BACK TO THE ROOTS,..OR HOW RETAILERS ARE REINVENTING THE TRADITIONAL RETAILING.

BACK TO THE ROOTS.

How retailers are getting back to the traditional retailing, to reinvent their staggering retail concepts.

What does Carrefour, Tesco, Lidl, Mercadona, etc...have in common, to have been changing drastically there existing boring basic discounter retail concepts into a kind of new lifestyle experience.  Today, the hiper and supermarkets are presenting a new brand business model, using the old traditional ways of retailing, maintaining strong competitive price levels.
Last week, the big boss of Mercadona, a leading food retailer in Spain, admitted openly his failed marketing strategy of dropping a few years ago the fresh food concept and announced the immediate creating and formation of 21.000 professional shopkeepers. (like the you can find them in the little neighborhood stores,..the real specialized retailer....)
In the meantime, Lidl is leaving aside, its pure pallet image, by offering more branded products, better presented and showing tendencies of a real convenience store, offering daily fresh, in the store made bread and even in some cases, a coffee station, (offering, to take away hot drinks) or fresh seafood.

By reorganizing the store concept into various attractive 'boutique' areas, like a food court (where all food products, like fish, meat, bakery and grocery are presented and made on a very artisanal tradition), fashion corner (all items are well presented, like the way you can only find them into a high end fashion store) or the multimedia products presented in a high tech environment and managed by specialized trained staff.

The key is specializing and bringing a new buying experience, by offering a good service, wide range of products, fresh and in front prepared foods,...in house courses and or product presentations.  The whole, presented in a clear visual easy to understand attractive animated and well presented concept.
Shopping becomes again a unique experience, it has to be easy, comfortable,....
So more appealing stores are needed...

Have a look to the interesting opinions of the consumers (what drives them..) after visiting the new 'Tesco' store concept....

It is clear that few businesses will survive, staying sticked with their existing business format.  As consumer tastes, wants and needs are changing rapidly, each retailer has to adapt them to the new trends.
Where in the late 2005 / 2006...the key business slogan was standardize and in advanced prepared products, in order to reduce costs and create a easy high rotation of products and sales, today we go back to the good old school where 'Small is again Beautiful'.

The economical difficult situation (less income, so less buying power), the new forms of family (more and more single living persons, an increasing senior population, more fast food and already prepared meals) and changes in buying habits, have forced the retailers in offering small quantity product offers and more competitive prices.  (today your local supermarket is full of 1€ pack offers and today you can easily buy just one piece of fruit from the vegetable stand or just two slices of you favorite cheese in the cheese section).
By having smaller quantity of products, prices looks more interesting for the consumer.  (however not always more cheaper than bulk packs, where you get more value for your money).
The recent confession of Tesco, that it has generated more than 30.000 tones of food waste in the first 6 months of 2013, has created an strong reaction and motivation for retailers to push strongly into above small quantity product policy.  (so more benefit, less waste...)

By combining above new product and pricing policy, offering a more personal shopping experience into their store spaces, creating a kind traditional local market atmosphere, above retailers hope to turn there staggering sales turnovers, competing again with the local small retailer.
As mentioned already in my previos posts on 'small retailers' and the 'empty shopping street' problem, the key of success and survival is specializing and being different.


Just have a look to some of the above concepts like Carrefour and Tesco....and the motives for their changes.

Not only food retailers are getting back to the traditional roots of retailing.  Above strategy is implemented  in a wide range of concepts around the world.

Just have a look, how they changed a classical garden center in Alberta, Canada..to the 'The Enjoy Center', where the garden center and greenhouse are the anchor, completing it with a central market place, with a home decoration and kitchen store, a deli with local food specialities, a wine store, a spa and even a restaurant.
The marketplace is mainly used to present events, product presentations and or trainings and has become the principal public attraction and a motor for selling its products.
Like its name,...you come to enjoy...

Just have a visit...at this amazing concept.

http://www.enjoycentre.ca/

Today, by analyzing above movements of key world retail players, reinventing the past, we can only confirm that the concept of the local small neighborhood retailer is fashion, hot and back.
Maybe they never have gone...

Above operators can reinvent, copy and create an perfect atmosphere or store concept,...but the major challenge will be definitely, the creating of a high level competitive retail 'detail' sales staff, like you often can find them, in your small neighborhood store.

THE IMPORTANCE OF STRATEGIC POSITIONING.

OR HOW YOU,..RETAILER CONTINUOUSLY  HAS TO
ACT, IN ORDER TO STAY ON TOP.











In a todays difficult market, where every retailer looks with a pessimistic feeling, towards the future (especially after more than 5 years of tough economical crisis), it is more than time for each store owner, to revise their positioning strategy, in order to survive or prepare themselves for the future to come.
It is clear that by maintaining the existing midlevel segment (by trying to keep a balance between price and quality), few interesting growing perspectives will exist.  

So,..'DON'T GET STUCK IN THE MIDDLE'..and focus your business and become more aggressive.

Start to revise your strategic positioning.  This position is something very fluctual and has to be revised permanently, in order to be or stay on the top.  Don't forget, the market is changing permanently. 

-How do you want, that you clients see you?
-What is the difference between you and your competitors?
-Why clients buy in your store and not with your competitors?
-Where can you be different than your competitors?

As mentioned in previous posts,..it is the art of being different, that will position your company or store out of the crowd.
So a perfect 'Brand Positioning' is needed.  

Here a small example of the local grocery store?

Imagine you have a small grocery store and next to your store they just opened a big supermarket with extensive grocery department.  How can your reposition yourself and be different ?

By  'SPECIALIZING'.  

Did you make a deep analyze of your position towards above competitor?
Did you analyze, where you can be different than above competitor?
Did you make your strength a weakness analysis?

Maybe you could do the following to be different:

- Home delivery.
- Prepared vegetable and or fruit salads. 
- Specialize in more exotic fruits and vegetables.
- More personal service.
- More flexible shopping hours.
- More fresh and ecological vegetables.
- Client loyalty card.
- Special personal offers.
- Small quantity packs (a quiet abandon segment for the increasing single alone living market)
- Etc....

As you can see,..you have to be creative, know how to analyze your market, asking your suppliers and clients their opinions and be willing to change and adapt your business very fast.
By using a value curve,... (see example 'The Blue Ocean Strategy'), you will be able to position the current situation of your store or brand.  By implementing different actions, depending the brand position you want to obtain,...you will receive a clear plan and a guideline to undertake action.
If you have a grocery store..or even if you are the owner of Zara,...a permanent revised strategic position is key in order to be successful.

Have a look to the following case of the 'the Cirque du Soleil'

As you can see in above curve, you will understand why 'Cirque du Soleil' is so successful.  They are just completely different than the average entertainment attraction.  They bring something completely new. (example. no animals but yes a amazing unique venue and always different amazing themes)
If you want to learn more about this curves...just visit  http://www.blueoceanstrategy.com/.

Positioning your company, can be done into a 'Low-cost Strategy' or a 'Differentiation Strategy'.  Both are valuable and can be successful. 

In a 'Low-cost Strategy', you will lower all extra costs on product, marketing (design, packing, etc...) and produce mainly into low salary countries.  You will offer a quiet basic product with a very low cost production and strong selling price.  (example retailer 'Primark').

In a 'Differentiation Strategy', you will create a unique image and or value added idea of your product.  Something your clients are willing to pay for.  
Production quality, brand image or name, design and product quality features, service, innovation exclusive retail channels,etc.. are some of the keys elements, to implement into this strategy.  (example retailer 'Abercrombie')

As you can see, as soon as you know your target group, you will be able to develop a clear strategy and quality service, allowing you to stick out of the crowd.
Just lets start changing our company and putting it on a curve. It is the beginning and a  perfect guideline to your successful future.

Just have a look to this very interesting video of Brian K. McCarthy about positioning, differentiation and value proposition.

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DE KRINGLOOP WINKEL, A WAY OF SOCIAL RETAILING.

Talking about the 'de kringloop winkel' is talking about an other form of retailing.  The more social retailing.  The kringloop concept you will find mainly in the Flemish part of Belgium and also in Holland.   However, they do work completely independent.  

'USED THINGS HAVE A STORY, OUR PEOPLE TOO' is the slogan used by above social organization, trying to create on a social economical way, activities in order to:

-Create quality, durable jobs for people, who, for various social reasons are excluded in the society and have it difficult to find above.

-Create more social jobs, offering services at various social economical organizations like hospitals, elderly care or unemployment organizations, immigrant integration groups,..etc...

-Offer valuable products and services through there 2n hand stores.

-Be part of the recycling and regeneration of used products and create a better environment, protect our natural resources and improve our quality of life.

-Offering an added value to our society.

The core business of 'de kringloop winkels' are the retail stores.  It is the engine of the whole organization. 

As 2nd hand stores, you can find a wide range of various items, like clothing, furniture, books, household, etc... at very competitive prices.   The organization offers a service, to collect all 2nd hand products from the people who want to get off there used products (you can also bring and deposit them yourself ).  

If needed, items like furniture, etc,... are repaired and refreshed, to give a new life.

Next to the 2nd hand stores, there are an other wide range of services offered, in order to create employment.

Services which go from washing and ironing for the local hospital or elderly home, to a complete furniture repair workshop or studio, offering all kind of repairments, etc...

The social idea still will dominate and be the red line throughout the company and its activities.

Just have a look to one of there stores and concept.

Or have a view to this funny presentation.

As you can see, a very interesting concept, focusing on a merely social and environmental policy.  Just a other way to be different.

www.dekringloopwinkel.be

WHY ALL SHOPPING MALLS ARE LOOKING THE SAME?

THE INVASION OF THE BIG BRANDS.










The recent opening of yet another commercial center in my neighborhood in Madrid (we have already 5 centers in an area of 20 miles), has put myself with some big doubts about, 'how' somebody can still invest his money into above.  
Mainly, all centers are the same and offer the same brands and stores.  The latest new one, probably is more clean, attractive, new,..and the oldest one, probably out of fashion and almost death,...but they just really offer the same brands.  So, if you have you seen one, you have seen them all.  
It is has been proven, that due to the tremendous expansion of shopping malls, each mall has become a more local center, where the local people of a particular area, visit and buy. (before, when there only existed one shopping mall, it was considered an event, something new and the whole town, came to visit the mall, creating lots of crowds and sales.)

Analyzing the evolution and boom of the shopping malls around the globe (even in Asia), we can see a similar way of first very 'success stories' and than in line tremendous 'decline stories' repeating every where.  Probably, retail investors, only have eye on the increasing emerging markets and the interesting, exiting and rewarding retail projects, some clever promotors are offering, ignoring the need for more professional management and real knowledge of how to manage a good shopping mall.

The last years, the high inflation, the world wide economical crisis (mainly Europe and USA), the failing consumer spending and  low and cautious investment climate, has turned up the whole way and form, how it has to go on,...from now off on.

The failure, to have been opening shopping malls on each corner, offering the same product groups and brands, combined with the above mentioned difficult economical situation, has created a big problem and a boring shopping mall effect.  'IF YOU HAVE SEEN ONE, YOU HAVE SEEN THEM ALL'

One of the major problems, we can see, is the right product mix, used in above shopping malls.  Frequently the mall management, prefers to stick to big brands, renting big retail spaces at very interesting rental prices (most of the time at rental prices much lower than the more local and smaller retail operator, forcing them to move out of the shopping center into nearby cheaper industrial areas) using them as a form of getting traffic into the shopping mall.  At the end, the mall consist out of the typical major retailers, dominating the center.
Could sounds logical, however...the risk of above decision, merely thinking financially, focusing on above, could create an revers effect. (less visitors as mall is boring and has a lack of innovation and new retail offer)
Today, everybody (brands, stores and also shopping malls) has to be different, innovative and be able to surprise their clients permanently.  So there is need for a lot imagination, different retail concepts and wide interesting permanent innovative product offer.
CONSUMERS WANT TO BE SURPRISED' and will move to the center, who is different.  
Only by offering the right product and retail mix, creating also a favorable business climate for the small retail operators, you will maintain a interesting product offer and loyal mall visitor.

So, dear shopping mall managers,...try to mix and find the right product retail offer without ignoring the importance of the smaller retail operators.  Don't forget to find the right F&B mix, as restaurants, theaters, etc and more convenient stores (postal office, banks, childcare service) will bring a permanent flew of visitors.   Also big retail groups are failing and the impact on your shopping mall will be much bigger.  Do not forget,...BEING DIFFERENT IS THE KEY TO YOUR SHOPPING MALL SUCCESS. 

RETAIL IS JUST DETAIL, IDEAS TO SELL MORE INTO YOUR STORE.

SIMPLE IDEAS TO SELL MORE INTO YOUR STORE.
Week 29







Internal systems, idea 8
'DO WHAT YOU TELL'.  In order to gain the confidence and the motivation of your staff, you have to maintain your promises and keep your word.  Often, just words are not enough and you have to show your capacity with acts.  'ACTIONS SPEAK LOUDER THAN WORDS'.
When promising promotions, incentives in order to sell more, be able and sure that you will be able to cumplish them.
The best way of motivation and gaining respect as manager, is being on the field with your people.  So, not just only training on the book, but also together in the field, store,...showing your capacities, working together with them.

Clients, idea 9
Using 'open questions' is probably the best way for your sales staff to understand the needs of the clients, visiting your store. However, be carefully, some questions, like 'Can I help you?? can already close the interest of the client and give a very short 'No' or 'I am just looking' of the client.  
It is the art of asking 'open questions' to the client, creating a door to open and start the conversation.  Open questions, are needed.  Your salesman should learn to listen, understand and be able to give the answer on the doubts your clients have.  It is important that your sales staff is listening concentrated when talking with the client, know its products and is able to convince with clear arguments.  
By own experience, when entering a client in our stores, I like to greet the client with a smile, explaining that all our products exist in various sizes and colors.  If any questions, we are available. After 10 minutes, we walk around the store, organizing the products, but listening and observing carefully (without annoying) to the conversations, clients have between them.  Most of the time, client have doubts on the products and we use this doubts to offer explanations and opening the road to start a deeper conversation with the client.  The ice has been broken and we start asking more details to the client, what he really is looking for. Often, the client feels comfortable and more open and we are able to answer on the needs of above.  This results most of the time in final sales and or a detailed product and price offer.  (with often a final order later on).

Employees, idea 8
'CALL THEM WITH THEIR NAME'.  It has been proven, that calling your staff by its name is motivating them and feeling them part of the company.  So, make the habit before visiting your store, to memorize the names of the people working.  (even if you have a lot of stores and employees)
By experience in our stores, all sales staff has a badge with its first name only, creating a very personal and comfortable link between the client and the store.
It is a part of this very important good feeling and the way you want to present your total concept.  Often you will be perceived different than other competitors.

HOW TO CONVERT TRAFFIC INTO SALES.

OR HOW TO INCREASE ABOVE SALES...










In order to convert the traffic into your store into real sales, we like to analyze and propose some basic ideas.  Often, we do not know the exact situation of what is happening into our store and are confronted  with various questions like:

*Do we know the exact needs and buying motivations of our customers?
*Do we know, why our customers are coming back?
*What is the buying behavior of our major customers group?
*How many shoppers really buy in our store?
*What kind of peel of rate do we manage in our store. (or,... how many people passing our store and how many of those people are really walking in)?

By knowing above, we will be able to adapt ourself very quickly to the continuous needs and changes of our potential and or existing customers. Here are some ideas to convert the traffic into real sales.

*Know your consumer: It is very important that you understand your consumer (know you consumer profile) and adapt your offer to them.  As mentioned in previous posts...consumer building, through membership, club or loyalty cards, should be one of your priorities. They will allow you, to know everything about them (buying frequency, their needs, behavior, etc..) and concentrate your business on the most profitable ones.  Your complete store concept should be adapted to them.

*Catch their attention: In order to grab the attention of the crowd passing your store, it is important to be different.  To be creative. So keep your message short, clear and attractive. Your window shop should have something special, drawing the attention and motivate them to get into your store.  An effective visual merchandising is important. Just have a look, how some retailers, like Desigual, try to captivate their consumers.

*

*Create reason to return: It is important to change your store on frequent base, in order to maintain a interest of your customers. Give you consumers reasons to come back. Create a permanent changing 
retail environment, offering new products, ideas,....
One of the most success full retailers in creating above is definitely Zara.  They have been able to create
a permanent curiosity, excitement and fascination to enter in their store every week and get out with something bought.  As mentioned in my previous  post on the success of Zara, they have been able to build there whole system on above sensation....a reason to return and to buy.
By using the social media (Facebook, Twitter, Blog, etc...) and a real retail planning, you should be able, to transmit and captivate above consumers and create a permanent flow into your store.

As you can see, it is not complicated, to convert traffic into sales.  It all starts with maintaing and taking care of your existing clients. Try to motivate them to come back, using them, making publicity about your concept and store. They will bring more customers.  Don't forget, they are you major ambassadors.
So, try to convert traffic into shoppers, shoppers into customers and customers into your mayor publicity and repeated buyers. Take note, that it is much more complicated to captivate a new client than maintaining and keeping an existing client happy.

Good luck.

OUR WEEKLY RETAIL VOCABULARY LESSON

OUR WEEKLY RETAIL VOCABULARY COURSE.
WEEK 17





A Balanced Tenancy: A term used, mainly in shopping malls, especially when starting up and selecting the different shop concepts and or products.  In order to have the perfect shop offer mix, the shopping mall management team try to select a wide range of different retailers, in order to captivate a wide and broader consumer, always adapting at the target population. It is a very important form, in order to create an attractive shopping mall.

Depth of Assortment: It is the variety of products or services in a general product group, who a retailer is offering to the consumer.  Today, it has been proven, that it is better to specialize, offering a short but more depth product group.  Better to be the best in one thing than be bad en everything.

Flexible Pricing: A strategy used by retailers, allowing consumers to be able to bargain on the existing retail  selling prices.  Consumers, specialized in bargaining can like this always obtain a better price.

A Leased Departement: A part of the store, rented to a third party, in order to sell its products.  Generally used by bigger stores,   Today, a lot of big department stores, discounter or speciality stores using above system (synergy of various brands) to cut down their operation costs and offer a wider range of products to their consumers.