January 11, 2016

Happy new year! We hope 2017 is off to a great start for you.

We shared with you the ups and downs throughout the holiday season. In short, ecommerce was strong, physical stores were weak, Amazon ruled the day, and promotional activity reached new levels. Across the board, the apparel category fared better than home, and emerging brands fared better than mature brands. Our year end industry reports coming out in late January will show more detail by category. Overall, and especially with the election, consumer holiday shopping narrowed to just a few weeks, starting just before Thanksgiving, and even after Thanksgiving there were slow days mid-week. Here are some of the highlights and stats that stood out to us.

Consumer spending continues to shift online:
44% of all Black Friday sales took place online (NRF) vs. 15% off-holiday.
Adobe reported that ecommerce sales increased 11% over LY (their information is based on analysis of 24.6B visits to shopping websites).
RetailNext reported mall traffic dropped 12.3% in November and December; however, the Thomson Reuters Same Store Sales Index registered a 1.8% gain for December.
Of the 70 percent of adults who visited a mall this season, a quarter said they did not shop at a store, according to ICSC. Nearly half reported dining at a restaurant.
Adobe reported that mobile devices accounted for 50% of visits to retailers’ websites, with a 23% increase in sales from these devices YOY.
Adobe also concluded that email marketing drove a fifth of all holiday online sales.

Amazon sets new records:
Amazon shipped more than 1B items worldwide this holiday season.
On the Monday before Christmas, 49.2% of all online sales in the U.S. were made on Amazon (Slice Intelligence). No other retailer came close. Best Buy had 3.9% and Target and Walmart were at 2.7% and 2.6% respectively.
Amazon shipped 50% more items for third party vendors (more than 28 million items from third party vendors just on Cyber Monday).
Amazon accounted for more than half of online product searches in December, with 52% of searches starting with Amazon compared to 26% with search engines, according to Google Search Trend data

Promotions reach new levels:
Of more than $6 billion in North American online retail transactions, Dynamic Action reported that retailers promoted much more heavily in 2016 than in 2015. Overall promotions were up 52% specifically within the holiday season.
The average apparel discount increased to 31.3% in December, according to the research firm Conlumino; however, they also reported that the amount of product on sale did not increase after December 26th, as it did last year when unseasonably warm weather left too much winter apparel on the rack.
Rakuten Marketing reported that average order value was down 5%; a downward trend in AOS is something we are seeing from many of you as a result of promotions.
A mid-December release from Retail Dive reported that the reliance on promotions had reduced product profit margins for North American retailers by 19% compared to last year, and driven up marketing costs by 7%, BUT with sales failing to drive new customer acquisition.

More interesting stats:
On average, 10% of items bought during the holidays are returned, with the large majority at stores (NRF).
2017 is expected to be stable but not spectacular, led primarily by ecommerce and international growth.
U.S. consumer confidence climbed to the highest level since 2001 in December.

After a year with highs and lows, we are hearing from many of you that your needs are two-fold: 1) the need to identify incremental, effective marketing channels and 2) the need to find meaningful ways to improve new customer acquisition. We hear you and we are ready to rise up to the challenge.

We wish you the very best in 2017, and we look forward to a great year together,
Polly & Your Friends at Belardi/Ostroy


December 21, 2016

It is hard to believe the holiday season is winding down so quickly, but we hope you have a chance to slow down this week and spend time with your family and friends.

It looks like the holiday season is shaping up to be shorter than ever. Consumers waited to shop until Thanksgiving, and it will be a bumpy ride right to the end. 80% of our clients are reporting that month to date sales are up to LY, but it has not been a stellar season. With the exception of our emerging brand clients, single digit growth has been hard to come by and at the expense of much larger promotions. Our retail trade pubs are filled with news of retailers taking a hit; brands like The Limited, Macy’s, J Crew, American Apparel, and Sears continue to struggle.
It is harder than ever to break apart sales performance from promotions, which by several reports are up significantly. A few facts from Dynamic Actions Retail Holiday Index:
Promotions, including 30% off sales and buy-one-get-one deals, are up 34% over last year to date, and up 52% during the holiday season (Nov. 1 through Dec. 5) compared to 2015.
A reliance on promotions has reduced product profit margins for North American retailers by 19% compared to last year, and retailers have seen marketing costs rise 7%, with a 25% jump over the holiday season so far. Yet sales are failing to drive new customer acquisition, which is down 12% for the year and 6% over the holiday season.
At the same time, there are some reports of strength in retail, but if you look closely it is in categories like Outlet and not in specialty retail. November retail sales grew a solid 5% year-over-year and 0.1% from an already-strong October, according to the NRF, which exclude automobiles, gasoline stations and restaurants. Online and other non-store sales grew 15.3% year-over-year, reflecting the growth of online shopping. This mirrors what we are hearing from many of you, that ecommerce is very strong while retail store sales continue to be soft and down to LY. This is reflected in the 14% decline in seasonal workers hired by retailers in the first two months of the holiday season, according to global outplacement firm Challenger, Gray & Christmas.

In a season with record catalog volumes, there were a few that stood out to me last week:
· Stylish and playful mini-catalogs from Huckberry, JMcLaughlin, and Marine Layer all focused on gifting.

· A new men’s catalog from Todd Snyder (and a shout-out to our creative team who did an outstanding job putting this piece together).

· A suite of delicious-looking, gourmet food gift catalogs from Dean & Deluca, Mackenzie, Petrossian, and Olive & Cocoa.

· “Gifts that give back” from Bambeco’s latest catalog- refreshing and beautiful as expected.

At Belardi/Ostroy, we are relentlessly focused on progress. Over the last year, there have been tremendous improvements in technology and data. At the same time, we have always been focused on holistic planning across channels. After extensive time and resources, we are pleased to announce our Integrated Planning solution coming in early 2017. Our goal is quite simple: Deliver an integrated marketing plan across channels to both customers and prospects at a known addressable level in order to improve response rates and increase marketing effectiveness. We still see marketing budgets being built and executed at the program level, but the future is here. Our goal is to first start by identifying your target audience of customers and prospects, determine your most effective marketing channels online and offline, and then build a seasonal plan focused on the specific contact strategy to each segment, essentially planning “consumer first” instead of marketing first. More to come after the new year – stay tuned!

Lastly, we continue to work on our speaker lineup for our May summit in Napa, and we are excited to announced that Carlos Alberini, CEO from Lucky Brand, has joined our list of industry leaders. We look forward to seeing you there. Click here for registration.

Wishing you the very best in the new year (personally + professionally),
Polly & Your Friends at Belardi/Ostroy

December 7, 2016

After a very strong Thanksgiving weekend and Cyber Monday for most of you, we are hearing that sales fell off dramatically Wednesday through Friday with some pick up over the weekend. The holiday season continues to be a bumpy ride. Categorically, the children’s market is doing well while the food/gift market continues to be soft. Results are very mixed across our apparel and home clients. Emerging brands continue to thrive, even at full price, showing us just how much consumers are hungry for something new. Interestingly, the men’s business is soft across the board, but they are comp’ing some big growth in the last few years.

Some of our favorite stats from last week:
· Of the $289 spent over Thanksgiving, $214 was on gifts, or 74%.

· Types of stores shopped Thanksgiving weekend: Department stores- 50.9%, Discount stores- 34.2%, Electronics stores- 31%, and Clothing or accessories stores- 28.4%.

· The most popular time to buy online is weekdays from 12-2pm and on Sunday evenings.

· 48% of holiday shoppers said they did the majority of their shopping on or before Cyber Monday.

· 41% of online shoppers purchased from a new retailer.

· 1 in 3 retailers dedicate 31-50% of their total online marketing budget to holiday efforts.

· 38% of marketers do not use personalization in their marketing efforts.

· Only 1.7% of E-Commerce orders on Black Friday through Cyber Monday came from social media (including Facebook, Twitter, Instagram and Pinterest).

Multiple Sources: NRF, Adept Blog, EConsultancy, Adobe, Google, Statista, TopRank.

We continue to see huge discounts, especially from the big multi-channel retailers in home and apparel as well as big box companies. We have taken the position that free shipping is no longer a promotion but an expectation. Here are some great free shipping stats from UPS:
93% of shoppers take action for free shipping.
Free shipping was deemed the 2nd most important factor for shoppers when purchasing online.
83% of shoppers will wait two more days in order to get free shipping.
Delivery speed is the 4th most important factor in the online buying process.
50% of shoppers will choose a slower transit time for free shipping.

After record volumes of mail every week in November, my mail volume last week was down to LY (69 pieces vs. 82) with the biggest declines for home (9 TY vs. 16 LY) and apparel (21 vs. 27). It will be interesting to see if there is more mail volume this week as companies try to capitalize on the trend towards consumers buying later. Some of the eye-catching pieces included a tri-fold from Olukai, Wrap London’s smaller catalog, Ted & Muffy (boots catalog – never seen before), Chewy.com (sent a dog Christmas card), Monticello (home catalog – never seen before), Torrid (fast fashion for the younger plus size woman), and Sundance’s Almanac (men’s only catalog).

Lastly, we are hard at work building a terrific speaker line-up for our spring conference in Napa. If you have any recommendations- or if you would like to speak yourself!- please don’t hesitate to let us know. Our speaker line-up this year includes industry leaders such as: Jodi Watson (SVP Petco Direct), Chris Nicklo (CMO ZGallerie), Lisa Bayne (CEO Artful Home), Sam Yaggan (former CEO Match.com), Beth Gumm (CMO American Giant), and Brian Tsung (CMO Bambeco). Here is the link to registration (retailers only).

As always, we hope this email finds you well and enjoying the spirit of the holidays,
Polly & Your Friends at Belardi/Ostroy

December 2, 2016

Happy holidays! We hope your holiday season is off to a great start (personally + professionally).

We are happy to report that the vast majority of you had a great stretch of sales over the holiday weekend. Results are indicating that there was indeed pent-up demand after a soft October and early November. We are seeing this across price points and categories. There is no question promotions helped to spur the growth, but even a few of the strong emerging brands we work with who stayed full price did very well, particularly on Cyber Monday. Here is a summary of the key stats from the long weekend:

· Online sales on Black Friday hit a record-breaking $3.34 billion, up 21.6% year-over-year, according to Adobe Digital Insights. As expected, electronics and toys dominated Black Friday shopping lists.

· Wal-Mart credits mobile for driving more than 70% of its Black Friday traffic. In total, the mobile channel generated 36% of total digital sales on Black Friday 2016, surging 33% over last year and eclipsing $1 billion in one-day total sales for the first time ever, according to Adobe.

· On Black Friday, desktop conversion rates average 5.5%, tablets 4.6%, and smartphones just 2.4% (Adobe).

· Amazon offered the deepest average discount on Black Friday promotions of any major U.S. retailer, with shoppers saving 42% off on average, compared to 36% off on Best Buy, 35% off on Target and 33% on Wal-Mart, according to data from e-commerce analytics firm Clavis Insight supplied to Retail Dive.

· Average spending per person over Thanksgiving weekend totaled $289.19, down slightly from $299.60 last year (those numbers aren’t exactly comparable because the NRF changed its methodology, the group said in a press release).

· Sales on Cyber Monday increased 12.1 percent over the prior year, to $3.45 billion, according to Adobe Digital Insights. That topped the firm’s projection for 9.4 percent growth, despite greater-than-expected sales on Black Friday.

· According to ShopperTrak, visits to brick-and-mortar locations fell 1 percent on Thanksgiving and Black Friday. While that was a more modest dip than expected, it nonetheless showed that consumers are allocating more of their budgets toward the web. Separate data from the NRF’s consumer survey found that 3 million fewer people visited stores this Black Friday weekend, while 5.5 million more shopped online.


We saw an incredible amount of discounting this past week, often 30-50% off (plus free shipping!) so our hats go off to those brands who remained steadfast at full price: Blu Dot, Everlane, Allbirds, Samuel Hubbard, American Giant, and Uncommon Goods, to name a few. The below chart was just published by Wallet Hub and represents the average discount by major retailers over the weekend.

With another week of over 100 pieces in my mailbox, I continue to see new records of mail every week. Most of these pieces are sent to me as a prospect, and there is a greater mix of form factors (not just catalogs) than ever before. While apparel was still the lion’s share at 30, the gift category surged to 23 catalogs, not including 12 children’s catalogs. It is interesting to note that the number of catalogs targeting the 30- to 40- something consumer continues to surge; also interesting was an 8-panel piece by Victoria’s Secret back in the mail. We will have a full DM creative update to you with holiday trends in the next few days.

Lastly, we are excited to announce our next client summit – Driving Retail Forward- on May 4th and 5th in Napa Valley, CA. Here is the link for more information and registration. We hope to see you there!

Wishing you great success,
Polly & Your Friends at Belardi/Ostroy

November 23, 2016

After a very soft start to the season, 80% of you are now reporting that sales last week were up to LY, from single to double digits. Adobe Digital Insights reported that retailers lost nearly $1 billion worth of online sales in the first 14 days of November, with the biggest drop happening the day after the election, when sales growth trickled to 1.3% compared to the expected 7.8% surge. This post-election plunge Adobe reported was the slowest growth for U.S. retail sales since 2012. In a recent survey, the NRF reported that over 40% of consumers have yet to start their holiday shopping. As we approach our peak season, here are a few highlights to note:
· Mobile devices will surpass desktops in digital shopping visits this holiday season, vaulting ahead by a margin of 53% to 47%, according to Adobe’s 2016 Digital Insights Shopping Predictions report.

· Americans plan to spend $426 on gifts during the 2016 holiday shopping season, down from $487 a year ago, and there will be little difference in the number and types of gifts on shopping lists this time around, according to Deloitte’s 31st annual holiday survey of consumer spending intentions and trends.

· Clothing and accessories remain the most popular gifts this year, given by 61 percent of shoppers; 56 percent will give gift cards. Nearly half of shoppers, 44 percent, will give books, CDs, DVDs, videos or video games; 42 percent will give toys, 31 percent food or candy and 30 percent will give electronics. (NRF Holiday report)

· For physical stores, the top 5 busiest shopping days will be: “Super Saturday,” Dec. 17 (Saturday before Christmas), Black Friday, Nov. 25, Friday, Dec. 23, Saturday, Dec. 10, and Monday, Dec. 26. Here are the top least busy days, in terms of shoppers visiting stores: Tuesday, Nov. 29, Cyber Monday, Nov. 28, Wednesday, Nov. 30, Thursday, Dec. 1, and Monday, Dec. 5.
WalletHub reported that 1 in 10 retailers are recycling the same promotions from last year this year. Many retailers have been referencing Black Friday promotions for 3 weeks now, and as expected, Monday’s emails featured headlines like, “Black Friday STARTS NOW” and “Black Friday Doorbusters NOW.” We are hard pressed to find examples of retailers who are not promotional right now; our decoy tracking last year reported that over 90% of all catalogs had promotional offers. This includes premium brands far and wide. We continue to see hybrid offers like we saw last year. Apparel is north of 40% off already, and the home category is pushing into unchartered waters with 30% discounts as they try to make up for a soft year. Lastly, if you are not sending 9-14 emails per week, then you are an exception.

Last week I had a record 116 pieces in my mailbox, compared to 75 last year. While this was in part due to mailers avoiding election week, we also saw a good amount of mail election week, as well. This growth is coming from online retailers launching into direct marketing and wholesale brands leveraging catalogs to help grow their direct to consumer business. By category, I received:
· Apparel – 38

· Gift – 24

· Misc – 24

· Home – 17

· Children’s – 13

Some of the new and/or interesting catalogs included a new catalog/magazine by Kid Made Modern, Society 6 (new catalog), Jeni’s Ice Cream in the food/gift space, Anthropologie (mailing more frequently to me than ever before), Coyuchi (new in my mailbox), and a lot of wine and food guides (which makes a lot of sense for those of you that know me well!).

Lastly, please be on the lookout for our Save the Date for our spring event in Napa on May 4th and 5th this year. We hope to see you all there!

As always, we hope this email finds you well and that you have a wonderful Thanksgiving.
Polly & Your Friends at Belardi/Ostroy