How Programs such as ‘Made to Matter’ are affecting the Future of the Brands?

Inline image 3

As the time is passing, people are looking for greener, sustainable and better products that are much safer to use. As people are getting more and more aware of the benefits of organic products, they are trying to incorporate them into their lives. Keeping in mind this fact, the ‘Made to Matter’ program has been launched that includes the brands that come under the following categories:

Baby

Beauty and Personal Care

Grocery

Healthcare

Household

This step is outright appreciable. We already are taking in so many chemicals in various forms that we cannot afford to consume any more. Organic foods will allow us to get rid of some of those if not all chemicals from our lives. It will be better for all of us and for the environment as well. 

Apart from being better for our health, it is also been noted that since the launch of products under the program ‘Made to Matter’ a huge improvement has taken place and the growth has shot-up to double figures.

All of this can have a significant effect on the future of the brands. After understanding the trends, many other brands will try to adapt the same methodology and will produce more organic and sustainable products.  It is not only the food items that are being made greener. Items such as clothes including baby diapers are also being made free from chemicals such as chlorine.

Other retailers can also employ this method on a smaller scale by displaying and promoting less number of organic brands, which are not that expensive. This would be a great way to help the planet get rid of some of the major problems such as pollution and diseases.

How Can Small Retailers Benefit From the Stores Such As Tjmaxx and Ross?

Displaying image.png

In this era of tough competition, the small retailers are facing a hard time improving their credibility. Many retailers are unable to sell off their old inventory and the products get accumulated over time. Nobody wants to sell their stock at a loss, but when there is an excess, they are forced to sell them to be able to earn capital to buy products that can make them higher and quicker profits.

What these small retailers can learn from the bigger players such as Ross and TJMaxx is to sell out the old inventory by providing their customers discount offers and offers such as ‘buy one get and one free’

Stores such as Ross and TJMaxx pay their suppliers without making them wait for a long time and that is the reason they are able to sell the products of the latest trends and earn huge profits.  The small retailers should learn from this and should pay their vendors in as little time as possible, so they can earn their vendors’ trust and can acquire highly fashionable products. This simply means that they are going to sell more, earn more profits, and become prosperous.

Paying the vendors on time also improves the demand in the market and thus, reduces the risk of the sales falling too low. Stores such as TJMaxx and Ross do not only sell products but also provide value for the money to its customers. That is the reason why they have been very successful in earning the customers’ trust and maintaining a healthy sales rate.

There is no doubt that people are always looking for the best deals and until and unless the retailers offer something intriguing to their customers, they will not be able to get through the tough competition.

Chinese Internet Kingpin Alibaba to Capture US Small Business Niche

Inline image 1

How the Chinese colossus, Alibaba, will affect the small businesses in the US? This question has been in heat for quite some time now, as experts are bewildered with Alibaba being whether a golden opportunity or a dime. As it is a China based group, business owners in US are still puzzled about what Alibaba and its ventures are all about.

As per the claims of Alibaba’s CEO, Jack Ma, they consider themselves the guardians and supporters of the little guys in the corporate world, that is, the small businessmen and women. They help them accumulate in their respective niches through internet technology, but most people doubt that if this is actually the case.

According to a product director of an online fraud protection company, the Alibaba’s reach is enormous to catch the market in the US. He suggests that either the Alibaba Group can use one of its existing platforms to accomplish its goal or set up a nascent platform. Though not all the US key players see eye-to-eye regarding the Chinese giant, as they think going along with their ball game is a double-edged sword.

But there are some plus points of working with Chinese manufacturers like having the augmented potential of competition within the US market, for example. Chinese manufacturers also have the luxury of less strict regulations and cheaper labor, which will aid in producing the similar products to American manufacturers, for lesser costs.

Tudor’s, one of the divisions of the Alibaba Group, spokesperson said that there is no need for their “to be” American competitor, Amazon, to worry about the Alibaba’s TMall service just as now. For the time being, they are still focused on the Chinese market and are still in their planning phase for conquering the US market. As for their motto of being the supporters of small businesses, they are going keep it consistent for the US businesses as well.

Lululemon Stretching out Its Athletic Products in Men’s Wear

unnamed

Branding from the scratch and making the brand popular and well famed for its attributes is not even close to being a cakewalk and takes years to build up reputation among people. On the other hand, those brands that already been established for decades, introducing new assortments is not much of a difficult task for them. These brands have already made their place in the market and since people know their quality and reliability, they are readily up for trying out anything they introduce in the market.

Such is an example of Lulelemon Athletica Inc., a brand known for the assortment of women yoga and athletic wear, as they have decided to stretch out their brand in men’s yoga wear as well. The expected hit in the men’s wear business is about $216 million in the upcoming few years. The brand envisions that they can achieve this goal by diversifying their men’s wear assortment and adding more categories to it beyond yoga outfits.

The brand took this step in order to recuperate from the troubles it faced in 2013 with their too-sheer women pants, and struggled to deal with the problem that came up amid the stiffer women’s yoga wear in comparison to the competitors. Along with that, last year, the brand cut off the nose to spite the face by offending their customers by suggesting them that they may be too old for wearing the brand’s clothing. After that incident, the CEO of the company had to leave the company because of the damage that was caused on the image of the brand.

For now, Lululemon has planned on keep on developing flexible men’s outfits that provide maximum comfort for activities like eating out, working out and travelling. They are keeping high hopes with their new assortment of men’s wear and soon will expand it to bring to the same level as their women’s wear.

Be Brand Focused and Expect Long Term Profits

Focus_brand

Brands and companies mostly focus on the designing, production and sending out remarkable products to the market that are capable of engaging their respective demographics. On the contrary, retailers mostly concentrate on optimizing their brand diversity, demand generation and inventory quantities that drastically enhance the product fit for a particular retail location or property.

Retail brands should now give up traditional one-dimensional merchant roles in favor of multi-dimensional identities. Retail is extremely operational focused, which makes brand thinking and management difficult. But when a company sets it right, the brand becomes a value creation tool.

Small retailers can exploit stand still markets created by the big retailers by understanding exactly what customers are looking for and quickly producing a product or service to serve them. This is what Warby Parker, an eyewear industry did when they started. They found out the eyewear industry is dominated by a single company, which keeps prices artificially high while gaining huge profits from consumers who have no other options.

Warby Parker was started as an alternative. They produced better looking eyewear at less than half the ongoing price. What is noteworthy about this strategy is that the focus is on additional revenues generated and not the profits. They are in for market share, not profitability.

Similarly in 2011, Mark Burton highlighted Hershey’s victory over Nestle in Krackle vs. Crunch war. Using an aggressive pricing strategy that is 30% trade discount on Krackle, Hershey increased its revenue by $25 million. Another fine example is Chobani Inc., a yoghurt making company. Ulukaya turned this $1 million Small Business Association loan into a company with $1 billion in annual revenue in 5 years. Today Chobani is America’s #1 Greek Yogurt and controls 47% of the US Greek Yogurt market with more than twice the market share of the Number 2 brand.

Focusing on brands rather than profits could be a viable idea for small brands.

Numbers Time: The Perfect Last Year

The Perfect Last Year

By Ty Long

The first thing people ask after reporting last week’s sales is what we did last year. Last year can provide some perspective, but how useful is one data point? Just as this year’s sale number contains all the peculiarities and randomness of a selling season, so would last year’s. The result is a very noisy data set. Comparing to a budget or projection could provide a better gauge of the business, but those numbers, besides having been created months ago, are tainted with forecasting biases, planning assumptions, and company expectations.

Sales were...noisy

Sales were…noisy 

What we need is a benchmark, based only on actual data, minus all the noise (random variations, holidays, and promotions) and smoothed to a show its true trend – a perfect last year. There are many data smoothing techniques that try to do this, but simple moving average can work well. The chart below shows the TY/LY sales as 6 week moving averages.

The next question is how significant is the variance. A variance of down 15% on a highly erratic sales pattern would be less of a concern than being down 5% on a stable one. To answer this question, we can borrow a technique from stock trading. Bollinger bands help define a high and low by setting an upper and lower band based on the standard deviation of a set number of periods. In this example, the bounds are +/- half the rolling 6 week standard deviation.

Smooth, not pointy at all

Smooth, not pointy at all

These three lines can provide better context for sales data and help spot trends. In this example, according to the banded chart, a turning point seems to occur in week 19. After this week, sales never rose above LY’s rolling average. Yet looking at the weekly data, week 19 would have been a minor celebration (+2.3% to LY, +3.5% YTD). For the following weeks (20-25), the two charts tell very different stories. The weekly data becomes highly erratic (- 18%, +3%, +6%,-21%, +23%), with the YTD variance still at 2.1%. However, the moving average shows a worsening trend, a consistently down to last year, usually close to the lower bound.

By week 32, the YTD variance has flipped from +3.5% to -0.1%, though some weeks still show positive gains. The rolling average would have not only have identified this trend by week 25, but, based on the fact that the sales are at the low end of the band, hinted that things are pretty bad. Sure enough, the last 10 weeks were abysmal, with weeks down 20-ish% to LY. The store ended the year down 6% to LY.

The smoothed year, a year without any random events, or a perfect year could provide a better gauge for tracking your sales and a warning for trouble ahead. Enough to cancel or reorder? Maybe not, but enough lead time to update your LinkedIn profile.

Ty Long writes for Hyperficial covering fashion, culture, business and design – but mostly fashion.


This post originally published on hyperficial (hyperlink to:http://hyperficial.com/perfect-last-year/)

On NPR with Warby Parker & Syama Meagher

popup-lease9341_custom-23649f4a7061b11fb8525de9e1192b0d35840380-s40-c85

I was recently interviewed by Esther HU from NPR to discuss the future of retail along with Warby Parker CEO Dave Gilboa.

Listen and read the interview here

Excerpts from my interview:

“With food trucks becoming more and more open and available, and the kind of migration of bringing that, I actually think that pop-up shops kind of followed suit,” says Los Angeles-based retail industry consultant Syama Meagher. She’s been watching pop-up retailing develop for the past half decade.

“Larger online brands are bridging together these empty spaces and starting to find ways to get in front of their customers,” says Meagher.

“You’re going to have a chance to experience brands unlike you have before. Being that they’re going to be in your hands, in your face and in your minds and on your phone all at once, and all at one time,” says consultant Meagher.