Retail & Merchandising

Tesco’s share price (c. 440p) is now the highest it has been for almost 12 years! In the last 3 years the share price has more than doubled. The killer graph below visualises how c.£70bn in sales converts to £1.6bn in net profit last financial year as the retailer continues to go from strength to strength. ➡ Strong Financial Performance Q1 2025: • Group like-for-like sales up 4.6% • UK food sales +5.1%, non-food +6.2% • Online sales +11.5% ➡ Key highlights (UK) • LFL sales grew by 4.0%, with growth both in stores and online • Volume growth was ahead of expectations • Market share grew +67bps year-on-year to 28.3%, marking 21 consecutive four-week periods of growth by year-end, and the highest since 2016 • Clothing LFL sales grew 3.0%, driven by womenswear, F&F Active, and F&F Edit ranges • Online sales grew 10.2%, including c.3ppts from Tesco Whoosh. Sales from Whoosh almost doubled YoY, average online orders per week up 10.8% year-on-year to 1.3m. Here's why I believe Tesco are in such a commanding position: 📲 Data Monetisation Tesco is orchestrating the UK's largest closed-loop retail ecosystem. With 23M Clubcard households, they've created a virtuous cycle: customer data drives personalisation, which increases engagement, which generates more data. Their partnership with dunnhumby transforms this into a powerful advertiser proposition - true closed-loop measurement across online and offline touchpoints. This is retail media 2.0. What's more, retail media typically delivers 60-70% margins, compared to traditional grocery retail's 2-5%. By building this high-margin revenue stream, built on strong tech underpinnings, their media tech proposition has become a key strategic asset boosting their valuation. It's a page out of the Amazon/Walmart's media businesses playbook where this part of the business is valued at multiples of their retail operations. 🎯 Core Business Focus Over the last few years, the business has developed strategic discipline. Tesco has systematically simplified its business model - exiting non-core markets and doubling down on what they do best: food retail with a magic sprinkle of data. It’s been fascinating to see how sometimes doing less allows businesses to achieve more. 🤖 AI-Powered Customer Centricity The deployment of AI to analyse shopping patterns is providing a tactical advantage. Tesco has "weaponised" their data, and as the benefits of GenAI are leveraged even further, it feels to me that they will double down on this opportunity. By using predictive analytics to anticipate customer needs and suggest relevant products, Tesco is moving from reactive to predictive retail. In my view, the next stage of personalisation. These results showcase Tesco's ability to balance traditional retail strength with digital innovation while maintaining strong market leadership. Learn more about Retail Economics and see how our insights help business gain clarity and actionable insights.

Loyalty is failing. Gen Z & long-term commitment. 22% of Gen Z consumers consider themselves loyal to one brand is a clear warning for legacy loyalty strategies. Unlike previous generations, Gen Z doesn’t see brand loyalty as a long-term commitment, they’re loyal to moments, not just names. +43% increase in engagement and sales conversions among Gen Z Beauty brands offering "limited-edition drops" and collaborative experiences. +71% Gen Z say they would rather spend money on an experience than a product. >>Loyalty is FAILING, but why<< +Transactional systems feel outdated: Point-based rewards for repeat purchases don’t excite this audience. They expect more than discounts or free samples. +They’re brand-agnostic but experience-driven: Gen Z freely switches between brands if the experience, aesthetic, or values feel fresher or more aligned with their identity. +They buy into stories, not just products: They want to align with brands that represent something, social causes, cultural movements, or communities they relate to. >>DYNAMIC LOYALTY<< What’s this? as it name indicates its a system that rewards interaction, aligns with their values, and constantly evolves. And that is what your brand needs. → Create experience-driven loyalty programs: Offer early access to limited drops, invite-only events, or backstage content. Think like a fan club, not a punch card. +Example: A loyalty tier that unlocks tickets to a pop-up experience or an exclusive AR filter. →Let them co-create: Invite Gen Z customers to co-develop product ideas, designs, or campaign themes. Give them ownership in your brand’s creative journey. +Example: Voting on packaging designs or joining beta tester groups. →Align with their values: Sustainability, inclusivity, and social good aren’t nice-to-haves. they’re expectations. Use loyalty programs to reward actions too, like recycling, sharing causes, or supporting small creators. +Example: “Earn loyalty points by returning empties or attending a sustainability workshop.” →Deliver constant novelty: Rotate limited editions regularly. Use scarcity and surprise to create FOMO and buzz. +Gen Z doesn’t commit to a single brand, but they’ll keep returning if each visit feels fresh and share-worthy. →Go omnichannel but social-first. Should live across TikTok, Instagram, pop-ups, and web. Let them earn or unlock rewards through social engagement, not just purchases. +Example: A user gets exclusive content or perks for creating UGC with your brand. Bottom Line. Loyalty must be earned over and over through experience, relevance, and emotional connection. Think dynamic loyalty: a system that rewards interaction and go for it. Find my curated search of examples and get ready for your next HIT. Featured Brands: Balmain Benefit Chanel Charlotte tilbury Cerave Fennty L’Oreal OGX YSL #beautypackaging #beautybusiness #beautyprofessionals #experienceretail #luxuryexperiences #genz

From my last 10 years of building an omnichannel brand with significant offline presence, one of my biggest learning is that irrespective of whether you are a founder building a consumer brand or an investor evaluating a consumer brand, the one metric to obsess about while looking at the health of the offline business is “retailer repeats” Doing primary sales by appointing distributor is the easiest thing to do. Doing secondary sales by placing the product in retail counters is a bit tougher than primary, but still fairly straightforward But what is really difficult and really bares whether you have PPCMF( Product Price Channel Market Fit) is repeat and regular sales from the same counters where you have placed your product If you are not able to get repeat sales month on month from the same counters, it means either of the 2 things: a) You have placed your products in wrong counters ( Eg: If I sell premium fans and place products in counters which sell only economy fans, it is bound to fail). This often happens when sales team is incentivized on reach( number of counters you place the product) and they take shortcuts to achieve the reach target b) The product at this price point with current awareness levels is very difficult to sell from this channel So, track M1 repeats( repeat billing in next 1 month) and M3 repeats( repeat billing in next 3 months) obsessively. Unless you are in a very seasonal/slow moving category, M1 repeats should be 50% at least. M3 repeats should be 80% plus For investors investing in Series A/B stage in omnichannel brands who just went offline , start looking at quality of revenue. Because offline market in India is so deep, brands can get away just by doing primary and placement secondary sales for 9-12 months. And without repeats it will come crashing down at some point. And if investors valuing these brands on a revenue multiple will find themselves in a tough spot And in case you don’t have access to system secondary sales data, look at hard metrics like collections and geography split of sales. If the accounts receivables also keep on increasing with revenue, it is a sign of channel stock increasing. If the brand has to keep opening new markets and expanding to new geographies to get sales, it is a sign of no PPCMF The best brands will have high repeats, continuously increasing throughput from existing retailers and will not be spreading themselves too thin from a geography point of view in the early stages of offline expansion

🚨Amazon has built a really cool new ad tech to monetise Prime videos, but it’s not what you would have thought! 🚨 To appreciate this new ad tech we need to go back in time and look at some history. We would have all watched on movies and tv shows where products have been strategically placed to drive brand awareness and recall. The hit show Stranger Things had about a 140 brands featured in the 4th season with some estimates sizing it to $27million in brand placement value. And this is just one season of one show. As more and more people are disengaging with intercepting ads, brands and media producers are trying innovative ways to gets brands in front of eyeballs without being skipped. Now if a studio had to integrate with brands, it requires for them to coordinate before hand with the brands and figure out where to strategically place the products and shoot the content. Enter Amazon’s Virtual Product Placement Technology. Virtual product placement is an emerging technology that inserts a digitally rendered product, billboard, or logo into a movie or TV series after it has been filmed. Amazon collaborates closely with content creators when determining placement locations and available product categories for each participating title. All decisions are made in line with the artistic vision for each movie or series, with a shared goal that placements will not interfere with the story or affect the viewer’s enjoyment. Brands are expected to spend upwards of $125bn by 2026 on video ads, so it’s a pretty huge market they are going after. Stats also show that 63% of viewers say they feel the urge to buy a product when they see it featured in a TV show with GenZ leading the pack. In a specific case study, Bubly a sparkling water brand saw a 18.1% lift in aided recall, 6.8% lift in brand favourability, 16.5% lift in purchase. This ad format becomes even more powerful when you combine it with Amazons e-commerce marketplace where marketeers can do full funnel advertisements all the way from awareness to purchase. Secondly, with post production virtual product placement, the same product placement could be bid by different brands for e.g the scene having bubly could very well also have any other canned drink which ever fit into the category. I must say this is by far one of the most impressive ad tech I have come across in recent times and Amazon is truly Priming us to purchase.

It’s easy as a PM to only focus on the upside. But you'll notice: more experienced PMs actually spend more time on the downside. The reason is simple: the more time you’ve spent in Product Management, the more times you’ve been burned. The team releases “the” feature that was supposed to change everything for the product - and everything remains the same. When you reach this stage, product management becomes less about figuring out what new feature could deliver great value, and more about de-risking the choices you have made to deliver the needed impact. -- To do this systematically, I recommend considering Marty Cagan's classical 4 Risks. 𝟭. 𝗩𝗮𝗹𝘂𝗲 𝗥𝗶𝘀𝗸: 𝗧𝗵𝗲 𝗦𝗼𝘂𝗹 𝗼𝗳 𝘁𝗵𝗲 𝗣𝗿𝗼𝗱𝘂𝗰𝘁 Remember Juicero? They built a $400 Wi-Fi-enabled juicer, only to discover that their value proposition wasn’t compelling. Customers could just as easily squeeze the juice packs with their hands. A hard lesson in value risk. Value Risk asks whether customers care enough to open their wallets or devote their time. It’s the soul of your product. If you can’t be match how much they value their money or time, you’re toast. 𝟮. 𝗨𝘀𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗥𝗶𝘀𝗸: 𝗧𝗵𝗲 𝗨𝘀𝗲𝗿’𝘀 𝗟𝗲𝗻𝘀 Usability Risk isn't about if customers find value; it's about whether they can even get to that value. Can they navigate your product without wanting to throw their device out the window? Google Glass failed not because of value but usability. People didn’t want to wear something perceived as geeky, or that invaded privacy. Google Glass was a usability nightmare that never got its day in the sun. 𝟯. 𝗙𝗲𝗮𝘀𝗶𝗯𝗶𝗹𝗶𝘁𝘆 𝗥𝗶𝘀𝗸: 𝗧𝗵𝗲 𝗔𝗿𝘁 𝗼𝗳 𝘁𝗵𝗲 𝗣𝗼𝘀𝘀𝗶𝗯𝗹𝗲 Feasibility Risk takes a different angle. It's not about the market or the user; it's about you. Can you and your team actually build what you’ve dreamed up? Theranos promised the moon but couldn't deliver. It claimed its technology could run extensive tests with a single drop of blood. The reality? It was scientifically impossible with their tech. They ignored feasibility risk and paid the price. 𝟰. 𝗩𝗶𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗥𝗶𝘀𝗸: 𝗧𝗵𝗲 𝗠𝘂𝗹𝘁𝗶-𝗗𝗶𝗺𝗲𝗻𝘀𝗶𝗼𝗻𝗮𝗹 𝗖𝗵𝗲𝘀𝘀 𝗚𝗮𝗺𝗲 (Business) Viability Risk is the "grandmaster" of risks. It asks: Does this product make sense within the broader context of your business? Take Kodak for example. They actually invented the digital camera but failed to adapt their business model to this disruptive technology. They held back due to fear it would cannibalize their film business. -- This systematic approach is the best way I have found to help de-risk big launches. How do you like to de-risk?

📸 THERES something SEOs and content marketers can learn about this retail strategy: Cadbury isn’t in the chocolate aisle. It’s in the wine aisle. Why? Because customers pair wine with chocolate. They’re not chasing the “chocolate” buyer - they’re meeting the “Friday night in” shopper. They’re intercepting the intent, not just the category. 🍷+🍫 = A full experience. So why are we still obsessed with ranking for “chocolate” when the real magic happens in “wine night snacks,” “date night ideas,” or “best pairings with red wine”? 👀 If you want to own the moment, stop thinking in silos. Start thinking like a shopper. Like a user. SEO isn’t about ranking for what you sell. It’s about showing up where buying decisions happen. 👟 Trainers showing up in “marathon prep checklists” 💅 Nail polish on “wedding guest outfit” pages 🎧 Headphones on “how to sleep better” content 🧘 Protein shakes in “morning routine for energy” searches 🏕 Outdoor gear in “solo travel safety” guides Think outside your aisle. Own the occasion, not just the product.

When L'Oréal uses AI to create new hair colors based on social media trends, they're in salons within weeks. Kraft Heinz—dead last in our study—still takes months to tweak a formula. After analyzing 26 major CPG companies at IMD's Center for Future Readiness, I discovered what separates winners from losers: The most future-ready companies treat consumer data like insider trading information. BACKGROUND: CPG in 2025 is brutal. Inflation persists. Gen-Z demands sustainability without premiums. Tariffs reshape supply chains daily. McKinsey & Company identified 150+ AI use cases for CPG transformation. Only 5 of 26 companies actually execute them. THE REVELATION: Coca-Cola didn't randomly launch Topo Chico Hard Seltzer. Their AI spotted the trend through social listening while competitors debated in boardrooms. By launch, they'd secured distribution nationwide. That's not innovation. That's prediction. What separates the top 5: L'Oréal (#1): 3.5% of sales to R&D. AI analyzes preferences real-time. Virtual try-on apps. Creates products from social trends. A 110-year company with startup velocity. The Coca-Cola Company (#2): Democratized AI internally. Every manager accesses demand forecasting. They analyze weather + social sentiment + sales simultaneously. These aren't tech companies selling beauty and beverages. They're prediction machines that happen to make products. THE WINNER'S FRAMEWORK: 1. AI at scale, not in pilots Winners integrate into workflows. Losers run demos. 2. Supply chains that anticipate Real-time visibility + AI forecasting = competitive firepower 3. D2C as intelligence goldmine 73% use multiple channels. Mine every interaction. 4. Disrupt yourself first Coca-Cola launched Costa Coffee, hard seltzers. Grew. Kraft Heinz protected legacy brands. Shrank. 5. Sustainable without premium Gen-Z spending hits $12T by 2030. They demand action at everyday prices. —— The inconvenient truth: Most CPG companies treat data like reporting instead of radar. Winners don't predict trends—they're already shipping products while competitors debate. Technological patience (knowing when to scale) + organizational agility (pivoting fast) = market domination. Three years from now, every CPG company operates like L'Oréal. Or they don't operate at all. P.S. Full Future Readiness Indicator here: https://bit.ly/3YTBzbX

Retail is dead. Foot traffic is down across the board. That’s the narrative we hear over and over being pushed in the media. Yet TALA - Grace Beverley’s brand born online - has opened their first physical store in Carnaby Street this weekend, to queues around Soho & a sell-out ticketed event. So rather than being dead, what if the role of brand retail has simply transformed? My take 👉 The store is no longer solely top of the funnel or entirely about discoverability. It’s the destination. The community hub. The clubhouse. It’s where content becomes tangible. Where brand world becomes real world. Where you walk through the door and it feels like stepping into their Instagram, their TikToks, their values. We’re not just talking racks and rails - there’s a coffee bar, photobooths, events, and experiences. This is community-led commerce. It’s a cultural space disguised as a high street shop. And I believe this is where we see the real revival of the high street - not as a retail destination, but as a brand world brought to life. A place to deepen connection with your community - ultimately strengthening the life time value of that customer. The blueprint is clear: Content captures. Community keeps. IRL deepens. TALA joins the ranks of Gymshark, Odd Muse and Glossier, Inc. - brands that built strong digital tribes before laying a single brick and now use their stores as destinations for the community to connect IRL. And in a world where discovery is unpredictable - spanning podcasts, group chats, TikToks and Substack - trying to funnel people in linearly is a lost cause. The smartest brands aren’t forcing a path. They’re showing up where their community already is & then inviting them in deeper. Retail isn’t dead. It’s reinventing itself & I'm so here for it. Calling it now - your favourite digital brand worlds will manifest in real life in the next 18 months whether through pop ups or permanent stores. Mark my words!

With the likes of B&M Retail, Poundland & Dealz and Primark coming under pressure, are we falling out of love with discounters? Britain isn’t, but our relationship is evolving. Consumers are savvier, competition is fiercer, and legacy players need to evolve to stay relevant against changing shopping behaviours. The surge during the cost-of-living crisis, when middle-class shoppers embraced value retailers, was always going to be difficult to sustain. Now, with discretionary incomes gradually recovering, we’re seeing selective spending on small indulgences and experiences. That said, middle-income families remain under pressure, squeezed by rising housing costs, rent hikes, and debt repayments. The least affluent households, who are core discount shoppers, are feeling the brunt of the squeeze. Their discretionary income remains lower than 2021 levels, reinforcing price sensitivity as the economy navigates a long and uneven path toward stable inflation and growth. But structural issues are also at play. Competition is brutal. Traditional grocers such as Sainsbury's and Tesco have aggressively defended market share with Aldi UK price matches and membership pricing to stave off German discounters. Meanwhile, SHEIN and Temu are rewriting the rules of discount retail in non-food, offering ultra-low prices with ultra-convenience that undercut traditional high street players. At the same time, discounters have struggled with rising prices, eroding their appeal. The omnichannel gap is widening. Primark’s strong click-and-collect performance of late highlights what high street discounters traditionally lack: seamless digital integration. Without it, they risk losing shoppers to cheap online rivals, particularly in clothing and homewares, leaving big box players with excessive store space. Recommerce is also surging. The cost-of-living crisis has accelerated pre-loved shopping just as technology has made second-hand retail more accessible. The likes of marketplace Vinted and parcel locker service InPost make fragmented second-hand spending easier than ever. This interest isn’t going away. We estimate UK recommerce is worth over £6bn today and is set to double to over £12bn by 2028 (Retail Economics, MPB). Concerningly, discounters face another squeeze: rising tax burdens. Retailers must decide whether to absorb costs, automate, or pass on higher prices. In any case, price alone is no longer enough. Long-term resilience depends on product proposition, agility, and digital integration. Great to discuss this with The Times’ Isabella Fish – article linked below. https://lnkd.in/eJUpqa6J ____________________________________ ⤴ Follow me for weekly retail, consumer and economic insights. ____________________________________

MASSIVE NEW EVIDENCE ON THE PRICE ELASTICITY OF BRANDS We can all agree that price is a key marketing mix instrument. In a recent paper that is publicly available, Byron Sharp and colleagues write that brand price elasticities are “remarkably low,” citing a meta-analysis (=a sophisticated summary of previous work) on 1,851 brands published in 2005 by Bijmolt and colleagues. In a thoughtful critique of Byron’s paper, published on LinkedIn, Prof. dr. Koen Pauwels pointed out that Bijmolt reported a mean price elasticity of -2.5. He wrote, “I have never heard anyone call a price elasticity of -2.5 low.” I agree. If you drop your price by 10%, sales increase by 25%. That is a large effect. BUT THE REAL QUESTION IS, IS THIS -2.5 STILL CORRECT TODAY? The mean of -2.5 is based on studies that go back to the 1950s. Much has changed. In the last few years, with my colleagues, I have conducted empirical research of unprecedented scale into the price elasticity of brands, in China (391 CPG brands), in 14 Pacific Rim countries (1,617 consumer durable brands), and in four continents (16,600 CPG brands). So, this new evidence is based on 10x the number of brands in the Bijmolt study. And the evidence is all based on the last 15 or so years. What do I find? THE AVERAGE PRICE ELASTICITY IS IN THE RANGE OF -0.4 TO -0.7. This is certainly not high. Thus, by far most massive, evidence ever collected on price elasticities, using cutting-edge and consistent econometric models, shows that consumer demand is much less price sensitive than we have always thought. It is time to recalibrate our thinking. So, Byron was wrong in the reference but right in the argument.  #business #leadership #grit #history #executivedevelopment