Black Friday 2022 eCommerce Stats

Black Friday 2022 was a record-breaking year for e-commerce. According to Adobe Analytics, online sales reached $9.12 billion, an increase of 2.3% over 2021. This was driven by a number of factors, including the ongoing COVID-19 pandemic, which led more consumers to shop online, and the increasing popularity of online marketplaces, such as Amazon and eBay.

The most popular categories for Black Friday 2022 were electronics, toys, and home goods. Electronics sales reached $2.5 billion, up 10% from 2021. Toys sales reached $1.2 billion, up 15% from 2021. And home goods sales reached $1 billion, up 12% from 2021.

Mobile devices were the most popular way to shop for Black Friday 2022. A record 48% of all e-commerce sales were made on smartphones (versus 44% in 2021). This was likely due to the fact that more people were shopping from home and on the go.

Overall, Black Friday 2022 was a successful year for e-commerce. Online sales reached a record high, and consumers were more likely to shop on mobile devices. This trend is likely to continue in the years to come.

Citizen Science & Research

A crowd-sourced virtual super computer may sound outlandish or based out of science fiction, but it is fiction no more. Meet Folding@home, created by Dr. Vijay Pande’s lab at Stanford University. The setup reads a lot like how bitcoin mining works, though, this is under the guise of "for the greater good" citizen science. Sorry MacOSX users, maybe your machine is just not cut out for this type of work. Windows OS is in the lead for active CPUs and GPUs. I am skeptical about all the bandwidth (millions of teraflops) this virtual computer needs. Someone is paying for that bandwidth, is it you?

On the other side of data, John Hopkins University released a newly updated dashboard that tracks COVID-19 cases in rich detail by county.

Supply Chain Disruption in Uncertain Times

What we are experiencing now is not the new normal. Uncertain times have always been around; some are triggered by macroeconomic factors (unemployment, inflation, economic output), others by the planet trying to kill off humans, terrorism, or poorly written/enforced retail and commercial <insert your industry flavor> industry laws at the state or national level.

Notable Supply Chain Disruptions:

• 20XX - global forest fires impacting raw materials sourcing and the construction industry
• 2007-2008 - residential lending banking crisis; LIBOR rate collusion and fraud; foreclosure filings increased by more than 81% in 2008
• 2011 - every company using Just-In-Time manufacturing was impacted, as well as all air travel within the US
• 2015 - Avian Flu outbreak in the US; millions of chickens destroyed, egg production drops significantly to cause egg prices to skyrocket
• 2017 - Cyclone Enawo struck Madagascar and wipes out 90-100% vanilla bean production in its Antalaha region and 80% of the crop in Sambava; price of vanilla skyrockets 4x its usual trading price; also, prior to the weather event, vanilla farms in other tropical countries had been cutting back on production in order to produce more lucrative crops such as coffee and palm oil
• 2019 - African Swine Fever - shrunk China's global herd by 55%, expected herd to decline by another 25%, and China pork production to fall by 10% to 15% in 2020;  impact to soybeans produced and exported by US farms for animal feed
• 2019-2020 - COVID-19 affects multiple industries everywhere

You might think that you're not impacted by vanilla bean production since you don't eat sweets, right? Natural vanilla products are in more than just dairy products (ice cream, yogurt, flavored milk), beverages, and baked goods. Vanilla flavor is in 18,000 global products including breakfast cereal, snacks, perfumes, skincare creams/lotions, and cosmetic products. Price per pound of natural vanilla was $300 in 2017, $600 per 2.2 lbs (1 kg) in 2018, and a slight improvement in 2019 as vanilla production gets better at $450 per kg. Remember when real vanilla extract was less than $10 per 16 fluid oz at Costco? Well that same bottle currently sells for $30 today. One ingredient can impact so many businesses.

2009-2019 Price of Vanilla
Image Source: Cook Flavoring Company

Fast-forward to today's supply chain issues among suppliers, distributors, and end-users (consumers, businesses).

What's up:

• companies that are deemed "essential"
• retail stores that offer delivery, take-out, or store pick-up (grocery stores, restaurants, 
• manufacturers of personal protection equipment (PPE) and ventilators
• companies that managed to pivot their production from whatever to PPE and medical supply (e.g., GE, Tesla, GM, beer/spirits manufacturing)
• subscription boxes w/ free or reduced delivery costs (e.g., meal prep kits, pre-made meals, DIY kits)
• Amazon - has now removed the product ban on non-essential products shipping to their warehouses
• Wal-mart - app downloads surpasses Amazon (14.4 mil in the US, 106 mil global uploads)
• software companies that create/support online learning platforms and video conferencing
• furniture and hardware companies that create/support remote office and work from home
• pharmaceuticals working on a vaccine for COVID-19
• distributed computing apps that rely on crowdsourced content, support, donations (e.g., Einstein@home, Folding@home)
• fabric wholesalers or retailers (e.g., JoAnn's)

What's down:

• everyone else not "essential"
• rideshare services (Lyft, Uber, etc.)
• homeshare/rental services (AirBnB, Vacasa, etc.)
• airport & travel services
• outdoor event venues
• movie theaters / entertainment industry
• live performances
• schools, churches, local government offices
• regional seafood supply & production - since dine-in restaurants and schools are shut down; seasonal seafood has nowhere to go
• consumer automotive sales (might have to transition to more online sales)
• ridership on public transit
• global oil demand & decrease in per barrel price
• amusement parks
• city/county parks that attract larger crowds
• trade shows and conventions
• indoor/outdoor festivals and parades (e.g., regional fireworks show)

The Age of Automation

I have mixed feelings about automation. The word even appears in my job title from time to time. The myth about automation is that somehow doing so will allow us to have more time to do other things. I've encountered many scenarios where a consultant or subject matter expert is brought into a workplace situation to help a company build out its marketing automation, only to not retain that talent for the long term.

But, this post isn't about marketing automation or my aforementioned rant about companies that fail to use it to build 1-to-1 relationships with their customers. Instead, I'd like to point out the concerns addressing automation's impact on the US trucking industry.

Snail Mail and Why We Love It

Why marketers love it is because it's a very well established mailing standard. Every property (and even those with just a box) has a postal address and you know that when spelled and annotated correctly, it has a 100% chance of getting delivered intact and mostly on time to the intended recipient, "to our neighbor", or "valued customer".

Why people love it is because it is an interactive communication piece with a tactile response. It's even better when it's personalized just for you; and, for the most part, it doesn't matter if it comes from a business or from a friend, although we like the latter part even better.

There are a lot of "standards" that just haven't died; although some who believe that everyone should be connected to everyone else online all the time want you to believe that it already has. The radio (118 yrs old). Fax machine (163 years, or for modern purposes 63 years). Libraries. Copiers. Telegrams. Land line telephones, etc.

Despite how traditional is trending against digital, according to the Direct Marketing Association's 2012 Response Rate report, the cost per order or lead acquisition costs were about the same regardless of the method used: direct mail ($51.40), postcard ($54.10), email ($55.24), and paid search ($52.58). Hmmm. Makes one wonder what's going on here.

It basically boils down to this:

Email	Mail	Phone
Lower response	Higher response	Highest response
Lower cost	Higher cost	Highest cost

Every marketing channel has its pros and cons, but what marketers and new entrants in the market need to be aware of is a) who you are trying to reach, and b) how much are you willing to spend on your campaign.

Coffee and Soda

The Atlantic reports that soda sales in the US are in a free fall, down 40%, while coffee sales have surged up by 50%. This is not surprising given the health backlash from consumers about sugary drinks; except coffee drinks don't have the same stigmas attached.

There are parts of that article that I did find peculiar. For starters, there's a bit about market share and consumer age. I wondered how many 13 yr olds it took to become a statistically significant data point. There are 14.3% of them (in the age group 13-24) that consume coffee drinks. And, there's no mention about the study or the survey size used. The National Coffee Association does track this, and in their study (or at least the preview of it) for 2012, roughly 3,000 adults in the US were surveyed about their coffee drinking habits, but the age cut-off is 18 or older. There's more about coffee drinking statistics at SBDCNet, a clearinghouse for consumer research.

Bring Your Own Device Strategy

Bring Your Own Device (BYOD) is an interesting customer acquisition strategy that is currently in use by T-Mobile, whether it is regarding a tablet, a SIM card mobile device, or other portable device such as a next-gen handheld GPS, wifi-enabled A/V, etc. The BYOD concept emerged just a few years ago and is gaining more traction among security software providers, as well as corporate and government work environments. 

By 2016, Gartner predicts that more than 1.6 billion smart mobile devices will be sold, two-thirds of the workforce will own a smartphone, and 40 percent of the workforce will be mobile. Mobile will change applications and how they are delivered.  By the end of the decade, more than 30 billion devices will be permanently connected (to the internet) and 150 billion will be occasionally connected. It will soon cost more not to monitor devices than to monitor them.

Chobani Market Share

Greek yogurt is as Greek as french fries are from France. Greek yogurt is a style of strained yogurt which has the consistency and flavor of whole milk yogurt; both of which have more protein per serving than their 1% or nonfat counterparts. I've had the opportunity to eat real Greek yogurt in Greece, so, I must say that all American-made yogurt pale in comparison. Some notable stats about yogurt:

• $7.6 billion: US yogurt industry in 2011
• 93%: average additional cost of Greek vs non-Greek yogurt
• 5 years: projected market gain of Chobani as a $1 billion business
• 25%: Chobani's market share in the US
• 2007: Chobani started selling yogurt cups at a grocery store in NY

Chobani has run only one ad campaign and relies heavily on word-of-mouth and social media buzz. While yogurt is marketed to a broad audience, women are the primary consumers who account for 63% of grocery sales.

Source: Steinmetz, Katy. "Smooth Operator: How Chobani spread Greek yogurt across America", Time, 2012-06-25, pp. 70-71

Hog prices: Up or Down

When evaluating market data, especially to promote a product or industry, it's important to look at data in context. A friend in Idaho had grumbled about the recent rise in menu prices at Five Guys Burgers, where a mere bacon burger and fries costed more than $13, and swore off visiting the restaurant ever again. I thought that maybe it's because of how much gasoline costs. Last time we were above $4.35/gallon for gas, food prices went way up at grocery stores. This is largely because distributors pass along prices to their customers, the grocery stores who then pass on those costs to consumers.

So take a look at this graph, which shows the month-over-month rise in hog prices from March to April of 2.9%. When data is laid out like this, it looks significant to us laypeople since we have no context for it nor do we know what factors are driving this rise.

In the following chart, I've expanded the chart to show hog prices for a year:

Quite a big difference, don't you think? Except, what online and traditional media outlets will report is the rise in pork prices but without the context that these prices are in cents per pound of what is sold in the US wholesale market. It then begs the question, why does pork cost about $7/lb at the grocery store. It's okay to blame marketing and advertising for this. Remember the 5 P's of marketing...it still costs money to bring various pork products (or any product) to market. 

Top US States that Benefit from Trading with China

The US-China Business Council (USCBC) released 2011 numbers recently. From the year 2000 to 2011, exports have risen quite a lot--from a mere $16.2 billion in 2000, to $103.9 billion in 2011.  The percentage change is simply amazing, considering the exchange rate between these two countries (1 yuan = 0.1584 US$). 

[PDF] Top US State Exporters to China, 2011:

		US State	2011 Exports	2000 to 2011 %Change	Top Exports to China
	1	California	$14.2 billion	300.00%	computers and electronics, waste and scrap, transportation equipment
	2	Washington	$11.2 billion	489.00%	transportation equipment, crop production, waste and scrap
	3	Texas	$10.9 billion	653.00%	chemicals, crop production, electronics
	4	Louisiana	$7.3 billion	690.00%	crop production, chemicals, waste and scrap
	5	New York	$4.5 billion	472.00%	waste and scrap, machinery, chemicals
	6	Illinois	$3.9 billion	631.00%	machinery, waste and scrap, crop production
	7	Pennsylvania	$3.5 billion	1177.00%	chemicals, machinery, minerals and ores
	8	Georgia	$3.2 billion	873.00%	paper products, transportation equipment, waste and scrap
	8	Oregon	$3.2 billion	936.00%	computers and electronics, chemicals, waste and scrap
	9	South Carolina	$3.0 billion	2261.00%	transportation equipment, waste and scrap
	10	Ohio	$2.7 billion	838.00%	machinery, computers and electronics, transportation equipment
	10	Michigan	$2.7 billion	1169.00%	transportation equipment, machinery, chemicals
	11	North Carolina	$2.6 billion	651.00%	machinery, computers and electronics, chemicals
	12	Alabama	$2.3 billion	1324.00%	transportation equipment, chemicals, crop production
	13	Massachusetts	$2.1 billion	316.00%	computers and electronics, machinery, waste and scrap

Psychology of Sharing, a NYT study

The Consumer Insight Group of the New York Times did a study on the Psychology of Sharing. Its content has disseminated in some form to various marketers involved with social media. If you were curious, these people are responsible for the "study" which has been quoted with the same subject title. A summary presentation appeared on SlideShare.

Methodology:

• In-person interviews in major metropolitan areas (New York, Chicago, and San Francisco)
• Quantitative survey of 2,500 medium/heavy online sharers

Observations:

• Sharing is not new, but in the information age we share more content with more users from more sources with more people, more often and more quickly
• Sharing acts as information management
• 85% say reading other people's responses helps them understand and process information and events
• 73% say they process information more deeply, thoroughly and thoughtfully when they share it

Motivations for Sharing:

• To bring valuable and entertaining content to others
• To define ourselves to others
• To grow and nourish our relationships
• Self-fulfillment ("We enjoy getting credit for it")
• To get the word out about causes or brands

6 Personas of Sharing:

• Altruists - share content to be helpful to others, and aspire to be reliable sources of information; prefers email and Facebook
• Careerists - well-educated sharers want to earn a reputation for bringing value to their networks, preferring content that is more serious and professional in tone; prefers  LinkedIn and email
• Hipsters - younger sharers “have only known life in the information age” and share cutting-edge and creative content, and they focus on identity-building; prefers Twitter and Facebook
• Boomerangs - sharers after validation and will respond to positive or negative responses; no strong preference but will share using Facebook, email, Twitter, and blogs
• Connectors - sees content sharing as a way to stay connected with others and make plans; prefers email and Facebook
• Selectives - put more thought into what they share and with whom they share it. Because their sharing is more personalized, they expect people to respond to and act on their content; Prefers email

I actually laughed at this part of the study:  Email is the #1 factor that influences sharing since it's perceived as more personal and private.

Holiday Marketing Ideas

And so it begins with Target announcing that it'll open its stores at midnight on November 25 (Black Friday).

Maybe you're just a small business or sole proprietor with limited shelf and store footprint, or you have an online business that's just starting up. Here are a few thoughts about making the upcoming shopping season the best experience for your customers:

Ease of use - make it easy and simple for customers to get in contact with you (telephone, email, Skype, Twitter, Facebook) or to shop at your store; make the research of the product with your online storefront easy to read on multiple formats (this means, no heavy use of graphics or Flash presentations); and add the personal touch of having a live person responding to these inquiries.

Comparable benefits - if you can't match or beat a competitor's low pricing or free shipping offers, then the next best alternative is to have better qualitative benefits such as superior customer service, faster turnaround times (from ordering to delivery), or alternative methods of shipping (maybe time isn't that big of a factor just as long as it gets to its destination within a reasonable amount of time; there is however, a big difference in shipping costs between FedEx, UPS, and USPS).

Get and respond to feedback whether it's positive or negative - Publishing a customer satisfaction survey link using Google Spreadsheet Forms or SurveyMonkey are a cost-effective way of capturing things you want to know about your products and the consumers that use them. You can use a free URL shortener like bit.ly or tinyurl to save on character printing space. Bit.ly even allows you to make custom urls if you have an account with them, for example: http://bit.ly/mktgurlblog

Final note:

Take industry revenue estimates with a grain of salt before comparing the potential of its impact to your niche market. In 2005, Forrester Research estimated that online retail sales would grow from $172 billion in 2005 to $329 billion in 2010. Then, in 2010, Forrester Research suggested that US online retail sales would grow by an average of 10% per year until 2014 from $172 billion to $248 billion. However, the US Commerce Department reported that 2010 e-retail sales in the US to be $165.4 billion. 

ComScore draws on online purchase data from its panel of about 1 million U.S. online shoppers. Commerce Department estimates are based on a quarterly survey of more than 11,000 U.S. merchants.

Private Company Valuation

Two of my grad skool classes (econ & finance) taught this topic as part of its curriculum and both professors had us neophytes look at quantitative data with respect to publicly traded companies; but what if you are trying to do a valuation of a privately held company. Can you train your intuition to be as good as the eons of financial valuations done by the professionals?

What do we know about a company? Does it matter who founded it or who their VC backers are? Does it matter more if end users actually like the products and services offered? And, how would you even know if it's the right time to buy? What can LinkedIn do that similar competitors cannot? What is their competitive advantage?

First things first. I haven't invested in the stock I'm about to talk about in this post. I thought about it quite a bit, but a SaaS vendor that is relatively new on the block and as one that embraces emerging technologies, it falls outside my personal criteria for investing in new stocks. I have been a basic end user since they launched; and I heard about it from a colleague. Word of mouth marketing is pretty powerful stuff. These days, it's nearly mandatory for business students at the undergrad or graduate level to have a LinkedIn profile. I have a user profile where I allow some public (non-login) access to; though you can see much more if you are also a member of the site. And, for the most part, for those of you without a dedicated site for your resume or portfolio, this is a good business networking site to connect with or show others in the industry or prospective markets what you are all about.

The site serves three distinct markets: human resource professionals, business end-users, and advertisers that want to market products/services to site users. For business networking sites, LinkedIn has few competitors using the freemium model, such as Germany's Xing (65 million members) or France's Viadeo (30 million members). Bloomberg, D&B, or Hoovers often provide basic data and company overviews. If we looked purely at the site being for mid- and executive level job seeker members, the site also competes for pocketshare with Execunet and TheLadders.

Over the last couple years, LinkedIn had been quietly rolling out web technology advancements and key partnerships with app add-ons, relevant ones that help sell a user's online business persona. Google AdSense ads have also recently appeared on the site too; though, they appear to be there to help the site pay for itself rather than be direct attempts at forming partnerships with key advertisers (though, the site has that feature too).

The target offering price of $45 is fair. It's the starved market that has pushed the price above $100/share. Is it sustainable at that price? Probably not, but investors don't care. If you're looking for a rational explanation for the jump in price, you won't find one on talk radio or the financial news hour on television. Investing isn't about rational decisions, it's based on GRIEF (according to one of my professors): Greed (Return, Income, Earnings) Fear. Anyhow, back to the topic at hand.

Companies typically go public to raise their status (more media coverage, more marketing), attract new customers, fund business expansions or R&D initiatives, and/or pay off existing debt and early-stage investors. Private company valuations are done to help sell the company, raise additional capital from investors, for a management buyout, for estate planning, for creating an ESOP plan (employee stock ownership plan), or for tax purposes.

To valuate a private company, one method is to look at the pre-IPO or SEC filings of existing competitors that are publicly traded or who are open about their earnings and revenues. The statements that privately-held companies make in these filings shed the best possible light into who they are and what they stand for; and are pretty good browsing for those who want to launch a similar concept or business.

A second method is to look at quantitative figures such as beta (how much market risk when compared to others in the industry), cash flow, or market capitalization (share price x outstanding shares). Here is a decent overview of how to calculate beta and total risk; this PDF link comes from Aswath Damodaran's NYU page.

A third method is to use Inc Magazine's valuation calculator or site resources. Industry data is already neatly aggregated for users to see sector averages for different types of businesses; and from the options of the drop-down box for industry, it is based on standard industry classification (SIC) categories, or its more modern counterpart NAICS. The interactive visual calculator looks at multiple quantitative data points such as industry median sales and revenues, net sales, gross profit, EBIT (earnings before income and taxes), EBITDA (earnings before interest, taxes, depreciation and amortization), discretionary earnings (operating profit, owner compensation, and noncash charges), and BVIC (book value of invested capital).

There are a lot more strategies out there beyond the top three listed here. To make an informed decision about whether or not to buy the stock of a privately-held company, you'll have to engage in more than one method of valuation.

US Oil Consumption and GDP

The price of gas is climbing towards $5/gallon in the US and it's making all of us consumers leery about commuting to work, driving between places for vacation, or consolidating food runs to the grocery store. Here's an interesting graph about oil consumption and GDP.

Source: US Department of Energy, US Bureau of Economic Analysis, Thomson Reuters

The chart suggests that the rising price of oil isn't having much of an impact on continued economic expansion, at least according to analyst Theodore Gilliland of Fisher Investments.

Secondary Market Research Tactics, part 1

Secondary market research consists of data points and report findings that were conducted and/or compiled by another source. It is typically used by students (for a college course that requires industry data about a company, a niche market, or an industry), businesses, and sometimes consumers who want to see who else is in the industry that could provide complementary products and services so they can make better purchase decisions. While research gathered this way is often inexpensive, it is also less accurate and doesn't provide a complete picture about a niche industry (e.g., Mazda aftermarket auto parts).

Perhaps a client or constituents within your firm have asked about growing market share or starting a new business line in other verticals or market segments. Maybe searching for this data validates or invalidates questions you have about a particular industry. Or perhaps, you are just looking for additional data to support primary research findings before presenting them to a client. All these are common uses of secondary market research findings.

There is a multitude of general use and industry sources where users can get a hold of published market data. The main types of secondary market research sources include government, trade associations (National Association of Realtors, National Automobile Dealers Association, commercial (e.g., JD Power & Associates, NPD, Nieslen), and national or international institutions (e.g., RAND) 
General use public sources:

• US Census Bureau - www.census.gov
• US Bureau of Labor Statistics - www.bls.gov
• National Institute of Health - www.nih.gov
• US Patent and Trademark Office - www.uspto.gov
• Science Accelerator - www.scienceaccelerator.gov
• Newspaper/magazine articles, press releases, and trade publications

Subscription-based sources:

• Lexis-Nexis (legal articles & risk assessment), Atypon (journal article search)
• Enerdata (energy research), OpenThesis (Theses, Dissertations & Academic Docs)
• Biomedical Search

When compiling secondary research data, don't forget to cite the source used and the link where it was found, this can be helpful in verifying your sources.

What's in your chocolate?

With the rising cost of raw materials, like cacao beans, political unrest along the Ivory Coast which produces 40% of the world's chocolate, and conflict in oil producing countries, it's no wonder that Nestle and other mass producers of chocolate confections are all too eager cut corners with the gold standard of chocolate. In 2007, the National Confectioners Association (chocolateusa.org) appealed to the FDA (Docket # 2007P-0085) to change the definition of what goes into chocolate, citing unfair competition by other country chocolate producers. The European Union allows up to 5% non-cocoa butter fats, like vegetable or soybean oil. This move is purely a financial one. Allowing the substitution of vegetable oil ($0.70/lb) for cocoa butter ($2.30/lb) and whey protein instead of dry whole milk would give US chocolate manufacturers an extreme competitive edge.

Last month cocoa futures averaged $3,472 per ton, rising from November 2010's average price of $2,910 per ton. This is how cocoa is trending today and it doesn't look good for consumers or producers:

Nestle started promoting an aerated chocolate product called Aero in the UK and Ireland this year, with a $24 million ad campaign to introduce textured aerated fillings (such as caramel and hazelnut) into some of its bars. If this ever comes to the US, how much fluff are you willing to pay extra for?

Related sites:

International Cocoa Organization
[PDF] FDA's Standards for High Quality Foods
Bloomberg's Businessweek, "Breathing More Profit into Chocolate Bars", 2/28-3/6/2011, p21

Who says you can't buy influence with money?

Top 10 industries (excluding party committees) that have contributed the most money from 2009-2010:

Lawyers/Law Firms	$242,198,213
Securities & Investment	$133,314,559
Health Professionals	$128,357,100
Real Estate	$126,922,328
Insurance	$69,110,521
Public Sector Unions	$58,949,366
Oil & Gas	$55,357,690
Education	$50,580,808
Tv/Movies/Music	$46,922,077
Lobbyists	$46,912,681

Taxes are obviously not high enough. $2 trillion in donations! See who influences financial reform at Influence Explorer.

Other sites like this:
Open Secrets
Follow The Money
Transparency Data

Price of Oil Rises..

TV/radio commentators have been saying for a while now that civil unrest in Libya is causing oil speculators to drive up the price of oil. If only they used Wikipedia, or had access to data resources such as the CIA World Factbook to look up the top oil producing countries. For those of us without a subscription to the Oil & Gas Journal, this will have to do.

To put this into perspective, in 2008 Libya was the 18th largest oil producing country, a step behind the UK. Heck, I didn't even know the UK produced oil, but I knew the US did from prior research into this topic. Domestically we produce a tiny amount of oil, which is made into all sorts of petroleum products.

It's stupid. That's what it is. The average price of US regular gas has risen to about $3.50/gallon. Btw, there are 44 gallons to the barrel. You can do the math (plus tax) on how much it really costs us for gas. You may think that oil from the Middle East plays a big part in US crude oil consumption, but it really doesnt. The top two countries we import from are... get this: Canada and Mexico. The third is Saudi Arabia, and the rest of the list can be seen here.

Global Agriculture and the Rising Cost of Food

Artificial shortages, increased consumption, weather-based crop destruction, and rising prices of raw materials can be seen throughout the US and the global economy, especially with civil and political unrest on the rise in the news. NPR recently published an article about rising food prices, but what it doesn't tell you is that there has also been a global decrease in food production.

Let's look at wheat production.

Abdolreza Abbassian, senior economist at the FAO, predicts that wheat prices may keep rising until the summer because importers are speeding up purchases to outrun inflation. Prices are more likely to stay high or go higher in the next six months than decline. (Source: Businessweek) That's right, countries are hoarding wheat and a few have already banned exports of their domestic wheat.

Market Factors:

As for US consumers of wheat products, since we're able to procure wheat from a multitude of domestic and foreign sources, we'll probably not notice the price shift, nor the inflation that it is bound to come with it.

See also:
Pooley, E. and Revzin, P. "Hungry for a Solution", Businessweek, 2/21-2/27/2011, p. 7-9

Cyber Monday / Black Friday Report 2010

Coremetrics, an IBM company, just released its benchmark cyber monday / black friday report for 2010. For those of you who don't work in retail, online or in a brick-n-mortar storefront, cyber monday refers to the first Monday after Thanksgiving weekend, and Black Friday is the day after Thanksgiving, supposedly among the busiest online and offline shopping days of the year as many retailers try to capture their 80% of annual revenues before the end of the year.

Here are some of the stats from the report:

Cyber Monday 2010 vs Cyber Monday 2009 (year/year): 

Consumer Spending Increases: Online sales were up 19.4 percent, with consumers pushing the average order value (AOV) up from $180.03 to $194.89 for an increase of 8.3 percent.

Luxury Goods Report Big Gains: Affluent shoppers opened their wallets wide, driving sales of luxury goods up 24.3 percent over 2009.

Shopping Peaks at 9:00 am PST/Noon EST: Consumers flocked online, with shopping momentum hitting its peak at 9:00 am PST/noon EST. But consumer shopping maintained stronger momentum throughout the day than on Cyber Monday 2009.

Cyber Monday 2010	Items Per Order	Avg Order	Cart Abandonment	New Visitor Conv. Rate
US Retail	6.41	$194.89	63.68%	4.41%
Apparel	2.36	$128.13	65.32%	3.20%
Dept Stores	3.03	$117.49	76.98%	2.90%
Health & Beauty	4.20	$68.30	59.74%	5.94%
Jewelry	1.57	$384.25	67.73%	1.02%
Sport Apparel & Gear	3.02	$120.60	72.78%	2.19%

How people shop shows more than a willingness to do business online; it also shows the level of comfort that users have with transferring financial data over an unsecured, wireless network. Two notable trends of holiday season 2010 are:

Social Shopping: The growing trend of consumers using their networks on social sites for information about deals and inventory levels continued on Cyber Monday. While the percentage of visitors arriving from social network sites is fairly small relative to all online visitors—nearly 1 percent—it is gaining momentum, with Facebook dominating the space.

Mobile Shopping: Consumers continue to use mobile as a shopping tool. On Cyber Monday, 3.9 percent of people visited a retailer’s site using a mobile device.

Afterthoughts:

I thought that there would be a bigger difference in YOY stats among all the retail channels--mobile, web, in-store, etc., but there weren't. 2010 did slightly better than 2009 and on average, the segments performed about the same as the prior year.

Health and Beauty segment performed the best overall with the highest new visitor conversion rate (5.94%) and the lowest cart abandonment rate (59.74%). The Jewelry segment had the highest average order ($384.25) with the fewest number of items per order (1.57). Department stores are still lagging behind all other segments with the highest cart abandonment (76.98%), though this could be due to any number of reasons (poor user interface, unsecured web forms, price not right, timing not right for the consumer, the deal just wasn't sweet enough, first time customer unwilling to trust retailer with financial information, etc.). 

What isn't covered in the report is the methodology used and the companies used to generate these stats.

Bounce rate is relatively low for the US retail market which means that via web/email/mobile, relevant messaging was used to entice a consumer to a point-of-sale action. Higher bounce rate typically indicates blogs (doesn't take much time for people to skim through text), irrelevant search keyword hits, or the wrong offer was used with an attractive call-to-action from an email or mobile message.

eCommerce can be more profitable than other sales or partner retail channels, especially if your website is managed in-house. Profit margin tends to be higher, operating costs are presumably lower, and if it is a well-oiled machine, you don't pay your website double time to work through the holidays.

Also, the more shopping that's done on cyber monday, the less they are doing actual work at work.

Read the report
Coremetrics' executive summary