Advertising consultancy Communicus has revealed the findings of its 2013 holiday advertising research. A Communicus study of retailers' holiday 2013 advertising included Target, Sears, JC Penney, Macy's, and Kohl's.
Key findings of the holiday ad research include:
- the average holiday ad only managed to engage and make a brand connection with 6 percent of the population;
- Macy's scored the best in branding of any retailer studied;
- JC Penney enticed shoppers back for holiday deals, but the chain is still in a precarious position, showing the least loyal customer base of all retailers studied; and
- Sears showed significantly more churn than any other retailer, losing the most customers over the past year.
Communicus said it employs a longitudinal approach, meaning that the company interviews the same consumers prior to and following the advertising running in order to isolate the changes in consumer brand preference and behaviors that occur as a result of advertising engagement. A broad sample of 835 men and women who reside in the U.S. was surveyed for this research.
"The success or failure of holiday ads with consumers is a strong indicator of overall company performance," said Jeri Smith, president and CEO of Communicus. "Macy's bested all retail competitors with the branding of their retail ads, which is reflected in the company's preservation of its gross margin during the hyper-competitive, discount-heavy holiday season."
Communicus' research also revealed that the average holiday ad only managed to engage and make a brand connection with 6 percent of the American population. "Advertisers can learn from success stories like Macy's," said Smith. "They excelled at capitalizing on previously established brand equities on TV and social media, such as Harold the sales associate and their partnership with One Direction."
In addition to Macy's success, Kohl's Holiday Surprise commercial was liked by 97 percent of respondents (vs. the typical 69 percent likeability) due to the TV spot's high level of emotional appeal and brand connectivity. Kohl's has reported positive sales over the holiday season, meeting its gross margin guidance for the fourth quarter despite higher shipping costs for its e-commerce business.
The report shows that JC Penney's strong focus on moving product out the door, without attention to brand-building, might not help the retailer meet CEO Mike Ullman's goal of completing its turnaround in 2014. "JC Penney's campaign was successful at building shopper behavior, but did nothing to build affinity, loyalty, or brand image," said Smith. "The company needs to focus on building long term results rather than quick inventory offloading. Short term sales are great, but true recovery will require an eye on quarters — and years — to come."
Communicus' research also highlighted that most consumers were unable to connect ads from Sears to the brand, losing much potential impact for the retailer. Sears chairman Edward S. Lampert has recently described the holiday 2013 season as "tough to terrible" for the company, which posted a net loss of $1.4 billion for the year.