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Dispute over Pricing: Edeka and the Delivery Boycott by Brand Manufacturers
Germany’s largest retailer Edeka wants to remain steadfast in the fight over the pricing of brand manufacturers. Currently, there are 17 corporations that do not supply Edeka, said CEO Markus Mosa. According to a current report by the news channel ntv from April 26, 2023, it is said that the “greed” of the international food corporations is not yet subsiding. Suppliers to the Edeka association, which consists of 11,000 stores, include corporations such as Procter & Gamble, Mars and Pepsi as well as parts of Henkel, Schwartau and Unilever.
The pricing of the brands is even less comprehensible than last year, as many raw materials for detergents, but also wheat, oils and fats have become cheaper again, says Mosa. The branded goods industry maximizes its results and prefers to forego delivery. The background is a dispute that has been smoldering for months between retailers and leading brand manufacturers over prices.
It’s about power issues: Who can assert themselves in the pricing strategy?
“Constructive cooperation between suppliers and trade looks different”, says pricing expert Prof. Dr. Hans-Christian Riekhof. “When a retail group reports that there is a delivery boycott by 17 well-known brand manufacturers, then this is a phenomenon that we do not encounter every day – and that consumers also register in view of the gaps on the shelf.”
Obviously, one of the parties feels disadvantaged and cannot agree with the prices or conditions offered – there is no negotiation result. Riekhof: “In negotiation management, this is called ‘BATNA’ (Best Alternative to No Agreement). It’s about power issues: who has the upper hand and can ultimately assert their ideas?”
What do the pricing strategies for own brands look like?
Retailers like Edeka have already started years ago to make themselves more independent of the brand manufacturers by building up their own brands. However, predominantly in the lower price ranges, Riekhof continues. He recommends that retailers urgently review the pricing strategy for their own brands.
“From our pricing projects for retail, we know that the price gap between the retail brand and the manufacturer brand can be significantly reduced from the customer’s perspective. Here are untapped profit potentials for retail. Good that the manufacturers force the trade to review their price architecture.”
(Read also Riekhof on Pricing on the subject of price architecture).
Links
Read full article:
https://amp.n-tv.de/wirtschaft/Edeka-meldet-Lieferboykott-von-17-Herstellern-article24079771.html
Photo:
Tara Clark/pexels.de
The Digitization of Stationary Retail – Prof. Riekhof on the PFH Podcast
In the current episode of the podcast “Beyond the Knowledge”, Prof. Dr. Hans-Christian Riekhof, CEO of the company locandis and Professor of General Business Administration at PFH Göttingen, talks about the opportunities of digitization in retail and presents the results of a current expert survey on the theme of Instore Navigation. According to Dr. Hans-Christian Riekhof, the three major challenges for trade in the coming years are:
- to realize an experience-oriented and high-quality design of the store areas
- to improve delivery capability and logistical processes.
- to drive digitization also in stationary retail and to communicate with customers not only face-to-face, but also via smartphone.
In an expert survey, Prof. Riekhof examined the digitization of retail. What are the major challenges for retail and how will the marketing concepts of retail develop in the future? These and other topics are discussed in the third episode of the PFH Podcast “Beyond the Knowledge”.
You can access the entire podcast episode here and then listen to it on all common podcast channels.
More about the company locandis:
www.locandis.de
Digitization of Retail: Trade Magazine Reports on Solutions from locandis
On the topic of “Digitization of Retail”, the magazine Rundschau für den Lebensmittelhandel has now reported under the title “The Next Step”. The digitization of retail cannot be stopped, but it is less clear how the process must actually proceed in order to stay in the game as a retailer, and which technological upheavals will ultimately shape the shopping of the future.
In the course of the research for the article, the experts for suitable solutions around location-based marketing, indoor navigation, digital customer cards from the Hamburg company locandis were also asked for an assessment. Thus, the following is reported about co-managing director Prof. Dr. Hans-Christian Riekhof and locandis, among others.
Digitalization of Retail: Digital customer card with functions such as location-based marketing and in-store navigation
…With his company Locandis, Riekhof has now implemented a system in the Hagebaumarkt C.J.Wigger in Neumünster that could close all these gaps. “The basis is the digital customer card, which basically does the same as Amazon: it records what the buying behavior was in the past. And this card can then be connected with various functions, e.g. an in-store navigation and a location-based marketing, since I know when the customer is at which shelf.” This opens up completely new ways of marketing, because if a customer is e.g. in the confectionery department, it can be assumed that he is also interested in this product group – which makes him more receptive to tailored advertising at the scene…. “We digitize everything possible. Therefore, stationary retail should also digitally map the shopping process”, says Riekhof.
Links:
You can read/download the detailed article here as a pdf:
https://www.unicconsult.com/wp-content/uploads/2022/02/RUNDSCHAU-2202_Seiten-15-21.pdf
Food Newspaper Reports on Instore Navigation at Hagebau
The Food Newspaper currently reports on the recently introduced system of instore navigation at Hagebau. With this technology, controlled via a smartphone app, customers can find their way around the hardware store better.
As reported, customers at Hagebau dealer Wigger from Neumünster can be guided through the market to the desired product by instore navigation. This is linked to offers and additional information that customers receive directly on their mobile phones at the shelf. This was realized by the company locandis from Hamburg, which specializes in technology, conception and strategies for solutions around location-based marketing, indoor navigation, digital customer cards and more.
The Food Newspaper refers in its article to the finding of experts that the technology is still waiting for its breakthrough. Thus, Prof. Hans-Christian Riekhof, Mathieu Grüneklee and Leon Reutel in 2021 conducted a study for the Private University of Göttingen (PFH) among executives in retail on the topic of instore navigation in German retail. The enormous potential of the technology for stationary retail also became clear.
Further links
Full article in the Food Newspaper (Paywall):
https://www.lebensmittelzeitung.net/tech-logistik/nachrichten/per-kunden-app-hagebau-lotst-per-instore-navigation-161283?crefresh=1
Hardware store: Instore Navigation offers targeted finding of products:
https://www.unicconsult.com/baumarkt-instore-navigation-bietet-zielsicheres-finden-von-produkten/
Article on the homepage of the company locandis:
https://www.locandis.de/instore-navigation-mit-der-app-durch-den-baumarkt/
The PFH Private University of Göttingen recently published a study on instore navigation in retail:
“Instore Navigation in German Retail” (Riekhof, Grüneklee, Reutel, 2021)
Hardware Store Manager Magazine picks up study “Instore Navigation in German Retail”
The digital trade journal Hardware Store Manager picks up the current study “Instore Navigation in German Retail” in an article. As part of an expert survey, Prof. Dr. Hans-Christian Riekhof, Professor of International Marketing at the PFH, together with two other authors from the PFH, examined for the university what contribution digital customer cards and the associated instore navigation can make to the digitization of stationary retail, such as facilitating product search in large sales areas like hardware stores. The magazine has now published some research results.
Under the headline “Study: Retail gives away chance for additional sales at the shelf”, the magazine essentially summarizes as follows: There is still room for improvement in the exploitation of digital possibilities in stationary retail in Germany. The survey among retail managers made it clear that only just under half (46 percent) of the companies surveyed by the researchers have already used or are using digital customer cards, this is planned by 11 percent.
Most companies are primarily concerned with making the shopping experience more pleasant for customers. “Location-based marketing and couponing, customer surveys directly at the scene and similar functions that digital customer cards also offer, seem to play a secondary role from the perspective of the surveyed managers”, Riekhof is quoted.
Links:
Article in Hardware Store Manager:
https://www.baumarktmanager.de/studie-handel-verschenkt-chance-auf-zusatzumsaetze-am-regal/150/84280/
Article in Hardware Store Manager as pdf:
Study: Retail gives away chance for additional sales at the shelf
More about the study “Instore Navigation in German Retail”:
https://www.unicconsult.com/referenz/instore-navigation-im-deutschen-einzelhandel-eine-expertenbefragung/
Instore Navigation: Expert Survey Results Report
An expert survey on the topic of Instore Navigation was conducted as part of the ERDF-funded DeepNav project by the PFH Private University of Göttingen. The results are now available.
Background: In contrast to online retail, digitization in stationary retail is progressing more slowly. This raises the question of a consistent implementation of accompanying digital communication concepts with the customer on site, especially for stationary store concepts. Instore Navigation, controlled by company-specific apps on smartphones, offers a range of options to practically support customers and improve the shopping experience, such as by facilitating product search.
Among other things, it was examined what contribution Instore Navigation makes in large-scale stationary retail to establish a digital customer dialogue on site. Can this generate exciting insights for retail? What role do app-based customer cards play, with which customers can be delivered promotional information directly at the shelf via push messages? How is this topic area assessed by experts, from the perspective of the companies?
The study basically shows two things: retail is at most at the beginning of a digitization of the customer experience in the stores, but there are also very concrete considerations visible on how to integrate Instore Navigation into this digitization process.
The study was created by Prof. Dr. Hans-Christian Riekhof, Professor of International Marketing at the PFH Private University of Göttingen, supported by the PFH graduates Mathieu Grüneklee and Leon Reutel.
Here you can read the results:
Further links:
Mobile Apps in Retail – Study by Capgemini Consulting
Technical innovation does not stop at stationary retail in Germany. This is happening at a rapid pace. After many retailers have already marketed their products in their own online shops or on Amazon, they are already confronted with the next wave of disruption. Mobile commerce is well on its way to becoming the number one online channel. Mobile apps on smartphones enable companies to interact digitally and in real time with customers. This creates completely new shopping experiences.
Capgemini Consulting, the global strategy and transformation consultancy of the Capgemini Group, has presented a study on the use of smartphones in stationary retail. It was examined in which phases of the purchasing process consumers are already using mobile devices today and what benefits they achieve.
Photo/Screenshot: Capgemini Consulting
The study:
Study “Mobile Apps in Retail” (pdf)
More about Capgemini Consulting:
www.capgemini.com/de
