Tag Archives: retailers

In-store marketing and it’s influence on customer spending

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Two days ago, I made my second speech of the year.

After the prestigious stage of TED, at the Bocconi University, this was the time to perform at BIFEX, the Beirut International Franchising Forum and Exhibition.

Professional people from allover the GCC countries but also some from oversea, attended to this very well organised event by Al-Iktissad Wal-Aamal, to share the Franchising philosophy, new trends and related businesses opportunities.

I wish to thanks the greatness Lebanese Franchise Association people for the very kind invitation and I hope to continue our cooperation as per our talks, checking the possibility of twinning Lebanon and Italy, therefore the LFA with IREF Italia.

For those who couldn’t attended, I’m gladly sharing here my speech presentation. Any questions or feedback are highly appreciated.

2013-04-18 07.02.32

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How to implement grocery retaling and e-tailing in India

We found this article by Avinder Batra, published on IndianRetailer.com very interesting because of its very detailed approach to the implementation of a home delivery service for those small groceries retailers that are facing the competition with by multinational like Wal-Mart. This is also a business model which is very sustainable, by lowering CO2 transportation emissions and by mainting vital the traditional small retail grocery business.

Batra identifies a big trend in the grocery business- home delivery- due to two main reasons:

-High fuel price: Indian families are not interested in spending time on these products
-Families want more leisure time for themselves: Since both the partners are working, shoppers find this activity as waste of time to collect groceries in weekends

“When most of the big retailers are fighting for larger space, opportunities can be foreseen where you do not have compact space and can still run successfully through Etailing the Grocery model” Batra says.

The solution could be a mix of website, mobile, IVR.

High rental costs have made the retail business cumbersome for the independent players.  As told by Ragib Hussain, VP, Vice President Strategy at e.Soft Technologies,  “This type of model does not need much of investments. Etailing models (having virtual shop) can help retailers in expanding the business thus by covering larger area & reap good volumes.”

Small independent retailers need to increase their customer base: Online services and then home deliveries would fetch revenues only when you have large customer base. Margins are the rewards which an investor gets and this is what he has to work on to have with minimum liable cost.

Develop tie-ups/partners: Developing partnership agreements with the kirana shopkeepers and others nearby shops in the area that would reach the consumers through home delivery systems. This should  be the initial step of building a strong network in the areas concerned you want to cover.

 Also, it would decrease the liability on the retailer—warehouse cost, maintenance cost, procurement cost, etc. 

Develop your own site and make a strong viable back-end system for smooth functioning of the business model: either by creating your own hosted website or by opting for cloud services, this is a very important step. Cloud services would play a vital role to make updated connections with your suppliers, logistics suppliers, CRM updates and drop shipping suppliers. Because time is a critical factor, efficient distribution is of utmost importance. Technology plays a key role in enabling an efficient dairy distribution model.

 This is the back bone of the whole concept when the business starts working and it is the most challenging part of the business to make real-time connectivity with them.

Home delivery services: By tying up with the partners in the local areas, investor can direct the orders to those shops and through delivery boys; the task can be executed smoothly. This would even increase the revenue prospects of the local partners.

 If the business model is churning profits, there is no harm in having your own warehouses and company owned shops in the localities. This could be the way to expand your business model and make it stronger.

Each small outlet should be centrally connected to the warehouse to record the sale and updates are on real time basis. This would help to replenish the goods which are going out of stock.

Delivery system: Tempos and other mini trucks can be used to provide deliveries in the located areas if orders come in bulk in particular area. (Source: IndiaRetailer.com)

Retail, web 2.0 and sustainability:an analysis

A recent Zumer and Sustainable Life Media research is helping medium to small size retailers to better understand what is the connection among sustainability, consumers and web 2.0 tools.

The survey analizes the behaviour of 50 of the biggest companies leader in sustainability, at a worlwide level. Names such as Chevron, McDonald’s, PepsiCo, Coca-Cola, Campbell’s Soup, Microsoft, Toyota, Starbucks appear in the list of the companies whose online conduct on the three top social media, Facebook, Twitter and YouTube was analyzed for six weeks between December 2010 and January 2011.

We have found three key points that can be summerized as follows:

1. Authenticity: sustainability must permeate the whole company and must involve the company’s stakeholders so that ensure an authentic online communication, a more effective management of external reputation and brand perception. This is perfectly in line with the Cone research we have posted a while ago: consumers DO PUNISH not authentic communication about sustainability.

2. Sustainability helps acquiring new market share: almost three quarters of the professional interviewed stated that sustainability-themed social media are the channels to be in in order to get the attention of new market segment and reinforce the company’s position in the more traditional ones

3.Mix platforms to get the best results: although Facebook is still the most favourite platform among the big 50 companies in the survey, with investments rising in 2011 too. Tweeting about sustainability is becoming very common too -investments will double by 2015, as well as are CSR dedicated company’s websites, while YouTube actions are still fragmented. Blogging about sustainability might be a very powerful tool, not yet fully implemented by companies (1-2% of total blog posts).

Mark’s and Spencer opens greenest store ever

On March 1st, 2010 Marks & Spencer announced a programme to be the world’s most sustainable retailer by 2015 launching 80 major new commitments under M&S’ eco and ethical plan, Plan A.

Plan A, started on 2007, had already proven its efficacy achieving these great results in 2009/2010:
• Cost savings of around £50m for M&S;
• New products and services, including 250,000 customers from M&S Energy;
• Cut CO2 emissions by 40,000t;
• Recycled 2 million used garments via Oxfam;
• Reduced 10,000 tonnes of packaging;
• Diverted 20,000 tonnes of waste from landfill;
• Saved 387 million food carrier bags;
• Used 1,500 tonnes of recycled polyester (equivalent to 37 million bottles);
• Saved 100 million litres of water;
• Recycled or re-used over 130 million clothing hangers;
• £15m for charities.

Yesterday, April 18th 2011, Marks & Spencer achieved a new great result opening the retailer’s “greenest-ever” store at Ecclesall Road in Sheffield.

The store is the first of a number of new ‘Sustainable Learning’ stores, that are part of M&S’ drive to become the world’s most sustainable major retailer by 2015.

The new 12,400 sq ft Simply Food store, built from scratch on a former brownfield site, incorporates a host of sustainable design and construction features, including an LED screen giving real-time public transport information, electric car charging points and a green living wall to attract wildlife.

All the bricks used in the build have also been reclaimed from a local mill.

Marc Bolland said:

“We’re delighted to be opening M&S’ greenest-ever store, providing customers with top quality M&S food and drink products in such a convenient location.”

The store is “firmly on course” to achieve a BREEAM rating of Excellent, making it one of the most sustainable retail outlets in the UK.

Its carbon emissions will be 23% lower and energy usage 30% lower than a traditional similarly sized store.

Innovative features include:

  • LED lighting, which is 25% more efficient than standard lighting, is used throughout the store, a first in the UK.
  • Sun pipes bring natural lighting onto the shop floor;
  • 100% of the timber used is FSC certified, a UK first;
  • All the bricks have been reclaimed from an old local mill;
  • Water costs will be reduced by up to 40%, compared with a traditional similarly sized store, by using harvested rainwater;
  • Capturing heat expelled from the store’s refrigeration units to help heat the store;
  • A living green roof of sedum plants and green living wall have created wildlife habitats, as well as insulating the store;
  • Bird boxes have been placed around the perimeter wall of the site;
  • In total, 62 different species of plants have been planted on or around the store;
  • Polished concrete floors have removed the need for floor covering;
  • 100% of the construction waste has been recycled.

All employees at the store have also been fully trained to understand its environmental features and will be encouraged to share this information with customers. (Source: The Food and Drink innovation Network)

China retail luxury: a long-term insight

China: a market that is continuously growing, a very rich but still unknown to the many. What is clear is that China is set to become the most powerful economy in the world, and this will happen in a very short time. Many are the companies that have already sucessfully entered the Chinese market, luxury good brands being the pioneers.

A McKinsey survey over 1.500 Chinese luxury consumers during spring 2010, shows interesting trends which are basically telling to the world that the “consumer culture” is changing at a very high speed, following the changes in the society and urban landscape. For those who are interested, the whole report can be downloaded here, but three are main facts:

  • “Rapid increases in wealth, and shifting social mores that sanction the display of that wealth, are driving a growing infatuation for luxury goods among Chinese consumers.”
  • “Access to an explosion of information on the Internet, an increasing penchant for overseas travel, and first-hand experience purchasing and consuming luxury goods are contributing to a substantial rise in sophistication among luxury consumers in China. Contrary to popular belief, a growing number of Chinese luxury consumers are exhibiting a noticeable trend away from overt displays of wealth, and towards more understated forms of luxury consumption.”
  • “Rapid urbanization and growing wealth outside of China’s largest cities is driving the emergence of several new geographic markets with sizable pools of luxury goods consumers. Over the next 5 years, [McKinsey] expects that the number of such cities will double from 30 to 60.”

Other key findings are social-demographics related. Not only traditional luxury brands consumers, but also 13 million upper-middle-class households (earning $15,000 to $30,000), which are stretching their budgets to buy luxury watches, jewelry, handbags, shoes and clothing. This segment represented 12% of Chinese luxury consumption in 2010, but is expected to reach 22% by 2015.

The survey also shows that approximately 73% of luxury consumers in China are under age 45, significantly younger than their counterparts in western nations or even nearby Japan. 

All these findings essentially reinforce the widespread idea that if this trend is going to be followed in 2011 too, China will become the biggest retal luxury market in the close future. (Source: McKinsey, Picture credits: TheChinaObserver)

What is Masdar and why it is so important for our future?

Masdar is a familiar word to all of us who are concerned about the future of our dear planet Earth. But for the few of you who have never heard of it, please allow us the pleasure to introduce you this incredible project.

Masdar is first of all a company, notably a Mubadala – Abu Dhabi government owned company, based in Abu Dhabi, UAE. As stated in the company’s website ” Masdar is a commercially driven enterprise that operates to reach the broad boundaries of the renewable energy and sustainable technologies industry – there by giving it the necessary scope to meet these challenges.  Masdar operates through five integrated units, including an independent, research-driven graduate university (Masdar Institute, other units are Masdar Capital, Masdar Power, Masdar Carbon, Masdar City cfr.) and seeks to become a leader in making renewable energy a real, viable business and Abu Dhabi a global centre of excellence in the renewable energy and clean technology category. The result is an organisation greater than the sum of its parts and one where the synergies of shared knowledge and technological advancement provide this commercial and results-driven company with a competitive advantage that includes an ability to move with agility and intelligence within an industry that is evolving at great speed.
This holistic approach keeps Masdar at the forefront of this important global industry, while ensuring it remains grounded in the pursuit of pioneering technologies and systems that also are feasible. As a result, it delivers innovation to the market while deriving profits for its shareholders.”

This huge project deals with all the aspects of sustainability: research, energy, finance, architecture, urbanism. Last but not least, retail. Because of its importance in the life of all the people who will live in Masdar City and for “its contribution to the city’s appeal as a renewable energy and clean-technology hub“, retail in Masdar “will provide valuable lessons regarding commercial activities (…) increasing our understanding of how retail activities can be conducted in a sustainable manner”. The list of the companies who have already been involved in the Masdar City retail project includes Caribou Coffee, health insurance provider Daman, telecom provider Etisalat, Sumo Sushi, express delivery company Aramex, Omeir Travel, Organic Foods & Cafe and National Bank of Abu Dhabi. The first commercial building, the Courtyard Building,  has been planned to be finished by 2012, therefore there is enough time for this list to become a very long one.

In the meanwhile, many are the people who are praizing the incredible urban project designed by Foster and Partners, but to be fair, there are also critics like New York Times journalist Nicolai Ouroussof  who wrote that “…its design also reflects the gated-community mentality that has been spreading like a cancer around the globe for decades. Its utopian purity, and its isolation from the life of the real city next door, are grounded in the belief — accepted by most people today, it seems — that the only way to create a truly harmonious community, green or otherwise, is to cut it off from the world at large“.

Our point of view and what we are always stressing in our ECOFFEE projects, is that sustainability is too important for our future and each and every project that has a little bit of sustainability in it is important to raise people awareness. To be too critical towards sustainability-related projects, requiring their perfection – which at this stage is quite hard to achieve – postpones any action and creates confusion among people, these two being the worst enemies of sustainability. (Picture credits: Masdar.ae)

Online retail: how to turn a negative consumer feedback into a positive one

Retailers who are going to open online shops often fear about negative feedbacks from online shoppers. “What if I receive a negative feedback? Should I ignore it or answer?” The most common retail behaviour is to ignore it, hoping it will be ignored by other consumers too. But this is a great misconception.

Retailers have an opportunity to fight back and use social media to turn unhappy customers into brand advocates, says the Retail Consumer Report, commissioned by RightNow and conducted online by Harris Interactive in January 2011 among 1,605 online US adults. The report shows how retailers are using social media to win back customers and drive buying decisions.

  • 68% of consumers who posted a complaint or negative review on a social networking or ratings/reviews site after a negative holiday shopping experience got a response from the retailer. Of those, 18% turned into loyal customers and bought more.

By listening and proactively responding on the social web, says the report, retailers have a chance to turn disgruntled customers into social advocates.
After a positive shopping experience, half of consumers cited great customer service and/or a previous positive experience as influencing their decision to buy from a specific online retailer.

Social advocacy can also help drive sales, the survey found:

  • Nearly a third of consumers researched what customers said on social networking and reviews websites while shopping online.

For those consumers that had a positive holiday shopping experience with an online retailer during the past holiday shopping season:

  • 21% recommended the retailer to friends.
  • 13% posted a positive online review about the retailer.

The survey found that 38% of consumers turned to the retailer’s website for information or support with online shopping. However, one of the top frustrations consumers had when shopping online was a lack of consistent information from retailers. Specifically, 22% of consumers were frustrated by information that was inconsistent between the retailer’s website and customer service agents.

For further research on how customer experiences impact the bottom line, including the fact that 85% of consumers said they would be willing to pay anywhere between 5-25% over the standard price to ensure a superior customer experience, RightNow makes the Customer Experience Impact Report 2010 available to download. (Source: MediaPost)

Italian consumers love sustainable products but need better product information.

One of the findings of the “For a Sustainable Supply Chain: business and consumers point of view” survey conducted by the GfK Eurisko and promoted by the Sodalitas Foundation,  the product/service sustainability is ranked fourth among the criterias used by consumers when choosing, but if better communicated, will become an increasingly important requirement. During the investigation 500 consumers and 183 businesses were interviewed . To more than a third of the companies, sustainability is very important. However, only a minority (29%) in the interviewed sample declares to be thoroughly familiar with this concept, while a substantial percentage (45%) say they have “enough information”, confirming the gradual integration of this concept in the corporate culture .
The majority of consumers (63%) had heard of sustainability, even if only 19% of them (mostly young and with a high level of education) believe to know well its meaning, with a prevalence of the environmental (83% ) on the social aspects (64%).

The responsibility for a “sustainable development” is primarily attributed to the central Government (86%) and to local governments (82%), but a very high percentage of respondents (over 70%)  thinks businesses and citizens responsible to ensure the sustainability of the development. The opinions about the companies’ commitment to sustainability is different: one third of the sample (35%) expressed a positive opinion, a  third is critical and another third has no a definite opinion about it.

Only a third of consumers (32%) had heard of “sustainability of the supply chain” (a percentage that is growing in those aged more mature and – especially – among those with a higher education degree). But after the concept was briefly explained a large majority (76%) said to believe that companies must ensure the sustainability of their supply chain. Today, already one quarter of Italian consumers are chosing which products to buy also using supply chain sustainability criterias. Three quarters of consumers also agreed to pay more for a product which is guaranteed in terms of its sustainability. The focus is on all product categories but in particular on food (71%) and detergents (65%). And, at least in theory, the majority of consumers (76%) would be willing to pay more for a guaranteed product in terms of sustainability (though – the majority said to be ready to pay only “little” or “very little” more). (Source: GfK Eurisko, Image credits: Transocean)

The colors of Ikea Italy: blue, yellow and.. green!

Ikea Italy announced an environmental investment of € 20 million: 150,000 solar panels to be installed by the end of August 2011in each store so that to create a small solar power station. Clean, renewable, sustainable.

About 150,000 solar panels modules will be placed on a aluminum structure resting on the Ikea store roofs, and in Catania (Sicily), also on the bus shelters in the parking lot. An area as big as 16 football fields to cover about 10% of the electricity needs of Ikea Italy. The first floor (showroom) of all stores will be then lightened with this renewable energy. A total of 10,000,000 kWh of electricity, equal to the average consumption of 3,300 households will be produced each year with a reliable and innovative technology.

This will prevent the annual emission of approximately 4,000 tons of carbon dioxide, equivalent to the quantity of CO2 absorbed annually by 400 acres of tropical forest and the emissions of 3,300 cars travelling an average of 10,000 km. Another key point of the Company policy is to reduce waste and an effective use of raw materials, recycled materials or easy to recycle ones, natural and renewable energy, CO2 emission reduction thanks to a clever consumption, the optimization of facilities’operational activities and electricity from renewable sources (in 2010 equal to 83% of the total consumption).

When dealing with waste management, the goal is to reduce it thanks to the development of a less bulky packaging and a careful waste disposal collection so that to assure their almost full recycling. Ikea is bio too. In restaurants, the group includes more than 58 recipes and organic products from biological origin. In 2010, Ikea Italy purchased 2,080 tons of organic products (+38% compared to 2009). Ikea Italy is now the third third largest Ikea supplier company in the world after China and Poland, as stated by the managing director of Ikea Italy, Lars Petersson during a meeting in Milan. (Source. Greenbiz.it)

Biometrics and retail marketing: the future is now

Biometrics, methods for uniquely recognizing humans based upon one or more intrinsic physical or behavioural traits, is very important when evaluating the efficacy of a retail store design or display and assessing counter actions to make the retail environment more customer friendly. According to NY Times, IBM is currently testing a revolutionary biometrics method in two location in downtown Milan – a fashion company flagship’s store and an electronic store. Biometrics the future of retail marketing
The I.B.M. solution, involves tracking biometrics through a mini camera in a mannequin’s eye or placed somewhere in a store and the collected data will be aggregated so that not to be traced to any individual.

“We started with fashion because it is a creative and innovative industry, but it’s clear that people have to be educated so they know their privacy will not be compromised,” said Enrico Bozzi, the manager of I.B.M. Forum Milano, the department that developed the technology. “It is a question of changing people’s perception.”

 The IBM biometric test is already showing its first results. At the pilot in the Milan fashion store, for example, the client noticed that almost all Asian customers enter the store through one particular door, even though five are available. “We thought it was a mistake, but we checked it out and it was right and it continues to happen,” Mr. Bozzi said. “We don’t know why yet but, in the meantime, the store is considering positioning products by that door that are known to appeal particularly to Asian shoppers.”

I.B.M.is now also working on software that will let clients try on jewelry and makeup wirelessly thanks to a mobile phone or computer, with an iPad application likely to debut soon.