Yesterday’s News- Talking Points 8/15
Here’s the retail and e-commerce industry trends you won’t ready about for the week of August 15, 2019
Fun Fact- Jersey Mike’s is America’s favorite sandwich chain, but let’s move on to things you didn’t already know…
The 10 Most Beloved Retail Chains in the US
This week, branding agency MBLM released a report on the most beloved brands in America based on a “brand intimacy quotient” that they have invented. If you want to read the details behind how this quotient is calculated you can do so here, but based on how fancy their website is I trust they know what they’re doing.
Here is the list of most beloved retail companies:
- Whole Foods
Some interesting facts to note:
- Brick and mortar chains garner the most affection among millennials. Target and Walmart lead the charge over Amazon and eBay.
- Men prefer eBay to Amazon. Probably because they like to buy used sports memorabilia more than Audible books.
- Home Depot, once the poster child of how brick and mortar companies can incorporate technology, had the steepest decline in popularity, falling from 6 to 12th.
- Retail had the 4th highest Brand Intimacy Quotient among all the industries studied. Not bad, but not as impressive when you consider that retail spends the most on advertising.
- People like slimy Swedish meatballs a lot more than I thought.
Retail stores are dead. Long live retail stores!
There has been a lot of loose talk about the decline of the retail store. Every time a chain announces a closure, the media hails it as another sign of the “Retail Apocalypse.” But you are smarter than that.
You dear reader- because you read this newsletter- know that these closures are more indicative of company bloat than a dying industry. You dear reader, know that eCommerce still makes up just 19% of total retail sales. You dear reader, know that Amazon still only makes 1/2 the revenue of Walmart.
Because you know all of this, it won’t surprise you that the IHL released a report showing that brick and mortar retail stores are actually thriving. That’s right, since January of 2017, US retail companies have opened an additional 8,575 stores. Most segments, notably restaurants, convenience stores, and dollar stores, have all seen growth. For each chain closing stores, there are nearly 10 more that are opening them.
So why the panic?
The truth is that the retail apparel segment is in decline, and since department stores are often mall anchors, news of their closure has the tendency to grab headlines.
But this decline is attributed mostly to outdated business models and an overabundance of supply. Malls were overbuilt throughout the last 40 years in middle-class America, and retail department stores have an estimated oversaturation of around 20x what is needed.
All of this is in the report, go click on the link and see for yourself.
But the TL:DR is that we are witnessing a course correction in a high-profile segment, not an industry erosion. So keep calm and brick-and-mortar on.
How to Train your Product Page
Brands are leaning on Amazon more and more to manage their digital presence, and that’s not necessarily a good thing. Here’s what’s going on…
Americans now search for product information on Amazon as often as search engines, so brands need to begin thinking of their product pages as extensions of their brand websites. This means including important content on the product page such as installation guides and instruction videos. It also means configuring product titles and page content so that they’re optimized for keywords that customers use when searching for the product. You can read more about these best practices in this eMarketer article or read our SellPoints product page optimization guide.
In addition to becoming a valuable resource for product information, Amazon is now also starting to offer price automation. This means that third party sellers can now set a minimum price for their product, and Amazon will optimize the prices so that the brand can maximize revenue as market demand rises.
And to provide full 360 degree support, Amazon is deploying a strategy to make advertising on their platform easier. Over the past year, Amazon has rolled out new video ad formats, pushed into connected TV, and built out programmatic tools that place ads on websites outside Amazon. During its recent second-quarter earnings, Amazon reported $3 billion in advertising revenue, representing a 37% year-over-year growth.
Price optimization, search engine optimization, and ad buy optimization; these are all valuable services to be sure, but brands should be careful to not become too dependent on a single source. Amazon is making themselves as enticing to work with as possible, but there’s no doubt they are doing so to secure their stranglehold on the eCommerce industry.
The history of free market economics shows that when a single company dominates an industry, they tend to stagnate that industry’s innovation (read Master Switch for a deep dive on this topic if you’re interested). Proceed with caution.
In case you missed our announcement on Monday, last week we were acquired by Syndigo! Together our combined product solutions will make it easier than ever to deliver enhanced content on the product detail pages, so brands can to provide their customers with even more transparency and critical information. We are super excited to join the Syndigo family and look forward to continuing to help you expand your brand reach!
And that’s all the news that’s fit to print! Have a great weekend.