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A Nielsen report highlights the strength of the premiumization trend that is driving sales around the world and looks set to continue as powerful underlining shifts play out. Rising income and a desire for exceptional quality (cited by 54% as a factor in premium purchases) and superior performance (46%), are core drivers. Interestingly, Nielsen finds that products with social or environmental benefits have premium potential. Some 42% of global respondents say they’d be very willing to pay a premium for products made with organic or all-natural ingredients, while nearly the same proportion (39%) say they’d pay extra for sustainable or environmentally friendly products. Premium is well established in many markets – it already accounts for about 25% of dollar sales in both the personal-care category in the U.S. and Southeast Asia and is growing faster than other segments. In Southeast Asia, for example, the premium segment grew 21% from 2012 to 2014, over double the rate of the
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"Global Premiumization Report: Moving Up", Nielsen , December 01, 2016
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British online grocery delivery firm Ocado is applying an array of advanced technologies to speed grocery purchases to consumer homes. The company maintains a 350,000 square-foot warehouse near Birmingham that beats Amazon at automated order fulfillment. Most of the 48,000 lines of products it sells are perishable, many chilled or frozen. The complex, time-sensitive optimization challenge is handled by sophisticated technologies like swarm robotics – teams of robots that cooperate to find, lift and grab products from shelves – as well as autonomous delivery vehicles, and machine-learned preferences. The company is expanding its warehousing and robotics capabilities to be able to handle and deliver more products even faster in the future.
"The Robotic Grocery Store of the Future Is Here", MIT Technology Review, December 29, 2016
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German discount grocer Lidl is launching a new strapline to further emphasize its focus on lower prices but not at the expense of quality. The strapline – an easily remembered subheading or phrase – is “Big on Quality, Lidl on Price.” It is not clear whether the new strapline represents a broader brand repositioning, or will replace the old #LidlSurprises tagline, or run alongside it. The idea of the new strapline is to emphasize to skeptical consumers that Lidl’s product lines do indeed have a quality provenance. The company’s sales rose 5.7 percent in the 16 weeks ending December 4, representing a growth rate that is slowing somewhat, but still far outpacing the grocery market’s 0.7 percent.
"Lidl Reveals ‘Big on Quality, Lidl on Price’ Strapline", Marketing Week, January 03, 2017
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Walmart has officially dropped Mediavest as its advertising shop, replacing it with Target’s former agency, Haworth Marketing + Media. Haworth’s new role, according to U.S. Chief Marketing Officer Tony Rogers, will extend “well beyond” that of a traditional media shop. The company said Haworth will provide a number of media services beyond planning and placement. These will include developing strategy for brand integrations and developing strategic partnerships in the marketing, media and entertainment arenas. Walmart has posted 10 consecutive quarters of same-store sales growth, including a 1.2 percent 3rd quarter gain in the U.S. Target reported a same-store sales decline of 0.2 percent for its fiscal third quarter, and flat sales for the first nine months. Walmart spent $2.1 billion on U.S. advertising in 2015.
"Walmart Shifts Massive Media Account to Target's Former Agency Haworth", Advertising Age, January 03, 2017
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In a rare piece of good news for traditional retailers that have for years seen slow growth and share declines – digital channel sales rose 23% in 2015 and 26% of all online retail sales now go to Amazon – research published in Harvard Business Review suggests that an omnichannel approach can give them an advantage. Omnichannel strategies aim to engage shoppers through multiple touchpoints and provide a seamless shopping experience across digital and brick-and-mortar platforms. Retailers that do this well can differentiate themselves through providing a multi-channel experience pure-plays simply can’t. Researchers found that omnichannel consumers, which are by far the majority (73% in this study), commonly interact with retailers in many different ways – in-store, online, on mobile. Importantly, these consumer spend some 4% more per shopping occasion than single-channel shoppers, while customers who used 4+ channels spent 9% more in the store, on average, when compared to those who
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"A Study of 46,000 Shoppers Shows That Omnichannel Retailing Works", Harvard Business Review, January 03, 2017
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Online retailer Amazon said it delivered more than two billion packages to 185 countries for sellers, brand owners and entrepreneurs in 2016 under its Fulfillment by Amazon program. The company said worldwide FBA shipments grew 50 percent during the holiday season. Amazon Prime members contributed significantly to the success of the program, ordering millions of items from sellers in the Seller Fulfilled Prime program that offers free two- or next-day shipping. Sellers worldwide using the FBA service grew more than 70 percent, while shipments grew 80 percent.
"Sellers on Amazon are Thriving: Fulfillment by Amazon Delivered More than 2 Billion Items for Sellers Worldwide in 2016", News release, Amazon, January 04, 2017
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A college marketing agency survey has determined that Generation Z, known as the first “digital natives,” easily adapts to new technologies, expects instant gratification of needs and desires, and yet is more cautious and disciplined in the face of economic uncertainty than one might expect. The Fluent survey of 501 college students found that Gen Z-ers: have jobs (75 percent), spend less time gaming, use cash less often, prefer in-store shopping (54 percent), tend to avoid cable TV and radio, increasingly cook for themselves, are hooked on social media to connect with friends or get news updates, and want to work for midsize companies when they graduate.
"Fluent College Student Survey Reveals Rising, Falling Trends among Gen Z; New Behaviors Reflect Social and Economic Realities", Marketwired, January 04, 2017
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Consumers increasingly want their beauty treatments as and when they want them and new businesses are emerging to serve this demand. Two broad business models are competing – retail ‘bars’ and apps offering at-home service. Retail bars offer a very defined service, often on a walk-in basis. Examples include Skin Laundry for a ‘15-minute laser & light facial’ ($65 base price), drybar for a wash and blow dry ($45) or Madison Reed Color Bar that will touch up your roots for $45 in 45 minutes. Other services available from similar beauty bars include makeup applications, chemical peels and eyelash extension application.
Against these retail offerings are apps that seek to be the Uber of beauty services, bringing together a range of professionals who will provide services at-home. Leaders include Zeel Massage (‘same-day, in-home massages with the best licensed and vetted massage therapists’), The Ritualist (‘in-home skin care treatment’), Glamsquad (‘Your pro team for hair, makeup and
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"Beauty Services War: Beauty ‘Bars’ Versus On-Demand", Women’s Wear Daily, January 05, 2017
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Wal-Mart de Mexico, S.A.B. de C.V. reported sales in December 2016 grew 11.6 percent to 63.46 billion pesos, compared with the same month in 2015. Sales in Mexico rose 8.4 percent, compared with December 2015, with same-store sales expanding 7.5 percent during the period. Sales for Central America increased 9.0 percent, on a constant currency basis, with comp store sales growing 5.2 percent.
"Wal-Mart de Mexico Centroamerica Reports December 2016 Sales", Walmex, January 05, 2017
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For decades, brands and traditional retailers have been joined at the hip, but that mutual dependency is starting to change. Consumers are purchasing ever more online: in 2016 and for the first time more shoppers (51 percent) made purchases online, up from 48 percent a year earlier (ComScore). And the range is extending, with e-commerce pushing into previously largely untouched categories, such as groceries and prestige. Some retail stores are having to scale back – this week Sears Holdings announced it would close nearly 150 Kmart and Sears outlets, while Macy’s plans to shut 68 stores by the middle of 2017, but for the most part, brands seem indifferent. Brands are increasingly investing to reach consumers wherever they can find them. "Ultimately, we don’t care how or where consumers get our products," said Sarah Ortman, National Associate Director at Clorox. "We just want to be where they are."As brands diversity their consumer contact points and make ever more sales in non
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"Do brands care if bricks-and-mortars survive the Amazon era?", Campaign Live, January 06, 2017
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2017 could the year of the chatbots for brands looking to automate consumer engagement. They reside within Messenger Services, like Skype and Facebook Messenger, as well as internal messenger services, like HipChat. They are becoming increasingly sophisticated with more user functionality, and as artificial intelligence becomes better understood, chatbots will be able to do even more, with development moving from what the bot builders believe consumers want to a machine-learned reflection of what they really want. Chatbots will proliferate and become an essential element of any integrated marketing campaign, supporting highly targeted campaigns delivered in the environment in which the consumer spends the majority of their online time.
"What, Why and How: Chatbots for Brands", The Drum, January 06, 2017
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Wal-Mart said it has appointed Sam's Club chief marketing officer Joe Furner as EVP and CEO of the retailer's warehouse-format business. Effective February 1, 2017, Furner will succeed Rosalind Brewer who is retiring from the company. EVP and CMO of Sam's Club since October 2015, Furner has occupied several management positions with the retailer.
"Wal-Mart’s Sam’s Club promotes its chief merchandising officer to CEO", Internet Retailer, January 06, 2017
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Walgreens Boots Alliance reported a rise in fiscal 2017 first quarter (ended November 30, 2016) diluted EPS of 6.8 percent to $1.10, but sales decreased 1.8 percent to $28.5 billion (a rise of 1.1 percent on a constant currency basis). The company is raising the lower end of its fiscal year guidance by five cents a share, and now expects adjusted diluted net EPS of $4.90 to $5.20. CEO Stefano Pessina said the company was “pleased” with first quarter performance, but growth in the second half of the fiscal year will “reflect the new strategic pharmacy partnerships we announced last year.”
"Walgreens Boots Alliance Reports Fiscal 2017 First Quarter Results", News release, Walgreens Boots Alliance, January 06, 2017
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Sephora now has more than 2,300 stores worldwide and some beauty brands are increasingly finding the store challenging to deal with. The store, which is owned by LVMH Moët Hennessy Louis Vuitton SE, seems to favor LVMH brands, and also has a growing line of private label products that can give it an advantage. An assessment by The Wall Street Journal found that in the makeup area of a Sephora store, LVMH’s beauty brands can occupy nearly half of the shelf space, even though they have only 15 beauty brands compared with over 200 the retailer typically carries. Beauty brands are responding by trying to secure alternate outlets. Estée Lauder has promoted its own website as well as its MAC Cosmetics stores, while L’Oréal has opened stores for its Urban Decay brand. Some brands are also selling in lower market stores such as Ulta Salon Cosmetics & Fragrance Inc., a risky practice that can remove allure from a brand. Brands selling at Sephora are also vulnerable to its own label Sephora
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"As Sephora Adds Products, Rivalry Heats Up at Its Stores", Wall Street Journal, January 08, 2017
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British grocery chain Tesco is tightening and simplifying its distribution network, reducing the number of distribution centers (to 23 from 25) and bringing all warehouse operations handled by DHL and Wincanton in-house. The changes are part of the company’s two-year-old plan to “ensure Tesco is set up for the future in a rapidly changing retail sector.” The changes will create some redundancies, the company acknowledged, but will also create “new roles” in other parts of the network, including jobs at the Reading and Middlesbrough centers and colleague support roles in most centers.
"Tesco simplifies distribution operations", News release, Tesco, January 09, 2017
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Walmart CEO Doug McMillon believes strongly that retailers need to adapt quickly to rapidly advancing technologies that have accelerated the pace of modern living, particularly when it comes to shopping, purchasing, and taking delivery of products. These technologies will create unprecedented opportunities for retailers. Looking ahead 10 years, he says customers will be able to fulfill everyday needs easily through stores, e-commerce, pick-up, delivery, thanks to sophisticated technologies. Retailers will need to adjust to the fact that customers globally will see what people in other countries have, and will want it too. Lastly, embedded social and environmental sustainability will require tighter collaboration among retailers, NGOs, governments and educational institutions so that customers, associates/employees, shareholders, communities, and suppliers will all benefit. “I can’t think of a more exciting time to be in retail,” McMillon concluded., Wikimedia ]
"3 Predictions for the Future of Retail – from the CEO of Walmart", Blog entry, Walmart CEO, January 09, 2017
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Thanks in part to strong sales from its newly-launched premium product range, discount grocer Aldi reported a 15 percent increase in U.K. sales in December. The company opened 70 new stores in 2016, and plans to open 70 more this year. An industry analyst said shoppers are embracing value players like Aldi, which emphasizes value and quality, while bracing themselves for difficult economic times ahead. Analysts are expecting more conservative sales improvements from other grocery retailers, like Morrisons and Tesco, of about one percent.
"Aldi reports record Christmas sales", BBC, January 09, 2017
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In an interview, Delon Wang, Manager of Asia Pacific Trends at Mintel, warned that the rapid growth seen in China’s consumer goods industry might slow as economic growth decelerates and the population adapts priorities to the new China, focusing for example on buzzwords like ‘ancient’ and ‘old’. Mintel’s Global New Products Database indicates that product claims including the word "ancient” on packaging grew 56% in the first half of 2016 within China’s beauty and personal care and food and drink and categories. Wang said that consumers are demanding authenticity, and they are increasingly concerned about health and the environment. Value remains another key attribute for consumers. More consumers are also looking at opportunities to be entrepreneurs themselves in a bid to improve financial security during turbulent economic times, and many are choosing subscription purchasing for their fitness and beauty items. Brand loyalty is highest among the middle-class consumers (68% versus 50%
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"China’s cosmetics and consumer trends in 2017 part I: A change of pace", Cosmetics Design, January 10, 2017
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British grocery retailers finished off 2016 with a very merry Christmas season in which shoppers spent £480 million more in stores than in 2015, a record sales period, according to Kantar Worldpanel. A Kantar analyst said the numbers certainly look good in comparison to a weak Christmas 2015,and were buoyed by “strong consumer appetite for festive celebration after a turbulent year.” The 12 weeks that ended January 1, 2017, showed the fastest supermarket sales growth – up 1.8 percent – since June 2014. Typical household grocery expenditure for December reached £365 this year, which was about £52 more than the average month.
"Checkouts ring up a record Christmas", News release, Kantar Worldpanel, January 10, 2017
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Retailer Target will launch Kristin Ess Hair, a line of haircare products developed by celebrity hairstylist Kristin Ess on January 5, 2017. Featuring 15 products, the range includes styling powder and a reconstructive mask, with prices ranging from $10 to $14. As part of the company's efforts to promote the product launch, Target will launch a related social media campaign.
"Target Taps Social Star for Hair-Care Collection", Women’s Wear Daily, January 11, 2017
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Tesco announced the appointment of Alessandra Bellini as chief customer officer. Effective March 1, 2017, Bellini's appointment includes her being part of the company's Executive Committee and of the UK leadership team. Bellini came from Unilever, where she has worked for more than 20 years.
"Tesco appoints Chief Customer Officer", Tesco, January 11, 2017
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Walmart India said it has named Fortuna Public Relations as its communications consultant. Wholly owned by Wal-Mart Stores Inc., Walmart India owns and operates 21 Best Price Modern Wholesale stores in nine states across the country.
"Walmart India appoints Fortuna PR as communications advisor", Economic Times, January 12, 2017
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UK retailer Tesco reported group like-for-like sales grew 1.5 percent and UK like-for-like sales rising 1.8 percent in the third quarter, covering the 13-week period ending November 26, 2016. According to the company, the quarter is the eighth consecutive quarter of like-for-like sales growth. For the six-week Christmas sales period, which ended on January 7, 2017, group like-for-like sales grew 0.3 percent, with UK like-for-like sales expanding 0.7 percent.
"Tesco Third Quarter and Christmas Trading Statement 2016/17", Tesco, January 12, 2017
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Online retailer Amazon said it plans to create 100,000 new full-time, full-benefit jobs in the US by middle of 2018. According to the company, these jobs are for people with “all types of experience, education, and skill levels.” As of 2016, the company employs 180,000 workers, making the online retailer one of the largest employers in the country. More than 10,000 military veterans are part of the company's workforce, while 9,000 employees have taken part in Amazon's Career Choice program, which pays 95 percent of tuition for degrees in high-demand professions, such as aircraft mechanics and computer-aided design.
"Amazon to Create More Than 100,000 New, Full-Time, Full-Benefit Jobs across the U.S. over the Next 18 Months", Amazon, January 12, 2017
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