Archive for July, 2011

Online reviews: Take ’em with a grain of salt

Today’s RetailWire discussion centers on the value of online reviews at Amazon and other sites. The focal point is Amazon’s tendency to rate more positive reviewers as “more trusted.” Here’s my take:

It’s not surprising that those most motivated to post reviews on Amazon or elsewhere are the most enthusiastic about the product/book/service they are reviewing. As a regular reader of these reviews, I’ve learned to take them with a grain of salt. (Just as importantly, it’s worth recognizing when a book gets “down-rated” on Amazon because of reviewers who complain about the Kindle price even if they haven’t read the book.) No system of online reviews — Amazon, TripAdvisor, Yelp or others — is going to be flawless.

The benefits of being relevant

A fascinating RetailWire discussion about the importance of “relevance” to top-line sales, especially in an increasingly diverse and multi-ethnic consumer society. As usual, I think the issue is deeper:

The biggest hindrance to relevance is the lack of a focused target market. If your store or brand is trying to be “all things to all people,” you are sending different messages into the marketplace. Further, the lack of focus will impede your brand’s effort to develop a targeted format and sustainable competitive advantage.

Every retailer and CPG company ought to aspire to four goals: Being strategic, consistent, responsive and relevant. The concept of relevance goes far beyond the issue of our multi-ethnic culture, to the very idea of targeted marketing.

 

Walgreens adds online ordering and in-store pickup

Is Walgreens’ latest service initiative (ordering online and picking up in-store) a game-changer? Here’s my comment from RetailWire this week. I don’t see it as a huge advance from their current system or from what Walmart.com is already doing across the store:

I don’t see a huge difference between this service and Walgreens’ longstanding offering of automated phone reorders with drive-through pickup. (It’s not a big leap in technology.) The real sign of progress will happen when Walgreens figures out how to solve congestion problems, both at its pick-up window and at the drive-through lanes. At least in my experience, Walgreens continues to struggle with “front of the store” and customer service issues that are holding it back from its “convenience” brand promise.

 

Retailers and suppliers: Can’t we just get along?

An interesting discussion at RetailWire this week about the prospects (or not) for better relationships between vendors and retailers. It’s never a simple issue, and becomes more complex every day for a variety of reasons. Here’s my point of view:

The long-term trend toward consolidation means that there are fewer retailers, each with more negotiating power in the marketplace. At the same time, these retailers’ need to develop exclusive products and brands puts many vendors into a vulnerable position. So the entire concept of “win/win” becomes much more challenging for manufacturers.

A good place to start is the use of collaborative planning, forecasting and replenishment (CPFR) to help manage the supply chain. This sort of open communication about ways to save costs and drive better in-stock execution is a fact-based way to encourage objective collaboration. From this point, it should be less challenging for vendors to build other areas of trust and cooperation with their biggest accounts.

 

Can Whole Foods cover the whole country?

FromĀ a recent RetailWire discussion about Whole Foods’ plans to open up to 1000 stores across the country…I’m bullish:

Whole Foods is by far the dominant player in its segment of the food business, and its penetration of potential markets is nowhere near complete. And the company does not need to target the most affluent areas in a given city as long as population density, demographics and the “right” lifestyle is in play. In my market (Milwaukee) Whole Foods could easily absorbĀ  more than its single location, and there are plenty of mid-sized cities that would support at least one store.
While plenty of competing grocery chains and supercenters have dabbled in “organics” and fresh-prepared food, nobody at this point can touch Whole Foods as the category-killer in this business.