Given yesterday’s news of Peters Bakery collapse into administration, together with today’s report in DIY Week that Allders of Croydon are ‘facing administration’ it might be useful for NAMs & KAMs to explore the possible consequences and implications of such moves.
As a legal concept, administration is a procedure under UK insolvency laws. It functions as a rescue mechanism for insolvent entities and allows them to carry on running their business. The process – an alternative to liquidation – means a company in administration is operated by the administrator (as interim chief executive) on behalf of the creditors as a going concern while options are sought short of liquidation. These options include recapitalising the business, selling the business to new owners, or demerging it into elements that can be sold and closing the remainder.
Options for Peters Bakery
In the case of Peters Bakery, it might be assumed that the owners have already explored the options of recapitalising and/or selling off the business, leaving the option of demerging into elements that can be sold, i.e. the bakery and the shops (The mobile sales operation might remain with the bakery as the better option).
The bakery
The bakery with its relatively new plant and its supply arrangements with major retailers could be attractive as a buy-out by management or takeover by another bakery where increased scale/synergies might add appeal, and some negotiation muscle ref the multiples.
The shops
Meanwhile, the 54 shops with their regional brand equity could also present viable options in terms of either management buyout or acquisition by another retailer. Given the parallels with Greggs shops in terms of positioning, possible acquisition might be worth adding as an agenda item at the next meeting of the Greggs team…
Which options do you feel are best for Peters Bakery?
Thursday 14 June 2012
Wednesday 13 June 2012
Walmart, P&G QR-Code Initiative, the back-story...
- This month-long initiative features virtual "pop-up" QR stores at Chicago bus stops and a "food truck"-style mobile hub in Manhattan, featuring P&G products was led by P&G, but in reality attempts to drive sales to Walmart’s online facility
- This innovative combination of mobile, social and real-time commerce appears to be an attempt by Walmart to neutralise Amazon’s increasing dominance in urban areas, a place where quick delivery is more convenient than access to big-box retailers
- (Amazon: think €36bn sales, growing at 46% p.a., 1-click purchase and ‘instant’ delivery…compulsive!)
- For P&G, a way of getting large packs into the hands of consumers, ultra-conveniently…
- ….apart from the peripheral impact of some extra on-street advertising in high-traffic urban areas..
In fact, which supplier-retailer combination will be first in the UK?
Tuesday 12 June 2012
Auchan opens first bio-supermarket Coeur de nature
We have deliberately chosen to sell mostly products of specialized brands in the store. The family business wants to make organic goods more widely available to everyone, although the price remains the biggest obstacle. That is apparent from an examination of l'Agence Bio. For 77 percent of consumers who do not buy organic products, the price appears to be the main obstacle.
Source: Le Figaro
Friday 8 June 2012
Morrisons feeds Big Brother, really!
This link with the UK’s most down-to-earth grocer should help keep some of the most extreme housemates grounded, thus minimising the possible emergence of the “Truman Show” Delusion now becoming more common in the US…
“Truman Show” delusion?
In fact, psychiatrists are seeing an increase in the number of patients who think they are the unwilling star of a secret reality show. This “Truman Show” delusion may be the first mental illness to come out of the 21st century's obsession with quick and easy fame.
The First Lawsuit
Nicholas Marzano believes he is the subject of a secret reality show, and everyone in his town of Hillside, Illinois is in on it. He's suing TV company HBO in federal court for, in his words, "filming and broadcasting a hidden camera reality show depicting the day-to-day activities of plaintiff" without his consent. His suit, filed in April, alleges that HBO has hidden cameras throughout his home, installed controlling devices in his car, enlisted the help of local police, and recruited actors to portray "attorneys, government and law enforcement officials, physicians, employers, prospective employers, family, friends, neighbours, and co-workers," all so that their show about his life can continue. Marzano also says HBO is keeping him from getting a job or paying his bills, so that he will be forced to remain on the show…..
(See a further 5 case studies here.)
For NAMs and KAMs with a compulsion to read all of the source material, the real article is available for sale by the journal Cognitive Neuropsychiatry
A reality wake-up call?
The real issue is the extent to which we are all in the process of emerging from a 30-year ‘unreality’ show, with growth built on credit, a world where forecasting meant adding 10% to last year’s figures, and a combination of inflation and devaluation, all ably managed by trusted politicians and bankers, helping to sustain unreal levels of ‘feel-good’ consumerism…
This unprecedented wake-up call means we are all now playing for real at having to think for ourselves, unwilling to outsource our decision-making to retailers and marketers, determined to settle for nothing less than demonstrable value-for-money, ever again….
Have a really nice weekend, from the NamNews Team!
Thursday 7 June 2012
If the Numbers Don't Add Up, They Probably Don't
Following a global financial crisis that has left
governments floundering, business managers have lost confidence in both
bankers’ and politicians’ ability to reverse downward spirals in economic
performance at country level.
This in turn is causing middle management to have to choose between denial and confusion as they attempt to move the business forward, where many of the numbers no longer appear to count.
Given that denial is obviously no longer a viable option, it remains for NAMs and KAMs to attempt to make workable sense of the unprecedented chaos in the market, as a basis for building customer strategies that have some chance of delivering acceptable returns on investment, while others naively await some guidance from the system…
Our latest guidance available free
This in turn is causing middle management to have to choose between denial and confusion as they attempt to move the business forward, where many of the numbers no longer appear to count.
Given that denial is obviously no longer a viable option, it remains for NAMs and KAMs to attempt to make workable sense of the unprecedented chaos in the market, as a basis for building customer strategies that have some chance of delivering acceptable returns on investment, while others naively await some guidance from the system…
Our latest guidance available free
Wednesday 6 June 2012
Pound shop revolution hits the big supermarkets!
More than
one-in-six products being sold in supermarkets are now priced at exactly £1 or
£2, highlighting how the pound shop revolution has started to affect long
established rivals.
Supermarkets,
and also chemist chains, have started to rely on distinctive red stickers, and
very clear £1 or £2 prices in a bid to attract shoppers on a budget, as well as
those consumers fed up trying to work out complex deals.
The combined
demand by pound shops and the Big Four has to be a driver of both scale and
relative permanence of the £1 offer, until a prolonged bout of inflation morphs
it into £2, the new £1…
Welcome back to the post-Jubilee realities, from the NamNews Team!
Friday 1 June 2012
World's biggest boxes of pasta on sale in Turkey
Given the Jubilee Weekend and the possibility of extra friends
dropping in, why risk running out of the basics?
Simply pick up a half-tonne box of
Barilla spaghetti now on sale in Turkey.
Too heavy and too big for the shopping trolley, delivery is
included in the price, at Turkey's Migros Ticaret supermarket chain.
The mega box of penne pasta, sells for 999
Turkish lira ($560), for charity.
The boxes at
1-and-a-half meters high and well over a meter wide, are for sale at
supermarkets in Istanbul, Edirne and the resort port city of Bodrum. All
revenues from the sales of the massive cartons will go to the United Nations
Children's Fund (UNICEF).
As with some ‘one-off’
promotional ideas, what happens if the half tonne carton really takes off and
becomes a ‘must stock’ line, complete with listing fees, availability KPIs and
returns allowances…apart from becoming an irresistible challenge for the professional shop-lifter...
Have a giant Jubilee weekend, from the NamNews Team!
Friday 18 May 2012
Talk about speed to market?
A fruit so new it is yet to be named, but described as a pear
disguised as an apple, is to go on sale next week at M&S.
A spokeman said the fruit -- dubbed a "papple" -- looks
and tastes like an apple but has the skin and texture of a pear, and is a
member of the pear family.
Dubbed T109, the new SKU is grown in New Zealand and is a
cross between European and Asian pear varieties, which resulted in a fruit
similar to an apple, the retailer said.
Given the high degree of trade concentration of its native market,
T109 should find the cut ‘n thrust of the UK and Irish retail scenes fairly
familiar...
The bigger issue for M&S may be the product description
at HM Customs, that innovative lot who like to separate their apples and
pears…i.e. the new name may be the least of M&S problems…
Meanwhile, have an actirest but fruitful weekend, from the NamNews
Team!
Friday 11 May 2012
Ferrari as collateral for €2k??
A Dublin property developer goes to his bank for a 10 day loan of €2k.
Following the opening stance, the bank manager offers the loan at 10% annual, + a little extra for admin, i.e. €57, effectively 104% interest, and requests security.
The property developer offers his new €450k Ferrari parked outside, hands over the keys, takes the cash and leaves the bank. The bank manager parks the car in the bank's underground car park, and later jokes with the staff about the €450k car being used as security for €2k…
Ten days later the property developer returns, repays the €2k + €57 interest, picks up the keys and is about to drive off when the bank manager asks why he was prepared to use such an expensive asset as security…and received the reply 'Now where in Dublin could I get 10 days secure parking for €57?
Moral: The same deal can have different values for each party in a negotiated agreement…
Have a dealerious weekend, from the NamNews Team!
Following the opening stance, the bank manager offers the loan at 10% annual, + a little extra for admin, i.e. €57, effectively 104% interest, and requests security.
The property developer offers his new €450k Ferrari parked outside, hands over the keys, takes the cash and leaves the bank. The bank manager parks the car in the bank's underground car park, and later jokes with the staff about the €450k car being used as security for €2k…
Ten days later the property developer returns, repays the €2k + €57 interest, picks up the keys and is about to drive off when the bank manager asks why he was prepared to use such an expensive asset as security…and received the reply 'Now where in Dublin could I get 10 days secure parking for €57?
Moral: The same deal can have different values for each party in a negotiated agreement…
Have a dealerious weekend, from the NamNews Team!
Tuesday 8 May 2012
Whistle-blowing for beginners?
In the Queen’s speech tomorrow, the Groceries Code Adjudicator Bill will apparently give suppliers based in Britain and abroad the right to act as anonymous whistle-blowers.
Key aspects will include post-agreement negotiation, where retailers try to obtain further price reductions and change terms, having struck a deal, along with failure to pay within the time agreed.
Key issues:
The key issues are preservation of anonymity, itself no mean achievement on the part of government with a long record of losing and inadvertently releasing confidential details of members of the public, and gathering sufficient sustainable evidence to make a case against a major retailer.
Preserving anonymity:
The only safe route to anonymity for a supplier is to remove any reference to category or origin that would identify the whistle-blowing company. However, sufficient detail has to be included that will make it possible to categorise the complaint (here the government could help by listing a maximum of ten types of complaint, and 10 broad product categories) and invite submissions on these points).
Sustainability of evidence:
In the interests of sustainability of the evidence, perhaps the government should specify minimum conditions on whistleblowing submissions, in order to count as ‘evidence’. In practice, it is difficult under current competition legislation for suppliers to collaborate in drawing up such checklists, so it may be necessary for individual suggestions to be submitted to authorised third parties (i.e. legal firms).
The same firms might also find it useful to draw up minimal templates for submission of complaints?
Action:
Using these guidelines, a supplier with a grievance could prepare an anonymous hard copy, run it past the inhouse lawyers and commercial team/board, and post it in a plain envelope from a central London postbox.
Paranoia? If the government are really serious about this one, this is how they can attempt to over-ride the fear and impact of the consequences for suppliers that are found to have blown the whistle, naively...
Key aspects will include post-agreement negotiation, where retailers try to obtain further price reductions and change terms, having struck a deal, along with failure to pay within the time agreed.
Key issues:
The key issues are preservation of anonymity, itself no mean achievement on the part of government with a long record of losing and inadvertently releasing confidential details of members of the public, and gathering sufficient sustainable evidence to make a case against a major retailer.
Preserving anonymity:
The only safe route to anonymity for a supplier is to remove any reference to category or origin that would identify the whistle-blowing company. However, sufficient detail has to be included that will make it possible to categorise the complaint (here the government could help by listing a maximum of ten types of complaint, and 10 broad product categories) and invite submissions on these points).
Sustainability of evidence:
In the interests of sustainability of the evidence, perhaps the government should specify minimum conditions on whistleblowing submissions, in order to count as ‘evidence’. In practice, it is difficult under current competition legislation for suppliers to collaborate in drawing up such checklists, so it may be necessary for individual suggestions to be submitted to authorised third parties (i.e. legal firms).
The same firms might also find it useful to draw up minimal templates for submission of complaints?
Action:
Using these guidelines, a supplier with a grievance could prepare an anonymous hard copy, run it past the inhouse lawyers and commercial team/board, and post it in a plain envelope from a central London postbox.
Paranoia? If the government are really serious about this one, this is how they can attempt to over-ride the fear and impact of the consequences for suppliers that are found to have blown the whistle, naively...
Friday 4 May 2012
Target to delist Kindle, fed-up ‘show-rooming’ for online...
Target, the US mass market discounter, communicated the decision to stores last week, and underlines growing antagonism between Amazon and bricks ‘n mortar retailers, which are threatened by the online retailer’s aggressive discounting, entry into new merchandise categories and attractive shipping service.
Target reported last November that the Kindle was the best-selling tablet in its stores on the day after the Thanksgiving holiday, typically the busiest shopping day of the year.
Target has in the past complained about the practice of “show-rooming”, a growing habit by shoppers to view a product in-store and then buy it from an online seller.
Apart from threatening the stability of routes to market for a number of key non-food categories, this move raises an important issue re the relationship between suppliers and specialist retailers.
Specialist shops viability
Essentially, as you know, the purpose of specialist shops in categories such as toys, bookselling, consumer-electronics and home entertainment is to meet a fundamental consumer-shopper need to physically experience the product. When specialists’ retail prices are so out of line with alternative formats, it is inevitable that having ‘pressed the buttons’ on a piece of electronic equipment in a specialist outlet, the shopper will invariably make a purchase online at a significant discount. There is no legal way of ensuring fulfilment of the sale by the specialist retailer unless via a price differential that is so low that purchasing elsewhere is not worth the trouble.
Even the mass retailers are under pressure from Amazon
It has to be expected that as bricks ‘n mortar specialist shops cannot compete with online providers they need help in optimising their business model. The major multiples have reached market dominance by taking state-of-art retailing to new highs, in effect becoming expert shopkeepers. In fact, these major multiple retailers have set global standards in state-of-art retailing that have redefined shop-keeping, and these standards need to be met by specialist retailers in order to survive.
Role of the supplier in helping the survival of specialist retailers
In practice, suppliers need to be retail business consultants to specialist and independent shops, helping them to adapt state-of-art retailing techniques and practices to their operations. However, as the cost of this level of service would rarely be covered by the size of the resulting order, suppliers need to change their approach to calculating the profitability of some customer types. Because specialist and sometimes independent customers are ‘educating’ the consumer and ‘show-rooming’ the product, they are in fact performing an advertising function for the brand. They therefore need compensation by way of additional margin and help in becoming more effective shopkeepers.
Budgeting tip to help specialist retailers
Should we not therefore charge say 50% of the cost of servicing them to the advertising budget, and continue to call if the remaining cost is covered by size of average order?
Otherwise find a new way of show-rooming your brand and re-engaging the consumer….
Meanwhile, have a long, experiential weekend, from the NamNews Team!
Target reported last November that the Kindle was the best-selling tablet in its stores on the day after the Thanksgiving holiday, typically the busiest shopping day of the year.
Target has in the past complained about the practice of “show-rooming”, a growing habit by shoppers to view a product in-store and then buy it from an online seller.
Apart from threatening the stability of routes to market for a number of key non-food categories, this move raises an important issue re the relationship between suppliers and specialist retailers.
Specialist shops viability
Essentially, as you know, the purpose of specialist shops in categories such as toys, bookselling, consumer-electronics and home entertainment is to meet a fundamental consumer-shopper need to physically experience the product. When specialists’ retail prices are so out of line with alternative formats, it is inevitable that having ‘pressed the buttons’ on a piece of electronic equipment in a specialist outlet, the shopper will invariably make a purchase online at a significant discount. There is no legal way of ensuring fulfilment of the sale by the specialist retailer unless via a price differential that is so low that purchasing elsewhere is not worth the trouble.
Even the mass retailers are under pressure from Amazon
It has to be expected that as bricks ‘n mortar specialist shops cannot compete with online providers they need help in optimising their business model. The major multiples have reached market dominance by taking state-of-art retailing to new highs, in effect becoming expert shopkeepers. In fact, these major multiple retailers have set global standards in state-of-art retailing that have redefined shop-keeping, and these standards need to be met by specialist retailers in order to survive.
Role of the supplier in helping the survival of specialist retailers
In practice, suppliers need to be retail business consultants to specialist and independent shops, helping them to adapt state-of-art retailing techniques and practices to their operations. However, as the cost of this level of service would rarely be covered by the size of the resulting order, suppliers need to change their approach to calculating the profitability of some customer types. Because specialist and sometimes independent customers are ‘educating’ the consumer and ‘show-rooming’ the product, they are in fact performing an advertising function for the brand. They therefore need compensation by way of additional margin and help in becoming more effective shopkeepers.
Budgeting tip to help specialist retailers
Should we not therefore charge say 50% of the cost of servicing them to the advertising budget, and continue to call if the remaining cost is covered by size of average order?
Otherwise find a new way of show-rooming your brand and re-engaging the consumer….
Meanwhile, have a long, experiential weekend, from the NamNews Team!
Thursday 3 May 2012
Argos: the writing is on the wall-chart…?
Home Retail Group's shares were down 13% yesterday, partly because of uncertainty about its ability to revive the current Argos model, combined with a decision to forgo the payment of a final dividend, and especially a fall of 9% in like-for-like sales at Argos….
As you know, investors rely on a combination of rise in share price and dividend in order to compare alternative investments. Faced with a two-thirds fall in share price, a company would normally offer a generous dividend to compensate and retain shareholders.
But not when the company has already used available capital of £150m to buy back its shares, all to no avail…..
The Guardian’s Nils Pratley gives a number of reasons for Home Retail to be cautious in 2010-2011: the group's return on capital had fallen for three years in a row, along with operating profits, as had Argos' like-for-like sales, and a chart that says it all....
Future of the catalogue-showroom format?
Another Guardian article quotes retail analyst Nick Bubb as saying that the catalogue-showroom format had "died a painful death" everywhere else in the world barring the UK. "In the US, the discount stores such as Walmart and the online giants like Amazon destroyed long ago the convenience and range advantage of the catalogue showroom. Is it only a matter of time before the same pressures prevail in the UK?"
It is obvious that Argos is in trouble because of its categories moving online, and increasing competition from other “click and collect” services. Faced with this scenario, it would be logical to radically cut the capital base ( i.e. close 50%+ of the stores). Instead the company plan to close but 10 stores in the coming year.
On balance, Argos needs to radically reform its business model, and suppliers with a heavy dependence on the company need to conduct several what-ifs on possible options for their categories in these unprecedented times, fairly quickly…
As you know, investors rely on a combination of rise in share price and dividend in order to compare alternative investments. Faced with a two-thirds fall in share price, a company would normally offer a generous dividend to compensate and retain shareholders.
But not when the company has already used available capital of £150m to buy back its shares, all to no avail…..
The Guardian’s Nils Pratley gives a number of reasons for Home Retail to be cautious in 2010-2011: the group's return on capital had fallen for three years in a row, along with operating profits, as had Argos' like-for-like sales, and a chart that says it all....
Future of the catalogue-showroom format?
Another Guardian article quotes retail analyst Nick Bubb as saying that the catalogue-showroom format had "died a painful death" everywhere else in the world barring the UK. "In the US, the discount stores such as Walmart and the online giants like Amazon destroyed long ago the convenience and range advantage of the catalogue showroom. Is it only a matter of time before the same pressures prevail in the UK?"
It is obvious that Argos is in trouble because of its categories moving online, and increasing competition from other “click and collect” services. Faced with this scenario, it would be logical to radically cut the capital base ( i.e. close 50%+ of the stores). Instead the company plan to close but 10 stores in the coming year.
On balance, Argos needs to radically reform its business model, and suppliers with a heavy dependence on the company need to conduct several what-ifs on possible options for their categories in these unprecedented times, fairly quickly…
Wednesday 2 May 2012
Buyer-seller corruption, a potential hot-potato for all?
Yesterday’s court case involving large-scale corrupt payments to a potato buyer raises important issues for suppliers and retailers. Given the potential impact on share prices of both parties, coupled with ever stringent corporate and government monitoring in these unprecedented times, it is surprising that anyone is nowadays prepared to take the risk of being a party to corrupt inducements to buy. In other words, it needs just one person with a conscience, or a grievance, to lift the lid….
However, given that the current plaintiff was arrested in 2008, with the case having now arrived in court, it could be said that parties on each side of the seller-buyer relationship harbouring any doubts re. their version of the selling-buying process have had adequate time to reflect on the implications and take appropriate action.
The distinction between gifts and bribery
If buying decisions were made solely on objective, rational criteria, a computer would probably do a better job. Instead, given that the basic offer satisfies the key objective criteria, then a host of emotional criteria/influences/needs come into play.
Emotional needs in buying
These include needs for avoiding effort, self-esteem, (pride, self-importance, power), to imitate, to acquire money (via saving vs. making, for the company) need for possession (icing-on-cake), investigate (data), create (new), sense of duty, and especially a need for security (avoiding fear). These can include meals out, or even a bottle of whisky at Christmas.
It needs to be emphasised that such attempts to satisfy the emotional needs of a buyer are not corruption, they are merely ‘icing on the cake’ by way of celebrating a done deal, a deal which ticks all the rational, objective boxes.
Bribery defined
Bribery is quite clearly an overt inducement to the buyer to over-ride the logic of a buying decision where a supplier’s competitor is patently offering a better deal on a like-with-like basis. In other words, the supplier’s offering is equal with that of the competitor except for the additional £10k on the price to fund the bribe.
This point, the first of many, was brought out yesterday in court by the prosecution: "A peculiar feature of the corruption was that it was self-funding. [The supplier was] not paying for it, [the retailer was] paying for the corruption of their own buyer and this was achieved by overcharging [the retailer]".
Action for NAMs and KAMs
The answer for NAMs/KAM’s is always to attempt to revert to the base deal and check that it satisfies objective buying criteria (the buyer’s job needs), like-with-like, before focusing on the buyer’s emotional needs. In practice some of this process occurs simultaneously, but it remains vital that the supplier’s basic offering is defensible and transparent, always, and with 20/20 hindsight…..its the nature of the job, folks.
However, given that the current plaintiff was arrested in 2008, with the case having now arrived in court, it could be said that parties on each side of the seller-buyer relationship harbouring any doubts re. their version of the selling-buying process have had adequate time to reflect on the implications and take appropriate action.
The distinction between gifts and bribery
If buying decisions were made solely on objective, rational criteria, a computer would probably do a better job. Instead, given that the basic offer satisfies the key objective criteria, then a host of emotional criteria/influences/needs come into play.
Emotional needs in buying
These include needs for avoiding effort, self-esteem, (pride, self-importance, power), to imitate, to acquire money (via saving vs. making, for the company) need for possession (icing-on-cake), investigate (data), create (new), sense of duty, and especially a need for security (avoiding fear). These can include meals out, or even a bottle of whisky at Christmas.
It needs to be emphasised that such attempts to satisfy the emotional needs of a buyer are not corruption, they are merely ‘icing on the cake’ by way of celebrating a done deal, a deal which ticks all the rational, objective boxes.
Bribery defined
Bribery is quite clearly an overt inducement to the buyer to over-ride the logic of a buying decision where a supplier’s competitor is patently offering a better deal on a like-with-like basis. In other words, the supplier’s offering is equal with that of the competitor except for the additional £10k on the price to fund the bribe.
This point, the first of many, was brought out yesterday in court by the prosecution: "A peculiar feature of the corruption was that it was self-funding. [The supplier was] not paying for it, [the retailer was] paying for the corruption of their own buyer and this was achieved by overcharging [the retailer]".
Action for NAMs and KAMs
The answer for NAMs/KAM’s is always to attempt to revert to the base deal and check that it satisfies objective buying criteria (the buyer’s job needs), like-with-like, before focusing on the buyer’s emotional needs. In practice some of this process occurs simultaneously, but it remains vital that the supplier’s basic offering is defensible and transparent, always, and with 20/20 hindsight…..its the nature of the job, folks.
Tuesday 1 May 2012
Touching response-rates in improving buying appetite, twofold
In a new study ranging from dating to restaurant tipping and following the waiter’s advice, passersby responding to surveys in a mall, and the percentage of shoppers in a supermarket who purchase food they had sampled, it would appear that suppliers and retailers are missing a trick by not building more touching opportunities into the shopping experience.
Impressing the researcher...
Given that the author Leonard Mlodinow is a theoretical physicist at the California Institute of Technology, with an appetite for statistical significance, even he was surprised to find a twofold increase in response rates following a light touch on the arm…
Not convinced?
Some scepticism is understandable. After all, some people recoil when a stranger touches them. And it is possible that some of the subjects in the studies did recoil but that their reactions were outweighed by the reactions of those who reacted positively.
'Over-touching'?
However, for those finding this blog-post an answer to a personal history of low-success social encounters, and are even tempted to experiment without further delay, it must be emphasised that these were all very subtle touches, not gropes. In fact, in studies in which the touched person was later debriefed about the experience, typically less than one-third of the subjects were even aware that they had been touched.
Apart from being an obvious pointer for Tesco in helping to warm up the shopping experience, there is surely an application in terms of supplier-retailer negotiation, both within and following a multilevel and multifunctional handshake routine…?
(Thanks to Andrew Sullivan)
Monday 30 April 2012
Flash Sale? The New Business Mantra
How they work
The offers are ‘abrupt’ and lasts for a brief time. It is also one of the safest deal takings. In other words you have to avail the opportunity as soon as you are offered the services. Consumers normally receive online offers including even invitations in the mail/emails, for offers averaging 50% off.
In the US, online sample sale site Gilt Groupe have launched an iPad app allowing users and buyers to access flash sales of luxury goods on its site.
Where flash sales are headed
A report by Business Insider estimate that flash sales will be a $6bn market by 2015.
Given the uniquely large supply glut in 2007, offline retailers of all stripes were likewise incentivized to convert their own inventories to cash positions, translating to even deeper discounts and fewer brand protections for manufacturers.
Into the void stepped flash sale sites to offer companies a novel strategy to off excess inventories while simultaneously creating an illusion of exclusivity.
Amazon’s flash sales
Amazon has launched a US private sale website for designer clothes, with members-only shopping and time-limited “flash” sales with discounts of up to 60%.
They opened the site called MyHabit.com last year, competing with start-ups including Gilt Groupe and Rue La La that have won well-off young female customers with their brief sales and urgent marketing.
Amazon promised a rolling series of cut-price deals – available for 72 hours each – from more than 800 brands.
Achica - an online breakthrough
Achica, the members-only home and luxury lifestyle UK website, defied the retail gloom after the fledgling company reported strong sales growth as it expands in continental Europe.
With the homeware sector being one of the hardest-hit areas on the high street as people delay refurbishment projects and trim spending on non-essential items, Achica has bucked this trend by focusing on offering premium homeware goods such as Anglepoise lamps and Le Creuset kitchenware at discounts of up to 70% via “flash” sales, typically lasting for 48 hours.
Apart from obvious opportunities in categories at the upper end of the market, how about suppliers anticipating the spread of flash sales into other categories, and pre-empting the competition, proactively…?
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