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Ecommerce, marketing, media

Clear Digital Digest: MP3, marketing spend and movies sur l’eau

17/7/2020

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Today’s Clear Digital Digest reviews a recent survey on changing customer attitudes as well as the latest IPA Bellwether marketing spend report.  The MP3 is 25 years old this week and although not widely used these days, as the key tech that paved the way for streaming its influence can often be understated, as we explore below.  Plus a look across the Channel at a new, unique way to watch films…
 
CONSUMER ATTITUDES AND MARKETING SPEND
Amongst the latest insights that emerged this week, Wunderman Thompson’s “Covid, Commerce and the Consumer” report stood out, based on a survey of 2000 UK consumers in early June.  Some key highlights include:
  • Future outlook was understandably negative, with 48% of consumers feeling less positive about the future, with an identical number feeling less positive about future finances.
  • 62% of consumers feel less positive about shopping in-store, slightly mitigated by 43% now feeling more positive about online shopping.
  • Amazon accounted for 35% of all online shopping during lockdown (up from 30% before), with a huge 94% of respondents having made at least one purchase from Amazon.
  • Grocery is the other online channel to see a significant increase in share of spend, as we also covered in last week’s Digest.
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Estimated lockdown % online shopping share, source: Wunderman Thompson
  • Some more interesting (albeit depressing) data from the IPA this week, as they reported that recent marketing budgets have been slashed by more than ever previously recorded in the 20 years plus of their IPA Bellwether report.
  • 64% of respondents had their marketing budget cut, albeit 13% saw a rising budget, leading to 51% of companies cutting their marketing budget in the second quarter of 2020, up from 6% in Q1.
  • The graph below shows the historic trend, with the credit crunch related downturn in late 2008 the only comparable slump, albeit marketing budgets did then bounce back fairly quickly in a V-curve. 
  • With this unprecedented crisis, the Bellwether report predicts total ad spend falling by 11.3% this year, followed by growth of 6% in 2021.  In 2022 and 2023 it once again expects above-average growth, before stabilising at average growth rates in 2024 and 2025.
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IPA Bellwether Report, source: IPA/Marketing Week
MP3 TURNS 25
There was an important but fairly unheralded digital milestone this week, as the MP3 file turned 25.
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  • In this typically excellent article by music industry journalist Eamonn Forde on The Quietus website, it is argued that the MP3, and not say the vinyl album, was the most revolutionary format in music history.
  • Forde breaks down the MP3’s life so far into 4 distinct phases and demonstrates how it has led to Big Tech taking the dominant hand in the music business from the traditional record labels, as MP3s paved the way for the streaming supremacy we see from the likes of Spotify and Apple Music today.
  • For further reading about the evolution in music consumption, the recent Clear Digital article “Discogs – the digital success story of the vinyl revival” covers similar ground; for example, how streaming now accounts for 60% of record label income and actual physical music products (ie CDs and vinyl) just 20%.
AND FINALLY...
With cinemas closed until recently and only gradually re-opening now, one new trend has been the emergence of drive-in cinemas to bring some US retro flavour to cinephiles who are seeking more than another Netflix binge.  Venues as varied as Brent Cross Shopping Centre car park and Alexandra Palace will be accommodating such yearnings this summer.

However, Haagen-Dazs are adding a new flavour in Paris with their “Cinema Sur L’Eau” concept: a socially distanced cinema where customers will sit in boats rather than cars.  Further investigation reveals they will be showing a film entitled Le Grand Bain (English title: Sink Or Swim), about a group of men who start their own synchronised swimming team.  Certainly a wiser choice of movie to show in this environment than Jaws or Titanic.
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Clear Digital Digest: online habits, haircuts and robot fans

10/7/2020

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Today’s Clear Digital Digest looks at the early impact of the lockdown slightly easing last week, some updated ecommerce sales trends, Ofcom’s research regarding online usage habits and perceptions plus perhaps the scariest sports supporters seen for many a year.
 
HAIRCUTS BEFORE HEINEKEN
One of the biggest changes in the UK in the last week has obviously been the lockdown easing last Saturday (4th July) for both pubs and restaurants as well as for some other service retailers, most notably hairdressers.
  • Despite elements of overcrowding in some hotspots, Saturday’s weekly high street footfall increase of 20% was still well down on the prior year (-56% YOY) meaning that high streets were still less than as half as busy as in 2019.
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  • Amongst the sectors newly re-opened, hairdressers and barbers seemed to be the clear winners, with digital bank Revolut stating that they recorded a 23% increase in revenue compared to a pre-Covid 19 Saturday.
  • By contrast, restaurant tills were running at 47% of a normal Saturday, with pub takings also half of what would typically be expected.
  • Thus far, it looks like hairdressers and barbers are doing a better job of convincing consumers to return short-term – and admittedly, it does seem simpler for them to adapt to the new restrictions and offer a customer experience closer to before.  For pubs, the (understandable) need to sign in and often order drinks/food through an app seems like too much hassle for many in order to enjoy what should be a relaxing event not a sterile experience, in addition to the cautious approach many of us are still taking.  It will be interesting to see if the potentially tokenistic “eat out to help out” scheme and VAT cut to 5% announced this week makes much difference in the coming weeks.
  • One ecommerce area that has seen a recent spike is subscription services.  The Guardian has reported that one in ten Britons has signed up to such a service during lockdown, with popular items including gin, coffee and cheese.
ECOMMERCE SALES UPDATES
  • Looking across the Atlantic, eMarketer have forecast that US retail will decline by 10.5% overall this year, well below the 2.8% growth originally forecast in February, just before the pandemic hit.
  • Within this, ecommerce will grow by 18% YOY, with bricks and mortar sales falling back by 14%.
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  • With similar lockdown periods etc, the UK market will likely experience similar headwinds; albeit with online grocery taking a larger slice of the market over here, total UK ecommerce growth for 2020 could well exceed the US’s 18%.  Last Friday’s Digest featured more on recent UK grocery sales including the fact that ecommerce food sales have grown by 91% in the last 4 weeks.
  • Also this week, IMRG stated that overall UK ecommerce sales in June grew by 34% on last year, the highest rate for 12 years.  The electrical sector was leading the way, with sales growth of +100%, while alcohol sales of +80% YOY were helped by all pubs still being closed then, with subscription services also playing a part as mentioned above.
  • However, it wasn’t such good news for all categories as clothing sales declined, down by 6.5% on last year.
ONLINE NATION
Ofcom last week released their latest report “Online Nation” that looks at what people are doing online as well as their attitudes to and experiences of using the internet.
  • The main headline was that the trend for increasing online usage has (as may be expected) been accelerated by the enforced lockdown.
  • In April 2020, internet users in the UK spent an average of 4 hours 2 minutes online each day, a record figure and 37 minutes more each day per online adult compared with January 2020. On average, 18- to 24-year-olds spent over an hour more online each day than adults overall.
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  • Another useful insight is that although UK consumers use a range of services, major platforms continue to make up the majority of time spent online. 
  • On average, more than a third of measured time spent online is spent on Facebook or Google owned platforms, so including the likes of Instagram, WhatsApp and YouTube as well as the parent brands.
  • After these properties Spotify is the third most used service, ahead of even Netflix, helped by more than 100bn tracks being streamed in the UK for the first time in 2019; a trend I recently explored on my deep dive in to the UK music industry and the music marketplace Discogs.
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  • Google and Facebook’s huge usage share (which continues to grow) helps to demonstrate why they dominate the online advertising market.  However, what is equally insightful from the Ofcom report is that consumers’ understanding of how online services actually make money remains relatively low.
  • According to Ofcom’s research, 87% of internet users said they are generally confident in their online abilities, while almost three quarters of internet users (73%) said that they are confident that they can manage who has access to their personal data online.
  • However, when it comes to recognising ads online and understanding the role advertising plays in online business models, only about half (53%) of all adults identified advertising as the main source of funding for search engines, while 43% were aware that YouTube’s main source of funding is advertising.
  • These figures have remained stable since 2018 and are broadly in line with understanding among 12-15 year old users of these platforms (54%). 
  • Therefore, generally half of the UK population (across all age groups) still remains unaware that Facebook and Google operate as ad based models, a figure that I’m sure would be substantially higher if examining a more traditional media brand such as ITV.
​AND FINALLY…
In the week that cricket was the latest sport to return behind closed doors, its sporting cousin baseball showed off an imaginative replacement for supporters in the stadium.  Japanese baseball team Fukuoka SoftBank Hawks unleashed 2 different types of robotic fans for their match against Rakuten Eagles on Tuesday, who arguably look scarier than Millwall fans from the 1980s…
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Clear Digital Digest: brands, baskets and bears

3/7/2020

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Hi and welcome to the first Clear Digital Digest for a while, as the Clear Digital blog returns.  More about that here but as before, these summaries will select a range of recent interesting, insightful and sometimes quirky ecommerce, marketing and media stories and break them down into handily digestible form. 
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​Today we’re looking at some new research on the world’s largest brands, the increasingly polarised nature of the UK retail market plus a novel way to socially distance ahead of lockdown restrictions further easing this weekend…
AMAZON REMAINS THE WORLD’S MOST VALUABLE BRAND, BUT FACEBOOK FALLS
  • Kantar announced their latest BrandZ global brand value top 100 list this week, with Amazon’s $416bn value remaining ahead of Apple for the second year running, and actually growing faster too. 
  • Kantar’s ranking reviews the year to 7th April 2020 and the top 10 is dominated by tech brands as the table below shows. 
  • One standout from the top 10 is that Facebook’s brand value of $147bn actually fell by 7% year on year, likely the result of growing unease over Facebooks’ operating methods (e.g. the Cambridge Analytica scandal) plus declining popularity amongst younger users. 
  • With the current advertiser backlash and #StopHateForProfit boycott led by the likes of Unilever and Coca-Cola plus a turbulent year ahead on several fronts, it will be interesting to see how this affects Facebook’s brand value and overall profitability this coming year.
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Source: Kantar/Marketing Week
Methodology: Kantar’s BrandZ valuation process takes the financial value created by a brand in US dollars and multiplies it by brand contribution, to calculate its Brand Value: the worth in dollars that each individual brand is tangibly worth.
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  • On the flipside, there is better news for Facebook in the list of fastest rising brands in the top 10, with Instagram the second fastest growing, its $41.5bn value up by 47% on the prior year, making it the 29th largest brand overall. 
  • Many of the biggest growing brands are again tech companies, as is the highest entry in the top 100: TikTok, whose brand value of $16.9bn sees it enter the list at number 79. 
  • The full BrandZ report is available from Kantar here.  
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Source: Kantar/Marketing Week
RETAIL’S CONTINUING DIVIDE
It’s been another unfortunately contrasting week of winners and losers in the retail space.
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  • Sainsburys announced bumper sales growth of 8.5% for the quarter ending 27th June.  This was boosted by a huge (but not unexpected) 87% growth in online orders, which grew to 650,000 per week, up from 370,000 the year before.
  • Sainsburys’ grocery business overall grew by 10.5% in the quarter, with general merchandise sales growing by 7.2%, boosted by a 78% rise in Argos home delivery sales.
  • Kantar have had a busy week, also publishing some data for the grocery market covering a similar period, showing how online growth continues apace.  Food ecommerce sales grew by 91% from mid May to mid June, a figure that would have been even higher had delivery capacity existed to meet the unprecedented demand.
  • And as we’ve all no doubt experienced, it’s not just the supermarket giants benefitting, but also smaller convenience stores and corner shops.  Sales at independent retailers have grown by 69% in the last 3 months.
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  • However, for non-food retailers, the outlook generally remains bleak, with casualties this week including TM Lewin permanently shutting all its 66 stores and Harveys falling into administration.
  • Having only re-opened 22 of its 50 stores since “non-essential” shops were allowed to open on 15th June, John Lewis announced plans to shortly re-open 10 more, including its flagship Oxford Street branch.  However, this still leaves 18 John Lewis department stores with uncertain futures and an internal letter to staff warned that store closures and job cuts were likely, with chair Sharon White stating that “the difficult reality is that we have too much store space for the way people want to shop now”
  • Further bad news this week from retailers including Harrods, Arcadia and Upper Crust owners SSP led to papers such as The Guardian focusing heavily on the story, headlining “Fears grow for UK high street as more than 6,000 jobs lost in a day” on its front page on Thursday.
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  • If all that sounds overly depressing, this excellent Econsultancy article “7 factors that will shape ecommerce in the second half of 2020” does at least offer some cautious optimism, for those retailers trading online that are able to flex and adapt to this constantly changing environment anyway.
AND FINALLY…

As Clear Digital returns this week, I’ve just published two deeper dives as well, both examining the marketplace sector.  This is an area that has actually benefitted to some degree from the present turmoil, with recent stories including Etsy doubling its sales in April and music marketplace Discogs seeing usage levels increase by 65%.
  1. The UK marketplace sector – and the role of community.   The UK marketplace sector is responsible for a third of all ecommerce sales - and 2020's unfortunate events have seen a large rise in sales and sellers.  This blog examines the sector's size, dynamics and the increasing success of community-driven marketplaces.
  2. Discogs – the digital success story of the vinyl revival.  Discogs is a digital brand with a difference; it’s thriving in the hugely competitive music sector, by catering to a niche but dedicated sector of music enthusiasts and record collectors.   This blog reviews the current music market as a whole, delves deeper into the second hand vinyl market and then examines Discogs’ offering and recent success.
 
And finally, with (some) pubs set to reopen this weekend – and mixed views as to what this will bring – I did like this novel solution from across the Channel that I discovered on Twitter this week…
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Clear Digital is back

1/7/2020

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Hi and welcome back to the Clear Digital blog, my newly reborn space to talk, discuss, review and speculate about the worlds of digital, ecommerce, marketing and media.  Clear Digital was originally set up in late 2015 as an interim project before I then re-entered the world of permanent work in June 2016, as Head of Ecommerce at Wyevale Garden Centres.  The blog has lain dormant since then, but having left Wyevale last year due to its break up and sell-off by its private equity owners, I’ve now decided to bring back Clear Digital.

As before, I’ll be focusing in particular on my main personal areas of interest in the digital world, filtered through the lens of my 15 years working in the industry with brands such as Argos, Bupa and Wyevale.  Of course, one significant change from four years ago is the tumultuous times we are living through in 2020, so this will obviously have some impact on what I cover.  Generally, these will be the main themes explored by Clear Digital:
  • Digital technology and market trends: with personal views, trying to cut through all the hype to pull out the truly exciting and significant developments.
  • Ecommerce trends and mini case-studies.
  • Digital media and changing consumption, especially around music and TV/film.
  • Regular “Clear Digital Digest” updates, summarising both recent industry news plus quirky stories you may have missed.

To kick things off, I’ve just published two pieces of related research looking at the UK marketplace sector.  Covid19 has led to steep recent online sales growth, and marketplaces (including the twin headed Amazon/eBay beast) have also benefitted from this significant change in customer behaviour.  However, this hasn’t been just due to the forced closure of many traditional shops, but also because a growing number of marketplaces offer a real sense of community, usefulness and fun – with a personal favourite of mine being Discogs, the record collector hub and marketplace. 
Therefore, I’ve taken a look at the UK marketplace sector as a whole, as well as a deeper dive on Discogs and the UK music sector, including the significant size of the under-reported used records market…
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The UK marketplace sector – and the role of community 
The UK marketplace sector is responsible for a third of all ecommerce sales - and 2020's unfortunate events have seen a large rise in sales and sellers.  This blog examines the sector's size, dynamics and the increasing success of community-driven marketplaces.
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Discogs – the digital success story of the vinyl revival 
Discogs is a digital brand with a difference; it’s thriving in the hugely competitive music sector, by catering to a niche but dedicated sector of music enthusiasts and record collectors.   This blog reviews the current music market as a whole, delves deeper into the second hand vinyl market and then examines Discogs’ offering and recent success.
 
All future posts will be shared via the @clrdigital Twitter feed, as well as my personal LinkedIn account, so please follow to get all the latest updates too…
CLEAR DIGITAL CONSULTING
Another reason for re-establishing the Clear Digital blog is more pragmatic; I’m also currently personally available for new assignments, having started searching for fresh opportunities at the worst such time in living memory.  Therefore, as well as being open for permanent roles, I can assist on an interim and consulting basis, utilising my past experience but also a wider network of contacts out there if necessary, specialising in a wide range of ecommerce, digital and marketing disciplines.   My Consulting section has more details on how I can help, particularly in these areas:
  • Interim Ecommerce and Digital Management
  • Consultancy, Projects and Research
  • Agency/Vendor Selection and Procurement
I’d love to hear from you and catch up to see if there’s anything I can help you with or even just share and exchange some thoughts…
GET IN TOUCH
​So, that’s all for now, but please feel free to get in touch via the usual channels - whether that’s comments below, on Twitter via @clrdigital, email jim@cleardigitaluk.com or connect on LinkedIn… 

​Take care, Jim 
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    Jim Clear

    Lead blogger and founder of Clear Digital: talking about ecommerce, digital, marketing and media.   

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