September Surge Changes Auto Forecasters' Tone

New-vehicle sales hit their fastest annual pace in more than four years in September, but the month could have been even better. After all, fleet sales were flat, fuel prices were unseasonably high and automakers laid off the incentives. 

September's seasonally adjusted annual selling rate of 14.9 million exceeded expectations by a wide margin, and the surge was driven entirely by retail gains, said Adam Jonas, Morgan Stanley's top auto analyst.

So are long-term forecasts being revisited?

The strong September -- in which sales rose 13 percent to 1,188,899 units -- has so far not prompted official forecasts to rise. But it has changed the tone of conversation among automakers and analysts, many of whom had revised 2012 forecasts downward since the first quarter.

Bill Fay, Toyota Division general manager, still expects 2012 industry sales of 14.3 million but now adds "and maybe a notch above."

R.L. Polk hasn't raised its forecast of 14.3 million this year and 15.2 million in 2013, "but we reviewed it for upward revision after August and September sales beat expectations," said Tom Libby, North American forecast manager.

TrueCar.com is still forecasting 14.4 million this year and 15.0 million next year.

Morgan Stanley's Jonas called September's 14.9 million annual selling rate "dreadful, no better than 1978." But he says the underlying strength of the market is consumers being forced to replace the aging U.S. vehicle fleet, which he says averages 11 years old with 130,000 miles on the odometer.

Fleet volume rose just 1 percent in September and retail jumped 15 percent for the seven largest automakers, which dominate sales to fleet buyers, according to theAutomotive News Data Center.

"If fleet had been as strong as retail, the September SAAR would have been 15.2 million," Jonas said.

Kurt McNeil, General Motors' U.S. sales boss, said GM pickup sales slipped because fleet volume fell in September, but the company isn't turning to incentives on them.

"We don't necessarily have the newest truck in the industry, but we still have the lowest incentive spend," he said.

Industrywide, per-vehicle incentives ranged from flat to slightly lower in September, according to TrueCar.com.

And gasoline prices, which normally decline after the summer peak driving season, remained unusually high. The mid-September average of $3.83 a gallon was only five cents off the year's highest level, the U.S. Energy Information Administration said.

That may have helped sales of fuel-efficient new cars in September, TrueCar.com analyst Jesse Toprak said, but it was a damper on trucks.

"Trucks are hurt by lingering high fuel costs," he said. "Small cars are remarkably strong, but trucks are weak."

In addition, small businesses may be spooked by the uncertainties of the upcoming presidential election and Congress' so-called Dec. 31 fiscal cliff and therefore deferring pickup purchases, Toprak said.

"Truck sales are based on prospects of business growing," he said. "Maybe the deals are not that great on trucks and so buyers are waiting. We'll probably see more incentives in the fourth quarter as is typical."

GM's McNeil believes auto sales will continue to outperform the slow recovery pace of the general economy, "which is particularly good news for GM as we walk into a cadence of new product in 2013 and 2014."

(Source: Automotive News, 10/15/12) 

2011 Was a Record Year for Dealership Profits

Average dealership profits in 2011 were the highest since the National Automobile Dealers Association began tracking the data in 1970.

The average dealership made a record $785,855 in net pretax profit in 2011. Net pretax profit as a percentage of total sales was 2.3 percent, a level not seen since at least 1978, said Paul Taylor, NADA's chief economist.

It's such a good time to be a dealer that dealerships even made money on new cars last year. The average retail net profit for a new vehicle was $23 in 2011 vs. a loss of $180 in 2010.

"It's normally a loss," Taylor said. He credited the turnaround to an improving economy, fewer dealerships in competition with one another and historically low interest rates.

With those trends continuing this year and probably through 2013, dealers could see a golden era of profitability if they stay disciplined, experts said.

"'Make hay while the sun shines' is the operative phrase here," Taylor said.

In 2011, interest rates alone made for the difference between a profit and loss on each new-vehicle sale. Because of the low rates and manufacturer incentives, the average dealership had a floorplan credit of $48 last year instead of the $200 expense typical in a growth year, Taylor said.

Used-car net profit is up slightly, he said. It went from $252 per vehicle in 2010 to $269 in 2011.

Sales in the new-vehicle department rose by 15.6 percent; in the used-vehicle department, by 9.8 percent; and in the service and parts department, by 5.7 percent. On a per-vehicle basis, advertising and rent expenses fell last year.

Service and parts absorption -- the department's gross profit as a percentage of total fixed overhead expense -- dropped from 59.6 percent in 2010 to 57.8 percent in 2011. That's to be expected, Taylor said: Fixed costs go up when vehicle sales rise, and service and parts sales weren't increasing as fast.

The overall rosy profit picture makes for a lot of happy dealers and those who advise them.

"It's a lot more fun to work with our dealers than it was three years ago," said Dan Thompson, a Pennsylvania dealer accountant. "I think they're going to have a good run."

Dealers continue to prosper from the lessons learned during the industry downturn, Thompson said. In particular, they sharpened their focus on used vehicles and the parts and service business.

In 2010, dealers generated as much gross as three years earlier on sharply lower vehicle sales volume, Thompson said. In 2011, dealers continued to perform at those higher levels while enjoying the benefit on incremental vehicle sales.

Going forward, dealers are challenged by how much payroll to add to the dealership.

"Our experience has been dealers have asked less people to do more, primarily because they are not all that confident that sales increases are here to stay," Thompson said. "At some point, personnel will need to be added -- knowing when, how many and what cost is the key."

Dick Heider, a Colorado dealer accountant, also is keeping an eye on expense control.

"Everyone learned a lesson in expense control over the last few years, and I think this will not be forgotten soon," Heider said. "Dealers are smarter and more focused on efficiency within their stores now than in the past."

Dealers should analyze employee productivity and look for process efficiencies. "In what is now more of growth market, this may mean using the same number of people to accomplish a greater volume of work," he said.

Money also can be saved in other areas, such as computer vendor and utility expense, Heider said.

Much better software is now available from computer vendors outside the Big 2 providers, he said.

"While not fully equal to the Big 2, the strides second-tier vendors have made is providing very capable software and is worth a second look," Heider said.

While the payoff is longer term, he said, dealers also can cut utility bills by installing more efficient lighting, including lot lighting.

(Source: Automotive News, 03/23/12)

Toyota, Honda begin to rebuild

The big sales winners of 2011 will try to hold off a resurgent Japanese giants

An early trend: Last year's three big sales winners -- Chrysler Group, Hyundai-Kia and Volkswagen of America -- continued to drive the market in January.

An early subplot: American Honda and Toyota Motor Sales U.S.A. have begun their long-awaited sales recoveries after a tough 2011. How much lost market share will they win back, and where will it come from?

A surprisingly strong January -- up 11 percent from January 2011 and the best January since 2008 -- seemed to preview that battle, in an optimistic setting. The 913,284 light-vehicle sales translated to a seasonally adjusted rate of 14.2 million, matching the cash-for-clunkers frenzy of August 2009 and well above December's 13.6 million pace.

The January SAAR "is 1 million over the early-month expectations," said Adam Jonas, top auto analyst at Morgan Stanley. "Our 14 million sales forecast is officially under review for positive revision."

"It's significant to see 900,000 in January when much of the country typically is in a deep freeze," said Toyota Division General Manager Bob Carter. "We're bullish with where the industry is going."

Chrysler Group sales surged 44 percent, VW group was up 40 percent and Hyundai-Kia rose 20 percent. And all three were going up against strong January 2011 figures.

But after losing volume last year because of product shortages caused by natural disasters, Toyota group sales rose 8 percent in January, and American Honda climbed 9 percent. And those comparisons were against a relatively normal January 2011, before the Japan earthquake.

Before January, American Honda's sales declined in every month since May. Toyota sales were down or flat in seven of the previous eight months.

Inventory levels still aren't back to normal for either company. But Toyota Motor Sales' market share in January was 0.7 points higher than the 12.9 percent share it achieved for the 2011 calendar year. American Honda was up 0.1 point from its 9.0 percent in 2011.

In 2011, the two Japanese groups lost a combined 3.9 share points. Meanwhile, Chrysler picked up 1.3 points, Hyundai-Kia added 1.1, General Motors gained 0.5 and VW picked up 0.4.

The coming battle

Analysts expect the battle to be in full force by the end of March, when Toyota and Honda expect full inventories.

Still, TrueCar.com analyst Jesse Toprak predicts Toyota and Honda won't regain more than half of the share they lost last year.

"The competition is so much better and customer loyalty is not what it used to be," he said. "The danger is that consumers have found out there are other good cars out there."

Toprak expects most of the share the two Japanese automakers regain to come half from Hyundai-Kia and half from the Detroit 3.

Analyst George Magliano of IHS Automotive expects Toyota and Honda to regain only about a fifth of their lost share during 2012 -- and he says it will come entirely from GM and Chrysler. He sees Hyundai-Kia continuing to grow.

"Toyota is still feeling the effects of the recall and, along with Honda, is hurt by the strong yen," he said.

"GM still has issues on the product side as the Silverado ages. Chrysler has some upside potential, especially later in the year if the Dodge Dart takes off from the start."

Last month Nissan North America sales increased 10 percent, while Ford Motor Co. volume gained 7 percent, both just below the industry average of 11 percent.

The only major player to lose volume in January was GM, down 6 percent. But GM's decline is distorted because it's coming off an incentive-driven surge in January 2010.

The company's January market share fell 3.4 points from a year earlier but was only 1.2 points lower than its full 2011 average.

GM U.S. sales boss Don Johnson expects a gradual improvement in consumer sentiment.

"We're seeing a continuation of the kind of growth and sentiment that we saw start to pick up in the fourth quarter," he said.

Caught by surprise

Jonas of Morgan Stanley wasn't the only analyst to be caught by surprise by the January surge.

TrueCar.com, Wells Fargo Securities and Kelley Blue Book also are rethinking 2012 sales forecasts as a result.

Kelley Blue Book analyst Alec Gutierrez did not officially revise his 13.3 million sales forecast for the full year. But he said "sales are on pace to surpass" that level.

In December, Jonas was the highest and Gutierrez toward the low end of 11 analysts Automotive News asked to forecast 2012 U.S. auto sales. The forecasts ranged from 13 million to 14 million and averaged 13.6 million, which would be up 6 percent from 2011's 12.8 million sales.

Jonas and Gutierrez cited as a positive factor a large number of new and redesigned vehicles hitting the market this year, starting in the second quarter.

For example, Carter said Toyota will launch 19 new or updated models this year as it tries to regain lost market share.

"About 40 percent of the vehicles we sell this year will be new or significantly updated models, compared to just 7 percent last year," he said.

Consumers are becoming more interested in new vehicles and advanced technology and less concerned about the economy, Toprak said.

"It's starting to feel like the good old days, when people got worked up about new products," he said.

Several executives and analysts cautioned that January is often a volatile month, but optimism about 2012 is growing because of the month's strong sales.

"It's too soon to declare victory," Toprak said. "But there's a very good chance we can get to that magic 14 million level this year if this pace continues."

Shifting shares
For the first time in months, market share for Toyota Motor Sales and American Honda moved upward in January.
	Jan. 2012	Jan-Dec.2011
General Motors	18.40%	19.60%
Ford Motor	14.9	16.8
Toyota Motor Sales	13.6	12.9
Chrysler Group	11.1	10.7
American Honda	9.1	9
Nissan North America	8.7	8.2
Hyundai-Kia Automotive	8.6	8.9
Volkswagen of America	4	3.5
Source: Automotive News Data Center, automakers

Jesse Snyder - Automotive News

Report by Nation's Largest Furniture Seller Lists Top 10 Trends of 2012

Sectionals and storage beds lead a list of the top 10 furniture trends of 2012, according to Ashley Furniture HomeStores.

The retail division of Ashley Furniture, the nation's largest furniture retailer, said the popularity of certain items relates to the Americans' changing lifestyles.

"Decisions about how and where to live have never been more critical," said Kris Woodcock, vice president of merchandising. "With older consumers wanting to stay put as long as possible, graduating children returning home after college and adult children inviting their parents to live with them, our houses are requiring smarter choices, better use of space and more long-term planning rather than resale considerations."

Here are Ashley's top 10:

1. Sectionals. Thanks to family rooms, more entertaining at home, and fashion-forward, younger shoppers, sectionals are going to be big. Durable, high performance fabrics and leathers make sectionals appealing in 2012, along with versatile pieces, such as a chaise ottoman that can flip to either end.

2. Storage beds. They're not just for kids' rooms anymore. Bedroom furniture pieces with storage are entering master bedroom suites in a big way, with sleek designs inspired by elegant platform beds. For 2012, many of them will include enough storage to reduce the need for both a chest and dresser, or add much-needed extra storage for shoes, off-season clothing, linens and more.

3. Better mattresses. Ever since hotels began replacing their mattresses with more heavenly versions, consumers have been upgrading their own homes with better mattresses and pillows. For 2012, look for a move away from plush pillow-tops to streamlined, flatter beds.

4. Console seating. Once a luxury product in need of a designated home theater room, theater seating today is going anywhere there's a big-screen TV. And the console loveseat is the rising star. Perfect for small spaces and budgets, it's as fully loaded as home theater sofas and sectionals, including cup holders, storage console, plush arms, headrest and chaise-style ottomans, multiple comfort positions and power.

5. TV consoles. Flat-screen TVs are cheaper, bigger and better, and are making their way into every room in the house. In 2012, the vast majority of those TVs will be housed in or on furniture rather than hung on the wall. Look for better-designed, better-quality TV stands (that look like real furniture), along with clever places to store components -- and taller, multi-purpose versions that double as a drawer chest.

6. Servers. The growing trend to hosting buffets rather than sit-down dinners explains the growing popularity of servers and sideboards. Easy access to cords for warming trays and blenders, less fancy china to display (younger consumers are opting out of rarely used dinnerware) and smaller homes all add to their popularity. For 2012, look for servers with as many drawers as doors, integrated power bars or moisture-resistant tops.

7. Writing desks. Laptop computers and wireless networks are changing our concept of a home office. A single "official" work area is being joined, or replaced, by multiple workstations that can go anywhere. For 2012, it's all about compact workstations, with a simple table in a bedroom, hallway or behind the sofa. Look for warmer styles that blend with other furniture pieces.

8. Bigger coffee tables. Many people opt to eat dinner on the sofa rather than at the kitchen table, explaining the trend to bigger and better coffee tables. Harking back to the 1960s conversation pit, a larger coffee table is a magnet for gathering. For 2012, look for pop-up coffee tables for eating or working in front of the TV, storage drawers or shelves and deeper sizes scaled for sectionals.

9. Gathering tables. The kitchen may be the emotional and physical center of the home, but it's the eating area that's becoming the hub -- especially when it's designed to be a comfortable, live-in gathering place. Higher-height gathering tables or pub tables are the perfect choice, able to house a crowd, double as a workstation or extra cooking surface, or act as space divider between the kitchen and living room (with enough height to see over the sofa to the TV). For 2012, look for unique, transitional styles that bridge more stylish kitchens and less formal living areas.

10. Accent furniture. Stand-alone accent furniture will add storage, flexibility, and plenty of character in 2012 -- satiating our appetite for something fresh, new or daring when budgets don't allow a full room makeover. Accent chairs, small tables, ottomans, shelves, drawer chests and screens will bring designer-style décor home, with a range of exotic or antiqued finishes, reclaimed woods or hand-painted pieces that look acquired from an antique store or exotic trip.
(Source: Furniture Today, 01/23/12)

Study: More Regional Ad Agencies Budget for Digital Specialists

The following article was written by Jay Friedman, chief operations officer of Goodway Group, and appeared in the January 17 edition of Ad Age Agency News.

This month we published the results of a study detailing the state of "going digital" within regional agencies around the U.S. The study asked 12 questions and was answered by 90 agencies, up from 74 in 2010.

The fact that we have two years of comparative data also allows us to see how the mindset around core digital-media needs has shifted year over year. Some results are expected, but many are truly astounding. What's more interesting is different people will find the results astounding for different, and sometimes opposite, reasons.

Responses to each of the 12 questions are fascinating, but I've chosen three of the questions to highlight here with the hope you'll read the full study as well.

In 2010, 26% of agencies said clients "weren't asking for" digital media. That dropped to 4% this year as it appears marketers who felt this way a year ago may have realized digital is a requirement, not an option. The fact that "budgeting to hire and train a new staff member" shot from 14% to 51% from 2010 to 2011 shows us regional agencies now have realized that digital media may be so complex that existing staff with different backgrounds and expertise will not naturally become digital-media experts. Or it could be the costs of learning on the job are too great.

We predict the major "aha!" in 2012 will be that budgeting to hire just one staff member will not be enough. Social content, web development, analytics, SEM and display are all significantly different subspecialties within digital. Still, most agencies do not have the budget or need to hire full-timers in each of these areas.

If you ask people who have been working in display (online, mobile, video) for a while about the notion of click-thru-rates as a metric of success, they will most likely scoff at it.

Real ROI, effective cost per action, and brand lift are often considered more meaningful metrics for success. Forty-eight percent of those surveyed view CTR as the primary metric for success while another 20% view CPM. This data shows that regional agencies are still in the introductory learning stage of digital media.

If you're a digital veteran, you may remember working on your first several campaigns and eyeing the CTR as the campaigns progressed. You may have gotten excited about a rising CTR only to feel a bit empty when a campaign finished: "Great, we got lots of clicks, but does that really mean we succeeded?"

Since many agencies (and likely their clients) are focusing on CTR and CPM to define success, it's not surprising how the next question plays out, "How successful would you rate your past digital campaigns?" Only 2% of regional agencies rated their past campaigns as "very successful" because they and their clients have not established healthy metrics for campaign success.

This study culminates with the final question, "In terms of agency business priorities, where would you say 'going digital' falls?" Last year, 71% answered it was either their top priority or one of the top few. This year 59% said, "We'd like to, but we're not in a hurry." What happened?

We believe this de-prioritization is the result of the combined experiences and lessons from the areas we've described above. This is especially true because in the beginning we all thought, "It's just another medium. It can't be that different." This obviously has not proven out.

Programmatic digital buying and the expertise needed around it are a world apart from the spots and dots of traditional media. These inaccurate expectations combined with the challenges of campaign metrics could certainly lead agency owners and top executives to rethink speeding headfirst into their next digital project.

Having spoken with hundreds of regional agencies across the country, one thing I can definitively say is these agency owners and top executives are incredibly smart and will figure this out in short order. But like any new subject, having a great teacher can be the best path. As regional agencies lean on vendors and other industry experts, we expect to see a hockey-stick-like understanding of digital and how it fits into the entire media picture.

(Source: Jay Friedman, Advertising Age, 01/17/12. The full study is available here.)

Digital to Get Bigger Slice of Ad Budget Pie

With more people turning to online and digital sources for their entertainment and information, marketers will be investing more in the digital space on brand-building (as opposed to direct-response) advertising in the coming year.

In 2012, 60% of marketers' digital advertising budgets will be devoted to online branding, according to a survey conducted by ad tech company Vizu. It found that 64% of markets will increase their online brand advertising budgets, with more than a fifth saying they planned to increase them by 20%. (Comparatively, only 56% of marketers said they planned to increase their online direct-response budgets.) Similarly, 60% said they were re-allocating dollars away from direct-response and into brand initiatives.

"Brand advertising is becoming a bigger and bigger part of the digital experience," Jeff Smith, chief marketing officer at Vizu, tells Marketing Daily.

Smith gave three reasons for the increases. First, more consumers are migrating online. Whereas 10 years ago, digital initiatives were a key way to reach younger consumers, the medium is more widely used by many age demographics.

"It's no longer this selective channel to reach younger people," he says. "It's an imperative to reach the target audience in total."

Second, many marketers are being asked about their "social media strategies," which is based in digital marketing.

"Social in itself is just another tactic, but it's taken on a life of its own," Smith says. "Whether or not they thought about social, their organization is asking them about social."

Finally, Smith says, the space offers better measurement than many previous brand advertising channels. This third factor, however, also comes with a downside. According to the survey, a third of marketers felt they were "drowning in data" when it came to online advertising, leading to what the company called a "metrics morass."

The solution, according to Smith, is to be clear about a campaign’s objectives and measurement before launch.

"What too often happens is the brands don't set that objective up front and they don't define the metric that's going to be measuring (the campaign)," he says. "(As a result), they get agencies reporting back any data they have."

Marketers, Smith suggests, need to set their goals and define the information they want reported back to them, and then ensure that all of their agencies (creative, media, digital, database, etc.) are on the same page and speaking the same language at the outset.

"It's really important regardless of what aspect of the campaign it is -- to get everyone on the same page, looking at the same data and using the same language," he says.

(Source: Marketing Daily, 01/09/12)

NRF Forecasts Retail Industry Sales Growth of 3.4 Percent in 2012

Though stubbornly high unemployment and continued uncertainty over the prospects for job growth will continue to dampen the outlook for retail sales growth in 2012, the retail industry will still grow at a rate faster than many other segments of the economy.

This year, retail industry sales will rise 3.4 percent to $2.53 trillion, according to the National Retail Federation -- slightly lower than the pace of 2011, in which sales grew 4.7 percent. Many economists estimate that real U.S. GDP will rise approximately 2.1 to 2.4 percent.

"Over the last 18 months, retailers have been on the forefront of the economic recovery -- creating jobs, encouraging consumer spending, and investing in America," said NRF President and CEO Matthew Shay. "Our 2012 forecast is a vote of confidence in the retail industry and our ability to succeed even in a challenging economy. Retailers have played a key role in driving growth, but to continue this momentum we need Washington to act on proposals that will spur job creation and unleash the power of the private sector."

Shay announced NRF's forecast to 24,000 retailers and their partners at NRF's 101st Annual Convention and Expo on Monday in New York. During his remarks, Shay discussed how continued growth in the retail industry will result in additional jobs, greater innovation and increased consumer value. But he warned that the private sector can't do it alone and Washington must take steps to support growth, including reforming our corporate tax system to enhance U.S. business' competitiveness, enacting sales tax fairness to level the playing field between brick-and-mortar and online retailers, and reforming our visa system so more foreign travelers can come to the U.S. to spend money and help spur growth. Shay and NRF's Chairman -- Macy's President/CEO Terry Lundgren -- outlined the industry's priorities in a letter to President Obama last week.

Though retailers ended last year on a strong note with holiday sales rising 4.1 percent over 2010, many factors will continue to influence the expected slowdown in consumer spending, but none remain more cumbersome than the stalled unemployment rate and lack of newly-created jobs. A number of factors contributed to NRF's 2012 economic forecast, including:

• Employment: The number of Americans out of work is at its lowest level in nearly three years, and the rise in employment and hours worked should bolster income and spending.

• Income growth: Consumers are constrained by modest growth in income. Congress extended the cuts in payroll taxes and unemployment benefits for only two months. While these provide a lift, consumers may act cautiously until both are approved. Income is predicted to lag consumption on a year-over-year basis.

• Housing: While most of the economic reports dealing with housing have shown a little more strength, these reports should be treated with caution, as some of the improvement is due in part to unseasonably mild weather. NRF expects home sales and construction will improve slightly in 2012 with low interest rates and affordability at an almost 30-year high.

• Inflation: Increased costs have been a drain on consumer purchasing power due to extraordinary agricultural commodity price inflation as well as high oil prices due to global geopolitical tensions. NRF expects inflation to slow down near a two percent range. Rising gas prices may also put pressure on spending.

• Consumer credit: Easier lending standards are expanding consumer credit. Revolving credit appeared to break out from its holding pattern showing a big surge in November, which indicates consumers have confidence to take on debt.

• Consumer confidence: Confidence continues to rebound from August lows but remains fragile given volatile financial market conditions and anemic housing markets.

(Source: National Retail Federation, 01/16/12)

2012 Predictions For Marketing To Moms

Women and, more specifically, moms have been quite the marketing focus in 2011 and that trend will continue in 2012. Their influence over an estimated $2.4 trillion in household spending will continue to make them the focus of brands for some time to come. What will be the key to success with moms? Here are five important considerations.

1. More mom video content on the web.
Moms love to view other moms in action. They trust what another mom has to say more so than they do celebrities. And they consume a lot of video on a weekly basis. So it’s only natural that video content will continue to rise. YouTube is commissioning new channels and Deca has launched “Kin,” a mom/women’s channel. And, don’t forget “The Mom’s View” from Maker Studios. Moms are also finding that their personal channels on YouTube can turn them into web celebs, lead to book deals and make them money with the right content. Brands need to jump on the video bandwagon if they want to stay engaged with mom.

2. Mobile will continue to influence mom’s path to purchase.
Moms armed with smartphones are putting them to good use. Brands that don’t yet have a mobile strategy are way behind the curve. Moms see mobile as their command center and remote control for managing life. According to BabyCenter, 53% of moms purchased a smartphone because they had become a mom. And, it’s influencing her path to purchase. With smartphone and apps in hand, she can comparison shop, check out potential purchases with friends, download coupons, manage the budget and more. Her phone is connecting her to all the information and references she needs to make a purchase decision.

 3. Moms will continue to gravitate to brands that provide great experiences.
Sure a great product wows mom, but she’s also looking for a great experience. It’s the biggest motivator to get a mom talking to other moms and she’ll do so across digital channels. Our Hersuasion study with SheSpeaks showed experience was a more important loyalty-building tool than viral content or coupons. What’s her idea of a great experience? One that saves her time, saves her money, provides all the pertinent information, great service, and multi-channel access from a customer service perspective.

4. Brands will need to embrace her inconsistent use of media.
Brands will need to look at their traditional silo structures and form a more integrated approach for marketing to moms. She may not be an early adopter, but she is taking the digital landscape by storm while still consuming traditional media like email, TV and magazines. She’s tricky, because she uses whatever tech tool and media it takes to help her get the job done at that particular moment. And the content, wherever it resides, needs to be compelling because she’s multi-tasking with her computer on her lap, her smartphone by her side and the TV in the background. And more than half the time, she’s accessing her social networks over her mobile. And she might be watching TV on the Internet versus the old boob tube.

5. Customer service will continue to earn yeas or nays.
Moms are speaking out via a brand’s social presence on Twitter and Facebook, as well as other platforms where she can voice her opinion. Brands can’t afford to ignore mom. She wants companies to respond to her and use the feedback she is sharing. She wants to know the CEO is listening and hear from him/her.

And customer service is so much bigger today than responding to complaints. For mom, service is about everything from correct product information to the brand’s ethical and social responsibility (sustainability, eco-friendliness, cause support.) Customer service is about being relevant and providing the right content for age and stage. Brands looking to connect and stay connected with mom will need to have cross platform content strategies in place.

Holly Pavlika - Big Fuel

Travelers Increasingly Choose Luxury in the Sky

Travelers increasingly are splurging in the air and scrimping on the ground.
A new American Express Business Insights study finds that spending on first- and business-class airline tickets increased by 9.1% and 5.4%, respectively, in the third quarter. But on the ground, travelers spent more of their dollars -- an additional 10.5% -- on economy lodging vs. only 2.2% more on luxury hotel accommodations in that time.

The reason for the seemingly bipolar spending: A growing frustration with flying and an improvement in the quality of economy lodging, industry analysts and travelers say.

"It really speaks to the fact that (consumers are) so concerned about the airline experience that they're willing to make the trade-off," says Maryam Wehe, senior vice president of hospitality at Applied Predictive Technologies, a consulting firm.

The spending trend applies to traveling for business or leisure, the study indicates.

Frequent traveler John Harding, a family law attorney in Pleasanton, Calif., says he doesn't mind paying more to fly business class. But when it comes to lodging, he's looking to save.

"It's a whole lot more miserable for me to spend five or 15 hours on an airplane in economy than for me to spend a couple of days in a budget hotel," Harding says.

Harding follows the same pattern whether flying for business or pleasure. He recently spent $1,100 each for business-class tickets to Hawaii for himself, his wife and two teenage children. But he spent less than $200 a night for the hotel.

Usually, he says, he tries to keep the nightly hotel bill under $125. "The only time I spend in a hotel is when I'm sleeping," he says. "I don't need all the accoutrements."

That seems to be the case among both affluent and average-income travelers. The American Express study found that midscale and even upscale hotels, the second-highest category, lost favor among all types of travelers, with declines of 3.4% and 3.9%, respectively.

"The most pronounced trend we're seeing is 'luxury or value,' which also speaks to the barbell effect apparent in travel -- and other sectors -- wherein consumers selectively choose either high-end or low-cost options, squeezing out the midtier providers with flat or declining spending growth," says Ed Jay, senior vice president of American Express Business Insights.

Other frequent business travelers say they're doing the same thing.

"A good comfortable bed and shower, the ability to work and get food and drink when needed works for me," says Stephanie Dickey, who lives in Richmond, Texas, and works as vice president of sales for an import company.

The upswing in business travelers opting for premium seats may also be attributed to companies loosening their policies on letting employees fly first or business class as the economy has improved.

According to a Global Business Travel Association report, just 42% of companies banned premium-class air travel this year compared with 47% last year.

And, analysts say, business travelers often may have had no choice but to upgrade their seats. In 2009, the economic downturn and high fuel costs forced airlines to cut flights.

Business travel has rebounded, but airlines have been slow to add flights, says Joel Wartow, senior director of the Solutions Group for Carlson Wagonlit Travel, a corporate travel agency.

(Source: USA Today, 12/13/11)

Auto Sales Could Hit 14 million in 2012



Auto sales could hit 14 million in 2012.

Analysts Cite Easier Credit, Aging Fleet

Rising employment, better credit availability, new products and urgency to replace aging vehicles will drive U.S. auto sales higher in 2012, forecasters say.

Sales predictions from 11 independent analysts ranged from 13 million light vehicles (Wells Fargo Securities) to 14 million (Morgan Stanley). The average outlook of 13.6 million would be up 6 or 7 percent from this year's sales, which are likely to finish between 12.7 and 12.8 million units.

That 1 million unit spread in forecasts is narrower than the 1.5 million spread among 2011 forecasts by seven analysts a year ago.

All the analysts expect as much disruptive and unsettling economic news in 2012 as there was this year. But they say American auto buyers don't scare as easily as they did three years ago, when the financial crisis hit.

Crisis-jaded consumers have become less likely to change car-buying behavior based on economic news -- good or bad, says Alec Gutierrez, senior market analyst for Kelley Blue Book.

Gutierrez noticed the change in summer during the congressional debt-ceiling standoff that triggered a cut in the U.S. credit rating.

"The Dow fell 1,500 points -- and car sales stayed smooth and consistent," he said. "The American consumer has seen so much gone wrong. If they have to buy a car, they will."

Economic ups and downs won't greatly alter 2012 auto sales, said Jeff Schuster, top forecaster of the Americas for LMC Automotive, formerly a unit of J.D. Power and Associates. He forecasts sales of 13.8 million.

A sharp European recession would trim 2012 U.S. light-vehicle sales by no more than 300,000, Schuster said, while a U.S. economic surge might add 200,000 units. More important are pent-up demand, larger inventory and growing credit availability.

"So 2012 depends on those positive trends and the will of consumers to replace vehicles," he said.

Jesse Toprak, vice president of TrueCar.com, said: "Consumers are changing their attitude. Many are comfortable buying a car even though there is no clarity on the economy."

Even relative pessimists say U.S. consumers are harder to scare.

"Consumers are feeling insulated from bad news and secure in their own jobs, so pent-up demand has been driving sales," said Mike Jackson, head of North American auto forecasting for IHS Automotive, who sees 2012 sales at 13.3 million. But Jackson worries that if conditions worsen, particularly if Europe's debt crisis affects credit availability in America, "then consumers will once again postpone purchases."

Most forecasters minimize the odds that troubles in Europe will hurt U.S. auto sales. Polk's Germany-based analysts, for example, compare the debt-crisis debate there to the August U.S. debt-ceiling squabble, said Anthony Pratt, Polk's director of research, Americas.

"There will be lots more noise yet, but in the end it'll get done," Pratt said.

Paul Taylor, chief economist for the National Automobile Dealers Association, says that if European sales falter, U.S. shoppers could benefit.

"German automakers will target the U.S. market to sop up excess capacity," Taylor said. For the same reason, he said, Asian automakers would boost shipments to North America, probably triggering higher incentives and sales.

The increase in sales will be mirrored by a rise in North American production. In fact, four forecasters project the same North American light-vehicle production next year: 13.8 million, up from about 13.0 million this year. That's about the same rise as U.S. sales.

The four prognosticators are IHS Automotive, LMC Automotive, NADA, and Polk.

Most forecasters see sales momentum accelerating in the second half of 2012.

Adam Jonas, top global auto analyst for Morgan Stanley and the most optimistic forecaster at 14 million, expects the seasonally adjusted annual sales rate -- which has been slightly above 13 million since September -- to fall back into the high-12 millions in the first quarter and then start to build.

"We expect a slow start" in 2012 once a flurry of Japanese catch-up buyers eases and because of the end of the accelerated-depreciation (business tax rule that has boosted truck sales) on Jan. 1," Jonas said. "Then the SAAR will improve to the 14 million level by May or June and exit the year in the high 14s."

Forecasters said the recovery of auto sales, from a low of 10.4 million in 2009, likely would continue the slow pace into 2012. The economic fundamentals most closely tied to auto sales -- personal income, unemployment rate and housing starts -- are still weak.

But other factors are helping sales, especially the need to replace America's aging vehicle fleet. The average age of vehicles on the road has risen to 10.7 years, up from 8 or 9 years during most of the past decade, said Tom Kontos, executive vice president of customer strategies and analytics for auction house ADESA.

"Americans have gone without for a very long time," he said. "'I need a car' is the biggest reason for optimism."

Morgan Stanley's Jonas cited higher leasing rates, new model launches and better credit availability.

It's no longer difficult to finance new-car buyers at Egglefield Ford in Elizabethtown, N.Y., said owner Dennis Egglefield.

"A buyer with a 620 credit score can get a loan in the 4 percent range," he said. "Lenders are actually trying to do some business."

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(Source: Automotive News, 12/26/11)