Thursday, October 30, 2014

Book Review: The One Minute Manager by Kenneth Blanchard

I recently finished the reading of "The One Minute Manager" By Kenneth Blanchard. The book discuss about a management technique, allowing the manager to adapt to all kind of situations and to all kind of people at different time.

The whole idea of the book is that you should not have a top to bottom approach while managing people, and also that the manager needs to adapt its management style depending on the person.

Indeed, one person may need different kind of managements depending on its level of expertise on a specific topic. I like this approach, as it tends to be more efficient and way smoother than a rigid and military approach.

I recommend the reading of the book to understand the whole concept of the book. Actually, it is very easy to read, with a lot of examples. 

Wednesday, October 29, 2014

#Walmart #Target Setting Aggressive Online #Pricing Strategy To Fight Amazon

The Internet is becoming more and more important in the growth strategy of brick & mortar companies like Walmart or Target. Indeed, as traditionnal retailing is slow to find a solution to stop the decrease of instore visits, The Ecommerce economy is still growing.

The Internet Retailer Website has noticed that both Walmart and Target have changed their pricing strategy in order to be more aggressive against Amazon. Amazon's size and strength can't be ignore by anyone, and Amazon has already become one of the biggest retailer in the world, which implies a high purchasing power, and the ability to have low operationnal costs.

But Walmart and Target have some arguments to compete online:
  • A strong brand
  • A size that allows them to have the same kind of purchasing terms than Amazon
  • A network allowing multi channel strategies and delivery possibilities to customers.
Now, is it the right approach to fight Amazon on its prices? Of course! How could a discounter like Walmart not be able to have the same prices and even cheaper prices than Amazon's?

Now Amazon still own 2 assests which will be difficult for brick & mortar retailers to own:
  • Its high efficiency delivery system
  • Its large product range, providing the best choice for customers.
Nevertheless, I believe that Amazon should fear a shrinkage of its market share, as competition will boost their investment online.

Monday, October 27, 2014

Some Thoughts On How Best Buy Can Get Back On Track #Bestbuy

Best Buy has been struggling the past few years, as a lot of electronic goods retailers. Among the reasons of its issues are:
  • Tougher competitions with online competitors like Amazon having aggressive pricing
  • "Showrooming", which is linked to the online competition: people go in store to touch the products, get information, than buy it online to competitors
  • Less disruptive innovation (tablets, Led TVs, blu ray, digital cameras...) than the last 2 decades. Also, and linked to it, we are not anylonguer in an equipment market, but in a renewing one, which implies less volumes.
  • Digitalization of cultural contents, which are decreasing the sales of DVDs, CDs, and soon video games.
Best Buy is in the same situation than other retailers, like Fnac in France, which had to adapt to the competition, and a lower demand. Obviously, Best Buy still have strong arguments to face competition:
  • A strong brand, which people knows and trust
  • A large retail network, which allows Best Buy to have proximity with its customers.
  • A know how in terms of logistics, and a size that allows it to master its operational costs.
I believe that Best Buy however need to move forward and make adjustment to its strategy in order to  find back growth:
  • Find new product categories linked with its brand image: That is what the Fnac has done in France, selling kitchen applicances. It will allow them to master the decline in DVDs and CDs sales.
  • Invest in instore experience: There are two ways they should do so: Educate its sales person. We are living in the information age, where most customers know more about products than most sales persons. Hence, in order to create value to the store visits sales person needs to provide great advice and information about products. Also, Best Buys stores should emphasize more on product demonstrations, to enhance shopper experience and trigger sales.
  • Lowering instore stocks to get more cashflow. Internet retailers are thriving on cashflows as they have cheaper infrastructures. Hence, instore inventory should be lower in order to get back some cash and hence profitability.
  • Embrace multi channel potential. And this by 2 ideas. First: get some lockers to develop click & collect activities. It will create some traffic from online shoppers, and hence potential instore sales. Secondly, master "showrooming". People want to buy it online after having visited the store? Fine, but on Marketing materials must hence be developped to make sure we track these customers.

Wednesday, October 22, 2014

OSICAM's New Website: One of the best CRM Approach I know

I have already discussed about the OSICAM strategy on this blog in the past. The OSICAM method has been developped by Christophe Bouguereau, one of the best customer relationship management expert I know. The concept of OSICAM is to base your CRM strategy on a 360 approach which allows your company to understand each of its components. This modell is adaptable either in a btoc or btob environment.

The website has recently been updated. It now proposes to download a free white paper which unfold the whole concept behind it. I highly recommend its lecture, and you to get in contact with Christophe in case you are interested in it. 

Monday, October 20, 2014

Let's Put Some Focus On Sampling: A Great Marketing Techniques

I read an excellent articles about a very efficient marketing tool a lot of marketing professionals don't seem to master: sampling

Sampling is a great way to give the opportunity to potential buyers to try out your products, and to convince them to buy it. Indeed, one of the reason why people tend not to switch from one product to another, or avoid new products is because they fear to be decieved or that the product is not worth what they will pay. By sampling, you limit the potential deception, and you can boost your sales!

Now you must use wisely this tool:
  • Sampling to anyone may not be that efficient: If you hand out free products to anyone, you will give probably 80% of your samples to people not in your target, which is not what you are planning.
  • Sampling should not also be considered as giving out your products, especially if you do it quite often. It will lower the face value of your products.
But I like some of the ideas of the article:
  • Get samples of different flavors in a tea box, to push customers to try out new flavors
  • Allow to get samples regularly with other purchases of the customers, which will boost your cross category sales
  • Get samples as the "exra value" of your products, which will increase customers' satisfaction.
Also, some good tips not to neglet:
  • If you use this technique, you should for sure not be greedy with the sampling, which could actually be as deceiving as not giving samples.
  • The medium (either a person, or a website) you use to access the samples should also be of quality. It should not be a bargain and to send 3 files to get a small sample of skin cream...
  • You should also focus on the education you may give to the customers around your product. The person needs to get as much information as possible about the products to make sure it will adopt the product and consume it from now on.

Thursday, October 16, 2014

Ikea Plans And Strategy In France

After Costco unveiling its strategy in China, a second global retailer has some quite innovative strategy in a foreign country. Ikea has announced three very important news about its expansion in France, and both of them focus on bringing Ikea downtown, in Paris. This is a very interesting strategy as Ikea so far has thriven in rural and urban places with its concept. But as competition is getting tough, Ikea needs to find new ways to get new customers.

Ikea testing some pick up lockers
Some companies have already had the ideas of locker to pick up goods bought online, such as Amazon, Walmart, or Dia for grocery shopping. Ikea will soon propose its own locker to pick up its furnitures. It will obviously implies large lockers, far larger than the ones operated by the other company I listed above.
The concept will be tested in France at the Lille's store. The lockers will also allow customers to use them for returns. So far this locker is only a prototype, but it could be launched at a large scales, in public transfert places such as train stations.

The invention of a "Shazaam for furnitures"
Second innovation, Ikea is working on an application that will allow the customers to take pictures of any furnitures. The application will be able to recognize the model, and for example if its an Ikea's model, to propose to buy it online.

These two ideas are very innovative, and I believe they will experience great success.

The opening of a store in downtown Paris
So far Ikea has not been looming on downtown store, but as more and more customers live in large cities, Ikea has decided to open a location in Paris. This store will be more a flagship than anything else, as the company is not forecasting any profitability of this store. Nevertheless, if Ikea is able to find the right chemistry to launch downtown locations, it may expect in a near future new business opportunities.

Wednesday, October 15, 2014

Costco's Strategy to Enter China

Costco is probably one of the most fascinating retailer in the world. Despite tough macro economic situation, Costco still performs better than most of its competitors. Also, Costco is one of the fewest US retailer that experiences real success abroad, with 30% of its warehouses located outside the US.

Costco has developped its international strategy the past few years, with especially big plans in Europe, with the launch this year of operations in Spain, and forecasted operations in France for 2015. 

But Costco made the news headlines this week by entering the Chinese market with a quite unusual approach. Indeed, Costco started its activities in China not by opening a warehouse, but by setting up an online partnership with E commerce leader Alibaba. What is even more surprising is that Costco has never really been a big fan of Internet sales, focusing on its core warehouse concept, which is thriving despite online competition like Amazon.

But in a country where Ecommerce rules, and where setting up a business means to have a partnership with a local company, this quite innovative approach is for sure a great idea:
  • Ecommerce is a $175 billions business in China
  • This partnership allows Costco to enter the business at a low cost
Now what will it mean for Costco in China. Will they open actual warehouses? Can we expect from them a 100% online strategy? I believe that once Costco will actually focus its strategy on China, there is a high leverage to be expected. What will be difficult for Costco is to set a strong brand in China online without the support of its warehouses.

For sure, Costco's journey in China will be one of the story to follow in the next few years.