business news in context, analysis with attitude

We wrote yesterday about the use of cell phones in Japan to provide increased information to consumers – reported on by the New York Times this week, and actually by MNB back in December: “One of the things we’ve seen while visiting Japan this week is a system that dramatically increases the level of transparency in the store, especially in the produce department. Aeon, the nation’s largest supermarket retailer, uses what is called a ‘QR’ tag on its private label produce items to allow consumers to take a picture of the tag with their cell phones, then instantly connect to the Internet, where the tag is scanned and then the shoppers are given details about where the product comes from…including a picture of and biographical information about the growers. ”

We suggested that the availability of this much information really communicates to consumers is a) confidence in the product and b) a desire for complete transparency, and it will put pressure on the food industry to simply make all information available to shoppers.

MNB user Glen Terbeek observed:

Clearly, the shopper is quickly getting the information advantage/control in the consumer products "demand" chain. First, through the Internet, and now the cell phone technology mentioned in this article. And there will be more technology breakthroughs in the future.

One of the biggest wastes in the industry is the money spent over and over again creating "moments of desire" that go unfulfilled because of the gaps in time and location before the shopper can satisfy that desire created. Shoppers often forget that Desire as a result. Remember, "Moments of Desire" are created in many places and times, not just during the shopping trip to the store. So imagine reading a magazine/newspaper ad anywhere, anytime; and then capturing the products of interest using the technology of the day. And then having the items fulfilled by an agent of the advertiser, when the shopper requests their next delivery or for pick up at a convenient location. That agent could be the current retailers, Amazon, or maybe the new Tesco format. Creating the "Moments of Desire", and then instantly "capturing that Desire".

There is no doubt that putting more information control in the hands of the shopper will change the business model of the industry to be much more efficient and effective for the shopper as well as everyone else in the process; what a marketer's dream. It most certainly will redefine the current rolls of the players in the industry and the current economics. Remember, "Those that make information work for the consumer first, will be successful". Accordingly, the industry needs to start focusing on the demand chain, starting with the shoppers.


Shoppers are, of course, the most important link in the supply chain. Not that you’d always know it from the way some companies behave.




We keep arguing that loyalty marketing is badly used by most food retailers because they see it as a way of delivering coupons and discounts, rather than as a way of creating a new kind of relationship with the shopper.

To which MNB user Geoff Harper responded:

I agree that it is no surprise that most loyalty programs do not work (because they are not executed well) but there are examples of loyalty programs that work very well. Among them are Lees Supermarket in Westport, MA, Green Hills Farms in Syracuse, NY and, based on your own comments....Tesco.

Exactly.

What most companies do not realize is that the most effective kind of loyalty marketing program is one that consistently demonstrates that the retailer is loyal to the consumer. Which requires a fundamental rethinking of how retailers approach the definition of loyalty.
KC's View: