Retailing and Consumerism – Stats

Equilibrium is the beauty of universe. Balance! If it exists, harmony and resonance flourishes. And if it doesn’t, turbulence and chaos appear. Somewhat similar is happening in the world of local commerce (in which towntawks is operational) i.e. retailing and consumerism.

Consumerism Leading the smartness:

The way we see, with the growth and proliferation of social economy, consumers of today’s age are becoming hyper-connected, hyper-vocal and hyper-social. Just about everything. Man is a social animal quote once famously uttered by Plato is now seeing its realization in its truest form because of the social driven age. Consumers specifically are now interacting with brands in entirely different ways and mediums. Its the age when they are lending no ear to advertisements. With the evolution of digital medium, consumers are becoming increasingly sophisticated, connected and have high expectations of retail experience. They are demanding instant availability of information. And they want information to be complete and accurate. In short, increasing social smartness in consumers is demanding “adaptive retailing” i.e. the retailing that may cope up with their lightening fast purchasing veracity. But thats where the equilibrium is being severely affected thus causing retailing and consumerism becoming out of sync.

Retailing lagging the digital stampede:

Whereas retailers and local businesses on the other hand are lagging poorly at almost the same rate consumers are becoming smart. They seem to be so oblivious of this increasing and inevitable  shift occurring in consumers thinking planes and evolved purchasing journeys that they are not adapting to stay competitive in this landscape.

Retail needs to embrace Omni-Channeling to adapt to Today’s Consumers’ surge in expectations!

Specifically, in the case of Pakistan, the state of their online presence is extremely poor if not absolutely absent. Roughly estimating that around 3% of the SMB/SoHo retailers in Pakistan have some decent online presence yet they still haven’t leveraged this to the maximum (the way we at towntawks have planned in subsequent versions). Majority of the retailers have no roadmap to tap the potential of internet for their business prospects. They are lagging in multiple capacities to ride the surge of internet driven economy and stay provocatively present online. These include but aren’t limited to technical, intellectual and economical incapacities i.e. retailers of today’s age aren’t that tech-savvy, not open-minded and are victims of inertia that most of them “haven’t felt the need” to be online and be digitally available to their consumers. And also because they seem to be so “over-occupied” in their daily activities of businesses that they simply don’t bother about being proficiently online and accessible to their potential consumers. They seem to have left their businesses’ fate and progress to traditional norms and cults. Resting on their laurels in their office cubicles and waiting for some astray customer to drop by. Or at max placing a “meh” poster outside of their shop and expecting a surge of customers to become entrapped by that and drop in their outlets’ premises.There is a dire need to cope up the laggard retailing with smart consumerism so as to keep them in lockstep. And that’s where towntawks is positioned to generate strides in this niche.

Retailing and Consumerism – Statistics:

Above comprehension may seem to an opinionated or biased so it always helps to pepper up the insights with some lucid stats. Here is a compendium of intriguing stats that consolidates our point of increasing differences in these retailing and consumerism:

Ninety-two percent of retailers are struggling with online/offline integration. (RSR Research)

92%! As elaborated that majority of the retailers have no road map to migrate to the online realm where their customers are hanging out the most.

Time spent with mobile apps (127 minutes per day) is starting to challenge television (168 minutes). Yet mobile budgets aren’t nearly as high as TV. (Tech Crunch)

The end of TV industrial complex as Seth Godin famously quoted once!

Fifty-four percent of consumers would consider ending their relationship with a retailer if they are not given tailor-made, relevant content and offers. (CMO Council)

it’s the age of experience-economy. RoE (Return on Experience) and CLM (Customer loyalty management) is now starting to herald in businesses CxOs and becoming a top priority gradually then RoI in Marketing and shallow CRM)

Fifty-seven percent of consumers will not recommend a business with a poorly designed mobile site. (Mobile Marketer)

No recommendations. No social virality and visibility. No peer influence. Less leads. Less sales.

Fifty-three percent of consumers have stopped an in-store purchase as a result of using their mobile phone. Thirty-eight percent have done so because they found a better price in another store, and 30 percent have because they found a better price online. (Mobile Commerce Daily)

Consumers smartphone is a battlefield that retailers should prepare to conquer to cope up with today’s consumers!

Retailers’ average response time to a post by consumers in social media is seven hours, more than enough time for the person to go ahead and purchase from the competition. (Exact Target)

Consumers have a lot of choices and extremely less time. They don’t care about you. They just care about themselves. If you aren’t there, they will have no remorse in ignoring you. And they are really great in ignoring, mind you!

Fewer than half of retailers collect social network data from third-party domains and only 8 percent thought it made an important contribution to generating insights. (ATKearney)

Data is the new goldmine of today’s economy. How to leverage that for actionable insights? Stay on board with towntawks and subsequent releases of towntawks will amaze you with its stupendous approach to data amassing.

Retailers say data is at the bottom of their list of initiatives planned to improve website performance. Email is at the top of the list of priorities followed by on-site search and merchandising, respectively. (E-tailing)

It’s the age of data driven marketing but retailers’ mindset is far lagged to embrace this. Only a tech-messiah can escort them to the heavens of data intelligence. May towntawks prove to live up to this hype in its future phases

Thirty-one percent of retailers are conflicted as to whether new technologies in-store will be tools or distractions. Yet consumer surveys have shown time and time again that technologies like mobile apps and QR codes linking to product information have driven people to make a purchase in store. (RSR Research)

As stated, retailers need to embrace and adapt to the modern era of consumerism or they will be left far behind

74% of businesses dont have a plan to stay  competitive in the new mobile world.

Its the age of competitiveness. If you aren’t competitive enough, you will be eventually out of the game!
Would love to hear your remarks about these statistics proving our point that retailing and consumerism are becoming leagues apart in this age of digital stampede. Stay connected with us and have a superb day!

Your purse carries more bacteria than the average toilet

iStockphoto

Kelly O'Shea, Philly.com

Posted: Wednesday, May 22, 2013, 5:30 AM

Here’s your weekly dose of yuck: Your purse could carry more bacteria than the average toilet seat! Grossed out? I know I am.
According to a recent study conducted by British company Initial Washroom Hygiene, purses – especially their handles – have up 10 times the level of germs found on the average toilet seat. The study found that one in every five purses tested carried enough active bacteria to transmit serious health infections. Leather handbags in particular were found to be the dirtiest because their spongy material is the prefect breeding ground for most bacteria.
Even worse, bottles of hand cream were revealed to be the most infected item carried in the average handbag. So while you may be taking extra care to have soft, smooth skin — it turns out that touching that bottle may not be worth it! Earphones and headphones were also found to be potential bacteria hot spots.
Let’s be honest, when you think about it, are you really that surprised? When was the last time you cleaned your purse? I know my Coach bag isn’t going through the washer anytime soon. Technical Manager at Initial Hygiene, Peter Barratt recommends cleaning purses as often as you clean your toilet. Women should wipe their purse and its contents once a week with anti-bacterial wipes, or use a disinfectant spray on materials that would be stained by a wet cloth.

Hershey launching chocolate bar in Chinese cities

Hershey bars on the assembly line.

Posted: Tuesday, May 21, 2013, 10:43 AM

HERSHEY, Pa. - The Hershey Company says it's launching a new chocolate bar in three Chinese cities next month, followed by a wider distribution next year. The central Pennsylvania-based company says it will mark the first brand new brand it's launched outside the United States in its nearly 120-year history. The new candy brand will be called "Lancaster" and be launched in the cities of Wuhan, Hangzhou and Chengdu in June.

Company officials say it was created in the company's innovation labs and did very well in consumer testing. Hershey says China is a priority market and that it will play a big role in the company's goal of reaching $10 billion in worldwide net sales by 2017.

Generation Y Tastes Have Mall Owners Shifting to Entertainment

ByKris Hudson

Contrary to the popular assumption, mall owners needn’t worry about young adults doing all of their shopping on their smart phones. However, the rapidly changing tastes of Generation Y has retail landlords considering adding more restaurants, entertainment venues and even dog runs to appeal to fickle young shoppers.
The Urban Land Institute on Thursday released the results of a survey showing that members of Generation Y, also called Millennials, prefer dining and entertainment as part of their shopping trips. They often shop online but also frequent discount department stores and warehouse clubs.
The survey, of 1,251 respondents between 18 and 35 years old, found that 45% spend more than an hour a day viewing retail-related websites. But they often leave the computer for social reasons, with 46% saying they dine out with others at least once a week and 25% saying they do so several times a week.
Such survey findings are important for the U.S. shopping center industry as it labors to recover from decades of overbuilding, tempered consumer spending since the recession and the growth of online shopping. The average vacancy rate for centers in the top 63 U.S. markets registered 6.8% in this year’s first quarter, according to research firm CoStar Group. That’s less than the 7.5% vacancy rate in 2010, but still more than the recent low of 5.8% in 2006.
Mall owners are keen to lure Generation Y because it is a massive group numbering nearly 80 million, and its formative earnings years are ahead of it. Thus, retail properties are seeking to woo Generation Y by adding more off-line tenants such as grocery stores and more gathering venues such as restaurants and upscale theaters.
“This generation is more about experiences than acquisitions,” said M. Leanne Lachman, a real-estate consultant who organized the survey with ULI, speaking Thursday at ULI’s spring conference in San Diego. “So mall owners need to think about how to create fresh sensory stimuli without spending a lot of money.”
One of Ms. Lachman’s suggestions: More than 71% of respondents in the survey own pets, so mall owners should consider adding dog runs or pet shows.
The survey also reveals that 91% of respondents had made a purchase online within the past six months. The type of retailer they most often visit in-person is discount department stores and warehouse clubs. Financially, more than a third of respondents were receiving some assistance from their parents. But less than 9% had debt exceeding $6,000.
Federal Realty Investment Trust , which owns 20 million square feet of U.S. shopping centers, is among those trying to appeal to young shoppers by adding restaurants and experience-oriented retailers like Lululemon Athletica , which sometimes hosts yoga classes in its stores.
“Everybody will buy commodities online; that’s just how they shop,” said Jeff Kreshek, Federal’s vice president of West Coast leasing, at the ULI conference. “But, until we invent a way for you to eat dinner online, they’re going to demand experiences” at malls like dining and movies.
Abby Lancaster is the type of Generation Y shopper that mall owners covet. A 31-year-old court reporting student in Thornton, Colo., Ms. Lancaster does half of her shopping online. When she ventures out to shop, she visits the grocery store twice a week and a mall or big-box store maybe three or four times a month. She and her husband meet friends or family to dine out two or three times a week.
“If I find something I like, I’ll buy it,” said Ms. Lancaster, who owns a home with her husband, a restaurant general manager. “Usually, if I’m sitting at home and I need something, I’ll go online to see if Walmart or Target has it.”
Courting Generation Y can be tricky because younger shoppers are fickle, especially with technology at their disposal.
“Their higher rates of adoption of technology will accelerate the life cycle for retailers,” said Suzanne Mulvee, director of retail research at CoStar. “Retailers will move more quickly from hot to not. That will drive higher turnover and (capital spending) for owners” of shopping centers.
In the Denver suburb of Longmont, Colo., a developer is recasting an aging mall with a lineup of stores seemingly tailor-made for the Generation Y preferences outlined in the ULI survey. Newmark Merrill Cos., which bought the half-empty Twin Peaks Mall in 2012, currently is preparing to demolish much of the mall to make way for new tenants it announced this week: a Sam’s Club warehouse, a Whole Foods Market and a 12-screen theater.

PSK Foodtown Cultivates Big Spenders Via Loyalty Program

Michael Garry

Fri, 2013-05-17 15:00

MT. VERNON, N.Y. — If you spend $300 or more per month at one of the nine Foodtown or three Freshtown stores operated by PSK Supermarkets here, company co-presidents (and brothers) Noah and Dan Katz want to know who you are.

These “top spending families” make up the core of the Katz’s longtime loyalty program, which tracks their spending habits and targets them for the most attractive promotional offers, in order to keep them in the fold as well as increase their numbers over time.

“We see gains in the number of top-spending families year on top of year,” said Noah Katz, who declined to provide specific growth numbers. “It’s what we focus on with the technology.” PSK also has a bonus program for store staff based in part on the number of top-tier shoppers the store serves compared with the previous year.

The program is based on software-as-a-service loyalty marketing technology provided by ProLogic’s Consumer Marketing Services division, Delray Beach, Fla. (formerly S&H Greenpoints, acquired by ProLogic last year), which delivers everything from points-based incentives to targeted offers. The platform, also used by other stores in the Foodtown cooperative as well as small chains such as Homeland and Harp’s, is designed “to appeal to retailers that don’t have large IT or CRM departments,” said Guy Keller,  senior vice president of sales & marketing for ProLogic.

PSK Supermarkets, whose stores are located within, and just to the north, of the New York Metropolitan area, was one of the first retailers to sign on to the program when it was introduced in 1999. PSK initially wanted the program to produce a 5% to 10% revenue increase over the previous year’s sales; it achieved that goal, “and generally compounded this increase each year since the onset of the program,” according to a white paper published by ProLogic.

In addition, Katz acknowledged that after accounting for the cost of the program, which he did not disclose, his company has realized bottom-line increases of about 1% annually. Keller said ProLogic charges a cost per store per week, plus the cost of points redeemed for gift cards offered via ProLogic.

PSK “has never raised prices to pay for this program,” Katz emphasized, adding, “The program pays for itself by holding onto more profitable customers. It’s a magnet that holds them to the store.”

It also works by increasing the number of visits that shoppers make to PSK’s stores. “The average family shops six times per month for groceries,” he explained. “They come to you three times and go elsewhere three times. What this does is get at least one extra visit to your stores. That extra business more than pays for the program.”

Katz said that promotions are funded in part by manufacturers but mostly by PSK, with markdown funds switched from generic deals to offers targeting higher-spending customers.

In addition to catering to top shoppers with promotions, the technology allows PSK store managers to identify and greet them at the checkout. Alerts indicating the presence of a top shopper used to be sent to managers’ beepers; that system is being replaced with text messages directed to smartphones. “The manager will ask them, ‘Is everything OK? Did you find everything?’ and help them bag up,” said Katz.

“Noah and Dan have done a fantastic job creating a loyalty culture,” observed Keller. “They make loyalty and taking care of their best customers a top priority.”

No Dummy Cards

PSK’s loyalty program is driven by its Club Card, with more than 90% of its business processed through the card. The stores have had “virtually no dummy card use” — whereby cashiers use a generic card to allow card-less shoppers to get loyalty-card promotions — since the company started getting daily reports on cards scanned more than twice, Katz said, adding, “There’s so much value in the card that people want to use it.” Phone numbers can be entered into the POS system for people who forget their cards.

The points-gathering function of the card — 10 points per dollar spent — allows shoppers to get discounts on store products, often resulting in free items. “We have shoppers who have never paid for milk,” said Katz. Alternatively, shoppers can use their points to select from a variety of gift cards offered through ProLogic.  Katz calls the points incentives “a tie-breaker between us and the competition.”

The targeted offers made possible through transaction data collected on shoppers represents the “stealth marketing” aspect of the program. “We are utilizing data very effectively to market to customers and provide even more benefits based on who they are, what they buy and how much they spend,” said Katz.

Targeted offers down to the individual shopper level are delivered via several delivery mechanisms, including a separate checkout printer, email and traditional mail. Shoppers can print out the email offers, which are scanned at the checkout, or, increasingly, show them to cashiers on their smartphones, with the cashiers entering an offer code. “As technology has evolved, the program has evolved with it,” said Katz, who is beginning to experiment with offers on Facebook.

In addition, all stores associated with the Foodtown cooperative have recently introduced a mobile app that facilitates list-making and offers coupons downloadable to the Club Card.

ProLogic receives a constant stream of POS transaction data from PSK and turns it into “a world of reports,” Katz said, covering everything from sales trends to promotional results to retention rates. In addition ProLogic assigns a representative to work with PSK to develop a loyalty calendar as well as the targeted offers geared to top shoppers as well as other segments, such as new or lost shoppers or those interested in certain categories.

Katz said he has learned over time which promotions are the most effective. One example he gave is a store anniversary sale that starts with emails to generate awareness and offer some coupons. Shoppers who redeem the initial round of coupons are eligible for more so they “keep coming back,” Katz said, calling it the “boomerang theory.”

Phoenix woman led largest counterfeit-coupon enterprise in U.S. history

Counterfeit coupons - CP art

Courtesy of Phoenix Police Department

By Cecilia Chan The Republic | azcentral.com Sat May 18, 2013 2:40 PM

Robin Ramirez owned a fleet of 26 vehicles, three condominiums and a 36-foot boat — all paid for with profit from selling fake coupons.The 41-year-old Phoenix woman led the largest counterfeit-coupon enterprise in U.S. history before her arrest last year, federal and local officials said.More than 40 U.S. manufacturers, including Procter & Gamble, fell victim to Ramirez’s sophisticated counterfeit scam. Ramirez sold enough fake coupons online to turn a $2.3 million profit over five years. She was sentenced this month to two years in state prison.Phoenix police arrested Ramirez, Amiko Fountain and Marilyn Johnson in July. Fountain, 43, and Johnson, 54, each received three years probation.

Investigators seized $40 million in counterfeit manufacturer coupons and $1.1 million in assets from Ramirez. The coupons were for about 240 product brands, including Bush Beans, Iams, movie theater chain AMC and Starbucks.“It was amazing to me,” Phoenix police Sgt. David Lake said. “Usually people we deal with are (so) midlevel, low-level (that) unless it’s a drug cartel, (rarely) will you find this kind of money.”Lake led a group of 12 officers in the eight-week investigation dubbed “Operation Super Coupon” that built the case against Ramirez and her accomplices.“Robin did not have any significant work history that I could find,” Lake said. “She was a pilot’s wife hanging out at the house and got into this easy money.”

Phoenix detective Sara Garza, who pored over the enterprise’s financial records, said Ramirez lived a low-key lifestyle with her illicit gains. She appeared to be an ordinary housewife who drove a 2007 Toyota FJ Cruiser and lived with her husband, a retired commercial airline pilot, in a four-bedroom Southwestern-style home on an acre in northeast Phoenix. “She had these really nice luxury cars that she didn’t drive,” Garza said.Ramirez amassed a fleet of 26 vehicles, including a 1965 Corvette, three Camaros and a toterhome, which is a recreational vehicle with trailer, Garza said. The toterhome boasted granite countertops and $30,000 in flooring and was “well-upholstered,” she said. Ramirez also owned a 36-foot Heritage boat and ATVs. Ramirez stored many of her “high-end toys” in a rented hangar at Deer Valley Airport, Garza said.

Ramirez also rented a stash house nearby that she used for her coupon business and to hide a BMW and a Land Rover from her husband, Garza said. She said Ramirez duped her husband into believing she operated a legitimate business. The seized assets include more than $100,000 in bank accounts, jewelry, Coach and Louis Vuitton handbags, 100 rifles and handguns and three condominiums and a house, all purchased in cash in 2012 in east Phoenix, Garza said.Lake said Ramirez began selling fake coupons seven years ago, using eBay before launching her website in 2007. The website, savvyshoppersite.com, is not associated with Savvy Shopper magazine, a publication owned by Gannett Co., Inc., parent company of The Arizona Republic, azcentral.com and KPNX-TV.

Phoenix police became involved after companies targeted in the scam partnered with industry watchdog Coupon Information Corp. and hired private investigators, who traced the bulk of the country’s high-quality fake-coupon sales to Phoenix.Lake said once the coupons were purchased from the website and verified to be fakes, the challenge was finding who was behind the Internet sales.

As Internet crime rises, the challenge for law enforcement is showing who is actually at the keyboard, Lake said. But in this case, all investigators had to prove was that Ramirez controlled Savvyshopper. Investigators did just that by obtaining search warrants for the website’s financial documents, digging through the trash and staking out a post-office box at a Glendale UPS Store where Ramirez was seen retrieving packages, Lake said. Ramirez used aliases and fake addresses to hide her identity, Lake said.

A complex operation

Ramirez would write a letter to a manufacturer complaining about a product and saying she would never buy it again. The manufacturer in turn would send her a free product coupon. Garza said investigators found a master file of these letters with fake names. Ramirez then arranged with a printing company that Lake suspects to be located in Asia to reproduce the manufacturer coupon in mass quantities. She then would sell the coupons online.

For an extra $2, Ramirez would add a counterfeit hologram, similar to what manufacturers use to prevent fraud, Garza said. “These were not just coupons for 50 cents,” Lake said. “Some were up to $70 in value.” The lowest-value coupon in Ramirez’s possession was for $2 off a product. Ramirez would sell the coupons for half the face value, Lake said. She had hundreds or even thousands of customers; many were repeat customers, investigators said.

Lake said Ramirez filled more than 20,000 orders. Some customers purchased large quantities of fake coupons. One woman in Illinois spent $77,841.50 on 148 orders from Ramirez’s business, according to the police report. Lake said some buyers he contacted knew the coupons were fakes.

Impact of fake coupons

“The Phoenix case in particular was very damaging,” said Bud Miller, executive director of Coupon Information Corp. “It’s the largest single coupon case we’ve encountered to date. While it was centered in Phoenix, it touched every state in the country.” Miller said Ramirez’s scam cost the industry “tens of millions of dollars, which translate to higher product costs and job loss.”

The coupon industry is a $4.1 billion business that loses roughly $500 million a year because of counterfeit coupons, according to industry officials. Manufacturers produce a limited number of coupons to control the cost associated with the promotion. Large quantities of fake coupons result in a significant loss, officials said. Lakes said fraud also causes manufacturers to give out fewer coupons and coupons with a lower face value.

Representatives from Bar-S Foods Co., in a news conference announcing the arrests last year, said the Phoenix company “lost a quarter of a million dollars” through Ramirez’s scheme. Bar-S Foods printed 5,000 coupons offering $2 off one of its products. The company issued 1,800 of these coupons and received more than 45,000 back, according to the Phoenix police report. The fake coupons gave $5 off each product purchased.

Miller said the group is working with law enforcement and industry partners to combat ongoing coupon fraud with measures such as placing holograms on coupons and educating the consumer. “The consumer should never purchase coupons,” he said. “They should not pay for something that is given away for free.” Selling or transferring coupons to a third party violates most coupon-redemption policies, according to the Federal Trade Commission. Miller said people paying for coupons “are giving their names and addresses and other information to people who may not have their best interest at heart.”

Ramirez’s accomplices

As Ramirez’s business grew, she turned for help to two of her customers, Fountain, a licensed chiropractor, and Johnson, a retired teacher who owned a business with her husband breeding English mastiffs from their south Phoenix home, investigators said. Lake said the two were hired about a year before their arrests. Fountain was paid a salary for such work as packaging and affixing the fake holograms to the coupons. She lived for free in the stash house.

A mail carrier told authorities that she picked up “20-200 packages” from Fountain each work day, with shipping labels from Savvyshopper. For her help in packaging and filling orders for coupons, Johnson had access to Ramirez’s coupons, which she sold on a competing website, Lake said. He said Johnson operated her site for about a year and earned $18,000.

A profitable business

During the five years Ramirez operated Savvyshopper, she took in $2.3 million, $2.1 million of that generated in the year before her arrest, Garza said.

“Her business was just booming,” she said. “People are looking to get into the same business she was, but she had the lion’s share of the market throughout the country.” Ramirez’s enterprise showed a profit margin of 91 percent.

In June 2012, Ramirez made $214,334. She spent $5,700 on postage, $1,900 for printing the coupons, $4,000 to pay Johnson and $1,700 rent for the stash house, Garza said. Most months that year were similar, she said. Lake said Ramirez has no previous criminal record. “We don’t know how she got involved,” he said. “This was a pretty elaborate and a complicated job. She did a great job hiding who she was. She layered herself as a professional would. “There were a lot of things that we don’t see from a first-time offender, so we believe that she was coached by someone bigger.”

Although Ramirez made big bucks, she lost it all at the end. She is incarcerated at the Arizona State Prison Complex-Perryville and faces a $5 million restitution order. Lake said Ramirez’s husband divorced her, and she lost her nearly 3,000-square-foot home with 10-foot ceilings. She and her husband agreed to buy the home in June 2011 for $515,000 but lost the property after Ramirez’s arrest and subsequent loan default. “There are still people out there doing this,” Lake said. “All ideas start somewhere. We have to track it back to whose idea it was and how it spread.”

Mercedes S-Class wows with 3D cameras and night vision

The Detroit Bureau via Mercedes

The Mercedes S-Class, to be launched in 2014, is packed with blow-your-mind details: LED lights, a perfumer, radar, 3D cameras.

There was a time when luxury cars were defined by their sheer size and mass, their power, performance and, of course, exclusive details like leather seats and wood trim.Those factors distinguish the 2014 Mercedes-Benz S-Class, but there’s more to the redefined German flagship that fit the changing nature of the auto industry. From its LED lamps to the 3D cameras, radar and night vision systems that allow the new sedan to virtually drive itself, the new S-Class is a technical tour de force that will likely have competitors racing to catch up.

The long-awaited remake of the classic full-size luxury sedan was staged at an Airbus factory in Hamburg, Germany – no surprise because parent Mercedes-Benz also holds a stake in the French airline manufacturer. But the venue was clearly chosen to underscore the technical sophistication of the new S-Class.Mercedes officials noted that it will be the first automobile to dispense with conventional light bulbs, opting instead for more advanced LED technology for everything from the head to taillights, and all those small indicators, reading lamps and mood lights in-between. All told, there are 300 LEDs in the interior alone, 56 in each headlamp and another 25 in each taillight. Oh, and you can choose from seven different colors for the interior lighting, with five dimmer levels and four distinct lighting zones.The mammoth, 104-page press release covering all the details of the new car is overwhelming. The section on sensors runs longer than most new car announcements.

There’s the latest version of the Mercedes Distronic technology, using both cameras and radar to monitor the vehicle’s surroundings. It allows the new S-Class to keep pace with traffic, come to a complete stop in a tie-up and then start rolling again. It triggers the brakes if a collision seems likely and even turns on the flashers when one does occur.

The latest in lane departure warning systems will even take control if a drowsy driver starts to drift into an adjacent lane.Short of the near desktop-sized displays on the Tesla Model S, the new Mercedes S-Class will feature some of the largest video screens ever stuffed into an instrument panel, two of them 12.3 inches each. The primary, reconfigurable display handles traditional duties, such as speed and engine RPMs, while the right panel oversees Mercedes’ latest infotainment technology.

As the maker revealed during a session halfway around the world at the annual Google I/O developers’ conference, there will be more apps. Mercedes is even developing a so-called “Heat Map” system to guide a motorist to the center of the urban action by visualizing areas with high concentrations of night clubs, restaurants and shopping centers.

Oh yeah: There will even be an automatic perfume atomizer option lifted from the Maybach brand abandoned last year.Among the many firsts Mercedes is claiming for the 2014 S-Class, the big sedan will introduce the Magic Body Control system. Rather than wait until sensors detect a bump or pothole, it will use the stereo camera system to look for uneven pavement and automatically adjust the standard-issue air suspension.As always, Mercedes plans to offer different versions of the new S-Class, including diesel and gasoline drivetrains and a plug-in hybrid, due out a year after the car’s launch.

The S550, slated for the U.S. market, could leave potential buyers wondering why they would need anything else. Its twin-turbocharged 4.7-liter V-8 will pump out an impressive 455 horsepower and 516 pound-feet of torque – more than the direct competitors from BMW, Audi or Lexus – and enough to launch the big Teutonic sedan from 0 to 60 in just 4.8 seconds. That’s nearly a full second faster than the outgoing model.

Mercedes won’t discuss EPA mileage ratings yet but hints that it should do better than the outgoing S-Class. That’s partly because of lightweighting and extensive improvements in aerodynamics – and Mercedes says that wind drag is now a wee bit better than that of a Toyota Prius.Expect a sizable share of the S600 Pullman model, a stretch version, to be shipped to China, the world’s fastest-growing luxury market, where the wealthy prefer to be chauffeured.

The Pullman model will feature two rear-seat layouts, much like the old Maybach S63, including a Business Jet-style two-passenger configuration that will introduce a new hot-stone-style massage function.The new model’s looks could generate some controversy, especially the much larger grille and the distinctive LED lamps.Don’t expect to see final pricing until closer to the 2014 Mercedes-Benz S-Class launch this autumn, but expect about $100,000, a moderate increase over the current $93,000 base.

The Stuttgart-based automaker has found itself slipping in the luxury market in recent years and now lags in an unfamiliar third place behind BMW and Audi. The relatively exclusive nature of the S-Class means it won’t help Mercedes regain the lead – at least not directly – but if the new design and features click, the maker is betting it will also bring in plenty of less affluent buyers for C-, E- and other models that could give the brand a needed boost.

Seattle’s Best to Open Stores in Wal-Mart Parking Lots

By Leslie Patton - May 19, 2013

Seattle’s Best Coffee, the chain owned by Starbucks Corp. (SBUX), tomorrow will open 10 new locations mostly in Wal-Mart Stores Inc. (WMT) parking lots, in what will be the biggest one-day opening event ever for the coffee seller.
Eight of the 10 stores in the Dallas area will be in Wal-Mart lots, Frank Sica, vice president and general manager of Seattle’s Best, said in an interview. There’s no indoor seating at the 523 square-feet (49 square meters) shops and customers order from their cars at the drive-thru or at a walk-up window, he said.
“Our customer is definitely on the go -- they’re value conscious and they’re in need of a better cup of coffee,” Sica said. “We were very strategic in terms of where we placed our locations.”
Starbucks, which has owned Seattle’s Best since 2003, has been trying to boost U.S. sales by expanding beyond its traditional coffee cafes. The Seattle-based company is also opening new Teavana locations after acquiring the tea seller last year for about $626 million. Starbucks has said it would expand Seattle’s Best and revive its retail presence with more locations.
Seattle’s Best has “forged a very strong relationship with Wal-Mart,” Sica said. He declined to discuss future expansion plans and specifics of the contract with the world’s largest retailer, which is based in Bentonville, Arkansas.
The first of the smaller-sized shops opened in November in Seattle after the brewer closed about 475 Seattle’s Best stores that were inside Borders Group Inc. locations following the bookseller’s bankruptcy filing in 2011.

Dunkin’ Donuts

Four more Seattle’s Best drive-thru stores are slated to open in the Dallas-Fort Worth area this year. The chain has about 75 locations, while Starbucks, the world’s largest coffee-shop operator, has more than 11,100 shops in the U.S.
Starbucks rose less than 1 percent to $64.13 on May 17. The shares have gained 20 percent this year through last week, while the Standard & Poor’s 500 Index has advanced 17 percent.
Dunkin’ Donuts has also recently announced that franchisees are opening more units in Texas cities including Austin and Dallas. Dunkin’ Donuts, owned by Canton, Massachusetts-based Dunkin’ Brands Group Inc. (DNKN), has more than 7,300 domestic locations. 

Thin is in, for new label technology

05/14/2013 5:18:10 PM
Tom Karst

click image to zoom

Courtesy Thin Film Building in temperature monitoring capabilities in labels as thin as a human hair will become a commercial reality by late 2014, a Norway-based company claims.Stick-on “smart” labels that can record how temperature-sensitive products like fresh produce have been handled throughout the supply chain will be available to industry in 2014, according to Jennifer Ernst, director of global sales and business development activities for Thin Film Electronics ASA. That could provide important food safety safeguards, she said.

The company is based in Norway and has offices in San Francisco, Sweden and Japan.

The Thin Film smart label will be printed on polymers using special inks that conduct electricity and can be placed on packaging, according to a company news release. The labels can be built in layers that include memory, sensors and batteries on a film that is thinner than a human hair and can be applied easily to packaging, according to the release.Having labels on fresh produce packages that record temperature would provide much more specific data than a silicon-based time/temperature recorder placed on a truck. The label could be placed on any type of package, Ernst said.

Ernst said those silicon-based time/temperature recorders cost between $11 to $25 and therefore only a couple of recorders can economically be put on a single shipment.Thin Film isn’t trying to compete with the $25 time/temperature units, but instead adding electronic temperature sensing capability into a label with a target purchase price of about 50 cents each. That price could decline to 20 cents or 30 cents with greater production, she said.“We would be looking to adding temperature monitoring at much closer to an object level, the individual case of produce,” Ernst said.

Whether the label needs to be applied to every fresh produce case would be up to the customer, she said. For example, one label could be applied to a master carton of raspberries.“It could depend on the product and how it is packaged and how you would want to monitor it,” she said.Thin Film manufactures a printed memory label and will add the temperature monitoring capability by late 2014, Ernst said.The label can be read by a contact-based reader that then could store the data collected. In addition, the label can be constructed with a visual indicator display. The company also plans to add the capability of a RF readout signal in the label that could transmit the data over a short range wireless connection. The memory in the label won’t degrade before ten years, she said.

Ernst said the product will be marketed to the fresh produce sectors all around the world.The size of the label is likely to be size of a business card, she said. Other future applications for the Thin Film label are possible, including humidity indicators. The labels are completely disposable and have no toxic compounds, she said. Ernst said the labels could be designed to be readable by smart phones if marketers and retailers desire, she said.“This is a totally new way of making electronics and that what makes it possible to bring this into an item-level application,” she said.

Will Ocado be the Amazon of online grocery shopping? Firm holds talks to expand abroad

• Company in talks to license its know-how around the world
• Signs 25-year distribution contract with Morrisons
• Chief executive Time Steiner believers grocers will rent delivery systems

 

Global vision: Tim Steiner, chief executive of Ocado, said the comapny has held talks with global retailers

Ocado has held talks to expand abroad and transform itself into the next big star of the technology industry.The retailer, which has been described as the Amazon of food for its cutting-edge warehousing and delivery system, is in talks to license its know-how around the world. Shares in the Hatfield-based firm, which was started by three former Goldman Sachs bankers 13 years ago, soared 32 per cent as it announced its first new contract since signing a deal with Waitrose in 2000.

In a move that could transform its fortunes, Ocado has signed a 25-year distribution contract with Morrisons which it will operate in tandem with Waitrose.Ocado will provide systems that will become the backbone for the online debut of Britain’s fourth largest grocer. Morrisons will pay to use Ocado’s hi-tech warehouse and delivery system to distribute its products.The chain is fighting to catch up with rivals including Tesco and Asda, who have sold groceries over the internet for years.

Ocado chief executive Tim Steiner told the Mail he think grocers will move from developing their own expensive systems to renting communal versions. He said the Morrisons move is the start of growing the Ocado business into new areas. ‘We have held talks with global retailers who are interested in our systems,’ said Mr Steiner. ‘Wherever you go around the globe experts say the most advanced retail system has been created by Ocado. Businesses from Asia, North America, Europe and Australasia have come to talk to us. They don’t need to reinvent what we’ve done already.’

 Ocado, which has still to turn a profit, has created an automated warehouse filled with robots and conveyor belts and owns the software that powers it.It also has sophisticated technology that routes its vans around the country to avoid peak traffic and road works so that deliveries arrive in time for specific hour slots.

Expanding: Ocado has created an automated warehouse filled with robots and conveyor belts and owns the software that powers it

Ocado’s systems have been compared to American technology giant Amazon, which also uses state-of-the-art technology to cut costs and deliver books and other mainly non-food items efficiently.It too rents out its platform to third parties and provides the backbone for Marks & Spencer’s website. Mr Steiner said: ‘There are many different ways we could utilise our intellectual property. ‘We could just sell it under licence, form a joint venture, or operate our own system in a new territory ourselves.’

Ocado was founded by Mr Steiner, Jason Gissing and Jonathan Faiman in April 2000 and by October had entered into the branding and sourcing arrangement with Waitrose. It started commercial delivery service in January 2002, operating initially in St Albans and Hemel Hempstead. By May 2005 its delivery area expanded to cover more than 10million households.

Unlike rivals, it hires computer experts to work in-house, rather than buy in existing programmes. Projects listed on its website include robots with 3D vision and intelligent machines that can adapt quickly to follow fast-changing instructions. ‘We are continuing to invest millions in our state of the art technology, and to develop software systems and algorithms to solve an array of complex problems,’ the company says on a website dedicated entirely to the company’s science and innovation.

When Elephants Fight: The Great Wal-Mart-Amazon War of 2013

ByTom Gara

Yesterday Corporate Intelligence spoke with the WSJ’s Paul Vigna about competition heating up between two American retail giants, Wal-Mart and Amazon. Wal-Mart has a well-earned reputation for mercilessly undercutting its rivals, running on razor-thin margins enabled by its vast scale. Mom-and-pop stores trying to compete with it are often left in the dust.
That just happens to be a pretty accurate description of Amazon as well, only Amazon is busy squeezing the margins in plenty of places other than just retailing: from streaming movies to tablet computers and cloud computing, the company’s entrance to an industry is typically followed by a price that is well below its competitors.
So Wal-Mart and Amazon seem somehow destined to collide, and now, Wal-Mart is loading the cannons for battle:

As the WSJ’s Shelly Banjo wrote earlier this week, Wal-Mart is promoting a series of new digitally-focused services that seem to have Amazon in their crosshairs:

The retailer will install lockers in a dozen stores this summer, and customers will be able to order goods online and pick them up in a pre-assigned locker 24 hours a day. Amazon launched a similar service in stores two years ago, to help combat failed package delivery and compete with traditional physical retailers.
Wal-Mart’s updated mobile app will soon let customers clip digital coupons that will be automatically applied as shoppers pay for their purchases at self-checkout counters. The app also allows customers to create shopping lists and locate store-specific products by aisle.
Shoppers will also be able to load gift cards on to their smartphones and checkout in store, a move that represents the Wal-Mart’s further foray into a mobile payment service that will allow customers to turn their smartphones and tablets into devices for making purchases.

Also on the cards is using its retail stores the way Amazon uses its warehouses: Wal-Mart staff will pick online orders off shelves, pack them and send them to customers. That’s a pretty big deal, because as Banjo reported, two-thirds of all Americans live within a five-mile drive of a Wal-Mart store – an asset even Amazon can’t compete with.
The retailer is even thinking of more adventurous steps into the online economy to enable rapid delivery of orders, Reuters reports today:

Wal-Mart Stores Inc is considering a radical plan to have store customers deliver packages to online buyers, a new twist on speedier delivery services that the company hopes will enable it to better compete with Amazon.com Inc.
Tapping customers to deliver goods would put the world’s largest retailer squarely in middle of a new phenomenon sometimes known as “crowd-sourcing,” or the “sharing economy.”

The idea is still in its early stages, Reuters reports, and would obviously require the company to jump through an inordinate number of hoops to comply with local laws and regulations.
But the thinking shows how seriously Wal-Mart is taking the challenge of an aggressively expanding Amazon. When elephants fight, so the saying goes, the grass gets hurt, and a fight between the two elephants of American retail will be a sight to behold. Grass will be trampled, prices will be cut, and shoppers might just find themselves loading somebody else’s groceries into the trunk alongside their own.

Moving Fast

Economics, logistics among challenges of same-day delivery

From May 2013 | By Sandy Smith | Tags: Cover Story, Supply Chain

While ill at home, Mary P. Anderson needed a prescription. Unable to find a retailer that could deliver it that same day, she dragged herself out bed, headed to the drug store and vowed to do something about it when she returned to work.
As the manager of emerging technologies for the U.S. Postal Service, Anderson had the ability to do just that. Late last fall, USPS joined a crowded field of retailers and logistics experts, all attempting to find the Holy Grail: the right product, price point and customer for same-day delivery.
At this point, most retailers remain in the test phase, targeting major markets like New York City and San Francisco. When the urge strikes, shoppers in those markets can get a hammer from Home Depot via eBay Now; Canon color ink via Amazon Local Express Delivery; or tonight’s dinner from Walmart to Go.
Add in any number of logistics companies — including British export Shutl, due to launch this year — and the ability to receive products the day they are ordered is practically unlimited, at least in major cities. But why now?
“Amazon has pushed the envelope on what’s possible and has gotten pretty successfully to two-day delivery on a lot of items,” says Rob Souza, a partner in the consumer and retail practice of the Boston Consulting Group. “Retailers are trying to figure out how to compete with that and so they are turning to same-day delivery. That said, the economics … are quite challenging.”
The competitive aspect
While it seems that same-day delivery has become the topic of the moment in the retail world, the question remains whether it is customers who are actually driving the conversation.
“You saw a lot of competition during the Christmas season … in big cities around highly promotional seasonal products,” says Al Sambar, retail strategist with consulting firm Kurt Salmon. “Retailers can’t avoid the topic. I’m certain that for the next few years, there will be retailers exploring new delivery options and an increasing number offering same-day delivery.
“From my perspective, there’s a lot of inside-the-industry hype, but it’s not the customer demanding it.”
That perspective is backed up by Shop.org’s eHoliday 2012: Post-Holiday Retailer & Consumer Survey results, which showed that only 4.2 percent of consumers use same-day delivery frequently.
Though it is clearly in its infancy, retailers must begin to explore same-day delivery, says Vicki Cantrell, senior vice president of communities for NRF and executive director of Shop.org, NRF’s e-commerce division. Shop.org’s Think Tank recently released a whitepaper on the topic.
Cantrell suggests retailers consider the competitive aspects, including using same-day delivery to differentiate from competitors. “Leveraging existing store infrastructure to better serve online customers ostensibly makes sense,” she says. “However, we know that delivering successfully on same-day delivery from one’s stores involves a number of critical considerations in turning stores into ‘mini fulfillment centers.’”

USPS joins delivery fray
The U.S. Postal Service launched a pilot with 1-800-FLOWERS last fall in San Francisco. Though florists have long provided same-day delivery, the pilot allowed 1-800-FLOWERS to offer the same service for its edible items.
USPS’ Metro Post service is taking the lessons learned in the initial test to other retailers and cities. Plans are to be in five additional cities by the end of spring and the top 26 markets by the end of the year.
Already, the test is providing valuable information. “One of the big things that we’ve learned is to determine the best cutoff time,” Anderson says. “Some of the other people that have same-day delivery have a very early cutoff time — customers have to know by 7 a.m. or 8 a.m. what they want to order. We’re going out with a 2 p.m. cutoff time … [and] may want to see if we want to push that back later. Cutoff time is an extremely important influence on the success.”
Anderson says there have been no delivery failures in the San Francisco test of Metro Post, which is the first USPS product to offer real-time tracking. “We’ve got the model down and we can replicate that throughout” the top 26 metro markets, she says.
How much further could it expand? Anderson isn’t sure. “We’ve batted that around,” she says. “Do we want to stay in the city proper or expand out, say 40 miles? How big of a city can we do same-day delivery in? Can we get down to the top 100 cities?”
Target: affluent Millennials
A lot of where same-day delivery heads may depend on where affluent Millennials take up residence. The Shop.org consumer survey found that close to one-third of Millennials used same-day delivery.
That mirrors a survey by the Boston Consulting Group, which found that affluent Millennials are 56 percent more likely to choose same-day delivery as a matter of course.
“This is why you see a number of the pilots happening in New York and San Francisco,” Souza says. “It’s a combination of the [concentration] of these affluent Millennials and an overall density of population that makes them potentially viable from an economic delivery basis.”
While Millennials may be driving the conversation at this point, Cantrell believes that they shouldn’t be the only focus. “We believe that retailers are thinking beyond the Millennial market,” she says. “The consumer demand for specific types of products — like those with immediate gratification or convenience including groceries, movies and gifting categories — will be where we expect to see continued growth of same-day delivery programs.”
And there are other factors that will influence what same-day delivery becomes, Sambar says. “It isn’t just about cost [and] population density: You need to have good inventory access and be certain that the product is there,” he says. “You can’t do it on every product, but can limit the assortment to ensure that you have a good stockpile. And you have to have a pretty sophisticated physical infrastructure.”
Pay for play
Companies have long proven adept at solving logistics issues, whether partnering with a delivery specialist or using their own bricks-and-mortar stores. But the issue remains: Will customers pay, especially as many have been trained to expect free online shipping? Souza believes there is a segment of shoppers for which the answer is “yes.”
“Today, it’s a niche,” he says. “But the U.S. retail market is a large market. Being a niche of that can still be quite substantial. Even if it won’t become a core business for a given retailer, there is a certain set of customers that will want it and it may be worth offering it to them as a part of the overall proposition to maintain their loyalty.”
Research Souza conducted with Vladmir Lukic, a principal in BCG’s Transportation and Logistics practice, stated definitively that customers have higher priorities when it comes to shipping. The survey of 1,500 U.S. consumers showed that 74 percent would be motivated to shop more online with retailers who offered free delivery, compared with 9 percent who could be persuaded with same-day delivery. In the wide swath of options that separates free from same-day were notions like lower prices, better view of products online, live chat with a salesperson and faster delivery options.
Perhaps there’s some comfort in knowing that it’s available for those times when the mother-in-law’s birthday sneaks up. BCG’s research showed that 51 percent of consumer respondents say that when they use it, it is for last-minute gifts; another 40 percent consider it a good option when time constraints prevent them from getting to the store. “It really is seen as an answer to an emergency situation,” Lukic says.
There also are opportunities to hone in on holidays and other gift-giving occasions like Valentine’s and Mother’s days. “But that is exactly why there is a challenge to deliver this economically,” Lukic says. “You have to build a network that can handle those requests such as high volumes on Valentine’s Day. If a big surge happens five times a year, you’re left with a network that is virtually unused for the vast majority of the time.
“If you don’t ensure the volume on a sustainable basis, and same-day delivery doesn’t become a habit for users, it will be hard to sustain the delivery economics,” he says.
Sambar sees another opportunity in grocery, especially if customers are willing to set up a shopping list and have a recurring delivery. “That really is a different animal from other product categories when it comes to same-day delivery,” he says. “Once you start talking about delivering individual products, those products have to be expensive to recoup the delivery cost, so that’s why delivering an entire grocery list at once is so compelling.”
Same-day grocery delivery has long been available, ranging from small mom-and-pop stores to major chains like Safeway. Walmart to Go launched a test using groceries as the base for its same-day delivery service, though it also includes electronics, office and sporting goods. The concept is currently being tested in Northern Virginia, Minneapolis, Philadelphia and San Jose/San Francisco.
Defensive move
Ultimately, the decision to enter same-day delivery may not be purely economic, either for retailers or carriers. “You certainly have to know the economics and what it costs to do this on an item level,” Lukic says. “But you cannot afford not to play here. Even if the market is small and it generates $500 million, if you allow a local player to get $100 million of that, that small local player now has a scale where it can start attacking some of your other products.
“You have to think of this as a defense play,” he says. “You may make a conscious decision to do that at a loss, or charge more.”
Same-day delivery “is a long way from being an everyday staple,” Sambar believes. “There are certain city dwellers at certain income levels — probably the same people who already use a courier service — who will flock to these types of offerings. Now, it’s about expanding the same service into the digital world.”

8 Surefire Ways to Demotivate Your Employees

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Ever notice how a new employee’s enthusiasm eventually wears off? In 85% of companies, employees’ morale significantly drops off after their first six months on the job, according to a survey from Harvard Management Update.
For the most part, enthusiasm is determined by work environment, and it can be fostered or hindered by you—the boss. Employee motivation experts say the best way to keep employee enthusiasm moving forward is to “first, do no harm.” At a minimum, don’t do anything that demotivates your workers.

Check out eight demotivators below.

1. Public criticism.

Pointing out a worker’s mistake in front of others rarely yields a good response. Though some managers think public reproach keeps everyone else from making the same mistake—it usually just makes everyone feel bad.

2. Failing to provide praise.

If employees feel like their hard work goes unnoticed, they’ll start to wonder why they’re working so hard in the first place. Be sure to offer praise, both privately and publicly. Even small things, like a thank-you card or a “good job” email work.  (See also: How to Thank Employees When You Can’t Afford a Bonus.)

3. Not following up.

Have you ever solicited ideas, asked what employees think about a policy, or asked your team to draft a proposal? If so, be sure to relay the results, even if the ideas or proposals don’t go anywhere. Asking employees for input without acknowledging it shows a lack of respect.

4. Give unachievable goals or deadlines.

Once employees realize they won’t be able to get something done, they’ll think, “What’s the point? I’m going to fail.” Provide goals and deadlines that are challenging, but not impossible.

5. Not explaining your actions or sharing company data.

Just because you hold the cards doesn’t mean you should hide them. Explaining the big management decisions will help employees understand your perspective—and they’ll respect you for it. Likewise, sharing key company data such as revenue and profits validates staff contributions.

6. Implied threats.

If an employee is producing sub-par work, it’s OK to let them know your expectations. But it’s not OK to threaten their job—especially if you’re threatening the entire team in a public setting. A “do this or else” attitude often has the opposite effect when it comes to motivation.

7. Not honoring creative thinking and problem solving.

When employees take initiative to improve something—a company process or an individual task, for instance—don’t blow it off. Instead, take a good, hard look at their suggestion. Don’t ignore it, or you risk losing that employee’s creativity in the future.

8. Micromanagement

Perhaps the worst demotivator is micromanaging. Employees need to feel trusted and valued to succeed—and micromanaging communicates the opposite.