Archive for Pithy Posts

From the MorningNewsBeat: Study Points To $1.75 Trillion In Retail Inefficiencies

There’s a new study out suggesting that “retailers worldwide lose a staggering $1.75 trillion annually due to the cost of overstocks, out-of-stocks and needless returns” – three components of what the study is a kind of “Ghost Economy” haunting retail.

“These inefficiencies, the study says, result in “monies left on the table and the loss of sales that otherwise would be available.” And it says that a retailer “addressing the inefficiencies and data disconnects throughout their organization could mean the equivalent of adding $117 Million in revenue for every $1 Billion in retail sales — or an additional $2.9 Billion in revenue for a $25 Billion retailer.”FYI … the annual inefficiencies break down to $642.6 billion in preventable returns, $634.1 billion in out-of-stocks, and $471.9 Billion each year in overstocks.

Kevin Coupe’s Comments:  The research was performed by retail analyst firm IHL Group, and commissioned by OrderDynamics.KC’s View:

As Senator Everett Dirksen is reputed to have said, “A billion here, a billion there, pretty soon, you’re talking real money.” Though these numbers might’ve staggered him.  Obviously, if retailers are looking at these kinds of inefficiencies, they need to address them.  My only caveat is that while they’re working to be more efficient, they need to spend as much money, time and energy trying to be more effective.  Because efficiency and effectiveness are not the same thing.

Source: MorningNewsBeat

Walgreens Drives Customer Engagement through Personalized Marketing | Loyalty360.org

Resource: Daily News

Walgreens Drives Customer Engagement through Personalized Marketing

By: Jim Tierney, Loyalty360   BACK TO RESULTS

Walgreens has a powerful loyalty program, Balance Rewards, which has a membership hovering around 130 million.Reaching that lofty status, from a membership perspective, didn’t happen over night.  Mindy Heintskill, Senior Director of Loyalty and Vendor Collaboration, Walgreens told attendees during her Tuesday session, “Driving Customer Engagement and Sales Growth through Personalized Marketing,” at the 8th annual Loyalty Expo presented by Loyalty360 – The Loyalty Marketers’ Association, that she started at the company around the time the Balance Rewards loyalty program launched in September 2012.“We’re getting great engagement in the loyalty program,” Heintskill said.

Why did Walgreens start Balance Rewards?  “We wanted to thank our customers and gain customer knowledge and customer behavioral data,” Heintskill said. “It’s important for us to focus on retaining best customers. Data is very important. Walgreens doesn’t make any assortment decisions without looking at customer data. We had the opportunity to be more personalized. We have a commitment to testing. What we’re doing now is very traditional. We have all kinds of tests going on through different forms and different channels. You can’t be customer-centric on your own.”

Source: Walgreens Drives Customer Engagement through Personalized Marketing | Loyalty360.org

 

MH-Comments.  The headline is somewhat buried in this article.  Ms. Heintskill is not only responsible for shopper loyalty, but also “vendor collaboration”.  Too many retailers have not transitioned their vendor partnerships from pure trade support to actually providing targeted content for their loyalty programs.  

This commitment by Walgreens is significant and will bode well for the continued success of their program.

Finding the “Sweet Spot” with Digital Coupons

At the recent ACP Conference in San Antonio, I moderated an expert panel discussion on the topic of the status of digital coupons.  For example, coupons that are printed at home or loaded from a website or shopper app directly to the shopper’s retail frequent shopper card or account are defined as such.  As an entity, they are indeed growing in use and evolving in terms of their sophistication and consumer appeal.

As in all things related to the space of retail consumer marketing, I have found the proverbial “Venn Diagramsweetspot” to be helpful in defining both the current status and desired direction of an initiative.

To that end, the adjacent diagram spells out one approach to understanding the elements of digital coupon proliferation and success.

 

1.  Stakeholder ROI:  Namely retailers and brands must see the monetized benefits of creating and distributing paperless coupons as an alternative to other collaborative consumer cost containment methods.  These methods include the FSI (weekly inserted coupon books in Sunday paper), checkout coupons, on pack coupons, etc.

2.  Consumer Ergonomics:  Before any new medium can grow, it must be simple for the consumer to engage.  We all agree that cutting paper coupons out of the newspaper is sub-optimal for the shopper.  The hurdle for any replacement medium, particularly if it is digital, is answering the question….”Can it be engaged by the shopper easier than alternatives?”.

3.  Content:  While satisfactory conditions could exist for the first two aforementioned factors, without meaningful, relevant offers the shopper will not engage.  There must be offers and content aplenty that represents the critical mass of shopper demand.

Satisfying all three elements is critical in finding the “sweet spot” of success, enabling digital coupons to continue to grow in both distribution and redemption.  During our panel discussion, our experts from many of the leading marketing services that promote digital “couponing” offered their views on how the industry is doing vis-a-vis these three elements.

In short, most believe we are at a “departure point” in terms of retailer, brand, and consumer engagement of this new medium.  It is also true that most believe that there is much work to be done before the “sweet spot” is reached.

In the weeks following, I will expand on each of the three elements depicted in the diagram and offer guidance (from the experts) in an effort to expedite the growth and shopper engagement of this new “digitized” way of conveying savings from the brand to the retailer and on to the shopper.

 

mark heckman

 

 

 

Three Key Messages from Savvy Shoppers

 

changesBy Travis Lewis…………

This year’s Inmar Forum brought a host of top speakers to Winston-Salem, including Andreas Weigend (formerly

the chief data scientist at Amazon), Peter Fader from the Wharton School, John Phillips with PepsiCo, Matt Gymer

of Novant Health and many, many others. But as insightful and informative as these and the other expert presenters

were, the most impactful sharing at the conference may have come from the eight “everyday folks” who

participated in a panel discussion exploring shopper attitudes toward promotions, the in-store experience and the

retailers and brands trying to engage with them.

The collective commentary from the panelists was candid, at times colorful and very, very telling. Here are some the key messages we heard from this diverse group of consumers:

Technology is critical to shoppers’ efforts, but traditional sources have not been abandoned.

The panel members, who ranged in age from 19 to 71, all spoke to their use of the internet to search for product information and availability, make price comparisons and find coupons and other savings opportunities. A multi-source search for savings was common practice among the Forum panelists who spoke of using retailer and manufacturer websites, apps and coupon blogs when looking for coupons and discount opportunities. However, while smartphones and apps were the preference of some consumers, newspapers, Sunday circulars and direct mail were all acknowledged as having real value and a definite place in the pre-trip planning process.

Engagement must be relevant, genuinely facilitate the shopping effort and deliver real value.

The collective message from this group of cost-conscious, self-described “savvy shoppers” was that outreach from marketers had to align with their demonstrated wants and needs. Random or “hard sell” techniques were not effective in moving them to trial or purchase. If they had an interest, the panelists would voluntarily engage with a retailer or brand – but, with the expectation that the “return engagement” would deliver information and offers of immediate, obvious value.

Social media also plays a part in the panelists’ shopping experience, as several in the group expressed a willingness to “like” a product or brand on Facebook in order to receive promotions. Twitter posts were also identified as influential, but more so when broadcast as informative enticements rather than direct advertisements.

Quality customer service trumps convenience in building shopper loyalty and driving repeat business.

Whatever their particular level of engagement, the panelists were consistent in their expectations of quality service – both in-store and online. Ready availability of product information, easily accessible and personally delivered offers, direct and prompt customer service, assurance of product quality and ease of return where all cited as reasons the panelists remained loyal to both retailers and brands.

The panelists also said that they would travel further to those retailers who provided superior customer service, especially when it came to retail pharmacy. Those panelists speaking to their experience in this area voiced that personal attention, close consultation with the pharmacist and the availability of information relative to medication and patient care were the primary decision drivers – having much greater influence than either cost or convenience.

While the panel did not comprise a scientific sampling, the comments from the group did represent, as our Chairman and CEO David Mounts said, “first-person verification” of previous research by Inmar Analytics showing increased use of technology by shoppers along the path to purchase as well as the desire among shoppers for more personal, relevant engagement from retailers (grocery stores, pharmacies and mass merchandisers) and brands (both food and non-food CPGs).

Hearing directly from end-users has always been a particularly powerful information-gathering experience. It’s a reminder that there is always something more to be learned from – and about – the customer.

Travis Lewis is President of Inmar Promotion Network. More information: www.inmar.com.

via Home.

Many Consumers Say Marketers’ Mobile Alerts Aren’t Useful or Relevant

Many Consumers Say Marketers’ Mobile Alerts Aren’t Useful or Relevant.

When technology outpaces content and strategy, alerts and other automated consumer messages can become more of a negative distraction, than a positive disruption.

Think before you hit “send” is an acxiom from which we can all benefit!

 

Chasing the Ghosts of Shoppers of the Past.

The deliberate, time rich shopper of the past, to whom we market our stores, no longer exists. Quite the contrary, In general shoppers are time starved, distracted, and in some cases just flat out annoyed when they enter our stores. This new shopper increasingly finds ways to short-circuit the store plan, finding their items and moving on as quickly as possible, despite the retailer’s best efforts to induce the shopper into a long and deliberate visit.

Shoppers are trying to tell us something!

To amplify my point, there exists quantitative research in abundance supporting the notion that bricks and mortar stores are rapidly alienating themselves from the evolving shopper. Among several notable KPI’s (Key Performance Indicators), such as Dollars per Square Foot, Same Store Sales and Customer Counts are trending in the wrong direction for all except the very few that have strategically embraced the new shopping paradigm.

Dr. Herb Sorensen1, who I consider the very best source of empirical knowledge on consumer shopping behavior, stated in one of his recent publications that the relatively short time the shopper spends in a retail store is mostly devoted to moving from point “A” to point “B” and not engaged with actual shopping at all. This is particularly true in larger foot print stores of 50,000 square feet and more. In fact, only twenty percent of the entire shopping trip involves the shopper facing the shelf and engaging in the purchasing process.

 

The implications of this information are profound. Retailers and their marketing partners spend annually $275 billion2 in the U.S. on advertising, marketing, and promotion initiatives. These monies generally are regarded as less than efficiently spent, due to a variety of reasons, but chief among them is that those funds are not reaching the shopper effectively at the shelf, when and where the majority of purchased decisions are made.

 

Retailers and brands alike now have access to new research techniques and resulting data that can help them re-think how they lay out their stores and categories. Ultimately, each retailer should have a Visual Strategy for its bricks and mortar stores. Much the same way a web designer uses Google Analytics to build and fine tune an efficient website, physical stores must be approached in the same way.

 

Training and Retaining Associates is Key for “Bricks and Mortar” Retailers

As consumers become increasingly more comfortable with ordering everything from soup to nuts on-line, the onus on bricks and mortar retailers to create a “value-added” in-store environment correspondingly increases.

cashierAs intuitive as that sounds, many retailers still regard training and employee retention as a luxury they cannot afford, as labor costs remain the “easiest” target for cost cutting.   Those that continue to view labor first and foremost as an expense, the future is bleak. Converesly, retailers who have structure and priority for training and retaining associates,  your path is paved with satisfied, loyal shoppers.

It’s all about metrics. If retailers make a point to measure training and labor in a ROI model, instead of purely looking at it as an expense, they have at least put themselves in position to accurately track the fruits of their training efforts.

“Sales per labor hour invested”, or “sales per labor dollars invested” are two measurements that can begin the process of considering store associates as “assets”, rather than expense items. Further, most HR departments can measure, at least directionally, the cost of employee turnover. Without this number in the equation, retailers are just fooling themselves when they believe that cuts to benefits, hours, and full time status save expense without have any consequence on both the top and bottom line.

In my view, the HR and Finance departments should team to own this process. Together they have the tools and the structure to affect training, compensate performance, and provide the financial impact to the P&L for training and retaining a productive team. Done correctly with sustainable commitment to associate training, bricks and mortar retailers will not only sell more soup and more nuts, they will attract the best people in the market to help them do it.

Bi-lo and Winn-Dixie Replace Reid’s, Harvey’s and Sweetbay

From Morning News Beat….10-9-13

 

What’s in a name?  We will soon find out when Bi-lo Holdings changes the banner names of recently acquired chains Harvey’s, Reid’s, and Sweetbay.  Conventional wisdom tells us that managing many banners with various names and named programs is menacing, if not expensive.  

With overlapping stores in the many of the same markets, this decision is the correct one.  Now it is up to Bi-lo Holdings to use these conversions as an “excuse”  to create some excitement around these events.  Further and most importantly, it is also important for the Winn-Dixie and Bi-lo brands to begin to better define themselves vis-a-vis their formidable competition.  We wait for that to happen.

mh

 

Bi-Lo Holdings announced yesterday that when it closes on its acquisition of Sweetbay, Reids and Harveys stores from Delhaize, it intends to convert the Sweetbay stores to the Winn-Dixie banner and the Reids stores to the Bi-Lo name.The company said that it intends to keep the Harveys banner, though some of the stores using that banner could be changed to the Winn-Dixie or Bi-Lo name.According to the company, “The transitioning of Sweetbay and Reids stores to Winn-Dixie and BI-LO banners respectively is to reduce overlapping footprints. There is little overlap between BI-LO, Winn-Dixie and Harveys stores. Through this transaction, we will be able to provide our great products at a great value to a broader base of customers.”The transaction is expected to close in the first quarter of 2014. Bi-Lo said in May that it has a deal to acquire the three chains from Delhaize for $265 million.The Tampa Bay Times writes that “Sweetbay has had a prominent spot in the marketplace since 2004, when Tampas Kash n Karry changed its name to Sweetbay as part of plans to remodel stores, expand product selection and create a customer-friendly culture. The name comes from a type of magnolia tree.”But caught between customer service-oriented Publix and value-driven Walmart, Sweetbay still struggled to find its niche and gradually lost market share. In January, Sweetbay said it was closing 33 underperforming stores in Florida, including 22 in the Tampa Bay area.”

via MorningNewsBeat.

Building Loyalty at Kroger …with Digital Overlays

I love the “digital overlay” concept.  It makes so much sense to me to drive digital coupon adaption by linking these new savings options with more traditional promotions.  It is not a surprise to me that Kroger is leading the way, employing brands and promotions with these digital overlays.  Details below;

“ConAgra has also effectively employed programs with digital overlays. For example, a January 2013 meal-solutions program sent an email blast to Kroger’s loyalty card shoppers with load-to-card coupons and incorporated a customized landing page at ReadySetEat.com. “Growing business with Kroger’s loyal shoppers is our priority too,” says Yurovski. “The programs that focus on loyal Kroger shoppers and our brand shoppers return higher ROI than those that target the competition’s [shoppers].”In each of these efforts, Kroger relied on its email database from global market research firm dunnhumby the retailer owns half of dunnhumby USA to identify and reward Kroger’s most loyal shoppers. The company’s ongoing partnership with Kroger has long set the industry standard for effective targeted marketing. “Over the past few years, dunnhumby has raised the bar with increased emphasis on post-program analysis, including following the shopper’s purchase behavior beyond a single mailer and introducing targeted digital communications,” says Catapult’s Cross.”

via Retail Intimacy, Part 3: Building Loyalty at Kroger | Path to Purchase Institute, the leaders in shopper marketing.

Bloomberg Reports that Safeway is in Protection Mode from Hostile Takeover

MorningNewsBeat.

MorningNewsBeat-Haggen Closes Stores

MorningNewsBeat.

Haggen finds the sledding tough in the Northwest.  Rests their revival hopes on a new format, “Northwest Fresh”.  Nearly every market in the U.S. is now ultra-competitive.  The onus on traditional supermarkets and especially independents is to re-invent themselves with service, digital communications, and top quality perishables.

MorningNewsBeat

MorningNewsBeat.

 

The season for mergers and acquisitions among traditional supermarkets continue.

The Wall Street Journal reports that A&P is for sale and Kroger is lurking.  While Ahold and others may also be in the hunt, if I were an A&P store associate, I would be rooting for Kroger to win the deal.  Kroger could bring some much needed stability, pricing competitiveness, and marketing programs to the languishing retailer.

MorningNewsBeat–Harris Teeter, Stockholders are “Teetering” on Dissatisfaction with Sale to Kroger

MorningNewsBeat.

Shareholders of Harris Teeter thought that  a 7x multiple was not a sufficient price for Harris Teeter.  Good luck proving that in court!

 

mh

 

MorningNewsBeat

MorningNewsBeat.

Mobile Email Optimization is a growing area of investment for on-line retailers, but should also be for bricks n’ mortar retailers….it is currently the most effective way to communicate targeted, relevant messaging….

Store Layout….Is There Gold to be Mined?

Colleague and shopping pundit, Herb Sorensen (www.shopperscientist.com), will tell you without hesitation that there is much to be gained by enhancing store layouts, particularly those that impede fluid shopper mobility within the store.   As just one example, we known from past studies on the topic that the more aisles and barriers a store has, the slower the pace of shopper spending.  This is particularly important when coupled with the knowledge that shoppers do not have an infinite amount of time to navigate through a store.

heatmap

Heat Map Depicting “Dense and Sparse” Shopping in Store.

In fact, after a few minutes into the trip, shoppers consistently speed up their pace, and accordingly decrease the rate in which they buy, speeding by aisles and categories that appear to be irrelevant to the shopper’s immediate needs or more commonly just represent too much time and energy to explore.

Most retailers are oblivious to these shopping tendencies.  In fact they design and stock their stores with the mindset that more aisles and products mean more sales opportunities.  It is just a matter of manipulating the shopper into spending more time in the store to take advantage of all of these great new products and departments.  Nothing is further from the truth.

Retailers who have taken the time to track their shoppers through the store…whether it be by personal observation or by technical means, are often surprised by many of the discoveries, including the following:

1.  How deep into the shopping trip, aka how long it takes for the shopper to select their first item for purchase from the time they enter the store.

2.  The miniscule percentage of time shoppers actually spend “shopping” as opposed to the time they spend traversing the store getting from one “shopping event” to the next.

3.  How little of the physical store shoppers actually traverse on any given shopping trip.

4.  How few aisles shoppers actually fully navigate as opposed to “diving into an aisle” quickly for a planned purchase and then revert quickly back to the perimeter of the store.

5.  How shoppers migrate naturally to open space, where they can clearly view the entire store, and conversely how consistently shoppers avoid tight, confining alcoves and aisles

Each of the aforementioned shopping tendencies represent opportunities for the retailer to embrace.  By understanding these consumer practices, retailers can make both subtle and overt changes to their layout and merchandising plan, resulting in a more efficient shopping experience for the consumer and larger baskets sizes for the retailer.