Wal-Mart keeps chin up despite lackluster forecast

Wal-Mart Stores Inc reported expectations of a challenging fall season and a “late Christmas” on Thursday due to current frugal consumer spending habits and the lower appeal of low-quality “throw-away“ items.

While Wal-Mart still enjoys growth potential in various US markets, says company President and CEO Mike Duke, investors should maintain conservative expectations in regards to significant increases in long-term margins, Reuters reports. 

"Customers are buying now when they need product, not anticipating a future need," he said. "I think this is something that will be with us for a long, long time."

Wal-Mart foresees falls in sales for all types of items -- even basics such as infant formula. At the same time, grocery and video game sales are rising, as shoppers opt to stay at home for dinner and entertainment.

"For any of us in the food business, there's more opportunity there," he commented.

The chain felt these effects during Christmas season 2008. Duke, therefore, is positive that holiday sales will be solid.

Wal-Mart’s positive 2008 holiday sales will certainly be reflected this year, said retail analyst Patricia Edwards, who runs Seattle’s Storehouse Partners LLC. Even so, she speculates that because Kmart and Sears offer layaway, some Wal-Mart shoppers will venture their way. 

"For the very, very strapped consumer, people will be drawn to layaway," she said.

Wal-Mart decided to stop offering the service due to skidding use and hiking costs in 2006.

"This year, things are still incredibly tight, but we are not as fear-driven as we were this time last year," Edwards noted.

Also, sales are rising as a result of Wal-Mart’s remodeling efforts at its US stores, Duke said. Still, the biggest expansion potential may be abroad, as the company’s Asda division in Britain continues to show higher shopper traffic, average ticket and overall market share and operations in Japan consistently record monthly same-store sales gains.

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Inside the 'Inside Intel' Campaign (INTC)

"Intel Inside" was the first, and arguably the best, "ingredient" branding to come out of Madison Avenue. And thanks to that campaign everyone knows that Intel chips are inside computers. But the success of that ad push, which made its debut in 1991, created an image of Intel as a staid chipmaker. 

Defined by a logo
"People think of [Intel] as a microprocessor company and that's a shame," said Paul Venables, founder and creative director of Intel's creative agency, Venables Bell & Partners, San Francisco. "Marketing in the past was always tied to the next chip or product and then co-branded with HP or Dell or other partners. ... 'Intel Inside' did a great job of making a brand out of something like chips at a time when ingredient branding was unheard of. But 10 or 20 years later, their whole identity was wrapped up in that little 'Intel Inside' logo."

If "Intel Inside" created the perception of a factory stamping out mini bits of silicon, then what's inside Intel? For starters, the company's inventors, who hold scores of patents for things such as universal serial buses (those connecting ports known as USBs), the DVD and airbag-safety technology and are working on futuristic projects including wireless power, neural sensors and personal robotics.

So the tech titan turned to a new marketing strategy this spring, called "Sponsors of Tomorrow," to change those perceptions, and now a second iteration, which launched Sunday night on the Emmy Awards, is beginning.

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Oprah myTouch 3G $100 off promo ending soon!

As part of a promotion celebrating Oprah Winfrey's 24th year on the air, T-Moblie is taking $100 off the cost of the Google Android-based myTouch 3G. That brings the final cost down to $99.99 with a two-year contract.

The promo ends Sept. 24, so those interested need to act quickly. New customers who want to get their hands on the device can type in a special code--"KICKOFF24"-- when buying online.

The myTouch 3G landed (quite literally) in Justin Herman Plaza on August 6 (see write-up).  While the San Francisco debut was pretty amazing, what took place in Chicago was off the charts.

On September 8, T-Mobile sponsored the kickoff party for Season 24 of "The Oprah Winfrey Show."Check out the video with the Black Eye Peas singing "I Gotta Feeling" with what T-Mobile describes as a surprise flash mob of dancers on Chicago's Michigan Avenue. Of course, Oprah was dancing on stage while waving a myTouch 3G.

T-Mobile is certainly going all out to promote their growing Google Android offerings. Their ad campaign features The View’s Whoopi Goldberg, Los Angeles Lakers coach Phil Jackson and Jesse James of the Discovery Channel’s Motorcycle Mania series.

There is a lot of competition in the smartphone space right now.  It is clear that T-Mobile is committed to the Google Android platform.  Now developers need to get on-board to up the app offerings.

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Baltimore-based Under Armour tries nostalgic approach with new ad campaign

With the launch of college football season this weekend comes a new national television commercial for Under Armour Inc. that relies on feel-good inspiration and nostalgia more than the sports apparel company's past ads.

The ad, "Under Armour is football ," portrays the brand's role in the many stages of football from Pop Warner leagues - look for the childhood footage of company founder Kevin Plank in uniform - to the college level complete with adoring cheerleaders and 100,000 cheering fans.

"It's a comprehensive look at our brand's role in the sport of football ," said Steve Battista, senior vice president, brand. "We started out with the one T-shirt, and now we're head-to-toe [with] cleats and [uniforms]. "

The 60-second spot will debut Saturday on the ESPN, ESPN2 and ABC networks and air throughout the regular season, which ends in December. High-profile games in the lineup include Plank's alma mater University of Maryland's home opener against James Madison University and University of Southern California vs. Ohio State, both on Sept. 12. It will be shown during the University of Miami vs. Florida State University game this Saturday.

Battista would not say how much the company spent on its media buys for the commercial, the third in a series of football -related ads targeting younger athletes that began this summer. (Under Armour also plans to buy advertising during the College Bowl Week but has not designated which commercials will be used.)

The ad is a montage of Under Armour commercials over the past decade, youth football and college scenes, and shots of professional players like the Ravens' Terrell Suggs. The theme song from NBC's show about high school football, Friday Night Lights, which uses Under Armour apparel, plays throughout.

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Amazon Slaps Its Brand on Some Consumer Electronics

Like many general retailers, Amazon seeks to forge direct ties with manufacturers wherever it can so that it can keep a larger percentage of the profits. Just as shoppers might find Safeway cereal, RadioShack batteries and Wal-Mart diapers, Amazon has sold such “private label” items since 2004, including Pinzon bath towels and sheets, Strathwood patio furniture, and Denali Power Tools.

Today, Amazon is expanding its private-label line with AmazonBasics, a new collection of consumer electronics items.

The items are not all that exciting, at least for now. They include HDMI cables, Ethernet cords, and blank CDs and DVDs.

All will be shipped in Amazon’s recycled cardboard frustration-free packaging, which gives people another opportunity to avoid those hermetically sealed plastic clamshell containers from other vendors.

“We think there’s an opportunity to provide really good quality and additional value in terms of lower prices than some other products we see in the market,” said Paul Ryder, Amazon’s vice president for consumer electronics and wireless.

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Verizon's New Wireless Pricing Is An Insult

Again, 'Open Network' Push Is About Nickel And Diming Users

It's been made fairly clear that as Verizon loses the ability to lock down their phones and network (forcing consumers toward their wireless handset content), the carrier is going to make up for it by squeezing the pipe and imposing some steep per-byte charges. A recently leaked Verizon memo gave insight into the company's new wireless pricing plans for Internet-enabled handsets not quite powerful enough to be considered "smartphones": $9.99 for 25MB (50 cents each additional MB) or $19.99 for 75MB (30 cents each additional MB). 

If you're a smartphone customer, you can still of course pay $60 a month for 5GB worth of data, but the significant majority of customers are going to be using what Verizon's now calling "Enhanced Multimedia Phones," which come tied to this new pricing. The company this week launched the first phone that utilizes this new, not so bargain basement pricing: the 3.1-inch AMOLED touch screen Samsung Rogue:

"The Samsung Rogue will serve as the flagship phone for the company's new data pricing option available to customers beginning today. The new data pricing gives Verizon Wireless customers more freedom to select how much data and the type of data they want to use. . . Customers who want to watch full-length TV shows plus news, sports, weather and live entertainment video clips can also add Verizon Wireless' new V CAST Video on Demand plan..."

Except with such low caps and steep overages, customers interested in freely wandering the web consuming video are going to be punished for their curiosity. That's of course where Verizon comes along to direct customers back to their $10.00 monthly VCAST video service. Previously, users who rarely went online could pay (an equally ridiculous) $1.99 per megabyte, though at least they had the option of choosing to not pay if they didn't use the Internet. Heavier users could sign up for the "unlimited megabytes" offered by Verizon's $15 a month Vcast VPak.

So what's the motivation? More money for an already very profitable company, silly. Verizon Wireless' second quarter results indicated that wireless data revenue comprised 29.3 percent of total Verizon Wireless revenues (net $3.16 billion in the second quarter alone), and jumped 24 percent from one year earlier. Verizon's already impressive wireless profits are about to get more impressive, and while that's great news for investors and Verizon executives, it's not particularly great news for you, or the generally open nature of the Internet.

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Beyond Online Ads: P&G Sets $4 Billion E-Commerce Goal

Aims to Grow Online Sales Eightfold -- Equal to Drugstore Channel

E-commerce has never reached even 1% of Procter & Gamble Co.'s sales, but now the company is looking to increase that share more than fivefold as it seeks to capitalize on its growing investment in digital media.

P&G -- and new CEO Bob McDonald -- is counting on e-commerce, including sales through such outlets as Amazon and Walmart.com as well as through its own websites, to become as much as a $4 billion or bigger business for the $79 billion company. That's more than eight times the $500 million a year P&G gets today from e-commerce.

Tellingly, P&G included both digital media and e-commerce in the job responsibilities of Lucas Watson when it appointed him global team leader of its digital business last year. Traditionally, the company has kept its retail sales and brand marketing functions mostly divided. But giving him responsibility for both has a strategic purpose, as the interconnection is both obvious and growing.

"Some categories see as much as 30% to 50% of their business in e-commerce," Mr. Watson said. "Our forecasts don't suggest consumer products will ever work like that. But it's not out of the realm of possibility e-commerce will be more than 1% of our sales. Getting north of 10% would be an aggressive goal, but somewhere in between that would be, we think, within the realm of possibility."

That would put e-commerce on par with such channels as dollar stores and drugstores, he said.

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