Different players prevail, with Walmart dominating TV advertising; Kohls implementing a strong social strategy; and Amazon attracting the greatest attention from online shoppers

Introduction

With each passing day on the calendar, the Winter Holiday shopping season builds towards its conclusion. The stakes are obviously high for the retail industry, with close to 20 percent of annual sales occurring during this year end period.

Accordingly, the holiday marketing and advertising programs that retailers are deploying (and continue to adjust) carry the demanding expectations of their architects and stewards: Cut through the competitive noise, effectively use paid media advertising and owned media assets to connect with the right audience, and convert these prospects into actual purchasers whether in-store or online. It’s a complex equation with many dynamic variables.

The final results for Winter Holiday 2014 are still to come. However, a meaningful body of data are already available that describe some important trends from the first half of the season – and perhaps indicate who the ultimate winners will be. For this report the fundamental question we have asked is, “Which retailer won the first half?” as applied to three areas:

Which Retailer Won The First Half?

• Offline – in paid TV advertising
• Digital – in social media engagement with the brands’ Owned Media content
• Online – in share of time spent on brands’ shopping sites

Thirteen retailers are analyzed in this report – the e-tailer Amazon plus twelve traditional, big-box, brick-and-mortar merchants (Walmart; Target; Kmart; JC Penney; Kohls; Macy’s; Sears; Home Depot; Lowes; Best Buy; Toys “R”Us; and Old Navy). The period examined is November 3 – December 1 (the end date is Cyber Monday). The data analyzed for this report has been provided by Kantar Media, our sister company Millward Brown Digital and our partner Unmetric.

TV Ad Spending: Chasing Walmart

Holiday ad spending on television from Walmart and Target during the 29 day period ending on Cyber Monday (Dec. 1) easily surpassed all other retailers. The companies spent an estimated $94.9 million and $72.1 million respectively on commercial time. Budgets for the other major retailers we examined ranged from $44 million (Macy’s) to $17 million (Old Navy).

Department stores and mass merchandisers accelerated their spending rates during the final eight day stretch which included Black Friday and Cyber Monday, concentrating 31-46% of their budgets during the Nov. 3-Dec. 1 timeframe into this critical and hyper-competitive period.

Black Friday themes dominated ad messaging during the days preceding the big sales event and for most retailers these references continued through the following weekend, advising the TV audience that Black Friday deals were still being offered.

Mentions of “Cyber Monday” (or “Cyber Week”) promotions hit the airwaves in force by Saturday 11/29 and accounted for a majority of the ad spend by Toys “R” Us, Lowes, Home Depot, Macy’s and Sears during the five days from Thanksgiving through Cyber Monday. Of the twelve retailers analyzed, eleven had TV spots explicitly pitching online “Cyber” events. In 2013, only three of these advertisers employed the tactic.

With a steadily rising proportion of Winter Holiday sales moving online and Cyber Monday now an entrenched (and expanding) retail marketing event, a threshold seems to have been surpassed this year with more big box retailers investing a larger chunk of offline TV ad spend to directly promote online deals and drive shoppers to their e-stores. These 2014 TV campaigns were still secondary to the primary strategy of using offline media to deliver customer into the brick-and-mortar locations but the shifting message mix is unmistakable.

TV Ad Winner: Walmart. While Target made aggressive attempts to catch up this year, Walmart clearly retains the top slot when it comes to share of voice. Interestingly, Walmart was less directly focused on Black Friday and Cyber Monday messaging this year, as part of a deliberate attempt to get consumers to shop earlier. However, its huge budgets meant that the volume of Black Friday and Cyber Monday ads it ran could easily outstrip smaller but more focused competitors like Toys “R” Us.

Social Media Engagement: Home Depot, Kohls and Macy’s Stand Out

As consumers spend more time and more money online, major retailers are increasing their effort to capture and convert this audience. One of the digital marketing channels being used is social networks, including Facebook and Twitter. Retailers are publishing branded content on their owned pages – generically referred to as Owned Media – to stimulate social media interactions, achieve brand engagement and move consumers along the pathway to purchase.

To provide insights on how retailers’ Owned Media holiday campaigns performed, Kantar Media has partnered with Unmetric, a social media intelligence company that specializes in Owned Media. Unmetric analyzed its database of brands’ activity on Facebook and Twitter to report on the volume of postings and the quality of engagement with Owned Media content published by top retailers during the period of November 3- December 1. In addition to the same twelve retailers from the TV ad spending analysis we asked Unmetric to also include Amazon.com because of its dominant position as a web e-tailer.

As a group, these marketers published more than 3,600 pieces of content on their Facebook pages and Twitter accounts during the time frame. As expected, volume rose sharply during the last week, which included Black Friday and Cyber Monday, and accounted for 40 percent of total postings.

Twitter had a 3:1 advantage over Facebook in total publishing volume. The heavy tilt reflects structural differences between the two networks. On Facebook, because of the way the newsfeed is structured, marketers are dependent on the audience themselves to do the work of bringing a content piece to the top of a user’s newsfeed by interacting with it. Quality of content is more decisive than quantity.

On Twitter, quantity trumps quality. The platform is about threads of conversation linked together by replies or common hashtags and no single tweet by itself is a standalone piece of content. In addition, tweets are consolidated and presented to a user in sequential order as a single feed. Each new piece of content pushes its predecessors down the list, reducing visibility and exposure. Frequent distribution of a brand’s message is required just to be seen, much less engaged with.

Among individual retailers, Amazon was the most prolific publisher with 894 total content pieces on the two social networks, or 24 percent of the group total. Kohls, Sears, Kmart and Walmart rounded out the Top 5.

Publishing quantity does not predict effectiveness or guarantee a strong ROI. Therefore Unmetric also analyzed the number and type of audience response to these Owned Media efforts and computed comparative engagement scores. The metric weights interactions with brand content such as Likes, Comments, Shares (Facebook) or Favorites, Replies, Retweets (Twitter) based on their importance. The weighted sum of interactions is then divided by the estimated number of brand fans and followers who actively receive and view such content. The scores are then fit to a scale of 0 to 1000 where a higher number indicates higher engagement.

The first insight to emerge was the different evolution of engagement scores on Facebook versus Twitter across time. Engagement with the average piece of Owned Media content on Facebook declined during the week of Black Friday but sharply increased for Twitter. This pattern was not universally true for every one of the thirteen retailers examined. We observed that brands’ tweets during the critical Black Friday sales week generally contained more call-to-action elements such as polls, contests or sweepstakes which helped boost the number of replies and retweets and directly lifted engagement scores. Broadly speaking, this was the catalyst for the spike in Twitter engagement.

Looking further at the critical sales period of November 24 – December 1, we found a wide spread in engagement scores for individual retailers and evidence that size of the paid media ad budget doesn’t automatically confer online social success. This trend may be due to differing strategies between TV and social channels. In our research, we found that TV spots from Home Depot, JC Penney, Macy’s, Kohls and Toys “R” Us all featured Twitter hashtags. However, only Toys “R” Us (#LetsPlay) and JC Penney (#justgotjingled) consistently integrated the same hashtag into both their paid TV ads and the content published on Facebook and Twitter. The other retailers used different hashtags in their TV and social media messages, and the top two spenders on TV advertising – Walmart and Target – didn’t use hashtags in their ads at all.

In terms of social engagement, generally, the marketers with higher scores on one social network also had higher scores on the other. And the same was true at the low end of the scale. Looking at Facebook and Twitter together, these retailers stood out as the winners at achieving engagement with their Owned Media content:

What message strategies did the winners employ to help them achieve separation from their rivals during the big shopping week? Home Depot’s top-scoring Facebook posts promoted holiday decorations for the home and a Black Friday sales preview. Decorations also got a big push on Twitter and were complemented by a series of sales price offers for a few of its in-house brands.

Kohls used a different strategy on each social network. Its most effective Facebook content was general, non-product specific announcements about in-store and online deals. On Twitter, it scored with a trivia sweepstakes offering “a chance to win a $500 gift card”. The call to action mechanism required respondents to submit their entries by including two branded hashtags, thus connecting and extending the conversation more broadly across its base of Twitter followers.

Finally, Macy’s leveraged its branded sponsorship of the Macy’s Thanksgiving Day Parade with a flurry of posts and tweets during the event that included photos of popular celebrity talent and balloon characters. Much of this achieved exceptional engagement scores, particularly in comparison to other Macy’s content during the week which had a more conventional focus on store merchandise. However, this high level of engagement may not necessarily translate into sales success given its less commercial focus.

Social Media Engagement winner: Kohls. While Amazon may have published more content through its owned channels, it scored quite low in engagement. Kohls clearly got more value from its social media strategy, with an action-oriented Twitter approach complemented by more informational Facebook postings. See this post on Thanksgiving and social media for more holiday insights.

Online Shopping: Amazon Laps The Field

Engaging consumers is important for retailers – but the ultimate goal of their winter holiday campaigns is of course to attract consumers to their stores and sites. How did the retailers in our study perform at drawing online shoppers, particularly during the competitive weekend of Black Friday to Cyber Monday?

For insights on this question, Millward Brown Digital (a Kantar company) examined online usage data powered by The Compete Panel, a consumer clickstream panel that provides insights into the internet browsing population. Panel members have installed metering software on their PC devices which captures time-stamped clickstream data and reports on sites visited and amount of time spent. (Usage on mobile devices was not measured for this study).

Millward Brown Digital analyzed the period of November 3 – December 1 and tabulated online traffic within a universe of 128 shopping sites that included Amazon.com plus the twelve brick-and-mortar retailers referenced throughout this report. The key metric is share of attention and it reports the amount of panelists’ time spent on an individual e-tail site as a proportion of their total time spent on the defined universe of all 128 shopping sites. The metric is calculated based on daily activity, can be rolled up to multi-day periods and enables direct comparisons between websites. It reflects how consumers allocate their online shopping time, not their wallets.

It’s no surprise that Amazon.com captures an overwhelming share of attention from online shoppers. During the pre-Thanksgiving period, its average daily share was just under 30 percent. The other twelve websites combined had about a 13 percent share of time spent and were led by Walmart, Best Buy and Target.

The influence of Black Friday and Cyber Monday on digital shopping behavior is revealed when looking at the day-by-day results starting with Thanksgiving Day. Many people took advantage of the holiday to browse store websites, whether to make online purchases, research in-store Black Friday deals or otherwise plan their weekend shopping. Compared to the pre-Thanksgiving benchmark, Amazon’s share of attention dipped 7 percent on Turkey Day while many other retailers saw increases of over 100 percent from their smaller bases.

On Black Friday the pattern changed. Amazon rebounded to a level above its pre-Thanksgiving baseline. Most of the competitor’s sites declined from Thanksgiving Day but still landed well above their pre-holiday benchmarks. Saturday and Sunday (Nov 29-30) saw further attention gains for Amazon and further erosion at competitors as consumers took stock of the unpurchased items on their shopping lists and updated their plans.

Amazon’s share of attention on Cyber Monday jumped again and hit 34 percent. Competitors also earned more attention as compared to Saturday-Sunday but lagged their high water marks achieved on Black Friday. Interestingly, the websites for two specialty retailers (bestbuy.com and toysrus.com) each got a relatively bigger lift in attention on Cyber Monday than each of the department stores and mass merchandisers. Meanwhile, despite very high levels of engagement in social media, Home Depot’s site actually declined below benchmark levels throughout the period of measurement.

Since share is a pie that is always defined as 100 percent (even though its absolute size may expand or contract), the online attention share gains that Amazon and the big box retailers achieved from Thanksgiving to Cyber Monday means smaller rivals suffered share losses. However, Amazon’s ability to grow share of attention day-over day and widen its already significant advantage versus primary competitors during the core four day stretch from Black Friday through Cyber Monday is a noteworthy achievement.

Online shopping winner: Amazon. Without the option of brick-and-mortar shopping, the online traffic battle is one that Amazon can’t afford to lose – and it hasn’t. Even on its slowest day (Thanksgiving), it had triple the share of attention of its nearest competitor and more traffic than all the other retailers we studied combined.

Summary

The Winter Holiday period is the most important part of a retailer’s marketing calendar and it is characterized by fierce competition for share of awareness, share of attention and, ultimately, share of wallet.

Retailers use a variety of levers to try and win the period against competitors and have multiple scorecards by which to evaluate and track outcomes. In this report we examined a group of thirteen major retailers on three dimensions for the period of November 3 – December 1 (roughly the first half of the holiday shopping season) and observed a range of outcomes.

Walmart and Target were the dominant TV spenders, especially during the week of Black Friday sales events. Their budgets outpaced rival department stores by factors of 2x-4x. However, this dominant share of voice offline did not carry over to social marketing efforts on Facebook and Twitter, where engagement levels with the brand’s Owned content severely lagged the top tier scores achieved by Home Depot, Kohls and Macy’s.

Amazon was the most prolific publisher of social content among the retailers examined, but its heavy focus on product specific deals did not resonate as strongly with its user base as some of the softer and more entertaining content from the top engagement department store brands, proving that quantity and quality don’t necessarily align. Instead, Kohls emerged as a savvy user of social media, with a thoughtful strategy that led to high levels of consumer engagement.

However, Amazon remained the magnet destination for online shoppers, commanding more than a 30 percent share of total time spent on shopping sites. The big-box traditional retailers were able to take share of online attention during the Black Friday weekend from smaller merchants but couldn’t make inroads into Amazon’s substantial advantage.

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