Term: Cognitive Dissonance

Cognitive Dissonance is a term used in retail to describe a customer’s poor post purchase experience.  Simply put, a bad feeling/experience that hangs over them after they leave.  It often leads to regret and seldom, if ever, does the customer return to the Merchant.

All retailers/merchants want to ensure that customers do not have a feeling of BUYERS REMORSE. This  ‘bad feeling’ can come from:

– The product or Brand itself not delivering as promised (ie a Merchant listed a poor product without testing it, or it is an isolated event/ defective product from the manufacturer)

– General feeling of “malaise” due to store atmosphere, location, can’t return it easily/not hassle free, etc

– The experience at the store in general is poor (ie a long customer line up, poor customer service experience, poor lighting, a crazy parking lot!, temperature, etc)

Merchants, try to leave your desk and purchase a product from your store and act as a “secret shopper” (a term used to describe someone who shops to review the WHOLE customer experience).

It won’t matter how good your programs and prices are if the overall customer experience at store level is poor.  They simply won’t come back and your target market will shop elsewhere. 

The challenge: leave your desk and go to your Retailer and ensure customers are happy with your shop experience.

More about Author: http://about.me/davidbartolini#services 

Consumer “Meal-Solution” Driven Ads…Please apply within.

Almost all FOOD weekly advertisements are the same old format.   Go ahead open up your newspaper this week and check them out.  There is a front page which has specials from several departments.  Inside pages have departments isolated from each other ie produce separated on one page, meat on another, a few pages of grocery and then a back page.

But why don’t retailers create MEAL SOLUTIONS for us worldly consumers? We are all time-starved; everyone is working hard these days.  And let’s face it, many don’t like or know how to cook ….but almost everyone loves to eat great food!  Simple creative culinary adventures should be available at our fingertips weekly!

When everyone is going in the same direction, there is opportunity to do something different

Anonymous

Majority of retailers do it all the same.  Yet they have hundreds of ‘foodies” with vast food recipe knowledge in-house.  Who knew baba ganoush went so well with a meatless BBQ burger, smothered with 2-year-old white aged cheese and fresh avocado?  (No need for ketchup!)   That a spicy Thai sauce goes oh so well with breaded butterfly shrimp!  

Please group these items together in weekly ads for the appropriate season!  Yet retailers continue to create Ads that works for them, in their department silos: grocery, produce, meat, natural value, seafood, deli, bakery, etc. 

Not sure why one retailer won’t create a solution to this opportunity. 

Always challenge the status quo. 

More about Author: http://about.me/davidbartolini#services 

Fundamentals of Packaging Design: Case Study “SmartSpud”

Packaging design is the visual representation of your product or brand.  It is the interface between the consumer and your product; and therefore it is vitally important you represent your product well and accurately to the consumer.

Product design can drive impulse purchases, reinforce brand message/equity, and visually stimulate consumers (either positively or negatively).  Below, we review some packaging design fundamentals for one product, The Smart Spud – a product that today resonates well with consumers; it is a Low Carbohydrate product which is designed to be interpreted as a “healthier” option.

But before design, however, we must observe the 4 P’s (Marketing Mix) of the Smart Spud (Note: Target Market are people with higher disposable incomes who love potatoes but don’t want to feel guilty about the carbohydrates they consume):

Product – The Product is a unique and premium potato product.  Low Carb potato, a ‘lighter’ option

Place – Only “Great Food” format stores, not discount stores

Price – 25% retail $ premium to other poly bag potatoes

Promotions – not applicable

Given that the Smart Spud is a high-end, healthier potato option, it is important all 4 P’s are congruent with the “premium & healthier” message (as well as design and the type of packaging used).   If the marketing mix is conflicting (ie a premium ingredient product with a discounted price?!), it will confuse consumers and weaken equity in your brand/product.

Let’s review the DESIGN strategy of this product:

The Name: Smart Spud – reinforces and/or hints at a “smart potato option”

–          Minimalistic design is used.  Minimalistic can be interpreted as “upscale”

–          Supporting Images – usually secondary and reinforce a  “healthier” message – in this case a waist-band measurement strap at the top of the bag design is used (difficult to see on image)

–          Colour – The predominate colours used are White (which reinforces the product is not “rich or heavy” but light and airy) and Blue (Blue is the standard in Canada to connote “healthier” option ie see President’s Choice Blue Menu sub Brand).  Therefore, we are borrowing the equity of an existing sub brand which already resonates ‘healthier’ with consumers.  We don’t need to recreate another.

–          Photo – note the use of a “serving suggestion” photograph.  In this case, a “mash potato” in a premium blue bowl is used.  It is simple and can be healthy.  A baked potato could have been used, however, baked potatoes can be synonymous with a “Loaded Potato” – ie sour cream, chives, bacon, etc.  Potentially marring our image of the healthy option.

 Remember, marketing and marketing design are subjective – this means they are open to interpretation.  While some design principles used above may work for this product, they may not for all.  What is important is you have an understanding of design basics, the market, and that your message is consistent with the 4P’s of marketing.  Consistent messages drive equity in your product.

More about Author: http://about.me/davidbartolini#services

The Good, the Bad & the Ugly

How do you distinguish yourself from others in the rat-race?  More specifically, how do you create a unique and professional Personal Brand*(PB)

One significant way to differentiate your PB, is to launch new products into the market – it can create such a buzz!  But the key is to work strategically with your vendors and push them to be creative and submit product concepts regularly.  In my experience do not discount smaller vendors – they are aggressive and entrepreneurial and want to grow market share.

And when something exciting is submitted, it is now where you utter: I want EXCLUSIVITY!” (refer to Blog Feb 17th before launching nationally).  

Tips to securing Exclusivity

–          Remember WIN/WIN philosophy always prevails!  The vendor needs to profit (at least in long run)

–          Create a promotion schedule with the vendor – how much will be invested? (ie you can advertise in-store  promotions  and/or distributed flyers).   Show a willingness to set the product ‘up for success’

–          Inform Vendor they will get merchandising space/planogram and that you will give promotional space in advertisements

Exclusivity will do the following for a Merchant:

–          Create brand loyalty to your category and the Company – you are the only show in town!

–          Differentiate you from colleagues and the business in general: The BUZZ factor!

–          Demonstrate your business acumen and vendor relations

Below, I include an item where Exclusivity was secured – The Smart Spud Potato (still on shelves today).  I mention it because you never know when/what category will get a unique product ideal for exclusivity – ie the Potato category was considered a boring “commodity” category and an area where creativity was looooooooong gone.

But this was launched just when the Atkinson diet was popular (low carb diets);  the vendor had exclusivity for the potato seed and in order to get exclusive rights for the Company, I negotiated to do the design and select the packaging type and support promoting it. 

Stay tuned next week – we will discuss how Merchants/Brand Managers can build equity in their products by successful product design.  I will discuss the design and methodology of this unique product. Packaging Design is key… and below is a good example we will expound upon next week.  Some vendors want to own design….but that doesn’t mean you can’t give them feedback if it is going on your shelves!

 

More about Author: http://about.me/davidbartolini#services

*Personal Brand  – consider it as your IMAGE (online or other) – this includes but is not limited to the body, clothing, appearance, online presence, etc, leading to an indelible impression that is uniquely distinguishable.

Easter Preparation! Merchants and Operators

Here’s a tip on how you can maximize the number eggs in your basket!

 “We are what we repeatedly do. Excellence, then, is not an act, but a habit.”

Aristotle

A great tip to set your Operators up for success (store managers, etc) is to plan “Over and Above” programs for your stores.  Now this doesn’t mean more work for them to execute.  No!  These proactive programs help them, while simultaneously demonstrating a deeper understanding of the importance of “the day”, and how you, as a Merchant, can be a team player.  Be always excellent.

 As Merchants, it’s easy to forget that Operators are implementing our strategies and promotions on days when thousands and thousands of people are coming to shop (while many are feasting!).  Operators are working hard and we need to make their life easier.  They need to execute and maximize sales while decreasing shrink; we want them on the floor with as little stress as possible.

 One great way to support your Operators is to provide them, by department, with a FAST and SLOW moving report. 

 A Fast/Slow moving report (by department!) is essential; it includes products that are frequently consumed (or not) during the Easter Holidays .  It reviews the top and slowest moving items (20-25 items only), in any department. ie For example, Produce Department would include Potatoes, Onions, Carrots, etc on Fast report and maybe Oranges, Ethnic produce items on Slow report.    

 You can provide this data as such:

     –  Large font! (most operators can’t view the file and make sure it is on Excel they can read/open)

     –  Be able to print on one page!

     –  Summarize each sku (sku = product or stock keeping unit) and then customize the movement BY STORE – not one generic report.  Each store has unique demographics!

     –  Include daily movement by store (not just for the entire week) for each item, using history from the previous year

     –  Provide Operators with a special planogram for each Department with key and promoted items (but keep it simple they don’t want to spend labour on elaborate planograms at this time)

 If you are seeing 5% growth (or decline) from previous year, adjust and tell them your methodology.  Also, offer to help a store for a few hours on “the day” – even collecting random buggies in the parking lot is a huge help.

 Being a team player maximizes camaraderie and from such efforts, one receives the serendipitous fruit of outstanding results!  Be excellent every day.   We are we repeatedly do…so never forget, excellence is a habit.

Merchant Tip: Vendors as Personal Consultants

In an earlier blog, I commented that bullying your vendors is not a synergistic business paradigm (see Nov 29th blog). Win / Win is the highest form of cooperation and this blog builds on that philosophy.

Vendor’s are SME (Subject Matter Experts).  Don’t think you have to know it all; there’s too many competitors, listings and programs out there and likely your portfolio is huge. 

So here’s how I would position it to vendors: “I’m new to the category. But good news! I’m hiring! And you are getting a new title to boot…you’re a Personal Consultant!”

Enlisting Vendors to educate you, including: plant tours, product tastings (always fun) and conduct complete business reviews will grow your category and personal knowledge.

Vendor Personal Consultants, ask them the following:
– Line listing – do I have your top skus for MY business? Which ones should I delist (they don’t like but that’s ok)
– Am I promoting right items at the right times?
– Are my retails competitive? Ie you do the market research!
– How much money is there in the pot for me to promote your items? Ie how much will you invest?
– What listings can we create together such that I have ‘exclusivity’ for these listings?
– Create a planogram for me based upon Consumer Behaviour shopping habits

Engage your vendors. Hold them accountable. Work together.

When you do business reviews (at least quarterly), review the sales. If the results are bad, they can only look to themselves and their recommended programs. Good vendors are happy to do this consultation; bad vendors don’t want to do the work nor want that accountability.
Strategic and effective, Vendor Personal Consultants are a great way to go. But wait! There is still the best part! Its FREE and unlike other consultants, Vendors have to stick around and LIVE the results.  And if they don’t get the results?  Well you’ve done your due diligence and can comfortably source a vendor that will grow your business.

Merchant Tip – Set yourself up for success!

One of my favourite mantra’s I expound to students at the University of Toronto is set yourself up for success.  But let me be clear from the onset: it’s not meant as a selfish act (ie looking after only number 1).  No, rather it is about thinking before jumping. 

Setting yourself up for success means enjoy the journey, not just the cheddar at the end of the frantic rat-race!  Specifically, for a Merchant, it is about developing programs, products, ads/promotions etc that have long-term sustainability and decrease the amount of stress in our lives. 

Proactivity: Many times in our careers we are conditioned to respond in a particular way to a particular stimulus (ie sometimes we react immediately when we have poor sales, low basket sales, beaten on a front page ad, etc).  Stephen Covey, renowned author of self-help books, defines ‘proactivity’ as:  having the awareness that between stimulus and response is our greatest power –  the freedom to choose!  There is a time lag so use imagination, self-awareness, introspection before you respond!  

Let’s take a practical example.  The all-to-familiar scenario: Sales are down.  Your boss is on you…his/her boss is on them.  Pressure is mounting, so, you are anxious to react.  Perhaps list new products and get immediate sales?!

 Sound familiar? 

But before you launch your program/products in every store – stop and think – think about the demographics, the scope of your product and of course, how can you set yourself up (and the products) for success. 

In my experience, sometimes it is prudent to just launch the program in a small area or a few stores and monitor.   Small launches allow Merchants the pleasure of the following:

–          Tweak your listings ie delist or list more, maybe different pack size?

–          Do the stores have the correct demographics?  Maybe target a specific area?

–          Get Operational or customer feedback

–          Adjust retails – not competitive?

–          Adjust Promotions – maybe invest in the program to see if it is successful to gain customer trail.  Incent them to buy it and try it!

You don’t have to make a killing on the first launch nor do you have to do a national launch every time.  Devoting merchandising shelf space is critical to your business…so, remember the following:

When it is a few stores, few people are watching.  When it is all stores, all eyes are watching.

So set yourself up for success.  Between stimulus and response, you have the time to think and choose before reacting.

Merchants vs Operators: The Retail Juggernauts

Merchandisers and Operators don’t always get along. Ok, seldom get along. There I said it. It’s out there. As Merchants scream “These guys can’t execute!”…. Operators are screaming “You can’t create a program for me to execute! You’ve never been on the “floor!””

But this difference in opinion (and occasional friction), is actually very healthy for retail business.

Merchandisers are typically the head office people and Operators are store managers/supervisors, etc. Operators are the front line with your customers. Merchandisers are the strategists behind the scenes.
While it is healthy for Merchants and Operators to delve deep into retail debates, a proactive Merchant will elicit Operator feedback before creating a program. Merchandisers: your programs are ONLY as good as the way in which they are seamlessly executed.

Merchandising TIP of the day
Merchants sometimes launch multiple products at the same time (example 10 plus flavours of ice cream). While it may seem intuitive to release all at once, it may not actually be the best strategy to employ. Too many products to choose from!  This is especially true for products with limited shelf life (very perishable), or products that are novel to the market place and thus riskier.

Merchants, put your Operator ‘hat’ on before launching too many!
– Operators are responsible for ordering. If a Merchant introduces 10+ skus (referred to as Stock Keeping Unit) on something new, Operators have no history on how to order.
– If they order incorrectly, they have too much on hand (not only taking up precious space in backroom) but it increases Shrink (product thrown out) which costs your program and the business $money.

INSTEAD…. introduce a responsible number of skus. Let the skus gain momentum. Have Operators begging you for more line extensions because consumers are buying.
MERCHANTS REMEMBER THIS: A PROGRAM IS MORE CREDIBLE IF YOU STRATEGICALLY ADD MORE SKUS THAN INTRODUCING TOO MANY AND THEN DELIST THEM!!

Both consumers and operators will lose faith in program. So set yourself up for success.

Pricing Strategies Examined

In a tough economy, many retailers are discounting prices.  But price alone is not a sustainable strategy to retain customers and earn a $profit$. Attract them yes! …But retain customers, no!
However, leveraging from your reduced price strategy while concurrently implementing a new value-added program(s) to your business model can be sustainable. And very profitable.

During a discounted pricing strategy, your business will increase customer traffic and customers will get exposure to your newly created (or even existing value-added (VA) services) and this will gain customer loyalty.  Such VA programs should be tailored to your target market and some basic examples include: elderly assistance, VIP treatment for women with children, build in loyalty program/points, partnering with a company that synergizes with your business, etc. 

The more creative and unique, the better: unlike Glengarry Glen Ross, it is not ABC! (Always Be Closing) but ABD! (Always be Differentiating!)

It is important for retailers to emphasize ‘what differentiates them” from the competition while employing the discounted price strategy.  Discounting on price alone will only reduce profits and ultimately precipitate a new retail strategy…one that will be a more desperate measure to gain sales. 

Side Note: New Entry Retailer Strategies
In some instances, however, discounting price is the only strategy of some retailers (usually new retailers or smaller outfits….a tactic employed to gain market share and exposure). This strategy usually has a set time limit and there is a fundamental understanding of the impact on short-term profits.
Strategically, these retailers reduce prices on specific KVI items (Known Value Items to the customer i.e. Coke, Tide) or even on destination departments such as Produce or Meat. This Retailer strategy is done to entice customers to shop repeatedly and gain familiarity with the retailer and its products/services. But, once the retailer gains significant critical mass/customer traffic, gradually they will increase retails to be more competitive. This is usually done slowly to avoid sticker shock.

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