Saturday, 11 October 2014
Thursday, 9 October 2014
‘One to show & one to go’ - minimalist stock control in retail
Mark Taylor built on Mike Anthony's link to the high cost of parked inventory by illustrating how retailers can re-allocate the cost of financing display-stock.
If we accept that the purpose of a facing-pack is to advertise the pack behind it, then it becomes logical to a retailer that the cost of the facing display-pack should be carried by the supplier. Moreover, since a consumer in general buys one pack at a time, it also follows that any back-of-facing stock, other than one-for-purchase, should also be carried by the supplier…
In other words, the only stock that should be financed by the retailer is one sales-pack per facing…!
It follows that all other stock, including pipeline from store-receipt to back-of-facing (minus one sales-pack) is the financing responsibility of the supplier.
This obviously challenges the fundamental purpose of Bricks & Mortar shops – are they really the ultimate ‘showrooms’ where consumers are reminded of the existence of the brand/pack, and then outsource the actual purchase and fulfilment to Amazon…? This leaves a sales pack available on shelf for those shoppers who insist on completing the purchase in the store.
In these fast-moving-consumer-goods times, it seems to me that strong retailers are in a position to insist upon the fair-share re-allocation of stocking-costs outlined above.
Time for suppliers to evolve a convincing counter-argument, or take another hit to their customer P&Ls?
Hat-tip to Mike and Mark
If we accept that the purpose of a facing-pack is to advertise the pack behind it, then it becomes logical to a retailer that the cost of the facing display-pack should be carried by the supplier. Moreover, since a consumer in general buys one pack at a time, it also follows that any back-of-facing stock, other than one-for-purchase, should also be carried by the supplier…
In other words, the only stock that should be financed by the retailer is one sales-pack per facing…!
It follows that all other stock, including pipeline from store-receipt to back-of-facing (minus one sales-pack) is the financing responsibility of the supplier.
This obviously challenges the fundamental purpose of Bricks & Mortar shops – are they really the ultimate ‘showrooms’ where consumers are reminded of the existence of the brand/pack, and then outsource the actual purchase and fulfilment to Amazon…? This leaves a sales pack available on shelf for those shoppers who insist on completing the purchase in the store.
In these fast-moving-consumer-goods times, it seems to me that strong retailers are in a position to insist upon the fair-share re-allocation of stocking-costs outlined above.
Time for suppliers to evolve a convincing counter-argument, or take another hit to their customer P&Ls?
Hat-tip to Mike and Mark
Optimising retail assets via after hours niche promotions
According to The Argus, 8,500 students yesterday flooded Brighton’s Churchill Square shopping centre to take advantage of 20% discounts.
The Student Lock-in event, one of 40 events in 20 cities, is organised by the marketing company Total Students, takes place after normal hours starting at 6.30pm and ending at 10.30pm.
Students are granted exclusive access to one-night-only discounts, giveaways and competitions across on-site stores and promotional stands. A range of entertainment is provided, including meet and greets with famous faces; activities include climbing walls and surf simulators; on-site club features like bars, live music and DJ performances
Worth locking in some students for something really incremental in your category?
Wednesday, 8 October 2014
Commercial Income - the driver for large space retailing?
The current controversy ref retailers’ advance booking of commercial income and its impact on profit forecasts will be the subject of increasing press coverage in the coming months, especially as other major retailers feel the need to reassess and explain how their procedures differ…
In the meantime, Shopper-scientist Herb Sorensen, in his work The Problem: "Parked" Capital, and his use of shopper-density maps of retail stores, questions retailers’ use of large space.
The above extract is an accurate map of the time shoppers spend in the store. All those blue, and especially the dark blue areas, represent what he calls ‘parked capital’, defined as money tied up in real estate and inventory.
The data and map above are relevant to both inefficient use of floor space capital, but are also directly related to the massive unmoving inventory on most stores' shelves.
Sorensen goes on to suggest that the building of larger and larger stores has been driven more by the desire to offer more inventory - requiring more space - on behalf of the brand suppliers, who are paying for the space and other marketing services, than consumer need.
In other words, large space is NOT needed to accommodate the demands of the crowds of shoppers.
If this is the case, then following the UK's ‘re-audit’ of Commercial Income, redundant space may not be the only casualty…
Hat-tip to Mike Anthony for the pointer
Monday, 6 October 2014
3D printing - coming to a category near you?
TechRepublic have identified 10 companies using 3D printing in ground-breaking ways. Whilst six of the companies deal in engineering and allied fields, four innovators could present challenges in FMCG categories…
- Nike: The Nike Vapor Laser Talon, was designed for players running the 40 yard dash on football turf in the 2014 Super Bowl.
- Hasbro: In February, Hasbro announced a partnership with 3D Systems to “co-develop, co-venture and deliver new immersive, creative play experiences powered by 3D printing of toys for children and their families later this year.”
- Hershey's has partnered with 3D Systems to make a special 3D printer for making chocolate
- MakieLab: London-based MakieLab offers the ability to design your own Makie doll with MakieLab, which 3D prints 10 inch flexible fashion dolls from thermoplastic, allowing a choice of all of the features of the doll: face, eyes, jaw, smile, hair, and more
Still in doubt?
McKinsey analysts project that total 3D printed economic worth will be around USD$230-550bn per year by 2025, of which USD$100-300bn will be direct consumer products, such as toys.
Finally, see No 10 on the list:
Matter.io is a company that is making it easier to make, download, and share designs by embedding the files into websites so users can download and customise the designs…..
Sunday, 5 October 2014
The growth of mobile - a zero-sum game?
This phone booth, at the entrance to Brighton Pier, the UK's most popular seaside destination, to my mind says it all for the future of landline utility...
Saturday, 4 October 2014
Friday, 3 October 2014
Shopper-engagement at the checkout?
According to Reuters, the Venezuelan government has started to fingerprint shoppers at some state-run supermarkets, in a plan to combat food scarcity by weeding out smugglers and hoarders. Around 785,000 people have been registered in six state-run food store chains across the country, allowing them access to price-fixed products on the shelves.
So, adding fingerprints to name, address, occupation, age, sex, family structure, income-level, state-of-health, recreations and travel, dietary habits, insurance, debt-profile and bank-balance, completes the retailer’s knowledge of the consumer…
In other words, if ‘ownership’ of a consumer is defined by extent of knowledge, then retailers combining loyalty card and scanning data to produce a 100% shopper-profile have to have a greater claim to ownership of the consumer than a marketer knowing that the consumer is probably grey-haired and living alone in the country, two children having left home…
However, a NAM working in collaboration with a major customer represents potential access to that retailer insight....
So perhaps taking a fingerprint is merely an inevitable move towards ultimate consumer satisfaction, all under the watchful eye of our benevolent big sister….?
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