The Amazon approach to backhauling: from within P&G warehouses..

Each day, P&G loads products onto pallets and passes them over to Amazon inside a small, fenced-off area of a joint-warehouse stocked with Pampers, and Bounty paper towels. Amazon employees then package, label and ship the items directly to the people who ordered them.

The e-commerce giant is quietly setting up shop inside the warehouses of a number of important suppliers as it works to open up the next big frontier for Internet sales: everyday products like toilet paper, diapers and shampoo. Amazon is going out to its suppliers with a program it calls Vendor Flex. By piggybacking on their warehouses and distribution networks, Amazon is able to reduce its own costs of moving and storing goods, better compete on price with Walmart and Costco, and cut the time it takes to get items to doorsteps.

Household staples have traditionally been considered too bulky or cheap to justify the cost of shipping. Americans currently buy just 2% of such goods online, retail analysts estimate. Yet even that sliver of business was worth $16 billion in 2012, according to Nielsen, who believe online sales will grow by 25% a year to $32 billion in 2015.

Having cracked the problem of bulky product shipments to consumers, why should Amazon and P&G not extend the idea to other parts of the portfolio?

With pay-offs for both parties (Amazon saving costs of bulky-storage, and P&G eliminating the cost of onward distribution) the idea has already spread to 7 P&G distribution centres worldwide…

...and with no mention of the resulting dilution of traditional multiples buying power, watch this space….

Selling ideas to the unresponsive buyer – challenging the status quo

A buyer who is ‘satisfied’ with your competitor’s brand, the status quo, is not in the market for change.

In other words, it is not possible to sell to a satisfied buyer.

Disturbing the status quo is crucial in making the buyer receptive to new ideas i.e. if the buyer is happy with the current situation, then there is no reason to change, and even less need to consider your proposition.  The first step means de-stabilising current levels of buyer complacency by appealing to their curiosity regarding how others are dealing more effectively with the same issue, or shocking them by exposing their personal vulnerability to changes in the market.

For instance, a buyer that buys at the same price and sells at prices equal to the competition yet nets 3% vs. the rival’s 5%, is obviously open to explanations…. Likewise, a highly geared retailer may not appreciate the danger of a 2% increase in cost of borrowing…

Successfully challenging the status quo means being able to capitalise on the key advantage of the NAM role – breadth of vision arising from experience of the category across the entire marketplace, an insight into all possible ways of making the category available to the consumer – combined with the indepth, but narrow view of the buyer operating within their own store environment.

This potential synergy can be leveraged when the buyer views the NAM as a pan-market expert, a source of insight as to how the other guys are doing. Nothing confidential, simply reassurance that tricks are not being missed…

However, successfully challenging the buyer’s perception of the status quo is not so much about opening the wound, but, having done so, being able to show a plausible link between your proposed solution and the ‘new’ problem.

Otherwise the buyer has simply been made available and receptive to your competitor’s next offer. 

A shelf nearby is watching you....

According to The Washington Post, Mondelez, says it's planning to debut a grocery shelf in 2015 that comes equipped with sensors to determine the age and sex of passing customers. Hooked up to Microsoft's Kinect controller, the shelf will be able to use basic facial features like bone structure to build a profile of a potential snacker.

While pictures of your actual face won't be stored, aggregate demographic data from thousands of transactions will be used to funnel appropriate products for impulse purchase....

It remains to be seen whether the resulting privacy-agro will the negate the obvious advantages of shelf optimisation...

A market segment of one consumer....how the market for consumer durables is adapting to real demand...

For the past 100 years, we have been taught to think that most things we use are best made in quantity on a production line.

Companies remained stuck in the 20th Century when life was moving on. Organisations of all kinds still saw their users through the lens of the mass market philosophy. They looked on their users as groups of people with similar desires. They missed the ability of emerging countries to do better.

In fact western companies simply cannot compete with the developing country producers who are using the mass production model faster and cheaper.

To compete on something other than price, companies based in the West will have to escape from their preoccupation with mass markets and fulfil the precisely-defined individual requirements of their individual customers with breathtaking speed and efficiency, in an environment termed the ‘heartbeat economy’ by Peter Day.

Joe Pine, an American management writer who has become the prophet of what is known as mass customisation, put it like this: "Customers don't want a choice. They want exactly what they want."

Thus the savvy consumer morphs into an ‘individual’ demanding a bespoke solution, and is already satisfying that appetite via the ‘tailor-makeable’ attributes of the smartphone…with 3D printing awaiting applications in other product areas.

Obviously, satisfying this ‘bespoke’ appetite has started and will develop with consumer durables, but once ‘the’ consumer experiences and develops a taste for individual treatment, do you really believe that FMCG can remain ‘as is’?

A fundamental challenge to all of our thinking…?

A wifi solution for compulsive kettle-watchers everywhere...

Given that standing by a kettle appears to prolong the boiling process, NAMs in a hurry can now switch on en route to the bathroom via the world's first wifi kettle, triggered from an iPhone anywhere in the home.

Available from Firebox, four different temperature settings mean it can be programmed appropriately for the drink of choice – 80C for a green tea or 95C for a coffee, for instance. Once boiled, a message on your smartphone will ask you if you are ready or would prefer to keep the water warm for a while....

Having thus cracked the 'watched kettle never boils' problem, the bonus time thus created could then usefully be deployed pondering on the origins and literal meanings of other, albeit violent everyday expressions like shooting ourselves in the foot, cutting off our noses, breaking each other’s legs for good luck, shooting messengers, and stabbing friends in the back. We’d be too hurt to dig our own literal graves. We’d be killing birds with stones, breaking camels’ backs, and beating dead horses. Dogs would be eating other dogs, cats would be getting skinned...however, in unprecedented times...?

Finally, a possible tip for NAMs needing to lend emphasis to a contact-report re making a hasty retreat from the buyer's office:

Describing the experience in terms of “Balls to the wall”, optimises a phrase that refers to military pilots accelerating rapidly, thrusting the ball-shaped grip of the throttle lever to the panel firewall, thus gaining full speed.

Hopefully, this may distract the reader's attention sufficiently from the fact that the negotiating session had a less than satisfactory outcome... 

Converting BOGOFs to BOGOFs: Buy-One-GIVE-One Free?

Students from Queen Elizabeth Hospital in Clifton have developed a clever solution aimed at reducing the mountains of grub going to waste every year, while helping deliver more meals to food banks. They say online supermarket customers should be given the option of sending one of their BOGOF items directly to food banks.

In fact, given that those who have to resort to food banks are also in need of all the other aids to wellbeing that we promote in our advertising, why not extend the idea to all online BOGOFs, and really make a difference…?

Safety contradictions at Heathrow?

                                                                                                            pic: Brian Moore
As my plane lands and taxis to the end of the runway, it always strikes me as bizarre that aircraft fuel is stored in massive tanks on, rather than underneath the side of the runway, a mere wing-tip away from a plane that might happen to land clumsily and a little off-centre…(especially if the pilot is awake but absentmindedly following the safety instructions ("..head in lap, uncrossed legs..." )

In fact almost as silly as forcing one through the government's £500m "e-borders" leaky programme* of security checks before encouraging the purchase of 2x1 litre glass bottles of inflammable liquid for carriage/abuse onboard…

* More on e-borders here 

A Flatline Saturday Afternoon in Whiteleys Queensway...

Saturday 5th October 2013, 1400: Whiteleys Shopping Centre, Queensway, London W2 4YN,
Previously busy to crowded...

                                                                                            pics: Brian Moore

Meanwhile, 'up North'......

Northern shoppers lead UK’s spending bonanza: Shock as London is outshone while confidence rises to post-crash peak 

...but nothing beats a store-visit...