Published on: April 2, 2009Now available on ITunes…
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Hi, I’m Kevin Coupe and this is MorningNewsBeat Radio, available on iTunes and sponsored this week by Webstop, experts in the art of retail website design.
I’ve been thinking a lot about a figure that was mentioned last week at the IRI Summit in Las Vegas, a number that on the one hand seems easy to understand, but on the other has all sorts of implications.
The number, which came out of IRI research, was quoted by Mike Salzberg, president of the Campbell Sales Company, and he said that “10.4 million shoppers started using the supercenter channel last year even as 8.2 million shoppers were leaving the supercenter channel.”
Now, what that means is that the supercenter channel saw its overall shopper base increase by 2.2 million people last year. Which is pretty good, I suppose.
But I keep thinking about the 8.2 million people who stopped shopping the format, and I keep wondering why.
The conventional wisdom is that the supercenter channel, especially but not limited to those stores operated by Walmart, is doing well in this down economy because it is effectively making the case that it has the right prices on the right products in a one-stop shopping experience.
Clearly, for 8.2 million, the case was not made. Now, I’m guessing that there could be a variety of practical reasons why some of them stopped, such as the price of gas or perhaps the distance.
Ultimately, though, I think it is fair to say that at least part of the reason that those 8.2 million stopped shopping in supercenters is that they were not persuaded that those stores offered a value equation that made it worth driving a little farther, spending a little bit more on gas, or ignoring whatever other factors led them to make a change.
And I’m wondering if this actually illustrates a bigger problem for many stores in the supermarket industry – that they are not engaged in making a persuasive argument to their customers every single day – and I am talking about an argument that is so persuasive that it trumps issues like distance and convenience. I am talking about offering a store experience so compelling that I simply won’t shop anywhere else.
I say this as someone who has been spoiled - every week for the past 25 years, I have driven past between four and six supermarkets to get to a store – Stew Leonard’s - about six miles from my house to do my primary food shopping. Nobody else has persuaded me…or even tried to persuade me, to be honest…to change my shopping habits.
Though, as I noted in one of my commentaries last week, it will be interesting to see what happens when the fabulous Fairway Market opens a new location right across from my gym sometime in the next 18 months. I have a feeling that they’ll be actively soliciting my business. If Stew Leonard’s is smart – and I think they are – they’ll start competing with Fairway now, and not wait until weeks before it opens.
Around here, we’re fond of talking about the cutthroat nature of competition. I’ve been saying for years that retailers need to be competing with Walmart even if there is no Walmart in their market; the fact is that through its ad campaigns and online presence, Walmart helps to shape the competitive scenario throughout this country, and retailers need to compete with that perception and reality every day. I’ve been saying for years that all food retailers need to have some sort of online presence, even if nobody else in their market does…because the simple fact is that Amazon can sell groceries online to everyone who lives in America, and so competes with every food retailer in America. And I’ve been saying for years that food retailers need to compete more actively with the restaurant and fast food brands that are seeking share of stomach and use supermarket aisles to give their brand names credibility and sales volume.
There were, according to IRI, 8.2 million people last year who the supercenter format was unable to keep as customers. They’re in play, as are most food shoppers.
My question is this. Are you seeking out those customers, with active, laser-like precision, with comprehensive knowledge of trends and demographics, with in-store staff that is engaged and challenged, and with marketing plans that stress a unique and engaging shopper experience? Because just convenience, or just a better price on bananas, just ain't gonna cut it.
For MorningNewsBeat Radio, I’m Kevin Coupe.
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