Artificial shortages, increased consumption, weather-based crop destruction, and rising prices of raw materials can be seen throughout the US and the global economy, especially with civil and political unrest on the rise in the news. NPR recently published an article about rising food prices, but what it doesn't tell you is that there has also been a global decrease in food production.
Let's look at wheat production.
Abdolreza Abbassian, senior economist at the FAO, predicts that wheat prices may keep rising until the summer because importers are speeding up purchases to outrun inflation. Prices are more likely to stay high or go higher in the next six months than decline. (Source: Businessweek) That's right, countries are hoarding wheat and a few have already banned exports of their domestic wheat.
Market Factors:
As for US consumers of wheat products, since we're able to procure wheat from a multitude of domestic and foreign sources, we'll probably not notice the price shift, nor the inflation that it is bound to come with it.
See also:
Pooley, E. and Revzin, P. "Hungry for a Solution", Businessweek, 2/21-2/27/2011, p. 7-9
20 years
I just realized today that I've been a netizen for more than 20 years now, having entered the Web since its mainstream adoption in the late 80s/early 90s. Back then, peer-to-peer BBS systems were just beginning to fade as 2400 baud modems were taking off (14.4k if you came from a tech-infused household). Also, the only entities with 24/7 unlimited access to the Internet were government agencies, very large tech firms, college campuses, and few others with the hardware and sophistication to create home-based LANs. Just look at how companies rose and fell over the years because of rapid adoption. What it takes to spur evolution is how willing an innovator is to let technology grow organically through its userbase. This isn't in the least viral marketing, that is a whole other beast.
An originator of a concept, an ideal, or a technological product can only hope to dominate market share by capturing as much of it as possible within the first year of its inception (e.g., Groupon vs LivingSocial, BOGOPOD, Goldstar Events). Momentum follows after that, and when executed well, it becomes a company's cash cow--stable and mature--allowing the company to sink resources into other revenue-generating endeavors.
Execution in a noise-rich world still takes well thought-out processes, a business plan, marketing and sales savvy, competitive advantages, and an inherent goal to be the best at what your firm does. This does not mean that you should focus on or be content with being #1 or #2 in the industry, but rather be the best at whatever your firm has to offer.
On a side note, when US companies look abroad for more revenues, they forget that domestically we are more than 300 million strong as potential customers, users, and collaborators in the next generation of their products and services. There aren't too many x-factors that can halt or slow down population regeneration and it is because of this that retail grocery stores not only thrived but were profitable during the Great Recession.
An originator of a concept, an ideal, or a technological product can only hope to dominate market share by capturing as much of it as possible within the first year of its inception (e.g., Groupon vs LivingSocial, BOGOPOD, Goldstar Events). Momentum follows after that, and when executed well, it becomes a company's cash cow--stable and mature--allowing the company to sink resources into other revenue-generating endeavors.
Execution in a noise-rich world still takes well thought-out processes, a business plan, marketing and sales savvy, competitive advantages, and an inherent goal to be the best at what your firm does. This does not mean that you should focus on or be content with being #1 or #2 in the industry, but rather be the best at whatever your firm has to offer.
On a side note, when US companies look abroad for more revenues, they forget that domestically we are more than 300 million strong as potential customers, users, and collaborators in the next generation of their products and services. There aren't too many x-factors that can halt or slow down population regeneration and it is because of this that retail grocery stores not only thrived but were profitable during the Great Recession.
Paperless Coupons & Loyalty Marketing
Coupons sure are a hot topic this year with all the display ads being clogged up utilized by online properties such as Groupon, LivingSocial, DailyDeals, etc. But, what about the long-standing purveyors of coupons.. the grocery store?
As far as I can tell, there are two types of paperless coupons:
a) the digitized version of the coupon that you show to the clerk at a store to be scanned using your mobile or smartphone, and
b) the coupons that users can elect to sign-up for and push to a rewards/loyalty card offered by a particular merchant like Fred Meyers (or any of the Kroger grocery stores with loyalty cards).
The biggest hurdle for the "b" group is consumer awareness. Using a loyalty card has bee pretty straightforward. You go into a store responding to either an in-store ad promotion or one from the weekly circular, match your product and get a discount when you fulfill the offer's requirements. It's a tiny, innoculous keyfob that just hangs there with all the other micro loyalty cards. Every merchant from the pet shop to the grocery store to the local coffee house to the corner drugstore wants a piece of the action in your pocketbook. Very few loyalty cards actually require you to do anything transactional on a merchant's website. Three notable firms that come to mind are: Starbucks (have to register and setup a user account to add more bucks to a Starbucks card, check card balance), REI (stores member details that can be accessed in-store or online at rei.com), and Fred Meyers (via the Kroger parent brand, has a very thought-out loyalty program but few are aware of it).
The following statistic picked up by Internet Retailer is a minor annoyance to how one should use a research data point.
"49% of loyalty program members never or rarely take advantage of loyalty program perks when shopping online; however, 78% of Americans who are members of loyalty card programs say easy online access to their loyalty memberships would make them more likely to shop at the retail web sites that honor their loyalty programs." --a study by ACI Worldwide, on electronic payments and rewards programs.
It really should have started out this way, "51% of loyalty program members take advantage of loyalty program perks when shopping online..." Heck, that's more than half! If ACI had stats from the prior years, they could have let on if this number is growing or shrinking. So anyways...
Like mindshare, there is limited space on your keyfob or in your wallet for additional loyalty cards. Typically, the cards that offer the best rewards are the ones that consumers put up with and carry them around everywhere. Having a customer to opt-into the card is the easy part. Getting them to proactively load their own card with preferred offers with the benefit of not having to print out the coupons is a considerable shift in a consumer's perception about coupons. How these offers are redeemed is no different than swiping the loyalty card at checkout. FM makes it pretty easy for customers to access information about their loyalty card account. No paper clippings are necessary.
FM uses an app called SoftCoin to host merchant offers for digital coupons, which is run by a bi-coastal company called YOU Technology. I think they've gotten pretty good at targeting and pairing offers to consumers. If FM is going to rise from being the #3 grocery retailer in the US, the way technology impacts both consumers and how users get informed about product offers will certainly make a difference.
As far as I can tell, there are two types of paperless coupons:
a) the digitized version of the coupon that you show to the clerk at a store to be scanned using your mobile or smartphone, and
b) the coupons that users can elect to sign-up for and push to a rewards/loyalty card offered by a particular merchant like Fred Meyers (or any of the Kroger grocery stores with loyalty cards).
The biggest hurdle for the "b" group is consumer awareness. Using a loyalty card has bee pretty straightforward. You go into a store responding to either an in-store ad promotion or one from the weekly circular, match your product and get a discount when you fulfill the offer's requirements. It's a tiny, innoculous keyfob that just hangs there with all the other micro loyalty cards. Every merchant from the pet shop to the grocery store to the local coffee house to the corner drugstore wants a piece of the action in your pocketbook. Very few loyalty cards actually require you to do anything transactional on a merchant's website. Three notable firms that come to mind are: Starbucks (have to register and setup a user account to add more bucks to a Starbucks card, check card balance), REI (stores member details that can be accessed in-store or online at rei.com), and Fred Meyers (via the Kroger parent brand, has a very thought-out loyalty program but few are aware of it).
The following statistic picked up by Internet Retailer is a minor annoyance to how one should use a research data point.
"49% of loyalty program members never or rarely take advantage of loyalty program perks when shopping online; however, 78% of Americans who are members of loyalty card programs say easy online access to their loyalty memberships would make them more likely to shop at the retail web sites that honor their loyalty programs." --a study by ACI Worldwide, on electronic payments and rewards programs.
It really should have started out this way, "51% of loyalty program members take advantage of loyalty program perks when shopping online..." Heck, that's more than half! If ACI had stats from the prior years, they could have let on if this number is growing or shrinking. So anyways...
Like mindshare, there is limited space on your keyfob or in your wallet for additional loyalty cards. Typically, the cards that offer the best rewards are the ones that consumers put up with and carry them around everywhere. Having a customer to opt-into the card is the easy part. Getting them to proactively load their own card with preferred offers with the benefit of not having to print out the coupons is a considerable shift in a consumer's perception about coupons. How these offers are redeemed is no different than swiping the loyalty card at checkout. FM makes it pretty easy for customers to access information about their loyalty card account. No paper clippings are necessary.
FM uses an app called SoftCoin to host merchant offers for digital coupons, which is run by a bi-coastal company called YOU Technology. I think they've gotten pretty good at targeting and pairing offers to consumers. If FM is going to rise from being the #3 grocery retailer in the US, the way technology impacts both consumers and how users get informed about product offers will certainly make a difference.
Cyber Monday / Black Friday Report 2010
Coremetrics, an IBM company, just released its benchmark cyber monday / black friday report for 2010. For those of you who don't work in retail, online or in a brick-n-mortar storefront, cyber monday refers to the first Monday after Thanksgiving weekend, and Black Friday is the day after Thanksgiving, supposedly among the busiest online and offline shopping days of the year as many retailers try to capture their 80% of annual revenues before the end of the year.
Here are some of the stats from the report:
Cyber Monday 2010 vs Cyber Monday 2009 (year/year):
Consumer Spending Increases: Online sales were up 19.4 percent, with consumers pushing the average order value (AOV) up from $180.03 to $194.89 for an increase of 8.3 percent.
Luxury Goods Report Big Gains: Affluent shoppers opened their wallets wide, driving sales of luxury goods up 24.3 percent over 2009.
Shopping Peaks at 9:00 am PST/Noon EST: Consumers flocked online, with shopping momentum hitting its peak at 9:00 am PST/noon EST. But consumer shopping maintained stronger momentum throughout the day than on Cyber Monday 2009.
How people shop shows more than a willingness to do business online; it also shows the level of comfort that users have with transferring financial data over an unsecured, wireless network. Two notable trends of holiday season 2010 are:
Social Shopping: The growing trend of consumers using their networks on social sites for information about deals and inventory levels continued on Cyber Monday. While the percentage of visitors arriving from social network sites is fairly small relative to all online visitors—nearly 1 percent—it is gaining momentum, with Facebook dominating the space.
Mobile Shopping: Consumers continue to use mobile as a shopping tool. On Cyber Monday, 3.9 percent of people visited a retailer’s site using a mobile device.
Afterthoughts:
I thought that there would be a bigger difference in YOY stats among all the retail channels--mobile, web, in-store, etc., but there weren't. 2010 did slightly better than 2009 and on average, the segments performed about the same as the prior year.
Health and Beauty segment performed the best overall with the highest new visitor conversion rate (5.94%) and the lowest cart abandonment rate (59.74%). The Jewelry segment had the highest average order ($384.25) with the fewest number of items per order (1.57). Department stores are still lagging behind all other segments with the highest cart abandonment (76.98%), though this could be due to any number of reasons (poor user interface, unsecured web forms, price not right, timing not right for the consumer, the deal just wasn't sweet enough, first time customer unwilling to trust retailer with financial information, etc.).
What isn't covered in the report is the methodology used and the companies used to generate these stats.
Bounce rate is relatively low for the US retail market which means that via web/email/mobile, relevant messaging was used to entice a consumer to a point-of-sale action. Higher bounce rate typically indicates blogs (doesn't take much time for people to skim through text), irrelevant search keyword hits, or the wrong offer was used with an attractive call-to-action from an email or mobile message.
eCommerce can be more profitable than other sales or partner retail channels, especially if your website is managed in-house. Profit margin tends to be higher, operating costs are presumably lower, and if it is a well-oiled machine, you don't pay your website double time to work through the holidays.
Also, the more shopping that's done on cyber monday, the less they are doing actual work at work.
Read the report
Coremetrics' executive summary
Here are some of the stats from the report:
Cyber Monday 2010 vs Cyber Monday 2009 (year/year):
Consumer Spending Increases: Online sales were up 19.4 percent, with consumers pushing the average order value (AOV) up from $180.03 to $194.89 for an increase of 8.3 percent.
Luxury Goods Report Big Gains: Affluent shoppers opened their wallets wide, driving sales of luxury goods up 24.3 percent over 2009.
Shopping Peaks at 9:00 am PST/Noon EST: Consumers flocked online, with shopping momentum hitting its peak at 9:00 am PST/noon EST. But consumer shopping maintained stronger momentum throughout the day than on Cyber Monday 2009.
Cyber Monday 2010 | Items Per Order | Avg Order | Cart Abandonment | New Visitor Conv. Rate |
| US Retail | 6.41 | $194.89 | 63.68% | 4.41% |
Apparel | 2.36 | $128.13 | 65.32% | 3.20% |
Dept Stores | 3.03 | $117.49 | 76.98% | 2.90% |
Health & Beauty | 4.20 | $68.30 | 59.74% | 5.94% |
Jewelry | 1.57 | $384.25 | 67.73% | 1.02% |
Sport Apparel & Gear | 3.02 | $120.60 | 72.78% | 2.19% |
How people shop shows more than a willingness to do business online; it also shows the level of comfort that users have with transferring financial data over an unsecured, wireless network. Two notable trends of holiday season 2010 are:
Social Shopping: The growing trend of consumers using their networks on social sites for information about deals and inventory levels continued on Cyber Monday. While the percentage of visitors arriving from social network sites is fairly small relative to all online visitors—nearly 1 percent—it is gaining momentum, with Facebook dominating the space.
Mobile Shopping: Consumers continue to use mobile as a shopping tool. On Cyber Monday, 3.9 percent of people visited a retailer’s site using a mobile device.
Afterthoughts:
I thought that there would be a bigger difference in YOY stats among all the retail channels--mobile, web, in-store, etc., but there weren't. 2010 did slightly better than 2009 and on average, the segments performed about the same as the prior year.
Health and Beauty segment performed the best overall with the highest new visitor conversion rate (5.94%) and the lowest cart abandonment rate (59.74%). The Jewelry segment had the highest average order ($384.25) with the fewest number of items per order (1.57). Department stores are still lagging behind all other segments with the highest cart abandonment (76.98%), though this could be due to any number of reasons (poor user interface, unsecured web forms, price not right, timing not right for the consumer, the deal just wasn't sweet enough, first time customer unwilling to trust retailer with financial information, etc.).
What isn't covered in the report is the methodology used and the companies used to generate these stats.
Bounce rate is relatively low for the US retail market which means that via web/email/mobile, relevant messaging was used to entice a consumer to a point-of-sale action. Higher bounce rate typically indicates blogs (doesn't take much time for people to skim through text), irrelevant search keyword hits, or the wrong offer was used with an attractive call-to-action from an email or mobile message.
eCommerce can be more profitable than other sales or partner retail channels, especially if your website is managed in-house. Profit margin tends to be higher, operating costs are presumably lower, and if it is a well-oiled machine, you don't pay your website double time to work through the holidays.
Also, the more shopping that's done on cyber monday, the less they are doing actual work at work.
Read the report
Coremetrics' executive summary
New Year's Resolution(s)
Last year, my new year's resolution for this blog was to write at least one post a month. Apparently I need a more ambitious resolution this year. Now, I write more entries/month to my food blog than I do to this one because there's always something to write about: a new recipe, a mad scientist way to make something, wines and gourmet suppliers in the region, or an eatery that I happened to come across. Blogging about marketing concepts, business models, strategy, and domestic or global marketing campaigns still takes some thought and research.
The resolutions:
The resolutions:
- Write more than one entry per month, at a 1:4 ratio to the food blog
- Investigate topics that provoke thinking rather than reacting to the latest buzz
- How the rising price of milk affects the increased demand of almond products
- Why it costs a lot more money to be #2 in the market, than #1 or #4
- The economic factors that encouraged Spain to win the World Cup and why the US will never win it (The last time we placed on the scoreboard, it was in 1930.)
Subscribe to:
Posts (Atom)
