12 May 2017

Lokesh Sikaria: On the Keys to Achieving Success as a Start-Up

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Moneta Ventures is an investor in Engage3’s Series B round of financing. Their mission is to identify and accelerate the growth of the most innovative companies in California’s capital region. 

Lokesh Sikaria, managing partner at Moneta Ventures, commented in a recent press release, “Engage3’s management team has a great record in the retail space. Their demonstrated domain expertise combined with current customer traction, the technology platform they have already built, and the product roadmap makes a very compelling investment thesis.”

Prior to his work with Moneta, he was the Founder and CEO of Sparta Consulting, a global IT consulting firm, and grew Sparta to more than $100 million in revenue in just five years. A Berkeley graduate with an Electrical Engineering and Computer Science degree, Sikaria was sent to work on a project at Intel by his first job with PricewaterhouseCoopers.

He greatly enjoyed working in Folsom and the ecosystem he found there, so he decided to stay and cultivate his industry within the region. We decided to sit down with him and understand his personal and professional motivations and what he believes are keys to success when starting a business.

What does it take for a company like Sparta Consulting to grow from 0 to 125 million in revenue?

Well, a lot of money. That’s when we realized that the ecosystem for that kind of growth just wasn’t here, in the greater Sacramento area. We knew we wanted to be the ones to start a fund here and focus on investing because we knew that there were other companies just like us, who were doing well in their business plan and growth but didn’t have the necessary funding. So I think the secret to building up a business is to have access to capital, a reasonable space and strong teams. I like to quote Ben Franklin, who said that “we must all hang together or we will all hang separately.” And I think the mindset of a team should be that we’re all in this together.

What traits do you look for when you hire someone for a team?

Evaluating how people react in adversity is the key. How do your team members react when things aren’t going according to plan? As a start-up you can almost be certain that things will not go according to plan, and when that happens, do your partners quit? That to me, is the defining criteria of the team.

In what ways, other than revenue, did Sparta see a lot of success and growth?

The key thing with Sparta was to let our employees participate in our success or failure. We let our employees invest in the company at the same price that we invested at, so by the time Sparta was sold, I held 20% of the company and the remaining 80% was owned by other employees. What’s really special is that when Sparta sold, for every 1 dollar invested we made $4.93 with around a 65% return per year. And I think we made 15 millionaires out of the process. For a lot of the families and employees with us, this was very special.

Do you have a thesis for how to make your investments or a criterion for choosing companies to invest in?

We have three filters that companies that are pitched to us must go through. From the onset, we knew we wanted to deploy at least 70% of capital in the greater Sacramento region. We all came from a tech background, so we wanted to invest in tech companies first and then slowly expand to other areas of investment such as healthcare or Ag-tech. We also focus on companies that are within half a million in revenue to 5 million in revenue. And we do this because when you focus on companies when they’re in the initial stages, it’s a lot more fun and interactive and rewarding to participate with them rather than when they become big corporations.

How have you persevered through some of your most difficult challenges while running Sparta Consulting?

As an entrepreneur, you have to be mentally prepared for the challenges and have the ability to withstand them. I was fortunate to have a very supportive management team around me and that made all the difference at Sparta. Not only I but several of my management team mortgaged their homes to keep the company going from an investment standpoint.
 
How do you spot companies that have promise of success?
Good management teams; growing revenue (at least $500K revenue run-rate annually); In sectors and areas that are seeing increasing demand; Founders with significant skin in the game;

What’s the best way for a start-up or a growing company to get your attention?

I suggest that the first step is to have your ducks in a row. Make sure you know who you’re selling to from a customer standpoint. You should ideally have a few customers already, have some beta customers, and at least a minimum viable product. Then the best way to approach Moneta Ventures is to reach out to Sabya Das, Associate Partner at Moneta, or apply on our website.

One of our challenges when assessing companies is that since there are 4 of us the business, the volume becomes very significant. We looked at 440 companies total to get to the 20 companies that were selected in Fund 1 and Fund 2 over a three and half year period. So it is competitive and it is challenging, but it doesn’t mean that just because we aren’t interested, that you’re not going to be successful.

Do you have advice for start-ups who are just entering the world of planning and creating their vision on what the process looks like?

There needs to be a balance between the planning and the execution. We want entrepreneurs to focus only on one or two things out of the 50 million ideas they might have, and then pursue them wholeheartedly. You’ve got to plan your actions and decide which idea you will pursue. In general, if you spread yourself too thin, it’s a problem. There will be obstacles and offsets. But you have to continue and give it it’s due before deciding to call it quits. That balance is key.

There’s an analogy in marketing that I think really captures the idea. What you want do is fire bullets, and then where you succeed, you want to fire cannons there. That’s the right mindset. Get to the ideas that hit, and when you know this is the right place, go at it with cannons.

What do you enjoy about being a VC?

I really enjoy the cyclical nature of it and seeing the successes come out of our investments and coming right back to us. We’ve created this foundation of providing each other value and working with each other as a team by sharing successes. The fun part is to be able to see the success come out and how that success feeds right back. What you do comes right back to you.

Sikaria spoke at the Startup Grind Sacramento event this month and shared these insights and experiences with the attendees of the event. Watch his full presentation here!

28 Apr 2017

“Surviving the Emerging Price War” Insights

Industry-expert and Chief Architect of Brick Meets Click, Bill Bishop, hosted a highly-anticipated webinar session with Engage3 CEO Ken Ouimet and COO Edris Bemanian. “Surviving the Emerging Price War” provides in-depth insights, tangible examples and tips and tricks on how to compete effectively in the face of a brutal and imminent price war among retailer powerhouses. The webinar supplies all of the key ingredients in making up a retailer’s survival toolkit.

“When elephants start to dance, mice get trampled.” Ouimet began the webinar with an analogy that accurately reflects the current state of affairs in the retail industry prior to highlighting Amazon, Aldi, Lidl, and Walmart’s price commitments in the emerging price war. As these giants begin investing in their pricing, the “mice” that are forced to follow but fail to react strategically remain in the elephants’ path.

Ouimet continues with a five-step plan on how to survive in the face of a price war and be met with some form of success or resilience. His ideas center around the notion that “the best offense is a good defense.”

Understand your customer’s perspective.

Using competitive intelligence data shouldn’t be the only tool retailers leverage. Retailers must identify which items are most important to their local customers and understand what items they are comparing against at their competitors’ stores. It’s essential to utilize accurate product linking practices to compare products in the way that customers do with attributes.

By understanding the way customers value their products and perceive the changes retailers make to their pricing, retailers will unlock opportunities to move their customers up the loyalty ladder. Engage3 is collaborating with customers to bridge sales, market share, customer survey, and competitive intelligence data to identify the items that are most relevant to their customers in each market and refine retailers’ KVI lists to reflect this.

Gain visibility into your local competition.

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If retailers don’t have visibility into local competition, then they simply can’t compete. Convenience stores have a high level of what Engage3 calls “localization” (geo-specific pricing), and drug stores have a lower level of localization. However, as a time-series analysis shows, localization scores have been increasing, and retailers like Safeway, Kroger, and Publix are developing higher levels of localization. Kroger, especially, has been met with a high level of success with localized assortments.

If competitors are not very localized, it provides an opportunity to strike hard and fast without any visibility. Engage3’s platform, in particular, takes price change frequency and competitor assortment localization into account when improving competitive intelligence programs over time.

Fly under the radar and attack where they aren’t looking.

Slide2.JPGOne suggested tactic could be moving away from larger competitive zones and instead into micro-zones. A regional grocery retailer that scores very highly with consumers in regard to their price reputation was able to maintain their positive reputation by leveraging their smaller zones to take advantage of their competitors’ blind spots through a mix of lower prices to earn price reputation points while taking higher margin on other items by allocating across zones. Engage3’s Competitor Strategy Analytics reverse-engineers retailers’ pricing and assortment strategies to identify margin opportunities and competitors’ price zones.

Strike hard and fast.

It’s not enough for retailers to Slide1.JPGattack from hidden angles, but they must also have an element of speed behind them. Amazon has a high price change frequency on several items found in conventional grocery stores, and the juggernaut’s price change algorithms are highly responsive. Retailers are taking notice of Amazon’s practices and efficient strategies and are beginning to follow suit.

Retailers need to minimize the time it takes to respond to margin opportunities or price reputation risks by getting data that is as fresh as possible to maintain visibility. Engage3 has helped customers identify when retailers can confidently leverage online data to provide a faster signal to increase visibility and proactively identify opportunities.

Reinvest benefits to defend your turf.

The environment of a price war is pressing and inevitable, so the first step to surviving is determining how to invest optimally in your respective markets by efficiently monitoring the local competition. Once retailers can establish a robust process in a program, they should be able to reinvest those savings to identify additional margin or price opportunities.

Personalization

The segment concluded with a last, but certainly important, strategic lever in fighting a price war: personalization. Ouimet believes that the future is personal and that personalization is unique in the way that it’s a highly desirable tool for consumers that also helps create a tighter relationship within retail communities. It provides more loyalty and more convenience for the consumer, and when applied to pricing, it becomes the ultimate segmentation and the most powerful means to “fly under the radar.”

The five-step plan is heavily reliant on updating competitive shop programs and price optimization strategies. According to Ouimet, those retailers seeking to constantly improve will be well prepared if there is a price war.

To register to watch the full webinar and find out more invaluable insights, click here.

17 Apr 2017

Data Discoveries: Store Brand vs. National Brand Part I

Milk: it does a body good, but what does it do to your finances? Conventional wisdom has it that prices always rise, and milk is one of the most consistently expensive items in its aisle – everyone needs it for something, from breakfast to baking, so of course the price of milk is going to go up over time, right?

Well, kind of. In the first round of our Store Brand vs. National Brand Analyses, we examined promotional and regular pricing trends for Organic and Conventional milk, and while a few of these analyses turned up what we might expect – regular price trends for conventional milk are both positive, with nationally branded items showing a significantly steeper increase over the past year than store brands — we found several surprising results as well.

SB vs. NB Milk

Let’s start with the major one: compared to store brands, the average price of nationally branded organic milk is plummeting, dropping by nearly a quarter per gallon over the past year. Store brand pricing has held steady at around $6.00 per gallon; but where nationally branded items once averaged close to $6.15, that average has fallen to $5.87 in the span of 14 months, now beating store brands. Promotional prices on organic milks are also dropping steadily, though store brands are outpacing national brands there.

The choice seems clear in one regard: if you’re an organic milk drinker, don’t just default to the store brand. It’s a good bet a gallon of Horizon might be easier on your wallet.

30 Mar 2017

Engage3 and Brick Meets Click to Host Joint Webinar: “Surviving the Emerging Price War”

thumbnail_Joint Co LogosOn April 5th, Engage3 executives Ken Ouimet and Edris Bemanian will co-host a webinar with Brick Meets Click Co-Founder Bill Bishop to unveil a new layer of competitive intelligence insights in the fast-moving consumables space. In this session, participants will gain an understanding of how retailers are managing the complexity of pricing in today’s marketplace and see examples of how more dynamic approaches can drive profitable sales.

In the hyper-competitive world of retail today, the importance of understanding competitive pricing is paramount to executing successful long-term sustainable strategies. A great deal of recent progress has been made in applying the power of advanced analytics to pricing strategy; from improving the speed and accuracy of competitive price checks to reverse engineering the competition’s pricing strategy. As this progress ushers in new pricing rules, retailers are in position to take advantage and compete more effectively. The webinar will focus on this premise and highlight new work from Engage3.

Long-time industry advisor Bill Bishop, Chief Architect of Brick Meets Click, will moderate the session. Bill brings 20+ years of experience helping retailers strengthen their price reputations.

Click here to register for the session today!

16 Mar 2017
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Data Discoveries: Is Organic Produce Really More Expensive than Conventional?

Market trends continually bear out the basic intuition that consumers prefer organic produce to conventional. More than ever, consumers are making conscious and active choices in selecting what type of produce goes into their bodies. Restaurants and fast food chains have begun to consider the preferences of their customers by introducing more organic, all-natural, gluten-free or GMO-free products into their menus.

But for the smart shopper, trying to be both health conscious and money conscious, there’s a worry associated with organics: higher prices. Generally, organic produce is more expensive than conventional produce, but recent trends indicate that gap may be closing. Price difference is highly impacted by region, availability, and a variety of other invisible factors.

We took it upon ourselves to analyze the marketplace over the past year for organic and conventional produce and noticed interesting movement in specific regions that reaffirm trends that are reflective of the widespread availability and increasing demand for organic produce. In the regions where prices for organic produce saw a sharp increase, conventional produce followed suit. In both the Midwest and the Southeast, prices for organic produce averaged around $2.60 and conventional prices averaged around $2.00 by the end of the 2016. Conventional prices rose in the same movement as the organic prices, a possible indication that there wasn’t a strong overall preference for either in these regions.

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The most notable results came from the mid-Atlantic, which saw a sharp increase in organic prices and steady movement of conventional prices. The gap between organic and conventional produce is the largest among the regions studied, nearing almost a full dollar. Mid-Atlantic shoppers are eagerly gravitating towards organic chicken breasts and largely ditching conventional options.

Florida and the South didn’t see an incredible change in prices of either organic or conventional products, as the market trends show steady movement. The South’s organic prices stayed around $2.00 and its conventional stayed around $1.40; the award for most expensive organic prices goes to Florida, which showed little movement in the gap between conventional and organic. Florida’s organic prices were averaging around a little more than $2.60 by the end of the year.

In the five regions where organic produce prices saw a slight decrease (Southwest, Pacific Northwest, Rockies, New England and Northern California), the markets for conventional prices held steady. The only region that saw both a decrease in organic and conventional prices was Northern California, a region widely recognized for their health conscious and active consumers. It’s possible that, to keep sales of conventional produce from incurring too drastic of a loss, conventional producers may have lowered prices to match the movement of organics. The Rockies stand out for having the lowest prices in both organic and conventional produce. Both produce types can be found within an average range of $1.20 to $1.60.

Every consumer’s preference is different when it comes to organics. Taste, price and environmental impact all play roles in affecting the mindset of the consumer, who is, on average, becoming more conscious about the price and quality of the food they are buying. With an overall market gravitation towards organic produce, prices for produce in general have seen an increase. However, when compared with conventional produce, we see this market in essence rolling up its sleeves and preparing to fight to keep their prices steady or matched with organics.

15 Mar 2017
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Competitive Intelligence 101

The Sherlock Holmes of Retail

The phrase “competitive intelligence” is tossed around among competitive retailers and pricing strategists looking to grow revenue and expand their reach. Formally defined, competitive intelligence is the act of defining, gathering, analyzing and distributing intelligence about products, customers and competitors in order to make strategic decisions.

But what this really sounds like is a socially and legally acceptable form of spying. Companies that use competitive intelligence methods are putting on their black ski masks and waiting in stakeout vans with binoculars, ready to observe and analyze their competitors every movement.

This kind of “spying” is actually one of the oldest forms of ensuring market competition and drives the system of exchange that our livelihoods depend on. A basic study of economics tells us that markets are sustained by simple supply and demand models. When the demand for new Legend of Zelda video game increases, Nintendo is smart enough to increase their prices and the quantity that they supply to legions of insatiable gamers.

Profitable choices and strategic pricing is dependent on looking at external factors and the ecosystem of markets around you. Companies who want to thrive in a competitive environment know that they have to study two major areas: their customers and their competition. The two share a magnetic-like attraction, linking them together and linking the success of the company with their push and pull.

But to simplify things even more, let’s take a look at the classic lemonade stand example. Sally spends her summer vacations selling lemonade for 2 dollars a cup and expects about 15 sympathetic parents to visit her stand and buy a daily cup. When another lemonade stand opens up across the street, Sally notices her customers waning.

Infuriated, she grabs a recording device, her binoculars and heat-resistant trench coat and hovers around her competitor’s stand only to discover that the other lemonade stand sells lemonade for 75 cents a cup.

Now armed with this information, Sally can re-re-price her lemonade at 75 cents or less and make an informed and strategic move to stay the queen of lemonade sales.

Retailers like Sally want information about the prices that their competitors are charging, so they’ll be able to assess their own prices and make adjustments accordingly. By expanding the scope of our lemonade example to include the millions of industries and retailers with a diverse range of products and services, it’s safe to say that we’re getting a little closer to the heart of competitive intelligence as it exists in the real-world marketplace today.

The (C)ompetitive (I)ntelligence spy tool kit can be broken down into a strategic four-step method:

  1. Plan. Companies need to crack open their laptops and begin their Google stalking. In other words, retailers need to have a plan for what information they feel will benefit them. If retailers are asking the right questions, they’re asking about their competitor’s mission and history or their competitor’s target customers. They’re asking about which products are being priced at what cost and what special feature of that product attracts customers. They’re asking about promotions and advertisements.

 

  1. Collect Data. Retailers accumulate information by utilizing competitive intelligence programs or platforms. CI tools like MissionControl address the largest questions retailers might have about how to be successfully competitive with their pricing strategies and promotions. MissionControl is just one of the many innovative technologies out there that retailers are latching onto. There are hundreds of free and private programs that help companies analyze features of their competitors such as Quantcast, Knowledge360 or CIRADAR.

 

  1. Analyze the Data. Put your smartest and brightest to work extracting information that can be beneficial to understanding your own business in relation to the other markets. Alternatively, there are companies out there like Engage3 that collect the data and help set strategy with advanced analytics and insights. For Sally, it was figuring out that 75 cents would steal the neighborhood moms away from her stand.

 

  1. Make Changes. Implementing new pricing strategies, promotional programs or re-evaluating inventory are some of the many ways retailers then act on the data they’ve acquired. Sally quickly made the change and started pricing her lemonade at 50 cents. It worked like a charm.

 

Using competitive intelligence is like being the Sherlock Holmes of retail, and it is amongst one of the fastest growing business strategies of the 21st century. As long as there are Sally’s in the world competing against other lemonade stands, competitive intelligence will continue to play an important role in the social and economic foundations of the retail industry.

18 Feb 2017
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Shopping Revolutions: The Future of Grocery Stores

Drive Through Supermarkets? A Revolution in Grocery Retail

Traditional grocery stores are phasing out and rapidly losing appeal to the 21st century shopper. With millennials at the height of their rule and a growing shift towards online and instant shopping, the existence of the list-making and cart-pushing shopper is moving towards extinction.

According to a report released by the U.S. Department of Agriculture, the greatest change in U.S. food shopping behavior is the extent to which food shoppers now rely on non-supermarkets as a source of grocery supplies. Long gone are the days when you opened your fridge, made a shopping list of necessary items and spent the morning cruising through the aisles of the closest and most cost-effective grocery store.

The changing mindset of the average consumer who demands an easier, faster and more convenient shopping experience has forced several industries to adapt. Conventional supermarkets are not as appealing in a world with a diverse amount of shopping options, and major retailers are actually starting to feel the pressure to adapt and meet a new set of needs.

From smaller store formats to online shopping, big grocers are wiping the beads of sweat off their foreheads and largely divorcing the “traditional” store formats.

Here are the top 3 ways large-scale grocers are innovating to win back their customers:

1. Convenient Store Formats

Large grocers have been creating smaller, easily-navigable versions of their mother stores with the format of a typical convenience store. Connected to gas stations, the idea is to create a quick and easy shopping experience for consumers who are bound to stop for a bite to eat as they wait for their tanks to fill up.

This past month, Walmart has been a huge player in the game and unveiled their newest convenient store, a “C-Store,” in Rogers, Arkansas. The 25,000 square foot building offers a hot food bar with quick to-go meals such as paninis, nachos, hot dogs and sausages. The new store offers a similar format to that of a classic 7-11 with coolers of beers, sodas and other beverages as well as aisles stocked with grocery staples: milk, eggs, frozen meals and pizza. Walmart has experimented with this type of store in the past in Crowley, Texas and other regions in Arkansas.

Kroger, one of the world’s largest grocery retailers, also opened up their version of a C-Store in College Station, Texas last year. Their take on the smaller store format features 16 gasoline pumps, convenient merchandise and a barrage of coffee and fountain beverages. If the goal is to make act of grocery shopping convenient at a variety of locations, then these grocers are hitting the target. Filling up gas will now become part of the same errand as grocery shopping.

2. “Grocerants”

Most grocery stores like Safeway, Whole Foods and Raley’s design their deli and hot meals sections to be an easy, sit-down spot for hungry customers to munch on a quick meal. There’s never been anything particularly attractive about the food options in these delis, so grocery stores have decided to switch their focus and hone in with full force on revamping and glamorizing these in-store eateries.

Meet the newest revolution in dining experiences: the grocerant. It’s a hopeful attempt at creating a hybrid between grocery shopping and fine dining by picking high-end restaurants or restaurants with name recognition and incorporating them into the store layout.

The supermarket chain Hy-Vee has a Market Grille Restaurant in over 20 of their stores. A Whole Foods in New York City has a Yuji Ramen inside their store. A Gateway Market in Iowa even has a beer program, where consumers can fill up pints from the in-store bar and shop with a beer in hand.

If the idea is to attract customers back into stores by offering them tasty, well-known dining options, the food has to be tempting enough to get them to sit down to a meal. Grocers figure that customers are probably more inclined to use the time before enjoying their meal or after the calorie boost to shop for products.

Grocers will be able to yield a better experience for the shopper if the shopper can save on time and money and consolidate their day’s errands, like eating, into a one-stop shopping excursion.

3. Online Services

Technological innovations have been one of the most dynamic tools for shopping evolutions. Making a shopping list? There’s an app for that. Comparing prices between similar items? There’s an app for that. Need groceries delivered? There’s even an app for that.

Over the last few years, grocers like Safeway, Raley’s, Costco and Wholefoods have begun utilizing online shopping platforms and delivery systems with the aid of tools such as Instacart or Google Express. These kinds of services completely remove the need for consumers to set foot in a grocery store.

Amazon is the Stephen Curry of grocery innovators, as Amazon has made huge strides in emerging into the grocery retail market with Amazon Grocery, Amazon Pantry and their newest technological revolution, Amazon Go.

Amazon Go is Amazon’s first physical grocery store and has the format of a traditional store but promises the convenience of online shopping. They reel in customers with the tag, “No lines, no checkout- just grab and go!” Customers walk in, scan their phones over a sensor that detects their account within the Amazon app, grab whichever food items they want off the shelves and simply walk out of the store when they’re finished. Amazon’s “Just Walk Out Technology” uses sensor fusion and computer vision to identify the item that was put in the physical cart and adds it to the virtual cart on the app. The Amazon account is later charged and sent a receipt.

The first store opened up in downtown Seattle, and Amazon is eager to announce additional locations for their new stores in the next few months.

Grocers have had to become more creative, strategic and innovative in the way they market to consumers and grow relationships. With ideas such as grocerants and Amazon Go already taking off in earnest, there’s no predicting the upcoming innovations and evolutions grocery retailers will be fighting to bring to the table.

Photo Courtesy: CSNews

08 Feb 2017

Bob Ramsey on Online Retail, Amazon Competition and more

BobRamseyChief Operating Officer Bob Ramsey has had over thirty years of experience working in the retail industry. He currently manages pricing strategy and operations at Bailey’s, an internet retailer based in Woodland, CA that specializes in a unique assortment of professional outdoor work gear and equipment. Bailey’s pricing strategy isn’t to charge customers at the cheapest price, but rather to create a relationship between the consumer, product and price that eliminates price as being the decision-making factor for purchases. Bob says Bailey’s “will be profitable and will make money, regardless of the prices it charges.”

Bailey’s has a dynamic relationship with competitive intelligence, as the retailer’s niche marketplace doesn’t have as much access to competitive data as larger grocery retailers. Bailey’s collects most of their customer data through their shipping procedures and by accessing and watching their Amazon sales. The internet retailer thrives on being able to differentiate from Amazon by printing in-mail ads and having convenient shipping processes. Bailey’s will also be the first customer of Engage3’s new “personalized promotions” platform, and Bob hopes to work with Engage3 to expand customer relationships.

To learn more about Bailey’s online platform, Bob’s experiences in pricing strategy, and Bailey’s relationship with Engage3, check out Bob’s full interview.

17 Jan 2017

Engage3 Promotes Helena Cisneros to VP of Customer Success

Helena CisneHelena Cisneros, Sr. Dir. Operationsros, formerly the Sr. Director of Operations for Engage3, was recently promoted to Vice President of Customer Success. Cisneros has been with the company for over 15 years after having served for 10 years in retail management with Target. With the company’s rapid expansion, the move places Helena in optimal position to ensure new customer success while also maintaining the quality service standards set for existing Engage3 clients. An overachiever by nature, Helena’s dedication to her team and her clients truly sets her apart. With the company’s plans to more than double revenues this year, Helena will continue to play a vital role in the process and the lead the charge as more clients take advantage of Engage3’s leading technology solutions.

20 Dec 2016

Six Reasons Why Retailers Need Dynamic Competitive Intelligence Solutions: Part II

Traditional Comp Shop Programs Don’t Account for Omni-Channel

Omni-Channel is no longer just a buzz word. Millennials now represent over 50% of retail spending. Both they and your traditional shoppers expect retailers to meet them wherever they like to go and however they prefer to interact. As a result, retailers are increasingly testing and rolling out click-and-collect and delivery programs. According to IBISWorld, online grocery sales are expected to increase 9.5% annually to become a $9.4 billion industry in 2017.

With all this in mind, retailers are beginning to realize that they can’t just look at the in-store data anymore—in fact now it’s much more cost-effective to use online data and augment with directed in-store checks. It becomes even more critical that retailers leverage solutions that help them understand where they can responsibly leverage online data (because sometimes the assortments don’t fully match) and where to use in-store data. Retailers’ online vs. in-store strategies are constantly changing, and so a hybrid approach becomes even more critical to maintain complete visibility.

Inflexible Programs

Woman-StretchingEngage3 market data demonstrates that while many categories and departments are still being priced at a national level, there is a strong trend towards increasingly localized pricing. It’s these location-specific products and categories that can be detrimental to a retailer seeking true visibility, because KVI lists and comp shop budget dollars are not allocated and reallocated appropriately. Far too often we see that many retailers’ competitive intelligence programs still leverage static, banner-level lists by which margin opportunities are missed and price reputation is threatened. It’s imperative that competitive intelligence programs be able to respond to market changes and leverage real-time analytics to maximize ROI.

Tactical, Rather Than Strategic Focus

Most retailers today put too much emphasis on the competition’s prices as they change, rather than the strategies that are being employed at the root of those changes. The comp shop processes of old produced data that was far too old and stale by the time it was received, and thus it has historically been much more difficult to discern the competition’s pricing and assortment strategies. Retailers need the ability to take a step back, see the bigger picture, and truly understand the competitive landscape and strategies that are being deployed around them.

Wrong Measurements

Confused Measuring Panda

We’ve seen that most pricing departments are responsible for managing a budget, however, oftentimes they aren’t responsible for measuring the quality or exact value that the program returns. How does your team measure the effectiveness or value of your competitive intelligence program today? We’ve seen over time the incredible value of appropriate Key Performance Indicators (KPI’s), or measurements, being defined and maintained to evaluate the program. KPI’s may include find rates, accuracy, competitive price visibility, completion rates, Return on Investment, and more.