PROFILE

Michael Terpkosh

President, City Square Partners LLC

A wholesale, retail and supply-chain leader with demonstrated success developing and executing strategic initiatives in category strategy, merchandising, marketing, and consumer insights. Strong record creating innovative programs to meet the challenges of ever-changing industries. Experience consulting with manufacturers and retailers domestic and abroad. Leader of many company-wide initiatives delivering enhanced business efficiencies while creating new sources of company revenue. Managed teams from 12 to 175 associates locate across the United States.

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  • Posted on: 12/12/2019

    Kroger and Walgreens are in a purchasing alliance and seeking more partners

    This is an excellent opportunity for two national retailers to join efforts sharing expertise, retail store space and use their combined buying clout. The partnership can have huge positives from faster innovation with private label, cost of goods reductions, reducing costs of non-resale goods (what you need to run the business), etc. Plus, there is an opportunity to bring together customer insights from the two companies that can be exponentially positive. In my past, I have been part of joint procurement agreements and the challenges are bringing together different company cultures and product specs to create equal value for the participating organizations. Who else might join the alliance? How about a major convenience store operator, national specialty foods distributor, national electronics retailer or a national home improvement retailer?
  • Posted on: 12/06/2019

    To localize stores or not, that is the question for retailers

    Over the last several decades local retailers have remained successful because they have been able to provide a great variety of products that are on trend and local to their markets/neighborhoods. This formula has allowed these retailer to compete with national "cookie cutter" retailers. As other RetailWire BrainTrust members have stated -- large box, national retailers provide variety, but it is very much the same store to store, mall to mall, city to city. Local entrepreneurial retailers cater to the customers and provide a unique shopping experience for their communities and for anyone visiting that want local shopping opportunities. Large chain retailers need to blend a national assortment with more local offerings to remain relevant or we will see more of these retailers go down the path of Sears and J.C. Penney.
  • Posted on: 11/26/2019

    Will IoT reinvent the supply chain?

    IoT can drive quick, cost effective wins in supply chains. The cost of the technology is relatively cheap, versus huge capital intensive warehouse/distribution projects. This can allow any supply chain to implement IoT projects and start to see benefits and payback in the short-term (same year vs. a multi-year capital intensive project). Many of the same technologies being implemented in retail stores can work equally well in the supply chain environment. Retail smart shelves equate to smart warehouse slots. Connecting devices across the store via wireless networks have similar efficiencies for warehouses, transportation networks and retail notification. Then, as mentioned in Tom Ryan's article, there are huge data insight opportunities in the supply chain using AI to fine-tune the whole supply chain. As retailers try to find the right combination of IoT in store that customers will appreciate, there are huge opportunities in their supply chain network for early and fast adoption of IoT.
  • Posted on: 11/25/2019

    Private label foods need work

    First, a retailer must make sure the quality of their private label product is equal to or above the quality of the national brands in the category. It is important to sample the product allowing the shopper to feel good about the trial purchase. Second, the retailer needs to have attractive packaging and branding. No need to call the private label retailer X brand. Have an innovative name for the private label with eye catching packaging. Third, be innovative with flavors and ethnic foods. Provide the consumer with unique flavors and ingredients that they can't get in a national brand. Finally, find the right price points. This may take some trial and error and analytics, but you must get the retail price right so shoppers can equate quality with the value of the product.
  • Posted on: 11/20/2019

    CBD and plant-based meats are the next big things in store brands

    U.S. grocery retailers "upping their game" in the private label space has been a great success story over the last 20 years. Today, private labels at most retailers have annual sales growth two to three times better than major CPGs. The ability of retailers to be progressive and innovative, with their private label manufacturers, has been key to this growth success. The time is now to jump on the plant-based proteins trend. The question for retailers is... Can they find a quality manufacturer partner to develop a whole line of plant-based proteins? One or two items won't work. An entire broad line of products will drive private label success in this category. As for CBD, I suggest a wait and see approach, watching for national CPGs to start to move into using CBD in products. Retailers need to be ready (with manufacturer partners) to move quickly, but not too far ahead of what might end up being more of a fad than a trend.
  • Posted on: 11/15/2019

    Walmart has a too much grocery problem

    I find it interesting that Walmart admitted low margin groceries are putting a drag on their results. Welcome to grocery retailing! Walmart does need to find the correct balance between grocery and general merchandise. Looking at Target, they have the opposite issue. Target is great with their general merchandising and branding across the store, but they continue to struggle with the grocery side of the business. For Walmart to find the right balance, they must up their game on general merchandise branding and offerings. This includes some upscaling of products/brands to drive incremental sales and profits.
  • Posted on: 11/15/2019

    Is the environment Amazon’s Achilles heel or opportunity?

    As a dedicated recycling household, my family would welcome the opportunity to have eco-friendly shipping options including the consolidation of items into one package. I believe most consumers would appreciate this service option and would be willing to accept a slight delay in shipping to help the environment. If Amazon moved in this direction, they could set an industry standard others would follow.
  • Posted on: 11/06/2019

    Will consumers decide that buying less is better than buying ‘green’?

    The movement to become less materialistic is still maturing with the consumer. The trend does cut across generations, but I feel it is too early to tell whether this trend will gain enough momentum to be a widely adopted lifestyle. For the retailer, the opportunity is to carry down-sized packages and products that are more durable (longer lasting). The consumer may be willing to pay more for more durable goods. The materialistic folks looking for green products are already part of a lifestyle movement and are willing to spend more to feel good about their purchases. Retailers are already doing a great job offering products that cater to this lifestyle. The caution for retailers is as green buying becomes mainstream, competition increases, retail prices go down and margins will get squeezed. Retailers will need to actively search for new and improved green products to differentiate themselves with the consumer.
  • Posted on: 11/04/2019

    Should McDonald’s CEO have been fired over a ‘consensual relationship’?

    Corporate policies around rules of conduct must be followed regardless of an individual's position in an organization. Any corporation that lets an employee "slide around policy" and looks the other way sets themselves up for more employee issues and lawsuits. I understand the relationship was consensual, but he was CEO. This means all employees of the company ultimately report to him including his consensual partner. In the end I feel Mr. Easterbrook and the Board made the right decision to part ways.
  • Posted on: 10/31/2019

    Are retailers out-of-step with consumers when it comes to price?

    Retailers have always struggled with understanding the consumer importance of price. With all of the advancements in pricing analytics, most retailers still look at price two ways: regular retail and promoted retail. The consumer perception of a product's retail price can vary from store to store, channel to channel. The current omnichannel shopping experience adds to the complexities of retailers trying to understand consumer price perception. The important conclusions from the survey are retailers need to invest more in pricing analytics and consumer insights to try to get a better understanding of the consumer's price perception.
  • Posted on: 10/31/2019

    McDonald’s drive-thru AI knows what you want before you order

    It will be interesting to see the reaction of customers. Some will see it as a convenience while others will think it is down right creepy. For McDonald's this may help to speed up the drive-thru experience. That in itself may sway most customers to think of this in a positive way. However, the enhanced convenience will wear thin for the customer when they buy a used car from another customer or get new license plates with different numbers. Regardless of the restaurant or retailer, the power of using AI will only be realized when the customer fully accepts it and even looks for it in their shopping experiences.
  • Posted on: 10/30/2019

    Will free deliveries for Prime members make Amazon the driving force in online grocery?

    Amazon may get an initial incremental bump in grocery sales, but then the ability to sustain the business will be dependent on high quality fresh (every time, all the time) and the right variety of center store items. Regardless of any sales gains for Amazon, they along with Target, Best Buy, etc. can't absorb the cost of free shipping over the long-term. At some point they all will return to charging for shipping, create an incremental fee or raise the cost of goods. I agree with other comments, the grocery wars across the omni-channel are finally beginning.
  • Posted on: 10/29/2019

    AI needs to be more than just a bright, shiny object

    Artificial Intelligence has great promise to help retailers be more nimble and respond to customer/consumer needs. However, a retailer must step back and have the foundational data pieces in place before trying to implement any AI solutions. I mean foundational pieces such as clean POS data, clean loyalty data and adequate IT systems to allow AI to deliver against its promises. A retailer needs deep pockets to set up their own AI shop with the expertise to manage AI on their payroll. Most retailers will look to the outside for help and a retailer needs to find an outside solution provider that is strategically interested in helping the retailer get their foundational data right FIRST before implementing any AI solution.
  • Posted on: 10/22/2019

    What should retailers do when brands post fake reviews?

    A retailer must have a strong written policy outlining the business relationship between the retailer and the supplier. Call this a partnership agreement, corporate policy statement or whatever you like. This written policy must clearly state the actions a retailer will take if their supplier partner fails to live up to their side of the partnership and creates distrust. This should include steps to reduce the supplier's ability to work in partnership with the retailer up to and including removal of the product from the retailer. Regardless of the FTC ruling, the creation and maintenance of trust in a business relationship is between the retailer and the supplier.
  • Posted on: 10/15/2019

    Why are grocers still missing the mark with small food brands?

    I agree with many of the comments already expressed today. As someone that has spent over 32 years in grocery wholesale and retail, the attraction of large CPG big money is not going away. The money goes beyond slotting to ad fees, corporate programs, selling show fees, etc. Many larger retailers even charge for access to their POS and loyalty data. As far as the large CPGs -- Kraft-Heinz, General Mills and others have learned the hard way you can't save your way to prosperity when it comes to driving your traditional brands via trade funds. I feel a blended approach is needed by all retailers to balance the big, traditional brand money with keeping an eye on innovation and maintaining enough space (shelf, ad, etc.) for innovative, smaller CPGs. A retailer must create a strategy of innovation meaning the retailer is actively looking for new brands, adding them to their item mix and shouting them out to the consumers.

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