M&S Flag-ship floor plan - the real priorities?

Click image for larger copy

You have seen the pics, (if not, Google Images Chester Oaks M&S)
You may have even made a storecheck…
Either way a floor-plan of ground and firsl floors layout will help you appreciate the relative importance of Food vs. Non-food, departmental adjacencies and all the other little things that tell you where a retailer is going…

P.S. If you would like a 3MB pdf of the the above floorplan, please email me on bmoore@namnews.com

RUSSIA: X5 Retail Head of Hypermarket Division, Jan Fuchs off to opportunities elsewhere…

Russia’s largest retailer has confirmed that it has lost the services of a number of senior managers due to disappointing results. The departures add more pressure on the group, which has seen sales at its hypermarkets fall regularly in the past few quarters.

• With sales declines like these is it any wonder that Jan Fuchs off to opportunities elsewhere…?
• Apologies, I have waited 54 years to use that one, ever since the London Evening Standard carried the headline “Famous explorer Sir Vivian Fuchs off to the North Pole” back in 1958…

Eye-controlled Gaze TV unveiled in Berlin’s IFA Trade show

Viewers that resisted over-dosing on their Olympics viewing can now revert to potato-mode by avoiding unnecessary exercise caused by having to reach out and press the clicker…
Details + pic at BBC

How it works
Viewers control the set by staring at the top or bottom of the screen to activate a user-interface.
The user can then change the volume, switch channel or carry out other functions by looking at icons shown on the display.

Applications
Apart from TV, the eye-tracking technology originally aimed at helping disabled people control computers. Potential applications include gaze-controlled car information systems, surgery room image display screens, and video games.

New levels of viewer engagement?
Whilst still at prototype stage, Gaze TV’s elimination of the remote-control offers potential for whole new levels of family disagreement, apart from the hazard of high-speed random channel switching caused by a family member nodding off during the boring parts…
It is also a step up from attempts to involve family pets in the viewing process

However, the real issue for advertisers has to be the renewed pressure on maintaining viewer engagement, the need to refine the message to a precise and unique fit with consumer need, linked with a solution that delivers above expectation, better than alternatives available, or else…. 

Beat 'em or join 'em? Coca Cola co-branded Private label promo…

                                                                               pic: Brand Privat, Romania*
In their fourth co-branded promotion in Romania, Coca Cola have again linked with a private label.
For the next two weeks Coca Cola will team with Real Quality, the mainstream private brand from Real hypermarket (part of Metro Group) in a ‘buy a special Olympic pack (2 bottles 2l Coca Cola) and get a free 50g pack with Real Quality salted sticks.

Previous promotions included:  

1. Coca Cola with spaghetti Fine Food (mainstream Private label from Metro Cash&Carry). Buy one box with four bottle Coca Cola 2l get 2 packs spaghetti 200g for free. This one was followed by a huge door-to-door campaign. Over 400,000 free samples (one bottle 1l Coca Cola + one pack 200g spaghetti Fine Food).
2. Coca Cola with spaghetti Top Apetit (entry level Private label from Penny Market – part of Rewe Group). Buy two bottle Coca Cola 2,5l and get one pack spaghetti 300g for free.
3. Coca Cola with “pasca*” Cora (mainstream Private label from Cora – the hypermarket chain Louis Delhaize). Special promo price for the pack.                                                                                             *pasca is the Romanian name for a traditional cheese pie made only for Easter. Followed by a two weeks out-door campaign in all the cities with Cora hypermarkets.

The real issue here is a major brand’s willingness to seek synergies via collaboration with a private label when it represents a logical, linked offering to the consumer…
A lesson (and a test?) for other brands?


Source: Brand Privat, Romania

Google, Amazon, Apple and Facebook - the new big four in retail...

We shop on phones, compare on Google and ask our Twitter-mates what they think. Even more importantly, we also have the ability to complain to 100 friends when a supplier/retailer misses our expectation…
This revolution in shopping behaviour is causing traditional retailers and suppliers to play catchup with multichannel marketing, or else…

Whilst historical purchase data reveals what we bought, social media reveals why and indicates the future. Think about it, we have been waiting 30 years for this insight…now we have it, are we doing enough?

The real opportunity
In fact, do we accept that the real  breakthrough hinges on the willingness and ability of the retailer to respond accordingly. For suppliers, the key issue is whether it is easier for traditional retailers to remodel the business based upon shopper-need, or for the new big four to fulfil the shopping transaction, profitably.

When I break from writing this KamBlog post to accept delivery of the Amazon book I ordered yesterday, at a 15% discount, while hesitating to drive to the nearest Tesco for a bottle of breakfast milk, somehow the answer suggests itself…

Just the first layer?
The multichannel e-commerce combination is obviously making it easier to buy, but I believe that as suppliers we are simply skimming off the first layer…

The real pay-off will result from re-engineering the entire brand offering to better meet consumer-shopper need, arriving at a minimal compromise between what a consumer is trying to tell us they require and our ability to provide the solution, better than the available competition.. In other words, building trust by delivering more than it says on the tin…always.

What this means for NAMs
This process includes adjusting our channel strategies to optimise their strengths, via NAMs that have the imagination to see that the accounts with real career-potential are the new retailers in emerging e-channels.
Sure, making real change in uncertain times is an uphill struggle, especially having to negotiate more with your own colleagues than with the customer.

However, given that we learn more from risk, mistakes, uncertainty and overcoming resistance (a buying signal?), numbers-based NAMs that are prepared to swim against the tide somehow move faster...

Discount stores boom as upmarket shoppers brag...

The economic quagmire has provided the perfect breeding ground for general merchandise discounters, who have expanded aggressively – more than filling the void created by the collapse of Woolworths in 2008. Analysts at the IGD predict the value retail sector will be worth £8bn by 2015.

Classless appeal
But the key to discounter success is their classless appeal. Mature NAMs will remember their first visits to Aldi Berlin in the early 1990s, and their bemusement at the shopper transport parked outside – ranging from students bikes to state-of-art Mercedes. As we all knew at the time, this could never happen in the UK….

City paying heed
The growing might of chains such as Poundland, Wilkinsons and Home Bargains means the City is starting to take notice. Stockbrokers Shore Capital believes discount retail is the fastest growing area of the whole market, with the strongest performers potential candidates for stock exchange listings or takeovers by quoted chains further down the line.

The forward working environment 
Given their arrival at critical mass in a flat-line economy, we reckon that discounters are merely at the start of a five year opportunity to gain share in the UK. NAMs need to second-guess the politicians: they have been telling us about imminent recovery for the past five years.
Having thus established politicians' credibility, with little change to EU/global economic conditions, is it likely that we can expect any real uplift in the next 5 years…?

Competition hots up...
The competitive landscape ranges from single-price chains such as Poundland and 99p Stores to general discounters such as Home Bargains and B&M Stores. But the rapid expansion of what were once regional, often family-run, companies means the retailers are now treading on each other's toes.

A zero-sum future?
This means that market will operate on a zero-sum basis with any share gains at the expense of not only other retailers but also of other discounters.
In other words suppliers have to prepare discounter strategies that are in harmony with  overall trade strategies, taking care to avoid inadvertent compromise or conflict.

This means that suppliers need to factor discounters more aggressively into their organisational structures and trade strategies, ‘permanently’…

Permanently? Bear in mind that the other characteristic is that discounters thrive in a downturn, but rarely surrender any gains in market share in a rebound… 

Marks & Spencer - an inevitable takeover?

Yesterday’s news of a possible bid for M&S obviously had an impact on the share price. However, the key issues for NAMs have to be
- the likelihood of takeover
- by whom
- impact on the business

Likelihood of takeover:
Apart from the usual indicators (ROCE, Net Margin and Stockturn where M&S is more or less in line with the big four) a key measure has to be the Market Capitalisation/sales relationship i.e. cost to buy the company vs. its sales.
                   
MktCap/Sales (latest figs, the higher the better, in terms of value of the company)
- Walmart         58.5%
- Tesco             42.1%
- JS                  27.3%
- Morrisons       38.5%
- M&S              60.3%

At £6bn MktCap it can be seen that M&S would be relatively more expensive to buy than Walmart, in terms of sales generation.

Possible players:
Essentially three options: another retailer, a Private Equity Fund or a Sovereign Wealth Fund

• A retailer: unlikely (competition rules, difficulty in improving fundamental ratios) insufficient synergies
• Private Equity Fund, unlikely given the need for 5year exit via re-flotation, difficulty in sell-off of real estate assets in this timeframe/climate to liquidate debt, no obvious improvements in key ratios possible vs. the competition
• A Sovereign Wealth Fund (a Government Agency like Mid-East or China), likely as a long term investment, a much slower burn vs. prevailing money-rates in the market, via existing management until they are found wanting…

Impact on the business:
A more stable supplier-retailer environment, with an emphasis on steady financial performance, long term, with access to money for investment in ideas/acquisition/global expansion in the business.

Base requirement for NAMs to calculate cost and value of supplier package to the new M&S, a good basis also for their dealings with competing retailers…

M&S docs:

Latest Annual Report 

5 year record 

The 'Per 100' comparison - upfront clarity & brand equity?

Now that we have all settled into an acceptance and appreciation of the advantages of decimal measurement (1971, 41 years ! ) and some are no longer stopping at traffic-lights, perhaps it is time for retailers and suppliers to aim for clarification rather than confusion in communicating price and value to shoppers?

Revealing pricing...
Expressing the shelf-price per 100g/100ml along with the SKU price would surely add clarity to the (deliberate?) confusion caused by random use of Kg/g in shelf-label unit pricing, BOGOFs, extra-value packs, and especially the use of shrinking-packs to disguise price-rises….

Converting the savvy consumer
Most of us have acknowledged the emergence of the savvy consumer, a person who is determined never to outsource their purchasing decision-making to marketers and retailers ever again, and yet we continue to serve up pricing indicators that at least cause confusion if not suspicion in shoppers who think for themselves, like never before…
Moreover, these same shoppers, with no credibility-baggage, are now equipped like never before with the means of ‘telling a 100 friends’, in complaining about a product.

Evaluating the real brand
Sure, the ‘per 100’ comparison forces the brand to rely upon Performance, Presentation and Place in a like-with-like Price evaluation with the available competition, causing the shopper-consumer to fall back on the brand equity we have taken so much trouble to build and sustain over the years.

If the brand is that good, it should be able to stand the heat…