Flash Sale? The New Business Mantra

Flash sales are a time-limited offer of high discounts on big ticket luxury items. The system is a win-win for both retailers and consumers: retailers can build brand loyalty and at the same time sell surplus stock within a short span of time.

How they work
The offers are ‘abrupt’ and lasts for a brief time. It is also one of the safest deal takings. In other words you have to avail the opportunity as soon as you are offered the services. Consumers normally receive online offers including even invitations in the mail/emails, for offers averaging 50% off.
In the US, online sample sale site Gilt Groupe have launched an iPad app allowing users and buyers to access  flash sales of  luxury goods on its site.

Where flash sales are headed
A report by Business Insider estimate that flash sales will be a $6bn market by 2015.
Given the uniquely large supply glut in 2007, offline retailers of all stripes were likewise incentivized to convert their own inventories to cash positions, translating to even deeper discounts and fewer brand protections for manufacturers.
Into the void stepped flash sale sites to offer companies a novel strategy to off excess inventories while simultaneously creating an illusion of exclusivity.

Amazon’s flash sales
Amazon has launched a US private sale website for designer clothes, with members-only shopping and time-limited “flash” sales with discounts of up to 60%.
They opened the site called MyHabit.com last year, competing with start-ups including Gilt Groupe and Rue La La that have won well-off young female customers with their brief sales and urgent marketing.
Amazon promised a rolling series of cut-price deals – available for 72 hours each – from more than 800 brands.

Achica - an online breakthrough
Achica, the members-only home and luxury lifestyle UK website, defied the retail gloom after the fledgling company reported strong sales growth as it expands in continental Europe.
With the homeware sector being one of the hardest-hit areas on the high street as people delay refurbishment projects and trim spending on non-essential items, Achica has bucked this trend by focusing on offering premium homeware goods such as Anglepoise lamps and Le Creuset kitchenware at discounts of up to 70% via “flash” sales, typically lasting for 48 hours.

Apart from obvious opportunities in categories at the upper end of the market, how about suppliers anticipating the spread of flash sales into other categories, and pre-empting the competition, proactively…? 

A euro parable: the couple with a joint account

Increasing the bank-leverage of a pre-nuptial joint account by adding extra family members and strict rules of compliance can benefit all, at first…... Adding a joint credit-card guaranteed by richer family members can appear to provide a short term solution to personal financial ‘mis-behaviour’ of those family members who in return promise to mend their ways via unsustainable cut-backs…
Attempts to eject problem members can cause the bank to threaten closure of the entire joint-account, resulting in core-members having to re-mortgage to prevent collapse… If you really want to understand how close the euro is to collapse, read this fascinating parable on the FT site. 
In other words, whether you are buying or selling, you owe yourself a couple of ‘what-ifs’ on the unmentionable, while others hope something will turn up, whilst awaiting an announcement from Brussels…
Meanwhile, have a real-world weekend, from the NamNews Team!

Complex mobile-payments tools a big turnoff for mobile-shoppers?

Anyone who has experienced Amazon’s 1-click shopping soon becomes increasingly frustrated at the constant ‘repetition’ of lengthy account creation procedures on less sophisticated sites, akin to standing in a shop queue and not being allowed to go to the cashier without giving up your email address and setting up a password.

Lost opportunities
New research indicates that the total amount of revenue currently being lost by users exiting at the checkout stage as a result of an inefficient purchasing process is £2.4 billion – £470 million, thus removing the ‘impulse’ of buying on impulse…according to a survey carried out on 18,000 mobile shoppers for Mobile Money Network.

Mobile-payment not a discrete channel  
MMN believe that mobile-payment is not a discrete channel and used properly, it is an enabler to improve sales conversion in all channels. Their ‘Simply-tap’ drives improved sales conversion for retailers by putting an instant mobile checkout anywhere a retailer has a communication with a customer.

Time for retailers to source centralised shopper-information to simplify the checkout process, safely? 

Or will major retailers see an opportunity to gain competitive advantage by simplifying (a la Amazon) their own process by converting all 'attempts-to-purchase' including impulse, while others await the adoption of a common, safe and fast buying-process....?  

The future is now, for you and the customer

Today’s Guest KamBlogger, Jeremy Blain, Managing Director of Cegos Asia Pacific, explains how to get started, fast…

Globalisation, mobilisation, consolidation, collaboration, communities, technology, social networks, the Cloud – a lot happening in the world of business today, a lot more jargon to contend with,  and a lot of it enabled by whizzy new technologies and applications.

The new workforce

Just consider….in less than 4 years half of the Global workforce will be made up of Generation Y, and in less than 8 years Gen Z will be in the workplace. They will expect to work, communicate and learn in very different ways. These are the people who are comfortable with technology and its uses. These people may be your customers and colleagues.  It is up to the rest of us to stay in the game and get savvy, quickly.

Entry level jargon

So if you don’t know your Twitter from your Tumblr, your Pinterest from your Storify, your Gowalla from your Foursquare, your Doodle from your GroupMe, your elearning from your immersive simulation and if you are not yet married in Second Life or have some kind of Avatar……you may need to consider it!

Essential catch-up action, fast 

To get you started there are a couple of short white papers* on new technologies to help you learn, and how to get the best out of social networks. There’s always trusty old Google to pop some of these names into. Go on, grab a coffee and explore.

You never know what you might find……or what might find you…

* See Jeremy’s free white papers:

-   Learning through social and informal networks 2011

-   The rise of virtual learning 2011

Jeremy Blain (jeremy.blain@cegos.com.sg)

Maths blunder wipes £170m off SuperGroup shares

A routine audit last week revealed a series of forecasting and accounting errors. The most basic error was the insertion of a 'plus' rather than a 'minus' into the fashion retailer’s company accounts, which contributed to its third profit warning since October.

The news wiped around £170m off the company's value as shares plummeted 38% to 351.8p in trading on 20 April.

Thinking positively, the person responsible should perhaps be thankful that the UK financial environment is relatively benign in that, apart from the impact on the share price, no personal retribution need be expected.….

Other geographies can be less tolerant...

For instance, in the early years following the fall of the Berlin Wall, a marketing director pal working in Moscow, issued a new trade discount structure at 0900, realised during coffee break he had inadvertently approved an arithmetical error that would cost some key distributors (with strong family ties in the ‘toe’ of Italy) significant sums before a correction would kick in…..

The company immediately despatched cars to his apartment and kindergarten to pick up his wife and child, and all three were on a flight out of Moscow by early afternoon….

KAM Moral: If you make a mistake in the numbers, be the first to discover, admit and have an appropriate correction plan ready.. You are already first at Square Two, take advantage of it…

In other words, get used to approximating ‘in your head’ and develop the ability to spot figures that do not add up (remember that manual skill that allowed you to graduate from kindergarten?), and always keep your car-keys in your pocket, just-in-case….  

Nestlé Wins Battle For Pfizer Unit With $11.9bn Deal

Pfizer has agreed to sell its baby food unit to Nestlé, in a deal worth $11.9bn, giving the Swiss food giant a major boost in emerging markets across the world.

With 85% of Pfizer’s sales in emerging markets – the deal will complement Nestle’s existing infant nutrition business perfectly. The sale marks Pfizer’s largest divestiture since it divested some consumer health brands to J&J in 2006 for $16.6bn. The unit owns infant formulas such as SMA and Promil, and also makes Enercal supplements for adults. It has a network in more than 60 countries, and was the world’s fifth-largest maker of infant formulas in 2010.

Implications:

• As the No.1 food company in many countries, Nestlé are accustomed to, and will have anticipated issues raised by anti-trust/monopoly legislation.
• This step to full global coverage will enable the company to develop and sustain a fully global strategy for the combined brands in baby food.
• However, given that the company will probably take its time integrating the two operations in order to secure a smooth transition for the companies and the trade (the 1988  Nestlé–Rowntree integration took several years), this may give competitor brands some time to adjust to the new category dynamics…although a couple of what-ifs this morning might be a wise precaution...

Kammed Laughter: Taking humour seriously in negotiation....

Given the current financial climate, gallows humour might best describe any attempt at levity as a relief from the doom and gloom…  Incidentally, looking over the precipice (doom) does not necessarily go hand-in-hand with ‘gloom’. In fact extreme, unprecedented change should be seen as a breakable window of opportunity (‘doom and boom’?) for positive KAMs, while competitors wait in vain for a return to ‘normal’…

Laughter defined

Given that laughter is a nervous reaction to tension (a comedian deliberately builds this up via the story, causing puzzlement, anxiety and even suppressed anger on the part of the recipient to a point where the tension is ideally released via explosive/convulsive relaxation of the jaw muscles, nasal passages (or worse), the only proviso being that the longer the build-up, the better had be the punch-line!

Factories have been closed down for less…..

Delicate use of humour in negotiation

In the KAM role, skilled use of laughter can be an aid in optimising a negotiated agreement.

For instance, in delivering serious news/data to a buyer, if humour is totally absent, the only way to indicate ‘more serious’ is to up the volume or emotion, even more intimidating, leaving no guns in reserve….

However, a KAM that is able to manage well-placed levity allows emphasis of serious interventions as required, thus adding to one’s control of the overall negotiation session.

Operating safely....

To operate safely at this level requires a high degree of focus on the buyer’s combination of Job or Functional needs, whilst also taking into account the complex set of unspoken emotional needs that are not supposed to, but in fact greatly influence the progress to negotiated settlement.

To achieve these levels it is obviously best to practice on those in your circle where abject failure does not result in loss of job or divorce…in other words, sharpen your skills on those you still regard as your friends…obviously avoiding those who are also your buyers…

Incidentally humour can and should be funny too...

Go on, have a ‘witty’ weekend by practicing on your friends, from the NamNews Team!

Gesture-based-marketing of Coca Cola?

Forget price sensitivity by replacing cash with hugs…

A Coke vending machine was installed overnight at the National University of Singapore. It looks like a fairly ordinary machine, in the brand’s iconic red and white. But instead of it’s logo, this machine says “Hug Me,” in the logo font

Positioning this stunt at a university is a smart move in Singapore, where public signs of affection have long been discouraged, but are on the rise among the young. Coke is positioning itself as a non-threatening ally to affection demonstrating youth.

Given the fact that appetite for carbonated beverages increases with ambient temperature (a few years ago, the company tested a vending machine in Germany that had a thermometer on top, triggering a rise in price with every degree increase in temperature…), it remains to be seen whether the company have built in a facility requiring increasingly intensive hugs as the temperature rises…

In effect, Coca Cola are ‘pressing all the buttons’, in a world where buttons have been replaced by touch….
However, the real issue for others in the vending channel is the extent to which the game has just been raised in Singapore…