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.

12 Dec 2016
1st place Engage3 winners (Ken Ouimet and Edris Bemanian), 2nd place winners from PocketPoints Mitch Gardner and Rob Richardson), 3rd place winner Ken Kruszka from SnapCheck and venture capitalist judges John Dougery, Arjun Chopra, Ankur Jain, and Lokesh Sikaria.

Venture Capitalists Grant Engage3 1st Place at TiE Pitchfest in San Francisco

On November 3rd, Engage3 took to the stage to pitch their business plan and traction to a panel of venture capitalists and an audience of Bay Area entrepreneurs at TiE Silicon Valley’s San Francisco Pitchfest event to ultimately secure first place after the presentation and Q&A.

Judges at this year’s event included: John Dougery, Managing Partner of Inventus Capital; Arjun Chopra, Partner at Floodgate; Ankur Jain, co-founder of Emergent Ventures; and Lokesh Sikaria, Managing Director of Moneta Ventures.

The event was sponsored by DLA Piper and moderated by Rajiv Dharnidharka, a partner of DLA Piper’s Silicon Valley litigation group. Other TiE sponsors include Adobe, Cisco, SanDisk Corporation, IBM, VMware, Zoho Corp, Discover, HP, Mayfield Fund, Bank of America, Ernst & Young, KPMG, Morgan Stanley, Silicon Valley Bank, and more.

TiE was founded in 1992 and currently has 13,000 members, including over 2,500 charter members in 61 chapters across 18 countries. The non-profit’s mission is to foster global entrepreneurship and claims an economic wealth creation estimate of $200 billion. TiE’s annual professional conferences, TiECon are regarded as the largest entrperneurial forum in the world and held in over 15 cities globally each year. Click here to learn more about TiE.

05 Dec 2016
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Six Reasons Why Retailers Need Dynamic Competitive Intelligence Solutions: Part I

As the in-store and digital customer experiences rapidly converge, retail sales are being attacked from all directions. Powerhouses like Amazon, Walmart, and other online retailers have developed aggressive pricing algorithms with the power to change a price multiple times in a single day. Sophisticated players are even changing the prices on 10-20% of their online assortment daily (and prices on their top items as frequently as 3-4x per day). Other threats to retailers’ price image include the continued growth of hard-discounters and dollar stores and the proliferation of private label products.

Hi All, my name is Kevin Johnson and I work in Product Marketing for Engage3. I’ve spent the better part of four years in the competitive intelligence industry and I’ve spoken with hundreds of different retailers in the space about pain points and inefficiencies as they persist today in so many organizations. This article is meant to be a two-part culmination of what I’ve learned about the evolution of retail technology and comp shops. I’ll spend time reviewing some of the key challenges facing those operating in the “Old World” of competitive intelligence and why it is absolutely critical to have a dynamic solution to combat these challenges. Please don’t hesitate to reach out here if you think there’s something I may have missed – my “door” is always open.

Typical regional comp shop programs today leak up to 65 basis points* of margin largely due to inaccurate data and pronounced gaps in ability to respond to these dynamic price changes quickly. However, new technologies and data-driven processes are emerging to help traditional retailers adjust in this new world of price transparency, hyper-competitiveness, and shifting consumer behaviors. At Engage3, we see more often than not that retailers don’t always have the visibility they need to make informed pricing decisions such that both profit is maximized and price image is maintained. It’s become apparent that traditional, static approaches are not suitable anymore. The problems that we’re constantly seeing are as follows:

Poor Visibility, High Error Rates, and Low Find Rates

Due to the combination of slow competitive product and price check cycles, expensive and error-prone data collection processes, product linking complexities, departmental resource constraints, and the ever-shifting competitive landscape, it is increasingly difficult to achieve the right level of competitive visibility. The “Old World” of competitive intelligence does not allow for intelligent ways to match products across retail chains, which results in low find rates and leaves the door wide open for natural human error.

Retailers working within this “Old World” of competitive intelligence are exceedingly at the mercy of the labor collecting the data. When we begin working with a new client, we on average see error rates between 20%-40%, find rates between 50-80% and low overall visibility. Whether you use a price optimization system for execution or have a more manual approach to pricing, these challenges contribute significantly to the aforementioned 65 basis point leakage.

Comparing Apples to Oranges

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Retailers are flying blind in an age where private label products are becoming increasingly commonplace. According to Nielsen, private label products share of retail sales grew from 16.2% to 17.4% between 2009 and 2011, with year-over-year sales growth outpacing national brands by a significant margin. The trend highlights the importance of quality product linking methods as store brands continue to consume market share. Without accuracy in like-for-like products, retailers are getting little or no value for the money they spend on competitive intelligence. How can they, when their auditors are unknowingly collecting data for apples instead of oranges?

 

More to follow…

02 Jan 2014

McClatchy Invests in Engage3

The McClatchy Company, a leading news and information provider and publisher of iconic news brands such as the Miami Herald, The Kansas City Star and The Sacramento Bee, invested an undisclosed amount in Engage3 in August of 2014.