Tuesday, 26 July 2016

A Drone-fleet in your street?

pic: Amazon

Amazon Prime Air getting serious....

According to reports today in The Verge, Amazon is partnering with the British government to expand its testing of delivery drones, paving the way for commercial air deliveries for UK residents.

The expanded testing involves Amazon working with the UK Civil Aviation Authority to focus on operating drones outside of the line of site of pilots, improving sensors for obstacle detection and avoidance, and having one pilot operate a team of multiple, semi-autonomous drones in unison.

This ground-breaking work will help Amazon and the Government understand how drones can be used safely and reliably in the logistics industry. It will also help identify what operating rules and safety regulations will be needed to help move the drone industry forward.

In other words, Amazon have a vision of replicating their traditional delivery system, via drone-fleet in the air...

As you know, home delivery works in terms of covering costs via high density geographical coverage - you realise they are No.1 when Amazon-man delivers your parcel along with one for next-door i.e. why not ask about the other package, next time...

Time to seriously elevate your partnership with Amazon, rather than following the competitive fleet?

See live footage Video

More detail here

Tuesday, 19 July 2016

'Farm' packaging - an opportunity to sell more British meat?

Given the ‘dawning realisation’ that non-UK i.e. Brazilian and Thai meat, is being sold in Britain without its country of origin being declared, two options are available:

 - Reactive: Government insistence that country of origin be declared on all meat products…
 - Proactive: UK branded meat products to emphasise local origin

Given that this situation has been known to the meat industry for years without appropriate government action, perhaps Option 2 has more appeal?

In other words, there appears to be a real opportunity for local producers – and pro-active retailers – to brand meat heavily and emphasise local sourcing, and by inference suggest that competitor products not thus labelled contain Brazilian and Thai-based meat…

In the current climate, this approach should resonate with at least 52% of the UK population – after all, if Brexit was not about nationalism…? 

NB. According to packaging regulations, the country of origin is the last place where a product is processed.... 

Monday, 18 July 2016

Post-Brexit opportunity: deck clearance vs. re-arrangement of deckchairs?

Governments’ pre-occupation with maintaining the ‘status quo’ provides us all with a temporary window where clarity of vision and a  modicum of decisiveness can help us to conduct a fundamental clear-out  of anything that does not contribute directly to business goal achievement.

In practice, this means getting back to basics, big time, while others still try to make sense of what is happening…

Essentially, despite the unprecedented Post-Brexit market conditions, in business we survive by driving sales or cutting costs, or a realistic combination of both. As we try to come to terms with Brexit fall-out, resulting in increasingly savvy consumers ‘making do’ and postponing purchase, thereby taking demand from the market, all growth will have to be achieved at the expense of competitors. In other words, we need to meet consumer needs better than the other guy, with tin contents always exceeding what it says on the label, whilst all costs that do not directly contribute to satisfying market need, have to be cut, to prevent others doing it for us…

1. Clarifying consumer and retailer needs

Despite our familiarity with the brand and an inclination not to try fixing what seems to be ‘working’, latest annual reports from both supplier and retailer show that companies are generating inadequate rewards for risk in the post-Brexit climate.

In fact, low or even negative interest rates – read between lines of Bank of England announcements – are causing companies to take false comfort from lower returns ‘in common with others in the same boat’…

In unprecedented times, random cut-backs can represent unacceptable risk. For this reason, consumer need has to be a starting point in establishing the real fit of our brand with the market, better than alternatives available, at both functional and emotional levels.

It is also crucial to keep in mind that consumers will increasingly buy easier, faster, closer, and more often, continuing to cause structural change in the retail market. In other words, given that the discounters are growing at the expense of brands, we all need to find ways of working profitably with Aldi and Lidl.

Similarly, our trade package comprising Product (brand performance) Prices and Terms, Presentation (how the offering is expressed) and Place (supply-demand chain and in-store logic) needs to be really tailored to individual customers, and demonstrably so. All excess will need to be trimmed back to release resources to augment inadequacies elsewhere, and not simply supplement margin.

Again, a cursory analysis of a customer’s latest annual report will indicate how our offering should be recast in order to show how it directly impacts and drives ROCE improvement. The fact that the buyer never mentions ROCE is not to say it is irrelevant, even in Post-Brexit times. In fact ROCE performance drives the entire business process. Those in doubt should reflect on the fate of companies that ignored this principle, even in the good times…!

2. Buying Mix Analysis – optimising competitive appeal

Our trade and consumer offerings are meaningless unless placed in a realistic market context of available alternatives, meaning related to other offerings to which retailers and consumers have access. Buying Mix Analysis can help

3. Driving Sales

Having identified degrees of competitive appeal above, a supplier is in a position to seek ways of driving sales. Again there are only four alternatives:
  • Encouraging customers to sell more of our current lines via full availability, adequate facings, tailored promotions and optimising shopper marketing, better than the competition
  • Selling our new products to current users, building on the trust established in our current products
  • Attracting new shoppers of similar profile to our brand-consumers to the store and offering them our current brands
  • ...and even selling our new brands to new traffic, who knows?
4. Cutting costs

While driving sales, knowing our competitive appeal and using customer/shopper need as the ultimate benchmark, we need to eliminate any redundant attributes of the offering, anything that is not actively contributing to customer and brand profitability. We thereby strip away anything that will not jeopardise the appeal of the offering, but will reduce cost…

In practice, this means reducing manufacturing, packaging and distribution costs by sourcing locally, lowering ATL expenditure to match actual consumer usage of media and redeploying where necessary. It also means communicating one-to-one with actual and potential users, and eliminating anything that is not fit for that purpose. In the same way, all trade terms and investment need to be related to expected performance via 100% compliance, with partners that adhere to the spirit rather than just the letter of the regulations, with trust as the essential ingredient…

5. Driving retailer ROCE

Using the output from 1-4 above, all moves should be incorporated into the retailer’s ROCE model, demonstrating how the brand is increasing net margin and improving capital rotation, taking overall ROCE from latest Annual Reports to where it needs to be (In spite of near zero interest rates, ROCE 15%, Net Margin 5%, Stockturn to 20 times/annum and Gearing 30% or below) without jeopardising the supplier’s own ROCE, in order to preserve their autonomy for both companies, better than the competition.

Post-Brexit survival will allow for nothing less…

Thursday, 14 July 2016

Publicis - Walmart's New Primary Agency of Record

According to yesterday's NamNews, Walmart has entered into what is being described as a strategic partnership with Publicis Groupe that will give the retailer “unfettered access” to all of the holding company’s agencies and resources.

In practice this means Publicis becomes Walmart's Primary Agency of Record i.e. an advertising agency authorised by an advertiser to buy advertising space and/or time on its behalf.

More than that, it gives Walmart access to all agency resources, globally, in managing Walmart’s US advertising and in-store creative giving the retailer access to resources outside of marketing, including capabilities to support corporate reputation and technology that builds relationships with customers.

In other words, think state-of-art, uniform, co-ordinated, creative  management of all communication with customers..

Add whatever it takes in terms of deep-cut EDLP to regain and maintain market share, big time, and you have a new dynamic in the market..

Asda has to be part of this…

More here

Time for NAMs to conduct some what-ifs in exploring the impacts on their categories…?  .

Wednesday, 6 July 2016

UEFA Euro Final, Paris, Sunday 10th July – urgent appeal from Wales…!

Amidst mounting anticipation re this evening’s match, a Welsh NamNews reader who had bought tickets to the UEFA Euro Final in Paris on Sunday 10th July, has contacted us.

The problem is that his bride-to-be, appreciating his passion for football, agreed to avoid possible Saturday clashes by settling for a Sunday wedding.

However, he completely forgot that Sunday 10th is his wedding day as he bought the tickets a few months before agreeing to the wedding date.

So he wants to know if anyone is interested in getting married......?

HT to AB

Monday, 4 July 2016

Smartphone shopper-tracking, a privacy-value trade-off?

Presumably, smartphone tracking in the High Street will yield more information than 'standard' security cameras, albeit some inevitable under-counting because of opt-out moves by privacy-sensitive shoppers and non-phone citizens...?

According to The Daily Mail, retailers so far signed up to take part include Pret a Manger, Aldi, Oxfam, Pizza Hut, Superdrug, Thorntons, Dixons Carphone, Patisserie Valerie, Jack Wills, Tortilla, The Entertainer, Eurochange, Itsu, and Ed’s Easy Diner, via 1,000 sensors that will be placed in 81 towns and cities.

The issue for all stakeholders will be the nature of the additional insights harvested - other than names - via wifi linkage, and the use in terms of consumer benefits...

In other words, to escape labelling as 'another 'Big Brother' move, it is important that changes are made in shopper service levels are demonstrably related to the information gathered.

The question is whether the risk of negative reaction by post-Brexit savvy consumers and their representatives, is worth the trouble...