Wednesday 2 September 2015
Germany moves towards credit card usage in retail - at a price!
Cashback cull: Tesco halves Clubcard points for 2.8m credit card holders
According to The Telegraph, EU rule changes on the fees paid by retailers accepting payments via Third Party credit cards has been halved to 0.3% of purchases to reduce shelf prices.
In practice, credit card owners like Tesco either have to reduce the reward points on usage of their card in non-Tesco outlets, or absorb the losses on such deals.
Tesco have decided to reduce the rewards from £1 per £400 spend (0.25%) to £1 per £800 spend (0.125%), whilst retaining the £1/£400 spend in Tesco stores.
In practice, being a lead player, other retailers will follow Tesco, and savvy shoppers will probably switch to a more rewarding card for their non-Tesco purchases. This means that the viability of retailer credit-card schemes built on the assumption of access to the entire market, will become less profitable and/or will result in additional charges/points reduction to claw back losses...
However, the real downside is that any attempt at detailed explanation will only heighten consumer awareness of the miniscule rewards available via credit-card and loyalty schemes, with questions asked re what costs are involved and how much is distributed via rewards, in an increasingly suspicious mode on the part of consumers, especially those returning from their first holiday trip refusals to show boarding cards at checkout...
In practice, credit card owners like Tesco either have to reduce the reward points on usage of their card in non-Tesco outlets, or absorb the losses on such deals.
Tesco have decided to reduce the rewards from £1 per £400 spend (0.25%) to £1 per £800 spend (0.125%), whilst retaining the £1/£400 spend in Tesco stores.
In practice, being a lead player, other retailers will follow Tesco, and savvy shoppers will probably switch to a more rewarding card for their non-Tesco purchases. This means that the viability of retailer credit-card schemes built on the assumption of access to the entire market, will become less profitable and/or will result in additional charges/points reduction to claw back losses...
However, the real downside is that any attempt at detailed explanation will only heighten consumer awareness of the miniscule rewards available via credit-card and loyalty schemes, with questions asked re what costs are involved and how much is distributed via rewards, in an increasingly suspicious mode on the part of consumers, especially those returning from their first holiday trip refusals to show boarding cards at checkout...
Sunday 30 August 2015
Saturday 22 August 2015
Friday 21 August 2015
Tesco setting a new KPI in fine wine appreciation?
The Guardian’s report on the retailer’s decision to close the Tesco Wine Community website on 28 August, and the slimming down of its in-store and online wine range are all part of chief executive Dave Lewis’s re-set quest to reduce the overall product range.
The key issue for suppliers is how these moves by the UK’s biggest wine retailer will impact alcoholic drinks’ off-trade sales, particularly as the website focused on blending wine-loving customers with other experts and wine-bloggers.
Therefore, the resulting vocal response should come as no surprise as disappointed members urge more enlightened retailers like Lidl to leap into the gap…
Think also of the tell-a-friend implications resulting from alienation of this special-interest network…
Seriously, whilst Tesco’s current priority has to be profit performance, its buyer-led drive to educate UK palates to more subtle appreciation of what really matters in wine selection may result in unintended consequences in terms of how discerning shoppers view the retailer's other post-cull categories…
Thursday 20 August 2015
Boarding passes - still a storm in a glass tea-cup?
Any airport operators and retailers in any doubt as to the depth of consumer feeling need only read the comments-section of the many news reports that continue to cover the issue. Unfortunately for airport retailers, it does not stop at the checkout...
This tip-of-iceberg boarding pass issue is now causing savvy consumers to bring their normal high street shopping behaviours into the airport. In other words, when mobile phones might have been left off as part of the pre-holiday wind-down process, price-comparison apps are being consulted to reveal price-gaps that are even wider than the ‘same as high street prices’ assurances being issued by airport retailers, as the issue escalates...
More importantly, with plenty of time to spare, airport travellers are able to indulge themselves in texting their feelings to friends. In practice this means applying the tell-a-friend rule: If a brand exceeds my expectations, I tell one friend, if short-changed, I tell ten friends...
Then think plane-loads of passengers continuing to spread the word at destination airports currently unaffected by this uniquely UK issue...
In other words, what was meant to be a shop-window for leading-edge retailers and brands is morphing into an outlet for pent-up frustration by vocal savvy passengers that fall out with the staff and vote with their feet...
Meanwhile, suppliers have to ask whether their brands’ presence in airport shops, and possibly the innocent target of consumer anger, is worth the damage, cost and growing inconvenience of travelling by air...
Tuesday 18 August 2015
Morrisons sale of C-Store Chain - a phoenix chicken under new ownership?
Details are obviously sparse at this stage, but logically, at breakeven on sales of say £300m, it is probable that the 160-outlet chain will change hands for no more than £250m - a financial relief for Morrisons, and an exciting convenience-challenge for the new owners.
The issue for suppliers has to be where the M local chain goes from here.
Morrisons have already addressed the viability issue by selling off unprofitable outlets, but it is probable that some branches in high-rent areas will be prioritised in terms of driving footfall and basket-size to improve the bottom-line, before decisions are made re lease-forfeiture/closure, with attendant write-off costs.
The key will be to establish a consumer-franchise to capitalise on small, local and more frequent shopping. This means that, having refined the formula, the focus will be on extending into neighbourhood areas, ideally with lower rentals and possibly going a franchise route…?
Either way, suppliers might usefully support a chain that will make an interesting 160-outlet investment-backed convenience chain customer firing on all cylinders, and possibly even realise a ground floor opportunity in what could become a significant player as it rises from the ashes of structural change in the grocery sector…
The issue for suppliers has to be where the M local chain goes from here.
Morrisons have already addressed the viability issue by selling off unprofitable outlets, but it is probable that some branches in high-rent areas will be prioritised in terms of driving footfall and basket-size to improve the bottom-line, before decisions are made re lease-forfeiture/closure, with attendant write-off costs.
The key will be to establish a consumer-franchise to capitalise on small, local and more frequent shopping. This means that, having refined the formula, the focus will be on extending into neighbourhood areas, ideally with lower rentals and possibly going a franchise route…?
Either way, suppliers might usefully support a chain that will make an interesting 160-outlet investment-backed convenience chain customer firing on all cylinders, and possibly even realise a ground floor opportunity in what could become a significant player as it rises from the ashes of structural change in the grocery sector…
Sunday 16 August 2015
Kids born in the 60s & 70s, and their clean dinner-plate neuroses?
His mother's insistence that no food went to waste has stayed with Colm O'Regan all his life. The ritual of dinnertime shaming and being made to finish his dinner will inevitably be repeated when he has his own children, he writes in this week’s BBC Magazine.
Some great insights but key was the fact that days spent in unsupervised outdoor pursuits soon burned off any excess calories resulting from clean plate ‘over-eating’, and more importantly, were vital in helping us manage uncertainty in a world without patterns...
First, we survived being born to mothers who smoked and/or drank while they carried us.
They took aspirin, ate blue cheese dressing, and tuna from a tin.
Then after that trauma, our baby cots were covered with bright coloured lead-based paints.
We had no childproof lids on medicine bottles, doors or cabinets and when we rode our bikes, we had no helmets, not to mention the risks we took hitchhiking.
As children, we would ride in cars with no seat belts or air bags.
Riding in the back of a van - loose - was always great fun. We drank water from the garden hosepipe and NOT from a bottle.
We shared one soft drink with four friends, from one bottle and NO ONE actually died from this.
We ate cakes, white bread and real butter and drank pop with sugar in it, but we weren't overweight because......
WE WERE ALWAYS OUTSIDE PLAYING!!
We would leave home in the morning and play all day, as long as we were back when the streetlights came on. No one was able to reach us all day. And we were O.K.
We would spend hours building our go-carts out of scraps and then ride down the hill, only to find out we forgot the brakes. After running into the bushes a few times, we learned to solve the problem .
We did not have Playstations, Nintendo's, X-boxes, ipads, had no video games at all, no 200 channels or catch-up on TV, no DVDs, no surround sound, no mobile phones, no text-messaging, no PCs, no Internet or social networking.......... WE HAD REAL FRIENDS and we went outside, found them and talked to them!
We fell out of trees, got cut, broke bones and teeth and there were no lawsuits from these accidents.
We played with worms and mud pies made from dirt, and the worms did not live in us forever.
Made up games with sticks and tennis balls and although we were told it would happen, we did not poke out any eyes. We rode bikes or walked to a friend's house and knocked on the door or rang the bell, or just yelled for them!
Local teams had try-outs and not everyone made the team. Those who didn't had to learn to deal with disappointment. Imagine that!?
The idea of a parent bailing us out if we broke the law was unheard of. They actually sided with the law!
This generation has produced some of the best risk-takers, problem solvers and inventors ever. The past 50 years have been an explosion of innovation and new ideas.
We had freedom, failure, success and responsibility, and we learned how to deal with it all…….. !
So, the continuing unprecedented times are simply challenges and opportunities for many of us…
Some great insights but key was the fact that days spent in unsupervised outdoor pursuits soon burned off any excess calories resulting from clean plate ‘over-eating’, and more importantly, were vital in helping us manage uncertainty in a world without patterns...
First, we survived being born to mothers who smoked and/or drank while they carried us.
They took aspirin, ate blue cheese dressing, and tuna from a tin.
Then after that trauma, our baby cots were covered with bright coloured lead-based paints.
We had no childproof lids on medicine bottles, doors or cabinets and when we rode our bikes, we had no helmets, not to mention the risks we took hitchhiking.
As children, we would ride in cars with no seat belts or air bags.
Riding in the back of a van - loose - was always great fun. We drank water from the garden hosepipe and NOT from a bottle.
We shared one soft drink with four friends, from one bottle and NO ONE actually died from this.
We ate cakes, white bread and real butter and drank pop with sugar in it, but we weren't overweight because......
WE WERE ALWAYS OUTSIDE PLAYING!!
We would leave home in the morning and play all day, as long as we were back when the streetlights came on. No one was able to reach us all day. And we were O.K.
We would spend hours building our go-carts out of scraps and then ride down the hill, only to find out we forgot the brakes. After running into the bushes a few times, we learned to solve the problem .
We did not have Playstations, Nintendo's, X-boxes, ipads, had no video games at all, no 200 channels or catch-up on TV, no DVDs, no surround sound, no mobile phones, no text-messaging, no PCs, no Internet or social networking.......... WE HAD REAL FRIENDS and we went outside, found them and talked to them!
We fell out of trees, got cut, broke bones and teeth and there were no lawsuits from these accidents.
We played with worms and mud pies made from dirt, and the worms did not live in us forever.
Made up games with sticks and tennis balls and although we were told it would happen, we did not poke out any eyes. We rode bikes or walked to a friend's house and knocked on the door or rang the bell, or just yelled for them!
Local teams had try-outs and not everyone made the team. Those who didn't had to learn to deal with disappointment. Imagine that!?
The idea of a parent bailing us out if we broke the law was unheard of. They actually sided with the law!
This generation has produced some of the best risk-takers, problem solvers and inventors ever. The past 50 years have been an explosion of innovation and new ideas.
We had freedom, failure, success and responsibility, and we learned how to deal with it all…….. !
So, the continuing unprecedented times are simply challenges and opportunities for many of us…
Thursday 13 August 2015
Boarding Pass checkout - the ultimate fall-out?
Think about it:
- Retailer brand equity haemorrhaging...
- Higher than High Street running costs
- Turnover-based rental
- High Street prices subsidised by non-refund VAT
- 'Free' insight re shopper-behaviour cut-off
- Boarding Pass refusal-issues at checkout
- HMRC queries...and attendant re-funds
- Political platform emerging...
- Shopper alienation...
Wednesday 12 August 2015
Grocers as Media Outlets for CPGs Suppliers?
In culling times when retailers don’t need more categories, retailers are in danger of missing a unique opportunity to add media-access to their instore range.
Simply by putting their existing customer analytics and communications assets to work more effectively – and then marketing these assets to their suppliers – grocers have the ability to generate significant revenue for their business, while also helping to support their customers through each stage of their purchasing journey. See more at The Progressive Grocer.
Given their extensive range of communications channels, combined with physical access to the consumer in the shopper-marketing aisle, grocers are in a unique position to hand-hold the shopper throughout the entire purchasing process, and beyond...
However, David Buckingham in the Progressive Grocer makes the point that the opportunity will remain dormant unless retailers optimise their unique advantages over other media by tying suppliers’ marketing initiatives back to each stage of the shopper’s purchasing decision via the retailer’s customer analytics tools.
This will provide a means of directly measuring return on marketing investment, hopefully over-riding the distractions of back-to-front margin moves…
By treating this ‘access and fulfilment bundle’ as an individual category and offering it as such to suppliers, the retailer can stimulate the collaboration necessary to raise its potential profile in both organisations.
It then simply takes communications-imagination on the part of supplier to add this new ‘category’ – a retailer’s unique channel, role and revenue stream - to their brand portfolio, and think accordingly…
Simply by putting their existing customer analytics and communications assets to work more effectively – and then marketing these assets to their suppliers – grocers have the ability to generate significant revenue for their business, while also helping to support their customers through each stage of their purchasing journey. See more at The Progressive Grocer.
Given their extensive range of communications channels, combined with physical access to the consumer in the shopper-marketing aisle, grocers are in a unique position to hand-hold the shopper throughout the entire purchasing process, and beyond...
However, David Buckingham in the Progressive Grocer makes the point that the opportunity will remain dormant unless retailers optimise their unique advantages over other media by tying suppliers’ marketing initiatives back to each stage of the shopper’s purchasing decision via the retailer’s customer analytics tools.
This will provide a means of directly measuring return on marketing investment, hopefully over-riding the distractions of back-to-front margin moves…
By treating this ‘access and fulfilment bundle’ as an individual category and offering it as such to suppliers, the retailer can stimulate the collaboration necessary to raise its potential profile in both organisations.
It then simply takes communications-imagination on the part of supplier to add this new ‘category’ – a retailer’s unique channel, role and revenue stream - to their brand portfolio, and think accordingly…
Tuesday 11 August 2015
Boarding Pass checkouts - the unintended consequences?
Reports in The Independent indicate that Airport retailers demand boarding cards from travel-shoppers to avoid paying 20 per cent VAT on everything they sell to passengers travelling outside the EU, as there is no purchase tax due on such goods.
Research by The Independent also suggests most of these stores don’t pass the savings on to customers.
Apart from the inevitable damage caused to retailer brand equity, and possible questions from the authorities re inappropriate VAT collection, the real issue has to be the knock-on effect of most airline passengers refusing to submit what is a valuable source of shopper insight at checkout...
In other words, think about the value of knowing name, destination, flight class and frequent-flyer details of every travel-shopper making a purchase...especially if linked with loyalty-data to optimise shopper marketing strategies in some of the world's most expensive retail real-estate...especially if it can be shared with the airline...
Think also about the fragility of shopper-retailer relationships, in a world where passengers held overlong in the security security-process, already suspicious that the indirect route to the plane is deliberately designed to encourage shopping, are known to 'punish' the airport by refusing to enter, let alone buy from airport shops...
Time for a grand gesture - and some overdue damage limitation - via VAT discounts at the checkout?
Research by The Independent also suggests most of these stores don’t pass the savings on to customers.
Apart from the inevitable damage caused to retailer brand equity, and possible questions from the authorities re inappropriate VAT collection, the real issue has to be the knock-on effect of most airline passengers refusing to submit what is a valuable source of shopper insight at checkout...
In other words, think about the value of knowing name, destination, flight class and frequent-flyer details of every travel-shopper making a purchase...especially if linked with loyalty-data to optimise shopper marketing strategies in some of the world's most expensive retail real-estate...especially if it can be shared with the airline...
Think also about the fragility of shopper-retailer relationships, in a world where passengers held overlong in the security security-process, already suspicious that the indirect route to the plane is deliberately designed to encourage shopping, are known to 'punish' the airport by refusing to enter, let alone buy from airport shops...
Time for a grand gesture - and some overdue damage limitation - via VAT discounts at the checkout?
Friday 7 August 2015
The Savvy NAMs guide to Best-by dates and food safety
A new article by Business Insider makes a point that the "sell by" dates indicate not whether foods are safe to eat - they simply tell you when food will reach its limits for "optimal quality".
They link to a fully searchable site that gives guidance re. the safe-life of most foods, along with advice on prolonging life-time by category
Well worth a check over the weekend…
Meanwhile, it might be worth contemplating on the implications of savvy consumers adopting ways of reducing waste - $165bn/annum - thus effectively reducing consumer demand by even half of that amount, in a flat-line environment…
The way forward for food suppliers?
Why not embrace the inevitable and promote ways of prolonging the life of your brand, and grow credibility and market share at the expense of more defensive competitors, even in flat-line…?
They link to a fully searchable site that gives guidance re. the safe-life of most foods, along with advice on prolonging life-time by category
Well worth a check over the weekend…
Meanwhile, it might be worth contemplating on the implications of savvy consumers adopting ways of reducing waste - $165bn/annum - thus effectively reducing consumer demand by even half of that amount, in a flat-line environment…
The way forward for food suppliers?
Why not embrace the inevitable and promote ways of prolonging the life of your brand, and grow credibility and market share at the expense of more defensive competitors, even in flat-line…?
Wednesday 5 August 2015
Amazon not clicking with Click & Collect?
Some recent research conducted by Instantly, a provider of audiences and insights tools, came out with an unexpected conclusion that Tesco is leading the way in click & collect at 60%. However, a surprise was that Amazon scored so badly at 16%....
Given that their home delivery is well-nigh perfect, it seem unusual that they are missing such an obvious trick on the more economic alternative from an online supplier’s point of view.
Unless Amazon are cooking up a radical alternative to collection-boxes in stores?
Given that their home delivery is well-nigh perfect, it seem unusual that they are missing such an obvious trick on the more economic alternative from an online supplier’s point of view.
Unless Amazon are cooking up a radical alternative to collection-boxes in stores?
Tuesday 4 August 2015
Aldi-man new fashion range launch
Having landed a few heavy punches on the grocery mults, Aldi is now squaring up to the High Street clothing giants M&S and Next, with its first fashion range for men.
The new summer clothing range includes linen trousers (£9.99), smart chino shorts (£7.99) and Oxford shirts (£6.99), and for those NAMs wanting to avoid being recognised by other Aldi-NAMs, marl zipped hoodies are a must-buy @ £8.99….
Worth at least a store visit, but if you cannot afford to be seen in Aldi, some good in-use pics are available here.
Where is this headed?
Sharp-eyed followers of mens’ fashion will remember that Lidl beat Aldi to it via their launch of a men's fashion range in November 2014.
However, apart from resulting in a little headline-grabbing skirmishing, taking both initiatives together gives another indication of the extent of the discounters’ ambitions in the UK.
In other words, someone at Aldi/Lidl has to be assessing potential opportunities category by category, seeking the right blend of complacent-pricing and tunnel-vision that might respond to a Lidl proper discounting...
It costs little to try, and one discounter’s success automatically provides a pointer for the other…
Meanwhile, one can only imagine the additional disruption in the men’s fashion world should Poundland find a way to follow suit…?
The new summer clothing range includes linen trousers (£9.99), smart chino shorts (£7.99) and Oxford shirts (£6.99), and for those NAMs wanting to avoid being recognised by other Aldi-NAMs, marl zipped hoodies are a must-buy @ £8.99….
Worth at least a store visit, but if you cannot afford to be seen in Aldi, some good in-use pics are available here.
Where is this headed?
Sharp-eyed followers of mens’ fashion will remember that Lidl beat Aldi to it via their launch of a men's fashion range in November 2014.
However, apart from resulting in a little headline-grabbing skirmishing, taking both initiatives together gives another indication of the extent of the discounters’ ambitions in the UK.
In other words, someone at Aldi/Lidl has to be assessing potential opportunities category by category, seeking the right blend of complacent-pricing and tunnel-vision that might respond to a Lidl proper discounting...
It costs little to try, and one discounter’s success automatically provides a pointer for the other…
Meanwhile, one can only imagine the additional disruption in the men’s fashion world should Poundland find a way to follow suit…?
Monday 3 August 2015
Webification - how The Entertainer is taking the shop floor to new heights in Toy Retailing
If your kids have not already pointed it out, a visit to a branch of Gary Grant’s The Entertainer Toy store will convince you of the merits of experimenting with alternative tech-driven experiences, increasingly integrating e-commerce functionality with in-store environments – a ‘webification’ pointer for other retailers?.
With sales of £107m, ROCE 22.7%. and Net Margins BT of 5.7%, and growing at 13% in the current climate, they are one of the most innovative toy retailers we analyse.
The Entertainer is significantly improving both customer enquiry resolution and conversion, and Click & Collect performance by deploying shop floor tablet devices. The independent toy retailer is now able to offer a 30 minute Click & Collect service, a development that saw sales via this channel grow by more than 80 per cent over Christmas 2014, accounting for 35 per cent of the company’s online sales.
The shop floor tablets used by The Entertainer are a great starting point (more at ItProPortal). For example, they can be used to enable easy review of a store’s entire inventory, the traditional in-store equivalent of which would be incredibly laborious, even with the help of a shop assistant.
By arming assistants with a tablet, retailers can provide the shopper with an ‘endless aisle’ experience similar to that of e-commerce.
Moreover, the devices can also allow assistants to process payments anywhere in-store, and even provide personalised recommendations.
Obviously, exposing your kids to a retailer’s entire inventory carries its own risks, so perhaps a solo store-check might be wiser this time…?
Sunday 2 August 2015
Friday 31 July 2015
"Unexpected Item in the Bagging-Area"
Dear Retailer
Why not keep our little mistakes secret by eliminating 'shout-over' and confining our dialogue to the check-out screen?
Have a User-friendly weekend from the NamNews Team!
Tuesday 28 July 2015
A step beyond GSCOP?
Whilst the issue of supplier-retailer trading relationships has become ‘Agenda: Upper Quartile’, and the Code of Practice, in practice, is now being seriously considered by key stakeholders, it could be that suppliers are not raising their sights and expectations to a place that was always the aim of GSCOP, in spirit rather than by the letter of the Code.
Whilst it is obviously important for all parties to understand the detail and practical application of GSCOP, it is important to keep in mind that focusing on the ‘letter’ of the code in legal terms will at best slow down the evolution of what could, and should, be a basis for improved day-to-day dealings between suppliers and retailers.
Meanwhile, there is little point in criticising retailers’ legal departments for helping buyers to avoid falling foul of the letter of the ‘legislation’, that is what corporate lawyers do…. And besides, retailers need, and can afford to employ the best talent available in finding a way forward, especially in unprecedented times…
In fact, should the GCA team ever find themselves in a position to levy a fine of 1% of a retailer’s turnover, they will find themselves opposite a/the best-in-class legal team, entirely focused on provable ‘letter-of-law’ breaches, with the spirit-of-law aspects playing little, if any, part in the process.
The answer for suppliers has to be a company-wide emphasis on evolving a sustainable offer that represents a demonstrable edge over available alternatives, an advantage that is not easily replicated by the competition. In practice, this could mean a supplier has to construct their own portfolio re-set, stripping out any brand/SKU that fails to reach this standard, and live with the consequences.., before Tesco does it on their behalf.
This should be followed by re-negotiation of your existing supplier-retailer relationship to a point beyond GSCOP, a fair-play arrangement where each party’s reward is proportional to relative risk, and the partners collaborate because they want to be in business together, in the full spirit of a mutually productive working relationship…
Over-idealistic, naïve even?
Would you prefer having to refer to a lawyer’s ‘letter’ for every stroke, and a life where you best energies are wasted on second-guessing your ‘opponents’ on the other side of the buyer’s desk?
There is a better way...
Whilst it is obviously important for all parties to understand the detail and practical application of GSCOP, it is important to keep in mind that focusing on the ‘letter’ of the code in legal terms will at best slow down the evolution of what could, and should, be a basis for improved day-to-day dealings between suppliers and retailers.
Meanwhile, there is little point in criticising retailers’ legal departments for helping buyers to avoid falling foul of the letter of the ‘legislation’, that is what corporate lawyers do…. And besides, retailers need, and can afford to employ the best talent available in finding a way forward, especially in unprecedented times…
In fact, should the GCA team ever find themselves in a position to levy a fine of 1% of a retailer’s turnover, they will find themselves opposite a/the best-in-class legal team, entirely focused on provable ‘letter-of-law’ breaches, with the spirit-of-law aspects playing little, if any, part in the process.
The answer for suppliers has to be a company-wide emphasis on evolving a sustainable offer that represents a demonstrable edge over available alternatives, an advantage that is not easily replicated by the competition. In practice, this could mean a supplier has to construct their own portfolio re-set, stripping out any brand/SKU that fails to reach this standard, and live with the consequences.., before Tesco does it on their behalf.
This should be followed by re-negotiation of your existing supplier-retailer relationship to a point beyond GSCOP, a fair-play arrangement where each party’s reward is proportional to relative risk, and the partners collaborate because they want to be in business together, in the full spirit of a mutually productive working relationship…
Over-idealistic, naïve even?
Would you prefer having to refer to a lawyer’s ‘letter’ for every stroke, and a life where you best energies are wasted on second-guessing your ‘opponents’ on the other side of the buyer’s desk?
There is a better way...
Monday 27 July 2015
Ikea has created the kitchen of 2025 — and there's no stove or refrigerator
The article gives an overview and pics here, but if you really want to dig into the detail and methodology, best check the Concept Kitchen site.
This give details of
- Smart shelves with induction cooling replacing refrigerators
- Smart table with hidden induction coils to heat pots & pans, replacing the cooker
- Smart waste disposal to aid recycling
Over the top?
Perhaps, but what it could mean is more savvy buying and significantly less waste...
Add to this the increasing tendency for major grocery retailers to expand vertically into food processing to restore profitability, effectively withdrawing demand from the market.
In other words, branded food suppliers have ten years to anticipate and adapt to supply chain dreams that are fast becoming reality...
Why not try a what-if to explore how your encounters with the buyer will reflect the above developments in the coming years?
Sunday 26 July 2015
Friday 24 July 2015
Amazon's Profit - a rounding error for Apple but proof of potential for the Stock Market
Amazon’s surprise second quarter profit of $92m, on revenue of $23.19Bn, a net margin of only 0.39% clearly leads the stock market to believe that the company is beginning to flex its latent profit muscles, adding $40bn to their market capitalisation, making them bigger than Walmart…
Reports in the New York Times confirm Amazon’s unchanging formula:
It is the leading e-commerce company, and e-commerce is going to be really big. Its dominant position will allow it to undercut competition and bring home large profits. In the most extreme case, it will control the delivery pipeline of goods into homes, kind of the way cable companies once controlled the flow of entertainment...
The stock market have obviously bought into the Amazon profit story, allowing the company to provide steady but minimal profits, re-investing surplus in innovations and experiments that normal companies can only dream about…
…Allowing Starship Amazon to continue on its mission of selling anything to anyone, anywhere, anytime, in whatever way they want to buy, forever?
BTW, in case you ever need reminding of their scale, Amazon have just opened a new multi-million pound fashion photography studio in London's Shoreditch as its fashion business continues to grow, and will produce half a million fashion images a year.
At 46,000 square feet (Asda-size), it houses 22 individual photography bays, a large state of the art editorial suite, video editing facilities, a creative fashion library, and office space for Amazon’s growing team of fashion creatives.
Please continue to watch this space...
Reports in the New York Times confirm Amazon’s unchanging formula:
It is the leading e-commerce company, and e-commerce is going to be really big. Its dominant position will allow it to undercut competition and bring home large profits. In the most extreme case, it will control the delivery pipeline of goods into homes, kind of the way cable companies once controlled the flow of entertainment...
The stock market have obviously bought into the Amazon profit story, allowing the company to provide steady but minimal profits, re-investing surplus in innovations and experiments that normal companies can only dream about…
…Allowing Starship Amazon to continue on its mission of selling anything to anyone, anywhere, anytime, in whatever way they want to buy, forever?
BTW, in case you ever need reminding of their scale, Amazon have just opened a new multi-million pound fashion photography studio in London's Shoreditch as its fashion business continues to grow, and will produce half a million fashion images a year.
At 46,000 square feet (Asda-size), it houses 22 individual photography bays, a large state of the art editorial suite, video editing facilities, a creative fashion library, and office space for Amazon’s growing team of fashion creatives.
Please continue to watch this space...
Tuesday 21 July 2015
NASA-funded study envisages a permanent Moon base within 20 years
According to Science Alert, a new economic assessment into the feasibilities of an ‘Evolvable Lunar Architecture’ base suggests that humans would be able to return to the Moon for approximately 90 percent less cost than previous estimates, which ran up to US$100 billion.
The new low-cost strategy would be possible due to leveraging partnerships with the private sector, and predicts that the US could lead an ‘International Lunar Authority’ comprising both public and corporate interests.
Time to begin to factor a re-born Tesco into your trade strategies, while others await a possible turnaround?
Monday 20 July 2015
Supermarket price wars fall-out: Food companies across the UK 'on brink'
A report by Begbies Traynor in NamNews says the number of food and drink manufacturers in ‘significant’ financial distress has risen by 54% in the past 12 months to 1,622, 89% of which are small or medium-sized suppliers and farmers dealing with the major supermarkets.
Given that branded goods suppliers need Net Margins of 5-10% to fund brand equity building, and - depending on category - stock rotation of 5-20 times per annum to meet availability KPIs, ROCE performances of 15 -25% to ensure an adequate reward for risk - and thus some local autonomy - it is fairly easy to assess the scale of the fall-out in your categories...
The key issue for suppliers is their own performance vs other companies in their categories.
In other words, check your company's UK figures at Companies House, for 2007 and the latest available - usually 2014 for most companies - allowing for issues re Corporation Tax (i.e. your company tax domicile arrangements can colour the reported performance at local level) but in general the figures will be usable for most companies in your category, especially in food.
Action:
Unless of course you prefer to believe the politicians and fly blind?
Given that branded goods suppliers need Net Margins of 5-10% to fund brand equity building, and - depending on category - stock rotation of 5-20 times per annum to meet availability KPIs, ROCE performances of 15 -25% to ensure an adequate reward for risk - and thus some local autonomy - it is fairly easy to assess the scale of the fall-out in your categories...
The key issue for suppliers is their own performance vs other companies in their categories.
In other words, check your company's UK figures at Companies House, for 2007 and the latest available - usually 2014 for most companies - allowing for issues re Corporation Tax (i.e. your company tax domicile arrangements can colour the reported performance at local level) but in general the figures will be usable for most companies in your category, especially in food.
Action:
- Check your own figures, 2007 & 2014
- Check three competitors on the same basis
- Assess relative strengths and weaknesses i.e. the relative damage done to date, the ability to continue funding price-cuts and especially the competitors' ability to compete in your category
- ...keeping in mind that the buyer is equally capable of investing a £1 per set of results, from the same source...
Unless of course you prefer to believe the politicians and fly blind?
Friday 17 July 2015
Co-op convenience cashback for the weekend?
Midlands Co-operative Food shop, Duckmanton, this morning 0400hrs,
Police checking if they went north or south!
Amazon's Birthday Sales - 398 items/second, 34.4m for the day, every little helps...
Good job Walmart were holding them back!
Thursday 16 July 2015
'Caveat emptor' has morphed into 'caveat venditor' - why ‘seller beware’ is the new mantra for savvy consumers..
Today’s news that the Competition and Markets Authority (CMA) plans to take action after its investigation into misleading supermarket promotions should not be news, except in that it signals a significant shift in responsibility from buying to selling…
In other words, for many years sellers have relied upon the ‘letter’ of the law in terms of leaving the responsibility for checking match with consumer need to the purchaser, rather than the ‘spirit’ of the law whereby a savvy consumer expects to receive what it says on the tin, at least…
• The real issue is why retailers need to learn about consumer trust the hard way?
• To say nothing of the basic Tell-a-friend formula in junior selling school:
- Exceed Consumers’ expectations and they will tell a friend..
- Short-change them and they will tell 10 friends…
In other words, in a world of savvy consumers, caveat emptor has truly morphed into caveat venditor…courtesy of the new Peoples' Champion - the government!
In other words, for many years sellers have relied upon the ‘letter’ of the law in terms of leaving the responsibility for checking match with consumer need to the purchaser, rather than the ‘spirit’ of the law whereby a savvy consumer expects to receive what it says on the tin, at least…
• The real issue is why retailers need to learn about consumer trust the hard way?
• To say nothing of the basic Tell-a-friend formula in junior selling school:
- Exceed Consumers’ expectations and they will tell a friend..
- Short-change them and they will tell 10 friends…
In other words, in a world of savvy consumers, caveat emptor has truly morphed into caveat venditor…courtesy of the new Peoples' Champion - the government!
Wednesday 15 July 2015
Asda Move Closer to Walmart - the two-pat approach to ‘Save Money, Live Better’
Further to NamNews' report on Asda's Overhauling Of Its Brand To Bring It More In Line With Walmart, NAMs might benefit from a deeper dig into where Walmart are headed in coping with Aldi/Lidl, and online competition like Amazon Fresh.
In fact, Walmart Food EVP Steve Bratspies' recent presentation to the Bentonville Bella Vista Chamber’s WalStreet (sic) supplier group gives considerable insight re Walmart's food plans, and by inference, a view of where Asda is headed.
Five building blocks that will remain
Bratspies outlined five customer promises that are foundational to Walmart’s strategy in the midst of these shifts.
1. Win in fresh
2. Re-energize the centre of the store
3. Expand physical-to-digital integration
4. Win on the fundamentals
Above all, Bratspies encouraged global suppliers to bring great ideas from other markets, empowering Walmart-facing teams to make decisions and “come sell us stuff”, pointing out that that their buyers are there to buy.
In other words, make a point and back it up with the numbers...we are listening like never before...
Hat-tip to Carol Spieckerman via Pete Louree and Spencer Booz
In fact, Walmart Food EVP Steve Bratspies' recent presentation to the Bentonville Bella Vista Chamber’s WalStreet (sic) supplier group gives considerable insight re Walmart's food plans, and by inference, a view of where Asda is headed.
Five building blocks that will remain
Bratspies outlined five customer promises that are foundational to Walmart’s strategy in the midst of these shifts.
- EDLP – Price is still “the decider,” even as the bar is being raised across other customer criteria.
- Quality you can trust – Customers are smart enough to expect one-dollar quality on a one-dollar item but won’t tolerate one-dollar quality on a five-dollar item. Quality is defined by the item being purchased.
- Everything you need – Despite its forays into small formats, Walmart is still very much in the supercentre business and is invested in facilitating a one-stop-shopping experience for its customers.
- Happy to help – Of Walmart’s three sub-promises (a fast, clean, and friendly shopping experience), friendliness makes the biggest difference at the end of the day.
- Shop your way – Customers must be able to access Walmart online from any device and from multiple locations.
1. Win in fresh
2. Re-energize the centre of the store
3. Expand physical-to-digital integration
4. Win on the fundamentals
Above all, Bratspies encouraged global suppliers to bring great ideas from other markets, empowering Walmart-facing teams to make decisions and “come sell us stuff”, pointing out that that their buyers are there to buy.
In other words, make a point and back it up with the numbers...we are listening like never before...
Hat-tip to Carol Spieckerman via Pete Louree and Spencer Booz
Monday 13 July 2015
Tesco £40 minimum delivery spend, an each-way bet on basket-size?
Their new £4 surcharge on orders below £40, in line with Asda and Sainsbury’s, means that Tesco are crossing fingers that a sufficient number of core £25-users will either pay the surcharge or raise their order-quantities to £40+…
In practice, they are taking the basket-size route to fulfillment-cost amortisation vs. the blanket-distribution approach of Amazon i.e. delivery density – try tracking your next Amazon parcel and be impressed by the number of local deliveries your driver makes en route to your door.
The Tesco numbers look like this:
Order size £25
Tesco gross margin say 25%, i.e. £6.25
Delivery charge, say £4 £4.00
Delivery surcharge - £4 £4.00
Approx. cost of order fulfillment say £20.00
An improvement, but Tesco still loses say £5.75 per order
Order size £40
Tesco gross margin say 25%, i.e. £10.00
Delivery charge, say £4 £4.00
Delivery surcharge - £4 £0.00
Approx. cost of order fulfillment say £20.00
Tesco loses £6 per order (i.e. needs incremental sales of £24 to cover the loss)
In fact, apart from increasing the base delivery charge, Tesco’s only route to break-even is via its gross margin i.e. say 25% of goods sold. This means they would need to increase the minimum basket-size size to £64, to break even on a delivery.
If Aldi enter the home-delivery race, my bet would be on them taking the localised delivery-density route, if Amazon don’t beat them all to it….
In practice, they are taking the basket-size route to fulfillment-cost amortisation vs. the blanket-distribution approach of Amazon i.e. delivery density – try tracking your next Amazon parcel and be impressed by the number of local deliveries your driver makes en route to your door.
The Tesco numbers look like this:
Order size £25
Tesco gross margin say 25%, i.e. £6.25
Delivery charge, say £4 £4.00
Delivery surcharge - £4 £4.00
Approx. cost of order fulfillment say £20.00
An improvement, but Tesco still loses say £5.75 per order
Order size £40
Tesco gross margin say 25%, i.e. £10.00
Delivery charge, say £4 £4.00
Delivery surcharge - £4 £0.00
Approx. cost of order fulfillment say £20.00
Tesco loses £6 per order (i.e. needs incremental sales of £24 to cover the loss)
In fact, apart from increasing the base delivery charge, Tesco’s only route to break-even is via its gross margin i.e. say 25% of goods sold. This means they would need to increase the minimum basket-size size to £64, to break even on a delivery.
If Aldi enter the home-delivery race, my bet would be on them taking the localised delivery-density route, if Amazon don’t beat them all to it….
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