Key Consumer Sector Insights

Market and consumer sector’s performance last week

The second quarter earnings season ended on a productive note. The S&P 500 Index (SPY) (SPX-INDEX) finished the week ending September 1 on a positive note with a 1.4% gain. Brown-Forman stock rose last week and benefited the consumer staples sector with its strong 1Q18 results. On the other hand, Campbell Soup stock (CPB) pulled down the staples sector. Its earnings and revenues missed its fiscal 4Q17 results. Overall, the S&P 500 Consumer Staples Index rose 0.51% last week.

Key Consumer Sector Insights for August 28–September 1, 2017

In the consumer discretionary sector, Best Buy (BBY), H&R Block (HRB), and Dollar General (DG) fell last week after their earnings results. However, automakers General Motors (GM) and Ford (F) rose. Their August sales results benefited the sector. The S&P 500 Consumer Discretionary Index rose 1.6% last week.

Other events last week that impacted the market included the US August jobs report on Friday. The United States Department of Labor said that the US economy added 156,000 jobs in August—lower than economists’ expectations of 180,000 jobs. The unemployment rate in the US rose to 4.4% from 4.3%. Average hourly wages rose 2.5% in the past 12 months. The disappointing jobs report might reduce the chances of another Fed rate hike this year. The jobs report had a subdued impact on the S&P 500 because automakers’ stock rose.

Consumer ETFs were productive last week. The Consumer Discretionary Select Sector SPDR Fund (XLY) rose 1.6% on a weekly basis—the highest among consumer ETFs. The SPDR S&P Retail ETF (XRT) rose 1.0% and the Consumer Staples Select Sector SPDR ETF (XLP) rose 0.55% last week.

Consumer Sector Overview: August 28–September 1, 2017 PART 2 OF 6

Analyzing the Consumer Sector’s Performance Last Week

Index performance last week

As of September 1, the S&P 500 Index (10.6%) (SPY) (SPX-Index) has outperformed the S&P 500 Consumer Discretionary Index (10.4%) (XLY) and the S&P 500 Consumer Staples Index (6.1%) (XLP) on a YTD (year-to-date) basis.

Analyzing the Consumer Sector’s Performance Last Week

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Key updates

On September 1, General Motors (GM) released its August sales report. In August, US retail sales recorded 275,552 vehicles—7.5% higher YoY (year-over-year). The company’s commercial sales have risen 19% YoY. General Motors gained domestic commercial market share for 13 consecutive months. Its commercial market share was driven by strong crossover sales at all four of the company’s brands. General Motors stock rose ~5.0% last week.

On September 1, Ford (F) released its sales results for August. The company’s overall sales fell 2.1% to 209,897 vehicles in August. It was mainly impacted by lower fleet sales, which fell 0.2%. Ford’s retail sales for August fell 2.7% to 164,067 vehicles. Its stock rose ~5.0% in the week ending September 1.

L Brands (LB) released its August 2017 sales report on August 31. Its net sales for the four weeks ending August 26, 2017, fell 1.0% YoY to $842.1 million. Its comparable sales also fell 4.0% in August. The company’s exit from the swim and apparel categories impacted comparable store sales for Victoria’s Secret by three percentage points and overall sales by two percentage points. As of September 1, the stock rose 2.4% last week.

[“Source-Market Realist”]

 

The Mobile Moment: Data-Driven Insights And The Consumer Frame Of Mind

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From the early days of geofencing to more recent developments around detailed audience definitions — including data-driven targeting and deep campaign analytics — strong mobile marketing strategies still start with the right ad in the right place at the right time. Today, however, time and location alone cannot capture the full dynamic of the mobile-savvy shopper.

In addition to smart creative combined with data-informed decisions about place and time, brands must work to engage with consumers at moments that align with the right frame of mind. Brands must go beyond shoppers’ immediate context, focusing on consumers’ longer-term goals and needs.

Yes, mobile technology is a conduit to the consumer, but designing engaging experiences takes insight. Acquiring and using the data that drives those insights often proves challenging for advertisers in the location-powered mobile space.

Understanding Mobile Advertising Challenges

Challenges for brands in the mobile space often come down to how well and how expansively they understand their customers. In Pursuing the Mobile Moment, a June 2017 commissioned study conducted by Forrester Consulting on our behalf, 38% of the polled brands cited difficulty contextualizing historical location insights about consumers, and 37% said they have trouble targeting customers with granularity.

Both steps are crucial to successful mobile campaigns. Brands must understand what collected consumer data tells them about where a shopper has been, what they do and when they tend to do it — in other words, the context of their location history. Next, as with the concept of granular targeting, advertisers can use these insights to reach present and future customers with mobile-ad experiences that reflect all the levels of detail and relevance that only data can provide.

Compounding the gap between brands and deep consumer insights are challenges around timing. About one-third of the polled advertisers said they were unable to track customers or reach them in their moments of need, also known as the mobile moment: the point in time and space in which the consumer uses their mobile device to achieve something.

For all brands, even if they have the data about consumer behaviors over time, and even if they can identify the granular, targeted audiences that drive relevant campaigns, it’s still critical to serve the right ad in the right place at the right time. And sometimes that “right time” represents a moment prior to the consumer even knowing what they want next.

Anticipating Consumers’ Needs

In our research conducted in association with Wildness in 2016, millennial and Gen Z respondents told us that mobile creative needs to not only preserve the underlying context of what consumers are doing in the moment, but mobile ads should also inspire and even anticipate what consumers want to do next.

For example, let’s say data-fueled insights help brands identify millennial consumers who have historically sought out limited-edition sneakers. Based on time and location, mobile creative can prompt these potential buyers to travel across town to a pop-up sneaker event, even if there’s some risk of long lines or the sneaker selling out. As Forbes reports, millennials often respond positively to brand experiences that include some element of risk.

It’s important to inspire shoppers with relevant opportunities they didn’t know about before. This data-driven approach not only builds positive brand engagements, but when a mobile creative experience hits those marks, 42% of those we polled said they would click on the mobile ad; 21% said they would screenshot the relevant ad for later, and 26% said they would send those saved screenshots to their peers. Perhaps most importantly, one in four of the mobile consumers surveyed said they would then be motivated to make a purchase.

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Next Steps: Maturing Mobile Marketing Programs

Many brands already understand these approaches but the challenges they face in the location-powered mobile space are real. We can see this in the realm of accurately addressing ROI, for example, down to the level of how organizations select metrics that represent best methodologies. Some 67% of marketers called out those challenges, in particular, as Marketing Dive reports.

Starting with the data we’ve just addressed, subsequent installments of this column will highlight how brands can generate these results in their own campaigns, fine-tuning their mobile marketing mix and maturing their overall mobile marketing program. When advertisers put location data and data-driven insights at the heart of their efforts, whole organizations grow stronger, more effective, and more successful at achieving positive marketing outcomes. It takes a dedication to location, context and capturing consumers in the right frame of mind.

[“Source-forbes”]

WhatsApp Sued for Sharing Data With Facebook by German Consumer Group

WhatsApp Sued for Sharing Data With Facebook by German Consumer Group
HIGHLIGHTS
German consumer group VZBV sues WhatsApp
WhatsApp alleged to transfer data to Facebook without consumer approval
Facebook claimed to use WhatsApp data to improve features on its platform
WhatsApp, the Facebook-owned messaging app, has been sued by a German consumer group for sharing data with the parent company. The Federation of German Consumer Organisations (Verbraucherzentrale Bundesverband) also referred to as VZBV has asked for an injunction in a Berlin court against data sharing between WhatsApp and Facebook.

Notably, the suit challenges the transfer of data between Facebook and WhatsApp. “Our experts brought the misconduct to light. Now we’ll meet in court. Be it Facebook, Google, Amazon or now WhatsApp: we target violations,” said VZBV. The group has alleged WhatsApp transfers private data to Facebook without consumer approval.

Last year, WhatsApp made some changes in its terms of service after which it could start sharing the phone numbers of its users with Facebook. Though, users were able to opt out of the sharing. The move was seen as a subtle but significant shift for WhatsApp, which for long promised to protect the privacy of more than 1 billion users around the world.
ZDNet points out that despite users opting out, WhatsApp still exports the data to Facebook. It also claims that Facebook utilises the phone numbers from WhatsApp to improve its friend suggestion feature on the social platform.

According to Bloomberg, WhatsApp however defends itself and claims that the privacy policy and terms updates comply with the law.

The European Commission in December sent a Statement of Objections to Facebook alleging that it provided incorrect or misleading information during the Commission’s 2014 investigation under the EU Merger Regulation of Facebook’s planned acquisition of WhatsApp. The European Commission had earlier stressed that companies are required to give the Commission accurate information during merger investigations.

Tags: Facebook, Social, WhatsApp, WhatsApp Data Sharing

Facebook Shares Interesting Insights on Consumer Mobile Buying Habits

facebook mobile

In the last couple of years, the number of shoppers using mobile devices to make purchases during the holiday season has increased rapidly. If Facebook is to be believed, it promises to be no different this year.

According to a Facebook IQ article, the percentage of online purchasers transacting on a mobile device will rise by 30 percent this holiday season.

In the article, Helen Crossley, Facebook IQ’s Head of Consumer Insights Research, shares some interesting insights on how to succeed in mobile commerce.

Basket Sizes on Mobile

For marketers, one of the biggest challenges is that the basket sizes on mobile devices are smaller than those on desktops and in-store. Crossley mentions that on an average and in aggregate, mobile basket sizes “are worth 60 cents to the dollar versus a desktop transaction, whereas a tablet transaction is worth $1.

She also explains several factors account for the smaller basket size on mobile phones. For example a large number of people who make mobile purchases don’t have access to tablets and desktops. Such buyers are likely to have less disposable incomes and spending power.

But what’s perhaps most interesting is a finding from an internal Facebook study that reveals when marketers control for people and the categories they’re buying from across devices, “smartphone and desktop sizes are actually on par.”

This is a useful insight because it tells us:

  • It’s not all about the size of the screen,
  • People who own a smartphone and a desktop are less likely to be mobile-dependent,
  • They are more likely to have higher disposable income and be tech-savvy.

Mobile Site vs. App

Deciding whether to go for a mobile site or an app often causes confusion among marketers. According to Facebook, 58 percent of mobile purchases are made on mobile sites, whereas 42 percent are on apps.

Further, there are fewer transactions on mobile sites and more on apps for frequent mobile shoppers.

To choose between mobile sites and apps, marketers need to ask themselves:

  • What is my primary goal?
  • Am I mainly concerned with customer acquisition?
  • Or do I want to drive frequency and loyalty?

Future of Mobile Commerce

Millennials are going to play a key role in driving mobile commerce growth. Crossley calls them the “Thumb Generation” and says they are going to conduct commerce related activities on their mobile devices more than the older generation.

There are also some interesting figures that support Crossley’s observation:

  • 83 percent of Millennials research products on their smartphone compared to 66 percent of Gen Xers (the Mouse generation) and 25 percent of Boomers (the Remote generation)
  • 69 percent of Millennials buy products on their smartphone compared to 53 percent of Gen Xers and 16 percent of Boomers

Consumer mobile buying habits clearly indicate that M-commerce will gain further momentum in the coming years. The best way to harness its potential is to focus on people and offer solutions that they’re most interested in.

Facebook Photo via Shutterstock

[“source-smallbiztrends”]