Latest figures from Kantar Worldpanel reveal that in the UK, more than one in seven people now have a tablet in their household and over 52% of the population own a smartphone. Couple this global realisation that tapping keys have become increasingly out-of-tune with consumer intuition and it can be seen why Apple have forced Microsoft, Blackberry and Nokia into catch-up mode…forever in pursuit of Apple’s innovator advantage.
In other words, Apple have made ‘screen-touching’ the only future…
A touching retail experience
Add to this the escalating success of Apple’s retail outlets, and it can be seen that the company is successfully applying the same fundamental creativity to retailing by populating its outlets with non-virtual Apple people! In fact, over the past five years, the company created 35,852 retail jobs, all acting as representatives for one of the best known brands in the world, optimising their unique combination of retail plus online plus a daily dialogue with enthusiastic users that few tech companies can duplicate.
In practice, their stores are more about being the front line for Apple advertising, rather than a ‘normal’ retail experience.
Helping people buy...
However, this experience of the ultra-softsell, in an open-table environment littered with products in constant use by enthusiastic shoppers, and continual access to human advice, can be addictive. In fact, this tactile experience, coupled with the realisation that the price cannot be bettered elsewhere, makes buying compulsive.
A frustrating lesson for ‘normal’ retailers everywhere….
Applying the Apple lessons to your business
Seth Godin extracts 10 iPad lessons to enhance your product launches, especially in niche markets.
Can you risk being out-of-touch in an Apple-free personal-corporate life balance that does not include a daily bite of the inevitapple?
Wednesday, 27 June 2012
Friday, 22 June 2012
Gourmet Flash-mobs, French Style!
Those who think that organising a flash-mob means simply encouraging members of your social network to turn up ‘as-is’, need to check out the 25 year old French version…
Dressed head-to-toe in white, flash-mob guests must bring a table and two white chairs, a picnic basket filled with "quality menu items" and a china service, including stemware and flatware. Only wine or champagne are allowed, as beer and hard alcohol drinks are considered no-nos.
A compelling invitation, in the right media?
Last week, thousands of participants at the "Diner en blanc" were told of the venue via social media sites and the Internet, then rushed to assemble in the heart of Paris' Marais district, in a 25-year-old tradition that still leaves passers-by open-mouthed. Other venues in Paris have included Notre Dame, the Eiffel Tower, the Louvre Museum's courtyard, Les Invalides, the final resting place of Napoleon, and the famed Champs-Elysees.
The pop-up event is so popular it has been picked up around the world, with Diner en Blanc events planned this year for the United States, Canada, Spain, Singapore, Mexico and even Rwanda.
Traditional new product launches a little passe?
Given the competition for attention represented by this 25 year evolution of consumer engagement, it may partially explain the increasing expense and diminishing returns in attempting to persuade ‘our’ apathetic/savvy consumer to drop everything and rush to buy our brand in a Kings Cross supermarket…
Perhaps a little less money, a little more creativity, and ideally unique, starting at home?
In fact, for something really different, why not make this a pop-up weekend, from the NamNews Team?
Wednesday, 20 June 2012
Walgreens-Boots - a new $100bn global customer?
With yesterday’s Stage1 purchase, Walgreens-Boots ($100bn) began a process that in three years will see them become a $130bn global player (prescription medicines, OTC and Beauty) with $100m savings on purchases in Year1.
In other words, plenty of time for suppliers to procrastinate on issues like prices and terms disparities…Wrong!
Given the high speed at which companies move in these circumstances (see their combined site which opened yesterday, and appears to have taken months of top secret preparation…) and the fact that Wall Street appear to think that Walgreens are paying over the odds for Alliance Boots (see yesterday’s drop in share price), suppliers would be wise to anticipate early pressures on prices to both companies ‘to prove it is a good deal’.
Action:
1. Check your US colleagues for your company sales to Walgreens, along with retail/wholesale margins, net margins on Walgreens business, credit periods and terms, plus pointers on trade funding and deductions…fast!
2. Check your UK and rest-of-world colleagues for your company sales to Alliance Boots, along with retail/wholesale margins, net margins on the AB business, credit periods and terms, plus pointers on trade funding and deductions…faster!
3. Quick ‘what-if’ on all of the above rising to the highest common set, the worst scenario for the business…even faster!
4. Map out key steps to harmonise prices & terms….already overdue!
5. Selling Prices to Walgreens and Alliance Boots: Run the following numbers for discounts of 1%, 2.5% and 5% on your best selling prices to each company
- Assume your total annual sales to Walgreens-Boots = £120m, ex. taxes
- Assume your Net Profit margin on Walgreens-Boots business = 7% = £8.4m
- Assume additional discount = 2.5% = £3.0m
- New sales = £117m
- Assume Costs, etc. remain the same = 93% of £120m = £111.6m
- New net margin = 4.6% i.e. 100-[(£111.6/117) x 100] = £5.4m
- Incremental sales to restore net profit of £8.4m = £65m = £182m- £117m
i.e. (£8.4m/4.6) x 100 = £182m
6. Time to map out your Walgreens-Boots negotiation strategy, globally?
In other words, plenty of time for suppliers to procrastinate on issues like prices and terms disparities…Wrong!
Given the high speed at which companies move in these circumstances (see their combined site which opened yesterday, and appears to have taken months of top secret preparation…) and the fact that Wall Street appear to think that Walgreens are paying over the odds for Alliance Boots (see yesterday’s drop in share price), suppliers would be wise to anticipate early pressures on prices to both companies ‘to prove it is a good deal’.
Action:
1. Check your US colleagues for your company sales to Walgreens, along with retail/wholesale margins, net margins on Walgreens business, credit periods and terms, plus pointers on trade funding and deductions…fast!
2. Check your UK and rest-of-world colleagues for your company sales to Alliance Boots, along with retail/wholesale margins, net margins on the AB business, credit periods and terms, plus pointers on trade funding and deductions…faster!
3. Quick ‘what-if’ on all of the above rising to the highest common set, the worst scenario for the business…even faster!
4. Map out key steps to harmonise prices & terms….already overdue!
5. Selling Prices to Walgreens and Alliance Boots: Run the following numbers for discounts of 1%, 2.5% and 5% on your best selling prices to each company
- Assume your total annual sales to Walgreens-Boots = £120m, ex. taxes
- Assume your Net Profit margin on Walgreens-Boots business = 7% = £8.4m
- Assume additional discount = 2.5% = £3.0m
- New sales = £117m
- Assume Costs, etc. remain the same = 93% of £120m = £111.6m
- New net margin = 4.6% i.e. 100-[(£111.6/117) x 100] = £5.4m
- Incremental sales to restore net profit of £8.4m = £65m = £182m- £117m
i.e. (£8.4m/4.6) x 100 = £182m
6. Time to map out your Walgreens-Boots negotiation strategy, globally?
Tuesday, 19 June 2012
Underestimating a 26% CAGR customer in a flatline zero-sum world…
With a vision ‘to be the earth’s most customer-centric company; to build a place where people can come to find and discover anything they want to buy online’, the problem in many categories is that Amazon’s vision is becoming reality, fast.
Walmart-like origins
Walmart-like origins
Essentially, having started trading in 1994, Amazon has grown fast, and in relatively low profile to its current global scale of US$48bn, growing over the four years of the global financial crisis at a CAGR of 26%, producing a net margin of 2.2% and an ROCE of 9.06% in fiscal 2011. In other words, serious customer-centric retailing, from a standing start, rather like Walmart - only faster - with an EDLP platform that seems to retain its excitement for consumers, everywhere.
Customer-level assortment
Amazon is raising not only the online commerce bar, with all of its potential efficiencies, but is also going to the heart of state-of-the-art retailing, providing much more than store level assortment. It is, in effect, tailoring the offering to individual consumer level, better than any other provider.
Convincing colleagues, fast
Our free analysis of Amazon’s business model aims at helping you build an in-house case to raise its profile within the business. We have also added a key-point treatment of the wealth of insight available within Amazon’s 2011 Annual report to help you explore the implications for your categories.
Finally, if still in any doubt about Amazon’s impact on your business, think 50% of most categories in the next 5 years, and see if that provides an appropriate wakeup call…
Customer-level assortment
Amazon is raising not only the online commerce bar, with all of its potential efficiencies, but is also going to the heart of state-of-the-art retailing, providing much more than store level assortment. It is, in effect, tailoring the offering to individual consumer level, better than any other provider.
Convincing colleagues, fast
Our free analysis of Amazon’s business model aims at helping you build an in-house case to raise its profile within the business. We have also added a key-point treatment of the wealth of insight available within Amazon’s 2011 Annual report to help you explore the implications for your categories.
Finally, if still in any doubt about Amazon’s impact on your business, think 50% of most categories in the next 5 years, and see if that provides an appropriate wakeup call…
Monday, 18 June 2012
Exploring the downside: A positive benefit at the museum of failed products…
Spend time vividly imagining exactly how wrong things could go in reality, and you'll often turn bottomless, nebulous fears into finite and manageable ones.
Happiness reached via positive thinking is fleeting and brittle; negative visualisation generates a vastly more dependable calm.
A new book* by Oliver Burkeman supports the intuitive realisation of many NAMs and KAMs, that we learn more from failure than success. In other words, when a project is successful, all of our energy goes into bragging about it, whilst a failure keeps us awake nights, revisiting every step, missed signal and failed KPI…
Provided we have the courage and power to cut our losses, maximise the learnings and move on to try again, the overall result can be positive.
The book deals with examples of many failed FMCG brand variants available at the Museum of Failed Products, Michigan (part of GfK Custom Research, North America). More details of products here. Each failure must have made it through a series of meetings at which nobody realised that the product was doomed. Perhaps nobody wanted to contemplate the prospect of failure; perhaps someone did, but didn't want to bring it up for discussion. The examples are fascinating in themselves, but also reassuring for those marketers and KAMs that feel their little set-back is a one-off…
*The Antidote: Happiness For People Who Can't Stand Positive Thinking, by Oliver Burkeman, published next week by Canongate at £15 (guardianbookshop.co.uk )
Happiness reached via positive thinking is fleeting and brittle; negative visualisation generates a vastly more dependable calm.
A new book* by Oliver Burkeman supports the intuitive realisation of many NAMs and KAMs, that we learn more from failure than success. In other words, when a project is successful, all of our energy goes into bragging about it, whilst a failure keeps us awake nights, revisiting every step, missed signal and failed KPI…
Provided we have the courage and power to cut our losses, maximise the learnings and move on to try again, the overall result can be positive.
The book deals with examples of many failed FMCG brand variants available at the Museum of Failed Products, Michigan (part of GfK Custom Research, North America). More details of products here. Each failure must have made it through a series of meetings at which nobody realised that the product was doomed. Perhaps nobody wanted to contemplate the prospect of failure; perhaps someone did, but didn't want to bring it up for discussion. The examples are fascinating in themselves, but also reassuring for those marketers and KAMs that feel their little set-back is a one-off…
*The Antidote: Happiness For People Who Can't Stand Positive Thinking, by Oliver Burkeman, published next week by Canongate at £15 (guardianbookshop.co.uk )
Friday, 15 June 2012
Making ideas work in the KAM role
In the same way that objections should be regarded as buying
signals, so too should degree-of-resistance be seen as an indicator of
‘goodness’ in the spread of ideas. Fear of plagiarism can also be a constraint,
however, as per Howard Aiken: "Don’t worry about people stealing
your ideas. If your ideas are any good, you’ll have to ram them down people’s
throats"
Have a persistent weekend, from the Namnews Team!
Thursday, 14 June 2012
Going into Administration, what then?
Given yesterday’s news of Peters Bakery collapse into administration, together with today’s report in DIY Week that Allders of Croydon are ‘facing administration’ it might be useful for NAMs & KAMs to explore the possible consequences and implications of such moves.
As a legal concept, administration is a procedure under UK insolvency laws. It functions as a rescue mechanism for insolvent entities and allows them to carry on running their business. The process – an alternative to liquidation – means a company in administration is operated by the administrator (as interim chief executive) on behalf of the creditors as a going concern while options are sought short of liquidation. These options include recapitalising the business, selling the business to new owners, or demerging it into elements that can be sold and closing the remainder.
Options for Peters Bakery
In the case of Peters Bakery, it might be assumed that the owners have already explored the options of recapitalising and/or selling off the business, leaving the option of demerging into elements that can be sold, i.e. the bakery and the shops (The mobile sales operation might remain with the bakery as the better option).
The bakery
The bakery with its relatively new plant and its supply arrangements with major retailers could be attractive as a buy-out by management or takeover by another bakery where increased scale/synergies might add appeal, and some negotiation muscle ref the multiples.
The shops
Meanwhile, the 54 shops with their regional brand equity could also present viable options in terms of either management buyout or acquisition by another retailer. Given the parallels with Greggs shops in terms of positioning, possible acquisition might be worth adding as an agenda item at the next meeting of the Greggs team…
Which options do you feel are best for Peters Bakery?
As a legal concept, administration is a procedure under UK insolvency laws. It functions as a rescue mechanism for insolvent entities and allows them to carry on running their business. The process – an alternative to liquidation – means a company in administration is operated by the administrator (as interim chief executive) on behalf of the creditors as a going concern while options are sought short of liquidation. These options include recapitalising the business, selling the business to new owners, or demerging it into elements that can be sold and closing the remainder.
Options for Peters Bakery
In the case of Peters Bakery, it might be assumed that the owners have already explored the options of recapitalising and/or selling off the business, leaving the option of demerging into elements that can be sold, i.e. the bakery and the shops (The mobile sales operation might remain with the bakery as the better option).
The bakery
The bakery with its relatively new plant and its supply arrangements with major retailers could be attractive as a buy-out by management or takeover by another bakery where increased scale/synergies might add appeal, and some negotiation muscle ref the multiples.
The shops
Meanwhile, the 54 shops with their regional brand equity could also present viable options in terms of either management buyout or acquisition by another retailer. Given the parallels with Greggs shops in terms of positioning, possible acquisition might be worth adding as an agenda item at the next meeting of the Greggs team…
Which options do you feel are best for Peters Bakery?
Wednesday, 13 June 2012
Walmart, P&G QR-Code Initiative, the back-story...
- This month-long initiative features virtual "pop-up" QR stores at Chicago bus stops and a "food truck"-style mobile hub in Manhattan, featuring P&G products was led by P&G, but in reality attempts to drive sales to Walmart’s online facility
- This innovative combination of mobile, social and real-time commerce appears to be an attempt by Walmart to neutralise Amazon’s increasing dominance in urban areas, a place where quick delivery is more convenient than access to big-box retailers
- (Amazon: think €36bn sales, growing at 46% p.a., 1-click purchase and ‘instant’ delivery…compulsive!)
- For P&G, a way of getting large packs into the hands of consumers, ultra-conveniently…
- ….apart from the peripheral impact of some extra on-street advertising in high-traffic urban areas..
In fact, which supplier-retailer combination will be first in the UK?
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