retail news in context, analysis with attitude

Got the following email from MNB reader Craig Espelien:

Your observations today on the Apple store in Portland and why Apple seems to stay focused on “cool” – and keeps the cool factor with emerging technophiles were interesting.  I have two points.

First, Apple does not seem to mind that they are not the units leader in anything (iPhones sell fewer units than other operating systems. Computers sell less than Windows based, etc.) and this may be due to price – they occupy the “Premium” or even “Luxury” segment of their space – where others focus on OPP (opening price point) or Mid-Price.  They have refused to budge over the life of the company from this price/value position – where others continually seek to undercut them in terms of price and overall value.  That leads to my second observation/comment…

Years ago there was a Quaker Buying Game (it may still be used but I am not sure) that put people into teams and you had to figure out how to make, market and sell a widget (think Coffee Makers).  This was a simulation that was built off of the decisions team members made about price, quality, innovation and a few other factors (some of these dim in the depths of time as this was part of my grad school experience – focused on team building strangely enough rather than sales and marketing) where the computer created an outcome by meshing the decisions of all teams into a fictitious marketplace.  I have since been exposed to this simulation multiple times – and the eerie thing is that the team that starts – and stays with – the best of everything (innovation, quality, price premiums, etc.) usually wins (my team came in second as we blinked in terms of quality during one of the rounds – we sold the most units but did not make the most money).

My point, Apple seems to be focused on the total value of staying cool – and connected to the emerging market – whereas Microsoft (and many other competitors) seem to want to race to the lowest common denominator.  We can tie this to the grocery segment as too many stores try to be the cheapest but the folks who focus on the higher end (Whole foods, Lund’s/Byerly’s, Wegmans, etc.) seem to be weathering the storm better.  Now, I am not naïve enough to think that there is not success in other areas – there is.  But, it seems to me that people who chase their competition end up struggling more (regardless of their channel – can you say Family Dollar) than those who focus on being the best they can be at what they do (Dollar Tree).  Walmart struggled when it tried to be more like Target, Target has struggled since it tried to be more like a grocery store, Save A Lot struggled when it tried to be too much like Aldi, the list could go on and on.

My Words of Wisdom for today:  All retailers and manufacturers should look at Apple and ask themselves – what nuggets of business acumen can I harvest from their success and what am I willing to sacrifice to get there (we could talk about canned vegetables sometime as they epitomize the challenges faced in the CPG world – but that is a much longer story)?

MNB reader Matt Weeks posted the following note on MNB's Facebook page:

It would be interesting to compare the difference … between "play" and "work" in terms of engagement with a brand. As in all consumer brand experiences that drift into the "must purchase" category (as in food, (coffee for you), soft goods, fuel, other regular repeat purchase brand experiences), there is something going on emotionally as people "engage" with, and associate the brand in their minds. Is there something chemical going on associated with the pleasure zones as well? In "play" we burn-in experiences with the brand in a different part of our mind than "work." Yet as you see in the Microsoft VS Apple store experiences, it's not the size but rather it's the nature of the brand. So what can all retailers/ brands learn from this? Is there room for "play" at Whole Foods? at BP? at Dunkin' Donuts? at Macy's? What are your thoughts on what drives people to "play" as part of engagement, even in categories that crossover into "work."

I'm not sure it is so much a matter of play vs. work as it is engagement vs. indifference. Apple has made the decision to create an ecosystem, not just products. It has focused on premium products, emphasized style and taste, and that approach - while much debated - seems to have worked in its favor. It may not be the biggest and most successful company of its type, but Apple seems to change the world with greater frequency than its brethren.

I must've been off my game yesterday.

We had a story that started out this way:

In Minnesota, the Pioneer Press reports that Target is testing a new small store format with a 20,000 square foot TargetExpress store that opened this week in Minneapolis's Dinkytown neighborhood, and another one that is planned for the Highland Park section of St. Paul.

MNB reader Jill M. LeBrasseur was faster than I:

Was it wrong of me to keep waiting for some comment on the fact that this new small store is opening in Dinkytown? I couldn’t believe you passed up that pun-portunity.

And another reader chimed in:

I would assume that everything (not just the new TargetExpress) is smaller in Dinkytown.

Boom! (I can't believe I missed this one.)

But I also missed another one.

We took note of an Extreme Tech report that a Sainsbury store in the UK soon will become the first supermarket on the planet to get all of its electricity from its own food waste. It all has something to do with biogas and anaerobic digestion, which led MNB reader Steven Ritchey to write:

I’m still trying to come up with a way to connect the campfire scene in Blazing Saddles with the creation of methane gas from garbage and generating electricity with it.  There’s got to be a connection.

Go figure. Mel Brooks was an environmentalist.

I just wish I'd thought of this. Apparently, yesterday morning my mind was nota raging torrent, flooded with rivulets of thought cascading into a waterfall of creative alternatives.

By the way, on a more serious note about this subject, MNB reader James Tenser wrote:

Here’s proof that I read and enjoy MNB even though I rarely pipe up in comments.

I loved the Biogas at Sainsbury Eye-Opener this morning because it adds even more fuel to the argument that retail stores can be net energy producers.

Of course I’ve been thinking mostly about photovoltaic rooftops, due possibly to my location in Solar Arizona.

Composting might be more efficient for supermarkets in some more northerly climes. Or maybe both make for a winning combination.

All true.

But for the record, you don't have to prove anything.

And MNB reader Joe Madigan wrote:

Just writing to say that I was at Chicago’s Museum of Science and Industry with my daughter recently and learned about the energy process that you described for Sainsbury.  You may already know this, but this technology is fairly well-established on US dairy farms, including selling energy back to the grid.  Even better, it captures the methane, a potent greenhouse gas, and uses it to create energy instead of polluting the atmosphere.  To paraphrase Sinclair Lewis….”they use every part of the cow except the moo”.

I did not know that. (Then again, what I don't know makes up a really long list…)
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