Discounters Outspend Tesco On Christmas Ad: Some Thoughts About Lidl Strategy

Lidl is at a very interesting time of its history. Lidl is indeed one of the largest retailer in the world, and thrive on hard discount. It is one of the leading retailer in Germany and has two interesting challenges in Europe:

1 - Grow as the most important challenger of Tesco in the UK

2 - Keep on growing in France as hard discount is going in limbo.

To achieve these two goals, Lidl has one main strategy: Strengthen its concept, in order not to be a standard hard discounter, but a reference in term of price/quality ration. This is the reason why Lidl has worked to hard to get its stores more welcoming. 

I read an interesting fact on the Internet: Discounters outspend Tesco on Christmas Ads this year. Indeed, the hard discount concept does not comply with advertisement, as hard discounter cuts off all kinds of extra costs that are not directly linked to operational costs. Lidl has also advertized a lot in France lately. But is it so strange to see hard discounter making ads? It is not so surprising. Both in France and in the UK hard discounters are now in a mature markets, where they need to find grow beyond expansion. That also needs they need now to explain well their concept, and to attract new customers out of their core clientele.

Of course, now that Lidl is now advertizing and hence getting far from the original discount concept, we may in couple of years from now see the rise of a new discount concept that will emerge, as it happened with the department stores, supermarkets, hypermarkets, hard discount...

Best Applications For Holliday Shopping

A quick article to show you what Forbes consider as the best applications to use for the holliday shopping season. 

This is interesting because it gives good example of the key features an application should have to boost retailers performance:

- Managing coupons and loyalty cards, thanks to barcodes management. Also, soon, you will be able to use NFC technologies, or bluetooth one like Ebeacon to do so.

- Proposes to reward instore visit. The key is to estimate how much you may reward your customers in order to have a positive return on investment. Nevertheless, the opportunity to leverage mobile technology to generate foot visite is important.

- Helping the customer to make a decision and find the right answer, by proposing content, ideas based on the user's profile, but also advices of other application users.

Walmart Investing In Its Prices To Compete With Amazon

I really believe that 2015 will be the year of a major fight in the Ecommerce industry.

Georges Plassat recent speeches on Amazon's strategy are not only to chat. Brick&mortar leaders intend to get marketshares quickly on the Internet. 

This is the reason why Walmart has decided to invest in its online pricing in order to catch up with Amazon. The price difference is narrowing, and I believe that Walmart has big plans on the Internet.

The price competition will hence become tougher as Amazon won't have any choice but to cut down its own price to keep its competitive advantage. As a result, the article shows that Compared with last year, prices are 12% lower at Wal-Mart, 9.7% lower at Amazon, and 3.5% lower at Target.  

As Georges Plassat said, traditionnal retailers have a competitive advantage in the Ecommerce game: They own stores network they developped over the years that will be hard to developp for a pure player (if they intend to do so). Amazon on the other end has plans to enter new categories to get business from brick & mortar retailers.

It will be interesting to see how things will go.

Les 3 principaux profils de promovores

Merci à @Adhréna pour l'article trouvé sur leur flux Twitter. Alors que nous sommes en train de terminer la période des fêtes de fin d'année, il est temps de faire un bref rappel des différents profils de promovore. Quelques informations sont très intéressantes:

1 Les coupons utilisés par les clients?

Pour être dans le monde de la distribution, il me paraît difficile de croire que les coupons sont fréquemments utilisés par les consommateurs. Au contraire, pour moi leur efficacité reste marginale vs des opérations de promotion de mass, avec théâtralisation en point de vente.

2 Les sources d'informations promotionnelles: 

83% In Store: Cela montre bien l'efficacité du marketing du point de vente, où je reste convaincu qu'il reste énormément à faire.

70% les boîtes au lettre. On est encore loin de l'arrêt du prospectus, média le plus efficace et le moins cher pour faire du marketing push. A quand une réelle réponse digitale pour préparer cette transition du prospectus à l'Internet. On y est pas encore.

Some Thoughts About Facebook's Long Term Strategy

I wanted to share with you an article (In French) I found about Facebook's Strategy for the next 15 years.

Here are the bullet points:

- Mobile as the heart of the strategy: Social media users migrate more and more to a mobile usage. That means applications must be developped on this channel to keep on growing their data base. The goal of Facebook in 5 years from now is to convert its users to its other mobile applications, such as WhatsApp, Instagram, Messenger, and Search. And then only to monetize this audience. This is this point that annoys mean. I mean, Facebook has already reached a large number of users, billions are using the service, it is now a public company, and is actually experiencing difficulties to keep some of its audience that are not using Facebook anylonger. I don't know if it is still time to grow the audience first, and then seek for monetization systems. Facebook needs to be profitable ASAP, in order to leverage these profits in new projects.

Splitting Facebook's Activites in several applications. The goal is to provide a better user experience. Indeed, when you have such a big Facebook activity, it becomes sometime overwhelming. It will probably also allows to have more advertizing product to market in order to get revenues out of it. Mark Zuckerberg believes that the different usage of Facebook actually respond to different target, with different interests. This is also something that is scaring me. Indeed, the Internet has based its success on the accessibility, and the freedom it allowed. But if Facebook really starts to master all the component of people's relationship online, Facebook would become a sort of private web, which everybody used and hence would be forced to use. 

Allowing The Most To Access The Internet: Mark Zuckerberg has goals to provide Internet to poor countries in order to the most people to access its service, which is something cool. 

The good thing about this stratgegy:

It is long term, it has a real vision. And I believe it is based on a good strategy, on the right path.

The bad thing about this strategy:

This strategy still delays the time when Facebook would become really profitable. I believe that Facebook has already mastered its competition, and can now focus on its business modell. Its IPO was meant for that reason. But Mark Zuckerberg don't really expect any revenues before a dozen of years... It is very risky.

Customer Decision Making Process: What information drives consumers' online buying decisions?

Interesting blogpost I found from Forrester's website. This Christmas season is obviously crucial for most retailers results. The shopping frenzy makes it one of the busiest time of the year for retailers. More and more, customers tend to shop online instead than in malls and stores. But what information drives customer to shop online. What are the key information that will trigger the sales for e-retailers. Here is an interesting chart: 

What is interesting, is how there key aspects of the decision making process need to be taken into consideration into the website's strategy. Hence, by advertizing clearly the information about the shipping costs, customer reviews, product information, and clear return policy, one e-retailer will limit the bargain of buying online, and hence maximize the chance the customer to buy online.

Especially, if these information are clear, it will limit the risk the shopper to go to different online stores to compare, which is a real risk in the e-commerce world.

Also, what is interesting, is to see that brick&mortar retailers, which are facing high competition of e-retailers, should actually leverage this information. Thanks to mobile technology, they are able now to provide a lot of information on product reviews, and product information on store. They also have most of the time clear return policy, which is easier as you may deposit it in the nearby store.

Very interesting stats.

How Properly Prepare Business Concept Experimentation, Especially in #Retail

New business concepts are a great way to dynamise sales and adapt to new customers trend. But most of the time, people don't really have a good process to implement these new businesses, which ultimately leads to failure.

Hence: "Think of it this way: A pharmaceutical company would never introduce a drug without first conducting a round of experiments based on established scientific protocols. (In fact, the U.S. Food and Drug Administration requires extensive clinical trials.) Yet that’s essentially what many companies do when they roll out new business models and other novel concepts. Had J.C. Penney done thorough experiments on its CEO’s proposed changes, the company might have discovered that customers would probably reject them."

Indeed, it is not that easy to perform a business experimentation. Because once you have the idea, which people believe is a good idea, the pressure is high to implement it as fast as possible to bypass the competition, and to earn the profits as fast as possible.

This article of the Harvard Business Review is very interesting, especially on a retail point of view as most of the examples brought are real case studies of US retailers.

Here is a Checklist of What You Should Do To Test A New Business Concept

1 - Does The Experiment Has A Clear Purpose?

In determining whether an experiment is needed, managers must first figure out exactly what they want to learn. Only then can they decide if testing is the best approach and, if it is, the scope of the experiment. 

When Kohl’s was considering adding a new product category, furniture, many executives were tremendously enthusiastic, anticipating significant additional revenue. A test at 70 stores over six months, however, showed a net decrease in revenue. Products that now had less floor space (to make room for the furniture) experienced a drop in sales, and Kohl’s was actually losing customers overall. Those negative results were a huge disappointment for those who had advocated for the initiative, but the program was nevertheless scrapped. The Kohl’s example highlights the fact that experiments are often needed to perform objective assessments of initiatives backed by people with organizational clout.

2 - Is The Experiment Doable?

Experiments must have testable predictions. But the “causal density” of the business environment—that is, the complexity of the variables and their interactions—can make it extremely difficult to determine cause-and-effect relationships. Learning from a business experiment is not necessarily as easy as isolating an independent variable, manipulating it, and observing changes in the dependent variable. Environments are constantly changing, the potential causes of business outcomes are often uncertain or unknown, and so linkages between them are frequently complex and poorly understood.

I believe that on this part it is very important to list all the variables that may impact the test, and right away from the beginning to understand how those variables have impacted the test results.

3- How Can We Ensure Reliable Results?

4- Have We Gotten The Most Value Out Of The Experiment?

What is fore sur is that experimentation is key before setting up new launches. The real effort is to master how much cost, and how much time you may spend on experimentation, as speed in execution also is a key factor of success in certain new business concept.

French #Retailer Picard Strategy: Japan & France

Interesting interview (in French) of Picard's CEO. Picard is to me one of the most exciting retail concept ever. As Ikea or Costco, it is based on hard discount operationnal approach, but by its store concept and category management, provide high service and optimized added value to customers.

Hence, Picard only sells frozen products, but as it focus on this technology, it is able to have large product range gowing to raw frozen veggies to concept desert or meals like sushi or burritos. Picard works on a 1 200 product range with 20% of the assortment changing every year.

Picard is aiming to launch a complete activity in Japan, and right now is testing a 50 products range in some corner stores.

Picard is planning on opening 250 to 300 new stores in France (it is counting so far 900 shops). It believe that stores are key in the customer relationship management of the company, compare to the Internet. Indeed, Internet website don't have any soul, don't create no feeling which could actually lead to brand loyalty. Instead, brick & mortar stores are the best way to create a real customer experience that ultimately lead to brand preference and loyalty.

Very interesting point of view. For those who don't know Picard, and if you come to France, I believe this is a must see concept.

The Bookbook of #Ikea

Not much to say, except it is a very clever way to advertize on a catalog, on an Internet medium.

Reuters decide to kill its comments Feature on its article

Reuter has recently decided to turn off its comments feature on its website. It explains the reason why on a long article. The whole concept is to say that in the age of social media, where conversation happens everywhere, and that it moved away for the comments on their website.

I totally disagree with this view. Of course, obviously, the conversation happens everywhere on social media, Facebook, Twitter, blogs, among other things. But social media is about multiplicity. And comments on an article are still one of the best way to discuss. When I read an interesting article on different news website, one of the first thing I do is to check out the comments. Indeed, where is the best place to see what people think about the article if it is not on this same page? 

I maybe old school on this one, but I still highly value comments on an article. Actually, I would really like to have more comments on my blog, which I always appreciate.

What do you think about it?

New #Retail Concepts: #Foodtrucks Allows Retails To Go To Customers

Brick & Mortar retailers are not dead, but they do need to evolve in order to adapt to the changes in customer behaviors. Indeed, with the rise of Ecommerce and multichannel strategies, retailers must adapt to reach its customers.

In the US, the food truck hype is high, and it allows people to get the food the closest they are, depending on the time of the day.

French retail magazine LSA published on its website some examples of retailers using this food truck concept as a store concept.  

I invite you to go on the website to have a look at actually what the pictures look like. The only regret I have, is that most of the examples are from brands sampling their products. But I believe that there are maybe a retail concept more sophisticated that may come up from it:

• You order what you want online, than collect it in the truck
• You maybe have a store that would move depending on the season, for example at the beach during summertime, in the business districk for the back to school period.

I think that having moving retail concept that will reach out to its customers is a trend that will eventually come up. It may not get a significant share of the FMCG market, but could tactically get customers from your competition, or lead to turn on sales.

What do you think about it?

What Do You Think About #Lowe's #OSHbot ? Is This The Future Of Shopping Experienc?

Intriguing article I found on the Internet lately. Retail chain Lowe's has launched experimentation of OSHbot, a robot designed to provide customer service in store. The robot can identify products, talk, interract with shoppers, and can lead the customer to the product it needs. It can speak several language, contact another salesperson in another store to provide extra advices. 

When I read the article headlines on Twitter "The Future of Shopping has Arrived and its Name is OSHbot" I had high expectations.

But after having seen the video, I am really wondering if this is what to expect from the future. Indeed, I believe that these kinds of robots must cost a fortune to equipe a store with (at least several thousand dollars a piece). How many of them would you need in a busy store to actually be enough to advice all of your clientele?

Also, those robots have a unique goal: to advice client. That means they can't do the other taskes a human may do, meaning merchandizing tasks.

Also, is the experience with a robot better than with an actual human? As a customer relationship expert, I still believe people do and will always value human interractions the most?

Now the only advantage I may found, is that if you are facing a high turnover, educating a salesforce may be costly and take time. Nevertheless, I am also questionning if those robots will have a long lifetime.

I would like to have your insights: What do you think about it? Do you really believe we will soon see those robots.

Does #Tesco 's Struggles Question The Application Of big Data In The #Retail Business?

Interesting article of the Harvard Business Review, trying to explain the reasons of Tesco's recent struggle in its domestic market. Tesco has been for years considered as one of the best global retailer, and a trailblazer in customer relationship management. But Tesco has lost market shares the past few years, letting hard discounters Aldi and Lidl grow in the UK market, whereas Tesco has based its success on its ability to value its customer experience and the analytics of customer data. Once the modell of a lot of other retailers, Tesco now brings a lot of questionning and the ability of big data to leverage revenue growth. Indeed, Tesco owns both the data (they know pretty much all what could be known of their customers) and have the experience to use it, but it has little impact now. What is even more schocking is that as hard discounters are benefiting of the weakness of Tesco, is that UK customers seem now to prefer a lean shopping experience to the fancy loyalty program Tesco has build up. To me Tesco's issues are simply revealing that before mastering marketing tools, one company should focus on execution. Also, analyzing data to maximizing profit without understanding customer needs is useless. It will be interesting to see how Tesco manages to get back on track to see if they rather lower their investment on their loyalty card program, or if they actually find new innovative way to create extra customer value out of it.

Georges Plassat CEO of #Carrefour Talks About Entrepreneurship, #CRM and #Technology

French Interview during the France Digital Day 2014, not so long ago, of Georges Plassat, CEO of Carrefour. Even though it was an English speaking event, the interview is unfortunately in French. But it was very interesting though, especially:

- His vision of customer relationship management: Before customer relationship management, in order to have a strong shopper experience, you need to master your trade and the basics. 

- His vision of "reinventing brick&mortar", it is a great happening to talk about reinventing brick & mortar business, but without strong core execution, it can only be an happening, a great PR speech. It is not so easy to transform brick & mortar business.

- His vision of E commerce: Even though things go fast, it is important to take its time, and to reach profitability, which is not such an easy business.

Should #Retailers Accept #ApplePay?

Apple Pay is probably the most innovative feature the new Iphones has. It has been years that cell phones company are looming on the mobile payment business. Apple has probably at the moment the best technology, it is one of the leader handheld manufacturer, and has probably a shot at getting the pie.

This news came up as Credit Card hack scandalls spring up. 

But the issue is that retailers are not keen on letting Apple getting in the business. When you run a business like Walmart that counts for about $500 millions in sales wordlwide, a tiny fee per sales could represent a lot. Here is a very interesting article that asks the question if Retailers shall accept Apple Pay. And It Emphasize on the reason why retailers are not proactive.

MCX was launched in 2011, led by Wal-Mart Stores Inc.,​ expressly to develop a mobile payment product. That product is CurrentC, which will be available sometime next year. MCX is a coalition of more than 50 retailers, including (besides Wal-Mart), 7-Eleven, Inc. Best Buy, CVS, Rite Aid, Lowe’s, Michaels, Sears, Gap, and Target.

In September, Wal-Mart Stores and Best Buy announced they wouldn’t accept Apple Pay, and in October CVS and Rite Aid came along with a similar pronouncement. 

The article emphasizes on the fact that Walmart should accept Apple Pay as it could be a bargain for customers.

But I think that Walmart is right to negociate hard on that.

Indeed, so far no actors is currently on the market, and there is no way Apple Pay could get big without Walmart or 7/11. Now the main question is: Who will actually be able to developp the winning technology? I bet that mobile phone manufacturers are not the best placed one. I would bet more on Visa and/or mastercard that are currently sharing the credit card market.

What do you think about it?

What To Think About #Foursquare New Strategy?

Foursquare has been a company I have been following right from the beginning. I loved the concept, about geolocalization mixed with social media. The application was also working great. But Foursquare have been struggling for years now to actually concretly find a business modell.

They have not been able to get a large enough audience to really go on with the original idea of gaming, which could ultimately become a way to advertize geolocally. They have not so long ago relaunch their application, abandonning the initial concept to become a geolocalization application of businesses, much more like Yelp. 

But I believe that it was the issue: How can you be better than Yelp that has been there already for years? It seems that the relaunch has not yet experience much success. Once again it is not because the application is not good, it is just that Foursquare was not able to turn its application and audience into a real business modell.

I don't know if that was a great strategical move, as geolocalization is doing great, especially with the new ibeacon technology. Maybe Foursquare should have more focused on this technology, because they already had a pretty good know how in terms of geolocalization advertizing.

 It is hard now to find the next move Foursquare will make, but I believe that they are still a talented company, and wish them the best, hoping they could find a way to make things work.