Latest research shows that most high street retailers are responsive to haggling, to varying degrees…
In a poll of 2,544 people, Martin Lewis of MoneySavingExpert.com found that most high street players will respond to haggling, with the following success-rate for determined shoppers.
The top 10 high street stores to haggle in
Retailer & Success rate (of those who tried)
1. Comet 78% 6. Asda 60%
2. B&Q 78% 7. Tesco 58%
3. Currys/PCW 78% 8. Wickes 56%
4. Homebase 69% 9. Sainsbury's 54%
5. John Lewis 63% 10. Debenhams 53%
Source: MoneySavingExpert.com
How this approach can help in negotiating with buyers.
Given that many buyers can sharpen their negotiating skills simply by dealing with more suppliers per day than a NAM can manage in a week, coupled with the fact that role-reversal can add insight re the other party’s position, then taking every opportunity to haggle at store level could be your way of raising your negotiating game to new levels of expertise. (See here and scroll down for Martin’s Top 20 haggling tips)
For a real immersion in your customer’s culture, why not start easy and gradually move down the haggling league table before selecting your customers outlets for your experiments?
Some precautions
Given the prevalence of security cameras, it might be worth donning off-duty clothing and a hint of make-up to avoid your next encounter with your buyer becoming a retaliation session…
Going for broke?
Finally, the retailer most resistant to haggling in the survey was Boots (it figures?) with a success-rate score of 29% - a real opportunity to refine your haggling skills, especially if you handle a different account…
Thursday, 27 September 2012
Wednesday, 26 September 2012
Kellogg's new tweet shop - pay with social currency...
According to a report in Retail-focus, Kellogg's have opened a new pop-up 'tweet' shop on Soho's Meard Street in London. The standalone store – thought to be the first to allow customers to pay by Tweet instead of money – marks the company's move into the savoury crisps market and is open until Friday 28 September.
The shop is lined with hundreds of packs of crisps, a 'try before you buy' snacking area, a 'community noticeboard' that captures social media reaction to the unique retail space, and a packet of new Special K Cracker Crisps can be bought by Tweeting a message about the snack range.
A real fusion of brand, medium and consumer, without retailer intervention..
Another potential use for empty shops in the high street?
Sao Paulo, 120mile traffic jams (+kidnapping)…
Next time you are stuck on the M25 on the way to Cheshunt, spare a thought for your colleague KAMs in Brazil, where traffic jams of 120 -180 miles in Buenos Aires are routine, wjth the added threat of being kidnapped for those KAMs working for major suppliers..
Several years ago while running a workshop at local headquarters of a multinational client I was informed that my personal bodyguard was essential in order to avoid the inconvenience and cost ($50k) of having to pay my ransom in order to conduct the workshop without interruption.
However, the $50k was a mere trifle compared with what they would have had to pay to release their global chairman, who paid a surprise visit from Europe, transferred from the airport by helicopter, landed on the roof, and participated in the workshop for 30 minutes before flying back to Europe again, all before the local mafia discovered he was in the country!.
The secrecy left me only moments to add a couple of spontaneous pleas for more local-KAM empowerment, before attempting to continue the session as planned.
Nice to be appreciated, if only via the price of a ransom…
Tuesday, 25 September 2012
Tesco to build national network of online-only 'dark stores'
Future dark stores
Towle said Tesco's would need "tens" rather than "hundreds" of dark stores. Speaking last week, Tesco chief executive, Philip Clarke, said Tesco.com "provides all the growth we have in our core food businesses these days".
Where this is heading
Besides representing a threat to Ocado, Tesco with 50% of an online grocery market that will be worth 6% of total grocery spend by 2016 (IGD), the market leader is still at an early stage in its rebalancing of online-and physical store presence that will reflect online demand, with an increasing dark store weighting that will provide a means of reducing online overheads and help to subsidise the cost of home delivery.
In other words, it will always be difficult for online grocers to break out of the '£5-per-drop' mode, so lower-cost dark stores will help by releasing more of the retail margin to help cover delivery cost losses (See posting below)
Monday, 24 September 2012
Home Delivery charges - a one-way subsidy?
Given that picking, bagging and making a home delivery costs supermarkets up to £20, the £5 charge actually represents a subsidy for the service.
This leaves the retailer with four options:
Some retailers may see significant scaling up of home deliveries as a possible solution, with the milkman’s street-agreements as a way forward (in the final days of home delivery of milk, dairies agreed solus access to individual streets in order to make individual milkmens’ routes profitable), a practice that might cause issues with the competition authorities, nowadays…
A radical business model?
However, for radical thinkers, the way forward may be via a significant scaling down of store sizes and numbers to better match a shrinking need for physical presence as online increases. With less physical overheads, the average retail margins of 25% could be used to fund home delivery, thereby evolving a new retail model that fully acknowledges a future balance of online and physical retailing.
Otherwise, Amazonian third party online retailers will emerge to take up the space, profitably…
This leaves the retailer with four options:
- Absorb the loss: impossible on current retail margins, especially as the online/physical shop ratio increases?
- Charge more for instore purchases: An increasing an unacceptable burden on those that want/need to shop instore.
- Charge £20 per delivery: a significant turn-off for many online shoppers?
- Or radically increase the minimum order size: a likely mismatch with real shopper need?
Some retailers may see significant scaling up of home deliveries as a possible solution, with the milkman’s street-agreements as a way forward (in the final days of home delivery of milk, dairies agreed solus access to individual streets in order to make individual milkmens’ routes profitable), a practice that might cause issues with the competition authorities, nowadays…
A radical business model?
However, for radical thinkers, the way forward may be via a significant scaling down of store sizes and numbers to better match a shrinking need for physical presence as online increases. With less physical overheads, the average retail margins of 25% could be used to fund home delivery, thereby evolving a new retail model that fully acknowledges a future balance of online and physical retailing.
Otherwise, Amazonian third party online retailers will emerge to take up the space, profitably…
Thursday, 20 September 2012
Time & Money - optimising the connection
A client once had the problem of the Board spending too much time in board meetings.
Questioning revealed that having spent an hour deciding whether the outside fire-escape stairway should be painted red or silver, the Board waived through a £1m trade-funding budget in five minutes….
Solution:
Even more time was spent agreeing the total annual cost of the combined annual packages of the Board, and the resulting cost per minute in board meetings. Once agreed, however, the agenda items were prioritised and allocated timings in terms of cost and value, making each session a little more productive.
WalmAsda however, did even better by removing all seats and conducting the board meetings stood up…
Questioning revealed that having spent an hour deciding whether the outside fire-escape stairway should be painted red or silver, the Board waived through a £1m trade-funding budget in five minutes….
Solution:
Even more time was spent agreeing the total annual cost of the combined annual packages of the Board, and the resulting cost per minute in board meetings. Once agreed, however, the agenda items were prioritised and allocated timings in terms of cost and value, making each session a little more productive.
WalmAsda however, did even better by removing all seats and conducting the board meetings stood up…
Wednesday, 19 September 2012
How Poundland makes its millions - the brand-issue for suppliers and retailers
Monday's Poundland item in NamNews resulted in over 250 downloads, indicating a high degree of NAM-interest and perhaps curiosity re possible 'trick-missing' in some cases.
Given that the Telegraph article was also the subject of a 30-min prime TV programme (see 'Dispatches: Secrets of Poundland’ on September 17, Channel 4, 8pm) poundshop optimisation raises important issues for suppliers wanting to maintain their brand equity.
Coping with inflation
In order to maintain the £1 price-point, suppliers and pound-shops have reduced pack-contents over the years. This is about consumer expectation, not the letter of promotions' legislation. As you know the original idea of branding was to persuade the consumer that the contents were safe, consistent and matched or even exceeded the expectation created by the advertising.... Think of the impact on a loyal user of having the contents of a £1 Family pack reduced by 50% in five years.
We all know why it happens, but we need to focus more on the impact
Extra-value packs
Pound shops sell a number of well-known brands with “50% Extra Free”, or even “100% Extra Free”, on the packaging. i.e. a pack of eight bars for £1,while the mults offer the same eight bars for £1 also, without the flash. Again a potential bad taste...
Consumer perception as driver
The issue is not about morality or even the letter of the law, but is more about the negative impact on consumer perception, a serious dilution of hard-won brand equity.
In the process we risk converting a savvy consumer into a cynical shopper that nowadays has the incentive and means to express their opinions via the internet...
The way forward
Brand-owners need to meet trade needs, but not at a cost to brand equity. Brand equity has to remain sacrosanct, its all you've got... Also, the retailers face the same challenge in preserving shop brand equity whilst responding to shopper demands, a possible basis for joint consultation?
It all goes back to trust in business, the basis for everything, and worth a lot more than a pound...
Given that the Telegraph article was also the subject of a 30-min prime TV programme (see 'Dispatches: Secrets of Poundland’ on September 17, Channel 4, 8pm) poundshop optimisation raises important issues for suppliers wanting to maintain their brand equity.
Coping with inflation
In order to maintain the £1 price-point, suppliers and pound-shops have reduced pack-contents over the years. This is about consumer expectation, not the letter of promotions' legislation. As you know the original idea of branding was to persuade the consumer that the contents were safe, consistent and matched or even exceeded the expectation created by the advertising.... Think of the impact on a loyal user of having the contents of a £1 Family pack reduced by 50% in five years.
We all know why it happens, but we need to focus more on the impact
Extra-value packs
Pound shops sell a number of well-known brands with “50% Extra Free”, or even “100% Extra Free”, on the packaging. i.e. a pack of eight bars for £1,while the mults offer the same eight bars for £1 also, without the flash. Again a potential bad taste...
Consumer perception as driver
The issue is not about morality or even the letter of the law, but is more about the negative impact on consumer perception, a serious dilution of hard-won brand equity.
In the process we risk converting a savvy consumer into a cynical shopper that nowadays has the incentive and means to express their opinions via the internet...
The way forward
Brand-owners need to meet trade needs, but not at a cost to brand equity. Brand equity has to remain sacrosanct, its all you've got... Also, the retailers face the same challenge in preserving shop brand equity whilst responding to shopper demands, a possible basis for joint consultation?
It all goes back to trust in business, the basis for everything, and worth a lot more than a pound...
Monday, 17 September 2012
Boots breaks the 'silence' as it agrees deal with China firm
Alliance Boots, under the terms of a strategic alliance agreement signed yesterday, announced that it will acquire a 12% stake in Nanjing Pharmaceutical Company Limited, through a private placement, for a total consideration of approximately £56 million (RMB560 million), making it the second largest shareholder with Board and operational management representation.
Boots China profile
Nanjing Pharmaceutical Company Limited, which is listed on the Shanghai Stock Exchange, is the fifth largest pharmaceutical wholesaler in China with sales of around £2 billion (RMB20 billion) in 2011.
Alliance Boots first entered the Chinese pharmaceutical distribution market in 2008 through its Guangzhou Pharmaceuticals Corporation joint venture, which operates in complementary geographies and continues its successful development.
A powerful stepping-stone...
In all, with this latest move Boots is aiming at gaining a 20-30% share of the Chinese pharmaceutical distribution market. Apart from the inevitable appeal of adding a retail element in China asap, this major wholesale step is a clear indicator that even without the Walgreens’ tie-up, Alliance Boots is determined to pursue its policy of increasing its global reach and scale.
This will not only make it more influential in the Walgreens-Boots mix, but will be another step in making the company one of the most connected and centrally-run health & beauty operations in the world, at least in the short and medium term, say five years.
Impact on suppliers
This increasingly scalable company will continue to be heavily geared in a global economic environment. As a result there will be increasing pressure on the company to provide an exit strategy for its stakeholders via re-flotation.
All of this adds up to increasing power and influence in its relationships with suppliers, a position that will inevitably cause it to bring issues like prices & terms disparities, and especially absolute cost-prices to the negotiation table.
Action
It hopefully goes without saying that any supplier wishing stay in the ring needs to factor the full global profile of W-B into the mix, fast.
….and if anyone, anywhere in your company still needs convincing of the obvious, why not run the numbers on Walgreens-Boots owning even 20% of global Health & Beauty retail & wholesale, with power to match…
Boots China profile
Nanjing Pharmaceutical Company Limited, which is listed on the Shanghai Stock Exchange, is the fifth largest pharmaceutical wholesaler in China with sales of around £2 billion (RMB20 billion) in 2011.
Alliance Boots first entered the Chinese pharmaceutical distribution market in 2008 through its Guangzhou Pharmaceuticals Corporation joint venture, which operates in complementary geographies and continues its successful development.
A powerful stepping-stone...
In all, with this latest move Boots is aiming at gaining a 20-30% share of the Chinese pharmaceutical distribution market. Apart from the inevitable appeal of adding a retail element in China asap, this major wholesale step is a clear indicator that even without the Walgreens’ tie-up, Alliance Boots is determined to pursue its policy of increasing its global reach and scale.
This will not only make it more influential in the Walgreens-Boots mix, but will be another step in making the company one of the most connected and centrally-run health & beauty operations in the world, at least in the short and medium term, say five years.
Impact on suppliers
This increasingly scalable company will continue to be heavily geared in a global economic environment. As a result there will be increasing pressure on the company to provide an exit strategy for its stakeholders via re-flotation.
All of this adds up to increasing power and influence in its relationships with suppliers, a position that will inevitably cause it to bring issues like prices & terms disparities, and especially absolute cost-prices to the negotiation table.
Action
It hopefully goes without saying that any supplier wishing stay in the ring needs to factor the full global profile of W-B into the mix, fast.
….and if anyone, anywhere in your company still needs convincing of the obvious, why not run the numbers on Walgreens-Boots owning even 20% of global Health & Beauty retail & wholesale, with power to match…
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