Tag: retailing

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

Sex Toys……The Next Product coming to a Supermarket near you ?

Posted on by markybrett

Yes.

Well according to that august title Retail Gazette, there are a number of product categories that the High Street Majors are considering. Sex Toys, Vaping and Plant Based products are three of them . Covid tests, meal kits and Pick and Mix are the others.

As far as Sex Toys are concerned it has already happened as Tesco is rolling out a range in 250 stores.

Vaping, I would have thought they were a bit behind the eight ball on this one. Yes, the market is still growing . Currently in the U.K. the market is estimated at about £3 billion. However, according to some retailers I have spoken with, the consumer tends to shop seeking advice. Perhaps trying different flavours it doesn’t appear to be natural for supermarkets where they would not get the service levels that provide optimum experience.

Plant Based products is the grouping that is a tad amusing. A massive part of what they sell already are plant based. Like what are bananas, potatoes, cabbages, sprouts, and the entire fruit and veg sections if they are not plant based . Sure, I know that there are plant based burgers , ice cream, cakes, and whole gamut of imitation type products. But the reality is that chunks of standard Supermarket offerings are Plant based. It is a marketing hype and I am not convinced it is terribly helpful especially to those who are very wary of what they would describe as fads without realising they are probably eating a load of plants already. There is also a large junk of the population who would see the Category Plant Based and put two and two together ( making it five during the current inflationary cycle looks a bit conservative) and assume that it would be too expensive . That said, the cynic on my shoulder would point that this category would be more expensive and more profitable.

Supermarkets are notoriously slow in their buying decisions, waiting for range reviews before even considering new products. I would have thought the search of new products should come first and then decide when to have range review. Buying Departments within the multiples should be renamed Sourcing . Actually one has started to use that Description. When it comes to a Multiple looking at products that are outside of their core range they tend to take the line of least resistance. I could not count the number of times, when approached or having approached a Multiple retailer their first test is to match your prices against their incumbent supplier. If you don’t match they wont look. Or rather the reality is that if you are not lower they wont look. Not sure this is the most efficient way of keeping pace with the market. But not likely to see much change anytime soon. ! It is just very frustrating.

Covid testing is a difficult one. One half of me says they are just jumping on a band wagon, the other half says if you need a test quickly and are unsure how to get one but know that Tesco ( or any supermarket) do them , it would make that process a lot easier and probably quicker. At least they would have some credibility as opposed to some strange and distant Medical Company that you know nothing about , or worse still the Government . Great situation that, Who do we trust most ? The Government or a Supermarket ? Answers on a postcard.

Strangely, none of these items appear in Shopify’s product trending list for 2022. What is even stranger is that items appear in the Shopify list that are products the Supermarkets are kicking out, Books and CDs.

Extract from Shopify 2022 Product Trends

What was No 1 ? Books and E-Books. Now Shopify was highlighting trends based on Online selling (hence E Books). However , nowhere in their top 21 did any of the Product areas as detailed at the beginning of this post, appear . I am not suggesting that Multiples should be looking at LP’s but when you look at the numbers especially for CD’s (albeit from a very low level ) that there must be more interesting and healthier options than Vaping.

For the Good Independent Retailer out there , I think this is good news. But you have to be good. For so many years (within the Party sector) I have walked into Party Retailers and they have said oh, I can’t sell that sort of product as the supermarkets have killed it. I just can’t compete. They could and can. Most of them have gone now . I suggest that many had not actually looked in their local supermarket as they were usually poorly ranged and certainly offered no level of service .

So for those looking at a range of sex toys -go for it. If Tesco are giving it a level of respectability and no level of service, you are onto a winner .

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.

Forecasting Consumer Demand….The Retailer’s Dilemma ….

Posted on by markybrett

I am not a Retailer. I could not be a Retailer. I have neither skill set nor temperament . I spend most of my working life talking with retailers and wholesalers, so I know a little of one aspect of retailing , that is the supply end and being a consumer , I know, sometimes what it is I want, the demand end. However, on many occasions , I don’t know what I want, which is the source of the problem.

The biggest retailers have access to data to tell them that their sales of Coca Cola (can’t use the word coke anymore) will peak in two weeks, using history and weather forecasts. They know the sales of baking products are going to explode when the Great British Bake off comes on telly. Sales of beer and pizza will suddenly jump when there is major sporting event on TV. Supermarkets , will know , I suspect , exactly how many loaves of sliced bread they will sell each and every week. But most retailers don’t have that data or sell the sort of product that is that demand reliable.

Twenty years ago, buyers would turn up at trade shows and apart from new product, and then they would be very wary of anything new, as they knew what sold last year would sell next year and taking on new products meant taking a chance; they would order their needs for the year. Actually it wasn’t quite that straight forward but it illustrates the general shape of buying behaviours it was not that long ago.

I sold 2000 widgets last year so I think I will sell 2100 this year (or 1900 depending upon the buyer).

Demand was not pulled it was driven from behind . The retailers (and wholesalers), in most markets, decided what they were going to sell and the consumer had little say in it. An over simplification, perhaps. Nevertheless it was pretty close to the truth. But then it started to change . With the incursion of online retailers and the gradual development of social media ,the consumer was starting to throw its weight. From the online operators offering a far bigger range of product, and sometimes very different product, to the consumer passing on this information via social media.

I believe this is why part of today’s UK Retail High Street is where it is today. There are a lot of tired brands that have received little attention over recent years , notably Arcadia, Debenhams, Edinburgh Woollen Mill……..They sat on their laurels, did not reinvest and lost sight of their customers. The latest Bonmarché supposedly the shop for the over 50’s . Well today’s fifty five year old is a very different beast to that of twenty years ago. Looking at their shop windows you would think you were back in the eighties .

Typical Bonmarché Store Front

It is easy to to mock, to just stand back and say well they are were a lot of old rubbish. What is not easy is predicting what the Buying Public actually wants. A not so perfect example is this current year of 2020. When the first lockdown of the year in the UK began, all thought that’s it for three months . Nothing is going to sell, except toilet rolls and food, as there is nowhere to sell it . Even the mighty Amazon stopped selling non essentials for a few weeks. But no, small web sites found themselves inundated with demand for craft items, games, toys, puzzles, drawing books, home party items. At its peak demand far exceeded supply. Now when the second lockdown occurred, it was a very different scenario . Why ? Because the consumer behaviour was different. As to why, leave that to the social psychologists reports next year.

There is nothing easy about second guessing the consumer and their wants. It is different if you are a major brand . They have the ability and resources to push their demand . The millions that wait outside The Apple stores when a new product is launched, before knowing how the product will perform. The brand, in this case Apple, telling their audience that they want it . But that wont last forever . But they understand this and develop other income streams, which one day will replace those of their physical products. In this case it is making programmes, films, digital music , and cloud computing (Amazon get 50% of their profits from 10% of their revenue ie Cloud computing). Few organisations have had the resources to adopt alternative strategies, or rather they have no plan to do so.

I am often asked What is selling ? What Should I buy ? I can only answer what sold yesterday and really do not have any idea of what will sell tomorrow. This sounds a bit like copping out. It is . There is no easy answer. Of course, within every range of product there is a core of items that the retailer will know they have to have in their store. But going forward that is not enough.

There are retailers that get it right, or rather they get a lot closer. Zara is one of them . they apparently can turn new ranges around in three weeks . The major successful discounters (certainly in the UK ) have open door policies in respect of seeing suppliers. This does not necessarily mean they know more about what the consumer wants, but it does mean from one end of the chain they are lot closer to what trends are coming through, and can act accordingly.

The bottom line is that there has to be radical rethinking by the retail entrepreneurs on how they operate . it maybe something along the lines of literally of more of a shop window. I have seen this happen with two new retailers in my neighbourhood. One is a deli/grocer , the other is a butcher. The attitude is more

This is what we have in the shop, but don’t hesitate to ask if we don’ have what you want or don’t know what you want .

Think Star Trek. Think Dematerialization. Think Spock being transmitted from Mother Ship to Planet Surface.

Rabbit in box is 3d Printer or I can never buy a red rabbit ornament when I want one!

Well maybe not quite but I suggest, that to counter the issue of not knowing what to stock and what your customer might want, the technology is not far away. For many the Store will become more of an idea fulfilment location. A place where you will be able to discuss your needs with knowledgeable staff within that field and walk out with what you want rather than what they want to sell you.

Maybe or maybe not. What I can say without any hesitation, retail cannot and will not stay in its present form. This has nothing to do with Covid, Pandemics, Brexit, Deal or No Deal , it has to do with a rapidly changing consumer. Retail must change and it must change radically.

Would you Buy that Doggie Sitting in the Window?

Posted on by markybrett
Is this an example of a retail miracle or just rubbish merchandising ?

A very crude bastardisation of the 1952 Novelty song How much is that doggie in the Window ? Sung by Patti Page.

First it was toilet rolls and pasta, now the panic buying has moved onto Bikes and Puppies. In a few months time I can foresee loads of bikes on eBay, hopefully not puppies but there are already signs of profiteering. That, however, is not what this is all about.

As I was queuing to go into the bank (as one does at the time writing) , it was a source of inspiration whilst looking in the window of a locked down independent card shop. Or rather, it wasn’t, as what I saw made me think why would you go into this store ? Yes the store was closed but centre point of the window display (I hesitate to describe it as a window display) was a child’s plush toy dog. The product did not tie in with anything else in store , it looked grubby and as any dog looks in any window, very sad.

There are stores of all shapes and sizes littering retail landscapes, that are, if not full, then stocking a load of product that really should not be there. It does not stop with retail stores as it is true of wholesalers, distributors, importers and manufacturers.

Apple created product that nobody needed, and most experts suggested nobody would (or at least few would ) buy. What Apple managed to do was to create desire and then developed need. There are very few parallels. Therefore distribution channels in all markets should be a lot more ruthless in their ranging . I am not talking here about only having best sellers . If product has a market or serves a purpose, no matter how small, it is not a rational for deleting it. There is the 80/20 rule. This states that you take 80% of your cash from 20% of your range. This does not, however, you dump 80% of your product range. The function of less popular 80% is to enhance and attract the buyer.

It is the product that serves no purpose, has no market value and quite simply has a negative impact upon your business, it should go. Within our industry (Party Market) much revenue is generated by Licensed product eg Disney Characters, Marvel Comics etc. When a successful movie is launched there is often a huge peak for the main character ( Frozen Princess product for example). However that can be very short lived. In the case of Frozen, when the next film came out the consumer only wanted the new designs. The old design becomes dead stock overnight. Now, to be honest, this is a really tough topic because you never really now when ‘The shows over‘ so to speak. That dead stock can drain any profit made when it was hot. Moreover, it is more easily identifiable by the consumer as dead stock.

Certain retailers are more exposed to this issue than others. It is rarely an issue with any grocery outlet as most of the time their stock is limited by sell by dates. Yet they tend to be the exception rather than the rule. Old stock whether defined by its age, fashion , poor sales history or just plain rubbish product does nothing to help a retail store. It has to be taken out of the business and a basket with a hastily printed sheet saying must be cleared, everything 50p is neither a good look nor an effective process.

At a time when we could go into shops, all of us will have experienced that moment when you are thinking what, on earth, is that doing in this shop? or how long has that been here ?

I have just had conversations with a customer , who having been in their current location for three decades has cleared all the stock out of the store and decided that when it can be reopened , everything will be fresh and new . A glimmer of hope , but only a glimmer. I am concerned a lot more will rely on old stock (because of financial constraints), fear of the unknown, or pure and simply going back to their old ways.

A word of caution. If you are in the process of restocking and your supply chain offers the once in a lifetime super deal on certain products. Just ask the question Why? Is it, perhaps, from their metaphorical must be cleared, everything 50p basket ?

In the current climate it is so important . The consumer will not bother going into unattractive stores and they will not be interested in looking at rubbish stock, not that they ever were. But now is the perfect time to look at what you have (and don’t have) and ask yourself

Would I buy that doggie sitting in my window ?