martinhoffmitz.com

Here is an interview from the Globe and Mail, I will make comments after the excerpt:

It’s no secret that consumers aren’t spending as much as they used to, and they’re buying different products as well.

Overspent baby boomers in particular used to be the most brand-loyal of all shoppers. Now, they’re perusing the weekly sales flyers like any other bargain hunters and causing grief for small businesses across the country.

“Brand loyalty is waning and comparison shopping is increasing,” says Gordon Hendren, a Toronto-based consultant who spends his working hours closely analyzing consumer behaviour.

“One of the trends that we see is a kind of cocooning, simplifying life and spending less,” says Mr. Hendren, who is president of Charlton Strategic Research, which, along with the Strategic Counsel, has just completed a quarterly survey of shifting consumer attitudes in both Canada and the United States.

Will a “new” consumer emerge through this recession? That’s one of the questions Mr. Hendren and his team are studying. They are also looking at how consumer behaviour is evolving, how the environment is playing a role and how brands can engage with buyers.

Mr. Hendren has more than 20 years of experience conducting consumer studies and providing insight, with client experience ranging across such sectors as media, petroleum, financial services and retail. He is also an expert in brand tracking and brand marketing. He is a graduate of the commerce program at Queen’s University in Kingston, Ont.

Mr. Hendren joined us earlier to talk about consumer behaviour and its effects on business.

First of all, as an expert in consumer behaviour, what kind of general advice are you giving to CEOs today?

Gordon Hendren: Although we see the recovery taking some time (likely a few years), good brands, smart brands, brands with a good point of difference and a value proposition should protect and even gain share.

Today is a time of risk but also a time of great opportunity for their brand and business – this is driven by brand loyalty declining and comparison shopping increasing dramatically, as consumers search for value. The paradox of the current marketplace is that many companies have dramatically cut marketing spending at exactly the time when they should be increasing marketing spending – to defend their position and take advantage of this opportunity. While there is a short term gain from cuts there may very well be a long term consequence. The weaker brands will likely suffer and decline.

Competition is increasing, so focus on your brand’s/company’s point of difference and competitive advantage. If you don’t know exactly what your point of difference is – I strongly suggest identifying it, quickly!

Dave Michaels, globeandmail.com: I’ve heard that this recession came on so quickly and frightened so many people that it has forever “changed” consumers. We’ve seen lots of stories about people cutting back who never thought they would do so, and now they are saying they’re not going to go back to their old ways. Do you think that’s true?

Gordon Hendren: There is no question that attitudes have changed significantly. That said, “forever” is likely an overstatement. Our quarterly tracking study, Consumer Shift, shows a significant pullback in consumer attitudes toward spending continuing and that a quest for value is still very much the current mindset. Also, I do believe in “wealth effect” – meaning that if your investment portfolio is down and/or the value of your house/condo is also down you are less likely to want to spend more. Negative media can also play a role – especially when coming from the U.S., where things are worse than in Canada.

We have noticed some key differences within certain demographics: Ontario has been the hardest hit in terms of attitudes toward spending; women are most likely to say that they are “comparison shoppers”; those 35 and older are most likely to be “price is the bottom line” or “comparison shoppers” segments; those with household income under $50k are most likely to be in the “price is the bottom line” category.

The segment that is likely to have a longer spending pullback (and increased savings) is the pre-retirement (50-plus) group. A significant proportion of this age group is worried that, as of today, they do not have enough saved for retirement. While this may be good for the financial services sector (increased savings and investment) it is not good news for other consumer categories. While they will be very selective concerning value, this 50-plus segment offers an emerging opportunity to win new consumer loyalty driven by relevant value propositions.

It is essential to understand the mindset and needs of the new consumer. Yes, different products may be offered OR the consumer might buy existing products for different reasons today. As well it is also important to understand that the marketplace is segmenting, meaning that there are different segments that are very price-sensitive, some are value shoppers, some are brand-loyal.

Using the automotive category as an example: Hyundai recognized a fear among buyers of being locked into a new vehicle purchase (fear of losing their jobs), so they created the assurance program where if you lose your job within a year they will refund your money – obviously an added feature to a current offer that was very relevant.

The continued emergence of the online world is another trend we see, because it is cheap to use and is perceived to offer lots of stuff that is free, thus appealing to value-conscious consumers. Notice that Microsoft is getting into the search business to compete with Google.

In the sports world we see indications of growth potential in fantasy pools, betting on sports and playing sport video games. These appeal to the consumer’s need and desire for escape (as do movies, which are up significantly).

The bottom line to thinking about any new products – start with consumer’s needs and their mindset.

Certainly the financial/investment sector has lost a great deal of respect in the past year. Re-earning their clients’ trust needs to be a big focus for them.

While consumer demand in the automotive sector is down significantly several brands have stood out with a solid value proposition: Ford and Hyundai. Ford for its straight talk and employee pricing. Hyundai being the first to offer its assurance program. This shows that some brands with a solid product offering and relevant communication can rise up, even in categories that are experiencing a tough time.

Offering good value is fundamental and is more important than ever. Think beyond price. Our study shows that while consumers are spending less in general they are also looking for better value. Rewarding customers with value added, product bundling and loyalty programs is very helpful in such a competitive environment.

From a communication point of view, there is a need to be in tune with how consumers are feeling and thinking. A humorous approach can be very effective but is hard to do well; straight/honest talk is seen as a good approach by consumers.

Social media have created new channels for information (such as Facebook, Twitter). Also, social media have changed the speed/rate that information can travel. A bad consumer experience can get circulated very quickly to hundreds, maybe even thousands of people. This can be further amplified by the fact that the source is “trusted” (for instance, a friend within the social media network). Marketers are trying to figure out how to harness social media – and it is not easily done!

Martin’s comments:

Now is the time to climb inside the “Mind of your Customer and your Market”

Retailers know the numbers, analytics can help you determine what your customers are doing, the blind spot is your customers who are not in your loyalty program (typically at least 70%) and your in store browsers and competitors customers.  How will you get good, real time information on their actions?

Now get better analytics to really segment your customers.

Once you have better numbers, you need to know two CRITICAL FACTORS

WHY DO THEY DO WHAT THEY DO?

WHAT CAN YOU DO ABOUT IT THAT WILL BE MOST EFFEFCTIVE/

You will need a way to get inside the mind of your customers and your marketplace.  Your solution needs to be like a real time nervous system, telling you what is happening day to day in your stores, and in your market.

That is where we are finding the greatest return on effort.

_________________________________

Martin Hoffmitz
VP, Client Partnering
BehaviorWorx Inc.
#202 – 222 Islington Avenue
Toronto, ON  M8V 3W7

Email: martin.hoffmitz@bwxi.com

Office: 416.251.0111 x250

Cell: 647.287.4491
Fax: 416.251.9489
Web: www.bwxi.com
_________________________________

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Increasing Retail Sales Now

More Customers…More Often…Buying More…

Lessons from the last recession.

In a time of retail declines, the above line should be your mantra.  It is well worth noting:

A study conducted by McGraw-Hill Research found that 
companies who maintained (or increased) their marketing throughout the 1981-82 recession saw an average sales growth of 275 percent over the next five years!

But those companies who cut their marketing saw paltry sales growth of 19 percent over the next five years.

Today let’s talk about the first of the aforementioned three mantras, once again, drill this into your head and into your team:

More Customers…More Often…Buying More…

So let’s take More Customers, and in the following two entries, I will talk about More Often, and then Buying More.

Day One: More Customers

More Customers will come from 3 key areas

1. Existing Customers

2. New Customers and Conquest of Competitor Customers

3. Conversion of Non Buying Store Traffic (Browsers)

A Magnet - What is it that attracts more customers through your doors?  Promotions, Advertising, Sales and discounts, Value and Excitement.

So, you need to build or enhance the “Magnet” that brings people to your stores and your brand.

Your magnet will need to be extremely targeted, it will need intelligence, imbedded within it, so that you can earn critical selling knowledge from all your new traffic, and you will need to be able to establish a “hook” a relationship that will let your effectively reach out to your new customers and market, in order to use your newly minted knowledge and relationship to bring these people back and sell them more in the future.

Today, there are better ways to harness the internet to generate excitement and Draw.  Retailers on the winning edge are using a new layered strategy to attract, engage and sell more.

A smart retailer will engage a strategically planned and well executed strategy to use intelligent contesting, linked to knowledge generating feedback and engagement tools, linked to rewards incentives and offers.

The result is a much wider exposure to the entire POTENTIAL  Market.  If this is executed effectively, you have:

An amazing, low cost MAGNET that sucks in large numbers of all the groups that could buy from you, and then you move to the:

COMPASS

Once you have attracted this huge new audience, you engage them with knowledge generating feedback and engagement tools, that forms the compass and the magnet that lets you craft the best offers, promotions, values and deals that will motivate purchase action at the most profitable level for each relevant group.

MAP

Once you have the audience and the knowledge and the relationship, you can create a map, that lets you figure out the best way to, clear inventory, fast, because you DO NOT WANT INVENTORY LEFT THIS YEAR.  Keep in mind that weak retailers will be saturating the market through this season and into the coming year.  Next you will want your map to help make sure that you will dominate your market.  THERE WILL BE LESS AND LESS ROOM FOR ALSO RANS.

Yes, there is great danger and risk ahead, but there is also incredible opportunity for those who see the opportunity and run with the right plan.

That is the intro to MORE CUSTOMERS.  NEXT, I WILL COVER MORE OFTEN.

It has been a wild ride for retailers.

 

What questions should a retail organization that wants to win more customers, be asking themselves?

 

Let’s take a look at the following article that tracks retail sales this last month first, then we can pose this question in the right light.

 

(12-04) 15:53 PST – A surge in day-after Thanksgiving shopping wasn’t enough to save retailers from weak November sales, signaling the industry is likely headed toward one of the worst holiday seasons in years.

Among the many retailers that reported sales figures Thursday, Wal-Mart Stores Inc. remained one of the few bright spots, with a sales gain of 3.4 percent last month compared with the same month a year ago. But virtually all retailers faltered, even such stalwarts as Costco Wholesale Corp., which posted a sales decline of 5 percent.

Heavy discounts lured consumers to malls and shops on what’s dubbed Black Friday, generating reports of sales increases both nationally and locally. But that couldn’t offset what was overall a disappointing month, exacerbated by early holiday promotions that cut into profit margins along with a late Thanksgiving that shortens the shopping period.

“It’s going to be a very, very challenging period and a lot of companies are not going to make their numbers because consumers are still not going to be spending,” said Dale Achabal, executive director of Santa Clara University’s Retail Management Institute.

Consumers will continue to be cautious until the economy improves, Achabal said. “Until that happens, an awful lot of consumers are not going to spend because they’re not certain about their own personal situation,” he said.

Discount and warehouse-style stores tended to do better than department and specialty stores, as is typical during a economic slump. But Target Corp. had a 10 percent drop in same-store sales.

Same-store or comparable sales are considered a reliable indicator of a retailer’s health because they compare stores open at least a year, thus excluding the impact of store openings and closings.

Sales at Nordstrom Inc. sank 15.9 percent compared with the same month last year, while sales at Neiman Marcus Inc. dropped 11.9 percent and sales were down 13.3 percent at Macy’s Inc.

“Those double-digit declines like that you just don’t see very often. Clearly those apparel and department stores retailers had as tough a month as they’ve ever had,” said Frank Badillo, senior economist at TNS Retail Forward, a market research and consulting firm.

Gap Inc., which is based in San Francisco, reported a 10 percent decline in comparable sales for the four weeks that ended Nov. 29.

“In anticipation of a challenging holiday season, we made the decision to attract customers with more aggressive offers than last year,” Gap’s chief financial officer, Sabrina Simmons, said in a statement. “While this resulted in November merchandise margins below last year, our strategy allowed us to successfully clear through inventory in the month.”

Among 40 retailers reporting results Thursday, sales declined about 2.5 percent, according to TNS Retail Forward. Badillo said that number compares with a relatively healthy 4.3 percent gain last November over 2006, which makes the comparison even tougher this year.

Retail sales slide

Most retailers reported that sales declined for the month of November compared with this time last year.

Company	Change*
Abercrombie & Fitch	- 28.0%
Costco	- 5.0
Gap	- 10.0
Kohl’s	- 17.0
Macy’s	- 13.3
Neiman Marcus	- 11.9
Nordstrom	- 15.9
Target	- 10.4
TJX Cos.	- 6.0
Wal-Mart	+ 3.4

* Compares sales at stores open at least a year with November 2007.

Here are the National Retail Mall numbers, for more scary numbers:

http://tinyurl.com/5h8pjd /

 

Whenever we engage customers and browsers at the store level, in order to measure great service and sales interactions that result in:

More customers visits, more frequency, and social network referral and higher purchases during the visit, we find one factor rises above the rest, and becomes a “SECRET WEAPON” for the smart retailers. 

What is the “SECRET WEAPON“?

Retail Managers

Retail Managers build, train and motivate the team that faces customers every day.

What Talents and Behaviours Create Winning Retail Stores?

 

Mental Toughness, 

Retail Managers are in the trenches every day, trying to balance the team against the never ending work load, while keeping the team focussed on the customer, the browser, and selling.

Mental Toughness is the behavioral quality that does not let obstacles stand in the way, Mentally tough Retail managers understand at a very deep level, that “Getting the Job Done – Is Job One”

Successful Retailers use behavioural profiling tools to hire for Mental Toughness, and then they reinforce these traits with appropriate managerial sikills to give them the “toolset” to be effective.

But without the underlying behavioral “sets” no amount of “tool training” will stick.

 

Creativity, 

Winning Retail Managers face a never ending set of changing demands, and the work flow is never steady.  They need to face these challenges with Creativity, again this is a behavioral trait that can be

augmented with the right training, but don’t make the common retail mistake of trying to turn a “sow’s ear, into a silk purse”  Too many retailers don’t bother to step back and get excellent at hiring the right

traits in the most critical person in the customer facing chain, the Retail Managers, who make all the difference.

 

 

Listening to the Customer, and your Browser

A great Retail Manager needs a great “nervous system”  a tool that actively listens to the voice of the customer, and your store browsers.  In addition, it helps to be able to listen to the voice of employees with a neutral and fair tool that employees feel safe talking to.

Head office needs this tool as well, how do you really know what is happening on a day to day, hour to hour basis?

How can you understand which stores are creating the excellence experience?  How can you possibly know what part of your team is breaking down, in time to take effective action?

So, if you want to win, you need the right people at the critical point of differentiation, and you need the right tools.

15 years of helping retailers make a difference has taught me that in tough times like these, the winners will win, by making a difference, and these are the best ways to get started now.

Martin Hoffmitz

November retail sales have been scary for most retailers.  Working with a range of retailers, who are doing business from Great, to Terrible, I thought it might help to consider some common actions and strategies that the winners are using.

Winners

Winning Retailers focus on much more than the customer.

I know that received wisdom is that winners focus on the customer, but that worked when the retail tide was high, now the tide is going out.

Warren Buffet said that

“It is only when the tide goes out, that we see who has been
swimming naked”

I think we may be seeing a lot of naked retailers in the coming months, so..grab a towel or a bathing suit now.

Winning retailers are FAST.  They know that the knowledge that they have of customers is only the beginning, they understand that winning at retail means much more in turbulent times.

Successful retailers understand that they need a grasp of far more than just customers.  They want a grasp of:

Customers

Browsing non buyers

Low Brand Users

Competitor’s Customers

Targeted New Customers

Social Groups and Family

Social Networks and Rating sites

Now, with a grasp of the wider market and POTENTIAL market, they want even more…

Timeliness

Trend Analysis

Market Dynamics

Wal-Mart is winning because they have a much better idea of who the customer and the market is, and they are mastering timeliness and Trending.. (they know where the markets, trends and consumers are going, long before you do.

That is why they are winning

Let’s take a closer look at that.

Wal-Mart stumbled badly in the last two to three years.  Wal-Mart realized that they needed a better strategy to understand and get ahead of the market

Wal-Mart has built the most effective tool for understanding the marketplace and their place in it.

So, tool number one.  Wal-Mart measures the “flow” of
customer and consumer spending.  What does that do?

Wal-Mart knew long before you did that the consumer, which includes all of the extended groups I have mentioned, was experiencing increasing financial stress.

By measuring “Flow”  Wal-Mart saw far earlier, what others
missed.

Consumer spending was increasing closer to the normal pay period for most workers, and decreasing near the end of the pay check cycle.

Wal-Mart calls it “stress’

Stress has been increasing for quite a while now…

Wal-Mart analyzed the nervous system they had build talking to the extended groups that they have engaged, and they identified  clear stresses, and trending for a changing mood shift on the part of customers and consumers.  The economic STRESS would trigger changing psychology of shoppers and that would set up a major trend shift and new market dynamics.

So Wal-Mart ANTICIPATED the market and the consumer, and they took action ahead of every other retailer out there, and they are reaping the rewards.

Wal-Mart realized they needed to target a wider group of “core” items and get really aggressive on pricing and pricing erception in the marketplace and mind space of the consumer.

Wal-Mart used their new “nervous system” to get the new message propagating into the marketplace and the mind space of the consumer; think of it as “react” from intelligence and then “propagate” intelligent response into the marketplace.

Winners have a better grasp of  Customers and the entire market, they also have tools to influence and reach out to them.

What about LOSERS?

Let us take a look at a recent set of articles on SEARS

http://www.google.com/hostednews/ap/article/ALeqM5imTOVIR8LCwd1qFDdcoVToPkd4UgD94QNTO00

http://news.google.com/news/url?sa=t&ct=us/9-0&fp=49381eb0070dbe74&ei=LEA4Sc-iE47SgwP84dGMDw&url=http%3A//www.marketwatch.com/news/story/sears-stumbles-good-times-bad/story.aspx%3Fguid%3D%257BB7BB384F-9DB9-4FBB-9C87-6CEC995BC677%257D%26dist%3Dmsr_1&cid=1276835763&usg=AFQjCNGdT75UHPkoDBzNGDp-faNpXW4RcA

Sears does not understand the market, the customer or any of the other dynamics and they are struggling.

Let’s take some pithy accurate quotes:

“But for Sears, the problems go much deeper. Even in good times the company has had trouble standing out from its rivals.

Sears essentially gave up on pleasing its customers awhile ago. Early on, it was considered m for Chairman Eddie Lampert — than a retailer. It slashed marketing and store spending while raising prices. Rundown stores, disappointing inventory and
higher prices chased business away and got people out of the habit of shopping there.”

“The deck is stacked against Sears. And its challenges go deeper than a weak economy.”

http://seekingalpha.com/article/108881-sears-holdings-squandered-opportunity

“Sears continues to operate as a sub-par retailer and uses excess cash flow to repurchase stock. As the economy has faltered, so has cash flow. Adjusted EBITDA year-to-date has fallen to $700 million, from $1.5 billion last year. The only positive has been the reduction in share count. Sears earned
$1.5 billion in 2006, or $9.58 per share. If it somehow is able to earn that much again when the retail environment improves, earnings per share would be nearly $12 per share because of the lower share count. With the stock at $31today, you can see that the stock would trade back above $100 in that scenario.  

But how will that happen anytime soon if Sears continues as it has? It won’t, which is why Peridot Capital has been steadily selling Sears stock over the last year. It used to be a very large holding, but is now one of our smallest. Eddie Lampert evidently was convinced he could do more with the retailer’s operations even after the low hanging fruit had been picked. That was a bad
decision.”

“To me, Sears is in the same exact position as General Motors (GM) right now. It is operationally inferior to its competitors, but refuses to dramatically alter its business plans to adapt to the market. Yesterday the Big 3 CEOs testified in front of Congress,
explaining that the economy is the source of their problems. They need annual auto sales of 13 million units to earn a profit, far from the 10 to 11 million run rate we are now facing.”  

“I don’t need to tell you that GM’s business model is the problem, not the economy. If the U.S. auto market shrinks due to higher job losses and tighter credit standards, managers need to make changes to ensure they can survive in such an environment. In that case, a stronger economy would mean higher profits, not just survival.”

“The bottom line is, if your company adapts you will likely be a

survivor. When times are bad the weak die out and the strong not only survive, but they come out of the downturn even stronger than they were before.

In today’s market, when nearly every stock is down remendously, there are fewer reasons to invest in Sears or GM when you can buy a stronger company like Target or Toyota (TM) on sale. When Target fetched a 20 P/E I preferred to buy the more undervalued Sears. Combine disappointing execution by Sears and a 50% drop in Target stock, and given the same choice I
will take Target at a 10 P/E, which is what I plan to do.”

So, I will finish by suggesting that you Mr. Retailer re-think how you know and plan to grow far more than your immediate customer base.

Be a WINNER and get ahead of the curve, retail has been far too reactive for far too long.

Now you need to get proactive if you want to survive.

If you are still in business in 2009, we can continue these conversations.

Merry Christmas

Well, Merry Christmas for Retailers, here is one of the best economic commentators on the internet, who has been almost dead on for the last 3 years, telling retail Presidents CEO’s and Executives what to expect this year.  Yes it is very scary.

Retailers, you are in for an ugly year, the victory will go to the aggressively prepared.  There will be many losers.

Don’t let that be you.

Bloomberg is reporting U.S. Initial Jobless Claims Rose to 542,000 Last Week.

First-time claims for U.S. unemployment insurance unexpectedly rose last week to the highest level since 1992, a sign the labor market is deteriorating as the economic slump deepens.

Initial jobless claims increased by 27,000 to a higher- than-forecast 542,000 in the week ended Nov. 15, from 515,000 the prior week, the Labor Department said today in Washington. The number of people staying on benefit rolls the prior week rose to 4.012 million, the most since December 1982.

Job losses in the U.S. have totaled 1.2 million this year as the economy entered a downturn exacerbated by the worst credit crisis in seven decades. More firings will weigh on the economy and consumer spending, putting pressure on President- elect Barack Obama and Congress to agree on legislation that will stimulate growth.

The four-week moving average of initial claims, a less volatile measure, increased to 506,500 last week from 490,750 a week earlier. So far this year, weekly claims have averaged 404,000, compared with an average of 321,000 for all of 2007, when the economy added a total of 1.1 million jobs.

Citigroup Inc., the fourth-largest U.S. bank, will eliminate 52,000 jobs over the next year, twice the target announced last month, as loan losses surge and the economy shrinks, the company said Nov. 17.

Carmakers are also shedding workers. Ford Motor Co. plans temporary shutdowns at nine North American plants this quarter, idling as many as 23,000 workers, as it slashes production after an 18 percent drop in U.S. sales this year, the company said Nov. 12.

Layoffs Not Yet Factored Into Unemployment Rate

Announced job cuts have been piling up so fast I do not understand how anyone could be surprised by the number of claims.

Those layoffs at Citigroup (C) and Ford (F) are not yet factored into the unemployment rate. Nor are job cuts at Goldman (GS), JP Morgan (JPM), GE (GE), and scores of other financial institutions. Nor are the huge jobs cuts at retailers that are coming early next year after what is going to be the worst Christmas shopping season ever.

The retailer layoffs have not been announced yet, but it is easy to predict they are coming. When the layoffs are announced and the jobless claims rise yet again, the safe prediction is that economists will once again be surprised by the announcements.

As layoffs and job losses mount, this will add to the downward pressure on retail.

You will need to know your Customers and your market in much greater depth.

You will need to GET AHEAD OF THE CHANGING PSYCHOLOGY

You will need to HAVE INFLUENCE IN THE BUYING DECISION

You will need to use your knowledge to CRAFT the best market offering and value mix

Your knowledge and relationships will allow you to win business and customers.

I have recently worked with a large national retailer who had the smallest drop in sales within their category, because they know the market, the customers and the changing mood.

Your greatest challenge, will be seizing the opportunity.

_________________________________

Martin Hoffmitz
VP, Client Partnering
BehaviorWorx Inc.
#202 – 222 Islington Avenue
Toronto, ON  M8V 3W7

Email: martin.hoffmitz@bwxi.com

Office: 416.251.0111 x250

Cell: 647.287.4491
Fax: 416.251.9489
Web: www.bwxi.com

By now, many retailers can see only hard times ahead.  It doesn’t take much to absorb the mentality of a loser. But time and time again, through hard times and recessions, the winners in the battle for customers always see opportunity.

Here’s a powerful example:

For many years, the convenience store industry had the famous “slushy”, a nice high-margin addition to their produce line-up. During the last number of years, Alimentation Couche-Tard, which owns Macs Milk and is one of the largest convenience store operators in North America, used a positive “market opportunity” mentality to vastly increase their margins and market penetration. Alimentation Couche-Tard realized that the “Slushy” consisted of ice, water and sugar selling for a high price.  The first lightbulb went on and Alimentation Couche-Tard invested heavily in developing and marketing their ability to sell and highlight “Slushy” sales at all stores. Alimentation Couche-Tard began researching and developing their understanding of the “Slushy” buyer and the “Slushy” market.  A number of new insights emerged:

• The “Slushy” is hugely profitable

• The “Slushy” buyer is typically younger and purchases additional snacks and retail food items

• Young “Slushy” buyers have very different tastes and interests

Now, Alimentation Couche-Tard began to realize an incredible retail opportunity lay before them.  By centralizing the “Slushy” station and marketing/promotion in key stores, and by highlighting the importance of developing “Slushy” concepts and marketing, Alimentation Couche-Tard began to create a massive new profit center that would drive sales and business to new levels of success that would also drive the growth of the Alimentation Couche-Tard business model over the next few years.  In addition to high profits, the new “Slushy” center became a magnet for the most profitable group of new customers that any convenience store could dream of.

Alimentation Couche-Tard, while understanding their new customers, realized that young “Slushy” buyers were interested in novel flavors with outrageous colors.  Two new values emerged.

• The brand cache of major soft drink names and

• Outrageous names for unusual flavors

As a result, Alimentation Couche-Tard stores were able to massively increase profitability, attract a highly profitable new demographic and take a low profit tired business model and turn it into a replicable money machine across all of their stores. With the new money machine operating in all stores, Alimentation Couche-Tard went from hard times to good times and with a money maker in their back pocket, they embarked on an aggressive expansion across North America, moving from 375 stores in 1972 to over 2300 stores in 2007, a massive increase in market share, size and profitability, making it the second largest retail convenience chain in North America.  Here is a powerful example of how a positive opportunity focussed mentality created massive business growth and profitablity in the tired convenience store industry.

I wonder how many retailers are ready for the changing face of retailing? What do we know about our customers, browsers, and our competitors’ customers?

Here is a powerful reminder that a real time link to the mind of your customer and market place is CRITICAL to your survival in the months to come.

In “Toops Scoops: Culture of the Recession,” FoodProcessing.com reveals a change in attitudes that could prove costly for those who assume the patterns of the past few decades are a guide to the future.

Consumers spending less on wellness, more on consumer electronics.

What has the recession wrought? Nearly half (44 percent) of U.S adults report their diets are becoming less healthy as food prices rise, 52 percent buy fewer organic products and 48 percent spend less on health and wellness overall, according to a new study from Faith Popcorn’s BrainReserve (http://www.faithpopcorn.com), New York cultural trend tracking firm.

Sonar surveyed 1,011 consumers online (50 percent men and 50 percent women over 21 years of age) between May 29 and June 6 for BrainReserve’s “Culture of the Recession” survey. BrainReserve then analyzed the results against 17 cultural trends that it regularly monitors, reports Marketing Daily.

As other recent surveys indicate, Americans are cutting back on everything from food and beverages to out-of-home eating/entertainment to day care. Two-thirds (66 percent) are cutting back on overall spending, while 84 percent are making changes such as reducing shopping trips. Fully 90 percent of women and 79 percent of men (84 percent overall) are “buying less stuff,” and 90 percent are considering opting for a simpler life. .

You should go to the link or to FoodProcessing.com to read the full article.

Christmas is coming, so many retailers will make or break the year in the next 6 months, it will be financially dangerous to get caught out as the winds of the consumer mood change.

I have been saying for months that the mood of the consumer is changing from a WANT mindset to a NEED mindset.

This will heavily influence traffic patterns, choices of retailers, brand selection, basket size and the expectations that most consumers have for the retailer they give their business to.

We help our clients stay close to customers and the market.

For our clients, the market and customers are speaking loud and clear.

Buying patterns are changing and that change will accelerate.

There are better ways to get ahead of your market. I am seeing Retailers who get it, making a difference in their markets.

Martin Hoffmitz