Friday, November 23, 2007

Where's the money?

The day after Thanksgiving and the annual Black Friday sales began as early as 4am! I'm thankful I don't work in retail. 5am was the time a few other stores opened, 6am was when most of those "Black Friday Sales" started. My youngest daughter Tiffany works in retail as a manager and managed to take a 4 day weekend!

Kathy and I went to the mall, not to buy anything except coffee. The mall was as busy as ever when we arrived around 11am. We went to a movie in the afternoon and then afterwards we came home and relaxed by paying bills and checking email and Blogging.

Observation shows us that we as Americans are still spending money. As a matter of fact, in my email was a survey that showed we have more discretionary income than we did 5 years ago. By a significant number too!

Take a look at who's got it to spend and then see how this compares to your current client and customer base.

Sixty Four Percent of Americans Have Money to Spend

With the week focused on shoppers, here's some information about spenders.

According to a report by The Conference Board, about 73 million US households now have discretionary (spendable) income, up from about 57 million in 2002. Total discretionary income in the US topped $1.7 trillion in 2006, with the household average at $24,335. Per capita income stood at $9,148.

Defined for the study, households with discretionary income are those whose spendable income exceeds that held by households with similar demographic features. The proportion of the US population with discretionary income has increased to nearly 64%, up from 52% in 2002.

Lynn Franco, director of The Conference Board Consumer Research Center, notes that "While the percentage of households with discretionary income has risen over the past several years, purchasing power remains concentrated in the wallets of the affluent."

Nearly 78% of all discretionary income is held by households earning more than $100,000. Average discretionary income for this segment, $66,451, is 2.7 times the national average.

Highlights of The Conference Board report include:

  • The region with the wealthiest concentration of households is New England. About 63% of these households have discretionary income, with an average amount of $27,337.
  • Household discretionary income is lowest in the West North Central region. Average household discretionary income in the region is $20,749.
  • California, the most populous state, is also the state with the largest number of households with discretionary income: 8 million. These households hold $224.7 billion in total discretionary income.
  • Texas has the second-highest number of households with discretionary income ofmore than 5 million, with $136.8 billion in total discretionary income.
  • Florida has almost 4.7 million households holding discretionary income of $126.1 billion, and New York has about 4.6 million households holding $119.4 billion in discretionary income.
  • The top end of the affluent group (≥ $200,000) accounts for only 3% of total households and 5% of households with discretionary income. This group, however, has 38% of total discretionary income with an average of $173,613 - more than seven times the national average.
  • Households with earnings under $50,000 account for nearly 60% of all households and 29% of households with discretionary income, but account for only 3% of aggregate discretionary income. Average discretionary income among this market is about $1,900.
  • Baby Boomers (1946 and 1964) have 43.7 million households, and more than two-thirds of Boomers have discretionary income, with the highest average discretionary income, at $29,754.
  • Two-thirds of Gen X-ers(1965 and 1981) have discretionary income, and the second-highest average discretionary income, at $22,562.

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Tuesday, November 20, 2007

Outside the "box"

Creating a "BUZZ":

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The Countdown to Christmas

Okay, you and I may think the following is a little ridiculous, but for the retailers of the world, especially those in the U.S.A. that have trained their customers to "Never Pay Retail(prices)", this is a nervous time of the year.

Here's what Walmart is up to:

Wal-Mart Tries To Pull An Extra Black Friday Out Of Its Hat
by Sarah Mahoney, Tuesday, Nov 20, 2007 5:00 AM ET
DETERMINED TO MAKE THE MOST of shopping madness, Wal-Mart says its will extend its Black Friday for two Black Fridays. Seriously. The retailer says it has petitioned Martin Rees, the Astronomer Royal at London's Royal National Observatory--asking that Sat., Nov. 24 also officially be named a "Friday."

"Because Wal-Mart will offer customers great prices on both Friday and Saturday as the Christmas shopping season moves into high gear," a Wal-Mart spokesperson says, it has "officially recommended the world's official time keeper consider a radical move: creating a week with two Fridays."

The letter to Lord Rees asks: "Does a week always have to contain seven days? And do those days always have to be the seven we're accustomed to?"

While there's no word on whether Wal-Mart will get its wish, "all this creativity from retailers is evidence that they are very nervous about the coming holiday season," says Kathy Sheehan, senior vice president of GfK Roper Consulting. "With the credit crisis, there's plenty of concern that this will be a soft season, and retailers are strategizing as never before to get people into their stores."

Wal-Mart has been steadily cutting prices for the upcoming holiday season since Halloween, weeks ahead of the normal retail schedule. Its latest announcement says it is now moving Black Friday up a day, with specials that start on Thanksgiving itself. The company is posting its entire Black Friday circular online, including "Secret In-Store Specials," such as a Kitchen Aid Classic Stand Mixer for $139. And it will also advertise in-store specials on its site.

"It's time to expand 'Black Friday' into three full days for the millions who want this convenience and need these savings," the company says in its announcement. Many of the price cuts are deep, including 60% off a Motorola H670 Bluetooth Earset, 30% off a Garmin Nuvi 650 Portable GPS System, and $100 off certain LCD HDTVs.

Wal-Mart definitely has a leg up in the Black Friday marathon. A new poll from Compete shows that the Bentonville, Ark.-based retailer is the No. 1 Black Friday destination for shoppers, with 34% of those polled saying Wal-Mart will be their first stop Friday morning. Best Buy comes in second with 18%, followed by Target, 16%, Macy's 9%, Circuit City, 5%, Sears, 4% and Kohl's 3%. "Other stores" total 11%.

And it's also no accident that the Web figures so centrally in Wal-Mart's holiday marketing strategy. A recent survey from, part of the National Retail Federation, finds that the Internet will influence 30.2% of holiday sales this year, up from 28.9% last year.

Still, Sheehan points out, retailers like Wal-Mart are especially vulnerable to the softer economy. Overall, GfK Roper Consulting's October poll on consumer confidence found that 48% of U.S. shoppers are uncertain about the economy, and 39% say they've experienced either job or housing distress in the last six months. And among those earning less than $50,000, who are more likely to have suffered an economic setback, Sheehan says, it tends to be higher: Almost half in that group say they have experienced some kind of financial distress in the last six months.

And while one in three polled say there will be less spent on gifts this year, one in two of those who have struggled financially plan to cut back on the gift budget.

And meanwhile, Wal-Mart still has its own We-hate-Wal-Mart holiday elves to deal with. just unveiled plans for its third-annual "Hope for the Holidays" campaign, and says it will spend $1.5 million on radio ads that highlight what it says are questionable safety practices. The ads point out that 70% of goods on Wal-Mart's shelves come from China, and that Wal-Mart has recalled "more than 25 dangerous products." Ads will run throughout the week.

WakeUpWalMart cites a poll, conducted by Peter D. Hart Research Associates, which finds that 60% of frequent Wal-Mart shoppers are uneasy buying Chinese goods.

For its part, Wal-Mart last week announced that it had stepped up its Toy Safety Net Program, and that since August, it has tested more than 12,000 toys.

Sarah Mahoney can be reached at

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Monday, November 19, 2007


When I got started in the advertising side of the radio business, I started soaking up as much info as I could get my hands on. There was a book by Al Ries and Jack Trout called Positioning. Here's a video from Al Ries:

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