Thursday, October 08, 2015

How To Think Visually

At the age of big data and reporting, we constantly present different kinds of charts to managing staffs, clients... But it is not that easy to create top of the line presentations that actually interest the audience.

Most of the time, sunk by the numerous data, diagrams presented, the audience tend not to listen.
Also, another very annoying habit I find most of the time of my suppliers: the ever growing market syndrome. The supplier comes with a 40 pages presentation with graphs only showing numbers growing, 1st position ranking, and so on... So annoying, as it does not reflect the truth of the situation.

Here is an interesting infographic showing the different ways you may present your point, either with data or by making some visual analogies. A great infographic to look at before creating a power point presentation, to assess the question: Am I clear in the analysis I made?

What really matters is to be able to use the right analogy to provide the right message.

How To Think Visually Using Visual Analogies #infographicYou can also find more infographics at Visualistan

Négociations annuelles 2016

Jeudi 7 octobre dernier avait lieu la conférence annuelle sur les négociations commerciales 2016 organisée par LSA.

Je n'y étais malheureusement pas convié, mais un post très court pour partagé avec vous les Tweets de la conférence. Peu de tweets, pas de Periscope, cela reste encore très "brick & mortar" comme événement.

Bientôt un article récapitulatif sur LSA.

Wednesday, October 07, 2015

Knowing When To Use Big Data

Interesting talk at NBA Open Court. Former NBA legends are chatting at the beginning of the video about basketball stats and what it means. They are discussing about “the Player Impact Estimate”. The player impact estimate ambition to encompass all the different statistics of one player in order to evaluate its impact on the game, beyond the simple number of points it scores. 

Here is how it is calculated:
"PIE measures a player's overall statistical contribution against the total statistics in games they play in. PIE yields results which are comparable to other advanced statistics (e.g. PER) using a simple formula.(PTS + FGM + FTM - FGA - FTA + DREB + (.5 * OREB) + AST + STL + (.5 * BLK) - PF - TO) / (GmPTS + GmFGM + GmFTM - GmFGA - GmFTA + GmDREB + (.5 * GmOREB) + GmAST + GmSTL + (.5 * GmBLK) - GmPF - GmTO)"

We see more and more data being used in order to prepare basketball players to perform, & make the right decisions. Same things for coach and general managers, using data to understand which trade would make the more sense, and how it will affect the overal team. This is how the Houston Rockets is managing their team, with complex data analytics. The Kellogg University recently published an article about it: Daryl Morey loves good data, and lots of it. As general manager of the Houston Rockets, the Northwestern graduate has made a name for himself with his devotion to using data analytics to make team decisions—everything from where to shoot from on the floor to whom to acquire in a mid-season trade.

In the business world, nowadays, we are submerged by data, thanks to big data, storage capabilities, and analysis tools. But as Reggie Miller points out, especially in retailing, entrepreneur mindset, personal instinct are key to make the right decisions.

It is important not to overate data in order to make decisions. Indeed, making decisions by itself creates more value than the analysis by itself. And understanding customers by the numbers sometimes don't matter more that understanding them with a down to earth conversation.

Personal interactions will always been key in business.

Tuesday, October 06, 2015

Will Electronic Price Tags Allow Retailers To Use Yield Management Pricing Strategies?

I remember as a business school student to have worked on case studies where companies were using yield management pricing. It was especially the case for airplane companies, changing their pricing depending on the demand and the filling of aircraft. The purpose was simple for those companies: maximizing profits while securing a rate of filling close to 100%. 

In retailing, E merchants tend to use the same techniques. They are indeed able to benchmark prices in real time in order to keep competitive prices upon competition. It is key for merchants as price search engines are numerous, and shoppers tend to compare prices more than in brick & mortar world. Actually, in the brick & mortar world, most of the time, shoppers tend to check prices online, either to get a discount in store, or to purchase what they found online, the infamous "show rooming" trend.

  • It secures more accurate pricing in store
  • It saves on operational costs while there are perequations happening
  • It also provides a better customer experience, with better naming of products, and more information.
But the article also outlines that this new technology allow brick & mortar retailers to compete with Amazon, and other e-retailers. I agree on the fact that electronic price tags allow faster changes in terms of prices. But the article goes beyond, and believe it could empower stores to change their pricing depending on the time, the day of the week, to maximize profits and to compete with Amazon.

I believe indeed pricing will evolve fast, in order to maximize profits, and automated pricing moves could for sure happen soon enough, thanks to big data. But I don't really believe that stores are actually adopting electronic price tags to do so.

But the article remains interesting, because the potential is there, and it would be interesting to test the technology, to see if it is really accurate.

Now, on FMCG products, it seems difficult to twist so much the prices, because you might loose your customers in such complexity, which will eventually be figured out.

What do you think about it? 

Monday, October 05, 2015

Category Management: Partnership Between Fnac and Microsoft

The Fnac has hit the headlines last week with its public offer to exchange with Darty, which would create a tycoon of the hardward retailing world in France.

This initiative have started in 2012, and the article is showing how to benefit of such a category management effort, especially in a market decreasing by 9% in 2015. Actually, let's remember that Walmart has set up its first category management initiatives while it was experiencing issues with its sales growth.

There are 6 pillars to this initiative:
  • Microsoft's shop in shop, with specific merchandising.
  • Microsoft staff in 40 of the largest stores. They aim to promote and demonstrate the products, enhancing the shopping experience and helping shoppers.
  • Exclusive premiere launch, like for the new Surface tablet, available 1 month in advance. It allows the Fnac to create differenciation through its product range.
  • Cocreation of products: they are exchanging information in order to create unique products, like the 365 Office Pack including Bitdefender
  • 4 Microsoft employees dedicated to the Fnac.
  • Data Exchange about sales and marketing.
Obviously, the partnership makes sense, as Microsoft is among the largest supplier of la Fnac, with a clear know how in terms of promoting high tech products, and la Fnac is  the biggest client of Microsoft (40% of shares in France), with a know how in terms of theatralization in store.

Those category management examples are pretty rare for different reasons in France, and I believe it was interesting for me to share with you those insights.

Thursday, October 01, 2015

Category Management Strategies: Conducting A Proper Shopper Market Research

The shopper is a key target to take into consideration in category management. Most of the time category manager will stick to its panel and market information in order to make decisions to improve its categories. It is an easy bet, with extensive data available. But let's not forget the key remains the customer, and at a higher extense the shopper. 

Understanding the shopper habit is key in order to think out of the box, and to make right category management decision. It will allow the category to react to potential shopping habits.

If you were to conduct such a research, I highly recommend you to read with close attention this document, as it gives you a clear step through.

Two points I wanted to highlight about the process:
You need to understand the shopper environment. And it encompasses its shopping activities, but also different aspect listed below.

Also, the checklist of things to verify if you have not forgotten to conduct your research.

Wednesday, September 30, 2015

Category Management Series: Thoughts About Evaluating Promotions Efficiency

Promotions is a key topic in retailing. It cost money, requires time, not quite profitable, but you stop it and sales plummets and customers go away.
Therefore it is important to estimate properly what kind of performance you expect from your personal activities. 

One of the common way to estimate a sales performance is conversion rate : the ratio between the number of items you buy, and the numbers of items you sell, on a certain period of time. Indeed, one of the main problem of promotion, is you need to have products in bulk to sell it, but what do you do with the unsold items. 

The problem with conversion rate is that :
  • It does not take into account the actual sales (if you have a low conversion rate but on high sales, isn't it worth it?)
  • You need not to have too much stocks at the end of the promotion....
  • .... But you also need to have quantities available until the very last day of the promotion (in order not to miss sales.

This is the reason why I like also to identify the time of resale rate. The concept is simple: How long did it take you to sell your merchandize. If you have a great 90% of conversion rate, but a 30% of time of resale, that means you were out of stock for 70% of the time. Meaning you could have potentially triple your sales. 

The index of missed sales is linked to this item. Now obviously, it is difficult to have a clear formula depending on the promotional event, your business model. But all those analytics must be taken into consideration while discussing promotional efficiency.

Quelques réflexions sur le projet d'acquisition de Darty par la Fnac

La Fnac vient d'annoncer aujourd'hui un projet visant a acquérir 100% de l'enseigne Darty sous système d'échange de titres
C'est une nouvelle importante, au vue des positions fortes des 2 enseignes sur un marché commun, l'électronique grand public. D'un côté, une Fnac qui va mieux, qui a réussit à recentrer ses activités et à conforter ses places sur le Ecommerce. 
De l'autre, une enseigne Darty qui a plus de mal à faire face à la concurrence des pure players.
Tout cela dans un contexte de consommation atonne, avec un marché de l'électronique en difficulté depuis plusieurs années, manquant de réelles innovations de ruptures, et arrivé à maturité.

Quelques questions et réflexions sur cette éventualité:

Pas de réelles synergies
De ce qui est écrit dans la presse, l'idée serait de faire coexister les 2 enseignes. En effet, les 2 anciennes ont des positionnements différents, et très souvent, les 2 enseignes sont présents dans les même centres commerciaux, car ils vivent bien ensemble. Par ailleurs, est ce que cette alliance ne va pas poser des soucis de concurrence, qui pousserait à revendre des magasins?
Il est vrai que les 2 marques ont un réel capital, et en faire disparaître l'une ne semble pas vraiment intéressante. Mais dans ce cas, quelle type de synergie pouvons nous attendre?

Clairement, la synergie au niveau des achats, pour maxifier les volumes, que ce soit les produits vendus que sur les produits non marchants. Peut être que la logistique peut aussi être meilleure, et on sait que la logistique est un facteur très important, surtout face aux E-marchands en face d'eux.
Peut être également sur la stratégie d'expansion, quand bien même il n'y a que très peu d'ouvertures prévues.

Une opération risquée
En terme de chiffre d'affaires, Darty réalise plus ou moins le même CA que la Fnac. Néanmoins, l'action de la Fnac est mieux valorisée que Darty, ce qui rend la transaction possible. 

Mais il ne faut tout de même pas oublié la fragilité des 2 entreprises:
  • Depuis plusieurs années les 2 entreprises réalisent des pertes et ont connu des restructurations
  • Leur marché cible de l'électronique est ultra concurrencé, mature et atonne.
  • 2 entreprises exposées, car côtée en bourse, avec un capital flottant très fort.
D'ailleurs l'action Fnac a baissée significativement de 3% dans la journée suite à la communication de l'information, alors que Darty a fait un bond de 17%. Dans un système d'OPE, cela augmente le coût pour la Fnac d'achat, ce qui diminue également l'intérêt économique de la fusion.

Néanmoins il existe quand même pas mal d'opportunité pour le groupe, et il est vrai que vu le contexte concurrenciel, il fallait s'attendre à des modifications profondes sur le marché. 

Tuesday, September 29, 2015

Book Review: Maitriser l'art de la PNL de Catherine Cudicio

J'ai récemment lu le livre de Catherine Cudicio: Maitriser l'art de la PNL. En effet, le sujet m'intéresse, et je n'ai que très peu de connaissance du sujet, et je me suis dit qu'avec un tel nom, le livre devait m'enseigner l'art de la PNL, et donc m'être utile dans la vie de tout les jours.

La PNL est la programmation neuro linguistique: C'est l'étude de l'ensemble des techniques d'analyse du comportement et de la communication permettant soit de comprendre, soit d'influer un comportement.

La PNL est donc un sujet très technique, qui peut s'intéresser aux éléments de langage, aux gestes, etc...
Et pour être honnête, je me suis un peu perdu avec le livre. En effet, celui-ci est très complet, et je l'ai choisit par rapport à son nom. Mais en fait, l'autre, Catherine Cudicio, a publié d'autres livres, notamment un livre qui s'appelle "comprendre la PNL". Et pour être franc, démarrer avec ce livre risque d'être difficile.

Par ailleurs, le sujet étant vaste, et bien que les différents éléments sont très clairement expliqué, il est difficile après avoir lu ce livre de mettre en place quoi que ce soit. En effet, je pense que le sujet est assez technique pour pouvoir avoir plus d'informations sur le sujet.

Donc ma conclusion: si vous êtes comme moi intéressé par la PNL, il faut démarrer par un livre plus accessible et plus simple, et même, je pense qu'une formation ou bien un podcast vidéo ne serait pas de trop pour vraiment comprendre et surtout assimilier cet art très technique et complexe.