ZBD Solutions

ASDA takes Tesco hostage

So my prediction in January that some retailers could make themselves a hostage to fortune with the current grocery price war turned out to be 100% right (‘copper-bottomed guarantee’ blog 13/01/11).  I just happened to be 100% wrong about who might be the loser. Tesco’s response to the ASDA initiative has caused them embarrassment and may look to have been ill-prepared.

Watchers of the ASDA-Tesco price war will have seen Tesco somewhat humiliated by their attempt to curtail Andy Clarke’s ASDA Price Guarantee; ‘If we're not 10% cheaper on your comparable grocery shopping we'll give you the difference. Guaranteed!’  In response, Tesco’s PriceCheck campaign promised ‘we’ll check the price of your grocery versus ASDA, then email you with your results. We’re confident you’ll find your shopping cheaper at Tesco, but if not, we’ll refund double the difference”. Tesco have now been forced to apply a bunch of caveats and limits to their offer.

Ingenious shoppers have been checking personal finance websites and conducting their own mystery shopping to create value baskets. One example published by journalist Rebecca Smithers, writing for guardian.co.uk, recently noted 4 bottles of wine and Cider, 2 bottles of moisturiser and a packet of mature cheddar (now that’s a party I’d go to…!) was a whopping £20.98 cheaper at ASDA: Tesco has been refunding claimants £41.96. There are plenty of claims noted on the web – including one from a Manchester shopper for £600.

As a result, there may be some pertinent questions asked within Tesco while they announce new limits on the PriceCheck campaign. How effective was Tesco’s competitor price monitoring, and what processes did they put in place to be able to respond to tactical or dynamic price changes?

ZBD’s light touch wireless communications system – ‘Bounce’ - enables an entire store to be easily equipped with 2-way communications coverage for a small number of ESLs - electronic shelf-edge displays. Just a couple of hundred ESLs in store would enable any retailer to track promoted and volatile products such as KVIs (known-value items) and keep them in line – in real-time - with competitor pricing.

ZBD’s fully graphic screens also mean that electronic shelf labels can be reassigned to new products in a moment – just as long as it takes to scan the new product and to scan the ESL display – beep-beep, job done. 

Jann Naef
Product Marketing Director
jann.naef@zbdsolutions.com

A fresh solution for reducing product wastage

Further to our recent news announcements that Hungary's Unio Coop and CBA stores have implemented our electronic shelf labels within their fruit & Veg department, it's becoming more common for grocery retailers to deploy ESL within their 'fresh' departments. These departments, which offer perishable products, are often responsible for significant financial losses every year through the inability to sell products nearing their sell-by date.

One way of eliminating product wastage is to reduce prices and make pricing more attractive to customers. Where markdown prices usually displayed on paper labels can devalue the product, with ZBD's electronic shelf labels, price markdowns can be made in seconds, and are invisible, protecting retailers' margins at the same time.

It often isn't feasible for many retailers to udpate pricing manually, potentially several times a day. However, implementing electronic shelf labels within perishable departments enables stores to make price changes quickly and wirelessly, saving store staff from having to print out new paper labels and distribute them within store, which help to make the store more efficient. ESL should also enable the store to sell more products at a lower price, eliminating costly product wastage.

We know that not all grocery retailers are ready to go down the route of deploying electronic shelf labels storewide quite yet. But installing them within a department gives them a chance to test the benefits first hand, without having to commit to rolling the solution out.

These are just one of the cooperative retailers that we're working with, and we'll be announcing more very soon. 

Sarah Hool
Marketing Manager
sarah.hool@zbdsolutions.com

ZBD at EuroCIS 2010

ZBD exhibited at EuroCIS, Europe's leading trade show for the retail sector in Dusseldorf, Germany, last week and the interest in our solution was overwhelming, with enquiries from retailers and potential partners from around the globe. There is often talk about electronic shelf labelling (ESL) not taking off, but if last week's show was anything to go by, then the interest is most definitely there. And with the retail sector still experiencing strong price competition, with frequent promotions, VAT rate changes, plus increasing legislative product and price labelling requirements, then it is only a matter of time before the solution becomes even more widely adopted, as retailers recognise the multitude of benefits that it brings. 

When we discuss our ESL (electronic shelf label) solution with a potential customer or partner, they all agree that our epaper displays are well designed, and visually appealing. But what resonates most with each and every one of them, is the lack of infrastructure required to support our solution in store. We show them the Bounce Communicator, which is roughly the same size as a laptop battery pack, and that's it. No wires, no cables. It really sets our solution apart from others in the market.

Sarah Hool
Marketing Manager
sarah.hool@zbdsolutions.com

28 days, eh?

So the UK government has presented retailers with a concession that for 28 days after the 1st January 2010, provided the retailer displays a sign they can get away with showing lower prices at the shelf edge versus higher prices at the tills (as long as the difference is only the incremental 2.5% VAT).

Now, I don’t know about you, but my ability to remember the price of everything I buy when completing a weekly shop in my local supermarket whilst adding 2.5% to the displayed price where applicable is going to cause me some confusion!!

Nevertheless, this still means that retailers across the country will have to print and place hundreds and thousands of paper shelf edge labels costing the retail business as a whole somewhere in the region of £90million (according to the British Retail Consortium) to complete.

Furthermore, I think it is also safe to say that this won’t be the last time the UK's VAT rate will be on the increase - the current Government has not ruled out future increases in VAT and Shadow chancellor George Osborne has also declined to rule out increasing VAT to rebalance public finance.

Of course, if your retail store operated ZBD’s epaper solution, in 28 days you could have changed millions of individual shelf labels at zero cost ensuring your customers only paid the price they see at the shelf edge - With zero infrastructure and 3 different sized labels, ZBD has packages to suit all sizes of stores and budgets - from individual promotional displays to Fresh Food counters & departments through to a complete storewide solution.

Contact me today to learn more.

Rob Morgan
Business Development Manager
Rob.morgan@zbdsolutions.com

Are your customers confused?

According to an article in the Daily Telegraph recently, Tesco is planning to end confusing labels on meat products by enabling customers to see where all of its lamb, pork and chicken originates from – specifically, it is now going to report where the meat in any ready meal, pizza or sausage is reared, instead of (legally) labelling products as ‘produced in the UK’ when the meat actually came from another country.

Whilst all the above is good stuff and very commendable (and is sure to please the farming groups and the Conservatives’ Honest Food campaign who have been working hard to make this a requirement for some time), how can you really educate and inform customers of what they are buying?

ZBD offers retailers a low-cost option to dynamically show ‘sell-by’ dates and other key nutritional content, giving the customer more comfort that there is more information available, more often, more relevant and up to date - this has to be a good thing.

If you are reading this and are a food manufacturer – then you might even consider adopting and part-funding our electronic shelf label solutions in your retailer’s environment to give great customer content and 'fresh stamp' your credentials to their customers – as I’ve said in my last blog – it’s all about communication first, sales second.

Our epop (electronic point of purchase) electronic shelf labels offer complete flexibility when it comes to presenting information, not just with country of origin or where ‘Florence’ became a steak dinner (!), but also all of the other nutritional content that is important to the consumer when deciding what is going to be on the dinner table tonight.

Here at ZBD we know a thing or two about high resolution epaper labelling – it’s what we do for the 21st century retailer. If you are an innovative retailer and still looking at segmented LCD displays (or are ready to refresh your current shelf labelling solution), then see how we can help you communicate more effectively to your customers - Zero confusion guaranteed!

Rob Morgan
Business Development Manager
Rob.morgan@zbdsolutions.com

Asda trials close proximity signage

This week's news sees Asda trialling Amscreen's 'close-proximity' screens within the pharmacy and photography counters at their Keighly store in Bradford, UK. The screens will carry product and pricing information although it's not yet known whether advertisers will pay to promote their products on screen.

You can see the screens in action on Amscreen's website - www.amscreen.co.uk/videos#asda-keighley. It's an interesting concept that could potentially see an uplift in sales for the retailer, but others have trialled similar screens previously which never took off. And I'm not convinced by the doctor's surgery-style LED ticker that sits above the screen. It all adds to the visual noise in-store.

There seems to be an assumption that consumers have the luxury of time when they shop for their groceries, which unfortunately isn't the case for many of us. It's more of a means to an end as opposed to a leisure experience, so do we really have time to watch an advert on a screen before we make our purchase decision? Surely today's price-conscious consumer will be looking for deals displayed prominently at the shelf edge, in amongst competing products, rather than the surrounding area?

Sarah Hool
Marketing Manager
sarah.hool@zbdsolutions.com

Obesity drives need for clearer nutritional information at point of purchase

I listened with great interest to a debate on Radio Five Live, where again there is a concern that obesity in the UK is growing at a tremendous rate. This was partly put down to the lack of clear and concise labelling at the shelf edge in the retail stores we shop in. Having children of my own, each with their own unique eating habits, it is worrying how much time and effort retailers put into providing up to date information at the point of purchase. There seems to be no consistency and no way to show ingredients, calories and general health information for consumers to make really informed buying decisions.

I would encourage all food retailers to look seriously at how they engage with their consumers, especially in these tough economic times, providing more information more often can only be a good thing for customers and sales?

David Rogers
Sales & Marketing Director
david.rogers@zbd.co.uk

We’re still buying; we’re just buying differently

As some household names have disappeared from our high streets all together, no grocery retailer has yet succumbed to the same fate, thankfully. There seems to be an invisible layer of insulation that’s protecting them against the forces of the recession that’s hit the rest of retail industry. In fact, you could almost say that the UK’s retail food sector is thriving. People will always need to eat, after all.

Admittedly, none of us know what’s around the corner, but there are certainly deals to be had on everything as retailers kicked off 2009 with an aggressive price cutting war, with Asda and Tesco leading the way. And it’s not just food items that are on the hit list. Tesco recently slashed the prices of more than 700 of its clothing lines in a bid to lure customers away from cost-cutting heavyweights Primark and Matalan.

British supermarkets are becoming even more competitive, driving prices down to lure shoppers in a move to defend themselves against the likes of veteran discount chains Lidl and Aldi who have long reigned over the price-conscious consumer. These stores have seen a steady stream of customers who have ventured through its doors for the first time. These simple, no nonsense stores, renowned for low prices and low costs, are drawing customers away from larger, more expensive stores. The Telegraph reports that Lidl’s car parks are now full of BMWs, Mercedes and Audis as it attracts more professionals to its stores.

The recession has forced consumers into shopping differently. It’s not just where they shop that’s changing; it’s how they’re shopping, and there are some interesting trends emerging amongst today’s cash-strapped consumers in terms of what they’re actually buying once they’re in store.

The weakening economy is driving people away from pubs and restaurants so as a result, more families are eating at home. The introduction of meal deal promotions such as M & S ‘Dine in for £10’ and Sainsbury’s ‘Feed your family for a fiver’ have been well timed to take advantage of this trend. And this in turn, has seen the return of the dinner party. The Telegraph reports that sales of wine have rocketed by almost 200% as dining in has become the new eating out.

There are increasing levels of brand disloyalty as consumers go without their favourite brands in favour of own brand goods. Sainsbury’s ‘Switch and Save’ campaign actively encourages consumers to opt for its own label goods, whilst Tesco offers a lower priced own brand alternative to more expensive premium brands when shopping online.

It’s also what people are buying that’s changing. In Asda’s Pulse of the Nation survey of 10,000 shoppers, it reports that UK consumers are turning off ready meals in favour of fresh fruit and vegetables and core ingredients, of which sales are up by 43%, as people are cooking meals from scratch. The store has also noticed a significant uplift in sales of Tupperware and freezer bags as people are storing or freezing meals, making their food last longer and reducing wastage.

Also on the up are sales of seeds. We’re growing our own vegetables and herbs, reverting back to the lifestyle seen in sitcom The Good Life in the 1970s, making ‘growing your own’ fashionable again. There are also reports of increased sales of food processors and bread-makers as home baking grows in popularity.

Our buying habits are changing, but retailers need to continue to adapt accordingly to prosper. Overall, the effect on supermarkets seems positive with Morrisons planning to create 5000 jobs this year and Asda looking to take on an additional 7000 staff.

Although times are still hard, there have been some positive side effects from the current climate – we’re eating more healthily, taking advantage of competitive pricing, eating together as a family more, baking from scratch, growing our own vegetables and wasting less. Let’s hope these continue once we emerge from the recession a healthier, wealthier nation.

Sarah Hool
Marketing Manager
sarah.hool@zbdsolutions.com