Archive for February 24, 2012

The More Things Change……

How true is the proverb “the more things change, the more the stay the same”….in the supermarket business?  Having the benefit of having witnessed four decades of variouis changes and new initiatives, I do have a perspective on the topic.   First, the bad news.  Supermarkets, compared to 40 years ago  are still square boxes, they still have aisles and checkouts, and spend billions of dollars on newspaper inserts and weekly circulars, and shoppers still tell us that visiting the supermarket is no fun.  And by the way, brands and retailers still shake their heads when they refer to the other’s business practices.

On the other hand, from my perspective, much has changed, at least in the way of amenities and technology.

I was introduced to the grocery business by my father, who ran his own store, “Kash is King”  for a number of years.  At the tender age of 15, complete with paper hat and apron,  I was cutting steaks, quartering chickens, making ground beef, and stocking shelves.  I still have vivid memories of the meat counter, the wrapping station, and the faces of our regular customers.  As with most small, neighborhood stores, we were not the cheapest, nor did we have the nicest facility…by far.  What we did have was customized service.

We knew our shoppers by name, what they liked, what they didn’t like and provided a little extra service, conversation, and would even deliver the groceries to their home if they were unable to come in.  We knew our shoppers and what they wanted and gave it to them when and where they wanted it!

Fast forward more than forty years…..

Stores are magnificent, but in most markets and for most supermarket retailers, dollars per square foot are in decline.  Over storing, competition from new channels and now the emerging popularity of commerce all put pressure on these magnificent stores.  Promotions and lowering of prices represent a piece of the answer, if executed smartly.  But in this economy and market conditions, promotions and low prices are not sufficient to change lasting behavior. 

Now for the more encouraging news.  The ingredients are out there, floating around just waiting for someone to put them all together in a nice package that could change the fundamental way shoppers, brands and retailers interact.  It takes data, (which most retailers have), affordable and ubiquitous technology, (that would be the mobile phone), and intelligent, relevant, and compelling content, (ok, this last component is still in the incubator).

Said another way, the first to crack the code on the mass marketing of the Kash is King model using technology, relevant content and shopper data will position themselves for lasting and profitable growth.

OK, at first glance, this sounds very intuitive.  I think about the old Steve Martin comedy routine describing the key steps of becoming wealthy when he begins with….”first, get a million dollars, then……..”

But very much like acquiring wealth, achieving competence in all three of these areas is a daunting challenge.  There are companies and practitioners that have become very adept at one and in rare cases, two of these elements, no one yet has brought them all together in a cohesive, manageable package.

As a consultant with many years of being a retail practitioner behind me, I understand how difficult it is to conquer this hill.  But I also know that it if we could do it 40 years ago, without a single MBA among us….we should be able to do it now!

 

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