Best use of a shop window postcard space

Chip Shop Awards 2014: one of the winners
Entrant: Boxer
Brand: Mens Health Clinic
Title: Erectile Dysfunction
Credits: Paul Martin

Factoring Aldi into your trade strategies

Despite its rate of growth and probably because of the fact that there is little national brand potential in Aldi, branded goods suppliers may not have a way of giving Aldi the 'status' it deserves within trade strategies...

This may be because most companies focus planning resource on finding ways of growing the business, especially in flat-line times... They may also be tasked on establishing reasons for falling sales, but this emphasis may fail to see beyond corporate rear-protection.

Instead, why not consider devoting one of the planners (or one day a week for smaller companies) to focus on sources of business loss and and their progression, in terms of increasing threat in the future?

In other words, treat significant sources of loss with the same emphasis as sources of growth. This would then provide a way of raising Aldi's profile within the company to a level commensurate with its importance in the market...

Or perhaps it is preferable to wait until it is responsible for 10% loss of sales?

Sh*tbull Terrier Savages Morrisons' Board...!

Sir Ken Morrison’s one-word assessment of the company’s turnaround strategy will have come as no surprise to seasoned Morrisons’ NAMs...

Whilst KM's judgement was delivered as a major shareholder at a gathering of concerned shareholders, he was really expressing succinctly the view of the loyal, savvy, outspoken consumer-shopper, the complainer who is attempting to give a favoured retailer a second chance to get it right.., a call-for-action that deserves to be taken at face value.

However, as most NAMs know, KM has been delivering ‘bulls**t’ assessments for years...  In fact, he always expressed a down-to-earth reaction to any trade presentation that was too theoretical, and even imposed six-month bans on NAM visits. Instead, NAMs were invited to ‘send in the details and we shall decide if it is worth stocking'…

This invariably caused proactive NAMs to revisit their brand rationale and distil it down to a simple, hopefully compelling proposition that might surmount the constraints of ‘a couple of leaflets and a covering letter’.

In fact, the only real problem for Morrisons’ NAMs turned out to be how to explain to the Sales Director why their sales actually improved during non-call periods…

Getting a fix on Big Data by switching your focus from 'dot collection to dot connection' (Seth Godin)

Ideally, Big Data - the ultimate 'dot collection' - provides total knowledge, real-time, and requires optimisation via real-time action.

However, leaving aside the amount of computer firepower required to manipulate large data-sets, real-time, with the attendant costs and time implications, it is obvious that Big Data is too big for NAMs to ignore...

Apart from the need to cope with the crazy compromises of real life account management, it seems obvious that NAMs need a way into the potential insights represented by 'total knowledge'. Whilst it can be tempting when under time pressure to revert to a 'fixer' role by deciding on a solution and diving into the data in a search for facts that support our prejudice, it seems obvious that more is required.

On the other hand, awaiting the collection of all the dots can take too long...leaving time for a more pragmatic competitor to find an 'adequate fix'.

What the pragmatic NAM needs is a basic reference-point, a way of looking at the data, and some courage...

One approach can be to acknowledge that a retailer is ultimately measured by Return On Capital Employed and its attendant ratios Net Margin and Capital rotation (stockturn), driven in part by like-for-like sales performance and market share. All else is supportive of these measures...

How to help Tesco?
For instance, Tesco's latest problems with their share price arise from the fact that the global financial crisis has reduced their key results to the following:

Tesco 2013/14: ROCE 8.2%, Net Margin 3.6% and Stockturn 17.8%, whereas Walmart, in the same global climate, have managed to maintain their pre-crisis performance:
Walmart 2013: ROCE 18.2%, Net Margin 5.2% and Stockturn 10.6%

A NAM wishing to use Big Data to help Tesco, needs to access the dot collection looking for ways to improve Tesco's margin (i.e. by driving sales and cutting costs, shopper marketing etc.) and increase stock rotation (i.e. via smaller, more frequent deliveries matched to shopper need, catman etc.)

Avoid the temptation to use every dot, and focus on real creativity, the ability to connect enough of the dots to get to Tesco with a workable plan, before the next guy... 

See Seth's blog here

Tesco heading to a 25% market share...?

If a 25% market share represents a point where a retailer begins to attract the negative attentions of consumers, suppliers, special interest groups, politicians and media, this may result in a defensive mode where more energy is spent excusing behaviour than growing the business.

Given the global potential for Tesco, a return to a 25% UK market share could represent a long term opportunity for the company and its NAMs…

Positive:

• Tesco would still dominate its home market, a key criterion for global players
• Media criticism would possibly divert to other retailers growing into the space
• Tesco could focus on doing what is right for markets home and abroad, better than the competition
• UK emphasis could be placed on optimising domestic profitability to fund global growth
• Stabilised UK supplier-partnerships could be leveraged for global risk management & joint profitability

Minus:

• A high-grade domestic team would be required in order to keep the UK share ‘on hold’ at 25%
• …meaning less glory for UK managers vs their overseas colleagues
• Any UK ‘distractions’ would threaten Tesco’s ability to optimise global opportunities, meaning ‘whiter than white’ performance would be a key requirement

Interesting:

• Patently over-spaced in large scale outlets, Tesco could use that space to focus on taking shopper-marketing and in-store theatre to their limits
• The resulting learnings would mean that their UK outlets could become test-beds for execution overseas
• UK NAMs with high quality and innovative ideas could optimise potential with what could become the best retailer in town
• …a stepping-stone to global opportunity?

In other words, Tesco and their NAMs might be better off aiming for a 25% share of every global market than trying to prop up an unsustainable 30% share in the UK...

Besides which, a 25% grocery share would still allow Tesco to optimise all of those non-grocery channels in the UK, below the radar…

Networking departed passengers...

The supercool quiet dude nursing a vodka tonic in the next seat could be already at his final destination... This could explain the failure of your skilled efforts in trying to network with a fellow airline passenger, possibly causing you to revert to LinkedIn for a slightly higher response rate...

According to a new BBC documentary* dead passengers on British Airways flights are seated in first class and disguised using 'sunglasses and a vodka tonic' out of respect for the departed, given the limited on-board alternatives available.....

This obviously raises the issue of why networking sometimes fails.

Essentially, proactive networking is more about giving than receiving, meaning that on balance the target gains more in the short and medium term from the process.

Eventually, networking results in some reciprocation - a ratio of ten to one initiatives satisfies professional networkers - or else some other more persuasive method is required if the target is that important, and alive to your initiatives...

In the long term, the networker can begin to draw from the joint pool, whilst continuing to top up the reserve...

Anything else is selfishness, doomed to result in unproductive dead-ends...

(Let me know if you want a free copy of our networking notes for NAMs)

*A Very British Airline, BBC2 iplayer

Reality Lesson-time in easyFoodstoring?

                                                                                                                                         pic: Gizmodo

In the current climate, extending the ‘easy’ franchise to food retailing seems a no-brainer….

However, given that other easyOffers have focused on eliminating the complexity and reducing the price for the consumer-shopper, it seems odd to concentrate on simplifying the retailing…

In other words, given that the target audience is pre-occupied with satisfying basic needs cheaply and quickly, attempting to test their appetites via a mock-up ‘browse-not-buy’ difficultFoodstore seems wasteful…

Instead, in a world of 15%+ High Street vacancy-rates, why not help the idea fly by developing 100 pop-up easyShops, stock them with 100 basic lines at sustainable prices, and within a week, let the consumer determine the inevitable take-off…like in most successful retailing?

The real issue for branded NAMs is the extent to which successful easyOwnlabel will impact branded sales, whereas own label NAMs need to prepare for negotiation with a guy who normally deals in easyCapital-equipment procurement, strictly by numbers…    

Trade planning via an exit-strategy?

Given the latest Which? report indicating Apple Retail’s fall in UK public esteem from last year’s No.1 retailer slot to No.13, coupled with being overtaken by Google as the World's Most Valuable Brand, according to BrandZ Top 100 Global Brands, there is perhaps a lesson here for all NAMs’ in their approach to trade-investment…?

Because most business planning is based upon growth and moving towards the top of a league table – remember the pre-2008 days when growth was a given, and innovation guaranteed increases in consumer-shopper esteem - flat-line demand requires a change in order to factor in new realities in most markets.

Private equity companies - the ultimate pragmatists - have no trouble embarking upon a high potential takeover opportunity with an exit-strategy already worked out to three decimal places, yet they manage to pursue the acquisition goal with full enthusiasm and drive….

They simply position themselves at the exit-point - the ultimate objective - and then work out all moves that will help them reach that goal.  It goes without saying that expressing everything in financial terms makes the process easier to measure, manage and communicate..

In other words, we should invest in retail opportunities early, and with the aim of driving our business with the customer all the way to the top, and then manage its inevitable descent, all as part of the ‘life-time’ trade investment process…

In the same way, writing a clear business objective means imagining oneself at the end point, and simply describing what will have happened, as a definition of a successful outcome:

Example:
Objective: as a result of implementing the plan, the following will have happened:
- Achieved successful launch of new variant
- Sales grown by 12%
- Profits grown by 11%,
- Increased distribution to 78% by month two of new brand
- Incremental business of £450,000
- By month 7 have achieved 70% of full year target

A bit clumsy, perhaps, but it ticks all the boxes…
Or perhaps you prefer more of the old way?