Celebrity endorsements run out of steam.

“Paid product endorsements are meaningless. I want to learn about the product from experts who are advocating for it – not just some random person who happens to have a job that makes them well-known.” 

— Consumer panel participant, ExpertVoice, May 2018.

The next time you see a celebrity spokesperson speaking about a product or a service … don’t think much of it.

Chances are, the celebrity isn’t doing a whole lot to increase a company’s sales or enhance its brand image.

We have affirmation of this trend in a report issued in June 2018 by marketing firm ExpertVoice, which recently investigated a Census-weighted audience of ~500 U.S. consumers on the issue of who consumers trust for recommendations on what to buy.

The findings confirm that while celebrity endorsements do raise awareness, typically it fails to move the needle in terms of sales. In fact, just ~4% of the participants in the ExpertVoice research study reported that they trust celebrity endorsements.  (And even that percentage is juiced by professional athletes who are more influential than other celebrities.)

As for the reason for the lack of trust, more than half of the respondents noted that their greatest concern is the monetary compensation given to the people from the brands they’re endorsing. Consumers are wise to the practice – and they reject the notion that the endorser has anything other than self-dealing in mind.

By way of comparison, here are how celebrities stack up against others when it comes to influencing consumer purchases:

  • Trust recommendations from friends/family members: ~83% of respondents
  • … from a professional expert (e.g., instructor or coach): ~54%
  • … from a co-worker: ~52%
  • … from a retail salesperson: ~42%
  • … from a professional athlete: ~6%
  • … from any other kind of celebrity: ~2%

A big takeaway from the ExpertVoice research is that more people are influenced by individuals who are making recommendations based on actual experiences with the products in question. Moreover, if it’s people they know they know personally, they’re even likelier to be swayed by their opinions.

In a crowded marketplace full of many purchase choices, consumers are looking for trusted recommendations. That means something a lot more authentic than a celebrity endorser.  Considering the amount of money companies and brands have historically had to pony up for celebrity pitches, it seems an opportune time for marketers to be looking at alternative methods to influence their audiences.

Click here for more information regarding the ExpertVoice research findings.

Changing Buying Behaviors: Clues from Thanksgiving Weekend 2017

If there was any doubt that we’re in the midst of fundamental changes in consumer buying behaviors, the results from the opening days of the 2017 holiday season have put such questions to rest.

Movable Ink, a firm that enables content personalization within e-mails, has just published some insightful statistics it compiled from Thanksgiving weekend last month.  Movable Ink logged nearly 438 million e-mail opens between the Wednesday before Thanksgiving and the following Cyber Monday. What did it find?

To start with, it found that recipients engaged with them.

Of the e-mails sent on Black Friday, nearly 50% achieved read lengths of at least 15 seconds. On Cyber Monday, the results were nearly the same (~46%).

Fifteen seconds may not seem like a long time to engage with an e-mail, but it’s light years compared to what is often experienced in consumer e-retail.

Movable Ink also found that the majority of the e-mails were opened on smartphones — far outstripping desktops and tablets:

  • Smartphones: ~53% of e-mail opens
  • Desktop computers: ~25%
  • Tablet opens: ~16%

An equal 53% of conversion actions happened on smartphones … but desktop conversions proved to be higher than their open stats, and e-mails opened on tablets were much less likely to experience conversions:

  • Smartphone: ~53% of e-mail conversions
  • Desktop computers: ~38%
  • Tablets: ~8%

Consumers were certainly in a buying mood over the holiday weekend, with purchases averaging between $120 and $140 on each of the four days of the long weekend:

  • Black Friday: An average of $124 spent
  • Saturday: $120
  • Sunday: $119
  • Cyber Monday: $141

However, while smartphones led in terms of e-mail engagement, when it comes to actual dollar sales smartphones come in last – by a country mile:

  • Desktop computers: ~$162 average holiday weekend total spend
  • Tablets: ~$107
  • Smartphones: ~$85

We can acknowledge that smartphones have become the most important method for reaching consumers with product content, coupons and special offers.  And yet, significantly more purchasing continues to happen on desktops.

One takeaway is that for all of the convenience smartphones purport to provide, the purchasing experience on mobile devices doesn’t yet match the experience on desktop computers.

It would also help if there was more similarity between the purchasing process sellers are delivering across all platforms. That continues to be a missing ingredient with some sellers, and it’s likely explaining at least some of the dampening effect on mobile sales revenues.

Holiday shopping behaviors: Black Friday is losing some of its luster.

It’s the beginning of October – which means that the holiday shopping season will soon be upon us.

… If it isn’t already, based on the holiday displays we’re already seeing cropping up at some major retail chain stores.

Of course, U.S. retailing firms have been gearing up for the season for months now, in terms of building merchandise inventories and so forth. But what sort of consumer shopping dynamics will they be facing this year?

According to new research published by Euclid, Inc. in its 2017 Evolution of Retail report which covers holiday physical and digital retail trends, Cyber Monday has now overtaken all of the other holiday-season shopping days in terms of consumer excitement.

That finding is based on a survey of ~1,500 U.S. consumers age 18 and older. While majorities of respondents report that they are excited about each of the three biggest revenue days of the holidays, for the first time ever Cyber Monday heads the list in terms of consumer interest and excitement:

  • Cyber Monday: ~72% of consumers report being excited about this shopping day
  • Black Friday: ~62%
  • Day after Christmas: ~55%

Clearly, online shopping continues to build momentum year over year. But the Euclid research also reveals that physical stores continue to have a major role in the “buying journey.”  Even among consumers in the 18-34 age group, three out of four respondents report that they visit physical stores on a regular basis to see products “in the flesh” – even if they purchase them online later.

Not surprisingly, “price” remain the biggest driver in consumer shopping behaviors during the holiday season, but convenience is another factor as well. It isn’t simply a store’s location that matters, but also how quickly shoppers can get in and out of the store that affects their views of “convenience.”

Interestingly, when comparing just in-store shopping plans, more respondents in the Euclid survey expect to be shopping on the day after Christmas (63%) than on Black Friday (60%) this year.

Perhaps the decisions by some big retailers to curtail store hours on that traditional first day of the holiday shopping season are being driven by more than simply altruism …

The complete Euclid report for 2017 can be downloaded here.

Whole Foods may now have to settle for half-a-loaf.

wfThe Whole Foods chain of upscale “healthy grocery” outlets just released its 2016 3rd Quarter results … and things continue to look a little less fresh and a little more droopy for company.

Sales for stores open one year or longer have now declined for the fourth consecutive quarter, and the latest ~2.6% drop is steeper than analysts had been predicting.

Company profits have slid more than 20% since the same time last year.

One bit of good news is that Whole Foods’ total sales have increased by around 2%. It isn’t exactly the double-digit growth experienced up until a couple years ago — but at least it remains a gain.

In a nutshell, the problems faced by Whole Foods, which describes itself as the “World’s Healthiest Grocery Store,” is a maturation of the market for high-end groceries and other foods. In the words of Stephen Tanal, a vice president at Goldman Sachs, as reported by Forbes last week:

“Wellness has gone mass, and it’s not coming back – never again to be relegated to niche specialty retailers serving price-insensitive early adopters.”

Underscoring Tanal’s contention is the fact that ~75% of Whole Foods store locations now have one or more Trader Joe’s located within five miles.  More than half of them have a Kroger store within five miles, and nearly 85% have a Costco outlet located within ten miles.

In response to the heightened competition, Whole Foods is speeding up implementation of its plans to open a line of smaller outlets called 365 by Whole Foods Market. According to the company, these are “value-driven” locations that feature a streamlined operating model while benefiting from centralized buying and auto-replenishment of inventory.

Reportedly, pilot locations in California and Oregon have been positively received, and a third location will be opening soon in the Seattle suburbs.

Other initiatives being undertaken by the company fall under an umbrella described by co-founder and co-CEO John Mackey as a “back to basics” program including refocusing on the customer experience as well as improved store layouts and wayfinding, signage and the like.

… And lower prices, too, one would presume – if the company is serious about reclaiming the mantle of “good for you” food market leader from Kroger, Wegmans, Redners and other “mainstream” chains that have been encroaching on Whole Foods’ turf.

Will Whole Foods regain the momentum … or continue to be on the defensive?  We’ll see how it plays out in the coming quarters.

Online shopping insights: Why is the in-store pick-up option so popular?

With online shopping so popular these days, why are consumers electing to pick up the merchandise they’ve ordered at the store?

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While it isn’t a pervasive practice, a study published recently by consumer analytics firm Connexity/Bizrate Insights finds that more than 30% of online shoppers have used in-store pick-up at least once during the past 12 months.

Even more surprising, perhaps, is that ~13% of respondents reported that they had considered abandoning a purchase because in-store pick-up wasn’t offered as an option.

As it turns out, people choose the in-store pick-up option for four major reasons:

  • To avoid paying shipping charges: ~55% cited
  • For the convenience: ~43%
  • Need to receive the order quickly: ~36%
  • Shopping online to ensure the item is available: ~29%

At first blush, I wouldn’t think that “convenience” means having to drive to a store versus having the product delivered right to the house. But perhaps “convenience” in this sense is related to product availability – avoiding a fruitless trip to the store only to find out after-the-fact that the desired product isn’t in stock.

But the other reasons cited make good sense, too. Everyone understands the desire to save money – if not on the product itself, then by avoiding shipping charges.  And if a quick drive to the store gets you the items compared to waiting a few days for the shipment to arrive, that’s understandable as well.

The Connexity findings underscore how important it is for retailers to align their e-commerce setups to allow for in-store pick-up – especially if the economics don’t allow them to offer a free shipping option. There’s simply too much competition from online-only retailers to afford losing sale to them based on any of the four factors listed above.

Holiday Sales: “Many Happy Returns”

retHere’s an interesting statistic coming out of the holiday season this year: Nearly one in four consumers has returned at least one of the gifts they received.

For gifts purchased online, returns are an even bigger part of the equation – as in one third of all online gift purchases being returned.

It’s part of a trend that’s growing at a pretty swift pace. In 2014, a total of $285 billion worth of merchandise was returned in the U.S., a 6% increase over the previous year and more than double the growth rate of retail sales as a whole.

Industry observers are expecting higher figures again for 2015 once the stats are fully tallied.

Which holiday gift items tend to be returned most often? In a survey of ~500 U.S. consumers conducted between December 28 and 31, 2015 by mobile app shopping circular developer Retale, the following gift categories were cited most frequently by respondents:

  • Jewelry: ~32%
  • Electronic products: ~29%
  • Gift cards: ~27%
  • Clothes/apparel: ~26%
  • Home décor/home improvement items: ~23%

Consumers may have gravitated to online shopping big-time this past holiday season, but as for the gift return “experience,” it’s pretty clear that consumers continue to prefer making a return at the store (~64%) rather than online (~12%).

Evidently, the “hassle factor” of shipping merchandise back to the seller – not to mention the cost of return shipping if that isn’t offered free of charge – is more onerous than getting in the car and driving to the store outlet.

As for the mountains of merchandise that retailers are having to deal with, it’s caused the growth of an entirely new business niche: reverse logistics firms.

These companies input information on each returned item and determine the most lucrative way for the retailer to dispose of it – which can include sending it to a wholesaler, selling it to a liquidator for scrap, or sending it to a distribution center to be repaired and resold.  Online “refurbished products” stores on Amazon and eBay enable retailers realize up to 70% of an item’s worth by selling those items directly to value-conscious consumers, compared to recouping only 20% or 30% in the past.

It’s part of the action –> reaction aspects of retail that pretty much define this industry.