Home Improvement Still on Americans' To-Do Lists for 2011

Nearly two-thirds (64 percent) of homeowners say they will invest in renovation projects this year, according to the latest American Express Spending & Saving Tracker.

While the number of people planning to make home improvements is similar to 2010 (62 percent), the amount they are planning to spend is significantly less -- dropping from an average of $6,200 in 2010 to $3,400 in 2011. Even though homeowners' confidence in the real estate market has increased compared to last year, less than half (43 percent) believe they would get the asking price for their home if it was on the market today.

Spending green to make green
Nearly one-third (32 percent) of homeowners with home improvement plans said they'll be looking to invest in green improvements this year. Many are choosing to spend on energy saving measures because of the long-term, cost-saving benefits (31 percent). Energy efficient windows and doors (16 percent) top homeowner's lists, followed by insulation (12 percent), roofing (11 percent) and heating/ventilation/cooling systems (10 percent).

"This year, consumers are spending smart and looking for ways to save when it comes to home renovation," said Pamela Codispoti, executive vice present and general manager of Consumer Card Services, American Express. "Our survey revealed that consumers are investing in green improvements to increase their savings over time and choosing to handle renovation projects on their own to save now. Many also plan to use their tax refunds to pay for improvements."

I'll do it myself, thank you
More than three in five homeowners (64 percent) with home improvement plans say they'll take on at least some of the work themselves, 20 percent will hire a contractor to do all of the work, and 11 percent will ask a family member to do the work. Among those who plan to do some or all of the work themselves, 30 percent will be taking a "friends and family" approach to getting the work done. Twenty-one percent plan to split the work load by hiring a contractor for specialized projects. Thirteen percent plan to go it alone.

Bathroom makeovers top list
Indoor renovations outrank outdoor remodeling projects 55 percent to 29 percent, respectively. Cosmetic work, such as painting and redoing rooms were the most popular indoor projects, with bathrooms holding on to the top spot again this year for the most popular room remodel. Those who set their sights on outdoor projects are most interested in refreshing their landscaping (22 percent), followed by building or redoing a deck or patio (9 percent).

American Express Spending & Saving Tracker research was completed online among a random sample of 2,045 consumers aged 18+.

(Source: American Express, 03/24/11)

Web Ads to Draw Nearly 25 Percent of Local Spend by 2015

Online advertising by local businesses will account for almost a quarter of all local ad spend by 2015, says local media research and consulting firm BIA/Kelsey. The company's new U.S. Local Media Forecast points to channels such as daily deals offers as increasingly popular with consumers, and thus a market ripe for local advertising dollars.

According to BIA/Kelsey, local online ad spending by small and medium-sized businesses (SMBs) will represent 23.6 percent of all local ad spending by 2015, growing from $21.7 billion last year to $42.5 billion by 2015. The economic downturn has tempered the company's predictions, previously more bullish. Back in 2006, the firm predicted local search and online classified spending alone would hit $31.1 billion in 2010.

BIA/Kelsey suggested maturing online ad products, increased usage of smartphones and tablet devices, and continued disruption of traditional newspaper models are driving momentum for local online ad spending.

The research outfit pegs 2010 online local ad spending at 14.1 percent of all spending by SMBs, and expects 2011 online local ad expenditures to account for 16.2 percent of the local ad pie.

The company surveyed clients and non-clients and compiled data from various sources to determine the findings. The report, released today, indicates overall local advertising revenues will increase from $136.3 billion in 2010 to $153.5 billion in 2015. However the projected revenue for 2015 is still less than the total for 2008, when spending hit $156.3 billion, according to BIA/Kelsey.

As firms like Yahoo and Gannett explore local daily deals offerings, BIA/Kelsey forecasts the daily deals space will generate $3.9 billion in consumer spending by 2015.

Another recent local online spending report from Borrell Associates found spending on social media marketing by SMBs would grow more than 30 percent this year.

(Source: Clickz, 03/21/11)

Fast Casual Restaurants Poised for Further Growth

While the deep recession and grindingly slow recovery have battered many in the restaurant industry, leading fast-casual chains like Chipotle, Five Guys and Panera thrived during that period, says new research from The NPD Group.

The Port Washington, N.Y.-based research firm found that customer counts at the nation's largest fast-casual concepts rose 17 percent over the past three years, logging traffic gains of 7 percent in 2008, 4 percent in 2009 and 6 percent in 2010.

In comparison, guest counts for the entire industry and the quick-service segment declined or remained flat during the same time frame.

"Fast-casual restaurants have done an excellent job of satisfying their customers' needs for quality and service and have built strong customer loyalty as a result," said NPD's restaurant industry analyst Bonnie Riggs. "The attributes that define the fast-casual concept -- fresh, food quality and service -- are the reasons why customers give them their highest satisfaction ratings."

Several fast-casual chains have stood out in the past few years for outperforming the industry. In its recently released "Top 500 Report," Chicago-based research firm Technomic identified Five Guys Burgers and Fries, Chipotle Mexican Grill, and Noodles & Co., as among the 10 fastest-growing restaurant chains with annual sales exceeding $200 million.

Five Guys' annual sales grew 38 percent last year to an estimated $625 million, benefiting from unit count growth of 35 percent. Segment heavyweight Chipotle increased sales 21 percent to $1.83 billion and its store count by 14 percent. Noodles & Co. expanded its sales 14 percent to $261 million and its system size by 11 percent.

Panera Bread Co., whose 2010 revenues rose 14 percent to $1.54 billion, recently told investors it plans to open between 95 and 105 new restaurants in 2011 and would seek to grow sales by expanding its catering business, leveraging data from its loyalty program and selectively building more drive-thrus.

"Fast-casual concepts are in an excellent position for growth," Riggs said. "We've seen other fast-food customers trading up to fast casual and full-service customers trading down to fast casual. In addition, with imitation being the highest form of flattery, we're now seeing other segments of the industry duplicate what has made fast-casual concepts so successful."

The spread between customers' increased visits to fast-casual chains and those brands' ability to expand rapidly enough to meet the demand demonstrates that high level of guest satisfaction, NPD said. While traffic at fast-casual operations has increased 17 percent between 2008 and 2010, the segment's aggregate unit count expanded 12 percent during that period, NPD found, leaving room for more sales growth in the near term.

Demographics also will play to the fast-casual segment's strengths in the coming years, NPD said, citing its report titled "A Look into the Future of Foodservice." The report provides a 10-year forecast for restaurant industry trends based on aging, population growth and trend momentum.

Incremental traffic for fast casual will grow significantly over the next decade, NPD said, due to high rates of usage by young consumers in "Generation Z," whose members are currently between 10 and 30 years of age. That cohort will be the largest demographic group in the United States, with 90 million people, by 2019.

(Source: Nation's Restaurant News, 03/15/11)

How Daylight Savings Affects Media Usage

Television Viewing Goes Down, But Other Media -- Including Radio -- Benefit
For most people, daylight savings time is a minor annoyance that causes them to miss an hour of sleep every spring. But for smart media people, it should be a consideration when planning spring campaigns. The extra hour of daylight gained has a major impact on people's lives, allowing them to stay outside later as the days grow longer, and that in turn has a major impact on their media consumption.

The pattern on television is obvious. Each spring primetime ratings take a notable dip after daylight savings weekend, and sometimes they don't recover. But other media is also affected by the change. Outdoor campaigns can receive more notice in spring than in fall, when temperatures begin to warm up. And radio and magazines, which can accompany people in their outdoor activities, are two not-so-obvious choices for advertisers eager to connect with people as they stay out longer.
Why does daylight savings have such an impact on advertising?

In an industry such as advertising, even the slightest thing can make the difference between a home run campaign and a complete dud. When planning your strategy for the months to come, it's extremely important to have a pulse on your surroundings and environment.

With the longer days and warmer weather that daylight savings brings, advertisers' efforts and focus will gradually shift from more at-home media outlets such as TV and Internet to more out-of-home tactics such as radio, magazines and especially billboards.

The message in campaigns is definitely affected since people feel different during warmer season, are more exposed and interact with each other in a completely different dynamic than during the cold season.

Moreover, the brands use these changes to create new needs and trends for consumers.

What media does it affect most and why?

The fact that it gets darker later in the spring than it did in the winter certainly has an effect on what we do in our daily lives. Since daylight savings brings warmer weather, we tend to be more outdoorsy and spend more time out of home.

In recent years, numbers for more at-home media outlets, such as TV, have shown drops in ratings of 10 to 11 percent during the week that daylight savings started up again.

This means that advertising campaigns should shift focus to more out-of-home tactics, such as radio, magazines and billboards, to reach consumers and broadcast their message more efficiently.

Do you think most media people are mindful of the effect of daylight savings on advertising? Why or why not?

Since advertising is a form of communication intended to persuade audiences, it's essential for media people to connect with crowds and be aware of consumer trends.

Adding daylight to afternoons benefits outdoor activities like sports and retail, indicating a change in lifestyles, mood, among others.

Media people understand that consumers change everything from one season to another in the way they eat, dress, shop and spend their free time, for instance. Media people are aware of this, and thus create summer-type campaigns during this time to be in accordance with the season and accomplish what the audience is looking for.

How have media people adjusted to daylight savings in their advertising work?

Media people are ready to adjust their work to any change in consumer trends. Since daylight savings is intended to make days longer and save energy, we are ready to shift campaigns to more outdoor-friendly outlets and find ways to advertise outside the conventional methods.

Why are radio and magazines included in your list of media that should be more prominent during warm weather months?

Adding daylight to afternoon benefits retailing, sports, and other activities that exploit sunlight after working hours.

Since people are going to be spending more time outdoors, this means a shift from TV and Internet campaigns, to more energy-friendly channels such as magazines and radio.

These outlets should be exploited because they provide a strong out-of-home audience since they can easily accompany people in their outdoor time.

Are clients usually responsive when you discuss daylight savings time strategies with them?

Since DST is a seasonal change in people's lifestyle, our clients are very responsive with us and understand the importance of campaign shifts to interact and connect efficiently and emotionally to consumers.

(Source: Media Life, 03/14/11)

In a Renaissance for Radio, More Listeners Are Tuning In

Radio stations are receiving a surprisingly strong signal from audiences and the financial markets this year, even as they face intensifying competition from satellite and Web-based audio services including Sirius XM Satellite Radio XM and Pandora.

An average of 241.6 million people 12 and older listened to conventional radio stations each week last year, an increase of 2.1 million over 2009 -- and up 4.9% vs. 2005, according to an annual study that media and marketing research company Arbitron released Monday.

"Radio is much stronger than the general perception of it has been," says Carol Hanley, Arbitron's executive VP of sales and marketing.

The industry still faces challenges. From 2000 through 2010, teens and young adults cut their radio-listening time in half as they became infatuated with the Internet, cellphones and video games, Edison Research reported.

Yet stations appear to be getting a lift from their ability to adapt to local tastes. Radio owners "can shift their programming very quickly," says Howard Bass, senior media and entertainment partner with consulting firm Ernst & Young. "That's why they're so resilient."

That has helped radio appeal to the growing Hispanic population. The number of Hispanic radio listeners increased 1.1 million last year, Arbitron says, as stations picked up on programming formats for Spanish-speaking audiences.

For example, Texas now has 154 Spanish-language stations, up from 25 in 2000.

The Hispanic audience "has grown immensely," Bass says. "Clearly the listenership has followed the trends."

Meanwhile, radio is benefiting financially from this year's stronger-than-expected market for local ads. Radio's biggest customers, automakers and dealers, are introducing 65 models in 2011, up from 60 last year and 40 in 2009, Wells Fargo analyst Marci Ryvicker says.

"As these local dealers become more (economically) sure-footed, you're just going to see incremental growth in that category," Cumulus CEO Lewis Dickey told Wall Street analysts last week.

The auto industry accounted for $1.8 billion of radio's $17.3 billion in ad sales last year, according to the Radio Advertising. The industry total was up 6% vs. 2009.

(Source: USA Today, 03/22/11)

Auto Aftershocks...Quake Hits U.S. Output; Japanese Scramble to Recover; Prices Could Rise

As Japan's escalating disaster comes ashore in North America, automakers, suppliers and dealers are preparing for shortages of parts and vehicles.

-- On Thursday, March 17, American Honda Motor Co. Executive Vice President John Mendel sent a memo to U.S. Honda and Acura dealers saying the disaster in Japan will disrupt dealer orders into May.

-- General Motors' Shreveport, La., factory, which builds the Chevrolet Colorado and GMC Canyon pickups, closed because it ran out of a Japanese part that it did not identify.

-- Toyota Motor Corp. and Subaru of Indiana Automotive Inc. slowed North American production to ration their parts.

-- At Sonic Automotive Inc., the nation's third-largest dealership group, Jeff Dyke, executive vice president of retail operations, said Sonic "is prepared to supplement our new-vehicle inventory with quality nearly new used vehicles should the manufacturing disruptions interrupt new vehicle inventory supplies longer than currently anticipated."

-- Last week, U.S. Customs directed all port operations to begin screening arriving Japanese sea and air cargo, including vehicles and auto parts, for radiation contamination. Customs will turn away containers or people if unacceptable levels of radiation are detected.

If factory shutdowns spread, says Jesse Toprak, vice president of industry trends at Truecar.com, U.S. retailers should prepare for higher transaction prices on new vehicles in the next 60 days.

"Not just Japanese-brand vehicles but all brands," Toprak says. "If there is going to be scarcity of Japanese models, then you will see their incentives fall. And if incentives fall on those brands, you can be certain they will fall everywhere."

Toprak estimates that the average transaction price of the Toyota Prius, which is built only in Japan, will go from $1,732 below sticker last week to $800 above sticker by April 30. One of three Japanese battery plants supplying the Toyota Prius was damaged by the quake.

"We have a Toyota dealership that sells 25 Prius models a month, and we have 13 in stock," said a dealership group executive who asked not to be identified. "What do you think will happen?"

Some of the transaction price increases reflect rising gasoline prices. Many of the models now threatened by production disruptions in Japan are among the automakers' most fuel-efficient, including the Honda Fit, Insight, Civic Hybrid and CR-Z. TrueCar.com forecasts that the discount off sticker on a Honda Fit will shrink from an average of $1,188 last week to $400 by April 30, effectively a price increase of $788.

Ford Motor Co. declined to speculate what impact future parts shortages would have on its sales.

"We don't want to be drawn into what potential impact it might have because this situation is moving so quickly," says Todd Nissen, a Ford spokesman.

Ford has not experienced any parts' shortages that would force it to suspend production at any plants, Nissen says. But he warns: "It's a situation that changes constantly and we're monitoring it daily with hourly contact with our suppliers, shipping companies and all the others that are part of the logistics system."

He declined to quantify the percentage of parts used by Ford that come out of Japan.

Multiple shocks
Vehicle producers in Japan quickly inspected the damage at their plants last week after the multiple shocks of two earthquakes, a tsunami and the unfolding nuclear power-plant disaster. Assembly plant shutdowns there will mean more than 285,000 units of lost production, just through March 23, predicts global forecasting firm IHS.

But as the week ended, Japan's auto companies were still struggling to get information from their thousands of suppliers around that nation -- companies that also export materials and components to U.S., European and Asian customers. In some cases, purchasing managers in Japan couldn't even communicate with suppliers let alone assess the damage to the parts plants.

"Most of us have a pipeline for a while," said an American staffer at a Japanese automaker in North America who asked not to be identified. "But when those run out, there's going to be trouble. You have to consider that even our American suppliers get parts out of Japan."

Japan exports 2 million transmissions a year to North America and another 6.5 million to other world markets, IHS estimates. The forecasting consultant estimated last week that as many as two-thirds of Japan's 72 engine and transmission plants had stopped production.

Two of them belong to Jatco, a transmission maker owned by Nissan Motor Co. and Mitsubishi Motors Corp. Jatco's two plants south of Tokyo escaped unscathed from the first 9.0-magnitude earthquake on March 11, the ensuing tsunami and the succession of earthquake aftershocks that continued last week. Then they were damaged by the second, 6.2-magnitude earthquake in the middle of last week.

Jatco produces some transmissions in Japan for Nissan's U.S.- and Mexico-made vehicles, but a spokesman for Nissan North America was not able to say what production might be affected because of the problem.

Aisin Seiki Co. supplies transmissions to the Shreveport pickup plant GM shut down because of a parts shortage. Chuck Sanders, assistant vice president of Aisin's U.S. unit, said Aisin's transmissions were not part of the shortages.

Delphi delays
Delphi Automotive has identified 20 of its 200 Japanese suppliers as being within 100 miles of the epicenter of the initial earthquake.

"With the continued shortage of power and water in the area, we anticipate delays and/or that potential disruptions may occur and could impact much of the automotive supply chain," spokesman Lindsey Williams wrote in an e-mail to Crain's Detroit Business, a sister publication to Automotive News.

In addition to still uncounted damage to buildings, machinery, bridges, roads and utilities, companies in Japan face rolling electrical blackouts. Toyota, Nissan, Honda Motor Co. and others halted production at some undamaged plants last week because of utility interruptions.

That problem was caused by the shutdown of damaged nuclear reactors in Fukushima, Japan. And that crisis, in turn, caused an entirely separate problem as corporations, residents and international governments began to fear radiation contamination.

As of late last week, Japanese nuclear power authorities had not publicly addressed the issue of how bad the radiation leakage is or could be. Nissan said it has begun monitoring all vehicles and parts for traces of radiation. Germany's BMW AG and Volkswagen Group recalled all German personnel from Japan.

Toyota, Honda, Mazda Motor Corp. and Suzuki Motor Co. say most or all of their Japanese plants will remain down until the middle of this week.

But uncertainty overshadows the discussion for many. Steve Curtis, a spokesman for Toyota Motor Sales U.S.A. Inc., said the automaker will "re-evaluate" today whether to restart production in Japan.

The dicey future in Japan is illustrated by the case of the Japanese assembly plant the farthest from the earthquake's epicenter.

On Friday, Nissan reopened its Kyushu plant, which builds the Rogue and Murano crossovers, the new Quest minivan and other models. But Nissan plans to run the plant only until available parts are depleted.

It also said its North American plants will run normal schedules this week. But after that, production plans are uncertain.

(Source: Automotive News, 03/21/11)

Daily Sales Tip: When Talking to Prospects on the Phone...

...Always use their first name. I know that there are two schools of thought on this, one being that you should show respect for someone you don't know and so use either Mr. or Mrs., but I don't agree.

I think you can show respect for someone by being courteous and professional, and I think you're going to make a lot more progress if you use a person's first name. Here are the two reasons to do so:

* First, by using a person's first name you aren't immediately signaling that you're a salesperson! I mean, how do you feel when someone you don't know calls you and addresses you by "Mr." or "Mrs."? Also, when you use a person's first name, you are starting the call equal, without giving them all the power.

* Second, everyone likes the sound of their own name. In fact, psychologists have found that everyone's favorite word is their first name! By starting with that you are immediately making a connection, and a personal one at that.

Source: Sales consultant Mike Brooks

Valvoline 'All In' For New 50 Percent Recycled Motor Oil

Valvoline is throwing almost all of its marketing budget this year behind a completely new kind of product for the motor oil segment: 50% recycled motor oil. The company says the new product, called NextGen, is of as high quality as Valvoline's other products, and that will be a big part of the message. Thom Smith, VP of branded lubricant technology at the Lexington, Ky.-based company, explains that new technology made the venture possible.

About 85% of motor oil is base oil, with the remaining 15% performance additives. "As the oil ages, contaminants can build up, but the oil itself -- the molecules -- are in good shape when you drain it. What we are able to do now is take used oil, remove the contamination, remove the additives and refresh it. In the past the processes for re-refining weren't of the quality to make a quality base oil. Recently, innovations in re-refining use the same process as virgin refining, so we are able to take that base oil and produce finished oils that are as good as virgin."

The other piece, he adds, is that the public had to be ready for this. "In the past, the public wasn't willing to accept re-refined oil; there was reluctance to buy such products. But crude oil is finite, so it only makes sense to make the best possible use of it. Also the production of re-refined is much better for the environment than production of virgin oil, so production of NextGen also means a smaller environmental footprint."

Blair Boggs, VP of global brands, says marketing activity around the new product, which hits retail next month (he says it will be in 75% of oil change centers by May and the rest through the summer) will include TV, print, radio, digital, grassroots efforts and a new program called MORE (Motor Oil Recycling Education). He adds that consumers in the U.S. go through about 800 million gallons of motor oil every year. "The key message," he says, "is that NextGen is not just a product but one that closes the recycling loop, because most people actually recycle motor oil already."

Boggs adds that a critical element of the new marketing strategy is pricing: unlike many "green" products, there will not be a price premium on NextGen. "Our challenge is to drive consumer acceptance of recycled motor oil," he says. "To do that, first, we had to make sure consumers don't have to pay more for the privilege. Second, we could not ask them to make a performance tradeoff."

The MORE educational program is designed to encourage consumers not only to recycle, but also to close the loop by using recycled products, says Boggs. "We will be asking them to begin recycling, and to pledge to use recycled oils." He says that for every consumer who takes the pledge, the company will donate a dollar to "Keep America Beautiful," and "The Great American Cleanup."

"From a marketing budget standpoint, Valvoline is all in supporting this," says Boggs. "It's what we are going to be talking about this year; we will advertise across traditional, interactive, social media, and activate with NASCAR teams with paint schemes, the use of product on race day and qualifying days. We are spending everything we've got against it."

(Source: Marketing Daily, 03/15/11)

Time to Fire Up the Barbecue Grill

The 22nd Annual Weber GrillWatch Survey reveals that 7% of Americans report spending more than 10 hours each week cooking outdoors during their grilling season. With this, almost half (49%) of all study respondents say they grill or smoke-cook year-round.

The survey also shows that U.S. grill and smoker owners cook an average of five hours per week. Additionally, 22% say they are grilling "more" this year compared to last.

Nearly 78% of U.S. grill and/or smoker owners say grilling is an "extremely important" or "pretty important" activity when entertaining guests at their home. Among those who grill primarily on charcoal (who also tend to be more passionate about grilling overall), an impressive 92% agree with either statement. Nearly one-fourth of Weber GrillWatch Survey respondents hosted at least five barbecue parties during the summer of 2010.

The grill continues to be the most important feature in the outdoor room at 59%, followed by a dining area (49%) and "food prep/counter space" (48%). Nearly one-third of those who have an outdoor room, defined in the industry as an outdoor area with designated cooking, dining and entertainment spaces, say they plan to use this room more in 2011 than they did in 2010.

Favorite Grilled Meals and Foods

Dinner remains the primary meal grilled on a regular basis (89%), followed by lunch (35%) and breakfast (3%). Although eight out of 10 grillers respond that they have never grilled breakfast outdoors, more than half of them are interested in learning.

Here are the Top 5 foods grilled most often during the last year:

1. Hamburgers (69%)
2. Steak (46%)
3. Chicken pieces (42%)
4. Hot dogs (39%)
5. Ribs (17%)

2011 Weber GrillWatch Survey respondents cited the following five foods as the "most challenging" to grill:

1. Desserts (34%)
2. Tie for second: Fish and pizza (both at 27%)
3. Shellfish (25%)
4. Fruits (22%)

While 96% of all Americans grill burgers outdoors, beef burgers are the country's favorite at 93%, followed by turkey (14%) and vegetables (6%). Favorite burger toppings are onions (62%), tomatoes, (61%), lettuce and ketchup (both 59%) and mustard (50%).

Other Grilling Facts from the 2011 Weber GrillWatch Survey

• Currently, 71% of all Americans own an outdoor grill and/or smoker.
• The majority own a gas grill (67%). Of these, 7% use a natural gas line versus a propane tank grill.
• 46% own a charcoal grill.
• 10% own a smoker.
• 4% own an outdoor electric grill.
• 30% of Americans own two or more outdoor grills or smokers, which is down 5% from 35% in 2010; 5% own three or more, which is down 2% from 2010.
• Although fewer people are grilling away from home compared to last year (53% compared to 65%), campgrounds are the second favorite venue (37%), with parks following at 28%, beaches at 18% and tailgates close behind at 17%.
• U.S. gas grill owners report these as their top barbecue features: 52% have a side burner (down from 2010's 61%); 27% have a rotisserie (down from 2010's 32%); and 19% have a sear zone of some kind (up from 17% in 2010).
• An overall 4% of all U.S. grill owners say there are outdoor barbecue restrictions where they live. Half of these report that gas grills aren't allowed, and the other half report that charcoal grills aren't allowed. The majority of these respondents (13%) live in urban areas versus those who live in rural or suburban areas of the country (7%).
• Men are still the primary griller in most U.S. households (61%) with 20% of households reporting that it's a shared responsibility among men and women.
• Independence Day remains as the favorite grilling holiday at 81%, followed by birthdays at 67%, Labor Day at 66%, and Memorial Day (61% compared to 71% last year). Father's Day is fifth this year at 48%.

(Source: Casual Living, 03/07/11)

Why the Easter Bunny Is a Retail Beast

The Easter Bunny may look fluffy and cute, but retailers know there's a lot of consumer-toned muscle beneath that fuzzy exterior.

Easter may not have the profile of other more secularly oriented holidays, but the bunny is a retail beast. Easter brought in more than $14 billion last year, accounting for 6.1% of all holiday spending, according to IBISWorld. That's good for fifth among its holiday cohorts behind the winter holidays (59.2%), Thanksgiving (13.4%), Valentine's Day (7.5%) and Mother's Day (6.5%).

Last year, the 79.6% of Americans who celebrated Easter spent an average of $118.60 on the holiday. The overwhelming majority of that spending went right into the Easter baskets as food ($37.45), gifts ($18.16) and candy ($17.29). For such companies as Tootsie Roll, Hershey's and Kraft -- which is on its second year of making Cadbury Creme Eggs -- Easter is a $1.9 billion basket of goodies with candy sales second only to Halloween's $2 billion, according to the National Confectioners Association.

"Easter is obviously a religious holiday, but many retailers have discovered that Americans consider Easter the official kickoff to spring," says Kathy Grannis, spokeswoman for the National Retail Federation. "We've found that millions of Americans head out every spring to buy not only Easter-related products, but to buy new spring apparel."

While roughly 65% of Americans got their chocolate, jelly beans and decorations at discount stores such as Wal-Mart, Target, Kmart, Kohl's and Fred Meyer last year, they were putting a lot more into the cart than just holiday treats. The NRF says that roughly 39.2% of Americans spent an average of $19 on Easter apparel last year -- fueling sales when there is seemingly little incentive to do so.

"It's more about promoting new lines through small discounts or events than big blowout sales like a post-holiday clearance," says IBISWorld analyst Nikoleta Panteva. "Because the prices are higher than during post-holiday sales, they kind of bring in revenue that way."

Stores such as The Gap and TJX may get nostalgic for winter around this time of year, as only 7% of NRF consumers shop at specialty clothing stores for the holiday, but other retail niches find the holiday as sweet as a truckload of marshmallow Peeps.

Since the basket is big enough to hold, say, a copy of Dragon Age 2, Easter's been a huge video game holiday. Last year alone, the NPD Group credited Easter sales with an $80 million spike in game sales that fueled big returns for Sony's God of War III and Electronic Arts' Battlefield: Bad Company 2. Conversely, they also blamed the movable feast for a more than $100 million decline in April sales when the holiday fell on April 4 last year after falling on April 12 a year earlier.

Normally retailers will just compensate by combining their March and April sales as they would with November and December holiday sales numbers. That's not going to be so easy this year; Easter doesn't come until April 24, the latest it's been since landing on its latest possible date of April 25 in 1943.

Retailers who were spoiled in 2008 when Easter came March 23 -- one day off its earliest possible date of March 22, where it hasn't fallen since 1818 and won't again until 2285 -- will have to stretch to make up for a fairly moribund March, but have billions in added revenue waiting for them on Easter morning.

"The shift in the Easter holiday often results in the dislocation of sales, but Easter falls in line with Valentine's Day and Mother's Day as a gift-giving holiday," Grannis says.

(Source: TheStreet.com, 03/24/11)

Ethanol Policies Leading to Higher Food Prices

Whether shopping at big-box stores in the United States or haggling with vendors at marketplaces in rural Africa, consumers around the world are confronting noticeably higher prices for the food they need.  Agricultural and economics experts report government policies encouraging or mandating ethanol production are largely to blame, says Bonner R. Cohen, a senior fellow at the National Center for Public Policy Research.

• Food prices globally have risen 29 percent during the past year, according to the World Bank Group, pushing tens of millions of people into poverty.
• Staple food crops show an even steeper rise, according to United Nations figures, with corn prices rising 53 percent and wheat prices rising 47 percent during 2010.

Agricultural experts are increasingly identifying government policies aimed at promoting biofuels -- corn-based ethanol in the United States, sugar-based ethanol in Brazil and biodiesel in Europe -- as a factor in the sharp rise of the cost of grains and meat around the world.
Figures from the U.S. Department of Agriculture underscore how the diversion of farmland from food to fuels has changed land-use patterns in the Midwest's corn belt.

• In 2001 only 7 percent of U.S. corn went to ethanol, or about 707 million bushels.
• By 2010, ethanol's share was 39.4 percent, or nearly 5 billion bushels out of total U.S. production of 12.45 billion bushels.

Because the United States provides more than half of global corn exports, the diversion from food to fuel inevitably makes its presence felt on global markets, says Cohen.

Source: Bonner R. Cohen, "Rising Food Prices Spark Renewed Criticism of Ethanol Mandates," Heartland Institute, March 14, 2011.

Ads on School Buses Bring in Revenue for States

The look of school buses hasn't changed much over the years, but as states scramble for revenue sources, a growing number are adding something new -- advertising for such clients as banks, real estate and insurance agents, says USA Today.

• New Jersey's Gov. Chris Christie signed legislation in January making his state the sixth to allow advertising on school buses.
• Arizona, Colorado, New Mexico, Tennessee and Texas also permit ads.
• Lawmakers in at least five other states -- Florida, Kentucky, Oklahoma, Utah and Washington -- are considering the idea.

Advertising in public school districts has existed for years at school gyms and athletic fields, says New Jersey School Boards Association spokesman Michael Yaple.  School buses offer the visibility of daily trips throughout a community -- along with the associated sensitivity of the commercial influence on young children, says Michael Beauchamp, president of Alpha Media, which manages advertising on 3,000 school buses in Texas and Arizona.

Beauchamp says advertising on 100 buses will, on average, generate $500,000 over four years.

Financing Getting Easier for Obtaining a New Car

As car buyers head back into dealerships after a two-year drought, they're being greeted by rock-bottom interest rates on auto loans, eye-popping lease deals and a renewed willingness to lend to people with spotty credit.

Banks are on firmer financial footing, helped by government aid and renewed demand for auto loans that are packaged and sold as securities, a market that raises money and allows banks to write more loans. Buyers, too, are gaining confidence. U.S. auto sales rose 20 percent in February to the highest monthly pace since Cash for Clunkers in August 2009.

This month, General Motors, Chrysler, Ford, Nissan and others are offering zero-percent interest rates on auto loans. Luxury makers such as Acura and Cadillac have lease deals with zero-percent down. Banks have cut their interest rates on auto loans in half.

"If you feel comfortable purchasing today, the deals are out there to be had," says Mark Hawks, 40, an information technology specialist from suburban Washington, D.C., who shaved thousands of dollars off the sticker price of the Ford Taurus SHO sport sedan he bought in December.

Hawks has a credit score of 780, which puts him in the highest tier of borrowers. He was pre-approved through his credit union for a five-year loan with a 3.99-percent annual interest rate. But his dealer beat that, offering a 3.79-percent rate with no payment for 90 days through Fifth Third Bank. The dealer also kicked in a $2,000 rebate and the trade-in value of Hawks' eight-year-old Subaru. Final price of the new car: $33,000, compared with a sticker price of $46,000.

The lesson? Shop around for favorable loan terms, even if you don't have great credit.

Here are some reasons for the great deals:

Lower rates. Buyers are paying an average annual percentage rate of 3 percent for new cars financed in February, down from nearly 4 percent in the same month a year ago, says auto research site Edmunds.com. That's one of the lowest rates since before the economic downturn, when cheap credit helped fuel the housing bubble and subsequent financial meltdown.

Banks, credit unions and automotive financing companies are in fierce competition to loan you money. While credit unions and finance companies once offered the lowest rates, banks now have more competitive financing. With short-term rates near zero percent, banks that offered loans at 7 or 8 percent can now profit off 3 or 4 percent, says Greg McBride, a financial analyst with the personal finance website Bankrate.com.

More loans for subprime borrowers. Unlike much of 2010, when the auto loan market was open mainly to buyers with the best credit, people with weak credit histories now are having an easier time finding loans because of the competitive market. The percentage of new-car auto loans going to subprime buyers -- generally those with credit scores below 680 -- rose 18 percent in the last three months of 2010 compared with the same period the year before, according to Experian Automotive.

Better leasing deals. Leasing is making a comeback. That's a boon for people seeking lower monthly payments on a car or truck. Leases made up a quarter of new-car transactions in February, Edmunds says. That was the highest single month for leasing since November 2005. Generally, leasing means you pay less per month than you would on a car loan. The reason: You're only paying off the amount the car will depreciate before you turn it in. When you buy, you're paying for the whole car, plus finance charges.

Typically, about 20 percent of new cars are leased. But the bottom fell out of that market at the beginning of the downturn because there were too many used cars and not enough demand for cars coming off lease. Leasing fell to 16 percent of the market in 2009. But as the recession progressed, used cars became scarce as people looked for cheaper wheels. That caused used-car prices to rise. Now, lenders are more willing to take on a lease, knowing the car will be worth something when the lease is up.

Cadillac, for example, is now offering to lease a $37,290 CTS luxury sport sedan for $399 a month for 36 months with no money down, according to Edmunds. A year ago, you had to put down nearly $6,300 for a similar deal, with a monthly payment of $369. Yes, you got a more luxurious version of the car last year with a $39,990 sticker price and more miles to drive, but this year's deal still is far sweeter because you avoid the big down payment. With no money down, you save more than $5,000 over the three years.

Interest rates are likely to stay low this year, as the economy continues to recover. That will help keep loan terms attractive. Competition also remains fierce among car companies. GM said earlier this month that it expects to dial back on lease deals and other incentives as the year goes on, but it could keep them in place if it faces too much pressure from rivals.

But even though deals are good, lenders have learned their lessons from the bust. Hawks, with his stellar credit, couldn't match the deal he got on his Subaru in 2002. Back then, he paid 2.9-percent annual interest rate on a five-year loan.

(Source: The Detroit News, 03/13/11)

Industries That Should Do the Most Hiring in 2011

Millions of Americans want to know: Where are the jobs?

Finally, some answers are emerging. There are still about 7.5 million fewer jobs than there were at the end of 2007, when the Great Recession began. That's a big hole, and it could take years before employment returns to "normal" levels of five or six years ago.

But we're turning a corner. Over the last few months, employers have added 125,000 jobs per month on average, and the trend is strengthening. That's enough job growth to start lowering the unemployment rate, which has fallen from 9.8 percent last November to 8.9 percent now. Companies need new people, and anxious CEOs are finally becoming optimistic enough to give hiring managers a green light.

Hiring is wildly uneven, however, and it's likely to stay that way. Some industries are in a natural decline that accelerated during the recession, with many jobs gone for good. But other parts of the economy are following the traditional patterns of a recovery, and some industries remain strong due to demographics or basic human needs.

To gauge where the most jobs will be created over the next year or so, data from research firm IBISWorld can be used to measure projected job growth in 2011 for nearly 700 industries and sub-industries. Unlike government or industry data that measures employment levels in the past, IBISWorld uses revenue forecasts, productivity data, and the expertise of analysts to estimate job changes in the future.

The outlook can help workers and employers better understand the job market -- and it also helps illustrate some of the most important ways the U.S. economy is changing. Here are the 10 industries expected to add the most jobs over the next year:

Office staffing (284,000 new jobs). The rapid hiring of office workers is one part of the recovery that's going the way it's supposed to. As recession gives way to recovery, companies typically hire temporary workers first, then hire more full-timers as business picks up. As revenue grows, businesses spend more on everything from support staff to printer repairmen to lawyers, consultants, and contractors.

Tourism (191,000 new jobs). When times get tough, the travel budget shrinks -- whether you're a company or a family. When conditions ease, travel picks up again. In addition to domestic tourism, the United States should benefit from economies in Asia and other emerging nations that are growing faster than average, since America is a top destination for foreign travelers.

Education (131,000 jobs). One lesson of the recession was that education has never been more important -- and often means the difference between a paycheck and an unemployment claim. State and local budget woes are causing teacher layoffs in some areas, but IBISWorld still expects a net job gain of 62,000 at public schools, including administration and support staff. Colleges and universities, along with trade and other specialist schools, should see a similar hiring surge, with nearly 67,000 new jobs.

Restaurants (130,000 new jobs). The dining budget is another obvious place to trim some fat when money gets tight, and the restaurant industry lost about 365,000 jobs during the recession. But people are starting to eat out again, which is good news for every restaurant category, from fast food to fine dining.

Car dealerships (101,000 new jobs). The local showroom was a depressing place during the recession, since car sales fell by more than 40 percent. Plus, the General Motors and Chrysler bankruptcies led to the shuttering of hundreds of dealerships. But the gloom is finally lifting, and rising car sales have been a bright spot lately. As buyers return, showrooms will ramp up. That includes used cars, which have been nicely profitable since more buyers are trying to save money by buying older models.

Doctors (63,000 new jobs). It's no secret that the aging of the baby boomers will require an ever-larger medical establishment to care for them, with a need for about 59,000 specialists and 4,000 primary-care docs in the coming year. The IBISWorld data doesn't break out nurses, physician assistants, and technicians into individual categories, but it does indicate the need for at least 200,000 new workers in healthcare overall. Virtually every sector will add jobs.

Home-building (47,000 new jobs). The real-estate bust is perhaps the single-biggest contributor to high unemployment, with about two million jobs lost during since the recession in the construction industry alone. But job losses have bottomed out, and there's a good chance 2011 will be the year that a slow housing recovery begins. Commercial real estate may have further to fall, but home building should start to pick up, especially in areas like the Midwest where the housing bust was fairly mild.

Warehouse clubs and supercenters (43,000 new jobs). Saving money has timeless appeal, and many consumers who flocked to discount megastores like Costco and Sam's Club are likely to remain loyal customers. Retail sales should pick up overall in 2011, but discounters will enjoy an outsized gain.

Nursing homes and elderly services (41,000 new jobs). The baby boom will soon become the senior boom, with the first of the boomers hitting retirement age this year. In addition to traditional nursing-home jobs, independent-minded retirees will drive up demand for home-based healthcare, with 20,000 new home-health jobs likely to materialize in 2011 alone.

Supermarket and grocery stores (31,000 new jobs). Sales of staples and niceties alike should pick up as the recovery gains strength. Plus, many retailers that have been absorbing cost increases due to more expensive energy and other factors have started passing them on to consumers. That means higher prices on food and some other goods, which consumers obviously don't like. But modest price hikes are often a sign of a strengthening economy, and if they stick, profit margins will rise, allowing these firms to hire more.

(Source: U.S. News & World Report, 03/08/11)

As Gas Prices Climb, Marketers Gird for Tumult at the Tank

With gas prices rising at about a penny a day -- the national average shot from $3.10 a gallon on Feb. 1 to $3.51 last week -- marketers across the country are bracing for a repeat of 2008.

But the difference this time is that marketers and agencies from Ford, General Motors and Unilever to WPP saw it coming, and, armed with hindsight, are better prepared to deal with consumers potentially dialing back spending or shifting shopping habits in response to spiraling oil prices.

"No one can predict what further developments will take place," said Martin Sorrell, chief executive of ad agency holding giant WPP, in an email. But he said that "further increases in the oil price, say at a level of $140 to $150 (a barrel), may stunt economic growth and impact corporate profits and, hence, spending. My view is that even a lower price increase (of $125 to 130 a barrel) might do that."

Oil was about $107 a barrel at press time.

With gasoline prices on the rise, shoppers are likely to consolidate trips, shop closer to home and turn to online retailers. Those are all trends that played out three years ago when gas prices surged. Google data show that consumer searches for stores nearby are up 25% over March 2010. Data also show that search volume for online shopping follows the rise and fall of gas prices fairly closely, a Google spokeswoman said.

"Searches on online shoe shopping and online clothes shopping had their first significant, non-holiday-related spike since 2004 in mid-2008, when gas prices were rising rapidly," she said.

Another concern is a cutback on travel. There have been six domestic airfare increases in the first 75 days of 2011, according to FareCompare.com, with an average increase of 25% in ticket costs. United Continental Holdings said last week that the increase in fuel price will force its two airlines -- United and Continental -- to drop some unprofitable routes, further inconveniencing some fliers.

So far, the driving market seems not to be affected. "The average driver goes through psychological stages when gas prices rise," said Sergio Stiberman, CEO and founder of the website Lease Trader. "During the uptick, concerns and complaints heat up when we pass certain price benchmarks, but widespread behavior doesn't actually change until we reach $4 per gallon."

The auto market certainly bore the brunt of some of that in 2008 when car buyers shifted preferences to smaller cars with better gas mileage. But Ford Motor Co. CEO Alan Mullally told the Associated Press last week that's also why his company is better positioned to handle rising gasoline prices compared with three years ago.

"We thought this was going to happen. We didn't think it was going to happen as fast as it is, but we feel like we're positioned with the right product line now," he said. "We've got the best smaller and medium-size vehicles we have ever had."

General Motors' Chief of Global Marketing Joel Ewanick, too, feels the company has the right mix of product to ride out high gas prices, most notably the Chevy Cruze Eco, a version of the new compact sedan that gets 42 miles per gallon on the highway. He said that Chevy, through both national and dealer ads, is increasingly tagging ads with high MPG ratings. "It's not new for us, but we are dialing it up because we have the right product at the right time," he said. The Cruze Eco and soon-to-be-launched Chevy Sonic both top 40 MPG; its Chevy Silverado Heavy Duty pickup has the highest fuel-economy rating in the heavy-duty category.

Gas prices tend to be cyclical, and that's nothing fast-food marketers aren't already prepared for. "Most quick-service restaurants have multiple campaigns going on at any given time. During times of inflated gas prices, we tend to see more promotion for value-menu offerings," said Morningstar analyst R.J. Hottovy.

Plus, Mr. Hottovy pointed out that gas prices tend to increase in the late spring and summer anyhow.

But rising gas prices add one more hurdle for food companies already dealing with commodity inflation and a slow-recovering economy. William Johnson, president-CEO of H.J. Heinz Co., made this observation at a recent analyst conference: "As gas prices continue to go up, if oil prices continue to escalate -- and who knows whether they will or not? -- the discretionary income available to consumers is really squeezed."

For packaged-goods marketers, who have finally been able to move off discounting and beat back private label as the recession eased, the trick will be now to stay their course -- which is to raise consumer prices in order to offset growing commodity prices. And at least so far, they have been mostly sanguine about doing so.

Procter & Gamble Co. plans to announce price hikes this month across an unspecified range of goods to help offset an estimated $1.5 billion in overall commodity increases. But while he lowered expectations for profit margins, Chief Financial Officer Jon Moeller said the company wouldn't back off investments in marketing or other areas to make short-term numbers, and stood by short- and long-term projections for consumer spending.

One factor that could help brand marketers is that private-label manufacturers don't have the margins or marketing budgets to use as cushions to absorb cost increases. And they were already narrowing price gaps. While volume share for private label overall went down 0.5 points, the value share was up 0.2%, reflecting higher prices.

Unilever CEO Paul Polman said on a call with Sanford C. Bernstein last week that recent movements in oil prices were in line with what the company budgeted earlier this year and said he still believes the company will be able to deal with the issue through price hikes, sales growth and other cost savings. Overall, he said he's encouraged by a rebound in pricing across Unilever's markets.

(Source: Advertising Age, 03/14/11)

Will the Run Up in Gas Prices Push the Economy Back Into Recession?

What would happen to the U.S. economy if petroleum prices continue their rapid rise?  University of California, San Diego, economist James Hamilton noted in a recent study that 10 out of 11 post-World War II recessions in the United States were preceded by a sharp increase in the price of crude petroleum.  The only exception was the mild recession of 1960-1961, says Ronald Bailey, Reason Magazine's science correspondent.

So how do oil shocks cause recessions?

• One of the key ways oil price hikes negatively affect the U.S. economy is by provoking a decline in demand for new automobiles.
• Unemployed autoworkers and idled factories cannot be rapidly deployed to other sectors.
• In addition, uncertainty over oil prices also leads people and firms to postpone purchases of capital and durable goods.
• While higher oil prices contribute to recessions, lower oil prices do not appear to have much effect on economic expansions -- people may postpone buying a new car when gas prices are high, but they do not rush out to buy one just because pump prices are low.

So will the recent run up in the price of crude push the U.S. economy back into recession?  On March 1, Federal Reserve Chairman Ben Bernanke testified that "sustained rises in the prices of oil or other commodities would represent a threat both to economic growth and to overall price stability, particularly if they were to cause inflation expectations to become less well anchored."

The price of oil spiked briefly in 2003 as the result of a strike in Venezuela and the launching of the Second Persian Gulf War.  Hamilton points out that actual oil production didn't decline that much and he believes that strong economic growth rode out that short-term price increase.  More worryingly, back in 1973 commodity prices also surged dramatically, which coupled with a doubling in the price of oil, resulted in a deep recession.  So, is this 1973 or 2003?

Source: Ronald Bailey, "Oil Price Shocks and the Recession of 2011?" Reason, March 8, 2011.

Mobile Media Consumption Intensified in 2010

Smartphones aggressively penetrated the mobile market in 2010, driving an escalation in mobile media consumption by subscribers worldwide. Technological innovations enabled an extraordinary number of new capabilities for mobile devices, even expanding the definition of what it means to be 'mobile' through the introduction of tablets, e-readers and other connected devices. As more subscribers access the mobile web in 2011, it will become essential for marketers to reach this rapidly-expanding segment of consumers.

CcomScore's report provides insight into the year's most important trends. Key findings highlighted in the report include:

• Smartphone adoption accelerated in both the U.S. and Europe. U.S. smartphone adoption reached 27 percent of mobile subscribers in December 2010, an increase of 10 percentage points from the previous year, while European adoption reached 31 percent, also up nearly 10 points versus year ago.
• Network quality and cost of monthly plan were the top 2 purchase consideration factors for mobile subscribers in the U.S. and UK.
• Nokia was the top OEM in the UK, Germany, Italy and Spain. Samsung took the top spot in the U.S. and France, and also ranked in the top three in the UK, Germany, Italy and Spain.
• 36 percent of mobile Americans and 29 percent of Europeans browsed the mobile web in December 2010, with access through an application reaching 34 percent of Americans and 28 percent of Europeans. Across regions, mobile browsing and application usage is growing in the range of 7-9 percentage points per year.
• More than 75 percent of mobile subscribers in Japan are connected media users (used their browser, accessed applications or downloaded content) far surpassing the U.S. and European countries in this regard. Japan also saw nearly 10 percent of its mobile audience make a purchase with their mobile wallet in December 2010.
• Over the past year the number of mobile users that accessed a social networking site at least once a month via their mobile device increased by 56 percent to nearly 58 million users in the U.S. Even stronger growth occurred in Europe, with a 75-percent increase in the number of users over the last year to 42 million in December 2010.

(Source: comScore, 02/14/11)

Inside the minds of digital ad buyers.

Decades of experience has radio relatively well prepared for walking into the office of traditional ad buyers. But in the age of digital there’s an entirely new breed of buyers across the table. “We are held to efficiency standards across the board,” Universal McCann SVP of digital media Jason Cole told last week’s Borrell Local Online Advertising conference. Universal McCann buys a lot of digital auto ads, and while the client wants results from everything they buy, it’s even more important online. As a result, buyers push as hard as they can to drive down CPMs in order to buy more ad inventory and compete for attention. 

But The Martin Agency group planning director Matt Williams, who buys for big radio clients such as Geico, says a deeper engagement with the consumer is even more important than price. “The power of an idea, no matter where it comes from, has gained so much traction in the last five years because of how we can bring that idea to life with different media and different channels of engagement,” he explains. “So CPMs could be out of line from an efficiency standpoint — but that’s okay — I’ll listen to that proposal a lot faster.” 

The internet is also shaking up the notion of what “local” advertising means. Finnegan says his clients define it by whether it makes cash registers ring. They also want a lot more data from sellers. William says, “I want the data upfront to plan, but I also want the data as the campaign rolls out to optimize on the back end.” 

To make the sale, Geomentum CEO Sean Finnegan says traditional sellers need to get better at researching the client, and spend less time talking about their company’s website content and audience size. “If you come in with a solution with how we’re going to achieve our goals and creativity how our brands will execute on your site — you give us vision and excitement and we work with you to enhance that — and larger budgets flow from that,” he says.

Growth Slows in America's Urban Cores

The ongoing Census reveals the continuing evolution of America's cities from small urban cores to dispersed, multipolar regions that includes the city's surrounding areas and suburbs.  To date the Census shows that growth in America's large core cities has slowed, and in some cases even reversed.  This has happened both in great urban centers such as Chicago and in the long-distressed inner cities of St. Louis and Baltimore, says Joel Kotkin, executive editor of NewGeography.com.

None of this suggests, however, that the American urban core is in a state of permanent decline.  The urban option will continue to appeal to a small but growing segment of the population, and certain highly paid professionals, notably in finance, will continue to cluster there.  So what does this tell us about the future of the American urban region?

• Dispersion is continuing virtually everywhere, and with it, a movement of the economic center of gravity away from the city centers in most regions.
• But in another way these patterns augur a bright future for an expansive American metropolis that, while not hostile to the urban center, recognizes that most businesses and families continue to prefer lower-density, decentralized settings.

The sooner urbanists and planners can accommodate themselves to this fact, the sooner we can work on making these new dynamic patterns of residence and employment more sustainable and livable for the people and companies who will continue to gravitate there, says Kotkin.

Source: Joel Kotkin, "The Protean Future Of American Cities," NewGeography.com, March 7, 2011.

Consumers Holding On to Products Longer

Throw away the cellphone after two years? Not so fast. Ditch the flat-panel TV for an even thinner model? Maybe next year. Replace the blouse with the hole? Darn it!

Consumer spending has picked up, but for some Americans the recession has left something behind: a greater interest in making stuff last.

For a number of products -- cars, phones, computers, even shampoo and toothpaste -- the data shows a slowing of product life cycles and consumption. In many cases the difference is mere months, but economists and consumers say the approach just may outlast a full recovery and the return of easy credit, because of the strong impression the downturn made on consumers.

It is hardly the stuff of generations past, those stung by the Great Depression, who held onto antediluvian dishware and stored canned goods until rust formed on the lids. But for the moment, many citizens of a throwaway society are making fewer visits to the trash and recycling bins.

In the case of Patti Hauseman of Brooklyn, that meant sticking with a five-year-old Apple computer until it started making odd whirring noises and occasionally malfunctioning. She and her boyfriend bought a new computer for Christmas -- actually, a refurbished one.

"A week later, the old one died. We timed it pretty well," Ms. Hauseman said with a laugh. Her cautious approach applies to other products: She is holding out on upgrading two seven-year-old tube-type TVs, and has taken to mending clothes rather than replacing them.

Ms. Hauseman, 41, a general manager of an independent record label, said this mentality was the product of several factors, including bills that have swelled more quickly than her income. She said it was not so much that she could not afford new things, but that the last few years of economic turmoil had left her feeling that she could be stealing from her future by throwing away goods that still had value.

"I've started upgrading for necessity, not vanity," she said, adding that to do otherwise "just does feel wasteful."

Whether a broad, long-term shift in consumer habits is underway is a question tickling economists and analysts. Some insist that, as with the Depression, the recent downturn has made a lingering impression on how people view the propriety of, say, stuffing a still-working cellphone into a desk drawer in favor of a newer model.

But other experts and historians argue that as spending and credit return, so will yearnings to favor brands, fashion and novelty over practicality.

With some products, the upgrade cycle is actually accelerating. According to NPD, a market research firm, consumers in 2010 reported spending more to upgrade major kitchen appliances like refrigerators than they did in 2008 or 2009, when such spending fell. The firm found similar trends at work in smaller kitchen and personal care appliances.

In the case of televisions, upgrades have slowed, but only because so many people snapped up flat-panel sets in recent years. There is now a lull in the product cycle, but not necessarily in consumer demand.

Tyler Cowen, an economist at George Mason University, said it was simply too soon to tell whether economic recovery would bring back a more disposable society. "There aren't enough aggregate statistics since the crash for us to know," he said.

But in some important categories there are indications of slowed upgrades. Consumers are holding onto new cars for a record 63.9 months, up 4.5 months from a year ago and 14 percent since the end of 2008, according to Polk, a research firm. In fact, the firm said, when used cars are included, the average length of car ownership stands at 52.2 months, also a record.

Industry analysts also report that people on average upgrade their cellphones every 18 months, up from every 16 months just a few years ago. They hold onto their laptops an average of 4 years and 4 months, a month longer than they did a year ago, though that figure has been creeping up since 2000.

And consumers are making sure to get the last drop from their household products, said Ali Dibadj, an analyst at Sanford C. Bernstein who covers big companies like Colgate-Palmolive and Clorox.

"People are squeezing the last bit out of the shampoo. They seem to be adding more water to really squeeze out the last bit," Mr. Dibadj said, noting financial reports from major companies showing frugality with things like razor blades, laundry detergent and toothpaste. "Consumers are doing their best to conserve -- we're seeing it again and again and again."

Nancy F. Koehn, a professor at the Harvard Business School and a historian of consumer behavior, said she would bet her boot collection that the change was, if not permanent, at least lasting. She said it stemmed not just from a shaky economy but also from a sense that great institutions -- like government and major corporations -- might not be reliable saviors in a crisis.

"We're not going back to a time of our grandmothers' tales of what they kept and how they used things so carefully. But we'll see a consistent inching or trudging towards that," Professor Koehn said. "It's a glimmer of that, a flickering of it."

For Walt Truelson, a management consultant in Portland, Ore., that has meant a shift in his lifelong love affair with cars, specifically Jaguars. He typically bought a new or slightly used one every year or two, but has had his current car, a 1999 model in dark green, for four years. "It's going to stay in my possession as long as it runs," he said.

Mr. Truelson, who declined to give his age because he said he acts much younger than he is, also switched 18 months ago to paying for cellphone minutes as he uses them, rather than subscribing to an expensive monthly plan.

He said the changes reflect in part the fact that his business fell with the economy, but also what he says is a reassessment of the need to constantly have new things: "It's a question of shifting values."

In a few cases, consumers who are inclined to discard less are getting some positive reinforcement from an unlikely corner: companies that profit from upgrades.

Levi Strauss is telling customers to take steps that will actually lead them to buy fewer pairs of jeans. The Levi's sustainability campaign urges customers to wash their jeans less often and in cold water, a move that the company says reduces water use.

"And they absolutely will last longer," said Michael Kobori, vice president for social and environmental sustainability at Levi's. He said the message was part of building trust with consumers and emphasizing the durability of the company's products.

When it comes to holding onto clothing, Genevieve Tung, 28, needs no campaign to motivate her. She has recently mended ripped socks and pants, sewn buttons onto jackets and gone to great lengths to save a peach silk blouse stained by soy sauce.

"I tried several home remedies involving dishwashing detergent and baking soda, and had it dry-cleaned twice," she said. "I bought fabric dye I'm going to cook on the stove and hope the dark color dye will blend in."

Ms. Tung, who lives in Brooklyn, recently left a corporate law job to go back to school, a move that curtailed her income. She is also worried about relying over the long term on the pension of her husband, a New York City paramedic, given how unreliable pensions seem.

She says there are other motivations too: "Personally, avoiding waste and using things until they're used up seems like a common-sense way to live."

(Source: The New York Times, 02/25/11)

U.S. Boat Industry No Longer Foundering, But Recovery Remains Murky

The U.S. recreational boat industry has likely stopped sinking, but it faces a slow recovery and an unpredictable future.

Sales of recreational power boats fell to a record low of 132,000 vessels last year, a 55% decline from 2006 and down 14% from 2009. While the industry is widely seen as having bottomed out last year, the momentum behind an upturn remains unclear. Some projections have sales rising as much as 10% this year, but few forecasters are willing to say when or if sales will ever return to the 300,000 boats a year the industry averaged in the 14 years prior to 2007.

The dynamics that sustained the industry for years changed significantly during the economic recession. Largely gone are the easy access to credit and the disposable income from rising real estate values, factors that helped send first-time boat buyers to showrooms and prompt existing boaters to move up to more expensive models.

Rising fuel costs and elevated unemployment levels, especially in such coastal states as California and Florida, have further dampened enthusiasm for boating among those who own boats. The average annual number of days owners used their boats dropped by more than a week between 2006 and 2009.

"I think we'll be a lot smaller industry, but that doesn't mean we'll be a less profitable industry," said Phil Keeter, president of the Marine Retailers Association of America, who expects boat sales to eventually plateau at about 200,000 units a year. "I don't think boating is going to go away."

Keeter's sentiments are shared by many in the boating industry who are counting on lower overhead costs, slimmed down boat inventories and fewer dealers and boat brands to create a healthier industry for the survivors.

Brunswick Corp., the largest boat and engine builder in the U.S. by annual sales, closed 17 plants, furloughed 45% of its worldwide work force and eliminated eight boat brands since 2007. The company estimates those moves will lower expenses by $420 million a year. Brunswick's remaining brands include Bayliner, Meridian, Sea Ray, Lund, Hatteras and Mercury engines.

"While we were going through this (downturn) we knew we had to come out differently," Brunswick Chairman and Chief Executive Dustan McCoy said during a presentation to investors. "We had to have a significantly lower cost base. We had to come out of this much more efficient."

McCoy's goal is for Brunswick to earn as much money from an industry that sells 200,000 boats a year as it did when industry sales were 300,000 boats a year. McCoy projects Brunswick should be able to break even if industry sales are no better than 135,000 boats this year.

The Illinois-based company also sells bowling, billiards and fitness equipment, but hasn't reported a profit since 2007. However, McCoy expects the company to earn between 5 cents and 40 cents a share in 2011.

"Brunswick did a pretty good of (showing) just how lean they could become," said James Hardiman, an analyst for Longbow Research. "If they hadn't, they would not be in business right now."

The number of U.S. boat dealers has fallen by more than 40% in recent years to 3,100. Boats from those shuttered dealerships flooded onto the used-boat market at rock-bottom prices. That depressed demand for new boats, which accounted for just 15% of all boats sold last year.

"Our biggest competitors became our own boats that were being repossessed," said Irwin Jacobs, cofounder of boat maker J&D Holdings LLC in Minnesota.

Jacobs previously presided over Genmar Holdings Inc., the second-largest U.S. boat builder behind Brunswick. But the privately held company's debt problems forced it into bankruptcy in 2009. Genmar, which had annual sales of $1 billion before the downturn, was sold last year to California private equity firm Platinum Equity for about $70 million. Jacobs managed to buy back six of Genmar's boat brands, including Carver, Marquis and Larson, and three of its factories. Jacobs sees J&D's sales reaching about $200 million this year.

"For the first time in two years, I have some sincere optimism," he said.

The glut of boats on the market from failed dealerships has eased in recent months, forcing more boat buyers to consider new models at full price. Sales from regional boat shows this winter have been running ahead of last year, with demand strongest for smaller, lower-priced motor boats and pontoon boats.

Kurt and Robin Anstaett were among those looking at pontoon boats at last month's Chicago Boat, RV & Outdoors Show. The suburban Chicago couple are building a waterfront home in Michigan.

"We'll buy a boat, but we're not sure what kind of boat," said Kurt Anstaett. "People are definitely buying boats. The dealers aren't giving them away."

But loans for boats from banks, credit unions or finance companies remain tight and consumers are cautious about taking on additional debt, dealers say. Unlike auto companies, boat manufacturers don't operate finance companies for their retail customers.

"People are still scared" of buying, said Warren Moulis, owner of a Brunswick dealership in Fox Lake, Ill. "If (Brunswick) could do the retail side financing, our industry would be back on its feet in no time. People are sick of sitting around. They want to get out on the water."

(Source: Dow Jones Newswires, 02/25/11)

Authenticity is the new currency in business today.

These 10 quick tips will make a HUGE difference to your bottom line.

1. Make intentions for your day. Predetermine your success. You are a powerful creator! Stop running on autopilot. Each morning answer these questions: How much money do I want to make? Who do I want to attract? What kind of interactions do I want to have? How would I like my day to unfold?

2. Start with gratitude. Practicing gratitude will inevitably invite more abundance to your life. Each day write down 2 separate lists: 1. What I am grateful for. 2. What I would be grateful for if I were to receive it. This gets you in the energy of RECEIVING.

3. Take care of your needs. Make your needs a top priority. Eat well, get plenty of rest and take care of pressing matters. You can then be present with clients. The art of "sales" is all about the exchange of energy between two people. Make no mistake, people buy your energy, not your product or service.

4. Dress for success. When you dress well you send the message to your clients that you are important and worthy of respect, but more importantly, you send yourself that message.

5. Make a list and JUST DO IT. This three minute task can save more time than any trick I know. Make your goals then start calling, knocking, adding friends on Facebook, or whatever you do to find prospects. Start with the most frightening tasks first. We tend to make them bigger than they really are. Then celebrate - the most important part!

6. Have backup tools to work with. The biggest secrets to my sales success are the energy tools that help bring me back to my presence and full power. You will face rejection, that's sales in a nut shell. Your success will be determined by how you navigate rejection and self-regulate your perceptions.

7. Remember, deliver value first. It's easy to get excited about money but remember your job, first and foremost, is to deliver real value to your clients. People can feel what your priorities are and, if it's not them, they won't open their wallets!

8. Have fun! Sales is creative. When you're stressed and burnt out there is no room for creativity to come through. Plan fun-time into your week! When you come back to selling you will find yourself rejuvenated!

9. Have the right mindset. For some people making $900 a day is insignificant. What are your perceptions on wealth? Expand your mind so you can expand your wallet too. Cultivate the habit of continually improving your perceptions of wealth.

10. Smile - a lot! Smiling lets people know you're safe to approach. People like to do business with people they know and trust. So smile, LOTS because following these ten tips will help you start seriously mopping up on cash. will make a HUGE difference to your bottom line.

Vanessa Simpkins via Jeffery Gitomer's Sales Caffiene.