Tuesday, February 02, 2016

Retail Strategy: How To Be Amazon Proof?

I wanted to comment on this article I found the headline interesting of Business Insider: Why Costco is Amazon Proof.

I actually found this interesting video showing how Costco was cheaper than Amazon, offering then more added value to Amazon. 

For those who read this blog often you know that I love Costco. But I don't want to write about how Costco could or could not be "Amazon Proof". To be "Amazon Proof", you don't need to copy Amazon, or to try to beat them at their own game, by expanding more your product range, or to be cheaper. You need to find a strong concept to rely on.

Costco for instance, has a membership short bulky product range concept, and hence is able to provide a clear service with a clear added value to customer. But you have other concepts that in my opinions are "Amazon Proof", like Ikea and its furnitures in kit concept, or some clothing stores like Zara or Primark.

This is also the reason why is developping right now some new services to bring extra added value thanks to its Amazon Prime service, not to compete solely on price, but to create added value despite not owning brick & mortar stores.

If you are a retailer, you need to get a clear and unique offer in order to stand out of the competition, and therefore compete with online actors.

Tuesday, January 26, 2016

Some Stats About This Blog

We are still in January, which means we still have a bit of time to discuss about 2015. I don't really discuss much about my blog. I don't really advertize it to my peers and friends, nor I do communicate much about what my blog is about. 

Nevertheless, I believed it would be interesting for me to share some data about my blogs, in order for you to understand better how it works. 

This blog was never really meant to be a top audience one, as the topics I discuss about are very specifics. Moreover, I am not a journalist, nor I get any money from this activity (nor I am eager to get benefits from it). So I will keep on with this activity that I highly appreciate, but I know that the stats could be much bigger with a bit more efforts.

So here are the stats:
  • In 2015, there were 74 719 visits on my website.
  • The higher month was December with 8094, the weaker, February with 4 913
  • The first country visiting this blog is the United States, then France not that far, then Russia
  • Most of you come from the blog URL directly or Google. There are actually very few visits coming from Twitter or LinkedIn, which is kind of deceiving. I believe there is a lot of room for growth on that aspect.
  • All Time, I have reach 480K views. 

Monday, January 25, 2016

Leadership: Gregg Popovich's Vision

There are a lot of sport coaches that are leadership icons, as they are able to lift a group of people toward a common goal. Obviously, some coaches really stand out, and have been able to achieve extroardinary restults over a certain period of time.
One of them is for example Claude Onesta, coach of the French national handball team, that have one most of the major championships in the world for over 20 years now. He has been able to manage the different generations of player, and always been able to put them in the best position to win.

But one of them that we never discuss about is NBA San Antonio Spurs coach Gregg Popovich. But if someday he decides to write a book, I'd be the first one to buy it. He had outstanding achievement over the past 2 decades that he has been coaching.
  •  He has been able to change the style of play of its team to adapt to its players. From a defensive team focused on their front court, it went to a passing fast team with a lot of 3 points shooters.
  • There are very few players that have not been able to success.
  • He has always been able to find great player from nowhere: Manu Ginobili, Tony Parker, now Khawi Leonard...
  • He has also been able to switch from an autoritary leadership style, to a delegating one once its best players Duncan, Ginobili and Parker have been able to stand up as great team leaders.
You should have a look at this interview I found on the interview about him: he is discussing about what kind of character he is looking for in a player, and how important it is. Indeed, having a compatible character is a security to fit in the group.

Therefore Gregg Popovich takes a lot of time evaluating a player personnality, and his interests in order to see if he is compatible with his vision of a team.

I am eager to get more stuffs, if available, about this fantastic leadership guru.

Friday, January 22, 2016

Some feedback on the IFM Days 2015

It has been a while I talked to you about my feedback of IFM days. I wanted to share you extra thoughts on those days, whic were interesting.

Some stats about retailing in France:
  • There are 7 800 hypermarkets and supermarkets in France
  • To feed 28 M households
  • Between 1997 and 2014, the number of products distributed has skyrocketed by 72%
  • A shopper spend 48 minutes by week in store, 57 seconds per sections
  • The average stockout rate in store is 6,8%
  • The average genorisity rate for a promotions is 32%
  • 80% of the time, an extra product generate extra sales
Couple of thoughts about it:
  • About Stock outs: It is directly linked to the rise of the number of skus available in store. It brings complexity at each level of the chain, which makes it more difficult to follow the sales, and therefore can generate in the end stock outs. For sure it will be a key element to take into accounts in order to generate extra sales.
  • About the growing number of skus: The number of skus available has exploded, far faster than the square meters available to retail those new products. If an extra skus generate extra sales, it also generates more operational costs, and you could be sure you will not be more efficient, which could results in stock out on top of it. As we have already discussed on this blog, you may see more and more lean marketing efforts in order to ease operations, but also the shopper decision making process, in order to be more efficient in the sales effort.

Thursday, January 21, 2016

Pricing Strategies

Pricing is one of the hypest job in the business right now. By mastering this art, you are supposed to be able to raise profits while appearing cheaper to customers. Obviously, mastering pricing and taking it seriously is a real leverage to profitability growth.

  • Take pricing more seriously: this is exactly what is going on in retailing right now. Pricing positions are blossoming, with senior profiles, in order to have a clear strategy, rather than leaving it to junior positions or local management. Pricing strategies are complex enough to have clear experts in charge.
  • Price upon added value, not based on production costs: customers purchase one product for the value it will carry out, not for how much it costed to produce. Therefore, you may under charge as an effort to stick to real operational costs, which is not efficient.
  • Unbundle prices: As airlines do by charging seperately insurance, luggages, aircraft seats..., you may unbundle your products, to make it cheaper for your customers price perception, or compared to your competition. Rather than selling a product with warranty, battery included, etc.. By the raw product with extra extensions. You may even be able to charge more in the end.
  • And most importantly STICK TO YOUR PRICE STRATEGY. I know new tools allow you to change your prices in a glance, depending on your competition, your financial results or the change in top managements, but a consistent strategy will be the best way to generate results. For customers to understand your pricing strategy it will require time, especially for him to trust in your prices. Don't change it over night. And evaluate on long term the results.

Wednesday, January 20, 2016

#bigdata and #retail : Still A Lot of Work Ahead

Big data has for sure a lot of opportunities ahead when it comes from retailing. Retailers own massive data but are still not using it properly. i wanted to share with you two clear examples.

Yves Rocher
I went Christmas shopping to health & beauty retailer Yves Rocher, as one of my relatives go quite often to the store. The salesperson ask me for the information of my relative as she could benefit from extra loyalty points. I give her the info. The salesperson then tells me she is a very good customer, one of the best of the chain. I then ask if she could give me information about the kind of products she buys in order to customize a bit more my gift. The salesperson tells me she does not have information as my relative goes to another store...

I used to go to Intermarché Noisy le Grand as it is nearby the train station of Bry sur Marne. I opened a loyalty card, in order to benefit from the promotions. Eventually, a closer to home location opened, at Bry sur Marne, 5 min from home. I went there, and I wanted to use the money I got on my card there. They told me it was not possible. Same thing when I went on vacation (Intermarché is every where. The network is so big they have a store each 17 km in France), and wanted to use my points there. They explained me I could get money in every store I shop in, but I can use the cash only in the store I opened my card.

As you can see in 2 examples, retailers are still using old information system that do not allow them to use the best of their loyalty reward initiatives. Big data is eager to narrow the gap, but considered how old the systems are, it's gonna be a while brick & mortar retailers will be able to switch to those new systems.

Monday, January 18, 2016

Category Management Series: Promotions: Another Trend To Follow in 2016

Promotions are a key elements to lift sales. They boost volumes, stock customers, get market shares up, a great way to push inovations and make customers test your products. Nevertheless, too much promotions could be something devastating.

  • It alters the price perception of one product. I am the first one to say it. When I used to purchase Pampers Diapers to my son full price without promotions I used to feel ripped off, and stupid not to have bought an extra one in a previous promotion. Over 50% of the diapers sales are under promotions. And there are no inovations either to try out... 
  • It kills your product range: The customer don't choose between a first price, private label, leading brand, organic brand or premium brand: It choose the best price. Most of the time leading brands under promotions are way cheaper than private labels... So it makes it more difficult to work on your category strategy in terms of product range.
  • It higher operationnal costs for both suppliers & retailers: You need to print brochures, plan promotions, finance discounts, most of the time be more aggressive in pricing to make sure you are the cheaper during the promotion. 
  • You don't create loyal customers you transform them in promotion hunter: you have professional customers that only buy on sales. They know that in Jannuary they buy their clothing soap, in february their Nutella, in April their cosmetic products, in March their Italian products... They know each retailers anniversary events. They collect coupons everywhere. They only buy the cheaper products under promotions, most of the time the goods you sale with negative margins. Do you really need those customers? When you see what I am picturing, maybe not. But if you don't have them, you are sure your sales are going to plummet.
I have already discussed the topic. But the trend is not yet to change. Olivier Dauvers shared with us the last information about the trend. 
That's a +4% increase... In 2016 the trend will be the same. So it will important to see the strategy retailers will have in order to limit this rise and control it, because trust me, it is not controlled yet.