A couple of stories caught our eye yesterday, suggesting how progressive and aggressive retailers should be thinking about the marketplace.
Best Buy, for example, announced that it will be opening 68 stores in California that will take liberties with its traditional consumer electronics format. Two dozen of the units will be geared to small business owners, a dozen will be targeted at suburban moms, 16 will focus on family men, another 16 on affluent professionals, and 11 will play to the whims of young, ‘early adopters’ of technology. (Yes, we know that ads up to more than 68…but some of the stores will have more than one target customer group.)
Best Buy is calling this approach “customer centricity,” and it represents a $50 million investment this year alone.
At the same time, Apple Computer announced that it would build on its successful retail strategy by opening six smaller stores that can be placed in locations that would not support the larger version. Apple CFO Peter Oppenheimer said the smaller stores will allow Apple to reach more people in more places, though he was not specific about what features the smaller locations would have and not have. (We fervently hope they include some version of the “Genius Bar,” a wonderful innovation that serves as a place where one can both get one’s computer fixed and get unlimited access to really, really smart people.)
The point here is pretty obvious. Customers are becoming more and more diverse, and it simply makes sense for retailers to create diverse formats that cater to different need states in different locations. It so happens that best Buy and Apple share a general category, consumer electronics, that can confound and intimidate consumers, so finding new and innovative ways to appeal to those shoppers is an intelligent way to go.
The same, it seems to us, could be said of food – another category that can confound and intimidate consumers. It is critical that food retailers begin to take this challenge more seriously, and to start creating a greater variety of formats that appeal to different customer demographics. Too many food retailers, when asked, will say that they still want or need to be all things to all people…which strikes us as an almost certain path to irrelevance in today’s marketplace.
The challenges of changing demographics also were made clear this morning in a Chicago Tribune story about how time-constrained women often are too busy to shop for clothes, and so are buying their clothing in at-home parties that used to reserved for products like Tupperware and cosmetics.
These parties are designed for women to get in quickly, pick out a bunch of outfits, and get out…no muss, no fuss, and no time wasted, with thousands of bucks sometimes being spent in just a few minutes.
Think about that for a minute, and its implications for every kind of shopping. And then think about whether the food retailers you know (or the food retailer that you are) are preparing themselves to deal with these remarkable shifts in priorities.
Best Buy, for example, announced that it will be opening 68 stores in California that will take liberties with its traditional consumer electronics format. Two dozen of the units will be geared to small business owners, a dozen will be targeted at suburban moms, 16 will focus on family men, another 16 on affluent professionals, and 11 will play to the whims of young, ‘early adopters’ of technology. (Yes, we know that ads up to more than 68…but some of the stores will have more than one target customer group.)
Best Buy is calling this approach “customer centricity,” and it represents a $50 million investment this year alone.
At the same time, Apple Computer announced that it would build on its successful retail strategy by opening six smaller stores that can be placed in locations that would not support the larger version. Apple CFO Peter Oppenheimer said the smaller stores will allow Apple to reach more people in more places, though he was not specific about what features the smaller locations would have and not have. (We fervently hope they include some version of the “Genius Bar,” a wonderful innovation that serves as a place where one can both get one’s computer fixed and get unlimited access to really, really smart people.)
The point here is pretty obvious. Customers are becoming more and more diverse, and it simply makes sense for retailers to create diverse formats that cater to different need states in different locations. It so happens that best Buy and Apple share a general category, consumer electronics, that can confound and intimidate consumers, so finding new and innovative ways to appeal to those shoppers is an intelligent way to go.
The same, it seems to us, could be said of food – another category that can confound and intimidate consumers. It is critical that food retailers begin to take this challenge more seriously, and to start creating a greater variety of formats that appeal to different customer demographics. Too many food retailers, when asked, will say that they still want or need to be all things to all people…which strikes us as an almost certain path to irrelevance in today’s marketplace.
The challenges of changing demographics also were made clear this morning in a Chicago Tribune story about how time-constrained women often are too busy to shop for clothes, and so are buying their clothing in at-home parties that used to reserved for products like Tupperware and cosmetics.
These parties are designed for women to get in quickly, pick out a bunch of outfits, and get out…no muss, no fuss, and no time wasted, with thousands of bucks sometimes being spent in just a few minutes.
Think about that for a minute, and its implications for every kind of shopping. And then think about whether the food retailers you know (or the food retailer that you are) are preparing themselves to deal with these remarkable shifts in priorities.
- KC's View:
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Incidentally, we’re privileged to have been asked to speak at the opening general session of FMI’s upcoming Retail Store Development Conference, scheduled for October 24-26 in Orlando, Florida…a conference at which we fully expect these kinds of issues will be discussed in detail and context.
If you’re attending the conference, we hope you’ll come up and say hello; if you would like to attend but haven’t yet made arrangements, just go to:
http://fmi.org/events/confmain.cfm?meetings_id=311
