Wednesday, 30 July 2014

The Battle Over a Milk Jug

Mac's Convenience Stores to sell 3 litre milk jugs as part of pilot project.

The dairy industry, like many agribusinesses, is a highly regulated one. Many consumers would be surprised to learn that their choices of milk containers are regulated by the Ontario Farm Products Marketing Commission. In Ontario the Milk Act regulates “the types and sizes of containers that shall be used for fluid milk products,” which currently does not allow for a 3 litre container.

Milk is typically sold in cartons of between 1-2 litres, or in bags totalling 4 litres per package. The Ontario Dairy Council is petitioning to open the field to a 3 litre middle option, but has encountered stiff resistance from dairy farmers. The producers fear that a 3 litre size will spur consumers to downsize.

Mac's Convenience Stores received the green light from the Ontario Farm Products Marketing Commission to sell 3 litre plastic milk jugs as part of a one year trial. While retailers argue the move is about increasing consumer choice, another motive may be at play. Many large grocery and convenience stores rely on milk as a loss leader, selling it at little to no profit in order to get customers through their doors and sell them more profitable items. Providing a smaller milk format would allow retailers to market a lower priced item, but not necessarily sell more milk.

Monday, 28 July 2014

Apple's iBeacon Technology Comes to Hudson's Bay

Partnership with Swirl to deliver targeted promotional messages to customers.

Hudson's Bay Queen Street will deploy Apple's iBeacon

Hudson's Bay announced today that working with Swirl it was launching an in-store smartphone marketing platform. Using beacon technology, the retailer will deliver targeted content via their own and third party phone apps in selected stores.

Launched by Apple in 2013, iBeacon allows technology companies and retailers to reach consumers via apps running on their mobile phones. Small puck-like devices are installed inside stores which trigger the apps on a consumer's smartphone. The retailer can deliver customized welcome messages, promote special offers, and even target the message to specific departments as a customer walks through a store. In more advanced systems iBeacon can also be used to facilitate payments.

"Beacon technology is the future of retail marketing and Swirl's platform will assist us to make every visit to Hudson's Bay or Lord & Taylor even more rewarding for our customers." said Michael Crotty, Executive Vice President and Chief Marketing Officer at HBC.

The Swirl beacons utilize Apple's iBeacon technology as well as Bluetooth transmission to deliver content. Multiple beacons will trigger as customers travel throughout the store providing promotional content. The size of a department store is a particular advantage for this technology as it allows the retailer to deliver multiple messages across a broad array of product categories. In Toronto, Hudson's Bay will be targeting its Yorkdale and Queen Street locations. Consumers will have to download either the Hudson's Bay or SnipSnap apps and opt in to receive the messages.

The initiative is also being rolled out to selected locations at Hudson's Bay sister retailer Lord & Taylor in the United States. The moves coincides with HBC's recently announced expanded e-commerce and digital marketing initiatives. Within five years, the company expects to achieve 20% of revenues from online sources.

With consumers increasingly reliant on smartphones, retailers are looking for innovative ways to reach their customers. Though Macy's has recently been testing beacons, HBC's move marks the first time a major department store retailer has deployed the technology on a large scale.

Hotel groups Hilton and Starwood have also been experimenting with enhancing the consumer experience via iBeacon. At Starwood's Aloft chain, guests can use their phones as room keys and bypass the standard check-in procedure.

[Click here for the official Press Release]