Published on: August 24, 2021
Got this email from MNB reader Steven Ritchey:
The story you ran day before yesterday about the new concept Taco Bell drive through made me think. Yes, the design was cool looking, it looked a bit futuristic. But, I've seen lot's of supermarket designs and layouts that looked cool, maybe a bit futuristic, but ultimately failed. They may have been very, very efficient, but in the end weren't effective. Too many people look at a concept that looks very cool, and they see that it's different and they declare it the next big thing. Within a fairly short time it's forgotten about because it was not effective. You used to say a few years ago that effectiveness was more important than efficiency.
Finally, another word on Covid. I'm like you, I see lots of mandates in our future, particularly when it comes to vaccination. Me being vaccinated means I have no problems with that. If a store demands vaccination or a very recent negative covid test for entry, I'm good with that. It means I'm safer in there than I would be otherwise, I means I run less of a risk of infection, meaning I run less risk of passing it on to a friend who for medical reasons cannot be vaccinated.
My own company hasn't announced a vaccine mandate as of yet, but, but I'm sure they are considering it. They have to, as we have too many people in retail establishments on a daily basis.
You see the thing is, the rugged individualism we seem so fond of in the US is useless in this instance. We each have to do our part to protect the whole population, to protect each other.
Two comments, if I may.
One is that I still believe in rugged individualism and American exceptionalism. The problem is that some people have decided that individualism is more important than responsibility, which strikes me as the antithesis of American exceptionalism. We're only exceptional if we prove it every day. These days, there are some of us who seem dedicated to proving that we are anything but exceptional.
As for Taco Bell … I continue to believe that effectiveness is more important than efficiency. I'm just willing to give Taco Bell the opportunity to prove that this new format can work.
Responding to my comment that affluent people like shopping in dollar stores, MNB reader Marek Littrell wrote:
Agree with your response about affluent shoppers – I know several that can afford the larger stores, but choose to shop at dollar stores simply because they can save a few bucks and spend somewhere else.
The other thing that (the article about dollar stores) misses out on is that the dollar stores are also in smaller towns where the Walmart’s and other stores can’t go in. My mother lives in a small town of 1500 and there is a Dollar General store. The nearest Walmart is 30 miles away.
MNB reader Julia Ann Mataras chimed in:
Would like to add another point about Dollar Tree.
Sometimes, they are just plain old CHEAPER than other stores for things where I don’t care where the item comes from (like non-food items). For example: balloons ($1 at DT versus more at Party City); craft items (ribbon is $1 versus $5+ at Joann’s or Michael’s); greeting cards ($1 versus $5+ at Hallmark store); wrapping paper. I would not buy any food item from DT. Also, I purchased a window cleaner from DT during the height of the pandemic last spring (I was desperate!), never again (it was very streaky- plain water would have been better).
I don’t go to those other stores to buy those things above- but I don’t consider myself affluent. It does make (dollars and) sense to get them much cheaper at Dollar Tree. Maybe the question is “What is affluent”?
And from MNB reader John Geocaris:
Over time the Dollar stores are a horrible replacement for traditional stores. They achieve their low prices primarily with material and ingredient reductions with the resulting cost per oz. increasing significantly as packaging and production costs cannot be proportionally reduced.
Regarding the ongoing supply chain issues that are creating out-of-stocks, one MNB reader wrote:
Perhaps if the Supermarket Chains would not rely on a auto- replenishment system and actually communicate with the vendors, and vendors would actually work at an office and collaborate with the customers the out of stock situation may be minimal.
Whatever happened to the Vendor Representative that followed his customers’ orders from start to finish? Oh, they must have been accepted (forced) the buyout and were replaced by a data analyst?
I suggested yesterday…
It seems to me that this presents two opportunities for retailers.
One is to use the moment to communicate effectively with shoppers. Rather than let them come into the store (or go onlineZ) and find out-of-stocks, retailers actually could get ahead of the wave and explain the problems to customers. Tell them what is hard-to-find, and why. Offer alternatives. Be pro-active, rather than reactive. Be an advocate for the consumer, not just a sales agent for the supplier. (Gee, didn't Glen Terbeek say that like 20 years ago?)
The other opportunity is to start culling out non-relevant, less-than-core products that don't differentiate the retail experience. Carry few flavors and sizes, as the Journal suggests some retailers already are doing. Figure out what is essential - to the customer, and to your differentiated value proposition - and focus on those things. (If you have 40,000 SKUs, are they all essential? Are 4,000 of them essential? Are 400?)
MNB reader Roy St.Clair responded:
‘Be pro-active, rather than reactive’….yes definitely.
‘Carry fewer sizes & flavors…decide what is “essential” and get rid of the rest’…maybe not such a great idea right now (or ever).
Eliminating sku’s leaves more holes on the shelf, when it’s already difficult to keep some items in stock.
The ability to buy a smaller/larger size (or in a different flavor profile) than usual might be preferable to not getting the item at all.
And essential to you is not necessarily the same for me.
There’s good reason for stocking a variety of products. I want to keep that customer who buys a smaller size but returns every week to do his/her shopping.
I want that customer who uses the unusual flavor in a special recipe he/she makes for her family…maybe she can only get that in our store.
In my opinion, you missed the mark on part of this subject.
And from another reader;
One of the best parts of the US shopping experience is the breath of variety. That needs to stay. The SKU rationalization direction has been going on for years and now has turned into a cash driver. The rational part that says we want the best for our customers has taken a backseat. It also is interesting the retailer slant you continue to take when commenting on the issues at hand. Yes, manufacturers are having component supply issues, but by simply repeating that the suppliers give little direction on how much or when the truck arrives, I find a little tilted. I have spoken with numerous supplier reps for other companies and brokers reps, all of whom have expressed their frustration in spending an inordinate amount of time communicating supply issues ranging from item availability to late trucks. Multiple adjusted PO’s. Multiple delivery times due to confined receiving windows. Drivers not showing for many reasons. All of which add to the issues at hand.
In my discussions, I see the communication being at least attempted. I have not heard of any retailers and distributors willingly carry extra inventory. If they did, it cost the manufacturer. You made suggestions on how retailers could help. Instead of discontinuing items out of need or punishment, which not only reduces options for the consumer it also puts added pressure on remaining items, and in the long run, reduces growth opportunities for the manufacturer. How about retailers add increased flexibility into receiving hours? How about expanding their driver routes so that more opportunity for FOB is available? How about taking a stand with hoarders and continuing max purchase amounts for fast moving items? How about stop taking the “charge the manufacturer” stance when trucks that carry our product and along with others is late? Those could help. From a supplier standpoint, we are not the only dog in this fight. Instead of pointing paws at each other how about we get together and work through this. We are all in the same yard.
When I talk about reducing SKUs, I'm thinking about the degree to which Stew Leonard's - which carries fewer than 2,000 SKUs in its stores - continues to kill it, just as it did during the pandemic. A smaller and highly curated SKU count actually sends a terrific message to customers about what is essential and what is not, what is quality and what is not, what is differentiated and what is not.
I'm not saying that everyone should be Stew Leonard's. Not everyone should, and few can.
But I am saying that a me-too approach to marketing and merchandising puts way too many retailers at risk from a highly focused and well-funded competitive attack - because they don't stand for anything unique.
Variety, in my view, is overrated … especially for retailers competing with "the everything store." I'd be looking elsewhere for a differentiated advantage.
And finally, from MNB reader Jim Antrup:
I couldn’t agree more with your response about National Trade shows and ending up being reported on in the Nightly news. Also agree whole heartedly, I am an avid NBC News Lester Holt fan and try to watch every evening, I also follow other sources (besides MNB) a few of the cable news shows, I think it is good to be informed and get a view from several perspectives.
Keep up the good work, Kevin, loved your piece this morning on the Amazon Fresh!