A recent article by Janet Morrissey in Time predicts that (after a better-than-expected holiday shopping season), retailers should expect to see continued improvement.  To John Canally, a bullish economist at LPL financial, retail sales may even rise as much as 3.5% this year, a full percentage point higher than was predicted by the National Retail Federations 2010 forecast, released earlier this week.

According to Morrissey, historic trends side with such optimistic claims. Typically, in the year following a recession, spending quickly rebounds to pre-recession levels. To most, this year’s spending, however is expected to be tied to savings.  This means that shoppers have grown used the last year’s discounts, and so retailers may have to get used to leaner margins, and learn how to run tighter operations (less employees, less inventory, etc).

Invariably, unemployment will a role in how much retail bounces back.To Howard Davidowitz of Davidowitz & Associates (a retail-consulting and investment banking firm), unemployment should reach as high as 11% before it drops off. Perhaps not surprisingly, Davidowitz suggests that discount retailers such as Kohls, Target, and Walmart will experience better than usual growth — but, that the recovery will not span the retail industry.

via Jane Morrissey @ Time

A recent MediaPost article, written by Sarah Mahoney, featured forecasts that the retail sector is expected to bounce back in 2010. After suffering for over a year, two retail industry organizations say that 2010 retail sales will see gains of at least 2.5%. The National Retail Federation has predicted decreased unemployment combined with a stronger housing market will boost sales in 2010, which were down 2.5% overall in 2009. The experts at Retail Forward are more optimistic,  forecasting a 1.5% to 2% gain in the retail sector in the first half of 2010, gains of up to 4% in the second half of the year.

However, according to Retail Forward economist Frank Badillo, these predictions remain nothing more than that: “Renewed job and income growth will ultimately outweigh other drags on the recovery, such as tighter credit availability and new credit regulation.” Badillo continues, “…and we’ve seen some real improvement in consumer confidence levels since last March. But if confidence and the overall mood of the country were to turn more negative, that could threaten the outlook.” Within the retail sector, food, drug and mass, and soft goods will continue to perform best in 2010. Each of those sub-sectors are expected to see gains of 2.5% in the first half of 2010, and 4% in the second half.

According to Rosalind Wells, NRF Chief Economist, “As we continue to see signs of improvement throughout the U.S. economy in 2010, overall sentiment will begin to lift, making way for slight increases in consumer spending.” She goes on to say that, “…while we still expect shoppers to continue to be frugal with their discretionary spending, retailers will soon be able to reap the benefits of leaner, smarter inventories and a year and a half of pent up consumer demand.” Following the recent economic downturn the retail industry could certainly use the boost that is predicted for this year. Needless to say, much remains to be seen.

via Sarah Mahoney @ MediaPost

Apple has produced some of the most innovative and iconic hardware products since the brand’s 1977 launch. In the last decade, Apple’s new product releases – and even announcements – have generated a flurry of media buzz. And for good reason. From the Apple II to the iPhone, the brand has perennially introduced industry-changing products. However, there is an underside of the brand; from the Apple Lisa, Newton MessagePad (Grandfather of  the iPad?), to the Pippin, Apple has had their fair share of flops.  Presently, the media is awash with rumors about a new product release — a tablet,  that everyone is expecting Steve Jobs to unveil to the world tomorrow. If Apple does release a tablet, it will signal the foray into yet an another niche. It will be interesting to see Apple’s impact  into the marketplace. Will this also signal another multi-million accessory market like the iPhone and the iPod? And how well will it sell when compared to recent product launches? These are just a few of the questions we have, and are hoping to have answered in the coming hours.

(click image to enlarge)

The results of ComScore’s 2009 global search market study were released last week and further analyzed on the search marketing news blog, searchenginewatch.com. In a snapshot, the increasingly robust global search market grew a massive 46 percent in 2009. Overall, the U.S. holds the lion’s share of the global search market, while Google properties also remain king of the hill.

In December alone, 131 billion searches were conducted around the world, that’s 46 percent more searches than the previous year. The astronomical monthly number figure represents more than 4 billion searches conducted per day, 175 million per hour and 29 million per minute.

In December, the U.S. held 17 percent of the entire global search market, which equals roughly 22.7 billion total searches. Markets trailing behind were China with 13.3 billion searches, Japan with 9.2 billion, and the U.K. obtaining 6.2 billion.

In regards to global search property, Google still retains a commanding lead. Google took in 87.8 billion searches in December, 66.8 percent of the global market. Over the past year Google has seen a somewhat drastic increase of 58 percent in search queries. However, that figure includes all Google owned sites that involve search queries, such as Youtube. But to highlight the mega-site, YouTube earned 28 percent of all expanded search queries in the U.S. on Google sites in November 2009.

In second place, trailing far behind Google, was Yahoo! which saw 9.4 billion searches globally. Yahoo! was closely followed by Chinese search engine Baidu taking in 8.5 billion search queries. Aided by the launch of the search engine Bing, Microsoft saw a sharp search query surge of 70 percent to 4.1 billion among the top five properties.

via searchenginewatch.com

Laurie Burkitt posted an article at Forbes this week, commenting on what she refers to as the ’stupidity of display ads’. The stupidity she says, is evidenced by the fact advertisers have not found ways to effectively cater to consumers, say, in the same way that forward-thinking brands have been able to do with mobile marketing and social media. Brands such as Dominos and Papa Johns have drummed up new business with mobile applications; while, 1-800 Flowers and Dell have been able to leverage the power of social sites such as Twitter and Facebook to generate new customers.

To Burkitt, there are several lessons that advertisers could learn mobile marketing and social media:

• Lesson 1:  Add a buy button. Why shouldn’t more ads be smart modules that could serve as mini sales channels?
• Lesson 2:  Stop trying to take consumers away from what they’re doing. Go to them on the pages they read and give them a way to buy without leaving the page.
• Lesson 3: Make it easy. Consumers will spend their money if you make a streamlined system for them to do it. Look at PayPal, iTunes, and texting.

Assuming another one of Burkitt’s claims is right as well — that display advertising is set to grow rapidly in 2010 — there is still a ways to go for an advertising form which has not changed much over the years.

via Laurie Burkitt @ Forbes

Marketplaces have always created value. Since the early inception of marketplaces, to the development of a mobile marketplace, connecting buyers and sellers has always been the focus.  This linking, in creating a buy-and-sell environment – whether in a physical, or virtual (cyber) way – has always been about reducing friction to facilitate greater commerce. Once a market is established, its value, whether recognized or not, becomes ingrained in both the minds and the actions of those who engage the marketplace.

In many ways, an established marketplace creates what many have referred to as a ‘competitive moat’, or a protective barrier within which commerce in developed in a way more efficient and with more utility than say, a peer-to-peer transaction. While the marketplace has developed in many ways over the centuries, it is important to note that each development has played an important role in evolution of the marketplace at its introduction, and today as part of the the composition of the modern marketplace. Today, the marketplace is not just a bazaar, or a mega-store; and, it’s not just e-commerce or mobile shopping. It consists of the various in-roads, and the very diversity itself is its value. Today, buyers and sellers now have more options than ever for completing a transaction. Below is a timeline illustrating the development of the marketplace, over the years.

(click to enlarge)

Internetretailer.com recently highlighted the findings by two search engine marketing firms for Q4. One firm, Efficient Frontier, reported that its retail clients spent 17% more on search engine marketing in the fourth quarter of 2009 than in the same period a year earlier, as well as a 46% increase over the third quarter in 2009. While the other firm, SearchIgnite, revealed that its retail clients spent 12% more on paid search ads in the fourth quarter of 2009 compared to the same quarter in the previous year.

Efficient Frontier also showed a 90% rise in retail-related search queries. Sales, however, did not show the same increase across the board. Click-through rates saw a 40% decline,  while conversions-per-click stayed about the same.  Unfortunately, orders per impression decreased 30%. The cost per click was also 9% less in the fourth quarter than the same quarter last year.

Some other noteworthy findings include:

• The average transaction size for orders coming from search engines was down roughly 5% year over year, but up about 5% compared to Q3 2009.
• Google captured the win in search ads, earning 74.4% of clicks, while Yahoo’s click share declined to 21% in Q4 from 24.4% in Q3. Bing captured 4.6% of clicks in Q4, a slight decrease from 4.7% in Q3.
• Google secured 74.5% of total search ad spending in Q4, up slightly from 73.9% in Q3. Yahoo lost only a small portion of spending, declining to 20.4% in Q4 from 20.9% in Q3, while Bing dropped to 5.1% in Q4 from 5.3% in Q3, according to Efficient Frontier.

While the numbers for Q4 appear lackluster, Efficient Frontier is anticipating a surge of 15%-20% in search ad spending  for 2010. This forecast echoes other recent claims about the state of the economy, as well as what many anticipate to be a recovery for online advertising.

via internetretailer.com

Earlier today, Forbes posted an article by Robert Olsen, discussing the rapidly expanding e-commerce market in China, which is expected to nearly double in 2010. According to this article, web activity in China appears to be business as usual despite recent discussions regarding the Google’s controversy. According to the China Internet Network Information Center, 2009 saw the number of Internet users in the country skyrocket 28.9%. As a result, China has 384 million users — more than the population of the US. In 2009, Chinese e-commerce grew by 90%.

Worldwide, online shopping sales reached $36.6 billion in 2009, a feat many experts attribute to increased web security, and waning consumers’ fears about ordering online. This has been a difficult obstacle to overcome in China, where many consumers have had a difficult time trusting retailers to send genuine and undamaged goods, once money is exchanged. Fortunately, new and reliable third party  payment services, such as Alipay, are are growing in prominence in China.

Alipay (owned by Alibaba) is much like Paypal, but funds are not transferred to the vendor until after after a confirmed delivery. Alipay’s growth is remarkable as they are now processing more than $146 million in transactions every day. And recently, Alipay  announced that within two years, their revenue would exceed that of Paypal. Similar to the Paypal/Ebay relationship, much of Alipay’s success has been linked to the company’s online retailer, Taobao, which accounts for 80% of China’s total online market share.

via Robert Olsen @ Forbes.com

Retailers saw modest gains in total sales this past holiday shopping season, including the online sector. According to the National Retail Federation, total holiday sales saw an increase of 1.1%, an unexpected but welcomed surprise after 2008’s -3.4% contraction. According to ComScore, online sales rose 4% this past holiday season, when compared to holiday 2008 — certainly an improvement over last year’s -5.7% decline.

Total holiday sales reached nearly $450 billion this holiday season (including November and December) and beat pre-holiday projections of a -1% decline. Of this $450 billion dollars, E-commerce represented $29.1 billion. Regarding this overall increase, NRF Chief Economist Rosalind Wells said, “…with an eye on managing inventory and maintaining lower price points, retailers did a tremendous job of planning for the holiday season.” However, she does not expect the momentum to continue given the double-digit unemployment numbers.

In E-commerce, Black Friday saw an increase in consumers shopping from their homes to avoid the crowded malls. This trend also points to the fact that consumers are becoming increasingly confident with finding deals and promotions online. The sector also received a helping hand from mother nature herself, as severe snowstorms forced many shoppers in the US to stay indoors. The industry’s best performers included: apparel, sporting goods, books and music, and health and personal care. All of these categories earned modest to considerable gains over last year.

Retailers also took the opportunity this past holiday season to increase their social network presences to further reach out to customers. Facebook and Twitter in particular aided retailers with distributing promotions and coupons to savvy consumers. eMarketer, the Internet market research firm, is optimistic in forecasting that online sales will continue to experience accelerated growth, even amidst an ongoing recession.

Via National Retail Federation and eMarketer

Motorola released the findings of their Global Holiday Shopping Survey on Motorola.com this week. This survey revealed that 51%  of consumers, across 11 countries, used their mobile phones while in retail stores this last holiday season to access peer feedback and price comparisons, as well as to download coupons. The study also showed that 93%  of consumers used the Internet to do research prior to visiting brick and mortar stores.

The study further showed that mobile shopping technology had a much greater impact this past holiday season than in previous years. While retailers are embracing  the increased use of mobile shopping technology, they are also looking to future technologies to expand this sector’s depth. All age groups represented in the survey expressed interest in next-generation retail shopping technology to help them be better informed shoppers.

Regarding the current economic climate, Frank Riso of Motorola Enterprise Mobility Solutions said,

“…with nearly seven in 10 surveyed holiday shoppers either reporting flat or declining budgets, retailers vying for finite shopper dollars need to provide a seamless customer experience. By utilizing mobile technologies, consumers have become empowered, better informed and more critical shoppers. Retailers need to establish near-term strategies to provide product information, stock availability, discounts and coupons directly to shoppers to help them to remain competitive.”

Additionally, surveyed shoppers placed a greater importance on coupon availability, than ever before. In fact, this research indicates that 39% of consumers were even willing to abandon their purchases when coupons or discounts were not offered. And with only half of shoppers reporting satisfaction with the availability of coupons and discounts, it is clear that retailers failed to meet the expectations of cost-aware consumers this past holiday season.

The study also revealed that consumers in North America kept an average of $109 unspent (from what they had budgeted) this past holiday season for various reasons including limited merchandise, and a lack of discounts or coupons. The 2009 holiday season saw 40% of shoppers abandoning purchases altogether because of these issues, twice as many as the previous year. Surprisingly, retailers could have turned many of these abandoned items into sales had they provided the right coupons and discounts.

Motorola’s report can be found here

via Motorola