Waitrose & Co-op demand price-cuts from suppliers

The retailers’ recent demands for up to 5% reduction on future payments has major implications for suppliers’ profitability following years of absorbing energy and ingredient cost increases.

A supplier with sales of £1m to a customer, on a net profit of 7.5% needs incremental sales of £666k to fund the reduction….

i.e. 5% of £1m = £50k = 7.5% of the incremental sales required to generate £50k. i.e 50k/7.5 x 100 = £667k

A retailer on 4% net profit receives a benefit equivalent to incremental sales of £1250k i.e. £50/4 x100.

It can therefore be seen why they do it, and why it will be difficult to insist upon fair share negotiation.

The numbers may help…

NamCalc shows how…

Sharks make Aussie golf course lake a real hazard

KAMs not wishing to lose contact with day-job sharks might wish to consider a weekend round of golf in Brisbane Golf Club?

Following flooding in the 1990s, the new lake was found to contain six man-eating bull sharks, each over 2.5m long, making ball-recovery a hazard.

The sharks have become renowned in the region and there is even a monthly tournament called the "Shark Lake Challenge."

Have a swinging Jaws weekend, from the Namnews Team!

Adding value to Sainsbury's instore braille initiative

Having becomethe first British supermarket to incorporate Braille signage, Sainsbury's could perhaps move further ahead by linking with Nokia’s touchscreen device that puts braille at the fingertips of the visually impaired.

Nokia and collaborators at the Tampere University in Finland have come up with a braille app for the blind and visually impaired.

It captures received SMS messages and brings them to the foreground for reading using braille and tactile feedback

An opportunity for all retailers to provide real value to disadvantaged customers?

Literary Giant rates grocery trade journalism

                                                                                   pic by Jason Carlin

Recently discovered letters of Samuel Beckett (Waiting for Godot) reveal that in 1946 he considered applying to RGDATA in Dublin

“…. I see advertised in to-day’s Irish Times an editorial vacancy on the staff of the RGDATA (Retail Grocery Dairy and Allied Trades-Association) Review at £300 per annum. I think seriously of applying. Any experience of trade journalism would be so useful.”

As you might expect, the entire Namnews team have taken this very much to heart as encouragement in pursuit of their literary endeavours….

Paypal helping to exploit “new normal” of seamless shopping

Shopping is now 24×7 and it happens everywhere – not just in a store or website. The intersection of smartphones, social media, online and offline shopping has put the consumer squarely in control.

The payment services firm plans to add several new features in the coming months, including mobile payments, barcode scanning using handheld devices, store inventory lookup, virtual wallet and location-based offers.

In other words, an opportunity for retailers to engage their customers directly during every part of the shopping lifecycle –  generating demand from consumers through location-based offers, making payments accessible from any device (not just from the mobile phone), and offering more flexibility to customers even after they’ve checked out

In effect, PayPal is re-imagining money and making it work better for retailers and consumers – whatever device they are on, wherever in the world, and however they prefer to pay (whether cash, credit, or instalments), making it fun to pay…..

The company reports its new services will help drive its volume of transactions in 2012 beyond the $100bn forecast for 2011, up from $92bn in 2010.

Have a fun-payment weekend, from the Namnews Team!

When ‘Every little may not help…’

News that Sainsbury's is dropping its "try something new today" positioning after six years in favour of a "live well for less" commitment to its customers reflects both the pressures being put on its customers, and takes the company back to its roots, which is great quality food at great prices.  

However, a US study in the Journal of Consumer Research reveals a strange facet of consumer behaviour: people behave differently when they encounter companies' brands than they do when they encounter their slogans. In one example, exposure to the retailer brand name Walmart, typically associated with saving money, reduces subsequent spending, whereas exposure to the Walmart slogan, (Save money. Live better.) increases spending, In another study, consumers who were subliminally exposed to the word "slogan" wanted to spend more when exposed to a savings message and less when exposed to a sentence that encouraged luxury spending.

Fortunately retailers can rapidly change stance based upon immediate sales performance, whilst  brand owners are locked into change for at least a year..  

New emotion detector to identify a bluffing KAM?

Did you happen to notice the new security camera, the buyer playing with a thermal sensor, while sucking on a suite of algorithms, at that last business review meeting?

A new system that uses a simple video camera, a high-resolution thermal imaging sensor and a suite of algorithms can detect lies just by watching our faces as we talk, experts say.

Developed by a team from the universities of Bradford and Aberystwyth in conjunction with the UK Border Agency, the system was unveiled today at the British Science Festival in Bradford.

It builds on years of research into how we all unconsciously, involuntarily reveal our emotions in subtle changes of expression and the flow of blood to our skin.

We give our emotions away in our eye movements, dilated pupils, biting or pressing together our lips, wrinkling our noses, breathing heavily, swallowing, blinking and facial asymmetry. And these are just the visible signs seen by the camera. Even swelling blood vessels around our eyes betray us, and the thermal sensor spots them too.

However, as the stakes rise in supplier-retailer relationships, it is important for KAMs to match every technical move of the buyer with equivalent technical aids in order to ensure a fair-share outcome…

A fascinating article in the New Scientist describes experiments with a pair of hi-tech glasses that can  whisper in the KAM’s ear through a headphone attached to the glasses. It reveals when the buyer is "confused" or "disagreeing". All the while, a red light built into the specs starts blinking above the right eye warning the KAM to stop talking. It seems as though the wearer has developed an extra sense.

The glasses can send this information thanks to a built-in camera linked to software that analyses the buyer’s facial expressions. They're just one example of a number of "social X-ray specs" that are set to transform interpersonal interaction. . The camera tracks 24 "feature points" on the buyer’s face, and software analyses the myriad micro-expressions, how often they appear and for how long. It then compares that data with its bank of known expressions By sensing emotions that we would otherwise miss, these technologies can thwart disastrous social gaffes and help us understand each other better. Some companies are already wiring up their employees with the technology, to help them improve how they communicate with customers.

The real issue is whether this boost to our emotional intelligence goes too far in helping the KAM to interpret feelings the buyer might rather keep private?

Whitby Scampi Gets a Little Help From Tesco

Whitby Seafoods has signed a deal which means its wholetailed scampi will go on sale at Tesco stores around Britain.

Launched in 1985 by Graham Whittle from the assets of the Whitby Shellfish company, founded in 1963 and was one of the first firms to sell breaded scampi in the UK.

Over the last 26 years, Whittle has transformed the business into the biggest scampi supplier in the UK.

Following a high rate of sale locally, they pitched to successfully to supply Tesco nationwide.

A big step for Whitby Seafoods, but giant leaps ahead in terms of meeting Tesco KPIs and more especially the own label potential, globally (Tesco products are in 90 countries where they do not have shops…)

In effect, the supplier could either become a scampi aggregator for Tesco, or focus on the brand and develop it via all UK multiples..  ( 'If you can make it here, you can make it anywhere..')

Either way, this could simply be the end of the beginning…a lesson for all niche players?