Thursday, October 11, 2012 | Edited by Daniel Moores
||The Myth of the Black Friday Deal
Attention Black Friday shoppers: You're probably wasting your time.
After crunching two to six years' worth of pricing data for a number of typical holiday gifts, The Wall Street Journal has turned up the best times to go deal hunting -- and they almost never involve standing in the freezing cold all night.
It turns out that gifts from Barbie dolls to watches to blenders are often priced below Black Friday levels at various times throughout the year, even during the holiday season, and their prices follow different trajectories as the remaining shopping days tick down.
Watches and jewelry, typical last-minute quarry for well-heeled shoppers, get more expensive as the season progresses, according to Decide Inc., the consumer-price research firm that gathered and analyzed the data for this article. Blenders, which might sit around for months if they aren't bought in the holiday window, get much cheaper at the end.
The results reveal a lot about how retailers plot pricing strategy ahead of the year-end shopping frenzy that can account for a fifth or more of their sales. They also highlight how the industry has managed to use more sophisticated technology to turn Black Friday into a marketing bonanza by carefully selecting items for deep discounts while continuing to price broader merchandise at levels that won't kill profits.
"In the old days, all of the great deals were on Black Friday, but now you see some great deals on Black Friday and lots of offers throughout the season," says John Barbour, chief executive of electronic-toy maker LeapFrog Enterprises Inc., and a former Toys "R" Us Inc. executive.
The fast rise of online shopping has presented a wealth of data for researchers looking to uncover retailers' strategies and pinpoint when prices are lowest. Decide aims to use that data to tell its member consumers whether to buy any of a number of products now or wait until later. The company is run by veterans of Farecast, a service that tried to predict whether airfares on specific routes were about to go up or down and was bought by Microsoft Corp. for a reported $115 million in 2008.
At the request of The Wall Street Journal, Decide tracked the prices of products ranging from flat-screen televisions to Barbie dolls each day for at least two years across a number of retailers and e-commerce websites. The results included the prices at more than 50 retailers, including Amazon.com Inc., Wal-Mart Stores Inc. and Macy's Inc.
Decide didn't track in-store prices, which differ from market to market. As a result, its findings don't reflect the "door buster" specials offered during Black Friday on limited quantities of items found only in stores. But online retailers like Amazon have become more aggressive about competing for Black Friday business, so the data still give a good picture of broader trends in pricing.
Prices for some gifts items are lowest early in the holiday season -- meaning now -- before retailers begin to gradually raise prices. But Decide's tracking of prices for at least two years produced some surprising conclusions about the best times to buy on average.
Decide tracked the price of a Citizen men's black watch from 2008 through 2011 and found that the best time to buy it was early March, when the watch sank to $350 from its $600 list price. The average price for the watch on Black Friday and Cyber Monday was $379.
If you missed that window, there is still no reason to wait for a bargain. Categories like jewelry and watches become pricier throughout the months leading up to Christmas, according to Decide's data, which showed a steady incline in prices from October through December.
Ugg boots, typically a winter item, also became pricier as the holiday season progressed. Decide's data show the best time to buy Uggs during the holiday-shopping window is in September or October. The average price for a pair of women's "Classic Cardy" Uggs during those two months was $85, down from the $159.95 list price. On Black Friday and Cyber Monday, the average price jumped about 59% to $135 and $137, respectively.
Hot items like flat-screen televisions also become more expensive closer to Christmas, Decide's data found. The best holiday-season time to buy a flat-screen television is in October, says Mike Fridgen, Decide's chief executive.
The average price of a Samsung 46-inch "Professional" LCD television was $1,159 in October, according to Decide. On Black Friday, the same TV's average price was $1,355, the data found.
The same goes for almost any hot item and popular toys.
Buying early could help you snag an item before prices rise as supplies become tight.
The price of a Sesame Street Elmo plush toy increased 31% to $17.78 on Black Friday from its average in September and October, according to Decide's data.
The late-season price increases for toys that turn into hits can be dramatic. Ron Brawer, a partner at toy maker Maya Group Inc., recalls that his $29.99 Orbeez "Soothing Spa" toy was sold for as much as $90 during last year's holiday season as online retailers raised the price when supplies became limited.
"It was crazy," Mr. Brawer says. "They spent three times as much for something than if they would have bought it three weeks earlier."
For other items, it pays to wait until closer to Christmas. The mid-December price of a KitchenAid Artisan Stand Mixer, for example, dropped nearly 20% from the month before, according to Decide data.
Retailers will generally look to reduce inventory levels on items they overestimated or bought too much of in the days before Christmas, rather than having to resort to an even steeper discount on Dec. 26, says Arnold Aronson, a former CEO of Batus Retail Group, which in the 1980s was the parent company of department stores Saks Fifth Avenue, Marshall Field's and Kohl's.
The retail veteran, now managing director of retail strategies at consultancy Kurt Salmon, says chains have much more insight into margin and sales than they did in years past because of technology, and they're using it to carefully craft Black Friday deals that maximize the promotional benefit without wiping out profit.
"They have to provide value on the day, but they engineer it in a way that they can control their own destiny rather than fall victim to it," Mr. Aronson says.
Black Friday may be the best time to find incredibly deep discounts on some select items. But quantities are often limited, making the odds of getting those items slim.
Retailers use the offerings to get people through their doors, even at the cost of losing money on the sale, in the hopes of drumming up business for other products that aren't priced at such steep discounts.
The deepest discounts at Sears Holdings Corp.'s Kmart and Sears stores are still offered on Black Friday, says Ron Boire, chief merchandising officer for Sears Holdings. But like other retailers, Mr. Boire said, both stores will tag many items at full price that day.
Black Friday can offer fleeting bargains on some highly prized items, too. The price of Apple Inc.'s iPad rarely moves up or down. But last year on Black Friday, Apple offered a $41 to $61 discount on its tablet computers depending on the model.
Apple declined to comment on whether it will have a similar sale this year.
Videogame systems like Xbox also showed their biggest price drops during Black Friday and the following Cyber Monday, resulting in more than $100 in savings, according to Decide's data.
But those are exceptions to the rule. The transparency created by online shopping has made pricing much more volatile, says Mr. Fridgen, Decide's CEO. The result is that prices have become much more fluid than in years past, when items were discounted most heavily on Black Friday.
Vendors and retailers are under pressure from still-frugal consumers and heavy online competition to offer discounts more frequently throughout the holiday season.
John McCarvel, the CEO of Crocs Inc., says the shoe maker has a big Black Friday planned at its 200 U.S. stores, but he's also planning promotions in early November and after the Black Friday weekend to keep customers shopping. Last year, Crocs sent its customers a mailing with a coupon in the first week of December that drove traffic, he says.
"I think you have to do more in this marketplace," Mr. McCarvel adds, referring to the need to be aggressive with discounts. "The consumer will shop where they can get a deal, whether it's finding you online or at Amazon and other locations."
(Source: The Wall Street Journal, 10/08/12)
||Technomic Study Provides a Snapshot of Quick-Service Restaurant Customers
What does the typical frequent quick-service restaurant (QSR) consumer look like? Recent research finds that he is Caucasian, between 25 and 34 years old, accompanied by his spouse or significant other, and likely dining in the restaurant.
So finds a demographic analysis of almost 38,000 consumers polled for Technomic Inc.'s ongoing Consumer Restaurant Brand Metrics research and analyzed for the recently released Understanding Quick-Service Restaurants and Their Customers Market Intelligence Report.
"The quick-service restaurant segment includes some of the largest and most innovative companies in the U.S., as well as some interesting up-and-comers," says Technomic Executive Vice President Darren Tristano. "But at the same time, increasing competition means that it's more important than ever to understand what consumers value about fast food and where QSRs have opportunities to improve."
Technomic's Consumer Restaurant Brand Metrics program provides chains with a unique scorecard to benchmark performance against their peers and track results over time. The study asks consumers to rate the importance of certain attributes when deciding which QSR to visit. Based on initial survey analysis, Technomic ranked the top attribute categories.
Attribute Importance Ranking
(percentage of consumers giving a top two box rating, based on a 1-5 scale where 1 = not important and 5 = very important)
1. Food -- 91%
2. Cleanliness -- 88%
3. Service -- 86%
4. Value -- 84%
5. Beverage -- 78%
6. Atmosphere -- 61%
Leading Chains in Each Attribute
(top five, in alphabetical order)
1. Food -- Chick-fil-A, Culver's, Golden Corral, Jamba Juice, Papa Murphy's
2. Cleanliness -- Chick-fil-A, Cold Stone Creamery, Culver's, In-N-Out Burger, Papa Murphy's
3. Service -- Chick-fil-A, Culver's, In-N-Out Burger, Krispy Kreme, Papa Murphy's
4. Value -- Chick-fil-A, CiCi's Pizza, In-N-Out Burger, Krispy Kreme, Papa Murphy's
5. Beverage -- Caribou Coffee, Chick-fil-A, Jamba Juice, Old Country Buffet/HomeTown Buffet, Starbucks
6. Atmosphere -- Caribou Coffee, Chick-fil-A, Cold Stone Creamery, Culver's, Starbucks
The first in a new series of related segment-specific reports, Understanding Quick-Service Restaurants and Their Customers examines the demographic composition, behavior and attitudes of quick-service restaurant consumers. The report is powered by Technomic's Consumer Restaurant Brand Metrics program, an ongoing comprehensive study that demonstrates how consumers rate the importance of roughly 50 restaurant attributes regarding food, service, atmosphere, value, convenience, reputation and more, as well as the performance of 52 leading quick-service chains on these attributes.
Source: Technomic Inc., 10/01/12)
- 82 percent of QSR consumers rate the food quality at their recent visits as good or very good.
- QSR patronage tends to peak with the 25-34 age group, then decrease with each age cohort.
- Consumers form opinions about products and services whether they have had first-hand experience or not. 66 percent of consumers feel that the average QSR is good or very good at emotional connection; and 58 percent say the same of brand image.
- Consumers give QSRs an average rating of 56 percent for advertising effectiveness, but those numbers range from a high of 69 percent who believe the top chain is good or very good to a low of just 33 percent.
- Eight out of 10 consumers say they are willing to recommend the quick-service restaurant they rated to friends and family.
||Smartphone Makers Size Up Apple in Holiday Competition
If you're shopping for a smartphone this holiday season, you might notice something: They're getting bigger.
The latest mobile devices, coming from companies that include Google Inc., Samsung Electronics Co. and Nokia Oyj, are coming out with larger screens and features such as fast, high-definition video streaming. Analysts call these smartphones "hybrids" because they resemble tablets.
While the larger and faster phones are trying to grab attention from the ubiquitous iPhone, manufacturers of the hybrids are also looking to snare sales from Apple's other popular product, the iPad, said Ross Rubin, principal analyst at Reticle Research.
"Manufacturers view phones with larger displays as competition for tablets," Rubin said in an interview.
There's good reason for their interest in tablets -- the market is growing fast. Global sales were forecast to reach 119 million units this year, a 98 percent increase from 2011, according to research firm Gartner Inc. Much of that is from sales of iPads, which accounted for 70 percent of tablet shipments in the second quarter of this year, according to IHS iSuppli, another researcher. The nearest competitor, Samsung, had a 9.2 percent share, down from earlier in the year, IHS said.
Hitting the right note
Several earlier hybrids have met with success. Samsung's Galaxy Note has sold more than 10 million units, and the Samsung Galaxy S III has sold more than 20 million units worldwide. The Galaxy line is narrowing the gap with the iPhone for the best-selling family of smartphones ever, said Michael Morgan, an analyst at ABI Research.
Many of the latest hybrids feature improvements that phone users covet –- such as a better camera and wireless charging -– while also offering faster speeds and more powerful processors handy for streaming video in the home, the domain of tablets.
"Imaging seems to be the big thing," said Will Stofega, program director at researcher IDC.
The new Nokia Lumia 920 comes with an 8.7-megapixel camera with technology that reduces blur and provides better pictures in poor light. The phone can also charge wirelessly, so there's no need to plug it in.
"The hybrids are coming out because telephony is no longer the primary motivation for buying a smartphone," said Shawn DuBravac, director of research for the Consumer Electronics Association.
Most hybrid manufacturers also offer a smartphone with a high-definition screen. In September, Google's Motorola Mobility division introduced the Razr HD and Razr Maxx HD, each with 4.7-inch high-definition screens. The same month, Samsung announced its Galaxy Note 2, which features a 5.5-inch HD screen and lets consumers launch more than one window so they can multitask.
"Samsung Mobile does not market its products against a single product or single competitor," Teri Daley, vice president of public relations for Samsung Mobile, said in an e-mailed statement.
Meanwhile, Motorola spokeswoman Danielle McNally said that "while there’s certainly a market for larger screen phones, after talking with consumers we also know that there's a sweet spot for big screen phones in a small package."
Nokia didn't respond to a request for comment.
To compete with the latest iPad that runs on the faster, so-called Long Term Evolution wireless networks, Apple's rivals are coming out with smartphones that run on the same, speedier technology. In September, HTC unveiled the Windows Phone 8X, which has a 4.3-inch screen and runs on LTE.
Meanwhile, LG Electronics' new Optimus G, whose U.S. availability is yet to be announced, can be operated by voice. For example, a picture can be taken by saying "smile" or "cheese." Many hybrids also offer near-field-communication technology, which lets consumers make wireless mobile payments, as well as share pictures and videos by touching each other's phone.
Although Apple's mobile devices lack near-field communication, the company has countered its rivals' moves by making the iPhone 5 -- with its 4-inch Retina display -- a hybrid as well. The device runs over the faster LTE networks and comes with a camera that can shoot panoramic images. As for the hybrids' challenge to the iPad: Apple is expected to release a smaller version this month.
(Source: Businessweek, 10/04/12)
Daily Sales Tip: 'I Didn't Prepare'
This is the number one reason why most salespeople fail to ask great questions. Without proper preparation you are choosing to wing it, and when you wing it you ask narrow, mind-numbing questions.
Don't believe me? Set a recorder on your desk and capture your voice during a customer phone call. Play it back and analyze how much time you spent making statements versus listening (dead air is the goal!).
Then pay particular attention to the quantity and quality of questions you asked. Are they open or closed? Did your questions get the customer to think differently or were they the same questions every other rep has asked them? Did they explore need, budget and timeframe, or were they designed to stimulate thinking around your specific benefits?
Asking great questions is a skill that top performers master. They refine their questions every week and benefit from increased insight, opportunity and bottom line sales.
Want to improve the quality of your business? Then improve the quality of your questions.
Source: Sales speaker/consultant Tim Wackel