Hotel category- lil stats, big importance

Rarely do I see a business article use data with such clarity & insight

https://www.thestar.com/business/2018/07/17/less-room-at-the-inn-for-toronto-conventions-report.html

This surprisingly well written business article (esp for Canadian publication)  supports oft-ignored lessons about Market Assessment; your boss will want to know  1. category size; 2. category growth,; 3. factors influencing growth and also 4.  competitive SWOT’s. The data/ considerations should look out a few years.

Given the need for a ‘future focus”, many ppl may assume the Conventions/ Tourism Biz should be consumed about airbnb data. Not so fast. Despite the popular media’s focus on casual shared accommodation, the reality is that Bed & Breakfasts & airbnb-type accommodations don’t influence a location most meeting managers would select for a convention; what DOES influence it is a city’s perceived safety, transport & services infrastructure, entertainment options, meeting halls/ convention centres – and the capacity & service level of legitimate inns & hotels. And Toronto isn’t faring well on that front.

There are some extremely relevant figures here – on prices & capacity/ market. The Convention Biz is big- with big ripples to all aspects of a city’s economy. The data seems to indicate Toronto has an uphill climb to continue to be a ‘world class’ convention site. This Biz Category invites a market share fight as would any big category; I hope Mayor Tory takes time from ‘detail management’ to review this Big Picture opportunity – and to strategize/ invest accordingly.

In his favour? Mayor Tory’s business background, and his common sense actions to ease road traffic congestion on major routes.

Discouraging signs? A still-woeful regional transit ‘system’; a myopic decision to spend billions of taxpayer $ to BYPASS a borough with a subway; a brutal lack of accountability on transit car supply; road construction contracts that still seem to still be poorly written, unenforced, or both (youre hereby invited to play: “Let’s see if any work is done in the closed lanes of Hwy427 today!”)

SL

C-Stores: unusual & oft untapped retail partners

A fine new list is out, reminding me how promising Convenience Stores (‘C-Stores’) are as a distribution partner, notably for:

  • impulse-oriented items (snacks, gift cards, etc)
  • off-hours purchases
  • on-the-run commuter items (water, antifreeze, sunglasses)
  • cottager or vacationer items (last-minute HABA items**, bug repellent)
  • addiction-oriented fill-in purchases (caffeine, smokes, lighters, energy drinks, soda,…)

The 1st new promotion I brought to P&G Canada was to suggest P&G try a first-ever C-Store display event (Kudos to SalesMerch colleagues JFM & MattG!) targeting summer cottagers en-route, or at point of destination. Within P&G, we referred to it a the “Small-Size” event; the name understates the importance of these comparatively ‘low volume’ events.

  1. Although the event wasn’t just about making profit, it was nicely profitable (small sizes typically being the most profitable sizes!).
  2. It was strategic, preventing OUR customers (Crest, Scope, Always, Pampers buyers) from leaving our brand due to a temporary shortage. Holding loyalty before that was much of a revered idea elsewhere.

[side note: A big tip of the hat to the “crazy risk-takers” in the Sales Merch Dept who creatively massaged a way through P&G’s conundrum-creating criteria #2. ie It wasn’t hard to prove it’d pass #1. “On Strategy” nor #3. “Profitable”; the dilemma for entrepreneurish staff was showing an idea is already #2.”Proven” – when it has never been done before!]

C-Stores’ potential goes WAY beyond selling gas, lottery tickets, tobacco, rolling papers, Doritos. I worked in one for years & respect their resilience; when grocery stores added late-night hours, C-stores profited by selling lottery tickets. By the time grocery stores started selling lottery tickets, C-Stores had significantly upgraded their self-serve coffee & brought in lines of 24/7 RTE fresh prepared meals. Now, some C-Stores sell fine-quality fresh-cut flowers. And other- get ready for it- sushi!

So don’t count’em out. C-Stores are wiley; they’re flexible; they’re open-minded to make a buck. And they might be your next distribution partner!

The Top 100 USA list is here: https://csnews.com/top-100-convenience-store-chains-2018

Steven

TrumpTradeTirade means a $ is no longer a $…

This month/week/day/minute in #Tariffs– a subject historically characterized by rational thought, measured policy, business + govt in harmony (if biased by corporate lobbyists, union & farm groups etc); the #TrumpEffect = replace that w threats, false facts, seat-of-your pants “Policy”.

Implication: Businesses must learn to predict the unpredictable, rationally deal w the irrational. Dollar stores’ options are limited by their name/ positioning. Your cost structure is no longer your own- and the P (‘Political’) in PESTL-C external factors (those a business does NOT control) has taken on huge impact.

Tariffs, quotas, trade restrictions, sanctions, embargos have long been a government tool to protect public safety (non Tata Nano’s here pls, nor Chinese pet food laced w plastics or children’s toys made w toxins,…), ecological protection ( a bit late in the case of for Emerald Ash, Zebra Mussels, etc ) national security**, domestic manufacturing & farming.

The lines between those ‘legit’ reasons for trade barriers can be fuzzy; Canada’s Massey Commission started protecting Canada’s broadcast content to build national unity/ bonds, yet ended up being a de-facto trade barrier stalling a cultural invasion long enough to nurture what became a globally competitive Canadian Content (ie CanCon) industry in comedy, stage entertainment, music, …

To use the ‘national security’ trump  card & slam your #1 trading partner with seat-of-your-pants tariffs on Aluminum & Steel for passenger automobiles – in an industry already thoroughly integrated continent-wide, is not only a betrayal of the spirit of NAFTA, it’s harmful to a North American auto sector that must compete against autos from Germany, Japan, Brazil,  Korea.

Mr Orange has a more viable argument against Canada’s dairy industry; an effective lobbying group has stalled a tide of cheap US dairy imports, securing for Canadian dairy farmers more stable incomes than earned by sibling pork / beef producers. US milk producers need not meet our less well known ‘behind the curtain’ standards of practise for milk, making ours safer & more nutritious. wrt a ‘Public Safety’ argument, should a nation protect …..Mothers Milk? imo yes, you might argue that ‘s pretty fundamental.

On this side of the border: If you were the Dollarama #retail chain, what would you do? You might assume most of their store goods come from India or China, but many are shipped from the USA.

http://business.financialpost.com/news/retail-marketing/dollaramas-first-quarter-profit-rises-7-3-to-101-6-million-on-higher-sales

What if you’re Gildan, Roots, Canada Goose? Will your textile items next get the tariff attention of Mr Orange? Canadian labour costs may be higher than those of the USA – and Higher Cost of Goods nations are rarely see new tariffs by an importing nation – but we’re in uncharted waters. There is no rational reason for what Mr Orange is doing to global trade and diplomatic relations.

Also at risk: infrastructure contract bidders: Bombardier (transit cars), Aecon, SNC Lavalin,… Boeing-bought American politicians got POTUS to whack Bombardier with a ludicrous 292% penalty on its C-Series passenger jet; though eventually overturned by a red-faced court (yes; we DO need an objective ‘dispute resolution mechanism; in trade deals!), don’t expevct an end to the trump trade tirade any time soon.

Uncharted waters indeed.

Steven Litt

Loyalty Programs vs Tech Ecosystems

Two topics covered lately that have caught passion of savvy Seneca students: 1. Ecosystems; and 2. Loyalty Programs.

How many Ecosystem partners does a typical consumer need?

Just ONE! imo it’s critical for Ecosystem players to be present in ALL ‘related’ categories of use, or risk being abandoned for a truly full-service tech partner.

Amazon, fb, Google & Apple all ‘play in’ several of these: file storage & sharing, photo storage & sharing, social media sharing, home security & home device monitoring, interactive voice recognition queries & trivia, home audio speakers, mobile shopping, customer reviews, personal banking, mobile payments, chat apps, mobile phone, film viewing, amateur video production & sharing, facilitating communities for ‘sharing’ resources, skills & time, etc, etc, etc…

Also catching students’ interest: Macro (multi-channel) loyalty programs: eg Aeroplan, AirMiles, PC Optimum. Loyalty players, in contrast to Ecosystem players, need not be present in every category, but typically tether to 2 anchors:

  • a partner providing ‘dreamer you’  an aspirational, indulgent big incentive (a vacation); and
  • a low value (frequent-use) anchor motivating ‘rational you’ to keep that loyalty tag/card on hand day to day.

Case in Point: Aeroplan lost both its Dreamer anchor – Air Canada- and its Rational anchor- Esso- but quickly regrouped, securing an Amazon partnership to fill both roles! (ie use Amazon for daily shopping, or buy yourself a holiday!).

However, the ‘anchor principles’ of critical relevance, don’t constitute the full list of success criteria for Ecosystem players, or for Loyalty programs.

What made this more evident lately? Evidence of their need to AVOID something- Leaks. And evidence they need to SHOW something- Respect.

iCloud leaks, fb leaks, Equifax leaks, etc make some consumers leery of ever joining a loyalty program. And undoubtedly cause others, to drop out.

Loblaws’ ‘transitioning’ of  trusting SDM Optimum & PC Plus loyalty members to a newly consolidated [ ahem- more efficient(!)] program has been awkward for the very customers they should respect & value.  A few years ago, AirMiles not only accelerated point expiry; they also imposed a needlessly complex, restrictive new 2-tier- award redemption structure. The 407 de-certifies members who spend ‘merely’ $3,000/year on their service via a rude letter (“You no longer qualify….”).  I received such a letter; its inept wording prompted a few laughs (a ‘Hall Of  Shame’ candidate, says a nearby CRM expert).

Loblaws, AirMiles and the 407 violate a basic principle of Loyalty programs: treat longstanding customers with some respect.

If you soon encounter press releases or Investor explanations about how tough the Loyalty industry has it, or how consumers are being more difficult, etc, feel free to join me in a laugh or two at their deserved expense.

Of course I could be wrong.

I’d welcome any comments!

Steven

 

Marketers: Make some noise! Problems are Opportunities

Sorry to be insensitive but Problems DO signal opportunities for marketing professionals. Undoubtedly you have already ‘heard’ of some obvious solutions to Noise Pollution –> increased opportunities for hearing aid chains.

But think a step further away, Marketers! There’s also growth in

  • noise-cancelling headphones;
  • improved  sound insulation for the New Construction/ Home Renovation industry;
  • New Product Claims such as quieter vacuums, dishwashers,…
  • New Services such as ‘Quiet Rooms’ where creative people can write their next great novel, screenplay or manuscript.

http://www.businessinsider.com/noise-pollution-effects-human-hearing-health-quality-of-life-2018-1

FMCG ‘old biz’ categories are- surprise! -increasingly shopped online

Omnichannel shopping. If you’re in FMCG marketing and believe that “online is a ‘future’ factor”, you’re already wayyyyyy behind, according to Nielsen.

http://www.nielsen.com/us/en/insights/news/2017/us-fmcg-trends-to-watch-in-2018.html

Years of work enroute to ‘Overnight success’

This is good! http://business.financialpost.com/news/retail-marketing/luvabella-is-this-the-hottest-toy-of-2018

A fine article & video illustrate how Spinmaster Toys puts itself in a position to be ‘lucky’.

Years of work, and many iterations, to create the next ‘overnight sensation’. (Hmmm – that sure is poetic, or perhaps just pathetic).

This also gives tons of practical insight into the New Product Development process, eg the  iterations of development, costing & cost-optimizing at stage 1,and stage 2 and stage 3 etc; their inspired choices for R&D input for a doll (Mimes! Puppeteers!); and even their thoughts on estimating market size & growth (MRK200 students should def observe 6:00 to 6:33).

Enjoy, baby!  

Steven

 

Amazon finds Key To Rebecca…and Rita & Jake & Jamal &…

According to updates from RetailWire, Amazon ‘Key’ delivery service aims to offer:

  • more convenience than some other models eg BufferBox, or pickup/drivethru at Loblaws- and
  • more security  protocols than some other cheap & available home delivery models- a certain Mass Merch behemoth delivering via cheapest, no secuirty cleared driver- and
  • more gegraphic reach than the market-specific icons eg Longos.

Should be interesting to check in on its acceptance and return customer rate.

Amazon to begin making in-home deliveries in 37 cities

grocery channel- shopper trends

Worth reading: a fine article by Canadian Grocer on shopper trends:

http://www.canadiangrocer.com/top-stories/headlines/amazon-meal-kits-and-beer-sales-among-the-hot-topics-at-gic-conference-76357

 

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