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The Cost of Promotional Sales
Grocery retailers frequently use promotional sales to lure customers into stores. Retailers hope customers will purchase higher margin products while they shop for the promoted items. Chicago grocers Jewel-Osco, subsidiary of SUPERVALU, and Dominick’s, subsidiary of Safeway, both follow use this marketing strategy, changing promotions twice a week. The promotional sales may increase customer traffic, but they may also lead to the demise of the store. I suspect, retailers that use promotional sales, on every day products sold year round, increase the cost of doing business and decrease supply chain efficiency.
Used by many grocers, promotional sales are the activities, materials, devices, and techniques used in the advertising and marketing of products. I separated their cost into two different categories; direct costs and indirect costs. I see the money spent on the processes and material to implement the promotional sale as direct costs, and the money lost due of the effects of the promotional sales are considered indirect costs. From my point of view, both of these costs are significantly high, high enough to possibly outweigh any benefit of the promotional sales. If I were managing a retail grocery operation, these are the items I would consider when deciding whether or not to continue utilizing promotional sales.
ERP and the Business of Change
I saw an article over at SmartChange™ about ERP and the Business of Change. It got me thinking of the culture and business practices I witnessed at my last job at USG. All three main points Marcelino Sanchez reviewed hit very close to home.
Individual Change… An individual may be confronted with a new user interface, a new “best practice”, a different way to make decisions, or any number of new requirements. When this is the case, individuals will tend to experience one or more of the following five key factors: fear, anxiety, confusion, loss of control, or erosion of power or influence in the organization. The more an individual feels any of these emotions, the less likely they are to accept the new way of doing things. Lack of acceptance will diminish or delay the benefits of the ERP effort…
ED HAYES 