While supermarkets struggle in today's competitive environment, convenience remains the essential ingredient to survival.
This has been said often, but it bears repeating in these difficult times. While the Wal-Mart Supercenters are the embodiment of convenience, their size makes them unwieldy for many customers to shop. Meanwhile, supermarkets can implement or enhance programs that will take advantage of their existing customer traffic. And many of these strategic opportunities to improve convenience are in the nonfood areas.
One good example is the 30-minute photo-processing program being rolled out by Albertsons, Boise, Idaho, an idea admittedly borrowed from the Wal-Mart Neighborhood Markets. It requires little by way of equipment upgrades, as most modern photo mini-labs already can process film in about 20 minutes, Brian Longheier, marketing research analyst, Photo Marketing Association International, Jackson, Mich., told me. Implementing it is a matter of store systems, policies and having enough trained personnel on hand during peak periods, he said.
The first advantage of such a system is, of course, competitive advantage. Aside from the 52 Wal-Mart Neighborhood Markets and a handful of independent photo processors, no one else offers 30-minute processing, Longheier said.
Perhaps more importantly, it keeps customers in the store to do their shopping, Ertharin Cousin, senior vice president, public affairs, told me. When given an hour to wait for their photos, customers are more likely to go elsewhere in the surrounding area -- perhaps to the drug chain for their health and beauty care needs or to the video stores to rent a DVD. But when the wait is 30 minutes, the shopper will stay in the store and discover that Albertsons carries these same products. Convenience wins again.
I suspect it's only a matter of time before Wal-Mart expands this concept to its other formats, but for now, Albertsons, even though it was second to embrace the idea, is out in front. This perhaps also is an indication of how the new top leadership at the company is doing business.
"We are moving very fast. When you see an opportunity, you take it," Cousin said.
Video, and specifically DVD, is another area where supermarkets can take greater advantage of convenience sales. More retailers are installing special racks with a higher level of security to display new DVD products and lower cost catalog. To their surprise, the retailers are finding an immense appetite among consumers for the older movie titles and, in providing them, keep the shoppers from picking them up at a mass merchandiser or electronics store.
Some supermarkets, like King Soopers, the Kroger Co. division in Denver, have even started to meet the mass retailers' loss leader pricing on big hit titles, industry sources tell SN. The impact of this on the bottom line is, I'm sure, not pretty. But it does help the retailer maintain a price image on a highly visible product, while giving its customers one less reason to go to the supercenter.
There are many other opportunities like this in the nonfood world, whether in pharmacy, new over-the-counter products, health and beauty care, and seasonal. Taking good advantage of them will help supermarkets keep their customers in their stores, and more importantly, keep them coming back.