Wednesday 16 April 2014
Which? investigates supermarket tactics to make/help you buy more (or Why? this report may be holding the wrong end of the 'supermarket-bashing' stick...)
Given that 60-70% of purchasing decisions are made instore, by making it easier to buy, supermarkets are perhaps meeting a fundamental need for reminding, in shoppers...
Taking the three key points as reported in the Which? report, it may be useful for suppliers and retailers to consider some 'helping buy' options...
1. 'You read shelves from left to right and top to bottom so supermarkets put more profitable products, such as own-brand products, to the right or under the leading brand' Product-siting can be helpful, especially to the time-poor shopper and placing similar products side-by-side makes for easier comparison. Where retailers miss a trick is in not facilitating true like-with-like comparison, ideally via unit pricing. Retailers that mislead or confuse at this point are eventually 'punished' via loss of custom...
2. 'You may find that products that are associated together can be located next to each other to encourage you to buy all of them' Sharp-eyed NAMs may recognise this as category management, the purpose of which is to help the shopper to make complementary purchases. Retailers might make this more explicit to researchers and naïve shoppers via appropriate signage and possibly linked promotion, providing the product-set is truly complementary, and not simply an inducement to over-buy, as in a bogof..
3. 'Your peripheral vision notices movement - 'wobbly signs' - but not necessarily fixed signs'. In an increasingly cost-conscious and clutter-free store environment, wobblies would not have survived for thirty years if they were not effective.... Given the increasing difficulty in attracting and retaining shopper attention in a multimedia-saturated world, perhaps suppliers and retailers should reassess their optimisation of the one 'grabber' that seems to work - the humble 'wobblie'...
Above all, when the consumer-shopper takes the trouble to pay attention, it represents a major break-through...
We call it "paying attention" for a reason. It's worth quite a bit, and ought to be cherished...
Seth Godin
Taking the three key points as reported in the Which? report, it may be useful for suppliers and retailers to consider some 'helping buy' options...
1. 'You read shelves from left to right and top to bottom so supermarkets put more profitable products, such as own-brand products, to the right or under the leading brand' Product-siting can be helpful, especially to the time-poor shopper and placing similar products side-by-side makes for easier comparison. Where retailers miss a trick is in not facilitating true like-with-like comparison, ideally via unit pricing. Retailers that mislead or confuse at this point are eventually 'punished' via loss of custom...
2. 'You may find that products that are associated together can be located next to each other to encourage you to buy all of them' Sharp-eyed NAMs may recognise this as category management, the purpose of which is to help the shopper to make complementary purchases. Retailers might make this more explicit to researchers and naïve shoppers via appropriate signage and possibly linked promotion, providing the product-set is truly complementary, and not simply an inducement to over-buy, as in a bogof..
3. 'Your peripheral vision notices movement - 'wobbly signs' - but not necessarily fixed signs'. In an increasingly cost-conscious and clutter-free store environment, wobblies would not have survived for thirty years if they were not effective.... Given the increasing difficulty in attracting and retaining shopper attention in a multimedia-saturated world, perhaps suppliers and retailers should reassess their optimisation of the one 'grabber' that seems to work - the humble 'wobblie'...
Above all, when the consumer-shopper takes the trouble to pay attention, it represents a major break-through...
We call it "paying attention" for a reason. It's worth quite a bit, and ought to be cherished...
Seth Godin
Tuesday 15 April 2014
Amazon offers $5,000 for employees to quit
Contrarian king Jeff Bezos turns the old training cliché (CEO: ‘What if we train the team and they leave…?’ SD: ‘What if we don’t train them and they stay?’) on its head and deflects a little potential ‘staff-abuse’ criticism in the process….
In his latest annual letter to Amazon shareholders, Bezos outlines a number of ‘inward innovations’ around people management. These include training staff for in-demand non-Amazon jobs such as nursing and paying employees up to $5,000 if they quit.
Outsiders may feel that Bezos is simply heading off criticism that Amazon work their warehouse staff too hard – ‘walking 11 miles per shift’, etc. – but in fact he is taking a very innovative approach to reducing attitude issues at work.
Given that the right attitude makes development of a team’s knowledge and skills easier and takes half the time, coupled with the fact that ‘festering discontent’ can be highly infectious, Bezos approach has to make sense..
If still in doubt, think of the resource cost and complicated legal process involved in applying the traditional approach to ‘attitude’ elimination…
Monday 14 April 2014
Walgreens urged to leave US to gain tax benefit - a step too far for the US authorities?
According to the Financial Times, Walgreens has come under pressure from an influential group of its shareholders who want the US pharmacy chain to consider relocating to Europe, in what would be one of the largest tax inversions ever attempted.
At a private meeting in Paris on Friday, investors owning close to 5 per cent of Walgreens’ shares lobbied the company’s management to use its $16bn takeover of Swiss-based Alliance Boots to re-domicile its tax base.
Whilst such a move would be attractive to shareholders, coupled with similar cases and especially the focus on taxation of Google, Amazon and Apple, given the state of the US economy, it seems likely that the US government will try to block the move.
In doing so, it not only means major distraction for Walgreens-Boots management in the short term, with inevitable impact on supplier-retailer implications at street level, it also provides a way to make the question of merger company taxation a centre-stage issue globally…
In other words, the US government could bring forward the issue of taxing US companies on their global earnings, challenge the viability of corporation tax vehicles such as the so-called double-Irish tax arrangements in Ireland, and intensify the pressure by the French/EU governments to eliminate low taxation rates in member countries…
However, for suppliers to Walgreens-Boots, the real tail-sting was another agenda-item tabled at the same meeting whereby the investor group told Messrs Wasson and Pessina that they wanted to see a greater role for Boots’ management team in running the merged business….
The real Boots agenda emerges?
…and given that Boots management have more global experience than their Walgreens colleagues, this has to mean W-B flexing their international muscles in term of optimising prices and terms disharmonies, at least…
Watch this space...
At a private meeting in Paris on Friday, investors owning close to 5 per cent of Walgreens’ shares lobbied the company’s management to use its $16bn takeover of Swiss-based Alliance Boots to re-domicile its tax base.
Whilst such a move would be attractive to shareholders, coupled with similar cases and especially the focus on taxation of Google, Amazon and Apple, given the state of the US economy, it seems likely that the US government will try to block the move.
In doing so, it not only means major distraction for Walgreens-Boots management in the short term, with inevitable impact on supplier-retailer implications at street level, it also provides a way to make the question of merger company taxation a centre-stage issue globally…
In other words, the US government could bring forward the issue of taxing US companies on their global earnings, challenge the viability of corporation tax vehicles such as the so-called double-Irish tax arrangements in Ireland, and intensify the pressure by the French/EU governments to eliminate low taxation rates in member countries…
However, for suppliers to Walgreens-Boots, the real tail-sting was another agenda-item tabled at the same meeting whereby the investor group told Messrs Wasson and Pessina that they wanted to see a greater role for Boots’ management team in running the merged business….
The real Boots agenda emerges?
…and given that Boots management have more global experience than their Walgreens colleagues, this has to mean W-B flexing their international muscles in term of optimising prices and terms disharmonies, at least…
Watch this space...
Sunday 13 April 2014
Red Bull - for that extra lift when you really need it!
A man survived an 80ft (24m) fall off a cliff when his car careered off the road and plunged into the sea near Brighton at midnight on Saturday...
The car ‘miraculously’ managed to avoid the concrete promenade at the foot of the cliff after it came off the A259 road near Roedean.
The driver told a fireman at the scene that ‘he just had a Red Bull and it… made him fly’…..
Thursday 10 April 2014
Myners’ striking at core Co-op issues...
Euan Sutherland argued that democracy and values might be vital, but without radical change the whole future of the Co-op business was at risk.
By implication, Lord Myners’ resignation endorses that view.
In practice, the Co-op will not go bust, but may break down into separate societies, each operating and buying without the benefits of scale, and as a consequence becoming less attractive to suppliers in terms of being a counter to the power of the major multiples…
The BBC quotes the Midcounties submission to Lord Myners' re-organisational recommendations: "Among the independent consumer co-operative societies, it is demonstrably the case that it is the most democratic that are the most successful in commercial terms, not the reverse."
No one is claiming that democracy in business does not work, it just takes longer…
And, as even the most consultative CEO’s know - and their teams accept - in crisis conditions a degree of temporary autocracy is essential…
If the Co-op really wants to perform commercially, it means being able to deliver an acceptable ROCE – not the currently depressed 5-10% level currently being delivered by the UK major multiples, but more akin to Walmart’s 19% - a combination of 5% Net profit and a stockturn of 10+ times/annum.
As anyone with commercial experience knows, producing an acceptable surplus of sales over costs – i.e. a source of funds for investment in the business and sharing with members – means aiming at 10% net profit and achieving 5%...
Suppliers are prepared to invest in suitably qualified trade partners a combination of retail margin (25+%), free trade credit of 45+ days, trade investment of up to 20% of retail purchases, and even suffer up to 7% deductions off invoice for failure on their part to meet professional retailer agreements...
All the supplier require in return is fair-share treatment, retail professionalism and 100% compliance, a standard even the major multiples find onerous…
If the Co-op wants a place at the table with the major multiples, and to be treated as a serious ‘invest’ player by key suppliers, it needs to perform commercially, and deliver standards of compliance comparable with other retail players…
A focus on the bottom line can help drive the business in the short term, and managing a gradual improvement in ROCE will provide a longer time-frame, each demonstrating to suppliers that the Co-op qualifies for longer term investment, and means it..
Unfortunately, a £2bn loss is not the best place to start…
By implication, Lord Myners’ resignation endorses that view.
In practice, the Co-op will not go bust, but may break down into separate societies, each operating and buying without the benefits of scale, and as a consequence becoming less attractive to suppliers in terms of being a counter to the power of the major multiples…
The BBC quotes the Midcounties submission to Lord Myners' re-organisational recommendations: "Among the independent consumer co-operative societies, it is demonstrably the case that it is the most democratic that are the most successful in commercial terms, not the reverse."
No one is claiming that democracy in business does not work, it just takes longer…
And, as even the most consultative CEO’s know - and their teams accept - in crisis conditions a degree of temporary autocracy is essential…
If the Co-op really wants to perform commercially, it means being able to deliver an acceptable ROCE – not the currently depressed 5-10% level currently being delivered by the UK major multiples, but more akin to Walmart’s 19% - a combination of 5% Net profit and a stockturn of 10+ times/annum.
As anyone with commercial experience knows, producing an acceptable surplus of sales over costs – i.e. a source of funds for investment in the business and sharing with members – means aiming at 10% net profit and achieving 5%...
Suppliers are prepared to invest in suitably qualified trade partners a combination of retail margin (25+%), free trade credit of 45+ days, trade investment of up to 20% of retail purchases, and even suffer up to 7% deductions off invoice for failure on their part to meet professional retailer agreements...
All the supplier require in return is fair-share treatment, retail professionalism and 100% compliance, a standard even the major multiples find onerous…
If the Co-op wants a place at the table with the major multiples, and to be treated as a serious ‘invest’ player by key suppliers, it needs to perform commercially, and deliver standards of compliance comparable with other retail players…
A focus on the bottom line can help drive the business in the short term, and managing a gradual improvement in ROCE will provide a longer time-frame, each demonstrating to suppliers that the Co-op qualifies for longer term investment, and means it..
Unfortunately, a £2bn loss is not the best place to start…
Wednesday 9 April 2014
A watch for blind people, being bought by sighted people
 |
| Pic: Kickstarter |
Designed to touch and see, around a groove in the centre a ball-bearing rotates to mark the minutes. Around the edge of the watch, another ball bearing rotates to tell the hours.
Realising that less than 10% of visually impaired people can read braille, with a constant battle between functionality and producing a beautiful object, the designers eventually found a solution - a magnet underneath the metal watch face would control two rotating ball bearings for hours and minutes.
Snyder became involved because of his need to use a watch that did not highlight him as someone with a special need. “I love the idea of using the same thing that everyone does. And I want to feel as normal as possible."
With the watch now named the Bradley, there was an appeal on Kickstarter, the crowdfunding website, in July last year - 3,681 people from 65 different countries backed the project, donating a total of $594,602 (£357,290). It will be available for sale from May in the US, with the UK and Europe likely to follow later. According to the BBC, a further 1,000 people have since pre-ordered the watch online but only 1-2% are visually impaired….
A great example of thinking outside the box, breaking away from the erroneous stereotype that visually impaired people are not fashion-conscious...
More details and pics on the Kickstarter site
Tuesday 8 April 2014
A Lidl more class please...?
Plans for a Lidl branch in Eastwood, Essex may be turned down for a second time because the building is too boring.
Proposals for a store bigger than an Olympic-size swimming pool at the corner of Progress Road and Rayleigh Road have divided the public. Eastwood Residents’ Association and three-quarters of visitors to a consultation have backed the scheme, but nearby businesses, a 53-signature petition and 78 letters have objected.
Planning officers have recommended Southend Council throw out the plans, as they say a landmark building is needed at the entrance to the Progress Road Industrial Estate.
A pointer for Lidl in terms of keeping pace with the upward adjustment of its place in UK society?
Thursday 3 April 2014
Hammer & Nails, the Nail Shop for Man-NAMs
Given the increasing rigors and need for perfection in managing major accounts, it is vital that male and female NAMs operate on an equal footing...
This new service in LA is designed to ease sore muscles of athletic and active men. The Sports Pedicure features hot stones, Hammer & Nails Signature Scrub, foot and leg massage, reflexology, and a hydrating mint clay mask, which stimulates blood circulation. It also includes nail trimming and shaping, cuticle oil and grooming, moisturizing, hot towel wrap, and paraffin treatment.
In fact, all those little things that make a difference to the busy man-NAM, who may feel that out-of-sight is out-of-mind...
Too busy?
For those NAMs not wanting to sacrifice an entire afternoon in a busy schedule, the salon owners have responded to requests from loyal clients who want to stop by and receive a quick treatment before a big meeting, by designing the Express MANicure/Pedicure, that includes nail trimming and shaping, light cuticle grooming, and moisturizing treatments.
Hammer & Nails currently have 1 outlet in LA, with plans to open further branches throughout the US.
Hopefully, it won't be too long before the company respond to pent-up demand by increasing their foot-print to include the UK...
Wednesday 2 April 2014
Amazon penetration....
Yesterday I took delivery of a package from Amazon.
It was due between 1230 and 1330 so at 1130 I did a parcel-check to find that ‘Leo’ was currently four streets away on delivery 30, and still had 33 deliveries to make before reaching me at 1245…
Scarey….in terms of both coverage-density and numbers of their deliveries…
It was due between 1230 and 1330 so at 1130 I did a parcel-check to find that ‘Leo’ was currently four streets away on delivery 30, and still had 33 deliveries to make before reaching me at 1245…
Scarey….in terms of both coverage-density and numbers of their deliveries…
7-Eleven bringing real convenience to the UK?
Given the news that 7-Eleven may be re-entering the UK market, it would be unwise to assume that this will simply be a re-iteration of our UK experience in the nineties...
In fact, it could be said that the only way to anticipate their potential influence is to visit some branches in Tokyo...
My personal memories may lend some insight:
There, in the same small outlets you will find a comprehensive range of goods and services catering for every convenience need, with hyper-efficiency.
With 75% of the range permanently in stock, the remaining 25% is rotated up to three times a day, based on customer need: milk for the school-kids in the morning, bottled water for office workers at mid-day and alcoholic beverages for tired NAMs on the way home in the evening....
A bank of ATMs and terminals for paying utility bills, a small microwave oven for heating snacks line one wall, with newspapers, magazines, books and mail-order pickup facilities lining another.
Outside a home-delivery moped is parked, ready to deliver even 1 SKU orders when required. Whilst the 3,000 SKU shop stocks a handbag-size hairspray, a nearby sub-depot stocks all sizes and variants, allowing the shop to offer a range of 60,000 SKUs to those wanting home delivery...
Oh, in terms of convenience, you will find a branch at the base of most high-rise apartment blocks, with the occupants referring to 7-Eleven as their refrigerator, as convenient to access (a lift-ride away) as the correspondingly small refrigerator in their kitchen...
In fact, it could be said that the only way to anticipate their potential influence is to visit some branches in Tokyo...
My personal memories may lend some insight:
There, in the same small outlets you will find a comprehensive range of goods and services catering for every convenience need, with hyper-efficiency.
With 75% of the range permanently in stock, the remaining 25% is rotated up to three times a day, based on customer need: milk for the school-kids in the morning, bottled water for office workers at mid-day and alcoholic beverages for tired NAMs on the way home in the evening....
A bank of ATMs and terminals for paying utility bills, a small microwave oven for heating snacks line one wall, with newspapers, magazines, books and mail-order pickup facilities lining another.
Outside a home-delivery moped is parked, ready to deliver even 1 SKU orders when required. Whilst the 3,000 SKU shop stocks a handbag-size hairspray, a nearby sub-depot stocks all sizes and variants, allowing the shop to offer a range of 60,000 SKUs to those wanting home delivery...
Oh, in terms of convenience, you will find a branch at the base of most high-rise apartment blocks, with the occupants referring to 7-Eleven as their refrigerator, as convenient to access (a lift-ride away) as the correspondingly small refrigerator in their kitchen...
Tuesday 1 April 2014
Frictionless commerce - what other businesses can learn from Amazon
With the move to smoother, quicker, and easier transactions using a combination of f-commerce and mobile payments, to virtual wallet options and NFC, frictionless commerce is becoming widespread.
However, whilst retail may appear to be leading the way in many cases, it can be easy to underestimate the lead that Amazon has gained over all other players...
Using data collection and one-to-one correspondence that would be intrusive were it not the fact that it is so accurately focused on real need, Amazon has become an indispensable buying-tool for many...
Moreover, by perfecting their 1-click approach - and combining it with Prime status to eliminate delivery costs - their model optimises impulse purchase
In fact, in my own case, I have had to remove the Amazon UK icon from my home page in order to cause me to think a fraction longer about real need while I source the site via Google...
However, as online practitioners strive to emulate their rival's 1-click KPI, Amazon's real USP has to be their frictionless returns policy...
In fact, any aspiring online operation has to experience a heartbeat-missing moment when they realise that Amazon's returns process is easier than 1-click, the ultimate online standard...
However, whilst retail may appear to be leading the way in many cases, it can be easy to underestimate the lead that Amazon has gained over all other players...
Using data collection and one-to-one correspondence that would be intrusive were it not the fact that it is so accurately focused on real need, Amazon has become an indispensable buying-tool for many...
Moreover, by perfecting their 1-click approach - and combining it with Prime status to eliminate delivery costs - their model optimises impulse purchase
In fact, in my own case, I have had to remove the Amazon UK icon from my home page in order to cause me to think a fraction longer about real need while I source the site via Google...
However, as online practitioners strive to emulate their rival's 1-click KPI, Amazon's real USP has to be their frictionless returns policy...
In fact, any aspiring online operation has to experience a heartbeat-missing moment when they realise that Amazon's returns process is easier than 1-click, the ultimate online standard...
Friday 28 March 2014
Shop where you borrow instead of buy - making do via the sharing economy...
According to The Guardian, the most popular items in Leila, Berlin's first "borrowing shop*" are the electric drills.
But it's not worth that person buying their own tools, said founder Nikolai Wolfert. "The average electric drill is used for 13 minutes in its entire lifetime – how does it make sense to buy something like that? It's much more efficient to share it."
Scarey...
Members can borrow anything from board games to wine glasses, fog machines to hiking rucksacks, juicers to unicycles. All they need to do to become members is drop off an item of their own.
Virtual tour of Leila here
At the more commercial end of the spectrum, Deutsche Telekom recently helped launch the social network wir.de, which allows neighbours to swap tools and services and sets up communal "toy boxes" in playgrounds around Berlin.
Whilst the idea of the "share-economy" is developing well elsewhere (i.e. Airbnb, which matches travellers to people with rooms to rent, and car2go and even M&S offering customers discounts in exchange for unwanted clothes, which are then donated to Oxfam) there is a sense that the shift away from ownership towards functionality is nowhere as tangible in Europe as in Berlin.
If you add share-economy drivers to consumers increasingly ‘making do’, it may begin to explain the difficulty of driving demand above flatline levels in many categories, everywhere…
And going back to drills, it is well known that drill manufacturers sell millions of ¾ inch drill-bits, not because people want drill-bits, but because they need ¾ inch holes, however produced...
In other words, the most insidious competition can be a product or service that replaces traditional ways of meeting needs. Therefore, training ourselves to focus on functionality and real need instead of want, can help us to anticipate and survive the shock of third-party innovation, hopefully….
* See video on how Leila works in practice here
Thursday 27 March 2014
'Ndrangheta mafia' made more last year than McDonald's and Deutsche Bank, combined...
Study finds crime network made €53bn (£44bn) from a combination of drug trafficking (€24.2bn), illegal rubbish disposal (€19.6bn), and other activities.
The report is based on analysis of documents from Italy's interior ministry and police, parliament's anti-mafia commission and the national anti-mafia task force. Its activities are believed to involve a workforce of as many as 60,000 people worldwide, the report said.
Extortion and usury last year brought in a substantial €2.9bn, while embezzlement earned the mafia €2.4bn and gambling €1.3bn. Arms sales, prostitution, counterfeiting goods and people-smuggling were less lucrative, bringing in less than €1bn together.
Organisationally, the 'Ndrangheta mafia' has a tight clan structure which has made it famously difficult to penetrate, or to leave?
In terms of business relationships, their negotiation flexibility appears to be limited to offers that tolerate little scope for refusal, and they appear to have very few issues with compliance...
A potential template for NAMs and KAMs everywhere?
The report is based on analysis of documents from Italy's interior ministry and police, parliament's anti-mafia commission and the national anti-mafia task force. Its activities are believed to involve a workforce of as many as 60,000 people worldwide, the report said.
Extortion and usury last year brought in a substantial €2.9bn, while embezzlement earned the mafia €2.4bn and gambling €1.3bn. Arms sales, prostitution, counterfeiting goods and people-smuggling were less lucrative, bringing in less than €1bn together.
Organisationally, the 'Ndrangheta mafia' has a tight clan structure which has made it famously difficult to penetrate, or to leave?
In terms of business relationships, their negotiation flexibility appears to be limited to offers that tolerate little scope for refusal, and they appear to have very few issues with compliance...
A potential template for NAMs and KAMs everywhere?
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