Coping with post-Christmas cash shortages…

Coping with post-Christmas cash shortages…

Shoplifting-to-order has emerged as a way of removing  some of the wasteful duplication and inefficiency of ‘grabbing what you can’ allowing more time for the planned-theft and increased pricing stability in the knock-off end of the market. Ranging from choice cuts of meat to full x-box packages, the fenced-offer can be tailored to most market segments and levels of need. It is even possible to access detailed instructions on skill development in all stages of the shoplifting process including preparation, shop-floor behaviour, blind-spots and other lifting techniques, leaving the store safely and even coping with being caught…

Time to drill into your sales-stats and factor shoplifting-to-order into your still buoyant sales in early 2012?

Have a soul-searching weekend, from the NamNews Team! 

Walmart launches video-contest for suppliers

Walmart has highlighted the internet’s potential to change the way companies source goods by inviting entrepreneurs to pitch their products in a video contest that will bypass the strict protocols of its buying department.

Called “Get On The Shelf”, the winning product will be sold at the retailer’s US stores and online after an internet vote, like TV shows such as American Idol, in which members of the public will be asked to choose the best pitch uploaded to a Walmart website.

Suppliers in any Walmart categories can create and submit videos of their latest products at www.GetOnTheShelf.com (See examples of current submissions here).

The public will then vote online for the top three winners at GetOnTheShelf.com. The three will be sold on walmart.com and the top winner will also automatically get shelf space in select Wal-Mart stores around the country.

Suppliers (US only) can submit their video pitches until Feb. 22. The first round of voting will happen between March 7 and April 4 to select 10 finalists.

Apart from the possibility of gaining a listing with the world’s biggest retailer, this initiative presents a terrific opportunity for suppliers to cover some of their production costs by gaining access to all the consumers that Walmart attracts to GetOnTheShelf.com.

The real issue is how soon Walmart will decide to adapt the technique to some of their routine sourcing (cost saving for suppliers, cost reduction, every little helps…Get it?)
Also if the initiative 'can make it there, it can make it anywhere' ...(apologies, Frank!)

Time to check out your video-pitching skills and upgrade the Skype connection?

Tesco, a rediscovery of good shopkeeping…?

Essentially, the future of Tesco lies in global retail, with profitable dominance of its home market a pre-requisite..

However, a market share of more than 25% of food becomes a political issue, attracting the normal criticisms of ‘abuse’ of power over suppliers, planning authorities and even the consumer in terms of real choice.

Achieving and potentially exceeding 31% in the UK had to present a problem for Tesco, despite attempts to generalise its offering via non-foods, thus allowing it to claim an ACV share of 12%, well short of the problematic 25% threshold….

Meanwhile, the rush for overseas growth caused them to miss some tricks in the UK.

‘Black Thursday’ was simply a massive correction, and a recognition that savvy shoppers want value instead of more choice i.e. via improved quality, range and service, in a flatline market environment, on the brink of another recession.

The issue of superstore overcapacity is an important side issue in that the growth of online non-food means less physical selling space is required, putting more pressure on selling intensity (sales per sq.ft.) of remaining SKUs. Given that it would be virtually impossible for other retailers to match Tesco’s space productivity via alternative use, then ‘spare’ superstore sites will be difficult to sell off. This means that these and underutilised stores will thus become a continuing drain on profits…

Unfortunately all of this this means Tesco and its suppliers will have to share the cost of £300-400m for the change, or risk wiping out this year’s profit growth for the No.1 retailer…

The way forward for UK NAMs is to assess degrees of congruence between brand consumer-profile and Tesco shopper-profile, map out Tesco’s appeal vs. other retailers from the consumer-shoppers’ point of view, and position their brands as ways for Tesco to improve quality, range and service, better than the opposition.

It hopefully goes without saying that calculating and demonstrating the financial value of the brand to the Tesco P&L in return for 100% compliance has to be pre-requisite for both parties in making this change, like never before…

ATM demand after Christmas?

Thieves have stolen money from a cash machine in Manchester after digging a 100ft tunnel underneath a video rental store in Fallowfield shopping precinct.

Obviously picking up tips from a Colditz DVD from a previous visit to the Blockbusters branch, they installed lighting and roof supports, and were also believed to have drilled tiny holes into the floor of the store through which they poked telescopic cameras to check their progress.

However, at an estimated 6 months dedicated to the project and an estimated £6k cash-haul, any Blockbuster NAM could have told them the potential ROI was not worth the effort...
A lesson for all NAMs attempting the impossible in financial darkness?

The future of Specialist retail?

Three decades ago, the rule of thumb in US retail was that there was room for three big players in each product category. “Good, better, and best,” as Walter Loeb, a veteran US retail consultant, recalls.

But today, it appears that each category has room for just one specialist chain, competing with Amazon, the world’s biggest online retailer by sales, and Walmart,

The issue for UK retail is how specialist retail will fare in categories such as electronics, alcohol, books and toys. The major multiples are growing at the expense of specialist retail, by focusing on these non-food categories, cherry-picking SKUs and reflecting scale economies via deep-cut prices, as retailers do…

Moreover, suppliers cannot afford, or be seen to give additional price support in different channels. Realistic customer profitability analysis will also prevent any other subsidising of specialist retailers by suppliers.

This has all been compounded by the emergence of the savvy consumer using smart phones and price-comparison sites

It follows that it is not possible for full-range specialists to compete and survive on this basis, however good their retailing abilities.

However, given that specialist retailers serve an important purpose of ‘explaining’ the category and ‘educating’ users, it is vital that they be treated differently by suppliers in terms of remuneration via performance-based-reward. In other words, a supplier should regard specialist retailers' activities as part of their advertising programme and reward them accordingly. Specialists can also benefit from help in providing category-specific instore entertainment, an enhancement of the shopping experience.

Otherwise, it is inevitable that even a 1-specialist chain, Tesco/Walmart and Amazon may be unsustainable in a flat-line market…

A home delivery service using local independent shops?

If you don't have time to visit the butcher, the baker and the fishmonger, someone else can do it for you

Growing fast, Hubbub was launched 12 months ago and now uses more than a dozen shops and six delivery vans (bright yellow ones – watch as they crop up everywhere soon). Currently it just serves an area of London which stretches from Kentish Town, via Islington and Hackney to the City, but the plan is to roll it out across the whole of the capital early this year and following that, the rest of the UK.

The clever bit about Hubbub is that if you log on in, say, north or west London, you will be only be served by the shops in your immediate vicinity, so you will be directly supporting your local businesses.

Scale issues remain but once they achieve critical mass, this has got to  be a winner, surely worthy of some support from suppliers and retailers..?

The Iron Lady - Lessons for NAMs in Thatcher remake?

Gordon Reece, a former television producer, has been widely credited with masterminding Mrs Thatcher’s change of image, advising her to adopt a softer hairstyle, get rid of her “fussy” clothes and stick to a high neckline and pastel shades. Crucially, he also advised her to lower the tone of her voice and speak more slowly and closer to the microphone to make her voice husky, intimate and, above all, less hectoring….

A team of well-known experts in their respective fields then focused on each aspect and helped to bring about the subtle changes that all boiled down to being herself, with emphasis..

Politics apart, in terms of learnings for your NAM role, by all means wear a ring in your nose, a pony-tail and goth-gear if that is your preferred weekend presentational mode but it just means that you have to work a bit harder to neutralise the resulting ‘negative‘ influence on a more conventional buyer, more accustomed to visits from competitor NAMs wearing horn-rimmed glasses and hair parted on the left…

However, whilst you may (or have to) be open to corporate advice on how best to present yourself to the buyer, ultimately, like Maggie, you are the one in charge…

A final pre-austerity treat for those not tired of Christmas fare?

For those amongst our readers still awaiting delivery of their Fortnum & Masons £5,000 Christmas hampers we can reveal that the unforgivable delay has been caused by a disastrous IT failure at the store earlier in December. As you know, the £5,000 Imperial Hamper comes packed with Beluga caviar, foie gras truffles, cognac butter, a magnum of Cristal 2002 and a bottle of 32-year-old whisky. 

Full refunds are available and who knows, perhaps a bogof might shift the unsold stock?  

In which case, why not indulge in a final pre-austerity bash this weekend?

‘We are all special cases’ *Meeting a Buyer’s Need For Special Treatment in 2012.

Given current pressures in the market, coupled with a tradition of attempting to meet a buyer’s needs, the new Age of Selfishness can mean that more ‘powerful’ buyers get more than their fair share, in effect making the strong players stronger…

Unless it is your company policy to eventually end up with one customer, it is important to attempt to meet a buyer’s needs within a context of all other buyers’ requirements. In other words, we need to balance resource allocation across the whole customer portfolio to avoid distortion of our consumer base.

Our starting point has to be our own survival in terms of an acceptable ROCE and Net Profit in a flatline growth environment, over the next five years, at least.

Realistically, this means achieving at least 15% ROCE and Net Profit of 10% for our company and for our business with each of our major customers, minimum…

There are two ways of achieving this, either growing the business, or cutting costs. Given the lack of growth, this means cutting all available slack in the system in terms of stock level vs. service level, trade terms and making trade funding investment conditional upon full compliance.

This exercise will help calculate the size of the ‘cake’ available for the customers, divided in proportion to their potential turnover within our total sales performance and profitability (i.e. ROCE and Net Profit).

Given that our competition are under similar pressures an probably fighting for their lives (and perhaps do not even know it), it is crucial that we maintain a realistic view of our competitive appeal vs. others in the category, and again cut away anything not demonstrably contributing to that appeal.

It is only then that we can consider a buyer’s need for special treatment, counting cost and value all the way..

Welcome to 2012…

*Albert Camus

Thinking straight for 2012?

With the most optimistic predictions indicating at best flat-line growth this year, our role in business still remains that of factoring in latest conditions and taking  action that will stand the test of 20/20 hindsight…

Apart from 'normal' competition, we need to cope with unprecedented forces at work in our markets including ‘making do’, delaying renewal/replacement, recycling goods via pre-owned, re-usable, second-hand sub-markets, with charity shops and pound-stores now becoming mainstream, all potentially reducing demand for our new products and services.   

All of these take on whole new meanings as savvy consumerism works its way up the pipeline.

We need to challenge everything to ensure we get demonstrable value-for-money, everywhere.

The age of credit is being replaced by selfishness as businesses struggle for survival by passing risk and cost back up the supply-chain via demands for extra credit, increased trade funding, anything that will improve competitiveness, all at the expense of other parties, any other parties… 

Realistically, in a flat-line market any growth has to come at the expense of the competition.

It is therefore time for really straight thinking in order to assess relative competitive appeal in the eyes of increasingly savvy consumers and  customers. We need to quantify cost and value by reflex, since without calculation and quantification, our reaction is simply emotional…

In fact, deep down, as everything changes and nothing changes, as always, we are on our own.

All we need is realistic optimism for 2012, in the firm belief that there is always room for a good idea.

All else is detail….

The Great British Understatement, a way of coping with 2012?

Slogging through the jungles of Africa in 1873, Dr David Livingstone recorded an extraordinary example of a species that has since become almost extinct:

The Great British Understatement.
The intrepid explorer was suffering from pneumonia, malaria, foot ulcers, and piles so savage he could barely walk. The roasting heat was punctuated by sudden torrential downpours. Many of his porters had run away, and he had been forced to pull out most of his rotting teeth. He had been attacked by leeches, slavers and hostile African tribesmen. Lurking in his gut was a blood clot the size of a cricket ball that would shortly kill him.

In his tent, by the light of a candle, Livingstone picked up his pen and, using berry juice because he had run out of ink, he wrote these magnificent words:
“It is not all pleasure, this exploration”.

The Times 27th Dec 2011
Ben Macintyre

A Christmas message from NamNews

November, the new January…

From a supplier and retailer branding point of view, pre-christmas discounting became the norm, bigtime....

A time when the need to move product also served to reduce brands to commodities.

Remembering that consumers buy the total package (Product, Price, Presentation and Place) and shoppers buy the total 'shop' (Products & assortment, Pricing, Promotional activities, Place i.e. store location, Personnel, Physical distribution & handling, Presentation of stores & products, and Productivity) it is obvious that price figures highly in each case. However, it can be seen that the retail offering is more complex, and by excessively discounting, given the knife-edge margins, there is simply little scope for permanently reducing prices, without damaging the fabric of the business.

The impact of this will become more obvious tn the new year, when the next quarterly rents become due…

Meanwhile, permanent discounting of brands merely serve to commodify the category, with little benefit for anyone

Again, the new year will allow brand owners to demonstrate their need to rebuild brand equity via direct ATL re-investment, whatever the cost to the diminishing pool of retail trade partners…

Making product placement work…?

Looking for the dress you saw on a hit television show or the jerseys worn during a football game or soccer match? An iPad app aims to help viewers shop while watching TV. Unlike television shopping channels, Watch with Ebay is a new feature in eBay's iPad app that lets users buy items related to the program they're currently viewing.

After entering the network provider and channel, items related to the TV show, the actors, guests or teams in a sporting event surface within the app, triggered by appropriate video-frame tags...

A recent US study by Nielsen found that 40 percent of smartphone and tablet owners use the devices while watching TV and 29 percent of them are searching for information related to the show.

With clothing just the start, this has to be an opportunity for mealtime dish-ingredients, and even via lingering shots of an open fridge, artistic integrity permitting, of course…

My shop sees me….

                                                                                                       Jiro Bevis
Given e-tailers ability to track every mouse-move to help customise sites and maximise the likelihood of a purchase, it was only a matter of time before  bricks-and-mortar stores were able to give shoppers some much needed attention via computer analysis of their instore behaviour via security cameras, even saving surveyed consumers the bother of saying one thing and doing another….

Added to their ability to track mobile phone signals instore, retailers can now use direct feed from a store’s existing security camera system, run it through software which analyses the video and correlates it with sales data. The software can also integrate data from hardware such as RFID chips and motion sensors to track how often a brand of cereal is picked up or how many customers turn left when they enter a store…

Early days, but initial research already appears to indicate that many shoppers pay more attention to centre aisle than end-of-gondola displays..

Some are testing facial-recognition software that can identify shoppers’ gender and approximate age, whilst others are using mobile phone-number analysis to check shopper nationality.  Opportunity for ultra-sensitive in-pocket scanning of credit-cards to tie the data-set together?

Apart from the need to reconfigure store layout, assortment and displays to optimise the insight and pre-empt privacy issues, all that remains is for stores to analyse staff behaviour and try to get them to echo even a small proportion of the attention their technology is giving the shopper…  

Have a cautionary weekend, from the Namnews Team!