Published on: February 2, 2005By Kevin CoupeIn addition to writing
MorningNewsBeat each day, Content Guy Kevin Coupe also contributes regular columns to a wide number of publications, including
Chain Store Age. As a regular
MorningNewsBeat feature, the folks at
Chain Store Age have graciously agreed to let us reprint some of these columns.
In a food industry that seems defined by value, is there a role for values?
I would argue that there is. Especially because most food retailers need to define their positions in the marketplace using something other than low prices. After all, you-know-who dominates the low-price position, making it tough for anyone else to use that to competitive advantage.
(Not that it matters. If I had a dollar for every retailer who told me that he planned to compete with Wal-Mart on price, it would be just a few more than the number of dollars I’d have for the number of retailers who have told me that if they can just hang on until the government puts Wal-Mart out of business, they’ll be okay. In other words, they’re smoking something.)
I think that a focus on values is something that is sorely missing from the ongoing evolution of American retailing, and especially the food business. Perhaps it is because “values” is a tough word to define, or implies areas of discussion that Americans are vaguely uncomfortable with. Maybe they see “values” as something that should be taught in church or school, but really has no place in the conduct of commerce,
But they’re wrong.
A store that has a goal or mission statement has, in essence, a set of values in place to which it can aspire. Of course, most employees in food stores (and many senior executives, for that matter) would have a hard time identifying or reciting their companies’ mission statements, which means that they are not values at all, but rather empty strategies unfulfilled.
Values are things taken to heart and mind, embraced as central to the store’s operations. They require focus and constant attention. Often, they mean that a store has to be far more targeted in its definition of the customer…because values can mean a relentless concentration on one facet or another of the store’s operation. For example, if I were operating a store in the current environment, I might make a core value helping parents feed their kids more intelligently, and creating a kid-friendly environment that embraces and entices children. I might say that because children are the customers of the future, and have an enormous role in dictating their parents’ purchases, my store needs to make connecting to these little people a core value.
Now, if I took that approach, it might mean that catering to senior citizens might not be a core value. But that’s okay, because one can assume that if I made this a core value, it is because there are a lot of kids in the neighborhood, as opposed to seniors. And by being the
kid-friendly store in the market, I’d hope to become a compelling alternative to supercenters and chain stores eating away at my business.
This is just one hypothetical example. Emphasis on the word “hypothetical.” In real life, I’d defy you to identify more than a few stores in the US that are using “values” as a key selling and strategic proposition. (If you know of one, let me know. I’d love to hear about it.)
But there is some stirring in this area. I recently had the opportunity to moderate a two-day conference sponsored by CIES: The Food Business Forum
in Dublin, Ireland, on the subject of values – and it was a remarkably comprehensive examination of the issues that can work for retailers in this area.
CIES and many of its global members believe, quite rightly, that food retailers don’t get enough credit in communities for the both the value and values they bring. And CIES has engaged researchers from Oxford University’s Templeton College to conduct an audit quantifying some of these values, planning to create a database that retailers can use as a resource. (I’ll have more on this in coming months.)
The opportunities for retailers to define values-oriented strategies are numerous. It can have to do with how a retailer treats its employees. It can have to do with environmental policies practiced by an organization (not just lip service). It can mean making sustainable development a guiding principle. It can mean being both informative and responsible in dealing with health and nutrition issues. It can mean being assiduous in being fair with trading partners. And, it can mean looking at consumer activists not as foes, but as customers with legitimate concerns and points of view.
Some of you will read these opportunities and think of them as being soft-sided initiatives that have little to do with selling more merchandise and making more money. But I think you’d be wrong about that…and there are plenty of companies that also would disagree with you.
Among them: France’s Carrefour and Casino. Ireland’s Superquinn. Switzerland’s Migros. And manufacturers and service providers that include ACNielsen, Kraft, Nestle, and PepsiCo.
Here’s the kicker, and the thing that I find amazing. There were no US retailers in attendance, apparently because US retailers don’t see “values” as a legitimate focus of discussion. Which I think is spectacularly short-sighted, if peculiarly American.
Of course, US retailers were represented in some sense…by European retailers that own US chains. Delhaize – which owns Hannaford, Food Lion and Kash n’ Karry – was there. As was Marks & Spencer, which owns Kings in New Jersey. And Ahold, which owns a number of chains on the US east coast.
And another company was there – one often lambasted as being so completely focused on value that there is no room in its portfolio for any consideration of values: Wal-Mart.
In fact, there were two Wal-Mart representatives there. Ron Virta, who is vice president of international operations, and David Smith, who is “people director” for Wal-Mart’s Asda Group in the UK, and who gave an excellent presentation about how and why Asda has been named the top employer in the UK.
It is a hard-nosed business reality that differentiation is a critical component of any retailing venture that wants to have any chance to succeed. And it seems clear that focusing on the value of values is one way to achieve a measure of compelling differentiation.
If it is done right, with commitment and heart.Reprinted with permission Chain Store Age (6/2004). Copyright Lebhar-Friedman Inc., 425 Park Ave., NY, NY 10022.
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