Compare that Price!

Walmart’s Ad Match Guarantee program is no secret to those frugal shoppers out there.  In an attempt to live up to the “Always Low Prices” tagline, Walmart’s ad match guarantee program vows to match any competitive price that is advertised in print.  However, there are some limitations to this program.  For instance, the program does not include online advertisements and clearly specifies that the Walmart item and the competitive item must be the same brand, weight, etc.  Now, there are some additional guidelines but these are reasonable specifications to ensure people do not cheat the system.  But do consumers really take advantage of this service?  I did some research online and people are talking about the program but it is typically found on couponing or how to find the best deal type blogs. 

Whether consumers take advantage of the ad match guarantee program or not, Walmart must have the right idea because as of this week, May 13^th, I noticed Target advertised a similar program called the Price Match Guarantee.

I was a bit shocked when I saw Target’s new program advertised.  I know Walmart does not always have the lowest prices but on the other hand, I don’t think of Target as the cheapest bottom line either.  So, I decided to investigate.  For the past 30 days I looked at the Walmart and Target circulars to compare prices.  The first thing I noticed is both retailers do not have many advertised items in common, which helps to limit the opportunity for price comparisons. 

Furthermore, the past few Walmart circulars are dedicated to one category theme and typically max out at about four pages.  This could definitely work in Target’s favor as their circular advertisements include several categories; from electronics to outdoor furniture, health and beauty care items and more.  To explain further, if Walmart only advertises a single category, for instance automotive, then scope of possible item comparisons is narrowed down to just automotive products which  ultimately lessens the chance Walmart beats Target on price and vice versa.   

I took a look at some item comparisons and I noticed the playing field is pretty even when it comes to price.  For example, below Target beats Walmart’s auto wipe price and Walmart beats Target’s Keurig price.  

I would be curious to see if this type of price comparison program generates enough revenue to justify the money lost through the comparison program. 

Submitted by: Rachel Shultz, ECRM

Just in time for Father’s Day!

 I don’t know about you, but when I think of Father’s Day gifts, candles are usually not on that list.  Well this year they might be as Yankee Candle is introducing a line of “manly” scented candles.  They announced these candles will come in four scents: Man Town, First Down, Riding Mower, and 2 X 4.  No I am not kidding; those are the actual names of the candles!

I think that Yankee Candle is smart by taking this chance to expand their product line and maybe gain some new consumers.  Even though I know men who have no problem burning a Cinnamon Apple scented candle or even one of those Fresh Linen ones, having more “manly” smelling candles might help  Yankee gain a new following.  Men who want their place to smell good, but had a complex about burning a “womanly” smelling candle will be more inclined to purchase one of these scents.  Also, I think this is great even for women.  As a woman, I actually can’t stand the smell of most candles.  I do not like the fruity ones and I do not like the sweet smelling ones.  I would much rather burn a candle that smells like a masculine bled of spices, woods, and musk over one that smells like mango.  I am definitely looking forward to the release of these candles!

Submitted by: Chelsea Kilway, ECRM

http://drugstorenews.com/article/yankee-candle-mans-new-collection

http://www.businessweek.com/articles/2012-05-16/new-yankee-candle-scent-smells-like-a-man-cave

A Second Look at Walmart’s Mother’s Day Circular

With Mother’s Day just around the corner, several of this week’s retail circulars feature shiny jewelry or boxed chocolates with a splash of pink in the background.  “Celebrate Mom” logos are placed next to spring flowers as seen in the below Walgreens Ad. 

From a Nook to a new purse, the front cover of this week’s Kmart circular offers gift suggestions for Mother’s Day.

Mother’s Day references are not just illustrated in one or two circulars but seen in several, like Target, CVS, Safeway and of course the mentioned Walgreens and Kmart.   However, this Mother’s Day, Walmart decided to take a more masculine or should I say Father’s Day approach to the holiday dedicated to moms across the country.   Rather than trying to promote gifts typically geared for women, Walmart filled each page of their glossy circular with tires, motor oil, jumper cables and window wiper fluid.   I’m not trying to say women can’t change their own oil or tires but this ad truly breaks from the norm typically seen the week of Mother’s Day. 

Over the past few weeks Walmart selects one product category and typically dedicates the entire circular to that particular category.  Although the category dedication is apparent in this week’s circular released on May 6^th, Walmart totally missed the Mother’s Day holiday.    Even if Walmart wanted to focus on the automotive category, at least referencing Mother’s Day would help to make the circular a bit more relevant to their readers. 

Submitted by: Rachel Shultz, ECRM

Spring Fever and Sporting Goods

Alright, I confess, I have got spring fever.  I want to be outside, running, jumping, and especially, playing sports.  But I also need to be inside analyzing retail advertising! So, let’s mix work with a little bit of play.  I’ll analyze the sporting goods category. 

My first assumption was that there was more sporting goods ads around spring time (for time being, the term sporting goods includes all sports equipment, camping, bicycling, scooters, and exercise equipment).  I was surprised to learn that the Christmas holiday season dominates the sporting goods category in advertising. Springtime had no observable influence on the sporting goods quality of quantity in circular or digital advertising.   

But I’d also like to know which retailers promote and advertise the most.  Not surprisingly, sporting goods retailers dominate the category, in both total ads publish, and in market influence.  Here I show a graph that represents all sporting goods advertised between 1/1/2009 – 4/28/2012.  There was 20,505 ads in my research database.

It is interesting that over 95% of all sporting good advertisements come from only eight retailers. Big 5 and Dick’s account for about 2/3 of the industry’s advertising.  Mass merchandisers Walmart and Target are the lowest on the list  but they still carry a lot of weight with their advertising.

Which brings up an interesting point.  Not all retailers are comparable.  It simply does not make sense to compare an ad count of a mass merchandiser with a category specific retailer or a grocery store.  Their promotion and advertising capabilities and methodology are very different.  To compensate for the scale and marketing power of retailers ECRM also weights ads to reflect the actual influence the advertising has on the market.  It better measures how often each ad is viewed, which really is more important.

Below is a similar graph, but instead is uses the weighted ad count. Same timeframe and database.

Submitted by: Michael Denson, ECRM

Barnes & Noble and Microsoft Form Partnership

Barnes & Noble Inc. and Microsoft announced on Monday a partnership in the formation of a new subsidiary of Barnes & Noble centering on digital reading and e-readers.

Microsoft made a $300 million investment for a 17.6% stake in the subsidiary and will offer a NOOK application for their upcoming operating system, Windows 8. The focus behind the venture will mainly be on the digital and College businesses of Barnes & Noble. Through NOOK Study Software, students and educators have a platform for the distribution and management of digital and education materials.

This seems like a good way for Microsoft to enter the e-reader market but makes me wonder how long Barnes & Noble will be using an android interface for NOOK tablets. To read the press release click this link.

Posted by: Jason Marshall

The Circular

It never fails; as soon as I get home from the grocery store I realize I forgot to grab some milk, bread or another everyday essential.  Now, if only I remembered to create a list before my trips I would not run into this problem.  However, it seems that I am in the minority when it comes to shopping without a list.  An article on emarketer.com states 70% of people use lists when grocery shopping and 90% of people search circulars and coupon books to map out exactly what they plan to purchase before hitting the aisles.   

90% is huge portion of the population and this is definitely recognized by retailers. This consumer statistic hits home with Walmart as the retail giant created an entire advertisement campaign solely based on circular price comparisons; the “Ad Match Guarantee” program.  Taking it a step further, several retailers are building sections into their websites or mobile applications that are designated for weekly circular browsing or that cater to shoppers that create lists online.  As the world is turning to mobile technology it is essential retailers continue this trend in order to stay afloat in the marketplace. 

For instance, Shopko is now including a section of their website where consumers can actually page through the Shopko circular to create a shopping list.  But Shopko is not the only one; CVS, Giant Eagle, Weis, Rite Aid and several others are including circulars on their websites or creating Apps to reach a tech savvy generation.  My point is not that technology is becoming more and more popular, that is obvious.  However, I think it is incredible that circular advertisements are not disappearing as technology comes to dominate more and more aspects of our everyday, rather the circular is maturing and evolving with the way people live their lives. 

The circular pages are beginning to including QR codes in the corner of the pages which encourages users to engage with the retailer online.  This week, the Target circular offered free shipping to those who order online with a Target Red Card.  Obviously Target is trying to encourage consumers to apply for or use the Target Red Card; Target’s credit/debit card, but they are also stressing the online purchases as opposed to in store.  Additionally, Facebook and Twitter logos are creeping into the headers and footers of circulars.  I do not think I go a day without seeing the “Check us out on Facebook” tagline.  However, it is essential the social media reminders are included as these sites play such a large role in society. 

As technology continues to develop I am excited to watch the ways in which retail circulars and other means of advertising jumps on board.

Click the link below for the article from emarketer.com

http://www.emarketer.com/Article.aspx?R=1009015&ecid=a6506033675d47f881651943c21c5ed4

Submitted by: Rachel Shultz, ECRM

Recent Shakeups at Best Buy

For Best Buy, the last couple of months have been interesting, to say the least.  In early March, former Starbucks CIO (and Fortune “Executive Dream Team” member) Stephen Gillet was brought onboard to help revitalize Best Buy’s e-commerce and technological operations.  In late March, the company announced a fourth quarter loss of $1.7 billion and a plan to close 50 of its big-box locations and open 100 of the smaller Best Buy Mobile stores.  In mid-April, Brian Dunn resigned as CEO, with the company initially releasing a statement saying that there were no specific problems involved.  A few days later, however, it was revealed that Dunn resigned after an investigation into his personal conduct began.

These developments are offering the company the opportunity to turn things around and avoid going the way of Circuit City.  The big-box, brick and mortar business model has been under attack for years now by online retailers, and these recent events are giving Best Buy the push it needs to survive.  Big-box retailers have been trying to avoid merely being a showroom for consumer’s online purchases, and the transition toward smaller, mobile-focused stores is a step in the right direction.  Cellphones, video games, movies, and smaller-ticket interconnected electronic items fit the instant gratification that comes with buying from a physical store; while most consumers would be willing to wait while a big-ticket item shipped from a large online retailer for a significantly lower price.  By combining the expertise of its new leadership with this shift in business models, Best Buy has a chance moving forward.  If nothing else, it must survive until a final decision is reached on whether Amazon will pay sales tax, which offers the potential to level the playing field afterward.

Below are the front pages of Best Buy’s circular for the last three weeks.  While big-ticket items are still present, there is certainly a push toward the smaller electronics that will be present at the mobile stores.

                                                                                                                           

Submitted by: PJ Pecuch, ECRM