Tesco Q3 - the update options for suppliers?

Given the positive market reaction to a review and probable sale of its Fresh and Easy operation, the resulting focus on core domestic market dominance and business development of overseas markets has to represent a short-term breathing space for Tesco.

The company now has an opportunity to intensify its £1bn regeneration project, perhaps switching the emphasis to food, as the world wakes up to the fact that austerity-driven consumers ‘making do’ have taken real demand from the replacement and new product market in non-foods….

Financial emphasis
Given the city’s focus on financial performance, then Tesco will need to demonstrate its new direction by squeezing costs and driving sales, whilst becoming potentially even more appreciative of the financial value of brands.

Suppliers in turn need to be able to calculate and demonstrate the impact on the Tesco P&L of margin, credit, settlement discount, ATL, trade funding, GMROII and even deductions…
An opportunity for financially articulate NAMs to sound like Tesco think?

A virtual US presence?
Meanwhile, a 100% withdrawal from the US probably means that despite an otherwise global success, Tesco will find it impossible to re-enter the US in the next 10 years. However, leaving aside a traditional 20th century bricks & mortar approach, Tesco could demonstrate its 21st century vision by building and maintaining a virtual presence in the US via:

• Private label via an agency network to build brand awareness
• Online: as a leading online player Tesco could use a combination of local partners in appropriate categories

Both are relatively low-cost, low-risk options especially for a company with an established presence and highly relevant experience elsewhere…

An opportunity for suppliers in relevant categories?

A bogof for B&M Bargains?

Having sold a significant share of the business for a 10x multiple that values B&M Bargains at around £965m, the Arora brothers have secured two major assets:
- A source of funding to realise its UK and overseas potential
- A visionary who saw the global potential when Tesco was tip-toeing into France

Arora bought B&M at the start of the global downturn in 2005 when it was loss-making and had fewer than 20 stores. However, the retailer has been transformed since then. It now has more than 300 stores, 10,000 employees, annual sales of £1bn, and is perfectly positioned to thrive in the global ‘post-recession’ flatline environment…

For NAMs wanting to scope out the company’s full potential, now rather than when everyone can exercise hindsight, think:
- Tesco with no baggage in the era of pile-it-high, sell-it-cheap
- Tesco freed from City restraints, at least for five years…
- A fully focused family with everything to gain
- A well-connected chairman with nothing to lose
- A stripped-down fully transparent discount offer
- A global environment crying out for same…

Mega-Monday - a vision of the future?

The first Monday in December comes shortly after payday for many consumers and in recent years has consistently been the busiest day for online retailers. Today Visa predicts that online shopping will be up 21 per cent on the equivalent day last year, making it the biggest online shopping day ever in the UK, a sentiment echoed by online retailers throughout the UK.

However, what if every Monday was Mega-Monday, on the way to 24/7?

In other words, why not multiply your online sales today by 365 and consider the resulting vision of the online future....? Moreover, in an essentially zero-sum game this online growth has to be at the expense of traditional retail...

Assume also that as consumers we respond positively to the Amazonian experts as they raise our 'norm-bar' for online access and service level, making non 1-click secondary players seem clunky by comparison...

Accepting the above, what can you do omnichannelwise to realise your fair share of the 24/7 dream?

Alternatively, why not ignore the signs and be surprised by the Mega-nightmare...? 

Supermarkets agreement to prices and discounts code – a brand responsibility?

By the time legislation catches up with a problem, the damage has already been done. Thus, having made significant progress in building consumer trust in private label and store ‘brand’, retailers forget that branding is really a guarantee that every time the tin is opened, its contents are the same or better than the consumer’s previous experience.

Having come so far, retailers have progressively undermined that trust by manipulation of prices and discounts to the disadvantage of the regular shopper – ‘secure’ in the knowledge that they have adhered to the letter rather than the spirit of the law…

It will be a pity if the new code is allowed to simply become a more demanding set of parameters for further manipulation.

Hopefully, good retailers will see a major opportunity for real differentiation – scope to become the champion of the people by representing transparent value via clear pricing and easy comparison, while competitors allow shoppers’ creeping suspicion to dilute their hard-won brand equity…

However, the real issue for brand owners has to be the realisation that it is their responsibility, rather than that of the retailer, to be the custodian of brand equity at point of purchase.

Brand owners are busy applying all the principles of shopper marketing in the aisle at incremental expense. A pity to allow all gains to be sacrificed at the checkout.

It is vital to ensure that a link is maintained with brand consumers in order that perceived value is exceeded by actual performance by helping shoppers to count and appreciate real value

Making the numbers add up would help…

Top five scams impacting online xmas shoppers

According to an online shopping survey of 1,005 people commissioned by software security vendor, Kaspersky Lab, 76 per cent of participants will be purchasing Christmas gifts online this year, and each of these is potentially vulnerable to credit card theft and other scams during the holiday season.

Top five holiday scams:

1. Christmas eCards: links to eCards may contain malware
2. Parcel delivery notifications: fake delivery notification emails may infect computers
3. Fake order confirmations: fake order confirmation emails causing shoppers to think someone ordered a product under their name
4. Holiday screen savers: Holiday-themed screen saver downloads can contain malware
5. Social media malware: include fake Facebook Christmas competitions, video links with malware, and Twitter viruses

Some tips available here

Managing online trust
Give the fragility of many shoppers confidence in online purchasing, it is vital that suppliers and retailers build consumer education and xx into their online communication. The Catch 22 is that such education needs pitching in ways that reassure rather than further de-stabilise nervous shoppers.

However, the real solution has to be strong online branding.
If in any doubt, think what Amazon has achieved by distilling all consumer reluctance into          1-Click shopping… 

Amazon-the-grocer moves from 22,000 to 150,000 products since July 2010

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?

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!

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?