Who’s surprised? It seems as though this retail dinosaur has been on its last legs for years now. Even when Sears merged with Kmart in the early 2000s, I recall one of my business colleagues remarking that it was “one dog of a company buying another dog of a company to create this really big bowser enterprise.”
“Most. Useless. Merger. Ever.” was how another person I know described it.
Indeed, it seems as though Sears’ biggest contributor to its financial bottom-line in recent years has been its real estate holdings. Sales of Sears commercial properties have contributed mightily to the company’s balance sheet, while retail sales seem almost like an afterthought.
“Old school” department store firms such as Macys and Kohls do significantly worse, typically taking between 3% and 4% of clicks apiece.
But Sears has been a poor performer compared even to the weak showing of traditional department stores; Adthena reports that Sears accounts for just 0.7% of online retail clicks.
To add the final nail in the coffin, anyone looking closely at what’s been happening with Sears’ print and online display advertising expenditures can see that the company was busily rearranging the deck chairs on the Titanic. Media measurement firm Statista reports that Sears/Kmart decreased the dollar amount it spent on such advertising from ~$1.5 billion in 2013 to just ~$415 million in 2017. That’s more than a 70% drop during a period of economic recovery.
When the numbers between market growth and advertising decline cross like that, you know exactly where things are headed …
Will Sears or Kmart even be brand names in another decade? It’s difficult to see how.
From the New York Times on down, leading publishers are telling us that print versions of their newspapers will eventually disappear. The only question is how soon it will happen.
But what are the implications of this pending shift to all-digital? Will online news consumers be as strongly engaged as they have been with the print newspaper product?
We now have a window into answering this question by looking at the experience of The Independent, a UK national daily paper. Two years ago, The Independent made the shift to become an online-only publication.
And the result was … no measurable increase traffic shifting from offline to online. That finding comes from a before/after analysis of the publication’s performance as conducted by European communications industry researchers Neil Thurman and Richard Fletcher.
Instead, these customers became like other digital readers. That is to say, in the words of the researchers, “easily distracted, flitting from link to link, and a little allergic to depth.”
Let’s drill down a little deeper. At the time it ceased publishing a print edition of its newspaper, The Independent had a paid print circulation of approximately 40,000, along with ~58 million monthly unique visits on its digital platform.
That a humongous chasm … but the researchers found that the publication’s relatively small number of print readers were responsible for more than 80% of all time spent consuming all of The Independent’s news content – print and digital.
That is correct: Considering engagement on all of its digital platforms, all of that added up to fewer than 20% of the time collectively spent reading the print publication.
The chart below shows what happened to readership. All of the time The Independent’s print readers spent with the paper seems to have simply disappeared when the company ceased publishing a print version. It didn’t transition to independent.co.uk.
Even more telling, the researchers found that half of print recipients had read the newspaper “almost every day,” whereas online visitors read a news story in The Independent, on average, a little more than twice per month.
While print readers typically spent from 40 to 50 minutes reading each daily edition of The Independent, online readers spent, on average, just 6 minutes over the entire month.
Here’s the thing: Whereas print newspapers usually have few if any competitors in their immediate space, online there are an unlimited number of competing sites to attract (and distract) the reader – all of them just a mouse-click away.
Even if we discount a measure of exaggeration on the part of respondents in terms of how much time they actually expend on their reading consumption versus what they reported to survey-takers, the print/online dynamics reveal stark differences. As researcher Thurman reports:
“By going online-only, The Independent has decimated the attention it receives. The paper is now a thing more glanced at, it seems, than gorged on. It has sustainability but less centrality.”
There is one silver-lining of shifting to an all-digital platform, at least in the case of The Independent. That shift has resulted in increased international reach by the publication.
But The Independent is a national newspaper, unlike most of America’s leading papers, and so that sort of positive aspect can’t be expected to apply very easily to those other media properties. How many people outside of central Colorado can be expected to read a digital edition of the Denver Post?
The main takeaway from The Independent’s experience is that for any paper choosing to go all-digital, chances are high that the audience isn’t going to follow along – certainly not at the level of loyal, in-depth time once spent with the print product.
Sure, the very real costs of printing and delivery will now be a thing of the past. But a significant – even dramatic – decline in reach, influence and impact will be the new reality for the publishers
Over the past year, Americans have been fed a fairly steady stream of news about the People’s Republic of China – and most of it hasn’t been particularly positive.
While Russia may get the more fevered news headlines because of the various political investigations happening in Washington, the current U.S. presidential administration hasn’t shied away from criticizing China on a range woes – trade policy in particular most recently, but also diverse other issues like alleged unfair technology transfer policies, plus the building of man-made islands in the South China Sea thereby bringing Chinese military power closer to other countries in the Pacific Rim.
The drumbeat of criticism could be expected to affect popular opinion about China – and that appears to be the case based on a just-published report from the Pew Research Center.
The Pew report is based on a survey of 1,500 American adults age 18 and over, conducted during the spring of 2018. It’s a survey that’s been conducted annually since 2012 using the same set of questions (and going back annually to 2005 for a smaller group of the questions).
The newest study shows that the opinions Americans have about China have become somewhat less positive over the past year, after having nudged higher in 2017.
The topline finding is this: today, ~38% of Americans have a favorable opinion of China, which is a drop of six percentage points from Pew’s 2017 finding of ~44%. We are now flirting with the same favorability levels that Pew was finding during the 2013-2016 period [see the chart above].
Drilling down further, the most significant concerns pertain to China’s economic competition, not its military strength. In addition to trade and tariff concerns, another area of growing concern is about the threat of cyber-attacks from China.
There are also the perennial concerns about the amount of U.S. debt held by China, as well as job losses to China; this has been a leading issue in the Pew surveys dating back to 2012. But even though debt levels remain a top concern, its raw score has fallen pretty dramatically over the past six years.
On the other hand, a substantial and growing percentage of Americans expresses worries about the impact of China’s growth on the quality of the global environment.
Interestingly, the proportion of Americans who consider China’s military prowess to be a bigger threat compared to an economic threat has dropped by a statistically significant seven percentage points over the past year – from 36% to 29%. Perhaps unsurprisingly, younger Americans age 18-29 are far less prone to have concerns over China’s purported saber-rattling – differing significantly from how senior-age respondents feel on this topic.
Taken as a group, eight issues presented by Pew Research in its survey revealed the following ranking of factors, based on whether respondents consider them to be “a serious problem for the United States”:
Large U.S. debt held by China: ~62% of respondents consider a “serious problem”
Cyber-attacks launched from China: ~57%
Loss of jobs to China: ~52%
China’s impact on the global environment: ~49%
Human rights issues: ~49%
The U.S. trade deficit with China: ~46%
Chinese territorial disputes with neighboring countries: ~32%
Tensions between China and Taiwan: ~21%
Notice that the U.S. trade deficit isn’t near the top of the list … but Pew does find that it is rising as a concern.
If the current trajectory of tit-for-tat tariff impositions continues to occur, I suspect we’ll see the trade issue being viewed by the public as a more significant problem when Pew administers its next annual survey one year from now.
Furthermore, now that the United States has just concluded negotiations with Canada and Mexico on a “new NAFTA” agreement, coupled with recent trade agreements made with South Korea and the EU countries, it makes the administration’s target on China as “the last domino” just that much more significant.
More detailed findings from the Pew Research survey can be viewed here.
For airline consumers, the news has been unremittingly bleak in the past few years, what with ancillary fees rising and in-flight comfort going the way of the dodo bird.
But when you think about it, this is something that was bound to happen.
According to the Associated Press, the average roundtrip fare for domestic flights in the United States today is approximately $500.
Let’s compare this to when I was a student in college 40+ years ago. Back then, coach airfare between Minneapolis-St. Paul and Nashville, TN typically ran approximately $250 — so roughly half of what today’s figure would be.
The equivalent of $1,200 a pop explains why it was financially necessary for me to stay in Nashville over various holidays such as Thanksgiving break instead of flying home for only a few days or a week.
On the plus side, flying back then was a breeze compared to today. Not just the stress and irritation of the terminal security lines, but also far fewer travelers, with planes often only one-third or half-full.
Deregulation followed by vastly cheaper airfares have led to flying being within nearly everyone’s budget, which is all very egalitarian but also making the air travel experience high on the “frustration factor.”
How about the airlines? They’ve had to deal with all sorts of regulatory developments along with sharply higher operating costs — jet fuel just for starters.
And while the airlines have benefited from serving more travelers, that hasn’t made up for the decline in fare prices. So it isn’t surprising that the airlines started cutting in other ways.
First it was in-flight meals, moving away from delicious hot platters to sandwiches … then to peanuts or pretzels … and now to nothing sometimes.
Next, it was the removal of pillows and blankets.
Accessing in-flight entertainment costs extra, too — as well as gaining access to cyber-communications.
And has anyone noticed the “squeeze play” going on in the coach section? That isn’t your imagination. Today’s typical coach seat is 17 inches wide, which is nearly a 10% decrease from the 18.5 inches from about a decade ago. (That corresponds with an average 8% heavier traveler over the same period, by the way.)
Space constraints spill over into the ever-smaller footprint of airplane lavatories. If you find that you can’t turn around in them, that’s because they’re literally smaller than a phone booth. I know I try to avoid using them as much as possible.
In any case, all this nibbling around the edges hasn’t been able to make up for airline revenue losses elsewhere. So now we have fees being levied for checked luggage — in the range of $25 to $40 per item. For a while the charges were levied on extra pieces of luggage, but now Delta, American Airlines and United Airlines are charging for the first checked item, too. Among the major carriers, only Southwest remains a holdout — but one wonders for how much longer.
And reservation change fees? They’re increasing for everyone — even people who have traditionally been willing to pay more for an air ticket if they’d have the opportunity alter their travel plans without a being charged whopping change fee. Those fees can sometimes go as high as $200 — nearly the cost of purchasing an entirely new one-way ticket.
According to transportation and hospitality marketing firm IdeaWorks, in 2017 the top 10 airlines brought in nearly $30 billion in ancillary revenues — a figure that’s sure to be significantly larger in 2018. It’s almost as if the ancillary revenues are as important as the base fare. As Aditi Shrikant, a journalist for Vox puts it, “Buying a plane ticket has been stripped down to mean that you are paying for your mere right to get on the plane. Anything else is extra.”
In their own lumbering way, the U.S. Congress is now making noises about cracking town on what it characterizes as unreasonable airline fees. I’m not sure that any such legislative moves would have the desired effect. Already, Doug Parker, American Airlines’ CEO, predicts that of Congress moves in that direction, the industry would respond by making airline tickets nonrefundable: “We — like the baseball team, like the opera — would say, ‘We’re sorry, it was nonrefundable.'”
What are your thoughts about the unbundling of services and fees in the airline industry? While that business model gives passengers the choice of flying for less without access to the amenities, it turns the process of purchasing an airline ticket into something that seems akin to a fleecing.
Do you have particular criticisms about the current state of affairs? What would you prefer to be different about the scenario? Please share your comments below.
The slow death of America’s alt-weeklies can’t help but feel a little disheartening.
Over the years I’ve enjoyed reading the so-called “alternative press.” I’ve found it a fascinating sociological exercise, where certain fringe or controversial topics and points-of-view are often aired long before they enter more mainstream discourse.
But that was before the Internet changed everything.
Before the ubiquity of the Internet, the role that alternative weeklies played was arguably one of consequence. I can recall a time where one could encounter a dozen or more papers freely available in retail establishments such as record stores, coffeehouses and head shops in any medium sized or larger North American city.
The editorial focus of these alt-weeklies covered the gamut – from alternative music, film and literature to environmental causes, LGBTQ interests and other social action priorities – not to mention various ethnic sub-groups.
Basically, any “ism” or group that was underrepresented in the mainstream press was a prime editorial focus and audience target of the alternative press.
One could chart the fortunes of cultural trends by the tone of the editorial writing in these publications – ranging from optimism and anticipation to depression or even rage – depending on the prevailing sociological or political currents of the day.
One friend of mine called it the “alt-weekly shrill-o-meter” – with the decibel level rising or falling with the fortunes of urban-progressive forces in America.
One of the foundational premises of alt-weeklies was that they should be available free to everyone, and therefore they were given wide distribution everywhere urban-aware people congregated.
The costs of production, printing and distribution were paid for through varied and frequently entertaining (of the voyeur sort) advertising.
Back in the late 1980s I was acquainted with a fellow who sold advertising for one such paper, Minneapolis-based City Pages. He earned a tidy-if-modest living selling advertising space for independent restaurants, funky specialty retailers, dive bars, performance spaces and the myriad music groups that were prevalent on the Twin Cities scene.
Other regular advertisers he relied on were the ones peddling more “questionable” fare like phone chat lines (of whatever persuasion one might prefer) and other services one can euphemistically characterize as “adult.”
Some people contend that these advertisers did as much as anything to keep many an alt-weekly publication afloat in the pre-Internet days.
The point is, in their heyday the alternative press played an important role in American urban culture – even if it existed on the margins of society and played a somewhat less-than “conventionally upstanding” role in the process.
And another thing: These alt-weeklies reflected the personalities of the cities in which they operated. Despite the inevitable superficial similarities between them, I always recognized distinct aspects of each publication that made it a true product of its place. (Speaking personally, I found this to be the case in Phoenix, Nashville, Minneapolis-St. Paul and Baltimore, where I lived and worked from the 1970s to the 1990s.)
Unfortunately, the past 15 years haven’t been kind at all to this corner of the publishing world. With the rise of the Internet (where “anything goes” editorially is an understatement), coupled with inexorably increasing costs to prepare and distribute a paper-based news product, the business environment has turned into a classic squeeze-play for these alternative papers.
Adding to those problems is the challenge of shrinking advertising revenues. Publishers aren’t facing merely the general decline of revenues from would-be advertisers who can now publicize themselves just as effectively online at a lower cost. It’s also the near-total banishment of adult-oriented advertising, as alt-weeklies have been shamed into dropping those ads due to changing societal attitudes about the objectification and exploitation of women (and men, too).
Because of these dynamics, in recent years the main story about the alternative press has been a predictable (and dreary) one: how these papers have been dropping like flies. Whereas once there were a dozen or more alternative papers published in a typical urban market the size of a St. Louis or Pittsburgh, today there may be just one or two.
In smaller urban markets, there may be none at all.
Just this past week, the last non-student run alt-weekly publication in the entire state of Montana – the Missoula Independent – shut down for good. Employees received this warm-and-fuzzy communiqué from the publisher, Lake Enterprises:
“This is to give you notice that we are closing the Missoula Independent as of September 11, 2018. As of that time, the offices will be closed and you are not to report to work or come into the building.”
In a now-familiar story line, closing Montana’s last remaining alt-weekly publication came down to a simple calculation of revenues vs. costs. (It probably didn’t help that the magazine’s staff had voted to unionize earlier in the year.) And adding insult to injury, Lake Enterprises has also shuttered the publication’s archives – all 27 years of it.
Suddenly, it’s as if the Missoula Independent never existed.
This alt-weekly publication’s experience is similar to numerous others. Lee Banville, an associate professor of journalism at the University of Montana, had this to say about the Missoula Independent’s fate after the previous owner sold the publication to Lee Enterprises:
“There was – almost immediately – a pretty good chance this was going to happen. Other alt-weeklies that have been purchased by paper chains have been closed.”
Indeed, it’s a scenario that’s been playing out all over the country: An alt-weekly begins to struggle; new owners move in with the objective of saving the publication, only to cut staffing to near-zero or shut down completely when the old (or new) business model cannot be sustained.
And in fact, no publication is immune – even an iconic brand like New York City’s The Village Voice.
Earlier this month, the world witnessed the effective demise of that vaunted alt-weekly – a publication that some people consider the best exemplar of the genre.
Village Voice publisher Pete Barbey, who acquired the media property in 2015 and turned it into an online-only publication in 2017, has now shuttered the publication completely barely a year later.
“Today is kind of a sucky day,” Barbey reportedly told Village Voice employees in a phone conference call. “Due to, basically, business realities, we’re going to stop publishing new Village Voice material.”
At least in this case, a veritable treasure trove of Village Voice archival material will be digitized and remain available in cyberspace. Approximately half of the publication’s employees are being kept on for a period of time to carry out that mission … but no new Village Voice journalism will ever again be produced.
As anyone who knows me personally can attest, I don’t come out of the “counter-culture” movement – nor would I consider that many of my personal or political views reflect those that are typically espoused by the writers and editors of the alternative press.
And yet … I can’t help but empathize with the comments of freelance writer Melynda Fuller, who has opined:
“The loss of alternative weeklies feels particularly personal. They act as mirrors for the complex lives lived in the cities where they publish. As more outlets are bought up, shut down or prevented from operating at full capacity, a much-needed connection is lost between that city’s culture and its residents.
Media is in the communications business. In a fractured time in our history, every connection counts.”
How about you? Do you feel any sense of nostalgia for the alternative press? Is there a particular favorite publication of yours that hasn’t been able to survive? Please share your thoughts with other readers.
Let’s dip back a few years for a quick history lesson. It’s 2010, and various business prognosticators are confidently predicting that the number of electric cars sold in the United States in 2013 will be ~200,000 vehicles.
And in 2015, electric auto sales will reach ~280,000 units.
What really happened?
In 2013 total electric car sales in the United States were fewer than 97,000. In 2015, the figure was higher – all of 119,000 units.
It’s worse than even these statistics show. The auto industry’s own expert predictions were off by miles. In 2011, Nissan CEO Carlos Ghosn predicted that his company would have more than 1.5 million Renault-Nissan electric vehicles on the road.
That forecast turned out to be about 80% too high.
More recent sales forecasts for electric cars are much more realistic. As has become quite clear, many consumers aren’t particularly interested in shifting to a newer technology of automobile if they have to pay substantially more for the technology up-front – despite the promise of lower vehicle operating expenses over time.
Even more telling, a recent McKinsey survey found that of today’s electric car owners, only about half of respondents indicated that they would purchase one again. Ouch.
So, what we now have are projections that electric vehicles won’t reach 4% of the U.S. automotive market until 2023 at the earliest. That’s about a decade later than those first forecasts envisioned reaching that penetration level.
Is it all that surprising, actually? If we’re being honest, we have to acknowledge that the most lucrative markets for electric vehicles are in highly prosperous, population-dense urban areas with strict gasoline emissions standards – the very definition of a “limited market” (think San Francisco or Boston).
Thinking about the next technological advancement in this sector, the industry’s newest “bright shiny thing” is self-driving cars – also referred to as the classier-sounding “autonomous vehicle.” But it appears that this sector may be facing similar dynamics that made electric vehicles the “fizzled sizzle” they turned out to be.
Consider the challenges that autonomous vehicles face that threaten to dampen marketplace acceptance of these products – at least in the short- and medium-term:
The regulatory and legal ramifications of autonomous vehicles are even more daunting than those affecting electric cars. For starters, try assigning liability for car crashes.
Autonomous vehicles require sophisticated mapping and data analytics to operate properly. The United States is a big country. Put those two factors together and it’s easy to see what kind of a challenge it will be to get these vehicles on the road in any major way.
How about resistance from powerful groups that have a vested interest in the status quo? Of the ~3.5 million commercial truck drivers in the United States, I wonder how many are in favor of self-driving vehicles?
Not every new technology operates in a similar environment, and for this reason some new-fangled products don’t have such a long gestation and ramp-up period. Take the smartphone, which took all of ten years to go from “what’s that?” to “who doesn’t own one?”
But there’s quite a difference, actually. Smartphones were a sea change from what people typically considered a mobile phone, with oodles of added utility and capabilities that were never even part of the equation before.
By contrast, consumers know what it’s like to have a car, and even self-driving cars won’t be doing anything particularly “new.” Just doing it differently.
At this juncture, McKinsey is predicting that autonomous cars will reach ~15% of U.S. automobile sales by the year 2030.
Maybe that’s correct … maybe not. But my guess is, if McKinsey’s prediction turns out to be off, it’ll be because it was too robust.
Today, behaviors across the board are far more “similar” than they are “different.”
Over the past few years, smartphones have clawed their way into becoming a pervasive presence among consumers in all age groups.
That’s one key takeaway message from Deloitte’s 2017 Mobile Consumer Survey covering U.S. adults.
According to the recently-released results from this year’s research, ~82% of American adults age 18 or older own a smartphone or have ready access to one. It’s a significant jump from the ~70% who reported the same thing just two years ago.
While smartphone penetration is highest among consumers age 18-44, the biggest increases in adoption are coming in older demographic categories. To illustrate, ~67% of Deloitte survey respondents in the age 55-75 category own or have ready access to smartphones, which is big increase from the ~53% who reported so in 2015.
It represents an annual rate of around 8% for this age category.
The Deloitte research also found that three’s little if any difference in the behaviors of age groups in terms of how they interact with their smartphones. Daily smartphone usage is reported by 9 in 10 respondents regardless of the age bracket.
Similarly-consistent across all age groups is the frequency that users check their phones during any given day. For the typical consumer, it happens 47 times daily on average. Fully 9 in 10 report looking at their phones within an hour of getting up, while 8 in 10 do the same just before going to sleep.
At other times during the day, the incidence of smartphone usage quite high in numerous circumstances, the survey research found:
~92% of respondents use smartphones when out shopping
~89% while watching TV
~85% while talking to friends or family members
~81% while eating at restaurants
~78% while eating at home
~54% during meetings at work
As for the “legacy” use of cellphones, a smaller percentage of respondent’s report using their smartphones for making voice calls. More than 90% use their smartphone to send and receive text messages, whereas a somewhat smaller ~86% make voice calls.
As for other smartphone activities, ~81% are sending and receiving e-mail messages via their smartphone, ~72% are accessing social networks on their smartphones at least sometimes during the week, and ~30% report making video calls via their smartphones – which is nearly double the incidence Deloitte found in its survey two years ago.
As for the respondents in the survey who use smartwatches, daily usage among the oldest age cohort is the highest of all: Three-quarters of respondents age 55-75 reported using their smartwatches daily, while daily usage for younger consumers was 60% or even a little below. So, in this one particular category, older Americans are actually ahead of their younger counterparts in adoption and usage.
The Deloitte survey shows pretty definitively that it’s no longer very valid to segregate older and younger generations. While there may be some slight variations among younger vs. older consumers, the reality is that market behaviors are far more the same than they are different. That’s the first time we’ve seen this dynamic playing out in the mobile communications segment.