Asda Seasonal POS

Which Big 4 Grocer has stolen a march on Christmas?

If there is a time to compare the grocer’s offers it is in the week before Christmas. The pressure is building with just a week of trading before the turkey goes in the oven and all the stops have been, or should have been, pulled out.

Whichever way you cut it, the year has been tumultuous for all the retailers. Sainsburys has probably been dealt the best hand of cards with Tesco, Morrisons and Asda making the best of what they have.

Sainsburys has an uncanny way of remaining un-flustered despite the competition. It maintains standards well, clear foyer, store POS well implemented, well stocked with few range gaps. Bulk stacked areas like beer are even deployed in such a way that there is little to impinge on the customer’s shopping experience.

While that makes for a stress free shop, it misses opportunities for the customer to be sold to. Marketing is understated, subtle, but is that what the customer actually now wants? Have they had their fill of product messages shouting at them at every turn and tripping them up in the aisles? Sainsburys has been very active in reducing prices but there is little to suggest this to the customer. A loyal customer might notice but a new customer wouldn’t know.

The store that we visited was quiet. Too quiet for the week before Christmas which should be a time of energy and excitement in retail. We think Sainsburys is overly reliant on its loyal customer, who is less frills and thrills than that of other grocers. Like the overstocked afterthought of TU clothing, Sainsburys has built it, so therefore the customer is expected to come.

In stark contrast Asda is all about excitement. The grocer has backed Star Wars in a big way, way beyond any of its competitors and if it converts it will be a big win for Asda, right when it needs a lift.

Asda POS is bold without being brassy, well executed and strong enough to attract attention signposting apparently good prices where in Sainsburys it did not. Fill was muted without significant gaps but entirely appropriate for the time of the week, ahead of weekend peak trading and the run up to Christmas.

The store was busy with an energy about it, customers shopping ambient goods in volume. End caps and hotspots were well set up with a good degree of seasonality for brands and its own Extra Special label. The strong merchandising and great customer service created an atmosphere where customers would be tempted to add items to their basket, feeling the seasonal mood.

Where Asda was a disappointment was in merchandising. The numerous FSDU’s across the store would interrupt customer flow, navigation of George clothing was compromised in the push for volume, and fresh merchandising lack clear range architecture. Worse still was the fact that the bank of TVs for sale weren’t switched on. Criminal for this time of year.

Tesco availability impressed us. Even in areas that were not yet at peak for the season, like in fresh, the amount of gaps were negligible and stock build looked effective. In ranges that were passed peak, clearance was professional and seemed to have reduced the risk the most of the grocers that we looked at.

Merchandising in Tesco was logical and interesting, e.g. tableware essentials with easy browsing of nice open low level displays, making non-food particularly easy to navigate.

Whilst the overall impression of the Tesco we visited was that of a clean formatted store, with FSDUs kept away from high traffic areas, other parts of the store felt scruffy and neglected off the cleaning rota – a sign of slipping standards and staff under pressure perhaps.

The balance of POS was not right with opportunities to flag great offers missed in favour of Christmas POS that fell flat, so missing the point on both counts. Thank heavens for the service led shop floor staff and engaging checkout staff.

Morrisons was one of the stores where finally we felt the POS and decorations worked well together in tandem, with price messaging still strong even in the well-executed and stocked seasonal aisle. Morrisons had also backed Star Wars but not to the same extent as Asda and looked like it would sell through.

Out of the seasonal aisles, Morrisons showed the most gaps in availability and range which just should not happen. Fresh areas were low level of fill and the serve over areas were not as good as in other retailers on the day. For a grocer that stands by its sourcing and provenance, displays missed the mark.

We were largely impressed by the stores that we visited, and no, we didn’t have low expectations. But we felt that there were still obvious opportunities being missed in more than one grocer:

  • POS: getting the balance right between Seasonal and everyday pricing and promotional POS is difficult. A complete change of store POS is expensive but more thought and consideration needs to be given to how seasonal can integrate with everyday POS to convey excitement and key messages.
  • Store standards: just one scruffy aisle is too many and we saw a few. The volume of footfall and longer opening hours doesn’t help but that really isn’t any excuse.
  • FSDU pollution: well organized and positioned FSDU’s and stacks are effective but can impinge on traffic flow and create frustrating scruffy bottle-necks in peak trading.
  • Service: putting a grumpy, stressed employee in a Santa hat doesn’t sell turkeys. Fix the stress, manage expectations, and then work on their Christmas cheer.

Who do we think will have the best Christmas? Well it is all relative. Sainsburys will continue to trend slightly up on the year with no big surprises despite the most engaging of Christmas adverts. Asda will pick up a bit compared to Q3 like for like comparisons but will struggle to maintain it post-Christmas. Tesco and Morrisons will probably continue to be slightly down on the year as they have been in recent months.

So despite some pleasant surprises in our walk around of the grocers, there was little to suggest to us there will be any big surprises in the Christmas trading updates. Expect more of the same but with ever more creative headlines from retail journalists trying to make them sound more interesting!


The Sale before The Sale

With the seemingly limp uplift provided by the hyped Black Friday, retailers are keen to kick start the Christmas spending. Fashion retailers in particular are hurting from mild weather in recent weeks, so targeted “sell thrus” have not been achieved.

The winter sales traditionally start on Boxing Day, but a short walk on the high-street and a glance through your inbox reveals the sales have already started.

Some medium to high end brands are already offering 40% off, and a number of high end department stores are offering their traditional “Fashion Preview” from 30 to 40% off. The execution of this was pretty varied, and what should be straightforward for the customer to understand and take advantage of, was in reality very complicated.

We visited a number of stores this week, from high street to high end, and these were our findings.

Fantastic windows greeted the customers of Harrods, with their theme running throughout. As ever the Food halls were in full swing. Christmas and gifting food as well as hampers in full and abundant supply always makes us want to buy.

Elsewhere in the store, the Fashion Preview was fully set up, 30% off the Spring Summer 2015 ranges. This was interspersed with seasonal reductions ranging from 40-50% off. Brands such as The Kooples, Sandro, Maje and All saints were already offering sale level discounts, but were excluded from the Fashion Preview offer.

Home and Furniture were actually in full sale with the famous red “The Sale” signage offering discounts from 25-40% off. The toy department looked great fresh from a new makeover, and here you could buy an original Star Wars Stormtrooper Helmet for £650. In addition to the Fashion Preview message, Gifting was a strong message, with numerous carts offering “gifts for her” or “gifts for him”.

Our favourite gift must be the Rolls Royce Dawn, on the ground floor by door 9. Just need the £250K to buy it!

Next was Harvey Nichols, starting on the fifth floor in the Food department, which has a pop up Christmas decoration clearance area. All reduced by 50%, and displayed to sell.

Harvey Nichols also operate a Fashion Preview, offering 40% off, but trying to find out what was in was difficult and confusing on some floors. Concessions have their own discounts. Here again brands such as The Kooples, Zadig and Voltaire and Sandro were 50% off, but you only found out when you asked – seems to be a well-kept secret. This was much clearer as you move down the store to ladies wear on the first floor, with signs indicating if the brands were in the preview or were “not participating”.

Next stop Selfridges. The Christmas shop on the fourth floor, has all decorations at half price. Beyond that there is a strong gifting theme across the floor, and again very strong in the basement, with the Conran Shop, Anthropologie, Technology and Decorative.

In fashion, there was a Fashion Preview in shoes, indicated by a red dot on the barcode, but strangely no signs to make you aware or encourage you to spend. Once again, The Kooples, Sandro, Maje and Zadig and Voltaire were displaying 50% off signs, but elsewhere in fashion, everything was full price. There was a definite feel of more new season product, as shown by some large oversize “New” swing tags.

Food halls have the new Marc patisserie and chocolate shop. We can recommend the Tahitian Vanilla Ganache!

Oxford Street itself was a buzzing mass of people as usual, chestnut sellers and steel bands playing Christmas Carols added to the atmosphere.

Who needs Black Friday?

Having started at the top, we then turned our attention to the next tier down.

Once again we found a number of areas of the stores in full sale, or at least offering Christmas Reductions across a number of categories. John Lewis had the least amount of markdowns, probably as a result of their strong recent performances, but House of Fraser seemed particularly heavy with stock.

House Of Fraser felt difficult to navigate, with numerous fixtures or rails, bursting with stock, and several different messages for markdowns, “Christmas your rules” in either black or pink, offering between 30% and 50% off, and then branded signage in red also offering 50% off. Not sure why this couldn’t just be the same though.

As you would expect Fashion had a number of brands on sale too, particularly in women’s wear and women’s shoes, where the KG concession was in full sale. Men’s wear had far fewer markdowns however.

Home and furniture were also in sale offering up to 40% off luggage and 15% off furniture. These could be great stories, if only they had a bit more atmosphere. Merchandising could have been stronger and simpler. Less rails and fixtures would have made shopping easier, and we did not understand some of the adjacencies; fit tech next to kitchen knives? Always a danger this time of year that the rules go out the window to get the stock on to the floor and in front of the customer. If only they could be as disciplined as John Lewis, our next destination.

Photo 16-12-2015, 13 37 30

John Lewis was very good, simple layouts, easy to shop, clear signage for brands and categories, really easy to navigate and find what we were looking for.

Christmas and gifting offered really good products, well done to the buyers but they could have made a bigger impact with their “Man on the Moon” theme. Finding space for Christmas is often challenging, and it did feel a bit odd, moving from a beautiful and busy Christmas shop into home office furniture. One for next year perhaps?

Another one for next year, when all signs point to the Toy area, you can be forgiven for expecting a toy grotto but when you got there it was a bit under whelming.

A reflection of its stronger performance, John Lewis had the least amount of markdowns in fashion; just a few brands such as Hobbs and Phase Eight were displaying clearance prices.

As we entered Marks and Spencer’s we were greeted by large A frame signs offering 30% off selected Christmas lines, which flowed across food, home and fashion but gifting at M&S seemed a bit sparse. There was an area dedicated to it, but it was one of the smallest we saw. Sell throughs could have been exceptional or it was under bought. Hard to tell but it was lacking for that point in the season.

Clearly fashion is the largest part of M & S and it is here where we struggled. There are such a high number of sub brands, and then category areas, it makes it hard to shop. When you get in amongst them, there are some great products with very good quality, but finding them is so difficult. Clearer sight lines and better signage for the sub brand or category would surely help customers discover their products easier.

In summary the key messages we took away, and would love to share with the retail teams involved, were adjacencies, signage, clarity of message and range stories become clouded and confused the closer one gets to the end of the season, just when the customer is under the most pressure and needs the most help to find a gift quickly and efficiently. Don’t let standards slip or the customer will leave frustrated.

The other message is that there is no such thing as a traditional sale calendar any more. It is a free for all, and the customer is in control. Winter sales officially start Boxing Day, but why wait, grab yourself a bargain now. Who said you can’t leave Christmas shopping to the last minute?

black friday

Black Friday, Cyber Monday – What have we learned?

  • Amazon reported biggest ever day on Black Friday with 6 million orders
  • Shop Direct sales up 36%
  • Web traffic on Black Friday up 16% vs last year
  • Footfall fell 4.5%
  • Currys PC World peak trading visitors per hour up 70%
  • Cyber Monday sales up 31% YoY to £968m

black friday

In store, this Black Friday was a far more civilised affair than last year, in part because the retailers burnt last year were better prepared this year or just not taking part, and in part because customers sought to avoid shops altogether and bag their bargains online.

So lesson one: learn from your mistakes. Who learned? Tesco

So what was Black Friday, became more of a Cyber Friday and Cyber Monday was therefore less impactful than hoped. Although Cyber Monday sales are reported to have reached £968m, it is less than predicted, diluted by stronger online trading on Friday.

Lesson two: compare sales and margin from the preceding Tuesday through to close of trading Cyber Monday for meaningful year on year data. Who this is most relevant to? Argos

Whatever your forecast for online traffic, up it for scenario planning. Despite lessons learned in previous years there was still evidence of either websites crashing or loading so slowly the sale was lost to a competitor. While some retailers talked of record traffic, and websites coping with the demand like Currys PC World, others were floundering and facing the social media backdraft of poor customer service.

Lesson three: Customer service is equally important online as it is in store. Who lives and breathes this? John Lewis

The customer that left the site due to poor service had every opportunity to buy the same deal elsewhere, particularly with John Lewis honouring its price promise and doing well despite website problems. There were any number of retailers offering TVs and Xbox One and if you couldn’t find a deal frankly you just weren’t looking.

Lesson four: To make your offer’s attractive, and to keep the sale, make your offer unique. Who should remember this next year? Sainsburys

The aftermath is the next obstacle and the next opportunity for retailers to maximise sales over the period leading up to Christmas. Returns will inevitably happen but strong descriptions and images online help to ensure the customer is confident of what they are buying. Click and collect gets the customer into store and gives the retailer an opportunity for add on sales.

Lesson five: Maximise the opportunity to build a customer relationship. Who stands to gain customers longer term? Currys PC World

There is always talk about lost margin at an event like Black Friday with heavy discounts. However most deals that we saw were either on special buys or on poor selling lines, and were therefore actually cash margin positive compared to not participating. The lure of customers onto the website or into store gives the retailer the chance to make that sale. By not taking part in Black Friday at all, customer traffic or footfall is lost.

Lesson six: You’ve got to be in it to win it. There’s always next year, Asda.

In summary we suggest that next year Black Friday will be the only event marketed with Cyber Monday being absorbed into what will become Black Weekend. One off special buys will prevail. Supermarkets will only participate with special buys. It will all be about the electrical and online retailers. And yes some online retailer’s websites will still fall over in the stampede despite what happened the year before, and the year before that.