Off the Shelf: The Retail & CPG Blog

In my earlier post "Online Grocers: Accelerating out of the turn", I started with how Online Grocers can leverage the trend where shoppers are chasing value. We had also talked about some ideas that could be implemented easily and thereby leverage the trend – in this post we look at a few more ideas...

Idea II- Offer more relevant Promotions and Package Sizes

Today, customers are looking to stretch their dollar and a prime mechanism being seen is eating at home more often

By recommending product pairings and combinations (food + wine + cheese + sides + dessert combinations) to induce customers to explore their offerings as a cheaper yet equally satisfying alternative to eating out is an opportunity that many retailers are successfully exploring. This move to offer value perception is strong in the UK and seen across mid-premium and premium retailers.

Also, customers are today looking to purchase larger packages that are cheaper on a comparison basis. To evolve the online capability and not just merchandise ‘multi saves’ or ‘ value packs’ retailers should analyzing the shopper’s previous shopping pattern and frequency  to intelligently suggest / recommend a higher volume package and quantify the savings.

Coupling such offers with a free shipping / reduced price shipping promotion when the cart size exceeds a certain threshold amount can further induce customers to pick up the essentials in larger quantities – a win-win-win approach for the manufacturer, retailer and customer.

Idea III - Minimize the cost of online shopping

Often while product prices are cheapest online, adding in the shipping cost skews the purchase decision in the stores favour. Also delivery delays and inconvenience causes customers to abandon their carts and retailers to lose revenue and goodwill.

This scenario can avoided by offering membership based shipping programs with a low one time sign up fee, that could be waived if the customer shops a significant amount during the year. Besides overcoming the fatigue with shipping charges, this approach also enhances customer loyalty and repeat visits – industry statistics show that customers who sign up for such a program typically shop the online store exponentially more often than customers who haven’t signed up for the program.

More and more grocery retailers are also promoting their ‘order online, pick up in-store’ service as it allows for dual benefits of bringing additional customers into the store –albeit for pickup of previously placed orders - and also keeps the in-store teams consistently engaged at predictable  workload levels to pick and pack orders placed online.

An article by Progressive Grocer refers to a Nielsen report that says 20% of shoppers are pro actively managing grocery budgets, and it’s all about value and not low price. Grocers will have to adopt this trend very quickly and leverage it to emerge successful when the things turn around. When things turn around, I think shoppers will remember the value they received than just the low price offers.

We will be discussing a couple more interesting delivery options in a POV that's soon to be published on the same lines. If you would like to receive a preview of the paper, please write to me at Jayanth_Rao01@infosys.com and I’ll send it across to you.

Posted by Jayanth Rao at 8:30 AM | Permalink | Comments (0) | TrackBacks (0)

I then started to dive deeper into those focus areas and analyzed how BI can assist companies in improving customer satisfaction and loyalty

SKU Rationalization
Food distributors typically carry a large amount of SKUs – probably in hundreds of thousands which cannot be fathomed by a retailer or a CPG company. And a good portion of those SKUs might not be as profitable as other SKUs and in fact bring down the overall margin considerably. How do you decide which SKUs to carry and which SKUs to discontinue?
 

Analytics can provide the visibility of item profitability location-wise, region-wise and company-wide. Using MDM as the backbone, analytics can also provide visibility to alternative SKUs if the company decides to discontinue a particular SKU. Of course, you cannot base your judgment purely on the profitability of a particular item. You might carry an item for a strategic reason and decide to carry it irrespective of its profitability. But in general, BI can provide the platform for the sourcing organization to recommend optimized SKU list. They will get lot of push back from the sales force, but powered by the data provided by BI, sourcing team should be able to justify discontinuance of certain items.

Posted by Prasanna Ramaswamy at 3:46 AM | Permalink | Comments (0) | TrackBacks (0)

In it's most simple form, the answer that gets back at you is that a retailer wants to provide their customers with the capability to "Buy online and return at stores" or "Shop online and pick up at stores" or a variant of these where invariably there is some transaction activity crossing the two channels of stores and online. Is that all it is then??

Let's first look at the business value that "multi-channel integration" brings. One of my clients found out that on an average they have incremental $10 revenue for every online customer that they can get to come to the store and a incremental $150 revenue every year for every stores customer that they get to sign-up online. However as the client CEO said to me "Sudhir, It is not about multi-channel at all. It is about providing what my customer needs across different touch-points in a way that is profitable for me".

Let's look at that statement again. Touch-points; for today's customer it includes the store, media, blogs, social commerce sites, online shoppoing sites, mobile phones, video games etc.

What does my customer need? : For a typical retailer, customer needs include information, convenience, social confirmation, perceived value etc.

Does a "buy online and return at stores" or a "shop online and pick up at stores" really meet all the above needs. No; it does so only partly.

In order to be truly multi-channel, a retailer needs to start with the obvious understanding of what their targetted customer segment desires. The entire organization then needs to orient itself along that customer dimension - whether it is design, merchandising, marketing or sales support.  The multi-channel experience then needs to be stitched in each of these organizational functions taking into account the channels that make sense for the targetted customer segment.

Let's take a few examples.

A pharmacy customer with diabetes. Multi-channel needs would include information on diabetes, possibly a social community that can help him network with other customers with a similar ailment, a prescription refill or a pick-up reminder service on his phone....

A teenage girl. Multi-channel needs would include a facebook community on her favorite brand with occassional celebrity chats, a virtual apparel closet, ability to get online feedback from her friends on her next purchase, a virtual fitting room, ability to return at stores, coupons and freebies at the mall on her phone....

Many retailers built thier online organization by revamping their catalog operations and provided the channel with the independence it needed to grow. While some of the independence may still be desired; it may be time to reign back especially in the areas of brand management, marketing to help craft that integrated multi-channel experience.

Posted by Sudhir Holla at 6:34 PM | Permalink | Comments (1) | TrackBacks (0)

When a consolidation happens  in any industry, the market takes the news in awe. The market reacts swiftly initially with lot of news-spread, followed by strong analysis, view points and the market settles down accepting the new order and moves on. I’m sure the same will happen with the JDA i2 acquisition. JDA historically has been a great aggregator and have done acquisitions at strategic moments in its growth phase. Acquisition of Intactix, E3 and Manugistics all helped JDA solidify its position in the market, expand its footprint and establish itself as the leader.

To this episode of JDA-i2 merger, I think there are 3 perspectives – each from the view of competition, client base and System Integrators.
Competition – Industry is aggregating and the entry barriers are building up stronger and taller. Handful of players will control the market. Oracle, SAP will have to compete more fiercely with a much stronger opponent. The equation of JDA/i2/SAP/Oracle now changes to JDA-i2/SAP/Oracle.
 

Client base – Users of these software and applications will be a tad happier. As the industry aggregates and if JDA & i2 packages move towards similar architecture and functionalities, it will be easier for the users/planners to learn to use various packages, companies will need lesser money to be spent on training – and that should be a relief. Lora Cecere, AMR Research describes how there is a huge scarcity of skilled talent available to use these packages effectively even in this times of 10% unemployment. So, this must be good news for the user base. How the support for the existing clients of i2 is going to be impacted remains to be seen, though.
 

System Integrators/Implementers – Managing talent is an issue for the SI as well. They need to either have consultants cross trained in all the packages available in the market or maintain a broad pool of talent that is skilled in each package. With the consolidation, the need for the companies to maintain such diverse pool of talent is going to be less.
Venkatesan, Infosys describes more on JDA i2 merger in his blog “A big fat geek wedding”. You will get more details on his post on the JDA’s acquisition of i2.

Posted by Kirthi S Subramanian at 2:15 PM | Permalink | Comments (2) | TrackBacks (0)

Loyalties have changed. Customers have migrated to the perceived lowest cost option and now there are news and signs of recovery, amidst caution. Is it time for another shift in loyalties and will such a shift happen as swiftly as it did at the onset of this recession? Times are uncertain and one is not sure if we will be seeing another round of change in shopping patterns and the slowly emerging signs of economic revival add to the uncertainty.
Grocery operators and specifically online grocers, though cannot wait & watch – they will have to be ready to adopt to patterns that customers may choose to follow. Grocers who can do the balancing act between shifting patterns and the pace of change will emerge winners. Kunal (my colleague at Infosys Consulting) and I think there are 3 key trends that can help online grocers to help achieve the balance -

1. Continue to help the customer save money
2. Offer a richer shopping experience
3. Enhance community interaction

In this post, I’ll focus on the trend - “Continue to help the customer save money” – an extension of last year’s mantra at all retailers.

Trend 1 - Continue to help the Customer save Money

Change in customers shopping habits are here to stay and online grocers should consciously continue to create long term value in their offering through specific marketing and merchandising initiatives.

Idea I - Promote private label’s online and induce trials through free sampling

Most retailers today offer a significant range of private label products that are competitively priced in relation to comparable national brands. The ‘brick’ business at retailers are seeing a growth in private label sales from the low to high teens and this market is a great opportunity to gain similar growth for the online business
Leading online grocery retailers in the US and UK are actively beginning to market private labels by increasing in-house brand visibility during the user journey and also displaying prominent indicators against the product listing.

Consistently promoting the competitive pricing and comparable quality of their private label products and simultaneously giving these products due importance in the online assortment – with higher visibility in listings and boosting these products within search results - retailers can ensure customers satisfaction by:

- Building customer loyalty as they return for private label products that cannot be found at other retailers.
- Helping stretch the customer’s budget
- Providing the same or more perceived value at a lower price

Besides increasing the online availability, visibility and ‘search-ability’ of the private label products, simultaneously inducing trials through free sampling will increase private label business in due time whilst gaining customer appreciation and loyalty.  

We will discuss more ideas in subsequent posts to strategize “Continue to help the Customer save Money”. Do you have any other ideas on how this trend can be positively used by Grocers?

Posted by Jayanth Rao at 6:08 AM | Permalink | Comments (0) | TrackBacks (0)

Every retailer in the eCommerce world is excited about the prospect of interacting with their customers via mobile devices like iPhones.  They dream of the day when a customer places an order using an iPhone app, then drives by the store to pick it up.  They envision their customer creating a shopping list, pushing a button, and getting an ordered pick list mapped to the layout of their local store.  They also want to create an item-Finder where the customer walks into the store, enters an item description on their phone and gets an aisle and shelf location for that item returned to them on their screen.  They would love for their customers to be able to access product reviews, video demonstrations and detailed specifications from their mobile device so that the purchasing decision could be made on the spot, even for expensive items like cameras and TV sets.

There are many rational reasons for this exuberance.  There are twice as many mobile phones in the world as computers.  The price of cell phone service is expected to continue its downward trend until it is affordable by all but the poorest people on the planet.  In the USA, it is hard to find any  teen or young adult without a mobile device of some sort, regardless of income.   In the US and Europe, the mobile computing device is seen as complimenting the use of the home or office computer.  In many parts of Asia, however, the phone is affordable and the computer is not.  In these regions, the phone is the only computer available.

However, this beautiful picture is easy to describe, but harder to paint.  There are several reasons for this:

·         Network Slowness - Network speeds are annoying.  Even if you are in range of your carrier’s network, the response times are not up to modern customer expectations, making them reluctant to even try and use their phone as an app platform.

·         Model Proliferation - Mobile Phone device models number in the hundreds, and if you count out-dated phones still in use, into the thousands.  New models are introduced on a weekly basis, complicating this further.

·         Lack of Standards - Very few phones are created to a programming standard.  Most phones have a custom interface that is programmed as part of the product development process.  This lack of standards makes third-party creation an application that will run on all makes and models literally impossible.  In fact, programming to even the five or ten most popular phone platforms is unaffordable by all but the best funded companies.  (This is the cause of app-envy, a phenomenon that occurs when your friend can use a great application on her device that doesn’t exist on yours.)

·         Phone Browsers - Phone browsers are mostly terrible.  Many of us tried using a browser when we got our first smart-phone.  We had to scroll up, down, left and right so often that we gave up.  It felt like reading a magazine through a keyhole.  Most people use their phone-based browsers for flight status, sports scores, headlines and not much else.

All is not lost however, as everyone in the mobile phone industry understands these problems and is motivated to solve them, or at least lessen the pain that they inflict on the customer.   I will list a few of these positive trends.

·         Network Slowness – The great race of this decade is to improve mobile data transmission speeds.  If you remember back 5 or 6 years, you could grow a beard waiting on a page to load on your phone.  Now, things are faster, but not nearly like Wi-Fi.  However, with each passing year, speeds will improve because this is a “do-it or die” issue for carriers.  If fact, there may come a day when Wi-Fi speeds are surpassed by 4G, 5G, or nG.

·         Model Proliferation -The number of phone models will continue to increase until this class of devices reaches a certain level of maturity.  Eventually, all of the logical improvements will be made, and future improvements will provide diminishing usefulness. 

·         Lack of Standards – There are two major standards that are here or emerging: iPhone and Android,( along with many ideas for future ones).  The iPhone is a pseudo-standard based on the popularity of Apple product.  Creating and selling apps on this platform is already a billion dollar business.  The tight distribution model via a single carrier, AT&T, is holding this platform back from being even bigger.  This could change, however.  In the future, other carriers may be selling the iPhone.  If this happens soon enough, the iPhone could become the dominant platform for the foreseeable future, resulting in a huge market share.  In that case, the developer will be primarily able to program to one device:   ----- If that happens too slowly, however, the Google Android OS is positioned to fill the vacuum.  Android is an open-source smart-phone operating system that provides many of the features of the iPhone.  Its primary advantage is that every phone manufacturer can create products for this platform without paying anyone a fee, and every carrier can sell one that works on its network.    Android also provides a Java-based programming target for third-party developers that could grow to rival the iPhone in size, (but spread over dozens of phone models offered by many carriers).

·         Phone Browsers - There is one safe course of action that developers can take while waiting for the shakeout to occur: program to the browser.  To me, the best part of both the iPhone and the Android phones (like the HTC Hero) is the browser.  Both phones display in wide-screen mode when turned sideways.  Both have the two-fingered zoom that make browsing on the small screen better than tolerable.  This feature makes real non-mobile Web pages easy to view and interact with.  Perhaps the wise course for developers would be to program your new apps to the browsers, making sure that the display looks good on the best smart phones.  You could then write a native app for each important phone platform that redirects the user to the Web page in one touch.

The mobile niche is interesting, but very fluid.  There is gold at the end of this rainbow for those who figure it out, however.

Posted by Stephen Alan Potts at 8:02 PM | Permalink | Comments (0) | TrackBacks (0)

Therefore a variety of SEO techniques should be effectively implemented by any retailer in order for them to be seen ‘king of the search results’. An example of this is www.scarfworld.com.  This website has placed keywords in the title to assist in SEO, and as a result it is one of the top results in Google for ‘Scarf’.

Marketing on the other hand has been the mainstay of retailers for decades.  Before e-commerce was even heard of, retailers have been using marketing techniques to ensure that customers (and prospective customers) knew that the retailer had what they wanted, or they had a wide selection of alternatives.  http://www.funshipisland.com is an example of a microsite.  It is an entirely contained website which runs independently but it is owned by the Carnival corporation which runs a separate website for selling its cruise packages.

Here are just 3 examples of techniques for both SEO and marketing:

SEO:

-          Title tags: Title tags are commonly used when search engines index websites, therefore having an informative title tag about your site/page is very important.  Having your company name as the title is no longer enough, the name, address, and type of products is more advised.

-          Meta tags: Not commonly used by Google anymore but still worth having.  Meta tags will provide some search engines with information about your site which is not visible to customers.

-          Content: The most important technique in SEO.  Ensuring your pages have appropriate and detailed content will guarantee search engines will pick up your pages and return them in results in the correct context.  Not only is it important for SEO, it’s also beneficial for your customers to have as much detail as possible.

Marketing:

-          Email campaigns: Retailers can send blanket emails to customers to build awareness of promotions of seasonal ranges that are going on.  However, the most effective form of email campaign is a targeted email campaign.  Products, deals, and offers are emailed to the customer based on their preferences (i.e. products they’ve viewed or purchased).  This can draw traffic to the retailer’s website as the customer wants to find out more.

-          Microsites: A retailer can set up one (or many) microsites on their website.  A microsite is a small website which focuses on a specific range, brand, or product.  Building a microsite has various advantages, for example it can have SEO of its own.

-          RSS: RSS (Really simple syndication) can be setup to allow customers to receive information about deals, promotions or new releases direct to their desktop without having to have an email address or navigate to a website.  With smartphones emerging in the market, RSS is becoming a more popular method of keeping up to date with the latest product releases.

Of course both SEO and marketing have their own pros and cons.  In SEO, a retailer can use a variety of techniques from white hat, black hat, or grey hat.  White hat SEO techniques are methods which are sanctioned by search engines while black hat methods disapproved of.  Black hat methods often involve deception such as hidden text or repeating key words needlessly in the hope of improving SEO.  Grey hat are methods considered not to be white hat or black hat (or in some instances may be both) – i.e. it’s a grey area as to whether or not certain methods are appropriate.

Marketing also has its pros and cons.  Insistent emails from retailers can become frustrating for a customer and it can result in them blocking emails from the retailer altogether.  Similarly, using microsites can be problematic if branding is not used appropriately.  Many retailers use microsites as an opportunity to break from their standard CSS and HTML templates in order to promote the range, product, or brand.  By not clearly marking that the microsite still belongs to the retailer, a customer (especially one not comfortable with online shopping) may feel they do not know the site and therefore cannot trust it.

In conclusion, to make customers aware of your business and your products a retailer must effectively implement both marketing and SEO.  Marketing and SEO do sit very closely together, and in some instances overlap, however only time will tell if one becomes more dominant than the other in generating brand awareness.

Posted by Jonathan Nobbs at 10:12 AM | Permalink | Comments (0) | TrackBacks (0)

The H.R.2749 Food Safety Enhancement Act passed earlier this year in the house, has provisions governing food safety  & mandates that companies in the Food Industry maintain the  full pedigree of the origin and the previous distribution history of the food. Any Traceability System that a CPG Manufacturer or Food Retailer would thus establish will need to maintain this information and also the lot number which is indeed a huge burden.  

In Parallel there is an ongoing industry-led effort called the Produce Traceability Initiative sponsored by the PMA, Unites Fresh Produce Association & the Canadian Produce Marketing Association to help the industry to maximize the effectiveness of traceability procedures while developing a standardized approach to enhance the efficiency of traceability systems for the future.  The current action plan proposes that every case in the produce supply chain will be have electronic traceability via encoding the GTIN & lot number on the bar code which will be based on GS1 Databar standards.

These developments and concerted efforts are a result of the multiple product recalls the produce  and meat industry has seen because of food contamination and because of the inability to effectively and efficently trace it to the right source and quickly identify what lots to exactly recall - leaving behind concerns regarding food safety

I personally believe whatever be the final H.R.2749 mandate/regulation, for a traceability system to be truly interoperable it needs to be based on the foundation like the GS1 Databar standards. Information like origin and previous distribution history needs to be maintained and propagated throughout the supply chain. While today there is no business case for a Grocery Retailer or a CPG manufacturer to build in comprehensive traceability capabilities as part of their supply chain systems, the H.R.2749 can certainly accelerate ongoing industry-led efforts like the Produce Traceability Initiative.

Desmond Martin had a very good article/POV on Grocery Headquarters on how a FIM (Fresh Item Management) Solution can help track ingredient usage for Fresh Items enabling comprehensive Food Safety.

What are your thoughts on Food Safety and Food Traceability ? How do you see the industry evolving on this front ? Its obvious Grocers do not want expensive Product recalls. I would be happy to hear your views on this.

Posted by Sangamesh S Bagali at 8:38 AM | Permalink | Comments (0) | TrackBacks (0)

Hello,

On my previous blog, “Can Private label and national brand co-exist?” <<http://www.infosysblogs.com/retail-cpg/2009/09/>> I received many queries like: what I think will drive growth, how companies will cope-up with the volatility and what role will supplier play in the game. I will pen down some of my thoughts on this.

Last week WSJ reported: “Li & Fung Apparel Deal Boosts U.S. Expansion” <<http://online.wsj.com/article/SB10001424052748703816204574483211164417496.html? >>. Last quarter, we heard the clothing designers and manufacturers who together created and supplied to the women’s wear brand Principal (now partially leveraged, partially bought by Debenhams), coming together to form epiqfashion.com.

The reason for both of them may look different: Li and Fung because it is sitting on huge pile of cash and Epiq Fashions because Principle left it with huge inventory. Look closer: both these stories are closely linked to hunger for growth and ability to handle challenges. And this is what is defining role of suppliers in the growth story of retail business. Both the companies: Li and Fung and Epiq Fashions are primarily suppliers, who saw opportunity in retail and moved. There are numerous examples to take.

Look it from another angle. The companies which are very strong in product, are moving closer to customer. Nike, VF Corp, apple, Microsoft, Polo to name a few. Most of the CPG companies are looking forward for avenues of direct retail. Ditto with suppliers, although not as aggressively. What does this all mean?

In my mind, the implication is: New channels of customer engagement will emerge, in stores, web or mobile – Everybody will try to get closer to the customer. Understanding customer lifestyle will become the entry barrier and the ones who know their customer, will grow. Supplier will no longer stay as the backend partner. Supplier will play a bigger role in translating the customer needs to tangible products and services. Kingship of the customer will be redefined!

Your thoughts?
Mayank

Posted by Mayank Jain at 4:30 AM | Permalink | Comments (0) | TrackBacks (0)

Posted by Madhu Janardan at 10:55 PM | Permalink | Comments (0) | TrackBacks (0)

By Rrituraj Sharma and Mahesh Bukkapatna

Private Labels and the CPG industry. The predicament continues. Or does it? Well, come to think of it, its no longer a predicament actually.

In our last post 2 weeks back*, we had discussed about the Prevalence and growth of Private Labels and the strategy options ideally to be adopted by Retailers in the long run. Lets continue the discussion on what are the strategic options that the CPG companies have. *(http://www.infosysblogs.com/retail-cpg/2009/10/private_labels_challenge_for_c.html#more)

Strategy Options for CPG companies

Retailers have certain strong holds which CPG companies cannot ignore. CPG companies have to find right strategies to face challenge posed by private labels. They have to align their internal thinking and formulate actionable initiatives and strategies to be successful. If a CPG company decides to take the private labels head on, it should focus on following areas that may help in achieving results.

Consumer insights – Going back to basics of marketing like understanding consumer behavior would certainly  be the first step. It is important to identify reasons for consumer shift to private labels and the needs that are met by private labels. That should result in right product strategies like coming out with new products, cost engineering, product re-positioning etc. For e.g. rising commodity prices is one of the reasons for shifting to private labels. So efficient sourcing and product cost engineering should help CPG companies to offer their products at competitive prices.

Category Strategies – CPG companies should identify categories that have lower potential for private labels and focus on them to achieve business objectives. If they have any categories that are prone to private label onslaught, reduce emphasis on such categories. A detailed analysis of private label trends should give a good insight into the direction in which private labels are moving.

Focus on emotional relationship – Brands loyalty is the most effective means to face competition. Same is true while competing with private labels. Categories such as personal products are relatively less affected by private labels. So brand positioning and communication strategy should focus more on how to build the emotional bonding with consumers to increase loyalty. CPG companies may look at new trends to engage consumers through social marketing, online communities etc.

Continuous innovation – A very pertinent activity for a CPG company would be to innovate and come up with newer & better products which have the potential to be winners in the consumer market. For E.g. Gillette comes up with innovative razors and hence the growth of private labels in this area is less. Innovative products will create brands and retailers will be happy to stock such products in their stores because of sheer consumer demand.
Identifying new potential markets and developing new products to meet that markets demand could be another strategy. For e.g. focusing on convenience stores with portion packs could be good strategy to reduce dependency on traditional retail channel.

Better Distribution - Having a distribution network with good depth and width is essential to win in the market. This ensures product availability which is crucial during seasons, promotions and new product launches. Agile distribution systems and processes would help CPG manufacturers to achieve desired results.

Compete or Collaborate

A different approach to face private label challenge is leveraging the situation to manufacturer’s advantage. Instead of competing with the retailer, CPG companies can collaborate with retailers in private label business to synergize each other’s strengths. With the increase of private label business, retailers will look out for strategic suppliers. Apart from their own robust supply chain, CPG companies can also partner with the retailers to manufacture and supply their private labeled products. Leading CPG companies like Nestle, Heinz, and Kimberly Clark manufacture many private labels. It is true that margins on private labels’ manufacturing is lesser but it ensures a steady flow of revenue as well as maximizing and optimizing use of fixed assets. To some extent it offsets decrease in own brand sales. Collaboration can also be extended to leasing of under-utilized warehouse capacities to the retailers for their various back end operations. Similarly retailers can give a commitment of stocking the CPG company’s products in volumes, allow promotions and provide a productive channel for the manufacturer to liquidate their products.

There is no single right strategy to successfully offset impact of private labels for CPG companies. It depends on company’s product categories, strength of brands, financial position, fixed cost structure and other factors.  A thorough analysis of both strategies - compete or collaborate - along with risks and benefits should show the right way to pursue.

Best Practices that CPG companies can adopt to face Private Label Challenge

Technology can play a big role in providing the required edge to CPG companies in the areas mentioned below:

Retailer Collaboration – CPG companies can improve their service levels through collaborative planning, forecasting and replenishment.

Advanced Analytics – generate superior insights leveraging multiple data sources including both structured and unstructured ones

Shopper insights – for better understanding of consumer behaviour at the last mile of supply chain and first moment of truth.

Social Marketing & Web Communities – to create a loyal group of consumers

Accelerated New Product Development & PLM – to reduce time to market and to differentiate them in the crowded market.

Well, we guess this is one topic where one can go on and on and we hope this post made interesting reading for you. Next time when you are out shopping make sure you go for the right pick between private label and/or branded products. But do know that not only the CPG company but now, the retailer is also keenly observing your shopping habit based on which many a key decision will be taken.

Posted by Rrituraj Sharma at 12:01 AM | Permalink | Comments (0) | TrackBacks (0)

If you are like me, you always have some streaming music either from an internet radio or a favorite playlist when shopping online. If you turn it off for a while you will notice how awfully quiet everything becomes. While retailers have done a decent job to attend to the consumer’s every sense in their physical stores, they have largely left the online domain to the visual dimension only. While technology is not there yet to help with touching, tasting and smelling, hearing is definitely possible, yet ignored by everyone. I can definitely do without some of the annoying overhead messages or background noise heard in the stores, but I would not mind listening to music or have some sort of sound effects while I browse a site. Using some carefully selected music or sounds can add a totally new dimension to the online user experience. A retailer can utilize this to drive brand recognition, improve product visualization and even call to action to drive sales. The trackable user experience and instant feedback from deploying this online can also help the retailer fine tune their sound messaging and improve the customer experience and sales conversion in their physical stores.
 

A great overview and introduction to deploying sound can be found in this TED speech by Julian Treasure - http://www.ted.com/talks/lang/eng/julian_treasure_the_4_ways_sound_affects_us.html. It is fun, dynamic, educational and only about five minutes long. Mr. Treasure represents the effect of sounds based on the sound properties he refers to as Drivers (Time, Pitch, Texture, Density and Dynamics), the situational influence – Filters (Function, Environment, People and Brand Values) and the effect itself – Outcomes (Physiological, Psychological, Cognitive and Emotional). The proper combination of Drivers and Filters can be used to trigger the desired Outcomes.

Posted by Nikolay Trandev at 10:16 PM | Permalink | Comments (0) | TrackBacks (0)