The National Retail Federation released its 2010 economic forecast recently, projecting retail industry sales (which exclude automobiles, gas stations, and restaurants) will increase 2.5% from 2009.  According to its bi-monthly Retail Sales Outlook, influential economic indicators such as the housing market and employment are beginning to show positive signs, which will bolster consumer confidence throughout the year. Total industry retail sales for 2009 declined 2.5%.

“As we continue to see signs of improvement throughout the U.S economy in 2010, overall sentiment will begin to lift, making way for slight increases in consumer spending,” said NRF Chief Economist Rosalind Wells. “While we still expect shoppers to continue to be frugal with their discretionary spending, retailers will soon be able to reap the benefits of leaner, smarter inventories and a year and a half of pent up consumer demand.”

Other positive economic contributions will come from trade, especially strong exports, a turnaround in the inventory cycle, and federal government spending. Consumer spending will lag behind overall economic growth, Wells estimates, but will continue to expand at a modest 2.0 – 2.5% rate.

“2010 Economic Forecast,” conducted by the National Retail Federation (NRF), January 26, 2010.  Website: www.nrf.com.

After a difficult 2008 and 2009, analysts are seeing improvement in the ad market for sporting events. This improvement is particularly obvious in TV and online media formats. One category that has upped its buying rate for NASCAR event advertising is automotive, according to a report in Sports Business Journal.

This report specifically focused on NASCAR and indicated that the Daytona 500 should sell out quickly and other events are seeing an 8-10% increase in demand compared to last year.

Tom McGovern, managing director for Optimum Sports and a media buyer for NASCAR sponsors says that ratings often fluctuate but NASCAR events reliably deliver an audience every year.

To generate more interest from marketers, Fox is offering data to prove that strategies besides 30 second spots bring more value to the ad campaign. These strategies include on-screen sponsorships such as in-car cameras and leaderboards. Buyers ranging from Aflac to Home Depot agree that the new on-screen techniques have increased their exposure to viewers.

The report also notes that Fox is ramping up its efforts to sell advertising on FoxSports.com and, to date, sees a 30% revenue increase over 2009. The types of online marketing vary from sponsoring an online photo gallery to an application titled RaceTrax.

This trend in NASCAR advertising may be an early indicator of an improving market in general for sports events in 2010.

[Source: Ourand, John. Fox: NASCAR Ad Sales Gaining Speed, Sports Business Journal, 2.1.10]

Most analysts and marketers know that younger consumers have typically been bigger Internet users than older consumers.  Web use by younger consumers is nearly ubiquitous (93%) while adults over age 65 now have a usage rate of 38%. The bigger news, according to a Pew Internet and American Life Project report, is that the type of Internet use varies drastically by age group.

Online consumers who write blogs:

• 18-29 year olds: 15% (down from 24% in December 2007)
• 30+ year olds: 11% (up from 7% in December 2007)

Online consumers who use Twitter:

• 12-17 year olds: 8%
• 18-29 year olds: 33%

Online consumers who use social networking sites:

• 12-17 year olds 73%
• 18-29 year olds 72%
• All online adults 47%

These statistics point to some interesting trends. Ben Parr, writing for Mashable, suggests that the younger audience’s shift away from blogs and teens’ lack of interest in Twitter may mean these age groups don’t want to create content. Perhaps younger consumers lack sufficient time or an audience for their blogs.  Parr may be correct that the average teen is not interested in reading lengthy personal posts. If that is the case, we have to wonder why teens aren’t flocking to Twitter, the perfect venue for brief posts. The reason may have to do with the media rich environment that social networks offer teens. In addition to writing brief comments on friends’ pages, teens can also view videos and upload photos. Until additional studies reveal exactly why teens find certain online destinations more appealing than others, marketers would do well to reach for younger audiences through social media sites.

[Sources: Parr, Brent. Teens Don’t Tweet or Blog, Mashable, 2.3.10; Social Media and Young Adults Summary, Pew Internet and American Life Project,  2010]

Online shoppers are on the hunt for deals. One of the favorite ways consumers like to save on their online purchases is by searching for free shipping offers.  Consumers love free shipping, and e-commerce sites that can provide it are often more successful than those who do not. One of the biggest reasons why people like shopping online is so that they can get a great deal in a convenient way. If a consumer is on an e-commerce site which charges shipping, they may try to find the item elsewhere or just buy in the store if they can get it for the same price. Compete.com released results from a recent Online Shopper Survey citing that free shipping would encourage 93% of respondents to purchase more online. 

Having free shipping is not always a possibility, as giving free shipping directly reduces profit margins.  However, retailers who did offer free shipping over the 2009 holiday shopping season were big winners as consumers rushed online to try and save as much money as possible. Executing a free shipping model well is very difficult and takes a significant amount of time and financial investment, especially if you sell electronics which already have a low profit margin.

Some e-commerce sites use techniques to circumvent free shipping and charge a flat rate on all orders, so that over time they can average the shipping cost to stay profitable. A good example of this is Overstock.com, which charges $2.99 shipping on every order. If you cannot offer free shipping across the board, then you should look to experiment with marketing free shipping promotions, or offer it on select items.

Free shipping is a tactic, not a strategy or your value. Look to drive a certain behavior with a tactical offer, like increasing conversions, boosting average order size, promoting more profitable products, or countering an aggressive competitive campaign. If free shipping becomes more than an offer and evolves into an expectation or the primary value, an online retailer has put itself in a precarious position, according to Bob Angus of The E-commerce Evangelist Blog.

Customer satisfaction always seems to hurt when shipping cost needs to be paid, regardless of how much value you seem to offer the consumers. Now is a great time to start experimenting with free shipping so you can have a proven plan for your ecommerce storefront in the 2010 holiday season.

“Free Shipping Causes Most Consumers to Purchase More Online,” by the ZippyCart Ecommerce Software Content Team, January 21, 2010.  Website: www.zippycart.com.

“The Ecommerce Evangelist Blog: Free Shipping Series #1,”  Angus, Bob.  June, 2009.