Compiled by John Kelly

Thursday December 29, 2016

Plenty of People Shopped on Christmas Day

Nothing like doing a little shopping as presents are being unwrapped.

E-commerce traffic volume on Christmas Day shattered all previous records according to Verizon Enterprise Solutions’

Holiday Retail Index report.

The report finds that traffic continued to build into the Christmas weekend, and reached feverish pitch on Christmas Day

which also coincided this year with the first full day of Hanukkah.

Specifically, ecommerce traffic volume to U.S.-based retailers was up 48% on Sunday (Dec. 25), shattering all previous

records. Peak ecommerce volume also skyrocketed – up by 78% on Sunday – breaking all previous records.

“Digital commerce is continuing to steal the show this season and the holiday weekend was clearly the tipping point as

consumers with gift cards to redeem and purchases to make turned en masse to the virtual marketplace that’s always open

for business,” said Michele Dupré, group VP for retail, distribution and hospitality with Verizon Enterprise Solutions.

http://www.chainstoreage.com/article/plenty-people-shopped-christmas-day

Last-minute Spending Surge Lifts U.S. Holiday Shopping Season

A jump in consumer spending in the final stretch of December significantly offset a slow start to the U.S. holiday shopping

season, and is likely to help many retailers beat sales forecasts, industry research groups said on Tuesday.

The December spending boost is in contrast to a muted November, when early holiday promotions and expectations among

consumers that deals would always be available took a toll. Spending over the Thanksgiving weekend in November fell 3.5

percent from a year ago despite a strong jump in online sales, according to the National Retail Federation.

"It was a hot start with Cyber Monday, followed by a lull for the last couple of weeks and then a big-bang finish," said Pete

Madden, a director at retail consultancy AlixPartners.

Sales data released on Tuesday showed the major shift in fortunes in late December

Brick-and-mortar sales in the week ending Dec. 24 rose 6.5 percent year-over-year after having fallen for the rest of the

month, according to data from analytics firm RetailNext.

Strong demand for furniture, home furnishings and men's apparel from the start of November through Christmas Eve pushed

U.S. retail sales up 4 percent, higher than the previously expected 3.8 percent, according to data from MasterCard's holiday

spending report, also released on Tuesday. The report, which tracks spending by combining sales activity in MasterCard's

payments network with estimates of cash and other payment forms, offers an early look into how the holiday season shaped

up.

Official government data and results from retailers will not be available until next month.

The jump in spending prompted a prominent retail consultant to raise his holiday sales forecast. Craig Johnson, president of

consultancy Customer Growth Partners, told Reuters that he now estimates sales growth of 4.9 percent in November and

December, up from his initial estimate of 4.1 percent.

Johnson said he expects this year to be the strongest since 2005, and sales momentum is likely to remain strong until the

New Year. There is growing evidence that an improving job market, lower gasoline prices and growing consumer optimism

all contributed to the surge.

President-elect Donald Trump attributed the spending increased to his impending arrival at the White House.

"The world was gloomy before I won - there was no hope. Now the market is up nearly 10 percent and Christmas spending

is over a trillion dollars!" Trump wrote on Twitter.

Whatever the reason, shoppers remained ebullient.

"I'm here just to shop," said Eddy Flores, 46, as he lugged three bags stuffed with clothing through Macy's in New York City.

He was there to take advantage of post-Christmas deep discounts.

LOSING OUT

Despite the late-December surge, not every retailer will benefit. Department stores like Macy's (M.N), J.C. Penney (JCP.N),

Kohl's Corp (KSS.N) and others are still heavily discounting items, as growth in women's apparel remained weak.

J.C. Penney offered the deepest average discount level of any retailer this year, according to retail pricing and data analyt ics

firm Market Track.

Jewelry retailers also had a lackluster season that could hurt the likes of Tiffany & Co (TIF.N) and Signet Jewelers (SIG.N),

industry groups said.

The verdict on electronics as a category remained mixed. MasterCard said electronics sales were weak while analytics firm

Slice Intelligence said electronics was a top revenue-earner, with Best Buy (BBY.N) and Apple Inc (AAPL.O) gaining share

the week leading up to Christmas.

The biggest beneficiary of the holiday season continued to be Amazon.com Inc (AMZN.O), which outperformed its rivals

again this year, research firms said. Amazon on Tuesday called the holiday season its "best ever."

http://www.reuters.com/article/us-usa-holidayshopping-idUSKBN14H02C

Sears and Kmart are Closing More Stores — See if Your Store is on the List

Sears just announced a fresh round of store closures. The company told employees on Tuesday that it will close 30 Sears and Kmart stores in early 2017, half a dozen employees told Business Insider.

Most of the stores will start liquidation sales on January 6 and go out of business between late March and mid-April. Sears announced the closures internally on Tuesday but did not publicly release a comprehensive list of the stores that would close. Business Insider confirmed most of the closures with store employees at each location. We will add to this list as we confirm additional closures. Kmart stores closing: Jasper Mall, Jasper, Alabama 2003 US-280, Phenix City, Alabama 3001 Iowa Ave., Riverside, California 501 N. Beneva Road, Sarasota, Florida 19400 Cochran Blvd., Port Charlotte, Florida 2111 S. Federal Highway, Ft. Pierce, Florida 1501 Normandy Village Parkway, Jacksonville, Florida 2211 W. Irlo Bronson Memorial Highway, Kissimmee, Florida 4955 Golden Gate Parkway, Naples, Florida 111 Town and Country Dr., Palatka, Florida 2815 West Parrish Ave., Owensboro, Kentucky 1501 Paris Pike, Georgetown, Kentucky 14662 N. US Highway 25 E, Corbin, Kentucky 1710 W. Highway 192, London, Kentucky 3010 Fort Campbell Blvd., Hopkinsville, Kentucky 2945 Scottsville Road, Bowling Green, Kentucky 9 Plaza Way, Fairhaven, Massachusetts 4645 Commercial Dr., New Hartford, New York 250 Three Springs Dr., Weirton, West Virginia 731 Beverly Pike, Elkins, West Virginia 5132 Sixth Ave., Tacoma, Washington 1050 Division St., Parkersburg, West Virginia Sears stores closing: Kentucky Oaks Mall, Paducah, Kentucky 1901 S. Yale Ave., Tulsa, Oklahoma Town Center Mall, Charleston, West Virginia Meadowbrook Mall, Bridgeport, West Virginia Walden Galleria, Cheektowaga, New York Boulevard Mall, Amherst, New York This latest round of closures will bring the total number of stores that Sears has closed this fiscal year to more than 200. That means the retailer will have fewer than 1,500 stores left by early 2017. That's down nearly 60% from 2011, when Sears had more than 3,500 stores. Sears is shutting down stores to help stem losses from falling sales. In the most recent quarter, Sears' revenue fell 13%, to $5 billion, and its losses widened to $748 million from $454 million in the period last year. Same-store sales dropped 7.4%, including a 10% decrease at Sears stores and a 4.4% decrease at Kmart stores. http://www.businessinsider.com/list-of-sears-and-kmart-stores-closing-2016-12

Birchbox CEO: We're Here for the 'Beauty Majority' Birchbox, the startup founded in 2010 by Harvard classmates Katia Beauchamp and Hayley Barna, sparked the subscription

beauty trend. At a time when beauty shoppers got their samples and testers from department-store counters staffed by

representatives of major brands, Birchbox seized on the chance to connect with customers online, devising the idea of a

monthly shipment of sample collections.

The idea was a hit, but Birchbox's initial brush with success inevitably attracted competitors to the space, including the likes

of big-name brick-and-mortar rival Sephora, rival beauty subscription service Ipsy (which outpaces Birchbox with 1.5 million

subscribers) and even Target. Those pressures conspired to stall Birchbox's expansion into overseas markets, led to the

dismissal of 80 of its 300 employees, and ultimately threatened its ability to fill its monthly curated boxes.

But Birchbox endures. Though Beauchamp once said that only selling people samples would be "really boring," the

company appears to be once again embracing more fully its sample-based curation approach, although it's also devised in-

house brands and other ways to stoke full-line sales, including store-based sales. Birchbox now serves 4 million total

customers and "well over" a million subscribers (about the same it reported last year), and this summer managed to snag an

additional $15 million from its current venture backers, bringing total funding to almost $87 million.

And while it looked to many in recent years that the subscription model was becoming over-saturated, subscription

management platform Recurly says that the “new trend” of subscription e-commerce is “here to stay,” with subscription

same-store sales over the Thanksgiving/Black Friday weekend up 15% over last year, according to Recurly analysis emailed

to Retail Dive. Birchbox itself adds that holiday season self-subscriptions (and not just gifts) are up more than 15% from last

year: In all, 65% of revenue comes from subscriptions, "and the margins and unit economics on the box are very strong,"

according to a Birchbox spokesperson.

Profitability remains elusive, however, although strategic changes this year "have helped us achieve major operational

efficiencies, and we’re on track to meet our profitability goals," a spokesperson told Retail Dive.

Against this backdrop, Retail Dive caught up with Beauchamp, now the company's sole CEO, to discuss the future of brick

and mortar, the path to beauty discovery and the company's focus on what she calls the “beauty majority.” The following

conversation has been edited for clarity and length.

RETAIL DIVE: At this point, how do you see subscriptions fitting into your business model?

BEAUCHAMP: Subscription is a huge part of our business, but I think what can be misunderstood is that it's not a business

model, it's a revenue model, and that it’s a part of a business model. There’s been subscriptions for a very long time and

there's always been different flavors of subscriptions.

Birchbox invented a new flavor of subscription. So what's always existed is replenishment — that’s always been there for a

very long time in dotcom. And then even before dotcom, there's been a chance to subscribe to 'of-the-month' clubs, for CDs,

books, wine, where the thing that you want or what you get comes to you monthly. Our vision as a company was grounded

in this realization that it was hard to buy beauty and particularly hard to purchase it online. We saw a huge opportunity with

making beauty discovery and shopping really enjoyable, and with making the internet a possible place to buy beauty.

Because even in 2010, less than 5% of beauty was bought online.

So we decided that we were going to overcome what the internet was bad at and leverage what the internet was great at,

and that's how we came up with Birchbox. What we believed in — before it was a real word — was always “omnichannel,”

because we sent you an offline, personalized boutique every month and then brought you online to learn about it and

hopefully purchase it from us.

Our business has always been about making beauty shopping online possible, and we went and built the biggest and best

online e-commerce experience for beauty. It was never about just having a subscription — we thought of subscription as a

really wonderful part of getting to know the customer and the customer getting to know us and having this regular drumbeat

touchpoint with her.

So we love our subscriptions — it's a great business, first of all, and it's always been a great business.

Aside from the revenue stream, what does the subscription side help Birchbox do?

BEAUCHAMP: It helps us to very quickly skip a lot of steps with our customers, and also for our brand. Traditionally, there

are estimations from various marketing publications that a customer has to be touched by your brand into the teens

sometimes — 13 times, 15 times — before she would even approach your brand and consider it. So at Birchbox, we skip all

those steps. You would give us your profile, and all of a sudden a brand that has been dying to meet you and where we

have surmised should work for you is in your home, in your bathroom. Now you're going to try it and see if it's something you

like. So it's been a win-win for customers and a win-win for the business and for the brand.

What have your learned about your customer?

BEAUCHAMP: A lot. One of the things that took us aback, and helped us reimagine how big this could be, happened a few

years ago, when we started to commission third-party research. We wanted to understand how BIrchbox fits into the beauty

ecosystem, and we wanted to know "How does our customer compare to the traditional beauty customer?" The result was

our second biggest "Aha!" moment of all time — the first one being the launch of the company — because we learned that

we were really pursuing a whole different market opportunity than the rest of the industry.

The rest of the industry has focused on women who love beauty and spend a lot in beauty, while we were really over-

indexing with women who had an average spend in beauty and who liked it ... maybe. Basically, if you think of the 80/20 rule

— the top 20% of consumers — we were over-indexing in the 80% and doubling her spend in beauty in less than a year. So,

really attracting somebody who was a less obvious customer and then giving her a whole new relationship with beauty in a

way that allowed her to stay somewhat passive, but where she was enjoying the process of discovery and buying, trading up

to different and higher-priced brands and also widening her use of beauty pretty fast.

So there’s opportunity for this massive pool of consumers, that 80% of women, to give them an experience really to be

treated as as they deserve to be treated. We believe that beauty in the context of your life is normal, that you don't have to

be obsessed with beauty to get a great experience in it. We want to give you a fast and effective way to know what's out

there and to upgrade when you feel it's worth it.

How much of a problem is it for Birchbox that many of those women go on to buy from other beauty retailers?

BEAUCHAMP: First of all, when we launched Birchbox we always knew that it would be a hybrid between a marketer and a

retailer. We always knew that it would lead to drive sales in other retailers, initially for no other reason that beauty was then

95% offline. We knew that people would be learning something from Birchbox, and they would be walking by someplace or

they'd be shopping for something else and they'd say, “Oh, now I know about that, because I tried it, and I want it.” We

always knew that that would happen.

The reality is that we are comfortable with that to a certain extent because, especially in the early days when we were an

unknown entity, it allowed us to be really non-threatening to everybody. It continues to be the case for us that we’re helping

to generate sales everywhere. There were actually several credit-card studies that showed a “Birchbox effect” in other

stores, that we were creating incremental business for them. And now we have that data and we can show incrementality.

The reality is that as we’ve been able to attract more and more of our core customers and improve our experience, we’ve

been able to retain more and more of that spend. But we know that having a brick-and-mortar store is a huge piece of the

equation, for sure, that would allow us to capture even more of that, so that's when we opened our brick-and-mortar store [in

New York], to learn about that. And we still see that as an opportunity.

So will we soon see many more Birchbox stores across the country?

BEAUCHAMP: It’s a really big opportunity for Birchbox to pursue brick and mortar, so that's something that we are really

looking into. But nothing that we can share just yet.

There are a few upstart online beauty brands, like Glossier, that are getting attention with a breezy, social-media-focused

play. What is your approach to Birchbox’s store brands?

BEAUCHAMP: We have some of our own in-house brands at Birchbox. We've been dabbling in and learning about that too,

and it's a been a great experience and a great success. Our customers love our brands. One is a color brand called LOC

and the other is one that is going to be in every category eventually called ARROW, geared toward athleisure — so high-

impact, active beauty. Both are doing great.

What we think about our own brands is can we do something very interesting that is on brand for the “beauty majority,” that

would really serve her well. We're not really interested in doing just derivative products that we know sell but that somebody

else makes and doing it as a Birchbox brand. We want to do real brands.

Beauty seems to be on the rise, including at the holidays. Are you feeling that at Birchbox, even for subscriptions?

BEAUCHAMP: Beauty gifting is massive, and subscriptions is such a huge part of what people choose to give because it's

this thing that comes monthly. People who give Birchbox often say how much they love that every month the person who

they gave it to calls them and thanks them all year. It's a really rewarding gift to give and it's still very cost-effective. So the

gift subscription itself is huge for us. We do so much gifting in November and December, and we also do a lot of gifting in

just the inline beauty. For that we focus more on gift packages that are exclusive to us. Some of our smaller independent

brands created great gifts for us and some of the more massive brands do exclusives for us as well.

We have over 20% of our shop for non-subscribers, so people can just shop Birchbox whenever, and we try to make that as

compelling an experience as possible for gifting for holidays.

A couple of rounds of layoffs dominated the news for you earlier this year. Do you have any further plans for downsizing or

any opportunity on the horizon for a buyout?

BEAUCHAMP: No plans for further downsizing. As far as what's on the horizon, we're always focused and probably most in

2016 on being a standalone company that can support itself, that can be profitable and continue to find growth.

What do you think is the biggest misconception out there about Birchbox?

BEAUCHAMP: You started off hitting on the biggest misconception. In every category of every business there are

successes and there are failures. And there is a conception for some reason that subscriptions as a business model, or

even as a revenue model, [is] unsustainable. I honestly think that's really an over-simplification.

Subscription became a very hot category, and just like all hot categories do, there are businesses that sustain and

businesses that don't. But it seems really strange to me to assume that subscription wouldn't be a very valid and existing

revenue model for many businesses and, I believe, for many more.

People blamed the model rather than [other companies' failed] attempts. I think like anything, it’s hard to tack on something

to your business. It's hard to stick on something well that isn't core to what you do, and it’s not unique to subscriptions —

that's just reality to any business. When it's core to what you do, you really learn how to make the economics work, the

acquisitions work. But if it's on the side of what you do, it's really hard to make that a focus.

Do you think there’s a perception that men’s grooming subscription model is easier because it’s just all about shaving?

BEAUCHAMP: I think men’s is obvious, to be honest. And I think there’s a surge of men being more interested in personal

care and taking care of themselves that I think extends far beyond shaving. Just a realization that there’s a way to take care

of yourself that will preserve your skin, your hair for longer.

When you think about what we have really have learned at Birchbox, which is that the 80% of women who aren't obsessed

with beauty are just a huge opportunity, that's how I like to think about men. They're not necessarily running around

wondering if they would look better if they exfoliate their skin. But once you've given them a product to try that helps them

feel that their skin is softer, they have the same response as any human: “I like that.” So it's the ultimate passive

consumption. They can still fit their Birchbox in, they can still discover. They don’t have to go inside a store and ask real ly

uncomfortable questions for a lot of men — and women — “What is this and what should I expect it does for me?” I frankly

think for a lot of women, walking onto a floor of a hundred thousand SKUs and being asked, “Can I help you?” is a terrifying

experience.

Speaking of that, do you have plans to provide more virtual assistance online?

BEAUCHAMP: We’re looking at what a lot of people are looking at, which is how do you get higher-touch experiences for

people who have questions. But one thing that we've had for a really long time at Birchbox is the largest reservoir of reviews

of every product. So what you can do when you go to a product page at Birchbox is filter your reviews by your beauty profile,

so that you see the reviews that are the most relevant for you. We have seen that it almost works as virtual sampling

because you're really getting lots of information about how people really felt about the product. There’s no incentive not to be

honest and in many cases there are hundreds of thousands, so you can go and look at the lowest star and highest star ones

and try to see — what do people like you feel about it.

http://www.retaildive.com/news/birchbox-ceo-were-here-for-the-beauty-majority/432275/

Newspapers Deliver Across the Ages Ever hear the phrase “print is dead”? Well if you check with almost 170 million Americans, they’d tell you that nothing could

be farther from the truth. In fact, a recent Nielsen Scarborough study found that more than 169 million adults in the U.S. read

a newspaper in a month—whether it be in print, on a website or via mobile app. In total, newspapers reach 69% of the U.S.

population in a given month.

Newspapers remain largely a print medium, but the dramatic growth in digital media in recent years has compelled

newspaper publishers to re-think their distribution models and become multi-platform content providers. According to the

recent study, 81% of monthly newspaper readers engage with the print product, with 51% reading print exclusively. The

remaining 49% reads a newspaper on at least one digital platform, with 30% reading both digital and print.

Traditionally, newspaper audiences have been more educated, affluent and older than non-newspaper readers. As digital

media have gained in prominence, newspapers have attracted younger readers. Newspaper readers are still educated and

affluent, but their ages are more reflective of the general population than they have been in the past. For example, 13% of

the U.S. population is 70 or older, and this age group now accounts for 15% of the total monthly newspaper audience.

Compared to previous decades, younger readers now account for a greater percentage of newspaper readers. Notably,

Millennials 21-34 make up 25% of the U.S. population and now represent 24% of the total monthly newspaper readership.

Based on the shift in age of the newspaper reader, it’s clear that the newspaper industry’s adoption of digital distribution has

allowed it to reach adults of all ages.

Despite their growing appeal among younger readers through digital channels, newspapers still maintain an educated and

affluent audience. Readers, whether print or digital, are still more likely to be college graduates and have annual household

incomes over $100,000 than non-readers. And by broadening their distribution to digital channels, many newspapers have

attracted digital readers, who represent an even more affluent and educated segment of readers. In fact, digital newspaper

paper readers are 49% more likely than the general adult population to be a college graduate and 43% more likely to have

household incomes over $100,000.

There’s no doubt that the newspaper industry has seen its fair share of change and evolution over the past decade or so,

some of which has resulted in a loss of confidence from agencies, marketers and even researchers. But based on the recent

Nielsen Scarborough survey, it’s clear that newspapers remain a thriving and viable medium, and they continue to engage a

larger portion of younger, affluent readers.

http://www.nielsen.com/us/en/insights/news/2016/newspapers-deliver-across-the-ages.html

Lidl Could be Big: Analyst Projects $8.8 Billion in U.S. Sales by 2023

Lidl, the German no-frills grocery retailer with more than 10,000 grocery stores throughout Europe, currently has a low

profile in the U.S. Yet with the brand planning an aggressive expansion into the U.S., Lidl may not only climb its way out of

anonymity but shake up the grocery industry — and possibly the convenience sector — in the next decade.

“Lidl’s arrival here in the U.S. will be the single biggest event in the U.S. retail industry over the next couple of years,” said

Mike Paglia, Director of Retail Insights at Kantar Retail. Such a confident prediction stems from the Kantar team’s forecas ts

for the next seven years, which project rapid growth for the brand. Lidl is expected to:

Generate $8.8 billion in U.S. sales by 2023, eclipsing Wegman’s 2016 value of $8.1 billion;

Generate $7 million when the rollout starts in 2018, with the first major jump in sales occurring when more stores openings

in 2019;

Generate an average of $10 million in sales in some early stores, averaging $15.2 million in sales per store by 2023

Open 100 stores per year, reaching 630 stores by 2023; and

Target the U.S. Eastern seaboard, building 400 stores there by 2020. This would put the brand in direct competition with

grocery retailers including Walmart, Dollar Tree, Dollar General and the Ahold-Delhaize brands Food Lion and Stop & Shop.

The high sales projections and aggressive store opening schedules should certainly catch the eye of the would-be grocery

competitors, especially given Lidl’s low-price merchandise and minimalistic service experience. Unlike most major grocery

brands, Lidl offers:

A limited fresh foods assortment focused primarily on private label;

Locally-produced and seasonal goods; and

Minimal focus on store investment, with limited labor and minimal assistance required.

These characteristics, in combination with a quick-to-decision supply chain, enable the stores to procure and sell goods at

cheaper prices than a typical supermarket.

With these characteristics in mind, grocers over the next decade are likely going to have to excel elsewhere, whether

through more personalized services, unique assortments and promotions and/or better integration of omnichannel shopping

solutions.

“The more differentiated a retailer is, and the more unique its value proposition is, the more that it can stand out from the

crowd and the better insulated it will be from the ‘Lidl threat,’” Paglia said in an interview with Retail TouchPoints. “The

flipside of that is that retailers that have already been struggling with lukewarm sales, and a perception among shoppers as

being vanilla and conventional and stale, are the ones that are feeling the pressure the most. They’re going to have to

reinvent themselves to get on their shoppers’ radars.”

Lidl Wields Sharper Tools Than Aldi

Lidl is often compared with fellow German discount supermarket chain Aldi, which has already established a major presence

in the U.S. with 1,550+ stores. Like Lidl, the brand is continuing aggressive expansion efforts, seeking to push its U.S. store

count above 2,000 by 2018. But while the two brands are often paired together due to their value-oriented business models,

Paglia noted that their similarities are largely superficial, and that Lidl has the chance to achieve greater sales within the

U.S.

“The core difference between the two is that Lidl is more flexible and innovative and I think that’s going to help them adapt to

the market differences here in the U.S.,” Paglia said. “Lidl is less risk averse, it’s willing to try new things, and that he lps

them discover the nuances of the markets that they’re in more quickly. Aldi has more of a cookie-cutter type approach to its

business, and for them the growth means finding markets where their existing offer will work well. While there are still a lot of

places in the U.S. where an Aldi can thrive, there is an upper limit to that somewhere.”

Will Convenience Be Part Of Lidl’s U.S. Expansion Plans?

In Europe, Lidl is now attacking the convenience store model, opening select ‘Lidl Express’ store formats that serve as a

pickup point for online orders where consumers can also buy fresh products. It is still yet to be determined whether the

brand has any plans to test these store concepts on U.S. soil.

Top U.S. retailers are embracing convenience headed into 2017, so there may be a battle brewing that would ramp up

quickly if Lidl were to get involved. Walmart has been a convenience player since the late 1990s with its Neighborhood

Market locations, but is just now integrating online ordering into a new test format called Walmart Pickup and Fuel. These

stores will offer same-day pickup for groceries ordered online, and will offer grab-and-go items including hot sandwiches,

healthy snacks, drinks and a coffee bar, as well as basics like milk, eggs, and bread.

Amazon made a splash when reports circulated that the company planned to open 2,000 small format grocery stores in the

U.S. — plans that have since been denied. But with the inaugural Amazon Go checkout-free grocery store scheduled to

open to the public in 2017, and 20 brick-and-mortar stores slated to be opened by the end of 2018, Lidl may need to make a

decision as to whether it wants to take on not only the titans of grocery, but the overall retail leader as well.

http://www.retailtouchpoints.com/features/trend-watch/lidl-could-be-big-analyst-projects-8-8-billion-in-u-s-sales-by-2023

U.S. Retailers on Pace for Best Holiday Season in Years

Spike in online orders, last-minute shopping has research firms forecasting strong holiday-sales growth

Surging online orders and last-minute shoppers helped retailers make up for a slow start to the holiday-shopping season,

fueling hopes that higher wages, the rising stock market, and lower food and gas prices prompted Americans to spend more.

Estimates from retail research firms suggest sales growth in the period—which spans from Nov. 1 to the end of December—

could outpace that of recent years. “American consumers are once again proving many of the pundits wrong, as shoppers

flock both to websites and to stores—and not just for returns,” said Craig Johnson, president of Customer Growth Partners,

a New Canaan, Conn.-based research firm. “They are shopping at a rate not seen since the mid-2000s.”

The firm raised its holiday-sales growth forecast to 4.9% from an initial estimate of 4.1% growth. That pace, according to the

firm, would be the fastest growth rate since a 6.1% increase in 2005. Customer Growth Partners’ forecasts—which excludes

auto, car parts, fuel and restaurant sales—are based on a weekly in-house survey of retailers across the country combined

with broader economic indicators and historical data.

Mastercard’s SpendingPulse survey found that total retail sales, excluding automobile and gas sales, rose 4% from Nov. 1

to Dec. 24, though its results found that the days preceding Christmas were weaker than expected. The survey highlighted

men’s apparel and home furnishings as strong points, while jewelry sales fell from a year ago.

The year-end retail blitz coincided with new signs of shoppers’ improving health. Consumer confidence levels for December

rose to the highest level since August 2001 amid improving expectations for job growth and rising incomes in the months

ahead, the Conference Board, a research firm, said Tuesday. Wages have been rising by 2.5% from a year earlier and U.S.

joblessness fell to its lowest level in nine years in November, according to the Labor Department.

The projections, while based on separate data and surveys, are slightly ahead of the National Retail Federation’s forecast

for 3.6% increase in holiday spending for the period. Last year, sales for the period increased by 3.2%, according to the

trade group.

Still, the sales growth may not have been shared equally among all retailers, many of which relied on deep discounts to lure

shoppers. Customer Growth Partners warned of continued weakness at department stores, which are struggling to attract

shoppers, while the drop in food prices will likely ding sales at retailers like Wal-Mart Stores Inc. and Costco Wholesale

Corp. Online sales continued to increase at a rapid clip. Mastercard forecast a 19% jump in online sales for the holiday

period, while Customer Growth Partners expects a 15% gain.

That surge came at the expense of physical stores, which have lost shoppers to online rivals for years. RetailNext Inc. a

brick-and-mortar retail analytic firm, said net sales at traditional stores fell by 10% from a year earlier during December, with

shopper traffic plunging nearly 15%. Those results were partially buoyed by a burst of spending in the final days before

Christmas, when sales rose 6.5%, according to RetailNext.

Melanie Kerton of Kansas City, Mo. did most of the Christmas shopping for her family—including two children— online. “I’m

kind of anti-crowds,” said Ms. Kerton, 38, who works in an elementary school office. She was able to avoid stores for the

most part, up until the last week before Christmas. Then, to finish up her shopping list, she braved the crowds and visited a

few stores, including Dick’s Sporting Goods, Buckle and Kohl’s. “That was the one day I thought I was going to get it done,

no matter how miserable I feel about it,” she said, noting that her spendingthis year was roughly equal to last year.

RetailNext said that the average shopper shelled out nearly 11% more during the week before Christmas, offsetting

a 3.9% decline in store traffic. Once the shoppers do come into stores, they do tend to buy more frequently and spend more,

said Shelley E. Kohan, RetailNext vice president of retail consulting.

Web retailers made a push for the last-minute shoppers too. Amazon.com, through its Prime Now service that delivers

orders in as little as an hour, had pledged to take orders as late as 9:45 p.m. on Christmas Eve in somemarkets.

Retailers appear to be managing the online surge better than in prior years. Nearly all the 32 retailers surveyed by

the consultancy Kurt Salmon said they managed to process all online orders placed by the last day they guaranteed

for Christmas delivery, up from 95% in 2015 and 87% the year before. Part of that was better managing expectations, as at

least 20% of retailers moved their deadlines up to have more time to deliver packages by Dec. 25.

In a sign of the surge of online shopping ,United Parcel Service Inc. said it expected to ship 14% more packages this year

than last, more than 700 million in total, a record level by volume. FedEx Corp. plan a 10% bump.

But peak season for the carriers isn’t overyet: UPS said it plans to ship 5.8 million packages back to retailers in the first

week of January, as consumers send back unwanted items.

http://www.wsj.com/articles/u-s-retailers-on-pace-for-best-holiday-season-in-years-1482956333

Majority Have Felt Deceived by Native Advertising

Writing in Fast Company, Joe Lazauskas, editor-in-chief of Contently, says native advertising is broken -- that study findings

reveal 54% of consumers have felt deceived by native advertising. The study, of 1,212 adults who regularly access the

Internet, was conducted by Contently and the Tow-Knight Center for Entrepreneurial Journalism at the City University of

New York, and found:

--The majority (77%) of those polled didn't interpret native ads as advertising.

--Almost half (44%) weren't able to correctly identify the sponsor of the native ad they read.

--And about the same percentage (43%) lose trust in a publisher when it features native advertising from an untrustworthy

brand. It wasn't clear what constitutes "untrustworthy."

It's been one year since the Federal Trade Commission released its recommended guidelines on native advertising.

http://www.mediapost.com/publications/article/291912/majority-have-felt-deceived-by-native-

advertising.html?utm_source=newsletter&utm_medium=email&utm_content=headline&utm_campaign=99222

Facebook Ads are 'Far Less Viewable' Than Some Advertisers were Expecting

Having suffered a number of embarrassing bugs that caused Facebook to both overstate and understate some of the

measurement metrics that advertisers and publishers rely on, the company has recently made efforts to be more upfront

about future errors and it has agreed to allow more third-party measurement firms to check its numbers.

The consequence in being more transparent than before, however, is that advertisers are now paying a lot more attention to

the accuracy of Facebook's numbers, and those numbers may not be as good as advertisers were expecting.

Speaking on a Nomura conference call about Internet advertising trends earlier this month, Drew Huening, director of

Omnicom's digital ad buying trading desk Accuen, said (according to a transcript provided by Nomura): "Facebook ads are

far less viewable than people [advertisers] were expecting."

As part of Facebook's improved measurement efforts — which actually pre-date the public measurement snafus— the

company has begun allowing a number of additional third-party measurement firms, including Integral Ad Science, to verify

its ad viewability and attention metrics.

Viewability is the advertising metric that determines whether an ad served on a webpage or in an app actually had the ability

to be seen. The industry standard for viewability, as set out by trade body The Interactive Advertising Bureau (IAB) is that

50% of an ad's pixels should be visible in the browser window for 1 second. For larger-sized ads only 30% of the ad's pixels

need to be visible, and for video ads, 50% of the pixels must be visible for a continuous 2 seconds.

Third-party analysis of Facebook ad metrics show "some really interesting numbers ... not all of which look great for

Facebook"

Huening said that allowing Integral Ad Science measurement has seen "some really interesting numbers coming out of that,

not all of which look great for Facebook, and I think people have been surprised by that."

While caveating that it's still early days, Huening explained that Integral Ad Science's viewability criteria — which requires

that a display ad needs to be visible for longer than 1 second — appears not to look kindly on Facebook.

Huening said: "So, while I think Facebook has done an excellent job of building a system in which everything is viewed by

human eyes, especially in mobile, people are scrolling very quickly, and so they’re not reaching that one-second threshold."

Huening's comments refer to the static ads you see in the Facebook news feed, rather than video, or on the Facebook

Audience Network (which lets advertisers buy Facebook ads on third-party sites and apps that are not owned by Facebook),

which he expects "will be contributing pretty substantially to [Facebook's] bottom line, a couple percentage points potential ly"

in its fourth quarter.

He added that he doesn't think this viewability metric will lead to a dent in advertiser spend — ultimately, if advertisers are

happy with the results they are getting from ads that have been viewed for just milliseconds, that's all that matters —but he

said it "does require recalibration from an advertiser perspective."

Facebook was not immediately available to comment.

Facebook's view is that not all platforms should be viewed the same — even if that makes life easier for ad buyers

Earlier this month, at Business Insider's IGNITION conference in New York, I asked Andrew Bosworth, Facebook's VP of

ads and business platform about the company's recent measurement efforts.

I mentioned that every time I ask ad buyers to name the one thing Facebook could improve, it always comes back to

measurement. And the key issue seems to be that they can't drop their own tags (pieces of code used to track ads) to target

and measure Facebook ads in the same way they do with other online ads across the web. And even though Facebook

works with third-party measurement firms, often the data ad buyers receive back is unique-to-Facebook data that can't be

compared apples-to-apples to their other online advertising spend.

Bosworth explained that user data is "sacrosanct" to Facebook and advertisers being able to attach tags is the exact type of

data leakage that "frankly represents a real risk to the security of the information that users are trusting us with."

He added: "We're not trying to be obstinate, we were not trying to be obstructionist ... it's honestly a commitment we have

that, the nature of the platform, the platform can't exist without that commitment that we have given to people."

Bosworth said he believes Facebook is offering marketers ample tools to "measure, iterate, and get better on the platform,

and we are committed to doing more and more," adding that its move to create a measurement council — made up of

marketers, agency partners, and executives from measurement firms who will provide feedback each quarter on what

Facebook is doing well and what Facebook can do better — will be a "huge help" on that front.

And as far as web-wide ad standards are concerned — such as the definition of a viewable ad impression — Bosworth said

he believes they are not always helpful.

Bosworth said:

"Bear in mind these platforms are different. As much as we wish that a YouTube, and a Snapchat, and a Facebook video

were all just interchangeable, they're not. They're different platforms, they're different consumer behaviors, and trying to

pretend that they're the same platform may be convenient [for media buyers] ... but it's good until it's not. It looks good, it

makes life easier, but does it help them provide the best content? Is it going to be the best return on investment? Maybe not.

So I think there's a degree to which we need to recognize that different platforms are different, even if some of the pieces

look similar. But having said that, I think certainly on things like 'what's an impression', 'who's a real person', I think we can

make real progress in this industry."

Facebook's definition of an ad impression: Seen by a real person for more than zero seconds

I asked Bosworth what Facebook defines as an impression.

He responded: "For us an impression is seen by a real person. That means it has to enter the view stream, it has to have

been there for more than zero seconds, and has to be a human on the other side of it."

North of zero seconds seems a lot lower than the 1-second IAB industry standard — and could well be why advertisers were

surprised, as Accuen's Huening referred to in the Nomura call, at Facebook's viewability metrics.

When pressed on exactly what "more than zero" means, Bosworth responded: "No seriously, you'd think this would be not

controversial in the industry we work in. More than zero pixels, more than zero seconds. [A] very good place to start for

what's an impression. It is not a universally-held opinion of what's an impression."

He added: "Some people have a standard that's higher than that, a lot of people in his room are buying on places that

maybe have a standard that's lower than that, and you should look into that."

Here, Bosworth appeared to be referring to the swathes of unchecked online ads marketers buy that are never actually seen

by a real person. The ad may be "served" through the website's ad server but it could have appeared at the bottom of a

page, or hidden in some other way, meaning a pair of human eyes never had the chance to look at it. Nevertheless, some

advertisers still prioritize buying volumes of impressions at cheap prices, rather than quality impressions that are guaranteed

to be seen, but come at a higher price point.

So even though Facebook's viewability metrics may not "look great," according to some advertisers, it's important to take

into account the wider picture. Accuen's Huening did also concede in the conference call that there is still some value in "ads

that aren’t even clicked that slowly, over time, increase awareness, consideration, that sort of thing." And marketers have

lots of different buying options on Facebook, including "100%-in-view impressions".

Viewability is certainly an important metric for advertisers to consider when measuring the impact of their online ads and the

quality of the platforms they are advertising on. It makes zero sense to pay for an ad that wasn't viewed by a human. But

ultimately, the most important metrics for advertisers to consider is whether their online ad campaigns — be they on

Facebook, or elsewhere on the web — actually had an impact on their businesses.

http://www.businessinsider.com/accuens-drew-huening-facebook-ads-viewability-for-less-than-1-second-2016-12

MediaMath will Offer Brands Ability to buy Influencer Marketing Programmatically

MediaMath on Tuesday said it’s partnered with ROI Influencer Media, a media firm that connects brands to celebrities’

influencer followings, to offer marketers the ability to purchase influencer marketing programmatically using industry-

standard CPMs. Marketers will be able to bid on influencer advertising programmatically, in real time.

MediaMath joins Google’s DoubleClick, Rubicon Project, PubMatic, and OpenX in making this service available to buyers.

ROI Influencer Media is initially providing MediaMath partners a mix of celebrities, along with up to 425 digital media stars in

fashion, style, and shopping.

The capability means that marketers can access celebrities to provide branded content on their social media pages, blog

pages, and Web sites.

After the initial offering, the program will be expanded so that marketers can connect with influencers in the travel, fashion,

food, entertainment, parenting, shopping, sports, technology, and TV categories. In addition marketers can include

influencer media packages for campaigns related to specific events like holiday shopping, the Super Bowl, Mother’s Day,

and Father’s Day.

Under the partnership, individual celebrities and their agents retain the ability to accept or customize offers to integrate

content for their respective audiences. ROI Influencer Media will also use so-called “micro-influencers” to guarantee specific

audience reach for brands.

ROI Influencer Media said it has an audience reach of 130 million consumers in the U.S.

"MediaMath's clients need to reach their customers across all channels, and social is one of the most important and fastest

growing channels," MediaMath VP of Solutions Development Michael Hauptman, told Real-Time Daily via email. "Working

with ROI Influencer Media, our clients can easily access native social media in real time through a variety of formats.”

A couple of examples of the influencers? Mike Conley, the NBA star, who has 1 million followers and friends on Facebook,

Twitter, and Instagram. Catt Sadler, correspondent for E! News, who has more than 1 million followers and friends on social

sites and her site theCATTWALK. And Regina King,who recently won an Emmy for her work on "American Crime," who has

more than 1.3 million followers on Twitter and Instagram.

http://www.mediapost.com/publications/article/291855/mediamath-will-offer-brands-ability-to-buy-

influen.html?utm_source=newsletter&utm_medium=email&utm_content=headline&utm_campaign=99214

Tronc Chairman Michael Ferro Buys 2.5 Million More Shares of Company

Tronc Chairman Michael Ferro has increased his stake in the company to nearly 25 percent — the maximum he can own —

with the purchase of an additional 2.5 million shares last week from a New York hedge fund.

Ferro and his Merrick Venture Management paid $15 per share, or $37.5 million, to acquire the shares Friday from HG Vora,

according to a Securities and Exchange Commission filing Wednesday. An activist investor that built a 10 percent stake in

Tronc, HG Vora earlier this year pushed for the Chicago-based newspaper publisher to sell the company.

HG Vora owned 3.625 million shares before Friday's sale.

A Tronc spokeswoman declined to comment Wednesday, while a Ferro spokesman did not respond to a request for

comment.

The sale occurred on the same day the Tronc board terminated a shareholder rights agreement, put in place in early May,

that created a 20 percent ownership cap meant to discourage Gannett's unsolicited bids to buy the company. Gannett ended

its six-month pursuit of Tronc on Nov. 1 after banks withdrew financing support to buy the publisher of the Chicago Tribune,

Los Angeles Times and seven other major newspapers for an agreed-upon price of $18.75 a share.

The shareholder rights plan was set to expire in May. In Friday's SEC filing, Tronc said it was in its best interests to

terminate the agreement early since the "threat posed to the company ... has abated."

Ferro, a technology entrepreneur who previously owned the Chicago Sun-Times, became chairman of Tronc and its largest

shareholder in February when his investment firm, Merrick Ventures, bought 5.22 million newly issued shares at $8.50 each.

Under the terms of the investment, Ferro is prevented from acquiring more than 25 percent of Tronc's outstanding shares or

selling his stake for three years.

He has been on a buying spree since Gannett walked away from the deal, adding more than 3.8 million shares at prices

ranging from $10.09 to $15 per share.

With Friday's purchase, Ferro owns 9.05 million shares of Tronc, or 24.8 percent.

http://www.chicagotribune.com/business/ct-ferro-buys-tronc-stock-1229-biz-20161228-story.html

The Media got a lot Wrong This Year, but the Criticism has Been Over the Top

I was right in July – but oh, so wrong in November.

In July, I wrote an amazingly intelligent column explaining how Donald Trump, then dismissed as an erratic underdog, could

win the presidential election. Voters were hungry for change, I wrote, and “when it comes to change, Trump can fairly claim

to own the brand.”

“As long as that’s true, Trump – for all his gargantuan flaws – has a real chance to win,” I argued.

If only I had quit there. Alas, I didn’t. By November, after hearing Trump brag on tape about grabbing women by the crotch, I

figured the campaign was effectively over.The only remaining questions, I wrote unwisely, were how big Hillary Clinton’s

victory would be and whether Democrats would win the Senate too.

Where did I go wrong?

Like most pundits, I put too much faith in the polls. The surveys forecast the nationwide vote pretty well, but state-by-state

polls were off – and in Wisconsin, Michigan and Pennsylvania, that made the difference.

If we’d simply failed to predict that Trump would win, that would have been one thing. Our true sin, though, was in failing to

remind our readers that our instruments of measurement are fallible. We forgot to be humble.

I still don’t think Trump has the experience or temperament to make a good president. But I’m going to try to take a lesson in

humility from the past year.

The only correct forecast, it turns out, was “too close to call.” But for those of us in the business of delivering crisp opinions

twice a week, that’s not a very satisfying conclusion.

Not much of an excuse.

That said, some of the postelection media flagellation has been over the top.

We’ve been scolded for not taking Trump seriously. That was true in 2015, but it wasn’t true this year. We not only took him

seriously; we took him literally. Now we’re told that was a mistake too.

We’ve been scolded (mostly by Clinton aides) for taking Clinton’s email problem too seriously. Sorry, but when a presidential

candidate is under investigation by the FBI, the media are going to take it seriously. The Clintonites’ real beef, a legitimate

one, is with FBI Director James Comey.

We’ve been scolded for ignoring white voters in the Rust Belt who were angry and desperate for change. That’s nonsense;

there was plenty of reporting on what Trump voters wanted. “What Trump's supporters hear from their champion is a

message of unbridled optimism — a promise that he can repair the economy, bring jobs back and Make America Great

Again,” I wrote in March. We heard what they were saying; we simply underestimated their numbers.

The challenge for pollsters now is determining why their surveys underestimated the Trump vote in the swing states. Their

big fear is that anti-establishment voters are refusing to respond to surveys more often than other people, a phenomenon

known as “differential non-response.” It’s hard to detect and hard to measure, so it’s hard to correct.

The challenge for the media is even more important: to earn our audiences’ trust back by doing our jobs better.

That begins with more reporting and less predicting. We’re pretty good at digging up facts and bringing them to light. We’re

not as good at forecasting what voters – or presidents-elect – will do in the future. That’s OK.

We need to keep verifying facts, no matter what critics say. It’s tempting to moan about “fake news” and conclude that fact-

checking has lost its value. But the flood of fabricated and false information being fed to citizens is a reason to redouble the

search for truth, not to slack off.

We should try to stop chasing shiny objects and focus on the most important issues. Trump promised voters that he’d grow

jobs, improve healthcare, drain the swamp and “be president for all Americans.” How’s he doing?

Here’s what I wrote on election night: “An optimist might argue that Trump won’t govern the way he campaigned: that he’ll

surround himself with seasoned advisors, embrace more traditional positions and satisfy himself with half-measures. But

Trump’s record offers little reassurance on that score.… It’s going to be a very rough ride.”

I still don’t think Trump has the experience or temperament to make a good president. But I’m going to try to take a lesson in

humility from the past year. I’m going to keep an open mind about our new president, look for signs of wisdom and virtue in

his administration, and give him credit if I find it.

After all, I’ve been wrong before.

http://www.latimes.com/opinion/op-ed/la-oe-mcmanus-mea-culpa-20161228-story.html

Walter Wick, who Helped Grow Family Newspaper Company, Dies

The former publisher of Arizona's Sierra Vista Herald, who with his brother grew Wick Communications into a media

company with publications in 11 states, has died. He was 85

Walter M. Wick died Christmas morning at his home in Hereford. He had pancreatic cancer.

His brother, Robert Wick, told the Herald that he was "as blessed as any brother could be with Walter's presence in my life."

The brothers bought their uncle's interest in the company in 1965. They took over full ownership when their father died in

1981. Their father, Milton Wick, and uncle, James, founded the company when they acquired the family's first newspaper in

1926 in Niles, Ohio.

"We at times had our differences but we each knew our love transcended all problems," Robert Wick said Tuesday. "In my

life this great soul is passed but his reverberation will ripple throughout all those who have known him."

Wick Communications is based in Sierra Vista, Arizona, and also publishes newspapers in Alaska, California, Colorado,

Idaho, Louisiana, Montana, North Carolina, North Dakota, Oregon and South Dakota.

Family members still run the company, with Walter's daughter, Rebecca Rogers, serving on the company's board of

directors and nephew Francis Wick serving as the president and CEO. Daughter Pat Wick is the assistant general manager

at the Herald/Review.

Walter Wick was a member of the Arizona Newspaper Association Hall of Fame and was publisher emeritus of the Herald

and the Bisbee Daily Review newspapers.

Wick was born in Youngstown, Ohio, on Feb. 4, 1931, and grew up in Niles, Ohio, before attending Kent State University

and the University of Minnesota. He began his newspaper career as publisher of the Niles Daily Times and later was

publisher of the Williston (ND) Daily Herald. He moved to Sierra Vista in 1974 and became publisher of the Herald. He and

his brother were co-chairmen of Wick News, Inc. for many years.

In addition to his two daughters and brother, Wick is survived by his second wife, Beverly, sons Robin, Jonathan and

Christopher, daughter Martha and numerous grandchildren. A son, Thomas, died at age 16 in 1973 and his former wife,

Joyce Wick, died in 2002.

Services are set for Jan. 6 in Sierra Vista.

http://www.thenewstribune.com/news/business/article123300719.html