Retailers have yet to truly connect with mobile shoppers - traditional retail missing another trick?

An article by Samanta Edwards over at The Wallblog examines new research on mobile-shopper optimisation (Window on Connected Shoppers - a free 20 page report on converting connected shoppers into buyers).

With one in three of the 30% of smartphone owners that have used their smartphone to shop in the last month, only one in ten of them regularly use apps as part of the purchase process – suggesting that retailers are failing to provide the right content.

In fact, according to the research, in-store smartphone users utilised their devices for:

• sharing ideas (47%)
• comparing prices (29%)
• product information (20%)
• sharing photos, taking pictures as a reminder, store location and browsing (with no intention to purchase) were all cited by 17% of respondents

As always, the problem is not that most retailers are missing the mobile trick, but that a select few (Apple, Schuh) are setting and making new standards in customer-connection work, and have to grow at the expense of old-fashioned retail competition, especially in the case of in-store mobile purchasing...

In other words, these physical retailers have managed to get live mobile-consumers into their stores, and are failing to see that online completion of the mobile journey is still a retail sale....

A 3-in-1 sign of the mobile times?

                                                                                    pic: B Moore, Greenwich High Street, 8-07-2015

Offline limits to online growth: Is click-and-collect 'cannibalising' retailers?

Given that the cost of fulfilling an online order is approximately £20, and market willingness-to-pay appears to have an upper limit of £5 per delivery, it is obvious that a retailer loses £15 per online order.

Charging for Click & Collect merely addresses the 'front end' of this problem in terms of covering some of the real cost of the 'final mile'. It also means that John Lewis introduction of a  £2 charge is possibly adding to the problem by giving the impression that a home delivery option is worth the difference - £3...

Meanwhile, for a Bricks & Mortar retailer in a virtually zero-sum flat-line environment, any scale advantages will be neutralised by increasing redundancy of physical space.

With Click & Collect growing at 20-30% per annum, the real issue for retailers is that the growth of their online business not only cannibalises their regular in-store sales but also causes them to lose more money as online sales increase.

In a flat-line demand environment with market share increases having to come at the expense of the competition, it would appear that major physical retailers are in a race to the bottom in terms of profitability.

Meanwhile, Amazon and other pure-play online retailers will grow at the  expense of physical players until a point is reached where even their growth is limited by consumers' refusal to pay adequate rates for order fulfillment.

For suppliers, this means that having managed to take the GSCOP-route out of the extremes resulting from dealing with the Big 4 multiples, we may be unconsciously accepting the even tighter harness of the online route to consumer...

In other words, with the benefit of hindsight, it might be wise to anticipate, prepare for and negotiate fair share dealings from the start, rather than require a Mk.2 GSCOP rescue sometime in the future...

Retail queue optimisation - or how to burn a mink coat safely...

                                                                                                    pic: Kim Stallwood

According to The Telegraph, the UK population is losing the ability to form an orderly line, in that companies are developing new technology to make queuing more efficient or eliminate waiting altogether.

In fact, dedicated tennis fans join the famous (or infamous) Wimbledon queue every year and, for many, waiting in line has become almost as enjoyable as the tennis itself.

However, this may become increasingly exceptional.

In fact it is estimated that British retailers lose almost £4,000 a day because people are put off making purchases by queues.

The article goes on to detail initiatives by John Lewis aimed at to shortening queues for "click & collect" parcels, sensors embedded in trolley wheels, Barclaycard Anywhere’s device that eliminates the need for receipts and cash protection in-store, and provides a number of pictorial examples of potentially redundant traditional UK queueing…

Speaking of which, despite having a low tolerance limit for any form of queueing, I did spend 15 minutes in a sale-queue outside a major London store, back in 1979..

A neighbour of mine had decided to queue for 5 days to secure a mink coat reduced from £795 to £79, which she planned to burn in an animal rights protest.

Details here & here

I was working in Oxford St on Fay's fourth day and decided to join her in line and keep her company for a while. She was delighted to see me (!) as she apparently had some technical issues to resolve i.e. how to ensure the coat burned quickly. I assured her that my expertise was limited to retail buying and selling, but decided to practice my listening skills for a moment…

I asked her what she planned and she told me about a bottle of petrol she had about her person, intending to sprinkle it liberally, etc.

I cautioned her that unless she intended to make the ultimate sacrifice, perhaps draping the coat over a nearby wire waste-bin (pic) would suffice…thus ensuring a 100% success in terms of media coverage, and my little place in history…

For the NAM in a hurry...

See the Cargo-Runner, and how it works, here ( BBC )

Are your media strategies keeping pace with market realities?

                                                                    Pic: B Moore: Olympia 27-06-2015

The case for Shopper Marketing, packed in a conundrum?

We somehow break through the apathy - at great expense in terms of time, money and people - in unprecedented times, within a flat-line demand environment, at a significant price disadvantage in a cut-throat environment, manage to get our brand considered as a fleeting alternative, and motivate the potential consumer to move towards the nearest store.....

Only to leave them to their own devices at the door.

They then have to find their way to our part of the store, cope with the confusing appeals of the category's competing offers, including private label, all subject to the inevitable 'cool-off', even if our offer presents on-shelf as intended...

"I cannot forecast to you the action of the brand owner. It is a riddle, wrapped in a mystery, inside an enigma; but perhaps there is a key. That key is the brand's need for 110% consumer satisfaction."
(with apologies to Mr Churchill)

The GCA-GSCOP five-issue approach to optimisation of supplier-retailer relationships.....

Some indication of the steady progress being made by the GCA can be gleaned from the latest YouGov survey (here), but nothing beats participating in yesterday's 2nd Annual Conference, a unique mix of Sales, Finance and Legal stakeholders, all sharing a common interest in optimising the supplier-retailer relationship.

(NamTip: key for NAMs to have a detailed knowledge of GSCOP in order to fulfill their co-ordinating role re the major customer)

At the start of the GSCOP process, the GCA was faced with what could have been an overwhelming number of potential issues. However, by focusing on a rolling five-issue 'hit-list', Christine Tacon was able to help both suppliers and retailers focus on a manageable set of issues within GSCOP as follows:

Top Five Issues:
1. Consumer complaints (processing charges by retailer) - New (in discussion)

2. Delays in payment (failure to pay suppliers within agreed time periods) - New (in discussion)

3. Forecasting/service levels (issues arising re forecasting and call-off/delivery) - Live (currently under discussion with each party)

4. Requests for lump sums: (see GSCOP) - Live (currently under discussion with each party)

5. Packaging & design charges (possible excess over market rates) - Live (currently under discussion with each party)

Forensics: third party audits (2 year limit on claims) - Closed (meaning agreement has been reached on process and  interpretation. Any further instances will be regarded as in breach)

Drop and drive - delivery performance:
(issues around possible discrepancies between deliveries and receipts - Closed (see Forensics)

As can be seen above, given that two issues are 'Closed', five issues remain. At yesterday's conference it was announced that the Consumer complaints issue is now closed. This means the GCA is now in the process of prioritising a new issue, to be determined by degree of relevance to suppliers/retailers i.e. your opportunity to submit details of perceived breaches either directly to the GCA, or via your trade association.

It has taken many years to reach this point in the evolution of supplier-retailer relationships. The application of GSCOP is now gathering momentum but still requires 'proof of purchase' in order to access the benefits

Your input can help...

NB GCA Conference: Speaker presentations now available here