Does the use of a common banner create a virtual chain of stores?
That's a question that comes up in various ways in this week's Page 1 news feature about wholesalers and the retail banners they sponsor.
Maybe in the end it's just a matter of definition, but to many observers the term "virtual chain" implies much more than a bunch of stores defined by a common name and unified advertising programs.
For a start, the banner must be the chief identity of the store; the owner's name can't be central.
Next, there must be standards associated with the banner. Standards must be established by a wholesaler or other banner license holder. Standards must go to store size, departments offered, stockkeeping unit count, sanitation and so on.
And, most importantly, banner standards must be enforced. In that vein, SN reported in the June 9 issue that IGA is opening an initiative next week intended to ensure retail compliance with standards. The idea behind enforcing standards is to make a banner become a brand -- a brand that trumpets consistency and compelling store features to shoppers of any aligned store. That's a virtual chain.
The goal of enforcing standards to the degree that a virtual chain, or brand, is reality will remain elusive for a while in most instances. That's because many wholesalers can't afford to be too heavy handed about enforcement for fear of losing customers.
But a start toward banner standards has certainly been made. And underpinning it all is the realization of most independent retailers that they need a means of telling customers at least something about price, service, selection and even format style.
But what of independents that are successful without a banner affiliation? How do they do it?
Highly successful unaffiliated stores are usually specialized, closely managed by family members and benefit from charismatic marketing and leadership.
Perhaps the best example of this type of store is Stew Leonard's Dairy Store in Connecticut. Another well-known store driven by these attributes is Marv Imus' Paw Paw Shopping Center in Michigan. Paw Paw, though, takes a hybrid approach and displays its wholesaler's name (Spartan Stores) along with the store name.
But for the very reasons that make stores such as these successful, they are quite difficult to duplicate and tend to be limited to one- or two-store operations.
So for most expansion-minded companies a banner is worth having. And retailers can help turn a banner into a virtual chain -- a brand -- by hewing to standards.