Costco got something from Tiffany for Valentine’s Day: a lawsuit claiming it had sold diamond engagement rings falsely marketed in stores using the jeweller’s name.
According to the New York Times, the suit says “Tiffany has never sold nor would it ever sell its fine jewellery through an off-price warehouse retailer like Costco.”
The real issue in these austere times might be the fact that Tiffany may eventually be happy to join other prestigious brands like Breitling, Cartier and Chanel in discovering worthwhile numbers of their target audience in the Costco traffic-flow…
Then it remains to find a face-saving way of positioning their offering, if Costco agrees to list a brand that seems a little out-of-touch with the new realities of a super-savvy, well-heeled consumer, shopping regularly in warehouse clubs…
Meanwhile, scope for some interesting top-table explanations at the resulting wedding breakfasts…?
Tuesday, 19 February 2013
Sunday, 17 February 2013
Amazing Amazon: Explore the supply-chain reaction to your 1-click order, in high definition...
Amazon's warehouse in Rugeley, Staffs, is the size of nine football pitches. Inside, hundreds of people in orange vests are pushing trolleys, glancing down at the screens of their handheld satnav computers for directions on where to walk next and what to pick up when they get there. They do not dawdle – the devices in their hands are also measuring their productivity in real time. They might each walk between seven and 15 miles today, ‘a sort of robot, in human form’.
At Christmas, the people working in this building, together with those in seven others like it across the country, were dispatching a truck filled with parcels every three minutes or so. According to the FT, before they go home at the end of their eight-hour shift, or go to the canteen for their 30-minute break, they must walk through a set of airport-style security scanners....
Products are stored anywhere there is free space, with only the computer ‘in the know’.
For a fascinating insight into Amazon ‘continuous improvement’ operations, recruitment, wage rates and its positive influence on other organisations’ operational efficiency, see this comprehensive FT article.
A ‘must-read’ for any organisation that feels they have cracked their online presence development….
In practice, Amazon’s operational bar-raising is (or should be) even more scary for online competition than their 1-click ease-of-use…
At Christmas, the people working in this building, together with those in seven others like it across the country, were dispatching a truck filled with parcels every three minutes or so. According to the FT, before they go home at the end of their eight-hour shift, or go to the canteen for their 30-minute break, they must walk through a set of airport-style security scanners....
Products are stored anywhere there is free space, with only the computer ‘in the know’.
For a fascinating insight into Amazon ‘continuous improvement’ operations, recruitment, wage rates and its positive influence on other organisations’ operational efficiency, see this comprehensive FT article.
A ‘must-read’ for any organisation that feels they have cracked their online presence development….
In practice, Amazon’s operational bar-raising is (or should be) even more scary for online competition than their 1-click ease-of-use…
Thursday, 14 February 2013
Another nail in the hoof? Heart Attack Grill claims second victim…
In 2012 a man in his 40s was hospitalised after he began sweating and shaking while eating a 6,000-calorie Triple Bypass burger at the restaurant. In 2011 another unofficial spokesman, a 260kg (575lb) man named Blair River, died at age 29 from what was said to have been pneumonia.
The diner is famous for its huge hamburgers, extra-fat milkshakes and fries cooked in lard. It uses the tagline: "Taste worth dying for."
The only issue now is whether the diner will add equine-based fare to its menu in response to leading-edge appetite evolution in the marketplace…?
Seriously, the above example illustrates the difference between knowingly eating food that has a proven record in compromising health, and being mislead as to ingredients that may or may not represent a health issue.
The issue is profit-enhancement deception, and no amount of buck-passing should be allowed to obscure that basic fact, its consequences, and treatment...
Wednesday, 13 February 2013
Opportunities for all brands in a horse-meat crisis?
Anyone who believes that the current crisis is about meat-ingredients needs to re-examine the small print.... What we are witnessing is a fundamental challenge to the meaning of branding, that assumed guarantee that a branded product contains what it says on the tin, no less and occasionally a little more, in a world where every little helps...
One of the first past the post, the Savvy Consumer, lost faith in intermediaries a few years ago. She learned never to outsource her purchasing decision-making to marketers or shopkeepers, ever again.., instead demanding demonstrable value-for-money before handing over a penny... Her lack of trust and purchasing insight has now extended all the way back up the supply chain, and discovered horses in a field...
Can we blame her for never trusting any of us again...?
The meat crisis has converted us all into savvy consumers, and therein lies the opportunity...
Essentially, those brands that are prepared to deliver what it says on the tin, plus a little more, in quantities and of a quality that meets or even exceeds consumer expectations, now have a clear run...
That old-fashioned combination of Product, Price, Presentation and Place, packaged harmoniously to meet created expectation are all that is required to be better than many alternatives, in these unprecedented times..
When ingredient-cost increases can no longer be absorbed, and retailers refuse to budge, the answer is to eliminate attributes now superfluous to consumer need, rather than substituting inferior quality in attempts to short-change a savvy consumer by cheating on brand delivery. In other words, if the product does not need a handle, its removal will not be missed, and the cost goes down...
Reverting to meeting a combination of the consumer's functional and emotional needs, better than the other guy, then becomes a basis for NAMs to build a similar 4P proposition for the retailer.
Rocket-science it ain't...
One of the first past the post, the Savvy Consumer, lost faith in intermediaries a few years ago. She learned never to outsource her purchasing decision-making to marketers or shopkeepers, ever again.., instead demanding demonstrable value-for-money before handing over a penny... Her lack of trust and purchasing insight has now extended all the way back up the supply chain, and discovered horses in a field...
Can we blame her for never trusting any of us again...?
The meat crisis has converted us all into savvy consumers, and therein lies the opportunity...
Essentially, those brands that are prepared to deliver what it says on the tin, plus a little more, in quantities and of a quality that meets or even exceeds consumer expectations, now have a clear run...
That old-fashioned combination of Product, Price, Presentation and Place, packaged harmoniously to meet created expectation are all that is required to be better than many alternatives, in these unprecedented times..
When ingredient-cost increases can no longer be absorbed, and retailers refuse to budge, the answer is to eliminate attributes now superfluous to consumer need, rather than substituting inferior quality in attempts to short-change a savvy consumer by cheating on brand delivery. In other words, if the product does not need a handle, its removal will not be missed, and the cost goes down...
Reverting to meeting a combination of the consumer's functional and emotional needs, better than the other guy, then becomes a basis for NAMs to build a similar 4P proposition for the retailer.
Rocket-science it ain't...
Tuesday, 12 February 2013
When the buyer does not benefit personally/directly from your rebate..
S: …and of course, you also have a 2% early payment discount…
B: ..that money goes to the Finance department.., it doesn’t benefit me..
S: So, you’re saying it’s not important…
B: Correct!
S: Tell you what, I’ll take it from the Settlement Discount bucket and add it to your margin, how about that?
B: No, you can’t do that!
S: You just said it wasn’t important….
B: Well, it is important to my company, you can’t just remove it
S: I am not taking it away from your company, I am simply transferring to a more important bucket…the total value stays the same…
B: No, I can’t authorise that..
S: Now let’s start again…. I represent the whole of my company in these negotiations. I had assumed you represented all of yours…
B: Correct!
S: But you have just implied that you are not responsible for all of the cake… I need to talk to someone who is responsible for the whole deal with us, someone who can factor in each piece…
Buyer: I am responsible for the whole deal…
SuperNAM: Great, so taking into account the 2% Settlement Discount, that makes your company’s total take equal to….
Adventures of SuperNAM! (12)
B: ..that money goes to the Finance department.., it doesn’t benefit me..
S: So, you’re saying it’s not important…
B: Correct!
S: Tell you what, I’ll take it from the Settlement Discount bucket and add it to your margin, how about that?
B: No, you can’t do that!
S: You just said it wasn’t important….
B: Well, it is important to my company, you can’t just remove it
S: I am not taking it away from your company, I am simply transferring to a more important bucket…the total value stays the same…
B: No, I can’t authorise that..
S: Now let’s start again…. I represent the whole of my company in these negotiations. I had assumed you represented all of yours…
B: Correct!
S: But you have just implied that you are not responsible for all of the cake… I need to talk to someone who is responsible for the whole deal with us, someone who can factor in each piece…
Buyer: I am responsible for the whole deal…
SuperNAM: Great, so taking into account the 2% Settlement Discount, that makes your company’s total take equal to….
Adventures of SuperNAM! (12)
Monday, 11 February 2013
Twenty Retailers that will save the High Street
Unlike brand marketing, where new products enjoy high status, the NAM/KAM system tends not to acknowledge the presence of new retailers until they achieve 5%+ of our business. In fact new, low profile retailers tend to operate under the radar until a chance discovery by our competitors…(think back to early Pound Shops, for starters…)
The 20 fastest growing high-street retailers are niche-carvers, multi-channel strategists, and go-to addresses for affordable goods. All of them have found their own particular edge that enables them to look to 2013 with optimism, despite challenging market conditions.
At the same time, they are diverse. The only thing all of the business on this list have in common is growth. Store numbers range from a single one to hundreds across the country; turnover from just over £200,000 to hundreds of millions. Business growth is very much present across the spectrum, with the right strategy in place.
Real Business and Jordans have identified the 20 UK retailers that are defying the downturn, with super-smart tactics and awesome growth.
Not all will be of direct interest (yet?) but five minutes studying the list of CAGR performances might be worth a ‘mabey’…?? or perhaps a 'what if'? see below
Criteria:
Perhaps even worth applying the above criteria to the tail-end of your customer portfolio, or the little player that naively requested a call, just-in-case?
The 20 fastest growing high-street retailers are niche-carvers, multi-channel strategists, and go-to addresses for affordable goods. All of them have found their own particular edge that enables them to look to 2013 with optimism, despite challenging market conditions.
At the same time, they are diverse. The only thing all of the business on this list have in common is growth. Store numbers range from a single one to hundreds across the country; turnover from just over £200,000 to hundreds of millions. Business growth is very much present across the spectrum, with the right strategy in place.
Real Business and Jordans have identified the 20 UK retailers that are defying the downturn, with super-smart tactics and awesome growth.
Not all will be of direct interest (yet?) but five minutes studying the list of CAGR performances might be worth a ‘mabey’…?? or perhaps a 'what if'? see below
Criteria:
- Sales greater than £5m in latest year’s accounts
- Ebitda greater than £50k in latest year’s accounts
- Latest accounts must be filed in 2011 or 2012
- Latest year and previous three years financial info to be provided (regardless of year or last filed accounts)
- UK based company
- The company needs to have grown turnover over each of the three periods, and most importantly in the final year
- Company to have been profitable in each of the three periods
Perhaps even worth applying the above criteria to the tail-end of your customer portfolio, or the little player that naively requested a call, just-in-case?
Friday, 8 February 2013
When the buyer knocks your trade spend…
S: ….and I am offering £50k to support this price promotion, subject to conditions,…
B: £50k is not very much…
S: How come?
B: Like I said, for a company of your size, a drop in the ocean…
S: How much profit do you think we make?
B: How should I know? Lots…
S: Our Pre-Tax Net Profit is 11%
B: So?
S: This means that when I put £50k trade spend on your desk, I need to see incremental sales of £455k before I let go of the money…
B: That’s your problem…
S OK, Sunshine, let’s talk about your problem… You think £50k is nothing…?
B: Agreed!
S: Your business makes 2.5% Pre-Tax Net Profit, right?
B: How do you know that?
S: Companies House online, £1 for the latest Annual Report. See, I’ve invested in you already, we call it preparation…
B: Wish I had the time to surf the internet… Anyway, so we net 2.5%...
S: This means that my little £50k is equivalent to giving you extra sales of £2m……
B: Prove it !
S: Fine. Our £50k trade investment comes with no handling costs (except bank charges!!!), so it goes straight to your bottom line. It therefore represents 2.5% of sales, in your business model.
B: So?
S: £50k divided by 2.5 and multiplied by 100 gives you sales of £2m, bingo!
Buyer: What do I have to do?
SuperNAM: Now you’re talking…..
Adventures of SuperNAM! (11)
B: £50k is not very much…
S: How come?
B: Like I said, for a company of your size, a drop in the ocean…
S: How much profit do you think we make?
B: How should I know? Lots…
S: Our Pre-Tax Net Profit is 11%
B: So?
S: This means that when I put £50k trade spend on your desk, I need to see incremental sales of £455k before I let go of the money…
B: That’s your problem…
S OK, Sunshine, let’s talk about your problem… You think £50k is nothing…?
B: Agreed!
S: Your business makes 2.5% Pre-Tax Net Profit, right?
B: How do you know that?
S: Companies House online, £1 for the latest Annual Report. See, I’ve invested in you already, we call it preparation…
B: Wish I had the time to surf the internet… Anyway, so we net 2.5%...
S: This means that my little £50k is equivalent to giving you extra sales of £2m……
B: Prove it !
S: Fine. Our £50k trade investment comes with no handling costs (except bank charges!!!), so it goes straight to your bottom line. It therefore represents 2.5% of sales, in your business model.
B: So?
S: £50k divided by 2.5 and multiplied by 100 gives you sales of £2m, bingo!
Buyer: What do I have to do?
SuperNAM: Now you’re talking…..
Adventures of SuperNAM! (11)
Thursday, 7 February 2013
HMV suppliers resist cut-price deal, the downside of administration…
According to the FT, HMV’s administrator Deloitte is attempting to pay rock-bottom prices to buy up the CDs, DVDs and video games provided to it under a loan arrangement, a move being resisted by some suppliers.
Before HMV went into administration, the entertainment retailer had agreed more favourable terms with suppliers, which meant it only had to pay for stock after it had been sold in stores. As a result, HMV is now stocking many thousands of video games, DVDs and CDs on consignment, where the content owners – music and film companies – still retain ownership.
Deloitte first offered to buy up this stock – which runs to hundreds of thousands of music CDs and films – at 12p in the pound, allegedly still significantly lower than standard retail deals of between 65p to 70p in the pound.
Given the large number of retail chains now in administration (see details), this negotiation stance by administrators presents issues for brand owners in many other categories.
Whilst every little sale helps in unprecedented times, the combination of low revenue and the low sell-on price by retailers in administration for prolonged periods, means brand value is suffering the same damage as an item on perpetual BOGOF..
Experienced NAMs will also appreciate that goods sold on consignment and based on scanned sales, means that the supplier is taking over the shrinkage problem. In other words, if a supplier delivers 100 items, and the retailer is paid for 98, two having been stolen, the suppliers absorbs the 2% loss.
A final thought, have you ever tried to actually retrieve unsold consignment goods...?
Before HMV went into administration, the entertainment retailer had agreed more favourable terms with suppliers, which meant it only had to pay for stock after it had been sold in stores. As a result, HMV is now stocking many thousands of video games, DVDs and CDs on consignment, where the content owners – music and film companies – still retain ownership.
Deloitte first offered to buy up this stock – which runs to hundreds of thousands of music CDs and films – at 12p in the pound, allegedly still significantly lower than standard retail deals of between 65p to 70p in the pound.
Given the large number of retail chains now in administration (see details), this negotiation stance by administrators presents issues for brand owners in many other categories.
Whilst every little sale helps in unprecedented times, the combination of low revenue and the low sell-on price by retailers in administration for prolonged periods, means brand value is suffering the same damage as an item on perpetual BOGOF..
Experienced NAMs will also appreciate that goods sold on consignment and based on scanned sales, means that the supplier is taking over the shrinkage problem. In other words, if a supplier delivers 100 items, and the retailer is paid for 98, two having been stolen, the suppliers absorbs the 2% loss.
A final thought, have you ever tried to actually retrieve unsold consignment goods...?
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