School of Retail
"After an hour surfing and browsing the Pick n Pay profile, I need to say thank you once again! There is some real powerful stuff here."
THIS ISSUE: 16 Sep - 23 Sep
A couple years back, in-store TV was the next big thing, with most major players announcing their intention to turn every store into an all-singing, all-dancing, all-branding feast for the eyes, ears and wallets. Only SPAR, however, together with their clever friends over at One Digital Media, have really made the investment and got it right. Today, it will flabbergast you to know, the SPAR Digital TV network features digital advertising screens in 120 large format SUPERSPARs across South Africa, reaching a total footfall of 25 million visitors per month. The system in these stores is hierarchical, with big entrance screens, smaller category screens and shelf-level screens educating the tele-literate punter about the specifics of the brands on offer.
Comment: Outsourcing to an innovative and committed third party was probably the smartest move SPAR could have made, enabling rapid and very visible coverage across the relevant stores and a rapid implementation of new technologies and packages as they become available.
Tatler Reporter 22/09/11
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More on Wakro’s R100million war chest for the benefit of the smaller supplier, its keys clinking tantalisingly in the capacious pockets of ex-CGCSA CEO Mncane Mthunzi. It appears that the focus of the fund will be on development and support of small farmers and small and medium businesses, some of which may already be supplying Massmart. Nor is it all about the money: Massmart intends to upskill smaller suppliers in various areas, including packaging and transport, and the specifics of the increasingly Walmartian supply chain. An area of some uncertainty is that of farmers, where skills are in short supply, and where Walmart’s expertise will apparently come in handy – they have already imported an expert from India to assist in this regard.
Comment: Exciting stuff, Big Guy.
Business Day 15/09/11
Shoprite has cut the red ribbon at the Shoprite Complex at the Polo Field Shopping Mall in Enugu, Nigeria in a simple but moving ceremony involving people with names like “Governor Sullivan Chime” and “Mr Sunday Onyebuchi”, which we simply couldn’t resist. The mall is the biggest of its type in Nigeria, whence Shoprite will be sourcing 75% of the merchandise sold. Shoprite have also opened their second and third stores (under the Kaddy Plus banner) in Port Louis and Tamarin, Mauritius, that Lichtenstein of the Indian Ocean. Comment: By way of indicating that despite the hype of classily understated joint ventures here and wobbler-waving Frenchmen there, Africa is still painted fire-engine red.
Rainbow Chicken has increased the contribution to its revenue of added-value products from 30% to 48% since 2004, in which time crumbed chicken, nuggets, cheesy viennas and so forth have expanded from 4% to 27% of its retail space, which just goes to show. But it’s not all hunky dory in the poultry game. The input costs are astronomical – mealies have gone up from R1,300 per ton to R2,200 in a year, and while Rainbow are enjoying some success with their newly-acquired delivery operation in Vector Logistics, central distribution on the part of the retailers represents a competitive threat. About those retailers, though – one of the bonuses of being Rainbow is that they each have such specific requirements of their chicken suppliers that more harmonious trading relationships than usual result.
Comment: Playing chicken is not for the faint of heart.
Financial Mail 16/09/11
Another set of scorchers from Aspen, who increased revenue 29% to a R12.4billions in the year to June, with operating profit up a tall, dark and handsome 25% to R3.1billion. Australia, home to hangovers and Asia, home to avian flu and sinister tropical infections, were particularly pleasing performers in the Aspen portfolio, and all the indications – contra-indications even – are that next year will see operations outside South Africa outselling domestic consumption. A single fly in the Aspen ointment, as it were, is the loss of patents (calm down, that was patents, without an “i”) to expiry, which allow other generic manufacturers to flood the market with cheap imitations – a taste, so to speak, of its own medicine for Aspen, which has made a bob or two off patents before today, we don’t mind telling you.
Comment: Still, a healthy little business.
In the teeth of increasing concerns about food security, South Africa’s agricultural sector continues to disappoint, with its contribution to GDP in the second quarter sinking by 7.8%, the biggest drop among the main contributors. The reasons for this are multifarious: A strong rand and low international prices, which saw a substantial drop in the ultimate value of the crop, late rains and a delayed harvest, which meant that income normally accounted for in the second quarter will only come through in the third, and an overall decline in the value of two of the main agricultural sectors – field crops including soy and sunflower, and animal products. In other farming news, SA’s dairy farmers are apparently leaving their farms in droves to take up positions in the cities as graphic designers and social media consultants, hit by increasing transport costs and low producers’ prices from the big processors. Comment: It never was easy being a son of the soil.
Financial Mail 09/09/11, 13/09/11
According to a little business called Nielsen, UK retailers have been using promotions to stimulate sales during the quiet summer holiday period, when the British punter traditionally splurges on burgundy and sunblock across the pond where it’s sunny. Purchases of goods on offer rose to 37% in the late summer, having hovered around the 35% mark in the glorious, then rainy, then glorious, then rainy again days of early summer.
Yellowood Group MD David Blyth has urged local branditionists to adapt to the opportunities of our emerging economy or die. Hit the ground running with new products designed to ride happening trends, rather than spending months looking for proof that people will want them, he cries, spurring his charger down the eager ranks. And one of the hottest trends, he yells with a bloodthirsty cry, the blue woad dripping from his glistening features onto the hilt of his broadsword, is status. Where are the new status opportunities in your category? How are you making consumers feel proud to be associated with your brand? he asks with a dramatic rhetorical flourish.
According to Siemon Scamell-Katz, founder of TNS Magasin, 80% of shopping decisions are made subconsciously, which makes it tough to fathom what the heck they’re up to. Local head of retail and shopper research Peter Wilson echoes this gloomy sentiment, suggesting that much of a shopper’s behaviour is habituated, with low levels of engagement with what’s happening in-store. This not only makes it difficult to get into their headspace, man, but also tricky to penetrate the subaquatic haze of their consciousness with promotions and other in-store goodies.
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