Wednesday, 13 February 2019

Amazon Secures First Sites For UK Launch Of ‘Go’ Format

According to property sources quoted by The Grocer, the online giant has now secured sites of around 5,000 sq. ft. in “key” locations across central London. Whilst the stores are said to be in high-footfall areas, they are not the “obvious highest rent prime pitches.” [more]
  • Patently a serious move in the UK’s most densely populated area…
  • …and better for NAMs to be on board, than not…
  • …with direct access to evidence of progress…
  • …rather than having to rely upon second-hand feedback.
  • i.e. a no brainer.

Friday, 12 October 2018

Ground down by the price of your £2.50 Patisserie Valerie and other high street cappuccinos?


Issues both financial, and now legal at at Patisserie Valerie (see Finance Chief arrested) highlight the value of examining one of the fundamentals of on-premise provision of food and drink...

Given that the humble £2.50 cappuccino has fallen out of favour, coffee connoisseurs apparently demand more than a standard caffeine fix to help them through the day, at a price!

The Daily Mail has listed sources like The Connaught in Mayfair (£7.50 for any cup of coffee) and Claridge’s (up to £20 for a filter coffee for two people), apart from the ultimate deep-pocket source like The Wellesley hotel in Knightsbridge serving Wild Kopi Luwak coffee, at £45 a cup.

In other words, connoisseurs trying DIY @ 9p/cup vs Wild Kopi Luwak coffee, at £45 a cup, can appreciate the threat to food service... 

But the real issue has to be the contrast between High Street coffee at £2.50 a cup compared with home filtered at 9p a cup.

In other words, far from seeing up market varieties as a threat, consumers adopting a DIY approach might be more dangerous…

In fact, with street coffee priced at upwards of £2.50 a cup, I have reverted to grinding and filtering best quality French coffee beans, purchased from Waitrose at £2.60 per 227g bag. Each bag yields 5 x 6 cups, effectively costing me 9p a cup. If I could buy wholesale, the price would be no more than £2/bag...

OK, the ambience is worth something, but 30x 'domestic rates'...?

In fact, when you think about it, apart from the bill, most people's memory of a great restaurant meal is coloured by the final course, a cup of coffee. Yet, even at these mark-ups, some restaurants risk diner alienation by skimping on the coffee, thereby triggering the manual 'tell a friend' mechanism' whereby, if you please a customer, they tell one friend, disappoint them and they tell ten. Add social networking muscle, and the reach is infinitesimal.....

Incidentally, for those NAMs that prefer tea, how about one tailored to cope with the pressures of the NAM day-job...  (Thanks Gerry)

A NAM insight from NamNews

Tuesday, 9 October 2018

Lidl Launches Pop-Up Gin Bar


Visitors to the bar will be offered samples of Lidl’s Hortus Gin range. Guests will begin their experience in the Pink Gin Liqueur Lounge, where Hortus Gin Liqueurs including Raspberry, Rhubarb & Ginger and Rose & Pomegranate will be offered. (more)
  • Please remember to pinch yourself as a reminder…
  • …that this is one of those ‘down market, common and ‘foreign’ discounters…
  • …that could never succeed in the sophisticated UK retail environment…

Tuesday, 4 September 2018

New Branding Unveiled For Waitrose And John Lewis

The John Lewis Partnership has today relaunched its two retail brands as ‘Waitrose & Partners’ and ‘John Lewis & Partners’ with a new visual identity and their first ever joint marketing campaign. [details]
  • Profit-sharing is still a large part of the partnership package for staff….
  • …so any reduction in profits can negatively impact the aisle…
  • Also scope for other retailers to replicate the staff part of the model by introducing a profit-share element…
  • A little more business-fixing yet to be done, methinks…

Thursday, 26 April 2018

Toys 'R' Us sets up $156m fund for trade claims - too little too late...!


The 'vendor reserve fund' will be carved out of a broader budget meant to cover some expenses as the retailer winds down its business in the largest-ever U.S. retail liquidation, Toys ‘R’ Us lawyer Joshua Sussberg said at a hearing at U.S. Bankruptcy Court in Richmond, Virginia.

However, the amount fails to cover total trade claims worth roughly $760m, lawyers who represent trade vendors said at the hearing.

Many vendors believed that payment for shipments after the Sept. 18 Chapter 11 filing would be covered by a $3.1bn bankruptcy loan, but that loan gives priority to lenders and other expenses such as legal fees, lawyers said on Tuesday. [more]
  • This highlights the fact that when a customer goes bust, suppliers come last for payment in a list that includes government agencies/tax, secured lenders, and staff...
  • For this reason, it is vital that NAMs & KAMs constantly monitor their financial exposure to all customers, given that they are in fact unsecured lenders at zero interest rate...
  • Apart from watching for signals from the market that credit insurers are refusing to offer cover (i.e. too late!), a supplier should divide their annual sales to the customer by their (the supplier's) net margin before tax, and multiply by 100.
  • This gives the incremental sales required by the supplier in order to replace the profit lost via a customer going bust...

Thursday, 22 March 2018

FedEx launches a Returns Technology service for ecommerce


Given the fact that Amazon set a gold standard in making returns as easy as 1-Click ordering and factored in the costs from the beginning, traditional and online retailers that stumbled into online without appreciating the cost implications are now suffering the consequences.

Moreover, Amazon customers have become accustomed to 'ordering three dresses, choosing 'the 'best fit' and returning two, 'as easy as 1-Click ordering'.

In fact, other online retailers now face “Returns Tsunami” As Try-Before-You-Buy Trend Intensifies...(more)

As a result, this week has seen the launch of FedEx Returns Technology. It’s new service billed as a comprehensive solution for returns management which aims to give high-volume merchants and ecommerce retailers the ability to quickly and easily improve their customer experience by helping them take returns (more).

It is now clear that returns have rapidly evolved into a critical factor, second only to cost, in satisfying today’s e-commerce customers.

This FedEx initiative may help....

Wednesday, 28 February 2018

Breaking News: Booker Shareholders Approve Tesco Deal

                                                                                           
83% of Booker’s investors are reported to have voted in favour of the transaction despite recent calls by shareholder advisory groups to reject Tesco’s cash-and-shares offer [more]
  • With 83% of Booker’s investors in favour of the transaction, despite recent calls by shareholder advisory groups for an improved Tesco cash-and-shares offer...
  • …this has to mean that shareholders believe that there is a greater long term value in the deal…
  • It also indicates that most Tesco-Booker initiatives will be supported...
  • Only issue will be what happens if the company cannot improve its bottom line in the process...

Monday, 26 February 2018

US: Details Emerge Of Amazon’s Exclusive OTC Range


CNBC has said that the ‘Basic Care’ brand was launched without an announcement back in August 2017. The range, produced by private label manufacturer Perrigo, offers 60 products that include painkillers and hair treatment. While Amazon already offers OTC products from select manufacturers, this range is exclusive to the online retailer, giving it a greater say in pricing. [more]
  • Anyone in the business knows that this is serious…
  • Given Jeff Bezos mantra: ‘your margin is my opportunity’…
  • …means some sleepless nights ahead for all stakeholders, at least!
  • Time for brands and private label OTC to anticipate full roll-out by Amazon…
  • …and explore what-ifs on what is left…
NB. Take another look at the impact of the Amazon-Berkshire Hathaway-JP Morgan tie-up (see NamNews 31/01/2018)

Thursday, 8 February 2018

Tesco £4bn Equal Pay Claim - an opportunity for robots?


Tesco is facing an equal pay claim from female store staff that could end up costing the retailer as much as £4bn.

Law firm Leigh Day is reported to have launched legal action on behalf of nearly 100 female shop workers amid claims they earn as much as £3 an hour less than male warehouse staff despite the value of the work being comparable.

If the legal challenge demanding parity is successful, thousands of shopfloor staff could receive back pay of up to £20,000 each.

Paula Lee, a Leigh Day lawyer who is representing the Tesco women, said: “We believe an inherent bias has allowed store workers to be underpaid over many years. There might be lifting and carrying in the distribution centre but there is also lifting and carrying in shops as well as dealing with customers asking questions and handling money.”

Leigh Day said the underpayment could apply to 200,000 of Tesco’s workers, the majority of them women. It has lodged initial claims with the conciliation service, ACAS – the first stage in what is likely to be a protracted legal process through the employment tribunal system which could last several years.

Reports said that even if a small proportion of the women are successful, the cost to Tesco would be significant.

The retailer stated that it has yet to receive details of any claim, with a spokesperson saying: “Tesco has always been a place for people to get on in their career, regardless of their gender, background or education, and we work hard to make sure all our colleagues are paid fairly and equally for the jobs they do.”

NAM Implications:
  • This has to add to the financial appeal of robots in both warehouse and retail shop-floor roles…
  • …and thereby accelerate their adoption in Tesco and in other mults…
  • …for starters.
Meanwhile, for context, £4bn represents approx. 8% of Tesco’s sales…

Saturday, 3 February 2018

Redefining the Supplier-Retailer Relationship - the Independent Retailer as an advertising medium for the Brand

Given the fact that global pressures on supplier and retailer profitability, especially since 2008, caused by a combination of Amazonian online, and discounting in a flat-line environment, suppliers are having to re-consider the emphasis traditionally assigned to multiple retailers in customer portfolios. These developments coupled with the increasing need for suppliers to optimise every channel to the consumer, are causing brand owners to fundamentally re-assess the role of different customer-types in their portfolios.

In other words, the traditional view of major customers taking more than 50% of supplier resources has been overtaken by events...

Essentially, suppliers now need to view customers’ outlets as selling points, advertising media and fulfilment centres (in terms of optimising the retail space as distribution and Click & Collect points).

Whilst the customer’s role as sales agent has been well documented elsewhere, and their role as fulfilment centres is evolving pragmatically as means of traffic–building and covering distribution costs, their role as advertising media may be worth exploring…

As they struggle with large space redundancy, and with long-tail ranges increasing their need to cherry-pick within categories, the mults cannot afford to offer a full representation of the suppliers’ range at point- of-sale, let alone provide hands-on experience of the brand within the store.

Add to this the fact that in a zero-sum game the additional trade support required by the major multiples means that there are even less supplier resources available for maintenance and development of the independent trade.

Current market pressures in terms of limited growth potential of the mults, a need to match Amazon online standards in going direct to the consumer, and increasing risks of being unable to find ways of working with Aldi and Lidl as they deliver 15%+ rates of growth, makes it vital that suppliers try to make more use of the independent trade as a route to consumer.

In fact, it could be said that Independent retailers are becoming more important to suppliers as consumers shop smaller, faster, closer and more frequently. They are also in need of NAM-quality consultancy advice.

This, coupled with the fact that the revenue stream from a good independent retailer cannot cover the costs of regular calling by a salesforce, means that the opportunities represented by the independent trade will continue to represent unfulfilled potential, unless suppliers take a radically different approach to investment in the channel.

Historically, suppliers have regarded the independent trade as a sales outlet, needing to at least break even on the cost of visit vs. size of order in order required to justify the cost of calling. This approach has obviously limited the number of direct-call accounts that are economically viable, resulting in increases in trade concentration, as the strong get stronger. Fortunately, the evolution of alternative channels such as online and discounting has halted the progress of the mults…

In many categories such as toys, books, houseware and home entertainment, the independent specialist retailer can fulfill an important ‘educational’ role on behalf of the supplier. Here the retailer helps to bring the consumers closer to the brand, allowing them to interact and bond with the product. They will also benefit from advice and shop staff expertise.

Properly supported with appropriate training and sales-support material, the independent retail outlet can also function as a ‘living billboard’ for the brand, communicating with the consumer in a way not easily achieved via the multiples. Unfortunately, given the economics of running an independent retail store, it is not easy for the retailer to match competitor’s prices. This inevitably results in their shoppers taking the advice and experience of the brand, and buying the product elsewhere. The increasing appeal of online retailing simply adds to the dilemma of ‘lost sales opportunities’ for a specialist retailer.

However, if the supplier shifts the role of the independent retailer from a sales to a marketing function, seeing the outlet as an interactive advertising medium, then it becomes easier for the supplier to classify at least some of the cost of independent calling as ‘advertising’. In fact, given the increasing fragmentation of traditional above-the-line media, it could be said that a well-motivated and supported specialist retailer could have more brand impact on the consumer than traditional media. The same could be said of trade investment with mults that can no longer justify traditional levels of trade spend as they struggle to exceed flat-line sales performance.

With this change in stance, it becomes easier to justify the allocation of say 50% of the cost of independent coverage to a combination of the brand’s advertising budget and trade spend.
It may even be more cost-effective…