Who’s minding the shopper?

The old deathbed story raises an interesting dilemma in retailing today:
An elderly shopkeeper on his deathbed asks for his wife and then for each of his six children. When the last one replies “I’m here” the old guy demands: “then who’s minding the shop?”

In other words, if the key retail stakeholders are all pre-occupied with survival and continuity of the business, then who’s minding the shopper?

Most of us accept the fact that, given the extent of their loyalty-data insight, compared with that of the supplier, and if knowledge defines ownership, the major retailers now ‘own’ the shopper. Despite the fact that a retailer’s knowledge is mainly derived from analysis of shopping behaviour, their increasing share of consumption via own label growth also means that they have potential access to the shopper’s consumers, and their consumption behaviour.

They are thus capable of leveraging shopper insight in also taking ownership of the consumer…

Unfortunately, ownership does not guarantee action in the best interests of the shopping consumer…
This means that brand owners need to enter the aisle and ‘hand-hold’ the shopper in an attempt to complete the intended purchase in favour of brand-consumer and supplier…

More in this month’s edition of NamNews, now in your mailbox.

Understanding the shopping-consumer

At the moment of purchase a shopping-consumer’s world is all about one SKU, with potential access to all possible alternatives, literally at their fingertips…

Meanwhile, a retailer is coming from a perspective that covers the entire shop’s offering, a world of up to 50,000 SKUs, an expert in selection.

This classic case of depth vs. breadth can be synergistic in that the shopping-consumer can be reassured by the assumption that the retailer, as expert, has surveyed the entire market on their behalf and is now presenting the best offer available. Moreover, the shopper is also taking for granted the implied endorsement i.e. that the product contains ‘what it says on the tin’, especially given the fact that the shopping-consumer may also be making the purchase-decision on behalf of family, etc.

One can only imagine the shopper’s reaction when even a cursory check reveals they have been misled, or even short-changed, either financially, or in terms of what they expected to receive for the money... Moreover, they have a hand-held means of communicating their dis-satisfaction well beyond the walls of the store…

Whereas, if the retailer plays by even the rudimentary rules of consumer marketing, and meets or even exceeds shopper-expectation, they can harness the positive aspects a shopper’s ability to ‘tell a friend’, endorse a purchase and even recommend a visit… 

Looks not tips the key to a good table in Paris

For the handful of NAMs that still treat buyer-lunches as a trade investment, latest news from Paris indicate a need for new facial KPIs in making a non-refuse lunch-offer to key buyers...

According to satirical weekly Le Canard Enchaine, it's the quality of diners' looks -- not the size of their tips -- that make the difference at Le Georges, the upmarket restaurant on the top floor of the Pompidou Centre, and the Cafe Marly, which occupies a prime spot within the Louvre museum.

Two waitresses who have recently quit Le Georges told the weekly that they were ordered to sort customers into the good looking and the, ahem, less good looking. Those who made the cut were seated in prominent positions at the front of the restaurant while those who got the thumbs down were ushered off to the back, preferably out of sight.

At the Cafe Marly, the pavement terrace was reportedly declared an ugly-free zone with anyone seeking to reserve by phone systematically told, "We'll do our best but we can't guarantee it," pending a looks appraisal on arrival.

Mobile KamTip:
To bypass the screening process, why not attach a badly lit pic of George Clooney/Sandra Bullock to your mobile request for a down-to-earth table in a spacious corner?

Have a real weekend in unreal times, from the NamNews Team!

See it, snap it, buy it: the new way to shop online...

"We shop with our eyes, so why not search with a photo?" asks Jenny Griffiths, founder and CEO of Snap Fashion, the fashion search engine that uses pictures instead of words.

Her idea was born out of her frustration at trying and failing to find affordable equivalents to the designer clothes she found in fashion magazines. When regular search engines failed to quench her affordable fashion thirst - there are after all only so many ways you can describe an item of clothing to Google - the 26-year-old realised that her quest would be markedly easier if she could just submit a photo of the item she was searching for.

Snap Fashion obviously meets a shopper-need, but savvy NAMs will appreciate that there is a much bigger idea lurking here…

In other words, this is all about pattern and shape recognition. So anytime you see an ornament, poster, piece of furniture, hairstyle, gadget, or even a foreign-language version pack of a ‘well-known’ brand and ‘you don’t like to ask’, a simple pic will help you to find an affordable source..

In fact, all it would take is for a company called Amazon to adapt the software to their site to flesh out the real potential….

"clicks to bricks" - Online retailers move into the High Street

Rapha Cycle Club on Brewer Street, near Piccadilly Circus

"Retail observers have been significantly overestimating our use of online and digital technology for shopping - we like shopping in stores," says Nicole Flasch-Mihalko of LIM College, which carried out a survey with the National Retail Federation in the US.

A number of online retailers have taken the survey findings to heart....
For instance, Rapha, which started as an online business in 2004 selling high-performance cyclewear, opened its first store or Cycle Club in San Francisco in 2011. Now it also has branches in London, Osaka, New York and Sydney.

Rapha says its stores have been a big hit with customers, offering a showcase for its clothing but also acting as a place to absorb cycle culture - to drink coffee, join in organised cycle rides and watch major races on big screens.

For High Street landlords with vacant space to rent as well as online start-ups this trend is good news, says Ross Bailey, founder and chief executive of Appear Here. His firm brings together shop landlords and mainly e-commerce entrepreneurs, with the aim of making renting a pop-up or permanent physical shop easier and more flexible.

The key idea is online retailers - Ronliners -, with no baggage or no preconceived notion of what works in classic retailing, but especially with little to fear from the emergence of online, can focus on the shopper's experiential interaction with the product, secure in the knowledge that they have already secured the ongoing deal...

...while their traditional competitors focus on restricting access to the instore wifi... 

Perks of an MP include free snuff...

MPs are being supplied with snuff at taxpayers’ expense, according to an official guide to life in Parliament.

“No, no, Minister, just one pinch per nostril”

The Customer's P&L - A road-map for your business?

Despite the fact that using a customer's latest P&L for guidance can be a little like driving via the rear-view mirror, five years after the global financial crisis, the effects are now truly evident in most retailer's Annual Accounts.

For instance, where retailers were producing ROCEs of 15+%, Net Margins of 5+% and Stockturns of 20 times per annum, latest results are showing performances of half these levels, or worse...

With one exception: Walmart, the retail elephant in the room.

This global player, on a low-price platform, continues to generate an ROCE of 19.6%, a Net Margin of 5.5% and a Stockturn of 10.7 times/annum, thereby demonstrating that it is still possible to achieve these results in retail... 

(incidentally, for those with an eye for detail, Walmart's 'low' stockturn reflects their mix of categories and the geographical scale of the US. When and if Walmart ever comes under ROCE pressure, they can simply insist on smaller, more frequent deliveries from 'eager-to-jump' suppliers...)

In turn, Walmart's performance puts pressure on other retailer's to revert at least to their pre-crisis performance levels in order to support their share prices.

...and as you know, a low share price encourages takeover bids, even in well-ordered, 'growing' economies...

In other words, retailers need suppliers, more than ever before.

In turn, NAMs need to be able to cost out each element of the remuneration package - margin, terms, trade-investment and deductions - and demonstrate each element's impact on the retailer's P&L and Balance Sheet, using the supplier's own P&L to measure progress...

Hopefully a little more engaging than making endless excuses ref inadequate trade investment funds...? 

(For a focused discussion on how this can work in your case, pls give me a call +44 (0)7977 273409)

UK shoppers replace loyalty cards with phones

A new survey from CloudZync via a poll of 2,000 consumers shows that while the average leather wallet now contains four loyalty cards, people have access to six schemes on their handsets.

Supermarkets are falling behind in the digital race - 92% of respondents have a physical card for Tesco, Sainsbury's or one of their rivals yet only 36% have a mobile scheme.

Furthermore, loyalty card users have on average £83 worth of redeemable points across their schemes at any point in time, and UK shoppers have cashed in on over £4 billion worth of points over the past year.

However, around £150 million in points remain unclaimed. Explaining why, 27% say that it takes too long to start earning benefits, 18% say they don't carry their cards in their wallets, and 14% don't remember to add on their points even when paying in-store.

In other words, traditional retailers are operating in ‘inertia-land’, on the assumption that low redemption rates will continue…

However, as with the infamous Hoover air-miles fiasco, if consumers are presented with more effective ways of managing their loyalty point redemption, current levels of inertia could disappear and be replaced by soaring redemption-levels, well beyond retailer expectations…

An app-nightmare in the making?