Compiled by John Kelly

Thursday December 8, 2016

Will West Coast Retailer Migration Continue as Northeast Rents Rise?

When the nation’s retail industry recently congregated in New York City for ICSC’s National Deal Making conference, much

of the discussion centered on the evolving mindset of consumers throughout the country. For retail real estate professionals

in the Northeast, this conversation is vital.

An increasing number of upwardly mobile, health-conscious, mass transit-minded individuals migrate to cities along the East

Coast with an expanding job market, such as New York City, where growing technology, advertising, media and information

technology (TAMI) sectors continue to attract new residents. As a result, the region’s retail market is reacting accordingly.

Forward-thinking retail brands that strive to be ahead of the curve are migrating east to establish a retail environment in the

Northeast that has been a mainstay of West Coast cities, where the TAMI sector has long driven market trends. We’re

seeing a proliferation of new brands breaking into different markets throughout the Northeast and, in many cases, quickly

expanding their footprints.

From novel grocery concepts that offer healthier product selections than traditional supermarkets to West Coast-based

women’s fitness brands and national value stores that can’t find space fast enough, the Northeast retail market is red hot

with retail concepts. Fitness brands want spaces in the 1,500-sq.-ft. to 3,500-sq.-ft. range, value store concepts need around

10,000 sq. ft., and supermarkets have a “sweet spot” of about 36,000 sq. ft.

Savvy retailers are seeking out locations in vibrant, walkable downtowns, pushing asking rents higher in many locations. As

a result, many are setting up shop in “up-and-coming” municipalities that have begun to attract the retailers’ preferred

demographics while still offering manageable rental rates – sometimes as much as 50% less than rents in similar, but more

established, municipalities.

For example, in my home state of New Jersey, I recently worked with a couple of women’s fitness companies to bring their

concepts to two of the state’s burgeoning locales. In downtown Somerville, where rents range from $18 to more than $40

per square foot NNN, California-based Studio Barre just opened its first New Jersey location.

Meanwhile, another California-based fitness center, is aggressively expanding throughout the region, having most recently

focused on Morristown, which boasts one of the most rapidly evolving downtown areas in all of the Northeast. There, rents

have climbed as high as $70 per square foot NNN for the most desirable retail space around the Morristown Green, a

popular and historic park.

It’s inevitable that the increased demand for space in these markets is resulting in rising rents, up by more than 10% in

several downtown submarkets.

The question becomes: Will retailers remain attracted to these up-and-coming East Coast areas after recognizing that

locating in established markets may mean a steep admission price, or will they see the value in paying more for instant

access and splash? All we can be certain of right now is that this is a very exciting time to be in retail in the Northeast. http://www.chainstoreage.com/article/will-west-coast-retailer-migration-continue-northeast-rents-rise

Ten Brands to Watch in 2017 Brand-building consultant Denise Lee Yohn has released her annual “Brands to Watch” list for 2017. There are 26

companies on the list, with retail and social media brands accounting for 10 of the spots. Here’s a review:

Barnes & Noble. The venerable bookstore chain has let its CEO go, lowered sales expectations, and shrunk its footprint by

dozens of stores. Meanwhile Amazon Books is opening stores. Is 2017 the year B&N’s death will become imminent?!

Chipotle. No one thought it would take this long for Chipotle Mexican Grill to recover from its food borne illness crisis.

Recovery plans for the coming year include a new store design, desserts, and digital ordering.

Home Depot. Competition between The Home Depot and Lowe’s has been one of the quintessential retail rivalries.

Currently The Home Depot is growing sales faster and enjoys higher profitability, and at the time I’m posting this, it was

popping up as an analyst choice for holiday season sales. Let the game continue.

J.C. Penney. J.C. Penney’s ability to execute a turnaround has been a crapshoot and its performance in 2017 will probably

as unpredictable. The company is making all the right moves but consumers are spending less on apparel.

McDonald’s. The fast-food chain will finally leverage its core brand equities in speed and convenience by launching a mobile

order-and-pay app and digital kiosks in 2016. But who knows if it’s enough to produce sustained growth for the struggling

chain?!

Amazon Prime. Amazon has been aggressively signing up new members to its Prime service and, according to some

speculation, has been losing money just as fast. In the company’s latest earnings report, the company missed estimates by

a wide margin. Will Amazon raise the membership fee above the $99 rate it’s offered for the last three years? Probably not,

but it’s always interesting to see CEO Jeff Bezos convince investors to be patient.

Ralph Lauren. 2016 brought signs that Ralph Lauren’s new CEO, Stefan Larsson, is successfully returning the company to

financial health. Let’s see if the momentum continues in 2017.

Twitter. It’s do or die time for Twitter. Either it figures out how to attract more users or it shuts down. If Trump continues to

use the channel the way he did during the campaign, it just might have a chance.

We Chat. WeChat, the Chinese messaging app owned by Tencent, is rapidly closing in on 1 billion users and seems poised

to give Facebook Messenger a run for its money…and lead the ascendance of Chinese brands in the world.

YouTube. It looks like YouTube is almost ready to launch its new live TV streaming service dubbed YouTube Unplugged. It

just signed CBS and is in talks with FOX, Disney, and NBCUniversal. Let the mass cord-cutting begin.

http://www.chainstoreage.com/article/ten-brands-watch-01

'Another Bad Quarter' Coming from Sears, but the Struggling Retailer is Expected to

Hold on

Executives are abandoning ship during the critical holiday season. The latest round of store closures is in the works. And a

key apparel account just recorded another quarterly sales decline.

Yet despite the slew of negative headlines leading into Sears' fiscal third-quarter earnings report Thursday, the department

store chain has reason — and likely, the resources — to hang on after the holidays and through early 2017, when retail

bankruptcies are typically filed.

As CEO Eddie Lampert continues to inject funds into the company, the chain has been able to purchase inventory for its

stores, while garnering returns for his hedge fund ESL. The company also has roughly 250 unencumbered Kmart and Sears

stores that it could sell off, potentially generating some $2.4 billion in proceeds, according to Fitch Ratings.

While such maneuvers are seen by many as temporary ways to plug the hole in Sears' operating losses, they should

continue to buy it time. At a national real estate conference in New York City this week, chatter swirled that late 2017 would

be the earliest date Sears would file for bankruptcy in order to protect the $2.7 billion in assets it sold to Seritage Growth

Properties and through joint venture deals last year.

Those people formed this thesis upon a piece of the U.S. bankruptcy law called "fraudulent conveyance," which would give

Sears shareholders a two-year window to go after Seritage's assets if the department store chain were to file for bankruptcy.

The two-year anniversary of that spinoff falls in August. In the short time Seritage has been a publicly traded entity, its

shares and market capitalization have already surpassed those of Sears.

"There isn't anything right now ... that says it's going to be any different than what people are expecting it to be, which is just

another bad quarter," Philip Emma, head of North America research at Debtwire Analytics, told CNBC.

Caution flags ahead of earnings

Indeed, the Thomson Reuters consensus forecast, which culls data from just one analyst, predicts Sears' top line will

contract by $803 million during the three months ended in October, to $4.9 billion.

Meanwhile, the department store chain is widely expected to report another quarterly decline in same-store sales. That

metric has not been positive for the retailer since the first quarter of 2010. Aside from that one reporting period, it hasn' t

happened in more than a decade. Sears has also reported just two profitable quarters since April 2012.

"There isn't anyone that's going to be surprised if the numbers are really, really bad on Thursday," Emma said.

A look at Lands' End's quarterly results is another sign of trouble. That brand, which generated 89 percent of its retail sales

from Sears stores in 2015, said last week that net revenue in that segment fell 15.6 percent, to $39.3 million, during its fiscal

third quarter. Sears spun off Lands' End in 2014, but continues to carry the brand in more than 200 stores.

"[We] have continued to see weak traffic trends within malls and more specifically within our Sears locations," Jim Gooch,

Lands' End's co-interim CEO, told investors on the company's earnings call.

Meanwhile, the Sears' executive shuffle continues to march on. Former Executive Vice President Jeffrey Balagna exited the

company Nov. 30 to "focus on his other business interests and pursue other career opportunities," according to an SEC

filing.

And Joelle Maher, who served as Sears president and chief member officer for that store format, left the company last week

after about a year and a half. When contacted by CNBC, Sears did not provide additional context as to the reason for her

departure, but said it appreciated her service. Robert Schriesheim also stepped down earlier this year from his post as

Sears CFO.

"It certainly doesn't help the challenges they have in the business to have that kind of a constant turnover, but it is not

atypical for them," Emma said.

Where Sears can go from here

Regardless of whether Sears' challenges are typical or not, it will eventually run out of options if it doesn't turn around its

fundamental business, analysts contend.

In a note explaining its view on the company last month, Fitch Ratings said it expects Sears to burn through between $1.6

billion and $1.8 billion in cash in 2016. To fund its inventory for the holiday season, the ratings agency pegged Sears'

working capital needs at $500 million to $650 million. Sears had $467 million in total liquidity as of July 30, Fitch said.

The firm concluded that Sears should be able to fund its holiday inventory through borrowings on its credit facility, but said

its restructuring risk remains "high" over the next 12 to 24 months. As of the second quarter, Sears had $3.5 billion in long-

term debt, according to Moody's.

Sears raised nearly $10 billion in liquidity from 2012 to 2015. And despite its shrinking asset pool, it still has plenty of ways

to fund what Lampert has repeatedly promised will lead to eventual profitability. At the top of that list is its real estate, which

could bring in more than $2 billion if sold, according to Fitch.

The company is also working to sell off its Kenmore and Craftsman brands, and said in August that it had received interest

from a "variety of potential partners." However, some have speculated that interested parties might try to wait for a potential

bankruptcy filing so they could scoop up those brands at a lower cost.

If a deal were to go through, Fitch says those proceeds would likely be used to pay down pension plans as opposed to

funding Sears' operations.

Several people in the real estate industry, who are monitoring Sears' performance from the perspective of potentially

needing to fill up large, vacant spaces, are keeping an eye on 2017. They contend that because Sears spun off more than

200 properties to Seritage last July, creditors could go after Seritage's assets in the event of a Sears bankruptcy until that

transaction hits its two-year anniversary.

At that two-year mark, the statute of limitations would run out on that transaction. However, Chuck Tatelbaum, director of the

Tripp Scott law firm and chair of the bankruptcy and creditors' rights department, said that wouldn't necessarily be the case

for Sears. Individual states have longer statutes of limitations on that piece of the bankruptcy code. Therefore, if Sears were

to file for bankruptcy its home state of Illinois or in Delaware, the statute of limitations would extend another two years.

The company will face additional pressure next summer, as all of Sears secured loans and bonds mature in a three-year

window beginning in July.

Fixing the foundation

Analysts agree that for Sears to truly execute change, it needs to fix its fundamental business. Recently, the company

announced several initiatives to try to inject life in its sales, including a partnership with Uber that it expanded on

Wednesday. But those efforts haven't yet showed up on the company's top line, Emma said.

Despite the closure of more than 1,000 stores over the past five years, its comparable-sales trends continue to slide. That's

even as a "significant number" of Kmart's 700-plus stores are profitable, and "have been profitable for many years," Lampert

said in an October blog post responding to rumors Kmart might shut down.

The retailer's updated store count, to be released in its third-quarter earnings report, will include the closure of 68 Kmart

stores and most of the 10 Sears locations that were announced in April. It will not include the 64 more Kmart stores it will

close in mid-December, or any other locations that could be shuttered during the current quarter.

But as the company shrinks its footprint and inventories to lower costs, it will become harder to turn around its sales,

analysts said.

"The environment hasn't gotten better, it's more competitive, and it makes it that much more difficult to operate from a

weaker position in the market," Moody's analyst Christina Boni said.

Moody's expects Sears to report a $1.5 billion loss in operating cash flow this year. http://www.cnbc.com/2016/12/07/another-bad-quarter-coming-from-sears-but-the-struggling-retailer-is-expected-to-hold-

on.html

Consumer Recall and Lift Better with Print + Online Pinterest is not the only place consumers go for inspiration and planning — in fact adding print to digital helps consumer recall.”Print ads (in magazines) can be read more leisurely, and be more evocative; they can encourage readers to fantasize, to put themselves in the picture,” according to a recent study Neuroscience May Explain Why Magazine Advertising Succeeds by MediaMax Network. According to the study campaigns that use traditional with digital channels are more effective and the least effective campaigns use online alone and, “Campaigns combining print and online also achieved significant lifts in ad effectiveness, beyond what a single platform would achieve.” However, print advertising — particularly newspaper and yellow pages — has taken a hit in the news recently. The MediaMax study acknowledges that despite evidence presented that print and digital combined deliver key performance indicators (such as ad recall, persuasion, brand consideration, purchase intention and actual purchase), “some advertisers are reluctant to spend their ad dollars on print versions of magazines.” While print advertising revenue is slowly declining while digital gains (see BIA/Kelsey’s forecast below), print is still an important part of the advertising pie, as shown by the latest wave of the Local Commerce Monitor survey of small and medium businesses and U.S. Local Advertising Forecast from BIA/Kelsey. Small Businesses Use Print and Other Traditional Channels Year over year in BIA/Kelsey’s Local Commerce Monitor™ annual survey of small businesses traditional and some print channels continue to be an important part of a small businesses advertising strategies. SMBs reported usage of print media is shown in the table above. Among the full sample, direct mail leads the print media, with 41.0% of SMBs surveyed reporting they use direct mail for advertising and promotion (placing it in 2nd place in usage overall). 26.7% report using newspapers and 18.1% report using magazines. Over half of the SMBs using magazines for advertising and promotion plan to maintain their current ad spend in the future, while 41.6% plan to increase spend. When it comes to return on investment (ROI), 27.5% of SMBs that use magazines reported excellent (10-19x spend) or extraordinary (over 20x spend) ROIs. Nearly the same number, 27.1%, reported good results (5-9x spend). While 18.1% usage may seem low compared to direct mail’s 41.0%, the SMBs using magazines are seeing a return on their investment and say they plan to continue, or even increase, their spend on magazine advertising. Online/Digital Local Ad Share Will Exceed Print Media by 2018 BIA/Kelsey released its latest U.S. local advertising forecast last week, estimating online/digital advertising will increase at 13.5 percent, from $44.2 billion in 2016 to $50.2 billion in 2017. That compares with a decrease of 2.4 percent next year for traditional — print and over-the-air — advertising revenues, which is predicted to go from $101.1 billion in 2016 to $98.6 billion in 2017. By 2018, BIA/Kelsey predicts, online/digital local ad share will exceed the share of print media. In the press release Mark Fratrik, BIA/Kelsey’s SVP and Chief Economist, lists a range of factors that will drive local ad revenues higher in 2017 and through the end of the next year, including an improving U.S. economy, increased spending by national brands in local media channels, extraordinary growth in mobile and social advertising, and the continued expansion and selection of online/digital advertising platforms. Many print channels are still strong with direct mail is projected to still be on top of the heap in 2017, garnering nearly a quarter of U.S. local advertising revenue. Although print advertising revenue is expected to continue declining, there is opportunity for revenue in print complemented with online. In fact the forecast shows the the growth in online (which includes magazines, newspapers and YP), is expected to help offset the losses. Print advertising, though losing share, is expected to continue to be a big part of ad dollars. http://blog.biakelsey.com/index.php/2016/11/02/consumer-recall-and-lift-better-with-print-online/

Print Media is Not Dead The benefits of print media can often be overlooked in a society that is quickly going digital. WhileThree Young Beautiful

Smiling Women Reading Magazine digital advertising has proved itself in the world of advertising, a study by MediaMax

Network found that campaigns that combine traditional and digital channels are more effective than those that rely on digital

alone. In her blog post, “Consumer Recall and Lift Better with Print + Online,” Suzanne Ackley gives some insight into how

BIA/Kelsey couldn’t agree with MediaMax more.

Small businesses provide excellent insights into the benefits of using print media. In the annual BIA/Kelsey Local Commerce

Monitor survey, print media never fails to prove its worth. The survey shows that small businesses value print media as an

important part of their advertising.

Here are the top contenders of print media used by small businesses for advertising or promotion that you can encourage

your clients to utilize:

Direct Mail: 41% of small businesses surveyed reported using this medium

Print Yellow Pages 29.4%

Newspapers: 26.7%

Magazines: 18.1%

Print Directories that aren’t Yellow Pages: 14.9%

When it comes to magazines, more than half of the small businesses that advertise and promote themselves using this

medium will continue spending the same amount on this advertising annually. Additionally, 41.6% of these businesses plan

to increase magazine ad spending. That’s not all. 27.5% of small businesses reported a 10-20 times return on investment

with magazine advertising, while 27.1% reported 5-9 times their return on investment.

It’s not just small businesses that are taking advantage of print media. According to BIA/Kelsey’s U.S. local advertising

forecast, traditional media has claimed its fair share of the ad market. Out of the $148.8 billion that is predicted to be spent

on local advertising in 2017, traditional media types will claim the following percentages:

Direct Mail: 24.9%

Print Newspapers: 8.3%

Print Yellow Pages: 1.3%

Magazines: 1.1%

These statistics show that regardless of print media’s declining fortunes, the format remains a force in the ad market. Don’t

let your clients miss out on this often overlooked opportunity. http://mediasalestoday.com/print-media-not-dead/

Ford's Futurist Foreshadows Consumer Trends to Watch in 2017 As the in-house futurist at Ford Motor Co., Sheryl Connelly's job is to predict the future -- not necessarily about driving or

cars, but about how consumer behavior is changing. Ms. Connelly's findings, however, often have a bearing on how the

automaker designs, builds and markets cars.

A few years ago, for instance, she predicted that there would be a backlash to the fact that technology has enabled people

to be constantly connected. "I said I think by the time the year 2025 comes around you are going to see people looking to

their car as a sanctuary. And indeed that is currently our strategy on the interior of our vehicles," she said. Cars should "be a

quiet respite from noisy, active world around you."

The insight is evident in the technology Ford uses to pair bluetooth-enabled devices with in-car entertainment systems.

"Probably the unsung hero of that platform is the do-not-disturb button which allows people to shut off incoming calls [and]

shut off reminder notice of emails and text messages," she said.

So what is on her mind this year? Ms. Connelly, whose formal title is manager-global consumer trends and futuring, outlined

some trends to watch in her latest report, called "Looking Further With Ford." The findings are partly based on a custom

survey of 8,100 people across U.S., U.K., China, Brazil, India, Spain, Germany and Canada. This is the fifth year that Ford

has publicly released the report. Below is a quick look at some of the findings. Ford posted the full 2017 trends report at

fordtrends.com.

Trust Is the New Black

Ford began documenting the mistrust of corporations, governments and media in its first trends report five years ago. The

situation has gotten worse with the concept of truth now on trial. "Where truth was once indisputable and often self-evident,

today's 'truths' are often heavily influenced by perceptions and reinforced by like-minded viewpoints," according to the

report. In the survey, 65% of people agreed that "people today are less likely to consider opposing viewpoints." For

marketers, this means transparency is more important than ever.

The Good Life 2.0

"Bigger isn't always better and ownership isn't equated with happiness," the report finds, adding that wealth is an

increasingly outdated measure of success.

At first glance the finding seems to spell trouble for auto marketers because they make money by selling cars to own. But

Ford has sought to adapt by marketing itself as a "mobility company." In March the automaker launched a subsidiary called

Ford Smart Mobility, whose investments include ride-sharing and autonomous vehicles.

Time Well Spent

The report declares that "punctuality is a dying art" and "procrastination can be a strength." This is behind the rising trend of

the so-called "gap year," which refers to the year off students take between high school and college. In India, 63%

respondents agreed that "procrastination helps me be more creative or productive," according to the survey. In the U.S.,

34% of respondents agreed with that statement.

The report cited an ad agency in Amsterdam called Heldergroen that has a unique way of encouraging employees to work

less: At 6 p.m., "steel cables hoist the desks into the air" freeing room for yoga, dance parties and other recreational

activities.

'Decider Dilemma'

"Products, services and values are adapting to accommodate a sampling society that prioritizes trying over buying,"

according to the report. In China, 99% of survey respondents agreed that "the internet creates more choice than I need or

want." And across all countries surveyed, 49% of respondents ages 18-to-29 said that in the past month "I have walked

away from a purchase decision because there were so many options, I couldn't choose."

Ford is affected by the "decider dilemma" as people wrestle with a plethora of transportation options, the report notes. The

automaker is seeking to address this by becoming more of a transportation consultant. Ford plans to open so-called

"experience centers" in urban areas called FordHubs, "where consumers will be able to explore Ford's latest innovations,

learn about the company's mobility services and experience exclusive events," according to a statement from earlier this

year. http://adage.com/article/cmo-strategy/ford-s-futurist-foreshadows-consumer-trends-watch/307050/

American Apparel Warns 3,500 Employees of Possible Layoffs

Last month, American Apparel filed for bankruptcy for the second time in 13 months, and said that it would be selling off $66

million in assets and intellectual property to Canadian company Gildan Activewear. This was the latest in a series of

struggles the company has faced, including weak sales, bankruptcy, and a revolving door of CEOs after a misconduct

scandal involving former CEO and founder Dov Charney.

Now, the company has notified workers at three of its production facilities — nearly 3,500 of its workers in Southern

California — that they could be laid off on January 6, 2017. American Apparel has said the state-mandated warning letters

are purely a legal precaution and that layoffs are "not certain," according to a report from the Los Angeles Times.

American Apparel also said in a court filing that it intends to shut down nine poorly performing stores by the end of

December, before a planned auction of more than 90 of the company’s remaining stores.

Although Gildan has already put in its bid, the bankruptcy process allows other potential buyers to make competing offers,

including for American Apparel's retail business. Gildan has expressed no interest in the 110 U.S. stores or the 83 others

around the world.

The auction is scheduled for Jan. 9 and 12, 2017. After the auction, “we will have more clarity on the go-forward plan,” wrote

Craig Simmons, the Chief Human Resources Officer for American Apparel in a letter to employees, “depending on which

buyer or buyers succeed, and how they wish to move forward.”

http://www.retailtouchpoints.com/features/news-briefs/american-apparel-warns-3-500-employees-of-possible-layoffs

‘Suggested Selling’ in Stores to Top 51% by 2019

As the store’s role continues to evolve with consumer shopping preferences changing, omnichannel retailers aren’t just

dabbling in personalization; they’re betting the farm on it. While currently just 7% of retailers use suggested selling based on

what’s in the customer’s closet, that percentage is expected to jump to 51% by 2019 — a 629% increase, according to

Boston Retail Partners (BRP).

In November 2015, BRP highlighted in its Future Store Manifesto that retailers are changing their initiatives to align with five

key future store imperatives: mobile, relevant, personal, ubiquitous and secure. One year later, BRP followed up the report

with a scorecard identifying where retailers have taken strides in these categories, projecting mobile and relevance will see

the biggest growth in the store of the future:

20% of retailers presently use mobile POS, but this percentage is expected to jump to 78% by 2019;

39% of retailers offer associates a mobile or tablet app during their time on the sales floor or checkout line; this percentage

will increase to 75% within three years;

18% presently utilize geolocation, with this total growing to 58% by 2019; and

22% offer real-time contextual promotions, with the number jumping to 68% within five years.

To keep up with consumer demand, half of retailers expect to offer “start anywhere, finish anywhere” transactions within five

years, with 73% expected to utilize a unified commerce platform with a centralized order management solution by 2019.

These retailers are expected to up the ante with their in-store security measures as well. As many as 88% are planning to

have end-to-end encryption (E2EE) implemented to ensure data security by 2019. While 20% use a single enterprise-wide

token solution now, this number should jump to 72% within two years.

“It is impressive to see how many retailers are making the five critical elements of the future store a top priori ty; however,

many retailers have a long way to go,” said Ken Morris, Principal at Boston Retail Partners in a statement. “The physical

store will continue to be the heart and soul of retail operations for the foreseeable future, however, a transformation is in

process. While the store isn’t going away, it’s already starting to get a whole lot more connected, mobile and smarter.” http://www.retailtouchpoints.com/features/news-briefs/suggested-selling-in-stores-to-top-51-by-2019

Online Holiday Spending Just Hit the $50 Billion Mark And Adobe says retailers are on track for a big new record

As shoppers take a post-Black Friday breather before the holiday season revs up again, retailer can take comfort in how well

things are going so far, online anyway: U.S. e-commerce sales since November 1 passed the $50 billion mark this week.

What’s more, that’s up 7.8% through December 5, a pace that would see U.S. online retailers hit a new record for the

season, according to Adobe Digital Insights.

Traditional retailers have grown aggressive this year in fighting Amazon.com AMZN 0.75% for their share of the online pie,

efforts that have yielded record numbers during the recent Thanksgiving holiday weekend from the likes of Kohl’s KSS

5.13% , Target TGT 0.26% and Walmart WMT 1.06% .

But Adobe is optimistic about the rest of the holiday season, expecting another $39.4 billion in online sales through the end

of the calendar year. Though the rate of growth slowed because of the current lull, Adobe is sticking with its forecast for 11%

growth when all is said in done on Dec. 31.

“This week is an ‘in between’ as shoppers looking for deals bought last week and procrastinators haven’t started yet,” says

Tamara Gaffney, principal analyst and director, Adobe Digital Insights. Adobe collects the data by measuring 80% of all

online transactions from the top 100 U.S. retailers.

Adobe isn’t the only one measuring impressive online sales this season: comScore SCOR 0.33% said that online shopping

from desktops (so excluding smartphones) had topped $1 billion for 11 straight days starting on Thanksgiving (Nov. 24.)

Some of the moves by retailers to spur online spending have included starting Black Friday deals online 18 hours earlier

before offering them in stores (Walmart, Target and Macy’s M 1.84% among many) and offering free shipping (Best Buy

by among others) regardless of order size.

Adobe says so far the best selling electronics have been Sony PlayStation 4, Apple AAPL 0.98% iPad, Samsung 4K TVS

and Microsoft MSFT 2.20% Xbox. And the blockbuster toys have been scooters from Razor, Lego sets, DJI Phantom

Drones and Nerf Guns. And no surprise, out of stock items have included the Hatchimals. http://fortune.com/2016/12/07/holiday-season-ecommerce/

Ad Agencies Probed Over Contracts to Produce Commercials The U.S. Justice Department is investigating whether advertising agencies inappropriately steered business producing

commercials to their in-house production units over independent companies by rigging the bidding process for those

contracts, according to people familiar with the matter.

Rebecca Meiklejohn, a government antitrust attorney based in New York, has been interviewing ad industry executives on

the subject over the past few months, the people said.

The production and postproduction of commercials is a roughly $5 billion business in the U.S. that involves services such as

directing, sound editing, special effects and color correcting.

Hundreds of independent companies compete for those contracts. But the giant ad agencies whose creative teams conceive

commercials also have been ramping up in these areas in the past several years, pursuing a growing revenue stream.

The Justice Department is investigating whether ad agencies are manipulating the bidding process, urging independent

companies to inflate their prices so that contracts could be awarded to the agencies’ own production and postproduction

outfits, according to the people familiar with the matter.

Price-fixing and bid-rigging are prohibited under federal antitrust law.

It isn’t clear which agencies are the subject of the government’s inquiry. Many of the big agency holding companies,

including WPP PLC, Omnicom Group Inc., Interpublic Group and Publicis Groupe SA, have in-house production and

postproduction divisions.

Representatives of WPP, Interpublic, Omnicom, and Publicis declined to comment.

Nancy Hill, chief executive of the American Association of Advertising Agencies, a trade group that represents agencies,

said in a statement: “It goes without saying that we require our member agencies and their staffs to follow the letter of the

law.”

The Justice Department’s probe adds a layer of controversy to an industry in which trust between the major parties in the

estimated $529 billion global ad business is already fraying.

In June the Association of National Advertisers, a trade group that represents big advertising clients, released the results of

a seven-month probe that found agencies are shortchanging clients through nontransparent business practices.

The group’s report, which didn’t point to specific ad agencies, detailed a range of suspect practices, such as agencies

getting rebates from media sellers for reaching spending thresholds on behalf of their clients.

Big ad companies have denied wrongdoing. The report has caused marketers to launch a wave of audits of their media-

buying contracts with agencies.

Ms. Meiklejohn’s inquiry has some ties to the ANA transparency probe. Shortly after the group’s report was released, she

contacted people close to the probe to see if they uncovered anything related to the bid-rigging allegations she was already

investigating, said several of the people familiar with the matter.

K2 Intelligence, the corporate investigation firm that conducted the trade group’s probe, uncovered allegations of bid-rigging

in the postproduction business, according to people briefed on the matter.

That material was spelled out in an early draft of the report but didn’t make it into the final version, which was focused on the

media-buying business.

The trade group currently has a task force looking into the issues it discovered in the postproduction sector, according to a

person close to ANA.

Ms. Meiklejohn held discussions with people involved in the probe and obtained the information about bid-rigging

allegations, the people said.

The language in the early ANA draft claimed that “some creative agencies” are increasingly directing “postproduc tion

projects to affiliated companies within the same Agency Holding Companies,” according to documents reviewed by The Wall

Street Journal.

The relevant passage said six producers and editors from independent production firms reported being asked to submit so-

called “check bids” on projects that agencies had already determined were going to their in-house outfits.

The postproduction companies were urged to inflate their bids “to create a paper trail that justified to the advertiser its

decision to award the project to an in-house facility, which provided a rival bid at a lower price,” the draft ANA language said.

Ms. Meiklejohn also has subpoenaed K2, the investigative firm, to gain additional information, one of the people familiar with

the matter said.

Independent production firms have begun making a case in public about their grievances. In October, AICE, a trade group

that represents independent postproduction firms, sent a statement to its members that accused advertising companies of

engaging in unfair business practices to keep advertiser postproduction work in-house.

The AICE memo said independent firms often feel coerced into providing check bids “for fear of alienating an agency and

risking future opportunities for work.”

While ad agencies have been offering production and postproduction services to some extent for decades, they have

doubled down on this area of the business over the past few years to find new revenue streams and to help address

marketers’ growing need for more ad content because of the rise of social media.

Madison Avenue is familiar territory to Ms. Meiklejohn. Following a 2002 federal investigation into alleged bid-rigging in the

advertising, printing and graphics industries, the Justice Department, with the help of Ms. Meiklejohn, sent several

executives to jail for antitrust violations and tax fraud. http://www.wsj.com/articles/justice-department-investigates-rigging-of-contracts-in-advertising-industry-1481046420

70 Email Marketing Stats Every Marketer Should Know Time and time again, you’ve been asked to prove the effectiveness and ROI of your organization’s marketing efforts–

especially when it comes to email marketing. And email marketing is the king of the marketing kingdom with a 3800% ROI

and $38 for every $1 spent.

But email marketing’s reach goes way beyond ROI, which is why we’ve assembled a massive list of 70 email marketing

statistics every marketer needs to know.

Here, you’ll find data-backed email marketing stats on everything from email automation, mobile emails, to email

personalization and more.

Email automation

1) Transactional emails have 8x more opens and clicks than any other type of email, and can generate 6x more revenue. –

Experian

2) Revenue for B2B marketing automation systems increased 60% to $1.2 million in 2014, compared to a 50% increase in

2013. – VentureBeat

3) Email marketing technology is used by 82% of B2B and B2C companies. – Ascend2

4) 95% of companies using marketing automation are taking advantage of email marketing. – Regalix

5) 56% of companies currently use an email marketing provider and are 75% or more likely to be purchasers of marketing

automation software over the next year. –VentureBeat

6) There were nearly 11x more B2B organizations using marketing automation in 2014 than in 2011. – SiriusDecisions

7) B2C marketers who leverage automation have seen conversion rates as high as 50%. – eMarketer

8) Automated email messages average 70.5% higher open rates and 152% higher click-through rates than “business as

usual” marketing messages. – Epsilon Email Institute

9) In 2014, 70% of businesses were currently using a marketing automation platform or were implementing one. – Aberdeen

10) Over 75% of email revenue is generated by triggered campaigns, rather than one-size-fits-all campaigns. Automated

email campaigns account for 21% of email marketing revenue. – DMA

11) As of 2013, 25% of Fortune 500 B2B companies had adopted email marketing automation. – ClickZ

12) Companies who send automated emails are 133% more likely to send relevant messages that correspond with a

customer’s purchase cycle. – Lenskold and Pedowitz Groups

Mobile emails

13) About 53% of emails are opened on mobile devices. – Campaign Monitor

14) 23% of readers who open an email on a mobile device open it again later. –Campaign Monitor

15) 75% of Gmail’s 900M users access their accounts via mobile devices. –TechCrunch

16) Data for over 1.8 billion opens from campaigns sent in 2013 shows that mobile is the most popular environment for a

subscriber’s first interaction with an email. –Campaign Monitor

17) From 2011 to 2013, email opens on mobile phones devices increased by 30%. –Campaign Monitor

18) The iPhone is the most common mobile device subscribers use to open their email for the first time. – Campaign Monitor

19) Though the number of new Internet users is growing at less than 10% per year, the number of new smartphone

subscribers is growing at a 20%+ rate. –TechCrunch

20) Between the iPad, iPhone and iPod Touch, nearly 90% of all mobile opens occurred on an Apple device. *Note: Data is

likely skewed by the fact that Apple devices display images by default (whereas many Android email clients don’t.) –

Campaign Monitor

21) One out of every three clicks within an email occurs on a mobile device. – Campaign Monitor

22) It is more common for a reader’s second open to be on a mobile device than it is on a different device: 70% will stick

with their mobile device, and 30% will go elsewhere. – Campaign Monitor

23) Mobile readers who open an email a second time from a computer are 65% more likely to click through. – Campaign

Monitor

Email personalization

24) Personalized email messages improve click-through rates by an average of 14% and conversions by 10%. – Aberdeen

25) 74% of marketers say targeted personalization increases customer engagement. – eConsultancy

26) Only 39% of online retailers send personalized product recommendations via email. – Certona

27) Emails with personalized subject lines are 26% more likely to be opened. – Campaign Monitor

28) Personalized emails deliver 6x higher transaction rates. – Experian

29) 53% of marketers say ongoing, personalized communication with existing customers results in moderate to significant

revenue impact. – DemandGen

30) Segmented and targeted emails generate 58% of all revenue. – DMA

31) 75% of enterprises will be investing in personalized messaging in 2015. –VentureBeat

32) Marketers have noted a 760% increase in revenue from segmented campaigns. – Campaign Monitor

33) Marketers see an average increase of 20% in sales when using personalized web experiences. – Monetate

34) 50% of companies feel they can increase interaction within email by increasing personalization. – Experian

35) Personalized promotional emails had 29% higher unique open rates and 41% more unique click-through rates in 2013. –

Experian

Email engagement

36) You are 6x more likely to get a click-through from an email campaign than you are from a tweet.- Campaign Monitor

37) Email is 40 times more effective at acquiring new customers than Facebook or Twitter. – McKinsey

38) 81% of online shoppers who receive emails based on previous shopping habits were at least somewhat likely to make a

purchase as a result of targeted email. -eMarketer

39) When it comes to purchases made as a result of receiving a marketing message, email has the highest conversion rate

(66%), when compared to social, direct mail and more. – DMA

40) Email subscribers are 3 times more likely to share your content via social media than visitors from other sources. –

QuickSprout

41) 72% people prefer to receive promotional content through email, compared to 17% who prefer social media. –

MarketingSherpa

42) Including a call to action button instead of a text link can increase conversion rates by as much as 28%. – Campaign

Monitor

43) Email marketing drives more conversions than any other marketing channel, including search and social. – Monetate

44) A message is 5x more likely to be seen in email than via Facebook. – Radicati

45) 4.24% of visitors from email marketing buy something as compared to 2.49% of visitors from search engines and 0.59%

from social media. – Monetate

46) Sending four emails in a month instead of one significantly increases the number of consumers opening more than one

email – WhoIsHostingThis “Email Deliverability 101”

Email ROI

47) Email marketing has an ROI of 3800%. – DMA

48) The average order value of an email is at least three times higher than that of social media. – McKinsey

49) 60% of marketers use conversion rates to evaluate an email’s effectiveness. – DMA

50) Nearly 1 in 5 companies (18%) reported an ROI of more than $76 in 2014, which is 3x more than 2013 figures (5%). –

DMA

51)Email’s ROI was 28.5% compared to 7% for direct mail. – Chief Marketer

52) Revenue per email was $0.11 in Q1 2014 compared to $0.10 in Q4 2013. –Experian

53) 29% of marketers look at ROI metrics to evaluate email effectiveness. – DMA

54) For every $1 spent, email marketing generates $38 in ROI. – Campaign Monitor

55) Emails triggered by behavior were responsible for 30% of revenue in 2014, up from 17% in 2013. – DMA

56) 77% of ROI comes from segmented, targeted, and triggered campaigns. – DMA

57) 50% of marketers anticipate their company’s spend on email to increase during 2015. – DMA

General email statistics

58) The total number of worldwide email accounts is expected to increase to over 4.3 billion accounts by year-end 2016. –

Radicati Group

59) Employees spend 13 of their working hours each week in their email inbox (on average). – McKinsey & Company

60) 92% of online adults use email, with 61% using it on an average day. – Pew Research

61) 57% of email subscribers spend 10-60 minutes browsing marketing emails during the week. – ChoozOn

62) 90% of email gets delivered to the intended recipient’s inbox, whereas only 2% of your Facebook fans see your posts in

their News Feed. – Forrester Research

63) 68% of Americans say they base their decision to open an email on the ‘From’ name. – Campaign Monitor

64) Across all editions, Outlook accounts for 56% of all desktop email opens and nearly 16% of total opens in any

environment. – Campaign Monitor

65) Six in ten (61%) American workers who use the Internet say email is “very important” for doing their job. – Pew

Research

66) Non-office-based workers to say the Internet, email, and cell phones have given them more flexibility in the hours they

work (51% vs. 19%) but also that these tools have increased the amount of time spent working (47% vs.18%). – Pew

Research

67) 83% of B2B marketers use email newsletters for content marketing. – Content Marketing Institute

68) 76% of marketers see active growth in their number of email subscribers. –Ascend2

69) Open rate is highest when companies send two emails per month. – Database Marketing Institute

70) At 1.47 million emails sent per month, US companies send more emails than the global average of 1.38 million. –

MarketingLand

Wrap up

Armed with these email marketing statistics, you know that email marketing is as relevant as ever. Now get out there and

make the marketing world a better place using the power of email marketing. https://www.campaignmonitor.com/blog/email-marketing/2016/01/70-email-marketing-stats-you-need-to-know/

People Watch More TV Than Ever -- but is it all Reported? Many years ago, when most usable television research data was in hard-copy reports released by Nielsen, there was a

monthly book called the Program Cumulative Audience Report (PCA). Its various nuggets of information included data on

how many episodes per month the average viewer watched of every network TV show on the air.

Back then, even when there were far fewer choices — no original scripted cable series, no Netflix, Hulu, or Amazon Prime,

and no regular series on premium cable — people watched only slightly more than two out of four episodes per month of the

most popular series. There were no DVRs on which to store programs, or On-Demand to catch up on episodes. If you

missed an episode of your favorite show, you had to wait until summer repeats.

When DVRs started to become a thing, I wrote an article speculating that they would cause television usage to go up as

people started to watch that third or fourth episode per month of their favorite shows.

That has, to a large degree, been the case. The advent of on-demand programming has also had an impact on increasing

viewership (albeit a smaller one).

Once Nielsen started including DVR homes in its sample, roughly 95% of all DVR playback was done within seven days of

the original broadcast. This is why one of the main debates was between C3 and C7. With quick analysis of program

performance and television buys being desirable, that extra 5% could be ignored.

Today, there are a lot more people who binge-watch several episodes of a weekly series. This means, of course, that there

is probably a tremendous amount of television viewing that is not being counted in Nielsen’s currency measurement (even if

C7 is used instead of C3).

I conducted a survey of my Facebook friends (a surprisingly diverse group), just as a fun exercise. I asked four simple

questions about their DVR, on-demand, and OTT usage. Twenty-five percent of respondents did not have a DVR (the

national average is about 50%). Here are the results.

On average, they currently have eight programs queued on their DVR (ranging from three to 20). There are currently four

shows on average where they have two or more episodes stored (ranging from one to 11). Two-thirds of respondents

watched at least one program on demand in the past week. Two-thirds also watched Netflix, Hulu, or Amazon Prime in the

past week, and spent 5 ½ hours doing so (ranging from one to 10 hours). This seems like a lot of viewing not picked up and

included in currency measurement. If you have eight programs on your DVR, you are likely not watching all of them within

three days of their initial broadcast. If you have four weekly programs with two or more episodes stored, by definition you

are watching many of them more than a week after their initial broadcast.

Of course this is far from a scientific survey. I’ve always believed, however, that what people are doing, what they are

watching, how much they are watching, and what devices they own are correlated with, in addition to age and sex, such

things as geography, income, education, presence of kids, etc. But once they have the device, and once they are watching

a program or video on that device, how they watch TV is mostly contingent on age/sex.

In other words, there is no reason to think a 25-year-old in Wisconsin, who is watching “The Walking Dead” on her DVR, is

fast-forwarding through commercials at a different pace from her counterpart in New York (if anyone has research that

shows otherwise, I’d love to see it). So a sample that represents the country at large is much more important to measure

some things than it is to measure other things.

If nothing else, this should be a conversation starter.

http://www.mediapost.com/publications/article/290558/people-watch-more-tv-than-ever-but-is-it-all-re.html

Magazine Newsstand Sales Fall Again, Though Some Publishers Report Small Sales Gains in Q3 The latest newsstand sales figures from MagNet are, in their own words, “somewhat concerning,” as sales fell in both the

US and Canada by roughly the same level – nearly 14 percent.

The pain was spread out pretty much across the board with most of the major magazine publishers seeing their numbers

tumble.

Celebrity, women’s and home and garden titles performed the worst, with general interest titles among the winners. Sell-

through continues to decline, as well, meaning that publishers are producing more unsold issues.

There is a glimmer of good news in the new report, as a couple publishers saw revenue grow, as price increases stuck. In

fact, the revenue decline is less than half of the unit sales decline. I suppose that is something.

Newsstand sales have been declining for a while, the result of a number of factors including the loss of bookstores following

the collapse of Borders and the closing of other large bookstores. Also, many convenience stores no longer carry as large a

selection as they once did.

The news here will likely reinforce the idea that some title that were very dependent on newsstand sales may have to be

sold off or shuttered. We are currently in Q1 of 2017 when it comes to ad closings. We’ll likely see more publishers evaluate

their magazine portfolios after three months of deadlines have passed. http://www.talkingnewmedia.com/2016/12/06/magazine-newsstand-sales-fall-again-though-some-publishers-report-small-

sales-gains-in-q3/

New Report Faults L.A. Times Editor-in-Chief for Paper's Woes

Los Angeles Times editor-in-chief Davan Maharaj is the subject of a scathing new report alleging that his "ego, insecurity,

and warped priorities" were responsible for dragging down morale and causing a staff exodus.

The report, by Ed Leibowitz of Los Angeles Magazine, claims that Maharaj had "a grim determination to tighten his grip on

power," leading him to denigrate employees behind their backs and sit on potentially explosive stories for months without

explanation.

While meeting with top investigative reporters to discuss an investigative series on the drug Oxycontin and its maker,

Maharaj allegedly asked the team "to take a few moments to admire the Ferragamo shoes he was wearing." At another

meeting, he "spent more than half an hour on his phone, trying to redeem airline miles for a trip he was planning to take."

Much of Leibowitz's article deals with that investigative series on Oxycontin, which Leibowitz reports Maharaja inexplicably

stalled for some time. One of the lead reporters on that series, Scott Glover, is now employed by CNN. Glover declined to

comment.

Leibowitz says he spoke to more than 40 former and current staffers for his report, as well as top editors Marc Duvoisin and

Larry Ingrassia, who pushed back against criticisms of the editor-in-chief. Both Maharaj and a Times spokesperson declined

to provide additional comment to CNNMoney, but Maharaj gave a brief statement to Los Angeles Magazine.

"We are in very challenging times in the newspaper business. My job is to make sure we produce quality journalism for our

readers. Yes, that means I have to make difficult decisions. Running a newspaper isn't a popularity contest. We and I should

be judged by the quality of our work, and by that standard the Los Angeles Times has done very well in the past five years.

Our journalism speaks for itself, and it speaks loudly."

CNNMoney spoke to several current and former Los Angeles Times sources at various levels of the organization, and all of

them said that the broad thrust of Leibowitz's article was accurate.

The Los Angeles Times has been beset by a litany of challenges in recent decades that go beyond the struggles facing the

newspaper industry generally. Among them: Owner Sam Zell, who famously drove the paper and its parent company into

bankruptcy; the subsequent years of buyouts and layoffs; and finally the new ownership, which has pledged to revitalize the

Times into a "global entertainment brand" but has done little to follow through.

The L.A. Times has also failed to gain prominence in the digital space. While the paper is the fifth largest-staffed paper in

the country, it commands a fraction of the online audience that its competitors do. Leibowitz cites Alexa Internet statistics

ranking The New York Times and Washington Post websites as the 21st and 41st most popular web sites in the country,

while latimes.com is in the 139th spot, "26 rungs below drudgereport.com."

But the assertion that the Times' own editor-in-chief is part of the problem is a new revelation, at least to the public, and one

that has potential to radically alter Maharaj's legacy at the paper's helm. http://money.cnn.com/2016/12/07/media/los-angeles-times-davan-maharaj/index.html?iid=hp-stack-dom