Showing posts with label locals blog. Show all posts
Showing posts with label locals blog. Show all posts
Monday, July 6, 2009
Tuesday, April 21, 2009
Retail - March Retail Sales Disappoint as Retailers Wrap up First Quarter, According to NRF
Washington – Several months of stronger-than-expected retail sales provided hope that the industry was poised to bounce back, but March retail sales demonstrate that the industry is continuing to struggle. According to the National Retail Federation, retail industry sales for March (which exclude automobiles, gas stations, and restaurants) decreased 0.6 percent seasonally adjusted from February and dropped 3.7 percent unadjusted over last year.
March retail sales released today by the U.S. Commerce Department show total retail sales (which include non-general merchandise categories such as autos, gasoline stations and restaurants) decreased 1.1 percent seasonally adjusted over February and decreased 10.6 percent unadjusted year-over-year. Retail industry sales for February were revised upward, increasing 0.3% instead of dipping 0.1% as originally reported.
“A chilly start to spring and a late Easter combined for dreary March sales,” said Rosalind Wells, Chief Economist for NRF. “To compensate for the Easter shift, retailers typically look at March and April together to get a better look at how their stores performed. Easter should give a much-needed boost to April sales.”
One of the only bright spots in March came from health and personal care stores, whose sales increased 0.4 percent seasonally adjusted over last month and 3.5 percent unadjusted over last year. Food and beverage stores sales also increased 0.5 percent seasonally adjusted month-to-month but decreased 1.8 percent unadjusted year-over-year.
The shift in Easter sales also played a role in consumer purchases of clothing and clothing accessories. Sales at those stores decreased 1.8 percent seasonally adjusted from February and decreased 8.7 percent unadjusted over March 2008. Electronics and appliance stores sales decreased 5.9 percent seasonally adjusted month-to-month and decreased 10.0 percent unadjusted year-over-year. Sales at sporting goods, hobby, book and music stores also decreased 0.9 percent seasonally adjusted over last month and decreased 3.0 percent unadjusted over last year.
The National Retail Federation is the world's largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drug stores and grocery stores as well as the industry's key trading partners of retail goods and services. NRF represents an industry with more than 1.6 million U.S. retail establishments, more than 24 million employees - about one in five American workers - and 2008 sales of $4.6 trillion. As the industry umbrella group, NRF also represents more than 100 state, national and international retail associations. www.nrf.com.
March retail sales released today by the U.S. Commerce Department show total retail sales (which include non-general merchandise categories such as autos, gasoline stations and restaurants) decreased 1.1 percent seasonally adjusted over February and decreased 10.6 percent unadjusted year-over-year. Retail industry sales for February were revised upward, increasing 0.3% instead of dipping 0.1% as originally reported.
“A chilly start to spring and a late Easter combined for dreary March sales,” said Rosalind Wells, Chief Economist for NRF. “To compensate for the Easter shift, retailers typically look at March and April together to get a better look at how their stores performed. Easter should give a much-needed boost to April sales.”
One of the only bright spots in March came from health and personal care stores, whose sales increased 0.4 percent seasonally adjusted over last month and 3.5 percent unadjusted over last year. Food and beverage stores sales also increased 0.5 percent seasonally adjusted month-to-month but decreased 1.8 percent unadjusted year-over-year.
The shift in Easter sales also played a role in consumer purchases of clothing and clothing accessories. Sales at those stores decreased 1.8 percent seasonally adjusted from February and decreased 8.7 percent unadjusted over March 2008. Electronics and appliance stores sales decreased 5.9 percent seasonally adjusted month-to-month and decreased 10.0 percent unadjusted year-over-year. Sales at sporting goods, hobby, book and music stores also decreased 0.9 percent seasonally adjusted over last month and decreased 3.0 percent unadjusted over last year.
The National Retail Federation is the world's largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drug stores and grocery stores as well as the industry's key trading partners of retail goods and services. NRF represents an industry with more than 1.6 million U.S. retail establishments, more than 24 million employees - about one in five American workers - and 2008 sales of $4.6 trillion. As the industry umbrella group, NRF also represents more than 100 state, national and international retail associations. www.nrf.com.
Monday, April 6, 2009
Business Plan - Did you hear?...Global retail sales of organic cotton products up 63 percent in '08
Thanks to global brands and retailers, such as Nike and Pottery Barn, retail sales around the world of organic cotton apparel and home textile products shot up 63 percent in 2008, according to a recently released report from Organic Exchange.
That year, sales reached $3.2 billion compared to $1.9 billion a year earlier, as reported in the non-profit’s "Organic Cotton Market Report 2007-2008."
Contributing to that leap are also outdoor industry brands like Patagonia, a pioneer in using organic cotton in the early 1990s, even switching to it exclusively in 1996 for all its cotton apparel. In 2005 and 2006, Patagonia was on the Organic Exchange’s top five list of programs, but has been bumped down the list as larger, more mainstream players have entered the market.
Now, among the top 10 organic cotton-using brands and retailers globally were five U.S. companies: Wal-Mart, Nike, Anvil, Pottery Barn and Greensource. Elsewhere, they included C&A in Belgium, H&M in Sweden, Zara in Spain, Coop Switzerland and Hess Natur in Germany."
The most important news surrounding this figure is the fact that organic is no longer a novelty. With Volcom, Billabong, Nike, Marks and Spencer, H&M and others all selling organic now, the general public is learning the benefits of organic, the perils of traditionally grown cotton, and making the connection between health, the environment and their wallets," Jen Rapp, a spokeswoman for Patagonia, told SNEWS®.
Rapp noted that Patagonia believes 2008's massive sales growth is a result of widely known brands, such as Wal-Mart, selling organic to their large customer bases.
"The beauty is that with brands such as Wal-Mart on the organic cotton bandwagon, and the number of farmers that are switching to organic farming, the cost of organic is going to continue to become more and more affordable, allowing this growth to continue in the current economy," she said.
The Organic Exchange found in its research that most brands and retailers selling organic cotton products remain committed to their sustainability plans and upbeat about market growth. They reported they have plans to expand their product lines 24 percent and 33 percent in 2009 and 2010, respectively. It estimates that the segment will be a $4 billion market in 2009 and a $5.3 billion market in 2010.
Additionally, the organization's "Organic Cotton Farm and Fiber Report 2008" reported that the number of organic cotton farmers grew worldwide by 152 percent in 2007/2008. Organic cotton production hit 145,872 metric tons, which is equivalent to 668,581 bales (a bale is 480 pounds). It was grown on 400,000 acres in 22 countries worldwide.
During 2008, the report noted, certified organic cotton fiber supplies grew by 95 percent, significantly higher than annual growth rates of 45 percent in 2006 and 53 percent in 2007.
"Farmers who planted on speculation or expanded without market partners may have shifted the market into a state of oversupply in 2009," said LaRhea Pepper, Organic Exchange's senior director, in a statement, noting that the non-profit strongly discourages farmers from taking this kind of risk.
"Brands may want to explore opportunities for expanding their organic programs with their business partners, as for the first time in many years, supplies of organic fiber, yarns, and fabrics are more available than in previous years," Pepper added.
Founded in 2002, Organic Exchange (www.organicexchange.org) facilitates expansion of the organic cotton fiber supply by working with the entire chain of supply, from farmers to retailers, to help develop organic cotton programs.--Wendy Geister
That year, sales reached $3.2 billion compared to $1.9 billion a year earlier, as reported in the non-profit’s "Organic Cotton Market Report 2007-2008."
Contributing to that leap are also outdoor industry brands like Patagonia, a pioneer in using organic cotton in the early 1990s, even switching to it exclusively in 1996 for all its cotton apparel. In 2005 and 2006, Patagonia was on the Organic Exchange’s top five list of programs, but has been bumped down the list as larger, more mainstream players have entered the market.
Now, among the top 10 organic cotton-using brands and retailers globally were five U.S. companies: Wal-Mart, Nike, Anvil, Pottery Barn and Greensource. Elsewhere, they included C&A in Belgium, H&M in Sweden, Zara in Spain, Coop Switzerland and Hess Natur in Germany."
The most important news surrounding this figure is the fact that organic is no longer a novelty. With Volcom, Billabong, Nike, Marks and Spencer, H&M and others all selling organic now, the general public is learning the benefits of organic, the perils of traditionally grown cotton, and making the connection between health, the environment and their wallets," Jen Rapp, a spokeswoman for Patagonia, told SNEWS®.
Rapp noted that Patagonia believes 2008's massive sales growth is a result of widely known brands, such as Wal-Mart, selling organic to their large customer bases.
"The beauty is that with brands such as Wal-Mart on the organic cotton bandwagon, and the number of farmers that are switching to organic farming, the cost of organic is going to continue to become more and more affordable, allowing this growth to continue in the current economy," she said.
The Organic Exchange found in its research that most brands and retailers selling organic cotton products remain committed to their sustainability plans and upbeat about market growth. They reported they have plans to expand their product lines 24 percent and 33 percent in 2009 and 2010, respectively. It estimates that the segment will be a $4 billion market in 2009 and a $5.3 billion market in 2010.
Additionally, the organization's "Organic Cotton Farm and Fiber Report 2008" reported that the number of organic cotton farmers grew worldwide by 152 percent in 2007/2008. Organic cotton production hit 145,872 metric tons, which is equivalent to 668,581 bales (a bale is 480 pounds). It was grown on 400,000 acres in 22 countries worldwide.
During 2008, the report noted, certified organic cotton fiber supplies grew by 95 percent, significantly higher than annual growth rates of 45 percent in 2006 and 53 percent in 2007.
"Farmers who planted on speculation or expanded without market partners may have shifted the market into a state of oversupply in 2009," said LaRhea Pepper, Organic Exchange's senior director, in a statement, noting that the non-profit strongly discourages farmers from taking this kind of risk.
"Brands may want to explore opportunities for expanding their organic programs with their business partners, as for the first time in many years, supplies of organic fiber, yarns, and fabrics are more available than in previous years," Pepper added.
Founded in 2002, Organic Exchange (www.organicexchange.org) facilitates expansion of the organic cotton fiber supply by working with the entire chain of supply, from farmers to retailers, to help develop organic cotton programs.--Wendy Geister
Surge in Campground Reservations Creates Opportunities for Outdoor Businesses
More evidence is emerging that Americans are turning to the outdoors for a respite from tough economic times, or perhaps because of them. Advance reservations for nearly 89,000 campgrounds on federal lands were up 26.1% for the period of January 1 to March 22 compared to the same period last year, according to data from the National Recreation Reservation Service. The overwhelming majority of the reservations came in online via reserveamerica.com.
The spike in reservations prompted a report by CNN, entitled “In a Slump, Camping Comes Into Vogue.” The article reports that reservations to state parks in California are also trending up. Of course it’s still too early to say whether media reports will translate into stronger sales of camping gear this spring.
Regardless, marketing gurus are urging outdoor retailers to start promoting close-to-home adventures now to both core outdoor enthusiasts and their more casual shoppers while both groups are planning their summer vacations.
A survey of Leisure Trends Group’s Most Active American Panel conducted between February 15 and March 10 found that 78% plan their summer vacation one or more months ahead of time. More than 50% plan three to five months out, in large part because they are hunting for deals. Among this group, 11 percent said they are considering doing more camping. Skiers, by contrast, often booked their trips this winter only one or two weeks out in hopes of getting the best airline and resort promotions as the economy weakened.
“If I was a specialty retailer, I would institute a program that would show people what they could do within 50 miles,” said Leisure Trend Group’s Julia Day Clark. “People are thinking about this. They are planning and what if retailers could show them something really cool?”
With that in mind, here are some ideas for luring folks into your store:
Blog: If you don’t already have one, you could start by publishing the top 25 local adventures for the spring and summer on your web site. If you have time, post directions, advisories, photos, maps, suggested provisions, GPS coordinates, etc. For an example, check out Dave Baker’s blog for Tucson’s Summit Hut.
Build community: Offer to post customers’ own photos and observations of their experiences on the blog. Contributors can become eligible for a $150 gift card drawing.
Point of sale: Print your top 25 list with a link to your website on fliers for your store. Laminate a few for your sales staff, who can use them on the floor to show customers just how easy it is to hike, climb, cycle, paddle and camp nearby.
Map room: Set up a trip planning area in your store where customers can browse maps, books and maybe even cruise the Internet. Blow up a map of the area and stick push pins into the sites on your list.
Newsletter: E-mail your top 25 list out to your customers as soon as possible with a link to your site. Or break up the list for a series of newsletters.
Events: Feel free to fold your store events into the list. Outside Hilton Head will celebrate “30 Weekends of Adventure” as part of its 30-year anniversary starting this summer. The events will include demo days, speakers and other community events. It’s all part of the outfitter and retailer’s expanded marketing this year despite a double-digit drop in sales. “I think you’ve got to really work harder for customers, but I also think there is a real opportunity for when things get better to get more market share,” said owner Mike Overton
The spike in reservations prompted a report by CNN, entitled “In a Slump, Camping Comes Into Vogue.” The article reports that reservations to state parks in California are also trending up. Of course it’s still too early to say whether media reports will translate into stronger sales of camping gear this spring.
Regardless, marketing gurus are urging outdoor retailers to start promoting close-to-home adventures now to both core outdoor enthusiasts and their more casual shoppers while both groups are planning their summer vacations.
A survey of Leisure Trends Group’s Most Active American Panel conducted between February 15 and March 10 found that 78% plan their summer vacation one or more months ahead of time. More than 50% plan three to five months out, in large part because they are hunting for deals. Among this group, 11 percent said they are considering doing more camping. Skiers, by contrast, often booked their trips this winter only one or two weeks out in hopes of getting the best airline and resort promotions as the economy weakened.
“If I was a specialty retailer, I would institute a program that would show people what they could do within 50 miles,” said Leisure Trend Group’s Julia Day Clark. “People are thinking about this. They are planning and what if retailers could show them something really cool?”
With that in mind, here are some ideas for luring folks into your store:
Blog: If you don’t already have one, you could start by publishing the top 25 local adventures for the spring and summer on your web site. If you have time, post directions, advisories, photos, maps, suggested provisions, GPS coordinates, etc. For an example, check out Dave Baker’s blog for Tucson’s Summit Hut.
Build community: Offer to post customers’ own photos and observations of their experiences on the blog. Contributors can become eligible for a $150 gift card drawing.
Point of sale: Print your top 25 list with a link to your website on fliers for your store. Laminate a few for your sales staff, who can use them on the floor to show customers just how easy it is to hike, climb, cycle, paddle and camp nearby.
Map room: Set up a trip planning area in your store where customers can browse maps, books and maybe even cruise the Internet. Blow up a map of the area and stick push pins into the sites on your list.
Newsletter: E-mail your top 25 list out to your customers as soon as possible with a link to your site. Or break up the list for a series of newsletters.
Events: Feel free to fold your store events into the list. Outside Hilton Head will celebrate “30 Weekends of Adventure” as part of its 30-year anniversary starting this summer. The events will include demo days, speakers and other community events. It’s all part of the outfitter and retailer’s expanded marketing this year despite a double-digit drop in sales. “I think you’ve got to really work harder for customers, but I also think there is a real opportunity for when things get better to get more market share,” said owner Mike Overton
Tuesday, March 31, 2009
RETAIL - HOW TO COUNTER THE EFFECTS OF THE ECONOMY: DELIVER REAL
I pick up my pro form BD Havoc's and Revelation backpack - a sweet setup for next season, but I still need a pair of DynaFit bindings - light and fast. Next season??!! This season is unbelievable - late March/Early April and it is dumping!!!!
Picking up my gear, I meet with Kurli, a rep for BD and we talk about the current state of the economy - his optimisim, love for life, passion for the industry, his company is uplifting.
He mentions, REAL. I am awed as I read this article this morning - Marty Weening from Gramicci, talking about "delivering real"
Must be the snow!
Be environmentally Cool,
Head Local and Local Artist
Monday, March 30, 2009
Retail - SNEWS Mini-Survey provides look at how retailers are adjusting to the new economic climate
The SNEWS® Mini-Survey that ended March 26, 2009 asked, “What are you doing differently to help your retail business survive the current economy?” It was refreshing to read that more than seven of 10 (71 percent) of our respondents indicated they were emphasizing more customer service and follow-up. Not surprisingly, more than two-thirds or 68 percent responded that they were “keeping their inventories leaner” while 53 percent indicated they were carrying fewer SKUs in their stores.
As a bit of a wake-up call to suppliers and manufacturers, nearly half of respondents or 47 percent stated they were cutting out “marginal suppliers.” It was also interesting to note that 44 percent were relying on holding special in-store events with the goal of attracting new customers.
What did surprise us a bit in the results is that only 29 percent of our retail respondents indicated they were seeking to negotiate rent decreases or moving to cheaper space. Several reports in our ongoing economic series, which can be found by clicking here, point out that renegotiating leases is a valuable retail survival tool during this economic downturn, and we do know from conversations with some retailers who have done this that savings have been substantial.
And as for seeking to match prices with competitors, including big box, we were pleasantly surprised to see only 17 percent of our survey respondents indicated this was one of their strategies. Indeed price competition is a course of action that retail experts have also noted is not the way to win the war.
Our new survey question, “Have you found social networking sites to be beneficial to your business?” is now live and awaiting your feedback. We look forward to hearing if you use these sites as a part of your business and, if so, which ones.
To make your vote count, simply go to the SNEWS Reader Poll section in the right navigation bar of every web page in SNEWS or, click here.
--SNEWS® Editors
Wednesday, March 25, 2009
Retail - Trading Down Phenomena has Outdoor Retailers Shopping Lower Price Points
Some outdoor specialty retailers are beginning to follow their customers down market. “I think people are scaling back on the number of $400 shells they are bringing in and buying more $100 shells,” said Dave Matz, president of Grassroots Outdoor Alliance. “There is a movement to bring in a lower price point.”
While fashion and luxury brands are much more vulnerable to the trend, average retail prices have declined in specialty outdoor channels thanks to a surge in sales of carry over product and a rise in sales of accessories, according to retail sales data for January released last week by Outdoor Industry Association (OIA) and Snowsports Industries America (SIA). SIA reported that while consumers snapped up accessories like hats, gloves, goggles, wax, parkas, fleece tops, sweaters and winter boots, they backed away from buying skis, boots, boards, and bindings.
In outdoor channels, the share of product sold in the fourth quarter that was priced under $25 grew to 17.5% in 2008 from 16.7% in 2007 and 16.0% in 2006, according to data compiled by Leisure Trends Group for the OIA Outdoor Topline Report. The share of product priced over $100, meanwhile, fell to 38.0% from 40.0% and 39.1% respectively. The trend became more pronounced in January, when sales of sub-$25 product grew to 22.7% of total outdoor sales from 18.7% in the same month a year earlier. Sales of $100-plus product fell to 33.0% of total sales from 38.0% a year earlier. The share of footwear sales priced under $25 nearly doubled to the 10% range.
While analysts warn against reading too much into January sales figures, consumer surveys are detecting the shift down market, particularly in apparel. In one survey published last month, 90.7% of Americans designated specialty shopping for apparel as expendable.
Even specialty retailers catering to a more affluent clientele are introducing lower price points. Their thinking is a shift in consumer buying habits toward value and will continue long after the recession ends. In Charlotte, NC, Jesse Brown’s Outdoors is bringing Columbia Sportswear apparel back into their shop for the first time in years. Owner Bill Bartee stopped buying Columbia years ago after deciding his future lay with brands not carried by big-box retailers. With consumer anxiety over the economy rising, Bartee will add product from Columbia’s PFG and Titanium lines to complement his assortment of Arc’teryx, Ex Officio, Patagonia, Mountain Hardwear and The North Face.
“We will still sell $500 Gore-Tex shells,” said Bartee, “But we will sell less of them. Columbia will bring a price-point to Jesse Brown’s that to a large extent is not available right now. We anticipate a backlash against luxury.”
Some retailers see the recession accelerating a long-term trend away from brand loyalty that was already being driven by the millennial generation (born 1978 - 2001). That generation is much less inclined to define themselves by conspicuous consumption of specific brands, said Ted Manning, VP of merchandising for Eastern Mountain Sports (EMS).
“The customer is coming back to the concept of minimalism and core functionality and not excess,” said Manning, “There will be less brand loyalty.”
Still, national brands will continue to play a major role at EMS, which continues to grow its own brand of apparel. “We have not headed into recession by throwing out national brands,” Manning said.
Below are examples of how retailers are adapting to consumers’ new frugality:
Loading up on basics and accessories that are priced below $25.
Shifting down within a brand. Rather than cut premium brands, buyers are bringing in more of their entry-level product. The good-better-best mix is shifting more toward better.
Bundling product on the equipment side to lower the cost of entry for your core sports. For instance, bundle a boat, PFD and paddle to show entry-level paddlers how inexpensively they can getting into paddle sports.
Bringing in new brands. Specialty retailers are giving more widely distributed value brands another look.
Expanding and/or promoting private label offerings.
Buying overstock and close-out deals. Many retailers who cut back their pre-season orders are aggressively buying overstock and closeouts to ensure a steady flow of deals.
While fashion and luxury brands are much more vulnerable to the trend, average retail prices have declined in specialty outdoor channels thanks to a surge in sales of carry over product and a rise in sales of accessories, according to retail sales data for January released last week by Outdoor Industry Association (OIA) and Snowsports Industries America (SIA). SIA reported that while consumers snapped up accessories like hats, gloves, goggles, wax, parkas, fleece tops, sweaters and winter boots, they backed away from buying skis, boots, boards, and bindings.
In outdoor channels, the share of product sold in the fourth quarter that was priced under $25 grew to 17.5% in 2008 from 16.7% in 2007 and 16.0% in 2006, according to data compiled by Leisure Trends Group for the OIA Outdoor Topline Report. The share of product priced over $100, meanwhile, fell to 38.0% from 40.0% and 39.1% respectively. The trend became more pronounced in January, when sales of sub-$25 product grew to 22.7% of total outdoor sales from 18.7% in the same month a year earlier. Sales of $100-plus product fell to 33.0% of total sales from 38.0% a year earlier. The share of footwear sales priced under $25 nearly doubled to the 10% range.
While analysts warn against reading too much into January sales figures, consumer surveys are detecting the shift down market, particularly in apparel. In one survey published last month, 90.7% of Americans designated specialty shopping for apparel as expendable.
Even specialty retailers catering to a more affluent clientele are introducing lower price points. Their thinking is a shift in consumer buying habits toward value and will continue long after the recession ends. In Charlotte, NC, Jesse Brown’s Outdoors is bringing Columbia Sportswear apparel back into their shop for the first time in years. Owner Bill Bartee stopped buying Columbia years ago after deciding his future lay with brands not carried by big-box retailers. With consumer anxiety over the economy rising, Bartee will add product from Columbia’s PFG and Titanium lines to complement his assortment of Arc’teryx, Ex Officio, Patagonia, Mountain Hardwear and The North Face.
“We will still sell $500 Gore-Tex shells,” said Bartee, “But we will sell less of them. Columbia will bring a price-point to Jesse Brown’s that to a large extent is not available right now. We anticipate a backlash against luxury.”
Some retailers see the recession accelerating a long-term trend away from brand loyalty that was already being driven by the millennial generation (born 1978 - 2001). That generation is much less inclined to define themselves by conspicuous consumption of specific brands, said Ted Manning, VP of merchandising for Eastern Mountain Sports (EMS).
“The customer is coming back to the concept of minimalism and core functionality and not excess,” said Manning, “There will be less brand loyalty.”
Still, national brands will continue to play a major role at EMS, which continues to grow its own brand of apparel. “We have not headed into recession by throwing out national brands,” Manning said.
Below are examples of how retailers are adapting to consumers’ new frugality:
Loading up on basics and accessories that are priced below $25.
Shifting down within a brand. Rather than cut premium brands, buyers are bringing in more of their entry-level product. The good-better-best mix is shifting more toward better.
Bundling product on the equipment side to lower the cost of entry for your core sports. For instance, bundle a boat, PFD and paddle to show entry-level paddlers how inexpensively they can getting into paddle sports.
Bringing in new brands. Specialty retailers are giving more widely distributed value brands another look.
Expanding and/or promoting private label offerings.
Buying overstock and close-out deals. Many retailers who cut back their pre-season orders are aggressively buying overstock and closeouts to ensure a steady flow of deals.
Monday, March 23, 2009
Rethinking Retail: Sunshine Fitness offers a smorgasbord of all things active
Think of Sunshine Fitness as a smorgasbord for those hooked on all things active, indoor or out. Customers who walk through the doors of the Anchorage, Alaska, store can buy scuba gear, mountain bikes, swim suits and all matter of fitness equipment from treadmills to rowers to barbells, all under a single roof.
As retailers across the country seek creative ways to reel in shoppers, Sunshine (www.sunshinefitness.com) is leaning on its wide variety of offerings to try to ride out the recession's rough waters.
"It's been a good way to diversify," said John Bice, owner of the 6,000-square-foot store. Sales "are up modestly," he said, which in this economy is no small feat.
SNEWS® knows the current economic state is having a huge impact on the specialty retail business. This is one look at different ways retailers are rethinking their retail strategy to become better at serving customers and keeping their bottom line intact. We will take a look at different retail concepts we find in a periodic and ongoing series of stories in SNEWS. This time around we focused on a new fitness retail store with an emphasis on fitness that includes equipment but speaks to the well-rounded needs of a fit and healthy lifestyle. Stay tuned for more in-depth reporting on the current situation both economically and at retail as it develops and changes.
Non-traditional mates
While it's true that what flies in Alaska might not fly in other parts of the United States, Sunshine's experience provides insight into the ups and downs of pairing non-traditional offerings.
"It's a nice mix if you think about it," said Brad Lally, global product development manager for San Diego-based Scubapro diving gear, which Sunshine Fitness has carried for years. "They're going after people in the active lifestyle. If you're outside biking in Alaska, you're definitely into nature and staying fit."
Lally noted that in Florida or California, it's not unusual for a store to combine scuba, snorkeling and swimwear.
"But in other regions of the country with weather extremes, you need to have something else in the store to complement you and sustain sales through the different seasons," he said.
That's pretty much the model that has worked for Sunshine Fitness. Bikes and fitness machines are good seasonal offsets, Bice said, and the state's competitive swimming events help keep sales of suits, caps and goggles strong throughout the year.
Scuba, which Bice called the "odd duck," actually is the bedrock of the store's many offerings. Sunshine Fitness opened 36 years ago in the southeastern Alaska city of Sitka as a scuba shop. The store relocated to Anchorage in 1980.
"Selling scuba in Alaska is probably like selling (snow) skis in Florida," he said. "It's a small, but profitable business."
Diversification to survive
Bice said the decision to diversify came as much from business necessity as it did from a desire to reach new customers. (He said he'd sell the scuba business in a heartbeat if someone offered a fair deal!)
Sunshine began selling fitness equipment five years ago because Bice was eager to unload the ski/snowboard business, which had become so competitive that margins were slim. Sales also were more closely tied to weather than other departments, and the bulky equipment took up valuable floor space. Sunshine officially closed out its line of skis and snowboards last winter.
"It was just a race to the bottom," Bice said of the fragmented ski/snowboard industry. "There was a huge amount of manufactured product, more than the market could handle. It was like selling potatoes."
Bice said he entered the fitness business at the top of the market. And while it remains a profitable and growing part of the business, Sunshine's home and commercial fitness sales have been "off tremendously" this year, Bice said, which is in keeping with most others in the 48 contiguous states. Scuba and bikes make up about 10 percent of sales, and swim a bit less than that, he said.
Tim Porth, co-founder of Octane Fitness, said Sunshine Fitness has stretched farther outside the box than most retailers who carry his company's ellipticals. Porth said it's more common to see fitness retailers branching out into supplements and offering enhanced service packages to try to keep customers coming back to the stores.
But with fitness industry sales plunging some 20 percent in the fourth quarter of 2008, Porth said retailers must get creative, yet remain wary of overreaching.
"You don't want to dilute your offerings too much," said Porth. "You gotta be an expert in fitness categories and you gotta believe in your equipment. If people are paying you that much money for a piece of equipment, you need to gain the respect of your customers."
Octane regional sales manager Dan Rahmann, who works directly with Sunshine Fitness as part of his 18-state coverage area, said Sunshine's location outside the continental United States means it faces some unique challenges.
"Shipping from Minneapolis to Anchorage incurs quite a bit more costs for the product than someone in, say, Denver," Rahmann said. "Dealers can save money through a container program by bringing in great quantities of a product and not paying freight on it. But you're not going to place big orders if you think it could take you a year to sell through it. The manufacturer wants to get paid in 30 to 45 days."
Planning for downturn
Bice said he saw the downturn coming and started making plans to cut inventory and shift his showroom floor in early July 2008. Getting rid of skis and snowboards allowed him to reduce some of his retail space, while also freeing the business of a high-risk category.
The diversity of offerings, he said, is helping him weather the slumping economy better than some of his competitors, though his outlook is far from sunny.
"We're not selling as much as we'd like," he said, "but every department is profitable."
--Jackie CrosbySNEWS® View: Even in the sporting goods category, some areas may sell better than others so for Sunshine offering a number of seemingly odd companions has served a purpose. Perhaps rather than thinking of Sunshine as a specialty dealer who is doing a number of categories, he should be thought of as a sporting goods dealer who is specializing. The broader but still selective offerings allow him to have more things for more people while still being a specialty retailer in dealing with customers. Not a bad model in today's times. --SNEWS® Editors
As retailers across the country seek creative ways to reel in shoppers, Sunshine (www.sunshinefitness.com) is leaning on its wide variety of offerings to try to ride out the recession's rough waters.
"It's been a good way to diversify," said John Bice, owner of the 6,000-square-foot store. Sales "are up modestly," he said, which in this economy is no small feat.
SNEWS® knows the current economic state is having a huge impact on the specialty retail business. This is one look at different ways retailers are rethinking their retail strategy to become better at serving customers and keeping their bottom line intact. We will take a look at different retail concepts we find in a periodic and ongoing series of stories in SNEWS. This time around we focused on a new fitness retail store with an emphasis on fitness that includes equipment but speaks to the well-rounded needs of a fit and healthy lifestyle. Stay tuned for more in-depth reporting on the current situation both economically and at retail as it develops and changes.
Non-traditional mates
While it's true that what flies in Alaska might not fly in other parts of the United States, Sunshine's experience provides insight into the ups and downs of pairing non-traditional offerings.
"It's a nice mix if you think about it," said Brad Lally, global product development manager for San Diego-based Scubapro diving gear, which Sunshine Fitness has carried for years. "They're going after people in the active lifestyle. If you're outside biking in Alaska, you're definitely into nature and staying fit."
Lally noted that in Florida or California, it's not unusual for a store to combine scuba, snorkeling and swimwear.
"But in other regions of the country with weather extremes, you need to have something else in the store to complement you and sustain sales through the different seasons," he said.
That's pretty much the model that has worked for Sunshine Fitness. Bikes and fitness machines are good seasonal offsets, Bice said, and the state's competitive swimming events help keep sales of suits, caps and goggles strong throughout the year.
Scuba, which Bice called the "odd duck," actually is the bedrock of the store's many offerings. Sunshine Fitness opened 36 years ago in the southeastern Alaska city of Sitka as a scuba shop. The store relocated to Anchorage in 1980.
"Selling scuba in Alaska is probably like selling (snow) skis in Florida," he said. "It's a small, but profitable business."
Diversification to survive
Bice said the decision to diversify came as much from business necessity as it did from a desire to reach new customers. (He said he'd sell the scuba business in a heartbeat if someone offered a fair deal!)
Sunshine began selling fitness equipment five years ago because Bice was eager to unload the ski/snowboard business, which had become so competitive that margins were slim. Sales also were more closely tied to weather than other departments, and the bulky equipment took up valuable floor space. Sunshine officially closed out its line of skis and snowboards last winter.
"It was just a race to the bottom," Bice said of the fragmented ski/snowboard industry. "There was a huge amount of manufactured product, more than the market could handle. It was like selling potatoes."
Bice said he entered the fitness business at the top of the market. And while it remains a profitable and growing part of the business, Sunshine's home and commercial fitness sales have been "off tremendously" this year, Bice said, which is in keeping with most others in the 48 contiguous states. Scuba and bikes make up about 10 percent of sales, and swim a bit less than that, he said.
Tim Porth, co-founder of Octane Fitness, said Sunshine Fitness has stretched farther outside the box than most retailers who carry his company's ellipticals. Porth said it's more common to see fitness retailers branching out into supplements and offering enhanced service packages to try to keep customers coming back to the stores.
But with fitness industry sales plunging some 20 percent in the fourth quarter of 2008, Porth said retailers must get creative, yet remain wary of overreaching.
"You don't want to dilute your offerings too much," said Porth. "You gotta be an expert in fitness categories and you gotta believe in your equipment. If people are paying you that much money for a piece of equipment, you need to gain the respect of your customers."
Octane regional sales manager Dan Rahmann, who works directly with Sunshine Fitness as part of his 18-state coverage area, said Sunshine's location outside the continental United States means it faces some unique challenges.
"Shipping from Minneapolis to Anchorage incurs quite a bit more costs for the product than someone in, say, Denver," Rahmann said. "Dealers can save money through a container program by bringing in great quantities of a product and not paying freight on it. But you're not going to place big orders if you think it could take you a year to sell through it. The manufacturer wants to get paid in 30 to 45 days."
Planning for downturn
Bice said he saw the downturn coming and started making plans to cut inventory and shift his showroom floor in early July 2008. Getting rid of skis and snowboards allowed him to reduce some of his retail space, while also freeing the business of a high-risk category.
The diversity of offerings, he said, is helping him weather the slumping economy better than some of his competitors, though his outlook is far from sunny.
"We're not selling as much as we'd like," he said, "but every department is profitable."
--Jackie CrosbySNEWS® View: Even in the sporting goods category, some areas may sell better than others so for Sunshine offering a number of seemingly odd companions has served a purpose. Perhaps rather than thinking of Sunshine as a specialty dealer who is doing a number of categories, he should be thought of as a sporting goods dealer who is specializing. The broader but still selective offerings allow him to have more things for more people while still being a specialty retailer in dealing with customers. Not a bad model in today's times. --SNEWS® Editors
ForecastIQ™ : Outlook Moves from Thunderstorms to Scattered Showers for Most Retailers
COLUMBUS, OH – 3/20/2009 – The forecast for same store sales growth is looking better for several retailers this month, according to the latest ForecastIQ™ analysis (a service from Prosper Technologies, LLC). In addition to Aeropostale, Buckle and Hot Topic (retailers who have maintained a positive outlook), there are more retailers to add to the list of those expected to see growth over the next two months.
Fred’s and Sam’s Club improved from retailers likely to see an increase to almost certain to see an increase in same store sales over the next 60 days. Cato and Ross are also expected to see significant improvement. Both are likely to see an increase, whereas last month’s forecast predicted a likely decline in same store sales growth for each.
"There is improvement on the horizon," says Prof. Greg Allenby, Fisher College of Business at Ohio State University. "A number of discount-oriented retailers, including BJs, Freds and Ross are expected to see an increase in same store sales relative to earlier predictions. While prospects for department stores still look generally bleak, there does seem to be a break in the clouds for stores offering good deals."
For a complimentary 30 day trial of ForecastIQ: www.forecastiq.com
Although there is a silver lining for some retailers this month, Abercrombie & Fitch, American Eagle, Gap, among others are almost certain to see declines.
A partial list of retailers covered in the ForecastIQ and expectations for same store sales growth/decline for the next 75 days follows:
Almost certain to see increase:
Aeropostale
Buckle
Family Dollar
Fred’s Hot Topic
Sam’s Club
Walmart
Likely to see increase:
BJ’s
Cato
Costco
Ross
Almost certain to see decline:
Abercrombie & Fitch
American Eagle
Banana Republic
Bonton
Chico’s
Dillard’s
Gap
Neiman Marcus
Nordstrom
Pacific Sun
Saks
Likely to see decline:
TJX
Wet Seal
Flat:Children’s Place
ForecastIQ was developed by Prosper Technologies and Greg Allenby by analyzing over 7 years of data from BIGresearch’s monthly Consumer Intentions & Actions (CIA) surveys. Allenby analyzed same store sales of over 37 publicly held retailers and applied Bayesian quantile analysis to the data including whether or not consumers said they plan to spend more, same or less. The results are accurate and for the first time, provide a forecast of consumer spending 75 days in advance. Same store sales forecasts are provided by percent growth over the next 45 and 75 day period. Short term forecasts are also available via enhanced consensus estimates.
About Prosper Technologies: Prosper Technologies develops consumer centric analytics such as ForecastIQ from consumer responses to help businesses forecast consumer demand and expenditures, budget marketing and merchandising allocations and provide retailer specific cross consumption behaviors.
ForecastIQ is a forecast of same store sales for 37 retailers based upon future spending plans of consumers derived from BIGresearch’s monthly Consumer Intentions and Action survey (CIA). Forecasts are 45 and 75 days forward and also include an enhancement to the consensus currently provided in the marketplace.
Fred’s and Sam’s Club improved from retailers likely to see an increase to almost certain to see an increase in same store sales over the next 60 days. Cato and Ross are also expected to see significant improvement. Both are likely to see an increase, whereas last month’s forecast predicted a likely decline in same store sales growth for each.
"There is improvement on the horizon," says Prof. Greg Allenby, Fisher College of Business at Ohio State University. "A number of discount-oriented retailers, including BJs, Freds and Ross are expected to see an increase in same store sales relative to earlier predictions. While prospects for department stores still look generally bleak, there does seem to be a break in the clouds for stores offering good deals."
For a complimentary 30 day trial of ForecastIQ: www.forecastiq.com
Although there is a silver lining for some retailers this month, Abercrombie & Fitch, American Eagle, Gap, among others are almost certain to see declines.
A partial list of retailers covered in the ForecastIQ and expectations for same store sales growth/decline for the next 75 days follows:
Almost certain to see increase:
Aeropostale
Buckle
Family Dollar
Fred’s Hot Topic
Sam’s Club
Walmart
Likely to see increase:
BJ’s
Cato
Costco
Ross
Almost certain to see decline:
Abercrombie & Fitch
American Eagle
Banana Republic
Bonton
Chico’s
Dillard’s
Gap
Neiman Marcus
Nordstrom
Pacific Sun
Saks
Likely to see decline:
TJX
Wet Seal
Flat:Children’s Place
ForecastIQ was developed by Prosper Technologies and Greg Allenby by analyzing over 7 years of data from BIGresearch’s monthly Consumer Intentions & Actions (CIA) surveys. Allenby analyzed same store sales of over 37 publicly held retailers and applied Bayesian quantile analysis to the data including whether or not consumers said they plan to spend more, same or less. The results are accurate and for the first time, provide a forecast of consumer spending 75 days in advance. Same store sales forecasts are provided by percent growth over the next 45 and 75 day period. Short term forecasts are also available via enhanced consensus estimates.
About Prosper Technologies: Prosper Technologies develops consumer centric analytics such as ForecastIQ from consumer responses to help businesses forecast consumer demand and expenditures, budget marketing and merchandising allocations and provide retailer specific cross consumption behaviors.
ForecastIQ is a forecast of same store sales for 37 retailers based upon future spending plans of consumers derived from BIGresearch’s monthly Consumer Intentions and Action survey (CIA). Forecasts are 45 and 75 days forward and also include an enhancement to the consensus currently provided in the marketplace.
Thursday, March 12, 2009
Wild and Scenic Film Festival Hits Park City
Films and shorts that have an eco-friendly theme
Eco Friendly Fair
Guest Speakers
Music
Thursday, March 5, 2009
Industry Watch: Keeping an eye on layoffs, bankruptcies and closings… Who’s next?
2/9/09
Precor
Amer confirms in its 4Q financial report that Precor had two rounds of layoffs in Q4 resulting in 41 positions being terminated. Click here to read SNEWS coverage.
2/11/09
Nike
Nike announces reorganization plans that could result in up to 1,400 employees losing jobs by end of year. Click here to read SNEWS coverage. And click here to read blog posting on news.
2/11/09
REI
Based on a significant business slowdown in the final months of 2008 and continued projected weakness in 2009, REI announced the elimination of 61 full-time jobs, which represents less than 2 percent of its full-time workforce. Click here to read SNEWS coverage.
2/20/09
Gymcor.com
Kelley Acevedo and his staff at GymCor.com stopped returning calls and emails, and, it appears, have emptied their offices and slipped away. Click here to read SNEWS coverage.
2/24/09
Horny Toad / Nau
As part of restructuring following the Nau acquisition, Horny Toad confirmed that five employees lost positions at Horny Toad, and then in February two more, including Ian Yolles at Nau were let go in Portland.
2/24/09
Champion / Duofold
Hanesbrands has about 45,000 workers in more than 25 countries. Last month the company said 310 jobs will be cut when it closes its Barnwell, S.C., sock-knitting plant and moves production to El Salvador by the end of April. Hanesbrands has been cutting jobs and closing plants in an effort to streamline operations and move production to other countries since it spun off from Sara Lee Corp. in 2006.
2/25/09
FHI, Omni, Busy Body
On Feb. 23, the remaining 24 stores, i.e. the eastern branch of Fitness Holdings International's formerly dominating 120-store national chain, were going to start close-out sales, signaling the eventual demise of the stores. Although once at a peak of 120 stores, FHI at the time of the October filing said it ran 111 stores -- 67 Busy Body and 44 Omni. In late October, the court approved closing 20 stores, and then added four stores to the list in November and another 30 in December. Add those 54 to the current 32 and that leaves 25 stores, which are now only in California and Colorado. Presence in Arizona, Nevada and Washington has already been eliminated. Click here to read SNEWS coverage.
2/27/09
Body Masters
After three decades of manufacturing high-end commercial fitness equipment, Body Masters has shut down operations. Knight Companies, a firm that specializes in oilfield and fishing tools, has acquired Body Masters' bank note and is foreclosing on the manufacturing facility including most of the manufacturing equipment. Click here to read SNEWS coverage.
3/2/09
Marmot / ExOfficio
Four employees at Marmot, including industry veteran John Cooley, as well as four employees at ExOfficio were laid off. Click here to read SNEWS coverage.
3/2/09
Accell Fitness
Accell said production was cut back in Estonia and purchasing is now fully concentrated in Asia. Also, R&D and purchasing activities in Finland were terminated, and were centralized at the head office in the Netherlands. The sales offices and warehouses in Germany, Switzerland and Austria were closed and stock management was transferred to the local distributors. These markets are now managed centrally from the Netherlands. Because of redundancy, 25 jobs were cut. Apart from the head office in the Netherlands, Accell said the fitness division still has sales outlets, including warehouses, in Finland, the United Kingdom and North America.
3/2/09
Big 5
Big 5 said it reduced its employee headcount by 9 percent last year through attrition.
3/2/09
Hardbody Fitness
After 7 years running Hardbody Fitness specialty shop and All Sports sporting goods, owners David and Brenda Hayes announce they are shutting when December 2008 sales plummet. Click here to see a SNEWS report.
Precor
Amer confirms in its 4Q financial report that Precor had two rounds of layoffs in Q4 resulting in 41 positions being terminated. Click here to read SNEWS coverage.
2/11/09
Nike
Nike announces reorganization plans that could result in up to 1,400 employees losing jobs by end of year. Click here to read SNEWS coverage. And click here to read blog posting on news.
2/11/09
REI
Based on a significant business slowdown in the final months of 2008 and continued projected weakness in 2009, REI announced the elimination of 61 full-time jobs, which represents less than 2 percent of its full-time workforce. Click here to read SNEWS coverage.
2/20/09
Gymcor.com
Kelley Acevedo and his staff at GymCor.com stopped returning calls and emails, and, it appears, have emptied their offices and slipped away. Click here to read SNEWS coverage.
2/24/09
Horny Toad / Nau
As part of restructuring following the Nau acquisition, Horny Toad confirmed that five employees lost positions at Horny Toad, and then in February two more, including Ian Yolles at Nau were let go in Portland.
2/24/09
Champion / Duofold
Hanesbrands has about 45,000 workers in more than 25 countries. Last month the company said 310 jobs will be cut when it closes its Barnwell, S.C., sock-knitting plant and moves production to El Salvador by the end of April. Hanesbrands has been cutting jobs and closing plants in an effort to streamline operations and move production to other countries since it spun off from Sara Lee Corp. in 2006.
2/25/09
FHI, Omni, Busy Body
On Feb. 23, the remaining 24 stores, i.e. the eastern branch of Fitness Holdings International's formerly dominating 120-store national chain, were going to start close-out sales, signaling the eventual demise of the stores. Although once at a peak of 120 stores, FHI at the time of the October filing said it ran 111 stores -- 67 Busy Body and 44 Omni. In late October, the court approved closing 20 stores, and then added four stores to the list in November and another 30 in December. Add those 54 to the current 32 and that leaves 25 stores, which are now only in California and Colorado. Presence in Arizona, Nevada and Washington has already been eliminated. Click here to read SNEWS coverage.
2/27/09
Body Masters
After three decades of manufacturing high-end commercial fitness equipment, Body Masters has shut down operations. Knight Companies, a firm that specializes in oilfield and fishing tools, has acquired Body Masters' bank note and is foreclosing on the manufacturing facility including most of the manufacturing equipment. Click here to read SNEWS coverage.
3/2/09
Marmot / ExOfficio
Four employees at Marmot, including industry veteran John Cooley, as well as four employees at ExOfficio were laid off. Click here to read SNEWS coverage.
3/2/09
Accell Fitness
Accell said production was cut back in Estonia and purchasing is now fully concentrated in Asia. Also, R&D and purchasing activities in Finland were terminated, and were centralized at the head office in the Netherlands. The sales offices and warehouses in Germany, Switzerland and Austria were closed and stock management was transferred to the local distributors. These markets are now managed centrally from the Netherlands. Because of redundancy, 25 jobs were cut. Apart from the head office in the Netherlands, Accell said the fitness division still has sales outlets, including warehouses, in Finland, the United Kingdom and North America.
3/2/09
Big 5
Big 5 said it reduced its employee headcount by 9 percent last year through attrition.
3/2/09
Hardbody Fitness
After 7 years running Hardbody Fitness specialty shop and All Sports sporting goods, owners David and Brenda Hayes announce they are shutting when December 2008 sales plummet. Click here to see a SNEWS report.
Monday, March 2, 2009
Retail - How to Get Green Goods Flying Off the Shelves
Major retailers, such as Target, Office Depot and Home Depot, report strong sales in green goods through the recession and studies indicate consumers’ commitment to buying environmentally friendly products has not fallen off.
Yet even as green product sales continue to thrive, industry insiders say, retailers need to tweak their message to emphasize quality and value in addition to the environmental attributes.
“The challenge is promoting the efficacy and innovation of the product, as well as the sustainable elements,” says Neil Stern, senior partner with retail consulting firm McMillanDoolittle in Chicago and author of “Greentailing and Other Revolutions in Retail.” “The message has got to be about value.”
That consumers are continuing to buy items offering a combination of quality and green characteristics bodes well for retailers who've invested time, money and inventory in private label green brands and other green product lines. The 2008 Good Purpose survey from public relations firm Edelman overwhelmingly shows that buyers plan to remain loyal to products that they perceive to have strong social value.
According to survey results, 68 percent of consumers say that even in a recession they would remain faithful to a brand if it supports a good cause; nearly seven in 10 would be prepared to pay more for eco-friendly products.
The results don’t surprise Ron Jarvis, vice president of environmental innovation for Atlanta-based Home Depot. While sales are down overall at Home Depot, its Eco Options label of energy efficient products are outperforming conventional merchandise sales across the board. “We are seeing continued interest in socially conscious products in our stores,” he says. “American consumers still want choices that have less of an impact on the environment.”
Jarvis points out that Home Depot sells non-luxury items that people need to buy, regardless of the economy, which gives the company and its green brand an edge.
“We aren’t selling designer luggage made from recycled material, these home essentials that people need.”
He notes that energy-saving products in particular, such as compact florescent light bulbs, are doing extremely well because they have such an obvious long-term financial and environmental benefit. “Customers may pay a little more up front but they see the payoff down the line,” he says.
Despite this strength, Home Depot is tweaking the marketing message -- and price points -- of its green products. The company has launched a price reduction program across the store, lowering prices on thousands of products to make them more affordable to struggling consumers. The Eco Options line is no exception.
Selling Green Products in Trying Times
Be consistent.
Communicate information about your green offerings across all media, including the website, advertising, catalogs and store shelves.
Show the value.
Consumers won’t buy low-quality products just because they have green attributes. You have to show that they perform as well or better than non-green competitors, ideally at a similar price point.
Make them easy to find.
The days of green products aisles and separate sections for green options in catalogs are over. Green products should be stocked side by side with similar non-green offerings so buyers can make comparisons and purchasing decisions on the spot.
Understand why customers are buying green products.
For many businesses, green choices are made to support certifications and regulations. If you can help them quickly identify products that meet their needs, you are more likely to make the sale.
“Our advertising message is that these products are great for the environment with new lower price,” Jarvis says. The company is also focusing on "opening price points," which spotlight the lowest priced items in a category.
“Consumers are looking for green products that they can afford,” he says. “Focusing on opening price points in our advertising shows them that they don’t have to spend any more than they would on conventional products to buy green.”
This kind of dual message is critical for marketing green products in a down economy, says Stern of McMillanDoolittle. He notes that those retailers who got involved in green branding early on, such as Home Depot, Target and Office Depot, are doing a better job of balancing the environmental message with quality and price.
Communicating the value statement is a key component of successful green marketing, agrees Anne Rodgers, spokesperson for Target in Minneapolis.
“Our focus has always been on value, giving consumers affordable options that enable them to live and work in eco-friendly ways,” she says. “That’s a consistent message for us, whether it’s a good economy or bad.”
Rodgers notes that along with pricing green products to be competitive with other product lines, the company stocks green items, such as its bamboo and organic cotton sheets, next to conventional ones so that consumers can make side-by-side feature and price comparisons.
The company also clearly states the environmental attributes on its packaging and signage to educate consumers about their choices.
“You have to offer an assortment of solutions at different price points so consumers can find multiple ways to be eco-friendly,” she says.
The Green Supply Cabinet
That combination of communication and education is critical to successfully positioning green product lines and establishing the corporate brand as an environmental leader, notes Stern.
“Communication is key,” Stern says. “You have to communicate what you are doing and what the value is to the buyer. And you have to do it consistently across all channels of communication, from the website and advertising down to the store shelves.”
Office Depot offers a vast array of products with environmentally friendly elements, from recycled paper and low toxicity cleaners, to a complete line of private label green brands that can outfit an office from top to bottom. The company’s message and selection is consistent regardless of the economy, which customers have come to rely on, according to Yalmaz Siddiqui, the company’s director of environmental strategy. As a result, the company reports sales of products from its green catalog continue to grow.
“In a tough economy our clients are still looking for environmentally sustainable products that perform, and they know they can find a tremendous range of green items that are price competitive,” he says.
When it comes to product messaging for green products, price and performance are equally as important as the environmental qualities, agrees Stern. “The challenge in promoting green products today is proving their efficacy,” he says. “Consumers want to know if they will work as well as other products.”
Part of Office Depot’s approach to selling green products is recognizing that every buyer has a different idea of the definition. The company focuses its green marketing message primarily on its business customers who are often seeking specific criteria to meet certification requirements or corporate goals. It offers them a choice of 4,300 different products that feature green attributes, such as environmentally preferable furniture, technology, lighting, dishware, cleaning products and printer cartridges.
A core part of its communication strategy is its annual Green Book catalog, which this year features an entire supply cabinet outfitted with green products, along with educational content to help buyers learn more about greening their office in a cost effective manner.
The company works with customers to identify products that meet specific environmental goals or certification requirements, such as federal government mandates to purchase a certain percentage of recycled materials, or LEED specifications for non-toxic products. Once they know what the client needs to accomplish these goals, they help them choose products that best meet those criteria at the desired price point.
Office Depot also help buyers choose products that
can strengthen their purchasing processes while still maintaining cost criteria, such as buying in bulk to improve their environmentally standing.
“Being aware of why our clients purchase green helps us help them identify solutions,” Siddiqui says. This is especially helpful for products that may not otherwise clearly communicate their green value, such as office furniture that features low volatile organic compounds (VOC) in its design, which is a key component for LEED certification.
“We reach out to our suppliers to learn about those attributes then we communicate them to our customers,” he says.
To help customers register their green purchases for LEED certification purposes, and to add further value to working with Office Depot, the company now offers a purchase-tracking tool that records green product purchases in a format that mimics LEED certification documentation requirements.
“It converts their historic spend to the exact template used by the U.S. Green Building Council (USGBC),” Siddiqui says. “It dramatically simplifies the paperwork for buyers because they don’t have to do it themselves.”
Office Depot also publicly honors those who make the biggest effort to buy green products through its annual Green Customer Award ceremony. This year the awards were presented during the USGBC Greenbuild International Conference & Expo to six customers, including law firm DLA Piper, Edelman public relations agency, and New Balance Athletic Shoe Inc.
“The rationale for these awards is partly to recognize customers for green purchasing, and partly to show that we are a seller of green products,” Siddiqui says, noting that at the recent awards ceremony several customers approached him to say they wanted to be on that podium next year – particularly if their competitors were winners. “It’s good recognition for individuals, and it’s an encouragement to other customers to make that transition.”
Whatever green products a company is offering, the message has to be consistent across all methods of communication, and product offerings have to support customer interests in cost, quality and environmental attributes.
“Whether the economy gets worse or better these products are not going away,” says Home Depot’s Jarvis. “Those retailers that carry green products through the hard times will establish themselves as the companies that care about the environment, and consumers will remember that.”
Sarah Fister Gale is a freelance writer based in Chicago.
Yet even as green product sales continue to thrive, industry insiders say, retailers need to tweak their message to emphasize quality and value in addition to the environmental attributes.
“The challenge is promoting the efficacy and innovation of the product, as well as the sustainable elements,” says Neil Stern, senior partner with retail consulting firm McMillanDoolittle in Chicago and author of “Greentailing and Other Revolutions in Retail.” “The message has got to be about value.”
That consumers are continuing to buy items offering a combination of quality and green characteristics bodes well for retailers who've invested time, money and inventory in private label green brands and other green product lines. The 2008 Good Purpose survey from public relations firm Edelman overwhelmingly shows that buyers plan to remain loyal to products that they perceive to have strong social value.
According to survey results, 68 percent of consumers say that even in a recession they would remain faithful to a brand if it supports a good cause; nearly seven in 10 would be prepared to pay more for eco-friendly products.
The results don’t surprise Ron Jarvis, vice president of environmental innovation for Atlanta-based Home Depot. While sales are down overall at Home Depot, its Eco Options label of energy efficient products are outperforming conventional merchandise sales across the board. “We are seeing continued interest in socially conscious products in our stores,” he says. “American consumers still want choices that have less of an impact on the environment.”
Jarvis points out that Home Depot sells non-luxury items that people need to buy, regardless of the economy, which gives the company and its green brand an edge.
“We aren’t selling designer luggage made from recycled material, these home essentials that people need.”
He notes that energy-saving products in particular, such as compact florescent light bulbs, are doing extremely well because they have such an obvious long-term financial and environmental benefit. “Customers may pay a little more up front but they see the payoff down the line,” he says.
Despite this strength, Home Depot is tweaking the marketing message -- and price points -- of its green products. The company has launched a price reduction program across the store, lowering prices on thousands of products to make them more affordable to struggling consumers. The Eco Options line is no exception.
Selling Green Products in Trying Times
Be consistent.
Communicate information about your green offerings across all media, including the website, advertising, catalogs and store shelves.
Show the value.
Consumers won’t buy low-quality products just because they have green attributes. You have to show that they perform as well or better than non-green competitors, ideally at a similar price point.
Make them easy to find.
The days of green products aisles and separate sections for green options in catalogs are over. Green products should be stocked side by side with similar non-green offerings so buyers can make comparisons and purchasing decisions on the spot.
Understand why customers are buying green products.
For many businesses, green choices are made to support certifications and regulations. If you can help them quickly identify products that meet their needs, you are more likely to make the sale.
“Our advertising message is that these products are great for the environment with new lower price,” Jarvis says. The company is also focusing on "opening price points," which spotlight the lowest priced items in a category.
“Consumers are looking for green products that they can afford,” he says. “Focusing on opening price points in our advertising shows them that they don’t have to spend any more than they would on conventional products to buy green.”
This kind of dual message is critical for marketing green products in a down economy, says Stern of McMillanDoolittle. He notes that those retailers who got involved in green branding early on, such as Home Depot, Target and Office Depot, are doing a better job of balancing the environmental message with quality and price.
Communicating the value statement is a key component of successful green marketing, agrees Anne Rodgers, spokesperson for Target in Minneapolis.
“Our focus has always been on value, giving consumers affordable options that enable them to live and work in eco-friendly ways,” she says. “That’s a consistent message for us, whether it’s a good economy or bad.”
Rodgers notes that along with pricing green products to be competitive with other product lines, the company stocks green items, such as its bamboo and organic cotton sheets, next to conventional ones so that consumers can make side-by-side feature and price comparisons.
The company also clearly states the environmental attributes on its packaging and signage to educate consumers about their choices.
“You have to offer an assortment of solutions at different price points so consumers can find multiple ways to be eco-friendly,” she says.
The Green Supply Cabinet
That combination of communication and education is critical to successfully positioning green product lines and establishing the corporate brand as an environmental leader, notes Stern.
“Communication is key,” Stern says. “You have to communicate what you are doing and what the value is to the buyer. And you have to do it consistently across all channels of communication, from the website and advertising down to the store shelves.”
Office Depot offers a vast array of products with environmentally friendly elements, from recycled paper and low toxicity cleaners, to a complete line of private label green brands that can outfit an office from top to bottom. The company’s message and selection is consistent regardless of the economy, which customers have come to rely on, according to Yalmaz Siddiqui, the company’s director of environmental strategy. As a result, the company reports sales of products from its green catalog continue to grow.
“In a tough economy our clients are still looking for environmentally sustainable products that perform, and they know they can find a tremendous range of green items that are price competitive,” he says.
When it comes to product messaging for green products, price and performance are equally as important as the environmental qualities, agrees Stern. “The challenge in promoting green products today is proving their efficacy,” he says. “Consumers want to know if they will work as well as other products.”
Part of Office Depot’s approach to selling green products is recognizing that every buyer has a different idea of the definition. The company focuses its green marketing message primarily on its business customers who are often seeking specific criteria to meet certification requirements or corporate goals. It offers them a choice of 4,300 different products that feature green attributes, such as environmentally preferable furniture, technology, lighting, dishware, cleaning products and printer cartridges.
A core part of its communication strategy is its annual Green Book catalog, which this year features an entire supply cabinet outfitted with green products, along with educational content to help buyers learn more about greening their office in a cost effective manner.
The company works with customers to identify products that meet specific environmental goals or certification requirements, such as federal government mandates to purchase a certain percentage of recycled materials, or LEED specifications for non-toxic products. Once they know what the client needs to accomplish these goals, they help them choose products that best meet those criteria at the desired price point.
Office Depot also help buyers choose products that
can strengthen their purchasing processes while still maintaining cost criteria, such as buying in bulk to improve their environmentally standing.
“Being aware of why our clients purchase green helps us help them identify solutions,” Siddiqui says. This is especially helpful for products that may not otherwise clearly communicate their green value, such as office furniture that features low volatile organic compounds (VOC) in its design, which is a key component for LEED certification.
“We reach out to our suppliers to learn about those attributes then we communicate them to our customers,” he says.
To help customers register their green purchases for LEED certification purposes, and to add further value to working with Office Depot, the company now offers a purchase-tracking tool that records green product purchases in a format that mimics LEED certification documentation requirements.
“It converts their historic spend to the exact template used by the U.S. Green Building Council (USGBC),” Siddiqui says. “It dramatically simplifies the paperwork for buyers because they don’t have to do it themselves.”
Office Depot also publicly honors those who make the biggest effort to buy green products through its annual Green Customer Award ceremony. This year the awards were presented during the USGBC Greenbuild International Conference & Expo to six customers, including law firm DLA Piper, Edelman public relations agency, and New Balance Athletic Shoe Inc.
“The rationale for these awards is partly to recognize customers for green purchasing, and partly to show that we are a seller of green products,” Siddiqui says, noting that at the recent awards ceremony several customers approached him to say they wanted to be on that podium next year – particularly if their competitors were winners. “It’s good recognition for individuals, and it’s an encouragement to other customers to make that transition.”
Whatever green products a company is offering, the message has to be consistent across all methods of communication, and product offerings have to support customer interests in cost, quality and environmental attributes.
“Whether the economy gets worse or better these products are not going away,” says Home Depot’s Jarvis. “Those retailers that carry green products through the hard times will establish themselves as the companies that care about the environment, and consumers will remember that.”
Sarah Fister Gale is a freelance writer based in Chicago.
Thursday, February 26, 2009
SNEWS View: We are in extraordinary times, but beware of decisions for short-term gain
There is no doubt we are in most extraordinary times. With the New Year have come more layoffs, continued belt-tightening, disappointing financial reports, and increasing challenges as companies struggle to maintain a balance of budgetary mindfulness and investment for the future.
Retailers across the board are running with lean inventories. As sales have slowed dramatically, inventories have often swelled in manufacturer warehouses. Unsold inventory, especially last year’s models, is not a healthy item to keep on a company’s books, so we understand that manufacturers must find creative ways to manage excess inventory levels. However, some ways are clearly better than others, and some just leave retailers shaking their heads in bewilderment.
Take, for example, a recent online notice posted in the Ocean State Job Lot website --
proclaiming:“
As part of an Old Town warehouse clean-out 1,517 kayaks and canoes are on their way to Job Lot stores. These include overstocks, discontinued models and blemished products, 42 models in total ranging in size from 11' to 18'6". 300 are "blems," boats with minor blemishes such as a decal in the wrong place (nothing that compromises their seaworthiness.) The balance is first quality.”
Job Lot operates 85 stores across New England, with stores right in the backyard of many outdoor specialty dealers that carry Old Town – Jersey Paddler, North Cove Outfitters, Kittery Trading Post to name but a few. Job Lot’s stated purpose, and the one that has made it a successful business, is to “sell brand name, first quality products at closeout prices.”
Naturally, getting Old Town boats in stock is wonderful for Job Lot. And cheap boats are wonderful for Job Lot customers. And, it certainly eliminates a problematic warehouse overstock position for Old Town. But that is a short-term gain. What of the long-term implications?
Suddenly, in New England, Old Town has likely created a market where their boats are simply a commodity to be purchased by the consumer at the best price possible. For the specialty retailer near a Job Lot store, it is unlikely that a customer will notice the boats the specialty dealer carries are a newer model or simply a better quality boat. All the customer will likely notice is that the specialty dealer’s Old Town boats are significantly higher-priced than the ones he just saw at Job Lot.
A retailer we spoke with recently told us, “A long time ago, a well-respected member of this industry told me ‘When you can get something everywhere, it is no longer special, and I am a specialty retailer.’ Increased distribution may be a short term answer to a manufacturer’s success, but in the long run it will only force those of us – the ones who showcase their products, train our employees, and educate the buying public (who then go to the off-price merchants to buy the product) -- to find other manufacturers to take their place.”
That retailer went on to state, “When a manufacturer dumps merchandise to bottom-feeding retailers who list their products in newspaper fliers and on websites at “60-70 percent off” two things occur: First, that manufacturer really annoys those of us who bought into their preseason terms. Second, that manufacturer is creating a market where essentially the discounted prices on the same product we are carrying make our own retail customers feel as if we are robbing them blind. And if we are doing it with this product, who’s to say all of our products are not priced too high?”
More than several retailers told us that, yes, manufacturers such as Old Town typically come to them first to offer the discounts before resorting to off-price retailers such as Job Lot, but usually open-to-buy dollars have already been used up buying the company’s products at full-priced preseason amounts. Short of cancelling the preseason orders and moving the dollars to a manufacturer with specialty price integrity, there’s often little a retailer can do except grumble.
Like the current economic situation though, there is no simple answer. No government bailout or stimulus package will solve the challenges that come from a combination of overproduction, overstocked warehouses, buying cycles moving earlier, production lead times getting longer, customer buying habit shifts, and retailers stocking less.
Retailers are customers of the manufacturers. They are under no obligation to buy anything. Just as a retailer’s customers are under no obligation to buy anything from the retailer either. If manufacturers run out of stock, they risk losing or frustrating their customer – the retailer. But, on the other hand, if they have too much stock, they risk angering a customer by then having to sell their product at a much lower price to a discount retailer. Oh, we’ve all heard the arguments – “But that retailer serves an entirely different set of customers.” Bull. Increasingly, and rightfully so, customers are shopping for the best price – online, specialty, discount, or chain. Think about how you buy. Was your recent camera, computer or electronics purchase made at a specialty retailer, or at a store like Costco…or online at Amazon. Price is always going to be part of the buying / selling equation. Notice we said part, not all. A good specialty retailer can always sell at a premium price when it offers high service and education, as long as the products they are selling are not being offloaded weeks later at a discount retailer by a manufacturer thinking in the short-term.
So, what’s the solution? It’s not an easy answer, but we’d love to hear your thoughts via the SNEWS Chat, below. Perhaps together we can arrive at a solution…or at least we can better understand the problem to be able to minimize a negative impact. Together and thinking of long-term gains for us all, we will prosper. Thinking only of individual short-term gains we will collectively suffer. --Michael Hodgson
Retailers across the board are running with lean inventories. As sales have slowed dramatically, inventories have often swelled in manufacturer warehouses. Unsold inventory, especially last year’s models, is not a healthy item to keep on a company’s books, so we understand that manufacturers must find creative ways to manage excess inventory levels. However, some ways are clearly better than others, and some just leave retailers shaking their heads in bewilderment.
Take, for example, a recent online notice posted in the Ocean State Job Lot website --
proclaiming:“
As part of an Old Town warehouse clean-out 1,517 kayaks and canoes are on their way to Job Lot stores. These include overstocks, discontinued models and blemished products, 42 models in total ranging in size from 11' to 18'6". 300 are "blems," boats with minor blemishes such as a decal in the wrong place (nothing that compromises their seaworthiness.) The balance is first quality.”
Job Lot operates 85 stores across New England, with stores right in the backyard of many outdoor specialty dealers that carry Old Town – Jersey Paddler, North Cove Outfitters, Kittery Trading Post to name but a few. Job Lot’s stated purpose, and the one that has made it a successful business, is to “sell brand name, first quality products at closeout prices.”
Naturally, getting Old Town boats in stock is wonderful for Job Lot. And cheap boats are wonderful for Job Lot customers. And, it certainly eliminates a problematic warehouse overstock position for Old Town. But that is a short-term gain. What of the long-term implications?
Suddenly, in New England, Old Town has likely created a market where their boats are simply a commodity to be purchased by the consumer at the best price possible. For the specialty retailer near a Job Lot store, it is unlikely that a customer will notice the boats the specialty dealer carries are a newer model or simply a better quality boat. All the customer will likely notice is that the specialty dealer’s Old Town boats are significantly higher-priced than the ones he just saw at Job Lot.
A retailer we spoke with recently told us, “A long time ago, a well-respected member of this industry told me ‘When you can get something everywhere, it is no longer special, and I am a specialty retailer.’ Increased distribution may be a short term answer to a manufacturer’s success, but in the long run it will only force those of us – the ones who showcase their products, train our employees, and educate the buying public (who then go to the off-price merchants to buy the product) -- to find other manufacturers to take their place.”
That retailer went on to state, “When a manufacturer dumps merchandise to bottom-feeding retailers who list their products in newspaper fliers and on websites at “60-70 percent off” two things occur: First, that manufacturer really annoys those of us who bought into their preseason terms. Second, that manufacturer is creating a market where essentially the discounted prices on the same product we are carrying make our own retail customers feel as if we are robbing them blind. And if we are doing it with this product, who’s to say all of our products are not priced too high?”
More than several retailers told us that, yes, manufacturers such as Old Town typically come to them first to offer the discounts before resorting to off-price retailers such as Job Lot, but usually open-to-buy dollars have already been used up buying the company’s products at full-priced preseason amounts. Short of cancelling the preseason orders and moving the dollars to a manufacturer with specialty price integrity, there’s often little a retailer can do except grumble.
Like the current economic situation though, there is no simple answer. No government bailout or stimulus package will solve the challenges that come from a combination of overproduction, overstocked warehouses, buying cycles moving earlier, production lead times getting longer, customer buying habit shifts, and retailers stocking less.
Retailers are customers of the manufacturers. They are under no obligation to buy anything. Just as a retailer’s customers are under no obligation to buy anything from the retailer either. If manufacturers run out of stock, they risk losing or frustrating their customer – the retailer. But, on the other hand, if they have too much stock, they risk angering a customer by then having to sell their product at a much lower price to a discount retailer. Oh, we’ve all heard the arguments – “But that retailer serves an entirely different set of customers.” Bull. Increasingly, and rightfully so, customers are shopping for the best price – online, specialty, discount, or chain. Think about how you buy. Was your recent camera, computer or electronics purchase made at a specialty retailer, or at a store like Costco…or online at Amazon. Price is always going to be part of the buying / selling equation. Notice we said part, not all. A good specialty retailer can always sell at a premium price when it offers high service and education, as long as the products they are selling are not being offloaded weeks later at a discount retailer by a manufacturer thinking in the short-term.
So, what’s the solution? It’s not an easy answer, but we’d love to hear your thoughts via the SNEWS Chat, below. Perhaps together we can arrive at a solution…or at least we can better understand the problem to be able to minimize a negative impact. Together and thinking of long-term gains for us all, we will prosper. Thinking only of individual short-term gains we will collectively suffer. --Michael Hodgson
Wednesday, February 18, 2009
Thursday, February 12, 2009
Wednesday, February 11, 2009
What You Should be Asking Your Banker
What You Should be Asking Your Banker
(Or accountant or lawyer if you don’t have one)
OIA WebNews spoke to Bob Seiwert with the Center for Commercial Lending at the American Bankers Association for some insight into what conditions small businesses are facing in the credit markets. Here are excerpts from the interview.
Q: If I have a banking relationship already, aren’t I safe?
Seiwert: For a well-run business with a track record there is money available. But it may not be available at the bank you are banking with, so you better figure out where your bank sits. Not all banks specialize in small business loans. They may do them as an accommodation for your other business, but you want someone who really specializes in them. If you don’t have that at your bank, then you need to move on.
Go visit them and ask them, “How are you affected by the banking crisis?” Get very specific, as in, “If I was to ask for a loan today would it be available to me? If so, how much would it cost? On what terms? What would be the interest rate? What would be the required collateral?”
The main thing is that you are less likely to get the advance rate you used to get on hard assets, like real estate and inventory. In the past a 50% loan against inventory was the max. Maybe it’s down to 30 to 35 percent today.
Q: My personal credit is pristine, why do I need a “relationship?” Won’t a bank lend to me on the strength of my FICA score?
Seiwert: You can have pristine financial statements, but if I don’t trust you I won’t make the loan. If your total relationship is through a credit card, you are a total unknown. Every bank loan that is done, the first thing the banker looks at is your character. He asks, “Will you work with me if things don’t go as planned? If you had the money, would you pay me?” If you don’t have that relationship, if you just have a series of transactions, you have put yourself and your business at risk. That may be okay in good times, but it’s not a good practice going forward.”
Q: So, if I don’t have a relationship and need one, where do I start?
Seiwert: If you want to get the best rate, go to the bank where you have your operating accounts (checking, payroll, collections account). They want to keep that business. That’s where the profits are today – on the operating side. Banks still make money on loans, but those come and go. Besides, if you are a small business person, you want to have a meaningful amount of business with your bank. You want to be a bigger fish. It’s no different than dealing with suppliers for your business.
Q: What if I’m not happy with the customer service at my existing bank? How do I find a new one?
Seiwert: If you are a well-run business, there are still bankers out there that would love your business. The first thing I would do is call your lawyer or accountant and say, “look I need to develop a relationship with a bank. Who is on your short list and may I use your name as a reference?”
(Or accountant or lawyer if you don’t have one)
OIA WebNews spoke to Bob Seiwert with the Center for Commercial Lending at the American Bankers Association for some insight into what conditions small businesses are facing in the credit markets. Here are excerpts from the interview.
Q: If I have a banking relationship already, aren’t I safe?
Seiwert: For a well-run business with a track record there is money available. But it may not be available at the bank you are banking with, so you better figure out where your bank sits. Not all banks specialize in small business loans. They may do them as an accommodation for your other business, but you want someone who really specializes in them. If you don’t have that at your bank, then you need to move on.
Go visit them and ask them, “How are you affected by the banking crisis?” Get very specific, as in, “If I was to ask for a loan today would it be available to me? If so, how much would it cost? On what terms? What would be the interest rate? What would be the required collateral?”
The main thing is that you are less likely to get the advance rate you used to get on hard assets, like real estate and inventory. In the past a 50% loan against inventory was the max. Maybe it’s down to 30 to 35 percent today.
Q: My personal credit is pristine, why do I need a “relationship?” Won’t a bank lend to me on the strength of my FICA score?
Seiwert: You can have pristine financial statements, but if I don’t trust you I won’t make the loan. If your total relationship is through a credit card, you are a total unknown. Every bank loan that is done, the first thing the banker looks at is your character. He asks, “Will you work with me if things don’t go as planned? If you had the money, would you pay me?” If you don’t have that relationship, if you just have a series of transactions, you have put yourself and your business at risk. That may be okay in good times, but it’s not a good practice going forward.”
Q: So, if I don’t have a relationship and need one, where do I start?
Seiwert: If you want to get the best rate, go to the bank where you have your operating accounts (checking, payroll, collections account). They want to keep that business. That’s where the profits are today – on the operating side. Banks still make money on loans, but those come and go. Besides, if you are a small business person, you want to have a meaningful amount of business with your bank. You want to be a bigger fish. It’s no different than dealing with suppliers for your business.
Q: What if I’m not happy with the customer service at my existing bank? How do I find a new one?
Seiwert: If you are a well-run business, there are still bankers out there that would love your business. The first thing I would do is call your lawyer or accountant and say, “look I need to develop a relationship with a bank. Who is on your short list and may I use your name as a reference?”
Tuesday, February 10, 2009
Special Report - Part 2: On Your Mark -- Strategies for protecting trademarks from becoming generic terms
Protecting a brand trademark from becoming part of the common vernacular isn't an issue just for large corporations like Kleenex and Xerox. In Part 1 of our special report on Jan. 30, 2009, SNEWS® examined how outdoor industry companies navigate the turbulent waters of brand trademarks to protect them from becoming generic terms, also known as "genericide." Click here to read Special Report - Part 1: On Your Mark -- Protect trademarks from being slaughtered by 'genericide'. In today’s Part 2, we talk to trademark experts, as well as companies that have dealt with legal battles, about strategies for both supplies and retailers to employ to protect a brand and trademark.
When determining whether or not a trademark name is generic, courts ask a fundamental question: Can you trace the trademarked word to a specific source?
Swiss Army is a term synonymous with a multifunction tool, but can you trace the words "Swiss Army" to a particular company? For a long time, that was a big question. Since the 1890s, Victorinox (now Victorinox Swiss Army) and Wenger both produced red-handled multifunction tools for the Swiss government, and neither could claim the sole trademark, as you couldn't trace the product to one manufacturing source.
Do’s and Don’ts to keep your trademark in good shape
Do:
>> Use a trademark in distinct type – Capitalize the entire trademark or set it off from other words through bold or italicized typeface: MIDAS® not Midas.
>> Use a mark as a proper adjective – Associate the mark with the descriptive name of the product or service in all labeling and sales promotional pieces, feature or technical articles, published reports and news releases: MEDTRONIC® pacemakers.
>> Use a mark with notice of its status – If the mark is registered with the U.S. Patent and Trademark Office, use one of the following with each mark: ® or TM (trademark) or SM (service mark).
Don’t:
>> Use a mark as a noun – Wrong: LR Mate® keeps costs under control.
>> Use a mark as a verb – Wrong: Let’s go Rollerblading.
>> Change a mark’s form, such as adding hyphens – Wrong: Buffalo-Wild-Wings®.
>> Use a mark in a possessive form – When it comes to waterproofing technology, Event’s
popularity has really grown.
>> Use a mark to modify or describe any words other than the appropriate generic or descriptive name – Wrong: Trail runners stay hydrated when they use a Camelbak system. Right: The Camelbak Octane XC hydration pack is convenient for trail runners.
>> Abbreviate a mark – Wrong: GSI. Right: GSI Commerce.
>> Wrongly identify a mark as registered unless it is filed with the U.S. Patent and Trademark Office – Wrong: Indoor Studio Cycles® pedal as well as any indoor bikes.
Information courtesy of Intellectual Property Attorney Dean Karau (dkarau@fredlaw.com)
With no company holding possession of the trademark, other knife manufacturers perceived that the Swiss Army term was generic. In the early 1990s, the Arrow Trading Company began to import pocketknives made in China that had red handles emblazoned with the words "Swiss Army." In 1992, Victorinox sued Arrow for false advertising and unfair competition.
"This was hard-fought litigation that went on for 10 years," said David Weild, a lawyer with Edwards Angell Palmer & Dodge LLP, which represents Victorinox Swiss Army. In the end, the court determined that Victorinox and Wenger could be considered the source for Swiss Army knives, because the term had become synonymous with high-quality tools made by these particular manufacturers. In 2004, Victorinox and Wenger were granted trademarks for Swiss Army, and in 2005 Victorinox purchased Wenger, further establishing itself as a single source.
Yes, the legal wrangling over trademarks can be confusing, but it just goes to show the headaches that can occur when a trademark name is not solidly connected to a particular company. If a company might be faced with a decade of litigation, it makes sense to aggressively prevent generic use of a brand name.
Bending over backward
Some companies go to great lengths to prevent genericide, including behemoth companies like Xerox. But does such a large company really have to worry about losing its trademark? Well, yes.
The Xerox Corp. had watched its trademark name being used synonymously for "photocopying." The company successfully addressed it with an extensive public relations campaign asking consumers to "photocopy" rather than "Xerox" documents. The company won the battle…mostly. It lost the campaign for the use of the word in Russian, Bulgarian, Romanian and Portuguese, in which Xerox is now a genericized term. Even recently -- the battle never is over, you see -- the company addressed the situation again, placing an advertisement in the November 2007 issue of the ABA Journal of the American Bar Association. With lawyers reading the publication, it's certainly important to keep awareness high. The ad showed a zipper placed over the word Xerox on the page. Below that was the following copy: "If you use 'Xerox' the way you use 'zipper' our trademark could be left wide open."
Eye-catching, yes? And, then to explain it further, came this: "No one likes to leave their name open to misuse. Which is what happens when you use our name in a generic manner. Basically you're putting it in a compromising position, which could cause it to lose its trademark status. That's what happened to the name 'zipper' years ago. So when you use our name, please use it as an adjective to identify our products and services, such as 'Xerox copiers.' Never as a verb: 'to Xerox' in place of 'to copy,' or as a noun: 'Xeroxes' in place of 'copies.' Now that you're aware of all this, that should just about zip things up. Thanks."
The Xerox ad brings up an important issue in preserving a trademark. A company -- and, of course, its retailers -- is not only required to protect its trademark, but it must not contribute to its use as a generic term.
Be careful what you say
"The reason a term becomes generic is due to the tension between marketing and trademark law," said Dean Karau, an intellectual property lawyer with the Fredrickson & Byron firm in Minneapolis, Minn. "Trademark law respects and gives right to distinctive terms that can help the public distinguish the source of products. Marketing oftentimes wants to be descriptive. And when you use a trademark descriptively, the public becomes conditioned to use it in the same way. That's when it morphs from a trademark to a generic term."
To understand this better, simply look at the company Google and what has happened to its name. For a modern success story, it's also a prime example of a company that might be putting its trademark in jeopardy. Unless you've been stranded on an island for the past few years, you know that Google has quickly morphed into a generic term for "search" on the Internet. In 2006, Google allowed Pontiac to run a TV ad with a voiceover that said, "Don't take our word for it, Google 'Pontiac' to find out."
When Google allowed its trademark to be used as a verb, it effectively endorsed the notion that its trademark was a generic term for performing an Internet search. You'd think the Google lawyers would have known better. Complicating matters, in 2006 the Oxford English Dictionary actually included Google as a verb.
Now, we know what you're thinking: Google is a big company that has such command of the search engine market that no competitor could challenge its trademark. Sure, that's the case now, but things change, especially when it comes to the high-tech world.
"Where they have to be worried is, as the search engine field levels out and they get serious competitors, they may have problems," said Karau. Google does have the advantage because it was the first highly recognized search engine and ruled the market early.
"Google became the leader so quickly, even though it is being used as a verb and noun -- every wrong way you can use it -- people still know exactly (what brand) you're talking about," said Karau.
W.L. Gore, GU and other outdoor trademarks such as CamelBak have had a similar advantage. These brands launched product categories, and they have gained some advantage by becoming synonymous with waterproof apparel, energy gels and hydration systems.
"If a customer is in a retail store and sees a selection of eight varieties of energy gels, they'll likely go with GU because the brand is safe and familiar," said Holly Bennett, senior marketing manager at energy-gel maker GU.
But Steve Shuster, global brand manager of W.L. Gore, warned that consumers can quickly shift their loyalty. "I could be aware of a lot of different brands, but if I don't understand the essence of the brand I can be moved off that," he said. And this really gets to the heart of genericide. When consumers no longer equate a trademark with a certain manufacturer's product with distinguishable traits or quality, then words, like Xerox or Thermos did, become nothing more than common lingo.
"We want to create a unique identity so consumers go into a store insisting on the Gore-Tex brand," said Shuster. "Having that leadership position is advantageous, but we need to make sure it's understood that not all products are created equally."
If you doubt the potential damage of genericide, just browse the drugstore aisles for "aspirin" -- yeah that was once a trademark name too. We swear. Google it and check for yourself. --Marcus Woolf
Missed Part 1? Click here to read that Jan. 30, 2009 installment.
When determining whether or not a trademark name is generic, courts ask a fundamental question: Can you trace the trademarked word to a specific source?
Swiss Army is a term synonymous with a multifunction tool, but can you trace the words "Swiss Army" to a particular company? For a long time, that was a big question. Since the 1890s, Victorinox (now Victorinox Swiss Army) and Wenger both produced red-handled multifunction tools for the Swiss government, and neither could claim the sole trademark, as you couldn't trace the product to one manufacturing source.
Do’s and Don’ts to keep your trademark in good shape
Do:
>> Use a trademark in distinct type – Capitalize the entire trademark or set it off from other words through bold or italicized typeface: MIDAS® not Midas.
>> Use a mark as a proper adjective – Associate the mark with the descriptive name of the product or service in all labeling and sales promotional pieces, feature or technical articles, published reports and news releases: MEDTRONIC® pacemakers.
>> Use a mark with notice of its status – If the mark is registered with the U.S. Patent and Trademark Office, use one of the following with each mark: ® or TM (trademark) or SM (service mark).
Don’t:
>> Use a mark as a noun – Wrong: LR Mate® keeps costs under control.
>> Use a mark as a verb – Wrong: Let’s go Rollerblading.
>> Change a mark’s form, such as adding hyphens – Wrong: Buffalo-Wild-Wings®.
>> Use a mark in a possessive form – When it comes to waterproofing technology, Event’s
popularity has really grown.
>> Use a mark to modify or describe any words other than the appropriate generic or descriptive name – Wrong: Trail runners stay hydrated when they use a Camelbak system. Right: The Camelbak Octane XC hydration pack is convenient for trail runners.
>> Abbreviate a mark – Wrong: GSI. Right: GSI Commerce.
>> Wrongly identify a mark as registered unless it is filed with the U.S. Patent and Trademark Office – Wrong: Indoor Studio Cycles® pedal as well as any indoor bikes.
Information courtesy of Intellectual Property Attorney Dean Karau (dkarau@fredlaw.com)
With no company holding possession of the trademark, other knife manufacturers perceived that the Swiss Army term was generic. In the early 1990s, the Arrow Trading Company began to import pocketknives made in China that had red handles emblazoned with the words "Swiss Army." In 1992, Victorinox sued Arrow for false advertising and unfair competition.
"This was hard-fought litigation that went on for 10 years," said David Weild, a lawyer with Edwards Angell Palmer & Dodge LLP, which represents Victorinox Swiss Army. In the end, the court determined that Victorinox and Wenger could be considered the source for Swiss Army knives, because the term had become synonymous with high-quality tools made by these particular manufacturers. In 2004, Victorinox and Wenger were granted trademarks for Swiss Army, and in 2005 Victorinox purchased Wenger, further establishing itself as a single source.
Yes, the legal wrangling over trademarks can be confusing, but it just goes to show the headaches that can occur when a trademark name is not solidly connected to a particular company. If a company might be faced with a decade of litigation, it makes sense to aggressively prevent generic use of a brand name.
Bending over backward
Some companies go to great lengths to prevent genericide, including behemoth companies like Xerox. But does such a large company really have to worry about losing its trademark? Well, yes.
The Xerox Corp. had watched its trademark name being used synonymously for "photocopying." The company successfully addressed it with an extensive public relations campaign asking consumers to "photocopy" rather than "Xerox" documents. The company won the battle…mostly. It lost the campaign for the use of the word in Russian, Bulgarian, Romanian and Portuguese, in which Xerox is now a genericized term. Even recently -- the battle never is over, you see -- the company addressed the situation again, placing an advertisement in the November 2007 issue of the ABA Journal of the American Bar Association. With lawyers reading the publication, it's certainly important to keep awareness high. The ad showed a zipper placed over the word Xerox on the page. Below that was the following copy: "If you use 'Xerox' the way you use 'zipper' our trademark could be left wide open."
Eye-catching, yes? And, then to explain it further, came this: "No one likes to leave their name open to misuse. Which is what happens when you use our name in a generic manner. Basically you're putting it in a compromising position, which could cause it to lose its trademark status. That's what happened to the name 'zipper' years ago. So when you use our name, please use it as an adjective to identify our products and services, such as 'Xerox copiers.' Never as a verb: 'to Xerox' in place of 'to copy,' or as a noun: 'Xeroxes' in place of 'copies.' Now that you're aware of all this, that should just about zip things up. Thanks."
The Xerox ad brings up an important issue in preserving a trademark. A company -- and, of course, its retailers -- is not only required to protect its trademark, but it must not contribute to its use as a generic term.
Be careful what you say
"The reason a term becomes generic is due to the tension between marketing and trademark law," said Dean Karau, an intellectual property lawyer with the Fredrickson & Byron firm in Minneapolis, Minn. "Trademark law respects and gives right to distinctive terms that can help the public distinguish the source of products. Marketing oftentimes wants to be descriptive. And when you use a trademark descriptively, the public becomes conditioned to use it in the same way. That's when it morphs from a trademark to a generic term."
To understand this better, simply look at the company Google and what has happened to its name. For a modern success story, it's also a prime example of a company that might be putting its trademark in jeopardy. Unless you've been stranded on an island for the past few years, you know that Google has quickly morphed into a generic term for "search" on the Internet. In 2006, Google allowed Pontiac to run a TV ad with a voiceover that said, "Don't take our word for it, Google 'Pontiac' to find out."
When Google allowed its trademark to be used as a verb, it effectively endorsed the notion that its trademark was a generic term for performing an Internet search. You'd think the Google lawyers would have known better. Complicating matters, in 2006 the Oxford English Dictionary actually included Google as a verb.
Now, we know what you're thinking: Google is a big company that has such command of the search engine market that no competitor could challenge its trademark. Sure, that's the case now, but things change, especially when it comes to the high-tech world.
"Where they have to be worried is, as the search engine field levels out and they get serious competitors, they may have problems," said Karau. Google does have the advantage because it was the first highly recognized search engine and ruled the market early.
"Google became the leader so quickly, even though it is being used as a verb and noun -- every wrong way you can use it -- people still know exactly (what brand) you're talking about," said Karau.
W.L. Gore, GU and other outdoor trademarks such as CamelBak have had a similar advantage. These brands launched product categories, and they have gained some advantage by becoming synonymous with waterproof apparel, energy gels and hydration systems.
"If a customer is in a retail store and sees a selection of eight varieties of energy gels, they'll likely go with GU because the brand is safe and familiar," said Holly Bennett, senior marketing manager at energy-gel maker GU.
But Steve Shuster, global brand manager of W.L. Gore, warned that consumers can quickly shift their loyalty. "I could be aware of a lot of different brands, but if I don't understand the essence of the brand I can be moved off that," he said. And this really gets to the heart of genericide. When consumers no longer equate a trademark with a certain manufacturer's product with distinguishable traits or quality, then words, like Xerox or Thermos did, become nothing more than common lingo.
"We want to create a unique identity so consumers go into a store insisting on the Gore-Tex brand," said Shuster. "Having that leadership position is advantageous, but we need to make sure it's understood that not all products are created equally."
If you doubt the potential damage of genericide, just browse the drugstore aisles for "aspirin" -- yeah that was once a trademark name too. We swear. Google it and check for yourself. --Marcus Woolf
Missed Part 1? Click here to read that Jan. 30, 2009 installment.
Monday, February 9, 2009
Consumers Still Buying Green Through Economic Changes
PORTLAND, Ore. -- Most consumers have not cut back their spending on green products, according to a new survey.
The 2009 National Green Buying survey by Green Seal and EnviroMedia Social Marketing found that half of consumers are buying just as many green products now as they did before the economic downturn began. An additional 19 percent are buying more products than before, and 14 percent are buying fewer green products.
When asked what the main factor is when making purchasing decisions, the amount of consumers that said a product's reputation mattered most (21 percent) was followed closely by word of mouth (19 percent) and brand loyalty (15 percent).
Only 9 percent said that green advertising is the primary influence on their purchase choices.
The survey revealed a few other issues related to green advertising. About one in three of those surveyed said they do not know how to tell if the claims on a green product are true, with only one out of 10 consumers trusting product claims no matter what.
Some consumers are taking the initiative to ferret out the truth behind some advertisements, with 24 percent saying the read packaging to understand more about claims and 17 percent researching online or looking at studies.
Consumers were also asked which green actions they make, with the grand majority (87 percent) saying they recycle. Almost the same amount look for minimal packaging (60 percent) and buy green cleaning products (58 percent), and 31 percent buy green personal care products.
Conducted by Opinion Research Corporation, the telephone survey questioned 1,000 consumers. Details of the survey were announced at the Greenwashing Forum at the University of Oregon on Feb. 6.
Another survey on consumer spending released earlier this year found that while consumers cut back on spending, more than 75 percent consider environmental and social aspects in deciding what to buy and about a third are willing to pay more for those benefits.
The 2009 National Green Buying survey by Green Seal and EnviroMedia Social Marketing found that half of consumers are buying just as many green products now as they did before the economic downturn began. An additional 19 percent are buying more products than before, and 14 percent are buying fewer green products.
When asked what the main factor is when making purchasing decisions, the amount of consumers that said a product's reputation mattered most (21 percent) was followed closely by word of mouth (19 percent) and brand loyalty (15 percent).
Only 9 percent said that green advertising is the primary influence on their purchase choices.
The survey revealed a few other issues related to green advertising. About one in three of those surveyed said they do not know how to tell if the claims on a green product are true, with only one out of 10 consumers trusting product claims no matter what.
Some consumers are taking the initiative to ferret out the truth behind some advertisements, with 24 percent saying the read packaging to understand more about claims and 17 percent researching online or looking at studies.
Consumers were also asked which green actions they make, with the grand majority (87 percent) saying they recycle. Almost the same amount look for minimal packaging (60 percent) and buy green cleaning products (58 percent), and 31 percent buy green personal care products.
Conducted by Opinion Research Corporation, the telephone survey questioned 1,000 consumers. Details of the survey were announced at the Greenwashing Forum at the University of Oregon on Feb. 6.
Another survey on consumer spending released earlier this year found that while consumers cut back on spending, more than 75 percent consider environmental and social aspects in deciding what to buy and about a third are willing to pay more for those benefits.
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