Yet More Probes Into The Great Supermarket Rip-off!

The Australian Government has directed the ACCC to conduct an inquiry into Australia’s supermarket sector, including the pricing practices of the supermarkets and the relationship between wholesale, including farmgate, and retail prices.

The year-long inquiry will also examine competition in the supermarket sector and how it has changed since the ACCC’s last inquiry in 2008.

“We know grocery prices have become a major concern for the millions of Australians experiencing cost of living pressures,” ACCC Chair Gina Cass-Gottlieb said.

“When it comes to fresh produce, we understand that many farmers are concerned about weak correlation between the price they receive for their produce and the price consumers pay at the checkout.”

“We will use our full range of legal powers to conduct a detailed examination of the supermarket sector, and where we identify problems or opportunities for improvement, we will carefully consider what recommendations we can make to Government,” Ms Cass-Gottlieb said.

Like London buses, you wait a long time, then they come in bunches – this is the fourth inquiry currently underway across the sector. As well as price gouging, shrinkflation, supplier management and competition need to be addressed.

In a year, we will know if it was worth the wait!

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Yet More Probes Into The Great Supermarket Rip-off!
Loading
/

Supermarkets To Work Together To Ensure Grocery Supply

Supermarket operators will be able to coordinate immediately to ensure consumers have reliable and fair access to groceries during the COVID-19 pandemic following the ACCC’s granting of interim authorisation.

The interim authorisation will allow supermarkets to coordinate with each other when working with manufacturers, suppliers, and transport and logistics providers.

The purpose of this is to ensure the supply and the fair and equitable distribution of fresh food, groceries, and other household items to Australian consumers, including those who are vulnerable or live in rural and remote areas.

The authorisation allows a range of coordinated activities but does not allow supermarkets to agree on retail prices for products.

“Australia’s supermarkets have experienced unprecedented demand for groceries in recent weeks, both in store and online, which has led to shortages of some products and disruption to delivery services,” ACCC Chair Rod Sims said.

“This is essentially due to unnecessary panic buying, and the logistics challenge this presents, rather than an underlying supply problem.”

“We recognise and appreciate that individual supermarket chains have already taken a number of important steps to mitigate the many issues caused by panic buying. We believe allowing these businesses to work together to discuss further solutions is appropriate and necessary at this time,” Mr Sims said.

The ACCC granted interim authorisation on Monday afternoon after receiving the application last Friday.

“We have worked very swiftly to consider this interim authorisation application, because of the urgency of the situation, and its impact on Australian consumers,” Mr Sims said.

The Department of Home Affairs has convened a Supermarket Taskforce, which meets regularly to resolve issues impacting supermarkets. Representatives from government departments, supermarkets, the grocery supply chain and the ACCC are on the Taskforce. The interim authorisation applies to agreements made as a result of Taskforce recommendations.

This authorisation applies to Coles, Woolworths, Aldi and Metcash. It will also apply to any other grocery retailer wishing to participate. Grocery retailers, suppliers, manufacturers and transport groups can choose to opt out of any arrangements.

The ACCC will now seek feedback on the application. Details on how to make a submission are available on the ACCC’s public register along with a Statement of Reasons.

Mobile Apps Can Be a Double-edged Sword

From The Conversation.

Intense retail competition has led old standbys, such as Sears, to close dozens of stores. Walmart is venturing online more. And Amazon is expanding offline, opening stores and buying Whole Foods. The fight for retail dollars is fierce, and the battleground will soon migrate into the palms of customers’ hands – via apps on their smartphones.

This isn’t just happening with mega-retailers. Moviechains and pet supply stores are increasingly connecting with their customers through their own branded apps. Zumiez, a specialty clothing chain with 600 stores in the U.S., has an app. Scooter’s Coffee, an Omaha-based coffee chain with 200 stores, has one too. So does New York Pizza Oven, a single pizza parlor in Vermont.

Mobile apps are becoming key ways for customers and retailers to interact. Our recent analysis of data from a large U.S. retailer of video games and electronics (whose name we agreed to keep confidential) found that apps can even affect consumers’ offline buying habits.

Growth in use – and spending

The number of people who have the option to use mobile apps is skyrocketing. More than 70 percent of the world population will own a smartphone by 2020. And they’ll spend more than 80 percent of their on-phone time using task-specific apps.

Is there no line because people are ordering ahead on their mobile phones? jessicakirsh/Shutterstock.com

Letting buyers learn about products, discover deals, locate nearby stores and even place orders in advance is a huge business opportunity. At Starbucks, for example, an app allowing people to order and pay on the go – just swinging into the store for pickup – helped customers avoid standing in line and waiting: Over five years, 20 percent of its sales shifted to online transactions.

Research has also begun to show that people who use mobile shopping apps buy more than they might otherwise. After individual shoppers started purchasing using eBay’s mobile app, their purchases from eBay’s website increased. Similarly, a tablet app from major Chinese e-tailer Alibaba led customers to spend about US$923.5 million more each year with the company than they would have without the app. Some of that increased spending is from shoppers using the app to buy impulsively – making one-off purchases of items they are interested in, or adding items to larger orders.

Our research recently found a new dimension to this app-related spending boost. Over 18 months, customers who downloaded the branded app of the retailer we studied spent 30 percent more in stores than they would have without the app. We can infer this by looking at data on customers’ spending before and after the app was installed, and by comparing that to the spending of a random sample of customers who had similar demographics and shopping behavior before the app launched.

We learned that most of the increase was because customers used the app to find out about products before buying them. For example, by closely analyzing the data on app use and purchases, we could see these customers started increasing purchases of lesser known video games when they started using the app.

App users return products more

While shoppers who use a retailer’s mobile app tend to buy more online and in stores, we find that they are also more prone to subsequently returning the products they purchased.

In particular, customers who use a retailer’s app tend to return products most often when they purchased those products on discount, and within seven days of making the original purchase. Apps often make it easier to purchase items on impulse. When customers receive some of the items and are dissatisfied, they regret the decisions and return the items.

Even taking into account the high rate of returns, app users spend more both online and in physical stores. But that’s when the apps work as customers expect them to.

App failures –- and consequences

Apps that load information slowly or crash frequently can deter not only online purchasing, but in-person spending, too. Surveys show that more than 60 percent of users expect an app to load within four seconds. And our ongoing research suggests that more than half of users will abandon an app that freezes or crashes frequently.

App slowdowns can be costly. One estimate suggests that if each Amazon webpage took just one second longer to load, the company’s sales could drop as much as $1.6 billion a year. For smaller retailers, a similar drop of 2 to 3 percent would be a smaller dollar amount but still a significant blow.

Our ongoing research with Stanford’s Sridhar Narayanan suggests that poor app performance reduces users’ in-store spending too. Specifically, we studied how shoppers react when an app is not accessible for five or six hours, due (users were told) to a server error. Our preliminary results suggest that in the following two weeks, those shoppers spent 3 to 4 percent less in stores than they would have otherwise. Less-frequent customers reduced their spending even more than the company’s more regular shoppers.

Unnati Narang discusses her ongoing research on failures in mobile shopping apps.

Interestingly, customers who experience app failures spend less in stores, but their online spending remains unchanged. A deeper analysis indicates that when a retailer’s app fails, shoppers often go to the retailer’s website to complete their intended transactions. But the negative experience from app failure discourages them from buying more in the retailer’s store.

Our research illustrates some ways mobile apps can be a double-edged sword for customers and retailers alike. Shoppers can use apps to learn more about prospective purchases, be inspired on the fly and save time at the cash register. But if the software fails, they may be frustrated, discouraged and even spend less at physical stores. Retailers can see increased sales and faster transactions, but may have to handle more returns – though they’ll still make more money. The longer-term effects of mobile apps on the retail business have yet to be seen, of course, but in an ever-changing landscape, companies and customers alike will be exploring the options.

Authors: Venkatesh Shankar, Professor of Marketing; Director of Research, Center for Retailing Studies, Texas A&M University; Unnati Narang, Ph.D. student in Business Administration (Marketing), Texas A&M University

 

Amazon should bring Whole Foods to Australia

From The New Daily.

A leading economist has welcomed Amazon’s shock $US13.7 billion takeover of Whole Foods, saying it could be very good news for Australian grocery shoppers.

UNSW Professor Richard Holden, who spent a decade teaching and researching at top US universities, said he hoped Amazon would open Whole Foods supermarkets in Australia, as the sector is ripe for a new premium competitor.

“As someone who lived in the US for 10 years and shopped at Whole Foods every second day, it would be great for the consumer if they came to Australia,” he told The New Daily.

Amazon announced on Saturday it had signed a binding $US42-a-share merger contract with Whole Foods, which has 460 supermarket outlets across the US, Canada and the UK.

This was a radical shift in strategy for Amazon. Almost overnight, it went from an almost entirely online retailer to an enormous bricks-and-mortar grocery powerhouse.

With last year’s launch of AmazonFresh, an online grocery delivery service, it’s clear CEO Jeff Bezos wants Amazon to change grocery shopping forever.

“Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy,” Mr Bezos said in a statement.

“Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decades – they’re doing an amazing job and we want that to continue.”

All physical stores will continue to operate under the Whole Foods brand, Amazon confirmed.

Professor Holden said the premium supermarket chain, which specialises in healthy, vegan and eco-products, could be expanded to Australia after AmazonFresh officially launches here in 2018.

“Coles and Woolworths seem to charge fairly high prices, so if someone was to come in with a premium offering like Whole Foods, then they’re not trying to battle into a market where people are used to paying extremely competitive prices,” he said.

“It’s certainly a market where a premium offering like Whole Foods might appeal, and where prices are already, shall we say, not low.”

Professor Holden said his experience of shopping at Whole Foods regularly while living in the US was overwhelmingly positive.

“They have a lot of organic food, really high-quality produce, a lot of incredibly good prepared meals as well. It’s like shopping at David Jones food hall, basically, but for everything,” he said.

“If you had to pay incredibly high prices, that would be one thing. But they’re really not that bad, compared to Australian prices.”

Whole Foods will join AmazonFresh for groceries, Amazon Prime for TV shows and movies, Kindle for e-books, Audible for podcasts and audiobooks, Echo to rival smart assistants like Apple’s Siri, and IMDb for movie reviews, among many other subsidiary companies.

Maria Prados, vice-president at online payments platform Worldpay, said in a statement that Amazon’s purchase was a “clear sign of its intention to disrupt the grocery industry globally”.

“From the ‘Dash’ buy button, to the launch of the AmazonFresh service last year, the eCommerce giant has been taking clear steps to build its position in the grocery sector. And investing in a physical presence could be the key to Amazon’s success in this space,” Ms Prados said.

Four in Five Retailers Say Mobile Is Having a Major Effect

Mobile’s importance is becoming undeniable according to eMarketer.

Mobile still accounts for a fairly small share of total retail sales, and, in many markets, even of digital retail sales. But retailers are feeling the impact of mobile devices.

In 2014, a little over half (57%) of retailers worldwide surveyed by payment solutions provider Payvision reported experiencing major growth in mcommerce sales. Among the total, 33% strongly agreed that growth was significant—already a sizeable share.

But by 2015 the evidence in favor of mcommerce was overwhelming. Nearly half of respondents were now in the “strongly agree” group, with an additional 34% agreeing more generally. Overall, 79% of retailers worldwide were undergoing major mcommerce growth this year.

More retailers around the world are getting into omnichannel as a result. This year, 91% of respondents said they offered customers the option to shop and pay across multiple devices. That was up from 84% last year.

Nearly three in four respondents reported this year that such an option had boosted sales via digital devices. In addition, 71% of retailers surveyed said they were focused on offering seamless shopping across multiple devices as well as offline sales channels.

eMarketer estimates that in 2015, US consumers bought $74.93 billion worth of goods and services via mobile devices, up 32.2% over 2014 spending levels. This year, mobile accounted for 22.0% of all retail ecommerce sales in the US, up 3 points since last year. It still made up a tiny portion of total retail sales, however, at just 1.6%.

In some other world markets, mcommerce is a bigger part of the picture. In South Korea, for example, mcommerce sales made up 46.0% of retail ecommerce sales and 5.1% of total retail sales this year, according to eMarketer estimates. In China, 49.7% of retail ecommerce sales and 7.9% of all retail sales occurred via mobile devices in 2015.

Is Amazon the New King of Retail?

From Brandchannel.

When Jeff Bezos founded Amazon as an online purveyor of books and then expanded the online giant into more and more verticals, he continually explained to investors that he wanted to forego short-term profits in favor of long-term diversification and domination of the businesses that Amazon entered. Has Amazon accomplished that? Check.

And obviously it’s not finished yet, as recent predictions indicate that Amazon will surpass Macy’s as America’s biggest apparel retailer in the next couple of years. And according to reports from Silicon Valley, it’s exploring more offline options for pickup and brick-and-mortar stores in the US, building on tests now underway in Europe and Canada.

When Amazon reported a quarterly breakthrough into the black on July 23rd, investors furiously bid up the stock. And in the process, Amazon crossed another historic threshold: It became worth more to investors than Walmart, the king of “old-fashioned” retailing.

Wall Street cognoscenti had predicted another loss and a more modest sales gain than the nearly 20 percent increase Amazon reported, which certainly helped its appeal. The 14 percent jump in its stock price on Thursday added more than $30 billion to Amazon’s market value and pushed its capitalization snapshot for the first time past Walmart’s, which ended the day at $230 billion versus Amazon’s $250 billion.

“The retail king has lost its crown,” declared Quartz. “The changing of the guard reflects the growing consensus that online retailing will play an increasingly central role in the global economy over the coming decades and underscores the high premium investors are placing on the growth they expect Amazon to deliver.”

That’s not the whole story, of course. Walmart is hardly giving up. Under new CEO Doug McMillon, it is fighting back furiously to become a true rival force to Amazon in e-commerce—witness Walmart’s attempts to echo the Amazon Prime Day promotion on July 15. And Walmart has recovered some of its mojo in the crucial bricks-and-mortar space, stemming sales declines and boosting wages for its lowest-paid workers.

Amazon is at a new sort of pinnacle vis-a-vis Walmart right now. But it promises to be a continuing game of king of the hill.