We are now seeing the rise of a neighborhood supermarket model to capture the busy shopper that is not bothered about paying 15% more for a product but, instead, demands a tailored and convenient shopping experience. The neighborhood stores of the Pão de Açucar Group are set to capture the custom of the busy people of São Paulo (Brazil) and fight in the same market area as Dia% for a more demanding and loyal shopper. The clientele is the same, but the shopper behaves differently, depending on their reasons for going to the supermarket, the time they have, and the expectation of what they are going to find in the selection on the shop shelves.
With low shelves, intuitive signing, small stores and a reduced range of products, Extra Fácil and Extra Perto are beating their targets by capturing very often small purchases, exploiting to the maximum the consumer potential of the neighborhood, where the stores are located.
Creating a tailored shopping experience, which caters to the different needs of the clientele, is a challenge for any retailer, as, in fact, this should please all kinds of public. In the virtual world, Amazon.com creates directed offerings for your profile with amazing precision. A friend told me once that, at the moment of choosing a present for himself, Amazon knows him better than his own wife. I don’t doubt it. In the virtual retail sector it is much easier to adapt the store to each customer profile, test what works and perfect the campaigns and
offers. In real-world retail, this is not so simple.
Despite information being scarce, in real retail there is, indeed, much more free information than the quantity actually used by retailers. In the on-line world, retailers make an effort to capture the maximum share of their customers’ pockets, as there are no spaces “for sale” nor high-promotional funding provided by consumer-goods manufacturers, as happens in the world of supermarkets.
The necessity of maximizing contact with the shopper, and capturing their custom, attention and loyalty has led Amazon.com to the state-of-the-art capacity of anticipating the needs of its clients. In real (world) retail, one just needs to both observe better and observe more this shopping or “buying” behavior, that shoppers display, to gain rich insights, such as spreading shopping baskets full of shopping throughout the store, or grouping all the natural fruit-juices into one single aisle (irrespective of whether these are frozen, come in cartons or
bottles), and measuring the results of changes in point-of-sale variables.
We are still a long way off from all this. The concern about shoppability has been less than the concern over reneogiating the promotional funding with industry. Successful cases are starting to be published now, but small and medium-sized supermarkets owners are still waiting for some great ‘player’ to make changes, so they can then just copy these new models. The traditional battle cry of “price offer, variety and service” is wearing thin, and survival now depends on a much greater effort and speed of change than this.
Originally published at Mundo do Marketing website in 4/8/2010