Which Color Shall You Use For Your Brand Logo?

I have previously posted about what the significations of colors were while choosing a template or a logo. Here is another representation of what logos transmit as values to people.

As you can clearly see, companies pick a color for a reason, and the color reinforce the idea and the concept of the company's positioning. Now, obviously, what is interesting is when a company change the color of its logo. It is actually pretty rare to see such a move. It shows clearly how important the color is.

I have seen several clothing brands that changed their brands several time in less than a decade. It obviously create confusion for customers. But as far as I remember, it has been a while I have not seen a company changing their core colors for another one.

Have you some examples? It will be interesting to analyse what happened in these cases.

Category Management Series: Lean Retailing: When Less Is More

Another very interesting article about lean retailing. Indeed, in the FMCG world the past 2 decades have seen the number of skus and products skyrocketing, in an effort to better suit customers' needs. By segmenting the offer, suppliers tend to believe they would make a better work at fulfilling the needs of customers. Furthermore, the rise of Ecommerce has also helped this trend, as the square meters available to display the offer is not much of a problem.

But that brings two issues:

• The number of stores and the square meters available for retailers is growing slower than the number of products, causing some issues on how to retail such a large product range.
• The costs of good sold is exploding, as the complexity of the offer requires more information system, more people to deal with the display on shelves, more merchandising, and more inventory cost (with a higher probability of stock out).
• As the book the paradox of choice point out, too much complexity while making the purchase decision is causing customers disatisfaction.

I read this very interesting article dealing with the issue. 

It shows well the problem. It exposes how retailers could adapt the Toyota Production System, aiming at a lean process production for cost efficiency purpose. 

"In general, the application of lean approach allows the company to reduce costs, increase efficiency, reduce execution time, reduce waste of all kinds, increase profitability and keep low inventories. It also contributes to customers' satisfaction, improving product quality and increase staff morale."

"According to research carried out in practice, quantitatively speaking, the effects of lean thinking in retail are: increased comparable sales by up to 10 percent, reduced labor costs by 10 to 20 percent, reduced inventory by 10 to 30 percent, and stockouts by 20 to 75 percent (Lean Retailing: Achieving Breakthroughs in-store profitability, McKinsey & Company). It significantly contributes to improved customer satisfaction. All this, in return, reflects the increased store profitability."

L'état du e commerce en France

Un graphique que j'ai récupéré via LinkedIn. Elle permet de voir le niveau de rentabilité et le niveau de chiffre d'affaires réalisés par la plupart des acteurs majeurs du E commerce en France. Il est intéressant car on peut voir qu'une grande partie des E commerçant en France ne sont à date pas rentable. Une situation qui va devenir difficile à garder car la croissance du marché commence sérieusement à ralentir. On le voit notamment via la vente de Grosbill par Auchan.

On voit également qu'en terme de vente, il y a 2 très gros acteurs qui se détachent: vente-privee.com et Cdiscount. Par ailleurs, la réussite de vente-privée reste remarquable, aussi bien en CA qu'en rentabilité.

Un autre point intéressant pour moi, c'est pour les acteurs de la grande distribution. Aujourd'hui, la présence en ligne et la part de marché sur le e commerce va devenir déterminante pour des groupes comme Carrefour et Auchan, il va être intéressant de voir les investissements qui seront mis par ces 2 groupes, par ailleurs internationaux (donc peut être plus impacté par Amazon que d'autres acteurs).

Egalement, Houra, le dernier des e commerçant pur sur l'alimentaire. Certainement qu'il y aura du chiffre d'affaires à aller chercher dans un future proche pour la filiale du groupe Louis Delhaize.

Maintenant, un grand absent: Amazon, américain, mais qui serait intéressant à analyser via ce spectre.

Costco outperforming pure players in the E commerce competition

Costco is really a fascinating company...

The Internet Retailer Top 500 E-commerce sites ranking has been released. The purpose of this ranking is to study which are the best performing e-merchant websites.


For this study, Dynatrace aggregates scores on four subcategories to create an overall score. Each retailer’s ranking in each subcategory is also reported in the index. Here are the four subcategories:

• Mobile: tests pulling up the mobile page across mobile carriers, 
• Last Mile: test running from real end-user machines running in homes and businesses across the U.S. 
• Web: test hitting the home pages of each retailer from network nodes
• Transactions: tests which search for a product, add it to a cart and checkout. 

 Each ranking is created by examining:
 1) Response Time: how fast to execute that transaction.
 2) Availability: how successful were we at executing the tests.
 3) Consistency: how much variability there was in the results.

What has made the headlines is the fact that Costco has been ranked n°11 of this website. Even though Costco has been pushing its online strategy, Costco is a hard core retailer focusing on operational executions to deliver sales growth. But what is interesting on this ranking is to notice how much operational execution is key to online success. Hence, Costco, by having an efficient e-commerce website, is able to maximize customer experience (even by proposing a minimal one), and therefore to out perform some other pure players, that we might have expected to be above Costco. Moreover, Costco out performs Apple!

Efficient operational execution remains key in retailing, no matter where.

Amazon To Open Brick & Mortar Drive In Stores

I announced it earlier this year: 2015 will be the beginning of the real fight between brick & mortar companies and e-merchants. And this battle will be engaged by 2 tycoons of each sides, Amazon & Walmart. While Amazon announced better than expected profits & sales for the third quarter, French website Lefigaro reports Amazon recently bought in Sunnyvale some real estate to launch a drive in  concept.

It will allow people to pick up their deliveries in car. It looks kind of the concept of drive in that succeed so well in France. The good thing about the concept, it will allow Amazon to sell its whole wire range of products, including probably groceries.

Amazon is already testing a store in Purdue University, allowing students to pick up their orders.

Beyond the drone hype, I highly believe Amazon is testing a key concept that will probably allow him to get an edge on competition.

Book Review: Le Retail aux Etats-Unis de Frank Rosenthal

Nouveau livre pour cette période estival: Le Retail aux Etats-Unis de Frank Rosenthal, aux éditions Kawa, qui me fut dédicacé par Henri Kaufman!

J'ai choisi ce livre pour 2 raisons:

Tout d'abord pour son auteur, Frank Rosenthal, clairement un réel expert de la distribution et notamment sur les concepts innovants

Et bien évidemment, le monde de la distribution aux Etats-Unis, qui est complexe et riche d'innovations et de créativité

En effet, les Etats-Unis, bien que possédant des monstres du retail tel qu'Amazon, Costco, ou Walmart, possède également quelques perles de petite taille. Peu d'acteurs sont réellement nationaux dans ce pays de taille continental. En effet, grâce à un coût d'exploitation bien moindre qu'en France (notamment via des charges bien plus faibles), les américains n'hésitent pas à innover en terme de merchandising et d'expérience d'achat. 

Le bouquin est riche, beaucoup d'exemples, dans différents secteurs d'activités, beaucoup de photos, et donc beaucoup d'idées à utiliser. 

Ce qui me marque particulièrement, mais qui m'a d'ailleurs toujours maqués, c'est leur capacité à aller très loin en terme de traitement d'une catégorie de produit: Trader Joe's, ou surtout Lululemon sur le Yoga.

Egalement, leur obsession du service client, notamment Zappos, Amazon, ou encore Target.

Mais également, ce qui m'a fait plaisir, c'est les commentaires "d'experts" que je connais bien du monde de la distribution et du marketing: Olivier Dauvers, Grégoire Kaufman, Cécile Delettré, Thierry Cotillard. 

Un très bon livre, vivant, qu'il faut feuilleter à envie pour qui est en manque d'inspiration dans ce monde formidable du retail!

Category Management : Some Thoughts On How To Bring Innovations In Retailing

Retailing is in constant evolution, challenged by new way to consumes, new needs, new technologies, new competition. I read a very interesting article about how retailers should approach innovation. 

Retailing is a simple game, but this is the most reason why it is so hard to stand out. And when the competition gets tougher, most of the time it is too late to innovate. I would like to highlight several inspiring bullet points of the article: 

The companies that are truly out-performing don’t necessarily bring a different what, but they bring an entirely different why

This means for retailers to have clear concepts, clear vision of what they want to offer to its customers. Most of retailers propose some category of products that already exists in a large number of other stores or channel (hypermarts, specialized stores, online pure players, sometimes even peer to peer solutions, and only for a simple example...). Obvious examples are Trader Joe, la Fnac, Whole Food Market, Costco, Ikea in the retail business. But yet, large retailers focusing on a different customer response and a real different shopping experiences are still rare.

When you examine the habits of highly innovative companies, you see that what they don’t do is as important as what they do do. For example, innovative companies don’t benchmark themselves vertically. 

The question is clear: is Walmart considering when selling a new TV screen it is facing a travel agency as a competition? 

Obviously, those approaches are difficult to handle. The statement is true as it shows clearly retailers should challenge more the way they conduct their business. And the question should always been considered to move on.

To let you think a bit more about it, some pics about clearly outstanding retail concepts.

When Retail Rules Don't Apply

A quick blog post about an interesting commerciales for Systembolagets, the Sweedish liquor retailer owned by the government, which owns a monopoly on the commerce of alcoholic beverages.

What is interesting in this commercial, is the standard techniques of retailing proposed by the consultant. But when you understand the purpose of the store, you can clearly see those rules don't apply. Furthermore, what is interesting to see is that despite some clear rules of retailing, what is more important than the standard rules is to have a clear concept, beyond the rules.

Lean Retailing: Procter & Gamble's CEO Willing To Cut Assortment

Another blog post about lean retailing! Once again, I believe that we will see more & more of those initiatives in the next few years. Product ranges have become too complicated, and implies 3 issues:

• The cost of goods sold for retailers is growing fast
• The high complexity of choice is causing issues to customers creating disatisfaction in shopping experience
• The large number of SKUs means a lower profitability of the manufacturing chains.

Today, it is nobody else but the CEO of Procter & Gamble (one of the supplier with the largest product ranges) that explain the reason why he believes he should adopt lean retailing. 

Therefore, AG Lafley considers they need to focus on the best franchises, simplify the ranges in order to ease customers' decision and boost sales.

This may seem non relevant, but the fact a company like P&G acknowledge this fact, and is working on lowering the number of SKUs available show clearly that a leaner offer may result in highering of sales, by being more efficient and on focusing on other leverage to improve shopper experience.

 

Category Management: Some Thoughts On The Positive Impact of The Growing Product Ranges In Retail

French magazine LSA has recently posted an article on the positive impact the growth of product ranges on sales figures. The article is quite comprehensive and includes detailed graphs and data.

Especially, this graph is key: the growth of the number of SKUs has grown by 72% in 18 years. Actually, the growth of product range actually overpass the growth of sales and volumes. Moreover, the article underlines 80% of the time a new SKU brings growth to the category.

Furthermore, customers love choice and plebiscite more products:

But to me, the article outlines one issue, and I would like to add 2 another key ones:

• The growth of the product ranges lead to issues in merchandizing and product visibility. The more products, the more difficult it is to find the right one and to make its choice. Moreover, hasn't the retailer a mission of product selections? I believe a lot of value for money could be brought by the product selection in order to create a better customer experience.
• The more product, the more costs: And I come back to the concept of Direct Profit by Products. This is the reason why companies like Costco, Ikea or Lidl are keeping short product selections in order to lower their costs of good sold and remain competitive in pricing. 
• The number of SKUs grow faster than the commercial real estate: at some point it is not possible to seek for growth only by adding new products. Because at some points stores won't be able to get them.

Category Management Series: Lean retailing and Inventory Management

Another blog post about lean retailing, inspired by an article that we have already discussed previously in this blog. 

The purpose of this article is to show you how by limiting the product range you could obviously lower your cost of good sold, but also increase customers satisfaction. Indeed, as the article outlines:

In the retail customers' demand is elastic. Retailers need to adapt inventory movements to customer demand. Basically, the concept of lean retailing is to give quick response to fluctuations in demand rather than holding large stocks.

Here is an interesting chart that shows how inventory management could help rise the profits of one retailer. Between the best and the worst scenarii you could lift up profitability by 6%.

Inventory should always been seen as an asset, but a complex product range will have a deep impact on the way you perceive one category profitability.

Stratégie Distribution: Lorsqu'Intermarché adapte ses concepts points de vente

J'ai eu le plaisir de travailler pour Intermarché pendant une année. Clairement l'enseigne jouit d'un fort dynamisme, avec l'ambition de s'adapter au plus près des attentes consommateurs.

Récemment, Olivier Dauvers a fait une vidéo mettant en avant ce fait:

• D'un côté un hypermarché de 6000 m2 en milieu rural, avec l'ambition d'être fort sur la promotion et les fruits et légumes
• De l'autre un petit magasin de 700 m2 en milieu urbain, misant sur la densité de l'offre et le merchandising

Mais pour aller encore plus loin, je me suis rendu il y a peu dans l'Intermarché Express du Perreux (94). Beaucoup moins médiatisé, cet Intermarché montre néanmoins la capacité d'adaptation et d'attraction des concepts Intermarché. Sur 300 m2, le magasin fait le choix du frais, travail sur les formats (petits formats), pour proposer la meilleure offre commerciale par rapport aux spécificités de la zone de chalandise.

Meuble avec repoussoir pour les tablettes de chocolat, pour avoir toujours un rayon attractif.

Auteur de l'offre, avec des étagères à plus d'1m80...

L'alcool en arrière caisse, pas de tapis car panier moyen faible (ultra proximité). J'ai pas pris de photos des caddies, mais pareil, du sur mesure.

Le fruits et légumes mis en avant dès le début de circuit. Intéressant notamment les fruits et légumes en devanture du magasin, ce qui permet de gagner de l'espace et de renforcer l'image de fraicheur du point de vente.

TG avec produits du monde.

Des meubles ultra court, permettant d'augmenter le nombre de gondoles, et donc le choix proposé.

Meuble très intéressant pour la mise en avant du snacking sec, en face des produits faits prêt à manger.

Walmart's Seeking For Innovations To Compete With Pure Players

I have posted quite a lot of articles about Walmart this year. Walmart has decided to compete with pure players online in order to earn marketshares in the Ecommerce battlefield, in order to grow its business. Indeed, it is difficult for Walmart to look for growth opportunities in the domestic brick & mortar business as they already have a strong leadership.

In order to get marketshares, Walmart is investing in new technologies and projects that will allow it to keep up with Amazon (its main online competition). Here are some of its projects as detailed by fortune.com:

Logistics: Leveraging its superstores to speed up Internet delivery: Some brick & mortar Walmart's superstores are used to prepare packages delivery in an effort to speed up the process. Thanks to its large network of stores, Walmart has tested the concept on 80 stores, which is the same number of distribution centers Amazon operates in the US. When we know that Walmart owns 4 500 stores, you can clearly see how this test could empower Walmart for its online Strategy. Furthermore Walmart has opened 4 automated distribution centers to prepare online orders.

Customer Service: Walmart to test Walmart Prime. To counter attack Amazon's Prime offer, allowing customers to subscribe to a service providing free delivery all year long, Walmart is testing free 3 day delivery. 

New Retailing Channel: Walmart is testing drive thru grocery service. The concept is thriving in France, and has been for the longest time, but it is pretty new in the US. By using this type of service, Walmart which actually has better expertise in the grocery business will have a clear edge on Amazon.

Category Management: Walmart is going to grow by 30% its online product range, to reach 10 million items. Obviously, it remains far from the 250 million items Amazon is retailing, but still a large product range will help Walmart to get in the competition. 

Amazon's Prime Day

Tomorrow, July 15th, will be the first Prime Day of Amazon: A special day aiming to celebrate the 20th anniversary of Amazon, which will become a massive sales day.

The event is aimed also to be global, with sales in all the countries where Amazon has launched its Amazon Prime service. 

To me, Prime Day is a clear response to Alibaba. Alibaba with its Singles Day has been able to create a massive promotional event from scratch. As did some previous retailers, the ability to create new sales peak point shows well how performing your company performs. Especially, it allows the company to create new slots, less crowded, to get new customers and generate sales. Indeed, it is difficult to compete on the traditionnal Black Fridays, Back to Schools or Christmas seasons. 

More than just adding a massive sales day, Amazon is eager to leverage this event in acquiring more members of the Amazon Prime service. There are hence two goals:

• lifting up sales
• Growing the Amazon Prime Clientele.

Now I still question the date of July the 15th, with a lot of people on vacations at this time. I would have probably located the event at some other points, like May or April.

They also have added a cultural layer, asking for some artists to represent what the Amazon's prime service inspired them.

Nevertheless I question the date of July the 15th. Indeed, it is a period with a lot of people on vacations and therefore with less potentials than other times of the years. 

What May Be The Next Interface With Mobile Devices

A quick note to share with you an interesting video about how we may in a near future interact with our mobile devices.

At an era of big data and more mobile data to interact with, especially Apple Watch, we may have to think once again how we interact with the new technology. As the mouse was a revolution to computing, tactile technology to smartphone, voice interraction linked with intelligent technology may be the next best way to interact with our connected object, whatever it will be.

The Battle For Customer Interface Is On

"Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate. Something interesting is happening."

This sentence you must have read it hundreds on time on the web either on LinkedIn, Facebook or on blogs. Indeed, the statement is very strong. We are in the middle of a real industrial revolution, that shakes up all kind of business models we ever experienced. But what is far more interesting, is what the article is about: customer interface.

In this blog I don't write that much about customer relationship management as we may have known it: Big data centers with softwares allowing to have an efficient response all through the decision making process of customers.

Because today, customer relationship management is more than ever the core of businesses created value. The real equity built is not much in the brands you build, but rather in the customer interface businesses can propose to customers. What does that mean? That means that you don't need to master the whole components of one product, but the interface you propose to the end user is the key to the real value you propose to customers.

That empowers to me more than ever new mobile devices, but also brick & mortar retails.

Online Flash Sale Market Is Plumetting

It is interesting to read this article about how the online flash sale market online has changed over the years. Flash sales was indeed one of the hot way to retail online. Companies like Vente-Privées.com  has grown fast by proposing hard discount on premium marchandises bought in bulk and sold for a limited period of time (which created a feeling of emergency).

As the article outlines, the industry has hit a plateau. But why is that? It seems that the economic meltdown forced the premium industry to find alternative retail channels in order to sell those merchandises, even though if it meant to lower their margins. But as the economy is back on track, the industry don't need that much of flash sales.

Now the flash sale market remains pretty big, and even though some mergers may happen, the industry still have the keys to perform by finding new sectors and new product categories to deal with.

Why More People Blocking Ads Is Bad For The Internet: Reference to Permission Marketing of Seth Godin

Are you fed up of all those ads coming up while trying to access your Youtube video, or your online newspaper article? With the raise of the Internet usage, and a lot of investment in the market, online companies are monetizing their audience. How do they do? As any other media business, they sell ads to corporation eager to find customers, by delivering them great content.

The problem is that on the Internet there are new tools that allow users to block ads. While you were watching TV, probably you were used to mute your TV set, or even shut it down while the commercials were on. Same thing for the Internet.

To me, there are two ways to understand this chart:

• First, you have more and more people using those tools to block ads.
• Secondly, the skyrocketing number of commercials sent online force people to their threshold.

Obviously, this news is bad: Websites need commercial revenues to keep on delivering their service. When you see leaders of the industry, especially Twitter, struggling to generate a strong business model even though they have developed a large audience show well what is at stake. But while the Internet allows companies to segment better their audience and deliver an accurate message, the spring in usage of the Internet as a media turned companies to consider this tool as a mass media. 

And that is the issue. Indeed, I remember having read while ago the book of Seth Godin Permission Marketing. The idea of the book was clear: customers would allow businesses to use their data in order to deliver them some valuable information about their products. As the number of media exploded (especially at this time via email marketing), there was a need for businesses to be responsible in the way they handled their push marketing campaigns.

Right now, the Internet is on a very important moment of its life. It needs to better use its data and rethink the way to use commercials. Because Internet users will not bear to have such a high exposition to ads. I am the firts person to complain while I am watching some videos on Youtube to see I am stopped every 5 minutes by a commercial. It is unbearable, and will turn people off the service.

Therefore marketing professionals need to focus on the way they use the Internet of ads.

Carrefour Aiming To Spread In Africa

On June 18th, Carrefour has opened its first store in Algeria, after having quitted the country back in 2009. But more than a simple hypermart opening, the information is far more important: Carrefour is looming on the African continent.

Carrefour is one of the most global retailer in the world. It has strong leadership in Europe, in Asia (China and the Middle East) and America (with Brazil).

After having sold several strategic countries over the past few years (Indonesia and Columbia amongst the main ones), and having failed fast at entering key markets (Russia and India, for less than 2 years), Carrefour is facing a great challenge. The African continent is probably one of the most promising one. African countries are growing fast, and has a large population, but yet both infrastructures and household revenues are weak. Carrefour is aiming to attack strong the market with openings in countries like Ivory Coast and Kenya. 

This information is also important as the Chinese market is getting tougher, with consumption plumetting those past few years.

I believe that the investments of global retailers like Carrefour, Walmart &/or Tesco will be important to follow, as it will obviously impact global leaderships for the next 10-15 years.

Hubert Joly Becomes Chairman of Best Buy

Today, I wanted to share with you the admiration I have for a French business leader that succeeded in getting back Best Buy on track: Hubert Joly. Indeed, it is rare to see a French businessman selected by a large US corporation to run its business. And when Hubert Joly took over the position back in 2012, a lot of people were questionning the move.

Let's keep in mind that Best Buy was going in limbo at this date, facing so many challenges that a lot of companies selling electronics had to face:

• The rise of the Internet competition: Amazon among other companies were earning market shares.
• The plummeting sales of the market, with lower new technologies coming up (after the spikes of laptops, smartphones, tablets, among others)
• Digitalization of a part of the offer: DVDs, CDs, books

Let's not forget that last year, Radioshack, another tycoon of the electronic gear retailing market shut down last year. It could have been the case of Best Buy for sure without a strong makeover. Today, clearly Best Buy's case study is a model for most of the electronic gears retailers needing to adapt their business model to the changing environment. 

What was the recipe of success for Best Buy?

• Cut costs to invest in pricing: Best Buy made for $1 billion in cost saving, allowing the company to set more aggressive pricing to be competitive against Internet competition.
• Put equity in stores: Best Buy rework its retail network by closing some stores, opening ATM machines in train stations and airports, and rethinking the layout of stores, to promote shops in shops like Samsung's.
• Work with its salesforce on customer relationship management and customer experience: The Geek Squad, The Blue Shirt personnel, focused
• Embrace omni channel retailing, and propose early the sharing of inventory information between the online channel and the stores, allowing same day delivery in most cases. I believe it was one of the first retailer to attach online sells to the geographical region, in order to make sure the stores understood online sales were not a threat.

Brand Equity and Customer relationship Value: A Dramatical Shift

For the longest time brand equity has been one of the key priority of businesses in order to stand out of the competition. A strong brand implied great values, and the ability to develop sales growth and value to companies over a long period of time. 

This is the reason why a lot of M&A happened in order to acquire those brands. The value of one company was linked to how people tend to perceive their equity. This is actually what is going on right now with a lot of FMCG companies like Unilever or Procter & Gamble or Mondelez which are trying to sell some "non strategic" brands in order to be more efficient in developping the other one.

But a recent article of the Harvard Business Review outlines a dramatical shift in what creates actual value to companies. Let's check the chart below.

"This graph, based on data from the MARKABLES database, represents brand and customer relationship valuations as a percent of total enterprise value. The percentages come from fair value assessments done by purchase price allocation experts according to established accounting standards."
You can clearly see that companies and the way they are valued tends to spend more focus on customer value than on brand value. And actually, companies that succeed are doing this shift.

Let's take the example of Amazon. Amazon has a strong brand, but it has not been built on any advertizing or standard bolding of the brand. It is due to the customer service it provides, which create the brand in the mind of customers. Also, focusing on customer relationship management allows company to have a more direct link between the investment and the return on investment, which is hard to perceive while analyzing brands.

Now don't get me wrong, I still believe branding is key and important, and a real asset for one company. But as standard loyalty reward programs the business has changed so much the way companies work their brand around has fundamentally changed, especially due to social media.

Therefore,we can clearly see the reason why customer service, CRM and social media investment are so important in order to create value for one company.