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MARKETING NEWS Consumers respond most to QR codes found in magazines ....................................................... 2

Global mobile ad revenue projected to grow to $24.5 billion by 2016 ...................................... 3

Hot print markets for 2013-2014 ................................................................................................ 4

Tablets see record in searches, surpassing mobile ad spend ....................................................... 6

PUBLISHING NEWS AMI and USA Today enter SIP partnership ............................................................................... 7

Hearst’s Clinton: Brand integration is driving more business .................................................... 8

Vogue again leads women's fashion for March-issue ad pages .................................................. 9

Advance Publications buys digital marketing agency, POP ..................................................... 10

POSTAL NEWS US Congress must help USPS grow revenues, says GAO ....................................................... 11

Why USPS is a viable alternative to FedEx and UPS .............................................................. 13

RETAIL NEWS 3 Major tech trends transforming the retail landscape .............................................................. 14

Amazon will build a third warehouse in California .................................................................. 15

Gigante and Petco in deal to open stores in Mexico and Latin America .................................. 16

JC Penney taps R/GA for digital work ..................................................................................... 16

ECONOMIC UPDATE

GDP: 3rd

quarter 2012: 3.1 percent.

Unemployment Rate: the unemployment rate was unchanged at 7.8 percent in December.

Consumer Confidence: which had declined slightly in November, posted another decrease in

December. The Index now stands at 65.1, down from 71.5 in November.

January 28th

, 2013

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MARKETING NEWS

Survey: Consumers Respond Most to QR Codes Found In Magazines

Staff Writer , Print In The Mix . 1/21/2013

Survey: According to a new Pitney Bowes report, 2012 QR Codes Use in the U.S. and

Europe: Getting ahead of the emerging QR code marketing trend, Quick Response (QR)

codes are “gaining increased acceptance among consumers in North America and Europe.”

Pitney Bowes surveyed 5,000 smartphone users – 2,000 in the U.S. and 1,000 in France,

Germany, and the UK respectively. The survey asked consumers whether they had used QR

codes and if so, where the QR codes had been located. Findings:

One in 5 Americans have scanned a QR code

• On average, 15% of all respondents say they have used a QR code. The study shows

Americans use of QR codes is slightly ahead of European equivalents, due to “almost a third

of the (U.S.) population” owning smartphones (U.S–19%, UK–15%, Germany–14%,

France–12%).

• Unsurprisingly, QR code use is an average 27% for consumers in the 18- to 34-year-old

group.

Location of QR codes most often scanned

• Consumers have responded most to QR codes found in magazines (15%), and on

consumer packages (13%) and mail pieces (13%), such as direct mail and bills and

statements.

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Global Mobile Ad Revenue Projected to Grow to $24.5 Billion by 2016

Tony Silber , Folio . 1/23/2013

While the mobile media landscape is still in a trial-and-error period for many publishers,

advertisers are jumping in headfirst. According to information technology research and

advisory company Gartner, Inc., mobile advertising revenue will reach $11.4 billion in 2013.

For the North American market that number is expected to climb to $3.8 billion this year—

an increase of about $700 million from 2012. By 2016, mobile advertising revenue

worldwide is expected to more than double to $24.5 billion and $8.8 billion in North

America.

“The mobile advertising market took off even faster than we expected due to an increased

uptake in smartphones and tablets, as well as the merger of consumer behaviors on

computers and mobile devices,” says Stephanie Baghdassarian, research director at

Gartner, according to a statement. “Growth in mobile advertising comes in part at the

expense of print formats, especially local newspapers, which currently face much lower ad

yields as a result of mobile publishing initiatives.”

Mobile search, which Gartner says includes paid positioning on maps and different forms of

augmented reality that will all be driven by a consumer’s location, will contribute to drive

mobile ad spending across the forecasted period. The company asserts that mobile display

ad spending will grow and take over mobile search, with Web display spending to take over

in-app displays by 2015.

These circumstances, says Gartner, creates a surplus condition because ad inventory is

generated at a pace considerably faster than most advertisers can shift their budgets, which

has been driving down unit ad prices—creating circumstances reminiscent of the early days

of Web advertising, in which cyclical advertising arrangements among websites produced an

inflated picture of revenue.

“Some correction in the growth rate must occur before demand for brand local advertisers

catches up with supply, and more sustainable economics support a faster growth rate

commensurate with consumer adoption,” says Baghdassarian.

By 2015, the Asia Pacific region will have the largest share of the $24.5 billion in global

mobile advertising revenue with $9.4 billion—North America will follow, with Western

Europe claiming $4.4 billion.

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Hot Print Markets For 2013-2014

Staff Writer , Print In The Mix . 1/22/2013

Printing Impressions has compiled their annual projection for the hottest print markets by

sector.

Packaged foods ranked top hot market

Packaged Foods ($1.15T, +4 percent; with $17.8B to print, +11 percent) ranked number

one, with a revenue forecast of $1,151 billion, thanks to a potential 4% growth rate for

2013-2014.

Printing Impressions cites varied drivers, such as, "smart printing in-pack, on-pack, near-

pack, in-aisle, on-cart, end-aisle, on-shelf, dangling down and topped with near-field QR

codes, Augmented Reality and nano-propertied inks and substrates that wink, blink, bubble,

scratch and talk...Also in the cart, containers, lids, sleeves, bags, wrappers and labels that

are two-thirds of this sector's print demand."

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Medical/Pharma and Publishing ranked number 2 and 3, respectively

Medical/Pharmaceuticals ($471B, +5 percent; with $14.6B to print, +8 percent) ranks 2nd,

while Publishing ($78B, +0 percent; with $11.6B to print, +6 percent) will grow to number

3, thanks to many more book titles are introduced via very-short-run digital printing and

finishing," and "tablets and other non-print delivery of literature are creating demand for

hard copies from new readers, on-demand of course." With this said, "newspapers, unable

nor willing to cross media, will continue in diminishment of circulation and page count, thus

folding FSI demand."

Now in its 34th year, Printing Impressions' "Hot Markets" is the longest continuous forecast

of the printing industry, by sector, region and product.

Tablets See Record in Searches, Surpassing Mobile Ad Spend

Press Release , Multichannel Merchant . 1/22/2013

The Search Agency, a global online marketing firm and the largest independent U.S. search

marketing agency, today released its quarterly State of Paid Search Report, which, among

other findings, reports that smartphones and tablets drove 23 percent of total clicks in the

fourth quarter of 2012, an 89 percent increase year over year. The quarterly report

analyzes aggregated client data from various industries on paid search marketing trends

across search engines and devices on a year-over-year (YoY—Q4 2011 to Q4 2012) and

quarter-over-quarter (QoQ—Q3 2012 to Q4 2012) basis.

"With ongoing advancements and multiple lower priced tablet options being introduced into

the market, it's no surprise traffic on these devices continues to increase," said Keith Wilson

, vice president of agency products at The Search Agency. "But, while our advertisers' spend

on mobile and tablets is increasing, it's not at the expense of desktop. In fact, data shows

that desktop searches remained level over the last two quarters, underscoring the trend

that search is steadily growing overall."

Additional findings from The Search Agency's State of Paid Search Report include:

Tablets see record searches; surpass mobile ad spend

The introduction of a number of new tablet models and record sales growth spurred on huge

growth in both tablet use and advertiser spend. Tablet click share in Q4 more than doubled

YoY and jumped 16 percent from Q3, and smartphones and tablets combined drove 23

percent of total clicks in Q4 2012, an 89 percent increase YoY. The last quarter of 2012

marked the first time in which share of spend on tablets exceeded spend on smartphones

(8.5 versus 7.1 percent of total spend).

Google and Yahoo!-Bing Network continue to see growth; Google leads in mobile

Search engine advertising continues to show healthy growth as impressions in Q4 2012

grew 11 percent YoY and total clicks grew 4 percent. Total clicks on Google increased 4

percent YoY and cost per click (CPC) rose 7 percent from $0.55 to $0.59. Bing also showed

a 4 percent growth in click traffic, with a 15 percent increase in average CPC YoY. Bing's

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mobile impression share and click share increased, but is still substantially less than

Google's impression and click share overall. Google continued to see more paid clicks

coming from mobile devices with 25.9 percent of its total clicks coming from tablets and

smartphones in Q4, compared to 12.6 percent for Bing.

Product Listings accounted for more than 14 percent of spend on Google

Product Listing Ads (PLAs) continued their strong growth in Q4 2012, accounting for 14

percent of retailers' total spend on Google in Q4, a 236 percent increase from the previous

quarter. Specifically, retailers spent more than 9 percent of their PLA budget on tablets and

smartphones, an 80 percent increase from Q3.

Retail surged on mobile during the holidays, but click volume declined YoY

In the retail sector, mobile click share increased from 14.3 percent in Q4 2011 to 26.1

percent in Q4 2012. Retail volume was the driving factor for Q4 growth in comparison to Q3

2012, with a 20 percent increase in click traffic. However, YoY click volume declined 6

percent.

"The holidays brought on big numbers in mobile retail searches but we saw click volume

decrease overall – possibly because of uncertainty from the presidential election and the

natural disasters that affected the Northeast," added Wilson.

To uncover key trends for the Q4 2012 State of Paid Search Report, The Search Agency

extracted client data from search engine advertising tools. The research sample included

advertisers who had 15 consecutive months of data with The Search Agency, and had an

established and stable business model from Q4 2011 to Q4 2012. All results are based on

U.S. campaigns only.

PUBLISHING NEWS

AMI and USA Today Enter SIP Partnership

TJ Raphael , Folio . 1/25/2013

Nowadays, publishers are looking for more and more opportunities to capitalize on existing

and new audiences. Brand extensions through special interest publications (SIPs) are just

one of the valued ways publishers are generating additional revenue from consumers and

advertisers, particularly on the newsstand.

American Media Inc. and USA Today have entered into an alliance to roll out 12 SIPs

together over the next 12 months. Under the partnership, the companies will publish these

12 special magazines that will carry a “Best Of” theme, distributing more than 400,000

copies to newsstands, airports and hotels.

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The editorial strategy and content for these special issues will be cultivated by teams at

both companies and will draw from the expertise of each organization, in addition to outside

subject-matter experts.

The overarching concept of the SIPs is to provide reader guides on what to buy or do across

multiple categories, including health, personal finance, travel, education and more,

according to a statement.

The Best of Diet and Fitness will be the first special issue to roll out, which is scheduled to

hit at the end of February 2013. The content will draw heavily from AMI’s health and fitness

titles, Shape and Men’s Fitness magazines.

All of the advertising sales and production for the issues will be handled by AMI. Companion

websites and digital applications for tablets and smartphones are also being considered.

“When you think of iconic brands across our national media landscape, USA Today has to be

at the top of the list,” chairman and CEO of AMI, David Pecker, says in a release. “Coupled

with AMI’s editorial, production and distribution strengths, we have a unique skill set to

create a series of magazines that will take the ‘Best Of’ concept to a new level in terms of

actionable information for today’s consumer.”

Financial terms of the deal were not disclosed. As of posting time, AMI could not be reached

for comment.

Hearst’s Clinton: Brand Integration is Driving More Business

TJ Raphael , Folio . 1/21/2013

Print may still be the breadwinner for most publishers, but multiplatform integration is now

what’s behind any meaningful growth in ad revenue. Bringing a brand’s content and

messaging across the entire media spectrum is where the fight for marketing dollars will be

won. At Hearst Magazines, that concept has helped propel revenue in the first quarter above

same-period 2011 levels.

“The whole idea of integration is driving business,” says Michael Clinton, president of

marketing and publishing director of Hearst Magazines. “Ten years ago, Cosmo’s audience

was about 17 million and change—that was it. Ten years later, the magazine audience is

around 18 million but there is another 10 million that live in the Cosmo universe. These are

women who go to Cosmo.com, that follow Cosmo on social media or they follow Cosmo on

Sirius Radio. The expansion of the audience, because of the other platforms, allows us to

work with advertisers in an integrated way through print, digital, tablets and social media—

it lifts all boats.”

While the company’s revenue continues to be derived predominantly from print,and,

Clinton adds, “Will be that way for as far as the eye can see,” the company has been

acquiring revenue sources from its other platforms by introducing cross platform, integrated

programs to advertisers.

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When doing year-over-year comparisons, Hearst is running up about 7 percent in ad pages.

Seventeen magazine will be up 50 percent in the first quarter; Food Network magazine will

be up 35 percent for the same period and Harper’s Bazaar will be up 20 percent as well. The

company now has 800,000 monthly digital subscriptions in the United States, of which 80

percent are new customers, as initially reported by FOLIO:.

Besides the company’s brands and content, Clinton says that Hearst’s success in advertising

and sales is driven by the new focus on audiences.

“Magazines are living, breathing organisms,” he says. “Good Housekeeping is a long

standing magazine and we went out into the marketplace to talk the consumer, the reader

and the target potential consumer over 18 months. We spent a lot of time getting insights

into what she wanted, what she liked and what she didn’t like. That led to the editorial

relaunch of Good Housekeeping. What has been the pivotal point or the pearl in all of this is

it’s our job to channel what the consumer is looking for. When we do that in the right way

through one-on-ones, focus groups and research, we provide enormous credibility.”

Treating magazine brands and content as audience driven, specific marketplaces that

capture the desire of readers is how Hearst will compete not only with rival brands, but for

coveted advertising dollars. Clinton points to HGTV magazine—it’s only published six issues

and has 725,000 print subscribers, 28,000 digital subscriptions and sells about 300,000

copies a month on newsstands, bringing its paid circulation to 1 million.

“It’s because HGTV magazine captures the consumer sensibility right now—it’s answering a

consumer’s interest and need,” he says. “If the consumer looks at magazines as a different

kind of experience than she does when she’s online or tweeting, that’s a good story. The

advertising world acknowledges that and is seeing that in an amplified way and that leads

us to being optimistic about 2013."

Vogue Again Leads Women's Fashion for March-Issue Ad Pages

Nat Ives , Advertising Age . 1/24/2013

Ad pages increased again in women's fashion magazines' important March issues, which see

designers introduce new collections every spring and only trail September in importance to

publishers.

March ad pages grew by double-digits percentages at a few titles and by smaller margins at

most others, but the gains are welcome amid a slow start to the year for monthly

magazines as a whole. Monthlies saw ad pages in their January and February issues slip

1.2% from the same period a year prior, according to the Media Industry Newsletter.

But Vogue's March issue will include 457 ad pages, more than any competitor and 3.5%

more than in March 2012, according to the magazine, which is part of Conde Nast.

Time Inc.'s InStyle came in second with 361 ad pages, a gain of 4% from last year. That

makes this the largest March issue in InStyle's 19 years, according to a spokeswoman. And

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Hearst Magazines' Elle ranks third with an estimated 338 ad pages and a 7% increase over

2012.

Larger percentge gains came for some of the titles a little further down the list. Harper's

Bazaar is running 330 ad pages in its March issue, up 21% and enough to set a March

record for Harper's Bazaar as well. Half the title's gains came from fashion, a spokeswoman

said, while half came from beauty. Harper's Bazaar is part of Hearst.

Conde Nast's W has 210 ad pages slated for March, an uptick of 3% and the biggest March

issue for W since 2008. Hearst's Marie Claire follows with 207.5 ad pages, yet another

biggest March yet and a 15.3% gain over 2012, the magazine said.

Time Inc.'s People StyleWatch is posting the second-largest year-over-year gain, 27%,

enough to get it to 172 ad pages, with new buys from brands including Bloomingdales,

Seven for Mankind and Sheiseido.

Conde Nast's Glamour will run 161 ad pages, an 11.5% decline from the year earlier,

although it has a tough comparison against last March, when it introduced a redesign and

saw ad pages leap 21.3%.

Cosmopolitan, part of Hearst, is running 130 ad pages in March, up12.6%. Teen Vogue, a

Conde title, will run 123.9 ad pages, up 31%. And Seventeen, one more Hearst title, will

have an estimated 92.4 pages, up some 66%, a spokeswoman said.

Advance Publications Buys Digital Marketing Agency, POP

Michael Rondon , Folio . 1/24/2013

Advance Publications, parent company of Condé Nast, has stepped up its efforts on two

fronts with the acquisition of digital marketing agency, POP. The company had been making

investments in marketing and M&A since last summer.

Terms were not disclosed.

Counting Nike, Microsoft, Target and Home Depot among its clientele, POP, founded in

1996, generated $35 million in revenues last year-a 30 percent gain on its 2011 earnings

and its tenth consecutive year of double-digit revenue growth.

The company, which will continue to operate independently, employs more than 200 people

between its Seattle headquarters and offices in Costa Rica. No layoffs or personnel changes

are expected. POP added 48 new positions in 2012 and expects to expand similarly in the

coming year.

"As the transition to a digitally-centered world continues, the demand for the services of

pure-play digital agencies will only grow stronger," says Steve Newhouse, chairman of

Advance.net, a division of Advance Publications, in a statement. "POP is incredibly well-

positioned to offer consumer brands something special."

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Adds POP CEO Bill Predmore: "With Advance we now have access to resources that will

support our expansion in North American and beyond."

The POP acquisition comes about six months after Advance made a $10 million investment

in social marketing firm, Unified. It also follows hints from mid-2012 that the company

would seek to increase its M&A activity moving forward.

Peter King Hunsinger, president and publisher of Condé Nast's Golf Digest brands, will serve

as liaison to POP.

Madison Alley Global Ventures advised POP in the deal.

POSTAL NEWS

US Congress must help USPS grow revenues, says GAO

Staff Writer , Post & Parcel . 1/21/2013

That is the central message of a new report from the US Government Accountability Office

(GAO) sent to Congress this week.

The report comes with a new session of Congress needing to restart the process of drawing

up and passing postal reform legislation this year in order to solve the huge financial

problems at the US Postal Service, with mail volumes currently falling “precipitously”.

The GAO sheds light on dozens of revenue-raising initiatives that the Postal Service has

been pursuing in recent years, but also warns that many have been abandoned for various

reasons including the fact that Congress decided back in 2006 to restrict USPS to providing

only products and services that could be firmly defined as postal.

The GAO report looks at suggested revenue-generating ideas that arose from conversations

between USPS and stakeholders since 2010.

The process identified more than 1,500 ideas, which were narrowed down into specific

projects with most potential, fitting with USPS priorities including making it easier to use the

mail, improving the value of the mail and growing the package business.

The Postal Service is pursuing 55 projects to increase revenue, 48 of which are extensions

of existing postal product lines and services like its Every Door Direct Mail saturation mail

programme and extended PO Box services. It has also been investigating experimental

postal products like prepaid greeting cards.

However, 25 other projects suggested by stakeholders have not been followed up.

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One reason behind some of the potential projects being shelved is that the Postal Service

was banned by Congress in 2006 from running non-postal services, although services up

and running before that year were allowed to continue, bringing in about $141m a year in

2012.

USPS wants the ban on non postal products lifted by Congress as part of this year’s hoped-

for postal reform legislation.

Similarly, USPS would like the legal power to start shipping alcoholic beverages and provide

more services to state and local government.

Abandoned initiatives

The Postal Service abandoned 12 projects because they were not expected to be sufficiently

profitable, or if it was believed there was a lack of customer demand.

Among the projects that USPS did not believe would offer a return on its investment were

an online Identity Management Service educating consumers about identify theft when

shopping online. Other projects were considered as requiring too high an initial investment,

including a domestic money transfer service and a retail bill-payment service.

Initiatives that were abandoned because of a perceived lack of customer demand included

plans to expand self-service passport kiosks in post offices, which was vetoed by the US

State Department on cost grounds. And, a plan to have post offices provide identity

verification services for the government’s Internal Revenue Service was similarly torpedoed

by the IRS opting for an alternative solution.

An initiative offering volume-based discount pricing for First Class Mail was ditched because

USPS believed mailers would not have the resources to increase their use of First Class Mail

sufficiently to achieve the discounts.

The Postal Service declined to pursue a hybrid mail service that would have involved

opening and scanning customers’ physical letters – with customers’ permission – and

sending messages to them in digital form. The GAO report stated that it was believed such a

service would “potentially damage the trust that customers have in the USPS brand”.

Similar services are provided to businesses by other postal services including Deutsche Post

and Swiss Post.

Another abandoned initiative similarly thought to risk trust in the USPS brand was a project

to provide companies with tools to better target their mailings to customers.

Congressional reforms

The thrust of the GAO report in its recommendations for Congress is that the Postal Service

should be freed up to provide a wider range of products and services as part of its efforts to

resolve its horrific financial situation.

USPS officials actively want to pursue more non-postal services, as well as the shipment of

wine, beer and spirits, the report said. They also want to provide more services for state

and local governments.

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“According to USPS, opportunities in these three areas could provide significant value to

customers, improve USPS’s financial position, and take full advantage of its resources and

competencies,” said the GAO, adding the proviso that fresh revenue-generating projects will

never be enough to fix all the USPS financial problems.

The GAO told Congress: “We continue to believe action to address the long-standing

challenges that hinder USPS’s financial viability, including a consideration of options to

expand its revenue generating potential, remains necessary.”

Why USPS is a Viable Alternative to FedEx and UPS

Tim Parry , Multichannel Merchant . 1/23/2013

Citing the fact that the United States Postal Service "cannot wait indefinitely for legislation,"

the USPS Board of Governors said last week that it has directed management to accelerate

the restructure its operations to further reduce costs in order to strengthen its finances.

That's good news for merchants who ship direct-to-customer, according to MCM Outlook

2012-13. According to the annual report, 56% of respondents said they felt the USPS is a

viable alternative to UPS and FedEx.

The USPS also gained ground as respondents' choice of primary domestic shipper: While

21.8% said the USPS was its primary domestic shipper of choice, that's up almost 1% when

compared to the MCM Outlook 2011 results.

The USPS continued to grow its package services business in FY 2012, which ended Sept.

30. Revenue from its package business increased by $926 million, or 8.7%, on a volume

increase of 244 million pieces compared to the same period last year, according to a press

release. Higher consumer spending, higher ecommerce retail sales plus increased marketing

efforts drove much of the growth in this segment of the USPS business during the last year.

Ken Wood, president and founder of freight auditing and consulting firm LJM Consultants,

says the USPS has its pros and cons for package shippers.

For example, Wood says USPS is very competitive when it comes to lightweight-residential

shipments with low value. Also, the USPS does not have the accessorial charges and

surcharges that UPS and FedEx have, such as address correction fee, residential fee and

fuel surcharges.

"The USPS has flat rate boxes that select shippers can benefit from," Wood said. "(But) the

drawbacks are a lack of guaranteed time delivery, inferior tracking system, lack of trust

when it comes to more expensive, time sensitive items."

Rob Martinez, president and CEO of transportation spend management firm Shipware, says

USPS cannot compete with discounted pricing of FedEx and UPS for the majority of

packages.

"If (you are shipping) 3 to 13 ounces, First Class parcel is a terrific choice. Even 1- to 2-lb

Priority Mail, or Flat Rate Box Priority Mail, can be an economic alternative to UPS and

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FedEx," Martinez says. "However, over 3 lbs., most volume shippers have significantly

better discounted pricing through FedEx and UPS."

Amine Khechfe, general manager and co-founder at Endicia, says it is interesting to see how

some shippers Endicia serves are migrating to deferred shipping using consolidators. This is

a joint service whereby private carriers such as FedEx SmartPost, UPS Mail Innovations and

DHL Global Mail use the USPS for the last mile.

"Both the USPS and private carriers win together," Khechfe says. "However, when looking at

the B2B arena, private carriers are still strong."

RETAIL NEWS

3 Major tech trends transforming the retail landscape

Staff Writer , Forbes . 1/23/2013

Another holiday shopping season has come and gone, and in its wake most major retailers

are scratching their heads, wondering how earlier-than-ever Black Friday openings

translated into retail’s smallest growth rate since 2008 (a measly 0.7 percent).

While a myriad of explanations have been offered for America’s softened interest in

shopping — bad weather and personal economic issues being the most cited — another view

is that traditional retailers are beating back against the technological revolution in retail.

Between our collective move towards e-commerce, the new technologies being introduced

into stores and an increasing reliance on smartphones and apps, retail is undergoing a

massive tech transformation.

Retailers of the future would be wise to come on board.

A changing tide: the online retail market’s steady growth

Just as predicted, the ease and comfort that online shopping affords us is in many ways

besting the traditional in-person shopping experience. Case in point: though many

traditional retailers struggled this winter, Amazon sold 306 items per second on Cyber

Monday (27 million purchases in total), setting a new record.

In general, the online retail market has grown steadily: It is now valued at $226 billion, and

is estimated to rise to $327 billion by 2016 — a 45 percent increase. Though retail giants

like Amazon and eBay may dominate the market, venture capitalists are pouring money into

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the sector, with flash-sales sites like Fab.com – which raised $105 million in July 2012 —

reaping the benefits.

1. E-commerce is replacing physical stores. In fact, e-commerce is set to replace

physical retail spaces altogether in some parts of the world. American companies like

Toys“R”Us, looking to gain a foothold in foreign markets, plan to open mobile-friendly retail

websites in places like China, Australia and France.

The way of the future is clearly to commit fewer resources towards opening brick-and-

mortar stores and instead, cultivating virtual ones. More and more companies are

acknowledging that this is where the real opportunity lies.

2. Smartphones are forcing retailers to keep prices competitive and websites

active. This e-commerce explosion is thanks in no small part to the increasing use of

phones and tablets for Web surfing and shopping. But our use of mobile devices isn’t limited

to shopping on-the-go or from the couch.

A study by Pew Internet shows that more than half of all adult cell phone owners used their

device to help with purchasing decisions while already in store. People either called friends

for advice, used their phones to look up product reviews or investigated the prices of items

they wanted. Smartphones give us direct access to the world’s information on nearly every

retail product, which forces retailers to keep their prices competitive and their Web presence

active — lest they lose out to more aggressive online retailers and flash sale sites.

Amazon will build a third warehouse in California

Thad Rueter , Internet Retailer . 1/22/2013

Amazon.com Inc.. will build a 1-million-square-foot warehouse in Tracy, CA, the e-retailer’s

third announced fulfillment center in that state.

Today’s announcement of the facility, to be located east of the San Francisco area, follows a

deal in September 2011 with state officials that requires larger retailers to collect sales

taxes from residents. Part of the deal called for Amazon to build more warehouses in the

state.

In October, Amazon opened a warehouse in San Bernardino. The e-retailer plans to open

another warehouse in Patterson this year. Amazon did not immediately say when the Tracy

facility would open; it is being built by Prologis, a development company. Amazon says the

Tracy warehouse will “create hundreds of full-time jobs.”

“We are grateful to be members of the California business community and to employ so

many hardworking and skilled Californians,” says Mike Roth, vice president of Amazon’s

North American operations. “We are excited to be growing in the state.”

Amazon is No. 1 in the Internet Retailer Top 500 Guide.

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Gigante and Petco in deal to open stores in Mexico and Latin America

Staff Writer , Chain Store Age . 1/25/2013

Mexican supermarket and restaurant operator Gigante has entered into a joint venture with

Petco Animal Supplies to open at least 50 stores in Mexico and other Latin American

countries over seven years, Reuters reported.

The first two Petco stores will open this year in Mexico City and Guadalajara, Gigante said in

a release to the stock exchange.

The financial terms of the agreement were not disclosed.

JC Penney Taps R/GA for Digital Work

Natalie ZmudaBio , Ad Age . 1/24/2013

JC Penney has tapped R/GA to handle digital marketing and e-commerce.

The shop was brought on board at the end of last year and is expected to work with the

retailer on a variety of digital projects. A JC Penney spokeswoman confirmed the

relationship, but declined to offer details on the scope of work.

According to an agency spokeswoman, "R/GA was brought on based on their history of

digital product, service and marketing innovation for a variety of retail clients."

R/GA counts Nike, American Eagle, Verizon and Barnes & Noble among its retail clients. It

also did a significant amount of work for Walmart, before splitting with the retail giant in

late 2011.

JC Penney previously worked with Razorfish on digital efforts.

Since parting ways with Saatchi & Saatchi a year ago JC Penney has relied on several

smaller shops, including Mother and Minneapolis-based Peterson Milla Hooks.

Nearly a year ago CEO Ron Johnson introduced his plans to reinvent the department store

to great fanfare. But he has been forced to adjust both the retailers' marketing and its sales

strategy amid slumping sales.

The upbeat, colorful marketing rolled out in the first half of 2012 made people rethink JC

Penney and was entertaining, Mr. Johnson has said, but it didn't reach the core customer

and didn't build the business. To that end, the brand shifted to more direct, product- and

price-focused messages in the second half. Mr. Johnson has also shifted money from TV ads

to print ads.