“Better” Supermarkets by Mark Bittman

Some of our recap posts from the 2010 FMI (Food Marketing Institute) event talked about shopper expectations, creating a sensory-rich experience, and how Dorothy Lane Markets was going about doing so. There was much discussion at the event on the in-store experience and what today’s shoppers have come to expect, from many different perspectives including the type of products displayed to the information provided on where their food comes from. I’m sure that many of these discussions are still taking place in boardrooms today, especially as the economy continues to be a difficult one to compete in any area other than price.

We were intrigued by this recent post from well-known foodie, Mark Bittman on “Better Supermarkets” which encourages us to think about what would make a better supermarket, and what it would take to make that happen.  It begs the question: are there shoppers and retailers willing to participate in this discussion? To look at the trade-offs and help grocers determine what the future of food marketing should look like to meet needs going beyond the basics? Are you one of those retailers wanting to be a “better” supermarket?

From Mark Bittman:

Tony Naylor, from the Guardian, writes here about rethinking his relationship to Waitrose, the UK’s principled (and generally upscale) supermarket chain that puts Whole Foods to shame.

We should unquestionably support good supermarkets, but we should also be pushing them to:

-          carry sustainable seafood exclusively

-          carry ethically raised meat and poultry whenever possible

-          carry organic and/or local fruits and vegetables whenever possible

-          buy from suppliers who themselves have a conscience whenever possible

-          pay their own staff a living wage, with benefits

-          think about their energy usage, their waste, their community service

And so on. All of which will, yes, make food more expensive. It has to: crap is cheaper than real food, and treating your employees like indentured servants or worse saves employers (and consumers) money, as does treating the environment as a dumping ground and the oceans as if they were inexhaustible. Reversing these policies will raise food costs. (Though there is an argument that reducing food waste will allow us to raise quality while raising prices less.)

For consumers, the basic answer – unexciting as it may sound to some – is to buy and cook real food whenever you can. It isn’t about Waitrose’s (or anyone else’s) artichoke sauce, which is never going to be an item for someone on a budget – it’s about, as Mr. Naylor says, buying a more expensive chicken – one that actually tastes like chicken – and then making it last for three meals. It’s about choosing quality over quantity.

Whenever a supermarket makes a good move, we should applaud it – it doesn’t mean we rush down to Walmart and buy organic milk or suddenly start buying all our seafood at Whole Foods. It means we say, “nice work, we appreciate that, and we’ll take advantage of it – but what’s next? There’s a farmer over here who’d love to sell you his corn, and there’s a single mom working your cash register who has no health insurance, and when are you going to stop promoting industrially raised chickens?”

Hitting the Right Notes

In a world of value, where bigger, larger and more seem always to work, is it possible that less can be better? I think we recently got an easy and powerful lesson in just that concept, not to mention how more can sometimes be too much.

Think back for to the recently completed World Cup soccer tournament and ask yourself this: Do you remember the vuvuzela?

I’m betting you do. For even if you caught only a second of a single game, you heard the vuvuzela. They are those annoying horns you heard buzzing loudly in the background of every broadcast. Apparently a single vuvuzela played properly can produce a somewhat pleasant sound. When tens of thousand are played together at a soccer game the effect is as obnoxious as if huge swarms of bees were buzzing next to your ears.

In other words, too much of a good thing can turn music into noise. More can be less. Now, remember that when it comes to your store, your services, your products and your customers. Too often, in our zeal to be special and please, we do everything possible. Every product is special and every service is stunning. But the effect can be like the vuvuzela. Too much can simply be too much.

It’s so easy to see this in a store. So many today emphasize virtually everything, which can pack far less impact than retailers thinking critically about the handful of areas that really create differentiation. It’s hard to imagine a retailer who wouldn’t be better served to think about the products, services or attributes that would get a customer to pass another store. Remember, you can better play up those things that are special by turning down the noise elsewhere.

We all know how nice it is to have one associate tell us to have a great day or offer to help. The effect falls apart when 10 people in a row ask me the same question. It ceases to be special and becomes somewhat annoying. Likewise, price specials can always pack a punch. But too often we see aisles featuring miles of price “special” tags that suddenly look anything but special. Emphasis is what stands out; overkill defeats everything.

My son, a student of classical music, is constantly educating me on how to be a more educated listener. (It’s a long, uphill struggle, but I’m trying.) One point he always talks about is the intensity of music. Many times what we think is loud is actually just intense. That is, the note is set up by a quiet period to build drama, attention and emphasis. If all the music received the same power, we’d miss the key phrases because there would be no key phrases.

It’s easy to see the parallel in business – points of distinction get buried unless there is some quiet around them. And the vuvuzela helps provide that lesson. None of us who watched those games had any appreciation for the noise. I have a gut feeling that many people watched the games as I did, with the sound turned way down to eliminate the buzzing. Of course, since I don’t know soccer all that well, it also meant I couldn’t hear any commentary, which might have helped my enjoyment. (And I can’t imagine how players coped with all that noise game after game.)

The bottom line is that without quiet, music becomes noise. Without quiet, the points that are special disappear. In short, less is more. But skip the cliché and simply repeat the following: remember the vuvuzela!

Playing To Win The Game

Something strange happened a few nights ago in the Dodgers/Giants baseball game. In the final inning, with the game on the line, a Dodgers coach – Don Mattingly – went to the pitching mound to discuss strategy. As the discussion ended he started walking away, took a few steps, turned and went back to finish his point.

The Giants’ manager bolted on the field and pointed out the move to the umpires. In baseball, you see, a pitcher must be removed if a coach or manager visits twice in one inning. By walking off the dirt of the mound onto the grass and then returning, Mattingly has technically and unwittingly made two visits. Suddenly, the Dodgers had to remove a star pitcher for a lesser substitute and the Giants won the game.

Imagine the same scenario in business. Suppose a competitor left you a small opening to exploit by making a small mistake or misstep. What would you do? Would you jump on it or would you let it go? Sadly, too many let the moment pass and wonder why they lose or complain about competitors who they feel are far more ruthless.

The Giants didn’t win simply because of the mistake. They played well and put themselves in a position to take the game. Yet they also didn’t let their opponent’s mistake go unnoticed. They saw it and got a key player taken out of the game. That’s playing to win.

A number of sportswriters pointed out that Bruce Bochy, the Giant manager who noticed Mattingly’s mistake, capitalized on the same gaffe when it was made by an opposing manager several years ago when Bochy was managing the San Diego Padres. So he’s obviously good at capitalizing on other people’s mistakes. It also helped that Mattingly was managing the Dodgers at that point – the more experienced Joe Torre having been ejected from the game several innings earlier. But that’s what doing battle is, whether in sports or business – taking advantage of the moment.

Competition is rarely pretty or nice. The rules may not be as clear as baseball, but the intent is just the same. Winning requires preparation, planning and execution. And it also requires the winner’s instinct to seize the opportunity whenever it appears.

“Compete” is still a verb.

Déjà Vu Again And Again

So your agenda is full, your balance sheet is troubling and the last thing you need is yet another reminder that inertia is a problem. Sorry, my job is to point out such stuff and this week we have a couple of reminders of the perils of standing still. Consider them both cautionary lessons.

In just the last seven days the spotlight fell on the problems of two American businesses that just a few years back seemed models of innovation and the ability to meet changing consumer demands.

The first concerns one of the quirkiest cars to hit the roads in the past few decades, the Chrysler PT Cruiser. It’s hardly a surprise that Chrysler is having a problem. Simply Google Chrysler problems and you’ll get 10 million suggestions in the usual 0.2 seconds. The Cruiser’s problem is the most common for the ailing company: nobody is buying it.

At one point the Cruiser fascinated me. Its unique design – something of a throwback to cars I’d only seen in old movies – was kind of gripping. I’d rented and driven it once and found it nothing special, except its quirkiness just seemed fun. Apparently, I wasn’t alone.

Years ago, when I was working at the Food Marketing Institute (FMI), we hired Dr. Clotaire Rapaille, a French-born psychoanalyst and a major influence in the design of the PT Cruiser, to speak at a conference. Rapaille talked about how the car appealed to basic instincts in the consumer that allowed it to stand out from the crowd in unexpected ways. It had something to do with the most basic, reptilian parts of our brains.

The PG-rated version of this is that the Cruiser had the ability to appeal to both masculine and feminine instincts at the same time, which allowed it to break through the clutter of car choices and power unexpected growth for Chrysler. Sadly, that was a decade ago. In the intervening years, Chrysler let the breakaway design linger unchanged, quality slipped and those masculine/feminine attributes got buried under usual consumer concerns. Last week, Chrysler manufactured its last Cruiser.

Example two. Failing to build on a great idea is apparently also pounding Curves, a rather unique gym that, owing to my gender, I will never use. Curves was designed as a new type of gym for busy women. The appeal was simple: a quick series of exercises designed to minimize the time busy women had to spending in the gym. Plus, Curves was for women only, removing the drawback of having us guys around—a situation I can understand.

In addition, the business case was fairly simple, as Curves had limited equipment and costs, making it profitable with a relatively small number of members. That led to Curves facilities popping up like Subway franchises.

Only Curves has apparently sat on its idea a little too long. Times change and demands in workouts shift. New equipment and classes are needed to break the routine and keep things exciting. Curves apparently hasn’t kept up and around the country the ubiquitous facilities are starting to close.

Taken together or apart, the stories of the Cruiser and Curves are hardly shocking or sadly unique. Far too many business catch lightening with a special idea and simply milk it too long, forgetting that even the boldest innovation becomes stale after a while. It is, to be honest, a really old business story that scarcely bears repeating because everyone knows it.

So why does it keep happening?

Time & Again

Time has run out for Nicolas Hayek, and we’re all the poorer for it.

Now, truth be told, I had never heard of Hayek until I read his obituary last week. But instantly it hit me that this was the kind of person that every business should have. At least, businesses that are facing competition, economic news, struggles with employees, etc…

The odds are that you, like me, never heard of Hayek, even though we know his legacy. In the 1980s, Hayek was hired by a group of Swiss banks to preside over the shutdown of the Swiss watch industry. Long dominant in the world of watches, the Swiss had fallen into irrelevance thanks to the rise of Japanese time pieces and consumers’ growing preference for digital.

Hayek failed miserably at his assigned task. Instead of shutting down the industry, Hayek revived it by creating a company and a product known as Swatch. His obituary, as written by the New York Times, explains the change Swatch brought about.

“Lightweight, with vibrantly colored bands and breezy novelty faces, (Swatch) was remarkably inexpensive to produce. (It had 51 parts, as opposed to the nearly 100 needed to make a traditional wristwatch.) It retailed for less than $35 when it was first marketed in the United States later that year. The Swatch quickly became a sought-after collector’s item worldwide. It was very likely the first time that ordinary people had even considered owning multiple watches.”

In short order, Swatch led a resurrection of the entire Swiss watch industry, leading to a resurgence of even high-end brands. The company Hayek formed became a huge part of that high-end market, producing watches today under names including Tiffany, Omega, Tissot, Calvin Klein and Longines.

Now, this story doesn’t have an entirely happy ending. Today, the watch industry is threatened by a generation of consumers that eschews wristwatches, using their ubiquitous cell phones to tell time. But we shouldn’t skip by Hayek’s passing too quickly at all. After all, this is possibly the best story ever of taking lemons and creating highly profitable lemonade.

Hayek’s lesson reminds us that creativity, marketing, a sharp eye on cost-cutting and savvy management can sometime move mountains. Break down what he did. He took a fresh look at a dying industry and remade it by cutting costs, embracing simplicity and finding a vastly underserved market even though his product was extremely old.

Remember, Hayek wasn’t in the watch industry. He was a consultant – an outsider – brought in to provide ideas (albeit on the closing of an industry.) However, his fresh eyes saw dawn where everyone else saw dusk. It happens and can happen again.

More importantly, he knew how to recognize and harness talent. As The Economist wrote: “Mr. Hayek achieved greatness not for his particular talent as an innovator or as a marketer, but for the fact that he excelled at harnessing the ideas and talent of others.”

In other words, creativity still works, fresh ideas can still succeed and occasionally, old products can be brought back to life with a new approach. And what’s more, leadership and recognizing the talents of a team can lead to revolutions. Certainly there’s no guarantee of success, but failure isn’t a certainty either.

Nicolas Hayek showed us what is possible.

Value and Values

Standing in the aisles of a price oriented supermarket in California, I thought I heard the best definition of value.

Now this was no average store. This was Grocery Outlet, a company whose stores will never get compared to Wegmans or Whole Foods. The stores are extremely simple, with small selections of self-service fresh products almost included as an afterthought. The bulk of the store is dedicated to the most ordinary center store products in crude, low-cost displays.

What’s most striking about Grocery Outlet is some of those products themselves. This is one of the few stores around where you can find (as I did) adjacent displays of private label applesauce from both Kroger and Albertsons. If Grocery Outlet can get it cheaply, they do it.

But that’s not the story. What caught me on this little visit was an announcement “from aisle three” as the in house audio explained. The ad reminded shoppers why they were at Grocery Outlet and why they should come back before they go to any other store. Simply put, it’s to check out the cheap prices. By purchasing some products at these cheap prices, the ad said, shoppers could save money to spend elsewhere on the products that are really important to them.

There it is, the meaning of value. Spending money where it matters most and spending less where it doesn’t. Grocery Outlet knows who is it and understands why its shoppers are in the store. Sure it’s not pretty, but it’s a heck of a message.

The key to any message is actually telling it clearly and simply. Elsewhere on the same trip I got two reminders why Fresh and Easy, Tesco’s concept store, may just make it yet. F&E is finding its voice and its message in ways others should consider. In one store I saw a simple frozen food case with a very interesting message. The sign above explained that a case with a door saves 45% in energy costs over an open-air case. And F&E passes those savings along.

Later I heard an F&E radio ad with a similar reminder. In that ad, a customer talked about his experience at F&E, obviously praising the store. Nothing special to that, except the announcer explained that by using real customers F&E saves money and that saving is passed on in lower prices.

Now, quite honestly there is nothing especially groundbreaking or radical in either the F&E ad or the frozen case sign, but that doesn’t matter. F&E’s stores still need work, but the messages are getting there: we find ways to save money to help you save money. Years from now those messages may explain why F&E took hold.

Of course, not every measure of value is in price. Some comes from the caring of staff, which I saw briefly at a Stater Bros. store. An employee chatted with me briefly while she repaired a “no soliciting” sign outside the supermarket. As she explained, the sign was positioned perfectly after her last shift, but then someone messed around with her sign. And she wasn’t happy about it.

If a staffer cares so much about a sign, I have to believe she cares an awful lot about food and customers. That too speaks volumes about value.

The Beautifully Boring Games

Okay soccer/football fans: prepare to get angry. Like the vast majority of Americans I would describe the World Cup in South Africa with one word: Dull!

I’m one of those people who prefer American football, despite it capturing the two worst elements of life in the US—sporadic violence and frequent meetings. Soccer just doesn’t do it for me, even though I actually played the sport in high school. Any chance of my watching the World Cup is being killed by a combination of the strange crowd noises and the complete lack of scoring and shooting.

By now, some of you are seething and are set to pound out a note telling me what a fool I am. You’ll tell me I simply don’t understand the “beautiful game.” You will tell me that I don’t appreciate the nuance, the passing and the intricacy of the entire event. Trust me, I’ve heard it before.

Save your anger: I fully accept and agree with all your criticism. You are totally right. I just don’t get it.

But here’s the funny thing: my favorite sport is baseball, which moves slower than soccer. (Much slower if the Yankees and Red Sox are playing.) However, I know baseball really well and I totally appreciate the nuance and intricacy and can watch it endlessly. So my problem isn’t patience, it’s education. If someone taught me soccer I might find I would like it much more.

And in that we find a great lesson in marketing. Too often products are displayed, advertised and merchandised without any thought to consumer education. If we don’t take time to educate the shopper, we completely miss the opportunity to raise them from observer to buyer.

Today’s stores increasingly have new and different items. In food stores there are countless products – from cheese to produce and artisan breads to balsamic vinegar – that consumers won’t appreciate unless they are taught how to use them. This problem is hardly limited to supermarkets. Electronics stores feature the never-ending parade of new technologies that many consumers barely understand. There are new features in cars, sourcing issues on apparel…well, you get the picture. Complexity keeps growing and the problem is the education of the shopper is lacking if not completely absent.

We need to think about product marketing in the way World Cup fans need to think about their beautiful game. Don’t assume the rest of us get it and don’t scold us for what we don’t know. Instead, try to educate and lift us up. Help us understand what we should know and you may be surprised. If you take the time to teach us the complexity and the nuance, we can learn to appreciate it. In short order, we could become fans and customers.

Once that happens, we might actually start talking to others. And that is the best form of shopper marketing for any product, store or even the World Cup.

Everyone Wants To Know: Where Are You?

Since we wrote about Location-Based Services like Foursquare, Gowalla and Loopt last week, more news around these programs have been announced, potentially indicating the growing popularity with both users and brands. Here’s a recap of some of those stories, to keep you up on the news and provide some food for thought as it relates to your own business.

Twitter Announces They’ll Add Places to Its Posts:  This brings new offerings for those using Twitter for data mining.

Forsquare to Open Online Store: Foursquare users get their wishes granted for real “offline” badges and merchandise to display their status.

Forget the Major, Gowalla Focuses on Serendipitous Deals for All: Everyone gets a chance to win cool offers just for checking in where they already are.

Brightkite Launches Location-Based Photo Tips: Imagine your shoppers letting their friends know that they’re at your store, and the season’s first strawberries have arrived, proving their ripeness with a photo.

Which Startups Will Bridge the Physical and Virtual Worlds? And have the sticky-ness to provide long-term value for consumers and brands?

Frequent Foursquare Miles? Topguest Checks In: For the travel industry, Topguest allows users to gather their “check-ins” from any of the LBS services out there and trade them in to their preferred travel partner of choice for reward points.  Could TopShopper be next for grocer retailers?

PlaceBook Bets on Privacy: While the exact purpose of this yet-to-be launched application is unknown today, it’s poised to address the big hurdle facing many who’ve not yet jumped into Foursquare and other LBS apps: privacy concerns.

What’s Next for Location Marketing? And how will these apps deliver value beyond the “I’m here” announcement?

Facebook Location Features Confirmed and Coming Soon: No details yet, but watch your local twitter stream for news.

What are your thoughts on this fairly new, yet popular tool? Are you thinking about location-based marketing tactics for your brand?

Connecting with Shoppers in New Ways: Location-Based Services

Remember the day you launched your first loyalty card program? It was likely based around a rectangular, credit-card sized laminated plastic card that identified shoppers at the checkout. You could track and reward purchases, and if you were fortunate enough to convince customers to give their real contact information, you could send special offers their way.

While some of us were trying to figure out how to get smaller loyalty cards onto our key chains, some really smart folks brought fun elements of gaming together with mobile and GPS technology to the market in a way that could quickly replace those plastic-covered cards.

Location-based service (LBS) start-ups like Loopt, Foursquare, Shopkick and Gowalla have developed new ways to use mobile phones to bridge the digital and physical worlds, turning the tasks of everyday life, like buying coffee and running errands, into a game for customers.

Customers are increasingly using their mobile phones to let their friends and network know “I’m here” which allows them to receive awards and recognition by the retailer they’re visiting.  This new technology opens up interesting marketing opportunities for retailers as they can now be alerted when their most loyal shoppers arrive at the store and engage with them in unique ways.

For retailers, these programs allow them to learn more about who their customers are and how they behave, and engage with them in ways never before imaginable. Today you can not only identify who your most loyal shoppers are, but encourage them to let their friends know what they love about your brand.

Word of mouth advertising that used to happen when Mary and Joe met at the coffee shop now happens online when your loyal brand advocates publicly announce “I come here often” and is encouraged with mayorships, special offers and invitations. Special events bring a long list of opportunities to interact with brand advocates in ways that allow them to participate and share with others.

Here are just a few ways that some retailers are using location-based services to engage with their shoppers:

  • Gap sends customers a 25% discount coupon after they check in twice to a Gap store.
  • Burger King is offering a soda with a sandwich or a coffee with a breakfast sandwich to people who check in three times.
  • Universal Music will send five free songs to people who check into any bar along with two friends.
  • Starbucks offers a barista badge on Foursquare, where people compete to become “mayors” of places, and the coffee chain is giving mayors $1 off Frappuccinos.

While these are examples of large, national retailers, the very nature of location-based services bring new marketing abilities for smaller retailers to stand out in their local market. The start-ups mentioned above are increasingly bringing new offerings and technologies that enable and empower small retailers to have impact with their shoppers in ways that build greater loyalty, and long-term sales.

I’ve been playing around with Foursquare and proudly wore my Aisle7 Major badge for about a week until I was dethroned by one of my own peers. By exploring the capabilities on my own, I can definitely see the potential for retailers to connect with me once I’m in their store. The possibilities are endless.