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Managing trade promotions is still both topical and critical. Collaboration is more critical then ever before given increasing power of disruptive players like Amazon.
Q: From the following list, please select the top 3 sales and marketing-related technologies and/or technology related projects in which your organization has invested in 2014. Q: Thinking ahead to next year, please select the top 3 sales and marketing-related technologies and/or technology related projects in which your organization will invest in 2015.
Wal-Mart Stores Inc. is increasing the pressure on suppliers to cut the cost of their products, in an effort to regain the mantle of low-price leader and turn around its sluggish U.S. sales.
The retailing behemoth says it has been telling suppliers to forgo investments in joint marketing with the retailer and plow the savings into lower prices instead. Makers of branded consumer products from diapers to yogurt typically earmark a portion of their budgets for marketing with Wal-Mart, spending on things like eye-catching product displays and online advertisements.
Wal-Mart has long had a reputation for pressing its suppliers to cut costs to help lower prices, but the retailer’s new leadership has embraced the concept with fresh vigor. Wal-Mart’s price advantage against its competitors has been eroded, and it has steadily been losing market share in the U.S. since the recession ended, while rivals including Kroger Co. and Costco Wholesale Corp. gained share, according to data from the consultancy Kantar Retail.
“But Amazon was soon undercutting us by going directly to the manufacturer we’d worked so hard to locate and secure. It then charged us for the stock we had sitting in its warehouses but could no longer shift without making a loss.”
“It’s a deal with the devil, though. You are basically giving your biggest competitor everything you have of value, including your product expertise and your customers. If you identify a hot-selling new product, Amazon will add it to its own inventory and undercut your price. And your customers are no longer yours: Amazon owns all of the customer data.”
“It’s not just an economy of scale offering better prices to the consumer – it’s also an economy of bullying and strong-arm tactics.”
“They can do this because of tax breaks, government grants, zero-hours contracts and predation of sales by disregarding profitability in favour of destroying competitors….”
Online shopping giant Amazon has been accused of artificially inflating prices by banning firms that trade on its website from selling goods more cheaply elsewhere on the internet. Thousands of shops and small businesses, ranging from record stores to perfume suppliers, sell their products on Amazon, which has seen its worldwide sales surge by 44 per cent. Under draconian new restrictions introduced by the American corporation, traders who sell products more cheaply on other sites face expulsion from the Amazon catalogue unless they agree to raise their prices…
In the UK, Amazon has achieved an extraordinary domination of the online shopping industry. The company refused to give figures, but analysts estimate it has a 20 per cent share of the market, accounting for £1 in every £5 spent by online purchasers.
In comparison, supermarket giant Tesco takes £1 in every £10 spent in British shops.
Amazon Drones Could Deliver Packages for Just $1, Study Suggests By Spencer Soper 3:51 PM MDT April 10, 2015
Bloomberg
Amazon.com Inc.’s proposed use of drones could drive down the cost to deliver small packages crosstown to about $1 -- a fraction of existing same-day delivery options…
…The report…suggests deliveries may arrive in as soon as 30 minutes. The research tried to quantify the savings from the use of drones compared with delivery trucks and couriers….
…The Federal Aviation Administration gave the Seattle-based online retailer a waiver allowing flights as fast as 100 miles (161 kilometers) an hour and as high as 400 feet off the ground…
Amazon charges $7.99 for one-hour delivery of shampoo, paper towels and thousands of other products in some cities, including New York, Baltimore, Miami and Dallas, through its Prime Now program started in December.
…Amazon would face an upfront cost of about $100 million to buy tens of thousands of drones. The company also would see expenses of about $300 million to deploy them to deliver 400 million orders annually…
Amazon would need to hire thousands of operators, each capable of monitoring multiple drones simultaneously, …each package weighs as much as 5 pounds and each delivery is no more than 10 miles.
You can now hire a goat herder through Amazon Elizabeth Weise, USATODAY5:27 p.m. EDT March 30, 2015 (Photo: Elizabeth Weise) 2890CONNECT 179TWEET 32LINKEDIN 7COMMENTEMAILMORE
SAN FRANCISCO -- Now you can buy a sink on Amazon and hire someone to come and install it. Or a goat herder to tend your flock. Or someone to teach you aerial yoga. All are available to Amazon customers through the company's newly-expanded professional services marketplace, launching on Monday.
Q10. Which of the following best describes your organization’s current approach to decision-making for technology solutions when applied to sales and marketing functions?
n=139, Base: Excluding DK.
IT most commonly owns decision-making for sales and marketing technology solutions
Yikes!
Source: Gartner Front Office Survey. September 2014.
“Getting field users engaged throughout the process and listening to their needs and preferences was the smartest thing we could do”. - Global Food Company. 2014
One of the keys to being able to optimize trade promotions is to recognize that some things can be modeled and some can’t. Mysteries are things that are random and can’t be understood through statistical simulation. This can be hard for us as humans because we like to think all things are rational and predictable. But in point of fact they are not. Here we give two examples: The terrorist organization Al Qaeda and the Cuban Missile Crisis. The former executes in a rather random and independent way, although its overall mission is pretty clear, and the latter is was a mission that could be understood and responded to.
So what………. • Is it just about the model, or is it a big, chaotic
and mysterious system?
• Increase probability of success by - Experimenting
- Adjusting
- Making collaboration easy
• Need hybrid thinkers who can handle both puzzles and mysteries
• Be patient, persistent and courageous!
Presenter
Presentation Notes
Predictive modeling is both an art and a science. It takes time and patience. Not all things can be predicted. Some are puzzles that can be solved and others are mysteries that just can’t or at least not with enough degree of certainty to be used in a commercial way to drive competitive advantage. But the requisite skill set requires personnel who can look at both mysteries and puzzles and be able to not get bogged down. This is because they can experiment and at some point be able be able to move on if the models aren’t yielding results. But part of the art lies in being persistent but knowing when a mystery can’t be cracked.