Monday 23 May 2016
Thursday 19 May 2016
The Entertainer triples email revenues
One of the UK’s most innovative toy retailers, The Entertainer is using The Message Cloud to power smarter emails tailored for specific personas in their existing database, according to Direct Commerce Magazine. The results, showing a 3x increase in email revenue and 120% lift in mobile sales are worth further analysis, via a tool that can be especially useful in categories where a parent buys on behalf of a child.
The real benefit is in moving from blanket e-mailing - alienation - then refining and converting your existing consumer email data to a 1:1, non-intrusive, more productive dialogue via your existing contact details. Then, having refined the method, a move to a pro-active gathering of additional email details has to provide a basis for further growth…
Time to check out the possibilities re what you already know...?
The real benefit is in moving from blanket e-mailing - alienation - then refining and converting your existing consumer email data to a 1:1, non-intrusive, more productive dialogue via your existing contact details. Then, having refined the method, a move to a pro-active gathering of additional email details has to provide a basis for further growth…
Time to check out the possibilities re what you already know...?
Monday 16 May 2016
wow = WOW! when you realise just 25% of Amazon sales are in Books & Media...
Latest US figures show that e-commerce is still only a tiny part of the overall retail industry, representing a mere 7.2% penetration rate.
However, when you begin to overlay Amazon performance, the threat to other retailers is obvious, as they play catch-up in category after category in the biggest trading opportunity ever...
Are you sure you are doing enough to anticipate the obvious?
Sunday 15 May 2016
Thursday 12 May 2016
BHS Attracts ‘Multiple Offers’ As Deadline Closes
News of five potential bids raises a number of issues for BHS suppliers:
- Having parked the pension deficit, a new owner will need to assess the profitability of every outlet, and sell off those that are a drain on the business, before exploring the viability and potential of the current business model
- (There may be buyers among the secondary bidders seeking sites that are complementary to their current locations)
- Previous suppliers to BHS need to check out possible prices & terms disparities re their relationships with the new owners...
- …but deep down, the real issue will be the extent to which the brand has been damaged – terminally? - by the surrounding controversy…
Friday 6 May 2016
More brands on Aldi’s shelves?
How about Nestlé, P&G and Unilever for starters?
Given the rate of growth of the discounters, primarily at the expense of brands, it was inevitable that major suppliers would begin to find ways of working with Aldi and Lidl in order to compensate for the sluggish growth of traditional retailers...
In fact, a new report by Miloš Ryba at the IGD, gives details of branded manufacturers such as Nestlé, P&G and Unilevers' increasing willingness to list their products on discounters’ shelves in Aldi Germany over the past 12 months.
Nestlé currently offers Nesquik, Smarties and Wagner-Pizza, while P&G lists Blend-a-med, Lenor, Pampers, Ariel, Always and most recently Head & Shoulders in Aldi...
Just last week, Unilever, joined them with listings of Knorr, Langnese-Magnum and Duschdas...
More details in Miloš' article, but the key message for all branded suppliers has to be the need to reassess trade and channel strategies in order to define a non-compromising role for their brands in outlets that will otherwise continue to grow at the expense of brands...
And if the big guys are managing the transition, it must be possible for others...
Given the rate of growth of the discounters, primarily at the expense of brands, it was inevitable that major suppliers would begin to find ways of working with Aldi and Lidl in order to compensate for the sluggish growth of traditional retailers...
In fact, a new report by Miloš Ryba at the IGD, gives details of branded manufacturers such as Nestlé, P&G and Unilevers' increasing willingness to list their products on discounters’ shelves in Aldi Germany over the past 12 months.
Nestlé currently offers Nesquik, Smarties and Wagner-Pizza, while P&G lists Blend-a-med, Lenor, Pampers, Ariel, Always and most recently Head & Shoulders in Aldi...
Just last week, Unilever, joined them with listings of Knorr, Langnese-Magnum and Duschdas...
More details in Miloš' article, but the key message for all branded suppliers has to be the need to reassess trade and channel strategies in order to define a non-compromising role for their brands in outlets that will otherwise continue to grow at the expense of brands...
And if the big guys are managing the transition, it must be possible for others...
Thursday 5 May 2016
Morrisons second quarter of sales growth, a baseline for NAMs?
Today’s news of steady progression establishes a minimum standard for Morrisons’ NAMs in making their financial case for a fair share deal for both parties.
In other words, unless your brand has grown by at least 0.7%, you won’t justify an interview.
However, the more your growth exceeds Morrisons average, the greater your appeal…
The key build on this position is to measure and compare Morrisons main financial ratios with your conservative estimate of your brand’s performance to show point-for-point how you are adding to the retailer’s comeback performance…
In other words, until Morrisons reveal more detail, work with the latest annual report and calculate their Net Margin, rotation, credit period, sales/sq ft and rate of growth, and then compare with your best estimate of your brand’s performance within the retailer.
For instance, you are already growing faster, like-or-like, so you have the buyer’s attention...
Next assess bottom line impact, your real contributor...
Typically, most mults, operate on an average 25% gross margin, will receive up to 20% of purchases in Trade Investment, average 43 days credit, turn their stock 25.6 times/annum and sell approx £900/sq. ft./annum.
Net Margin
Say Morrisons Gross Margin on your brand is 30%, with typical shrinkage (2%) and Store costs & Handling (15%), Overheads of 5%, you are contributing 8% to their bottom line…minimum.
If their GM on your brand is less than 25%, tip in your trade investment…
Trade credit
If you are giving more than 43 days credit, you are adding the additional cost savings to their bottom line.
Stockturn
If you are delivering your main SKU on a weekly basis, this looks like a stockturn of 50 times a year.
Sales/sq. ft./annum
Calculate your brands foot-print performance in Morrisons (number of facings x back-of-facings stock x SKU footprint x number of stores stocked) to give your selling area, and divide it into your annual sales to Morrisons to provide your sales/sq. ft., vs Morrisons average…
The above calculations will give you a conservative estimate of your positive impact on Morrisons performance…and hopefully a basis for indepth discussion on leveraging your brand's performance and optimising your trade investment in the aisle...
In other words, unless your brand has grown by at least 0.7%, you won’t justify an interview.
However, the more your growth exceeds Morrisons average, the greater your appeal…
The key build on this position is to measure and compare Morrisons main financial ratios with your conservative estimate of your brand’s performance to show point-for-point how you are adding to the retailer’s comeback performance…
In other words, until Morrisons reveal more detail, work with the latest annual report and calculate their Net Margin, rotation, credit period, sales/sq ft and rate of growth, and then compare with your best estimate of your brand’s performance within the retailer.
For instance, you are already growing faster, like-or-like, so you have the buyer’s attention...
Next assess bottom line impact, your real contributor...
Typically, most mults, operate on an average 25% gross margin, will receive up to 20% of purchases in Trade Investment, average 43 days credit, turn their stock 25.6 times/annum and sell approx £900/sq. ft./annum.
Net Margin
Say Morrisons Gross Margin on your brand is 30%, with typical shrinkage (2%) and Store costs & Handling (15%), Overheads of 5%, you are contributing 8% to their bottom line…minimum.
If their GM on your brand is less than 25%, tip in your trade investment…
Trade credit
If you are giving more than 43 days credit, you are adding the additional cost savings to their bottom line.
Stockturn
If you are delivering your main SKU on a weekly basis, this looks like a stockturn of 50 times a year.
Sales/sq. ft./annum
Calculate your brands foot-print performance in Morrisons (number of facings x back-of-facings stock x SKU footprint x number of stores stocked) to give your selling area, and divide it into your annual sales to Morrisons to provide your sales/sq. ft., vs Morrisons average…
The above calculations will give you a conservative estimate of your positive impact on Morrisons performance…and hopefully a basis for indepth discussion on leveraging your brand's performance and optimising your trade investment in the aisle...
Tuesday 3 May 2016
Where are Aldi & Lidl headed, profitwise?
Thinking back to the relative simplicity of the 800 SKU model, based primarily on surrogate label with a handful of anchor brands, coupled with low staffing levels and small outlets, it was relatively easy to beat the multiples on price and yet make adequate profits.
At that time, it was cost-effective to approach the multiples’ suppliers of private label, and piggy-back on key lines, without picking up origination and compliance costs.
However, now that the discounters are extending their ranges via more creative product introductions, it follows that they will need more expertise in terms of more support staff in R&D, Tech, QC, apart from picking up the burden of the usual ‘9 out of 10’ failure rate…
Furthermore, as they continue to grow share, consumer media will highlight any product defects, thus triggering the ‘tell a friend’ mechanism – 'if I like it, I tell one friend, disappoint me and I tell 10 friends…'
All adding further to the compliance overhead.
Given the fact that the mults continue to keep pressure on shelf prices, it follows that the discounters’ additional costs will dilute bottom line performance. Perhaps this will become an opportunity for an entrepreneur to re-discover the original 'hard discount' formula, and launch a competitor to Aldi & Lidl?
Leaving us all to ponder on where the legal responsibility for damage to consumers can be laid: retailer or O/L manufacturer?
Welcome to the high-cost world of ‘normal’ retail…
At that time, it was cost-effective to approach the multiples’ suppliers of private label, and piggy-back on key lines, without picking up origination and compliance costs.
However, now that the discounters are extending their ranges via more creative product introductions, it follows that they will need more expertise in terms of more support staff in R&D, Tech, QC, apart from picking up the burden of the usual ‘9 out of 10’ failure rate…
Furthermore, as they continue to grow share, consumer media will highlight any product defects, thus triggering the ‘tell a friend’ mechanism – 'if I like it, I tell one friend, disappoint me and I tell 10 friends…'
All adding further to the compliance overhead.
Given the fact that the mults continue to keep pressure on shelf prices, it follows that the discounters’ additional costs will dilute bottom line performance. Perhaps this will become an opportunity for an entrepreneur to re-discover the original 'hard discount' formula, and launch a competitor to Aldi & Lidl?
Leaving us all to ponder on where the legal responsibility for damage to consumers can be laid: retailer or O/L manufacturer?
Welcome to the high-cost world of ‘normal’ retail…
Saturday 30 April 2016
Wednesday 27 April 2016
Online clothing service for those that hate 'going shopping'...
Business Insider details a new online service that appears to eliminate one of the bugbears of a busy single-tasking (i.e. male) NAM's life - going shopping...
The Chapar, founded in 2012, is an online clothing-concierge service that offers its members "trunks" of curated items - including shirts, shoes, and knitwear - tailored to their taste and delivered next-day direct to their door.
Based on a combination of a short questionnaire, and phone consultation, a personal stylist sends a trunk of 12 items, of which 8 are usually returned...
For those who cannot wait, more details available on the Business Insider site...
A new way of shopping, but the issue for branded suppliers/retailers is how to factor a 66% return rate into an online business model...
The Chapar, founded in 2012, is an online clothing-concierge service that offers its members "trunks" of curated items - including shirts, shoes, and knitwear - tailored to their taste and delivered next-day direct to their door.
Based on a combination of a short questionnaire, and phone consultation, a personal stylist sends a trunk of 12 items, of which 8 are usually returned...
For those who cannot wait, more details available on the Business Insider site...
A new way of shopping, but the issue for branded suppliers/retailers is how to factor a 66% return rate into an online business model...
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