What have I learned at the Anti-Crisis Retail Strategies conference at InterContinental Hotel Bucharest (2009.05.26)?

On the 26th of May 2009 I took part at the Anti-Crisis Retail Strategies conference at InterContinental Hotel Bucharest. This blog post is about my thoughts on the conference. The presentations in Romanian are available for download on the Retail360 web site (and the links beside each presentation also work; I also made links to other information on the speakers, check out the links below).

A. The first part of the conference

1. “New strategies of development in the context of crisis” (PPT) – Daniel ENESCU, General Director for Daedalus Group
How does the behavior when buying changes?
1. Before vs. After:
a. experimenting (try new things) vs. making a sure choice (certainty);
b. more is better (never ask if you really need it) vs. lesser and better;
c. I spoil myself (an attitude) vs. I take care of others (family, responsibilities);
d. luxury (not necessarily luxury products, but premium brands) is a trend vs. “eco” is the new luxury (recycling);
e. I replace (with new items) vs. I fix;
f. my resources are infinite (continuous growth) vs. my resources are finite (these are extremes);
g. I do shopping vs. choosing is stressful;
h. I am on my own vs. I decide with my family.

I gave up to some products, or stopped experimenting (see carbonated water, coffee), or look for cheaper alternatives (sunflower oil). There is a tendency to stop consuming juice.

A person out of four frequently buys products that are on sales / promotions.

A vast majority read the advertisements in magazines.

Discounts, promotions, prices – they all matter more in the buying process. There is an equilibrium point, which represents the value of the brand (”how much I pay is how much the product is really worth”).

A lot of the decisions are taken at the shelves.

2. “Revitalization of electronics and home appliances” (PPT) – Dragos SIMION, President of Flamingo International
The sales costs had to be adjusted.
We had to optimize the working capital, postpone expanding plans and some investments, reduce the number of suppliers and prioritize among them, close non-performing stores, close small size stores, focus on large size stores.

3. “Reducing operational costs by automating bill processing” (PPT) – Theodor DUMBRAVA, Business Process Services Manager, Xerox Romania and Republic of Moldova

An idea to take home: You can reduce costs by providing a bonus: if a buyer of yours pays its bill within 10 days, he gets a 2 percent bonus, which is larger than any bank interest.
If a bill is processed entirely manually, the cost per one bill can be up to 50 dollars.

4. “How to have a lot of clients in the malls yet again?” (PPT) – Razvan GHEORGHE, General Manager Cushmann & Wakefield

B. The second part focused on 10 marketing solutions for increased sales:

1. “The story of a client with fidelity or how to sell with fidelity?” (PDF) – Radu SCHMITZER, Sales Director Linea Directa Communications
I liked this quote:
“The main goal of the business is not simply making money but creating clients …” (Peter DRUCKER)

This was fine also:
“Business’ aim must be creating and retaining the clients” (Theodore LEVITT, Harvard Business School)

All that a customer wants is really related to:
a. Relevant information;
b. A pleasant experience in the store;
c. Easy methods to buy things;

68% of the clients (I’m not sure if in Romania or worldwide) are brand switchers. Only 5% are loyal to a certain brand.

73% of the clients us at least 5 different information channels prior to buying a product.

26% of the clients only buy from one retailer (universal store, web site, kiosk, gas station).

Target of the retails store: the consumers in shopping mode (set to buy something).

70% of the decisions to buy products are done at the shelves.

In-store activities:
a. selecting and positioning products;
b. environment within the store;
c. conversations between the buyer and the sellers.

Who are the clients that are appropriate to your business? Find out their name, where they live, why have they bought, what do they need

2. “Marketing solutions for increasing sales” (PPT) – Marius LUCIAN, General Manager Reveal Marketing Research
Big errors:
a. giving up premium brands;
b. altering the image of premium brands (see the solution of Vodafone, who tackles the problem of price with no cuts, but by making sure the clients know exactly how much they pay).

You should keep the premium brands intact.

Put more emphasis on the shelf presence. There is a discrepancy between what the marketer sets as guidelines within an office, and the reality at the store level.

There is an error in trying to be “The cheapest price” for a highly competitive market. On any market it can’t be the same positioning for any brand.

The smallest price is an added value which is not believed by the market.

What is tricky in trying to advertise a promotional price for only one product out of the whole range of products a supermarket has?
a. The product must be physically present in the store (there is not always on stock);
b. The promotional price must be sustained on all the products in the store, not only on that specific product (this never happens).

3. “Marketing solutions for increasing sales – Retail as brand” (PPT) – Mona OPRAN, Managing Director Saatchi & Saatchi
65% of all buyers are not conditioned by the price.

In 84% of the cases, the brand can make the difference if a product is bought in favor of another one.

Treating the store as a brand can be a solution for:
a. Loyalty of the buyers;
b. Increasing the shopping list;
c. Increasing the value of own brands (in-store brands);
d. Increasing market share.

You can have yoga classes in a sports article store.

a. Your clients;
b. Your employees;
c. Yourself;
say: “I love my store”.

4. “Blue Ocean Strategy” (PPT) – Eusediu MARGASOIU, Managing Partner The Network
You have two main options:
a. Fight within the limits of your ocean and fight the competition (blood bath = red ocean);
b. Jump from a market with fierce competition into another market.

This is The Blue Ocean Strategy:

Red Ocean Strategy

  • Compete in existing market space
  • Beat the competition
  • Focus on existing customers
  • Exploit existing demand
  • Make the value-cost tradeoff (create greater value to customers at a higher cost or create reasonable value at a lower cost)
  • Align the whole system of a firm’s activities with its strategic choice of differentiation or low cost
Blue Ocean Strategy

  • Create uncontested market space
  • Make the competition irrelevant
  • Focus on non-customers
  • Create and capture new demand
  • Break the value-cost tradeoff (Seek greater value to customers and low cost simultaneously)
  • Align the whole system of a firm’s activities in pursuit of differentiation and low cost.

What I’d do better had I organized the conference?
a. I’d start the conference at the scheduled time;
b. I’d make sure that the PowerPoint presentations are on the laptop one day prior to the event;
c. I’d have a quick look at the PowerPoint presentations and see if there are any small-sized fonts in them (I personally had problem with this);
d. Do a prior instruction of the speaker on the microphone and pointer;
e. I’d make sure the speakers don’t promote their own business with more than a small reference;
f. On the footer of Retail360 web page, there are a few error messages:”Antreprenor360: No Feed Key Found, Cariere360: No Feed Key Found”, etc.;
g. I would allow some presentation to take a little longer, if needed.

Bottom line: All-in-all, a great conference to take part to, lots of things to learn in there.

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