It’s near the bottom of the list of life’s likeable experiences, somewhere alongside going to the dentist.

I’m talking about taking your car to be serviced.

Rightly or wrongly, I use the main Audi dealer, in Derby. They did me a very decent favour with a wheel problem once, and so I reward them with my loyalty, and – guardedly – I trust them.

Textbook customer service stuff. So far, so good.

Today’s visit started with a smile, not just from the service receptionist. The showroom sound system plays Radio 2, which this morning featured ‘Oh Lord won’t you buy me a Mercedes Benz’.

This dealership gets a good rap on review websites, and I can see why. The team are (on the whole) very personable, they say all the right things when you book, they make a day-before courtesy call, they clean the car inside and out, and so on.

I will skim over their not so generous offer of a pair of wiper blades for £34, because something has to fund all the suits in the building.

But at the very end of an otherwise stress-free visit I was cheerily advised that I would get a phone call from Audi, just “to make sure that you were extremely satisfied.”

High value cars, no value feedback.
Why spend scarce resources collecting it?

Not my first observations on this subject but…

Since the Christmas reporting season, analysts and City commentators have quickly turned negative on the ‘big box’ retail format.

Online retail may have reached a tipping point and it is clearly damaging conventional retailing, so it is entirely rational and understandable that there should be concern expressed over the future floorspace ambitions of the major food groups.

But land isn’t cheap and the supermarkets have it in the bank. Moving into non-food was a natural but ambitious progression, and something else will take (some of) its place in the large store format in future. Some may become ‘dark stores’ but others will refocus their selling areas.

Meanwhile Capital Shopping Centres has just revealed the strength of foodservice rental in its malls, as it seeks to enhance the shopping experience, consumers appear only too keen to embrace the convenience (and comfortable security) of eating out in the mall environment, and foodservice operators increasingly say they want to go where the people are. It’s telling when Capital say that half of the Trafford Centre’s business is now done after 5pm.

So, if online retail means the food retailers may have to be even more about food in future in some stores, why wouldn’t they be attracted to foodservice?

In-store cafes have historically been moderate at best, appealing to a modest section of the footfall.

From the first steps into in-store Costas, what’s next on the menu for those big boxes?

According to the Local Data Company we have 48000 empty shop premises in our town centres. 10000 closed in 2010 and 2011 alone, with footfall in centres outside central London down -10% in the last 3 years, according to a report for the Department for Business, Innovation and Skills.

Nationally the vacancy rate is stable year on year, but the inequalities from town to town are huge. It’s conveniently painted as a north/south divide, but this overlooks high vacancy rates in places like Margate and Dunstable, and comparatively low rates in York, Harrogate and Chester.

It reflects the apparently increasing disparity of wealth in the nation, as disadvantaged consumers in poor areas, with low car ownership, face a growing poverty of access to retail provision. But that’s not just true of retail. This market migration has been vivid in the pub market in recent years.

Majestic Wine’s Chairman Phil Wrigley recently observed that some high streets are in a terminal decline, and (in my view) rightly suggested that redundant space should be made available for much needed housing development. In response, Mary Portas Tweeted her disappointment.

Yet her own review was too narrowly focussed on retailing as the future salvation of our town centres, ignoring the contribution that a bigger resident population could make. It also paid scant respect to the contribution to town centres made by the foodservice and hospitality sectors.

Simply, there are too many shops. Many are being by-passed by economic and behavioural change. Nor are shops uniquely important – we used to have many more petrol stations, cinemas, working mens clubs, bingo halls and pubs than we have now. Change happens.

Past Times went into administration recently. But these are Changing Times for consumer behaviour and prosperity, and that calls for a change of use.

I’m admittedly quite prudent with my hard-earned, but I can’t be the only person that thinks that eating out is a more often than not a combination of good value food, and expensive drink.

And in pubs, you can make that great value food.

Even 25 years ago, I remember the then Marketing Director of Greenalls already saying to me that as an industry we had become guilty of selling cheap food with expensive drink.

And their beer was dismal.

You wouldn’t expect your food retailer to sell keenly priced food with poor value drink would you? Yet in foodservice, it has become a norm.

In the current consumer downturn it really surprises me that we have not seen more attempts in the UK to promote BYO nights. To the average Aussie (and I am not one) taking your own good bottle of wine to the restaurant is perfectly normal. The whole eating out occasion immediately takes on a different value equation.

So, I’m grateful to my good mate Peter Martin at Peach Factory (www.peach-report.com) for alerting me to the fact that M&B’s Browns restaurants are running a BYO promotion in January.

Having said that, it appears to be confined to its ‘Friends’ database, but it’s a good start.

Last week we learned that internet retail sales now account for almost £1 in every £10 spent in the UK, according to new ONS data. Internet retail sales grew by a mere 30% year on year in September.

At about the same time a survey emerged from the IGD showing that 40% of adults expect to shop on line in the next five to ten years compared with the 20% that currently do so.
Then a recent survey for HSBC reported that more than 1 consumer in 8 intends to do all their Christmas present shopping online this year.

Meanwhile the major supermarket groups continue their space race. According to the IGD there’s over 190m square feet of food store selling space currently, and whilst the size of the new store pipeline is uncertain, due to the unpredictable pace of development, some estimates put the figure as high as 41m sq ft.

Much-quoted retail analyst Dave McCarthy at Evolution Securities graphically describes this as “a new Tesco in the planning“.

What’s all this floorspace going to be used for?

The grocery market is already struggling to achieve same store sales growth, even without the addition of potentially 20% more space.
Yet the standard of in-store food-store catering is at best moderate, at a time when the main shopping mall developers are fast upgrading their foodservice offering, and publicly emphasising the contribution it makes to the destination appeal of their centres.

I will eat my crystal ball if the grocers don’t move beyond the coffee shop and bring ‘proper’ branded foodservice into their stores in the next 5 years. That’s a cheap dare, because Domino’s are already on test in a new Tesco in the West Midlands.

It’s the thin end of an inevitable wedge.

This month’s Research magazine carries an article on the work of the insight team at Universal Records. Nice jobs I thought, but it included an eye-catching observation from Universal’s Head of Research, Hanna Chalmers, on the changing nature of music consumption:

“in the past people would badge themselves with the artists they liked – it would define them, whereas now you don’t see that. If you scroll through their music collections you’ll see a huge array, across genres…”.

The essential point, as the article’s author Robert Bain points out, is that today’s young “tend to listen to a much wider range of artists than previous generations.”

And my point is that music is just a symptom of a wider fragmentation trend that affects all sorts of consumer markets – not least beer.

I’m old enough to remember a time when people were keen to identify themselves as a Carling drinker, or a Tetley drinker – or at the very least, as an ale or lager consumer.

No longer. The categories boundaries are blurring, the younger educated consumer is open-minded, socially connected, and keen to experiment, and so the playing field is wide open for a myriad of brands and brewers.

CAMRA has just observed in its new Good Beer Guide that another 99 breweries opened in the UK in the last year – all the dynamism in the market at the small end, whilst the big global giants struggle (and arguably fail) to retain consumers’ increasingly wandering interest.

The supermarkets are of course already on the case – Sainsbury’s Great British Beer Hunt is a great example of customer collaboration, and is currently going through its sales trials phase, to choose the next range of specialist, local brews.

But all good insight is evidence based, and evidence is preferably quantitative – so let’s refer to recent reports from the USA, on the demise of the big beer brands, the kind that made Milwaukee famous.

Of the 23 largest selling beer products in America, eight have lost at least 30% of their sales from 2005 to 2010 – and that list includes Budweiser. Whilst lower calorie beers have been gaining share, damage is being done by the small guys: the craft brewers in the USA saw their volume grow by 11% in 2010 alone, and imported beers grew by 10%.

Many of those craft beers, diverse in style and branding – that huge array of genres, as Universal would say – are increasingly seen in the UK in the on and off trades, and it is absolutely no coincidence that as Molson Coors launches a new campaign for its Carling brand, Marketing director Chris McDonough admits that ‘whilst Carling remains Britain’s best-selling beer, we know we can’t afford to stand still’.

He’s not wrong, because today’s consumer is learning how to play the brews.

See: http://247wallst.com/2011/09/09/the-eight-beers-americans-no-longer-drink/
http://www.research-live.com/

The difference between eating out and eating in? It’s increasingly not clear-cut.

Asda has recently introduced a counter serving “restaurant quality food” supplied by an Asian restaurant operation, Zouk, which has two restaurants of its own, in Manchester and Bradford, with another one to come in Liverpool in 2012. (www.zoukteabar.co.uk)

It has trial ‘Zouk Deli’ bars trading in four stores in the Midlands. The first trial store was Small Heath, in the ethnically diverse heart of inner city Birmingham.

With generous main courses priced at £4.50, and a meal deal of three main courses for £10, you get ready meals supplied by a restaurant, but to eat at home, and at well below typical restaurant take-away prices.

The range is wide, the quality – on a sample of three meals – is excellent, and the portions are generous. The value is unquestionable, and there’s none of that expensive restaurant drink to pay for either.

No one should doubt that the supermarket groups will aggressively defend their share of the food pound. The simple notion that the UK food market will trend smoothly towards the American market model, of nearly 50% spent out of home, is something they just will not let happen.

A new initiative like the Zouk Deli is just one part of the grocers’ increasingly determined fight for the consumer’s dining occasions.

We should expect them to turn up the heat yet more, especially in a consumer downturn. Sure enough, Asda has already announced an expansion of this test into some London stores next year, this time with a different regional restaurant partner.

Photos from Small Heath, and an example menu can be seen on  http://www.twitpic.com/e/1sz0

Some businesses, and sectors, elect to charge seemingly greedy prices for add-on elements of their core proposition.

Either because it’s a historical convention that is apparently addictive, or because of a deliberate policy.

Think about the price of snack food and drinks at the cinema – recent Mintel research says that almost 9 in 10 cinema goers consider food and drink to be overpriced. (see http://bit.ly/oDFYiF).

Think about Ryanair’s stance on the pricing of everything other than the flight itself. Anything and everything it conceivably could think of in fact.

And think about the way that restaurants price their wines.

All these examples serve to contaminate the value image of the basic proposition.

To the point where some consumers, especially in these straightened times, will simply decide not to buy at all.

Mintel’s view on the pricing policy of cinemas?  – “the industry runs the risk of pricing itself out of competitiveness….Cinema chains are going to have to tread very carefully in the next 12 months with their pricing….consumers are starting to feel their custom is being taken for granted by operators.”

NPD Crest’s view on restaurant pricing? – “full-service restaurants are still too expensive and they are out-pricing themselves, particularly with alcohol.”

I need say no more, except you exploit your customers at your peril.

Top marks to Sainsbury’s.

I have just participated in their Great British Beer Hunt, a competitive tasting of a range of  bottled beers from a diverse range of regional and local brewers, in my case from the Midlands and the North.

Selected via the Nectar database (thank you Mrs Martin), JS customers with some beer purchasing history (though not all that much in our case) were invited to one of four regional heats. Four winning beers from each regional heat will go forward for a one month listing later in the year with the best sellers gaining full national listings thereafter.

A simple idea, well executed, and as a beer enthusiast I can say this is very probably the most motivating  reward I have had from the Nectar card, and Sainsbury got my willing participation (and that of all the many other attendees) for nothing.

This was not just a tasting either, as the exhibiting brewers were available to talk to afterwards, giving them some free informal direct feedback too.

They call it Crowdsourcing.

But whatever you call it, it’s to be applauded.

Loyalty – it’s one of the most ambiguous and misquoted words in marketing.

A recent US study into out of home coffee purchasing habits gained a lot of coverage –  because McDonalds’ coffee customers are more “loyal” than those of Starbucks. Allegedly.

http://www.thewisemarketer.com/news/read.asp?lc=f59024ix3431zj

But surely it’s no surprise that McDonald’s coffee consumers should make a higher proportion of their coffee purchases under the Golden Arches, compared to the buying behaviour of the Starbucks customer?

McDonald’s is huge at breakfast, and whilst the data is not revealed in the news story, I’ll wager that’s where the fast food chain makes a large proportion of its coffee sales – an occasion that’s particularly prone to habitual daily behaviour, and where the purchase has a comparatively functional, rather than emotional element.

Conversely, it’s highly likely that Starbucks coffee buyers include far more considered consumers of coffee, who like to consume it on a wider variety of occasions, moods and dayparts – and therefore from a wider variety of places.

It’s all about the mode of purchase. It quite likely has nothing at all to do with ‘loyalty.’

McDonald’s coffee buyers are probably just more prone to habitual purchase.

When you think about loyalty, mind your language.