Group Deals and Offer Bombardment

The number of one day deal sites in New Zealand grows every day. There are dozens of them and many of them now have a separate site for each region with deals for experiences, dining, accommodation, attractions and activities. This is great for bargain seekers, but doesn’t necessarily do a lot for bricks and mortar businesses.

There are scenarios where they have value, for example if a business has very large volumes of aged stock that they need to quit. It can also be useful for new businesses to make customers aware they exist. They also come at a price. The more powerful the site, the more they charge with fees being anything up to 40% of the sale of each item.

If you want to attract new customers to your bricks and mortar store, then obviously you want a coupon or something that needs to be taken to the store for redemption. Even if you are quitting aged stock, there may be advantages in getting people into your store in the hope that they will purchase other products while they are there. There are also benefits to both the customer and the retailer in not having the time, packaging  and distribution costs in delivering product to the buyer. More on this in future blogs, looking at check in applications as opposed to group deals.

A study by Rice University found that  32% of businesses surveyed who used Groupon for promotions said they were unprofitable and 40% said they would not do it again. A major issue cited in the research was cannibalising existing business. Mashable quoted a statistic that less than 20% of people who purchased deals where they had to go to a store to redeem them, returned subsequently to buy full priced product.

So the question which I will come to in upcoming blogs is how to get people into your store at quiet times and more often. I believe the answer is in locations based services such as check ins and proximity based marketing. I welcome your experience or opinion on this.

Advertisement

Whitcoulls and Borders

I was thrilled to learn that the remaining Whitcoulls and Borders have been sold to Anne and David Norman. Now they have some hope. They will now live in the Pascoes Group and of course this group are known as having revived the ailing Farmers chain and given them new life.

Once the essential housekeeping details are sorted, such as property leases and staff contracts, there is every reason to hope that they will breathe new life into Borders and Whitcoulls.

That can not mean BAU or Business As Usual, because even though they did OK and the biggest problems were in Australia with REDGroup. Nevertheless these stores were not run optimally and they were not run with the times.

I heard people, partly lead by local publishers, saying that if the NZ stores were run from Australia, they would probably signal the demise of the NZ author. Certainly I agree that we would have seen less Kiwi authors in store, but I think ultimately either the publishers would have to become less greedy and insular or the local authors would start to embrace the new eBook media and of course in doing so they can either self publish or join Amazon or other local eBook publishers. Neither are ideal for people who love books.

As I’ve said in many previous blogs about Whitcoulls and Borders, a few of them can be found here, the first thing is to go back to basics. For these stores to be successful they need to operate smarter and provide what the modern shopper wants. There are many good examples overseas.

With the chain expanding, here a some ideas that I would look at.

• 

  Macy's

  Gift Registry. Chains like Macy’s in the USA have had phenomenal success with their national gift registry programs for decades. They have kiosks in store which are linked nationally. I was so excited the first time I went through one I almost bought a gift for a young man’s Bar Mitsva in Chicago. I was in New York at the time looking for a hat in one of the coldest winters I have ever experienced. It was so well laid out, there were thousands of special events from weddings to anniversaries and being national, you could see from New York, what a person in Madison Wisconsin had their hopes on. Given that the chain owns Farmers and a number of jewellery stores, this would be a great opportunity to combine the lot.

• I keep harping on about Jeff Jarvis’ book What Would Google Do? It’s funny in a way that in one of his first blogs about the book, he suggests that you could buy it from Borders. The thing was though that I couldn’t buy it from Borders at the time because they didn’t have it, so I bought it from Amazon.
• So I think that Borders and Whitcoulls need to start saying, what would Amazon do. So many companies are naive and believe their own hype that web retailers (only part of what they are) are no threat, or they consider them such a threat that when things go bad, they become a self fulfilling prophecy.

Hanging a few Kobo’s on the wall is not the answer, that has been a major botch up in my humble opinion. Even on the web, sell the sizzle on the home page! But some things they could do with their ‘loyalty’ programs is monitor what each customer buys and make recommendations based on the buyer habits. I have bought at least a dozen books on Amazon’s recommendations. Amazon is also much cheaper than buying locally, but that’s a different story because it costs a lot to get books to New Zealand, so unless you buy a stack of books, you pay back what you save on freight.

Amazon has many great features that can be just asdestination events

Mobile Marketing easily applied to a bricks and mortar chain, which has the benefit of being able to hold a book, tell you what store it is in and provide you with much quicker gratification.

I don’t want to write a book, but here a some things you may find in this blog in the coming days for Whitcoulls and Borders:

• Becoming a destination for events such as readings and signings
• Back to basics and way beyond in inventory management
• A major web presence with lots of ideas perhaps sparked by What Would Google Do (which should be a mandatory read for all Whitcoulls and Borders management at all levels)
• A new way for both stores to have lots of stock available, but not necessarily on the spot. A central warehouse with the option of home delivery could cut down inventory sizes without sacrificing range and depth.
• Embrace proximity based marketing on mobile devices. I would strongly recommend that management from Borders, Whitcoulls, Farmers and in fact all retail chains attend the Mobile Marketing Forum in Auckland this June. This Forum could be called The Retailer Strikes Back. They will learn many new ideas at this event.
• Understand their regional customer base. There is no point in carrying the same stock range in each store. It simply won’t work and you will have aged stock going on sale. Some of the category managers need to take a long hard look at the books they have been stocking and ask themselves what on earth possessed them to make some of the decisions they made? Or was it the publishers reps that conned them?
• They should look at products like GeoSmart’s impending Business Intelligence on a MAP. This could produce many aha moments when used to geographically view their business results in combination with consumer demographics.

I could go on but that’s plenty for now. I think with the right motivation and attitude, these two stores can be not only revived, but will rise to new heights. But only if they stop living in the past of this is the way we always did it. They need to embrace and perhaps even lead the future. It’s not hard, its just thinking outside the square and remembering that it is the customers and the books that make your business. Its about the words and the stories and people.

The Smart Connected Home

The home, its technology and its inhabitants are now becoming more and more connected. Many of us now have WiFi networks in the home. We can sit with notebooks on our laps, wireless routers connected to our internet connection allow us to connect entertainment systems, iPads and other network appliances, printers, external drives, Smartphones and more.

Many other devices are now being developed that also offer the benefits of connectivity. For example Internet TV is almost here with products like Google TV being right on our doorstep.

Many years ago I had the opportunity to spend a day at the Arthur Anderson offices in Chicago for a glimpse of the future. An example was an intelligent  fridge with a bar code reader that created a shopping list and could automatically send the list to the local grocery delivery company.

Bill Gates had a master plan of having a Windows CE engine in home appliances, creating an intelligent house. Smart Appliances will I’m sure be in the home soon and the idea Gates had was that if they all used Windows CE, they would all have a common platform to communicate not only with each other and with your mobile computer, perhaps your home appliances.

The European Commission has perhaps seen the light in setting up The Hydra Project. “The Hydra middleware allows developers to incorporate heterogeneous physical devices into their applications by offering easy-to-use web service interfaces for controlling any type of physical device irrespective of its network technology such as Bluetooth, RF, ZigBee, RFID, WiFi, etc. Hydra incorporates means for Device and Service Discovery, Semantic Model Driven Architecture, P2P communication, and Diagnostics. Hydra enabled devices and services can be secure and trustworthy through distributed security and social trust components of the middleware.”

This has the potential to reduce the risk of being tied to specific brands of computing, communications and other technology by providing middleware that everyone can work with. Of course the home is only one place that can benefit from this concept. It applies equally to telemedicine (monitoring patients in the home), business automation, security, agriculture, manufacturing, warehousing and pretty much any industry you can think of.

Once again Science Fiction is about to become reality. It’s taken a while, but looks like we are getting there.

The following video shows an e-home controlled by voice or even by your X Box Controller and of course you can control it from your iPhone:

What’s wrong with calling yourself a New Zealander

I love the Census. Every 5 years we get this massive set of questions about who we are, where we come from, what we do, where we live etc. There is an amazing wealth of information in the Census and this time the Government have made it available for free if you can find what you want without assistance.

I spend a lot of time helping people on the fringe of this and am working on the development of a web application to help people view both their own business data and relevant Census data. Watch for this in a future blog if you are following me.

One of the questions they ask us Kiwis is about our ethnicity. I remember in 2006 when there was a strong movement of people saying to each other that they had had enough of the racial issues between Maori and Pakeha (and this clearly came from both sides of the fence).  A large percentage of Kiwis grew up side by side with Caucasians, Maori and people from many othr places including the Pacific Islands. They grew up as friends and neighbours and if there was discussion of ethnicity it was with interest and pride, not with any tensions or mistrust.

On that theme, 400,000 Kiwis signed their ethnicity, not by selected tick boxes for European Caucasion. New Zealand Maori etc, they signed in a text box called other as New Zealanders.

Whilst this made sense in a way as they tried to make their point, it has also caused some significant problems for organisations who use that information for decision making and the Department of Statistics is looking for ways to get better information in the next Census is 2010.

In the Statistics New Zealand Draft report, prepared for public discussion, they outlined some of the concerns and explained ways that the ethnicity data is used. Here are some examples including some of my own:

• The health sector uses ethnicity data to target services for groups experiencing inequalities in health. For example, it is commonly known that Maori have a significantly lower life expectancy than Europeans.
• Asian people, especially new immigrants have unique health needs.
• Local government agencies use these statistics in planning and service delivery, particularly in regions experiencing significant demographic, social and economic change.
• Marketers with products targeted and particular groups are able to identify where those markets reside.
• Education planning needs to take into consideration the demographics that make up local communities to ensure that education services are relevant to the needs of that community. Diverisyt is a key tenet in the NZ education system, but in order to best support it and plan for it, statistics are requred.
• In the business world, demographics can help with many aspects of business planning. For example a manufacturer of baby bottles found that in one area bottles with blue teets weren’t selling and in another area bottles with yellow teets weren’t selling. After a year or so with lots of stock thrown away or discounted they discovered that it was an ethnicity issue. By rotating the stock to the other areas the problem was solved.
• Today we have many ethnic communities, which is a relatively new situation, at least in Auckland where most of the population lives. This can be very useful for specialist retailers or service providers such as ethnic supermarkets, restaurants, clothing, music and entertainment providers. This is also of relevance for churches who want a lot of their congregation to be able to walk to their place of worship, immigration consultants, language schools or ESOL and so on.If a business can identify where their target market lives, they can better plan on placement of their business or how to find their new customers.

From a futurist persepctive we can use this information to try to predict what the city and country will look like in the future, where the opportunities and threats lie and how to support the changing community. For many people, New Zealand is seen as a wonderful safe and green place to live and raise a family, but each one brings a piece of their own culture with them, but also bring issues of culture, work training, language, education, commerce and the need to belong to a group of people with similar interests and problems, while their children are assimilating into the local community. New Zealand has changed dramatically over the last few decades and it is essential to the wellbeing of the country that the Census accurately represents statistics that can assist in making sure that everyone is able to enjoy living in this country and able to contribute in their own ways.

The Census provides valuable information about the changing nature of our country. Unfortunately this ‘movement’ towards calling people Kiwis means that it has been very difficult to monitor the change in ethnicity in NZ from the 2001 Census to the 2006 Census, meaning that the data is difficult to use for a 10 year period.

Statistics New Zealand is now asking the country for input as to how to allow people to assert their relationship to the country, while at the same time allowing Statistics to gather important information in order to help the country meet the needs of the large range of ethnicity in our country.

I think the answer has to accomodate both the desire for people to consider themselves bona fide New Zealanders irrespective of their ethnicity, but it is also essential to understand their roots or backgrounds. It shouldn’t be hard to combine the questions in such a way as to support the need for quality of information as well as the need of people, irrespective of their origins, to feel they belong and are important players in our multicultural society today.

While this blog is starting to get a good following, I would love to get more readers and encouraging me to keep writing. If you feel that my blog is interesting I would be very grateful if you would vote for me in the category of best blog at the NetGuide Web Awards. Note that the form starts each site with www whereas my blog doesn’t and is of course https://luigicappel.wordpress.com.

Thanks so much for your support:)

The Final Word on Unilever

If you read my last 2 posts about the new improved laundry detergent products from Unilver, my daughter just rang me to let me know that the new product has gone back down to the old price of $1.89. Social networking and blogging seem to help:)

The first blog was when it appeared that Unilever had a new improved product that does the same amount of work as the old one, but in concentrated form in a smaller pack. Pak N Save had been selling it on special for $1.69 and $1.89 and then offered the new one at 2 packs for $5.00, representing more than 25% increase.

The second blog was after a friendly discussion with Unilver who told me that they hadn’t increased the price at all and had no control over retail pricing, which was up t the retailer.

Today the price has come back down again and it seems that WordPress and Twitter have helped bring the price back down. Thanks Unilever for holding on to your values.

While this blog is starting to get a good following, I would love to get more readers and encouraging me to keep writing. If you feel that my blog is interesting I would be very grateful if you would vote for me in the category of best blog at the NetGuide Web Awards. Note that the form starts each site with www whereas my blog doesn’t and is of course https://luigicappel.wordpress.com.

Thanks so much for your support:)

Seems Unilever are not trying to con us

A few days ago I wrote a blog about the new Uniliver products such as Surf and Persil, complaining that they have just launched new super concentrated products and that at a local Pak N Save store where they used to special the product at prices ranging from $1.69 to $1.89 a pack and were promoting the new pack which has the same washing power as the old one, but their new special was 2 packs for $5, a premium of over 25%.

At the time I wrote the blog, I also contacted Unilever via their website and asked for clarification of this and an explanation. Initially I got a very nice email from their Consumer Relationship Consultant, ellaborating on the wonderful properties of the product but bypassing the question on price. I replied to say that I agree, their products are great products and that being more biodegradeable was an excellent feature. The quality was never in question and I have to say that their website is excellent, full of great information about how to use their products in a variety or circumstances.

I then got another response saying that they haven’t changed the product pricing from the old one to the new concentrate and inviting me to call them with any further questions. I did call the Consumer Relationship Consultant who was open and diplomatic, explaining that they have no control over any pricing other than setting the Recommended Retail Price (RRP). That is in fact true and I should have realised that to start with. It was in fact Pak N Save who were manipulating the pricing.

I’m relieved to hear that, its just a shame that the promo person in the supermarket didn’t understand the question to start with. So what was happening? Basically the Supermarket were hoodwinking their customers by in effect saying you could buy 1 of the old product for $1.89 or 2 of the new products, which are the exact equivalent of the old product from a use per pack perspective for more then 25% more.

This is not an unusual trick in a supermarket. They have lots of ways to make you think you are getting a bargain. A common one is to haphazardly throw tins or other containers into an end aisle dump bin to make it look like the products are on sale, but still charge normal full retail. This is all part of the tricks of the trade. On the other hand they also have their loss leaders, where they sell product at very low prices, often below their cost to the supermarket, to get people to come in and combine those with other more profitable products for the grocery spend.

In this case, they were just a bit silly and patronising of their customers who are often quite astute. Their timing was very poor and it has reflected poorly on them. On the other hand Pak N save are often cited as the best value for money grocery chain in the country. So the lesson is, be alert and watch for good deals and be aware of items that look good but aren’t. In today’s tough times, they would have done better to keep the price as it was and keep customers trust.

While this blog is starting to get a good following, I would love to get more readers and encouraging me to keep writing. If you feel that my blog is interesting I would be very grateful if you would vote for me in the category of best blog at the NetGuide Web Awards. Note that the form starts each site with www whereas my blog doesn’t and is of course https://luigicappel.wordpress.com.

Thanks so much for your support:)

What’s That Smell?

When I was a lot younger than I am today I had a keen sense of smell, many of which I still remember and can relate back to earlier times when I smell them again. There was the smell of ozone in the air when it was about to rain, the smell of the steam as a tar sealed road near my home dried up after a rain. Certain food smells evoke memories. For example a few days ago I was in Tauranga for the jazz festival and smelled food cooking in a nearby restaurant, which smelled exactly the same as the pork my late grandmother used to broil in butter on a Dutch winters evening. If you speak Dutch, here’s a recipe which is very similar to how she used to do it. I can still remember many odors from my youth.

According to C. Russell Brumfield, author of the book Whiff! The Revolution of Scent Communication in the Information Age, we can more easily remember what we smell than what we hear. Apparently scent goes straight from the nose to the brains emotional centers whereas the other senses have to go through an interpretation process first. Of course the ability to smell has many purposes that date back to our primitive past where this sense would help protect us from danger, identify food and when a partner was in season, so to speak. Pheromones are of course well researched and companies who manufacture perfumes and fragrances, would consider it the holy grail to come up with a scent that genuinely causes people of the opposite sex to flock to their side.

When I first embarked on my sales management career, I read the mandatory books such as Tom Hopkins, How to Master the Art of Selling Anything. One of his key areas of expertise was selling real estate. A classic example of his teachings was to drop a little vanilla essence on the stove element, which would make the house smell like fresh coffee. I’ve often wondered why nobody does these things, its much more appealing than the ammonia smell of wet nappies.

I often talked about smellovision and there have been a number of attempts over the years to come up with scratch and sniff cards for TV shows or movies. A couple of years ago I visited the theme parks of Disneyworld in Orlando and in one of the theatre shows, they sprayed the scent of cookie dough and others into the audience. The aromas were authentic and while it was a novelty, it certainly was a taste of what will come in the future. I’m sure that before too long, digital theaters will be equipped with atomizers designed to send odors around the room. It may not happen often, but this is a great opportunity to enhance the theater experience and keep people going out to enjoy movies. Whether it is the scent of flowers in a romantic spring scene, or the metallic smell of blood in a horror or action movie, technology will ensure that we are immersed in the scene.

Many organizations have been considering the use of smell with their products. For example, Nokia has been experimenting with the ability to emit smells from their mobiles. At MIT’s List Visual Arts Centre, they used a technology to immerse the smell of sweat and fear into the white paint, which you can smell if you rub the painted surface.

Pepsi used a similar concept added to the surface of the bottles when they launched their new Black-Cherry Vanilla Soda.

My early prediction of Smellovision came true a few years ago with the launch of Smellavision (oh well it was pretty close). I’ll leave the final word to ScentAndrea who are doing it now. They have scents from burnt charcoal, to car paint to fresh coffee and donuts and they have an agent near you.

OK I lied, here is the final word, scent has such a great following that last year they held the SCENTworld conference and Expo in New York and there is another this year in Las Vegas.  So if you haven’t got a whiff of it yet, don’t hold your breath. You could hit the casinos and smell the money as well:)

While this blog is starting to get a good following, I would love to get more readers and encouraging me to keep writing. If you feel that my blog is interesting I would be very grateful if you would vote for me in the category of best blog at the NetGuide Web Awards. Note that the form starts each site with www whereas my blog doesn’t and is of course https://luigicappel.wordpress.com.

Thanks so much for your support:)

Is Unilever trying to hoodwink us?

This afternoon my daughter came home and said she had an argument at Pak N Save, (the premium brand of NZ owner operated supermarkets in New Zealand under the Foodstuffs banner) with a promo person who was telling people about the new concentrated laundry detergents of Surf, Drive, Persil, Cold Power, Fab and Dynamo, all from Unilever, who according to their UK website are one of the most trusted brands in the UK and state that Always Working with Integrity is one of their key philosophies.

So you would think that their new ‘ small and mighty’ 2x concentrate products on all of their laundry detergents would offer great value. The pamphlet that arrived in our letterbox says that the product has been changed to a super concentrate that offers the same washing power in half the volume. The promo person at Pak N Save, said that the new product offered far better value because you could do the same amount of washing with half the amount of powder. My daughter didn’t have a problem with that, the problem she had was that if it was essentially the same washing power, doing the same amount of washing, why did the new product cost more?

Herein lies the problem and it was perhaps slick marketing at first, because your first reaction with new improved and concentrated would be better than the product it replaced and therefore worth a premium, which was pretty much what the promo person in the store was trying to get across, but that wasn’t what the printed material says. It says that it does exactly the same as the old product did, but with half the volume of powder. So from a benefit or performance perspective it is exactly the same result in a smaller box.

The smaller box has many benefits for the grocers and Unilever because it uses at least a third less packing and distribution costs are halved because it takes up half the space in the warehouses, trucks and supermarkets.

That’s all great, but the problem is that they are charging more! My daughter said that on special she used to pay $1.89 or sometimes $1.69 and the new promotion special was 2 for $5 yesterday. Which equates to $2.50 per box. That represents more than a 25% increase in cost to the consumer for a product that costs less to bring to market and does the same job as the old product.

Perhaps someone from Unilever would like to explain this. It appears to me to be a cynical attempt to hoodwink consumers out of their hard earned money, which in today’s economy would appear to be out of step with their stated values. It sounds to me like a rip off!

They don’t have a New Zealand web site, but this is their Australasian contact page if you would like to ask the question. I will be making contact with them and if I don’t get a good answer, I’ll be following my daughter away from the Unilever brands.

While this blog is starting to get a good following, I would love to get more readers and encouraging me to keep writing. If you feel that my blog is interesting I would be very grateful if you would vote for me in the category of best blog at the NetGuide Web Awards. Note that the form starts each site with www whereas my blog doesn’t and is of course https://luigicappel.wordpress.com.

Thanks so much for your support:)