Retailer Trend: Playing at Two Speeds

OBSERVATION

Walgreens is in the early stages of rolling out its ambitious Customer Centric Retailing initiative, which promises to transform everything from store layouts to merchandising and product assortments in over 3,000 stores by this fall. In the meantime, they just purchased the largest drug chain in the New York metropolitan area, Duane Reade, for $1.08 billion. Formerly stodgy Kraft has rolled out sweeping changes and new initiatives that include a popular iPhone app (iFood Assistant), a completely revamped consumer website, and edgier advertising and product placements for stalwart brands such as Miracle Whip (which can now be found in Lady Gaga videos and skateboarding games). They also have managed to squeeze in a major acquisition: 186-year-old British confectionary brand, Cadbury - for $19 billion.

Until very recently, retailers and brands were either getting their houses in order or venturing out into acquisitions and alternative channels, but rarely doing both at the same time. Now the smart ones, and not just those with stratospheric stats, are playing at two speeds - revisiting old assumptions about how their business has always run while at the same time seizing immediate opportunities to break into new markets.

MOTIVATION

It's been a brutal couple of years in retail; once promising retailers such as Circuit City, Steve & Barry's, and Linens 'n Things have liquidated, and national brands that used to dictate category direction are being put on notice as the retailers that remain create and market their own brands. The former vision for both retailers and suppliers was of a valiant company competing in a slow-changing field with easily identifiable rivals and clear boundaries. That has been replaced by the realization that value has migrated and companies can be competitors, buyers, and suppliers all at the same time. Everyone is the competition, snooze you lose and no opportunity is off limits!

DIFFERENTIATION

My clients aren't just changing what they do - they are changing how they think about their current retail positioning and their role in retail's future, and they are getting comfortable with executing against both present and future at the same time.

Here are two ways that you can accelerate your retail relevance by playing at two speeds:

- Implement simultaneously, not sequentially. Tying your customer retention and client services initiatives together with your business development and channel expansion plans accelerates both and sends a more coherent message to your customers and prospects in the process. Every well-crafted business development proposition will bring new relevance to your existing customer base; learning how to go deeper with your existing customers will lay a foundation of success for your business development efforts.

- Develop unique direct-to-retail propositions.  Consumer marketing is great for building brand awareness but it can't serve as a one-size-fits-all substitute for retailer-specific proposition development.  Every retailer has a unique vision for their business and these days, they aren't just responding to consumer demand, they are attempting to shape shopper preferences.  Your latest ad campaign or social media blitz won't impress a major retailer by default;  you'll have to demonstrate how they link to each retailer's specific vision and business goals.

Now is the time to redefine challenges and opportunities. Retailers aren't taking still pictures of the future, they are dynamically evolving . . . maintaining a larger vision while reserving the right to change their minds about which categories, brands, and products will support it.  That's great news for suppliers that embrace agility and responsive decision-making, and even better news for those that can kick it into gear and play at two speeds!

Want additional retail insights? Visit my website/blog and follow me on Twitter.

Want to continue the conversation?  Contact me directly at carol@newmarketbuilders.com


POPON - Point of Purchase Online Network Featuring Carol Spieckerman