Jun 18, 2014 | Collaboration, Customers, retail, Small business
Strategyaudit.com.au
Chain stores dominate our grocery shopping environment, they have developed all the advantages of scale, and use them to the advantage of their shareholders, by delivering returns, and to customers by delivering low prices.
The model works, in Australia 75% of the grocery shopping dollar goes to one of two retailers, and small retailers have been decimated.
However, small retailers are making a comeback, the ones left are good, good enough to deliver value to their customers in different ways to the chains, and they are making a good bob.
They compete with a variety of strategies, all of which have elements of the following 10 rules.
- Make the store look warm, friendly, inviting, and, importantly, current. The last Valentines day, a client put in huge volumes of roses on which he put some very cheap prices compared to the highway robbery employed elsewhere, but he also had a promotion of Chocolates and a voucher for collaborative promotion with the grog shop two doors down, on sale. He did sell a lot of roses, a pile of chocolate, and got a slice from the bubbles the grog shop sold.
- Collaborative retailing is a really effective way of building sales and relationship s with customers. The example above worked really well, as have others that group retailers of differing women’s apparel, dresses, shoes, hairdressing services, et al together.
- Experiment, with everything under your control. Store layout, range, price, stock weight and position, proximity of complementary products, promotional activity, it is a long list limited only by imagination and energy. However, experimenting is not the only game, you need to track results, now easy via the electronic tills, and if nothing else, Excel pivot tables. Understand what works, and improve it for next time, eliminating the things that prove not to work. It is a simple formula, challenging to implement consistently, but in principal, simple. Learn as you go, and as the you experiment more, you will also find your depth of tacit knowledge also increases. A small business can put in place an experiment, have the outcomes and a resulting tactical outlook while their bigger competitors are still trying to get a meeting together to decide if it may be a good idea.
- Use technology widely, not just in the tracking of sales, but in the management of your operations, and most importantly, the engagement of your consumers. Make your website the co-ordination centre of your marketing efforts. Mobile, email, social media platforms, blog posts, all potentially have a place, but mostly you cannot do them all, so make informed choices. However, you need to recognise that digital is not free, there are both operating and opportunity costs attached, and for most SME’s, a capability gap. Outsource all you can, which is getting easier by the day, and importantly, track the results of everything you are doing on line
- Make sure you have a website that does you justice. A mate sent this to me this link to Victor Churchill, a butcher in Sydney’s eastern suburbs, and now I just want to go there.
- Personalise, personalise, personalise. The chain retailers have “mass market” business model, they cannot easily personalise their offer to the customer base. They may have a technology edge because they have the resources, but how often does the casual filling the shelves greet a customer by name? Enquire after their kids, and ask how the fruit basket you supplied last week for the centre-piece of your dinner party work out?.
- Specialise in what you do best, deliver “depth” to consumers where the mass retailers can only deliver “breadth” to a mass market.
- Be the expert in your category. If you are a produce retailer, know where the best strawberries come from, and when they will be available , similarly, a fashion retailer needs to be current with the trendsetters, to know what is coming, what will accessorise easily, and how the fashion can be tailored to the market they are serving. Most people want to deal with, and seek the affirmation of experts, be the expert, and they will keep on coming back.
- Apply the disciplines of Category Management to your inventory and space management. In its simplest form, Category Management is a mindset that seeks to allocate finite and valuable shelf space on the basis of maximising the customer experience, while delivering optimised profitability and long term commercial sustainability. This can get as complicated as you like, but for an SME, building an excel database leveraging the capability of pivot tables, tools virtually every business has sitting on their PC already, is sufficient to get started.
- Watch the cash. This one always gets a run. Retailers greatest cost, and biggest risk is usually inventory, and inventory is a raging consumer of cash. On the other hand, the oldest adage in retailing is “stock sells stock”, so there is a tightrope to be walked. Perhaps the most valuable, and in SME’s underused, performance measure in retailing is stock turn. Use it aggressively to fine tune your range, and inventory.
None of these “rules” are of great value separately, but together, they offer a potent competitive tool set for small retailers.
Jun 16, 2014 | Branding, Marketing, Sales
A journey evolves
One of the most memorable, and biggest mistakes I made as a young product manager was to redesign a pack.
The product was an old fashioned, relatively low value product on supermarket shelves, it had a small niche to itself, and the sales ticked over, pretty much unaffected by promotional activity of any sort.
The pack was truly horrible.
Over the years , as suppliers of the display box had come and gone, the original photo had morphed into a messy amalgam of unrecognisable shape and conflicting colour to the point that it was not easy to recognise what the product inside might be, and if you did, it seemed unlikely to me that any reasonable consumer would consider buying it.
So, I did the obvious thing, at least it seemed obvious.
I contracted a designer, who did a great job of redesigning the pack, new photos, layout, recipe ideas, the whole five yards, so it looked clean, fresh, appetising, and with a bit of a flourish in womens magazines (this was the early 80’s) we relaunched the product.
The unexpected, unthinkable, happened.
Sales stopped, literally, dead in the water, nothing, nada, zilch.
Panic stations were manned, as while the volumes and profile of the product were low, the gross margins were outrageously high, and I had just shot the goose.
Not having any budget for research, I did the next best thing, which turned out to be the best thing, another lesson I have kept and reused, and reused.
I lurked around in supermarket isles for a while trying to talk to consumers of the product, and begged the field staff to do the same, to try to understand the reason for the abject failure of the new design.
It was rapidly clear that while consumers had no love for the old pack, they also thought it was rubbish, but they recognised it, bought it by habit, and when the design was so radically changed, they simply did not recognise the new pack as the same product, assumed their regular purchase, that had done the job for them well despite the packaging, was out of stock and moved on.
We changed the pack back, with a couple of subtle improvements and sales recovered immediately.
The point here is that I am sometimes faced with a client wanting to completely redesign their websites, they get sick of the old one, it is dated, unresponsive, not mobile friendly, and so on, and it seems like a good idea, and it almost always is.
However, I relate my pack story, and seek to persuade that many incremental steps that create an evolution of design that takes people with you is better than a big jump that risks losing some of the rusted on followers, those to whom you probably owe the bulk of your profits.
Now, you do not have to lurk in supermarket isles to assess the impact, you can conduct a series of A/B tests, to maximise the impact of the changes as the evolution journey winds along, a journey that should not end, just seek to deliver a superior experience.
BTW, the old product is still on the shelf, and having just googled it, the design seems fairly close to my memory of the brand, spanking new design of 30 years ago that so nearly truncated my marketing career.
Jun 13, 2014 | Marketing
the only cat photo on this bllog
Walk under any ladders yet?
It seemed appropriate to have a think about some of the silly superstitions that infest the world of marketing, and proffer a view about the reality.
- “The internet will never be a good marketing tool”. Hello, the jury came back a decade ago.
- “Twitter is a waste of time.” Wrong. Twitter is now a powerful tool for search, connection, and marketing. The # is changing the face of marketing in new ways every day. Some time ago presenting the Andrew Olle lecture, the editor of the Guardian offered a whole bundle of uses for Twitter, which I massaged into this post, 15 uses of Twitter.
- “Google is just another search engine“. Google is way, way more than just a search engine, it is a door into a host of tools, platforms and services.
- “TV, radio and magazine advertising is dead, supplanted by the web.” Rubbish. Crap advertising never worked anyway, now we just have a viable alternative. Good old fashioned advertising still can work, but is a far more demanding mistress than ever before.
- “Social media is free“. Well, it is if you do not count the time and effort it consumes to develop, organise and post content, then follow up to make the effort worthwhile. It is a two way medium, not one way as media used to be.
- “Banner ads on the web work“. No, it seems not, despite the touting that goes on. Economic logic prevails, when supply is infinite, as virtually it is with space on the web the price should be very low, as will the value. Detailed and focussed targeting can deliver some value, and in the right circumstances can be a useful part of a media mix, but just using banner ads……..why?
- “You need help to be on line if you are an SME“. Not any more, there are free tools to build very serviceable websites, so you are just up for the domain and hosting, and anyone with a bit of curiosity , time and inclination can do it. Weebly, Squarespace are two of the best, my preference is Weebly because of the plug ins, and there are people around who can help you for remarkably low cost. Getting the summer intern to do it for you is a mistake however, do it for yourself, and learn as you go, or use Imagehaven or someone who can teach you as you go.
- “As an SME owner you need to do everything yourself” . Only if you choose to. As with the point above, there are great services around, world class expertise available to you often at modest cost offering outstanding value so long a you are very clear about what you need and actively project manage the services. Mostly the outsourced experts are not mind readers, and assuming they are is a mistake. From design to IT selection and implementation, copywriting, marketing and financial management, engineering, and operational management, the expertise is a mouse-click away.
- “Collaboration is too hard for an SME“. Rubbish again. The collaborative economy is booming, as Jerry Owyang keeps on documenting, and is even easier for SME;s to leverage. One of my mates runs a personal training business, and has developed relationships with a nutritionist, yoga instructor and womens apparel retailer, all of which support and reinforce each other to their mutual benefit, and they agree on the joint marketing programs over coffee.
What further examples do you have?
Jun 11, 2014 | Collaboration, Customers, Social Media
There are many contenders for the most effective social media too around, and just as many promoters.
“Email marketing” and “Content marketing” usually occupy the first and second places, but to my mind are one and the same. Email does not work without content, and vice versa.
Further down the list you get bombarded with the names of platforms, facebook, Linkedin, Pinterest, et al, then tools and services like SEO, landing page optimisation, affiliate selling, yada, yada, yada.
The one tool we know for sure that maximises the chances of success is a real conversation.
Remember them?
Two people sit down, exchange views and ideas, interact as humans have throughout our history, and determine if there is mutual value in doing business.
Personal communication can be confronting, is extremely resource hungry, hard to schedule, and is still a punt, but perhaps those real hurdles are why it still works best.
The management challenge is to deploy the limited and expensive resources for a return from this most effective of social media investments, your obvious commitment to the other person.
Jun 9, 2014 | Branding, Marketing, Sales
Strategyaudit.com.au
We all know the world of sales has changed.
Consumers now have virtually all the information they need to make a purchase choice without any assistance from a “sales assistant”.
Before a significant purchase, consumers now review all sorts of web based resources that can deliver exactly the information important to them in making the choice.
It is exactly the same in B2B, sales people really only come in most of the time when the purchaser is almost ready to place an order and has all the information they need, except one bit:
The performance of the vendor and their product, by reputation, by past actions, and by undertakings about future performance
In the old days, choices were made on relative value, The purchaser had limited information, and really only chose between a few options.
Now they have enormous choice, and access to all the information that could possibly be relevant should they choose to look for it, so they are in a position to make a choice on the absolute value of the alternatives to them.
Changes the dynamics of brand building just a bit, and the old dilemma of functional priority is well and truly determined in favor of marketing, who now runs the sales show.
No longer is it about weight of distribution, advertising, number of sales people on the road, and relative value, it is about the absolute value delivered.
Now to be successful you need to be thinking about the balance between your sales and marketing investments, and making the most of marketing automation. Software and the cloud have changed the game, weather you are just using excel, the free Mailchimp and others, or going the whole mile with Marketo, Hubspot, or other enterprise solution marketing automation packages.
PS. September 2014. One of the really well known marketing writers David Meerman Scott, has written a new book called “The new rules of selling” and released a Slideshare of the same name on this topic. The book is worth reading, the slideshare is long, and summarises the ideas with great generosity.
