iTunes takes over No. 3 ranking for online sales

Filed under: Retail |

iTunes, the digital download service, has moved up on the charts and passed online retailer Amazon.com.
According to a study from market research firm NPD Group, Apple Inc.’s iTunes Store has 9.8 percent of overall retail music sales, making it the third largest music retailer in the United States. Amazon.com and Target captured 6.7 percent and 6.6 percent of the market, respectively.
Apple trails Wal-Mart, which has 15.8 percent, and runner-up Best Buy, which has 13.8 percent. NPD attributed Apple’s gains to iPod sales during the holiday shopping season.
In November 2005, Apple ranked seventh on the list of leading U.S. music retailers, having then passed Tower Records, Sam Goody and Borders to crack the top 10 for the first time.
According to NPD, digital music downloads during the first quarter of 2006 accounted for 13.8 percent of all music purchases.
The remaining 86.2 percent were sold in physical disc format.
According to sales data from Nielsen SoundScan, first quarter sales of music CDs were down by more than 20 percent year-over-year, a trend that analysts don’t expect will change.

Breakfast opportunity

Away-from-home breakfast sales are growing, but remain a major underdeveloped opportunity for restaurant operators, according to research by Technomic.
Even though the majority of consumers still prepare breakfast at home, consumers’ demand for time-saving convenience continues to grow, signaling breakfast growth opportunities in both the limited- and full-service restaurant segments.
“Breakfast menus are underdeveloped and often lacking in innovation,” said Darren Tristano, executive vice president of Technomic Information Services. “Few limited-service restaurants, for example, offer a separate kids breakfast menu or a ‘healthy’ menu.”
The report found that consumers view weekday and weekend breakfast occasions differently.
During the week, convenience and portability play enormous roles. On weekends, however, consumers are looking for quality food, variety and a welcoming restaurant atmosphere.
Breakfast sandwiches are a growing consumer favorite. Since the last study was conducted two years ago, the percentage of consumers reporting that they ordered breakfast sandwiches when eating away from home during the week increased from 60 to 73 percent; weekend breakfast sandwich purchases grew from 55 to 60 percent.
About 44 percent of consumers surveyed said they would like to see breakfast served all day and 43 percent would order breakfast during non-breakfast hours.

Search engine rankings

Google remains in the lead among Internet search engines, according to comScore’s monthly analysis of activity.
In May, Google Sites captured 50.7 percent of the U.S. search market, gaining a full share point from the previous month. Yahoo Sites maintained its second place ranking with 26.4 percent of U.S. searches, followed by Microsoft Sites (10.3 percent), Ask Network (5 percent) and Time Warner Network (4.6 percent).
Americans conducted 7.6 billion searches online during May, up 4 percent compared to April and up 11 percent compared to May 2006.
Google Sites led the pack with 3.9 billion search queries, followed by Yahoo Sites (2 billion), Microsoft Sites (782 million), Ask Network (384 million) and Time Warner Network (348 million).

Ad spending increases

Last year, the top 100 U.S. advertisers increased ad spending by a modest 3.1 percent, to a record $104.8 billion. But most of that growth came from “unmeasured” disciplines.
In a troubling sign for traditional media, the marketing leaders increased measured media spending by just 0.6 percent, the smallest gain since the 2001 recession.
Media measured by ad-tracking services such as TV, print and some forms of Internet advertising accounted for 58.2 percent of the top marketers’ U.S. ad spending, down from 59.6 percent in 2005, according to Advertising Age’s 52nd annual 100 Leading National Advertisers report.
The rest of the spending came from unmeasured disciplines, primarily marketing services such as direct marketing, sales promotion and digital communications (including unmeasured forms of Internet media such as paid searches).
Sixty-nine of the 100 marketers disclosed worldwide ad spending in their annual reports. They define “advertising” differently.
Some include only media spending, while others factor in promotion, but the figures provide a useful indicator about global spending trends. Among these companies, worldwide ad spending last year increased 3.5 percent, and revenue increased 7.3 percent.
As for U.S. advertising, 69 of the 100 LNA companies increased combined measured/unmeasured U.S. ad spending last year; 75 of the 100 increased measured media spending.
General Motors’ decision to cut back on advertising dropped the automaker down a notch to third place in the LNA ranking. AT&T grabbed the No. 2 slot with estimated spending jumping 26 percent to about $3.3 billion.
The top advertiser was Procter & Gamble, whose estimated spending last year rose 6.8 percent to $4.9 billion. P&G has been No. 1 or No. 2 for 50 of the 52 years that Ad Age has ranked Leading National Advertisers.
Joan Johnson covers retail for the Colorado Springs Business Journal.