With kettle sales dropping by over 7% in five years, it might appear that kettle decline was due to a combination of the global financial crisis, people 'making do' with what they have, and a direct result of cutting back, when in fact our loss in sales may be caused by demand switching to another delivery mechanism, a new consumer-taste via a different appliance (22% of households in Britain now make their own espressos, lattes and cappuccinos). In other words, we are the knock-on effect of other peoples actions.
In practice, management-ego can cause us to assume that the knock-on effect is a result of our actions, rather than caused by others....
This means that direct attempts to stimulate demand can be a waste of promotional funds, when in practice we need to reassess fundamental demand for our product, re-examine its competitive appeal and then invest appropriately in maintaining the share-of-pocket our brand deserves...
And, just-in-case, perhaps diversify into coffee-making machines...?
More on home-coffee developments here
Monday, 14 January 2013
Friday, 11 January 2013
Amazon moves your old CDs into their cloud with AutoRip
Added value, at zero-cost
Apart from being able to listen to an album before the physical CD arrives from Amazon, the service allows you to re-access albums purchased in the past 15 years… OK, so some of your old stuff you might never want to play again, even if you still have the original…..but now you have the choice..
Also, for those that like the look ‘n feel of ‘real CDs, it would not be beyond the capabilities of Amazon to build in a sleeve-note library for even more added value.
Speaking of which, just suppose Amazon decide to add books to the initiative…..
To really get a grip on how fundamental a step Amazon have taken, and the impact on traditional retailers, why not pop into your local branch of HMV (still open?) and ask for a spare copy of a CD you bought back in 1998, free-of-charge….?
Alternatively, why not have a Cloud-nine weekend, from the NamNews Team!
Wednesday, 9 January 2013
Everything is negotiable, when the chips are down…
Keith Ewing, owner of Number Eight Clothing in Stirling, commented that Independent retailers need to "put their heads above the parapet", as his shop was nominated as one of the UK's "top 100 inspiring shops" for 2013 by Draper's magazine. He listed rent-reviews, online, buying and display as key needs in independent retailing.
NAMs could help by sharing their negotiating expertise with appropriate retailers, as follows:
In practice, independent retailers can help themselves to survive by adapting the supplier-approach to business development:
Sharing negotiating expertise can help....
NAMs could help by sharing their negotiating expertise with appropriate retailers, as follows:
In practice, independent retailers can help themselves to survive by adapting the supplier-approach to business development:
- Cutting-costs: rent and rates are currently too high in these unprecedented times. Landlords and local government know this and are vulnerable to the ‘walk-away’ threat by retailers. In other words, retailers should calculate the level of rent and rates (seek help from commercial architects that can provide a broader view) that make the business viable, and renegotiate on this basis, ideally via a combination of lower rent and a ‘per cent of sales’ model, to force landlords to share the business risk.
- Driving sales: develop a strong online strategy by mining your customer records and collecting email addresses going forward in order to extend your reach beyond a shop visit. Optimise supplier help by negotiating better prices, terms and supply arrangement and especially instore merchandising in exchange for customer stats and enthusiastic/ innovative collaboration. Suppliers want you to succeed as a counterbalance to major multiple retailers and are willing to negotiate flexible packages for the right customers.
Sharing negotiating expertise can help....
Monday, 7 January 2013
HMV: the song-writing on the wall?
Given the probability of weak Christmas sales, leading to a breach of its banking covenants, a fall in market capitalisation from £1bn to £10m, and a net debt of £176m preventing it from investing in belated development of multi-channel access to the consumer, perhaps HMV is in need of a radically different business model?
This initiative could be driven by a supplier-base that cannot afford to allow a customer with 20% market share of UK music sales to fail.
Essentially, HMV has become a suppliers’ show-rooming retailer, establishing physical presence and price points for products that are subsequently purchased online, elsewhere.
Staffed by music and entertainment enthusiasts that could explain and demonstrate product, the outlets could perform an invaluable merchandising function, like other specialist retailers provide in the toys category, with the added benefit of some direct sales where possible.
At a total cost of HMV’s current market capitalisation of £10m and combined backing for the £175m debt, competition authorities permitting, a consortium of suppliers could buy the company and convert it into a joint-merchandising/show-rooming vehicle, funded in part from advertising and promotion budgets.
Alternatively, why not let HMV go down the tin-pan, and allow price to be the only driver of sales in entertainment…..?
(How it has come to this)
This initiative could be driven by a supplier-base that cannot afford to allow a customer with 20% market share of UK music sales to fail.
Essentially, HMV has become a suppliers’ show-rooming retailer, establishing physical presence and price points for products that are subsequently purchased online, elsewhere.
Staffed by music and entertainment enthusiasts that could explain and demonstrate product, the outlets could perform an invaluable merchandising function, like other specialist retailers provide in the toys category, with the added benefit of some direct sales where possible.
At a total cost of HMV’s current market capitalisation of £10m and combined backing for the £175m debt, competition authorities permitting, a consortium of suppliers could buy the company and convert it into a joint-merchandising/show-rooming vehicle, funded in part from advertising and promotion budgets.
Alternatively, why not let HMV go down the tin-pan, and allow price to be the only driver of sales in entertainment…..?
(How it has come to this)
Friday, 4 January 2013
Keeping independent shops independent - a new business model for 2013?
More than 50 of Itteringham's 120 residents work in their local shop voluntarily, helping to sell locally grown produce first stacked on its shelves in 1637 (Full details and pics here).
This local community's efforts to keep a village shop open by agreeing to work free indicates the degree of help some traders need in order to survive the combined pressures of flatline demand, consumption cut-backs and price-cutting by the multiples.
Whilst these moves may help on the cost-control side of the equation and with suppliers unable to justify lower prices for independents, those whose brands' viability depends on 'full' distribution, need to find ways of helping a retailer to address the sales-driving side of the equation.
In other words, ways must be found of helping the independent retailer to develop the good shop-keeping skills already established by the multiples. Retailers need the help, but under the current business model, suppliers cannot justify the cost of the call, given the size of resulting order required to break even.
However, given that our advertising effectiveness requires adequate levels of distribution and our brand may benefit from in-store discussion and even demonstration, then surely it would be realistic to regard part of function of the brand's presence in independent outlets can be to augment the marketing message and its effectiveness. We should therefore consider writing a proportion of the cost of call off to the advertising budget.
In this case, covering 50% of the cost of a retail call would translate into a 50% reduction in the size of order required to break even.
I leave you to ponder on the potential for shopper marketing initiatives and new variants that could be explored and even refined in readiness for sophisticated application in selected mults....
Support independent retail, you know they could be worth it...!
...and in a year like 2013, anything is worth trying..
Meanwhile, have a great weekend, from the NamNews Team!
This local community's efforts to keep a village shop open by agreeing to work free indicates the degree of help some traders need in order to survive the combined pressures of flatline demand, consumption cut-backs and price-cutting by the multiples.
Whilst these moves may help on the cost-control side of the equation and with suppliers unable to justify lower prices for independents, those whose brands' viability depends on 'full' distribution, need to find ways of helping a retailer to address the sales-driving side of the equation.
In other words, ways must be found of helping the independent retailer to develop the good shop-keeping skills already established by the multiples. Retailers need the help, but under the current business model, suppliers cannot justify the cost of the call, given the size of resulting order required to break even.
However, given that our advertising effectiveness requires adequate levels of distribution and our brand may benefit from in-store discussion and even demonstration, then surely it would be realistic to regard part of function of the brand's presence in independent outlets can be to augment the marketing message and its effectiveness. We should therefore consider writing a proportion of the cost of call off to the advertising budget.
In this case, covering 50% of the cost of a retail call would translate into a 50% reduction in the size of order required to break even.
I leave you to ponder on the potential for shopper marketing initiatives and new variants that could be explored and even refined in readiness for sophisticated application in selected mults....
Support independent retail, you know they could be worth it...!
...and in a year like 2013, anything is worth trying..
Meanwhile, have a great weekend, from the NamNews Team!
Thursday, 3 January 2013
2013: A year for realistic optimism?
With five flatline years behind us, and a high street littered with casualties, realistic NAMs should be finding it easier to factor in a further five years of the same....
If we accept that whilst politicians operate to a different agenda (re-election) and vocabulary (triple dip = flatline...) those of us still in business are here because we know that in times of zero-growth, any market gains have to be made at the expense of the competition.
This means always seeing our offering through the eyes of an increasingly savvy consumer that is unwilling to settle for anything less than demonstrable value-for-money, a consumer determined never again to outsource their purchase decision-making to marketers or retailers.
In these circumstances, it is vital to strip our offering back to the bare essentials, leaving a needs-based package that represents real value, measured by what people are prepared to pay, over and over again.
Using consumer need as the only real benchmark, realistic NAMs will assess the offering vs. what is available from competition, and will continue to cut until what remains represents true value, and more, to a consumer and ultimately the savvy retailer.
Achieving this level of confidence in our value means realistically factoring in politics, economics and banking into our business thinking, as we constantly strive to achieve acceptable financial rewards for risk in a market environment where the numbers do not appear to add up...first time.
In practice, this means realistically measuring all of our costs and being able to translate them into value that we represent to our customers, and being able to demonstrate our impact on their Balance Sheets and P&Ls...
In such unprecedented times, real opportunities exist in 2013 for those determined to be realistically optimistic, and are prepared to act decisively, while the competition await a return to the 'good old days'...
Meanwhile, a Happy and Positive New Year, from the NamNews Team!
If we accept that whilst politicians operate to a different agenda (re-election) and vocabulary (triple dip = flatline...) those of us still in business are here because we know that in times of zero-growth, any market gains have to be made at the expense of the competition.
This means always seeing our offering through the eyes of an increasingly savvy consumer that is unwilling to settle for anything less than demonstrable value-for-money, a consumer determined never again to outsource their purchase decision-making to marketers or retailers.
In these circumstances, it is vital to strip our offering back to the bare essentials, leaving a needs-based package that represents real value, measured by what people are prepared to pay, over and over again.
Using consumer need as the only real benchmark, realistic NAMs will assess the offering vs. what is available from competition, and will continue to cut until what remains represents true value, and more, to a consumer and ultimately the savvy retailer.
Achieving this level of confidence in our value means realistically factoring in politics, economics and banking into our business thinking, as we constantly strive to achieve acceptable financial rewards for risk in a market environment where the numbers do not appear to add up...first time.
In practice, this means realistically measuring all of our costs and being able to translate them into value that we represent to our customers, and being able to demonstrate our impact on their Balance Sheets and P&Ls...
In such unprecedented times, real opportunities exist in 2013 for those determined to be realistically optimistic, and are prepared to act decisively, while the competition await a return to the 'good old days'...
Meanwhile, a Happy and Positive New Year, from the NamNews Team!
Tuesday, 18 December 2012
How do they sell Xmas champagne for £9.99?
According to The Daily Mail, you need 2.2lb of grapes for a single bottle of champagne. At current market rates, that will cost you £4.38. Excise duty on top of that is £2.43, and VAT, at 20%, must be paid on the total - another £1.36.
Already we’re up to £8.17, and we still haven’t paid for bottling, warehousing, shipping and distribution. Those overheads vary but, altogether, the total cost price is almost certain to match or exceed the selling price of £9.99. So, a tight fit until they revert to the normal price of £12.99 until the new year.
If Aldi seems a step too far this Christmas, try Asda @ £10, or Waitrose/Tesco @ £14.99
However, if you feel this removes some of the romance from the Christmas festivities, why not pick up a couple of the traditional brands, the only issue being whether you serve these up before or after the Aldi version…
Thursday, 13 December 2012
Tesco and Asda poles apart in Cyber Monday web performance speeds
If speed is key, then Tesco will increase their online lead over Asda at Christmas.
A study by Aberdeen Group published by Internet Retailing into ecommerce site performance found that a one-second performance delay reduces sales conversions by seven per cent, a figure which can represent £2.55 million a year lost for a £100,000 per day site.
The results showed that Tesco came out on top with 100% availability on the day and an average response time of just 1.403 seconds, a far cry from Asda, which had an average response time of 13.634 seconds and an availability rate of only 86.44%. The sluggish Asda rate was more than double the average UK-retail benchmark of 6.369 seconds and far behind the average availability of 98.48%, making Asda the worst performer of all the retailers that were tested.
However, the big issue for me was the fact that with a worse than UK average response time of 6.378 secs, Amazon have most to gain by bringing their response times up to match the simplicity of 1-Click purchasing…
Average response times and availability for the Top Ten UK online sites can be seen here.
A study by Aberdeen Group published by Internet Retailing into ecommerce site performance found that a one-second performance delay reduces sales conversions by seven per cent, a figure which can represent £2.55 million a year lost for a £100,000 per day site.
The results showed that Tesco came out on top with 100% availability on the day and an average response time of just 1.403 seconds, a far cry from Asda, which had an average response time of 13.634 seconds and an availability rate of only 86.44%. The sluggish Asda rate was more than double the average UK-retail benchmark of 6.369 seconds and far behind the average availability of 98.48%, making Asda the worst performer of all the retailers that were tested.
However, the big issue for me was the fact that with a worse than UK average response time of 6.378 secs, Amazon have most to gain by bringing their response times up to match the simplicity of 1-Click purchasing…
Average response times and availability for the Top Ten UK online sites can be seen here.
Wednesday, 12 December 2012
Pound shop backstory - 'Commodity City' - home of pound shop supply
Quick answer: China. However, nowhere reflects China's contribution to the pound shop phenomenon better than the town of Yiwu, about two hours by fast train from Shanghai. Four decades ago it was a small town - now it is a "commodity city" with a population of over a million.
Yiwu City has the largest small commodity market in the world.
It seems dedicated entirely to the production, exhibition and sale of the thousands of small products that cram the shelves of pound shops. Any shop owner can visit the city, order a dozen different kinds of vases, teddy bears or fishing nets, anything they want and which can be made for under a pound, fill a container and have it shipped back to the UK.
Vital statistics
And massive it is. 4.3 million square metres of floor space containing 62,000 booths representing factories and suppliers producing everything from 2011 Rugby World Cup balls to Hello Kitty socks.
Yiwu’s 3,000 jewellery booths make it the largest supplier in China and the jewellery accessories sector is even bigger. 70% of pens in China come from there, 60% of the gloves, and for those inclined, there are 3,000 booths peddling underwear. Yiwu is often called Sock City – if you’re wearing socks anywhere in the world, there’s a 50% chance they came from Yiwu.
Can’t wait to pay a visit?
In which case, a few helpful Chinese terms for visiting Yiwu
Yī wàn ge duō shao qián? … How much for 10,000?
Tài guì le! … That’s expensive!
Wà zi nǎ lǐ? … Where are the socks?
Wǒ néng bu néng mǎi yī ge? … Am I able to buy one of them?
Tuesday, 11 December 2012
Ten of Britain's most unusual shops?
Bored with store visits? Next time you need a break in the market-checking routine why not include an unusual shop in your schedule?
The Observer have identified what could be the 10 most unusual shops in Britain
1. Unicorn Antiques on Dundas Street in Edinburgh
2. Mr B's Emporium of Reading Delights, Bath
3. Fragile Design, Birmingham
4. Laste, Brighton
5. Nook & Cranny, Liverpool
6. Labour and Wait, London
7. Junk, Manchester
8. Junior Toys, Wells
9. Blaze, Bristol
10. Lupe Pintos, Glasgow
(pics and details in The Observer )
Given the conditions in the high street and the increasing emphasis on productivity, you can be sure that any ‘quirky’ shop still standing must have a unique and profitable appeal. This means that it stands out because of its high degree of match with shopper need, a real standard-setter in terms of assessing how well major mults branches are aligned to your target consumer….
These unusual shops can look messy, disorganised and unprofitable…but in practice they are re-writing the shop-shopper rulebook, in unprecedented times, when everyone is searching for new solutions…
Perhaps these shops have the courage to be different, and have simply found an unusual way forward…..?
The Observer have identified what could be the 10 most unusual shops in Britain
1. Unicorn Antiques on Dundas Street in Edinburgh
2. Mr B's Emporium of Reading Delights, Bath
3. Fragile Design, Birmingham
4. Laste, Brighton
5. Nook & Cranny, Liverpool
6. Labour and Wait, London
7. Junk, Manchester
8. Junior Toys, Wells
9. Blaze, Bristol
10. Lupe Pintos, Glasgow
(pics and details in The Observer )
Given the conditions in the high street and the increasing emphasis on productivity, you can be sure that any ‘quirky’ shop still standing must have a unique and profitable appeal. This means that it stands out because of its high degree of match with shopper need, a real standard-setter in terms of assessing how well major mults branches are aligned to your target consumer….
These unusual shops can look messy, disorganised and unprofitable…but in practice they are re-writing the shop-shopper rulebook, in unprecedented times, when everyone is searching for new solutions…
Perhaps these shops have the courage to be different, and have simply found an unusual way forward…..?
Monday, 10 December 2012
Rewards points scheme for smaller shops
At £1 per point, Clickypoints eliminates the uncertainties associated with traditional schemes, and being redeemable at any member branch allows shoppers to optimise their ‘personal’ value…..
However, in terms of potential spread of usage, the real driver is the fact that offering pound-for-pound points instead of price reductions, not only can the retailer sell at full price and maintain brand equity, they can use what would have been spent on advertising to fund the deals…
Surely a way of combining the interests of shopper and supplier in helping to build a healthy independent sector, everywhere?
Sunday, 9 December 2012
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Friday, 7 December 2012
For the buyer who has had everything: the world’s oldest Courvoisier vintage
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pic: Talking Retail
According to Talking Retail, the world’s oldest known Courvoisier vintage, Courvoisier & Curlier 1789 is now available in the Harrods Wine Shop, from 5 – 8th December. The historic cognac, a snip at £95,000, dates back to the French Revolution, and was bottled over 200 years ago by the Curlier brothers, nephews of Felix Courvoisier.For those whose buyer has been less accommodating in 2012, four lesser vintages are available priced between £9,500 and £38,500 a bottle.
Livestream today
If you cannot get to Harrods today, a livestream tasting is available at 12 noon GMT London time / 13:00 CET Paris time, where not only will you get the chance to glimpse the Courvoisier & Curlier 1789 Cognac, but you can also see Master Blender, Patrice Pinet, host a tasting of Courvoisier’s premium Cognac Succession J.S and a chance to send in your inevitable questions to him direct…..
Who knows, you may even see your rival NAM in the background, executing the ultimate in buyer appreciation…
Seriously, what should be your buyer-gifting policy in these austere times? - too little says too much, too much says too little….
Anyway, why not have a really vintage weekend, from the Namnews Team!
Wednesday, 5 December 2012
Tesco Q3 - the update options for suppliers?
Given the positive market reaction to a review and probable sale of its Fresh and Easy operation, the resulting focus on core domestic market dominance and business development of overseas markets has to represent a short-term breathing space for Tesco.
The company now has an opportunity to intensify its £1bn regeneration project, perhaps switching the emphasis to food, as the world wakes up to the fact that austerity-driven consumers ‘making do’ have taken real demand from the replacement and new product market in non-foods….
Financial emphasis
Given the city’s focus on financial performance, then Tesco will need to demonstrate its new direction by squeezing costs and driving sales, whilst becoming potentially even more appreciative of the financial value of brands.
Suppliers in turn need to be able to calculate and demonstrate the impact on the Tesco P&L of margin, credit, settlement discount, ATL, trade funding, GMROII and even deductions…
An opportunity for financially articulate NAMs to sound like Tesco think?
A virtual US presence?
Meanwhile, a 100% withdrawal from the US probably means that despite an otherwise global success, Tesco will find it impossible to re-enter the US in the next 10 years. However, leaving aside a traditional 20th century bricks & mortar approach, Tesco could demonstrate its 21st century vision by building and maintaining a virtual presence in the US via:
An opportunity for suppliers in relevant categories?
The company now has an opportunity to intensify its £1bn regeneration project, perhaps switching the emphasis to food, as the world wakes up to the fact that austerity-driven consumers ‘making do’ have taken real demand from the replacement and new product market in non-foods….
Financial emphasis
Given the city’s focus on financial performance, then Tesco will need to demonstrate its new direction by squeezing costs and driving sales, whilst becoming potentially even more appreciative of the financial value of brands.
Suppliers in turn need to be able to calculate and demonstrate the impact on the Tesco P&L of margin, credit, settlement discount, ATL, trade funding, GMROII and even deductions…
An opportunity for financially articulate NAMs to sound like Tesco think?
A virtual US presence?
Meanwhile, a 100% withdrawal from the US probably means that despite an otherwise global success, Tesco will find it impossible to re-enter the US in the next 10 years. However, leaving aside a traditional 20th century bricks & mortar approach, Tesco could demonstrate its 21st century vision by building and maintaining a virtual presence in the US via:
- Private label via an agency network to build brand awareness
- Online: as a leading online player Tesco could use a combination of local partners in appropriate categories
An opportunity for suppliers in relevant categories?
Tuesday, 4 December 2012
A bogof for B&M Bargains?
Having sold a significant share of the business for a 10x multiple that values B&M Bargains at around £965m, the Arora brothers have secured two major assets:
- A source of funding to realise its UK and overseas potential
- A visionary who saw the global potential when Tesco was tip-toeing into France
Arora bought B&M at the start of the global downturn in 2005 when it was loss-making and had fewer than 20 stores. However, the retailer has been transformed since then. It now has more than 300 stores, 10,000 employees, annual sales of £1bn, and is perfectly positioned to thrive in the global ‘post-recession’ flatline environment…
For NAMs wanting to scope out the company’s full potential, now rather than when everyone can exercise hindsight, think:
- Tesco with no baggage in the era of pile-it-high, sell-it-cheap
- Tesco freed from City restraints, at least for five years…
- A fully focused family with everything to gain
- A well-connected chairman with nothing to lose
- A stripped-down fully transparent discount offer
- A global environment crying out for same…
- A source of funding to realise its UK and overseas potential
- A visionary who saw the global potential when Tesco was tip-toeing into France
Arora bought B&M at the start of the global downturn in 2005 when it was loss-making and had fewer than 20 stores. However, the retailer has been transformed since then. It now has more than 300 stores, 10,000 employees, annual sales of £1bn, and is perfectly positioned to thrive in the global ‘post-recession’ flatline environment…
For NAMs wanting to scope out the company’s full potential, now rather than when everyone can exercise hindsight, think:
- Tesco with no baggage in the era of pile-it-high, sell-it-cheap
- Tesco freed from City restraints, at least for five years…
- A fully focused family with everything to gain
- A well-connected chairman with nothing to lose
- A stripped-down fully transparent discount offer
- A global environment crying out for same…
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