Holiday Sales versus Holiday Discounts: Are You Giving Too Much For The Same Revenue?

Holiday shopping is still in full swing even with the economic slowdown. Black Friday has shown no signs of a decrease in consumer spending as thousands flocked to their favorite retail destinations to get the best deal for their money.

The National Retail Federation, adding up sales Thursday through Saturday and projected sales for Sunday, said that each shopper spent about 7 percent more this year than last year. Shoppers spent an average of $372.57 Friday though Sunday, according to the federation, a trade group.

Strength of online sales can even be seen via this reuters article that said, PayPal, an online payments service owned by eBay, saw almost 34 percent more transactions this Black Friday than a year earlier.

PayPal saw sales rise 26 percent on Black Friday, the day after the Thanksgiving holiday that traditionally kicks off the U.S. holiday shopping season. PayPal said its sales numbers reflected 12 percent of all U.S. e-commerce.

Black Friday is best known as the day consumers crowd shopping malls, while greater online traffic is expected three days later on "Cyber Monday," when consumers use faster Internet connections at the office to make purchases.

Overall Web sales during the U.S. holiday season are expected to be flat at about $29 billion this year, according to tracking firm comScore.

Amazon.com said Apple Inc's iPod touch was the top-selling electronics item on Friday morning, followed by a Canon Inc PowerShot camera. Wii Fit and the Wii console were the top-selling items in the video game category, while the LeapFrog Tag Reading System was the best-selling toy.

But are we giving too much away? Analysts said the discounts that drew in shoppers over the weekend were so steep that many ailing chains might be no better off in the long run.

“You’re looking at discounts of 50 to 70 percent off,” said Matthew Katz, managing director in the retail practice of Alix Partners, an advisory and restructuring firm. “You have to sell two to three times as much to break even.”

What will the Holiday Season be like for Online Retailers?

More than half of online retailers (56.1%) expect their holiday sales to increase at least 15% over last year - although last year's survey had found that three-fourths (77.5%) expected their sales to grow more than 15%.



Overall results show that “Retailers will be heavily promotional to attract shoppers on a budget, but have also invested in new site features to improve the online buying experience," according to executive director of Shop.org - retailers will suffer from the economic slowdown but nevertheless they are believed to be resilient.

What are retailers doing to manage the economic slowdown this holiday season? What online strategies will be applicable this year?

1. Majority of retailers (78%) plan to offer free shipping with conditions* at some point during the holiday season, consistent with last year’s levels.
2. Compensating for increased shipping costs by renegotiating terms with shipping providers (40.4%), closely managing company headcount (33.3%), and reducing other promotions (15.8%).
3. One-fifth (21.3%) of retailers will require a higher purchase amount for customers to be eligible for free shipping, and one in ten (10.6%) will cut back on usage of free shipping with no conditions.
4. 42.9% of retailers added or improved their website since last holiday season, to help customers navigate sites more easily.
5. Websites now provide product video (42.6%) and customer reviews (32.7%) can give shoppers more information to make buying decisions.
6. Website enhancements in clearance-sale pages (27.1%) and featured-sale pages (31.3%).
7. Nearly one-fourth (25.0%) of online retailers added a Facebook page this year

What are buyer behaviors (consumer patterns) this holiday season?

1. Consumers acknowledge that 24-hour shopping convenience is one of the main reasons they choose to buy online (58.6% this year vs. 58.5% last year).
2. Shoppers’ other top reasons for buying online instead of in stores include not wanting to fight crowds (41.1%), easy price comparisons (36.4%), and free shipping (33.3%).
3. Nearly one in four shoppers (23.1%) says they are spending more online due to high gas prices, more than double the number which said the same last year (9.0%).
4. One in five shoppers (20.1%) say they simply have less money to spend this year for the holidays, while 10.6% cited a poor economy as a factor.
5. One in ten (11.0%) plans to spend less online this year due to high shipping charges.

Findings shown here are from the eHoliday Study conducted by BizRate Research, a Shopzilla company, for Shop.org, surveyed 2,040 online buyers (defined as anyone who has made an online purchase in the last 12 months) from September 29 to October 3, 2008, as well as 60 online retailers from October 1-20, 2008.

If You Were PaperMaster What Would You Do?

Okay you're a genius engineer, considered one of the premier chip designers with IBM. You're so good in fact that you became vice president of microprocessor technology development in IBM. But you happen to have so much more potential, so Apple across the street offer you a position as well. Steve Jobs' company offers you a vice president position for device hardware engineering.



Possibly there was a lot of fine print here not mentioned in the news but one thing led to another and you take the position with Apple - probably more money.

But when you start your first day, you get the shock of your life - you get sued! IBM claims that you have violated prior employment agreement by accepting a position at a competitor and may divulge IBM's trade secrets to Apple.

This is what happened to Mark Papermaster. He has reportedly has authored several papers on PowerPC chip development and is considered a "top expert in Power architecture and technology." Papermaster's expertise in system design--putting together the entire package of processor, chipset, and the rest of the guts that form a computer--could serve him well at a company that prides itself on soup-to-nuts design.

It's such a shame as Steve Jobs had such high praises for this guy. “Mark is a seasoned leader and is going to be an excellent addition to our senior management team,” said Steve Jobs, Apple’s CEO.

So now he's in big trouble. Wonder if he gets paid? That's like being in between a rock and hard place. Management sure is a difficult spot to be in. It's not like you're just an engineer, but being in a position like that allows you permission to privy information/ sensitive information that makes it complicated in what may otherwise be such simple terms as work transition

Yahoo CEOs Daughter Tells Guard To Google Her

Now it's rather ironic when Yahoo CEOs daughter says "Google me, you dumb f**k!" Not just because it's very rude and unkind, it's also promoting the competition. It's unfortunate that Courtenay Temel had to be in the drunken state to have blurted out those words. Ending up in this rather messy lawsuit.

Isn't Yahoo already in enough trouble as it is? Last October 30, Jaroslaw Jarczok claims he was working security last August at 4 in the morning at PureNightclub when Courtenay was "quite intoxicated due to alcohol and/or chemical or other substances."

Apparently it got out of hand because Terry Semel's daughter was eventually handcuffed to which she said, "Do you even know who I am, f**king idiot?...Google me, you dumb f**k."

And that will go down in history as one of the worst things she could have said, ruining not only herself but her dad as well. Haven't heard about Semel as Yahoo's CEO in business terms, it's such a shame his name is dragged in mud as a result of his daughter's drunken escapade.

Why start bgC3? Bill Gates' New Company

Bill Gates officially retired from Microsoft mid-year 2008, but then jumped ahead to build another one - bgC3 a.k.a. "Bill Gates Catalyst 3", earlier named Carillon Holdings. BgC3 is supposedly described as a "think tank," which includes "scientific and technological services", "industrial analysis and research", and "design and development of computer hardware and software". Others say it's a way of coordinating Gates's business and philanthropic work.


I think Bill Gates wants to focus on less grind work and more broad strokes, Nobel-worthy activity. I've met CEOs who dream of just thinking about what the company could be or could be doing in the next 3-5 or even 10 years without having to worry about the limitations of now, or the current problems (Vista) faced by the company's current image and processes.


No doubt, he wants to be free from actually worrying about how Microsoft runs while still being able to contribute to its success. It's always nice to be in the planning stage and not have to worry about the details. I guess that's the privilege of being a retired CEO

What Will Happen To Marketing In The Time Of Economic Crisis?

That question must be in the minds of a number of marketing professionals these days. What do we do with marketing now in times of economic crisis? Given the economic conditions brought about by the US recession, it's imperative we ask:

1. Do we shut down marketing?
   
2. Do we slowdown on marketing?

The answer to #1 is of course NO. Do not stop marketing. Research shows that retention is strengthened in consumers particularly when marketing is done during economic lows. Why is that? Because your company emanates an image of strength and tenacity during a time when everybody else seems weak and vulnerable.

I'm inclined to respond "no" to the 2nd question too, but of course there will have to be a consideration as to the company's budget and goals. I am not averse to cost cutting when it is done prudently. However, marketing is a very complicated thing - because you spend money to make money. You spend a dollar to get a hundred or maybe even more.

Although cutting marketing cost may end up having to be an option when the bottom line becomes thin, it is nevertheless not a wise move specially if your marketing campaigns are timely and targeted. Because even if the economy is down, your market may still be nudged into the right direction. Even if you decide to lower the marketing budget, always bear in mind the opportunity cost of returns that may not be gained.

One thing about marketing is that, if people are really not interested (or if your marketing campaign does not echo the right message) they will not respond to your advertising.

Bear in mind that marketing is an activity of resonance. Prospects will respond to your message if your marketing campaign is successful - meaningful and well-targeted. Regardless of the signs of the times, people will still spend for essential commodities like food and clothing. Although they might tighten their belts in terms of non-basic expenditure such as vacations, hobbies and maybe extra services that they can still live without at the moment, they might still part with their money if they perceive the value to be much higher than the actual money they shell out.

So capitalize on your products value, if consumers see the value and/ or quality of your product then for sure your marketing will be well worth the allocated budget.

Predictions on How the Philippine Economy will Suffer along with the rest of the World

It's a good thing the Philippines wasn't so advanced in the first place in terms of investment because if we had been, then the Philippines would also be in a pretty bad shape now.

The only reason the Philippine economy is still afloat is because the Philippines was too poor to invest its finances in the riskier financial institutions. Unfortunately the smarter more advanced economies thought that taking smaller more secure investments and reinvesting them into riskier investments made them a lot more money. Unfortunately, that didn't work out the way they planned it.

The Philippines will feel the ripple effect of the US economic slowdown. The impact will be felt first of course in the stock market as well as direct exposure. The latter is minimal while the stock market will hurt PSE among other things. And then in terms of incoming investments. The export industry will suffer - particularly those that service the US and Europe. Yes Europe is also in trouble as a result of the sub prime catastrophe. Iceland has already declared bankruptcy and I'm pretty sure that country was much better off than the Philippines. Both the US and the UK have put in place bailouts as sponsored by their governments. Let's hope they make it through this as well. Because we are all interconnected financially, the Philippines owing money to other countries, make it susceptible to these changes although not on our shores.

Nevertheless the living conditions won't be as bad as it has always been - prices will continue to be high, gasoline prices have at least has gone down because there is less demand for oil now as a result. Business that are dependent on tourism and incoming remuneration from abroad will be hit specifically.

If OFWs abroad will have a difficult time, the Philippine economy will be hit pretty bad although I doubt the the extent to which overseas Filipino income will be threatened any worse than an American or European.

The newspapers these days are just peppered with images of the stock market and how it has just crashed amidst the US economic trouble. The bail-out will take a few months or even years to take effect - as the primary issues now are that people are no longer comfortable with spending money, banks are no longer free to give as much credit as they used to. There is a lack of predictability as to what might happen to the stock market, everything being red now.

Some people are buying stocks while their dirt cheap while most are just unloading what seems like lost causes.

The world will be a lot wiser after this economic slum... if it will survive it