Top blog posts of 2017

Over the last year, these are the most viewed posts on my blog:

  1. Dinner in the 70s
  2. What are the average earnings in the UK
  3. Different approaches to pricing
  4. One Sheet TV advert
  5. Superdry UK success story
  6. Wii on your television and the BBC wins
  7. Great (and bad) straplines
  8. Henry Gordon Selfridge said what?
  9. What brand do you most admire and why?
  10. Are wheelie bins advertising media space?

 

Is Black Friday good for UK retailers?

Black Friday - retail madnessWe seem all too happy to follow US fads; Halloween and “have a nice day” continue to grate on me. One of our latest adoptions is Black Friday. I set out to look at the impact on retail profits and the issues I found shouted out cautionary notes to all retailers.

My starting point was the feeling that the whole thing is a con, isn’t it? How can the retailer afford to discount by an average of 23% (source: TheBalance.com) when, for example, department stores only make 3.2% net profit (source: SmallBusiness.com)? Are they ripping me off the rest of the year? Should I only shop on Black Friday?

In the US there seems to be no stopping the steady growth of Black Friday sales. Average sales growth on Black Friday is 3.5% per year for the last decade (source: TheBalance.com). The UK growth was about 20% this year.

The issues that should put off many a retailer are greater than just lost profits. This is what Eden Dwek of KPMG had to say about Black Friday:

Aside from the clear hurdles such as ensuring stock availability and suitable sales staff, the ripples of Black Friday and Cyber Monday are seen by retailers in the weeks that follow, as impulse purchases are returned and items damaged during delivery are replaced. Above all, the biggest hurdle for most companies is around maintaining website continuity; as unresponsive pages will send social media into overdrive and can cause short-term revenue loss and long-term reputational damage. (source: KPMGtechgrowth.co.uk)

Negative brand impact is a less obvious, but real, issue for retailers. At the same time as losing money, a retailer can devalue their brand. That doesn’t sound good, does it? The reality is that brutal discounting changes the profile of a brand’s customers, and not for the better. See the article at TranslateMedia. At the extreme, it is estimated that as many as one in five sales are being sold on (source: ThisIsMoney.co.uk):

There’s also some evidence that some of these mercenary consumers may be engaging in retail arbitrage – selling the discounted goods on for a profit.

In summary, Black Friday appears to be bad for profit, bad for the brand, can equate to wholesaling not retailing, and doesn’t make the customers love the brand. But I wholly expect it will grow again next year, but without my help.

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Annoying verbal platitudes

Annoying verbal platitudesThe umpteenth person this year just said, “Enjoy,” as they delivered my order to me. Is that a request or an instruction? Whatever it was, was she thinking about what she was saying. I doubt it, I suspect it was just an annoying verbal platitude.

I then read this wonderful letter (left). What a great response to the, “Have a nice day,” garbage some people come it with. Well done Peter Ustinov.

What I need then is the same quality of response to the request or instruction for me to enjoy my coffee, drink or meal. Any suggestions are welcome.

 

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You can complain when it suits us

Boeing 747 flying out of the sunHelp me, please. I’m trying to decide if this is ethical or fair trading. I would love your opinion. Read on…

I was looking at a UK based holiday company online. They are conveniently available 7 days a week including bank holidays. In fact, they are even open for our calls until 20.00 on weekdays. That is if you want to spend money and buy a holiday from them.

Now, if a customer wants to complain, the convenience evaporates; calls to the complaints team will only be answered Monday to Friday between 09.00 and 17.00. This is of course at the time most customers are working to earn the money to buy the holidays.

As a policy this makes me feel uncomfortable. What’s your opinion on this? Am I being unfair?

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Decoy pricing

doughDon’t put your prices down, use a decoy.

Let me explain the idea with a case study from Williams-Sonoma, an American publicly traded consumer retail company that sells kitchenwares and home furnishings.

Williams-Sonoma introduced a home bread making machine for $275. Sales were significantly lower than expected. One option was to discontinue the product, another was to reduce the price. But before either of those options were taken Williams-Sonoma retained a marketing research company who suggested the decoy strategy. This was to introduce a slightly better bread making machine that was priced 50% higher than the $275 model. In other words, they would have a product that was only marginally better but at a price of $415.

Once the new $415 machine was introduced, the sales of the original $275 model began to grow. What was going on? Simply, the consumer spotted the $415 product and used that as a price anchor in their minds. Then, the $275 bread maker, which was almost as good, was identified as being a bargain.

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Barclaycard terms and conditions, a sign of the times

Barclaycard terms and conditions, multiple copiesThis a poor sign of the times…multiple copies of Barclaycard terms and conditions. Let me share the story of their arrival.

I upgraded my iPhone. As a big fan of Apple Pay, I needed to add a few cards to my new phone and a couple of Apple Watches. I duly did this and accepted Apple’s terms online and I think Barclaycards as well (I expect so as I could use it to then make a payment).

Then three separate 14 page printed sets of terms and conditions arrived in my postbox.

My question is, why three? And then why any in analogue format? Isn’t it disappointing how some businesses purport to be digital and continue to chop down trees to hang on to legacy processes?

I also wonder how many people ever read terms and conditions presented in this way.

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Purpose in a Venn diagram

purpose in life

Most Venn diagrams seem to have two or three overlapping circles. This one has four and it makes sense.

It has helped me validate a couple of decisions this month. I’m sharing it with you now, save it for your own use.

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