Tag: partyretail

2023…Could be a (or not so) Great Year ….?

Posted on by markybrett

My Customers will, soon, start asking me the perennial question…How do you think the new year will be? I am very succinct and precise. It could be good or bad. That’s it in a nutshell.

There is a footnote to this response that is not always obvious as depending who the customer is, I do not include this is in my ‘six word ‘ financial forecasts.

I am very clear in my own head ( as if anyone is any doubt ??)

  • I am not a financial analyst
  • I am not a retail analyst
  • I am not a market analyst
  • I am not an analyst

But I am frequently asked this question at the beginning of the year by customers, colleagues, Julia , A few friends ( very few that confined, in that I only have a few , very few. To extend my audience I have asked Aristotle ( our dog) and his canine response is I am only interested in three things …

  • Walking (currently it is -5 degrees but that doesn’t bother him )
  • Food
  • A massage

As long as my face and the sound of my voice assures him, that is the only interest he has in the coming year.

Stormy Monday Blues – T bone Walker -Lately Eric Clapton

There is undoubtedly a number of gloomy indicators out there , especially for the first three months.

Cost of energy,

continuing Ukraine crisis,

inflation,

interest rates ,

consumer confidence,

industrial unrest,

and a lot of uncertainty within the World at large.

Good day Sunshine -The Beatles

So what’s good about 2023

  • Inflation appears to be peaking and below what was forecasted
  • Interest rates whilst still rising are predicted to be well below original forecasts
  • Sterling has recovered some of its losses
  • Covid does not present the same barrier it has for the last 2 years
  • Fixed mortgage rates have reduced a little
  • The survey of 138 companies, including 50 retailers, found that a net balance of 11 per cent of businesses said sales grew, up from -19 per cent in November (CBI)
  • A Coronation (at least for the Party Sector in the U.K. )
  • Retail landlords are starting to become a little more realistic

This does not detract from it being potentially being very tough, but it should be put it into some of perspective. The total retail sales within the U.K. in 2021 were £421 billion . There were approximately 316,000 retail outlets. If retail sales fall by 3% that equals £12 billion . However, if we look it another way a consumer who had £100 in their pocket to spend freely may only have £97. If you extrapolate that further and look at the total U.K. spend on party (of which it is really difficult to find a true figure) even if was half of 1% of total retail spend which would be a gross over estimate , we are looking at targeting less than 50p of the consumer spend .

There will be many (gross exaggeration) readers who will say don’t be bloody stupid ….that’s only £30 million total party market. It is quite clearly many times that, but the principal is the same . Within our market place our target audience is a very small proportion of their overall disposable income. They will look to have a good time, which is why Glastonbury 2023 sold out in minutes despite the ticket price being £300 (220,000 x£300=£66 million pounds =One Event)

It is down to the entire chain no matter what market, to be creative, pro-active, positive, supportive and all aim for very slightly bigger slice of that £421 billion . The proverbial tills wont ring themselves .

Just to illustrate my analytical skills and give you all lot more confidence in what I write : In March 2020 my analysis of Covid was that it was a very bad cold and would be all over by September.

Twixt the optimist and pessimist
The difference is droll:
The optimist sees the doughnut
But the pessimist sees the hole.

McLandburgh Wilson b. 1892 author

Whose the Party Pooper…?

Posted on by markybrett

Reader Warning !

For those who may be offended by the intrigues, complexities, dark arts, hidden secrets, and just sheer audacity that go to the extremities of the Party market , should , perhaps look away. Read no further . Hide behind the latest Stephen King, some Shakespeare or maybe Jean Paul Sartre. This may not be for you .

And for those whose first language is not English …Party Pooper is someone who ruins a happy occasion .

This is a return to the roots of the Blog Title thepartyblog.org .

The party market has always been dynamic. Or rather in the last 10-15 years it has. Prior to that it would be difficult to argue . Much has happened during the pandemic ,some of which was happening already but was rapidly accelerated by the events of the last two years.

To avoid confusing myself ,I shall divide the market into 2. Decoration, including Balloons and Dress Up.

Decoration

It might seem to be stating the blindingly obvious, but Covid was a game changer. Yes, of course it was , but not ,perhaps, in the way that most think. There were changes afoot in the way the UK consumer approached decorating for parties for a number of years but after the first few raw weeks of lock down in April 2020 ,this went into overdrive. Well summarised by an Observer(UK Sunday Newspaper) Journalist …

You might think Covid – no parties (except in Downing Street), no proms, no fun at all – would have popped the balloon bubble. Quite the contrary. As Kasiri says: “People were still pregnant, they were still having birthdays, baby showers… although they didn’t invite guests, they still wanted a backdrop so people could attend on Zoom or pop into the garden.” Elari pivoted to contactless deliveries of bike-sized backdrops, as a balloon arrangement became the consolation prize; a cheer-up for a cancelled celebration rather than the inflatable icing on the cake.

Emma Beddington -Observer 10th April 2022

I believe that, initially, this was very much a UK trend. It was not confined to Balloons as the consumer decided that if they could not go out for their celebration they would make very best of it at home and as it was very adult centric , the results were often quite stunning . Emma Beddington puts it quite succinctly….

Animal sculptures are Old Balloon, along with the traditional packet of primary-coloured ovals, effortfully inflated and tied by apprehensive parents, pre-party, and just sort of tossed on the floor, perhaps rubbing one against a jumper to perform the never-not-funny static hair trick on a nearby child or tying a couple to the door knocker with string. Also Old Balloon: a single, or small bunch of foil “birthday girl”, “18 today” or L-plate helium-filled ones, dragged round streets and into bars, bobbing chaotically in the wake of a group of lairy revellers, eventually abandoned in a club queue, floating up, up and away.

Today it is more about design , creativity and impact.

Now Party Decoration , at home or somewhere outside the home, has taken on a different meaning. This provides a challenge for Retailers, whether online or on Street. It is essential to keep a very close eye on trends . It is no longer enough to rely on your suppliers to tell what are their top best selling items as today’s best sellers are very unlikely to be tomorrow’s . Although it pains me to say this, but what the Kardashians do today , millions try tomorrow.

This has created an retail environment of opportunity. Not to say there will not be challenges . However, the days of filling your store with product, open the doors and let the punters pore in are over. Though in reality, it was never quite like that anyway but the consumer will expect more in terms of the retail experience. They will want to see new innovations , ideas, product and retail colleagues who can help them achieve the party atmosphere they want to create . It will no longer be sufficient to refresh your product ranges once a year (some retailers don’t even do that ) . Speak with your suppliers, talk with your customers, look at social media These are opportunities that the supermarket or discount chains cannot access and are very difficult for websites of any format difficult to gain any traction.

As a footnote , here is a fairly eyepopping figure from the Observer, although a source is not declared. Nevertheless it is fairly impressive…..

the global balloon market is big business: it was valued at $647.3m in 2020 and is predicted to grow at an average of 4.2% until 2026.

Dress Up

The costume and dress up market has been undergoing change for, probably, the last five or six years. It is widely considered that the market (throughout most of Europe ) in costumes has plateaued and possibly is in a slight decline. Throughout the pandemic it was virtually none existent . The opportunity to wear fancy dress simply did not exist . No hospitality, no parties, no travel, no sporting events, no festivals. All, of which are major dress up opportunities. But, Covid aside, there was a move away from buying what is basically an one off purchase . That is to say if you buy a Roman Gladiator costume, you only really wear it, if you are going to be a Roman Gladiator.

Jumpy People or Kangaroos? Any other ideas -Boland Kangaroo Onesies

During the pandemic there was a uptick in accessorization ie the use of wigs, beards, glasses, anything to enhance the atmosphere with the temporary trend of Zoom Parties. But again it just nudged on an existing trend whereby using accessories , the consumer found the ability to adapt product they bought for one occasion they could use for another . Moreover, it once again it encouraged creativity as a daft hat or wig could be used with your every day clothes or other items. Pre-Covid this was a trend very evident in recent Halloween themes. Wear a Pirates hat and beard at same time as wearing Devils Wings and fake blood . This will continue and develop. Initially online and High Street Party retailers did not like this as they were losing a single sale of £30-£40 plus and have to make several sales in accessories to make up the lost revenue. Then they started to realise, although more work was involved the margins were much better and there was less competition from the Supermarkets, and discounters as they are unable to offer the extensive accessory ranges you need to make this work.

So who are the Party Poopers? No, not the party loving UK Prime Minister. Covid, disrupted supply chains , Russian Invaders, fuel costs and inflation. Each and everyone is interlinked in some way or another. Covid is continuing as a major problem primarily due to the way the Chinese Government is handling the problem in China. The locking down of major conurbations fundamentally mean that many factories of all shapes and sizes and not operating. Compounded by the Chinese Government limiting energy supplies to certain manufacturing areas. Rampant world wide inflation will put a damper on consumer spending. So it is not a good look and these disruptions are here for some time . However, I am reasonably optimistic. The Party market often does well when there are major economic pressures. The Retail price points are such that whilst the consumer may think twice about having a lavish celebration in a third party environment they will spend on ensuring that celebration at home is made all that bit more special . Lockdowns highlighted this pattern and I believe it has created an awareness with the consumer that will persist and grow. But the retailers, of all types ( and suppliers) will have to work for it.

To conclude with a riposte to all Party Poopers …..

“Nobody can be uncheered with a balloon.”

A.A Milne -Winnie The Pooh

Who Needs the Big Brands ?

Posted on by markybrett

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 …….

Posted on by markybrett

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 ‘flipping ‘eck 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 ?

Posted on by markybrett

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 ….

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

Posted on by markybrett

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 ?

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

Posted on by markybrett

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 .

Shortages…..what do you mean? We are not in the middle of a bloody war !

Posted on by markybrett
National archives (Note: Fires not Fries)

Toilet rolls …No. Sanitisers ….No. Pasta….No. Chips….Yes.

Now before you start calling your local chippy and Pre-Ordering your month’s requirements or buying a new freezer to keep a years worth of frozen chips, it is not the tasty sort we are talking about.

Jaguar Land Rover, Ford, Volkswagen, Tesla to name but a few are cutting back on production because there is a shortage of semi conductor chips that are used in modern day vehicles. This has come about because during the pandemic there was a huge drop in demand from the automotive industry so chip makers switched to chips for laptops, electronic gadgets, and mobile devices etc as the demand spiralled .

Yet this is just the tip of a veritable iceberg. Just go into your local supermarkets, and look carefully at the shelves, you will start to see a lot of stuff missing . Construction materials , medicines, bikes, and many food products are just a growing list of products that are going to be hard to get over the next six months .

The construction materials shortage has impacted self builders, renovators and DIYers, and further problems are expected

Jack Woodfield Homebuilding & Renovating

There is currently a global shortage of raw material shortages, stemming from global demand and other external factors (including the slowdown and in some instances, factory closures, outside the UK), which continues to constrain production of certain products, such as insulation, paints and adhesives, as well as packaging for products.

Jack Woodfield Homebuilding & Renovating

Samsung warns chip crisis could lead to shortage in TVs and home gadgets

Samsung’s chip division saw profits drop after it had to close vital US factories in February James Cook ,Telegraph April 2021

A combination of covid, major supply chain disruption , demand changes , cost and organisational issues within world shipping have created that oft used phrase a perfect storm.

What may come as a little bit of a surprise to some (but not perhaps those within our own industry ) is that you may not be able to not be able to pop into your local Party store , or your favourite party web site and buy the latex balloon of your dream. The worlds latex balloon manufactures are being faced with exactly the same problems as that of rest of worlds supply chain.

  • Extraordinary demand (throughout Covid)
  • Shortages of raw materials
  • Manufacturing limitations due to covid restrictions
  • Shipping disruptions

The following is an an extract from a statement put out by the Balloon Council of America (Organisation representing major Latex Balloon Manufacturers in the Americas.)

Industry Update: Growth and Supply Chain Impact
It has been over a year since the pandemic began impacting our lives and business. As leaders in the balloon
community, it is important that we address the disruptions in the supply chain that the industry continues to
experience.
Although we are shipping large quantities of balloons, we have seen a marked increase in demand and the reality
is COVID-19 continues to impact all segments of our industry. Some of the challenges that we faced early on
continue to cause disruptions and impact the overall business.
• COVID-19 has continued to impact employees. Safety is essential. In many companies, new work rules,
social distancing, and physical barriers have been necessary to ensure a safe work environment and these
changes usually mean a reduction of efficiency and output. We have also faced challenges in finding and
retaining employees during these challenging times.
• Balloons are an element of a global supply chain, and many suppliers, both here in the U.S. and overseas
that we don’t control, have been similarly hit, impacting their ability to deliver raw materials or services.
This has been an ongoing issue in the past year.
• The whole supply chain, including freight companies, continues to struggle to operate efficiently and has
not been as predictable pre-COVID-19.
We know this is frustrating for balloon buyers at all levels. Manufacturers, related products suppliers, and
distributors are doing everything in our power to ramp up volume and responsiveness. TBC members are trying
hard to control the things we can, such as increasing production capacity, asking our employees to work overtime
and recruiting additional workers.
It will take more time for the supply chain to reset but we are tirelessly working to achieve our goal to return to
pre-COVID-19 service levels as quickly as we are able.
The global vaccination effort currently underway offers a beacon of hope that a return to normality is a possibility
in the not-so-distant future. That said, every day we are hearing stories about new variants that may or may not
respond to the existing vaccines. Few expected the pandemic would be this severe for this long, and none of us can
really project when its impact to industry will be over.
Balloons have brought joy to many people throughout the pandemic. As an industry, we are committed to doing
everything possible to get business back to pre-COVID-19 service levels. We are all working to make that day come
soon, and our teams won’t be satisfied until we achieve that.
Thank you on behalf of all the manufacturers and distributors who are TBC members for your patience and
understanding during these challenging times.

I make no apologies about the length of this specific extract as hopefully it will be of interest to the odd reader who is involved within the party industry and it would be remiss of me if I did not highlight these problems, particular as this product has put food on the plates in our household for many years.

Moreover, these issues are the very same (or similar) facing the entire supply chain in many product areas.

Most consumers wont even notice , or rather they may have difficulty in getting their brand , but there will be an alternative. Yet higher up the supply chain, the pain will be greater. Because of the way the supply chain operates in most markets, it is just not that straightforward in finding another supplier.

What does of course happen when supply dips , and demand remains constant or increases then so do prices.

Yet we are not at war. Well maybe we are in a sense, of all trying to fight a virus, which is complex enough but then putting into the mix the complexities of world trade, there is a inevitably about the impact of the supply of goods and services. Despite this ‘inevitability’ , none of us actually know what is going to happen from day to day . So if you cant get exactly what you want today, but you want exactly what you want, hang on a bit and you will probably get it. If you don’t want to wait buy something else.

Brexit …..aaargh….Jan 1 …brrr…Customs… aaargh !

Posted on by markybrett

Over the last four years , I have tried as much as possible not to post about Brexit. However, from a purely practical point of view I have relented, in the hope I can inform in an apolitical way.

Unbiased (I keep biting my lip even when I only write those words), I am going to try and put some of facts down which will hopefully inform traders who have been buying from suppliers within the EU, on what they need to do. I would like write about exporting to the EU , but that is even less clear and to be honest my interest is in stuff coming from the EU.

So lets start with some facts. There are 11,000 containers of UK Government PPE at Felixstowe docks. Ships coming into both Felixstowe and Harwich have been subject to delays for some time now. The Customs IT systems are not fully tested yet. Every UK point of entry ie ports & airports invariably run different types of software for customs declarations . It is muted there will be all singing, all dancing single system by 2025 . No matter whether there is a deal or no deal on Jan1 2021 things will change big time. If you did not really understand the words ‘free movement of goods’ you will then .

What’s to do then ? If you import absolutely anything from the EU or intend to then the following 2 steps are essential.

  1. Apply for an EORE ( pronounced by HMRC as EOREE. Well at least someone has a sense of humour or irony) .
  2. Apply for deferred Custom Declarations and Vat payment
Eoree -Amused me !

You have to do No 1 before you No 2 (that may chime with some- schoolboy humour). You can only apply for 2 if you have not been a naughty person with HMRC. If you are having difficulty loading the HMRC site to download this form, it maybe the browser, as it only works on certain browsers. But HMRC Help Line doesn’t seem to know that. It also doesn’t explain the forms you may or may not need. The one that you probably do is called C1202 as it is a direct debit mandate for HMRC. Without this you are unlikely to get approved . Here’s a good ‘un, you have to complete the form online but then you have to print and post it. This implies that they could have anywhere between 100-200,000 postal applications between now and Christmas, which they will then have to handle manually. Having just had two weeks locally of no postal service, the signs are pretty ominous.

If your application for deferred status is confirmed it allows you to do 2 things …

  1. From the Jan 1 to June 30th you can defer making your customs declarations. But you must keep a record of all your transactions during that period. I will itemise the data you need later.
  2. Whilst in the EU there was an agreement that all VAT transactions between states did not carry VAT on the invoice. This stops on Jan 1. From then on, there will be no VAT on an invoice from an EU supplier but you will have to record the VAT that would have been due on that same invoice in your VAT returns.

The Following list are the core items you will need to record for customs declarations :

Customs Procedure Code

Supplier

Date

Consignment no/ Invoice no

Product code

Description

Tariff code

Tariff Rate

Cost Price

Quantity

Total Due

Without doubt I will have missed certain elements but these are the basics. If a deal is reached, I get the impression that declarations will still have to be made as to what they contain is another matter . One thing is for certain is that you will have to record the Vatable amount as that will certainly be due on July 1. I cannot speak for the Northern Ireland Protocol, as that is another layer of political customs speak. Nor do I have any knowledge of specialised products such as plants , food, oil, gas, aero engines, airplane parts, chemicals, drugs………All of which I assume comes into the definition of oven ready deals.

None of this helps with the importing from nations not in the EU but have free trade agreements with the EU. There are fifty plus such nations . We have made a couple of deals notably Japan, Switzerland , Norway and Iceland but there are a number of significant trading nations where we will no longer have a free trade deal such as Mexico, Vietnam and Turkey. And I am not so sure there is a lot of help available. There are grants for training on customs procedures and there are also grants if you want to set yourself up as a Customs Agent ! I think that in itself tells a story. There are also many HMRC webinars . Having recently sat through one , I would not raise your hopes of celestial enlightenment . Maybe others are better .

I lied. At the start I said I was going to be apolitical . I have been . Now I am not. The UK Government has been floundering about in very deep waters dealing with Covid. So has every other National Government. No matter what shade of political belief , no Government would have got it right. It is one of life’s undeterminables. And it will continue to be so. The Government has a duty to preserve and protect the lives of its citizens. Where there are definitive actions that could be taken they should take them.

Which brings me back to Brexit. I am a remain voter accepting of the UK decision to leave. What I cannot agree with is reckless political ideology that puts our nation in harms way or at very least increases the risk to both health and wealth. One of the underlying principles of paying off the huge debts that have been incurred (quite rightly) is the returning to some form of economic growth. Even (at least most ) political Brexiteers agreed that the first months of Brexit would be very hard on the economy, and that was pre-covid. Consequently , I get very wound up by superficial ads with actors, apparently in large warehouses, saying we are ready are you? When they, the Government are very evidently not. Moreover, how would you expect hundreds and thousands of businesses that have currently got to deal with more economic, financial and emotional hurdles to deal with than at any other time since the 2nd world war .

So please tell me UK Government why you have chosen not to doing anything about the one thing you did have control of ie Brexit Transition you chose to stick with political ideology . That is to say you kept your snouts well and truly stuck in a political bucket . Take back control , whatever that means but do so when you when can at least see the steering wheel. As a consequence we can look to at very least six months of even more supressed if not depressed growth rates. Ta very much .

Kerb Crawling..The New Business Opportunity!?

Posted on by markybrett
Courtesy ‘mac’ Daily Mail

It is one of the world’s oldest professions. It can be highly profitable . It is a very quick and easy way to start a business, if you are prepared to be out there in all weathers.

Selling stuff on the street is common place throughout the world. Whether it is street food in South East Asia through to Street grafters flogging Bargains to unsuspecting consumers throughout towns in the UK , there would be few anywhere in the world who would not have bought something from a street vendor at some time or other. So nothing new there then.

Well there is sort of .. rather sort of new . I first experienced something which I thought at the time was very innovative. During lockdown when restaurants could offer takeaways , a local restaurant offered a Kerb Side service. You ordered and paid via your phone and when you arrived you stayed in your vehicle , sent a text you had arrived and they would come out and put the collection in your boot.

In the US this has gone a stage further. A number of retailers concerned about Covid did not want shoppers back in their shops. Yet they still wanted to trade. Their solution is to make their shop window their Shop Window. so to speak. The principle is the consumer pulls up in front, or is walking on the pavement, and the retail offer is shown clearly in the shop window. The buyer then phones through to the store say what they want, pays for it and hey presto it appears at the front door or is delivered to your boot (Trunk as the Americans would say).

Whilst click and collect at the curb side is not in itself revolutionary , it is when there is a store that informs you and you use the shop window to make your purchase. It favours the smaller stores and those with limited store offering . It also favours small stores that have small stores or rather very shallow but with a long frontage.

Party Store In USA. Courtesy BBC

It helps if you are not on a Red Route (London) or Double yellow lines, that aside if you are actually on pavement there is potential there for many retailers. By restricting your selling space to a window is very restrictive, but the alternative is that less customers or even nobody comes into the store . This is not instead of a website it is another tool. Potentially it would attract the passer-by, especially if they are going somewhere else and think ‘I can order this now and do what I was out to do and collect it on my way back.‘

THE WALL STREET JOURNAL -Stay Forever Store ‘Walk up & Browse’

I have heard from a number of customers that during lockdown they executed a similar plan. They did not make specific use of their windows but they offered a drive by service via social media and in conjunction with their web sites. This is by no means a Retail Panacea but it is another weapon in the armoury (….or ‘tool in the box’ depending upon your mind set).

Whilst having developed during the Pandemic, it is not uncommon for retail innovation to jump to the front of the queue during any crisis, it could be a very useful tool during ‘normality’. It can be thought of metaphorically reaching out to the consumer and looking at ways that make it easier for them to buy from you. Instead of you having to drag them in from the street you are meeting them half way in the Street.

“This is the new abnormal and the consumer wants a different experience,” said Mr. Fawkes of PSFK, the research firm. “If the legacy retailers won’t provide it, new entrants will.”

THE WALL STREET JOURNAL