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Moving Targets

BY Marianne Wilson

From online episodes of favorite television shows to text messaging to podcasts, consumers increasingly expect to be able to consume media when and where they want, on any platform or device, and in any context. As media becomes more and more fragmented, the task for retailers and other marketers grows more complex.

“Capturing the attention of the consumer has never been harder than it is right now,” said Ann Raider, chief strategy officer, Vertis Communications, Baltimore, a leading provider of targeted advertising, media and marketing solutions.

With no one customer group using one type of media exclusively, retailers have to take a broader, integrated approach.

“It’s not just one type of media or another anymore,” Raider explained. “Marketers have to think in terms of multiple media forms that work together, with relevant content that is consistent across the different channels.”

But while there is no question that today’s consumers have many more media options than those of just a few years back, that does not mean they have abandoned traditional forms of media.

“A big fallacy is that major media such as television and radio is out,” Raider said. “It isn’t.”

Rules of Engagement

Media fragmentation is re-writing the rules of customer engagement. To capture the consumer’s attention, Vertis Communications recommends that retailers:

Support multiple platforms for their content and messages—content not available across the spectrum of platforms used by consumers will become irrelevant to them;

Ask permission of consumers who increasingly expect to select and consume their media granularly;

Send relevant messaging based on behavior, attitudes and lifestyle; and

Collaborate more with consumers who, in online discussions, blogs and podcasts, are increasingly creating their own media.

In fact, according to a recent Vertis survey (“Vertis Customer Focus: Retail 2006”), weekly media use has remained fairly consistent over the past six years. The survey found that 84% of total adults surveyed watched prime-time television in the past seven days, up from 82% in 2000. The number of adults who read the newspaper rose to 73% from 71%, and the number who listened to early-morning radio inched up to 67% from 66%.

The survey also illustrated the enduring power of advertising inserts and circulars. In 2006, 69% of respondents said they had read an ad insert/ circular in the past week, up from 61% in 2000.

Weekly Media Use Is Consistent Over Six Years
Which of the following have you done in the past 7 days…?
(Total Adults)

Source: Vertis Communications
  2000 2006
Watched TV during prime time 82% 84%
Read the newspaper 71% 73%
Read an advertising insert/circular 61% 69%
Listened to the radio between 6 a.m.-10 a.m. 66% 67%
Read a magazine 60% 62%
Surfed the Internet 32% 53%

“Our research shows that ad inserts are still very relevant, and that people pay attention to them as a point of reference when they shop,” Raider said.

Indeed, ad inserts/circulars beat out all other types of media in the survey when it came to capturing the consumer’s attention. Ads in newspapers and on prime-time television were next on the list.

Adults who prefer inserts also have an affinity for direct mail, according to Raider, who said the two types of marketing media work well together.

“Direct mail is a powerful media link in driving your message to consumers,” Raider said. “It gives you an ROI in a very aggressive way.”

As for new media, it is still very much in its infancy. In the Vertis survey, for example, 18% of adults said they had paid attention to ads in e-mail in the past seven days (by contrast, 64% said they paid attention to an ad in a circular).

“The excitement of e-mail and mobile marketing is still unfolding,” Raider said. “They are important as another touch-point to the customer, but they are a small percentage of what the customer gets today.”

But there is no question that marketers are beginning to shift dollars from traditional to new media, even though as a percentage of total activity it is still very small, according to Raider.

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Sears comps hurt by energy costs

BY CSA STAFF

HOFFMAN ESTATES, Ill. Sears Holdings today reported net income of $216 million, or $1.40 per diluted share, for the first quarter ended May 5, compared with net income of $180 million, or $1.14 per diluted share, for the first quarter ended April 29, 2006.

“In part, our domestic operating results reflect the impact of some of the same challenges being faced by our customers, such as rising energy costs and a slower housing market,” said Aylwin Lewis, Sears Holdings’ ceo and president. “However, as an organization, we need to overcome these factors by better controlling costs and developing innovative solutions that better meet our customers’ needs and allow us to generate a more reasonable level of profitability even in the face of such challenges.”

Domestic comparable-store sales declined 3.9% during the first quarter of fiscal 2007. Sears domestic comparable-store sales declined 3.4% for the quarter, while Kmart comparable-store sales declined 4.4%. We believe these declines reflect both increased competition and the impact of external factors such as rising energy costs, a slower housing market and poor weather conditions during the latter part of the first quarter of fiscal 2007. Kmart experienced lower transaction volumes across most merchandise categories, most notably within home goods, health and beauty products, and food and consumables. Similarly, Sears domestic recorded comparable-store sales declines across most merchandise categories and formats, with a notable decline in home appliance sales, which we believe reflects both a slower U.S. housing market and the impact of increased competition.

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Big Lots 1Q net sales up 3.4%

BY CSA STAFF

COLUMBUS, Ohio Big Lots today reported first quarter fiscal 2007 income from continuing operations of $29 million, or 26 cents per diluted share, compared to income from continuing operations of $14.5 million, or 13 cents per diluted share, in the first quarter of fiscal 2006. Including the impact of discontinued operations, first quarter fiscal 2007 net income totaled $28.8 million, or 26 cents per diluted share, compared to $13.7 million, or 12 cents per diluted share, in the prior year.

Net sales for the first quarter ended May 5, increased 3.4% to $1.13 billion, compared to $1.1 billion for the same period in fiscal 2006. Comparable-store sales for stores open at least two years at the beginning of the fiscal year increased 4.9% for the quarter.

For the second quarter 2007, the company expects income from continuing operations of 7 cents to 10 cents per share versus income from continuing operations of 4 cents per share last year. Comparable-store sales are expected to increase 2% to 4%, compared to a 5.2% comparable-store sales increase recorded last year.

For fiscal 2007, the company expects income from continuing operations of $1.25 to $1.30 per share versus income from continuing operations of $1.01 per share last year.

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