by Michael Sansolo
In the never-ending battle to create differentiation in the marketplace, Hannaford Bros. gets a gold star. Or maybe two or three.
A year ago, Hannaford took a big chance with its Guiding Stars program. In retrospect, the program looked like a sure winner by highlighting healthier product choices to a population that is growing increasingly concerned with how they eat. Remember though that success always looks like a sure thing when considering it in retrospect.
Let’s also recall that many sure things become anything but. The economic turbulence of the past year could have easily overwhelmed the Hannaford program if consumer choices became more price-based than usual. And let’s not forget how many healthier products have shown only marginal success when shoppers desire for a healthier lifestyle didn’t translate into checkout lane bonanzas.
Hannaford took a chance and consumers responded by taking Guiding Stars and its suggestions very seriously. As Hannaford told MNBin an exclusive interview, starred products widely outperformed their competitors. Hannaford’s suggestions helped shape shopping and buying and the program is now set to grow.
Differentiation is the constant buzzword of the industry these days. Of course, differentiation also means taking a chance that your shoppers will like what you have decided will make you special. There are countless examples of store designs, format and products that didn’t make the cut. Figuring out value is anything but clear-cut.
A big part of the problem is that shoppers can be so wonderfully contradictory. The same shopper who will complain loudly over a five-cent rise in the price of one product will eagerly spend that additional money and more on a product they see as providing a special value. (Otherwise, someone explain the lines for coffee at Starbucks.)
Yet there are tools to understanding shoppers. The World According to Shoppers, a study released in 2004 by the Coca-Cola Retailing Research Council of North America, is one such tool. It examines the different mindsets that might move a customer to choose one store or another and how those mind sets change between shopping trips. The bottom line of the study was simple: be something or be nothing, but make sure that whatever you choose is what your customers want. And make sure it is something you do better than the competition. The study can be found at www.ccrrc.org. (Full disclosure time here: I am a member of the Coke Council through my work at FMI.)
But the study can only take us so far. We all have to stay up on the changing goals and desires of shoppers that now translate into their choices in so many ways. What’s unthinkable one day might be perfectly valid the next.
I saw a powerful example of this during my recent trip to Australia. Sydney’s major morning newspaper reported that about eight percent of Australians were willingly spending more money to sign up for environmentally friendlier energy. The cost for an Australian family opting into this new program ranges from $50 to $400 per year.
Now clearly, eight percent could easily be explained as reaching a small, but committed audience with the financial power to absorb the cost. However, the lesson is just as profound. People are spending more for a cause they believe in.
We all know it will happen again. It might be issues of health, environment, politics or any other cause that strikes at the heart of a shopper. It might be an issue we don’t even see yet or one that no one can articulate. But it’s coming and the question that should be asked inside every company is pretty simple: How are we going to shoot for the stars?
In the never-ending battle to create differentiation in the marketplace, Hannaford Bros. gets a gold star. Or maybe two or three.
A year ago, Hannaford took a big chance with its Guiding Stars program. In retrospect, the program looked like a sure winner by highlighting healthier product choices to a population that is growing increasingly concerned with how they eat. Remember though that success always looks like a sure thing when considering it in retrospect.
Let’s also recall that many sure things become anything but. The economic turbulence of the past year could have easily overwhelmed the Hannaford program if consumer choices became more price-based than usual. And let’s not forget how many healthier products have shown only marginal success when shoppers desire for a healthier lifestyle didn’t translate into checkout lane bonanzas.
Hannaford took a chance and consumers responded by taking Guiding Stars and its suggestions very seriously. As Hannaford told MNBin an exclusive interview, starred products widely outperformed their competitors. Hannaford’s suggestions helped shape shopping and buying and the program is now set to grow.
Differentiation is the constant buzzword of the industry these days. Of course, differentiation also means taking a chance that your shoppers will like what you have decided will make you special. There are countless examples of store designs, format and products that didn’t make the cut. Figuring out value is anything but clear-cut.
A big part of the problem is that shoppers can be so wonderfully contradictory. The same shopper who will complain loudly over a five-cent rise in the price of one product will eagerly spend that additional money and more on a product they see as providing a special value. (Otherwise, someone explain the lines for coffee at Starbucks.)
Yet there are tools to understanding shoppers. The World According to Shoppers, a study released in 2004 by the Coca-Cola Retailing Research Council of North America, is one such tool. It examines the different mindsets that might move a customer to choose one store or another and how those mind sets change between shopping trips. The bottom line of the study was simple: be something or be nothing, but make sure that whatever you choose is what your customers want. And make sure it is something you do better than the competition. The study can be found at www.ccrrc.org. (Full disclosure time here: I am a member of the Coke Council through my work at FMI.)
But the study can only take us so far. We all have to stay up on the changing goals and desires of shoppers that now translate into their choices in so many ways. What’s unthinkable one day might be perfectly valid the next.
I saw a powerful example of this during my recent trip to Australia. Sydney’s major morning newspaper reported that about eight percent of Australians were willingly spending more money to sign up for environmentally friendlier energy. The cost for an Australian family opting into this new program ranges from $50 to $400 per year.
Now clearly, eight percent could easily be explained as reaching a small, but committed audience with the financial power to absorb the cost. However, the lesson is just as profound. People are spending more for a cause they believe in.
We all know it will happen again. It might be issues of health, environment, politics or any other cause that strikes at the heart of a shopper. It might be an issue we don’t even see yet or one that no one can articulate. But it’s coming and the question that should be asked inside every company is pretty simple: How are we going to shoot for the stars?
- KC's View:
