Online Sales and the Economic Environment: Q2 Update

News regarding the economic situation continues to be relatively gloomy and has been reflected in the Q2 results that offline retailers have been reporting. For example JC Penny reported Q2 comp store sales declined 4.3% versus last year, Abercrombie and Fitch Q2 comp store sales were also down by 11% versus last year.

Wal-Mart US (+4.6% w/o fuel increase versus Q2 2007, in contrast to a 1.2% increase for Q2 2007 versus Q2 2006) continues to do well on the strength of its overall low price positioning and those product lines that contain necessities rather than discretionary items. This performance shows a continued trend of consumers trading away from mid-market stores down to off-price sellers.

Online sellers like Amazon (US net revenue +35% versus a year ago); Overstock (over 20% growth in gross bookings) and eBay (WW GMV +8%) continue to post healthy increases supporting the notion that online continues to be strong. However, online sellers are beginning to lower expectations for the second half of the year in spite of their success thus far.

In contrast to the strong online performance by some of the top retailers, the census bureau's Q2 ecommerce sales increase is posted at 9.5% versus Q2 2007 - the smallest increase ever and a 22% increase for Q2 2007 versus 2006.

Read more

Kayak arms travelers with information to avoid pain points

Kayak has launched information tools to provide travelers with details on some of the greatest pain points in travel:

Airline fees are extensive, vary between carriers, and change frequently. In response, Kayak has posted a Fees Chart which is particularly handy when comparison shopping includes checked bags fees.

The quality of some flights is, well, let's say "less than ideal". Kayak has launched a "Flight Quality Warning" which serves as a filter helping travelers identify short connections, long layovers, few seats remaining, turbo prop planes and those flights with an on-time record of 75% or less.

In response to record high gas prices, Kayak has launched a Miles Per Gallon (MPG) filter and Fuel Cost Calculator on the results page of its rental car search.

We talk a lot about how user generated content has redistributed power to travelers. It is true: social marketing has had a massive impact on online travel planning.

But sometimes, the power is simply in information. Kayak has given this to travelers by providing information tools that are timely, relevant, and easy to find.


Southwest: I'm ready for my close-up Mr. Kelly

In a report I wrote earlier this year called "Travel Blogs: Aligning Marketing Objectives with Blog Strategy", I talked about the potential of corporate blogs as a branding opportunity and the importance of allowing readers to post comments to maintain a conversational dynamic.

Today, Southwest Airlines launched an online casting call to find their next "Blog-o-spondent" for its corporate blog "Nuts About Southwest".

Readers are invited to create a one minute video explaining why they should get the position. Blog readers will vote for the top three entries who will compete at the 2008 BlogWorld Expo in Las Vegas.

This is a great example of how a corporate blog can be an interactive community builder and branding tactic.

Nuttiness will surely ensue — if you're interested in demonstrating yours, check it out.


Kayak and American Airlines part ways

Kayak has pulled AA fares from its website. Or AA has withdrawn itself from Kayak. Depending on which headlines you read.

American Airlines and Kayak disagreed about how AA fares would be displayed on Kayak — specifically if fares would be displayed via or through Orbitz or other partners.

The "CEO of a competing travel site" leaked information to TechCrunch last week suggesting that American Airlines would have to pay a double fee for its fares sold on Orbitz via Kayak. This doesn't makes sense as far as I understand it: Orbitz would pay Kayak for the lead, and American would pay Orbitz for the sale. This is a surprisingly oft-quoted comment given it doesn't make sense and unnamed sources from competing sites aren't exactly unbiased credible sources.

According to an American Airlines' spokesman, the airline wants to retain control over its distribution and it requests from Kayak the same linking policy as it has with Mobissimo and Farecast.

From Kayak's perspective, they can't offer exclusive listings to airlines and maintain relationships with online travel agencies who provide access to carriers with whom Kayak doesn't have relationships as well as cross carrier airfares.
Rock, meet Hard Place.

Read more