Trade Tatler
“Here I am, brain the size of a planet, and they ask me to pick up a piece of paper.”
Marvin the Paranoid Android

TATLER ARCHIVE

THIS ISSUE:     13 Oct - 19 Oct

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RETAILERS AND WHOLESALERS

Clicks  If you want loyalty, get a loyalty programme

OK, we’re pretty sure that’s not what Gordon Gekko said when the highest success a New York sleaze ball could aspire to was a pair of red suspenders and an ample expense account. Ah, those were the days. But they are words Clicks appears to have taken to heart these how many years, and it’s paid off: they’ve just claimed back the loyalty crown from last year’s winner, Pick n Pay, in the 2017 Truth Loyalty Whitepaper, a contest that was named by an order of copywriting nuns who labour in silence in a salt cavern under a high Swiss glacier. Interestingly, loyalty overall is up 8% this year, taking the total number of respondents using loyalty programmes to 79%. Back to Clicks, then: the business reports that the ClubCard membership base has grown to 6.5 million members and these now make up 77.4% of sales – this after the old paper vouchers were replaced with virtual points redeemable as cash back at the till.
Comment: This does give lie somewhat to the idea that cash-strapped punters are more likely to shop around promiscuously for a deal.

Tatler Reporter 13/10/17

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Woolworths  “What are you doing Dave? Dave, put down the shopping basket.”

This from Charmaine Huet, head of marketing over at Woolies: “78% of our revenue comes from credit cards, so we already know a lot about our customers. Now what we’re really thinking about is how do you really personalise the experience for them and how do you create content that is really personalised and resonates with each of them - and this is really difficult, it takes humans and data and AI.” AI, as you know, is something that people like Stephen Hawking and Elon Musk get apocalyptically exercised over, but not the marketing community: they wish to harness its awesome power to drive sales, and this ambition was on unchecked display at Shoptalk Europe, where the subject dominated conversation, from machine learning to visual search, natural language processing and more, and all of this to facilitate smarter and more personalised customer experiences. By 2020, said a whole bunch of speakers quoting Gartner, 85% of customer interaction in retail will be managed by AI.
Comment: And yet we will still value a friendly reaction from helpful and well-trained floor staff. More so, in fact. Remember that, retailers.

Forbes 11/10/17

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Food Lover’s Market  Click-click, ding-ding, chop, sizzle.

Some years ago, someone came up with the brilliant idea of packing up all the ingredients you needed for a healthy and delicious meal, popping in a recipe card and delivery it to your door in time for you to work your own personal magic and amaze your dinner guests. The idea flopped. Then someone came up with it again, and again it flopped. Now there are hundreds of such services, and they’re all doing amazingly well. What changed? The internet, for one: people are now so used to the idea of things being dropped off as if by magic at their door, so why not ingredients? Plus when you do the math, the average shop for the ingredients for one meal generally ends up costing you three times the value of the actual meal. Plus, Masterchef. Now, Food Lover’s Market have got in on the game, partnering with UberEATS, and it’s genius. Kits start at R160, you select your meal online, press “order” then wait for the natty young man in the black sedan to drop it off at your doorstep. (Fine print: Currently available from selected stores only.)
Comment: And Food Lover’s get to showcase the crispy freshness of their prime ingredients, while making a buck.

Tatler Reporter 17/10/17

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MANUFACTURERS AND SERVICE PROVIDERS

Unilever  Contrite like me

The consensus seems to be that Unilever and indeed Dove will emerge from its most recent advertising misstep relatively unharmed, albeit wiser. And Dove itself rather graciously had this to say, on Facebook: “In an image we posted this week, we missed the mark in thoughtfully representing women of colour and we deeply regret the offense that it has caused.” But as brand expert (a real job) Jeremy Sampson says, "We live in a highly sensitive and highly charged world right now and no more is that emblematic than in the social media space. It’s imperative for brands these days to think hard about campaigns; realise what the consequences could be or a hard won reputation could be impugned very quickly." In other Unilever news, word on the street is that Estée Lauder might be up for grabs, and that Le Grand Bleu might be buying – although other businesses like L’Oréal and a dream team of 3G and Berkshire Hathaway are also said to be nosing around.
Comment: The scale that the acquisition could give our friends might put it out of reach of hostile takeovers like the one Kraft Heinz tried to mount a few months back.

Business Day 10/11/17, RetailDetail 10/11/17

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Heineken  Rising star

While AB InBev and SABMiller have spent considerable blood and treasure creating the world’s biggest something or other, rival Heineken has been busily growing its own business, spending $30bn on 65 acquisitions since 2005, and expanding its operations from 39 countries into 70, including the thirsty geographies of China, Mexico, Brazil, Ethiopia, Vietnam and, most recently, Côte d'Ivoire. This has had the welcome effect of reducing its dependence on the stuffy and over-served markets of Northern Europe while doubling its profits. “It’s not necessary to be the number one to be a successful company," says cheeky Belgian CEO Jean-François van Boxmeer. A small but significant part of its strategy has been the acquisition of large craft brewers like Lagunitas in the US (which surprisingly leads the world by a wide margin on the production of small batch brewskis), thus capturing both hipster cache and market share.
Comment: Reaching the parts other beers can’t reach, indeed.

Financial Times 10/10/17

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TRADE ENVIRONMENT

Cash Money  That’ll do nicely.

Credit cards. Debit cards. Payment apps. Square. Cryptocurrency, maybe one day. Paypal. There sure are a lot of ways to hand your hard-earned over to the man these days, and that’s fine and dandy if you like convenience and instant gratification. But the one way that’s never out of fashion, at least here in the Beloved Country, is hard, cold cash. The reason for this, says Mark Labuschagne, Head of Cash and Cheque at Absa, is the scale and energy of our informal sector, which depending on whom you ask is equivalent to anywhere from 35% to 100% of the formal economy. In 2015, for example, South Africans spent $183.7bn in cash, up from $156.9bn in 2010, and this trend is likely to continue as long as cash remains anonymous and universally accepted. And also – more worryingly – as long as financial inclusion remains out of reach of many poor South Africans.
Comment: Bottom line, retailers, is that it might be too soon to dispose of those registers altogether.

Mybroadband 11/10/17

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IN BRIEF

Chep  Pallet Kong

Congrats to our good friends Chep, who in the UK won the IGD John Sainsbury Learning and Development award for combining category management and Virtual Reality (VR) to teach the value and benefits of using its platforms, such as quarter pallets, as reusable merchandising solutions in stores. The tool uses category management principles to develop employees’ and customers’ understanding in a VR store environment. 

Tatler Reporter 10/10/17

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International Retailers  Lightly Seared

Sears Canada, the original mail-order giant, is going into liquidation with the loss of 12,000 jobs – victims of the success of Amazon, mail order 2.0. And over in the UK, Tesco we are told is trialling self-checkout stores (seriously, don’t, they’re horrible) and considering the burgeoning meal kit market (see Food Lover’s above), while back across the pond Lidl has had a summer horribilis in the US, where sales have gone off the boil after a promising start. And that, boys and girls, is a wrap.

Tatler Reporter 16/10/17

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