Weekly Industry Update
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April 1st, 2013 MARKETING NEWS Online reviews influence shoppers most, but print catalogs trump social networks .................. 2 Why Gatorade held big play for second quarter -- And print is key to new push ...................... 4 LG also works on augmented reality glasses, Smart interactive watch ...................................... 5 26% of Americans own a laptop, a Smartphone and a tablet ..................................................... 6 PUBLISHING NEWS Hearst Corp. names Swartz to succeed Bennack as Chief Executive ......................................... 7 Daring magazine ad spending helps Architectural Digest beat industry odds ............................ 8 Are tablet editions driving luxury print ad sales? ....................................................................... 9 Time.com taps Daily Beast vet as Managing Editor ................................................................. 11 POSTAL NEWS USPS has no power to axe Saturday mail delivery, says GAO ................................................ 12 RETAIL NEWS New web initiatives and more stores has Cabela's targeting double digit growth .................... 14 Survey names Kohl's, Dollar General, Lowe's among top brands ............................................ 15 CVS/pharmacy launches new iPad app .................................................................................... 15 Family Dollar names merchandise head ................................................................................... 16 ECONOMIC UPDATE GDP: 4th quarter 2012: 0.4 percent. 3rd quarter 2012: 3.1 percent. Unemployment Rate: the unemployment rate edged down to 7.7 percent in February. Consumer Confidence: improved in February, declined in March. The Index now stands at 59.7 (1985=100), down from 68.0 in February. 1 MARKETING NEWS Online Reviews Influence Shoppers Most, but Print Catalogs Trump Social Networks Lenna Garibian , Marketing Profs . 3/25/2013 Although online channels such as ratings and reviews, search results, and email promotions influence online shoppers' purchases most, traditional paper catalogs also hold sway, according to a survey from Baynote and the e-tailing group. Meanwhile, social networking sites are the least effective channel for influencing shoppers whether they are making purchases in-store or online. Below, additional findings Baynote's survey of smartphone-owning online shoppers, conducted during the 2012 holiday shopping season. Among online shoppers surveyed, online ratings and reviews were cited as the most influential source of information when making online (33%) and in-store purchases (24%). Search results via Google were the second most influential source of information for online and in-store purchases (26% and 19%, respectively), followed by email promotions (25% and 19%, respectively). 2 Even so, people still love their paper catalogs: 22% of smartphone owners cited print catalogs as the most influential source of information when making online purchases, and 21% cited paper catalogs for in-store purchases. By contrast, social media sites exert less influence over purchases. Across popular social networking sites, Facebook had the most influence whether buying online (15%) or in stores (12%). Pinterest and Twitter were nearly tied for second place. Meanwhile, roughly 1 in 10 online shoppers cited mobile ads as most influential when making online (10%) and in-store (11%) purchases. Making the Final Purchase Ultimately, cost matters most to people: 47% of online shoppers cited price as the ultimate influencer for making a final purchase, while 38% cited free shipping. However, in the hyper-competitive retail market, factors such as the availability of a product (35%), merchant reputation (33%), product reviews (29%), and return policy (24%) still sway buyers. Tablets vs. Smartphones During the 2012 holiday season, consumers favored tablets over smartphones when browsing, shopping, and transacting online: 65% of tablet owners used their device to browse websites in advance of buying vs. 50% of smartphone owners who did so. 3 62% of tablet owners used their device to compare prices before a store visit vs. 49% of smartphone owners who did so. 57% of tablet owners used their device to make a purchase on a website vs. 43% of smartphone owners who did so. 51% of tablet owners used their device to get coupons and offers vs. 46% of smartphone owners who did so. About the data: Findings are based on a survey of 1,000 consumers fielded by the e-tailing group for Baynote, Nov. 24 to Dec. 5, 2012. Respondents had shopped online more than four times in the previous year, spending $250+ annually. All respondents owned a smartphone and 55% owned a tablet. Why Gatorade Held Big Play for Second Quarter -- And Print Is Key To New Push Natalie Zmuda , Advertising Age . 3/25/2013 Gatorade was noticeably quiet this past January, after years of ringing in the New Year with big, ad campaigns. Instead, Gatorade will launch creative this month, closer to its busy spring and summer seasons and in the midst of March Madness. The brand is also shifting how it approaches marketing for the G Series line and recommitting to athletic camps and locker room and sidelines programs. The changes come amid new leadership -- Brett O'Brien replaced Sarah Robb O'Hagan last year as Gatorade's president. (A Gatorade spokeswoman said the marketing changes are unrelated to the exec moves.) Two campaigns launch this month. "Lightning Bolt" focuses on the brand's history, while "Fixation" features Dwyane Wade and Kevin Durant. "Fixation," which breaks March 27, shows the two players training furiously after dreaming they were one-upped by the competition. Morgan Flatley, VP-brand management at Gatorade, said delaying new creative until closer to the brand's peak season was a strategic decision. She also said there will be a new approach to marketing the 3-year-old G Series line. In years past, Prime, Perform and Recover have all been prominently featured in TV advertising, the goal being to boost awareness for G Series. But in the coming year, Perform beverages will be the focus of TV ads, while Prime chews and pouches, as well as Recover beverages and shakes, will be hyped in print ads. Those products are newer -- and not the traditional sports drink for which the brand is famous -- and print lets Gatorade better explain the products and why athletes should be fueling before and after activities, not just during. "We are investing more in print than we have at least the last two years. It's really about using print to articulate the product benefits," Ms. Flatley said. Ms. Flatley said the overall media weight and marketing spend will be in line with a year ago. Gatorade spent $101 million on measured media in 2012, according to Kantar Media. 4 The brand is also increasing its investment in grassroots and various locker room and sidelines programs, boosting its presence at summer camps and year-round competitions, in a bid to reach twice as many athletes in 2013 as it did last year. "We can tell the story of Gatorade well in 30 seconds," Ms. Flatley added. "Prime and Recover, where they are in the life cycle, it's much better told in a locker room, on a field, by a trainer one-to-one." LG Also Works on Augmented Reality Glasses, Smart Interactive Watch - Report. Anton Shilov , Xbit Laboratories . 3/27/2013 It looks like the race for smart interactive wrist-watch is officially on. In addition to Apple, Google, Samsung and unknown companies from China, LG Electronics, a major consumer electronics giant, has already begun development of its own smart watch device. Moreover, the South Korean company is also working on wearable construction akin to Google Glass. The Korea Times recently reported that LG Electronics is already developing a wearapble smart product similar to Google’s Glass, as a part of its long-term strategy to keep its competitiveness in the volatile information technology industry. In addition, the company is working on smart wrist-watch, which will assist its smartphones and eventually tablets. “It is one major part of many currently non-commercialized products under development by LG Electronics. The company has spared no efforts to invest in products that it believes are must-haves to stay ahead technology wise in the market, whatever the situation maybe. LG Electronics believe that it is not lacking in technology compared to its competitors, especially Samsung Electronics, and have maintained a consistent standard to keep innovation alive,” a source familiar with ongoing proceedings at LG Electronics told the news-paper. While the wearable construction like Google Glass seems to be something all-new and interesting for LG, it should be noted that the company already offered LG GD910 Touch Watch with Internet capability, which could tell time, make voice and video calls, send email and SMS messages and play music. The product did not end-up popular partly because of a hefty price tag, because of lack of functionality. Given that LG is currently working on the second generation of its smart watch, it should avoid many mistakes that are natural for the first generation of any device. Interactive wrist-watches are supposed to be companions for smartphones and media tablets. It is logical to expect smart watch to feature media player controls, information updates, calendar, compass, reminders, NFC payment system and other functions that do not require a lot of screen real-estate. A lot of users will also appreciate custom apps for such