The last—and for retailers, most important—four months of the year are upon us. As the economy struggles to gain some forward momentum, the retail world is working hard to make the most of the holiday season. While we can be fairly certain that this year’s sales will exceed last year’s, that’s not much of a goal.
According to SymphonyIRI Group in its latest Times & Trends, here are some things keeping CEOs awake nights:
- Cross-channel shopping is at an all-time high with three-fourths of shoppers visiting five or more channels for CPG needs
- Trips overall are down, and basket size has dropped in grocery and mass
- Drug and dollar basket size is up
- Much of this is the result of deep-discounting and the lack of a strong differentiator
- Special-purpose trips are down overall
- People are shopping less frequently, and buying less for each trip
- Convenience and small fill-in trips are driving share gains
Kill Your Television: Local Media Rules
A few years ago at a conference, I heard a presentation on the “Three Ages of TV.” Going all the way back to 1947, the speaker listed the evolution of television viewing—how consumers had changed and what advertisers did in response.
- 1947-1979: The age of no remote, or the “Interrupt & Irritate” age. Ads could be more obnoxious because most folks wouldn’t get off the couch to change the channel or turn it down.
- 1980-2004: The remote appears and the game changes significantly. Now viewers can change the channel or mute the sound. Advertisers respond by using an “Entice & Entertain” strategy; in response, ads become more humorous.
- 2005-2010: The age of TiVo, also known as the “Skip & Omit” age. Advertiser response is to embed ads (product placement) or tie them into the show. Think Ford on “Fringe,” or nostalgic ads on “Mad Men.”
Food Safety Training: Well Done or Medium Rare?
The current issue of Supermarket News has a great article entitled “Teachable Moments,” which highlights the efforts of some retailers (notably Hy-Vee) to educate their shoppers about food safety. There’s a disturbing sidebar article, though, that quotes an unnamed meat/seafood director:
“I guess we take it for granted our customers know how to take care of the food they buy.”
My first thought was how ignorant that statement was; this person apparently felt that teaching shoppers about food safety wasn’t the retailer’s responsibility. I also find it interesting that the person quoted asked not to be named, which tells me he knew he was at least a little out of line making the statement. I’d like to pretend that folks like this are in the minority, but I suspect this is the prevailing attitude in food retail, at least based on the evidentiary lack of existing programs.
There’s a story that pops up now and then in business about hockey legend Wayne Gretzky. When asked about his skills in the rink, he said it’s simply a matter of being where the puck is going. There is a similar analogy in hunting: if you want to hit the duck, aim where it’s going, not where it is. In hunting this is known as “leading the duck.”
Both of these are apt in business, especially so with today’s rapidly advancing technology. But there is an art in being where the technology is headed, and making the right bets on the right tech. A few years ago biometrics was a big idea; a few retailers tried it and shoppers stayed away in droves. It seemed no one wanted to give retailers fingerprint info, no matter how much time it saved. The trick with technology is finding those things that provide real value for the shopper, beyond just the novelty or “gee-whiz” factor.
The Year of the (SKU) Rat
There’s something new scuttling around the halls of major food, drug and mass retailers this year. It began rearing its ugly head last year when the economy was at its worst, and has now infested nearly every retailer to varying levels.
I’m talking about SKU rationalization, shortened to SKU Rat by industry folks (mostly manufacturers). Also known, in a more positive spin, as the Strategic Assortment Initiative, the aim is to increase sales and reduce costs by adjusting the mix in our currently over-SKU’d stores. According to a recent white paper from Heinz and Kantar Retail, this amounts to a $25 billion opportunity through reductions in inventory carrying costs and in-store operations, as well as reduced out of stocks.
Read more…
Go Mobile or Go Home
Over the past few months in this space I’ve made a number of observations about the coming mobile market, and the fact that retailers have been a little slow to respond. Now the National Retail Federation has released its 176-page “Mobile Blueprint,” a guide to help retailers in planning and implementing mobile applications.
I think it’s great that the NRF has gotten on board here, and I applaud the work they’ve done, although I’m afraid that much like the recent Health Care Reform legislation, no one is actually going to read a 176-page document, no matter how good the information might be. There is an Executive Summary available that’s only four pages in length and will at least give the reader some guidance in the development process.
Advertising Age just released the results of the current “up-front” television advertising market and declared a resurgence in TV advertising. For those not acquainted with the world of television, the up-front market is where the networks offer advertising time for the coming season. The success of up-front sales apparently has some folks believing that TV is coming back.
Innovation is one of those words tossed about in business so often, and in so many varied contexts, that it has lost its meaning. Merriam-Webster defines innovation in very simple terms: the introduction of something new. But what is new, really?
One of the more famous quotes around innovation comes—allegedly—from Henry Ford, about his idea for building the Model T, a car that the average person could afford. “If I’d asked people what they wanted, they would’ve asked for a faster horse.” I don’t know if that’s really what he said, but I certainly hope it is; it’s a great quote, and it’s not from Steve Jobs.
Mobile Is Here…but It’s Moving
Yesterday Steve Jobs once again ruled the news with the “official” introduction of the new iPhone, dubbed v.4. The result is the same as always when Mr. Jobs takes the stage: the Apple faithful readjust their smirks for being part of the cult, while the non-Apple-toting population pretends not to care, or openly gnashes their teeth in frustration.
The growth of private label was one of those stories that we just couldn’t get away from last year, with numerous examples of shoppers dropping their standard national brands and switching to store brands to save money. As things have picked up economically, predictions that private label would retreat to its corner began; as early as February this year there were reports that private label was slowing down, and name brands were on the verge of roaring back to dominance.
