‘Apples of Love’: Nisa to change how consumers buy potatoes

A new potato innovation will copy milk in using colour coding as a KISS approach to simplifying potato purchasing for both retailers and shoppers.

The product is called ‘The Same Every Time’ and will be launched only through participating Nisa member stores.

According to NISA “The concept comprises three ranges; firm potatoes in a green packet, fluffy potatoes in a pink packet; and creamy potatoes in an orange packet. Being first to market with this exciting new concept that is only available from participating Nisa member stores retailing for £1, the range is not only convenient but also great value for money.” 

For NAMs that become enamoured with this initiative, we have uncovered over 60 uses for potatoes, ranging from nourishment to aphrodisia, along with a book of 101 potato recipes…

Have a colour-coded weekend, from the NamNews Team!

Why Robert Wiseman Dairies was attractive to Müller

An investor’s view of Müller’s acquisition of RWD, and how a NAM can help

Stockopedia writes about investing from a ‘value’ perspective i.e. finding companies that are priced attractively, like RWD.

They explain a number of attraction-criteria including category leadership, prosperous/profitable, manageable gearing, long history, no threats to permanent earning power, and a sustainable business model, simply a short term problem of a milk price-war. For details on valuation of RWD see Stockopedia,

How A NAM can help 

In this type of situation NAMs can help their own companies by seeing their jobs in terms of how they affect ROCE performance (i.e Return On Capital Employed, the profit a company makes on the money tied up in a business)  An acceptable level of ROCE, say 15%+, can result in more credit from suppliers of packaging, ingredients etc, cheaper borrowing from banks, more clout with retailers, but especially autonomy and freedom from takeover…

Improving your ROCE 

ROCE is driven by Net Margin and Capital Rotation, so a NAM can help improve Net Margin by being able to negotiate better selling prices, lower discounts/promo allowances, lower selling and distribution costs, and driving volume. Capital rotation i.e Sales/stock can be improved by driving volume, getting customers to pay faster, and more accurate sales-forecasting (if you ‘over-forecast’ i.e. sell less than forecast, then the ‘spare’ stock is being carried around the system not earning, resulting in a dilution of margin).

Obviously NAMs do all of these things (?), but the key is to know why you do it, and their direct impact on company profitability, i.e. ROCE, resulting in long term sustainability of the business model, and a higher share price, thus making the company too expensive to take over…

Trendfear: Ever feel you're being left behind?

If definitions* of Pinterest, Summly, Flipboard, Zeebox, Groupon, Waze and Foursquare don’t leap eagerly to mind, the resulting nagging anxiety that you are missing out might be called "trendfear" in a recent article on the BBC 

A feeling sometimes well-founded in that in many categories, NAMs might find themselves feeling a bit exposed if they reveal they have no idea of the technological state-of-play. There is a point when, arguably, you should know about something. And the earlier you know, the better.

It's unnerving because we are no longer all equal in the information stakes, says digital strategist Nic Newman. "In the era of mass media everyone found everything out at the same time.

"The difference now is that with all these different information channels some people know things almost as soon as they happen. But people outside those networks are not hearing it."

The key for NAMs, apart from the pleasure of responding to reflex curiosity, is to apply the cost vs. value relationship in prioritising the new developments. In other words, given the time required to cover the learning curve, what is it about the trend that will make our (i.e. mine and the buyer) jobs simpler, faster, easier and less expensive to conduct, and how much difference will it make to the bottom line of each company in terms of value?

Feeling better already?

If not, read the definitions below

*Stress-reduction definitions:

Pinterest: an image-based website where users create virtual pinboards based on specific interests, such as baking

Summly: iPhone app which summarises and simplifies the content of web pages and search results

Flipboard: designed for use on the iPad, it allows users to pick the websites they want to create a personalised magazine

Zeebox: an app that links up the user's TV viewing and social networking

Groupon: a discount website that can now target people shopping in a certain mall with specific offers

Waze: an app that interrogates drivers' sat navs to share traffic information and cut delays

Foursquare: a location-based social networking website for mobile devices 

NB. Trend spotting: see end of article for a great summary of key trends early mentions and then becoming commonplace…

A Unique Day-out Treat For Your Buyer?

M25 Orbital Coach Tour

Think of it, a 4 hour (minimum) captive audience, you and your buyer, with little or no outside distractions as you explain category dynamics and share a packed lunch in recognition of current austerities.

The day is designed for lovers of modern coach travel by Brighton & Hove Coaches in an attempt to provide a “flight of fancy” around the London Orbital.  The coach direction will be decided on the day by the drivers and will stop to take refreshment at the services, perhaps even at Cobham to coincide with the opening of the new Cobham Services.  An entertaining commentary by the co-driver will accompany the journey covering interesting facts about the motorway’s evolution.  Passengers are invited to crowdsource by guestimating to the nearest mile the distance the coach will travel around the route, with a bottle of Champagne as a prize for the closest.

The planned date was 11 October 2012, but because of demand, another date, 22nd March, has now been added.

Book up now to avoid disappointment

New CEO Carrefour, hypermarket fix instead of breakup?

Carrefour has picked a retail veteran  with a solid track record in company restructuring, Georges Plassat as its next boss.

Plassat spent 14 years at French retailer Casino and two years at Carrefour Spain before joining Vivarte, a retail fashion chain in 2000. He also holds a stake of about 10 percent in Vivarte.

Global No2 Carrefour has been struggling for years, partly due to its reliance on hypermarkets, which have been losing out as time-pressed shoppers buy more goods locally and online, and prefer to purchase general merchandise from specialist stores.

Squashing speculation of possible breakup and sell-off of global businesses, Plassat may pursue an alternative strategy for the hypermarkets, like downsizing them, slashing prices to lure back cash-strapped shoppers who think that Carrefour products are too expensive and investing more in e-commerce

However, some think Plassat faces an uphill struggle and giant stores are out of touch in a world where you need to give shoppers a good reason to make that out of town trip.

The new move will be watched carefully by suppliers and competitors alike, not least of which Tesco, as it reconsiders the long term value of its superstores....

Crowdsourcing: tapping the collective want…

Following the impact of our NamNews item: Nestle checking views on Kit Kat flavours (1,265 hits in two days), we felt it might be useful to point you at some useful sources of potential applications

Definitions: Essentially, crowdsourcing is a technique whereby the long tail plays an important part i.e. each member of the crowd submits an insignificant contribution to the total outcome, but the total of these contributions amounts to a considerable difference. (More on definitions)

How it started: The Social Path tells the story of a 1906 country fair at which attendees were invited to guess the weight of a large ox. Hoping for a cash prize, about 800 people made guesses, though no one got it right.

Afterwards, a statistician analysed the written guesses and discovered something shocking: the average of all the guesses was a mere one pound away from the exact weight of the ox. The site also gives some great examples with spooky implications…

Examples: For a comprehensive coverage of examples see Anjali Ramachandran on the following

1. Individual businesses or sites that channel the power of online crowds

2. Brand-sponsored initiatives or forums that depend on crowdsourcing. I've included those that are no longer active as well, for reference.

3. Brand initiatives that allow users to customise their products

4. Brand-sponsored competitions/challenges focussed on crowdsourcing

Curiously, much of the good source material is two years old…an indicator that given its success, perhaps companies are paradoxically now keeping crowdsourcing to themselves?

Have a crowded weekend, from the NamNews Team!

High Street survival and leases

For many years, UK and Irish retail property markets have been compromised by the existence of 25 year upward-only leases with no break clauses. This has ensured that institutional landlords like banks have been able to put the leases on their balance sheets as assets with a guaranteed income stream. In fact commercial property is valued not on its sale price, but rather as a multiple of annual rental*.

This explains why bank-landlords cannot renegotiate rentals, in that to acknowledge a lower yield means lowering the value of the asset in the balance sheet, leading to a need for re-capitalisation…God forbid,,,

Because of the global financial crisis, a two-tiermarket has emerged for high street leases depending on whether they have an upwards-only reviews or not.

For retailers the new leases mean there is a stronger focus on the unit, the pitch, the covenant and the lease terms. In other words, a more realistic, commercial approach to risk-sharing by the landlord.

There is a commercial logic to aligning the interests of the landlord and the tenant to ensure both maximise the performance of their capital. But it requires a more forensic approach to retail development in the future, with developers/investors, governments and banks taking a greater, long-term interest in how a retailer will trade.

Until then high street retail will continue on a downward spiral, as most of the action moves to the suburbs and retail parks…


* Deep down the same logic applies to domestic housing. In most countries outside the UK & Ireland, houses are regarded as places where people live, and are not seen as investments. In other words a house is valued at approximately 20 times its annual rental…a yield of 5%. This may explain the periodic housing bubbles that occur when consumers lose track of what their houses are really worth...
Incidentally, why not sit down with a strong coffee and try the 20x multiple on your home…?

Will ‘behavioural pricing’ affect your behaviour?

'Behavioural pricing' tailors pricing to individual users - with special offers targeted to certain shoppers, but also taking into account information from social networks such as Facebook or Twitter

Online shops already have an unprecedented amount of information at their fingertips - from whether you've purchased from them before, to what sites you've visited before you arrive at their shop, accessible via browsing history.

If price is simply part of the total shopping experience then it is surely appropriate to match price to shopper need?

In the same way, regional pricing variations in the same retailer’s branches across the country, and even differing prices for the same product in different types of store such as convenience and superstore variants for that retailer, should not be a cause of concern.

Also, reports that Tesco plan to overhaul its stores to reflect location and income of families who shop there, has to be an attempt to improve the shopping eperience 

The real issue with behavioural pricing is potential abuse of the insight, an increasing risk for any retailer attempting to deceive the socially-networked savvy consumer.

Instead of attempting to resist the inevitability of behavioural pricing, suppliers should encourage this move towards more focused shopper-satisfaction by factoring the process into their consumer marketing and varying their trade marketing initiatives according to degree of congruence between consumer-profile of the brand and shopper profile of the retailer.

This will help suppliers to anticipate the evolution of location-based offerings in retailing.

In other words, accept the fact that national conformity and uniform brand positioning is now too blunt an instrument in today’s connected society. This means that patchwork regional brand launches, tailored completely to local tastes will allow a more cost-effective allocation of scarce resources, based upon real need, with pricing simply part of the package.

In fact why not consider the Coca Cola idea whereby a thermometer on the top of a vending machine varies the price of a can with change in temperature….