'3D tape measure' for online shoppers, a pointer for NAMs?

Scientists from Surrey University and design experts from the London College of Fashion are developing a programme which can take precise waist, hip, chest and other measurements from camera images.
Using the person's height as a starting point, the software will be able to build up a 3D image and estimate their size at various different points on the body, based on their overall proportions.

Why it matters...
The result will be a more accurate sizing guide than systems based on waist size or a "small/medium/large" scale, which rely on limited measurements and the buyer's perception of their own body size. Instead, the programme will use the exact measurements of each individual garment to predict which size will be the best fit, avoiding shopper tendency to order several sizes of the same garment, just-in-case…

Ultimate in shopper engagement 
For fmcg NAMs, the issue is not how much extra clothes it sells, but the degree of competition it represents to ‘regular’ fmcg in terms of shopper engagement (coupons, leaflets, competitions, pale by comparison….).
This advance in meeting online shopper needs really forces fmcg suppliers to find more creative ways of engaging with the shopper, like tying self-measure monitoring to dietary aids/foods, for starters....

Time to encourage your marketing colleagues to re-assess and engage with consumer needs, before retailers add a real difference to private label? 

Bionic Mannequins are Keeping an Eye on Shoppers to Boost Luxury Sales

The EYE SEE mannequin from Almax S.p.A. (Italy) in collaboration with Kee Square makes it possible to observe who is attracted by store windows and visual displays using facial recognition software. The software, powered by IBM, uses a camera embedded in one eye that feeds data into facial-recognition software like that used by police. It can track age range, gender, race, number of people and dwell time.

Results
The €4,000 ($5,072) device has spurred shops to adjust window displays, store layouts and promotions to keep consumers walking in the door and spending.

According to Bloomberg, Benneton US are among five retailers currently trialling the mannequin camera.

A step too far?
Like all attempts to monitor shopper behaviour, the innovation raises privacy issues for both staff and shoppers. Staff issues could be managed via loading of all personnel pics into the software and eliminating them from the tracking, hopefully….

However, given that privacy tends to be less of an issue when consumer needs are being met via tailored offerings, like with Amazon’s relevant emails, providing the store can demonstrate reactive use of the insight, then size and quality of basket will deliver the ultimate endorsement.

The letter vs. the spirit of multibuy promotions

Given the media coverage of Which? latest research on ‘misleading’  promotions, the key issue is how the consumer-shopper will react to creeping realisation that no-one can be trusted…

As a person or company works to the edge of ‘right and wrong’ they might acknowledge that whilst their observation of the spirit of the law might be in question, strictly speaking they remained within the letter of the law... In an environment where loyalty to a brand or store is increasingly fragile, spirit and letter become indistinguishable, especially to a savvy consumer, and, as you know we are all becoming savvy consumers...  This means that if a deal even seems wrong, the damage is already done..

The Which? findings
Which? year-long investigation into "misleading" pricing tactics by the major chains indicated that seven out of 10 people prefer straightforward discounts to multibuy offers.

Multibuy deals have become a staple of supermarket promotions in recent years, and now apply to nearly half the goods on offer in a supermarket at any one time. Which? said that of the 115 products that it examined in the first half of this year, 46% of the time they were on multibuy, compared with 35% of the time in the first half of 2011.

Increasing suspicion
But there are signs that consumers have become increasingly disillusioned by the value on offer in supermarket promotions. Around one in 10 products on supermarket shelves increased in price when they went from the previous standard price to the new multibuy price, then decreased again when the promotion ended.

Losing the consumer...
The only real issue for suppliers and retailers is whether, having been ‘mislead’ by a promotion, the shopper associates the deception with the multibuy itself, the  brand involved or the shopkeeper…  In other words, does the shopper dismiss multibuys and revert to ‘straight’ sales, switch to another brand or change stores…

Given the upfront investment in getting the consumer-shopper to this point, it seems a pity to then kick ‘em over to the opposition….

Happy own-brand Xmas, how Ansoff can help?

Given Sainsbury’s predictions that this will be an own brand Christmas as hard-up Britons “splash out” to enjoy a family Christmas, making their money go farther via own-brands perhaps the Ansoff Matrix can spell out the moves and help suppliers to anticipate the impact…?

As you know, Ansoff identifies four ways of growing a business by selling:
- More current products to current customers
- New products to current customers
- Current products to new customers
- New products to new customers

How Sainsbury’s could increase own-brand sales

More current products to current customers:
Essentially, as most produce sales are own-brand, coupons and keen prices and store-level assortment could encourage purchase of larger portions of Christmas meats turkey, fruit & veg, with pricing delicately balanced to avoid over-purchase/waste….making current customers happier

New products to current customers:
Here the emphasis could be on encouraging purchase of complementary Christmas items both food and non-food, brands & own-brands, with in-store promotion/theatre and linked couponing to tease custom away from branded alternatives and other mults/channels via current JS customers in the aisle – making current customers even happier....

Current products to new customers:
By studying the profile of their current customer, JS could seek out new shoppers of similar profile, and try to attract them to the store via the own-brand products that appear to appeal to current JS customers, given that they probably have similar appetites. These new customers will need to be attracted and retained by a combination of virtually one-to-one communication and coupon-swaps to encourage a first-time switch from their traditional Christmas destination. To achieve an acceptable ROI, this has to result in an unprecedented and compelling experience, well suited to the JS approach.

This will probably be the most competitive segment as Tesco tries to recover lost share/customers and retain its current customers via its £1bn investment programme…

New products to new customers:
This high risk alternative means trying to attract new shoppers and sell them new products, targeting consumers that are unaccustomed to the JS experience, with products that are new to JS, a double-whammy that may attract the risk-seekers, but will probably play a small part in own-brand Christmas..

So, from a supplier’s point-of-view, this is all about own-brand, wrong!
This is about how a skilled and systematic retailer is going to make this an unforgettable own-brand Christmas, using differentiation to build and hold an enlarged customer-base, at the expense of brands…unless suppliers make Ansoff work even better for their brands…
PS  For insight on the subtle moves see our free paper : 4 generations of private label

Delivery leverage for on-time supply - Walmart pays upfront

Mexico's leading retailer Walmex has made early payments totalling US$326 million to its suppliers to make sure they deliver products on time for Thanksgiving and for the Christmas season. This has to be an indicator that when the circumstances are right, even the world’s biggest retailer will pay for goods in advance.

When you take into account that retailers in Mexico pay in 60-90 days, it can be seen that Walmart are in fact paying up to 6 months earlier than suppliers would normally have been paid…

Why a retailer can pay upfront
In practice, being cash-rich in that the consumer pays on receipt of goods, a retailer is capable of, and willing to pay in advance, on delivery or up to 90 days later, with or without settlement discount. In the case of private label, a retailer can even contribute to the investment in special plant, buy the raw material and ingredients and even contract to purchase at a given price for up to five years in order to help the supplier to amortise investment.

It all depends on the deal….
For this reason, it is vital that suppliers always have a clear idea of the financial dimensions of their relationship with individual retailers. This means being realistic about the pulling-power of their brand vs. available alternatives in the eyes of both consumer and retailer.

Running the numbers, both ways...
Based on this potential leverage, it is essential to calculate each element of the deal in terms of actual/estimated cost and also the incremental sales to the retailer in order to break even. It is then necessary to calculate what the retailer ‘gets’ from the brand in terms of margin, free credit, settlement discount, trade funding and above-the-line support in addition to service level, rotation, availability, exclusivity and priority when stocks are scarce, all set against their sales equivalent required to generate this total investment.

In other words, by listing the brand, a retailer on 5% net profit needs sales of £20k for every £1k received from a supplier…this needs bringing out in negotiation!

Going to ‘see’ the buyer without having run the numbers in this manner is worse than going in blind, especially if your competitor, without your brand benefits, knows and can use the financials, has eyes wide open…

Incidentally, before emailing the Asda buyer, it might be prudent to keep in mind that with planned purchases of $6.4bn in Mexico for Q4, Walmex are in fact paying for $326m in advance, i.e. 5% of purchases…

Making more of existing traffic in supermarket convenience….

With more than 1-in-20 shoppers are leaving supermarket convenience stores having failed to spend all they intend, according to him! research & consulting, it follows that improved availability will optimise existing traffic, without adding another shopper...

At a time when every little helps, it seems a no-brainer to respond to the 5,000 shoppers surveyed at supermarket convenience stores, including Tesco Express, Sainsbury’s Local, M-Local and Little Waitrose, that report the main reason for these failed purchases is poor availability. Moreover, failure to buy one product in smaller format stores, when shoppers only need two or three, means a significant proportion of a shopper’s needs are left unfulfilled.

Losing business in the aisle
As you know, a brand’s consumers exhibit different need-sets as they shop different store formats, and retailers need to tailor both the offering and layout to suit, or suffer business drift…

In the current climate, suppliers and retailers invest heavily in presenting the offering to the consumer. It seems a pity to discard that consumer as shopper when they respond via a more convenient store of their choice…

Moreover, any additional traffic arising from more satisfied shoppers ‘telling a friend’ will be truly incremental.. 

'Boots the Grocer' - How Walgreens and Musgrave are helping them become a force in UK convenience…

Given that Walgreens, Boots 45% partner’s experience of food in pharmacy, give c15% of their store space to food, coupled with the Musgrave trial of food-to-go in Boots’ branches means that ‘Boots the Chemist’ could become a big competitor in the UK convenience landscape.

A new report from him! focuses on the Boots / Musgrave food range trial, and new exclusive shopper feedback shows that shoppers are excited about the extended range of food products being trialled in 11 Boots stores.  Looking to Boots to provide healthier alternatives, 58% said that they are likely to buy from this new food range at Boots in the future.

Why this initiative matters to everyone...
Given their track record, traditional suppliers to Boots will not underestimate the ability of this global player to expand synergistically via the right partners. Moreover, this logical brand-stretch via healthy food from a quality convenience retailer, combined with Boots retail footprint and regular traffic, has to represent a major breakthrough in the convenience sector, for both retailers.

Implications in a zero-sum market
The obvious implications in terms of relative space, ease-of-access and increased buying muscle means that it is important therefore that all suppliers tap into the Walgreens food background and link this with Musgrave’s quality convenience-experience in order to adequately factor this innovative food range trial into your trade strategies…

Full details of the Walgreens-Boots merger, the Boots-Musgrave trial and shopper reactions in the him! report

Morrisons losing share - what would you do?

According to latest results with a 2.1% fall in like-for-like sales, Morrisons are losing share vs. the other mults, apparently due to insufficient presence in convenience and online….

Essentially, they are doing the right things, promoting no-nonsense value for money to a hard core of loyal users, who are perhaps hurting more than most in the current climate.  However, the company needs to drive its share price in order to remain autonomous, and independent…

How to help
Every salesman, myself included, ‘knows’ how to run a hotel, a pub, and even a shop.
So what would you do if you were in Dalton Phillips’ shoes?  All ideas and suggestions welcome, at least in Kamblog…

For starters: 
The one-to-one approach with existing customers, the most valuable asset

• Work on the core users: a basic business-building principle, they are already sufficiently satisfied to visit your store regularly, presumably in preference to other retailers
• Find out who they are, where they live and look after them (social marketing/media, networking, online)
• Treat them well as individuals and they may even tell their friends. In other words, find out why they came in and make sure their needs are satisfied (store-level assortment, availability, instore theatre, shopper-marketing )
• In effect, sell more of their current requirements, where feasible
• Attempt to help them buy appropriate new products, rather than selling to them
• ‘Follow them home’: after-sales checking for satisfaction via e-networking

Attracting new customers

• Ideally via recommendations from current customers (back to rewarding satisfied current customers)
• Attracting ‘spontaneous’ new custom is too costly and takes longer than you have…

Optimising supplier support

• Shop staff look after 450 categories, a supplier NAM manages three, maximum
• NAMs can generate 20 ideas per category, all they need is access..
• NAMs represent pan-market breadth, in that they know how their categories are sold in most types of outlet, a wealth of insight, available on tap..
• Many suppliers are willing to shopper-market, and want to influence the shopper in the aisle

Any more ideas from you guys, the NAMs who actually do the job, unlike myself, a mere describer of the process….?