That was not the title I was expecting to use on new year's day in 2012.  

New Year's Eve presented us with La Senza closing 80+ stores and more from Barratts, Black's Leisure and a host of others.  I would expect a repeat of 2008 when Zavvi and Woolworths became the very public wake up call.  HMV, with nothing left sell, will be just hoping that the focus from CD's to expensive headphones will have done the trick.

The next 18 months will be painful with analysts estimating 40,000 job losses over the period and more retailers being unable to balance the debt pool with the basic running costs.

An over reliance on debt funding over the years (working on the same issue as consumer credit, it was cheap and easily available) is now biting back. Coupled with the fact that consumer spending is down and will continue to shrink. Even the best turnaround consultants are taking two steps back and waiting because it's just not worth the risk right now.

If you're a small retailer it gets harder, though not impossible.  Your focus is simple, maintain the bottom line and keep the customers you already have.  Multichannel selling, online, mobile and bricks and mortar will be key over 2012 so if you're not selling online (either stock, gift tokens or booking services) then you seriously need to start thinking about it.

There'll be no government bailouts or much grant funding to backpeddle the trend.  

Welcome to 2012, welcome to reboot.  It's painful but it's required I'm sorry to say.

 

 

We never said much about RetailCalc, just put it together and got it out there. 

Quick and easy to use, give it the cost price of your item and use the slider to work out what gross profit margin you want. Simple really, no catches or marketing signups. Just an app to help retailers.

Available for iPhone/iPod you can download it now.

In times gone by a high street sale was to clear out inventory.  Items that hadn't sold until a key point in the retail calendar (Christmas for example).

The January sales were essentially to clear room for new stock for delivery towards the end of January with your next sales peak being Valentines Day and then the incline to Easter.

In the last three years it's been a very different story.  Retailers are into discounting, heavy discounting and for a very simple reason, they want you through the door.  The question I want to ask is at what point does a "sale" just become the norm?

The number of 70% off signs on the windows a month before Christmas was concerning especially when you take into account the retailer's rent, rates, staff wages, electricity, heating, insurance and other bits.  The profit margin is essentially wiped out.  Now I understand that not every item is reduced but I'm seeing more and more going in that direction.  This is no longer about profit, it's about survival.

Assuming that 80% of the profit is made in 20% of the year (which makes it the 10 weeks to Christmas) wiping it out with a sale before Christmas makes no commercial sense at all.  Take in to account the drop off in January.  In previous retail appointments January was basically a cleaning month.

Footfall figures and guesstimates on turnover are all very well but profit is the true key to a successful business. 

Now we're seeing larger retailers hitting trouble, the ones that you'd expect to make it through - in the news recently we've already seen HMV, Thorntons and LeSenza going through their own troubles. And as online trading becomes the norm we see the shift as the likes of Thomas Cook close stores.

And if you think 2011 was no fun then I would wager that 2012 and 2013 aren't going to be much better. To be honest I believe we're at the start of the curve, not on the peak.  People said things were going to get better in 2009 and I've yet to see it happen.

Retailers need to seriously rethink their selling strategies, whether that be multichannel, mobile commerce, loyalty or syndicating offers with other retailers in different sectors.

I'll be putting a few more posts about discounting together over January, if there's anything you'd like to see then please feel free to leave a comment.

 

 

The problem with stock checking

From POS to backoffice to webstore.... companies claim allsorts of things they can and can't do.  What frustrates me, especially at this time of year, is the process for the user on how to find and reserve items.  The time wasting exercise of checking stock in store for every item.

Browsing product is all very well but with a big chain, like Argos in the image, you have to check per item for availablilty. If you have a list of items to look for (or even worse you have no idea what you really want and are randomly clicking away) then getting stock checks for every item is a drag.

A possible solution?

Using some form of location checking regardless of it being GPS or GeoIP tracking can easily bring the search down.  So, you arrive at the Argos site and from your IP address it knows roughly where you are.  The server could in theory geo fence the closest 10 stores and show items that ARE IN STOCK within those stores.  No more mad stock checks and time wasting, you know the stuff is in stock.

If that's not possible then even tagging items to do a stock check on all of them in one go.  Then I can plan my journey to two or three of your stores if they are within driving distance.

Just an idea and I'm not pointing the finger at anyone in particular.

Retailer's are busy, really busy. And what's more they have a hundred one other things on their mind than your startup product.  So from the hundreds of retailers I've spoken to there's one simple question I'm asked every time, "can I do [insert your service here] in less than ten minutes?".

A giant black clock, yesterday.

As retailers also live in the real world you can pretty much assume that between 9am - 5:30pm they are doing the most important thing as retailers, selling to, and looking after, their customers. So mindless distractions like social media, marketing and your startup won't get a look in during the day normally.  Ask a retailer to add something to their to do list in November or December.... just try it.

In a world is disruptive technology retailers are constantly being asked to change their routine to accommodate new things, family time gets cut into and as being self employed is enough of a strain on their family time new concepts and gadgets become ignored things pretty quickly.

Large retail have departments to do the time wasting stuff and keep the sales teams clear to do what they really need to do, sell.

So in answer to the uVoucher question.... a piece of mission critical information, an offer or a flash deal setup and out to your customers, we can do in less than four minutes.

• View the Datasentiment website and see how we help retailers with communicating exciting brand deals.
• Get more information on uVoucher our phone based customer loyalty system
• Sign up to our newsletter and keep in the loop for more retailer tips.
• Join our affiliate programme and earn 20% commission each month for every retailer you successfully sign up to uVoucher. 

 

Even though it was a Sunday I thought it would be a good idea to quietly announce the uVoucher affiliate programme. So once it starts to run in October anyone who refers a retailer to us they could start earning 20% of the fees a month (once the subscription starts and the app is on the AppStore).

So can you crowdsource a sales team? I'd like to think so....

The invention of the Party Plan is attributed to Brownie Wise who used it as a direct sales channel to sell Tuppaware.  Until that point Earl Tupper while a great inventor couldn't get his invention to the mass market. Brownie changed all that, it's just a shame that it all ended in 1958 when Tupper fired Wise over operational differences.  A bit like musical differences in a band.

Since then the party plan has been copied many times over in various different fields. Brownie's work spawned a lot of companies going the same type of model, one of the more famous ones is Ann Summers and the results are impressive.  With an average of 4000 parties a week and an average of revenue of £240 a party, well you can do the maths from there in terms of the revenue (the party organisers are reported to get in the region of £50-£60 commission per party).

On a micro level the Amazon affiliate programme enables website owners to make small commissions from any of the inventory on Amazon. The commission amounts are much smaller that running a party plan for example (it is online after all) but over time those little amounts add up. There are hundreds of online affiliate plans available and don't rule out things like Google's AdSense for ad revenue as well.

With uVoucher we want to help retailers but we can't get to every retailer, I'm sure any company really can.  So the best way of getting to the smaller retailers is through their very own customers. It's a win win all round.  The retailer can manage their own customer loyalty and drive incremental revenue, their customers while getting great offers and updates to their mobile also get a commission. 

So, everyone knows a retailer and if you want to make a game of it we'll be putting up the league tables.  For more details on the uVoucher affiliate programme it's all on the Datasentiment website. If you want to keep up with updates of when the programme goes live in October you can join the mailing list.

 

 

 

[I originally posted this yesterday on my personal blog but it seemed apt not just to Northern Ireland daily deal sites but all of them.]

One of the positive notes of creating a site based on a trend is that you can ride the crest of marketing spin without a huge amount of hassle.

One of the drags is that as soon as the main player starts to get in a mess then everyone else has the potential to go down with it.

Groupon's very public IPO (VPIPO?) left many investors wondering if there was a company at all. From Ponzi scheme comments through downright good sales tactics through to the ultra big no no of raising huge amounts of money to pay off the original investors. Well the world watched and most noticed.

Northern Ireland has a wonderful mentality of creating copycats and going for it, yes we love #JFDI but this one had a very short shelf life and I'm not sure most noticed.

So the fact remains, now is the time to pivot or die.

1. Your mailing lists are too small.

I would estimate that Groupon's mailing list size is about 250,000 and Living Social is just a bit below that. I've heard varying reports of the size of the smaller players. If you work on the basis of 5%'s then numbers of redemptions should average out at 625.  

The smaller players have smaller mailing list sizes so the reach and redemption potential starts to decline.  Where Groupon have the upper hand is within on day there are at least 300+ other sales going on. This is a serious numbers game and to have just one deal a day is no good. You need many.

For every 100,000 people in the database a redemption return of 15% is a good target baseline, it's hard though, really hard. 

2. Yours deals need to vary.

Once a deals site begins to cycle the deals of the same company then it's the end. Daily deals sites are 10% tech and 90% sales and marketing. Those that know me well know that you play a dangerous game of piggy in the middle by running these sorts of things, you have to keep your mailing list happy and the retailer happy.  Skimping out on either of these and any retailer can walk to a competitor.

DD sites failed to maximise their retailer base, it's not all fish pedicures (not that we can see that fad lasting long either, just think of the bacteria) and over inflated restaurant prices.

3. Customer acquisition is a very weak argument.

It was always a weak sales line but I've seen a lot of retailers fall for it without doing the maths. "But I got 30 new customers on my mailing list", yeah not bad when 1000+ people showed up to get 70% off the retail price. 

Ultimately retailers need to realise one thing, the daily deal is not there for them. It's solely making profit from the retailer which it has to do on a daily basis.  For any daily deal site to say it's there for the retailer, well it's not.

So there are only two options in this game.... pivot or close. Given that there's already a 50% drop in traffic to Groupon it's time to regroup and rethink.

 

 

How do you want to reach your existing and potential customers?  Do you want to put an ad in the lonely heart's column, send a love letter or go on a hot date?

 

The Financial Times have reported that Tesco are to trial in-store Wifi in four of it's UK stores. Doesn't sound like much of a big deal. In my eyes it is.

First things first, this is not about searching for stuff and price comparison. I personally think there's a broader long term agenda here and it's down to how the Clubcard is used.  The Clubcard, up until recently, has been a physical card that you had to carry around.  The card on a smartphone is a brand communication device that can (if you let it) track and trace your every move.  There's a trade off here, for the information Tesco collect about you then in return you'll get offers.

I've gone on in the past how I think that any forward thinking retailer should have Wifi installed for the same reason.  The phone is your loyalty device, it's the one item you tend not to leave the house without and it's the one thing that you look at it when it pings or vibrates in your pocket.  I can't think of any other device that has our attention so much.

If I were to guess here this trial marks the start of a five year plan to phase out the physical Clubcard and move it to the smartphone.  Me personally I already use my iPhone as my Clubcard but I know for a fact that Tesco aren't targeting me as effectively as I'd like to see.

Those who have spoken to me or know me well already know that the Tesco Clubcard plays a large inspiration behind the whole Datasentiment/uVoucher concept.  The ability to communicate any brand large or small direct to the customer.  Real time deals, messages and brand info to your phone as it happens.  It's exciting stuff.  The better news is that with Datasentiment this technology that Tesco is looking to bring is already here and working in the retail space.

• View the Datasentiment website and see how we help retailers with communicating exciting brand deals.
• Get more information on uVoucher our phone based customer loyalty system
• Sign up to our newsletter and keep in the loop for more retailer tips.

 

Check in services are seemingly becoming a mystery to users, business and the app owners (just take a look at Color). The root of any check in service from a customer perspective boils down to one simple question, "What's In It For Me?".

So you become the Mayor of your local pizza hangout in your area and once a week, on a Wednesday, you can get a free little pizza.  So one discount for one person and not much in the way on incremental revenue.  Apart from a business protecting the name and location on it's services on the likes of Foursquare and Gowalla there's little commercial value for putting offers up on the system from where I can personally see.

We do use check in services within uVoucher but the workings are slightly different.  Firstly there's no big button to check in, asking the customer to force a check in is leaving things to fate.  Fire up the app and if you've let your location be declared then you're checking all during the time the app is active.  If you're near the retailer you are viewing then there's some neat calculations on where you are, what offers the retailer has going and whether you are entitled to them.  

Putting the power of the check in with the retailer will reap rewards for the retailer and the customer.  This is where it goes from beyond being a game and becomes a powerful brand tool.

With the likes of Foursquare and the other check in games you're really chasing the title of Mayor, if you use the reward after well that's all down to fate.  The real question is will anyone really care about your Mayorship?

• Have a look at the Datasentiment website and see how we help retailers with communicating brand loyalty to their customers.
• Get more information on uVoucher our phone based customer loyalty system with check in technology, coupons, messages and 360 feedback.
• Sign up to our newsletter and keep in the loop for more retailer tips.