Wednesday, August 26, 2015

How Small Businees Could Benefit From Instacart

Instacart is a US start up which is proposing same day grocery delivering.

Today, Instacart is fighting up against Amazon, which has set its strategy of online grocery shopping thanks to its same day delivery service.

What is innovative, is that Instacart is hiring "shoppers" in order to deal with the grocery picking and deliveries. Moreover, what is great is that it could be used in different stores, as the service is not linked to any retailers.

This is the reason why I would like to go beyond their actual service, and I believe it could give a lift to the small downtown retailers. I believe that in our nowadays competition local retailers have great opportunities if they can work together in order to create a comprehensive offer. And Instacart, by allowing one person to shop for another person, could be a great way to ease shopping in different small retails. It could for those retails:

  • Provide online and mobile exposition
  • Provide a better customer service
  • Recruit some customers that don't usually go to their shop.
What do you think about it?

Tuesday, August 25, 2015

Concentration des centrales d'achat en grande distribution: Vers plus de marketing?

Excellente tribune écrite par Frank Rosenthal pour le monde. L'année 2014 a profondément modifié le monde de la grande distribution en France. Le rapprochement des principaux acteurs en 4 super centrales d'achat, via souvent des alliances indépendants-intégrés a modifié la manière de négocié.

Elle a aussi certainement pérennisé la guerre des prix, octroyant à chacun des acteurs des conditions commerciales proches. Maintenant, il est temps de voir ce qui va se passer après.

Première question: est ce que ces alliances sont pérennes? Comment vont elles évoluées? les différentes allicances de différentes natures montrent bien que les évolutions risquent d'être importantes prochainement.

Deuxième question: comment créer de la valeur ajoutée au dejà du prix? Les rentabilités des distributeurs sont mises à mal, aussi il faut trouver de nouvelles manières de créer de la valeur. 2 axes:
  • Le coût outil: en améliorant les structures de coûts, logistiques (transport, entrepôt), magasin (frais de personnels, frais généraux, électricité...), coût centraux (marketing, communication, études, services au point de vente), commerciaux (tailles de l'assortiment, réduction de la promotion, réduction des surfaces, suppressions  de magasins.
  • La "value for money": développement de services (garanties, choix, accueil en magasin, qualité des produits frais, etc...)

Aujourd'hui, Frank Rosenthal penche plutôt pour la deuxième option, en pariant sur une augmentation de l'importance des stratégies marketing des enseignes. Je suis d'accord avec lui. Néanmoins le réel challenge pour les enseignes restera leur capacité à avoir les moyens de leurs ambitions. En effet, il va falloir faire "plus" avec "moins" de moyen, car je vois mal un distributeur sortir de la guerre des prix pour financer une politique marketing visant à améliorer la value for money et l'expérience client.

Et vous, qu'en pensez vous?

Wednesday, August 19, 2015

Retail Strategy: Whole Food Market Launches New Store Concept To Counter Attack Competition In The Organic Food Market

Whole Food market is in a very interesting position. It is considered as one of the fastest growing retailer in the US, thanks to its unique concept of organic, healthy and sustainable growth strategy. But lately, US competition has awaken with appetite for market share. This is the reason why Costco has recently published organic sales turning the company into the market leaderKroger’s natural and organic Simple Truth line has become a $1 billion-a-year brand.  And Whole Food Market growth is slower than the market's growth.

What is true though is that more and more competition is entering the segment, making the products more available, cheaper, and therefore reinforcing the penetration rate and the sales (which could be on the long run a good thing for Whole Food Market to get a new clientèle).

Therefore Whole Food Market needed to set a new strategy to fight against the new competition. That's the reason why Whole Food Market is launching a new store concept called 365. Smaller stores, in downtowns, to attract new customers and develop its store network. 

Now will it be enough? I believe it is interesting to see Whole Food Market focusing on downtown smaller units. In France, this is where the organic retailers are thriving. Also, I believe there is a lot to be done on the Internet, in order to adress to a clientèle that is accustomed to the E commerce. But maybe (and probably) Amazon is around the corner...

Tuesday, August 18, 2015

Retail Strategy: Sephora Is Expanding Its E commerce Activities

Sephora has recently launched a beauty box offer. The concept is simple: 
  • The customer fills in a questionnaire, about its preferences in terms of cosmetic products (colors, style, type of skin...)
  • The customer pay a monthly subscription
  • Each month it receives a box full of samples to try out
Now, the fact that Sephora proposes beauty boxes is not what is really outstanding in terms of retail strategy:
  • It is a leader of the beauty market
  • The beauty box is known to be a success for several years in a row
  • They have strong brand partnerships, and already proposes tons of samples to their customers.
What is interesting, is to see how Sephora leverages its Ecommerce presence. Indeed, not for every companies it is a good idea to launch an online stores. At least, it is difficult to find success as competition is very tough. Especially when Amazon is eager to develop the category online.

But the fact that one retailer creates a specific offer for its online strategy is something very interesting:
  • Rather than selling DVDs online, why not selling a streaming service?
  • Instead of selling the same clothings than in store, why not having a customization proposal?
  • Instead of selling some furnitures online, why not having a second hand market?
There is a lot of new business models, created by start up or not yet existing online, that need to be figured out, and having a creative and unique strategy online could be a great way to generate online traffic and extra sales.

Monday, August 17, 2015

Category Management: CVS Go On With Its Strategy With A New Store Concept

CVS now needs to move beyond with its concept.

 Hence, CVS has undertaken a clear category management strategy in order to stick with their core mission. And it is expressed in their new store concept.

“We are trying to help educate her right at the shelf so she can make some really good decisions for herself,” Foulkes said. One area in which the company has tried to raise the bar is in women’s wellness, where it has expanded offerings to provide a wider range of solutions to address the different stages of a woman’s life — not just prenatal but also post-natal; not just products to help manage menopause but also, perimenopause, Judy Sansone, SVP, front store business, told DSN.
“As we look to continue to strengthen our brand, we are looking to do some more innovative things in our core categories. The CVS/pharmacy brand is actually the No. 1 brand in our stores and as we think about it in our core categories first aid is a great example,” said Cia Tucci, VP, store brands.  “We just recently launched an expanded wound care line, which is an exclusive relationship with a supplier who specializes in hospital-grade wound care. … This is one way we are strengthening the core of our brand and we are really excited about this.”

CVS is working on its product range and service to provide a comprehensive shopping experience. You can see it in the example below:

Specific end of the aisle specific display to promote some categories

A reshape of the beauty sections, with lower shelves and a lot of marketing on the point of sales.

Clear labels to explain the different categories of products. Also an extensive work on categories, that go beyond medication, with food (gluten free, organic...)

I am convinced CVS made the right move, and we will soon enough the results of those initiatives.

Friday, August 14, 2015

Category Management Series: How To Lower Sales Under Promotions?

Promotions is not always the first item you study about in marketing and/or category management classes. For sure, we discuss about 4 Ps, but most of the time, while talking about promotions, professors talk about media planning, communication channel, rather than how to spend a promotional budget.

But nowadays, promotion is clearly part of the landscape of what is going on in retailing. The share of sales under promotion is about 20 to 30% (depending on categories), and is still growing. I invite you to read Toby Desforges' amazing article he wrote about the topic. He assesses the right diagnosis of what the state of promotion is at the moment, in the UK, but same thing could be said of the French market. Here are the key bullat points I must highlight:

  1. an annual promotions spend of close to US$310 Billion. That’s roughly US$44 spent for every person on the planet and nearly twice as much as is spent on cancer research every year in the EU. 
  2.  less than one third of promotions break even
  3. Today promotions are a habit. As shoppers we are used to stores and websites dripping with messages about the latest offers
  4. nearly 80% of the time is spent planning, executing and evaluating promotions
  5. Even a reasonably profitable brand (making say 25% EBIT) would have to sell 66% more in order to break-even on a 10% price discount (see page 219 of “The Shopper Marketing Revolution“). According toDeloitte’s, the average composite net margin of a global consumer goods business is 9.6%, so for most securing a break-even is probably economically impossible.
  6. More over, promotions are so key to suppliers that it is most of the time one of the key elements of the contracts they sign with retailers.

So why are we going on? Well, because as I have said, 30% of sales are made under promotions, and by avoiding promotions, you leave the space to competitors to get market shares, and also retail space (end of the aisle ones). It is also an easy action which impacts instantly sales and market shares.

Now don't get me wrong, promotions are a great way to attract new customers, to increase sales, to trigger impulse purchases, to show out innovative products. It needs though to be mastered carefully.

In fact, there are to me two main information retailers must know in order to get ready for lowering the promotion habit:

1 Identify clearly discount hunters and loyal customers
 The discount hunters will always get non profitable products, which they would get either in your store or somewhere else. Those could be abandonned for sure. Loyal customers must get their discount as a reward to their loyalty.

How to identify them? Loyalty programs provide enough data through the purchases habit to identify them & what they buy. Probably some brands and/or markets interest more those people than other. Cutting on those promotions could be a clear first step to have clear results.

2 Test the strategy
You may identify some stores where you could cut off promotions to identify what is going on. By having those sample stores, it would help to identify clearly what is at stake, how the permanent items sell. But more than simply by cutting down the promotions, it is also important to have clear idea on how to create added value to customers to compensate the lack of promotions: merchandizing, product range, cut down prices, new services...

Thursday, August 13, 2015

Twitter Feed To Follow For Retail Pros: The Shopper Marketer @ShoprMktg4users

I don't necessarily advertize a lot about the people I follow on the Internet (even though I don't hide it, as you may check the people I follow on LinkedIn or Twitter), but this time I wanted to share with you the fidings I made about The Shopper Marketer.

Retail is detail, and operational execution is key. There is so much that could be done on a point of sales to trigger the sales, to introduce new products, or propose new ways to shop, that I am always amazed. I don't exactly know who is behind the twitter account, but it feeds us with great pictures of in store merchandizing initiatives, from all over the world (or at least Europe). A kind of International Olivier Dauvers. I love to hang around, seeing the new pics he posts. Here are a very few pics I found interesting. 

Mercadonna and its lovely display of Make Up in Spain, with the creative shelve drawer under. 

Tuesday, August 11, 2015

Category Management: Dealing with Out of Stocks

Out of stocks is for sure a key issue for retailers. Indeed, studies show that products that are out of stocks tend not to be replaced by another product, which leads to lost sales.

In France, LSA has reported that in 2014, 1,4 billion € have been lost due to out of stocks items. This is a key issue in the near future, as sales growth targets will get harder to achieve in mature markets like France or the US.

Now here are some keys to think about while fighting against Out of stocks:
  • Limiting product range, in order to ease the operations and secure full access at all time
  • Having a better supply chain, allowing better leadtime to be more responsive while stock is shorten.
  • Working on shelf capacity: having enough capacity on shelves to respond to the demand, and not being out of stocks on your busiest day.
  • Having a better cooperation between retailers and suppliers on the ordering process: the out of stock could be caused either by the supplier (not delivering) or the retailer (not ordering enough). A better sharing of information could ease the suppliers' production & retailers order.
The threat behind out of stocks is obviously breakings which could be costly for retailers, but also cost of inventory, as most of the time it is the skus with lower rotations that tend ironicaly to be out of stock sooner. 

In the article ECR is alerting the retail actors about the issue. ECR is willing to work with all retailers and suppliers in order to find out a specific method which could be adopted by all to fight against this issue. This is actually to me a category management issue, as it is costing sales, and you could develop the best product range with the best store concept, if you are falling out of stock on key items, you would lose sales and customer satisfaction.
A white paper is expected to express the findings of ECR.

Monday, August 10, 2015

What's The State Of Drive Thru Retailing In France

One of the purpose of this blog is to share with you the innovation and what is going on in the retail business in France. France is one of the premium retail market with leaders like Carrefour, Auchan, Fnac and so on.

One of the main innovation that happened the past 10 years is obviously the drive thru hype. It represents now over 6% of the whole market, and the number of these stores has sprung up over the years. Hence, most of the market growth comes from those new types of retail.

French Newspaper LSA share with us the state of drive thru at the moment. The market starts to mature, and the number of opening per months has dicreased. French leader E. Leclerc will open only 50 drives this year after having opened 140 in 2014, to reach 600 drives. Actually, some locations start to close, some of them which have been opened at an early stage of the franzy. 

Today, the drive thru has a penetration rate of 25%. One of the interesting figure is that the drive thru is losing customers. 3,1 million customers abandonned the channel, 2 millions were recruited, and hence they lost 1,1 million customers. The growth then come from the loyalty of the users, and the effort to grow the average basket. 

Now the next phase is to open drive thru locations downtown, in order to reach a new clientele. The story is still unfolding. 

I believe that the French market of drive thru is very important, because I believe that this new system of retailing will soon boom in other markets, especially in Northern America. 

Thursday, August 06, 2015

Some Thoughts On Wanzl White Book On Retailing

"Re enchanting the store": This might be a cliché issue for retailers. It has been a while retail experts,customer relationship management consultants are working on a new vision of what brick & mortar commerce should be. But after almost a decade of the real digital revolution (to me, marked on the rise of the smartphones via the Iphone and social media via Facebook) commerce seems not to have evolve that much. The old Bernardo Trujillo's rule still apply, even though the emphasis on shopper experience has for sure changed the primary goals of retailers.

I have recently read the white book of Wanzl (in French) that discusses about this will to re enchant the store. It has been written by Bruno Daucé, a French expert I know very well on experiential marketing. What the White book points well, is how shopping experienced is impacted by our senses: vision, touch, hearing, smelling. And that is what is interesting in the book. Not to focus on technology for what the technology is, but what can deeply impact the well being of a shopping experience.

Tuesday, August 04, 2015

Permission Marketing: Thoughts On How Social Media Leverage Their Potential On Advertizing

I wrote not so long ago an article about how people were blocking ads on social media, and why it was a threat to the ecosystem. Don't get me wrong, I still believe the same way. But I am a high consumer in Youtube videos, I use to listen to shows and/or music online. And since several months, I am spammed by massive number of commercials. It is nearly impossible to have over 5 minutes of content without a commercial popping out.

Another issue, is that most of the time, it is continually the very same commercial that pops out. It has been for weeks Engie, the new merger between GDF & Suez, but also commerciales about clothing soaps, among others.

I point out two issues:
  • The number of ads proposed, which doom the user experience
  • The fact the threshold effect is reach so fast, as it is the very same commerciales showing on...
Social media and online advertizing was supposed to be the age of customized and rich content, with retargeting technique, and accurate message at the right time. None of that.

In a race to be considered as a key social media company, a lot of global corporations are spending massive amount of money to flood the web with their commercials. They use the same techniques online than for a TV campaign. And that worries me. 

  1. Worries me as a user, because I can't enjoy a good experience
  2. Worries me as a marketer, because I believe we are far from the permission marketing and one to one marketing as it should be done with social media
  3. Worries me for the social media eco system companies like Twitter, Facebook or Youtube needs in order to keep growing and developping their amazing products.
I believe social media have a part of responsabilities, as they are the ones who permits announcers to publish commercials. They therefore should take a good care of their user experiences, because if not, maybe people will turn to other social media.

Monday, August 03, 2015

Movie Review: 12 Angry Men

I recently watched a movie I watched already as a teenager: 12 Angry Men with Henri Fonda. The pitch: a jury of 12 men needs to make a decision on the guiltiness of a young kid who supposely killed his father.

What is interesting in this movie is obviously the way Henri Fonda is able to convince one after anothher every one of the jury based on one simple paradigm: there is a certain doubt about the fact the kid has not killed his father. Henri Fonda is not speaking much to make his points, he actually rather have the others speaking in order to demonstrate they are wrong.

It also shows clearly how paradigm shape the way people make their judgement, far more than actual facts, no matter what they say.

A very interesting movie to watch and rewatch to analyze the whole script and how the debate evolves.