Author: Mark Heckman
According to a recent report published by Inmar, by the Year 2021 one-fourth of all the traditional supermarkets (over $2M in annual sales and approximately 25,000 to 75,000 square feet) open today will be shuttered. Their existence they predict, to be summarily supplanted by herds of smaller specialty stores, on-line retailers and a few scattered mega-warehouse stores.
Typically I view these survey-based reports with a healthy dose of skepticism, but in this case I’m a believer. In fact, given the speed in which shopper options are growing and expectations are changing, I wouldn’t be surprised if their prognostications are understated. As counterintuitive as it may seem, this former dominant format is caught in an awkward conundrum. They have become too big to be convenient and too limited to be a true one-stop shopping resource. The exodus is real and their vacant footprints are sadly destined to become temporary outlets forHalloween Costume or Fourth of July Fireworks operators.
Many of the big supermarket chains that find themselves with a huge inventory of these endangered formats are doing a reasonably good job of proactively transitioning to smaller, more shopper-centric stores. Still others have attempted to add new, more convenient meal solutions within their existing stores. While others have made more token gestures such as partnering with third party purveyors such as Shipt and Instacart to begin the offering of home delivered groceries and have added technology like shopping apps and kiosks in hopes of remaining relevant.
The one positive aspect of tradition supermarkets that will likely slow their transition into oblivion is based in clear irony. The innovative inertia has kept their stores virtually the same throughout the years. Fortunately, this dearth of change is actually attractive to a segment of shoppers who value their familiarity with ‘where the stuff I buy is’…..more than anything else.But even this once compelling attribute is becoming less important as new shoppers enter the marketplace looking for meal solutions, savings and physical convenience.
Can the Seemingly Inevitable Obsolescence be Averted?
The short answers ‘probably not’….but if there is an solution, it lies in traditional supermarkets becoming far less ‘traditional’. Said another way, ad hoc steps that simply layer new stuff on top of the old is a recipe for failure. Conversely, retailers need to roll up their sleeves and start thinking like their customers. Further, they must make tough decisions as to which technology and methodology is best suited to intercept the changing direction shopper norms. As a starting point, the five dimensions I offer below will at a minimum create the proper frame of mind from saving the endangered specie we call traditional supermarkets.
- Engage in a meaningful dialogue with shoppers, not to confuse this step with conducting closed end customer satisfaction surveys, but rather a real look at qualitative attitudes, issues and expectations.
- Manage departments and categories according to how shoppers want to engage them in the store not by accommodating merchandising or operational objectives.
- Stop limiting store design with traditional appurtenances such as aisles, parameters, end caps and other fixtures. To think outside of the box, you must stop designing a box.
- Measure and manage your shopper’s time in the store. Your goal should be to sell more to them in a short period of time….not to keep extend their time in the store without the mutual benefit of shoppers buying more efficiently.
- Be prepared to make subtle, but important changes to the stores based upon micro-marketing findings. While there is virtue in consistency, adapting to local shopper demand and priorities can be critical, especially for regions with concentrations of ethnic groups.