Staples settles Delaware property dispute for $8.9 million
Dover, Del. — A Friday report by the Associated Press said that Staples Inc. will pay $8.9 million to settle an abandoned property dispute with the state of Delaware.
A final payment is slated to be paid by Staples on Monday to settle the two-year-old suit that involved Delaware’s method of calculating liability for abandoned property. Staples argued that unclaimed customer rebates should not be considered abandoned property, but a judge disagreed.
RILA lauds sales tax fairness in California
Arlington, Va. — The Retail Industry Leaders Association (RILA) said Friday it is applauding the impending implementation of sales tax fairness in California, which stands to even the playing field between bricks-and-mortar retailers and online competitors.
Beginning Sept. 15, online-only retailers, such as Amazon.com, will begin collecting state sales tax in California. “Modern retailers operate in a competitive environment that requires them to compete on price 24 hours a day both in the store and online,” said RILA president Sandy Kennedy. “Closing the loophole that has given Amazon and other e-tailers an unfair competitive advantage over brick and mortar stores is essential to a free market economy that is void of government picking winners and losers.”
RILA continues to call for a federal solution that will end special treatment for online-only sellers. “A level playing field where every retailer competes on price in a free market is the right prescription for innovation and job growth in the retail sector,” added Kennedy. “Congress can give these job providers a big boost by enacting e-fairness legislation by the end of the year.”
California joins Texas and Pennsylvania this year in requiring Amazon to begin collecting sales taxes. New Jersey and Virginia will require the same in 2013.
Filling the competitive in-home knowledge void: retailer advertising and promotion
With shoppers making fewer trips and impulse purchases, the need to influence them earlier and more frequently in the purchase decision-making cycle is critical for sales success. To accomplish this, consumer packaged goods (CPG) retailers and manufacturers are increasingly using cooperative advertising and promotion programs that target shoppers at home when they are most likely to be planning shopping trips and creating lists. As retailers, understanding what your competition is planning for in-home is just as essential to staying competitive as what’s happening in-store.
A new battleground
CPG retailers and manufacturers who have historically focused on in-store factors like distribution, shelf space, pricing, and merchandising are making big changes. Today, retailers and manufacturers realize that concentrating on actions taken in-store might give these actions too much weight. This approach has also often de-valued the role that advertising and promotion play in driving increased shopper traffic and improving sales.
Today’s reality is this: Advertising and promotions can have a significant impact on shoppers, independent of who is funding and controlling the program. Manufacturer participation in the advertising you do, for example, helps build equity and provides continuity for both featured brands and for your store. Your participation in manufacturer-funded FSI coupon promotions reaches shoppers who “opt-in” to the free-standing insert (FSI) coupon vehicles at a time when they’re thinking about purchasing and planning shopping trips, similar to the way manufacturers’ digital coupons on your website can reach the shopper when they’re looking for deals for a planned trip to your store.
Knowing all of this, it’s not a surprise that retailer advertising, retailer participation in FSI coupon promotions, and digital coupons distributed on retailer websites increased in 2011. There was also a marked shift in spending toward media that target shoppers at home when they are in the midst of planning shopping trips. The changes are certainly reflected in the data that Kantar Media collects.
Coupon spending swells
When we look at the data we’ve gathered, we see that CPG retailer advertising expenditures increased almost 2% in 2011 across the 18 media Kantar Media monitors. Even though their overall spend decreased by 27%, Walmart still topped all other retailers in the category for ad spend in 2011. Retailer FSI pages grew 31% to more than 17 billion pages last year. Walmart also significantly upped their participation there — with a whopping 677% jump that moved them from being ranked seventh in 2010 to being ranked first in 2011. Digital coupon offers on retailer websites increased 40% in 2011. Kroger.com led with the greatest number of digital coupon offers distributed during this period among the retailer websites Kantar Media tracks.
Source: Kantar Media
While these advertising and promotion trends vary significantly by retailer, by category, and by week, they illustrate the overall trend which shows that brand marketers and retailers are increasing their use of media that will create more engagement with their shoppers at key decision points.
Perspectives from Personal Care
The significance of FSI activity can further be seen through focusing on the key personal care category. The following graphs show the top retailers based on advertising and promotion activity across the personal care segment including diapers, oral care, hair care, skin care, deodorants, shaving products, feminine care and other categories.
The chart on the left shows the top five retailers based on advertising and promotion expenditures that included personal care categories (i.e., which retailers are important to personal care categories). The chart on the right shows the top five retailers based on the percentage of each retailer’s overall advertising and promotion support that included personal care categories (i.e., to which retailers are personal care categories important).
Walmart ranked first with $8 million of advertising and promotion activity which included personal care categories in Q1 2012. However, this represented only a tenth of Walmart’s overall advertising and promotion activity during that timeframe.
In comparison, personal care categories were included in 84% of Family Dollar’s and 45% of Dollar General’s advertising and promotion activity in Q1 2012. Clearly, Walmart is a very important retailer for brands that compete within personal care categories, but personal care categories and brands are even more important to leading value retailers.
The below graph highlights total personal care support and the top personal care categories by week at Walmart based on advertising and promotion activity during Q1 2012. Although the children’s diapers and training pants category was included in the greatest amount of advertising and promotion activity during five individual weeks, the dental supplies category ranked first overall due to strong support during the first two weeks of Q1 2012. Dental supplies activity was driven during these two weeks primarily by a Walmart television advertisement that featured Procter & Gamble’s OralB® Glide Floss.
With just a few critical insights like these, you can understand which retailers are featuring specific categories and when they’re highlighting them. Insights like these can also help you, CPG brand marketers, and account teams to make better decisions not only during strategic planning but throughout the year. Manufacturers can grow sales and make their promotions more efficient by holding retail programs during weeks with higher levels of retailer advertising and promotion, which can help increase shopper traffic and store sales. Additionally, you can win more shopping trips and increase the size of each transaction by increasing your advertising and promotion presence for strategic categories or promoted brands during key weeks. To do so, you and the manufacturer need to first fill the competitive in-home knowledge void by integrating retailer advertising and promotion intelligence into the overall competitive analyses.
Dan Kitrell is VP account solutions, Marx, for Kantar Media.