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MARKETING NEWS Target comes out swinging with aggressive holiday marketing strategy ................................... 2

Consumers already starting their holiday shopping .................................................................... 3

Going mobile? Make it more than a marketing strategy ............................................................. 5

Study: More than 40% of smartphone and tablet owners ‘showroom’ ...................................... 6

PUBLISHING NEWS “Magazine-Media” industry optimistic on publishing’s future at AMC .................................... 7

Ad Age's Magazine A-List: HGTV Magazine is launch of the year .......................................... 9

Behind Mother Jones’s recent dual cover strategy ................................................................... 10

Penguin to launch kids graphic novel line ................................................................................ 12

POSTAL NEWS Credit maxed out, USPS waits cautiously for festive volumes ................................................ 13

USPS urges customers to switch from POSTNET to IMb barcodes ........................................ 14

USPS to trial same-day ecommerce package delivery ............................................................. 15

RETAIL NEWS Gap Inc. streamlines leadership to fuel growth ........................................................................ 17

Nielsen survey gives retailers reason for holiday cheer ............................................................ 18

Sears Hometown and Outlet Stores spin-off to trade on Nasdaq.............................................. 20

Macy's targets millenials with new brands ............................................................................... 20

ECONOMIC UPDATE

GDP: 2nd quarter 2012: 1.3 percent

Unemployment Rate: the unemployment rate decreased to 7.8 percent in September.

Consumer Confidence: which had declined in August, improved in September. The Index now

stands at 70.3, up from 61.3 in August.

October 22nd

, 2012

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MARKETING NEWS

Target Comes Out Swinging With Aggressive Holiday Marketing Strategy

Natalie Zmuda , Ad Age . 10/17/2012

Target is leaving nothing to chance this holiday season, with a strategy focused on both the emotion of gift giving as well as competitive promotions that emphasize price.

The retailer's executives unveiled at a media event Tuesday plans for aggressive promotional pricing, a heavy rotation of holiday ads in October and November and tactics -- such as a price-match guarantee against a group of competitors that includes popular online retailers such as Amazon -- to ensure customers can "shop with confidence." The overarching theme for the holiday campaign, which is being handled by 72andSunny, is Dream Big. Save Bigger.

"Guests are feeling better about finances and are more comfortable considering larger purchases," said Target CEO Gregg Steinhafel. "We will be highly promotional and intensely competitive on price, delivering the exceptional value consumers want. … I believe this is an outstanding fourth quarter strategy, all about providing the right merchandise and deals at the right time for consumers throughout the season."

Jeff Jones, Target's recently appointed chief marketing officer, said the "Big Dog" spot from 72andSunny, which began airing last week, is intended to lay the "value foundation" for the holiday season. It carries an upbeat tune with the chorus, "Are You Ready?"

"There are three different kinds of guests. A group that are planners, a group that are doers, and there's a group that are procrastinators. We think about our strategy in terms of those people who earlier and earlier are planning for the holidays," said Mr. Jones. "There's no magic on what the right start date is."

In years past, Target has been vocal about its strategy to not start holiday ads, with the exception of its two-day sale ads, before Thanksgiving. Mr. Jones says the shift is the result of a number of factors, including guest surveys, the retailer's business objectives and the reality that competitors are discussing holiday earlier and earlier. A number of retailers, including rival Walmart have already been promoting layaway options.

After Halloween, Target will begin promoting the holiday in earnest. There will be a series of ads focused both on gift inspiration and on getting the best deal. One spot shows a young girl pulling a Target bag off a closet shelf and climbing in to find a world populated by skating legos and frolicking toys. Another spot shows a father checking out at the store, imagining the glowing reactions his family will have to the perfect gifts in his cart. In a new twist for the retailer, there will be a focus on "shoppable media" with consumers able to purchase items seen in broadcast spots.

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As Black Friday approaches, Target will debut a new perky couple, the Deal Duet, replacing the Christmas Champ -- a.k.a. comedian Maria Bamford -- who has starred in ads for the last three years. The duet, one male, one female, pop up in consumers' homes singing about the deals available at Target on Black Friday. Execs said Target will "leak" its Black Friday deals earlier than ever before. (See our poll and weigh in on whether holiday deals should start on Thanksgiving or hold off until Black Friday.)

"I love the modern humor that they bring. They're not snarky. They're positive and funny," Mr. Jones said of the Deal Duet. "There's a hard value message with a great Target wink."

Consumers Already Starting Their Holiday Shopping

Staff Writer , Marketing Charts . 10/19/2012

Americans will get a head start on their holiday shopping this year, finds the NRF in October 2012 survey results. Slightly more than 4 in 10 respondents said they would start shopping before Halloween, including 19.3% who indicated they would have already started shopping by now. Another 39% said they would begin in November, leaving just 1 in 5 shopping during December.

Those consumers already beginning to shop may be ignoring the potential to find the best deals: recent PriceGrabber survey results indicate that one-third of consumers believe the best deals are to be found on Black Friday (which falls on November 23rd this year). Still, the NRF respondents appear to be highly influenced by sales and discounts: 36.6% cited this as their top factor in deciding where to shop.

Per-Person Spend Relatively Stagnant

This year, the NRF study results indicate that the average consumer will spend $749.51 on holiday items, up only marginally from $740.57 last year. Even so, the NRF believes holiday sales will increase by 4.1% over last year.

The conservative per-person spending estimate mirrors other recent survey results. Earlier this month, the NPD Group released findings showing that holiday consumer spending intentions are only slightly better than last year. MarketLive found similar results, as did Nielsen. Still, Nielsen forecasts 2.3% dollar growth on average for sales in 89 categories across 5 critical departments (food, beverages, alcohol, health/beauty, and homecare).

The economy is obviously a big factor in consumer spending decisions. A little more than half of the NRF respondents said that the state of the economy will affect their spending plans. That’s down from 62.3% last year, but may simply reflect better adaptation to conditions over the past few years.

1 in 2 Will Shop Online

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Further details from the NRF survey indicate that 51.8% of consumers will shop online for holiday items, up from 46.7% last year. The average consumer said they would complete almost 40% of their shopping online.

Some of that behavior will be driven by the economy, too: almost one-third of consumers said the economy will drive them to comparative shop online more often this year.

While the NPD Group survey found no growth in the percentage of consumers who will be purchasing holiday gifts online this year, Nielsen’s recent holiday survey supports the NRF finding that consumers will be spending more with online retailers.

Families to Benefit Most From Giving

Families stand to reap the most rewards from consumers’ generosity this year. Americans said they would spend an average of $421.82 on family members, far more than they’re willing to spend on their friends ($75.13). Co-workers ($23.48) and others, such as pets and community members ($28.13) will also be on the shopping lists.

Those lists will include items such as food and candy (an average of $100.76 per person), greeting cards ($28.66), and flowers ($19.55).

Tablet Owners Will Put Their Devices To Use

The survey also finds that tablet owners will be shopping via their devices, with 3 in 10 saying they plan to purchase products on their devices. Tablets will also be used to research products and compare prices (44.2%), look up retailer information (27.6%), and redeem coupons (19.8%), among other activities. All told, slightly less than two-thirds of the tablet owners surveyed said they would use their device to research or make a purchase.

Smartphone owners are less willing to do so – as a comparatively smaller 52.9% will use their devices to research or make a purchase. Although about one-third will research on their device, just 15% plan to purchase products, making them half as likely as tablet owners to do so.

About the Data: The NRF 2012 Holiday Consumer Spending Survey polled 8,899 consumers and was conducted for NRF by BIGinsight October 2-8, 2012. Nielsen’s survey of more than 25,000 demographically representative households throughout the U.S. was fielded in mid-September, 2012. Weekly consumer surveys of 1,100 shoppers, beginning the week of September 10th, tracks planned spending for the holiday season. Nielsen sales forecasts are derived from an analysis of 89 categories across five departments: food, beverages, alcohol, HBA and homecare using Nielsen Scantrack – syndicated data. Forecasting is for November and December, 2012.

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Going Mobile? Make It More Than A Marketing Strategy Erik Sherman , Inc. . 10/17/2012

Typically when a business considers going "mobile," it involves marketing moves: mobile ads, local offers, location-based activity. And all of that is important.

But to assume that marketing is the be all and end all is to make an enormous mistake, as a single remark in a recent report on mobile relationship marketing from the CMO Council shows:

"More than 60% of our guests check into our hotels using an iPad compared to zero three years ago," says Susan Helstab of Four Seasons Hotels and Resorts. "Providing consumers with relevant information at the right moment leads to higher levels of engagement, loyalty, and ultimately conversion. In order to do this, we have to maintain a clear, customer-centric view of everything we do, and that involves breaking down all of the silos."

Of course such terms as engagement, loyalty, and conversion are the language of marketing, but pay attention to that first part. More than 60% of the guests to the chain of exclusive hotels check in using an iPad rather than going to the front desk. Furthermore, at some locations like the Four Seasons Los Angeles, the chain is providing iPads in guest rooms. Patrons will be able to order room service, make restaurant reservations, and call for a car from valet parking without putting a hand on a phone.

If people essentially opting for self-service at such a high-touch facility seems odd, it only show how much business, consumers, and the world are changing. People are creating new habits and preferences and mobile is at the center.

This is similar to the change that began to happen with interactive voice response phone systems. The intent was to drive requests to automated responses, so people could make reservations, get bank balances, and the like without having to wait for and talk to a person. Companies wanted to save money on staffing. What they learned is that while many consumers still wanted attention from a human, a large portion became used to automation and often preferred the speed and convenience.

Mobile is starting to do the same today. Apps let people check flight statuses in transit, find the nearest location of a chain store, or compare prices of goods on a shelf with what is available online or at other retailers.

All of these capabilities exist at the intersection of customer service and operations. To be prepared for the future, it isn't enough to think about how to convince customers to buy.

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You have to know how you will sell and satisfy their needs in concrete ways. That includes questions like these:

•What segments of your customer base want mobile services?

•How do they want them delivered?

•Do you have to support all mobile devices? Just some?

•Is your technical infrastructure capable of delivering what they want?

There are no standard answers and no easy solutions. The only thing you can be sure of is that now is the time to start asking the questions and understanding how quickly you'll need to find answers.

Study: More than 40% of smartphone and tablet owners ‘showroom’ Alaric Dearment , Chain Store Age . 10/18/2012

An online consumer survey shows that nearly half of consumers go into brick-and-mortar stores with their smartphones to research items without buying them and then looked for the same item at a lower price online.

The 2,361-adult survey, conducted by Harris Interactive on behalf of CouponCabin.com between Sept. 18 and 20, found that 43% of smartphone and tablet owners have engaged in the practice, known as "showrooming."

Of the shoppers who have showroomed, nearly all have sometimes or often bought a showroomed item online for a lower price later on, according to the survey; 28% of respondents said they did this often, while 68% said they do it sometimes. Forty-four percent said they were "not at all" concerned that showrooming may drive brick-and-mortar retailers out of business, while 41% said they were somewhat concerned, and 15% said they were very or extremely concerned.

"Consumers are using technology to find as many ways to save as possible, and showrooming is a prime example of that," CouponCabin.com president and chief savings officer Jackie Warrick said. "As showrooming becomes more widespread, some stores are concerned and are changing their strategies, offering new incentives and providing special offers to keep shoppers buying at their retail locations."

When asked what kinds of items they had showroomed, 50% of respondents said home electronics, while 44% said tech devices. Meanwhile, 40% said they showroomed entertainment items; 31% said they showroomed clothing; 29% said they showroomed shoes; and 24% said they showroomed computers.

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PUBLISHING NEWS

“Magazine-Media” Industry Optimistic on Publishing’s Future at AMC

TJ Raphael , Folio . 10/16/2012

Mary Berner, the new CEO of MPA, set a feisty tone for the 2012 AMC right from the start. “I’m pissed because we have others hijacking our narrative,” Berner said in opening remarks here Monday morning. “By letting others hijack our story, it has become one of doom and gloom, demise and even death. And that conversation is affecting our business.”

Instead, Berner said, the magazine industry is well positioned to thrive, if it has the “balls and the chutzpah” to prevail. Changing the conversation, she said, “has to be faster, louder and with one strong freakin’ voice.”

Berner took the audience of 200-plus attendees through a quiz in which each multiple-choice question had one answer that told a negative gloom-and-doom story, and another that had the often much-happier reality.

For example, total magazine-audience numbers have increased by 4 percent since 2010, and there has been a 57 percent spike in the number of brands advertising on magazine media platforms (tablet, online and print) since 2010.

Paul Bascobert, president of Bloomberg Businessweek and conference chairman, also helped set the stage for the conference in opening remarks. “We’re competing in an attention economy—building an audience has never been more difficult,” he said. He added that while difficult, it is not impossible, especially given the expansion of media and the strength and quality of magazine brands.

In one sense, Berner’s message and Bascobert’s was standard fare at the annual conference of large consumer-magazine companies. Berner’s message has been heard before—if not as strongly stated—many times, over the last decade, even as digital media has continued to transform the landscape.

Still, the ability to use strong brands to prevail in a changing world was a key takeaway of the majority of the first day of AMC. The focus was on digital assets—tablets, mobile, online, social and otherwise—and how these platforms will play an integral part in publishing’s future health and growth.

The ability to distribute magazine content and expand brands is an enormous opportunity in the digital space, Next Issue Media CEO Morgan Guenther told the audience. And with 2.5 billion global Internet connections, 5 billion mobile devices, 30-billion App Store downloads and 25 billion with Google Play, that’s a core of the Next Issue business plan, he said.

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“What else can we do to add value?” asked Karen Kovacs, publisher of People magazine in a morning session. The publication’s readers spend $100 a year for a subscription to the printed product. Yet, with proliferation of new avenues, Kovacs emphasized that publishers should be providing paying customers with several touch-points that extend beyond the magazine, and that can also drive revenue.

People will roll out a new customizable mobile app in November that will give users to access specific content about their favorite celebrities, allowing the brand to also bring in advertisers in an integrated way. Similarly, Food & Wine magazine vice president and publisher Christina Grdovic, who sat on the same panel, said the publication had executed a editorially-driven cocktail recipe app that was sponsored by Belvedere. In this way, the company leveraged digital media, integrated an advertiser to drive revenue and extended its brand presence.

"We have the opportunity to reach 200 million consumers through new platforms," said Kovacs.

Enthusiast publisher Source Interlink Media is turning its eye to video—it now has a 45-person production crew and is focusing on entertainment-based streaming content.

“YouTube has allowed us to dive into episodic content and it’s evolving to be able to provide a lot of advertising content,” said Chris Argentieri, president of Source Interlink Media. Source in the digital age will be “truly a diversified media company from a revenue standpoint,” he added.

Digital opportunities can also come in the form of in-the-moment offers, said Russ Grandinetti, vice president of Kindle Content for Amazon. The late Vanity Fair writer Christopher Hitchens, for example, released a 15,000-word Kindle Single article on the death of Osama Bin Laden shortly after Bin Laden’s death. This type of long-form journalism, which is easier consumed on a tablet than a desktop or laptop Web browser, was readily available before the magazine went to print, and easily monetized in a topical and timely way.

“The best way to predict the future is to invent it,” said Grandinetti. “You’re only going to be constrained by how good your ideas are.”

Timely interaction—through instant content updates or social media—will also help the magazine industry grow, Joel Lunenfeld, vice president of Global Brand Strategy for Twitter told the audience during a luncheon interview with Wired senior editor Bill Wasik.

“There is an incorrect use of Twitter,” Lunenfeld said. “Using it as a broadcast platform is the wrong way to use Twitter—as just a one way dialogue. When you look at the best magazines on Twitter, they re-tweet and reply. A follower is a subscriber.”

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Lunenfeld added that Twitter does not have an algorithm that stops content from going to a person’s feed—that means if someone follows a magazine, they can see everything the publication pushes out, opening the door for heightened click-through rates and exposure.

On average, a magazine’s Twitter following represents 14 percent of its circulation. However, the top 50 magazines by circulation usually have 150 percent more followers, said Lunefeld.

“Twitter extends what editorial means,” Lunenfeld said. “Maybe it’s a poll or a question with a chat. It’s also leveraging expertise to give real time advice—the minute that people start talking to audiences it’s an ‘Ah ha’ moment,” where users feel appreciated and welcomed by a brand, he said.

Perhaps the largest takeaway from the first day of AMC came in the form of a question from Ethan Grey, vice president of Digital for the MPA. He asked Pamela Maffei McCarthy, deputy editor of the New Yorker, “What is a magazine?”

“There is a core that goes across all titles and all times,” she said. “It’s a critical mass of writing and pictures, very often subject specific, with a voice. There was a time we assembled it all in one place and in one time. But now there are a dozen ways and it’s 24/7. We used to welcome readers to our world, now it’s to our universe where all sorts of things are going on.”

Ad Age's Magazine A-List: HGTV Magazine Is Launch of the Year

Nat Ives , Ad Age . 10/15/2012

Nobody thought Hearst Magazines could repeat the success of Food Network Magazine, a joint venture with Scripps Networks Interactive that took off like a rocket as soon as readers and advertisers were able to get their hands on it. (See this year's A-List, and last year's, and the year before that...) But HGTV Magazine, another venture with Scripps, is making an awfully good start.

After two test issues last fall and winter performed well -- the first going back to print when demand surpassed projections -- Hearst made HGTV Magazine an "official" launch with the June/July issue. It now guarantees advertisers an average paid circulation of 450,000 copies but is handily overdelivering, with a subscription file already above 600,000. It plans to increase rate base to 700,000 next January and to 800,000 next July, putting its circulation in striking distance of some long-established titles.

As with Food Network Magazine before it, HGTV Magazine benefits from a brand established on cable TV. But Daniel Fuchs, publisher and chief revenue officer, and Sara Peterson, editor-in-chief, also know exactly what they're doing in print.

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The pair spoke with Ad Age about squeezing a new shelter magazine into a market crowded with other brands -- including some owned by Hearst.

On gearing up in semi-stealth mode: "It's been fun since the beginning," Mr. Fuchs said. "This had been rumored for a while; it had been tested in the marketplace. I was working on another magazine at the company and working behind the scenes on this. When Sara and I met it was off-campus."

On the pitch to advertisers: "We've been very clear on the positioning," Mr. Fuchs said. "Hearst already has a great footprint in shelter. The HGTV brand is about your daily life at home. We position this as "home lifestyle,' that space between more broad lifestyle like Real Simple or Martha Stewart, and shelter."

On making the covers stand out from others: "It's not a whole room on the cover," Ms. Peterson said. "I believe it's easier for people to imagine this kind of vignette or moment in their own home when it's not such a big, large picture. It always has to convey an idea that feels accessible and fun to try in your own home."

On sticking to that editorial mission: "I just came from a story meeting," Ms. Peterson added. "One story got shot down because somebody said, "I don't think anybody who does this project will have fun doing it.' We said, "OK, that's not for us.'"

Behind Mother Jones’s Recent Dual Cover Strategy

Robert Newman , Folio . 10/15/2012

For their November/December 2012 issue, the editors and creative director at Mother Jones decided to do a split run cover, with a completely different cover story and image for subscribers and newsstand buyers.

Subscribers get “No Way Out,” a long-form investigative piece on solitary confinement in California state prisons written by Shane Bauer, who himself was imprisoned in Iran for 26 months, six in solitary, when he was picked up on the Iraq border in 2009. The cover image is a realistic illustration by Tim O’Brien of a tormented man in a prison cell.

The newsstand cover story is “Sweet Little Lies,” a story by Gary Taubes and Cristin Kearns Couzens about the sugar industry’s 40-year long campaign to cover up evidence about the bad affects of the sweet stuff: obesity, diabetes, heart disease, and its addictive nature. For that cover, also an illustration by Tim O’Brien, there’s a pitcher of Kool-Aid with a grinning skull superimposed on it. (Note that on the newsstand the issue is simply dated December 2012.) By Mother Jones standards this is considered a lighter, more accessible story!

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“No Way Out is a great story, but we felt that it might not sell that well on newsstands, where the potential buyer is not as familiar with our magazine,” says Mother Jones creative director Tim J Luddy.

Early last year Mother Jones did another split cover for similar reasons. Editors Monika Bauerlein and Clara Jeffery wrote about their decision for the January/February 2011 issue to put a story about gang rape in Haiti on the subscriber cover, but deliver a newsstand cover story that highlighted the pot business: “As compelling as all that is in a story, it’s a tough sell on the newsstand. Even assuming that anyone tempted to buy this magazine probably isn’t expecting cheerful (our joke is that the Mother Jones tagline should be ‘It’s Worse Than You Think’), rape gangs are pretty heavy stuff to hit a new reader with on our first encounter.”

That both current covers were illustrated by Tim O’Brien was more by chance than design, says Luddy. “I did a separate set of conceptual sketches for the Sugar and Solitary covers, and in the end, it happened that Tim O’Brien was our top choice for each image. We were considering one image for the Sugar cover which would have been best executed as a fairly complex photo shoot. Since our final decision on the double covers ended up being made relatively late in the process, it was just more efficient to have Tim do both.”

The actual cost for producing and printing two separate covers for Mother Jones is minimal, since they already print different covers with a UPC code and a subscriber address. And Mother Jones does its own in-house proofing. As Luddy says, “The only additional cost is the extra wear and tear to the creative director and editors,” along with the additional fee for the illustrator or photographer.

How does Mother Jones handle the covers on other platforms? On their website, or for any online editorial use, they rotate between the two. For their Zinio app or other digital versions that require a cover, they use the newsstand version. For development and fundraising, they use the subscriber cover, since according to Luddy, “That’s the kind of story our donors like to support.” For circulation (blow-in cards, etc.), however, they go back to the newsstand version.

Are split covers worth the effort and is there a payoff? There’s a long history of entertainment magazines like TV Guide and Entertainment Weekly doing multiple covers. But they usually promote the same story, albeit with different cover images (like doing a separate cover for each cast member of Lost). It’s much less common to take the Mother Jones approach, although idiosyncrasy for a smaller independent title can work to its advantage.

When I was creative director at Reader’s Digest we tried a similar split cover strategy for several issues, but found that it confused readers, and got us plenty of complaints. It also didn’t pay off at the newsstand; in fact one of the covers was the worst-selling of the year.

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And Luddy reports that last year’s Mother Jones split cover was also one of their worst-selling issues for 2011.

So why bother? Newsstand sales are only about 10 percent of Mother Jones’s total paid circulation, so featuring a “softer” story at retail is a strategy that’s aimed at luring in new readers rather than one that’s designed to materially boost single copy sales.

Nevertheless, I wondered whether the strategy had any downside for the brand overall. Liz Gettelman, Mother Jones’s public affairs director, put it this way:

“The game has changed when it comes to print magazine covers. In the print era you would rarely see a logo separate from a cover image. But now, the logo is a much more prominent feature, since that alone (without cover art) is usually a publication’s branding image on platforms like Twitter and Facebook, and on websites. The split covers signal to readers that we are versatile and robust enough to be able to highlight various types of coverage. So long as they all feel like Mother Jones stories, then we are actually staying true to our brand.”

Penguin to Launch Kids Graphic Novel Line

Graeme McMillan , Book Business . 10/19/2012

Wondering where the next generation of comic book readers will come from, if not the Big Two? Turns out, the answer may be the mainstream book market:

At the New York Comic Con Penguin Books’ Rich Johnson told ICv2 that Penguin was launching a new kid-targeted line of graphic novels that will be published under the Dial/Dutton line… Why is Penguin making this move now? Johnson explained, “Clearly it’s a huge, growing market, the kid’s graphic novel market. You see those titles making the bestsellers list all the time. So we are looking to do work in that area to get more kids reading comics.”

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POSTAL NEWS

Credit maxed out, USPS waits cautiously for festive volumes

Staff Writer , Post & Parcel . 10/18/2012

USPS spokesman Dave Partenheimer told reporters that the world’s largest postal service was in a “serious situation”, with little operating flexibility now available.

The Postal Service has a $15bn limit on the amount it can borrow from the US Treasury, but has been losing billions in the last few years, and in the first 11 months of its fiscal year 2012 surpassed expectations of a $14bn loss for the whole of this year.

This year alone, it has had to refuse $11bn in mandated healthcare liability payments to the federal government to avoid losing more than $14bn, and is now hitting its credit limit nevertheless.

USPS hit its borrowing limit late in September, and must now negotiate an uncomfortable few weeks until mail volumes and revenues begin to swell as the festive season gets underway in the United States.

With the holiday season driving mail volumes including greetings cards, gift shipping and online shopping – not to mention the flood of product returns after Christmas – once USPS gets through October it should have sufficient cash coming in to get through the winter.

USPS closed 48 mail processing plants this summer, and is to shutter 92 more plants early in 2013 to save money and respond to the 25% cut in mail volumes in the last six years. It is also set to raise mail and shipping prices in January to help cover the costs of loss-making services.

But, the Postal Service will still need legislative change to rebalance its books before next summer.

However, Congress is currently suspended ahead of next month’s elections. The best hope is that legislation is pushed through Capitol Hill during the “lame duck” period, between the elections and the official start of the next Congressional session in January.

“Walking a tight rope”

The US mailing industry today called on Congress to get back to work and pass much-needed postal reform in order to help USPS.

“With its borrowing limit reached, the Postal Service is now walking a tight rope with no net,” said Art Sackler, who co-ordinates the mailing industry lobby group Coalition for a 21st Century Postal Service.

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“There are 8m private sector jobs that depend on the mail, and there would be catastrophic economic consequences if the Postal Service shuts down. The longer Congress waits to enact postal reform, the more difficult and more expensive the solutions become.”

Back in April, the US Senate passed postal reforms to make changes to USPS healthcare and pension payment arrangements, but the US House of Representatives has not passed equivalent legislation this year, which is needed before a compromise bill can be adopted.

If proposals are not passed through Congress by the end of this year, the US Senate will need to pass an entirely new postal bill, as well as the House.

USPS urges customers to switch from POSTNET to IMb barcodes Staff Writer , Post & Parcel . 10/19/2012

The Postal Service has been phasing out its old barcode system this year in favour of the more capable IMb system.

This week saw USPS writing to 800,000 business mailers who hold a POSTNET permit to encouraging them to start making the transition to IMb.

If they don’t make the switch by 28th January, 2012, those mailers will no longer be eligible for discounts for business mail prepared to standards for automated processing.

Companies that use a mail service provider are also being advised to check that their mailings will qualify for the automation price.

All Permit Reply Mail and Qualified Business Reply Mail are also required to have the IMb code for their full discounts.

The IMb system was first introduced in January 2009 and currently supports two options – basic and full service. Basic has fewer preparation requirements, and is easier to implement, but full service offers better discounts and tools like address correction and better intelligence on the mail stream, but preparation standards generally require specialist software to achieve.

From January 2014 automation prices will only be available for those on full service IMb.

Pritha Mehra, the USPS vice president mail entry & payment technology, said: “By starting the transition to the Intelligent Mail barcode now, you will continue to benefit from automation prices and will set the foundation to participate in the Intelligent Mail Full-Service option.”

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Mehra said mailers could get more information about the IMb system through the RIBBS website, while help could also be provided by their nearest Business Mail Entry Office.

Full service

USPS published proposed rules in the Federal Register on Wednesday (17th October) on the move to require full service IMb on all mail seeking automation prices.

Comments from stakeholders are being invited until 16th November.

USPS said it recognised that “significant” changes would be required for mailers currently benefiting from automation discounts, and said it will therefore attempt to minimise the impact that requiring full service IMb will have on smaller or infrequent mailers.

Additional tools and simplified requirements would be offered to these mailers, it said.

USPS wants to create 100% visibility in its mail stream by 2014, providing mailers with near real-time data on the location of mailpieces within the network, the time of delivery for full-service IMb mail, and also address correction.

It said full visibility would mean mailers able to respond more effectively to their customers’ inquiries on the status of bills, statements, catalogues and other publications.

Permit fees will be waived for mailings that are at least 90% full-service mailpieces, and mailers will be able to use a national account to mail through, rather than needing to use local permits at each mail entry destination.

For the Postal Service, the IMb system will allow a better monitoring of the processing network, and the ability to react quickly to problems in order to avoid delays. Simplified acceptance processes and better planning for volumes coming through the system will also mean more efficient and cost-effective services, USPS said.

USPS to trial same-day ecommerce package delivery

Staff Writer , Post & Parcel . 10/15/2012

The world’s largest mail delivery service has been seeing good growth in its parcel shipping volumes this year, as letter volumes have continued to decline.

It is now looking to trial a new “Metro Post” service that would allow ecommerce merchants to offer rapid home delivery to customers in certain cities.

A new market test is set to begin on or shortly after 12th November, assuming regulators give the green light, to allow USPS to test the operational feasibility of same-day delivery to multiple locations, and work out a possible pricing structure.

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The Postal Service said it is looking to run the service with up to 10 retailers that sell online, but who also have a physical store network. Companies taking part in the trial will have to have at least 10 physical locations across the US, with one or more situated in a trial area.

Testing will involve about 200 packages a day during the trial’s initial period, although the service could be expanded once the early testing is completed.

The trial would see cut-off times set between 2pm and 3pm for items to be delivered same-day, with items expected to be delivered between 4pm and 8pm.

The initial stage of the trial would be completed in January 2013, but the testing of the Metro Post service as a whole will run for one calendar year. It could then become a permanent product if successful.

Filing for approval from regulators, USPS stated: “The Metro Post service offering is designed to improve the shopping and delivery experience for customers, and therefore generate more package deliveries that do not currently move within the postal system.”

USPS said several prominent companies are currently offering some form of same-day delivery, or are actively exploring such a service in the near future. Although it is keeping its pricing confidential, the Postal Service said it will test different price levels, and rates for its trial would be generally similar to those offered by existing same-day providers.

The new Metro Post service would be a competitive parcel service for USPS, which is expecting the trial to generate more than $10m in revenues, although “exact revenue and volume is difficult to predict”.

Same-day delivery

For retailers that have a brick-and-mortar store presence, being able to offer rapid delivery of products to consumers local to their stores is seen as a big way to hit back at dominant Internet-only retailers like Amazon.

However, Amazon and eBay are also trying same-day delivery in select American cities.

Wal-Mart, the largest physical retailer, revealed last week that it has begun testing same-day delivery for a limited range of online purchases in four areas, including Northern Virginia, Philadelphia, Minneapolis and San Francisco. Deliveries can be rapid because items are sourced from local stores, with shipping priced at $10.

UPS has shown its interest in the concept recently by investing in the UK same-day delivery company Shutl, which is currently in the process of launching in the United States to build on the increasing interest being shown in rapid retail home delivery.

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London-based Shutl currently offers delivery in under an hour to almost two-thirds of Britain, and has set a record of delivering a product in less than 15 minutes of purchase. It intends to launch in New York, San Francisco, Toronto, Atlanta and other US cities from 2013.

Tom Allason, the Shutl founder and CEO, said at the recent Ecommerce Expo in London that as well as Amazon and eBay, Google was also potentially looking to get into the same-day product delivery space.

“We think this space is going to get really, really important,” he said. “Consumer expectations are moving faster than they ever have before, and they are only moving in one direction.”

RETAIL NEWS

Gap Inc. streamlines leadership to fuel growth

Gail Hoffer , Retailing Today . 10/16/2012

Gap Inc. is bringing several of its divisions under the leadership of one executive in order to fuel long-term growth.

With the start of the 2013 fiscal year, the company will bring together its North American, international, online, outlet and franchise divisions under a single global executive for each of its Gap, Banana Republic and Old Navy brands. In addition, the company will form a new Innovation and Digital Strategy team to further its leadership position in this area.

“Our strong performance gives us the confidence to make this move to bring each brand together with the goal of gaining market share around the world and enhancing shareholder value,” said Glenn Murphy, chairman and chief executive officer of Gap Inc. “The global teams will move even faster in anticipating and responding to the ever-evolving needs of customers, delivering consistently great product around the world.”

Effective November 5, the following members of the company’s management team will begin to transition into their new roles in preparation for the upcoming fiscal year:

At Gap brand, Steve Sunnucks, current president of the Gap Inc. international division, will become global president, based in New York. Mark Breitbard, the senior product leader for the brand in the United States and Canada, will take on an expanded role based in San Francisco as President of Gap North America, reporting to Sunnucks.

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Art Peck, the current president of Gap North America, has been appointed president of the new innovation, digital strategy and new brands division. Peck will build upon the company’s leadership position in e-commerce and oversee further investments to provide our portfolio of brands with world-class digital capabilities and expertise. He will also guide the development and growth of the Athleta and Piperlime brands.

At Banana Republic, Jack Calhoun, the established president for North America, will become global president and expand his focus to include all channels and markets globally. The brand’s top merchant, Julie Rosen, will take on additional responsibility for the brand’s North American performance, while continuing to lead global product, reporting to Calhoun.

At Old Navy, as previously announced, Stefan Larsson, a veteran of global retailer H&M, started earlier this month as global president. Jill Stanton, the former Nike executive who has served as a creative advisor to Old Navy this year, joins the brand full-time overseeing all aspects of product design, development and production, reporting to Larsson.

Tthe current, dedicated team in Shanghai, led by Redmond Yeung and Jeff Kirwan, will be overseen by Murphy in the new fiscal year. Nancy Green, product leader for Old Navy, will assume a new role supporting China with responsibility for guiding the product assortment and merchandise for the market.

The company also announced that Toby Lenk, president of its online division, will leave Gap Inc. in February 2013, after ensuring a smooth transition. Lenk has indicated his desire to return to his entrepreneurial roots. Under his leadership, the online division has been a stellar performer and is expected to deliver $2 billion in sales ahead of its 2014 goal.

Nielsen survey gives retailers reason for holiday cheer

Marianne Wilson , Chain Store Age . 10/15/2012

Higher consumer confidence levels, increased impulse buying and consumer intent to spend more could all lead to an upside surprise in 2012 holiday spending, according to Nielsen analyses.

Although almost six out of every 10 consumers (59%) reported plans to spend the same as last year, there is a 10-point drop (from 37% in 2011 to 27% in 2012) in the number of people expecting to spend less. Eight percent of respondents reported plans to spend more this holiday season, up from 5% in 2011 and 2010.

For sales in 89 categories across five key departments (food, beverages, alcohol, health/beauty and homecare), Nielsen is forecasting spending for November and December

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2012 to reach $98.3 billion. Nielsen expects dollar sales to increase 2.3% and unit sales to remain generally flat (0.1%).

“Nielsen’s Consumer Confidence Index is the highest since before the recession,” said James Russo, VP global consumer insights, Nielsen. “Planned shopping-list usage is down so impulse buying could be up, and shoppers across the income spectrum say they plan to spend more in multiple areas.”

On the topic of gift-giving plans, Nielsen’s Holiday Shopping Survey revealed gift cards and technology products tied for the lead (11% each) as products respondents plan to spend more on this year. Except for jewelry, every category including toys, apparel, video games, books, cookware/kitchen and sporting goods showed modest improvements in consumer plans to buy more than in years past.

The number of respondents saying they plan to spend more with online retailers leads all channels at 18%, up from almost 13% last year. Consumers saying they will spend more at mass merchandisers doubled this year to 12% in 2012.

Within the five departments and 89 categories examined, items projected to do well over the holidays include:

Alcoholic beverages: Wine is expected to lead the category with 6% dollar and unit growth, followed closely by liquor, and beer rounding out the top three with 3% gains.

Food: The continued success of fresh produce (expected holiday sales and unit growth of 4.6% and 3.7% respectively) seems to signal more health-conscious consumers and home cooking this holiday season. Traditionally popular holiday food categories could do well also, including nuts (7.5% dollar growth and 15.1% unit growth) and jams/jellies/spreads (7.1% dollar and 1.1% unit growth expected).

Beverages: Coffee will lead all beverages with 10% dollar and 7% unit growth.

Health and beauty: Vitamins will be a bright spot in this department with dollar (9%) and unit (9.2%) growth figures better than most items in the five-category analysis. Cosmetics could do well also, with an expected boost of 4.8% dollar and 2.3% unit growth.

Homecare: Pet care will be the darling of the category with “spare-no-expense” pet owners expected to drive 5.9% dollar and 3.1% unit growth. The rest of home care, including cleaning and households products - even holiday wrapping paper - will see modest, price-driven dollar gains and unit sales declines.

Most respondents from all incomes identified $100-$250 as the ideal spending range for holiday food and household items. Gift-giving spending estimates hovered in the $250-$500 range.

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Sears Hometown and Outlet Stores spin-off to trade on Nasdaq

Staff Writer , Chain Store Age . 10/15/2012

Sears Hometown and Outlet Stores Inc. is set to begin trading on the Nasdaq Capital Market on Friday after Sears Holdings Corp. completed a spin-off transaction of the home appliances, hardware, tools and garden equipment retailer.

Sears Holdings received $446.5 million in proceeds in the transaction, including a $100 million dividend paid by Sears Hometown prior to the separation and about $347 million from a rights offering.

Macy's targets millenials with new brands

Gail Hoffer , Retailing Today . 10/18/2012

Macy's is hoping to entice the coveted 13- to 30-year-old market with the launch of its millenial initiative.

The initiative involves the rollout or expansion of more than 20 brands for its Macy’s mstylelab (primarily serving customers ages 13 to 22) and Impulse (primarily serving customers ages 19 to 30) departments.

According to Macy's, the millenial generation, which is the largest and most diverse in America, is expected to spend an estimated $65 billion this year.

“We have identified Millennials as a priority customer for Macy’s, and we know that growing our relevance for this customer will start with product,” said Jeffrey Gennette, Macy’s chief merchandising officer. “Over this season and spring 2013, we will be introducing 13 new brands targeted to a cross-section of lifestyles, as well as growing those within our current portfolio that are already passion brands for this customer. This product investment and repositioning is the first phase of our millennial strategy and will help strengthen Macy’s credentials and credibility with this customer by offering them newness, fashion and innovation across product categories and lifestyles.”

Among the new brands launching at Macy's are:

Marilyn Monroe, launching March 2013 for mstylelab, featuring classic sportswear and screen tees, priced from $29 to $89;

Made Fashion Week, launching March 2013 for Impulse, feauturing dresses, knits and jackets for an average of $65 each;

Keds, launching spring 2013 for mstylelab, featuring clothing priced from $28 to $89; and

Blossom and Clover launching February 2013 for Impulse, featuring dresses, shorts, denim and jackets piced from $38 to $88.