2013: A year for realistic optimism?

With five flatline years behind us, and a high street littered with casualties, realistic NAMs should be finding it easier to factor in a further five years of the same....

If we accept that whilst politicians operate to a different agenda (re-election) and vocabulary (triple dip = flatline...) those of us still in business are here because we know that in times of zero-growth, any market gains have to be made at the expense of the competition.

This means always seeing our offering through the eyes of an increasingly savvy consumer that is unwilling to settle for anything less than demonstrable value-for-money, a consumer determined never again to outsource their purchase decision-making to marketers or retailers.

In these circumstances, it is vital to strip our offering back to the bare essentials, leaving a needs-based package that represents real value, measured by what people are prepared to pay, over and over again.
Using consumer need as the only real benchmark, realistic NAMs will assess the offering vs. what is available from competition, and will continue to cut until what remains represents true value, and more, to a consumer and ultimately the savvy retailer.

Achieving this level of confidence in our value means realistically factoring in politics, economics and banking into our business thinking, as we constantly strive to achieve acceptable financial rewards for risk in a market environment where the numbers do not appear to add up...first time.

In practice, this means realistically measuring all of our costs and being able to translate them into value that we represent to our customers, and being able to demonstrate our impact on their Balance Sheets and P&Ls...

In such unprecedented times, real opportunities exist in 2013 for those determined to be realistically optimistic, and are prepared to act decisively, while the competition await a return to the 'good old days'...

Meanwhile, a Happy and Positive New Year, from the NamNews Team! 

How do they sell Xmas champagne for £9.99?

The question is, how on earth can supermarkets afford to sell their champagne at such rock-bottom prices? In all its essential elements, the Aldi champagne @ £9.99 follows the time-honoured rules of the drink. It’s made from traditional champagne grapes - a third chardonnay, a third pinot noir, a third pinot meunier - using the double fermentation method that produces the famous bubbles. Its alcohol level is 12% - a classic figure for champagne. And it doesn’t taste too bad, either.

According to The Daily Mail, you need 2.2lb of grapes for a single bottle of champagne. At current market rates, that will cost you £4.38. Excise duty on top of that is £2.43, and VAT, at 20%, must be paid on the total - another £1.36.

Already we’re up to £8.17, and we still haven’t paid for bottling, warehousing, shipping and distribution. Those overheads vary but, altogether, the total cost price is almost certain to match or exceed the selling price of £9.99. So, a tight fit until they revert to the normal price of £12.99 until the new year.

If Aldi seems a step too far this Christmas, try Asda @ £10, or Waitrose/Tesco @ £14.99

However, if you feel this removes some of the romance from the Christmas festivities, why not pick up a couple of the traditional brands, the only issue being whether you serve these up before or after the Aldi version…

Tesco and Asda poles apart in Cyber Monday web performance speeds

If speed is key, then Tesco will increase their online lead over Asda at Christmas.

A study by Aberdeen Group published by Internet Retailing into ecommerce site performance found that a one-second performance delay reduces sales conversions by seven per cent, a figure which can represent £2.55 million a year lost for a £100,000 per day site.

The results showed that Tesco came out on top with 100% availability on the day and an average response time of just 1.403 seconds, a far cry from Asda, which had an average response time of 13.634 seconds and an availability rate of only 86.44%. The sluggish Asda rate was more than double the average UK-retail benchmark of 6.369 seconds and far behind the average availability of 98.48%, making Asda the worst performer of all the retailers that were tested.

However, the big issue for me was the fact that with a worse than UK average response time of 6.378 secs, Amazon have most to gain by bringing their response times up to match the simplicity of 1-Click purchasing…

Average response times and availability for the Top Ten UK online sites can be seen here. 

Pound shop backstory - 'Commodity City' - home of pound shop supply

Ever wonder where pound shops obtain those supplies not sourced via your surplus goods department?
Quick answer: China. However, nowhere reflects China's contribution to the pound shop phenomenon better than the town of Yiwu, about two hours by fast train from Shanghai. Four decades ago it was a small town - now it is a "commodity city" with a population of over a million.

Yiwu City has the largest small commodity market in the world.
It seems dedicated entirely to the production, exhibition and sale of the thousands of small products that cram the shelves of pound shops. Any shop owner can visit the city, order a dozen different kinds of vases, teddy bears or fishing nets, anything they want and which can be made for under a pound, fill a container and have it shipped back to the UK.

Vital statistics
And massive it is. 4.3 million square metres of floor space containing 62,000 booths representing factories and suppliers producing everything from 2011 Rugby World Cup balls to Hello Kitty socks.

Yiwu’s 3,000 jewellery booths make it the largest supplier in China and the jewellery accessories sector is even bigger. 70% of pens in China come from there, 60% of the gloves, and for those inclined, there are 3,000 booths peddling underwear. Yiwu is often called Sock City – if you’re wearing socks anywhere in the world, there’s a 50% chance they came from Yiwu.

Can’t wait to pay a visit? 
In which case, a  few helpful Chinese terms for visiting Yiwu
Yī wàn ge duō shao qián? … How much for 10,000?
Tài guì le! … That’s expensive!
Wà zi nǎ lǐ? … Where are the socks?
Wǒ néng bu néng mǎi yī ge? … Am I able to buy one of them?

Ten of Britain's most unusual shops?

Bored with store visits? Next time you need a break in the market-checking routine why not include an unusual shop in your schedule?

The Observer have identified what could be the 10 most unusual shops in Britain
1. Unicorn Antiques on Dundas Street in Edinburgh
2. Mr B's Emporium of Reading Delights, Bath
3. Fragile Design, Birmingham
4. Laste, Brighton
5. Nook & Cranny, Liverpool
6. Labour and Wait, London
7. Junk, Manchester
8. Junior Toys, Wells
9. Blaze, Bristol
10. Lupe Pintos, Glasgow
(pics and details in The Observer )

Given the conditions in the high street and the increasing emphasis on productivity, you can be sure that any ‘quirky’ shop still standing must have a unique and profitable appeal. This means that it stands out because of its high degree of match with shopper need, a real standard-setter in terms of assessing how well major mults branches are aligned to your target consumer….

These unusual shops can look messy, disorganised and unprofitable…but in practice they are re-writing the shop-shopper rulebook, in unprecedented times, when everyone is searching for new solutions…

Perhaps these shops have the courage to be different, and have simply found an unusual way forward…..?

Rewards points scheme for smaller shops

Scotland's independent shops are fighting back against the invasion of chain stores and the march of online retailers by launching their own customer loyalty scheme. Over 400 retailers have signed up to Clickypoints, giving them access to mobile marketing and online sales, and will go live early next month with hopes of spreading throughout the UK within two years.

At £1 per point, Clickypoints eliminates the uncertainties associated with traditional schemes, and being redeemable at any member branch allows shoppers to optimise their ‘personal’ value…..

However, in terms of potential spread of usage, the real driver is the fact that offering pound-for-pound points instead of price reductions, not only can the retailer sell at full price and maintain brand equity, they can use what would have been spent on advertising to fund the deals…

Surely a way of combining the interests of shopper and supplier in helping to build a healthy independent sector, everywhere?

'Making do' in austere times?

    'Making-do' in austere times?

For the buyer who has had everything: the world’s oldest Courvoisier vintage

pic: Talking Retail

According to Talking Retail, the world’s oldest known Courvoisier vintage, Courvoisier & Curlier 1789 is now available in the Harrods Wine Shop, from 5 – 8th December. The historic cognac, a snip at £95,000, dates back to the French Revolution, and was bottled over 200 years ago by the Curlier brothers, nephews of Felix Courvoisier.

For those whose buyer has been less accommodating in 2012, four lesser vintages are available priced between £9,500 and £38,500 a bottle.

Livestream today 
If you cannot get to Harrods today, a livestream tasting is available at 12 noon GMT London time / 13:00 CET Paris time, where not only will you get the chance to glimpse the Courvoisier & Curlier 1789 Cognac, but you can also see Master Blender, Patrice Pinet, host a tasting of Courvoisier’s premium Cognac Succession J.S and a chance to send in your inevitable questions to him direct…..
Who knows, you may even see your rival NAM in the background, executing the ultimate in buyer appreciation…

Seriously, what should be your buyer-gifting policy in these austere times? -  too little says too much, too much says too little….

Anyway, why not have a really vintage weekend, from the Namnews Team!