From The Wall Street Journal:
The struggling parent of the Sears and Kmart stores hasn’t run paid national television commercials since late November, according to ad research firm iSpot and a person familiar with the situation. The Kmart brand has been absent from national TV networks since Nov. 24, , iSpot said, while Sears hasn’t run a paid national TV spot since Nov. 25—the Friday and Saturday after Thanksgiving.
That compares with about $8.4 million the Sears brand spent on national TV ads in December last year, while the Kmart brand shelled out roughly $6.5 million during the same period, according to iSpot estimates.
Sears Holdings Chief Executive Edward Lampert has championed the use of digital marketing over traditional TV and print advertising, arguing that digital is more cost-effective and quantifiable.
. . . .
For a retailer to back off of TV ads during the holidays is a highly unusual move, ad experts said. “Retailers establish their value and relevance with consumers during key shopping times,” said Dean Crutchfield, a corporate branding expert.
Indeed, retail rivals such as Macy’s Inc. and J.C. Penney Co. spent tens of millions of dollars during the final month of 2017.
. . . .
Sears spent $285.1 million on paid advertising in 2016, down from $664.2 million in 2011.
. . . .
In meetings over the past year or two with [Sears CEO Edward] Lampert, Sears executives produced data showing that the deep cuts to TV and newspaper advertising had hurt sales, particularly since the majority of Sears’s revenue still comes from brick-and-mortar stores where commercials and circulars are particularly effective at driving foot traffic. According to retail research firm eMarketer, 11% of Sears sales come from e-commerce.
But the executives were overruled
Link to the rest at The Wall Street Journal
PG suspects Sears may be having cash flow problems as foot traffic in its physical stores continues to plummet under Sears’ “managing the decline” strategy.
Fewer and fewer people are going to physical stores to buy all sorts of different items, preferring an online experience and pricing.
But the public position of legacy publishers is that bookstores are different than all other retailers and people will always want to travel to physical bookstores to buy books.
PG wonders when Amazon will schedule meetings with major publishers to revisit agency pricing so Amazon can once again discount books from those publishers to price levels that will increase sales.
Or perhaps Amazon has a long memory and will simply allow publishers to continue to overprice their books and die by inches.
Between indie authors and Amazon’s own publishing imprints, Amazon has positioned itself to continue to increase its book sales regardless of whether New York publishers walk off a cliff or not. Amazon will still have a larger collection of books for sale than any other commercial entity.
Ironically, PG suspects the decline of Big Publishing because of poor pricing decisions will more effectively kill off traditional bookstores than anything Amazon is doing.
If Randy Penguin cuts the number of its titles in half to save money or if the gnomes at Bertelsmann decide the US book market is a long-term financial loser and shuts down US trade book operations, bookstores lose a lot of bestselling titles and authors that are one of the few attractions that may still bring people into the stores.