Harvey Norman raises white flag in online fight

Electronics and furniture retailer Harvey Norman will launch anonline store “within weeks,” signalling it will cease its public battle with the government over internet shopping, according to sources knowledgeable in the matter.

The insiders confirmed a News Ltd report that Gerry Harvey, the retailer's managing director, would soon unveil a "sizeable internet presence”.

“My heart's beating very strongly on whether we make any money out of it," he told News. "I haven't got any choice. I've got to cannibalise our stores."

The rise of online shopping has put pressure on Australia's so-called bricks and mortar retailers who face higher costs for staff, distribution and real estate than their internet rivals. The rising value of the Australian dollar has supercharged the trend of local consumers shopping online from retailers based in the US, UK and elsewhere.

That squeeze helped send store-based retailers REDgroup - owner of Borders and Angus & Robertson book shops - into administration last month. Owners of clothing retailer Colorado said today they would have to place the company into administration after a recovery plan was rejected by creditors.

Harvey Norman declined multiple requests for comment on the plans. The retailer extensively upgraded its website in late 2009, adding many needed functions for online sales  - except the ability for consumers to purchase directly.

Back down

Harvey Norman's decision to compete for internet sales comes after Mr Harvey set off a firestorm of in November when he singled out the federal government for allowing consumers to buy online merchandise valued up to a $1000 from overseas without paying GST.

The retailer later said he would create on offshore website that would skirt paying GST by shipping to consumers directly from China. Rival retailer Myer has already embarked on a similar plan.

Harvey Norman's planned move online is understood to be under the Harvey Norman brand name. It's also understood a compromise was reached between Harvey Norman and its franchisees to divide online revenue based on customer locations.

The electronics retailer's franchise model and extensive property holdings were long considered stumbling blocks to Harvey Norman's entry into the online market, industry sources said.

Southern Cross equities retail analyst Paresh Patel said the online move was an acknowledgment of the shifting retail environment.

In addition to eroding traditional sales, the shift may also put pressure on commercial property values, he said.

“If sales online take off then what does it mean for the store and the rents they can demand for the store owners?” said Mr Patel.

The structural shift in the way retailing works in Australia wasn't just an issue for Harvey Norman but for big property owners Westfield and Centro, as well, Mr Patel said.

eBay Australia head of communications Daniel Feiler welcomed Harvey Norman's move online.

“From eBay's perspective having more Australian retailers come online is a good thing because we think e-commerce is growing quickly and it's just going to grow the pie more quickly,” Mr Feiler said.

Story by Chris Zappone www.smh.com.au

Sensis shrinks the Yellow Pages

I’ve been wondering when Sensis would start to trim this old stalwart, now that the majority of people search for businesses on line.

Research has been around for a long time indicating the decreasing number of people that actually use the traditional form of Yellow Pages, so it’s not a surprising they would scale this down, wonder why it has taken them so long. 

They have still persevered though in charging small business owners like wounded bulls for the privilege of advertising in a medium that has been reaching less and less people everyday.

For those of you who would like to read the full story from the Sydney Morning Herald, I’ve included it below for you:

 

“The familiar sight of unclaimed phonebooks stacked outside apartment blocks will be around for a little longer - but it’s certain to be a smaller pile from next year.

Telstra subsidiary Sensis will scrap the second volume of the Yellow Pages print edition in response to competition from the internet, pushing its less profitable categories online as it tries to halt a slide in earnings.

Sensis will cut the second book by cutting the large number of categories - more than 2000 - which contribute just 11 per cent of Yellow Pages revenue but add sizeable bulk and cost to the print product.

Categories such as government administration, defence, forestry and agriculture categories are amongst those to have won less than 10 per cent of the advertising pie for Sensis and may be amongst those to be axed.

By contrast, more than half of Yellow Pages revenue comes from 230 ‘‘tier one’’ categories and nearly 40 per cent from 530 ‘‘middle tier’’ categories. Sensis considers the health and construction industries as prime clients with more than 40 per cent of market share.

Sensis claims that most of us still go to the Yellow Pages to look for a plumber.

About 10 per cent of Sensis’s costs come from printing and distributing the Yellow Pages.

With the Yellow Pages under pressure from online search engines, many users are either opting out of receiving the books or throwing the directories straight into the recycling bin when they arrive.

Sensis said that so far 20,000 Australians have asked not to receive the Yellow Pages directories.

The dominant online search engine Google is often criticised by small and medium enterprises for its AdWords function which is seen as poor for local searches. The emergence of classified websites such as carsales.com.au, realestate.com.au and Seek.com.au have also eroded the attraction of the Yellow Pages.

Sensis boss Bruce Akhurst said earnings would fall this year and for the next two years as costs are cut and it invests in its digital business. He said that while the print directory still had a ‘‘valuable role to play ... we recognise the shift to digital is likely to continue.’’

Telstra’s crown jewel never met targets set by former boss Sol Trujillo in November 2005 for Sensis to double revenue to $3 billion by 2011. Its ability to reach the forecasts were to be a key part in the success or otherwise of Telstra’s five-year turnaround strategy.

Financial analysts are disappointed at the division’s outlook. Mark McDonnell from BBY said it was unsatisfactory. ‘‘I think this reflects very poorly on the business and its management.’’

Story by Michael Evans www.smh.com.au

SMBs Turn to Social Before Search

Social media is the top online marketing channel for small businesses after company websites

According to the American Express OPEN and Search Engine Marketing Professional Organization (SEMPO) “Small Business Search Marketing Survey”, US small businesses recognize word-of-mouth as the top way their customers find them, followed by the internet and search engines.

The reliance on word-of-mouth—likely along with the low cost in dollars of participating—has led small businesses to make social media their No. 2 online marketing effort, after company websites. As of March 2011, 44% of respondents to the survey used social media for marketing, vs. 28% who used SEO and 21% who used paid search. Looking ahead, more small businesses planned to add social media marketing this year than either search tactic.

Other research supports the finding that small businesses have made social a top priority. A February 2011 MerchantCircle survey found over 70% of US local small businesses used Facebook for marketing, while only about two-thirds used Google and one-third used Bing.

While 57.2% of small business respondents told Ad-ology that social media was at least somewhat useful at generating leads, the MerchantCircle survey found local small businesses were more likely to say search engine marketing was an effective channel than social networks, at 40.2% vs. 36.7%.

Social may have an easier learning curve and require less direct spending by small businesses that are less experienced with online marketing—and the “must-do” factor helps as well—but time-tested online marketing methods like search should not be ignored. Search, in particular, unquestionably helps businesses get found by consumers right when they’re looking to buy.

Facebook Has Big Lead in Avg. Monthly Minutes

While Facebook.com trailed Google in unique US monthly audience during February 2011, the average Facebook user spent substantially more time on the site than any users of any other sites, according to new data from The Nielsen Company.

Google had a unique audience of about 147.9 million, 13% more than Facebook’s unique audience of about 130.8 million.

Time is On Facebook’s Side.

 

The average Facebook user spent about six hours and 36 minutes on the site during February 2010. That is roughly triple the average monthly time of two hours and 10 minutes on Yahoo, the site with next-highest average minutes total. Google ranked fifth at one hour and 15 minutes.

Multi-category, Map Sites Dominate Travel Category

Map and multi-category sites remain the most popular type of travel websites; Google Maps led the way with 67.3 million unique US visitors in February 2011, followed by MapQuest (24.7 million) and Yahoo Local (13.1 million). Despite the shorter month, both MapQuest and Yahoo Local saw slight increases in the average time visitors spent on their site.

Map sites account for four of the 10 most popular travel sites, while multi-category travel sites – led by Expedia, account for half of the top 10. Southwest Airlines, at sixth, is the sole airline represented in the top 10 during February 2011.

Multi-category travel sites TripAdvisor and Orbitz were the only other two among the top 10 to see an increase in the average amount of time (16.7% and 10.9%, respectively) visitors spent on the site compared to the longer January 2011 month.

Overall MOM Web Usage Down

Month-over-month unique audience and average time spent figures were down, in some cases by more than 10% (and approaching 20% for certain travel sites), for all the top 10 web brands and six of the top 10 travel sites. Overall US web usage figures for February 2011 demonstrate these trends follow the norm.

For example, in February, the average US web user had 54 sessions, down 8.4% from 59 the prior month. Domains visited dropped 8.1%, from an average of 99 to 91 per person. There were also declines in month-over-month average per person figures for web page views, PC time, duration of web page viewed, and active digital media universe. The current digital media universe stayed virtually flat at a little less than 300 million.

Google, Yahoo UA Down, Facebook UA Up from Feb. ‘10

While February being a short month is likely a reason for at least some of the generally decreased topline statistics compared to the prior month, a year-over-year comparison of Nielsen data shows Google had more visitors in February 2010. Google also held the largest unique web audience in February, but at almost 154 million it was about 5% higher than Google’s February 2011 audience.

Meanwhile, Facebook, ranked third among web brands in February 2010, grew its year-over-year unique audience 10%, from 118.8 million to 130.8 million. This allowed it to switch places with February 2010 number two Yahoo, which lost about 6% of its unique audience of 134.1 million, recording about 126.5 million in February 2011.

Facebook’s Diversification Drives Continued Growth

Site evolves into all-purpose web destination for messaging, video-sharing, gaming and more

 

Facebook, the largest social network in the US as well as the world, has been adding members at a rapid clip for the past two years. While that growth will moderate now that the social network is reaching a saturation point among many age groups, it will continue to gain audience for the foreseeable future.

eMarketer estimates that 132.5 million people in the US will be users of Facebook this year; by 2013, that number will increase to 152.1 million.

“Facebook’s recent successes—and its future prospects—are intrinsically connected with the site’s diversification,” said Paul Verna, eMarketer senior analyst and author of the new report, “Facebook Users: The Juggernaut Rolls On.” “What started out as a pure-play social network has evolved into an all-purpose destination that is beginning to replace email, instant messaging, video sharing, gaming and other activities that were otherwise scattered across unconnected venues.”

This growth will be driven primarily by increased Facebook use among older boomers and seniors. At the same time, teens and young adults will remain the site’s most active and engaged age groups. Compared with other age groups, they show extremely high penetration rates, spend more time on the site and have more friends in their networks.

The 18-to-44 age segment represents the largest demographic slice, 56.7% of Facebook users, and is a key target for marketers.

“With so many options to promote their brands on Facebook and its partner sites, marketers have little choice but to formulate a cohesive social media strategy,” said Verna. “Whether they advertise on Facebook, seed viral content on the site, build their digital presence through branded pages, use the ‘like’ button in their own content or mine data from users’ newsfeeds, marketers have a wealth of methods for monetizing the massive Facebook audience.”

A Look at the True Twitter Audience

Not as large as many optimistic estimates

Reports of Twitter usage can vary widely. The company itself reported that as of September 2010, 175 million accounts had been created. Firms that track unique visitors to Twitter.com tallied between approximately 20 million and 26 million per month last year.

But because of duplicate accounts, international users, “Twitter quitters” and the fact that many visitors to Twitter.com are simply reading public tweets and not truly using the service, those numbers are nearly all higher than survey data that asks internet users about their online and mobile habits.

“Twitter users are a sizeable and growing bunch, but their numbers are considerably smaller than those disseminated by many media outlets and Twitter itself,” said Paul Verna, eMarketer senior analyst and author of the new report, “Twitter Users: A Vocal Minority.” “In the US, this means tens of millions of users, as opposed to hundreds of millions.”

eMarketer estimates that 20.6 million US adults will access a Twitter account at least monthly this year, up 26.3% from 16.4 million last year. Growth will continue in the double digits through 2013, when nearly 28 million adults will be Twitter users.

This estimate is primarily based on a meta-analysis of surveys that polled people on their actual use of Twitter, regardless of platform.

A demographic profile of Twitter users from the Pew Internet & American Life Project found that 10% of US female internet users and 7% of US male internet users used Twitter. The service was decidedly more popular among younger adults, a result supported by other research.

Mobile is a large and growing platform for Twitter users. comScore noted that in January 2011, 7.8 million US mobile device subscribers used Twitter on their phones—a steep 66% increase over the previous January.

“Brands should consider the demographics and usage habits of the Twitter audience as they plan marketing initiatives and ad buys on Twitter,” said Verna. “Setting realistic expectations based on a thorough data analysis will yield better results than getting swept up in overhyped estimates.”

Days of Double-Digit Growth in Social Network Users Are Over

Reaching a saturation point in some age groups

Social networking now reaches most internet users in the US and has become an integral part of their lives. Thanks to the rapid growth of Facebook, updating status, posting comments and sharing links with friends have become routine activities for millions of people.

eMarketer estimates nearly 150 million US web users will use social networks via any device at least monthly this year, bringing the reach of such sites to 63.7% of the online population. But the days of double-digit growth in users are over as social networking reaches a saturation point. By 2013, 164.2 million Americans will use social networks, or 67% of internet users.

“With fewer new users signing up, social network users will be more sophisticated and discerning about the people and brands they want to engage with,” said Debra Aho Williamson, eMarketer principal analyst and author of the new report, “US Social Network Usage: 2011 Demographic and Behavioral Trends.”

Even as the social network audience has broadened to include a significant number of people from the Generation X, boomer and senior age segments, the youngest age groups are still the most represented, active and engaged. The enormous usage increases in some older age groups over the past two years will be less pronounced in the coming years.

Still, more than half of internet users ages 45 to 64 and over four out of five 12- to- 34-year-old online users will be regular social network users in 2011. The highest penetration level of all age groups will remain in the 18-to-24 age group, where 90% of internet users will use social networks this year.

“In 2011, social networks will need to cement their relationships with their users, particularly people ages 35 and older, in order to keep them engaged,” said Williamson. “Marketers and media companies can contribute to this effort by creating compelling user experiences that make people want to stay connected to social networks so they can gain access to experiences, deals or content they may not be able to find anywhere else.”