ETD: 862 Advertising & Marketing; Sirius Radio; Business
Outlook Survey; Luxury Consumers Personal Confidence Rises
E-Tailer's Digest
etd_post at gapent.com
Tue Feb 22 12:11:43 GMT 2005
E-Tailer's Digest --- Everything for the Retailer
Issue #0862 February 22, 2005
George Matyjewicz, Moderator mailto:georgem at gapent.com
Published by: GAP Enterprises, Ltd. http://www.etailersdigest.com
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CONTENTS
[1] Greetings
[2] Advertising & Marketing
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[3] Business Outlook Survey
[4] Luxury Consumers Personal Confidence Rises
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[1] Greetings.
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Hi All:
I listened to a discussion yesterday about the luxury market, which
surprised me. In the U.S., seven percent (7%) of the population earns more
then $125,000 per year - considered the "new rich." Yet they shop at clubs
(Sam's, BJ's, etc), clip coupons and watch for sales. It brings up
interesting challenges for those selling to this market - give them
coupons, not slick ads. Pam Danziger, our resident luxury market guru,
always has interesting information for this market.
What do you think is happening with advertising and marketing
now-a-days? What works and what doesn't? Traditional thoughts about how
your target acts may not be what actually happens. So what do you do?
List member Janet Attard is doing a survey for consultants and small
retailers who may not be included in the SBA studies. It will benefit all
if you take the survey (see 3 below).
Tell us about your business, which will remain for posterity at
our "Members: Who Are You?" site. This is a courtesy to our members who
contribute to our forum, and not merely a way to advertise for
free. Anything to do with the retail world, i.e., supplier, retailer,
consulting, etc. http://etailersdigest.com/resources/members/index.htm And
we have a form there for you to tell us about you. As I said when I first
proposed this idea, we have "known" each other for a long time, yet we
often don't know anything about each other. So, tell us who you are and
what you do.
Now, let's get to everything for the retailer.
Sincerely
George Matyjewicz, PhD
Chief Global Strategist, GAP Enterprises, Ltd.
mailto:georgem at gapent.com
http://www.etailersdigest.com
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[2] Advertising & Marketing
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Periodically we go through this exercise - what is the best method(s) of
marketing/advertising? Does it differ for what you sell? Does a certain
type of promotion work better with services than products?
I get bombarded with e-mail advertising where, of course, they say I "opted
in" which really means my email address was available online to be
pirated. Normally I toss those ads, but lately I have actually looked at a
couple of them. Interesting stuff. They usually promote one product and
show the picture and a brief description of the offer, with a link to the
product online. Do they work? Is there still this hatred for these ads,
like we had a couple of years ago? Has anybody tried them?
We use Google ads periodically, mainly for services. They get traffic, but
not necessarily business. I realize the latter may be the site, not the
ad. Has anybody had success with Google ads?
Banner ads never did seem to do a lot, except for helping to build a
brand. If you constantly see the name spread across the Net, you may
consider the company.
Newsletters like E-Tailers Digest no longer have the sponsorship they once
had (today we have an ad - the first in over a year).
Companies like iVillage are now starting to make money (first time in
history), even though they seemed to have an ideal concept - provide
content of interest to women which should be a Mecca for advertisers.
So, what do you think? What works and what doesn't? (In order of preference).
George
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[3] Business Outlook Survey
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The SBA has just released a survey showing that economic conditions for
small business were strong in the fourth quarter of 2004.
http://www.sba.gov/advo/research/sbqei0404.pdf
But we were wondering just how consultants, small retailers and others who
might not get counted in SBA studies are doing. So, we set up a survey to
find out. Please take a minute if you can and take the survey. Responses
are all anonymous unless you specifically add your email address in a
comment section at the end of the survey.
http://www.businessknowhow.com/smallbizfeature/outlook2005survey.htm
--Janet Attard
Business Know-How Small Business Resource Center
http://www.businessknowhow.com
Free newsletter: www.businessknowhow.com/subscribe.htm
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[4] Luxury Consumers Personal Confidence Rises
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Luxury consumers' confidence was mixed at the end of 2004 and beginning of
2005. While luxury consumers (average income $136.5k) felt positive about
their personal financial status and spent more on luxuries in the fourth
quarter 2004, they expressed strong doubts on the financial well-being of
the economy as a whole, according to the latest statistics compiled by
Unity Marketing.
Luxury consumers' conflicting feelings held down the Luxury Consumption
Index to 95.6 points for the fourth quarter 2004. That represents a .4
decline from the third quarter and a 7.1 point drop from 2004's high of
102.7 at the end of the second quarter. The Luxury Consumption Index,
compiled by Unity Marketing, measures the luxury consumers' feelings and
attitudes about their financial well-being.
At the start of 2005 luxury consumers feel positive about their personal
finances, but they are dubious about the economy as a whole. Overall,
luxury consumers feel their financial status today is better off (39
percent) or about equal to (46 percent) the way it was three months
ago. Moderating their positive personal outlook is weakness in their view
of the country as a whole. Only 26 percent believe the country as a whole
is better off.
Commenting on this quarter's Luxury Consumption Index, Thomas Bodenberg,
economic forecaster for Unity Marketing and former Conference Board
executive says, "Overall, the demand for luxury goods and services looks
good in the short-term. However, the outlook for intermediate-term (beyond
six months) looks cloudy due to two factors. One is the uncertainty
engendered by the Bush budget, especially the tax outlook. Second,
increasing mergers and acquisitions activity in such arenas as
telecommunications and pharmaceuticals give an uncertain employment outlook
for thousands of highly-paid executives and administrators in the affected
firms. We feel this is reflected in the data."
Luxury consumers' worry about the future did not impact their luxury
spending in the fourth quarter 2004, with luxury spending up 12 percent
overall. While luxury consumers spent less on their home in the fourth
quarter, they kept up a steady pace in buying personal luxuries, including
fashion, fashion accessories, jewelry and automobiles.
But the biggest growth was tracked in spending on experiential luxuries,
including fine dining, travel, beauty services and home services, up 19
percent over spending in the third quarter. As the luxury consumers
continue to focus their spending on experiences, this is the category where
the most robust growth is predicted for 2005-2006.
It is also in spending on experiences where the real differences in levels
of affluence are measured. The super-affluent consumers (incomes of $150k
and above) increased their spending on experiential luxuries by 66 percent
in the fourth quarter and they spent more than two-and-one-half times more
on experiences during the period than the luxury consumers one rung down on
the affluence ladder (incomes $100k to $149.9k).
Real affluence today is measured not by what you own, but by what you do
and where you go.
In the luxury market today what separates the truly wealthy from the merely
rich is not the places they shop, clothes they wear, the cars they drive or
the way they decorate their homes. "The playing field in material luxury
goods has pretty well been leveled. Today true affluence is measured in
the intangibles. It is about where you vacation, where you dine, the shows
you see, the spas you visit. Super-affluents who spend so much in all
aspects of luxury, spend even more on experiences where one's feelings are
paramount," Danziger says.
Unity Marketing's benchmark index of luxury buyers is calculated from a
sample of over 700 upper-income households throughout the United
States. This panel, with household incomes over $75,000 (about one-third
$150,000 or more) represents one of the largest longitudinal studies of
high-end luxury consumption of goods and services. Panelists reported
purchasing behavior of luxury goods and services over the past three
months, as well as attitudinal and expectation data about luxury brands and
categories, their households and the health of the economy in general.
Unity Marketing publishes its Luxury Tracking Study quarterly with the next
due in March 2005.
For more information, visit
http://www.unitymarketingonline.com/reports2/luxury/luxury3.html or call
me at 717-336-1600.
Pam Danziger,
President
Unity Marketing Online
717-336-1600
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