Holiday Clicks and Bricks
AnnaLisa is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Indie filmmakers can finally tell their parents they don’t need their day jobs anymore. A relatively new retailing phenomenon called “shoppable videos” has finally hit the mainstream in this last year. What is a shoppable video the parents of a filmmaker ask? “Dad, Mom I get hired by a retailer to shoot a scripted video and people can watch it in store or online and click on products they sell in the story.” But can you make money? ask the ‘rents. “Yes, big companies like Target are doing it,” exclaims indie filmmaker. “Yay,“ shout the parents, “Now, move out of the basement.”
Target (NYSE: TGT) has just announced their biggest version of a shoppable video yet. The three five minute episode film is called “Falling For You”, a romantic comedy in which consumers can click and buy over 100 items from the Target collection featured in the movie and also share on social networks. The episodes run on October 2, 4,9, and on October 10 will feature live streaming with bonus content.
It’s not just an extended commercial and is directed by Phil Abraham, veteran of “the Sopranos” and “Mad Men”. It features actors Kristen Bell, Nia Long and Zachary Burr Abel who will be familiar to readers of People Magazine as popular TV actors.
Can They make Money?
Shoppable videos are gaining traction with retailers and manufacturers like Barney’s, Levi’s, jeweler David Yurman, Gucci, Juicy Couture and even K-Mart. K-Mart ,owned by Sears Holdings Corporation (NASDAQ: SHLD), ran a miniseries shoppable video targeted to Hispanic mothers which was stylistically reminiscent of the over-the-top Spanish language soap operas called telenovelas.
While product placement has been a time-honored advertising ploy, this is actually considered more soft-sell. Target partnered with Italian designer Missoni last year on a shoppable video and had a huge success with stores and online venues selling out within hours.
The question is does it move the needle? Possibly not that much but it does show Target is trying to outshine Wal-Mart Stores, (NYSE: WMT) in attracting the more fashion-forward and tech savvy shoppers they desire and embracing new media. The shoppable video trend is still in its early days with surveys showing that even the younger demographic is still watching broadcast and cable television at ten times the rate they watch online content.
Target is really ramping up for the holidays hiring over 80,000 workers, showcasing special holiday designer collections, and running this shoppable video. While Target has announced they will not compete on the Black Friday mega doorbuster deals this year, they are still planning a lot of holiday buzz.
Target has a 14.38 P/E and a 2.20% yield. It was just named by Performance Inspired Inc., a brand consulting firm as number 3 of the “25 Most Inspiring Companies”.
What about Wal-Mart?
Wal-Mart has a slightly higher P/E at 15.60 and a smaller yield at 2.10%. But the stock has had an amazing run, up 42.87% in a year after years of being range bound. The stock even shrugged off an investigation under the Foreign Corrupt Practices Act into Wal-Mart's Mexican operations.
The mass-market retailer with 10,130 stores was named number 2 in the same survey conducted for the 25 Most Inspiring Companies with additional responses from the surveyed consumers indicating they like its good value prices and their hiring of senior citizens. They were mixed however on the treatment of employees, in general.
Wal-Mart is planning a big Black Friday this year and the Black Friday deal sites are falling all over themselves to glean any info about the big bargains this year. So far, the only news Wal-Mart has released is their extended lay away policy. Wal-Mart and Target both report on November 15.
A Languishing Laggard
Then there’s Sears Holding which has a negative EPS of -$26.16, no yield, and the price target is $21.50 way below the current share price of $55.12.
Sears Holdings has more than 4,000 Sears and K-Mart stores. Its Q2 results were worse than expected with a loss of $0.86 per share and a decline in sales to $9.467 million although margins are expanding.
Despite turnaround tactics things don’t look so hot for the company with several years expected before it turns a profit.
Although this year’s holiday season is expected to be bright for retailers like Target and Wal-Mart with consumer confidence up, Sears will likely struggle to participate in the same good will.
I have posted about Target before and I still like it better than Wal-Mart as a long term hold as I see it as a more progressive and forward thinking retailer, more along the lines of Macy’s with both companies personalizing and localizing their wares. However, it is hard to argue with the stock performance of Wal-Mart. I do think the big move that shareholders had waited for so long has been made. As for Sears Holdings, it’s going to take more than shoppable videos and cuts in operating costs for them to turn the tide.
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