising & Marketing Association’s Retail Advertising Conference (RAC) in Chicago last month.

While Secret Weapon Marketing (the chain’s advertising agency) develops the content, PlayNetwork, Redmond, Wash., serves as the content-management company. It also provides customized music programming (Jack Radio) that is interspersed with messages from Jack.

The network has been tested in two markets: Waco, Texas, and Seattle. It was created with several objectives in mind, from providing entertainment that would improve wait-time perceptions to reinforcing Jack in the Box’s key brand differentiators.

“We produced 46 minutes of original content that runs on a loop and is shown on plasma screens,” O’Brien said.

There are two plasma screens in each store, with one near the cash registers and the other in the dining area, she added.

Retail Marketing Stars

Target Stores was the big winner at the 2007 RACie (Retail Award for Creativity, Innovation and Excellence) Awards presentation. The awards are given out by the Retail Advertising and Marketing Association (RAMA) during the Retail Advertising Conference (RAC) in Chicago. RAMA is a division of the National Retail Federation, Washington, D.C.

The awards cut across a wide variety of categories, including in-store, direct mail, online ads and TV spots. Target took home the gold in six categories: multi-media (fourth quarter), single-media (fourth quarter), insert, gift cards, direct mail and creative award. Additionally, two Target executives were inducted into the Retail Advertising Hall of Fame: Eric Erickson and Minda Gralnek, both of whom serve as VP, creative director.

Other multiple winners at the presentation included OfficeMax (innovation/new media, fourth quarter; large multi-media; and small multi-media). The office-supply chain unveiled its new logo at RAC: a colorful rubber-band ball. The logo was launched to the public via an outdoor marketing campaign that projected giant, bouncing and spinning images of the ball against familiar Chicago landmarks, including the Sears Tower.

Cause marketing: J.C. Penney was the recipient of the Peter Glen Award for cause-related marketing. The retailer was honored for its “J.C. Penney Jam: Concert for America’s Kids” promotion. The televised concert and subsequent CD/DVD twin pack has raised more than $2 million for the chain’s AfterSchool Fund.

For a complete listing of the RACie award winners, visit www.rama-nrf.org.

Patrons have responded positively to the re-imaging program, according to O’Brien, who noted that it is difficult to measure the individual parts of the program on their own.

“However, wait-time perceptions have improved significantly and we think the TV has a lot to do with that,” she said. “Also, consumers have said that having the flat-screen TVs separated Jack from the QSR [quick-serve restaurant] pack.”

The merchandising content is not as popular as the branded content, which, similar to the brand’s Jack-centric television commercials, is humorous and entertaining. Going forward, O’Brien sees the opportunity to include some non-branded items, such as local news, into the network programming as well. The firm is also soliciting some consumer-generated content.

“We are evaluating the in-store content to make sure we have the best combination of content for the maximum impact for the consumer,” O’Brien said.

The digital network has provided a gateway for other marketing ventures for Jack in the Box. The programming content, for example, is used on Jack’s My Space page, which is updated by Secret Weapon Marketing twice a month.

“Jack TV is still in its infancy, but we’re excited to be moving forward and using the content in unexpected places to create more branded synergy,” O’Brien said.

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FINANCE

Home Depot Projects Lower Profit in 2007

BY CSA STAFF

Atlanta, The Home Depot Inc. said Wednesday it will pump $2.2 billion into improving its business this year even as it expects lower earnings and slim sales growth. Home Depot said that for fiscal 2007 it expects sales growth in the range of flat to an increase of 2%, a decline in comp-store sales in the middle single digit percentages and an earnings per share decline of 4% to 9%.

Including the effect of a 53rd week in its fiscal year, consolidated sales are expected to increase by 1% to 2%, and earnings per share are expected to decline by 3% to 8%, Home Depot said.

CEO Frank Blake told investors at Wednesday’s conference that like last year, “2007 also will be a difficult year.” But he said it will be a year of focus on Home Depot’s priorities and a year with “hopefully less noise.”

The “noise” was apparently a reference to the investor furor over former CEO Bob Nardelli’s hefty compensation in light of the company’s lagging stock price. Nardelli resigned in early January after six years at the helm of the company. He took with him a severance package valued at $210 million.

To improve its business, Home Depot said it will invest $2.2 billion this fiscal year in key priorities, including the opening of 115 stores. The investment includes $1.6 billion in capital spending and $600 million in expense.

Home Depot said it will recruit master trade specialists, simplify its staffing model, use more technology to aid customer service, and redesign employee compensation and reward plans. It also will invest in new merchandise and review its pricing strategies. Additionally, the chain will spend money on customer loyalty programs, direct-ship programs, credit programs and other specialty sales initiatives.

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FINANCE

Federated Plans Name Change

BY CSA STAFF

New York City, Federated Department Stores on Tuesday said it would ask shareholders to approve changing the company’s corporate name to Macy’s Group Inc. A vote to amend the corporation’s charter to accommodate the new name will be held in conjunction with Federated’s annual meeting on May 18. If approved, the company will be known as Macy’s Group Inc., effective June 1. The move comes on the heels of the company changing most of its store nameplates to Macy’s.

“Macy’s Group is the appropriate name for our company, given that about 90% of our sales involve the Macy’s brand. That said, Bloomingdale’s is—and will remain—a very important part of our company,” said Terry J. Lundgren, Federated’s chief executive. Federated Department Stores also said stronger sales at established stores and lower costs drove a 5% rise in fourth-quarter earnings. For the quarter ended Feb. 3, net income rose to $733 million from $699 million the prior-year period. Sales fell 4% to $9.16 billion from $9.57 billion, as the company shuttered 80 “duplicative” store locations. Comp-store sales rose 6.1% in the quarter.

During the quarter, Federated lowered its selling, general and administrative costs 11% to $2.31 billion.

The company also announced a $4 billion increase to its stock buyback program and said it will immediately repurchase 45 million shares for $2 billion under the plan.

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