Archive for December, 2008

PRISM Schism

Posted in Blogroll on December 31, 2008 by nmb

If you remember Project Apollo as a 60’s and 70’s-era spaceflight program launched by NASA, and if “single-source” research conjures up visions of late-nights spent on your laptop, then Nielsen and Arbitron’s previous valiant attempt at moving beyond demographic metrics and ferreting out psychographic shopper insights must not have made much of an impression.  Seems that the brand world wasn’t ready to embrace portable people meters and so in February of last year, 3 years and $45 million dollars later, Project Apollo crash-landed due to the data duo’s inability to “. . . secure sufficient client commitments.”

 

Not one to fear getting back on the kicking horse, Nielsen once again assembled a “consortium” of 16 power retailers and several mega brands in 2006 to launch PRISM (Pioneering Research for an In-Store Metric) http://www.instoremarketer.org/?q=node/5779, an even more ambitious project that relies on calculations, not gadgets, to achieve the once-unachievable: measuring the impact of in-store marketing activities and impressions. 

 

Well, here we are pushing into 2009 and 15 out of the original 16 retailers have stuck it out with Nielsen through the initial pilot and into next phase rollout.  Not a bad statistic . . . unless the one retailer that bowed out is (cue the music from Psycho) WALMART!  Ruh roh . . .

 

Although Nielsen is doing its best to minimize the impact of Walmart’s pull-out, the development has to be a crashing blow to all PRISM participants . . . and not just because Walmart controls a disproportionate share of sales in every major retail category (though that alone substantially decreases PRISM’s value proposition).  Surely there was some major lip-licking going on among the consortium members back in September, when Walmart announced the launch of its in-store Smart Network. http://walmartstores.com/FactsNews/NewsRoom/8566.aspx

If Walmart shared even a few data crumbs from the Smart Network analysis (provided by DS-IQ www.ds-iq.com) with the group, wouldn’t it be great for the larger cause?  Alas, it is not in the stars . . . and I’ll posit, precisely BECAUSE Walmart transported its capabilities so far beyond the group with the Smart Network launch.  With Walmart deploying 27,000 digital screens chain wide by 2010, and DS-IQ’s constant refinements and granular category and item sales impact analysis, Walmart has the potential to singularly redefine “research for an in-store metric.”  In the meantime, I’m betting that PRISM will go the way of Apollo.

 

WRISM anyone?

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Many Unhappy Returns: Managing “Sell Stick”

Posted in Blogroll on December 31, 2008 by nmb

Over the past year, I’ve participated in many interesting conversations (and a few debates) regarding vendors’ roles in sell-in vs. sell-through.   Day in and day out, I see how the value that vendor companies place on one or the other (and it tends to be one-sided) affects everything from organizational structure to the procurement of talent to relationships with key retailers.  The fact is, many vendors manage sell-through passively, by watching POS numbers roll in on a computer screen; they view the sell-in process is their only active responsibility.  And so it is with a grim new reality, a third leg of the sales stool that I call “sell-stick.”  The need to stick a sale and avoid returns is nothing new to retailers; however, we’re hearing that it has become nothing less than a nightmare lately as consumers take full advantage of generous return policies and second-guess even the smallest of purchases.  Buyer’s remorse is a constant reality and one that is draining the bank accounts (and morale) of commissioned sales associates along with the coffers of retailers and vendors; after all, the only thing less profitable than a lost sale is a return!  Retailers realize that cash register reassurances (“That sweater was a great choice!”) no longer have the staying power they once did as returning merchandise has morphed from a shame-filled shopper exception to a shameless entitlement.

And speaking of shameles, vendors have had to deal with the reality that no sell-in is final either as retailers cancel orders that are already on the water (or sometimes in the DC).  Now vendors are going to have to step up and actively own the process one step further, and not just by issuing return authorization numbers right and left. 

The proactive panacea for returns is deploying teams at the store level, your internal teams or sales guns for-hire, that will personalize the sales experience.  Our surveys show that consumers are still much less likely to return products when they make a personal connection during the sales process.  Many actually fear having the original sales associate execute the return and that alone is enough to make them hold tight.  Sometimes fear is a good thing; however, taking an ACTIVE role from sell-in to sell-through AND on to sell-stick will be a vendor success mandate for 2009.