Mail-in rebate replaced by Internet, convenience

Filed under: Retail |

More big-name online retailers, including Dell Inc. and Office Max, are saying goodbye to the hassle of mail-in rebates.

Dell plans to move to an online rebate program next month. The company is eliminating paper rebates to improve customer service and sales. The changes, which will mainly affect consumers and small businesses, will take 12 to 18 months. Dell expects a 70 percent reduction in the number of promotions per product line and an 80 percent reduction in the number of promotions tied to a single product.

OfficeMax is offering instant discounts at the time of purchase both in stores and online instead of paper rebates.

“Rebates were the No. 1 customer complaint we were getting,” said Ryan Vero, OfficeMax’s chief merchandising officer.

Vero said the decision will benefit customers because the new discounts will make shopping simpler and will apply immediately.

“In our stores, they’ll be able to save that money right at the register; they don’t have to pay taxes on that or wait four to six weeks,” he said.

Advertising runs for the border

Border Billboards will be displaying its third billboard along the U.S.-Mexico border this fall. The 4-year-old company hopes to dominate the border with boards at all 13 crossings within the next five years.

Next up for the company is the crossing between El Paso, Texas, and Ciudad Juarez, Mexico, where each month 178,000 cars stagnate in bumper-to-bumper traffic.

Advertisers pay $10,000 for a commercial that plays 144 times a day for a month. The billboards incorporate video, audio and text-messaging features. A tri-vision panel can hold three advertisements that play in rotation.

Consumers are able to listen to messages on their car radios and can send text and picture messages via their cellphones. They also can participate in contests and product giveaways sponsored by the advertisers.

The text-messaging capability allows advertisers to see who responds to contests and giveaways, painting a fuller picture of who they are reaching.

Advertisers range from retail to restaurants — McDonald’s, Hummer, Best Buy and Circuit City have each purchased space.

Nestlé explores use of molecular physics

With the increasing demand for foods with better nutritional value, Nestlé is stepping up its research to find more ways to protect the flavor and nutrition in foods

Dr. Job Ubbink from Nestlé Research Center said that the food industry is being challenged with increasing demands on flavor impact, nutritional value, food stability and consumer acceptance, and that new ways are needed to optimize food systems and processing routes.

For example, by optimizing the molecular packing of carbohydrates, Ubbink said, scientists can influence and thereby reduce the rate of oxidation of food ingredients such as flavors and polyunsaturated fatty acids.

Back-to-school spending heating up for retailers

Retailers will get a glimpse of new trends and popular items as families with school-aged children head out early for back-to-school merchandise.

According to the National Retail Federation’s 2006 Back-to-School Consumer Intentions and Actions Survey, which was conducted by BIGresearch July 5-12, families with school-aged children will be spending more on back-to-school shopping this year than last.

The average family is expected to spend $527.08, up from $443.77 in 2005. Total spending is estimated to reach $17.6 billion, up from $13.4 billion last year, according to the survey of about 9,000 consumers.

Electronic and apparel purchases will fuel this year’s back-to-school growth. Total spending on electronics or computer-related equipment, such as home computers, laptops, PDAs and calculators, is estimated to increase by more than $1.5 billion this year. Electronic and computer sales should reach $3.82 billion, compared to a decline of $2.06 billion last year.

“The back-to-school shopping season serves as an important bellwether for the holiday season by helping retailers pinpoint emerging trends and popular products,” NRF President and CEO Tracy Mullin said. “Retailers will be tracking the performance of apparel and electronics very closely to ensure that their stores have the right merchandise mix for the fourth quarter.”

Apparel is expected to be a big item with spending anticipated to be $228.14 for the average family, up from $205.31 in 2005. Other popular items on consumers’ back-to-school lists include shoes at $98.34 and school supplies, such as notebooks, folders, pencils, backpacks and lunchboxes at $86.22.

The survey found that one in six parents will begin shopping for back-to-school merchandise at least two months before school starts. Close to half will begin three weeks to a month before school starts, and one in three will wait until a week or two before school begins.

According to the survey, discount stores will remain popular back-to-school shopping destinations, with nearly three-quarters (72.2 percent) of shoppers heading to discounters to purchase items on their lists.

Department stores and specialty stores will be seeing increased traffic this year. More than half of consumers will head to major department stores to satisfy a portion of their back-to-school needs and close to a third will shop at their favorite specialty shop, such as clothing or electronics store.

Joan Johnson covers retail for the Colorado Springs Business Journal.