With a sevenfold increase in the groceries it offers online in barely two years, ‘having completely met expectations and growing great’, in a flatline market, Amazon has to be growing at the expense of traditional grocers. Whilst some big-lunged suppliers and retailers may decide to await the outcome of possible government moves ref alleged tax issues, proactive suppliers will take a positive approach and follow the market…..
Managing Amazon-the-grocer
This means accepting the fact that Amazon are going to go all the way with food, offering the simplicity of 1-click ordering, pick-up/drop-off convenience on the back of a food range that knows no limits, and no-quibble returns, all tailored in terms of consumer tell-your-friend delight.
It also means staffing Amazon with NAMpower matched to potential, rather than history, of a quality that can scope out and deliver an omni-channel strategy that integrates with all other ways of buying your products, seamlessly…using the Amazon strategy as a template for all other retail.
How to recognise this Amazing NAM?
Big-thinking question: ask candidates how Amazon might finesse its home delivery within the M25…
Disqualifying hint: In terms of ways and means, given Amazon’s growth record and prospects, how long do you think it would take them to raise the £386m it would take to buy Ocado at today’s share price?
Monday, 26 November 2012
Friday, 23 November 2012
Pit-stop perfection: Formula 1 teams reveal their split-second technology
pic: sportinglife.aol.co.uk
Lack of time to have a haircut or change a set of tyres can be indicators that 24/7 NAMs need to review their time-management skills.With this weekend's Grand Prix in Brazil marking the climax of the Formula 1 season, there may be lessons to learn from how top Marussia and McLaren drivers use technology to try to shave fractions of a second off a trip to the pits.
BBC News went behind the scenes with the two teams to learn how it simply takes 4-men per tyre and a heap of state-of-art technology to make a difference…Full 3.23 minute video here.
Incidentally, for those NAMs that like a target, McLaren recorded the world's fastest Formula 1 pit stop during the German Grand Prix in July this year, with a stationary time of 2.31 seconds, while they changed Jenson Button's tyres.
So, with the right attitude and tools, and a slightly faster car, it can well be possible to fit in that last-minute dash to the buyer’s waiting-room queue, with every hair cut to perfection…
Have a full 172,800-second weekend, from the NamNews team!
Thursday, 22 November 2012
Taking space-management into the warehouse - a networking aid for NAMs?
Given that a NAM’s effectiveness increasingly depends upon multifunctional motivation, and with warehousing efficiency a key cost in the pricing equation, then any insight into optimising warehouse space has to count. This is why the fact that Mini Bendi have scooped the Innovation Award at Asda’s annual Store Proposition award ceremony is closer to the NAM role than you think.
The Asda view
Simon Grass, Asda Back of House Development Manager commented: “The Mini Bendi allows us to significantly drive the use of the cube in our back of house areas as it can work in the narrow aisle format and maximise the usable height available, but due to its way of working, that allows us to have pedestrian pick within the same area permitting the stores to drop and fill effectively. This supports the reduction in the building footprint and thus improves the building’s selling efficiency as we can either build a smaller store or increase the selling sq ft. It also allows us to lower the height of the building as we can now store as many pallets above ‘pedestrian pick’ in narrow aisles, as we could in the reach truck aisles at height, which is especially welcomed by the local planning authorities in certain areas of the country.”
A networking opportunity?
In a place where space is money, the Mini Bendi, which saves warehouse space, increases shop floor selling space and frees up congestion in the pedestrian pick area, offers NAMs a way of opening a productive networking dialogue with both colleagues and ‘back-of-store’ customer contacts.
Why not pass a link to relevant contacts and see it make a difference?
Wednesday, 21 November 2012
'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?
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?
Tuesday, 20 November 2012
Bionic Mannequins are Keeping an Eye on Shoppers to Boost Luxury Sales
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.
Monday, 19 November 2012
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….
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….
Thursday, 15 November 2012
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
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
Wednesday, 14 November 2012
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…
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…
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