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LAS VEGAS – Amid all the presentations and displays of technology solutions at the 2005 Global Electronic Marketing Conference (GEMCON), it was interesting that two of the more compelling messages had nothing to do with specific technology-based tactics.

It was left to Deborah Grassi, the former senior manager of research and database management for Sam’s Club and director of CRM with Wal-Mart Financial Services, to urge on the retailers attending GEMCON in their battle to compete with Wal-Mart.

Wal-Mart may have a 30 percent market share, “but that means there is 70 percent that it does not have,” she said. That 70 percent is up for grabs, and is likely to go to retailers that aggressively use technology to understand their shoppers better than Wal-Mart understands its shoppers. Grassi, currently a retailing and CPG consultant with Acxiom, said that the best use of technology is to engage in the study of psychographics, which is looking “not just at what consumers do, but how they think and what they feel.” Demographics, she said, “is the study of how people are similar, while psychographics is the study of how people are different.”

It is in these differences, she said, that retailers can find success among the 70 percent of consumers that Wal-Mart is leaving on the table. “Use what you have,” she said. “Be the store of the community.” However, she conceded in a conversation after her presentation that inevitably Wal-Mart will look to expand its fleet of Neighborhood Markets, trying to take on the mantle of “store of the community” – which is why retailers have to use the tools are their disposal proactively to create for themselves differential advantages.

Paula E. Payton, of the Oxford Institute of Retail Management at Templeton College at the University of Oxford, had a slightly different take on the subject – though she was no less emphatic in urging retailers to get aggressive. “We know a lot about supply chain management,” she said, “but we are a lot less successful at demand management.” Retailers simply don’t have a good understanding of how and why consumers shop, she said, and noted that until they start getting more aggressive in creating compelling shopping environments, their ability to compete will be limited.

Using a number of Las Vegas stores as examples – from the Apple Store to the M&M Store, from the new Playboy Store to the Fashion Show Mall – Payton suggested that there is a consistent and remarkable theatricality that essentially creates unique presentations, sampling of various kinds, and brand-building that is second to none.
KC's View:
We were surprised by the mention of the Playboy Store as a successful venture – since we couldn’t imagine a more anachronistic and obsolete brand name in 2005 America. But Payton corrected us, saying that in fact Playboy has turned its fortunes around in part by focusing on upscale apparel that appeals primarily to women.

We found it hard to believe…but there is no reason to doubt her.