Retailers Focus on ‘Green’ & Print amid Holiday Budget Cuts

December 15, 2008

This article is included in these additional categories:

CPG & FMCG | Financial Services | Radio | Retail & E-Commerce | Television

One-third (32%) of chief marketing officers at leading US retailers say their holiday marketing and advertising budgets have been reduced this season, according to a new study conducted after the financial market meltdown by BDO Seidman, LLP, reports Retailer Daily.

More than four in ten (43%) retail CMOs say their holiday budget will remain flat and only a quarter (25%) cite an increase.

Indicative of an increased interest in green marketing, a sizable 43% of retailers say they will be increasing their advertising and marketing focus on green products this holiday season; that’s up from the 37% who said so in 2007.

Most of the retailers (57%) say they will spend the majority of their advertising and marketing budget on print advertising, while 21% will focus on broadcast outlets and 19% will focus spending on internet advertising, including social networking sites.

“The recessionary climate has caused retailers to cut back in many ways, and advertising budgets are among the first items retailers consider when reducing spending,” said Catherine Fox-Simpson, partner in the Retail and Consumer Product Practice of BDO Seidman.

“This holiday season, we can expect that advertising buys will be very targeted, and in some cases more conservative. Historically, in tough times, campaigns become less flashy, more sentimental and heavily focused on value-added items, such as sustainable products.”

Among the other findings of the BDO Seidman survey:

  • Holiday Sales Growth. CMOs expect comparable store sales to decrease by 2.7%, and overall sales by 2.8%.
  • Internet to Drive Sales This Holiday Season. Half (50%) of retailers expect their internet sales to increase this holiday season compared with 2007 levels, while 38% expect sales to stay the same, and 12% anticipate a decrease in online sales. Overall, retailers anticipate 8% internet sales growth this holiday season.
  • Consumer Electronics Strong. Asked about which product category will perform the strongest this holiday season, most (49%) of CMOs cite consumer electronics, which received far more mentions than home goods (16%), toys (15%), lifestyle goods, such as books and sporting equipment (13%), apparel (5%) and jewelry (2%).
  • Gift Cards a Bright Spot. More than one-third (37%) of retailers expect gift card sales to increase this holiday season over the 2007 holiday season, while 50% expect gift card sales to be flat, and 13% think sales will decrease. Overall, retailers expect gift card sales to grow 5.1% this season – and account for 11.9% of overall holiday sales.
  • Gift Cards will Boost In-Store Sales. Most (44%) of retailers say in-store purchases will be the biggest driver of gift card sales this holiday season, while 34% cite online purchases, and 21% think third-party vendors (such as kiosks and grocery stores) will drive the most gift card sales.

About the data: The study findings are from the most recent edition of the BDO Seidman Retail Compass Survey, a national telephone survey conducted by Market Measurement, Inc., an independent market research consulting firm, whose executive interviewers spoke directly to chief marketing officers, using a telephone survey. The survey examined the opinions of 100 chief marketing officers at leading retailers located throughout the country regarding their expectations of the 2008 holiday shopping season. The retailers surveyed, excluding automotive dealers and restaurants, had revenues of more than $100 million, including 13% of the top 100 based on annual sales revenue. The survey was conducted in October 2008.

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