OPERATIONS

Study ranks Macy’s, Sephora and Michael Kors as Facebook ‘geniuses’

BY Marianne Wilson

New York — Macy’s, Sephora, Michael Kors and Lancome were ranked as Facebook “geniuses” in the second annual L2 Facebook IQ Index, developed in partnership with Buddy Media, a social enterprise software firm.

The Index measured the “aptitude” of 100 luxury and prestige brands across beauty, fashion, specialty retail, and watches & jewelry on Facebook. The study—authored by Scott Galloway, New York University Professor of Marketing and experts from his L2 firm (a think tank for digital innovation), and Buddy Media—ranks the brands’ Facebook efforts across four criteria, including size & growth, engagement, programming, and integration. Each brand was scored against more than 350 qualitative and quantitative data points, and assigned a Facebook IQ ranking of Genius, Gifted, Average, Challenged, or Feeble.

“Facebook investors have shifted the measurement stick: from promise to performance,” said Galloway. “Similarly, the marketing and digital professionals at prestige organizations charged with building and engaging communities on the world’s biggest platform, will face heightened expectations and scrutiny.”

Each brand was scored against more than 350 qualitative and quantitative

The L2 Facebook IQ Top 10 remains dominated by retailers and beauty brands that have been adept at facilitating higher rates of engagement via user-generated content and local page posts.
Key findings of the second annual L2 study include:

• While community growth is up, engagement across prestige communities has declined, with the average interaction rate or the percentage of the community liking or commenting on brand posts declining almost 50% year-over-year;

• The move to the Timeline interface in and of itself does not appear to be a growth driver; Prestige brands added 125% more fans in the 50 days prior to the Timeline launch, than they did in the 50 days after the mandatory switch to the new interface;

• More than 20% of prestige brands still do not engage in any two-way conversation and one-third prohibit fan posts on their Facebook walls; and

• 41% of brands now maintain at least one local country page; local Facebook pages have grown at double the rate of Global and U.S. prestige communities and register 50% higher engagement.

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Community involvement in action

BY CSA STAFF

The St. Jude Children’s hospital is the beneficiary of a bicycle ride slated for this weekend that wouldn’t be happening without the support of Target.

Motocross champion Ryan Dungey and Target are hosting the MN Major River-to-River Ride with Ryan Dungey on Sunday, July 15, featuring rides of different lengths and skill levels. The ride takes place the day after Dungey competes at Spring Creek in Millville, Minn. as part of the Lucas Oil Pro Motocross Championship.

The MN Major offers two different lengths – a 100 kilometer (62 mile) “Major” and a 25 mile “Minor”. Both will start at Bielenberg Sports Center in Woodbury, Minn. and follow a route through the St. Croix and Mississippi River valleys. Both rides are timed events and, there will be a timed hill climb for cyclists to test their skills. During the event, there will be a kids’ ride featuring a mile-long loop on the paths of the Bielenberg Sports Center.

The entire $50 registration fee goes to benefit St. Jude and support its mission of finding cures for children battling cancer and other deadly diseases while ensuring that no family ever pays St. Jude for anything. The event will also be supported by Livestrong, the Lance Armstrong-founded organization that works to empower those affected by cancer. Dungey has been partnered with Livestrong since 2008 and joined the Global Envoy team in 2011.

“I’m really excited about The MN Major; this is a cause that is close to my heart,” said Dungey. “I lost my grandmother to cancer and am committed to doing what I can to help find a cure, and am honored to be in a position to work with my Target and Livestrong partners in an effort to support and contribute to St. Jude Children’s Research Hospital.”

Target has been committed to supporting St. Jude for more than ten years. Target House, opened in 1999, provides apartments free-of-charge to families of children who are receiving life-saving treatment at St. Jude. Target also coordinates entertainment events on the St. Jude campus and promotes its commitment to education with the St. Jude School Presented by Target.

As a Minnesota native, Dungey came up with the River-to-River Ride as a way to incorporate his hometown roots with his enthusiasm for cycling, an activity he incorporates into his regular motocross training. As one of his main sponsors, Target worked with Dungey to develop the event and provide the resources needed to make it a reality.

"Ryan’s drive and work ethic is inspiring. He is a true champion and brings that spirit to everything he does. We are honored to have been partnered with Ryan since 2009 and working with him to create the MN Major has been a highlight of the relationship,” says Devin O’Brien, a lifestyle marketing manager at Target.

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No one questions Target’s strategy or results

BY CSA STAFF

MINNEAPOLIS — Canned peaches, criminal records and political contributions were among the top shareholder concerns expressed at Target’s annual meeting on Wednesday afternoon.

The meeting, held inside a soon-to-open CityTarget store in downtown Chicago, lasted less than an hour and featured a brief recap of the company’s 2011 performance from chairman, CEO and president Gregg Steinhafel. He touched on previously disclosed details regarding some of the company’s key strategic initiatives, such as the 5% REDcard Rewards program and the PFresh store remodeling program. Both are key drivers of Target’s improved financial performance and enabled the company to produce a first quarter same-store sales increase that was the strongest in six years.

Last year target set a record and remodeled 400 stores to its PFresh format which features expanded food and consumables. The program, now in more than 1,000 of the company’s former general merchandise stores, has begun to decelerate with 230 remodels planned for this year while new store growth ticks up to between 20 and 25 stores.

The REDcard program, which offers a 5% discount to those who pay with a Target debit or credit products, doubled its penetration rate last year to account for 9.3% of purchases. Steinhafel thinks that figure could go higher as the penetration rate in Kansas City, where the program was first tested, is now at 16%. Another key highlight mentioned by Steinhafel is that Target now has 10 proprietary brands that generate annual sales in excess of $1 billion.

He also alluded to the growth potential of the CityTarget format, noting that the Chicago location where the meeting was held with be one of three (Los Angles and Seattle are the others) locations to open next month. They will be followed by October openings in San Francisco and a second Los Angeles location. A third Los Angeles location will open in 2013 along with a location in Portland.

Despite the improvements highlighted by Steinhafel, when he opened the floor for questions shareholders took the meeting in a direction unrelated to the company’s growth prospects or ability to execute key initiatives.

Instead, what executives got were questions about political contribution policies, some of which related to a now two-year-old issue that arose after Target gave money to a candidate opposed by the gay and lesbian community. Another speaker took exception to Target selling gay and lesbian pride T-shirts on its website and felt the company had been pressured into doing so. Another speaker questioned the need for Target to be involved in the Retail Industry Leaders Association trade group.

Steinhafel defended the company’s involvement, noting that while there is a risking related to involvement in politics, legislative and regulatory matters, the bigger risk is not participating.

“We focus our energies around two things; swipe fee reform and efairness,” Steinhafel said. “It is important for us to have a seat at the table because we want a level playing field.”

Another shareholder took exception to Target’s efforts in the area of sustainability and seemed concerned that the company’s environmental efforts were resulting in higher prices. He encouraged the company to produce a report showing how much its efforts were adding to the cost of goods. Another shareholder appearing on behalf of a person who was denied unemployment wanted Target to reform its hiring practices.

And then there was a gentleman from California concerned that Target’s canned peaches are sourced from China and cost more than those sold at Walmart that are sourced from California.

EVP merchandising Kathee Tesjia vowed to look into the matter and apologized because the company is relatively new to the food business but looking to beef up its local sourcing efforts. Steinhafel took it a step further and said, “There is no excuse for us to ever be higher priced that our competitors on a similar item.”

The meeting ended with a long-time shareholder lamenting that no one ever talks about all the good stuff Target does.

“The board is doing a fantastic job and the stock is way up. Thank you,” he said.

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