Published on: November 17, 2014by Kevin Coupe
Last Friday, just days after Golub Corporation-owned Price Chopper announced that it plans to convert the entire chain to a new banner concept dubbed Market 32, Jerel Golub, the retailer's president and CEO, went on Facebook for for an hour-long "town hall" session in which he offered to answer questions from customers and employees about the coming change.
Golub ended up fielding hundreds of questions, which suggested that however people feel about the change - and opinions were mixed, to say the least - they feel passionately about their connection to Price Chopper.
And that's important.
One typical Facebook posting went like this:
Just 3 comments: 1. If the name Price Chopper doesn't define your market anymore, does that mean you won't be 'chopping prices?' 2. I know the new trend is to change a name but to quote from a wise and wonderful friend 'If it's not broken, why fix it?' 3. I don't like it at all…
Golub responded this way:
Saving our customers money will always be at the forefront of everything we do, whether it be in Price Chopper or Market 32. We did not start with the intention of changing our name. We started with the goal of determining the type of shopping experience that our customers are looking for now and in the future.
As a business owner, it's your right to spend your money as you wish. But don't forget - Price Chopper is synonymous with the Albany area, and people like to feel a connection to a name. By rebranding, you're losing that connection - and making it easier for a competitor to capitalize on their existing sense of connection to the community. Your marketing people obviously sold this idea to you as a way to "refresh" the brand. What they failed to understand - or didn't stress enough - is that you're creating a crack that competitors will surely exploit.
And Golub's response:
Thanks for your perspective, Bobby. We understand that there are a lot of positive feelings particularly in the Capital District for Price Chopper. We have done a number of things to help our customers make this transition, including having our Price Chopper brand products available in Market 32. We are also using "by Price Chopper" under the Market 32 logo to remind people of the connection.
One of the interesting things about watching the forum unfold was to see how most people tended not to read the questions and answers that came before, so they they would ask the same questions and Golub would have to answer them over and over again. More often than not, these questions had to do with price, as in, "Will you be raising prices to pay for the format change?" (The answer always was "no.")
People also used the forum to complain about specific stores, ask for more of this product or that category, and even to suggest that there were other ways that the company could (or should) spend the $300 million it would cost to re-banner, rebrand and reinvent the entire chain.
That's not to say there was not support for the concept; there were a number of people who used Facebook to express their support and to acknowledge that there comes a time in the life of every business that it must reinvent itself … and Price Chopper clearly believes it has come to that moment.
To be fair, I think there was more skepticism than approval … but it is early in the game.
As the Facebook session was winding down, I used the forum to pose the following question to Golub:
What do you know now that you didn't know before this "town hall" chat began? And do you think that you need to do anything different than planned to deal with the questions of substance and perception that have been raised?
And he responded:
Today's live chat reinforced my longstanding commitment to embrace social media as an important communication tool for our company. It also really highlighted a few things for me: While there can be a lot of negativity on Facebook at times, there are even more people who are truly interested in understanding the rationale behind our decision and are open to our responses. I was really pleased with all of the interest and comments we received from so many of our teammates. As you can tell we have lots of great people here, and we are very proud of all they do for our company. Finally, today's Facebook chat was a way for me to personally connect with so many of our customers and teammates and to respond to their questions and concerns. It was particularly useful in our effort to answer a number of important questions and clarify some misunderstandings that may have existed.
If I'm reading the situation right, I think there remain a lot of questions to be answered and a lot of misunderstandings to be clarified.
What Price Chopper is doing is very risky, and very hard. That doesn't mean that the company shouldn't do it … just that a total rebranding of a company carries with it the possibility that long-established brand equity will be diluted, and that the existing business could be imperiled.
Clearly, the folks at Price Chopper don't believe that, or at least have been persuaded that it is worth the risk … and that it is better to stay ahead of the curve than to be allow the company to be marginalized in the marketplace. Of course, there will be those who will suggest that Price Chopper may already have been feeling marginalized, and that this is an act of desperation.
(Two examples. Delhaize didn't decide to convert all of its Kash n' Karry stores in Florida to Sweetbay Supermarkets because things were going swimmingly; it decided to do so because Kash n' Karry had lost its relevance and it needed to do something radical and change the narrative. But when FedEx decided to retire the Kinko's name after it acquired that company, switching to FedEx Office banner, it was an act - in my view - of corporate arrogance, ignoring the fact that the Kinko's name had a lot of positive brand equity. When the dust settles, the Price Chopper/Market 32 doesn't want to be lumped in with either earlier scenario.)
One thing seems clear, regardless of the motivation. Price Chopper/Market 32 will have to demonstrate to customers - especially the passionate shoppers who feel like Price Chopper is their store - that the new format is as relevant as can be to shoppers' lives, needs and desires. If they do that, then they will have a significant head start on a process that at best will be challenging and laborious.
Either way, it will be an Eye-Opener.
- KC's View: