Outsourcing Gaining Traction

An item in Supermarket News by Mark Hamstra examines the world of Sales and Marketing Agencies both from the standpoint of large national players and regional independent brokers like those who belong to the IFBA. The message is quite clear. In tough economic times, it makes sense for CPG manufacturers and retailers to outsource sales and at-retail merchandising and marketing functions. According to one analyst, these partners provide cost savings, enhanced sales flexibility, increased depth of coverage and increased service frequency. Many of the experts quoted in the story are long standing members of NARMS and the IFBA.

In a nutshell, here is what the story has to say. The industry is seeing increased outsourcing by CPG companies that seek to focus on core competencies. Hybrid relationships are being formed using support functions such as category management. Agency value is being increased due to acquisitions of or alliances with smaller specialized brokers that add key relationships or retail channels. Agencies are providing additional retail services such as demos and resets. Members are expanding beyond grocery into alternative channels such as drug and convenience stores.

The story quotes a 2007 study by GMA that said sales agencies and brokers provide $4.8 billion in value to the industry. There has been a movement for some who have never traditionally outsourced toward models in which they outsource some or all functions. A popular model is a hybrid approach in which the manufacturer keeps key accounts in-house, but may delegate other product lines to sales agencies. The supplier might keep headquarters selling, but outsource service and category management to the agency.

Outsourcing is the business philosophy that drives most of the members of NARMS. The use of outsourcing is not necessarily counter-cyclical but economic downturns, in which manufacturers and retailers are looking for every conceivable edge, provide an enhanced stage for members of the at-retail merchandising and marketing industry. You can link to the story by clicking here.

Aug 26, 2011 IRI/Morning NewsBeat

Below is the list of articles you will find for the week ending 8/26/11 edition of Retail Industry News.

- Coop Food Stores Said To Be Gaining Members, Sales
- Walgreens Consolidates Private Labels Into New Private Brand
- Sansolo Speaks: When Marketing Really Matters
- Marsh Outsources Its Distribution Business
- Shoprite Gets Aggressive In South Africa As Walmart Enters The Market
- FastNewsBeat
- Executive Suite

Click here to read Retail Industry News

Stephens to Discuss the Post-Crisis Consumer

Now what? That is the question being asked by the retailing industry as the worst of the economic downturn appears to be behind us. During the next installment of the NARMS Webinar series, Doug Stephens will provide some answers by looking into the mind of the post-crisis consumer. Stephens, a highly sought after retail speaker and opinion leader, will explain the trends and changes that are shaping consumer behavior and purchasing patterns. He will share essential information that retailers and their service partners can use to build sales and loyalty in a post-crisis economy. The session will be held on Tuesday, August 30, 2011 at 1:00 PM CDT. The NARMS Webinar series is sponsored by Natural Insight and brought to you through the technology of ReadyTalk.

During this one hour session, you will gain an understanding of why frugality is a coping strategy, not a desired state. You will also hear insight into why the roots of the current economic crisis actually reach back more than 40 years. Stephens will offer clear tactics and strategies to win the trust and purchasing power of consumers in the post-crisis era. The audience will have an opportunity to ask questions and participate via the conference chat function.

Stephens is widely recognized as a retail industry futurist. His intellectual work and thinking have influenced many North American retailers and brands including Wal-Mart, Home Depot, Hudsons Bay Company, Air Miles, Disney, Loblaw and Benjamin Moore. Prior to founding Retail Prophet Consulting, Stephens spent 20 years in retail holding senior international roles, including leadership of one of the most iconic retail chains in New York City. Doug is the author of the Retail Prophet Shift 2020 Retail Trends Report and a member of the Retail Wire Brain Trust. He is also founder of the Retail Prophet industry think-tank and a contributing blogger to the Technorati business channel. He also sits on the advisory board of the Location-Based Marketing Association.

This session is complimentary to NARMS members as a valuable membership service but is also made available to other interested persons at a non-member rate of $99.95. We encourage you to share this invitation with other co-workers and anyone else who might gain value from this information-sharing opportunity. Click here to register.

Aug 19, 2011 IRI/Morning NewsBeat

Below is the list of articles you will find for the week ending 8/19/11 edition of Retail Industry News.

- Whole Foods Opens Pricey Wellness Club In Massachusetts
- Sansolo Speaks: Dogs And Sharks And Promotions With Bite
- Walmart South African Moves Create Challenge To Pick n Pay
- FastNewsBeat
- Executive Suite

Click here to read Retail Industry News

Drug Stores Feast on Food Expansion

This week we introduced you to the Supermarket News Category Review, an analysis of category trends supported by SymphonyIRI data. In a companion piece today, SN Editor-in-Chief David Orgel takes a closer look at how the Drug Channel is leveraging the economy and an expanded food aisle to increase market share. Orgel was a keynote speaker at the IFBA Top to Top Conference last May.

Orgel uses several categories to illustrate that, in some cases, food sales are increasing faster in drug than in grocery stores. Beer sales in drug stores rose almost 7 percent, frozen dinners sales rose almost 16 percent and dog food increased 17 percent in the 52 weeks that ended June 12. These increases are compared to flat results in supermarkets.

Several economic factors are driving these food category gains in the drug channel. Fuels prices have increased the frequency of visits because drug outlets are often more convenient. Quick trips to replenish are becoming more frequent than big stock up missions that require a trip to the supermarket. The drug channel has also done a good job increasing the basket size of heavy shoppers while at the same time attracting heavy shoppers from other channels.

The members of NARMS, at-retail merchandising and marketing service experts, have always provided service in all channels of trade. There may be increased opportunity to expand drug channel visits as food items often require more frequent service to avoid out-of-stocks or to place promotional material. The members of the IFBA division provide sales and marketing services for food brands directly to retailers and are particularly adept at providing regional and market specific expertise in the areas they service.

Click here to read the Orgel editorial. It appears that CPG manufacturers and their retail partners will leave no stone unturned in the quest to build market share. The members of NARMS stand ready to help them in that mission.

SN Category Guide a Must Read

An unexpected yet welcome resource popped into the inboxes of subscribers to the Supermarket News daily update today. SN has released its annual Category Review and it is something that everyone involved in CPG retailing will want to read and review and save for future reference. The guide shares trends, group data for dollar and unit sales, and profiles of nonfood, fresh foods and center store categories.

The issue starts out with a three part introduction and overview of category trends. The first story is an introduction written by Mark Hamstra. Part two, by Christina Veiders, looks at nonfood categories in supermarkets and how it is losing share to the drug channel. Part three, by Julie Gallagher, looks at fresh food categories and how inflation is offsetting volume decline.

The next section looks at the top 260 supermarket categories with data from the last 52 weeks ending June 12. The source for the information was Infoscan Reviews by SymphonyIRI Group. The data is broken down by both unit sales and volume sales over the period.

And finally, an in-depth profile of 50 key categories, once again broken down by nonfood, fresh market and center store. Each category is broken down by several subcategories and dollar sales and changes going back to 2008 in supermarkets, drugstores and hybrids.

For members of the at-retail merchandising and marketing industry, this data can provide a roadmap that leads to exactly where retailers and manufacturers need store and shelf level level help. Top sellers can maximize by using services designed to reduce out-of-stocks and distribution voids while struggling categories can utilize sales building at-retail promotional services such as sampling and POP display building. Follow the links in this story or go directly to Supermarket News to access this important information.

Aug 12, 2011 IRI/Morning NewsBeat

Below is the list of articles you will find for the week ending 8/12/11 edition of Retail Industry News.

- New LA Bag Rules Confound Some And Please Others
- Paperless Receipts - A Trend Gaining Traction
- The Other Side Of The Paperless Coupon Argument
- Sansolo Speaks: My New Philosophy
- Invasion Of The Pod People
- Assessing The Daily Deal Phenomenon
- Walgreen Said To Be Ready To Begin Selling Health Insurance
- Sunday FSI Usage Said To Be Up
- Chicago Getting More Grocery Stores, But Needs More
- FastNewsBeat
- The MNB Wal-Mart Watch
- Executive Suite

Click here to read Retail Industry News

Lawrence Merchandising Announces Joe Huston, Director of Business Development

MINNEAPOLIS, August 15, 2011 – Lawrence Merchandising, a Minneapolis-based Merchandising Service Organization, today announced the appointment of Joe Huston as the Director of Business Development.
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Small Stores Making Big Splash

Small stores are becoming a big factor. Stores with square footage between 10,000 and 20,000 represent a new wave of new store growth in the retail food industry. An article in Supermarket News this week examines this phenomenon and discusses the reasons for the movement and the risks that are still prevalent. Players such as Save-A-Lot, Aldi, Dollar General, The Fresh Market, Trader Joes, Fresh & Easy, Wal-Mart and Target are all in on the game.

According to author Jon Springer, the reasons are mixed. Some are using smaller formats to penetrate urban markets. Others are exploiting niches in already saturated markets to grow share. It appears that the size of stores is going down around the country. The story cites Food Marketing Institute information that says retailers experimenting with smaller formats now equal those dabbling in bigger concepts.

According to FMI, 28% of retailers who built new stores in the last five years said the new stores where smaller than previous stores. An almost equal amount of 26% said the news stores where larger. FMI said average store size is fairly constant at about 45,500 square feet.

No matter the store size, all the same challenges exist. Because of the smaller size, selection and inventory, it becomes critical that at-retail marketing and merchandising initiatives are executed flawlessly. Store staffs are smaller and cost management more critical as these new formats attempt to use their size and flexibility as a competitive tool in urban and rural markets. Merchandising consistency and alignment with local trends will no doubt become an issue. Flexibility and multi-channel experience in getting new stores open and adapting to existing retail spaces will be at a premium.

For these and many other reasons, the members of NARMS fit the bill for those retailers and their manufacturer partners looking to expand using smaller footprints.

Converting Traffic to Sales

Driving increased store traffic is an admirable goal, but it is not the same as increased sales transactions. That is the key point of a recent Progressive Grocer article by Mark Ryski in which he offers 5 Ways to Drive Customer Conversion Rates in Your Stores. Ryski is the CEO of HeadCount, an analytics firm specializing in store traffic and conversion. According to Ryski, convincing just a few more consumers who are browsing to buy something can have major impact on sales.

That is not to say that store traffic is not important. Without it you cannot even calculate a conversion rate. Ryski describes three tricks to the trade: drive more prospects, increase average basket sizes and convert prospects into buyers. He says it is not hard and offers the following suggestions:

Understanding why people do not buy includes identifying long till lines, not getting sales help, out-of-stocks and other merchandising factors. Aligning your staff to traffic, not transactions can help maximize conversion rates. Looking for conversion leaks and plug the holes talks about the fact that when store traffic if high, conversion is low. Setting conversion targets by store recognizes that every store is unique and needs unique conversion goals. Make conversion a team sport puts the emphasis on conversion to everyone who works in the store.

From these suggestions, you can draw a strong correlation between plugging conversion holes and closing the merchandising gap. The merchandising gap occurs when sales building at-retail initiatives run up against dwindling retailer resources. Using the members of NARMS to perform at-retail, whether you are a retailer or a manufacturer, provides benefits on two fronts. First it brings experience and expertise to the job that might not be available from the store staff, and secondly, it allows the store staff to concentrate on the customer not the shelves and aisles. Closing the merchandising gap is synonymous with increased conversion rates.