Actionable Insights From APT's Retail Practice

Executing A Relevance Reset

October 26th, 2010 | Posted by retailblogadmin in Restaurants - (Comments Off on Executing A Relevance Reset)

The restaurant business is full of concepts that have gone stale.  Mindful of their sizeable investment (a sunk cost!), many restaurants attempt to enhance or revive their tired platforms with mixed success.  Rarer, but more important and much riskier, is the “relevance reset” – something big, announced with great PR fanfare and paid media – that says to the customer: “Hey, I know I was irrelevant to you in the past… but look again!”

We first heard the term “relevance reset” in a Pizza Hut presentation to investors earlier this year.  Executives described their $10 Any Pizza effort as “not a traditional [marketing] window.  It is a relevance reset” (complete with a graphic of a giant reset button).  Since then, we’ve been looking at the industry with this concept in mind.  When new ideas are launched, are they game changing, like $5 Footlong or Domino’s new pizza campaign?  Or, are they possibly-helpful-but-not-game-changing tactics, like Fire-Grilled Ribs at Burger King or IHOP’s lower-calorie Simple & Fit menu (all of which may be fine, but won’t make a stale concept fresh again)?


Frito-Lay Bags its New ‘Green’ SunChips Bag

October 19th, 2010 | Posted by Jatin Atre in Retail - (Comments Off on Frito-Lay Bags its New ‘Green’ SunChips Bag)

UPDATE: Frito-Lay announces the release of a new, quieter, compostable SunChips bag… hopefully they’ll test it in-market in a few markets before rolling it out more broadly…

When SunChips rolled out its new compostable bag in April 2009, it seemed like a smart move for a company that emphasizes natural ingredients, healthy lifestyles and environmental sustainability.  The packaging was another way for the Frito-Lay subsidiary, which already uses solar power at its factories, to grow its green credentials and gain credibility among its core consumers. (more…)

Starbucks: Will Slowing Down Speed Sales Growth?

October 19th, 2010 | Posted by retailblogadmin in Uncategorized - (Comments Off on Starbucks: Will Slowing Down Speed Sales Growth?)

Starbucks’ evolution from Seattle coffee house to corporate giant has caused hand-wringing in recent years as it has tried to retain its neighborhood coffee-shop feel while simultaneously covering the globe.  When Howard Schultz resumed his role as CEO in January 2008, he initiated changes that were meant to bring the company back to its roots—grinding coffee beans in stores, menu revamps, and even unbranded “local” stores.

Starbucks latest change was announced last week when baristas were asked to focus on making no more than two drinks at a time. Such edicts, while admirable in theory, may ignore the reality of a modern-day Starbucks.  Baristas are already complaining that the new requirements will limit their ability to deal with long lines.  Debates between quality and quantity are not new nor are they limited to Starbucks. Different chains have landed on different sides of the debate – who is right? What do customers actually prefer?


Best Buy, Family Dollar, and Sam’s Club Weigh In On Retailer-Supplier Collaboration

October 12th, 2010 | Posted by Dan Schreff in Retail - (Comments Off on Best Buy, Family Dollar, and Sam’s Club Weigh In On Retailer-Supplier Collaboration)

Collaboration is an interesting topic these days in the Consumer Goods and Retail industries.  Nearly everyone agrees that collaboration between retailers and manufacturers is important, but few can point to shining examples where its worked as well in practice as on paper.  But if Consumer Goods marketers are going to be truly successful at capitalizing on the Shopper Marketing opportunity, closer collaboration between the manufacturers that make the products and the retailers that shelve them will be essential.

At least that was the view put forth by top executives at Best Buy, Family Dollar, and Sam’s Club during a panel discussion on Collaboration moderated by John Dranow of SmartRevenue.  During the discussion, a number of key points of effective collaboration emerged: (more…)

Chipotle Drops Ad Agency

October 11th, 2010 | Posted by JMarek in Marketing & Media - (Comments Off on Chipotle Drops Ad Agency)

The most interesting part of this article, in Ad Age, is the comments section.  The ad world sure doesn’t like it when a company drops the agency and brings creative in-house!

Chipotle’s position is interesting to us because it presents an ongoing challenge:  how do you keep the “green” message fresh, and how do you measure your success in doing so?  Promoting a central theme, like sustainable, local, organic ingredients, shouldn’t absolve a brand from measuring the dollar-and-cents success of their marketing activities.

As an aside, the “dress-as-a-burrito” promotion is a great example of getting killed on non-incremental promotions.  Maybe Halloween is the right time to talk about the two scariest words in the industry?!?

Market Basket Analysis: The Future is Here

October 6th, 2010 | Posted by Marek Polonski in Retail - (Comments Off on Market Basket Analysis: The Future is Here)
Washington D.C. – The concept of market basket analysis, so simple yet so ingenious, has mesmerized merchants and marketers for at least the last two decades. Yet in its traditional form, known as affinity analysis, or what do customers buy when they also buy item X, it has also been largely useless. This is because affinity analysis attributes correlation, as opposed to causation, never delivering on its promise of getting inside the shopper’s mind.
Say goodbye to the pastTraditional market basket analysis tells us what is (i.e. correlation). To cite a classic, yet most likely an erroneous example, affinity analysis may find that on Thursdays and Fridays customers tend to buy diapers and beer together in a supermarket — i.e. young families stock up for the weekend. The main shortcoming of this information is that, beyond the conclusions that (a) the store should stock up on diapers and beer more heavily on certain days of the week and (b) both products should be placed close to each other in the store, there is little actionable information merchants and marketers can use to make smarter decisions. Affinity analysis tells us nothing about optimal pricing (e.g. should we discount diapers so that customers come in, buy discounted diapers but also grab a pack of beer with a healthy margin?), optimal promotional strategy (e.g. should we place diapers, beer or both in the ad?) or optimal merchandising tactics (e.g. which product should be placed on the endcap?).

Recent advances in the ability to collect and process transaction-level (TLog) data, coupled with exponential increases in computational power and much cheaper storage, all made it possible for grocers, c-stores and other retailers to build in-house or purchase market basket analytic software. Unfortunately, almost all of these solutions deliver non-actionable insights based on affinity analysis. (more…)

How Coke Uses Testing to Measure the ROI of In-Store Marketing Initiatives

October 5th, 2010 | Posted by Dan Schreff in Retail - (Comments Off on How Coke Uses Testing to Measure the ROI of In-Store Marketing Initiatives)

Whether it’s figuring out the value of in-store sampling or rethinking its sizable investment in in-store displays, Coca-Cola is using testing to figure out what is working and what isn’t when it’s communicating to consumers at the point-of-purchase.  Jessica Ellickson, Director of Global Shopper Marketing at The Coca-Cola Company, took the attendees at Shopper Insights in Action through a detailed case study of how Coke used a combination of primary consumer research and in-market testing to enhance the message of freshness around its juice products in Turkey. (more…)