You are the CEO. Ten years ago a competitor emerged creating a new distribution channel. You eventually followed that competitor into the channel, but not until they had claimed a very substantial chunk of business…a chunk that continues to nibble at your market share.
Now that competitor has opened yet one more channel. Industry pundits discount the competitor’s self reported 
progress for the new channel, claiming that the product lines delivered through this new format are not full price product and therefore might not represent true impact. Still, the delivery method has grown from 10% of sales in March of 2009 to 60% of sales in January 2010. From whom do you take your advice?
Peter Drucker “the most important work fo the executive is to identify change that is already happening. The challenge is to exploit these changes and to use them as opportunities. Far too few businesses are willing to slough off yesterday and as a result have too few resources available for tomorrow. ”
The product line in question here are books, the statistics Amazon’s percentage of sales on books “kindle ready”. The trend is real, rapid and irreversible. The game is afoot, has been for some time. Traditional book sellers have already lost with Borders reporting holiday sales off 14% from year ago. Next year the book source brands people will be talking about for the holidays will be Apple, Google and of course Amazon. Borders may well be a division of B&N and most probably there will be more empty retail space to add to the over 200,000 retail doors that have closed since the beginning of this downturn.
I bought two Kindles for Christmas ‘08. One for my very tech savvy eldest, who travels extensively and reads voriciously. One for my tech-aphobe wife whose relaxation depends on books. One week after my daughter left from her Christmas break and went back to work in Texas, my wife still had her head buried in the Kindle and had “improved” the design by adding a battery powered reading light. The game was clearly well underway at that point.
What change that has already happened am I failing to exploit? What game is already afoot, in which I am not engaged?
Day after day, week after week category and shelf plans are made. Plans are communicated to the store, brokers and reset teams. Team supervisors lead the charge and changes are made at the shelf. What does the space management team know about each store’s shelf set? What decisions does the store manager override? What decisions are the reset team leaders forced to make during the reset? What unplanned changes occur to this carefully orchestrated plan in the weeks and months following the reset? Do any of these changes work their way back up the line? Or is the whole process more like a game of Telephone?Planning, implementing, maintaining and running the store’s business is expensive. Money is spent creating and implementing the plans. Hopefully, money is made when the plans are complete. You are already spending the money, a lot of it.So, here is the question, “How do you know you are spending money effectively?” Measuring the implementation and maintenance is hard, but critical in managing this money and the results of the investment.Recent research by ShelfSnap evolved the definition of out-of-stocks to include products that are in the PLAN but that are in fact missing from the shelf. This includes:1. Traditional Out of Stocks2. Assortment Voids3. Short facingsDistribution voids and short facings, have been found to be every bit as big a problem as traditional out of stocks. While traditional out of stocks affect 8% of products on the store shelf forfeiting 3-4% of sales, assortment voids are at least another 8% or larger and more detrimental to sales because the voids are day in and day out.
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We did a bit of work recently looking at a major retailer display program in a top 3 retailer across the stores in a top ten marketing area. The retailer accounts for almost 50% of FMCG (Fast Moving Consumer Goods) sales in this market so, if the manufacturer is going to succeed in using display in this market, either standalone or in conjunction with other in-store media . . . they need to succeed with this retailer.
Some interesting findings based on the ShelfSnap analysis. The retailer took pictures of all of their displays, uploaded them to our service and we identified the products, facings, OOS, assortment etc. on the displays. Some findings:
1. All stores that had the display up.
2. 58% had the two brands included in the promotion that were specified . . . wow!
3. All stores that had the display had an endcap. Of those stores:
a. 20% had a 7 shelf endcap (why do we care?, it affects assortment of flavors!)
b. 42% had a 6 shelf endcap
c. 38% had a 5 shelf endcap (more…)
Plan, Do, Measure….That is the mantra of the In Store Implementation Share-group, and has been in one, shape or form the tactical basis of every effective management technique for many years. (more…)
Wow! At the May 28th Chicago, DisplaySearch conference, DIGITAL SIGNAGE, THE FUTURE IS OUT-OF-HOME, the buzz was on just how big this vehicle would become and how soon. (more…)
In addition to the consumer grocery spending shift to Wal*Mart, commented upon below, both BJ’s and Costco reported strong year over year fourth quarter gains. Same store sales were up 5.4% in BJ’s and 7% (excluding gas) at Costco! These gains were driven by perishable and other food items!!
The move must be in part price driven (duh) as the University of Michigan’s Customer Satisfaction Index measured Wal*Mart’s performance in the fourth quarter at its lowest rating ever (68) down 6% from third Quarter.
