Archive for January, 2011

Controlling your brand message in the social networking age

The best thing CPG and retail brand managers can do is to ensure that the elements of their strategy are consistent. In the case of retailers, this involves making sure that the merchandise assortments, pricing policies, customer service and store atmosphere (among other attributes) work together instead of fighting each other. Start with consistency — and execute well — and it becomes easier to push your brand to top-of-mind relevance.

There is no doubt that brand managers face a rising challenge executing this task because of the growth of social networking. External communication like Facebook and Twitter can shape brand perceptions in viral ways beyond the control of marketers…unless those managers figure out how to turn these tools to the advantage of the brand image. Not an easy task!


Best Buy growth is stalled

A lot of speculation on RetailWire following Best Buy’s lowered expectations for the quarter. For this “best of class” retailer, it’s a puzzle:

The question facing Best Buy — and I’m not sure that I have the answer — is whether its key franchises in HDTV’s and PC’s are temporarily stalled or matured to the point of saturation. Not every home has an HDTV yet but the growth surge at high price points is at least a couple of years post-peak. Now the challenge becomes how to grow market share in this category without sacrificing margin — and frankly a key competitor like Walmart is better prepared to do both.

The hottest growth in electronics right now seems to be in small portable devices…whether it’s smartphones, e-readers or tablets like the iPad. Best Buy has not staked out the “headquarters” position in these businesses, at least not yet. I’d like to see the Best Buy Mobile rollout speed up, and I’d also like to see the concept expand to include more of the handheld electronics that are capturing share right now

Target and Walmart: Who’s gaining share?

From a RetailWire comment following the release of November sales data. Obviously we’ll know more after December sales:

As with yesterday’s survey data about smartphones, I’d like to see some sales data that backs up the information about Target and Walmart. Since Walmart doesn’t report comp sales by month, it’s tough to compare their November performance with the strong outcome at Target. And “intent to visit” (or reported visits) don’t necessarily equate to sales unless we know what’s in the consumer’s shopping cart.

Despite these reservations, it’s clear from Target’s YTD comp sales compared to Walmart’s numbers that they are delivering a stronger performance this year. The discount customer is showing signs of being more aspirational, spending more on apparel and other discretionary goods (a weak spot for Walmart) and generally giving herself “permission to spend” within a household budget.

The surprise in Walmart’s weak numbers is its failure to recapture consumers who had traded all the way down to dollar stores, perhaps the weakest segment of the retail business right now. It speaks volumes about Walmart’s continuing struggles with softlines as well as the costs of its SKU rationalization program to the top line.