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Out in the cold

BY Dave Wendland

For those of us living in the Midwest — and perhaps throughout the country — we have become familiar with a weather term "polar vortex." No doubt you've heard the phrase pinging around the news media in recent weeks. One of the coldest Arctic outbreaks in two decades has blanketed a significant portion of our country, bringing bitterly cold temperatures to the Midwest, South, and East.

This unusually cold weather has likely put a deep freeze on retail sales, also. Not only did the retail sector experience a lackluster holiday shopping season, but now they are also hit with the reality that some shoppers are simply not going out into the cold. The winners may very well be online retailers.

What could this signal for traditional brick-and-mortar operators? It’s time to develop an omnichannel strategy before it’s too late. I’m not suggesting that these retailers dip their toes into the icy water, but rather they take a polar plunge … without hesitation.

Here are five strategies for retailers who want to get started:

  1. Make it personal – engaging customers in a dialogue across all of their desired platforms in a consistent, meaningful way is paramount
  2. Create synergy – the mobile and in-store experiences should appear seamless (disparity will undermine clarity)
  3. Tap social media – reach shoppers when and where they are through effective alignment of social media assets and transactional sites
  4. Reward shoppers – offer reasons for shoppers not only to be loyal, but to keep coming back, bringing others with them
  5. Assortment strategy – consistently display products with up-to-date images, content, and details to make shopping easier while guiding a shopper’s path to purchase to fill their market basket

The evolution towards an integrated physical, digital, mobile, and social shopping experience is underway. Retailers are increasingly moving towards cross-channel customer experiences. It will be interesting to see what happens and what works – but the chill of this winter should motivate many to get moving.
 


Hamacher Resource Group vice president Dave Wendland, a 20-plus-year retail industry veteran, is a popular presenter and discussion facilitator available to speak at corporate and association events on a variety of retail-related topics. HRG is a research, marketing and category management firm specializing in consumer health care at retail. Product manufacturers, healthcare distributors, retailers, technology partners and others rely on HRG for strategic and creative solutions to help build their business. Learn more at www.hamacher.com.

 

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Coca-Cola, GMCR enter partnership

BY Ryan Chavis

ATLANTA and WATERBURY, Vt. — Coca-Cola and Green Mountain Coffee Roasters have signed a 10-year agreement to work together on the development and introduction of Coca-Cola’s global brand portfolio for use in GMCR’s upcoming Keurig Cold at-home beverage system.

Under the agreement, the companies will cooperate to bring the Keurig Cold beverage system to consumers around the world. The companies also entered into a Common Stock Purchase Agreement; Coca-Cola will purchase a 10% minority equity position in GMCR.

As part of the strategic partnership, GMCR will be Coca-Cola’s exclusive partner for the production and sale of Coca-Cola-branded single-serve, pod-based cold beverages. The companies also will explore other opportunities to collaborate on the Keurig brand.

“With the Coca-Cola Co. as a global strategic partner in our multi-brand at-home Keurig Cold beverage system, we believe there is significant opportunity to premiumize and accelerate growth in the cold beverage category by empowering consumers with an innovative, convenient way to freshly prepare their favorite cold beverages at the push of a button,” Brian P. Kelley, president and CEO of GMCR, said. “This global relationship combines the Coca-Cola Company’s unparalleled brand, distribution and marketing strengths with GMCR’s innovative technology and beverage system expertise.”

The Keurig Cold single-serve beverage system currently is under development with expected availability in fiscal year 2015.

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Fred’s: Foul weather dampens January sales

BY Michael Johnsen

MEMPHIS, Tenn. — Fred’s Super Dollar on Thursday reported $134.8 million in sales for the four weeks ended Feb. 1, representing a 1.1% decline on an adjusted basis. Total sales for the fiscal year totaled $1.9 billion, representing an increase of 1.4% on an adjusted basis. 

On an adjusted basis, comparable store sales decreased 1.8% in January versus flat comparable store sales in the year-earlier period. Also on an adjusted basis, comparable store sales for fiscal 2013 increased 0.6% versus a decrease of 1.4% for fiscal 2012. 

"The weather was a significant challenge for us in January," stated Bruce Efird, Fred’s CEO. "It not only disrupted consumer shopping patterns, but also resulted in more than 120 store closings during the final week of the month. Prior to the last week of January, sales were running in the mid-range of our forecast, with reconfiguration departments leading the way," he reported. "In the final week of the month, comparable store sales dropped into the negative double digits, culminating in a weather effect on comparable store sales for all of January that is estimated at more than 300 basis points."

Efird noted that lower-than-anticipated sales in the last week of January will reduce earnings for the final quarter of 2013 by approximately $0.03 per share. Fred’s now expects to report fourth quarter earnings per diluted share in the range of $0.13 to $0.16 cents versus earnings of $0.15 per diluted share for the comparable 13-week period last year.

"With January closing out the fourth quarter, we had success in several areas, most notably in our reconfiguration departments that include pharmacy, pet, auto and hardware, which will carry forward in 2014," Efird said. "We are also in the process of revamping our fourth quarter marketing, promotion and pricing strategies to respond to changing consumer buying habits, along with the increasing popularity of internet shopping. We are confident that our strategies to build a strong presence in specialty pharmacy and clinical services, together with accelerating pharmacy acquisitions and new pricing, promotion and marketing programs, will lead to continued success in 2014."

Fred’s sales for the four-week month of January and 52-week fiscal year 2013, which ended Feb. 1, were compared against five-week month and 53-week year-earlier periods. To make the January sales results for 2013 comparable with those of the prior year, Fred’s eliminated the first week of the month, quarter and year in 2012 to make similar four-, 13- and 52-week periods. 

During January, Fred’s opened one new store and two Xpress pharmacies. For the year, Fred’s added a net total of 25 new locations, consisting of 11 new stores and 14 new Xpress pharmacies, which was offset by the closing of 25 store locations and eight Xpress pharmacies. The company also opened 26 new pharmacies in 2013 and closed 17, for a net addition of nine pharmacies during the year.

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