As promised I will spend this NL on the Fancy Food Show. Last Sunday, July 1, I spent the day at the FFS in NYC. The heat was only a blistering 99 degrees and it was a little quiet at the show. Let’s discuss that and the other topics relevant to our markets.

The show has moved into a more buyer centric philosophy to help the exhibitors focus on real buyers. Show administration called it, STRONGER BUYER-FOCUSED REGISTRATION PROCESS. You had to present electronic “proof” that you were involved in the food business. In talking to show exhibitors that are customers they felt that although there was less people they did not have to deal with students and people just there for the “free” handouts which are more than appetizing. Considering the price paid by vendors at the show I can see how this benefits the exhibitors. If you pay $3,000 for a 9 by 10 booth (not counting travel, meals, and set up) you just want to talk to buyers. Less, in this case, means more.

Moving on to the next discussion about what it means to be Amazoned. Amazon today has captured over 50% of the on-line retail sales and through their AWS Services (the Cloud) they dominate the cloud being 4 times larger than Salesforce. They are one of the top 5 software Companies in the world at $40 Billion. Just last week, in the New York Times, when they announced their acquisition Walgreens, CVS and Rite Aid lost $11B in market cap. Amazon is approaching 1 Trillion in market cap. Almost every specialty food guy puts their products for sale on Amazon to make sure they can share in the retails giants spoils. Just go to Amazon and type in Salami.

One of our large customers at the FFS, Seacrest Foods who is a specialty cheese distributor has been a supplier to Whole Foods for many years. I talked to Shawn, their VP of Sales, about the effect of Amazon buying  Whole Foods.  Amazon had announced that they would be asking all vendors to reduce their prices so they could be more competitive. That would have an effect on them. The request never came and he was happy to tell me their Whole Foods sales increased 20% after the merger and they have a 10% increase in sustained sales. That is quite the opposite of negatively being Amazoned, that is a positive. If you look at total retail sales Amazon has a scant 3% of all retails sales in the country. Promoting their Whole Foods brick and mortar stores will do nothing but enhance their position in the retail market.

WHAT ARE YOU DOING TO PREVENT BEING AMAZONED?

 

 

 

 

Issue 634 - The New ROI

A prospect recently challenged me to show a return on investment of two to two and a half years. For the majority of my career a 'good' return on investment (ROI) was two years, a great return was one year, and an unbelievable return was six months.  Today with our SaaS offering we're seeing customers regularly returning on their investment in four to five months, so it may be time to revisit how we think about ROI calculations.

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