Who Needs the Big Brands ?

So….I think there are 2 types of ‘Mega’ Brands.

Rock Hard (Hard Rock looks better but makes no sense ) and Soft Rock (looks better and sounds OK).

Rock Hard

Equates to the likes of Apple . When a consumer goes online, or goes in store, and searches (asks) for Apple, that is invariably what they are are looking for. An Apple Product and not something that is a bit like an Apple product. I think there are few that fall into this category . Coca-Cola maybe be another. I, for one, when asking for a Coke (rather unfortunate additional connotations here) I am asking for Coca-Cola and not Pepsi nor any other Cola. I think this may fall into a bit more of a sub category HardSoft .

Microsoft, perhaps McDonalds, certain upmarket Car Brands, and in a very peculiar inverse sort of way Google. By that, I mean, many will use other search engines but will inevitably say they have Googled something. When did you ever here some one say …

I Binged (edged, chromed, safaried…..) such and such.….

Like it or not Amazon cannot be excluded from this Grouping as they most certainly do not fall into the category below as nobody benefits from the Amazon brand apart from Amazon.

Soft Rock

There’s loads of these. Big Brands which have positive impacts on generic smaller brands.

Levi’s, who hasn’t gone into a store looking for Levis when what you are, actually, doing is looking for a pair of Jeans. Hoover became the generic term for Vacuum Cleaners. Even Dyson is often used to describe bag less or cordless upstarts.

This category is littered with huge world wide brands but in most cases other smaller players benefit to a degree from the consumers awareness in the product because of the Big Brands own activities.

All these Super Brands spend hundreds of millions each year promoting their products in order to remain Super Brands. Yet some fascinating research has just been published.

http://www.inriver.com Feb 2022 via Retail Gazette

We commissioned OnePoll to
conduct an independent survey
of 6,000 online shoppers from
across the US, UK, and Germany
to share what they think about
poor product information,
availability, and findability.

As Above

There are a whole bunch of reasons why these surveys have come up with these sort of results. One, which is certainly relevant for me, is often whatever I am searching for , I don’t know of any
significant brands. I want to see whatever brands are available or more simply I have not the slightest idea of what I am looking for. At this very moment I have no doubt there will be a whole raft of consumers out there looking for Wifi Connected Swim suits so they can remain
connected whilst sunning themselves in the Mediterranean Sea and are not separated from the internet . They wont know who makes them and certainly not the brands. No, they don’t exist (-yet and yes I have checked ) but I think it works as an illustration.

Within our own industry (ie Party) a major latex balloon manufacturer’s brand has dominated the market for many years. And for good reason. They produce an excellent product and they invested heavily in marketing. However, a change happened during Covid (yes its that word again) . Supply disruption occurred. The market needed product , as there was huge demand and they found alternatives . The alternatives were found to be more than acceptable replacements . The consequence was a major distillation of the brand and a huge increase in product choice.

This effect migrated into other party products. Retailers reliant upon major brands could not get the stock they wanted started to look at other Brands who had stock. Hey Presto ! They suddenly discovered that there were other good brands out there and the product was just as good and sold as well if not better.

As above

I am not knocking good brands. I have spent most of my working life trying promote brands in various market places . My point is that I think ‘professional’ consumers i.e. `buyers should re-evaluate the brands they rely on and ask themselves are they really getting value for money . The amateur buyer i.e. the end consumer , according to the research seems to know better ……

Have you heard ?…Retail Stores are the thing of the future …….

Shops on the High Street ….you wont see one by Spring 2023

Old Saxon Retail Times

There wont be a single bricks and mortar shop left in the UK in 12 months

George Porkpie

I ain’t got that intanet thing.. ‘ow am I going to buy me stuf..

Ivy Asbeen

A great deal has been has been reported about the rapid demise of the Hight Street Store, never more so than in the last two years , so the following may come as a bit of a surprise.

In the past 18 months, retail has gone through one of the fastest and most demanding transformations in the past decade. As a result, the role of the physical store has and is changing profoundly. For example, retailers are embracing new functions that are key to define the quality of the shopping experience delivered to customers.

Despite the “online-shift” assumption, the physical store is actually gaining centrality in retail’s operations. 76% of retailers agree that, following the pandemic, the store is becoming a more important asset in the customer shopping journey, expanding its role as experiential and fulfilment hub.

Retail Gazette/IDC January 2022

The fundamental role and purpose of retail stores are changing. Digital transformation forced brick-and-mortar outlets to evolve as more of the path to purchase shifted online. Now, as e-commerce expands, retailers are reimagining the functionality of stores and tapping into digital tools to keep those stores relevant.

Physical retail will remain the largest and most important channel for the foreseeable future, but how space is leveraged will transform. In Euromonitor’s recent Commerce 2040 virtual event, Jason Goldberg, chief commerce strategy officer at Publicis, noted that stores are no longer a singular touchpoint in the shopping journey; now, stores play several roles, becoming platforms that serve multiple missions and stakeholders. Michelle Evans -Forbes December 2021

Whilst this a welcome step, it is important to consider two words in the IDC report.

Experiential

Fulfilment

What this implies is an environment where you can undergo the experience of the product or service . Plus the store will be a smaller fulfilment hub .

Not that there is anything wrong in either concept as the key factor will be bringing the consumer back onto High Streets or other retail environments.

An example of an Experiential store is…….yet here is another ‘flippingeck moment ….Netflix

Netflix is expanding its retail operations further as it announces plans to open its first ever permanent physical store next year.

The streaming giant, which opened its debut online store last month, plans to open a high-tech physical store in Tokyo, Japan, in 2022 aiming to “merge the virtual world of the internet with the real world”.

Netflix is understood to be introducing a host of experiential features to its new store, while selling a range of merchandise from its most popular shows in line with its online offering, according to The Japan Times.

In other words Disney store with attitude.

Here’s another Experiential Store, which offers a truly strange but very interesting possibilities

London’s Westfield shopping centre partnered with teams at TikTok to create the concept. The pop-up has an area of about 370 square metres and will be open until 8 August (2021)

For shopping centres, it can be a tool to attract more visitors again, after the decline caused by corona. ” TikTok has become a cultural phenomenon. It’s where many of our visitors are getting their inspiration from, whether that’s fashion trends, the newest home styling influencer or foodie fads”, says Harita Shah of Unibail-Rodamco-Westfield.

Retaildetail.eu

Who would have thought five years ago that there would one let alone two types of Amazon physical stores?

-Amazon Fresh Stores -checkout free grocery convenience stores (currently 15 in the UK)

-Amazon 4 star stores- Range of 4 star plus reviewed products from the Amazon web site (currently 2 in the UK

Amazon Fresh -Wembley UK

Who would have thought five years that IKEA would open Town Centre ‘Convenience style’ (my words) stores ? It is not actually that small at 4,800 square Metres but it is on the High Street-and is small in comparison to their regular stores.

Who would have thought that any of this was good news ?

I do .

Well at least in part.

What is the one common feature of any type of retail ?

They all need to have Customers.

What is the one common impact of all these developments?

They, all , for many different reasons, will attract loads of potential customers. Whether it High Streets, Town Centres or Shopping Centres, it will bring old and new consumers back in numbers

Over the as last fifty years, town’s main shopping areas have had a corner stone or key store attraction. These were often Department Stores, most of which have gone. Even the ones that are left have reduced their exposure (eg John Lewis ).

Whilst many of these Brands maybe considered anathemas to many , there is no doubt they are crowd pullers. What these Brands understand and are very good at, is Branding . Part of that branding is the permanent reinforcement of being on a High Street. They also see the value of physical locations within centres of population as the retail environment continues to develop.

And whilst many retailers may not see this as welcome news, they should maybe re-evaluate they way they operate and take advantage and welcome these potentially dynamic changes. Flipping’ eck it is, I think a very positive step in bringing people back on the High Street in numbers.

Moreover, whatever we think of any of these brands and where they pay their tax they still employ in big numbers and they attract spending in big numbers. The independents out there, and maybe next door to them, just need to make sure that some of that spending goes into their tills.

The Power of Colours….Or is Beige really that Exciting ?

Julia is an Artist. I have spent the major part of my working life in the Party Industry. Anybody who may know me would not say I was someone really into Colour. Anybody who knows me well, would same exactly the same .

Yet…..On so many levels , I am mesmerised by colour. It plays such a monumental part in all our lives , eating, dressing, transport, health through fitness, travel, education to politics, science and religion. Colours are a predominate factor in all our lives, for good or bad .

It dresses you, envelopes you, invites you, beguiles, encourages, politicises, hurts, invigorates, creates, good or evil, you cannot avoid it.

Since I started posting I have assiduously avoided making any sales pitches. This once, I make no apology for a little pitch. Latex Occidental ( A Mexican Latex Balloon manufacturer – the largest in the World -Brand Globos Payaso) is kicking off 2022 with a programme called the The Power of Colours.

Initially, I thought Nice idea ….The more I thought about it , the stronger the phrase became until I thought that’s a great idea . I suspect we are all guilty for taking colours for granted . The concept is so much part of our daily lives that we rarely think about it in its entirety .

Courtesy GRAF1X.com

Party Product is all about Colour. It may seem strange but there was a time when most disposable tableware was white and white only . Latex balloon manufacturers may have made maybe ten, tops twelve colours. Foil balloon makers started with silver only (came from the base colour of Mylar- I think). Drinking straws where white . Now, Colour is (obviously to some) party paramount. There are loads of influences, the fashion industry, home decor but much of what happens today , within our market comes from Social Media. This has a huge impact especially within areas such as party decor and balloon decoration. During the last two years, colours that have often lay dormant within suppliers warehouses suddenly burst into favour. When asked what was trending in their area, one of my very knowledgeable clients responded succinctly ….

Various shades of poo !

As a consequence……

Beige came of Age !

Me 😁 January 2022

Everything that you can see in the world around you presents itself to your eyes only as an an arrangement of different colours

John Ruskin

Colours express the main psychic functions of man

Carl Jung

The Pantone Institute, the ‘go to’ organisation for world wide colour specifications since the early 1960’s , forecast the ‘colour of the year’ . This process is carried out by bringing together colour specialists from throughout the world as to what they think will be the trend for the coming year . 2022 it is Very Peri. A colour specifically invented and inspired from A Happy Periwinkle. Or in a more simplistic manner,is a new shade of Blue.

Within the Party Market, we are very fortunate in being immersed in the world of colour. It has spawned a wealth of creativity, especially within the world of Balloon Decorating. At the very same time, more especially over the last 2 years, there is much heightened consumer awareness of the vast number of colour combinations available. It is generally accepted that there are about 10 million colours that the human eye can detect . That’s a heck of a lot (in this case heck is a lot bigger than vast) of possible combinations.

Courtesy of Latex Occidental (Globos Payaso) -Susana Guerrero

Despite the all pervasiveness of colour there has been little scientific research into its impacts. Or rather there has been quite a bit but little agreement. Aristotle (not our dog in this instance) made the first acknowledgment of colour , however his conclusion was that colour derived from God. White being good and black evil. I think whatever your belief you would comfortably find the problem with that thesis .

Sir Isaac Newton, by analysing sunlight through prisms isolated the colours of the rainbow. Which is a bit handy as the following possibility, would made the world a very different place ..

…if the Sun’s Light consisted of but one sort of Rays, there would be but one Colour in the whole World…

Sir Isaac Newton -Optics

Which conclusively illustrates that Beige is incredibly exciting …..

For those of us, albeit in a very small way, who have the opportunity to influence the use of colour in their working practices, should think about phrase of the power of colours, as apposed to the use of colours. Many probably do it anyway without actually saying it. Like many things saying it out aloud often gives it a stronger impact . But I still be wary about shouting out that beige is exciting ….

Why do We Swallow all this Guff ?…and if it’s not all Guff, it’s bloody expensive ….

What does ‘Guff’ mean…..

Cambridge Dictionary

Second question …From whence does all the flow ? First two frames of the first image. Now before you scream and shout ….

If you add the first image with the second , it may give a clue.

You simply cannot generalise . Management consultants would not be so successful if they’re weren’t successful !

And this quite right , I should not generalise. It is without doubt they perform many a useful task in many sectors. They invest large amounts of money hoovering up the world’s greatest potential talent and training them to be good at what they do .

This is a list of the U.K.’s leading consultants…..

And this is how they earn some of their keep …

The value of contracts awarded by the government and public bodies to consultants rose from £1.2bn in 2019-20 to £2.5bn in 2020-21, according to Tussell’s analysis. The figures include work for central government and arm’s length public bodies, but exclude local authorities. Payments under many contracts may be lower than their published value — and in some cases consultants pass on work and fees to subcontractors. Financial Times October 2021

Actual spending on consultants by central government and arm’s length bodies was about £1.5bn in 2020-21, said a person briefed on the government’s figures. That was about double the total of “more than £700m” the government has said it spent on consultants the previous year. Financial Times October 2021

So was it all worth it ? That is not for me to judge but there are reasons to be cautious .Again taken from the Financial Times. The paragraph below that refers to a threat that the U.K. Government is considering not allowing KPMG to bid for contracts.

PwC’s German headquarters in Frankfurt and its offices in four other cities in the country were searched on Tuesday in a far-reaching investigation of suspected aggravated tax fraud by current and former partners. The raids, which also included the private homes of eight individuals, were disclosed in a press release from the Frankfurt General Prosecution office. Some 250 law enforcement officers across Germany took part in the action.

KPMG’s reputation has suffered in recent years after a series of fines for misconduct. It is also under investigation over other allegations of malpractice.

It is very easy to find faults in any large organisation employing thousands but when these organisations are involved with central governments, throughout the world, spending public money, there, at times, seems to a huge lack of scrutiny . Of course during the pandemic, UKGOV needed expertise not to hand within the civil service. However there are so many examples of vast amounts of dosh slipping through public finance hands into Consultants pockets without any fruitful outcomes . That said there are times , particularly during the pandemic (ppe) when seeking expert advice would have been more effective than ringing your mates.

I suspect one of the problems with major projects such as the various attempts to digitise the NHS is the lack of specific knowledge to be able draw up comprehensive briefs for consultants to work to. But just as likely is for the Civil Service and politicians inability to fully comprehend the plans and advice presented by advising organisations.

32 billion items of ppe…..ordered at a cost of £12.5 billion in five months (This turned out to be drastic over order, based on ‘modelling‘ from Mckinseys, one of the many consultancy firms to be quids in from Covid).

Private Eye 1560 Nov 2021

Deloitte’s partner in test and trace was Serco. ……….But then Serco was no stranger to public service foul ups , including with Deloitte it’s auditor as a partner in crime. The latter being fined £4 million for not spotting Serco had cheated on tagging contracts a few years before with tagging contracts.

Private Eye 1560 Nov 2021

£665 million Cost to tax payer of services from Deloitte 202/21 (not all Covid)

Private Eye 1560 Nov 2021

It would very easy to be flippant (or flipping easy ) to just say that Management Consultants are just organisations designed to suck up vast amounts of dosh . ‘Cos they do. If one considers the figures below they amount to a figure that is approximately 30% bigger than the entire U.K. defence budget. But ( and I’m struggling a bit) they perform a function. They must do if the good people of the UK spend £63 billion with them. They have huge resources of expertise that would not be commercially viable for any single organisation to have sitting still in a room until they are needed.

Total Size of the UK Market

  • UK Management consultancy  Market Size: £63bn
  • business Number of Businesses: 172,912
  • employs 419,850 IBISWorld(reseeacrh organisation established 1971)

These numbers are on the top end of estimates, but it sort of suits me. They, only, reinforce the argument you can find any number that suits your own theories, which I suspect is an argument much used by The Consultancies selling their wares.

When the numbers are this big it is easy to make cheap shots as there are bound to be screw ups, and the odd over charge (Deloitte’s average staff pay inc pension and NI is £77,000-£27,900 average for NHS worker ) in their vast spread of work but at the same time the icing on the cake is going to be pretty thick.

Some ‘Guffy’ examples…

  1. “What’s the so-what?” Translation: How is this analysis useful? Real meaning: You’re one up on me because you’ve done…
  2. “MECE” Translation: Mutually Exclusive and Completely Exhaustive. Real meaning: Tell me you haven’t missed something… Forbes

Whilst it is quite clearly not all guff, the bit that is will be bloody expensive.

Re-inventing the Wheel….Retailers do it all the time ……

An Original Wheel
An Original Retailer

I’ve got to say, whilst both concepts remain little changed in their function , the ancient retailer, in many ways, resembles the modern version much more than that of the original wheel.

Whilst aesthetics and the use of the wheel has undergone massive changes, basically the retailer does exactly the same as they would have 2000 years ago and more. They buy something and then sell it. Meanwhile, the wheel has undergone multiple transformations. It is no longer just about shifting stuff , it enhances power, tells the time (cogs), controls movements (steering wheels ,Ship’s wheel,) ,Chinese revolving wheel tables to name just a few. The Retailer still buys then sells.

But, of course , it is not quite that simple. Since the early 1900’s retail (especially within the U.K. & the USA ) began to change dramatically. In 1901 Michael Marks and Tom Spencer started to roll out their first joint venture under the Marks and Spencer banner and consequently the beginning of the ubiquitous British Chain store . Between 1931 and 1939 Jack Cohen expanded from 1 store to 100. In 1903 John Sainsbury opened his first grocery store (the very first general store was opened 1869) by 1928 there were 128.

In the 1950’s the concept of the Supermarket started to emerge, followed by Superstores, Discount operators , Convenience Stores , Mail order catalogues, even Boot Sales and eventually through to Online Retailers. All these were evolutions that would change retailing, and in the view of some eventually kill the High Street, independents and market traders. There is,of course, an element of truth in that view. But it is not the whole picture . By 2020 there were still over 300,000 retail outlets employing 2.9 million people.

So, What now ? Oh yes, we have Amazon Shops ! And what the f…!(…=acebook) we are now going to get Facebook shops.

Meta, the social media company formerly known as Facebook, has discussed opening retail stores that will eventually span the world, said people with knowledge of the project and company documents viewed by The New York Times. The stores would be used to introduce people to devices made by the company’s Reality Labs division, such as virtual reality headsets and, eventually, augmented reality glasses, they said.

The New York Times Nov 2021

But that is not about the changing wheel. What I have seen since the pandemic (and it is particularly during the pandemic I have seen this emerge) is a new type of independent Retailer that is dragging the High Street into the 21st Century .

During the late 1990’s, early 2000’s the major brewers started to dominate the Pub Scene. The inevitable consequence was a constant consolidation in the number of pubs and beers. So was that the end of the local hostelry ? Not so, there are now nearly 2000 Micro breweries in the UK ,many with their imbibing outlets.

The total number of (gin) distilleries registered in the UK in 2020 grew to over 560 (at least 563)*, up from over 440 (at least 441) in 2019.

WSTA

Street Food Stats: (Dunns Food & Drink Oct 2019

  • Over 6.6 MILLION posts on Instagram with the hashtag #STREETFOOD
  • Mexican is the 3rd most popular ethnic cuisine in the UK
  • Street Food is consumed by 2.5 BILLION worldwide each year
  • 71% of Generation Z like to try new dishes and flavours
  • The street food market is now worth an estimated £1.2 BILLION in the UK
  • 68% felt that street food introduced them to new flavours
  • £198 is spent on food and beverage by festival goers each year

Who would have believed this ten years ago……

There are now 14,727 physical shops in the UK which sell records, CDs, DVDs and Blu-ray, up almost 50% on last year, according to research by the Entertainment Retailers Association (ERA).8 Mar 2016

This is a six year old figure but there are no suggestions to show that this has changed much.

UK vinyl sales have continued to climb in the UK despite the dramatic impact of COVID-19 on the music industry. 

New figures from the Entertainment Retailers Association – who manage Record Store Day in the UK – reveal that last month’s RSD ‘drop’ on August 29 saw vinyl sales rise 3% year on year with 2.7 million units sold so far in 2020. 

Rob Copsey Official Charts

Since the easing of various lockdowns, I have been able to restart visiting towns throughout the UK. There is change (retail) afoot. There is evidence of more individualised independent retailers of all types offering different product in a much more professional manner . Perhaps it is the Hipsterisation of many town centres eg Brixton, & Hackney in London, Salford in Manchester, The Quays in Liverpool ,Glasgow’s East End, and areas such as Handsworth in Birmingham. There is a new vibrant feel. As such, it does create a dichotomy. That is to say these changes are coming at the behest of the middle classes. The poorer areas of towns and cities are not going to attract the entrepreneurial retailer. And that is very clear from seeing some of these areas where there are loads of boarded up shops. Yet, there is always hope, as landlords will start looking at their rentals and encourage these entrepreneurs with much more competitive and attractive rates. I digress.

Over to Ari…..

Aristotle November 2021

Our ancestors invented the wheel and it remain unchanged for a long time. The opportunists saw other possibilities so the wheel went from this …….

This image has an empty alt attribute; its file name is img_8131-1.jpg

To this….

Formula 1 Steering Wheel

Retailing has gone from this …..

This image has an empty alt attribute; its file name is img_8132.jpg

To this….

Less Change, more Innovation

Pricing ……Art or Science? Pricing Art is not a science…..

Julia paints. Yes, pictures. It is not quite that straight forward but it suffices for the sake of discussion on pricing theories , which is something we, often, toss backwards and forwards in our day to day chatter, especially prior to an exhibition where a piece of her has been selected .

When selling a piece of Art, there a number of considerations to consider that are not dissimilar to selling anything else .

  • Cost of materials
  • time and labour (for artists this a little bit of a conundrum, as in many cases is this was done properly most art would not sell as the true labour cost even at minimum wage would extraordinarily high)
  • location -Central London Vs Middle of Nowhere, City centre gallery Vs local art exhibition
  • cost to sale(most galleries and exhibitions will charge over 40% commission)
  • Artist Rep-If Any ? Banksy Vs Jeremy Catchpole (of no fame whatsoever)
  • Media-eg Oils, Prints, Water Colour etc
  • Size- 20cmx20cm Vs 1,5m x 1.5m
  • Framed or unframed

Then comes the finger in the air bit , which is probably what most ‘reputable’ suppliers would say is Research or knowing your customers. Therefore after considering Milton Friedman’s theory of Pricing, the cost basis , potential demand at a certain price , we ignored the lot and made up a number .

Why is a Banksy worth several million? Whereas a very accomplished artist with appealing finished work will struggle to make a living unsupported by any other form of income . The answer because people will buy a Banksy because it has a value that at a point in time someone paid that sum . Not scientific, does not conform to any specific economic theory (especially not supply and demand ,which can really only relate to dead artists ) nor any real understanding of true value. So how does this fit in with every day product pricing , initially it would seem not a lot .

How for instance are the prices for the watches below calculated ?

The Times Luxx 16th October 2021

What for crying out load does POA mean ? Yes, of course I do. But why, keeping it from your competitor ? If you need to ask , you can’t afford . well the price does not seem to bother Bulgari, Chanel , or Audemars Piguet . Some sort of completely bonkers inverted vanity . If I saw someone wearing the Hermes watch I could just as easily think it was Fifty quid. Whereas I would know how the ‘Pillock ‘ paid for the Bulgari. Anyway, what sort of price is £90,500? What’s wrong with a traditional £89,999 or at very least £90,999 The watch makers may indeed write tomes about the craftsmanship involved , the precious metals, and the jewels but the latter two items are only highly valued because they have been deemed to be as opposed to having any real material value . Functionality, design, and performance can be created at a fraction of the price, so what is the balance ? It has to be primarily vanity . Only this morning I read a high end watch advert which emphasized how accurate it is and is not affected by a mobile phone. Well even if it was, you would only have to check your mobile phone for pin point accuracy.

How does this relate to products much further down the price chain ? Sometimes I think more than we are prepared to admit . At least with High End Cars , the bystander will have some idea what the marque is by the giant animal logo on the bonnet or at very least the name splashed across the back. You show off to your flash mates by giving them a ride. With a Watch you have to stick it under their nose before they have an inkling of the amount of money stuck on their wrist.

For many years retailers of real product have been transfixed by price points. Whilst I have for a long time firmly believed that selling an item for £2.25 as opposed to £1.99 will make a great difference to your revenue but it will to your profit margin. Yet I have had many a customer suggest to me that is not the case. The price point is a key focus in many product areas. Going back to cars. You will see many an ordinary car priced at something just below a particular thousand mark eg £14,900 against £15,100.

Today, and I mean now when retail has just started to get back on its feet but there is a shortage of stock, there are other influences coming into play , shortage of stock and potential inflation . Before exploring these influences let me go back to the end of 2019 .

Your prices might be going up 3% ? What planet are you living on ? My customers wont pay for that sort of increase

Various Customers

I will go back even further to the early 80s

What your prices are only going up 18% ? What good is that to me when inflation is 18%

Different Various Customers

Now, at very least within the party industry, there is a completely different consumer mindset. There have been a not inconsiderable number of price increases within our market during 2021 and the consumer does not seem to be at all bothered. Retailers have been saying over recent weeks that they are making price changes within their stores almost on a daily basis, and it makes not one jot of difference to consumer behaviour . Or rather it has, they are,currently, buying without pricing considerations. Of course this is , maybe temporary and we are talking, in the main about low cost items. Yet, to me it underlines the fact that within our market it is not all about price. Those that say they cant compete with supermarkets or discount stores on pure price . They can’t, but in most cases they are not competing with price even if the discounter is next door. Moreover, I know a number of retailers who are actually next door to a discounter and do very well .

Two good reasons:

a) They are next door and benefit from footfall

b) They are next door and the consumer sees the different between a range of max 50 items as against 5,000

Does this ramble actually take us anywhere ? We are in a very complex environment, but there are various principles that remain the same . All that changes is the value of each principal.

I feel very strongly that many often price according to threat or even lack of. Whereas, the focus should be on maximising the returns that are available within your sector of the market . On occasion that involves a little more art as opposed to science .

Back to Julia’s conundrum. We worked out all the costs , especially labour and time and came to the princely sum of £700 . So the piece was priced at £325. Told you it was not a science. Maybe it is Art ?

Keep on Truckin’…..

Note: Truck is left hand drive ….

Only last week, Julia and I spent one day flying up and down the M1, as we sometimes do , checking out services station stations to make sure they were all well and good . We, both, had to use the loos, which brought us to the momentous conclusion that Female Truck drivers were not required . In the Gents there were loads of posters offering vast sums of money to join various happy bands of truckers whilst the Women’s only offered solutions to incontinence . The immediate conclusion on that was that women would not want to become truck drivers as they would be constantly looking for a Loo.

Despite the fact that neither Julia nor I know anyone who has any issue with incontinence , of either sex or age, we bow to knowledge of the great marketing research that must have been carried out by Incontinence solution makers and providers. That said their solutions are that effective then the problem should not be a barrier to entry. So what is ? There are those(men) who say that women can’t navigate . Well GPS, Sat Navs, ensure that the modern day truck driver can find even the most unnavigable farm tracks on their way to some random small town centre. So that’s not a barrier.

Three years ago women accounted for less than 2% of the truck driving community and yet I suspect given an equal opportunity there could be a considerable uptake should pay and conditions( one of the factors that are deterring men plus poor dining facilities, rubbish, showers loos, dodgy lay up areas comparing U.K. conditions vis a vis Europe ). That figure is now 1%. The stats for female commercial pilots in the UK is nearly 5% . Hardly enormous in itself but nevertheless a significant difference. So one can assume Navigation is not the problem. Said skill being somewhat more important for pilots than for truck drivers, there being no road signs in the sky .

Good Truck Cab
Not So Good Cab
Great Truck Stop
Not So Great Truck Stop

Here’s another number I struggle with, 100,000 drivers short . That’s a huge number . It’s more than the entire U.K. British army, nearly twice as big as the Met police, more than BT or Sainsburys total work force . I know it does not mean 100,000 new trucks as it invokes multiple use, shifts etc but it must 15-20,000 or so . Where are they all going to go and on what road? I know The UK motorway system reasonably well , having travelled most if not all of it ( I can quite confidently say that there is not a single stretch of UK motorway I have not driven on)I can vouch that most of the time at 06:00 a.m there is little room for another 1,000 trucks, let alone 15,000. As to when they leave the motorway and head on to the A roads , and then the B’s , and those with dodgy sat navs the odd footpath, well that’s another story.

There is constant guff spoken about short term visas, couple of hundred squaddies, ninety year old retired truckers going back on the road, but I have heard absolutely nothing about encouraging more young females to qualify. Nor have I heard a single word about investing in the infrastructure within which the trucker works .

This is from a BBC news report in 2016

The haulage industry has a shortage of drivers, so the government is urging companies to encourage more women to get behind the wheel.

BBC News Oct 2016

Apart from ‘urge’ the UK Government has done diddly squat.

The UK needs far more haulage drivers on the road to keep the UK moving, with an estimated shortfall of over 50,000 drivers in 2017. Could more women lorry drivers be the answer?

HR GO Recruitment Feb 2019

What has the haulage industry done ? Not a lot. Or if they have , its not terribly successful as the stats don’t show it and nor do the ads in the Motorway services . What has the Government done ? Even less . Sorry not quite true they have offered visas for a few months , hijacked the squaddies (great message to the public don’t panic, there is no shortage, but we will be bringing in the Army) and allowed HGV drivers to drive for a couple of days non stop . Stupid boy there’s the solution… if women don’t start queuing at the cab door allow drivers to drive 24/7 and then you may triple the number of available truck driving hours . Simples !

Keep on truckin’

Eddie Kendricks 1973

Do you eat too much Data?

Err Yes ….bit of a no brainier really. Or at very least it is for me. Only have to meet three people (data) ,and I would have forgotten the name of two within ten minutes . We are awash with it, data that is .

In any business we are constantly being told that the more information (for information read data , its the same thing) you obtain, the better you can operate your business. There is no doubt that there is an element of truth here, but only an element.

Ever since mankind decided it was jolly useful to write stuff down, we have collected data. How we used it depends on who you were or are. Historically the collection of data was rarely used for the general benefit of society. It was more about who or what you owned and just as important how you can increase your ownership and power structure. Many would say that little has changed.

Whatever the motivation data has become increasingly important to the point that it could argued that power wealth and data are inextricably linked . That said it can be argued that society has benefited from its use within areas such as health, education, technology and well being.

We are awash with it and half the time we don’t know what to do with it and the other half we think we do but we don’t really. I am not referring to those of us sat the bottom of the data strata, I am talking about the data giants, the Googles, Facebooks, Amazon et al. Here’s one of my favourites , or rather personal pet hates ( not ‘pet’ hates , as I love pets but ‘hates’ that I love the most ). The super companies who probably accrue more data together than the rest of the world intelligence services. I search for a new telly . I buy one. Meanwhile the cogs at google have been whizzing away saying that I am wildly interested in TV sets. and send me ads for the next six weeks. But I have bough one and you know that as well so what is the point in sucking loads of dosh from companies who are advertising to sell me one when I have already bough the bloody thing. Amazon admit to some sellers they struggle with the counterfeits as there is so much that goes through their market place. If they struggle what does any mortal company do about it.

Covid seems to be the perfect example of incremental amounts of data with bucket loads of organisations interpreting it all in widely different ways , leading to utter confusion and in many cases poorer decision making.

The above image replicates one of the more everyday, and simpler data overloads that many of us face everyday . Every item of data is most probably valid and legitimate but the method of portrayal, imagery and context is likely to lead to misunderstanding, poor decision making and ultimately much worse .

Some Completely Bonkers Data statistics

Here’s a very simple example I made up myself, which will seem obvious (that I made it up).

Man walks into jewellery shop and buys a very expensive piece . He does not speak to anyone or ask any questions , just takes it to the counter, pays for it then walks out .

That transaction is now a piece of data for that retailer. But what use is it ? What was the purpose of the purchase ?what is the customer profile ?

1. He bought it for his Wife

2. He bought it for his Mistress

3. He bought it for his Daughter

4. He is a cross dresser

The list is endless and without further data is really of no help to the retailer as to why certain purchases are made. Its very simple but by being very simple illustrates how very complex data can easily be misread if read at all.

Data accrues data. It feeds on itself . The more there is the more processes that are needed to make use of it and even to determine if its of any use. Worse still is bad data. The data on its own will not have any indicator that it is bad . It is its effect that makes it bad. Viruses are made from using bits of data albeit in a rather nasty way. Combatting bad data is more ‘good’ data.

In 2018 alone, the development of macOS malware tripled. As much as 250,000 new malicious programs are registered every single day, and there are grounds to assume this number will keep growing. A thorough analysis of scans performed by our users revealed that as much as 62% of Macs are infected with viruses (with an average of five infected files per user)

mackeepr.com

The flow is relentless and will only increase at an exponential rate . Mankind has becoming data obese. Obesity has many side effects . Data obesity has its own hunger and that is energy . It consumes vast quantities of energy . And this is only the beginning.

Bitcoin consumes a similar amount of power to the Netherlands

This suggests that whilst we may all be trying to reducing our energy consumption , data will be out there having an orgy of eating more energy . I am sure that tech guys will find ways of reducing this hungry beast, but they will need to ‘crunch’ a load more data to find the answers.

Most large organisations have CIO’s -Chief Information Officers who report to the CEO. They know the importance of data but whether they are able to really understand it remains to be seen . There have been too many events within the last 10-5 years when events that have occurred because previous data has been ignored or misinterpreted . The financial crisis for 2008 and many would say our current pandemic, are just two.

The obesity crisis in much of the West has been looming for some time (the data has been there). It can be resolved with education, government policy, time, and of course the will. I am not sure data obesity would be as easily solvable.

Data is crucial to every organisation and increasingly to the individual. What is overwhelmingly important is to the evaluation, sourcing, examination and decision making process involved with that analysis. Even within our own market place I have a seem an increasing number of players starting to use data analysis. My concern it is limited to what is happening today or yesterday but it is not very effective in determining what is likely to happen tomorrow .

‘It ain’t easy ‘ ….Being an online retailer !

It is also the title of a David Bowie song from way back in the early 1970’s, way before the internet, but not door to door van deliveries. My ‘Old Mum’ used to give her greengrocer a written list and he delivered it to the front door a day later. And she was doing that in the sixties. No internet, no iffy broadband, no crashing web sites, no ‘out of battery‘ phones. Pen, paper, man in greengrocer and a green van ( colour that is, not in the slightest bit eco-friendly) . Simples as a wise Meerkat once said.

That Greengrocer eventually closed because of the rise of the supermarket. What do you make of that because my mother then had to drive to get her greengroceries. Now, it was not down to my mother that all independents closed, but there is some irony in that some consumers lost an element of convenience in the name of convenient shopping.

Race forward sixty years and we are back to delivering our purchases via a method somewhat more complex than pen and paper. Before the shout goes out about the Internet killing the retailer , unfair competition blah, blah, blah., lets just take a gander (Look for non native English speakers of whom I know there are a few , or at least one or two)over the last 18 months . With the various lockdowns throughout Covid, the retail environment would have been even more dire. Dare one say the emotional health of the nation would have been somewhat worse the wear, in that costumers were , when finances allowed, able to indulge in a huge variety of product, whether books ,puzzles, hobbies, household products, clothing , all product that was not essential but enabled a slightly better environment when you were confined to your own four walls.

So if we can make the case that all online operations are not all bad then I think it is only fair to look at the case as to why they should not get quite the bad press most of the media seems to give them .

Whilst these 2 Charts are from different sources and slightly different years , it helps to illustrate the way retail is moving

There are broadly 3 types of B2C operators

Those who sell on the market places eg Amazon, eBay & Etsy etc

Those that operate their own Web shops

The Third being those who operate on both

Let’s examine the the second ie those who trade via their own web shops.

Before doing that it is important to make thing clear about online operators , for the most part they do not operate on the High Street therefore their rent and rates will tend to be lower than a Bricks and mortar equivalent per square metre. There ends in my view their main economic cost benefit .

Basic Higher Costs for Web shop operators Vs Bricks and Mortar

1.Unit size tends to be much larger than equivalent bricks and mortar
2.Stock holding is likely to be much higher
3.Technology both hard and soft high cost of entry due to much greater demands on the systems
4.Greater number of SKUs-Independent brick and mortar (in Party) maybe 6000+ ,web shop more like 30,000+
5.Can take up to 30 minutes to load one new product onto a web shop (that is similar for the market places, if not more so)
6.Very high cost of marketing or web awareness. It would be no exaggeration to say this can be in 6 figures
7. High cost to maintain awareness
8. Cost to deliver (no cost to Bricks and mortar). Current major issue is a problem concerning shortages of drivers
9. High cost to maintaining customer loyalty (Since there is no face-to-face interaction like in a retail store, the development of trust and loyalty takes more time and effort in eCommerce)
10. Cost of returns (Over 60% of online shoppers look at a shop’s return policy before making a purchase.)
11. Cost to pick and pack
12. Increasing IT requirements such as data analysts

These are just some of the cost issues. Other barriers facing B2C e commerce platforms are (all involve cost at some point)

Online identity verification
Overall cyber security
Shopping Cart Abandonment (apparently this can amount to anything between 60-80% )

Many of these issues can be offset by using the market places such as Amazon & eBay. Yet these have their own pitfalls in terms of there is, of course a cost, pricing is very aggressive, you can be competing against a far bigger supply chain, and you are reliant upon the whims the platform you are using and subject to their rules.

Here’s a fascinating little fact

It takes about 50 milliseconds (that’s 0.05 seconds) for users to form an opinion about your website that determines whether they like your site or not, whether they’ll stay or leave.

sweor.com


and another …….

47% of Users expect a maximum of 2 seconds loading time for an average website

sweor.com

yet another ….

Users spend an average of 5.59 seconds looking at a website’s written content

sweor.com

Take the sum of these 3 stats and you are not looking 8 seconds in total. It takes that long to walk into a shop before you have begun to get an impression of what is on offer. That said there are some retailers where I have made a very precise decision not to enter in a fraction of that time , which will say loads about those particular shops.

The following diagram may also illustrate how being an online seller is not that straight forward. Show me a bricks and mortar retailer that is faced with any of these dilemmas.

Governments have talked much about taxing the ‘ so called‘ advantages of the online operators . There maybe an argument for the likes of Amazon, but for the rest it is taking a sledge hammer to crack a nut. There has never been an argument for additional taxation for the supermarkets .  Tesco & Sainsburys alone take over 42% of the market. Who had it before they existed (as supermarkets) ? The independent retailer . It is how retail evolves. The market place has to adapt as it always has. Nobody said it was going to be easy.

No Retailing is easy. It never has been, and it wont get any easier. It has to evolve to survive. There will always be the ‘naysayers’. Online is here to stay and so are good bricks and mortar retailers , we started with Bowie so I’ll finish with Ike & Tina Turner

Working together we can make a change

Working together we can help better things

Ike & Tina Turner 1970

Bit of a shame Ike didn’t think more about some of the words he sung , but that does not detract from the essence .

Has the Consumer gone Bonkers ?

Some may say most of their customers are bonkers and always have been . But the real question, but less attractive title is Has the consumer changed in the last eighteen months, (or since covid started in the West Feb 2020).

Again most would say Yes, but would have more difficulty quantifying those changes and whether they will last .

There has been a seismic change in what people are buying and how they are buying it. According to Selligent’s most recent consumer survey 60% consumers now focus on buying essential items and almost a third (29%) say their shopping behaviours have changed forever.

These changes have been largely driven by a change in employment, with 75% of global respondents reporting that they have less work. Despite the economy and jobs market recovering, conservative approaches to spending will have a lasting effect, making it more important for brands to cater to cost conscious customers in the long term.

MarketingTech Anne Jarry March 2021

Selligent is a Belgian company ,with offices throughout the world and is an intelligent omnichannel marketing cloud platform. So whilst having a Global perspective they specialize in something most have of us have never heard about (they have been going since 1990 for crying out loud). Therefore a Global perspective with very specific ideas, perhaps.

Consider some of the changes that have happened with consumer behaviour since March 2020.

  1. Dramatic increase in online shopping-Overall, online sales rose to a record high of 33.9% as a share of all retail spending-Office For National Statistics 2021

2. Increase in shopping local -People are shopping more with local brands, both for convenience and to support their community: 46% are shopping in closer neighbourhood stores and 80% feel more or as connected to their communities. Paypal US December 2020. However, I would suggest a similar pattern, certainly in the UK

3. Caution in spending – More of a do I really need that ….attitude. Will I be in a job tomorrow ?

4. Nearly 40% of consumers are likely to use touch-free payments via mobile devices or credit cards, avoiding cash and person-to-person exchanges and opting for more hygienic methods. Consumers across the globe also plan to continue using low-touch services like self-checkout. PayPal US

5. Delay in consideration of environmental issues- In 2020, Euromonitor found that 73% of professionals believe sustainability efforts are critical to success. Interestingly, environmental initiatives in particular were waylaid in 2020 as companies and consumers rapidly changed their behaviour in response to the unique circumstances created by COVID-19: 51% of professionals reported increased use of plastic packaging, and respondents also noted delays in recycling, waste reduction and green technology efforts. Feb 2021 Retail TouchPoints

6. Trying something new . Consumers are trying new brands and products for accessibility and curiosity. Almost 30% have reported picking up new hobbies during quarantine, prompting them to discover new brands they will continue to shop with in the future. In China, studies showed 28% of consumers switched to a new store for convenience and stock availability, and 47% of them do not intend to switch back after the pandemic. PayPal US. Not sure about the China example but there is plenty of subjective evidence to show many took up new hobbies. This has been illustrated within our own Party Market. A huge number of people (and in the US) in the UK took up Balloon decorating via watching YouTube videos (On Balloon decorating !).

7. Personal Care. Google searches for “No Poo” (meaning no shampoo) have more than doubled in the last six weeks, as consumers take this opportunity to stop washing their hair or use alternatives like apple cider vinegar. Inferring a decline in expenditure of personal care products.

8. Change in working practices . Less expenditure in city centre establishments as home working continues . More working from home also leads to increase spending locally.

I shall take each one of the changes individually.

  1. Well Holy Moley! Most shops were closed, you could only move one metre from your house, you had to go out blindfolded and gagged and online sales only went up 34%. Well what a surprise or rather its a surprise the number is not greater. That said the volume of food sales has dropped back (online) . That’s no surprise as we can go out now ! Of course it will have moved more to shopping online or rather hastened a changing pattern.
  2. Again , where else could we go ? I do, however, think good local independent local retailers will have benefitted from a shift here. As to how the working from home and the return from furlough will reduce this trend is anyone’s guess. But at least it has shown some that they do actually have some quite good shops under their noses.
  3. This is balanced against those who have done well out of lockdown ie those working from home , who have no commuting costs and not spent anything on holidays and going out.
  4. The increase touch free payment was already happening this however has accelerated it. The trend will continue .
  5. I don’t know .
  6. The consequence of this is yet to be defined as it to a degree it is on going and will continue for some tiome as shortages continue. If the consumer is happy with the ‘different brand’ then i suspect there will be some quite big changes or there will be a lot more competition amongst the big brands.
  7. Not convinced this will continue.
  8. A change has happened and it will be difficult ot reverse. That said I am not at all convinced it is going to quiet as seismic as some ‘experts predict’.

Now I’m not quite up to speed with Cloud nine, metaphysical data analysing and marketing platform capabilities but I think a lot of these had started well before Covid. What has happened is their development has been hastened during the pandemic.

Most consumers have always been a bit bonkers . The consumer is an ever changing beast and always has been . What any of us who have any involvement in the retail market have to do is ascertain how long the changes that have occurred will remain and how they may evolve into something else .

One of many confusing tables produced to show Consumer habits during Covid