The Gilman Company Blog

Shocker of the Month: Soap Brands Expand Advertising on Swine Flu News

Earlier this month, brands like Dial, Lysol and Purell ramped up aggressive advertising print and TV ad campaigns in light of the swine flu buzz. A pretty logical marketing response to an epidemic that has every MD in the world saying that the best preventive measure is covering mouths and washing hands.

Every now and then the media hands your company a slam dunk. When gas prices went through the roof, bicycle sales and small car sales followed suit. When President Obama announced his intent to ban certain types of firearms, sales of those firearms exploded. The list goes on and on.

What types of news might your business prosper from and are you ready to respond? Chances are one or more of your competitors are.

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Minimum Pricing Deals on the Block: Manufacturers Tame the Internet

That's right. Consumers have gone to the Internet in search of better deals and online retailers are giving it to them. Now, since some who use the Internet to sell products have found ways to increase efficiencies, reduce supply chain costs and make a profit by selling for way less, the U.S. Senate, responding to manufacturer complaints, is considering a bill related to fixed pricing.

The problem, if you're a big name manufacturer, is that some online sellers have innovated to the extent that they can offer a pricing model that turns MSRPs upside down. If you sell enough Gucci handbags at 40% off, this starts to change the retail value of Gucci handbags in the minds of consumers. Retail forums like eBay are a perfect example of this. As manufacturers attempt to control pricing and manage consumer values, some merchants are going so low that pricing alone is causing accusations of counterfeiting.

Of course, there is a line separating manufacturer pricing policies and Antitrust, but it's nearly impossible, especially for smaller retailers, to show that certain agreed upon manufacturer minimum pricing policies are illegal.

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Profits Up, Sales Down

A Forbes.com article yesterday noted that Toys 'R' Us 4th quarter profits rose by 11%. Pretty good performance on the profit side.

On the other hand, sales at the retail toy giant declined 6.3% from $5.83 billion. In light of the economic crunch, a decline in sales makes sense. But, how do you get an increase in profits in light of declining sales? With corporate and payroll expenses declining by $73,000,000 at the toy retail giant, it's not too hard to understand.

Clearly, Toys 'R' Us has undergone some operations streamlining over the past few years and has done a pretty good job of managing its e-commerce segment in light of the fact that it also has about 1,500 brick and mortar retail stores to funnel products through. When you cut $73M in costs and and operations still result in a solid profit, you've done a pretty good job managing operations.

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World Domination Move of the Month: Gmail Goes Offline

In what can be characterized as a move against Microsoft's Exchange, Google recently announced a new version of Gmail that will allow users to access their Gmail account without an internet connection. Believe it or not, there are still places where access to a wireless network is not available, such as in planes or in remote areas and at times when connectivity isn't always stable.

With Gmail offline, there may be a viable alternative to MS Outlook and the technology behind the offline version of Gmail has already been applied to Google Docs and Google reader. Does a Google productivity suite on par with MS Office pass the laugh test? Yes!

What's really happening here? Google has innovated to meet an important set of needs and has done it in a way that could unseat a long standing and somewhat stagnant product. Google is competing on a different level and they've done this by effectively leveraging their momentum and carefully cultivating the heart of the venture that is Google: ad sales.

More on this story at COMPUTERWORLD.

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Leaseholders Haggle with Property Owners:

General Growth Properties, Inc., the second largest mall owner in the US, warned that it may have to seek bankruptcy protection.  You don't have to read The Wealth of Nations to know what that means (to say that real property ownership and real property rental prices are an important part of our economy would be an understatement).

As the retail pinch continues, some store owners are vacating while the hold outs are seeking concessions from property owners to maintain brick and mortar retail outlets, office and warehouse space. The types of concessions you can get from a commercial property landlord will likely depend on your market and your current lease terms. Either way, now may be a reasonable time to begin discussions with your landlord about possible concessions. They'll be expecting you.

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Ho Ho Hmm: First Quarter 2009 Retail Inventory

The numbers are in. No real shockers. Americans didn't spend as much over this holiday season. According to the Wall Street Journal, luxury goods took the hardest hit at -35% compared to last year. The best news of the lot was online sales, which took a modest dive at -2%, thanks to special promotions, email campaigns and aggressive discounting.

The good news: If you're still shopping, the prices are right. Most retailers will continue with aggressive pricing to clear out inventory. The bad news is that first quarter retail buyers will be especially shy with restocking shelves once the holiday dust has settled.

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The "Trust" Downturn

Every day, it's something else about the "economic downturn." Another way to think about this is the "trust downturn".

Throughout 2008, Americans have been burned economically across the board. Taxes, gas, jobs, bail outs, investments, etc. Of course, everyone is feeling it, but everyone is also acting on it and there is a change in the collective psyche.

The news: banks and lenders can't be trusted, the people who are supposed to protect your money can't be trusted and feds can't be trusted with spending your money. Generally, consumers have some serious trust issues.

What does that mean for your business? It means, at the bare minimum, a recognition that we are going through a trust recession. The same model of building trust with consumers has changed. It's different now. Even the most trusted household name brands are crumbling, which does an injustice to all brands.

The good news is that our economy is the only game in town for consumers, meaning that some business will come out on top. Dealing with this trust issue successfully may be one of the ways to foster growth.

Get a Gilman consultation.

New NV Law Requires Businesses to Encrypt Data: Other States to Follow

Okay, maybe passing information about your customers around to administrate various aspects of your business works just fine without complicated technical safeguards in place. After all, it is possible to make something that is very simple unnecessarily complex by applying technology, right?

That said, get ready for a wave of new laws requiring business to protect information that might personally identify your customers or clients. Nevada is the first state off the blocks with this type of law. Other states are soon to follow.

This is all about information security and the major key to compliance will be encryption on networks, laptops, email and record keeping. With many encryption and general security options available, be sure to make the right choice for your company. The right solution here will be based on how you presently handle data that is contemplated by these new laws.

Example: sending and receiving invoices by email that include credit card information.

Details on this story from FCW.com.

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