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October 16, 2006

The end of the insert?

 

Probably not. But Media Daily News offers up something worth thinking about:

 

Verklin, who heads up Carat's Americas and Asia units, dropped the bombshell that a major retailer has told agencies that future media plans would eliminate FSIs--the colorful supplements used to distribute coupons and promote retail sales--from its advertising plan by 2007.

 

That's about all the already-punchdrunk newspaper industry needs to hear.

I very much doubt that the FSI is going away anytime soon. But a significant decrease in frequency and/or size would affect not only the newspapers, but vendors. Where will all those trade promo dollars go? What leaps to mind is in-store, but as a shopper I'm wondering how many more ad impressions I can handle as I traverse the aisles.

 

 

Kohl's opened 65 stores in one day

 

That's a lot of stores, folks. And this is a company that is doing very well.

The company’s financial picture is the envy of the retailing industry, analysts said. Revenue is up, to $13.4 billion last year, from $6.2 billion in 2000, during which time profits rose to $842 million, from $372 million. Shares of Kohl’s rose $1.61, to $69.14 on Wednesday.

 

And on Thursday, when the nation’s retailers report September sales for stores open at least a year, a closely watched industry measure, Kohl’s is expected to report a 16 percent increase, above the industry average, which is in the single digits.

Kohl's has done so well by being determinedly mid-market:

 

The no-frills, no-mall, no-full-price retailing model of the Kohl’s department store has turned the once-quiet Wisconsin company into a clothing industry powerhouse ...

 

So why am I reading this:

 

So the chain’s once-steadfast focus on the classic, traditional consumer — who had a family and bought snowflake mock turtleneck sweaters and plaid button-down shirts — has expanded to include clothing like white fur vests from Daisy Fuentes, a brand exclusive to Kohl’s.

 

And this:

 

In a coup, Kohl’s wooed the designer Vera Wang — a name associated more with Sak’s and Bloomingdale’s than discount retailers — to design a line of contemporary clothing, handbags, shoes and home goods. The products will reach stores in autumn 2007.

 

And this:

 

The company has said it will make women without children, who typically have more disposable income and crave more fashionable merchandise than the average Kohl’s shopper, a priority in its merchandise and marketing.

 

Why is it that stores have this craving to move "up-market"? I have always suspected that it's because the execs are embarrassed to be running a store where they and their friends wouldn't be caught dead shopping.

But then I'm a cynic.

Obviously, the people who are running Kohl's are successful merchants who presumably know their market a whole lot better than I do, but every time I read about a store moving up-market, I hear a voice whispering "sell that stock."

 

 

Channel conflict: Target warns Hollywood on DVDs

 

Reportedly, Target has warned movie producers that if they give better terms on downloadable movies, Target will respond by cutting shelf space and promotion.

Target sent a letter to large film producers last month stating that it wants "a level playing field" when it comes to movie pricing, according to the report. The Minneapolis-based discount retailer said it might reduce DVD shelf space and marketing efforts if online services get better deals.

Wal-Mart and Target (who between them account for more than half the DVDs sold in the US) are apparently upset about a deal between Apple and Disney (the Steve Jobs connection) giving iTunes the right to sell Disney films for $12.99.

This could get interesting.

 

As a sidelight to this, one of the articles about it contained this bit of hypocrisy from a Target spokesperson:

 

“Target does not object to competition, but we do expect a level playing field upon which to compete with the online services,” the company said.

 

So, let me ask, Target: Do you also believe in a level playing field for small retailers when it comes to trade promotion allowances?

My, aren't the crickets noisy tonight?

 

 

I can’t resist …

 

I promised not to overdo the self-promotion, but I can’t stop myself from mentioning again that my new book, Trade Promotion Marketing, is out and is available at Amazon and at the Association of National Advertisers bookstore.

 

 

More Channel Marketing News at Our Blog

 

Our blog, TPMtoday, has more news on trade promotion and other issues of interest to marketers. It’s updated several times a week. Among recent items:

 

·        Song sung blue

·        Cisco wants consumer awareness

·        Private label software

·        Best Buy partners with SanDisk and Real

·        More trouble at Penn Traffic

·        Catching up on management changes

·        Weekend quick notes

 

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