Practical Progress: converting Eco Intent vs Action

If you view my upcoming videos or have had me as Instructor in Applied Marketing Research, you will know I warn ppl against putting too much faith in respondent survey data on topics that I refer to as Survey Sirens. One of those is ‘eco-intent’.

First- TRIVIA TEST! In what year did  a nationwide USA CPG brand first launch a national eco-responsible line extension? Was it2005? 1999? 1995?

Would you believe… 1990? John Cook, Mitch Gumma, John DePaolis, Marie Blomquist, Mike Ziemke- and  I- were on Kimberly-Clark’s brand team, with tons of logistics help to coordinate 5 manufacturing facilities to source, qualify, test, contract, QA verify and –  eventually – launch Hi-DriTM Recycled Paper Towels. It was an awesome adventure, and an awesome succcess. Consumers actually paid slightly MORE PER ROLL to do the right thing.

Until 1996.

Oh yes, the recession. When it hit, the same consumers would still claim to want to do the right thing- but they looked after the household first- and pennies were pennies! Hi-Dri Recycled retreated as mightily as it began.

The Moral: Don’t always believe Consumer Intent scores about eco-solutions. Intending is not the same as Acting. Intent does not always lead to Acting. Survey respondents may answer optimistically; it validates a more pleasing self-image. And the time gaps & psychological gaps between filling out an at-home survey, and when they see the options in store at shelf – can be vast! Lots of time for cognitive dissonance- ie to escape your own self-commitment!

So it’s delightful to see savvy USA Retailers tighten that time gap & psychologcal leeway. Ahold’s Giant and Stop & Shop banners have installed powerful ‘eco-ranking’ Point-Of-Sale signage- No, sorry, even better, not ‘point of sale’, but ‘place of decision’- ie at the store shelf! Putting those eco-flags in your face, leaves you less room to wiggle out of your own commitment.

 http://www.supermarketnews.com/sustainability/turning-ethical-shoppers-buyers

Ahold- you have earned my endless respect- and let me time travel a bit back to 1990 Wisconsin, to boot! Thanks!

Steven

Online Vs Store Shopping by Generation: Assume Less!

Cool article reveals some shifts in Boomers through their offspring Generation Y. While Boomers are shopping online more, Gen Y members are increasingly shopping multiple physical stores in parts of the USA.

It’s wise not to assume too much about shoppers by age: eg avoid the trap of “old people will do/want this, and younger ppl will do/want this”; there are far better predictors of most shopper behaviours, than age.

https://www.cnbc.com/2017/09/21/retailers-dont-ditch-the-store-millennials-love-them-survey-finds.html

SL

 

The Strategy Behind Acquisitions

Acquisitions – why do they happen?  As an Industry guy involved in many takeovers (taking over, and taken over), I’ve seen many strategic reasons for an acquisition. Usually, there’s more than 1 reason in play. I’ve created a crude table (below) listing 17  key reasons.

This is another of those blog posts where I’d love it if industry colleagues would chip in some insights. Students eagerly await your wisdom!

Not shown here: a column describing ‘What Research Can Do’ in each scenario, so Acquisition decisions are made (and initial post-acquisition business moves are made) with greater wisdom. To see THAT column, you must be enrolled as a student at Seneca college – or be an industry partner to the college.

Membership – and paying it forward- has its privileges!

Steven

why acquire a company?

 

How many #trends can you spot?

A fine CSA article calls your attention to several trend-worthy #retail concepts.

http://www.chainstoreage.com/article/now-trending-eight-clicks-bricks-retailers-keep-eye

Feel free to make your own notes on which particular ‘macro’ trends are driving or supporting each of these retail concepts eg CSR (charitable or community involvement), transparency, authentication, customized, artisan or locally crafted, VIP treatment, etc.

If that challenge seems like too much work (or if you’re on a NoThinkingRequired sabbatical), then maybe this article will be less taxing; just two of the above listed trends are driving this new Roots foray:

http://business.financialpost.com/news/retail-marketing/cabin-chic-new-roots-concept-will-customize-your-jacket-and-monogram-your-purse

Steven

Customized Gyms a ‘fitting’ #trend for Millennials

cool L.A. Times article (link below); Millennials are resisting ‘mass targeted’ gyms & fitness activities. As per Chris Anderson’s astute and visionary The Long Tail, more customized fitness ‘experiences’ are imo going to be the fitness trend, beyond Millennials, too!

http://www.latimes.com/business/la-fi-boutique-fitness-20170823-story.html

Enjoy!

Steven

 

Knockoff vs Homage

When is a copycat product ‘inspired’ by your proprietary design and trademarks a threat ? When is it a…. partnership opportunity????

Usually the news that your brand is being copied signals the entry of another ‘low-life copycat ripoff’.

Adidas’ actions show there’s room for distinction between types of copycats. imo that makes sense; low-cost options undercut the consumer & constitute a BIG VOLUME threat that must be met with hard, fast litigation.

But an upscale ‘homage’ to your brand ? Not much of a volume threat certainly, and, in fact, kind of a respectful nod. Enjoy this soulful story.

SL

Why is Adidas partnering with a knockoff brand?

Oslo & Steady wins the race

3 new sources of insight on #Retail trends fyi!

10 new ideas or approaches to inspire readers to try new methods, service a different kind of customer, give a new kind of retail experience

http://www.chainstoreage.com/article/americas-top-10-retail-center-experiences

An upcoming ‘call for ideas’ summit on etail-retail- virtual shopping, sponsored by WalM…

http://www.massmarketretailers.com/store-no-8-thrive-global-launch-innov8-v-commerce/

Finally, an example of how to not REACT to trends, but get ahead of them by a Canadian-based retailer that’s imo a benchmark to admire.

http://www.csnews.com/product-categories/fuels/couche-tard-ceo-talks-electric-cars-fuels-future?cc=3

C-stores by definition are positioned based on “convenience” – consider how treacherous that is!  Examples:

  • when Grocery stores opened late, they lost an advantage;
  • when weed became legally available to millions of Canadian  “glaucoma sufferers” (cough cough…) C-stores Dorito & RollingPaper sales took a ‘hit’;
  • when tobacco smoking incidence fell, C-store visits fell

Again & again, C-stores adapted: seizing new opportunities to sell throwaway cellphones & phone cards, lottery tickets, decent coffee, fresh meals, last-minute gifts & cards, and more. Couche-tard is investing to test other ways to drive shoppers to C-stores in Norway, presumably a lead market for e-vehicles.

Consider: many C-stores have traditionally been linked to (located in conjunction with) gassing up a vehicle. If consumers instead charge up their e-vehicle at home at night, what’s to become of C-stores?

Couche-tard is too smart to wait & see; the savvy retailer is getting ahead by trying & measuring different approaches. As a marketer, I applaud this! As an R&D guy, I’ve mixed feelings about a country test market. The scale is terrific, however everything is oh-so-readable… to the competition. My bet is that this move hasn’t escaped the attention of Couch-tard’s global rival, 7-Eleven. Quite possible that right now, in Irving TX and Chiyoda, Japan, note-takers are busily tuning into “Lillehammer’ on Netflix- and managers are booking tickets for a prolonged stay in Norway. They simply can’t ‘affiord’ not to know what Couche-tard is trying.

SL

Ways to Grow

You can’t beat H&M or Zara at calling the trends right & getting right items to market FAST! That’s ‘Fast Fashion’: on-trend ‘durable enough’ apparel, made with ‘adequate’ construction quality. You wear it a few months, then it’s out of style AND worn out. Defacto Disposable clothing.  A trend that’s taking a toll on other fashion retailers:

https://www.thestar.com/business/2017/07/11/abercrombies-failed-deal-sign-of-retail-industry-woes.html

What’s a fashion retailer to do to compete? Well, for one thing, not everyone wants Fast Fashion. And not everyone wants ‘adequate’ durability. There are segments of consumers who are less interested in being ‘leading edge’. There are others who prefer SOME items to be ‘trending’, but others to be more lasting. eg buy a few casual seasonal clothing items in latest styles, textures & colours- but buy WorkWear that will look better, longer.

Some of you will read about A&F and wonder if they can cut staffing, cut promotion spending, possibly reduce their footprint, etc. Cost cutting is an option- one that keeps the ‘chainsaw’ firms & ‘transition Exec’s quite flush.

imo cost cutting is rarely adequate over the long term. Growth is.

the firm I’m with  http://www.spitfireglobal.com  prefers growth over cutting & hacking. Retail brands might do worse than consider their situation, resources & risk tolerance (‘fit factors’) for some ‘classic’ paths to growth via NewUsers &/or NewUses?

1. sell online.

2. umbrella several generation-specific sub-brands eg A&F for GenX; Hollister for GenY.

3. Product expansion (American Eagle into undergarments; Starbucks serving alcoholic beverages in prime ‘night life’ locations);

4. Control Label &/or Brand Exclusives (Caution: this approach is contractually tough & raises Competition Act (legal) risks!);

5. Sign an on-trend Spokesperson (Burberry w Emma Watson);

6. all-out chain-wide repositioning (new targets for J Crew, Old Spice, Harley Davidson and, more recently, McDonald’s and Axe);

7. ‘Place’/ Geographic Expansion (Buick to China, Caplansky’s Deli to food trucks, Lego & Fashion brands to Flash retail).

8 Offer Services -eg Petsmart makes good money and generates more store visits (& loyalty?) by offering pet grooming & boarding (although Sears’ expansion into Home Reno Services ages ago was poorly overseen & less than a stellar success)

9. Rethink the Business Model- retailers who followed the ‘paradigm’ to own costly real estate are reassessing. eg Banks & Department stores are leveraging REIT’s and/or (aghast!) selling off ‘essential’ downtown corners. WestElm & other upscale Retail brands are plying their brand in the CONDO market.

imo the ‘secret sauce’ is savvy objective Situation Assessment that lets a consultant recommend the right option or the right blend of these. eg Lululemon expanded its product line to Women’s ‘day-wear’ items for use outside yoga studios- it worked. They also started to target Men’s apparel- imo the verdict remains out on that.

Can A&F be saved? Despite their past unfortunate management comments & weak PR efforts? The competition is tough. Very tough. Segment leaders Zara and H&M are adept @ acquiring right items @ right time @ right cost ie predict the trends, then getting product to market fast!

One path to growth I’d NOT recommend, is to try to mimic that strategy and hit’em head on. A&F needs to be smarter than that.

SL

 

Manufacturer sees Space to grow in Green, evolves into a Consolidator!

GreenSpace Brands’ shares are soaring as the firm wins at a role in Canada that SpitfireGlobal long ago urged USA firms to take- ‘Consolidator’ of on-trend ideas.

https://www.bloomberg.com/news/articles/2017-07-07/quinoa-baby-mush-puts-canadian-company-in-takeover-spotlight

There’s nothing really revolutionary about the ‘Consolidator’ role- one could argue that P&G and Unlilever are more truly buyers (consolidators) of brands created by others, more so than inventors of new brands.

From 2004 to 2012,  SpitfireGlobal pushed companies to fill a gap & be a  ‘Consolidator’ in then-new all-natural products; eg sourcing & managing chemical-free & 100% natural ingredient items in Pet Products. Sadly, the companies we pushed thought it too high-risk. It’s nice to see one company has seized the gap (the stock market richly rewarded GreenSpace!)

What does a Consolidator do? At minimum, they …

1. ‘validate’ each supplier’s fit & legitimacy (sustainability, logistical capabilities, etc);

2. administer supplier actions to fit Key Account’s mission, vision, core values, priorities & logistics updates (allowable ship formats, new DC locations, new Vendor forms & certifications); and

3. provide efficient ‘single source’ shipping (eg full truckloads vs multiple part-loads or depot-drop nuisances).

What changes created the Consolidator opportunity? Two big changes:

(i) Retailers destaffed so heavily that many now lack staff on hand who know how to fill out their own New Product forms ( I kid you not!); consequently, they ‘outsourced’ duties to ‘Rep agencies’ who play a growing ‘defacto staff’ role that includes seeking new Vendors, qualifying them, managing category entry, promotion & merchandising activity (far beyond just Control Label decisions). That Rep agency role expansion happened in most categories!

(ii) Now add to this: the complication of traditional-thinking, risk averse Retailers trying to stay abreast of a fast-growing, fast changing, fragmented & risky field such as Natural products-and you have even more reason to hire a Consolidator to answer questions such as “Is this new one-off product line supplier capable of supplying us in full & on-time?”, “Are they aware what’s important to us?”, “Are they legitimately using all natural ingredients, processes?” The risk of selecting an unethical or inept supplier is huge! Because it’s the Retailer who takes the business hit &/or reputation hit, if a supplier fails to deliver, either figuratively or literally.

Are YOU ready to be a Consolidator? It’s not a role for a newbee or casual opportunist: you must know the market & respect the consumer’s preferences. That’s why GreenSpace won; they started as a Natural item supplier who understood Natural consumers’ preferences to be non-negotiable (unlike a baking soda firm that blew a foray into the Natural Products pet category after misreading Natural consumers preferences as ‘optional but not necessary’).

What will you do as a Consolidator? That varies according to how much the Retailer can handle in house & which duties can be done by other Reps/Partners. The firms we advised had to be ready to step up & handle duties as diverse as: document inspection, site inspection, process audits, assistance to ‘remedy or re-source’ any iffy or non-compliant ingredients, graphics upgrades, revised inner pack & outer packs counts & configurations, first-ever logistics models to allow consolidated shipping (many of the small firms had never needed to understand basic Big Retailer logistics -pallet height limits, truck fit calculations, Retailer logistics software, forecasting promotion load inventory, etc).

Yes- there is some hand-holding required!  There’s good reason Retailers hesitate to find & teach unsophisticated firms on Big League Basics.

Are you up to it? Consider: (a) Is the category in which you compete growing quickly (perhaps a bit chaotically?) eg SuperFoods, Craft Beer, Vintage/Hand-Crafted decor, All-Natural, Fair Trade, User Sourced… (b) Are Retailers slow to jump on the trend, due to staffing constraints &/or supplier risks? (c) Do you know that segment’s consumer needs?

If you answered Yes to (a), (b) and (c) -maybe you should think beyond your own business. You might fill a Greater Gap. Seize an opportunity outlined long ago by Spitfire Global, captured successfully by GreenSpace. Be a Consolidator!

SL

ecosystem hits the trifecta

paying a company to own my data

Opposed as I am to   -1 corporation to rule them all, 1 corporation to bind me –(apologies to the late Mr. Tolkien), somehow it seems I’m willing to sacrifice privacy for convenience. I’ve warned students & clients of Applied Research ‘Sirens‘ – a term I use for topics where Research respondents are more likely to lead us astray, intentionally or not.

One ‘Overstatement’ Siren is driven by guilt that drives us to overstate out intent to ‘be responsible’ -eg I may overstate my intent that in future I’ll (mos def!) safeguard my data & enforce my privacy rights.

That intent will, sadly, conflict with an opposing ‘Understatement’ Siren– the temptation of …. convenience! Why do you spend $1.69 for 1 pack of gum or 1 chocolate bar at a Food store checkout, if a pack of such items just 50 feet away in the candy aisle, is priced at 4 for $3? Convenience! Why pay $75 for someone to wash your windows if all it takes is 1 hour work and $2 of cleaning supplies? Convenience! Consumer are rarely honest in advance about how they will  succumb to the Siren of Convenience.

A couple days ago, I gave in – and let a Cupertino CA firm to hold sway over ever more of me. They had my hardware purchase (an iPhone), software purchase (i-everything). They have the perfect Trifecta– I now pay them to own my data!  And presumably, according to the contract, allow them to do with my data pretty much whatever they wish. It’s merely more convenient for me to leave 1 ecosystem in charge. The advantages of integration seemed, in the moment, to outweigh the drawbacks of lost control and privacy.

The Sirens are winning – again.

Steven