Following Best Buy’s announcement that it would shutter 50 retail locations as part of an effort to cut costs, one market research firm said it believes the decline of big-box consumer electronics retailers in the United States and Europe will continue. Canalys said in a report on Tuesday that it expects more big-name retailers to follow in the footsteps of companies like Best Buy Europe, CompUSA and Circuit City, which filed for bankruptcy in 2008 before closing all of its retail stores and selling its online brand. Big-box retailers’ failure to adapt as aggressive online companies such as Amazon grew rapidly is seen as the root cause of their woes. “They were hit by a perfect storm of competition from the Internet and supermarkets,” Canalys CEO Steve Brazier said in a statement. ”They lost too much business to competitors undercutting them on price and failed to respond to the many attractions of Amazon’s online approach, such as its vast stock ranges, peer reviews, recommendations, free delivery and excellent returns services.” Brazier continued, “Today’s consumers are even willing to browse for a book in a local store then order it from Amazon at a higher price simply because they want Amazon to understand their entire library, to optimize future recommendations. This is more than ‘showrooming’ – this signals a fundamental shift in consumer perception of value.” Canalys’s full press release follows below.

Expect more famous retailers to disappear

- Services and experiences are key to retailers’ survival

Shanghai, Palo Alto, Singapore and Reading – 17 April 2012

Market analyst firm Canalys predicts that many more consumer electronics (CE) retailers will follow in the footsteps of Surcouf, Best Buy Europe, CompUSA and Circuit City and disappear from the high streets of Europe and the United States. It describes this as a result of the ‘strategic failure’ of the CE retailing model and warns retail chains in other segments to learn quickly from the mistakes of the fallen.

‘They were hit by a perfect storm of competition from the Internet and supermarkets. They lost too much business to competitors undercutting them on price and failed to respond to the many attractions of Amazon’s online approach, such as its vast stock ranges, peer reviews, recommendations, free delivery and excellent returns services,’ said Canalys CEO, Steve Brazier. ‘Today’s consumers are even willing to browse for a book in a local store then order it from Amazon at a higher price simply because they want Amazon to understand their entire library, to optimize future recommendations. This is more than “showrooming” – this signals a fundamental shift in consumer perception of value.’

As well as online competition, supermarkets have proved adept at running promotions for low-end products, and are often willing to sacrifice margins to bring customers to their stores.

‘They have the locations and the parking facilities, which make them convenient for collection of heavier items,’ added Alastair Edwards, Canalys Principal Analyst. ‘Many have good online tools and make deliveries too. In many countries, supermarkets are the most efficient route for shipping a single product in high volumes.’

Edwards pointed out that CE retailers in Europe saw their lucrative extended warranty business undermined too, by the EU’s insistence that two-year warranties be provided as standard. Their content businesses have also collapsed: most have seen their vinyl, film, film processing, CD and now DVD businesses disappear. Kindle and iPad apps are removing opportunities in books and magazines. Software applications and gaming are transferring to online and download businesses too.

‘The future for multi-specialists, such as the much respected FNAC in France, looks as bleak as for the more hardware-focused companies,’ Edwards continued. ‘CE retailers now offer very few benefits to consumers. They appeal to the rapidly shrinking proportion of people who are unable or unwilling to shop online. They enable impulse buying and they allow somebody to pick up a product immediately, rather than the next day. But that’s about all.’

The growth of Internet shopping should not have come as a surprise to the retailers; the threat has been building for 15 years or more. Yet, as a group, they failed spectacularly to respond. Most now have online stores to complement their shops, but in nearly every mature market they are the distant followers, not the leaders, of Internet retail.

‘The window of opportunity has closed; they will never catch up with the Internet specialists. They started late, under-invested and could not build a culture to excite talented programmers. Their Internet businesses were held back by them not wanting to undercut in-store prices,’ Edwards said. ‘They wrongly assumed the benefits of “touch and feel” would continue to protect them, but a new generation of consumers has grown up with a different way of thinking. The success of online fashion retailing is a strong indicator that no category is safe from this change in behavior; other retailers should take note.’

What path, then, should the remaining CE retailers take? Some will look towards Asia, but Canalys points out that, although Internet shopping is still a niche activity in some countries, for example Thailand and Singapore, it is booming in China. It is not wise, therefore, to assume safety in emerging markets.

Canalys suggests that some may explore becoming genuine showrooms – that demonstrate but do not sell – but this will require funding from vendors. Some will no doubt look at Apple and argue that its iconic stores have redefined modern retailing. They provide a luxury setting in prestigious locations and offer a range of services from free hints and tips, to paid-for classroom training. They partner with artists and create events to attract the crowds. They offer one-to-one sales engagement to maximize accessory and upsell opportunities. They also integrate closely with the online shop by offering mixed services such as ‘reserve online, collect tomorrow’.

Few can doubt the wisdom of Apple’s approach while it sits on its perch as the most successful company in the world, but the attraction of the stores to Apple may be more about the company’s ability to control the brand and customer experience than anything to do with retailing economics. Chris Jones, Canalys VP and Principal Analyst, raised a key question:

‘Do the stores attract the customers, or do customers come simply because Apple’s products are so popular? Competitors should be extremely cautious before trying to emulate Apple’s approach. The product ranges of most other companies are unlikely to generate customer traffic at anything like a similar rate.’

Canalys predicts that, by 2020, many city centers will look quite different from today, with many famous retailers disappearing.

‘People will seek retail premises out for a number of reasons: for experiences centered around entertainment, relaxation and education; for events, such as celebrity appearances, performances and signings; for socialization and sustenance; and where brand exclusivity or the nature of specialization or service required cannot be met by online alternatives,’ said Edwards. ‘A great innovator may find a way to build a next-generation outlet that can shift CE goods while offering some of these experiences, but it is more likely that the majority of CE retail chains in mature markets will simply disappear within the next five years.’

When Apple’s new iPad failed to sell out at retail stores in and around New York City, we wondered if launch day turn-out was lower than expected or if Apple had finally managed to build enough iPads to meet consumer demand. We got our answer on Monday afternoon when Apple announced that it had sold more than 3 million new iPads in less than four days. While retail locations still seem to have a fair amount of inventory on hand, Apple’s online store still shows that all iPad models are out of stock. Shipping quotes for new iPad orders improved on Tuesday, however, dropping from an estimated delivery time of 2-3 weeks to 1-2 weeks. Apple’s new iPad features a 2,048 x 1,536-pixel Retina Display, a new dual-core A5X processor with quad-core graphics, a 5-megapixel camera and optional 4G LTE connectivity. BGR reviewed the new tablet on Monday and said it improves upon the iPad 2 in almost every way, keeping Apple not one but two steps ahead of the competition.

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Consumer technology hardware sales in the United States fell 0.5% percent in 2011, ending the year just shy of $144 billion according to market research firm The NPD Group. Roughly 60% of all sales were from PCs, TVs, tablets, eReaders, mobile phones and video game hardware, NPD said. Computers generated the most revenue with nearly $28 billion or roughly 20% of sales, with tablets and eReaders doubling sales to $15 billion in 2011. For the second year in a row, Apple led all consumer electronics brands and was the only one to increase sales during the holiday quarter, posting a 36% year-over-year increase. The Cupertino-based company accounted for 19% percent of all sales, almost double second-ranked Hewlett-Packard. Best Buy was the top retailer for the second year in a row, followed by Walmart and Apple respectively, with Staples and Amazon tied for fourth place. Online, direct mail and TV shopping channel sales increased 7% and accounted for 24% of all sales, up from 22% in 2010. Read on for NPD’s press release.

Apple tops 2011 as the #1 Brand and Best Buy is the #1 Retailer

PORT WASHINGTON, NEW YORK, FEBRUARY 13, 2012 – U.S. consumer technology hardware and consumable sales* fell just one half of a percent in 2011 ending the year at nearly $144 billion, according to leading market research company The NPD Group.

Nearly 60 percent of all sales in 2011 were driven by the top five categories; PCs, TVs, tablets/e-readers, mobile phones, and video game hardware, according to NPD’s Retail and Consumer tracking services and Mobile Phone Track. PCs (notebooks and desktops) generated the most revenue with nearly $28 billion in sales, accounting for almost 20 percent of sales, but that figure was a decline of 3 percent from 2010. Tablets/e-readers were the clear winner in 2011, nearly doubling sales to $15 billion in 2011.

“U.S. hardware sales growth is becoming harder and harder to achieve at the broad industry level,” said Stephen Baker, vice president of industry analysis at NPD. “Sales outside of the top five categories fell by 8 percent in 2011 as consumers shifted spending from older technologies to a narrow range of products.”

Apple benefited from this shift as it was the leading consumer electronics brand for the second year in a row. Among the top five brands Apple was the only one to experience a sales increase, posting a 36 percent rise over 2010. By the critical fourth quarter Apple accounted for 19 percent of all sales dollars, almost twice as much as number two Hewlett-Packard.

Top 5 U.S. Brands Based on 2011 Revenue

Brand Sales Growth/Decline
Apple 36%
Hewlett-Packard -3%
Samsung -6%
Sony -21%
Dell -17%
Source: The NPD Group/Consumer Tracking Service, Retail Tracking Service, and Mobile Phone Track

At the retailer level, Best Buy came out on top once again, followed by Walmart and Apple. Staples and Amazon tied for fourth place to round out the top five, a repeat of 2010.

Sales through online, direct mail, and TV shopping channels jumped 7 percent and accounted for 24 percent of all sales, up from 22 percent in 2010. Sales through these non-retail channels captured 25 percent of industry revenue in the fourth quarter of 2011.

“While in-store sales fell about 2.5 percent in 2011, the growth in online volumes for retailers meant that retail name plates still accounted for well over four of every five dollars spent on CE hardware in the US,” said Baker. “Despite their sales strength, retail stores still face serious challenges in 2012 as volumes in the traditional CE categories, which once carried these stores, continue to slide. It shouldn’t be forgotten, however, that a large majority of mobile phones and tablets/e-readers (the two fastest growing CE categories) have mostly been driven through in-store experiences.”

Tablet owners spend big bucks online according to a new report. In fact, the new study published by Adobe Digital Marketing Insights suggests that tablet owners spend 50% more per purchase than smartphone owners on retail purchases, and over 20% more than PC users. The study found that smartphone owners spent about $80 per purchase on average but tablet owners spent an average of $123. Laptop/PC users spent $102 per retail purchase on average in 2011. Tablet owners are three times more likely to make a purchase on a retail website than a smartphone user is, too. Adobe Digital Marketing Insights gathered its data from more than 150 U.S. retailers last year and more than 16.2 billion transactions made online.

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Last week rumors began to circulate that Apple was planning to open itsy bitsy retail stores in as many as 25 Target locations. During a presentation on Thursday, Target confirmed that it will have 25 stores featuring “special displays” of Apple products. Neither company has provided details on the partnership, however it will likely be similar to Apple’s deal with Best Buy, which sells the company’s products from dedicated mini stores within more than 600 Best Buy locations.

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Apple may be planning to open retail stores inside as many as 25 Target locations, according to recent rumors. The partnership would likely be similar to Apple’s deal with Best Buy, which sells the Cupertino-based company’s products from dedicated mini-stores within more than 600 Best Buy locations. AppleInsider said Friday that Apple is likely interested in Target so that it can offer its products in markets that are too small for a full blown Apple Store. Apple’s senior vice president of retail operations, Ron Johnson, once served as an executive at Target, so there is a new link between the two companies that could add some weight to this rumor.

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Best Buy on Friday reported weaker than expected revenue for the five weeks ended December 31st, 2011. The company noted $8.4 billion in revenue, which was flat compared to the same period last year but included a comparable store sales decline of 1.2%. The company’s international segment generated $1.9 billion in revenue, a 1.7% decrease and a 4.3% drop off in store sales. Its domestic segment generated $6.5 billion in revenue, which was up 0.4% from the same period last year but it also represented a 0.4% drop in store sales. Read on for more.

“Based on our performance in December we continue to expect to achieve our annual guidance, despite customer traffic that was lower than expected until the last week before Christmas, which resulted in December revenue that was slightly lower than our expectations,” Best Buy CEO Brian Dunn said. “The actions we have taken during the year to improve our performance online and in key connectable products such as tablets, eReaders and smart phones continued to deliver strong growth in December.”

Cell phones helped drive domestic revenue and mobile-related store sales increased 20% over December of last year. Domestic tablet and eReader store sales jumped into the low triple-digits and domestic online channel sales increased 26%. Best Buy’s full press release follows below.

Best Buy Reports December Revenue of $8.4 Billion

Continued strong growth online and in connected products including mobile phones, tablets and eReaders
Company reaffirms fiscal 2012 EPS guidance range

Fiscal 2012 December Revenue Summary
(U.S. dollars in billions)
	Revenue		Revenue % Change		Fiscal Dec. 2012  Comparable Store Sales % Change(1)		Fiscal Dec.  2011  Comparable Store Sales % Change(1)
Total company	$8.4		0.0%		(1.2%)		(4.0%)
Domestic segment	$6.5		0.4%		(0.4%)		(5.0%)
International segment	$1.9		(1.7%)		(4.3%)		(0.1%)

December Highlights

• Domestic segment online channel sales increased 26 percent
• Domestic segment tablets and eReaders comparable store sales each increased low triple-digits
• Domestic segment mobile phones comparable store sales increased 20 percent

MINNEAPOLIS, Jan. 6, 2012 — Best Buy Co., Inc. (NYSE: BBY), a leading multi-channel global retailer and developer of technology products and services, today reported revenue for the five weeks ended Dec. 31, 2011, of $8.4 billion, which was flat compared to the prior-year period and included a comparable store sales decline of 1.2 percent.

“We built off of share gains in the third quarter to deliver December sales that we believe compared favorably to the retail CE industry,” said Brian J. Dunn, CEO of Best Buy. “Based on our performance in December we continue to expect to achieve our annual guidance, despite customer traffic that was lower than expected until the last week before Christmas, which resulted in December revenue that was slightly lower than our expectations. The actions we have taken during the year to improve our performance online and in key connectable products such as tablets, eReaders and smart phones continued to deliver strong growth in December. I want to thank our employees for their significant dedication to serving our customers during this key holiday period.”

The company’s Domestic segment generated $6.5 billion in revenue for fiscal December, an increase of 0.4 percent when compared with the prior-year period. The Domestic segment’s revenue performance was driven by the addition of new stores in the past 12 months, partially offset by a comparable store sales decline of 0.4 percent. Domestic segment areas of comparable store sales growth included tablets and mobile phones within the Computing & Mobile Phones revenue category, eReaders within the Consumer Electronics revenue category, and the Appliances revenue category. Tablets and eReaders each delivered low triple-digit comparable store sales gains during the month. Mobile phones had a 20 percent comparable store sales increase during the month, driven by strong smart phone sales. These increases were more than offset by comparable store sales declines in other areas, including gaming within the Entertainment revenue category and digital imaging within the Consumer Electronics revenue category. Gaming and digital imaging both experienced low double-digit declines in comparable store sales. The company noted that televisions experienced a mid single-digit comparable store sales decline within the Consumer Electronics revenue category. The company also noted that overall Domestic segment inventory levels finished fiscal December in line with its expectations.

The Domestic segment online channel delivered a 26 percent revenue increase compared to the prior-year period, driven by a strong traffic increase and momentum from share gains achieved in November.

The International segment’s fiscal December revenue totaled $1.9 billion, a decrease of 1.7 percent versus the prior-year period. The revenue decline was driven primarily by a comparable store sales decline of 4.3 percent and unfavorable fluctuations in foreign currency exchange rates, partially offset by the addition of new stores in the past 12 months. The International segment comparable store sales decline was driven by comparable store sales declines in our stores in Canada and Europe. Sales results for all countries in the International segment other than Canada are reported on a two-month lag.

Company Reaffirms Fiscal 2012 Annual EPS Guidance Range 
The company is confirming its annual adjusted diluted EPS guidance in the range of $3.35 to $3.65 as previously disclosed in its press release dated December 13, 2011. This guidance includes the estimated impact from fiscal 2012 share repurchases and excludes the gain on the sale of investments and previously announced charges, which are comprised of the purchase of CPW’s share of the Best Buy Mobile profit share agreement, a non-cash impairment charge to reflect the write-down of Best Buy Europe goodwill, restructuring charges (primarily associated with U.K. big-box store closures) and other related charges.

The company’s annual guidance reflects basic EPS loss calculated in accordance with accounting principles generally accepted in the U.S. (“GAAP”) in the range of ($3.52) to ($3.17). This loss is primarily driven by charges attributable to Best Buy outlined above which total approximately $2.6 billion in fiscal 2012. Please see table titled “Reconciliation of Non-GAAP Guidance” attached to this release for further details.

(1) Best Buy’s comparable store sales is comprised of revenue at stores, call centers, and Web sites operating for at least 14 full months as well as  revenue related to other comparable sales channels. Relocated, remodeled and expanded stores are excluded from the comparable store sales calculation until at least 14 full months after reopening. Acquired stores are included in the comparable store sales calculation beginning with the first full quarter following the first anniversary of the date of the acquisition. The portion of the calculation of the comparable store sales percentage change attributable to the International segment excludes the effect of fluctuations in foreign currency exchange rates. The method of calculating comparable store sales varies across the retail industry. As a result, Best Buy’s method of calculating comparable store sales may not be the same as other retailers’ methods.

Forward-Looking and Cautionary Statements:
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that reflect management’s current views and estimates regarding future market conditions, company performance and financial results, business prospects, new strategies, the competitive environment and other events. You can identify these statements by the fact that they use words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “project,” “guidance,” “plan,” “outlook,” and other words and terms of similar meaning. These statements involve a number of risks and uncertainties that could cause actual results to differ materially from the potential results discussed in the forward-looking statements. Among the factors that could cause actual results and outcomes to differ materially from those contained in such forward-looking statements are the following: general economic conditions, changes in consumer preferences, credit market constraints, acquisitions and development of new businesses, divestitures, product availability, sales volumes, pricing actions and promotional activities of competitors, profit margins, weather, natural or man-made disasters, changes in law or regulations, foreign currency fluctuation, availability of suitable real estate locations, the company’s ability to react to a disaster recovery situation, the impact of labor markets and new product introductions on overall profitability, failure to achieve anticipated benefits of announced transactions and integration challenges relating to new ventures, consummation of the transaction with Carphone Warehouse Group plc and unanticipated costs associated with previously announced or future restructuring activities. A further list and description of these risks, uncertainties and other matters can be found in the company’s annual report and other reports filed from time to time with the Securities and Exchange Commission, including, but not limited to, Best Buy’s Annual Report on Form 10-K filed with the SEC on April 25, 2011. Best Buy cautions that the foregoing list of important factors is not complete, and any forward-looking statements speak only as of the date they are made, and Best Buy assumes no obligation to update any forward-looking statement that it may make.

Amazon’s new Kindle Fire was a hot item during the holiday shopping season, and one analyst believes the new Amazon tablet may have cost Apple well over $1 billion in holiday iPad sales. Morgan Keegan analyst Travis McCourt on Tuesday lowered his December-quarter iPad sales estimate from 16 million units to 13 million. Hot sales of the Kindle Fire ahead of the holidays are responsible for trimming sales of Apple’s iPad by between 1 million and 2 million units, the analyst believes, making Amazon’s new slate the main reason for McCourt’s slashed forecast. Read on for more.

On the low end of McCourt’s estimate, the Kindle Fire cost Apple at least $500 million considering the iPad 2′s $500 entry-level price point. If the Kindle Fire was indeed responsible for cutting iPad sales by 2 million units, Amazon tablet sales cost Apple a minimum of $1 billion. Considering the range of available iPad 2 models that sell for between $500 and $830 each, however, that figure would likely be significantly higher.

Amazon announced last week that it sold more than 4 million Kindles during the holiday shopping season, noting that the Kindle Fire was its most popular device. McCourt believes total Kindle Fire sales for the 2011 holiday shopping season were between 4 million and 4.5 million units.

Research In Motion’s debut tablet has been something of a disappointment for the Waterloo, Ontario-based vendor. While the slate showed promise, it failed to offer potential users a compelling reason to choose it over the iPad or an Android tablet, and RIM would end up taking a $485 million charge in the third fiscal quarter due to unsold PlayBook inventory. Sale pricing ahead of the holidays last year seemingly helped RIM and its distribution partners clear out some stock, however, as the company is once again offering discounts on its QNX-based tablet. While pricing starts at $299 rather than $199 this time around, all three PlayBook models cost $299, which means the 64GB version can be had for a deep $400 discount. RIM’s first major update for its tablet OS set to bring native email and more next month.

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Amazon announced on Thursday that the 2011 holiday season was the best ever for sales of its Kindle devices. While the online retailer didn’t specifically say just how many devices were sold by model, it did say Amazon customers purchased “millions of Kindle Fires and millions of Kindle eReaders” and more than 1 million devices per week during the month of December. The company also noted that its #1 and #4 best-selling eBooks released this year were published by independent authors through its Kindle Direct Publishing platform. “We are grateful to our customers worldwide for making this the best holiday ever for Kindle,” Amazon.com CEO Jeff Bezos said.  “And in a huge milestone for independent publishing, we’d also like to congratulate Darcie Chan, the author of ‘The Mill River Recluse,’ and Chris Culver, the author of ‘The Abbey,’ for writing two of the best-selling Kindle books of the year.” The Kindle Fire was the most popular device followed by the Kindle Touch and the Kindle. Amazon also said that gifting of Kindle eBooks jumped 175%, between Black Friday and Christmas Day, compared to last year. Amazon’s full press release follows after the break.

2011 IS THE BEST HOLIDAY EVER FOR KINDLE

Amazon customers purchased millions of Kindle Fires and millions of Kindle e-readers

#1 and #4 best-selling Kindle books released in 2011 published independently by authors using Kindle Direct Publishing

Businesses selling on Amazon have record-breaking holiday sales

SEATTLE, Dec. 29, 2011 – (NASDAQ: AMZN) – Amazon.com, Inc. today announced that 2011 was the best holiday ever for the Kindle family as customers purchased millions of Kindle Fires and millions of Kindle e-readers.  Authors also continue to benefit from the success of Kindle — the #1 and #4 best-selling Kindle books released in 2011 were both published independently by their authors using Kindle Direct Publishing (KDP).

“We are grateful to our customers worldwide for making this the best holiday ever for Kindle,” said Jeff Bezos, Amazon.com founder and CEO.  “And in a huge milestone for independent publishing, we’d also like to congratulate Darcie Chan, the author of ‘The Mill River Recluse,’ and Chris Culver, the author of ‘The Abbey,’ for writing two of the best-selling Kindle books of the year.”

More Kindle holiday facts:

·         Throughout December, customers purchased well over 1 million Kindle devices per week.

·         The new Kindle family held the top three spots on the Amazon.com best seller charts – #1: Kindle Fire, #2: Kindle Touch, #3: Kindle.

·         Kindle Fire is the #1 best-selling, most gifted, and most wished for product across the millions of items available on Amazon.com since its introduction 13 weeks ago.

·         Kindle is also the best-selling product on Amazon.co.uk, Amazon.de, Amazon.fr, Amazon.es and Amazon.it this holiday season.

·         Gifting of Kindle books was up 175 percent between this Black Friday and Christmas Day compared to the same period in 2010.

·         Christmas Day was the biggest day ever for Kindle book downloads.

·         Kindle Fire is the best-selling product on Amazon.com’s mobile website and across all of Amazon.com’s mobile applications.

Additional Kindle Direct Publishing successes include:

·         December’s #1 best-selling Kindle Direct Publishing book “Wife by Wednesday” was also the #5 overall best-selling Kindle book in December and has appeared on both the USA Today and Wall Street Journal best seller lists. Author Catherine Bybee was formerly an emergency room registered nurse, and has now left her job to focus on writing full-time.

• In 2011, KDP and CreateSpace author CJ Lyons reached #2 on the Amazon best seller list, #2 on the New York Times best seller list, and #4 on the USA Today best seller list. As a former pediatric ER doctor, CJ has lived the life she writes about in her cutting edge suspense novels, and she quit her job in medicine after 17 years to pursue her dream of becoming a full-time novelist.  Her latest work includes “Face to Face” and “Hot Water.”

Businesses Selling on Amazon

2011 was also a record-breaking holiday season for businesses that sell on Amazon.  Third-party sellers experienced record holiday growth: the number of sellers who exceeded $5,000 in sales during the holiday season increased 44 percent year-over-year.  For the year, businesses on Amazon sold hundreds of millions of units worth billions of dollars worldwide.

Scharf Industries, an office supplies and electronics provider, increased its sales on Amazon by over 500 percent this holiday season compared with last holiday season.

“We greatly value the cooperation that we have developed with Amazon,” said Andrew D. Scharf, CMO of Scharf Industries.  “They have provided us with the tools necessary to grow our business in a rapid and efficient manner.”

Ken Reiss, the owner of Reiss Innovations, LLC, started with one Amazon Webstore, selling five to 10 mouse pads for the year. Six years later he has a successful eCommerce business, selling through multiple Amazon Webstores.  Just this year alone, Reiss saw a 21 percent increase in sales compared with the holiday season last year. He has also increased the number of product listings by 50 percent over 2010 and recently extended his business to Canada.

According to Reiss, one of the most beneficial aspects of his relationship with Amazon is that “It allows me to scale in efficiency. I can devote my time to building vendor relations and growing my inventory, rather than worrying about logistical aspects, such as shipping products.” Reiss currently stores 90 percent of his inventory in Amazon’s warehouses, up from 75 percent last year.

Other seller successes include:

·         Amazon’s third-party sellers sold enough cameras for every fan at the next 10 Super Bowls to snap their own shots of the winning touchdown.

·         Amazon’s third-party sellers sold enough toys in 2011 to give a toy to every resident of Chicago.  In fact, they sold as many Lalaloopsy Dolls as there are lights on the Rockefeller Center Christmas Tree in New York City.

·         Debra Keyes, CEO of The Internet Department Store, which sells costumes for both adults and children, began utilizing Fulfillment by Amazon (FBA) – the Amazon service that stores, packs and ships orders for third-party sellers – as soon as it launched.  By January 2011, she had 1,300 products listed in FBA.  That number has now grown to 7,800 products by November 2011. During that same time period, the company’s sales increased by 34 percent.

Holiday Fun Facts

 Shipping:

• The last One-Day Prime order that was delivered in time for Christmas was placed on Dec. 22 at 11:59 p.m. PST and shipped to Ballwin, Mo. The item was “The Cook’s Herb Garden,” a book by Jeff Cox and Marie-Pierre Moine.
• The last Local Express Delivery order that was delivered in time for Christmas went to Seattle, Wash. It was a Sony Rechargeable Battery Pack that was ordered at 2:35 p.m. PST on Christmas Eve and delivered at 6:15 p.m. PST that same evening.

• Earlier this year, an Amazon customer called with an urgent request for large volume of a single book, which they needed at the airport the next day before they boarded a flight. The books were special gifts and no other retailer had them available in such short notice.  Even though the cutoff time had passed for all traditional delivery methods, Amazon was able to arrange a delivery to the customer’s hotel just prior to their departure for the airport.

Customer Purchases (Amazon.com only; holiday timeframe-specific):

·         Amazon customers purchased enough copies of Walter Isaacson’s “Steve Jobs” book to create a stack taller than Mt. Everest.

·         The cumulative weight of the Bowflex 552 Adjustable Dumbbells purchased by Amazon customers would outweigh more than 70 adult elephants.

·         If you unfolded and stacked each pair of jeans purchased by Amazon customers this holiday, the height would be 2,500 times taller than the Statue of Liberty.

·         Amazon customers purchased enough sweaters to outfit each of Santa’s reindeer during Christmas Eve deliveries for the next 14,000 years.

·         Amazon customers purchased enough copies of Just Dance 3 to give 15 copies to each person who participated in setting the world record for simultaneous dancing.

·         Amazon customers purchased enough HeatMax HotHands Handwarmers to give a pair to each resident of Iceland.

·         Amazon customers purchased enough Rory’s Story Cubes to give a cube to each person watching the New Year’s Eve ball drop live at Times Square.

Holiday Best Sellers (Amazon.com only; based on units ordered):

• Electronics: Kindle Fire; Kindle Touch; and Kindle
• Toys: Rory’s Story Cubes; Qwirkle Board Game; and Perplexus Maze Game

·         Video Games: Just Dance 3; Call of Duty: Modern Warfare 3; and Elder Scrolls V: Skyrim

• Sports & Outdoors: Zumba Fitness Total Body Transformation DVD Set; Emergency Fire Starter; and Flexible Flyer Snowball Maker
• Home & Kitchen: Cuisinart 5-in-1 Griddler; Fred M-Cups Measuring Matroyshkas; and Pure Komachi 2 Series Hollow-Ground Santoku Knife
• Books: “Steve Jobs” by Walter Isaacson; “Diary of a Wimpy Kid: Cabin Fever” by Jeff Kinney; and “11/22/63” by Stephen King
• Kindle Books: “The Hunger Games” by Suzanne Collins; “Catching Fire” by Suzanne Collins; and “The Litigators” by John Grisham
• CD: “Christmas” by Michael Bublé; “21” by Adele; and “Duets II” by Tony Bennett
• Amazon MP3: “100 Classic Christmas Songs” by Various Artists; “Mylo Xyloto” by Coldplay; and “A Very She & Him Christmas” by She & Him
• DVD: “Harry Potter and the Deathly Hallows, Part 2”; “Bridesmaids”; and “The Help”
• Amazon Instant Video: “Super 8”; “The Help”; and “Crazy, Stupid, Love”
• Watches: Timex 1440 Sports Digital Resin Strap Watch; LEGO Kids’ Star Wars Darth Vader Mini-Figure Alarm Clock; and XOXO Rhinestone Accent Gold-Tone Bracelet Watch
• Jewelry: 10k White Gold Round Diamond Stud Earrings; Sterling Silver Amethyst Butterfly Pendant; and White Peacock and Pink Freshwater Cultured Pearl Button 3 Pair Stud Earrings Set
• Clothing: Levi’s 501 Jean; Levi’s 505 Straight Fit Jean; and Levi’s 550 Relaxed Fit Jean
• Shoes: UGG Australia Classic Tall Boots; Crocs Classic Clog; and BEARPAW Emma Short Boot
• Beauty: Wonderstruck by Taylor Swift Eau de Parfum Spray; Olay Pro-X Advanced Cleansing System; and NARS Orgasm Blush
• Health & Personal Care: Philips Norelco SensoTouch Electric Shaver; Philips Norelco Shaving System; and Philips Sonicare Essence Power Toothbrush
• Tools & Home Improvement: Streamlight Nano Light Miniature Keychain LED Flashlight; Smith’s PP1 Pocket Pal Multifunction Sharpener; and Black & Decker All-In-One SureGrip Laser Level
• Automotive: Battery Tender Junior 12V Battery Charger; Wagan 12-Volt Heated Seat Cushion; and Mystic Industries Reindeer Vehicle Costume
• Baby: Baby Einstein Take Along Tunes; Vulli Sophie the Giraffe Teether; and Cloud B Twilight Turtle Constellation Night Light

·         AmazonWireless: Motorola DROID RAZR 4G Android Phone (Verizon Wireless); Samsung Galaxy S II Epic Touch 4G Android Phone (Sprint); and Samsung Galaxy S II 4G Android Phone (AT&T)

• Amazon Appstore for Android: Angry Birds (Ad-Free); TETRIS; and Pandora Internet Radio

U.S. Consumers spent $35.3 billion during this year’s holiday season, up 15% from the same period last year. Shoppers also spent a total of $2.8 billion during the week ended December 25th, up 16% from the same week in 2010, comScore reported. “Holiday e-commerce spending has remained strong throughout the season, and we have now reached a record $35 billion in U.S. online sales for the season-to-date,” said comScore chairman Gian Fulgoni, noting that the record $1.25 billion spent on Cyber Monday represented the heaviest online spending day for the second straight year. ComScore also said that there were a total of nine days during the holiday season during which consumers spent more than $1 billion. The research firm noticed a spike in digital content and subscription sales on Christmas Day, no doubt as a result of consumers loading up their new tablets, computers and phones with applications. Digital content and subscription purchases typically counted for 2.8% of all e-commerce sales during the holiday season, but that figure jumped to more than 20% on Christmas Day. ComScore’s full press release follows after the break.

Christmas Day Sees Significant Spike in Digital Content & Subscription Sales as Consumers Load Up New Tablets, e-Readers and Music Devices

RESTON, Va., Dec. 28, 2011 /PRNewswire/ – comScore (NASDAQ: SCOR), a leader in measuring the digital world, today reported holiday season retail e-commerce spending for the first 56 days of the November – December 2011 holiday season. For the holiday season-to-date,$35.3 billion has been spent online, marking a 15-percent increase versus the corresponding days last year. The most recent week (ending Dec. 25) witnessed $2.8 billion in spending, an increase of 16 percent versus the corresponding week last year.

2011 Holiday Season To Date vs. Corresponding Days* in 2010Non-Travel (Retail) Spending Excludes Auctions and Large Corporate Purchases Total U.S. – Home & Work Locations Source: comScore, Inc.
	Millions ($)
	2010	2011	Percent Change
November 1 – December 26	$30,591	$35,274	15%
Thanksgiving Day (Nov. 24)	$407	$479	18%
Black Friday (Nov. 25)	$648	$816	26%
Thanksgiving Weekend (Nov. 26-27)	$886	$1,031	16%
Cyber Monday (Nov. 28)	$1,028	$1,251	22%
Green Monday (Dec. 12)	$954	$1,133	19%
Free Shipping Day (Dec. 16)	$942	$1,072	14%
Week Ending Dec. 25	$2,450	$2,831	16%

*Corresponding days based on corresponding shopping days (November 2 thru December 27, 2010)

“Holiday e-commerce spending has remained strong throughout the season, and we have now reached a record $35 billion in U.S. online sales for the season-to-date,” said comScore chairman Gian Fulgoni. “We can now say with certainty that the $1.25 billion spent on Cyber Monday will rank it as the heaviest online spending day of the season for the second consecutive year, but we should also note that it was accompanied by nine other billion dollar spending days this year.”

Christmas Day Sees Huge Spike in Digital Content & Subscription Sales

One of the interesting e-commerce phenomena occurring over the past several years is the dramatic increase in Christmas Day purchases of Digital Content & Subscriptions, a retail category that includes digital downloads of music, TV, movies, e-books and apps. Not surprisingly, as many consumers get new smartphones, tablets, e-readers and digital content gift certificates for Christmas, they spend Christmas Day loading up their devices with new content.

On an average day during the 2011 holiday season-to-date (Nov. 1 – Dec. 26), Digital Content & Subscriptions accounted for 2.8 percent of retail e-commerce sales, but on Christmas Day the category accounted for more than 20 percent of sales. Consistent with past years, comScore expects sales for this category of products to remain elevated throughout the entire week following Christmas Day.

M-Edge Accessories has filed a lawsuit against Amazon with a federal court in Maryland that accuses the online retailer of bullying it into coughing up higher commissions in exchange for better placement on Amazon’s website. M-Edge Accessories isn’t just filing a suit for extortion according to The Wall Street Journal, however — the accessory maker is also accusing Amazon of patent infringement, false advertising, creating unfair competition and hampering M-Edge’s customer relations. Amazon reportedly played some pretty dirty games with M-Edge in order to secure a larger percentage of commissions. M-Edge said it initially signed a deal with Amazon that would provide the retailer with a 15% commission on all goods sold. Amazon allegedly came back two months later and demanded a larger 32% commission. When M-Edge declined, an executive told M-Edge that Amazon would “de-list,” “play” with, or bury the accessory maker’s products so that “no one will be able to find you.” M-Edge eventually signed a new contract with Amazon, but it had to pay $6.5 million in commissions in order to do so. Even still, Amazon allegedly left its products off of the “Amazon Approved Accessory Maker” list. M-Edge is also suing Amazon for patent infringement and is arguing that it holds a patent for a Kindle case with a built-in reading light.

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Italy’s Antitrust Authority has fined Apple Sales International, Apple Italia Srl and Apple Retail Italia a total of $1.2 million for “unfair commercial practices.” According to The Wall Street Journal, Apple’s Italy-based retail stores were fined €500,000 ($653,000) for not providing customers with adequate information about its AppleCare Protection Plan warranties, and an additional €400,000 ($523,00) for not being completely transparent about the length of product guarantees. The fines are a bit surprising, considering that Apple is typically praised for customer satisfaction in the United States. Apple has not commented publicly on the matter.

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Users of Apple’s iPhone smartphones and its iPad line of tablets accounted for 92% of all mobile purchases made thus far in December, a recent study by eCommerce company RichRelevance found. That figure is up from April 2011 when a similar study conducted by the firm found that Apple’s iOS devices accounted for 88% of non-desktop online shopping. Beyond being more frequent shoppers, RichRelevance also found that iOS users are bigger spenders than their Android counterparts — the average purchase made from an iOS device was $123 in December while the average Android-originated mobile purchase amounted to $101. Both iOS users and Android users top those who shop from desktop PCs, as they spent an average of just $87 per order in December according to the company. Overall, RichRelevance found that shopping from mobile devices has doubled from 1.87% of all online shopping to 3.74% over the past nine months.

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The week ended December 18th was the heaviest week for online holiday shopping ever, with shoppers spending more than $6.3 billion, up 15% from the same period last year. Consumers have already spent about $31.9 billion this holiday season according to comScore, which published new figures on Tuesday. “With only a few more days until Christmas, the preponderance of Americans’ late season holiday shopping will shift to brick-and-mortar retail, although the procrastinators among us will still be able to take advantage of expedited shipping and buy online up to and including the day before Christmas Eve with the guarantee of having their gifts delivered in time for the holiday,” said comScore chairman Gian Fulgoni, noting that there were four days last week during which consumers spent more than $1 billion. “In total, we will see another $5 or $6 billion in e-commerce spending over the remainder of December to finish off what has clearly been an outstanding season for online retailers.” November 28th, Cyber Monday, will go down as the heaviest online spending day this holiday season, and in history, with more than $1.251 billion spent. ComScore’s full press release follows after the break.

Heaviest Week in U.S. Online Holiday Shopping History Pushes Season-to-Date Total to $32 Billion, Up 15 Percent vs. Year Ago
Spending Approaches 2010 Holiday Season Total of $32.6 Billion with Nearly Two Weeks Remaining in 2011 Season

RESTON, VA, December 20, 2011 – comScore (NASDAQ : SCOR), a leader in measuring the digital world, today reported holiday season retail e-commerce spending for the first 48 days of the November – December 2011 holiday season. For the holiday season-to-date, nearly $32 billion has been spent online, marking a 15-percent increase versus the corresponding days last year. The most recent week (week ending Dec. 18), led by four individual days surpassing $1 billion in sales, reached an all-time record of $6.3 billion in online retail spending, up 14 percent from the corresponding week last year. The final shopping weekend before Christmas reached $1.04 billion to rank as the second heaviest weekend of online spending on record.

2011 Holiday Season To Date vs. Corresponding Days* in 2010 Non-Travel (Retail) Spending Excludes Auctions and Large Corporate Purchases Total U.S. – Home & Work Locations Source: comScore, Inc.
	Millions ($)
	2010	2011	Percent Change
November 1 – December 18	$27,814	$31,973	15%
Thanksgiving Day (Nov. 24)	$407	$479	18%
Black Friday (Nov. 25)	$648	$816	26%
Thanksgiving Weekend (Nov. 26-27)	$886	$1,031	16%
Cyber Monday (Nov. 28)	$1,028	$1,251	22%
Green Monday (Dec. 12)	$954	$1,133	19%
Free Shipping Day (Dec. 16)	$942	$1,072	14%
Week Ending Dec. 18	$5,499	$6,286	14%

*Corresponding days based on corresponding shopping days (November 2 thru December 19, 2010)

“The final big week of online holiday shopping remained strong throughout, with four days surpassing $1 billion in sales and the second heaviest online shopping weekend on record,” said comScore chairman Gian Fulgoni. “With only a few more days until Christmas, the preponderance of Americans’ late season holiday shopping will shift to brick-and-mortar retail, although the procrastinators among us will still be able to take advantage of expedited shipping and buy online up to and including the day before Christmas Eve with the guarantee of having their gifts delivered in time for the holiday. In total, we will see another $5 or $6 billion in e-commerce spending over the remainder of December to finish off what has clearly been an outstanding season for online retailers.”

Ten Online Spending Days Top $1 Billion this Holiday Season

For the 2011 holiday season-to-date, ten individual days have surpassed $1 billion in online retail sales. Cyber Monday (Nov. 28) currently ranks as the heaviest online spending day of the season – and in history – at $1.251 billion. Monday, December 5 ranks second at $1.178 billion, followed by Green Monday (Dec. 12) in third with $1.133 billion. Free Shipping Day (Friday, Dec. 16) ranks sixth at $1.072 billion.

Billion Dollar Spending Days for 2011 Holiday Season Non-Travel (Retail) Spending Excludes Auctions and Large Corporate Purchases Total U.S. – Home & Work Locations Source: comScore, Inc.
Rank	Date	Spending in Millions ($)
1	Monday, Nov. 28 (Cyber Monday)	$1,251
2	Monday, Dec. 5	$1,178
3	Monday, Dec. 12 (Green Monday)	$1,133
4	Tuesday, Nov. 29	$1,116
5	Tuesday, Dec. 6	$1,107
6	Friday, Dec. 16 (Free Shipping Day)	$1,072
7	Tuesday, Dec. 13	$1,064
8	Wednesday, Nov. 30	$1,025
9	Thursday, Dec. 8	$1,024
10	Thursday, Dec. 15	$1,018