More Weigh in on Starbucks

Posted in Blogroll on February 2, 2009 by nmb

Following up on my last post . . . threw in my two cents on Retail Wire this a.m. also. Read what everyone else has to say . . .


It’s all Just one Big “Misperception”

Posted in Blogroll with tags , , on January 29, 2009 by nmb

Its official: Starbucks’ earnings are down 69% for the quarter and immediate plans are to close 300 additional stores (eliminating up to 6,000 jobs). Sure the economy sucks and (just about) everyone is paring down . . . but according to Starbucks, there’s another problem: Consumers’ “misperceptions” of the brand, specifically, that Starbucks is a “premium” brand. Is it me or did Starbucks do everything in its power to create that perception in the first place?

Back in November, Target began grousing that it too needed to overcome “misperceptions” that its products are more expensive than Walmart’s. Now if there’s any retailer who masterfully manipulates perception, it’s Target! Groovy marketing, designer exclusives, upscale private labels . . . All of that to make shoppers perceive Target as the low cost leader? I think not.

Soon you’ll see “value pairings” at Starbucks (want a scone with that latte?) and perhaps you’ve noticed that Target has begun sharing prices in its commercials for the first time (something that before was considered to be beside the point). There’s nothing wrong with tweaking your POV during difficult times . . . but blaming the consumer for buying in during the good ol’ days seems not-so-smart. Instead of saying that the consumer got it all wrong to begin with, why not just say “My bad”?

ARSE Alert: PRISM Fizm

Posted in Blogroll on January 26, 2009 by nmb

Always right, sometimes early . . . PRISM is officially out.

PRISM – Walmart = Outta here

Focus Pocus

Posted in Blogroll on January 13, 2009 by nmb

One of the biggest concerns that I heard coming out of CES and NRF is “too many technologies with too little focus!” For those of you selling tech to retailers, know that they don’t just want innovation for innovation’s sake; they want to know the insights that drove the innovation and what it means to their specific goals and brand image. For you peddlers of high-tech customer experience enhancers, it’s all about each retailer’s POV on in-store environment (no two the same). Going forward, technology firms, including ingredient brands, will be challenged to reign in the “gee whiz” a bit and direct the sometimes thousands of engineers that are creating killer apps in their sleep.
In the meantime, all you tech salespeople keep mega dosing on the Focus Factor . . .

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), 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.

If Walmart shared even a few data crumbs from the Smart Network analysis (provided by DS-IQ 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?

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.

NMB’s Rules of Pre-Holiday Retail: “Don’t let the promise of short-term volume compromise long-term brand equity”

Posted in Blogroll on November 30, 2008 by nmb

This past week, our firm walked the high-end boutiques along Melrose Avenue and Robertson Blvd in Los Angeles. In store after store, we were greeted immediately with “Everything in the store is an additional 40% off” and whispers of “Everything in this room is 70% off.” I don’t know about you, but I wouldn’t pay full price for Alexander McQueen ever again after seeing such drastic slashes. The discounts also had the effect of cheapening others’ brand premises along the block. A more moderate rocker-brand boutique down the street was full-on full price . . . nothing was marked down.  That left me a bit indignant . . . who are they to stay at full price on their $140.00 screened t-shirts when “real” designers are getting drastic?  Like the old Saturday Night sketch:  “The ones who ruined it for everyone.”  Where did we stick around for a while? The completely full price Chanel boutique . . . Order was restored!