Travelling home tonight on the train out of Waterloo I’m flicking through the Evening Standard and suddenly realised how smart today’s hunter-consumer is.
Last year people spent £810m on Black Friday trampling each other in the shops. This year they’ll spend over £1bn, most of it done on their smartphones.
The hunter-consumer is smarter than you think and quick to learn.
So now is timely to announce a shareholder revolt, Boards and C-suite beware!
The BF phenomenon has made me realise how stupid, stupid, stupid, so much of commerce has become across the year. Firstly, they’re wasting our life away chasing consumer attention; secondly, they’re trashing profits and shareholder roi.
Here’s what I mean:
•Summers gone, back to school and bam, its Christmas promotion deals, 3 months before Christmas day, and it’s still an Indian summer!! (madness)..with Halloween and bonfire night in the middle
•And now we have Black Friday, Black weekend, cyber Monday shopping dynamics (super madness)
•Post-Christmas its Sale time (that’s OK as traditional after the pre-Christmas boom at ‘normal’ prices; well, used to be; now the predictability of supply and demand is down the tubes because of BF)
•First week January, Valentine’s Day deals, over a month away (madness)
•Second week January, Easter deals, 2-3 months away (madness)
•Early Feb, Mothers Day deals, 6 weeks away (madness)
•April, don’t forget Fathers Day deals (madness)
•Then, oops, we’re coming into summer, there’s no event to promote, so let’s do ‘summer sales’… more lost margin…
… commerce has just gone nuts chasing their and their competitors’ tails. One month’s lead time, surely that’s enough; or maybe just a little more so you cover 2 pay days.
And then, wonder of wonders, these companies spend a fortune advertising all the bargains and money they’re giving away. Like compound interest, only it’s going south, not north!
So what does the smart hunter-consumer do? Search for cut cut price bargain offers.
But there’s only so much wardrobe, garage, larder, loft and fridge space to fill. So for each calendar event during the year smart hunter-consumers fill their boots with offers and deals.
Do they buy more? Do they spend again after the calendar event at ‘normal’ price? Ha, ha, you must be joking. Head phones for £69 down from £169, what do you think that advertises to everyone? Loads of slack that needs to be hunted down, again and again.
Now put yourself in the shareholders shoes. Do you think they’re impressed how much profit has been trashed?
I’m a shareholder of lots of companies and I’m astonished and irked. I just see my dividend dwindling away because the stupid commercial folk are cutting price and hammering margin.
Please don’t do it again next year.
CEOs and CFOs beware, just wait ‘til the next AGM… and wear thick pants for the backlash.
THE ONLY WINNER, BLESS THEM, IS THE SMART CONSUMER-HUNTER.
STOP IT MR AND MRS CEO, ACT MORE INTELLIGENTLY. Is there a solution to this irresponsible downward spiral commercial behaviour?
Maybe there is. Think about Data. Intelligent data capture and data usage. Capture the right data, use it creatively to talk to your customers how they want to be spoken to. Add value as an exclusive, or privilege or loyalty benefit rather than sweepingly cut price across the board for any ‘tom, dick or harry’ bargain hunter that may buy from you once, because it was cheap, but not again.
If you don’t know what I mean, ask someone you trust. Ask someone who 1) has great data skills and 2) has great commercial acumen. The more you know about how your customers live their lives, the more can you can influence them.
You might not sell the same quantity. But you will make more profit per sale. Supply chain logistics and peoples heart rates will be calmer. Demand fulfilment spikes and troughs should be smoothed out a bit.
Certainly Andy Street of John Lewis seems to agree.
So, thinking of shareholder interests, which smart companies are going to add lots of value (more than a direct big price cut) that’s relevant to the customer and their family or business, tell each customer personally about it and charge more ‘normal’ prices, instead of giving a huge chunk of shareholders’ money away? Thereby protecting shareholder dividend and return on investment.